Q Fixed Income Release

Transcription

1 Q Fixed Income Release Denver, Colorado May 7, 2015: Liberty Global plc ("Liberty Global") (NASDAQ: LBTYA, LBTYB and LBTYK) is today providing selected, preliminary unaudited financial and operating information for certain of its fixed-income borrowing groups for the three months ended March 31, 2015 ("Q1") as compared to the results for the same period last year (unless otherwise noted). The financial and operating information contained herein is preliminary and subject to change. We presently expect to issue the March 31, 2015 unaudited condensed consolidated financial statements for each of our fixed-income borrowing groups prior to the end of May 2015, at which time they will be posted to the investor relations section of our website ( under the "Fixed Income" heading. Convenience translations provided herein are calculated as of March 31, Page 2 Delivered Strong Segment OCF Growth and Record Low Customer Churn...Page 10 Continued Focus on Superior Value and Bundles Driving Customer ARPU up 8% Year-Over-Year...Page 16 Steady Progress Made On Integrating Ziggo And UPC Nederland...Page 22 Revenue Growth Driven by Solid Swiss/Austrian Performance...Page 29 Quarterly RGU Gains Fueled by Strength in Broadband

2 Virgin Media Reports Preliminary Q Results Delivered Strong Segment OCF Growth and Record Low Customer Churn Virgin Media Inc. ("Virgin Media") is the leading cable operator in the U.K. and Ireland, delivering ultrafast broadband, entertainment and market-leading connectivity to 5.5 million customers. The results presented herein have been retrospectively revised to give effect to the UPC Ireland Transfer, as described below. Operating and financial highlights*: Q1 operating performance driven by record low churn 1 and subscriber growth in the U.K. Q1 combined U.K./Ireland customer churn of 14.5% driven by a third successive quarter of record low U.K. churn of 14.3%, compared to 15.4% in the comparative period of 2014 Q1 combined RGU 2 additions of 14,000 driven by 23,000 RGU additions in the U.K. Delivered 115,000 next-generation (TiVo and Horizon) video subscriber additions in Q1 Added 19,000 postpaid mobile subscribers in Q1 driven by Freestyle mobile subscriptions Encouraging early consumer and business interest following the announcement of our U.K. network extension program ("Project Lightning"), in advance of full sales and build programme commencing in the second half of ,000 two-way homes added during Q1 with the majority added in the last six weeks Focus on under-penetrated small office/home office and small and medium enterprise market Launched nationwide campaign supported by first TV advertisement targeting all U.K. startup, small and medium businesses Offering faster dedicated connections for businesses in Tech City located in East London Rebased 3 revenue increased 3% to 1,130 million in Q1 Q1 rebased total subscription revenue growth of 2% to 926 million, impacted by 20 million lower revenue due to VAT changes as compared to Q Rebased business revenue 4 growth of 3% in Q1 with growth in data and amortisation of upfront fees, partially offset by lower voice and local area network equipment revenue Rebased other revenue growth of 5% in Q1 includes 13 million due to higher Freestyle mobile handset sales 5 U.K. performance driving strong rebased Segment OCF 6 growth of 7% to 504 million in Q1 Segment OCF margin 7 improved to 45% in Q1 from 43% in Q Segment OCF growth driven by strong cost control and continued benefit of substantial synergies in the U.K.; Ireland integration started Operating income increased to 97 million, up from 29 million in Q Property and equipment additions 8 as a percentage of revenue were 20% in Q1 Raised 1.8 billion equivalent amount of debt during Q1 to fund the UPC Ireland Transfer and to refinance existing debt to improve our maturity profile * The financial figures contained in this release are prepared in accordance with U.S. GAAP 37. During the first quarter of 2015, Liberty Global undertook various financing transactions in connection with certain internal reorganisations of its broadband and wireless communications businesses in Europe, including the intragroup transfer of a controlling interest in UPC Broadband Ireland Ltd. ("UPC Ireland") from UPC Holding B.V. (the "UPC Ireland Transfer") to our company. We have accounted for this common control transfer at carryover basis and the financial information and operating statistics presented herein have been retrospectively revised to give effect to this transaction for all periods presented. 2

3 Operating Statistics Summary (Combining Virgin Media and UPC Ireland for both periods) CABLE As of and for the three months ended March 31, Footprint Homes Passed ,513,900 13,429,900 Two-way Homes Passed ,389,600 13,322,600 Subscribers (RGUs) Basic Video ,500 47,800 Enhanced Video ,070,500 4,087,600 MMDS ,500 35,900 Total Video... 4,135,500 4,171,300 Internet ,929,500 4,764,100 Telephony ,573,400 4,459,900 Total RGUs... 13,638,400 13,395,300 Q1 Organic RGU Net Additions (Losses) Basic Video... (2,600) (3,300) Enhanced Video... (23,000) (4,000) MMDS... (2,700) (2,600) Total Video... (28,300) (9,900) Internet... 29,500 44,800 Telephony... 12,500 24,300 Total RGU net additions... 13,700 59,200 Customer Relationships Customer Relationships ,538,100 5,460,300 Q1 Customer Relationship net additions... 2,600 12,800 RGUs per Customer Relationship Q1 Monthly ARPU per Customer Relationship Customer Bundling Single-Play % 18.0% Double-Play % 18.7% Triple-Play % 63.3% Quad-Play % 14.7% MOBILE Mobile Subscribers 19 Postpaid... 2,128,200 1,957,700 Prepaid ,100 1,040,800 Total Mobile subscribers... 3,007,300 2,998,500 Q1 Postpaid net additions... 18,800 78,600 Q1 Prepaid net losses... (64,500) (70,300) Total Mobile net additions (losses)... (45,700) 8,300 Q1 Monthly ARPU per Mobile Subscriber 20 Excluding interconnect revenue Including interconnect revenue

4 Financial Results, Segment OCF Reconciliation & Property and Equipment Additions The following tables reflect preliminary unaudited selected financial results for the three months ended March 31, 2015 and Revenue: Subscription revenue: Three months ended March 31, Change Rebased % in millions, except % amounts Cable Mobile Total subscription revenue Business revenue Other revenue Total revenue... 1, , Segment OCF Share-based compensation expense... (10.7) (11.7) Related-party fees and allocations, net (19.1) (11.6) Depreciation and amortisation... (381.9) (421.9) Impairment, restructuring and other operating items, net (4.2) Operating income Segment OCF as a percentage of revenue % 42.9% The table below highlights the categories of our property and equipment additions for the indicated periods and reconciles those additions to the capital expenditures that we present in our condensed consolidated statements of cash flows: Three months ended March 31, in millions, except % amounts Customer premises equipment Scalable infrastructure Line extensions Upgrade/rebuild Support capital Property and equipment additions Assets acquired under capital-related vendor financing arrangements... (61.8) (11.5) Assets acquired under capital leases... (12.1) (14.6) Changes in liabilities related to capital expenditures... (2.6) (15.2) Total capital expenditures Property and equipment additions as a percentage of revenue % 20.0% 4

5 Combined Virgin Media and UPC Ireland Historical Information OPERATING STATISTICS Q Q Q Q Q Footprint Homes Passed... 13,482,200 13,439,400 13,395,900 13,429,900 13,379,700 Two-way Homes Passed... 13,353,300 13,275,800 13,291,400 13,322,600 13,268,700 Subscribers (RGUs) Basic Video... 40,100 42,100 44,500 47,800 51,100 Enhanced Video... 4,093,500 4,074,600 4,070,400 4,087,600 4,087,900 MMDS... 30,200 31,900 33,600 35,900 38,500 Total Video... 4,163,800 4,148,600 4,148,500 4,171,300 4,177,500 Internet... 4,900,000 4,823,200 4,767,800 4,764,100 4,714,000 Telephony... 4,560,900 4,497,500 4,469,600 4,459,900 4,429,900 Total RGUs... 13,624,700 13,469,300 13,385,900 13,395,300 13,321,400 RGU net additions (losses) Basic Video... (2,000) (2,400) (3,300) (3,300) (2,900) Enhanced Video... 18,900 4,200 (17,200) (4,000) 2,600 MMDS... (1,700) (1,700) (2,300) (2,600) (1,700) Total Video... 15, (22,800) (9,900) (2,000) Internet... 63,000 55,400 3,700 44,800 47,400 Telephony... 41,100 27,900 9,700 24,300 10,100 Total RGU net additions (losses) ,300 83,400 (9,400) 59,200 55,500 Customer Relationships Customer Relationships... 5,535,500 5,469,600 5,436,800 5,460,300 5,441,500 Net additions (losses)... 41,100 32,800 (23,500) 12,800 18,600 RGUs per Customer Customer churn % 15.0% 15.3% 15.3% 15.2% Monthly ARPU per Customer Customer bundling Single-Play % 17.7% 17.6% 18.0% 18.1% Double-Play % 18.4% 18.6% 18.7% 19.1% Triple-Play % 63.9% 63.8% 63.3% 62.8% Quad-Play % 15.4% 15.1% 14.7% 14.7% FINANCIAL STATISTICS Q Q Q Q Q Revenue Subscription revenue: Cable Mobile Total subscription revenue Business Other Total revenue... 1, , , , ,102.7 Segment OCF Share-based compensation expense... (6.3) (8.6) (7.2) (11.7) (22.8) Related-party fees and allocations, net... (12.4) (4.4) (8.2) (11.6) (7.9) Depreciation and amortisation... (386.4) (381.2) (418.6) (421.9) (416.6) Impairment, restructuring and other operating items, net... (0.6) (1.1) (6.8) (4.2) (10.2) Operating income Property and equipment additions % of revenue Segment OCF % 43.6% 43.8% 42.9% 42.0% Property and equipment additions % 21.0% 19.5% 20.0% 19.8% 5

6 Subscriber Statistics Customer loyalty has remained strong in the U.K where we have delivered another quarter of record low churn. We continue to invest in our superior products and service quality in both Ireland and the U.K. with additional TV content and higher broadband speeds. These investments have supported 5.9% average price increases implemented in the U.K. and Irish markets in Q Our 14,000 RGU additions in Q1, comprised 23,000 RGU additions in the U.K. and 9,000 RGU losses in Ireland. Our RGU performance in Ireland was due in part to increased competition. Recent product enhancements in Ireland, including our new top internet speed of 240 Mbps and our SVoD MyPrime service, are expected to support future RGU growth. We continue to see strong take-up of our top-tier internet and connected TV services. As of Q1, 36% of our 4.9 million internet subscribers were taking speeds of 100 Mbps or higher, up from 12% at the end of Q Subscriptions to our next-generation connected TV services, TiVo in the U.K. and Horizon in Ireland, increased by 115,000 during Q1 to 2.8 million at quarter-end, representing 67% of our video base. Our Q1 ARPU of was up 1% after adjusting for currency movements. The benefits from improvements in our tier mix and price increases were partially offset by the impact of VAT changes, which accounted for a 1.11 decrease from our Q ARPU, as well as ongoing declines in telephony usage. In terms of mobile, the 19,000 increase in postpaid subscriptions in Q1 was more than offset by a decline in our prepaid base, resulting in a 46,000 decline in our total mobile base. Mobile additions are lower than in Q due to lower postpaid subscriber additions, which partly reflect less aggressive pricing for our SIM-only plans. During Q1, we added a total of 36,000 two-way homes passed and, following the announcement of Project Lightning in February, we have seen an encouraging level of early interest from potential customers and businesses in areas not covered by our cable network. We expect to focus on demand driven new build in the second half of the year, supported by marketing initiatives in select areas. Financial Summary Total revenue increased 3% on a rebased basis to 1,130 million. This increase was primarily attributable to (i) higher cable subscription revenue, driven mainly by growth in subscribers, and (ii) a 13 million increase in other revenue due to higher mobile handset sales following the November 2014 launch of our Freestyle proposition, which enables customers to purchase a mobile handset independent of a mobile airtime contract. Previously, handset revenue that was contingent upon delivering future airtime services was recognised over the life of the customer contract as part of the monthly fee and included in mobile subscription revenue. Total subscription revenue growth was also affected by declines due to (a) an 11 million impact from a VAT legislation change that took place on May 1, 2014 and (b) a 9 million change in how VAT is applied to certain components of our operations that took effect on January 1, Segment OCF increased by 7% on a rebased basis to 504 million in Q1 due to the aforementioned revenue growth, cost controls and the delivery of substantially all of the expected OCF synergies as a result of reorganization and integration activities following the acquisition by Liberty Global. Q1 Segment OCF growth was also positively impacted by reductions in network infrastructure charges from local authorities, including a nonrecurring 5 million reduction in Q and a recurring benefit of 4 million arising from other successful appeals of network infrastructure charges in the second half of Meanwhile, Segment OCF margin improved from 42.9% in Q to 44.6% in Q Property and equipment additions increased 3% in Q1 to 230 million, compared to the prior year period. A decrease in customer premises equipment was more than offset by investment in our mobile billing system and new build activities. As a result, property and equipment additions as a percentage of revenue increased slightly from 20.0% in Q to 20.3% in Q

7 Summary of Third-Party Debt and Cash and Cash Equivalents The following table details the nominal value and sterling equivalent of the carrying value of Virgin Media's consolidated third-party debt and cash and cash equivalents as of the dates indicated: Nominal value March 31, December 31, Carrying value Carrying value in millions Senior Credit Facility Term Loan A (LIBOR %) due Term Loan B (LIBOR %) due $ 2, , ,761.1 Term Loan D (LIBOR %) due Term Loan E (LIBOR %) due Revolving Credit Facility Total Senior Credit Facility... 2, ,083.3 Senior Secured Notes 6.00% GBP Senior Secured Notes due , % USD Senior Secured Notes due $ % GBP Senior Secured Notes due % USD Senior Secured Notes due $ % USD Senior Secured Notes due $ % GBP Senior Secured Notes due % GBP Senior Secured Notes due % USD Senior Secured Notes due $ % GBP Senior Secured Notes due % GBP Senior Secured Notes due Total Senior Secured Notes... 4, ,779.7 Senior Notes 7.00% GBP Senior Notes due % USD Senior Notes due $ % USD Senior Notes due $ % USD Senior Notes due $ % GBP Senior Notes due % USD Senior Notes due $ % GBP Senior Notes due % EUR Senior Notes due % USD Senior Notes due $ Total Senior Notes... 2, , % USD Convertible Senior Notes due $ Capital Lease Obligations Vendor Financing Total third-party debt and capital lease obligations... 9, ,684.0 Less: cash and cash equivalents Net third-party debt and capital lease obligations , ,647.4 Exchange rate ( to ) Exchange rate ($ to )

8 Total third-party debt increased by 1.0 billion during Q1 primarily due to the financing associated with the UPC Ireland Transfer. In January, we issued 300 million principal amount of 5.125% senior secured notes due 2025, $400 million ( million) principal amount of 5.75% senior notes due 2025 and 460 million ( million) principal amount of 4.5% senior notes due 2025 to fund the UPC Ireland Transfer, which subsequently was completed on February 12, In March, we issued an additional $500 million ( million) principal amount of 5.25% senior secured notes due 2026 and 525 million principal amount of 4.875% senior secured notes due The net proceeds were used to (i) prepay in full the 375 million outstanding principal amount of Term Loan A and $400 million ( million) of the outstanding principal amount of Term Loan B and (ii) redeem 10% of the principal amount of certain series of outstanding senior secured notes. In April, we executed a $500 million ( million) tap on the 5.25% senior secured notes due 2026 issued at 101% of par. The proceeds were used to further reduce the amount outstanding on our Term Loan B on May 1, Following these financing activities, our fully-swapped third-party debt borrowing cost 24 improved to 5.6%, as compared to 6.0% at Q1 2014, and the average tenor of our third-party debt is now over eight years. Based on the results for Q1 2015, and subject to the completion of our Q compliance reporting requirements, the ratio of Senior Net Debt to Annualised EBITDA (last two quarters annualised) was 3.65x and the ratio of Total Net Debt to Annualised EBITDA (last two quarters annualised) was 4.63x, in each case, calculated in accordance with the Senior Credit Facility. As of March 31, 2015, we had maximum undrawn commitments of 660 million. When the March 31, 2015 compliance reporting requirements are completed, we anticipate the full amount of unused commitments will continue to be available. 8

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10 Unitymedia Reports Preliminary Q Results Continued Focus on Superior Value and Bundles Driving Customer ARPU up 8% Year-Over-Year Unified-Brand Strategy Across German Footprint Kicked Off in April Unitymedia GmbH ("Unitymedia") is the leading cable operator in Germany and the federal states of North Rhine-Westphalia, Hesse and Baden-Württemberg. We provide cable television services, as well as internet and telephony services under our "Unitymedia" brand to 7.1 million customers who reside in our fiber-rich footprint. Operating and financial highlights*: Implemented a 10% price increase to 1.3 million legacy broadband subscribers in February Monthly ARPU 17 per customer grew 8% to in Q1, best growth in seven quarters Q1 net additions of 29,000 RGUs 2, primarily impacted by anticipated churn as a result of the aforementioned broadband price increase Added 35,000 broadband internet and 27,000 telephony RGUs in Q1 Record quarter of Horizon TV additions in Q1 with 80,000 new subscribers, increasing our total next-generation video base to 326,000 Entered into a distribution agreement with Maxdome, Germany's leading subscription-based videoon-demand ("SVoD") platform Launched a new high-value product portfolio in March with Horizon TV, SVoD from Maxdome and superfast broadband to offer the best "plug&play" solution in our footprint Enhanced Horizon Go, which now offers over 100 channels in combination with Maxdome SVoD, and nearly all linear live TV channels are available out-of-home In March 2015, started offering all new customer acquisition bundles at higher price points Initiated unified-brand strategy across German footprint in April following full KabelBW integration New TV campaign highlights Unitymedia's endless opportunities in the digital world Revenue increased 6% to 538 million and Adjusted Segment EBITDA 29 up 7% to 334 million in Q1 Both growth rates were negatively impacted by a favorable non-recurring item in Q Net loss in Q1 was 40 million Property, equipment and intangible asset additions 8 were 27.5% of revenue in Q1 Refinanced 1.0 billion of debt in Q1, improving cost of debt by 210 basis points and extending tenor * The financial figures contained in this release are prepared in accordance with EU-IFRS 32. Unitymedia s financial condition and results of operations will be included in Liberty Global s consolidated financial statements under U.S. GAAP 37. There are significant differences between the U.S. GAAP and EU-IFRS presentations of our consolidated financial statements. 10

11 Operating Statistics Summary As of and for the three months ended March 31, Footprint Homes Passed ,722,400 12,639,900 Two-way Homes Passed ,415,800 12,311,200 Subscribers (RGUs) Basic Video ,131,500 5,344,000 Enhanced Video ,393,400 1,240,800 Total Video... 6,524,900 6,584,800 Internet ,931,000 2,661,200 Telephony ,775,100 2,579,300 Total RGUs... 12,231,000 11,825,300 Q1 Organic RGU Net Additions (Losses) Basic Video... (65,500) (44,400) Enhanced Video... 32,500 27,800 Total Video... (33,000) (16,600) Internet... 34,600 81,600 Telephony... 27,100 61,800 Total RGU net additions... 28, ,800 Penetration Enhanced Video Subscribers as % of Total Video Subscribers % 18.8% Internet as % of Two-way Homes Passed % 21.6% Telephony as % of Two-way Homes Passed % 21.0% Customer Relationships Customer Relationships ,111,600 7,080,800 RGUs per Customer Relationship Q1 Monthly ARPU per Customer Relationship Customer Bundling Single-Play % 62.4% Double-Play % 8.1% Triple-Play % 29.5% Mobile statistics Mobile subscribers , ,300 11

12 Financial Results, Adjusted Segment EBITDA Reconciliation & Property, Equipment and Intangible Asset Additions The following table reflects preliminary unaudited selected financial results for the three months ended March 31, 2015 and Three months ended March 31, Change in millions, except % amounts Revenue % Adjusted Segment EBITDA % Depreciation and amortization... (189.5) (176.8) Impairment, restructuring and other operating items, net... (0.3) (1.6) Share-based compensation expense... (1.0) (0.6) Related-party fees and allocations (33.4) (26.5) Earnings before interest and taxes ("EBIT") Net financial and other expense... (144.7) (133.3) Income tax benefit (expense)... (5.3) 5.5 Net loss... (39.9) (20.7) Adjusted Segment EBITDA as % of Revenue % 61.5% The table below highlights the categories of our property, equipment and intangible asset additions for the indicated periods and reconciles those additions to the capital expenditures that we present in our condensed consolidated statements of cash flows: Three months ended March 31, in millions, except % amounts Customer premises equipment Scalable infrastructure Line extensions / new build Upgrade / rebuild / network improvement Support capital Capitalized subscriber acquisition costs Software and licenses Property, equipment and intangible asset additions Assets acquired under capital-related vendor financing arrangements... (39.5) (19.6) Changes in liabilities related to capital expenditures Total capital expenditures Property, equipment and intangible asset additions as a % of Revenue % 24.5% 12

13 Subscriber Statistics Entering 2015, we continued our strategy of focusing on customer value and providing the best entertainment and broadband experience in our market. In order to harvest the investments we have made in our superior products and network, we implemented a price increase for 1.3 million of our broadband subscribers in February, driving monthly ARPU per customer up 8% in Q1 on a year-over-year basis, the highest increase in seven quarters. This price increase follows the video price increases we initiated in the second half of 2014 and underpins our strategy of balancing price and volume growth. On the volume side, our RGU net additions of 29,000 were tempered as compared to 127,000 in Q1 2014, partly due to our price increases and approximately 20,000 incremental RGU losses related to housing association contract disconnections. Our video attrition was 16,000 higher as compared to the first quarter of 2014, mainly due to the aforementioned disconnection of housing associations with 12,000 video RGUs and the aforementioned price increases. However, Horizon TV, our next-generation video platform, had its best quarterly performance ever. We added over 80,000 new Horizon TV subscribers during Q1 2015, as compared to 44,000 during Q1 2014, partly driven by the successful Horizon TV launch in the Baden-Württemberg region and successful Horizon TV marketing efforts. As of March 31, 2015, we had 326,000 Horizon TV subscribers, representing 23% of our enhanced video base and 5% penetration of our total video base, which provides a substantial opportunity for continued upsell. Our broadband RGU growth of 35,000 in Q1 was 47,000 lower than in Q due largely to the aforementioned price increase. As a result of continued demand for superfast broadband, over 60% of our new subscribers chose products with speeds of 120 Mbps or higher in Q1. With broadband penetration of only 24%, the ability to offer superior speeds across our entire footprint and the upcoming deployment of EuroDocsis 3.1 technology, we are well positioned for continued growth. Our telephony RGUs were similarly impacted by the broadband price increase, as we typically bundle our telephony products with our broadband internet offerings. During Q1, we signed a new distribution agreement with Maxdome, Germany's leading SVoD service, and launched a new product portfolio containing more value for our customers in early March. These new offers feature Horizon TV with DVR functionality, Maxdome's rich SVoD offering and further enhancement of our multi-screen "Horizon Go" video service. In conjunction with these improvements, we increased the price points of our customer acquisition portfolio by approximately 5 to 13 per month, depending on the bundle and tier, and reduced the promotional period from 12 to 9 months. This will enable us to continue investing in our value leadership by offering the best broadband connection along with outstanding content and functionalities to our customers. Financial Summary Total revenue increased 6% to 538 million in Q This growth was primarily attributable to higher cable subscription revenue, driven by growth in subscribers and an increase in ARPU, partially offset by the 9 million negative impact of a favorable revenue settlement during Q1 2014, of which 8 million positively impacted our Adjusted Segment EBITDA in the prior-year period. We delivered 7% Adjusted Segment EBITDA growth as compared to Q1 2014, primarily due to the aforementioned revenue growth drivers. Our property, equipment and intangible asset additions were 27.5% of revenue in Q1 2015, compared to 24.5% in the prior year period. The increase was largely attributable to higher customer premises equipment due to record Horizon TV subscriber additions, as well as an increase in capitalized subscriber acquisition costs due largely to higher commissions paid on our higher-priced product portfolio. 13

14 Summary of Third-Party Debt and Cash and Cash Equivalents The following table details the nominal value and euro equivalent of the carrying value of Unitymedia's thirdparty debt and cash and cash equivalents as of the dates indicated: March 31, 2015 Dec. 31, 2014 Nominal value Carrying value Carrying value in millions Senior Credit Facilities Super Senior Revolving Credit Facility (Euribor+2.25%) due Senior Revolving Credit Facility (Euribor+2.75%) due Total Senior Credit Facilities Senior Secured Notes 5.500% EUR Senior Secured Notes due % EUR Senior Secured Notes due % USD Senior Secured Notes due $ 1, % EUR Senior Secured Notes due % EUR Senior Secured Notes due % EUR Senior Secured Notes due , , , % USD Senior Secured Notes due $ % EUR Senior Secured Notes due % EUR Senior Secured Notes due Total Senior Secured Notes... 5, ,755.9 Senior Notes 3.750% EUR Senior Notes due % USD Senior Notes due $ % EUR Senior Exchange Notes due Total Senior Notes... 1, ,360.4 Finance lease obligations Vendor financing Transaction costs and accrued third-party interest Total third-party debt and finance lease obligations... 6, ,550.3 Less: cash and cash equivalents Net third-party debt and finance lease obligations , ,535.9 Exchange rate ($ to ) At March 31, 2015, our fully-swapped third-party debt borrowing cost 24 improved to 4.9%, as compared to 5.4% at December 31, 2014, and the average tenor of our third-party debt is now nearly 10 years. During Q1, we issued 500 million principal amount of 3.5% senior secured notes due 2027, which were used to redeem 10% of the principal amount of certain senior secured notes, repay the outstanding drawings under our senior revolving credit facility and pay the related call premium and transaction costs where applicable. In addition, we issued 700 million of 3.75% senior notes due The net proceeds were used to redeem the 9.50% EUR Senior Exchange Notes and to pay the related call premium and transaction costs. Based on the results for Q1 2015, and subject to the completion of our Q compliance reporting requirements, (i) the ratio of Senior Secured Debt to Annualized EBITDA (last two quarters annualized) was 3.84x and (ii) the ratio of Total Debt to Annualized EBITDA (last two quarters annualized) was 4.95x, each as defined and calculated in accordance with our Senior Revolving Credit Facilities. As of March 31, 2015, we had maximum undrawn commitments of 500 million. When the March 31, 2015 compliance reporting requirements are completed, we anticipate 482 million will be available. 14

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16 Ziggo Reports Preliminary Q Results Steady Progress Made On Integrating Ziggo And UPC Nederland Launched Unified Portfolio Under Ziggo Brand In April Offering More Value with Horizon TV & Broadband Speeds Ziggo Group Holding B.V. ("Ziggo") is the leading Dutch provider of entertainment, information and communication through television, internet and telephony services, providing 9.9 million services to its 4.2 million customers. Operating and financial highlights*: Continued competitive pressure and our network and product harmonization efforts were among the factors that impacted our first quarter RGU 2 performance, resulting in a net loss of 47,000 RGUs Delivered 10,000 broadband internet RGUs in Q1 or 93,000 in the last twelve months Added 44,000 Horizon TV subscribers in Q1, growing next-generation TV base to 375,000 Postpaid mobile subscriber additions of 29,000 in Q1 or 105,000 in the last twelve months Steady progress made on integration since mid-november 2014; starting to drive scale benefits across the organization Completed network and product harmonization in former Ziggo footprint, which enabled the launch of our new high-value product portfolio under the unified Ziggo brand in April Targeting reduction of approximately 450 permanent positions through 2018 and closure of three offices to result in a more streamlined and efficient organization 34 Unified portfolio as of mid-april including Horizon TV, Horizon Go, MyPrime, Replay TV and mobile Additional content and functionality in core bundle "Complete" offered at an incremental 5 Created national challenger in business market with launch of new Ziggo Business portfolio Rebased 3 revenue growth of 1% to 628 million in Q1 Monthly ARPU 17 per customer grew 4.2% to in Q1 Rebased Segment OCF 6 decline of 4% to 326 million in Q1 impacted by 14 million of expenses associated with rebranding and network and product harmonization efforts Operating income was 9 million in Q as compared to 71 million in the prior year period Property and equipment additions 8 were 17% of revenue in Q1, as compared to 22% in Q1 2014, driven by rationalization of non-cpe projects following the integration Issued 1.6 billion equivalent of bonds in Q1 and effectively rolled 689 million of loans from UPC Holding credit pool as part of the Netherlands Reorganization that resulted in the creation of a unified Dutch credit pool * The financial figures contained in this release are prepared in accordance with U.S. GAAP 37. The financial and operating information included herein as of and for the three months ended March 31, 2014, and for other periods that precede the November 11, 2014 common control date, is presented on a pro forma basis that gives effect to the transfers of Ziggo Holding B.V. ( Ziggo Holding ) and UPC Nederland B.V. ( UPC Nederland ) (collectively, the Netherlands Reorganization ) into Ziggo as if they had occurred on January 1, Financial and operating information included in this release for all other periods is presented on a historical basis unless otherwise noted. For additional information, see footnote 31 on page

17 Operating Statistics Summary As of and for the three months ended March 31, Historical Pro forma 31 Footprint Homes Passed ,993,600 6,949,700 Two-way Homes Passed ,979,200 6,936,300 Subscribers (RGUs) 26 Basic Video ,800 1,022,000 Enhanced Video ,368,100 3,363,600 Total Video... 4,239,900 4,385,600 Internet ,076,300 2,983,000 Telephony ,568,600 2,580,500 Total RGUs... 9,884,800 9,949,100 Q1 Organic RGU Net Additions (Losses) Basic Video... (30,300) (48,000) Enhanced Video... (19,200) 18,400 Total Video... (49,500) (29,600) Internet... 10,300 53,000 Telephony... (7,400) 25,400 Total RGU net additions (losses)... (46,600) 48,800 Penetration Enhanced Video Subscribers as a % of Total Video Subscribers % 76.7% Internet as a % of Two-way Homes Passed % 43.0% Telephony as a % of Two-way Homes Passed % 37.2% Customer Relationships Customer Relationships ,241,900 4,387,800 RGUs per Customer Relationship Q1 Monthly ARPU per Customer Relationship Customer Bundling Single-Play % 30.0% Double-Play % 13.1% Triple-Play % 56.9% Mobile Statistics Mobile subscribers ,400 53,800 17

18 Financial Results, Segment OCF Reconciliation & Property and Equipment Additions The following tables reflect preliminary unaudited selected financial results for the three months ended March 31, 2015 and Three months ended March 31, Pro forma Historical Pro forma 31 % Change in millions, except % amounts Rebased % Revenue Segment OCF (4.5) (3.5) Share-based compensation expense... (1.1) (0.3) Related-party fees and allocations (40.1) (36.0) Depreciation and amortization... (269.5) (232.5) Impairment, restructuring and other operating items, net (5.9) (1.7) Operating income Segment OCF as a percentage of revenue % 54.4% The table below highlights the categories of our property and equipment additions for the indicated periods and reconciles those additions to the capital expenditures that we present in our condensed consolidated statements of cash flows: Three months ended March 31, Historical Pro forma 31 in millions, except % amounts Customer premises equipment Scalable infrastructure Line extensions Upgrade/rebuild Support capital Property and equipment additions Assets acquired under capital-related vendor financing arrangements... (3.9) (3.0) Assets acquired under capital leases... (2.8) (8.6) Changes in liabilities related to capital expenditures Total capital expenditures Property and equipment additions as a percentage of revenue % 21.6% 18

19 Subscriber Statistics During the first quarter of 2015 we lost 47,000 RGUs, including 43,000 in the former Ziggo footprint. This reflects the continued competitive landscape and lower sales and higher churn in the former Ziggo footprint associated with the network and product harmonization that we completed in March. Prior to the completion of these efforts, Ziggo and UPC Nederland operated under two separate brands and marketing approaches. In April, we launched our unified portfolio under the Ziggo brand name and we now offer all of our customers the same great products and functionality, including Horizon TV and Replay TV, Horizon Go, MyPrime, broadband speeds up to 200 Mbps, mobile services and access to 2 million WiFiSpots across our footprint. From a product perspective, our video attrition in Q1 was 20,000 RGUs higher as compared to Q1 2014, mainly as a result of the above mentioned impacts. In the former UPC Nederland footprint, we continued to see strong demand for Horizon TV and added 44,000 subscribers in Q1, bringing our total Horizon TV base to 375,000. This represents a 34% penetration of the former UPC Nederland enhanced video base, or 9% of our total video base, providing ample conversion opportunity following our national Horizon TV introduction in mid-april. Powered by our superior network, we added 93,000 broadband internet RGUs over the last twelve months, of which 10,000 were added during Q1. Driven by the continued demand for superfast broadband speeds, the weighted average speed that customers currently receive on our network increased over 50% yearover-year to 90 Mbps in Q1. Our ongoing network investments continue to pay off, as evidenced by Ziggo being voted the best internet provider in the Netherlands by the independent Dutch website Tweakers.net for the fifth time in a row in February. With respect to fixed-line telephony, we experienced a decline of 7,000 RGUs during Q1 reflecting increased demand from 'mobile-only' households for video and broadband internet dual-play bundles. Driven in part by price increases implemented after March 31, 2014, our ARPU per customer relationship rose by 4.2% year-over-year. We are making significant progress on the wireless front, including preparations for the launch of our 4G mobile service as well as ongoing expansion of our WiFiSpots, which will further enhance the customer experience. We added 29,000 mobile subscribers during Q1 to reach a total of 158,000 mobile subscribers. We look forward to creating the leading challenger in the Dutch mobile market and, in combination with a targeted convergence strategy, we see ample opportunity for mobile growth ahead of us. Financial Summary Total revenue increased 1% on a rebased basis to 628 million. This improvement is primarily attributable to increases in (i) cable subscription revenue, driven mainly by higher ARPU, and (ii) mobile subscription revenue, primarily from growth in subscribers. This increase was partially offset by (a) lower revenue from set-top box sales due to Ziggo s increased emphasis on the rental of set-top boxes in the former Ziggo footprint and (b) a decrease in installation revenue. Segment OCF was 326 million in the first quarter of 2015, representing a decline on a rebased basis of 3.5% from the same period in The Segment OCF decline is due in part to 14 million of expenses associated with our rebranding and network and product harmonization efforts, partially offset by the aforementioned growth in revenue. The decrease in property and equipment additions as a percent of revenue is primarily attributable to lower non-cpe additions, as certain projects initiated by Ziggo in the pre-acquisition periods were discontinued in Q after the completion of Liberty Global's acquisition of Ziggo Holding. 19

20 Summary of Third-Party Debt and Cash and Cash Equivalents The following table details the nominal value and euro equivalent of the carrying value of Ziggo's consolidated third-party debt and cash and cash equivalents as of the dates indicated: Nominal value March 31, December 31, Carrying value Carrying value in millions Senior Credit Facilities Term Loan B (LIBOR %) USD due $ 2, , ,913.5 Term Loan B (EURIBOR %) EUR due , , , % Senior Secured Proceeds Loan due % Euro Senior Proceeds Loan due % Dollar Senior Proceeds Loan due $ New Ziggo Credit Facility (EURIBOR %) EUR due Revolving Credit Facility Elimination of the Proceeds Loans in consolidation... (1,572.9) Total Senior Credit Facilities... 4, ,893.3 Senior Secured Notes 3.75% Senior Secured Notes due % Senior Secured Notes due Total Senior Secured Notes Senior Notes 7.125% EUR Senior Notes due % EUR Senior Notes due % USD Senior Notes due $ Total Senior Notes... 1, Vendor financing Capital lease obligations Total third-party debt and capital lease obligations... 7, ,794.3 Less: cash and cash equivalents Net third-party debt and capital lease obligations , ,766.1 Exchange rate ($ to ) During Q1, we issued (i) 800 million principal amount of 3.750% senior secured notes, (ii) 400 million principal amount of 4.625% senior notes and (iii) $400 million ( million) principal amount of 5.875% senior notes, all due in The proceeds were used to fund the transfer of UPC Nederland to our company as part of the Netherlands Reorganization. In addition, as part of the transfer of UPC Nederland, certain lenders rolled 684 million in term loans from the UPC Holding credit pool to the Ziggo credit pool and increased their total commitments to 689 million. Following these financing activities, our fully-swapped third-party debt borrowing cost 24 was 4.9% at March 31, 2015, and the average tenor of our third-party debt was over 7 years. Based on the results for Q1 2015, and subject to the completion of our Q compliance reporting requirements, (i) the ratio of Senior Net Debt to Annualized EBITDA (last two quarters annualized) was 3.61x and (ii) the ratio of Total Net Debt to Annualized EBITDA (last two quarters annualized) was 4.64x, in each case, calculated in accordance with our Senior Credit Facilities. Upon completion of our Q reporting requirements, we anticipate that the full 650 million of our undrawn commitments will continue to be available. 20

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22 UPC Holding Reports Preliminary Q Results Revenue Growth Driven by Solid Swiss/Austrian Performance Continued Focus on High-Value Product Offerings Across UPC Footprint UPC Holding B.V ("UPC Holding") connects people to the digital world and enables them to discover and experience its endless possibilities. Our market-leading triple-play services are provided through nextgeneration networks and innovative technology platforms in seven countries that connected 6.7 million customers subscribing to 12.2 million television, broadband internet and telephony services at Q Operating and financial highlights*: Q1 RGU performance adversely impacted by competition and price increases ARPU 17 per customer up 3% on an FX-neutral 35 basis, including 6% at Switzerland Added 23,000 RGUs 2, including 9,000 in Switzerland/Austria Successful implementation of price increases in Switzerland, Austria and Hungary Central and Eastern European ("CEE") RGU growth below Q level, mainly due to lower telephony growth, partially offset by better RGU performance in the Czech Republic Offering high-value bundles with top speeds between 240 and 500 Mbps across our 7 markets Another strong quarter for Horizon with 34,000 new subscribers in Q1 In April, expanded Horizon TV triple-play bundles including MyPrime to the Czech Republic following launch of Horizon Go in November 2014 Multi-screen service Horizon Go now in 6 out of 7 markets, offering out-of-home capabilities Increased WiFiSpots to 1.8 million and started Czech Republic WiFi trial in April Began offering all new acquisition bundles in Switzerland at higher price points in March Swiss/Austrian integration continues to streamline operations; up to 250 employee redundancies expected through 2018 Rebased 3 revenue up 3%, driven by a 4% increase in our Swiss/Austrian operation Rebased Segment OCF 6 declined 1%, primarily due to a Q accrual release in Poland and an increase in recurring VAT payments in our DTH operation that took effect on January 1, 2015 Our Swiss/Austrian business delivered 3% rebased Segment OCF growth in Q1 Property and equipment additions 8 were 15% of revenue, down 340 basis points year-over-year Restructured UPC credit pool during Q1 with the extractions of UPC Ireland in February and UPC Nederland in early March * The financial figures contained in this release are prepared in accordance with U.S. GAAP 37. During the first quarter of 2015, Liberty Global completed certain internal reorganizations of its broadband and wireless communications businesses in Europe that resulted in the transfer of (i) UPC Broadband Ireland Ltd. ("UPC Ireland") and its subsidiaries, (ii) UPC Nederland B.V. ("UPC Nederland") and its subsidiaries and (iii) certain entities (the "Corporate Entities") from our company to certain other Liberty Global subsidiaries outside of UPC Holding (collectively, the "Common Control Transfers"). The Corporate Entities incur central and other administrative costs that are allocated to Liberty Global s operating subsidiaries, including UPC Holding following the transfer of the Corporate Entities. We have accounted for the Common Control Transfers at carryover basis and the financial information and operating statistics presented herein have been retrospectively revised to give effect to these transactions for all periods presented. 22

23 Operating Statistics Summary As of and for the three months ended March 31, Footprint Homes Passed ,279,400 11,902,000 Two-way Homes Passed ,981,500 11,213,800 Subscribers (RGUs) 26 Basic Video ,725,300 2,019,600 Enhanced Video ,471,600 3,275,500 DTH 25 + MMDS , ,400 Total Video... 5,977,600 6,060,500 Internet ,784,300 3,524,200 Telephony ,459,900 2,340,500 Total RGUs... 12,221,800 11,925,200 Q1 Organic RGU Net Additions (Losses) Basic Video... (46,300) (82,500) Enhanced Video... 8,100 65,900 DTH + MMDS... (3,200) (14,100) Total Video... (41,400) (30,700) Internet... 41,700 61,400 Telephony... 22,400 42,900 Total RGU net additions... 22,700 73,600 Penetration Enhanced Video Subscribers as % of Total Video Subscribers % 61.9% Internet as % of Two-way Homes Passed % 31.4% Telephony as % of Two-way Homes Passed % 20.9% Customer Relationships Customer Relationships ,741,900 6,777,500 RGUs per Customer Relationship Q1 Monthly ARPU per Customer Relationship Customer Bundling Single-Play % 52.7% Double-Play % 18.6% Triple-Play % 28.7% Mobile Statistics Mobile subscribers ,600 23,100 23

24 Financial Results, Segment OCF Reconciliation & Property and Equipment Additions The following tables reflect preliminary unaudited selected financial results for the three months ended March 31, 2015 and Revenue Three months ended March 31, Change Rebased % in millions, except % amounts Switzerland/Austria Central and Eastern Europe Total Operating Cash Flow Three months ended March 31, Change Rebased % in millions, except % amounts Switzerland/Austria Central and Eastern Europe (9.2) Other... (0.3) N.M. Total Segment OCF (1.3) Share-based compensation expense... (1.8) (1.9) Related-party fees and allocations, net (65.4) (62.7) Depreciation and amortization... (143.6) (127.9) Impairment, restructuring and other operating items, net... (10.0) 0.6 Operating income Segment OCF as percentage of revenue % 53.6% N.M. - not meaningful The table below highlights the categories of our property and equipment additions for the indicated periods and reconciles those additions to the capital expenditures that we present in our consolidated statements of cash flows: Three months ended March 31, in millions Customer premises equipment Scalable infrastructure Line extensions Upgrade/rebuild Support capital Property and equipment additions Assets acquired under capital-related vendor financing arrangements... (122.3) (80.4) Assets contributed by parent company (4.4) (5.2) Assets acquired under capital leases... (0.4) (0.1) Changes in current liabilities related to capital expenditures Total capital expenditures Regional Property and Equipment Additions Switzerland/Austria Central and Eastern Europe Other Total Property and equipment additions as a percentage of revenue % 18.6% 24