ITEM 1.    FINANCIAL STATEMENTS

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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See accompanying notes.

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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.

        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.

        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.

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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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        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.

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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

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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.

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