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VIRGIN MEDIA INC. FORM 10-Q QUARTER ENDED SEPTEMBER 30, 2007 INDEX

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2007
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 000-50886

VIRGIN MEDIA INC.
(Exact name of registrant as specified in its charter)

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED
(Additional Registrant)

Delaware (State or other jurisdiction of incorporation or organization)		59-3778247 (I.R.S. Employer Identification No.)
909 Third Avenue, Suite 2863 New York, New York (Address of principal executive offices)		10022 (Zip code)
(212) 906-8440 (Registrant's telephone number, including area code)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ý No o

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý                Accelerated filer o                Non-accelerated filer o

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes o No ý

        APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

        Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes ý No o

        As of November 6, 2007, there were 327,393,660 shares of the registrant's common stock, par value $0.01 per share, issued and outstanding, excluding shares of the registrant's common stock issuable upon the exercise of the Series A Warrants and options and shares of restricted stock in escrow.

        The Additional Registrant meets the conditions set forth in General Information H(1)(a) and (b) of Form 10-Q and is filing this report with the reduced disclosure format. See "Note Concerning VMIH" in this Form 10-Q.

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VIRGIN MEDIA INC.

FORM 10-Q

QUARTER ENDED SEPTEMBER 30, 2007

INDEX

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Virgin Media Inc.
	Condensed Consolidated Balance Sheets—September 30, 2007 and December 31, 2006
	Condensed Consolidated Statements of Operations—Three and Nine Months ended September 30, 2007 and 2006
	Condensed Consolidated Statements of Cash Flows—Nine Months ended September 30, 2007 and 2006
	Notes to Condensed Consolidated Financial Statements
Virgin Media Investment Holdings Limited
	Condensed Consolidated Balance Sheets—September 30, 2007 and December 31, 2006
	Condensed Consolidated Statements of Operations—Three and Nine Months ended September 30, 2007 and 2006
	Condensed Consolidated Statements of Cash Flows—Nine Months ended September 30, 2007 and 2006
	Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Item 4. Controls and Procedures
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits
SIGNATURES

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"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

        Various statements contained in this document constitute "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995. Words like "believe," "anticipate," "should," "intend," "plan," "will," "expects," "estimates," "projects," "positioned," "strategy," and similar expressions identify these forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements or industry results to be materially different from those contemplated, projected, forecasted, estimated or budgeted, whether expressed or implied, by these forward-looking statements. These factors, among others, include:

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the ability to compete with a range of other communications and content providers;



•

the ability to manage customer churn;



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the effect of technological changes on our businesses;



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the continued right to use the Virgin name and logo;



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the ability to maintain and upgrade our networks in a cost-effective and timely manner;



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possible losses in revenues due to systems failures;



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the ability to provide attractive programming at a reasonable cost;



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the reliance on single-source suppliers for some equipment, software and services and third party distributors of our mobile services;



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the functionality or market acceptance of new products that we may introduce;



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the ability to obtain and retain expected synergies from the merger of our legacy NTL and Telewest businesses and the acquisition of Virgin Mobile;



•

rates of success in executing, managing and integrating key acquisitions, including the merger with Telewest and the acquisition of Virgin Mobile;



•

the ability to achieve business plans for the combined company;



•

the ability to fund debt service obligations through operating cash flow;



•

the ability to obtain additional financing in the future and react to competitive and technological changes;



•

the ability to comply with restrictive covenants in our indebtedness agreements; and



•

the extent to which our future earnings will be sufficient to cover our fixed charges.

        These and other factors are discussed in more detail under Item 1A. "Risk Factors" and elsewhere in our Form 10-K filed with the SEC on March 1, 2007. We assume no obligation to update our forward-looking statements to reflect actual results, changes in assumptions or changes in factors affecting these statements.

Note Concerning Corporate Name Changes

        We entered into a license agreement with Virgin Enterprises Limited under which we are licensed to use certain Virgin trademarks within the United Kingdom and the Republic of Ireland. As a result, in February 2007, we rebranded our consumer business and a large part of our content business to

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"Virgin Media". We also changed the name of our corporate parent from NTL Incorporated to Virgin Media Inc. and the corporate names of certain of our subsidiaries, including:

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NTL Investment Holdings Limited, the principal borrower under our senior credit facility, to Virgin Media Investment Holdings Limited;



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NTL Cable PLC, the issuer of our public bonds, to Virgin Media Finance PLC;



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NTL Group Limited, a principal operating subsidiary, to Virgin Media Limited;



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Flextech Television Limited, our content subsidiary, to Virgin Media Television Limited;



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NTL Communications Limited to Virgin Media Communications Limited; and



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NTL Holdings Inc. to Virgin Media Holdings Inc.

        For the purposes of this quarterly report on Form 10-Q, the new names will be used where applicable. In this quarterly report, unless we have indicated otherwise, or the context otherwise requires, references to:

•

"Virgin Media," "the Company," "we," "us," "our" and similar terms refer to Virgin Media Inc. and its subsidiaries (which include Telewest Global, Inc., or Telewest, and its subsidiaries and Virgin Mobile and its subsidiaries);



•

"NTL" refers to NTL Incorporated and its subsidiaries as they existed prior to the name change to Virgin Media Inc., and prior to the merger with Telewest, refers to the company now known as Virgin Media Holdings Inc. (which was formerly known as NTL Incorporated before the merger); and



•

"Telewest" refers to Telewest Global, Inc. and its subsidiaries as they existed prior to the merger with NTL in March 2006.

Note Concerning VMIH

        This quarterly report on Form 10-Q (excepting financial statements responsive to Part I, Item 1) covers both Virgin Media Inc. and Virgin Media Investment Holdings Limited ("VMIH"), an English company with an address at 160 Great Portland Street, London, W1W 5QA, United Kingdom, that is a wholly-owned subsidiary of Virgin Media Finance PLC and a wholly-owned indirect subsidiary of Virgin Media Inc. VMIH is not an accelerated filer. VMIH is one of the guarantors of Virgin Media Finance PLC's 9.75% senior notes due 2014 (sterling denominated), 8.75% senior notes due 2014 (euro denominated), 8.75% senior notes due 2014 (U.S. dollar denominated), and 9.125% senior notes due 2016 (U.S. dollar denominated). VMIH's guarantee of these notes is not deemed to be unconditional.

        VMIH carries on the same business as Virgin Media Inc., and is the principal borrower under Virgin Media Inc.'s senior credit facility. In this quarterly report, unless the context otherwise requires, the terms "Virgin Media," "the "Company," "we," "us," "our" and similar terms refer to the consolidated business of Virgin Media Inc., including VMIH and its subsidiaries. Unless otherwise indicated, the discussion contained in this report applies to VMIH as well as Virgin Media Inc.

Note Concerning Financial Information and Currency of Financial Statements

        All of the financial statements included in this quarterly report have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The reporting currency of our consolidated financial statements is U.K. pounds sterling.

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PART I—FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

VIRGIN MEDIA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions)

				September 30, 2007			December 31, 2006
				(Unaudited)			(See Note)
Assets
Current assets
	Cash and cash equivalents			£	364.0		£	418.5
	Restricted cash				5.9			6.0
	Accounts receivable—trade, less allowances for doubtful accounts of £21.9 (2007) and £51.8 (2006)				452.0			461.2
	Inventory				95.9			65.3
	Prepaid expenses and other current assets				120.3			87.4
		Total current assets			1,038.1			1,038.4
Fixed assets, net					5,780.3			6,026.3
Goodwill and other indefinite-lived intangible assets					2,508.2			2,516.5
Intangible assets, net					892.4			1,120.5
Equity investments					372.2			371.5
Other assets, net of accumulated amortization of £39.2 (2007) and £21.8 (2006)					175.7			170.3
Total assets				£	10,766.9		£	11,243.5
Liabilities and shareholders' equity
Current liabilities
	Accounts payable			£	368.3		£	379.6
	Accrued expenses and other current liabilities				403.0			485.5
	VAT and employee taxes payable				79.8			82.8
	Restructuring liabilities				93.6			126.8
	Interest payable				148.8			158.2
	Deferred revenue				261.5			268.0
	Current portion of long term debt				28.7			141.9
		Total current liabilities			1,383.7			1,642.8
Long term debt, net of current portion					6,071.1			6,017.2
Deferred revenue and other long term liabilities					270.3			276.2
Deferred income taxes					82.1			77.2
		Total liabilities			7,807.2			8,013.4
Commitments and contingent liabilities
Shareholders' equity
	Common stock—$.01 par value; authorized 1,000.0 (2007) and 1,000.0 (2006) shares; issued 328.4 (2007) and 326.4 (2006) and outstanding 327.0 (2007) and 323.9 (2006) shares				1.8			1.8
	Additional paid-in capital				4,328.9			4,303.4
	Accumulated other comprehensive income				135.2			116.0
	Accumulated deficit				(1,506.2	)		(1,191.1	)
		Total shareholders' equity			2,959.7			3,230.1
Total liabilities and shareholders' equity				£	10,766.9		£	11,243.5

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Note:    The balance sheet at December 31, 2006 has been derived from the audited financial statements at that date.

See accompanying notes.

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VIRGIN MEDIA INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited) (in millions, except per share data)

			Three months ended September 30,						Nine months ended September 30,
			2007			2006			2007			2006
Revenue			£	1,006.2		£	1,024.9		£	3,023.1		£	2,520.6
Costs and expenses
	Operating costs (exclusive of depreciation shown separately below)			(454.0	)		(440.0	)		(1,338.4	)		(1,062.4	)
	Selling, general and administrative expenses			(210.7	)		(267.1	)		(722.2	)		(648.7	)
	Other income (charges)			8.9			(30.9	)		(5.8	)		(51.4	)
	Depreciation			(225.7	)		(222.6	)		(689.4	)		(591.2	)
	Amortization			(78.0	)		(73.9	)		(232.9	)		(166.3	)
				(959.5	)		(1,034.5	)		(2,988.7	)		(2,520.0	)
Operating income (loss)				46.7			(9.6	)		34.4			0.6
Other income (expense)
	Interest income and other, net			10.8			7.1			25.6			24.3
	Interest expense			(127.9	)		(113.2	)		(374.5	)		(332.6	)
	Share of income from equity investments			6.0			3.9			18.5			8.4
	Foreign currency transaction gains (losses)			2.2			6.3			7.8			(97.8	)
	Loss on extinguishment of debt			—			(0.5	)		(1.1	)		(32.9	)
	Gains (losses) on derivative instruments			0.8			1.6			(0.7	)		(1.9	)
Loss from continuing operations before income taxes, minority interest and cumulative effect of change in accounting principle				(61.4	)		(104.4	)		(290.0	)		(431.9	)
Income tax benefit (expense)				0.4			0.9			(10.3	)		10.8
Minority interest				—			(0.7	)		—			—
Cumulative effect of change in accounting principle				—			—			—			1.2
Loss from continuing operations				(61.0	)		(104.2	)		(300.3	)		(419.9	)
Discontinued operations
Gain on disposal of assets				—			8.1			—			8.1
Income from discontinued operations				—			8.1			—			8.1
Net loss			£	(61.0	)	£	(96.1	)	£	(300.3	)	£	(411.8	)
Basic and diluted loss from continuing operations per share			£	(0.19	)	£	(0.32	)	£	(0.92	)	£	(1.49	)
Basic and diluted income from discontinued operations per share			£	—		£	0.02		£	—		£	0.03
Basic and diluted net loss per share			£	(0.19	)	£	(0.30	)	£	(0.92	)	£	(1.46	)
Dividends per share (in U.S. dollars)			$	0.04		$	0.02		$	0.09		$	0.03
Average number of shares outstanding				326.4			322.0			325.4			282.5

See accompanying notes.

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VIRGIN MEDIA INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited) (in millions)

				Nine months ended September 30,
				2007			2006
Net cash provided by operating activities				£	448.1		£	512.2
Investing activities
	Purchase of fixed and intangible assets				(424.0	)		(397.0	)
	Income from equity investments				14.5			7.3
	Acquisitions, net of cash acquired				(1.0	)		(2,447.7	)
	Other				6.4			6.0
		Net cash used in investing activities			(404.1	)		(2,831.4	)
Financing activities
	New borrowings, net of financing fees				874.5			8,923.9
	Principal payments on long term debt and capital leases				(966.8	)		(7,064.7	)
	Proceeds from employee stock option exercises				11.4			35.2
	Dividends paid				(14.8	)		(5.1	)
		Net cash (used in) provided by financing activities			(95.7	)		1,889.3
Effect of exchange rate changes on cash and cash equivalents					(2.8	)		(3.1	)
Decrease in cash and cash equivalents					(54.5	)		(433.0	)
Cash and cash equivalents, beginning of period					418.5			735.2
Cash and cash equivalents, end of period				£	364.0		£	302.2
Supplemental disclosure of cash flow information
Cash paid during the period for interest exclusive of amounts capitalized				£	380.8		£	267.8

See accompanying notes.

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VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1—Basis of Presentation

        The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007. For further information, refer to the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for Virgin Media Inc. for the year ended December 31, 2006.

        On March 3, 2006, Virgin Media Holdings Inc., or Virgin Media Holdings (then known as NTL Incorporated), merged with a subsidiary of Virgin Media Inc., or Virgin Media (then known as Telewest Global, Inc., or Telewest). The merger has been accounted for as a reverse acquisition in which Virgin Media Holdings is treated as the accounting acquirer, primarily because Virgin Media Holdings' shareholders owned 75% of the common stock upon completion of the merger. Following the merger, Telewest changed its name to NTL Incorporated, and subsequently to Virgin Media Inc. As a result, the historical financial statements of Virgin Media Holdings became the historical financial statements of Virgin Media Inc. as of the completion of the merger. Therefore, the results of operations and cash flows for Telewest, the acquired company for accounting purposes, are included in the consolidated financial statements from March 3, 2006, the date on which the merger was completed. The results of operations and cashflows for Virgin Mobile (as defined below) are included in the consolidated financial statements from July 4, 2006, the date of its acquisition.

        Certain prior year balances have been reclassified to conform to the current period presentation.

Note 2—Acquisitions and Disposals

Acquisition of Virgin Mobile

        On July 4, 2006, we acquired 100% of the outstanding shares and options of Virgin Mobile Holdings (UK) plc, or Virgin Mobile, through a U.K. Scheme of Arrangement. Virgin Mobile is the largest mobile virtual network operator in the U.K., with approximately 4.4 million customers.

        The total purchase price of £953.2 million included cash of £419.2 million, common stock valued at £518.8 million and estimated direct transaction costs of £15.2 million. We financed the cash portion of the offer and transactional expenses through £475 million of additional borrowings under our senior credit facility and cash on hand.

Reverse Acquisition of Telewest

        On March 3, 2006, Virgin Media Holdings Inc. (then known as NTL Incorporated) merged with a subsidiary of Virgin Media Inc. (then known as Telewest Global, Inc.) and the merger has been accounted for as a reverse acquisition of Telewest using the purchase method. This merger created the U.K.'s largest provider of residential broadband and the U.K.'s leading provider of "triple-play" services. In connection with this transaction, Telewest changed its name to NTL Incorporated, and has since changed its name to Virgin Media Inc.

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        The total purchase price of £3.5 billion included cash of £2.3 billion, common stock valued at £1.1 billion, stock options with a fair value of £29.8 million and estimated direct transaction costs of £25.1 million. During the nine months ended September 30, 2007, we reduced goodwill by £6.8 million for amendments to deferred tax liabilities that were recognized at the acquisition date and by £1.4 million as a result of the disposal of our international content rights syndication operations.

Pro Forma Results

        The following pro forma financial information for the three and nine months ended September 30, 2006 presents the combined results of operations of Virgin Media Holdings, the former Telewest and Virgin Mobile businesses as if the acquisitions had occurred as of the beginning of the periods presented (in millions, except per share data). The unaudited pro forma financial information is not intended to represent or be indicative of the consolidated results of operations or financial condition of Virgin Media that would have been reported had the acquisitions been completed as of the date presented, and should not be taken as representative of the future consolidated results of operations or financial condition of Virgin Media.

		Three months ended September 30,						Nine months ended September 30,
		2007 Actual			2006 Pro forma			2007 Actual			2006 Pro forma
Revenue			£1,006.2			£1,031.3			£3,023.1			£3,080.6
Operating income (loss)			46.7			(9.0	)		34.4			(5.5	)
Loss from continuing operations before income taxes, minority interest and cumulative effect of change in accounting principle			(61.4	)		(103.7	)		(290.0	)		(483.4	)
Loss from continuing operations			(61.0	)		(103.5	)		(300.3	)		(481.6	)
Discontinued operations:
Income from discontinued operations			—			8.1			—			8.1
Net loss		£	(61.0	)	£	(95.4	)	£	(300.3	)	£	(473.5	)
Loss from continuing operations per share		£	(0.19	)	£	(0.32	)	£	(0.92	)	£	(1.49	)
Net loss per share		£	(0.19	)	£	(0.29	)	£	(0.92	)	£	(1.46	)

        The pro forma financial information above includes the following material, non-recurring charges in the nine months ended September 30, 2006: write-offs of historical deferred finance charges of £32.9 million; acquisition-related charges of £16.3 million; and other charges including restructuring charges of £51.9 million.

Disposal of Ireland operations

        On May 9, 2005, we sold our operations in the Republic of Ireland, comprising all of the ordinary shares of ntl Communications (Ireland) Limited and ntl Irish Networks Limited and certain additional assets, to MS Irish Cable Holdings B.V., an affiliate of Morgan Stanley & Co. International Limited, for an aggregate purchase price of €333.4 million, or £225.5 million. During the three months ended

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September 30, 2006, we were able to release certain contingent tax liabilities of £8.1 million relating to the disposal of our former Ireland operations.

Note 3—Long Term Debt

        Long term debt consists of (in millions):

        The effective interest rate on the senior credit facility was 7.6% and 7.1% as at September 30, 2007 and December 31, 2006, respectively.

        In April 2007, we borrowed £890 million under our senior credit facility which is repayable in 2012, and used £863 million of the net proceeds to repay some of our obligations under our senior credit facility that were originally scheduled to be paid from 2007 to 2011. In April 2007, we also amended our senior credit facility agreement to allow for this £890 million of additional indebtedness, the relaxation of certain financial covenants and additional flexibility to pay increased levels of dividends on our common stock.

        In May 2007, we made a mandatory prepayment of £73.6 million on our senior credit facility as a result of cash flow generated in 2006 that was in excess of levels prescribed in the senior credit facility agreement.

Note 4—Employee Benefit Plans

        The components of net periodic pension cost in the three and nine months ended September 30, 2007 and 2006 were as follows (in millions):

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Employer Contributions

        In April 2007, we agreed with the trustees of one of our pension plans to a new funding arrangement whereby we will be paying an additional £3.3 million per annum for the next three years. Additionally, in June 2007, we effected a merger of our three other defined benefit plans. The merger of these plans was subject to the approval of the trustees and, as a condition of trustee approval, we agreed to make a specific one-time contribution of £4.5 million. For the three and nine months ended September 30, 2007, we contributed £6.0 million and £13.3 million, respectively, to our pension plans. Reflecting the changes referenced above and current regular contributions, we anticipate contributing a total of £17.3 million to fund our pension plans in 2007.

Note 5—Other Income (Charges) Including Restructuring Charges

        Other income for the three months ended September 30, 2007 of £8.9 million related primarily to a revision in our lease exit costs resulting from new sublease agreements offset by employee termination costs. Other charges for the three months ended September 30, 2006 were £30.9 million relating primarily to lease exit and employee termination costs. Other charges of £5.8 million and £51.4 million for the nine months ended September 30, 2007 and 2006, respectively, relate mainly to lease exit and employee termination costs as a result of our acquisition-related restructuring programs.

        The following tables summarize our historical restructuring provisions and the restructuring provision resulting from the acquisitions during 2006 (in millions):

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Note 6—Stockholders' Equity and Share Based Compensation

        We commenced the payment of regular quarterly dividends in June 2006. During the nine months ended September 30, 2007 and the year ended December 31, 2006, the Company paid the following dividends:

Board Declaration Date		Per Share Dividend			Record Date		Payment Date		Total Amount
									(in millions)
Year ended December 31, 2006:
May 18, 2006		$	0.01		June 12, 2006		June 20, 2006		£1.6
August 28, 2006			0.02		September 12, 2006		September 20, 2006		3.5
November 28, 2006			0.02		December 12, 2006		December 20, 2006		3.4
Nine months ended September 30, 2007:
February 27, 2007		$	0.02		March 12, 2007		March 20, 2007		£3.3
May 16, 2007			0.03		June 12, 2007		June 20, 2007		5.0
August 15, 2007			0.04		September 12, 2007		September 20, 2007		6.5

        Future payments of regular quarterly dividends by us are at the discretion of our Board of Directors and will be subject to our future needs and uses of cash, which could include investments in operations, the repayment of debt, and share repurchase programs.

        Basic and diluted net loss per share is computed by dividing the net loss for the three and nine months ended September 30, 2007 and 2006 by the weighted average number of shares outstanding during the respective periods. Outstanding warrants, options to purchase shares and restricted stock totaling 38.5 million and 39.8 million shares at September 30, 2007 and 2006, respectively, are excluded from the calculation of diluted loss per share, since the inclusion of such warrants, options and shares of restricted stock is anti-dilutive. The impact of the cumulative effect of change in accounting principle did not change the earnings per share for all periods presented.

        The average number of shares outstanding for the three and nine months ended September 30, 2007 and 2006 is computed as follows (in millions):

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        The following table summarizes the activity of our option plans for the nine months ended September 30, 2007.

        Total share based compensation expense included in selling, general and administrative expenses in the statement of operations was £(0.2) million and £7.3 million for the three months ended September 30, 2007 and 2006, respectively, and £14.1 million and £27.3 million for the nine months ended September 30, 2007 and 2006, respectively.

        The following table summarizes the activity of our restricted stock plans for the nine months ended September 30, 2007.

Note 7—Comprehensive Loss

        Comprehensive loss comprises (in millions):

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        The components of accumulated other comprehensive income, net of taxes, were as follows (in millions):

Note 8—Income taxes

        At each period end, it is necessary for us to make certain estimates and assumptions to compute the provision for income taxes including, but not limited to, the expected operating income (or loss) for the year, projections of the proportion of income (or loss) earned and taxed in the United Kingdom and the extent to which this income (or loss) may also be taxed in the United States, permanent and temporary differences, the likelihood of deferred tax assets being recovered and the outcome of contingent tax risks. At each interim period, management uses the best information available to develop these estimates and assumptions, which are used to compute the forecast effective tax rate for the full year which is applied in computing the income tax expense or benefit for the interim period. In accordance with U.S. generally accepted accounting principles, the impact of revisions to these estimates are recorded as income tax expense or benefit in the period in which they become known. Accordingly, the accounting estimates used to compute the provision for income taxes have changed and will change as new events occur, as more experience is acquired, as additional information is obtained and our tax environment changes. To the extent that the estimate changes during a subsequent quarter, the effect of the change on prior quarters as well as on the current quarter is included in income tax expense for the current quarter.

        For the three and nine months ended September 30, 2007, there was an income tax benefit of £0.4 million and an income tax expense of £10.3 million, respectively, as compared with income tax benefits of £0.9 million and £10.8 million, respectively, for the same periods in 2006. The income tax benefit for the three months ended September 30, 2007 was comprised of current federal taxes of £nil, a U.S. state and local tax benefit of £nil, a deferred federal tax benefit of £0.3 million and a U.K. tax benefit of £0.1 million. The income tax expense for the nine months ended September 30, 2007 was comprised of current federal taxes of £0.7 million, a U.S. state and local tax benefit of £0.6 million, deferred federal tax expense of £13.4 million and a U.K. tax benefit of £3.2 million. In the three and nine months ended September 30, 2007, we recognized an income tax expense of £0.6 million and an income tax benefit of £6.8 million, respectively, that resulted in deferred tax expense with an offsetting reduction in our reorganization value. The U.K. tax benefit relates to amounts receivable in respect of the sale of U.K. tax losses to an equity-method investee.

        In June 2006, the FASB issued FASB Interpretation ("FIN") No. 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement 109. FIN 48 prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return, including a decision whether to file or not to file in a particular jurisdiction. We adopted FIN 48 on January 1, 2007. The adoption did not have a material effect on our consolidated financial statements. Upon the adoption of FIN 48, we had £70.9 million of

14

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unrecognized tax benefits. If subsequently recognized, £66.5 million would not impact the effective tax rate due to an offsetting valuation allowance. Of the remainder, £1.1 million would decrease income tax expense and £3.3 million would reduce goodwill. In addition, we had accrued £0.6 million for interest. We recognize interest and penalties related to unrecognized tax benefits in income tax expense in the statement of operations.

        During the nine months ended September 30, 2007, we recognized £54.1 million of previously unrecognized tax benefits due to a change in facts and circumstances. This had no impact on the effective tax rate due to an offsetting valuation allowance. We also recognized £0.2 million of previously unrecognized tax benefits as a result of the expiry of the applicable statute of limitations, together with £0.3 million of accrued interest thereon. At September 30, 2007, we had £16.0 million of unrecognized tax benefits and £0.4 million of accrued interest thereon. The amount of unrecognized tax benefits and accrued interest that, if recognized, would impact the effective tax rate is £0.8 million and £0.1 million, respectively. We do not expect that the amount of unrecognized tax benefits will significantly increase or decrease in the next twelve months.

        The statute of limitations is open for the years 2004 to 2006 in the U.S. and 2003 to 2006 in the U.K., our principal tax jurisdictions.

        The U.K. enacted changes in tax legislation in July 2007 that will impact our future U.K. tax position. These changes include a reduction in the rate of taxation from 30% to 28%, and a reduction in the rate at which capital allowances can be claimed in a year from 25% to 20%, with both changes coming into effect on April 1, 2008. Under FAS 109 the effect of such changes on deferred tax balances are required to be recognized in the period in which the new legislation is enacted. Our deferred tax assets are fully covered by a valuation allowance, such that there is no impact to be recorded in the three and nine months ended September 30, 2007. There may be an effect in a future period, to the extent a deferred tax benefit is recognized.

Note 9—Recent Accounting Pronouncements

        In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS 157 provides guidance for using fair value to measure assets and liabilities. It also responds to investors' requests for expanded information about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. SFAS 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value, and does not expand the use of fair value in any new circumstances. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and is required to be adopted by us in the first quarter of 2008. We are currently evaluating the effect that the adoption of SFAS 157 will have on our consolidated results of operations and financial condition and are not yet in a position to determine such effects.

Note 10—Industry Segments

        Our reportable segments Cable, Content and Mobile are based on our method of internal reporting. Our primary segment is our Cable segment, which consists of the distribution of television programming to consumers, broadband and fixed line telephone services to consumers, businesses and public sector organizations sold on our cable network and, to a lesser extent, off our cable network. We operate our Content segment through our wholly-owned subsidiaries Virgin Media Television Limited ("Virgin Media TV", formerly known as Flextech Limited) and sit-up Limited ("sit-up"), which supply

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television programming to the U.K. pay-television broadcasting market including our televised shopping unit sit-up tv, which markets and retails a wide variety of consumer products using an auction-based format. We operate our Mobile segment through our wholly-owned subsidiary Virgin Mobile Holdings (UK) Ltd., which consists of our mobile telephony business. Our segments operate entirely in the U.K. and no one customer represents more than 5% of our overall revenue.

        Segment operating income before depreciation, amortization and other charges, which we refer to as Segment OCF, is management's measure of segment profit as permitted under SFAS 131, Disclosures about Segments of an Enterprise and Related Information. Our management, including our chief executive officer who is our chief operating decision maker, considers Segment OCF as an important indicator of the operational strength and performance of our segments. Segment OCF excludes the impact of costs and expenses that do not directly affect our cash flows. Other charges, including restructuring charges, are also excluded from Segment OCF as management believes they are not characteristic of our underlying business operations. The business segments disclosed in the condensed consolidated financial statements are based on this organizational structure and information reviewed by our management to evaluate the business segment results.

        Segment information for the three and nine month periods ended September 30, 2007 and 2006 is as follows (in millions):

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        As at June 30, 2007, we performed our annual impairment review of the goodwill recognized in the Virgin Media TV and sit-up reporting units included in our Content segment and the Virgin Mobile reporting unit and concluded that no impairment charges were necessary.

Note 11—Condensed Consolidated Financial Information

        On April 13, 2004, our wholly-owned subsidiary, Virgin Media Finance PLC (formerly NTL Cable PLC), or Virgin Media Finance, issued £375 million aggregate principal amount of 9.75% senior notes due 2014, $425 million aggregate principal amount of 8.75% senior notes due 2014, €225 million

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aggregate principal amount of 8.75% senior notes due 2014 and $100 million aggregate principal amount of floating rate notes due 2012, together referred to as the Senior Notes due 2014. On July 15, 2005, the $100 million aggregate principal amount of floating rate notes was redeemed. On July 25, 2006, Virgin Media Finance issued $550 million aggregate principal amount of 9.125% senior notes due 2016, and together with the Senior Notes due 2014, these are referred to as the Senior Notes. We and certain of our subsidiaries, namely Virgin Media Group LLC (formerly NTL:Telewest LLC), Virgin Media Holdings Inc. (formerly NTL Holdings Inc.), Virgin Media (UK) Group, Inc. (formerly NTL (UK) Group, Inc.) and Virgin Media Communications Limited (formerly NTL Communications Limited), have guaranteed the Senior Notes on a senior basis. Virgin Media Investment Holdings Limited, or VMIH, has guaranteed the Senior Notes on a senior subordinated basis.

        We present the following condensed consolidated financial information as of September 30, 2007 and December 31, 2006 and for the three and nine months ended September 30, 2007 and 2006 as required by Article 3-10(d) of Regulation S-X.

			September 30, 2007
Balance sheets			Company		Virgin Media Finance		Other guarantors		VMIH		All other subsidiaries		Adjustments		Total
			(in millions)
Cash and cash equivalents			£1.9		£—		£21.2		£8.4		£332.5		£—		£364.0
Restricted cash			—		—		—		—		5.9		—		5.9
Other current assets			—		—		1.3		3.7		663.2		—		668.2
	Total current assets		1.9		—		22.5		12.1		1,001.6		—		1,038.1
Fixed assets, net			—		—		—		—		5,780.3		—		5,780.3
Intangible assets, net			—		—		(17.7	)	—		3,418.3		—		3,400.6
Investments in, and loans to, parent and subsidiary companies			2,961.7		1,149.9		526.7		5,517.7		(6,620.5	)	(3,163.3	)	372.2
Other assets, net			—		—		—		119.7		56.0		—		175.7
	Total assets		£2,963.6		£1,149.9		£531.5		£5,649.5		£3,635.7		£(3,163.3	)	£10,766.9
Current liabilities			£3.9		£39.0		£11.0		£122.6		£1,339.2		£(132.0	)	£1,383.7
Long term debt			—		1,010.1		—		2,312.3		2,748.7		—		6,071.1
Other long term liabilities			—		—		0.3		136.1		216.0		—		352.4
Shareholders' equity			2,959.7		100.8		520.2		3,078.5		(668.2	)	(3,031.3	)	2,959.7
	Total liabilities and shareholders' equity		£2,963.6		£1,149.9		£531.5		£5,649.5		£3,635.7		£(3,163.3	)	£10,766.9

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			December 31, 2006
Balance sheets			Company		Virgin Media Finance		Other guarantors		VMIH		All other subsidiaries		Adjustments		Total
			(in millions)
Cash and cash equivalents			£2.4		£—		£31.5		£0.2		£384.4		£—		£418.5
Restricted cash			—		—		—		—		6.0		—		6.0
Other current assets			(1.7	)	—		0.3		0.1		615.2		—		613.9
	Total current assets		0.7		—		31.8		0.3		1,005.6		—		1,038.4
Fixed assets, net			0.7		—		—		—		6,025.6		—		6,026.3
Intangible assets, net			—		—		(11.0	)	—		3,648.0		—		3,637.0
Investments in, and loans to, parent and subsidiary companies			3,242.3		1,411.7		774.4		5,327.2		(6,407.5	)	(3,976.6	)	371.5
Other assets, net			—		—		—		103.2		67.1		—		170.3
	Total assets		£3,243.7		£1,411.7		£795.2		£5,430.7		£4,338.8		£(3,976.6	)	£11,243.5
Current liabilities			£11.8		£30.1		£9.4		£97.6		£1,593.9		£(100.0	)	£1,642.8
Long term debt			—		1,024.4		—		1,872.4		3,120.4		—		6,017.2
Other long term liabilities			1.8		—		8.5		124.9		218.2		—		353.4
Shareholders' equity			3,230.1		357.2		777.3		3,335.8		(593.7	)	(3,876.6	)	3,230.1
	Total liabilities and shareholders' equity		£3,243.7		£1,411.7		£795.2		£5,430.7		£4,338.8		£(3,976.6	)	£11,243.5

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		Three months ended September 30, 2007
Statements of operations		Company		Virgin Media Finance		Other guarantors		VMIH		All other subsidiaries		Adjustments		Total
		(in millions)
Revenue		£—		£—		£—		£—		£1,006.2		£—		£1,006.2
Operating costs		—		—		—		—		(454.0	)	—		(454.0	)
Selling, general and administrative expenses		(1.2	)	—		(1.3	)	0.3		(208.5	)	—		(210.7	)
Other income		—		—		—		—		8.9		—		8.9
Depreciation and amortization		—		—		—		—		(303.7	)	—		(303.7	)
Operating income (loss)		(1.2	)	—		(1.3	)	0.3		48.9		—		46.7
Interest income and other, net		0.2		24.9		11.7		25.5		(14.5	)	(37.0	)	10.8
Interest expense		—		(24.8	)	(6.6	)	(96.4	)	(37.1	)	37.0		(127.9	)
Share of income from equity investments		—		—		—		—		6.0		—		6.0
Gains (losses) on derivative instruments		—		—		—		(1.0	)	1.8		—		0.8
Foreign currency gains (losses)		—		—		0.5		(4.3	)	6.0		—		2.2
Income tax benefit (expense)		—		—		0.6		—		(0.2	)	—		0.4
(Loss) income before equity in net (loss) income from subsidiaries		(1.0	)	0.1		4.9		(75.9	)	10.9		—		(61.0	)
Equity in net (loss) income of subsidiaries		(60.0	)	(66.7	)	(65.2	)	9.2		—		182.7		—
Net (loss) income		£(61.0	)	£(66.6	)	£(60.3	)	£(66.7	)	£10.9		£182.7		£(61.0	)

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		Nine months ended September 30, 2007
Statements of operations		Company		Virgin Media Finance		Other guarantors		VMIH		All other subsidiaries		Adjustments		Total
		(in millions)
Revenue		£—		£—		£—		£—		£3,023.1		£—		£3,023.1
Operating costs		—		—		—		—		(1,338.4	)	—		(1,338.4	)
Selling, general and administrative expenses		(3.2	)	—		(9.4	)	—		(709.6	)	—		(722.2	)
Other charges		(0.3	)	—		—		—		(5.5	)	—		(5.8	)
Depreciation and amortization		—		—		—		—		(922.3	)	—		(922.3	)
Operating income (loss)		(3.5	)	—		(9.4	)	—		47.3		—		34.4
Interest income and other, net		0.5		75.3		35.6		67.0		(42.7	)	(110.1	)	25.6
Interest expense		—		(74.7	)	(19.5	)	(280.9	)	(109.5	)	110.1		(374.5	)
Loss on extinguishment of debt		—		—		—		(0.5	)	(0.6	)	—		(1.1	)
Share of income from equity investments		—		—		—		—		18.5		—		18.5
(Losses) gains on derivative instruments		—		—		—		(1.0	)	0.3		—		(0.7	)
Foreign currency gains (losses)		—		0.1		0.9		(8.8	)	15.6		—		7.8
Income tax expense		(0.2	)	—		(6.7	)	—		(3.4	)	—		(10.3	)
(Loss) income before equity in net (loss) income from subsidiaries		(3.2	)	0.7		0.9		(224.2	)	(74.5	)	—		(300.3	)
Equity in net (loss) income of subsidiaries		(297.1	)	(297.6	)	(298.3	)	(73.5	)	—		966.5		—
Net loss		£(300.3	)	£(296.9	)	£(297.4	)	£(297.7	)	£(74.5	)	£966.5		£(300.3	)

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		Three months ended September 30, 2006
Statements of operations		Company		Virgin Media Finance		Other guarantors		VMIH		All other subsidiaries		Adjustments		Total
		(in millions)
Revenue		£—		£—		£—		£—		£1,024.9		£—		£1,024.9
Operating costs		—		—		—		—		(440.0	)	—		(440.0	)
Selling, general and administrative expenses		(5.9	)	—		(3.2	)	—		(258.0	)	—		(267.1	)
Other charges		—		—		—		—		(30.9	)	—		(30.9	)
Depreciation and amortization		—		—		—		—		(296.5	)	—		(296.5	)
Operating loss		(5.9	)	—		(3.2	)	—		(0.5	)	—		(9.6	)
Interest income and other, net		0.3		28.7		10.3		37.3		—		(69.5	)	7.1
Interest expense		—		(28.4	)	(1.9	)	(86.3	)	(66.1	)	69.5		(113.2	)
Share of income from equity investments		—		—		—		—		3.9		—		3.9
Loss on extinguishment of debt		—		—		—		(0.4	)	(0.1	)	—		(0.5	)
Gain on derivative instruments		—		—		—		1.6		—		—		1.6
Foreign currency gains (losses)		—		(8.1	)	2.0		35.5		(23.1	)	—		6.3
Minority interest		—		—		—		—		(0.7	)	—		(0.7	)
Income tax benefit		—		—		0.3		—		0.6		—		0.9
(Loss) income from continuing operations		(5.6	)	(7.8	)	7.5		(12.3	)	(86.0	)	—		(104.2	)
Income from discontinued operations		—		—		8.1		—		—		—		8.1
Equity in net (loss) income of subsidiaries		(90.5	)	(87.7	)	(97.0	)	(75.4	)	—		350.6		—
Net loss		£(96.1	)	£(95.5	)	£(81.4	)	£(87.7	)	£(86.0	)	£350.6		£(96.1	)

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		Nine months ended September 30, 2006
Statements of operations		Company		Virgin Media Finance		Other guarantors		VMIH		All other subsidiaries		Adjustments		Total
		(in millions)
Revenue		£—		£—		£—		£—		£2,520.6		£—		£2,520.6
Operating costs		—		—		—		—		(1,062.4	)	—		(1,062.4	)
Selling, general and administrative expenses		(18.5	)	—		(9.7	)	—		(620.5	)	—		(648.7	)
Other charges		—		—		—		—		(51.4	)	—		(51.4	)
Depreciation and amortization		—		—		—		—		(757.5	)	—		(757.5	)
Operating income (loss)		(18.5	)	—		(9.7	)	—		28.8		—		0.6
Interest income and other, net		0.3		69.4		23.6		150.2		—		(219.2	)	24.3
Interest expense		—		(68.4	)	(80.6	)	(194.6	)	(208.2	)	219.2		(332.6	)
Loss on extinguishment of debt		—		—		—		(0.4	)	(32.5	)	—		(32.9	)
Share of income from equity investments		—		—		—		—		8.4		—		8.4
Losses on derivative instruments		—		—		—		(1.9	)	—		—		(1.9	)
Foreign currency (losses) gains		—		(5.7	)	(101.7	)	—		9.6		—		(97.8	)
Cumulative effect of change in accounting principle		—		—		—		—		1.2		—		1.2
Income tax benefit		—		—		9.2		—		1.6		—		10.8
Loss from continuing operations		(18.2	)	(4.7	)	(159.2	)	(46.7	)	(191.1	)	—		(419.9	)
Income from discontinued operations		—		—		8.1		—		—		—		8.1
Equity in net (loss) income of subsidiaries		(393.6	)	(240.8	)	(234.7	)	(194.1	)	—		1,063.2		—
Net loss		£(411.8	)	£(245.5	)	£(385.8	)	£(240.8	)	£(191.1	)	£1,063.2		£(411.8	)

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		Nine months ended September 30, 2007
Statements of cash flows		Company		Virgin Media Finance		Other guarantors		VMIH		All other subsidiaries		Adjustments		Total
		(in millions)
Net cash provided by (used in) operating activities		£(7.7	)	£—		£1.4		£(9.7	)	£464.1		£—		£448.1
Investing activities:
Purchase of fixed and intangible assets		—		—		—		—		(424.0	)	—		(424.0	)
Acquisitions, net of cash acquired		—		—		—		(1.0	)	—		—		(1.0	)
Investments in, and loans to equity investments, parent and subsidiary companies		10.6		—		(8.9	)	(396.0	)	408.8		—		14.5
Other		—		—		—		—		6.4		—		6.4
Net cash (used in) provided by investing activities		10.6		—		(8.9	)	(397.0	)	(8.8	)	—		(404.1	)
Financing activities:
New borrowings, net of financing fees		—		—		—		576.8		297.7		—		874.5
Principal payments on long term debt and capital leases		—		—		—		(161.9	)	(804.9	)	—		(966.8	)
Proceeds from employee stock options		11.4		—		—		—		—		—		11.4
Dividends paid		(14.8	)	—		—		—		—		—		(14.8	)
Net cash (used in) provided by financing activities		(3.4	)	—		—		414.9		(507.2	)	—		(95.7	)
Effect of exchange rate changes		—		—		(2.8	)	—		—		—		(2.8	)
(Decrease) increase in cash and cash equivalents		(0.5	)	—		(10.3	)	8.2		(51.9	)	—		(54.5	)
Cash and cash equivalents at beginning of period		2.4		—		31.5		0.2		384.4		—		418.5
Cash and cash equivalents at end of period		£1.9		£—		£21.2		£8.4		£332.5		£—		£364.0

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		Nine months ended September 30, 2006
Statements of cash flows		Company		Virgin Media Finance		Other guarantors		VMIH		All other subsidiaries		Adjustments		Total
		(in millions)
Net cash provided by (used in) operating activities		£(14.4	)	£(9.3	)	£13.7		£(22.2	)	£544.4		£—		£512.2
Investing activities:
Purchase of fixed assets		—		—		—		—		(397.0	)	—		(397.0	)
Acquisitions, net of cash acquired		—		—		(2,447.7	)	—		—		—		(2,447.7	)
Telewest reorganization		—		—		(2,420.6	)	(4,220.6	)	2,420.6		4,220.6		—
Investments in, and loans to equity investments, parent and subsidiary companies		(13.5	)	(294.7	)	(1,640.1	)	2,288.1		(2,753.1	)	2,420.6		7.3
Other		—		—		—		—		6.0		—		6.0
Net cash used in investing activities		(13.5	)	(294.7	)	(6,508.4	)	(1,932.5	)	(723.5	)	6,641.2		(2,831.4	)
Financing activities:
Proceeds from exercise of stock options		35.2		—		—		—		—		—		35.2
Proceeds from new borrowings, net of financing fees		—		871.2		1,775.1		4,590.7		1,686.9		—		8,923.9
Principal payments on long term debt and capital leases		—		(567.2	)	(1,709.0	)	(2,709.2	)	(2,079.3	)	—		(7,064.7	)
Issuance of stock		—		—		4,220.6		2,420.6		—		(6,641.2	)	—
Share redemption		—		—		1,800.0		(2,350.8	)	550.8		—		—
Dividends		(5.1	)	—		—		—		—		—		(5.1	)
Net cash provided by financing activities		30.1		304.0		6,086.7		1,951.3		158.4		(6,641.2	)	1,889.3
Effect of exchange rate changes		—		—		(3.1	)	—		—		—		(3.1	)
(Decrease) increase in cash and cash equivalents		2.2		—		(411.1	)	(3.4	)	(20.7	)	—		(433.0	)
Cash and cash equivalents at beginning of period		—		—		446.6		5.4		283.2		—		735.2
Cash and cash equivalents at end of period		£2.2		£—		£35.5		£2.0		£262.5		£—		£302.2

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VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions)

				September 30, 2007		December 31, 2006
				(Unaudited)		(See Note)
Assets
Current assets
	Cash and cash equivalents			£340.9		£384.0
	Restricted cash			5.2		5.2
	Accounts receivable—trade, less allowances for doubtful accounts of £19.3 (2007) and £49.4 (2006)			447.5		454.9
	Inventory			95.9		65.3
	Prepaid expenses and other current assets			119.3		89.2
		Total current assets		1,008.8		998.6
Fixed assets, net				5,630.3		5,863.9
Goodwill and other indefinite-lived intangible assets				2,520.0		2,521.4
Intangible assets, net				888.1		1,110.3
Equity investments				372.2		371.5
Other assets, net of accumulated amortization of £39.2 (2007) and £21.8 (2006)				175.8		170.3
Due from parent and subsidiary companies				658.8		650.3
Total assets				£11,254.0		£11,686.3
Liabilities and shareholders' equity
Current liabilities
	Accounts payable			£368.5		£379.5
	Accrued expenses and other current liabilities			397.3		474.8
	VAT and employee taxes payable			73.3		86.2
	Restructuring liabilities			94.5		124.5
	Interest payable			210.3		196.5
	Deferred revenue			252.1		258.0
	Current portion of long term debt			28.7		141.9
		Total current liabilities		1,424.7		1,661.4
Long term debt, net of current portion				6,400.2		6,345.9
Deferred revenue and other long term liabilities				268.3		266.2
Deferred income taxes				82.3		77.0
		Total liabilities		8,175.5		8,350.5
Commitments and contingent liabilities
Shareholders' equity
	Common stock			—		—
	Additional paid-in capital			4,371.3		4,371.3
	Accumulated other comprehensive income			4.4		(36.0	)
	Accumulated deficit			(1,297.2	)	(999.5	)
		Total shareholders' equity		3,078.5		3,335.8
Total liabilities and shareholders' equity				£11,254.0		£11,686.3

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Note: The balance sheet at December 31, 2006 has been derived from the audited financial statements at that date.

See accompanying notes.

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VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited) (in millions)

			Three months ended September 30,				Nine months ended September 30,
			2007		2006		2007		2006
Revenue			£978.2		£993.9		£2,934.7		£1,947.0
Costs and expenses
	Operating costs (exclusive of depreciation shown separately below)		(443.2	)	(427.9	)	(1,303.2	)	(828.4	)
	Selling, general and administrative expenses		(200.8	)	(249.1	)	(683.1	)	(487.5	)
	Other income (charges)		8.0		(28.2	)	(5.3	)	(47.7	)
	Depreciation		(220.2	)	(217.2	)	(673.0	)	(463.0	)
	Amortization		(75.9	)	(72.0	)	(227.0	)	(125.7	)
			(932.1	)	(994.4	)	(2,891.6	)	(1,952.3	)
Operating income (loss)			46.1		(0.5	)	43.1		(5.3	)
Other income (expense)
	Interest income and other, net		10.5		3.9		23.9		14.5
	Interest expense		(131.7	)	(117.7	)	(384.9	)	(235.4	)
	Share of income from equity investments		6.0		—		18.5		—
	Foreign currency transaction gains		1.8		12.4		6.9		5.4
	Loss on extinguishment of debt		—		(0.5	)	(1.1	)	(32.9	)
	Gains (losses) on derivative instruments		0.8		5.6		(0.7	)	2.1
Loss from continuing operations before income taxes, minority interest and cumulative effect of change in accounting principle			(66.5	)	(96.8	)	(294.3	)	(251.6	)
Income tax (expense) benefit			(0.2	)	1.6		(3.4	)	1.6
Minority interest			—		(0.6	)	—		(0.1	)
Cumulative effect of change in accounting principle			—		—		—		1.2
	Loss from continuing operations		(66.7	)	(95.8	)	(297.7	)	(248.9	)
Discontinued operations
Gain on disposal of assets			—		8.1		—		8.1
	Income from discontinued operations		—		8.1		—		8.1
Net loss			£(66.7	)	£(87.7	)	£(297.7	)	£(240.8	)

See accompanying notes.

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VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited) (in millions)

				Nine months ended September 30,
				2007		2006
Net cash provided by operating activities				£438.5		£568.4
Investing activities
	Purchase of fixed and intangible assets			(418.6	)	(345.1	)
	Purchase of Telewest UK Limited from parent			—		(3,966.7	)
	Purchase of Virgin Mobile			(1.0	)	(423.5	)
	Investments in, and loans to, parent and subsidiary companies			24.5		1,208.9
	Other			5.8		3.1
		Net cash used in investing activities		(389.3	)	(3,523.3	)
Financing activities
	New borrowings, net of financing fees			874.5		3,505.4
	Principal payments on long term debt and capital leases			(966.8	)	(2,996.5	)
	Issuance of shares			—		2,420.6
		Net cash (used in) provided by financing activities		(92.3	)	2,929.5
Decrease in cash and cash equivalents				(43.1	)	(25.4	)
Cash and cash equivalents, beginning of period				384.0		288.1
Cash and cash equivalents, end of period				£340.9		£262.7

See accompanying notes.

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VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1—Basis of Presentation

        Virgin Media Investment Holdings Limited ("VMIH") is an indirect, wholly-owned subsidiary of Virgin Media Inc. ("Virgin Media").

        The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007. For further information, refer to the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for Virgin Media Inc. for the year ended December 31, 2006.

        Certain prior year balances have been reclassified to conform to the current period presentation.

Note 2—Acquisitions

Acquisition of Virgin Mobile

        On July 4, 2006, Virgin Media and VMIH acquired 100% of the outstanding shares and options of Virgin Mobile Holdings (UK) plc, or Virgin Mobile, through a U.K. Scheme of Arrangement. Virgin Mobile is the largest mobile virtual network operator in the U.K., with approximately 4.4 million customers.

        The total purchase price of £953.2 million included cash of £419.2 million, common stock valued at £518.8 million and estimated direct transaction costs of £15.2 million. Virgin Media financed the cash portion of the offer and transactional expenses through £475 million of additional borrowings under its senior credit facility and cash on hand.

Reverse Acquisition of Telewest

        On March 3, 2006, Virgin Media Holdings Inc. (then known as NTL Incorporated) merged with a subsidiary of Virgin Media Inc. (then known as Telewest Global, Inc.) and the merger has been accounted for as a reverse acquisition of Telewest using the purchase method. This merger created the U.K.'s largest provider of residential broadband and the U.K.'s leading provider of "triple-play" services. In connection with this transaction, Telewest changed its name to NTL Incorporated, and has since changed its name to Virgin Media Inc.

        On June 19, 2006, in connection with our integration with Telewest UK Limited, we engaged in a post acquisition restructuring of Telewest UK Limited and its subsidiaries in order to integrate their operations with our existing U.K. operations and to implement permanent financing. This restructuring involved a series of steps that included internal contributions, distributions, mergers and acquisitions as well as borrowings from external sources and contributions of the proceeds of the same to us, to effect our acquisition of the shares of Telewest UK Limited and its subsidiaries. The completion of this restructuring resulted in Telewest UK Limited and its subsidiaries becoming our wholly-owned subsidiary. We have accounted for the acquisition of Telewest UK Limited and its subsidiaries by applying the principles of APB 16, Business Combinations, in respect to transactions between entities

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under common control. As a result, the assets acquired and liabilities assumed have been recognized at their historical cost and the results of operations and cashflows for Telewest UK Limited are included in our consolidated financial statements from June 19, 2006, the date the restructuring was completed. During the nine months ended September 30, 2007, we reduced goodwill by £6.8 million for amendments to deferred tax liabilities that were recognized at the acquisition date and by £1.4 million as a result of the disposal of our international content rights syndication operations.

Disposal of Ireland operations

        On May 9, 2005, we sold our operations in the Republic of Ireland, comprising all of the ordinary shares of ntl Communications (Ireland) Limited and ntl Irish Networks Limited and certain additional assets, to MS Irish Cable Holdings B.V., an affiliate of Morgan Stanley & Co. International Limited, for an aggregate purchase price of €333.4 million, or £225.5 million. During the three months ended September 30, 2006, we were able to release certain contingent tax liabilities of £8.1 million relating to the disposal of our former Ireland operations.

Note 3—Long Term Debt

        Long term debt consists of (in millions):

        The effective interest rate on the senior credit facility was 7.6% and 7.1% as at September 30, 2007 and December 31, 2006, respectively.

        In April 2007, we borrowed £890 million under our senior credit facility which is repayable in 2012, and used £863 million of the net proceeds to repay some of our obligations under our senior credit facility that were originally scheduled to be paid from 2007 to 2011. In April 2007, we also amended our senior credit facility agreement to allow for this £890 million of additional indebtedness,

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the relaxation of certain financial covenants and additional flexibility to pay increased levels of dividends on Virgin Media's common stock.

        In May 2007, we made a mandatory prepayment of £73.6 million on our senior credit facility as a result of cash flow generated in 2006 that was in excess of levels prescribed in the senior credit facility agreement.

Note 4—Employee Benefit Plans

        The components of net periodic pension cost in the three and nine months ended September 30, 2007 and 2006 were as follows (in millions):

Employer Contributions

        In April 2007, we agreed with the trustees of one of our pension plans to a new funding arrangement whereby we will be paying an additional £3.3 million per annum for the next three years. Additionally, in June 2007, Virgin Media effected a merger of three other defined benefit plans including two of our plans. The merger of these plans was subject to the approval of the trustees and, as a condition of trustee approval, Virgin Media agreed to make a specific one-time contribution of £4.5 million. For the three and nine months ended September 30, 2007, Virgin Media contributed £6.0 million and £13.3 million, respectively, to these pension plans. Reflecting the changes referenced above and Virgin Media's current regular contributions, Virgin Media anticipates contributing a total of £17.3 million to fund its pension plans in 2007.

Note 5—Other Income (Charges) Including Restructuring Charges

        Other income for the three months ended September 30, 2007 was £8.0 million relating primarily to a revision in our lease exit costs resulting from new sublease agreements offset by employee termination costs. Other charges for the three months ended September 30, 2006 were £28.2 million relating primarily to lease exit and employee termination costs. Other charges of £5.3 million and £47.7 million for the nine months ended September 30, 2007 and 2006, respectively, relate mainly to lease exit and employee termination costs as a result of our acquisition-related restructuring programs.

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        The following tables summarize our historical restructuring provisions and the restructuring provisions resulting from the acquisitions during 2006 (in millions):

Note 6—Stockholders' Equity

        On June 19, 2006, we issued shares to Virgin Media Finance PLC for cash consideration of £2.42 billion which was utilized to effect our acquisition of Telewest UK Limited and its subsidiaries.

Stock Option Plans

        We are an indirect, wholly-owned subsidiary of Virgin Media. Accordingly, we have no stock-based compensation plans. As at September 30, 2007, certain of our employees participated in the stock-based compensation plans of Virgin Media, as described in Virgin Media's 2006 Annual Report on Form 10-K.

Note 7—Comprehensive Loss

        Comprehensive loss comprises (in millions):

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        The components of accumulated other comprehensive income, net of taxes, were as follows (in millions):

Note 8—Income taxes

        At each period end, it is necessary for us to make certain estimates and assumptions to compute the provision for income taxes including, but not limited to, the expected operating income (or loss) for the year, projections of the proportion of income (or loss) earned and taxed in the United Kingdom and the extent to which this income (or loss) may also be taxed in the United States, permanent and temporary differences, the likelihood of deferred tax assets being recovered and the outcome of contingent tax risks. At each interim period, management uses the best information available to develop these estimates and assumptions, which are used to compute the forecast effective tax rate for the full year which is applied in computing the income tax expense or benefit for the interim period. In accordance with U.S. generally accepted accounting principles, the impact of revisions to these estimates are recorded as income tax expense or benefit in the period in which they become known. Accordingly, the accounting estimates used to compute the provision for income taxes have changed and will change as new events occur, as more experience is acquired, as additional information is obtained and our tax environment changes. To the extent that the estimate changes during a subsequent quarter, the effect of the change on prior quarters as well as on the current quarter is included in income tax expense for the current quarter.

        For the three and nine months ended September 30, 2007, income tax expense was £0.2 million and £3.4 million respectively, as compared with a benefit of £1.6 million for the same periods in 2006. The income tax expense for the three months ended September 30, 2007 was comprised of deferred federal tax expense of £0.3 million, and a U.K. tax benefit of £0.1 million. The income tax expense for the nine months ended September 30, 2007 was comprised of deferred federal tax expense of £6.6 million, and a U.K. tax benefit of £3.2 million. The U.K. tax benefit relates to amounts receivable in respect of the sale of U.K. tax losses to an equity-method investee.

        In June 2006, the FASB issued FASB Interpretation ("FIN") No. 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement 109. FIN 48 prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return, including a decision whether to file or not to file in a particular jurisdiction. We adopted FIN 48 on January 1, 2007 and the adoption did not have a material effect on our consolidated financial statements. Upon the adoption of FIN 48, we had £3.3 million of unrecognized tax benefits. If subsequently recognized, the £3.3 million would reduce goodwill. At September 30, 2007, we had £3.0 million of unrecognized tax benefits and £0.3 million of accrued interest thereon. None of the unrecognized tax benefits or accrued interest, if recognized, would impact the effective tax rate. We recognize interest and penalties related to unrecognized tax benefits in income tax expense on the statement of operations. We do not expect that the amount of unrecognized tax benefits will significantly increase or decrease in the next twelve months.

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        The statute of limitations is open for the years 2004 to 2006 in the U.S. and 2003 to 2006 in the U.K., our principal tax jurisdictions.

        The U.K. enacted changes in tax legislation in July 2007 that will impact our future U.K. tax position. These changes include a reduction in the rate of taxation from 30% to 28%, and a reduction in the rate at which capital allowances can be claimed in a year from 25% to 20%, with both changes coming into effect on April 1, 2008. Under FAS 109 the effect of such changes on deferred tax balances are required to be recognized in the period in which the new legislation is enacted. Our deferred tax assets are fully covered by a valuation allowance, such that there is no impact to be recorded in the three and nine months ended September 30, 2007. There may be an effect in a future period, to the extent a deferred tax benefit is recognized.

Note 9—Transactions with Virgin Media Companies

        We are a wholly-owned subsidiary of Virgin Media. We charge Virgin Media and our other affiliates for operating costs and selling, general and administrative expenses incurred by us on their behalf. The following information summarizes our significant related party transactions with Virgin Media and its affiliates (in millions):

        The above recharges are recorded in operating costs and selling, general and administrative expenses and offset the respective costs incurred.

        Intercompany interest is charged by and to us by affiliates based on intercompany debt balances with Virgin Media. Intercompany interest income and expense is calculated using a weighted average interest rate of external borrowings by Virgin Media and its affiliates. The following information summarizes the amounts of intercompany interest charged by and to us, which is included within interest income and expense in our statements of operations (in millions):

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        The amounts due from and to Virgin Media and its affiliates included in our consolidated balance sheets as of September 30, 2007 and December 31, 2006 were as follows (in millions):

Note 10—Recent Accounting Pronouncements

        In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS 157 provides guidance for using fair value to measure assets and liabilities. It also responds to investors' requests for expanded information about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. SFAS 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value, and does not expand the use of fair value in any new circumstances. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and is required to be adopted by us in the first quarter of 2008. We are currently evaluating the effect that the adoption of SFAS 157 will have on our consolidated results of operations and financial condition and are not yet in a position to determine such effects.

Note 11—Industry Segments

        Our reportable segments Cable, Content and Mobile are based on our method of internal reporting. Our primary segment is our Cable segment, which consists of the distribution of our television programming to consumers, broadband and fixed line telephone services to consumers, businesses and public sector organizations sold on our cable network and, to a lesser extent, off our cable network. We operate our Content segment through our wholly-owned subsidiaries Virgin Media Television Limited ("Virgin Media TV", formerly known as Flextech Limited) and sit-up Limited ("sit-up"), which supply television programming to the U.K. pay-television broadcasting market including our televised shopping unit sit-up tv, which markets and retails a wide variety of consumer products using an auction-based format. We operate our Mobile segment through our wholly-owned subsidiary Virgin Mobile Holdings (UK) Ltd., which consists of our mobile telephony business. Our segments operate entirely in the U.K. and no one customer represents more than 5% of our overall revenue.

        Segment operating income before depreciation, amortization and other charges, which we refer to as Segment OCF, is management's measure of segment profit as permitted under SFAS 131, Disclosures about Segments of an Enterprise and Related Information.Our management, including our chief executive officer who is our chief operating decision maker, considers Segment OCF as an important indicator of the operational strength and performance of our segments. Segment OCF excludes the impact of costs and expenses that do not directly affect our cash flows. Other charges, including restructuring charges, are also excluded from Segment OCF as management believes they are not characteristic of our underlying business operations. The business segments disclosed in the condensed consolidated financial statements are based on this organizational structure and information reviewed by our management to evaluate the business segment results.

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        Segment information for the three and nine month periods ended September 30, 2007 and 2006 is as follows (in millions):

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        As at June 30, 2007, we performed our annual impairment review of the goodwill recognized in the Virgin Media TV and sit-up reporting units included in our Content segment and the Virgin Mobile reporting unit and concluded that no impairment charges were necessary.

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ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The following discussion should be read in conjunction with the Condensed Consolidated Financial Statements and related notes that appear elsewhere in this document.

OVERVIEW

        We are a leading U.K. entertainment and communications business providing the first "quad-play" offering of television, broadband, fixed line telephone and mobile telephone services in the United Kingdom. By number of customers, we are the U.K.'s largest residential broadband and pay-as-you-go mobile provider and the second largest provider in the U.K. of pay television and fixed line telephone services.

        Virgin Media Television, or Virgin Media TV, and ntl:Telewest Business also operate under the Virgin Media umbrella. Virgin Media TV provides a broad range of programming through its twelve wholly-owned channels; through UKTV, its joint ventures with BBC Worldwide; and through the portfolio of retail television channels operated by sit-up tv. ntl:Telewest Business provides a complete portfolio of voice, data and internet solutions to leading businesses, public sector organizations and service providers in the U.K.

        We presently manage our business through three reportable segments:

•

Cable: our cable segment includes the distribution of television programming over our cable network and the provision of broadband and fixed line telephone services to consumers, businesses and public sector organizations, both on our cable network and, to a lesser extent, off our network;



•

Mobile: our mobile segment includes the provision of mobile telephone services under the brand name Virgin Mobile to consumers over cellular networks owned by T-Mobile; and



•

Content: our content segment includes the operations of our U.K. television channels, such as Virgin 1, which was launched on October 1, 2007, as well as LivingTV and Bravo and sit-up's portfolio of retail television channels. Although not included in our content segment revenue, our content team also oversees our interest in the UKTV television channels, through our joint ventures with BBC Worldwide.

        Our revenue by segment for the nine months ended September 30, 2007 and 2006 was as follows (in millions):

        For further discussion of our business, please refer to our Annual Report on Form 10-K for the year ended December 31, 2006 as filed with the SEC on March 1, 2007.

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Acquisitions

Acquisition of Virgin Mobile

        On July 4, 2006, we acquired 100% of the outstanding shares and options of Virgin Mobile Holdings (UK) plc, or Virgin Mobile, through a U.K. Scheme of Arrangement. Virgin Mobile is the largest mobile virtual network operator in the U.K., with approximately 4.4 million customers.

        The total purchase price of £953.2 million included cash of £419.2 million, common stock valued at £518.8 million and estimated direct transaction costs of £15.2 million. We financed the cash portion of the offer and transactional expenses through £475 million of additional borrowings under our senior credit facility and cash on hand.

Reverse Acquisition of Telewest

        On March 3, 2006, NTL merged with a subsidiary of Telewest and the merger has been accounted for as a reverse acquisition of Telewest using the purchase method. This merger created the U.K.'s largest provider of residential broadband and the U.K.'s leading provider of "triple-play" services. In connection with this transaction, Telewest changed its name to NTL Incorporated, and has since changed its name to Virgin Media Inc.

        The total purchase price of £3.5 billion included cash of £2.3 billion, common stock valued at £1.1 billion, stock options with a fair value of £29.8 million and estimated direct transaction costs of £25.1 million.

Factors Affecting Our Business

Cable Segment

        Our Cable segment residential customers account for the majority of our total revenue. The number of residential customers, the number and types of services that each customer uses and the prices we charge for these services drive our revenue. Our profit is driven by the relative margins on the types of services we provide to these customers and by the number of services that we provide to them. For example, broadband internet is more profitable than our television services and, on average, our "quad-play" and "triple-play" customers are more profitable than "double-play" or "single-play" customers. Our packaging of services and our pricing are designed to encourage our customers to use multiple services such as television, telephone and broadband at a lower price than each stand-alone product on a combined basis. Factors particularly affecting our profitability include customer churn, average revenue per user (ARPU), competition, the success of our integration efforts, capital expenditures, currency movements and seasonality.

        Customer Churn.    Customer churn is a measure of the number of customers who stop subscribing to our services. An increase in our customer churn can lead to increased costs and reduced revenue. We continue to focus on improving our customer service and enhancing and expanding our service offerings to existing customers in an effort to manage our customer churn rate. Our ability to reduce our customer churn rate beyond a base level is limited by factors like customers moving outside our network service area, in particular during the summer season. Managing our customer churn rate is a significant component of our business plan. Our customer churn rate may increase if our customer service is seen as unsatisfactory, if we are unable to deliver our services over our network without interruption, or if we fail to match offerings by our competitors.

        Cable ARPU.    Average Revenue Per User, or ARPU, is a measure we use to evaluate how effectively we are realizing potential revenue from our residential on-net cable customers. We believe that our "triple-play" cable offering of television, broadband and fixed line telephone services is attractive to our existing customer base and enhances our Cable ARPU by facilitating the sale of

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multiple services to each customer. Cable ARPU excludes any recognition of revenue from our Mobile segment. With the acquisition of Virgin Mobile, we are now able to offer "quad-play" of television, broadband, mobile and fixed line telephone services, which we believe will enhance our competitiveness and growth opportunities.

        Competition.    Our ability to acquire and retain customers and increase revenue depends on our competitive strength. There is significant and increasing competition in the market for our consumer services, including broadband and telephone services offered by British Telecom ("BT") and resellers or local loop unbundlers such as British Sky Broadcasting Group plc ("BSkyB") and Carphone Warehouse (Talk Talk), alternative internet access services like DSL, satellite television services offered by BSkyB, digital terrestrial television offered through Freeview, internet protocol television offered by Tiscali S.p.A. ("Tiscali") and BT, and mobile telephone services offered by other mobile telephone operators. Our business services also face a range of competitors, including BT and Cable & Wireless. Certain competitors, such as BT and BSkyB, are dominant in markets in which we compete and may use their dominance in those markets to offer bundled services that include two or more of our product offerings. If competitive forces prevent us from charging the prices for these services that we plan to charge, or if our competition is able to attract our customers or potential customers we are targeting, our results of operations will be adversely affected.

        Capital Expenditures.    Our business requires substantial capital expenditures on a continuing basis for various purposes, including expanding, maintaining and upgrading our network, investing in new customer acquisitions, and offering new services. If we do not continue to invest in our network and in new technologies, our ability to retain and acquire customers may be hindered. Therefore, our liquidity and the availability of cash to fund capital projects are important drivers of our revenue. When our liquidity is restricted, so is our ability to meet our capital expenditure requirements.

        Seasonality.    Some revenue streams are subject to seasonal factors. For example, telephone usage revenue by customers and businesses tends to be slightly lower during summer holiday months. Our customer churn rates include persons who disconnect their service because of moves, resulting in a seasonal increase in our churn rates during the summer months when higher levels of U.K. house moves occur and students leave their accommodation between academic years.

Mobile Segment

        Competition.    Our ability to acquire and retain customers and increase revenue depends on our competitive strength. There is significant competition in our markets from mobile operators, including O2, Vodafone, Orange, T-Mobile and 3, and from other mobile virtual network operators, including Tesco Mobile, BT Mobile and Carphone Warehouse. Many of our competitors are part of large multinational groups, have substantial advertising and marketing budgets, and have a significant retail presence. If competitive forces prevent us from charging the prices for these services that we plan to charge, or if our competition is able to attract our customers or potential customers we are targeting, our results of operations will be adversely affected.

        Seasonality.    Some revenue streams and cost drivers are subject to seasonal factors. For example, in the fourth quarter of each year our customer acquisition and retention costs typically increase due to the Christmas period. Our ARPU generally decreases in the first quarter of each year due to the fewer number of days in February and lower usage after the Christmas period.

        Distribution.    We rely upon third parties to distribute our mobile products and services. If any of these distribution partners were to cease to act as distributors for our products and services, or the commissions or other costs charged by the third parties were to increase, our ability to gain new customers or retain existing customers may be adversely affected.

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Content Segment

        Competition.    Our television programming competes with other broadcasters for advertising revenues, subscription revenues, and programming rights. sit-up competes with a large variety of retailers in the U.K. market and with other television channels for audiences.

        Access to Content.    Most of the television content on the Virgin Media TV channels is purchased from the U.S. and because there is a limited supply of content available and an increasing number of digital channels in the U.K., Virgin Media TV may experience an increase in the cost of programming.

        Seasonality.    Our Content segment incurs increased costs in the fourth quarter of each year due to the need to provide enhanced programming over the important Christmas holiday period. Also, sit-up generally records increased revenues and costs in the fourth quarter due to generally higher retail sales in the lead up to the Christmas holiday.

        Limited Number of Buyers.    The principal third party buyer of our television channels is BSkyB. Other than BSkyB, there are no significant buyers of our television channels. We are currently litigating with BSkyB concerning the terms of carriage of our channels.

        Advertising Revenue.    The majority of revenue for Virgin Media TV is from advertisers. Consequently, Virgin Media TV's revenue is directly affected by changes in the total spend on television advertising in the U.K. and the viewing levels for its channels.

General

        Currency Movements.    We encounter currency exchange rate risks because substantially all of our revenue and operating costs are earned and paid primarily in U.K. pounds sterling, but we pay interest and principal obligations with respect to a portion of our existing indebtedness in U.S. dollars and euros. We have implemented a hedging program to seek to mitigate the risk from these exposures. The objective of this program is to reduce the volatility of our cash flows and earnings caused by changes in underlying rates.

        Integration.    We are presently integrating our legacy NTL business with Telewest and Virgin Mobile. This involves the incurrence of substantial operating and capital expenditures and, in some cases, involves the outsourcing of key functions in an effort to achieve synergies through the integration of the businesses. For example, we will be completing the final stages of the integration of our cable billing platforms over the next nine months. Any issues that may arise in connection with our integration could have a material negative effect on our financial performance.

Critical Accounting Policies

        The preparation of our consolidated financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and contingent liabilities. We base our judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making estimates about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

        For a discussion of the accounting judgments and estimates that we have identified as critical in the preparation of our consolidated financial statements, please refer to our Annual Report on Form 10-K for the year ended December 31, 2006 as filed with the SEC on March 1, 2007.

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CONSOLIDATED RESULTS OF OPERATIONS

Revenue

        For the three months ended September 30, 2007, revenue decreased by 1.8% to £1,006.2 million from £1,024.9 million for the three months ended September 30, 2006. This decrease is due to a decline in revenue in our Cable segment partially offset by an increase in revenue in our Mobile segment. See further discussion of our Cable and Mobile segments below.

        For the nine months ended September 30, 2007, revenue increased by 19.9% to £3,023.1 million from £2,520.6 million for the nine months ended September 30, 2006. This increase is primarily due to the reverse acquisition of Telewest and the inclusion of its revenues from March 3, 2006 and to the acquisition of Virgin Mobile and the inclusion of its revenues from July 4, 2006.

Operating costs

        For the three months ended September 30, 2007, operating costs increased by 3.2% to £454.0 million from £440.0 million during the same period in 2006. This increase is primarily attributable to increases in the operating costs in our Content segment along with the inclusion of a full quarter of Virgin Mobile's operating costs for the three months ended September 30, 2007 compared with the inclusion of its operating costs from July 4, 2006 in the corresponding period in the prior year. Operating costs as a percentage of revenue increased to 45.1% for the three months ended September 30, 2007, from 42.9% for the same period in 2006, due to lower gross margins in our Cable segment due primarily to lower consumer revenues and lower gross margin in our Content segment due to lower subscription revenues partially offset by an increased gross margin in our Mobile segment.

        For the nine months ended September 30, 2007, operating costs increased by 26.0% to £1,338.4 million from £1,062.4 million during the same period in 2006. This increase is primarily attributable to the reverse acquisition of Telewest and to the acquisition of Virgin Mobile. Operating costs as a percentage of revenue increased to 44.3% for the nine months ended September 30, 2007, from 42.1% for the same period in 2006, due to lower gross margins in our Cable segment together with the full impact in 2007 of the inclusion of the Telewest Content segment subsequent to the reverse acquisition of Telewest and the new Mobile segment subsequent to the acquisition of Virgin Mobile, since these segments have lower gross margins than our Cable segment.

Selling, general and administrative expenses

        For the three months ended September 30, 2007, selling, general and administrative expenses decreased by 21.1% to £210.7 million from £267.1 million for the three months ended September 30, 2006. This decrease is primarily attributable to a reduction in our employee expenses as a result of our integration activities together with a reduction of £10.4 million resulting from a review of our expected company bonus scheme payments during the quarter; a reduction of £7.5 million in our share-based compensation expense resulting primarily from stock and option forfeitures; and a reduction of £12.3 million in our bad debt expense due to operational improvements in our billing and collections resulting from the integration of our systems and processes.

        For the nine months ended September 30, 2007, selling, general and administrative expenses increased by 11.3% to £722.2 million from £648.7 million for the nine months ended September 30, 2006. This increase is primarily attributable to the reverse acquisition of Telewest and to the acquisition of Virgin Mobile partially offset by the reductions in costs recognized in the three months ended September 30, 2007 discussed above.

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Other income (charges)

        Other income for the three months ended September 30, 2007 was £8.9 million and other charges for the nine months ended September 30, 2007 were £5.8 million. Other income (charges) relate primarily to lease exit costs and employee termination costs in connection with our restructuring programs initiated in respect of the reverse acquisition of Telewest. Other income (charges) for the three and nine months ended September 30, 2007 included a reduction in the lease exit provisions totaling £17.1 million, primarily due to the successful sublease of one of our larger vacant properties.

Depreciation expense

        For the three months ended September 30, 2007, depreciation expense increased to £225.7 million from £222.6 million for the three months ended September 30, 2006. This increase is attributable to the additional purchases of fixed assets.

        For the nine months ended September 30, 2007, depreciation expense increased to £689.4 million from £591.2 million for the nine months ended September 30, 2006. This increase is primarily attributable to the reverse acquisition of Telewest and additional purchases of fixed assets.

Amortization expense

        For the three months ended September 30, 2007, amortization expense increased to £78.0 million from £73.9 million for the three months ended September 30, 2006. The increase in amortization expense relates to additional intangible assets arising from the acquisition of Virgin Mobile.

        For the nine months ended September 30, 2007, amortization expense increased to £232.9 million from £166.3 million for the nine months ended September 30, 2006. The increase in amortization expense relates to additional intangible assets arising from the reverse acquisition of Telewest and from the acquisition of Virgin Mobile.

Interest income and other

        For the three months ended September 30, 2007, interest income and other increased to £10.8 million from £7.1 million for the three months ended September 30, 2006 primarily as a result of a gain from the sale of our international content rights syndication operations. For the nine months ended September 30, 2007, interest income and other increased to £25.6 million from £24.3 million for the nine months ended September 30, 2006.

Interest expense

        For the three months ended September 30, 2007, interest expense increased to £127.9 million from £113.2 million for the three months ended September 30, 2006. This increase is primarily the result of increases in interest rates on the variable portion of our debt.

        We paid cash interest of £85.8 million for the three months ended September 30, 2007, and £48.3 million for the three months ended September 30, 2006. The increase in cash interest payments is due to changes in the timing of interest payments under our current debt arrangements as compared with our debt arrangements in 2006.

        For the nine months ended September 30, 2007, interest expense increased to £374.5 million from £332.6 million for the nine months ended September 30, 2006, primarily as a result of the additional borrowing as a result of the reverse acquisition of Telewest and the acquisition of Virgin Mobile.

        We paid cash interest of £380.8 million for the nine months ended September 30, 2007, and £267.8 million for the nine months ended September 30, 2006. The increase in cash interest payments

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resulted from the additional borrowings as a result of the reverse acquisition of Telewest and the acquisition of Virgin Mobile, and changes in timing of interest payments.

Foreign currency gains (losses)

        The foreign currency gains of £2.2 million in the three months ended September 30, 2007 were largely comprised of gains resulting from favorable exchange rate movements, principally on U.S. dollar settlements. The foreign currency gain of £6.3 million in the three months ended September 30, 2006 was largely comprised of foreign exchange gains of £8.5 million on U.S. dollar forward purchase contracts that were entered into to hedge the repayment amount of the U.S. dollar denominated bridge facility offset by losses of £5.8 million relating to the repayment of the alternative bridge facility.

        The foreign currency gains of £7.8 million in the nine months ended September 30, 2007 were largely comprised of gains resulting from favorable exchange rate movements, principally on U.S. dollar settlements. The foreign currency losses of £97.8 million in the nine months ended September 30, 2006 were largely comprised of foreign exchange losses of £70.8 million on U.S. dollar forward purchase contracts that were entered into to hedge the repayment amount of the U.S. dollar denominated bridge facility. The repayment of approximately $3.1 billion of this facility on June 19, 2006 resulted in an offsetting gain of £120.7 million that was recorded as a component of equity during the nine months ended September 30, 2006.

Income tax expense

        For the three and nine months ended September 30, 2007, there was an income tax benefit of £0.4 million and an income tax expense of £10.3 million, respectively, as compared with income tax benefits of £0.9 million and £10.8 million, respectively, for the same periods in 2006. The income tax benefit for the three months ended September 30, 2007 was comprised of current federal taxes of £nil, a U.S. state and local tax benefit of £nil, a deferred federal tax benefit of £0.3 million and a U.K. tax benefit of £0.1 million. The income tax expense for the nine months ended September 30, 2007 was comprised of current federal taxes of £0.7 million, a U.S. state and local tax benefit of £0.6 million, deferred federal tax expense of £13.4 million and a U.K. tax benefit of £3.2 million. In the three and nine months ended September 30, 2007, we recognized an income tax expense of £0.6 million and an income tax benefit of £6.8 million, respectively, that resulted in deferred tax expense with an offsetting reduction in our reorganization value. The U.K. tax benefit relates to amounts receivable in respect of the sale of U.K. tax losses to an equity-method investee.

Net loss

        For the three months ended September 30, 2007, net loss from continuing operations decreased to £61.0 million compared with a loss from continuing operations of £104.2 million for the same period in 2006 due to the factors discussed above. Net loss after discontinued operations for the three months ended September 30, 2007 was £61.0 million compared with £96.1 million for the three months ended September 30, 2006.

        For the nine months ended September 30, 2007, net loss from continuing operations decreased to £300.3 million compared with a loss from continuing operations of £419.9 million for the same period in 2006 due to the factors discussed above. Net loss after discontinued operations for the nine months ended September 30, 2007 was £300.3 million compared with £411.8 million for the three months ended September 30, 2006.

Net loss per share

        Basic and diluted net loss per common share from continuing operations for the three months ended September 30, 2007 was £0.19 compared to £0.32 for the three months ended September 30,

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2006. Basic and diluted net loss per share is computed using a weighted average of 326.4 million shares issued in the three months ended September 30, 2007 and a weighted average of 322.0 million shares issued for the same period in 2006. Options and warrants to purchase shares along with shares of restricted stock held in escrow outstanding at September 30, 2007 are excluded from the calculation of diluted net loss per share, since the inclusion of such options, warrants and restricted stock are anti-dilutive. Basic and diluted income per share from discontinued operations was £0.02 for the three months ended September 30, 2006.

        Basic and diluted net loss per common share from continuing operations for the nine months ended September 30, 2007 was £0.92 compared to £1.49 for the nine months ended September 30, 2006. Basic and diluted net loss per share is computed using a weighted average of 325.4 million shares issued in the nine months ended September 30, 2007 and a weighted average of 282.5 million shares issued for the same period in 2006. Options and warrants to purchase shares along with shares of restricted stock held in escrow outstanding at September 30, 2007 are excluded from the calculation of diluted net loss per share, since the inclusion of such options, warrants and restricted stock are anti-dilutive. Basic and diluted income per share from discontinued operations was £0.03 for the nine months ended September 30, 2006.

Segment Information

        A description of the products and services, as well as year-to-date financial data, for each segment can be found in note 10 to Virgin Media's condensed consolidated financial statements. The segment results for the three and nine months ended September 30, 2007 included in our condensed consolidated financial statements are reported on an actual basis and include the results of Telewest and Virgin Mobile. The segment results for the three and nine months ended September 30, 2006 included in our condensed consolidated financial statements are also reported on an actual basis and include the results of Telewest from March 3, 2006 and the results of Virgin Mobile from July 4, 2006.

        The results of operations of each of our Cable and Content segments for the nine months ended September 30, 2006 are reported in this section on a pro forma combined basis as if the reverse acquisition of Telewest had occurred at January 1, 2006 and combine Telewest's historical Content and sit-up segments into the combined company's Content segment. The pro forma data has been calculated on a basis consistent with the pro forma financial information filed with the Securities and Exchange Commission under our Form 8-K/A on May 10, 2006. We believe that a pro forma comparison of these segments is more relevant than a historic comparison as: (a) in respect of our Cable segment, the size of the acquired legacy Telewest cable business would obscure any meaningful discussion of changes in our Cable segment if viewed on a historical basis; and (b) we did not have a Content segment prior to March 3, 2006. Comparative pro forma results of our Mobile segment have not been presented.

        The reportable segments disclosed in this Form 10-Q are based on our management organizational structure as of September 30, 2007. Future changes to this organizational structure may result in changes to the reportable segments disclosed.

        Segment operating income before depreciation, amortization and other charges, which we refer to as Segment OCF, is management's measure of segment profit as permitted under SFAS 131, Disclosures about Segments of an Enterprise and Related Information. Our management, including our chief executive officer who is our chief operating decision maker, considers Segment OCF as an important indicator of the operational strength and performance of our segments. Segment OCF excludes the impact of costs and expenses that do not directly affect our cash flows. Other charges, including restructuring charges, are also excluded from Segment OCF as management believes they are not characteristic of our underlying business operations.

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Cable Segment

        The summary combined results of operations of our Cable segment for the three and nine months ended September 30, 2007 and 2006 were as follows (in millions):

Revenue

        Our Cable segment revenue by customer type for the three and nine months ended September 30, 2007 and 2006 was as follows (in millions):

        Consumer:    For the three months ended September 30, 2007, revenue from residential customers decreased by 5.5% to £607.7 million from revenue of £642.8 million for the three months ended September 30, 2006. For the nine months ended September 30, 2007, revenue from residential customers decreased by 3.1% to £1,864.3 million from pro forma revenue of £1,924.2 million for the nine months ended September 30, 2006. These decreases are primarily due to declines in fixed line telephone customers, reductions in telephony prices and usage along with higher price discounting to stimulate customer activity and retention in light of competitive factors in the marketplace. Partially offsetting these decreases have been increases in revenues from additional customers subscribing to our broadband services and selective television price increases.

        Cable ARPU has decreased from £42.48 for the three months ended September 30, 2006 to £41.55 for the three months ended September 30, 2007. The decrease in Cable ARPU is due to the fall in revenue as described above. The decline has been mitigated by our focus on acquiring new bundled customers and on cross-selling to existing customers which is shown by Revenue Generating Units (RGUs) per customer increasing from 2.14 at September 30, 2006 to 2.26 at September 30, 2007 and by the percentage of our customers with "triple-play" services growing from 38.7% at September 30, 2006 to 47.0% at September 30, 2007.

        Business:    For the three months ended September 30, 2007, revenue from business customers decreased by 1.4% to £160.0 million from £162.3 million for the three months ended September 30, 2006. For the nine months ended September 30, 2007, revenue from business customers decreased by 1.9% to £478.8 million from pro forma revenue of £488.0 million for the nine months ended September 30, 2006. These decreases are attributable to declines in voice and wholesale revenues, partially offset by greater data revenues. Across both our retail and wholesale sales channels, total data

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revenues represented 61.2% of total business revenue for the nine months ended September 30, 2007 compared with 59.6% for the same period in 2006.

Cable segment OCF

        For the three months ended September 30, 2007, Cable segment OCF increased to £303.5 million from £296.3 million for the three months ended September 30, 2006. Lower consumer and business revenues have been more than offset by lower selling, general and administrative costs as described above.

        For the nine months ended September 30, 2007, Cable segment OCF increased to £852.8 million from pro forma Cable segment OCF of £848.4 million for the nine months ended September 30, 2006. Lower consumer and business revenues have been more than offset by savings in operating costs and selling, general and administrative costs. Cost savings resulting from the integration activities since the reverse acquisition of Telewest have in turn been offset by higher marketing and advertising costs incurred in connection with the rebrand to Virgin Media in the first quarter of 2007.

Summary Cable Statistics

        Selected statistics for our residential cable customers, excluding customers off our cable network and Virgin Mobile customers, for the three months ended September 30, 2007 as well as the four prior quarters, are set forth in the table below.

		For the three months ended
		September 30, 2007			June 30, 2007			March 31, 2007			December 31, 2006			September 30, 2006
Opening customers			4,737,300			4,807,600			4,854,500			4,891,500			4,928,700
Customer additions			256,500			191,900			184,300			213,500			229,200
Customer disconnects			(243,500	)		(262,200	)		(231,200	)		(250,500	)		(266,500	)
Net customer movement			13,000			(70,300	)		(46,900	)		(37,000	)		(37,300	)
Closing customers			4,750,300			4,737,300			4,807,600			4,854,500			4,891,500
Churn(2)			1.7	%		1.8	%		1.6	%		1.7	%		1.8	%
Revenue generating units(1)(3):
Television			3,417,000			3,396,600			3,390,000			3,353,900			3,315,400
DTV (included in Television)			3,167,000			3,125,300			3,081,100			3,005,900			2,922,000
Telephone			3,992,500			3,993,800			4,050,600			4,114,000			4,178,300
Broadband			3,307,700			3,191,900			3,146,400			3,058,500			2,980,400
Total Revenue Generating Units			10,717,200			10,582,300			10,587,000			10,526,400			10,474,100
RGU/Customers			2.26x			2.23x			2.20x			2.17x			2.14x
Triple-play penetration			47.0	%		45.2	%		42.9	%		40.6	%		38.7	%
Cable average revenue per user(4)		£	41.55		£	42.16		£	42.75		£	42.82		£	42.48
ARPU calculation:
On-net revenues (millions)		£	590.5		£	603.1		£	620.0		£	626.7		£	625.4
Average customers			4,737,100			4,768,000			4,834,900			4,878,800			4,907,400

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        Selected statistics for our residential customers that are not connected directly through our cable network are set forth in the table below.

		For the three months ended
		September 30, 2007		June 30, 2007		March 31, 2007		December 31, 2006		September 30, 2006
Broadband RGUs		282,300		275,200		270,500		260,800		242,800
Telephone RGUs		90,500		75,500		65,100		44,500		43,400

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(1)

Data cleanse activity in Q2-07 did not result in a change in customer numbers but did result in an increase of 4,200 RGUs comprised of an increase of approximately 4,400 Television and 100 Telephone RGUs and a decrease of approximately 300 Broadband RGUs.

(2)

Customer churn is calculated by taking the total disconnects during the month and dividing them by the average number of customers during the month. Average monthly churn during a quarter is the average of the three monthly churn calculations within the quarter.

(3)

Each telephone, television and broadband internet subscriber directly connected to our network counts as one RGU. Accordingly, a subscriber who receives both telephone and television service counts as two RGUs. RGUs may include subscribers receiving some services for free or at a reduced rate in connection with promotional offers.

(4)

The monthly cable average revenue per user, or cable ARPU, is calculated on a quarterly basis by dividing total revenue generated from the provision of telephone, television and internet services to customers who are directly connected to our network in that period, exclusive of VAT, by the average number of customers directly connected to our network in that period divided by three.

Mobile Segment

Revenue

        Virgin Mobile was acquired on July 4, 2006, and its results of operations have been consolidated from that date. Total Mobile segment revenue for the three and nine months ended September 30, 2007 was £158.7 million and £446.0 million, respectively, of which £147.3 million and £425.6 million was service revenue and £11.4 million and £20.4 million was equipment revenue, respectively.

        Total Mobile segment revenue for the period from acquisition to September 30, 2006 was £140.4 million, of which service revenue was £132.5 million and equipment revenue was £7.9 million. The increase in the revenue for the three months ended September 30, 2007 compared with the period from acquisition to September 30, 2006 was primarily due to growth in Mobile ARPU, partially offset by the decline in customers between the respective period ends, together with the impact of four more days revenue in 2007 compared with the period from acquisition in 2006.

        In the three months ended September 30, 2007, the number of mobile customers increased by a net 15,900 compared to an increase of 122,700 for the period from acquisition to September 30, 2006. Contract customer gains of 29,700 were partially offset by net losses of 13,800 prepay customers in the three months ended September 30, 2007, compared with 24,600 contract customer gains and 98,100 prepay customer gains in the period from acquisition in 2006. The growth in contract customers reflects the drive for "quad-play" packages through cross-selling with our Cable segment products. The decline in prepay customers reflects increased competition in the prepay market, although the decline in the three months ended September 30, 2007 was significantly lower than in the three previous quarters following our decision to re-engage in a more favorable prepay market.

        Mobile ARPU increased to £11.11 for the three months ended September 30, 2007 from £10.28 for the period from acquisition to September 30, 2006. The increase is primarily due to the increased

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proportion of contract customers, from 2.7% of total number of mobile customers at September 30, 2006 to 7.4% at September 30, 2007 resulting in an increase in our overall Mobile ARPU.

Mobile segment OCF

        For the three months ended September 30, 2007, Mobile segment OCF increased to £31.5 million from £16.0 million for the period from acquisition to September 30, 2006. This increase was primarily due to the additional four days of operating activity in the period along with our shift towards more efficient sales channels such as cross-selling with our Cable segment products and other direct channels with lower subscriber acquisition costs together with lower employee expense resulting from a review of our expected company bonus scheme payments during the quarter. Mobile segment OCF for the nine months ended September 30, 2007 was £90.9 million.

Summary Mobile Statistics

        Selected statistics for Virgin Mobile since its acquisition are set forth in the table below:

			For the three months ended
			September 30, 2007			June 30, 2007			March 31, 2007			December 31, 2006			September 30, 2006
Opening customers(1):
	Prepay			4,115,900			4,215,200			4,330,700			4,390,900			—
	Contract			299,100			246,300			192,100			120,800			—
				4,415,000			4,461,500			4,522,800			4,511,700			—
Increase in customers on acquisition of Virgin Mobile:
	Prepay															4,292,800
	Contract															96,200
																4,389,000
Net customer additions:
	Prepay			(13,800	)		(99,300	)		(115,500	)		(60,200	)		98,100
	Contract			29,700			52,800			54,200			71,300			24,600
				15,900			(46,500	)		(61,300	)		11,100			122,700
Closing customers:
	Prepay			4,102,100			4,115,900			4,215,200			4,330,700			4,390,900
	Contract			328,800			299,100			246,300			192,100			120,800
				4,430,900			4,415,000			4,461,500			4,522,800			4,511,700
Mobile average revenue per user(2):			£	11.11		£	10.70		£	10.07		£	10.59		£	10.28
ARPU calculation:
Mobile service revenue (millions):			£	147.3		£	142.3		£	136.0		£	141.8		£	132.5
Average customers:				4,417,900			4,434,700			4,499,300			4,465,400			4,294,800

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(1)

Mobile customer information is for active customers. Prepay customers are defined as active customers if they have made an outbound event in the preceding 90 days. Contract customers are defined as active customers if they have been provisioned and have not been disconnected.

(2)

Mobile monthly average revenue per user, or Mobile ARPU, is calculated on service revenue for the period, divided by the average number of active customers for the period, divided by three.

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Content Segment

        The summary combined results of operations of our Content segment for the three and nine months ended September 30, 2007 and 2006 were as follows (in millions):

		Three months ended September 30,						Nine months ended September 30,
		2007 (Actual)			2006 (Actual)			2007 (Actual)			2006 (Pro forma)
Revenue		£	79.8		£	79.4		£	234.0		£	245.4
Inter segment revenue			6.2			5.9			18.2			16.9
Segment OCF			6.5			5.5			18.8			23.7
Depreciation, amortization and other charges			(4.1	)		(0.2	)		(12.5	)		(13.7	)
Operating income		£	2.4		£	5.3		£	6.3		£	10.0

Revenue

        For the three months ended September 30, 2007, revenue in the Content segment increased by 0.5% to £79.8 million from £79.4 million for the three months ended September 30, 2006. For the nine months ended September 30, 2007, revenue decreased by 4.6% to £234.0 million from pro forma revenue of £245.4 million for the nine months ended September 30, 2006. These decreases are driven by reduced subscription revenue in Virgin Media TV mainly as a result of a new satellite television carriage contract entered into at the end of 2006 which has lower pricing, partially offset by increased advertising revenues and increased revenue from our sit-up channels.

Content segment OCF

        For the three months ended September 30, 2007, Content segment OCF increased to £6.5 million from £5.5 million for the three months ended September 30, 2006. This increase is mainly due to the reduction in subscription revenue referred to above and increased programming costs offset by gains totaling £4.7 million from settlement of long standing contractual issues together with lower employee expense resulting from a review of our expected company bonus scheme payments during the quarter.

        For the nine months ended September 30, 2007, Content segment OCF decreased by 20.7% to £18.8 million from pro forma Content segment OCF of £23.7 million for the nine months ended September 30, 2006. This decrease is mainly due to the reduction in subscription revenue referred to above and increased programming costs, partially offset by the settlement of certain long standing contractual issues totaling £12.6 million.

UKTV Joint Venture

        We own 50% of the companies that comprise UKTV, a group of joint ventures formed with BBC Worldwide. UKTV produces a portfolio of multi-channel television channels based on the BBC's program library and other acquired programming and which are carried on Virgin Media's cable platform and also satellite. Some channels are also available on Freeview.

        We account for our interest in UKTV under the equity method and recognized a share of net income of £5.9 million and £18.4 million for the three and nine months ended September 30, 2007, respectively.

        UKTV is funded by a loan from Virgin Media, which was £148.3 million at September 30, 2007. This loan effectively acts as a revolving facility for UKTV. We received cash payments from UKTV in the form of loan capital repayments of £14.5 million for the nine months ended September 30, 2007. We also receive dividends, interest payments and payments for consortium tax relief from UKTV.

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        At September 30, 2007 our investment in UKTV is carried on the balance sheet at £371.2 million, which includes the outstanding £148.3 million loan.

LIQUIDITY AND CAPITAL RESOURCES

        As of September 30, 2007, we had £6,099.8 million of debt outstanding, compared to £6,159.1 million as of December 31, 2006, and £6,207.0 million as of September 30, 2006, and £364.0 million of cash and cash equivalents, compared to £418.5 million as of December 31, 2006 and £302.2 million as of September 30, 2006. The decrease in debt since September 30, 2006 is primarily attributable to a mandatory prepayment of our senior credit facility of £73.6 million in May 2007 as a result of cash flow that was in excess of levels prescribed by the senior credit facility agreement, combined with favorable exchange rate movements on our U.S. dollar and euro denominated debt. Our business is capital intensive, we are highly leveraged, and we have historically incurred operating losses and negative cash flow, partly as a result of our construction costs, operating expenditures and interest costs.

        We require significant amounts of capital to connect customers to our network, expand and upgrade our network, offer new services and integrate our billing systems and customer databases.

        We must also regularly service interest payments with cash flows from operations. Our ability to sustain operations, meet financial covenants under our indebtedness, and make required payments on our indebtedness could be impaired if we are unable to maintain or achieve various financial performance measures. Our ability to service our capital needs, to service our obligations under our indebtedness and to fund our ongoing operations will depend upon our ability to generate cash.

        Although we expect to generate positive cash flow in the future, we cannot be certain that this will be the case. We believe that our cash on hand, together with cash from operations and undrawn credit facility, will be sufficient for our cash requirements through to at least September 30, 2008. However, our cash requirements after September 30, 2008 may exceed these sources of cash. This may require that we obtain additional financing in excess of the financing incurred in the recent refinancing transaction. We may not be able to obtain financing at all, or on favorable terms, or we may be contractually prevented by the terms of our senior notes or our senior credit facility from incurring additional indebtedness.

        We are a holding company with no independent operations or significant assets other than our investments in our subsidiaries. As a result, we will depend upon the receipt of sufficient funds from our subsidiaries to meet our obligations. In addition, the terms of our and our subsidiaries' existing and future indebtedness and the laws of the jurisdictions under which those subsidiaries are organized limit the payment of dividends, loan repayments and other distributions to us under many circumstances.

        Our debt agreements and the debt agreements of some of our subsidiaries contain restrictions on our ability to transfer cash between groups of our subsidiaries. As a result of these restrictions, although our overall liquidity may be sufficient to satisfy our obligations, we may be limited by covenants in some of our debt agreements from transferring cash to other subsidiaries that might require funds. In addition, cross default provisions in our other indebtedness may be triggered if we default on any of these debt agreements.

Consolidated Statement of Cash Flows

Nine Months Ended September 30, 2007 and 2006

        For the nine months ended September 30, 2007, cash provided by operating activities decreased to £448.1 million from £512.2 million for the nine months ended September 30, 2006. This decrease is primarily attributable to an increase in cash paid for interest. For the nine months ended September 30, 2007, cash paid for interest, exclusive of amounts capitalized, increased to £380.8 million

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from £267.8 million during the same period in 2006. This increase resulted from the higher levels of borrowings following the reverse acquisition of Telewest and the acquisition of Virgin Mobile.

        For the nine months ended September 30, 2007, cash used in investing activities was £404.1 million compared with cash used in investing activities of £2,831.4 million for the nine months ended September 30, 2006. The cash used in investing activities in the nine months ended September 30, 2007 mainly represents purchases of fixed assets. The cash used in investing activities in the nine months ended September 30, 2006 includes £2,024.2 million for the reverse acquisition of Telewest, net of cash acquired of £294.9 million and £423.5 million for the acquisition of Virgin Mobile, net of cash acquired of £14.1 million. Purchases of fixed and intangible assets increased to £424.0 million for the nine months ended September 30, 2007 from £397.0 million for the same period in 2006 primarily because of the reverse acquisition of Telewest and the acquisition of Virgin Mobile.

        Cash used in financing activities for the nine months ended September 30, 2007 was £95.7 million compared to cash provided by financing activities of £1,889.3 million for the nine months ended September 30, 2006. The principal sources of cash provided by financing activities for the nine months ended September 30, 2006 were the new £5.3 billion senior credit facilities and the $550 million senior notes due 2016. The principal uses of cash for the nine months ended September 30, 2006 were the repayment of our previous senior credit and bridge facilities. Cash used in financing activities for the nine months ended September 30, 2007 was primarily principal payments on long term debt and capital leases of £966.8 million, partially offset by new borrowings, net of financing fees, of £874.5 million.

Long-Term Debt

Senior Credit Facility

        During 2006, we entered into a new senior credit facility in an aggregate principal sterling equivalent amount of £5,275 million, comprising a £3,350 million 5 year amortizing Tranche A term loan facility, a £175 million 5 year amortizing Tranche A1 term loan facility, a £300 million 6¹/2 year bullet Tranche B1 term loan facility, a £351 million 6¹/2 year bullet Tranche B2 term loan facility, a €500 million 6¹/2 year bullet Tranche B3 term loan facility, a $650 million 6¹/2 year bullet Tranche B4 term loan facility, a £300 million 7 year bullet Tranche C term loan facility and a £100 million 5 year multi-currency revolving loan facility. The principal under Tranches A and A1 is subject to scheduled repayment every six months.

        In April 2007, we amended the senior credit facility and borrowed an additional £890 million under a 5¹/2 year bullet Tranche B5 term loan facility and a 5¹/2 year Tranche B6 term loan facility. We used the net proceeds to repay some of our obligations under the Tranche A and Tranche A1 term loan facilities. In April 2007, we also amended our senior credit facility to among other things, (i) enable us to issue this £890 million of additional indebtedness, (ii) relax certain of our financial convenants, and (iii) provide us with additional flexibility, including permitting our Board of Directors, if they so determine, to pay increased levels of dividends on our common stock.

        In May 2007, we made a mandatory prepayment of £73.6 million under our senior credit facility as a result of cash flow generated in 2006 that was in excess of levels prescribed in the senior credit facility agreement.

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        After giving effect to the refinancing in April 2007 and the mandatory prepayment of £73.6 million in May 2007 referred to above, the principal payments are scheduled as follows (in millions):

        The senior credit facility (other than for Tranche C) has the benefit of a full and unconditional senior secured guarantee from Virgin Media Finance PLC as well as first priority pledges of the shares and assets of substantially all of the operating subsidiaries of Virgin Media Investment Holdings Limited ("VMIH") and of receivables arising under any intercompany loans to those subsidiaries. The senior secured guarantee of Virgin Media Finance PLC is secured by a first priority pledge of the entire capital stock of VMIH and the receivables under any intercompany loans from Virgin Media Finance PLC to VMIH. The guarantee of Tranche C of the senior credit facility will share in the security of Virgin Media Finance PLC granted to the senior credit facility, but will receive proceeds only after the other tranches and will not benefit from guarantees or security granted by other members of the group.

        The annual rate of interest payable under our senior credit facility is the sum of (i) the London Intrabank Offer Rate (LIBOR), US LIBOR or European Intrabank Offer Rate (EURIBOR), as applicable, plus (ii) the applicable interest margin and the applicable cost of complying with any reserve requirement.

        The applicable interest margin for Tranche A, A1 and the revolving facility depends upon the net leverage ratio then in effect as set forth below:

        The applicable interest margins for Tranche B and Tranche C are as follows (including the Tranche B5 and B6 term loan facilities):

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Senior Notes

        On July 25, 2006, Virgin Media Finance PLC issued U.S. dollar denominated 9.125% senior notes due 2016 with principal amount outstanding of $550 million. The senior notes due 2016 are unsecured senior obligations of Virgin Media Finance PLC and rank pari passu with Virgin Media Finance's outstanding senior notes due 2014. The senior notes due 2016 bear interest at an annual rate of 9.125% payable on February 15 and August 15 of each year, which began February 15, 2007. The senior notes due 2016 mature on August 15, 2016 and are guaranteed by Virgin Media, Virgin Media Group LLC, VMIH and certain other intermediate holding companies in the group.

        The U.S. dollar denominated 8.75% senior notes due 2014 were issued by Virgin Media Finance PLC on April 13, 2004 and have a principal amount outstanding of $425 million. The sterling denominated 9.75% senior notes due 2014 were issued by Virgin Media Finance PLC on April 13, 2004 and have a principal amount outstanding of £375 million. The euro denominated 8.75% senior notes due 2014 were issued by Virgin Media Finance PLC on April 13, 2004 and have a principal amount outstanding of €225 million. The senior notes due 2014 mature on April 15, 2014 and are guaranteed by Virgin Media, Virgin Media Group LLC, VMIH and certain of the intermediate holding companies in the group.

Restrictions under our Existing Debt Agreements

        The agreements governing the senior notes and the senior credit facility significantly and, in some cases absolutely, restrict our ability and the ability of most of our subsidiaries to:

•

incur or guarantee additional indebtedness;



•

pay dividends or make other distributions, or redeem or repurchase equity interests or subordinated obligations;



•

make investments;



•

sell assets, including the capital stock of subsidiaries;



•

enter into sale and leaseback transactions or certain vendor financing arrangements;



•

create liens;



•

enter into agreements that restrict the restricted subsidiaries' ability to pay dividends, transfer assets or make intercompany loans;



•

merge or consolidate or transfer all or substantially all of their assets; and



•

enter into transactions with affiliates.

Debt Ratings

        To access public debt capital markets, we rely on credit rating agencies to assign corporate credit ratings. A rating is not a recommendation by the rating agency to buy, sell or hold our securities. A credit rating agency may change or withdraw our ratings based on its assessment of our current and future ability to meet interest and principal repayment obligations. Lower credit ratings generally result in higher borrowing costs and reduced access to debt capital markets. As at September 30, 2007, the corporate debt ratings and outlook assigned by the rating agencies engaged by us are as follows:

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        On July 3, 2007, Standard & Poor's changed the outlook for Virgin Media to "Negative', citing the possibility of increased leverage following receipt of a proposal from a private-equity firm to acquire 100% of the company's stock. The Company's ratings were unchanged. On August 9, 2007, Moody's changed the outlook for Virgin Media to "Negative', citing increased competitive pressure in the telephony and mobile businesses. The Company's ratings were unchanged.

Cash Dividends

        We commenced the payment of regular quarterly dividends in June 2006. During the nine months ended September 30, 2007 and the year ended December 31, 2006, the Company paid the following dividends:

Board Declaration Date		Per Share Dividend			Record Date		Payment Date		Total Amount
									(in millions)
Year ended December 31, 2006
May 18, 2006		$	0.01		June 12, 2006		June 20, 2006		£	1.6
August 28, 2006			0.02		September 12, 2006		September 20, 2006			3.5
November 28, 2006			0.02		December 12, 2006		December 20, 2006			3.4
Nine months ended September 30, 2007
February 27, 2007		$	0.02		March 12, 2007		March 20, 2007		£	3.3
May 16, 2007			0.03		June 12, 2007		June 20, 2007			5.0
August 15, 2007			0.04		September 12, 2007		September 20, 2007			6.5

        Future payments of regular quarterly dividends by us are at the discretion of our Board of Directors and will be subject to our future needs and uses of cash which could include investments in operations, the repayment of debt, and share repurchase programs.

Off-Balance Sheet Arrangements

        As of September 30, 2007, we had no off-balance sheet arrangements.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

        The following table includes aggregate information about our contractual obligations as of September 30, 2007, and the periods in which payments are due (in millions).

					Payments Due by Period
Contractual Obligations		Total			Less than 1 year			1–3 years			3–5 years			More than 5 year
Long-Term Debt Obligations		£	5,991.9		£	3.0		£	1,510.5		£	3,167.8		£	1,310.6
Capital Lease Obligations			190.9			32.7			32.4			36.5			89.3
Operating Lease Obligations			347.7			51.9			77.7			68.2			149.9
Purchase Obligations			663.8			340.1			192.2			84.9			46.6
Interest Obligations			2,200.5			475.3			918.9			605.0			201.3
Total		£	9,394.8		£	903.0		£	2,731.7		£	3,962.4		£	1,797.7
Early termination charges					£	37.6		£	56.9		£	24.8		£	4.7

        Early termination charges are amounts that would be payable in the above periods in the event of early termination during that period of certain of the contracts underlying the purchase obligations listed above.

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        There have been no material changes in the nine months ending September 30, 2007 to our commercial commitments from what was disclosed in our Annual Report on Form 10-K for the year ended December 31, 2006 as filed with the SEC on March 1, 2007.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        There have been no material changes in the nine months ending September 30, 2007 to the information required under this Item from what was disclosed in our Annual Report on Form 10-K for the year ended December 31, 2006 as filed with the SEC on March 1, 2007.

ITEM 4.    CONTROLS AND PROCEDURES

(a)   Disclosure Controls and Procedures

        Our management, with the participation of our acting chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, our acting chief executive officer and chief financial officer have concluded that, as of the end of such period, these controls and procedures are effective to ensure that information required to be disclosed by the registrant in the reports the registrant files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the registrant in the reports that it files or submits is accumulated and communicated to the registrant's management, including our acting chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b)   Changes in Internal Control Over Financial Reporting

        On March 3, 2006, we completed the reverse acquisition of Telewest and on July 4, 2006, we completed the acquisition of Virgin Mobile. As a consequence of our continued integration of these acquisitions, we have made and expect to make further material changes to our internal control over financial reporting. Other than as stated above, there were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the third fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

        We are involved in disputes and litigation arising in the ordinary course of our business. We are also involved in various disputes and legal proceedings, none of which is a material pending legal proceeding that exclusive of interest and costs, is anticipated to exceed 10% of our and our subsidiaries' current assets on a consolidated basis, or is otherwise reportable in response to this item.

ITEM 1A.    RISK FACTORS

        There have been no material changes in the nine months ended September 30, 2007 in the risk factors discussed under "Risk Factors" and elsewhere in our Form 10-K for the year ended December 31, 2006 as filed with the SEC on March 1, 2007.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

        None.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

        None.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        No matters were submitted to a vote of our security holders in the quarter ended September 30, 2007.

ITEM 5.    OTHER INFORMATION

        None.

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ITEM 6.    EXHIBITS

3.1		Second restated certificate of incorporation of Virgin Media Inc. (Incorporated by reference to the Annual Report on Form 10-K of Virgin Media Inc. as filed with the Securities and Exchange Commission on March 1, 2007).
3.2		Restated by-laws of Virgin Media Inc. (Incorporated by reference to the Annual Report on Form 10-K of Virgin Media Inc. as filed with the Securities and Exchange Commission on March 1, 2007).
10.1		Compromise Agreement and Release, dated August 21, 2007, between Stephen Burch and Virgin Media Inc. (Incorporated by reference to the Current Report on Form 8-K of Virgin Media Inc. as filed with the Securities and Exchange Commission on August 21, 2007).
10.2		Form of Non-Qualified Stock Option Notice for UK employees.*
10.3		Form of Non-Qualified Stock Option Notice for non-executive directors.*
10.4		Employment Agreement, dated September 18, 2007, between Virgin Media Inc. and Mark Schweitzer.*
10.5		Form of Incentive Stock Option Notice.*
10.6		Amendment Letter No. 2, dated October 1, 2007, to the Trade Mark Licence between Virgin Enterprises Limited and Virgin Media Limited dated April 3, 2006 (previously filed).*
31.1		Certification of Chief Executive Officer, pursuant to Rule 13(a)-14(a) and Rule 15d-14(a) of the Exchange Act.*
31.2		Certification of Chief Financial Officer, pursuant to Rule 13(a)-14(a) and Rule 15d-14(a) of the Exchange Act.*
32.1		Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.*

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*

Filed herewith

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SIGNATURES

        Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

		VIRGIN MEDIA INC.
Date: November 8, 2007		By:	/s/  NEIL BERKETT       Neil Berkett Acting Chief Executive Officer
Date: November 8, 2007		By:	/s/  JACQUES KERREST       Jacques Kerrest Chief Financial Officer
		VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED
Date: November 8, 2007		By:	/s/  NEIL BERKETT       Neil Berkett Acting Chief Executive Officer
Date: November 8, 2007		By:	/s/  JACQUES KERREST       Jacques Kerrest Chief Financial Officer

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