VMED: Virgin Media Inc.: First Quarter 2013 Results

  VMED: Virgin Media Inc.: First Quarter 2013 Results

UK Regulatory Announcement

                   Strong Revenue and Free Cash Flow Growth

LONDON

London, England, April 24, 2013 –Virgin Media Inc. (NASDAQ: VMED; LSE: VMED)
announces results for the quarter ended March 31, 2013.

Strong financial performance

  *Revenue up 3.6% to £1,043m
  *OCF^1 up 5.8% to £399m

       *OCF before merger-related costs^1 up 7.9% to £406m
       *Operating income up 14% to £150m
       *Net income of £139m, up from £7m

  *FCF^2 up 54% to £135m

       *Net cash provided by operating activities up 44% to £306m

Improved churn, ARPU and customer mix

  *Cable customer net additions of 8,600

       *Churn fell to 1.1%; sixth consecutive quarter of year-on-year
         improvement
       *Triple-play penetration up to 65%; quad-play penetration up to 16%

  *Cable ARPU up 5.2% to £49.38
  *Improved customer mix

       *TiVo customers increased 171,900 to 1.5m; 40% of the TV base
       *Paying TV customers^3 increased 13,700 to 3.3m; 87% of the TV base
       *Superfast broadband customers (30Mb and above) increased 337,900 to
         2.5m; 58% of the cable broadband base
       *Contract mobile customers increased 35,100 to 1.7m; 58% of the mobile
         base

  *Business division: new major backhaul contract wins from Sky, Telefonica
    and another large UK mobile network operator

Neil Berkett, Chief Executive Officer of Virgin Media, said: “We have had a
good start to the year with accelerated revenue growth, improved churn, and
strong free cash flow growth. The great value we provide through our
Collections packages, which bundle superfast broadband and our next generation
TiVo service, has seen new customers join and our existing customers stay
loyal to us. This positive momentum in the business positions us well for our
planned merger with Liberty Global."

Note: The notes preceding the Appendices relating to non-GAAP financial
measures and other matters and the Appendices to this earnings release are
considered an integral part of the financial and operational information in
this release. Financial and statistical information is as at and for the three
months ended March 31, 2013, unless otherwise stated. Comparisons of financial
and operating statistics are to the first quarter of 2012, unless otherwise
stated.

Virgin Media Inc.
Investor Relations:
Richard Williams, +44 (0)1256 753037
richard.williams@virginmedia.co.uk
or
Vani Bassi, +44 (0)1256 752347
vani.bassi@virginmedia.co.uk
or
Phil Rudman, +44 (0)1256 752677
phil.rudman@virginmedia.co.uk
or
Media:
Gareth Mead, +44 (0) 20 7909 3289
gareth.mead@virginmedia.co.uk
or
Tavistock:
Matt Ridsdale, +44 (0) 20 7920 3150
mridsdale@tavistock.co.uk
or
Lulu Bridges, +44 (0) 20 7920 3150
lbridges@tavistock.co.uk

Conference call details

There will be a conference call today for analysts and investors at 1pm UK
time / 8am ET, which can be accessed live on the Company’s website,
www.virginmedia.com/investors. Analysts and investors can dial in to the call
on +1 646 254 3363 in the United States or +44 (0) 20 3478 5300 outside of the
US - passcode 4415845# for all participants. The conference call replay will
be available approximately two hours after the end of the call until 5pm UK
time on Wednesday, May 1, 2013. The dial-in replay number for the US is: +1
347 366 9565 and the international dial-in replay number is: +44 (0) 20 3427
0598 - passcode: 4415845#.

Liberty Global

On February 5, 2013, Liberty Global, Inc. and Virgin Media Inc. announced that
they had entered into an agreement, subject to shareholder approvals, pursuant
to which Liberty Global, Inc. will acquire Virgin Media Inc. in a stock and
cash merger. For further information, please see the press release announcing
the proposed merger and other documents filed or to be filed with the SEC as
further detailed below.

This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or approval.
Liberty Global Corporation Limited, a company that has been established in
connection with the transaction, has filed a registration statement on Form
S-4 (Registration No. 333-187100) with the Securities and Exchange Commission
(SEC), which includes a preliminary joint proxy statement of Virgin Media Inc.
and Liberty Global, Inc., and constitutes a prospectus of Liberty Global
Corporation Limited. VIRGIN MEDIA STOCKHOLDERS ARE ADVISED TO READ THE
REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING ALL
AMENDMENTS AND SUPPLEMENTS THERETO) BECAUSE IT CONTAINS IMPORTANT INFORMATION.
A definitive joint proxy statement/prospectus will be sent to security holders
of Virgin Media and Liberty Global seeking their approval of the proposed
transaction. Investors may obtain a free copy of the definitive joint proxy
statement/prospectus, when available, and other relevant documents filed by
Liberty Global Corporation Limited, Liberty Global and Virgin Media with the
SEC at the SEC’s Web site at http://www.sec.gov. The definitive joint proxy
statement, when available, and such other documents filed by Virgin Media with
the SEC may also be obtained for free from the Investor Relations section of
Virgin Media’s web site (www.virginmedia.com) or by directing a request to
Virgin Media Inc., 65 Bleecker Street, 6th Floor, New York, New York 10012,
Attention: Investor Relations. Copies of documents filed by Liberty Global
and/or Liberty Global Corporation Limited with the SEC may also be obtained
for free from the Investor Relations section of Liberty Global’s website
(www.lgi.com) or by directing a request to Liberty Global, 12300 Liberty
Boulevard, Englewood, Colorado 80112, Attention: Investor Relations.

Virgin Media and Liberty Global and their respective directors, executive
officers and certain other members of management and employees may be deemed
to be participants in the solicitation of proxies from their respective
stockholders in connection with the proposed transaction. Information
concerning the interests of Virgin Media’s participants in the solicitation,
which may be different than those of Virgin Media’s stockholders generally, is
set forth in Virgin Media’s proxy statement relating to its 2012 annual
meeting of stockholders filed with the SEC on April 30, 2012 and subsequent
statements of changes in beneficial ownership on file with the SEC.
Information concerning the interests of Liberty Global’s participants in the
solicitation, which may be different than those of Liberty Global’s
stockholders generally, is set forth in Liberty Global’s proxy statement
relating to its 2012 annual meeting of stockholders filed with the SEC on
April 27, 2012 and subsequent statements of changes in beneficial ownership on
file with the SEC. Investors may obtain additional information regarding the
interests of such persons in the proposed transaction by reading the
registration statement, the definitive joint proxy statement/prospectus (when
available) and other relevant documents regarding the proposed transaction
filed with the SEC.

Safe Harbour Statement under the Private Securities Litigation Reform Act of
1995

Various statements contained in this communication may include
“forward-looking statements”, both with respect to us and our industry, that
reflect our current views with respect to future events and financial
performance. Words like “believe”, “anticipate”, “should”, “intend”, “plan”,
“will”, “expects”, “may”, “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 include the following factors relating to the proposed
transaction:

  *The ability to obtain governmental and regulatory approvals of the
    transaction on a timely basis;
  *Failure to realize the anticipated benefits and synergies of the
    transaction, including as a result of a delay in completing the
    transaction or an increase in costs associated with integration or a delay
    or difficulty in integrating the businesses of Virgin Media and Liberty
    Global;
  *Limitation on the ability of Liberty Global Corporation Limited, Liberty
    Global and/or Virgin Media to incur new debt in connection with the
    transaction;
  *Any disruption from the proposed transaction making it more difficult to
    maintain relationships with customers, employees or suppliers;
  *The outcome of litigation which may arise in connection with the
    transaction;
  *Failure to receive the approval of the stockholders of either Liberty
    Global or Virgin Media for the transaction; and
  *The impact of legislative, regulatory and competitive changes and other
    risk factors relating to the industry in which Virgin Media and Liberty
    Global operate, as detailed from time to time in the reports of Virgin
    Media and Liberty Global filed with the SEC.

Additional factors are discussed under “Risk Factors”, “Special Note Regarding
Forward-Looking Statements” and elsewhere in the registration statement on
Form S-4 of Liberty Global Corporation Limited (Registration No.333-187100)
that has been filed with the SEC. In addition, factors relating to the
ordinary course operation of our business are discussed under “Risk Factors”
and elsewhere in our annual report on Form 10-K for the year ended December
31, 2012, as filed with the SEC on February 7, 2013. We assume no obligation
to update our forward-looking statements to reflect actual results, changes in
assumptions or changes in factors affecting these statements. Virgin Media
cautions that the foregoing list of important factors that may affect future
results is not exhaustive.

SUMMARY FINANCIAL RESULTS               3 Months ended
(unaudited)
                                           March 31, 2013    March 31, 2012
                                           £m                   £m
Revenue
Cable                                      725.8                678.3
Mobile                                     137.8                138.5
Non-cable                                  15.5                 19.0
Consumer segment - Total                   879.1                835.8
Business segment                           163.4                170.4
Total Revenue                              1,042.5              1,006.2
                                                                
OCF before merger-related costs            406.3                376.5
                                                                
OCF                                        398.5                376.5
                                                                
Operating income                           149.8                130.9
                                                                
FCF                                        134.5                87.1
                                                                
Net cash provided by operating             306.0                212.1
activities
                                                                
SELECTED CONSUMER OPERATIONS               3 Months ended
STATISTICS
(in thousands, except ARPU)                March 31, 2013       March 31, 2012
                                                                
Consumer cable customers                   4,902.9              4,826.8
                                                                
Consumer cable products
Broadband                                  4,309.6              4,148.6
Television                                 3,782.1              3,775.3
Telephone                                  4,179.6              4,147.6
                                           12,271.3             12,071.5
                                                                
Mobile - contract                          1,744.0              1,588.0
                                                                
                                                                
Consumer cable customer net                8.6                  21.2
additions
                                                                
Net consumer cable product additions
(disconnections)
Broadband                                  37.4                 45.7
Television                                 (13.4)               12.2
Telephone                                  0.5                  14.9
                                           24.5                 72.8
                                                                
Mobile - contract net additions            35.1                 64.1
                                                                
Cable ARPU                                 £49.38               £46.95
                                                                
Mobile ARPU                                £14.60               £14.96
                                                                

OVERVIEW

Strong revenue and FCF growth

Revenue was up 3.6% to £1,043m, with gross margin^4 up 4.4% to £615m. SG&A
increased 1.8% to £217m, principally due to £8m of costs related to the
planned Liberty Global merger. This resulted in OCF of £399m, up 5.8%.
Operating income increased 14% to £150m and net income amounted to £139m, up
from £7m. Free Cash Flow was up 54% to £135m due to higher OCF, lower capital
expenditure and lower interest costs. Net cash provided by operating
activities was up 44% to £306m.

OCF before merger-related costs was £406m, up 7.9%.

Accelerated cable revenue growth

Consumer cable revenue increased 7.0% to £725.8m, primarily due to 5.2% cable
ARPU growth.

The cable customer base grew by 8,600 compared to 21,200 a year ago. Gross
disconnections fell year-on-year for the sixth quarter in a row resulting in
lower monthly churn, down from 1.2% to 1.1%.

Triple-play customer numbers also grew by 17,500 in the quarter, increasing
triple-play penetration to 65.1%, up from 64.0% a year ago.

Superfast broadband and TiVo growth

Demand for superfast broadband (30Mb and above) continues to grow as the
number of customers on such speeds increased by 337,900, taking the total to
2.5m or 58% of our broadband base. Total broadband net additions in the
quarter were 37,400. Our programme to double customers’ broadband speeds is on
track with over 85% of our network now upgraded for the new faster speeds.

TiVo is driving strong pay TV performance. We added 171,900 more TiVo
customers during the quarter to reach a total of 1.5m, which represents 40% of
our TV customer base. The number of paying TV customers increased by 13,700.

Weadded more HD channels to our total TV line-up this year, taking our
totalto 43 channels.In addition we launched 21 new live channels to Virgin
TV Anywhere, our cloud-based entertainment service.

Mobile – improving contract mix

Mobile revenue was relatively flat at £137.8m as improving contract mix was
offset by declining prepay revenue and the impact of regulatory changes to
mobile termination rates (“MTR”). Contract service revenue increased 0.6% to
£99.3m, while prepay service revenue declined by 10% to £32.7m. The MTR change
reduced the amount of inbound mobile revenue we received by approximately
£6.9m compared to the same quarter last year.

We increased our contract mobile base by 35,100 to 1.7m, while our prepay base
reduced by 75,800 to 1.3m. Quad-play penetration increased to around 15.9% of
our residential cable customer base, compared to around 15.0% a year ago.

Major new Business contract wins

In our Business segment, significant contracts can cause some unevenness in
revenues from quarter-to-quarter, especially at this stage of our growth
cycle.

Revenue in this particular quarter was down 4.1% to £163.4m, reflecting lower
voice and install revenues. Since the start of the year, we are seeing
improved sales momentum compared to the second half of last year, with the
first quarter being the strongest in the last six quarters.

During the quarter, we signed a significant ten-year deal with Telefonica
UKfor the provision of backhaul to 1,500 sites. We have also secured
significant orders under a framework agreement to support the creation of a
UK-wide Aggregation Network for another large UK mobile network operator. This
means that we now have material backhaul contracts with all the UK mobile
network operators.

Additionally, we've secured a significant five-year backhaul contract with
Sky, a major UK ISP.

We expect to see the revenues from these new contracts benefit the second half
of this year and we remain confident that the underlying growth rate for
business remains strong.

RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2013

Comparisons of financial and operating statistics are to the first quarter of
2012, unless otherwise stated.

TOTAL REVENUE

Total revenue was up 3.6% to £1,043m due to consumer revenue growth, partially
offset by a fall in business revenue.

OPERATING COSTS AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (SG&A)

Operating costs (exclusive of depreciation) were £427.4m, up 2.5% as higher
consumer cost of sales and higher network and other operating costs were
partially offset by lower business cost of sales. Gross margin grew from 58.6%
to 59.0%.

SG&A increased by £3.8m or 1.8% to £216.6m, mainly due to £7.8m of costs
incurred in relation to the planned merger with Liberty Global. These merger
costs principally comprised legal, accounting, printing and filing fees.

OPERATING INCOME BEFORE DEPRECIATION, AMORTIZATION, GOODWILL AND INTANGIBLE
ASSET IMPAIRMENTS AND RESTRUCTURING AND OTHER CHARGES (OCF)

OCF ^ was up 5.8% at £398.5m due to improved revenue and gross margin,
partially offset by increased SG&A.

OCF before merger-related costs was up 7.9% at £406.3m.

OPERATING INCOME

Operating income increased 14% to £149.8m mainly due to improved revenue and
gross margin, partially offset by £7.8m of merger-related costs.

Depreciation expense was up 3.4% at £248.3m mainly due to depreciation in
respect of new fixed assets, partially offset by certain fixed assets becoming
fully depreciated.

TAX EXPENSE

The income tax expense for the quarter of £22.7 million primarily represents
the net reduction in our deferred tax assets where these have been used to
offset to nil our taxable profits for the quarter.

NET INCOME

Net income for the quarter was £138.9m compared to net income of £7.0m in the
first quarter last year. The improvement was mainly due to increased gain on
derivative instruments, reduced loss on extinguishment of debt and reduced
interest expense, partially offset by £7.8m of merger-related costs.

CAPITAL EXPENDITURE

Fixed asset additions (accrual basis)^5 were down 5.3% to £220.6m mainly due
to reduced spend on customer premise equipment.

The total purchase of fixed and intangible assets was down 5.3% to £174.4m
mainly due to the decrease in fixed asset additions (accrual basis) and
represented 16.7% of revenue.

FREE CASH FLOW

Free Cash Flow was up 54% to £134.5m due to increased OCF, lower purchase of
fixed and intangible assets and lower net interest expense, partially offset
by £7.8m of merger-related costs. Net cash provided by operating activities
was up 44% at £306m mainly due to higher operating income, lower interest and
a loss on extinguishment of debt in the prior year.

DEBT

As of March 31, 2013, total debt of £6,111m consisted of £750m outstanding
under our Senior Credit Facility, £1,900m of Senior Notes, £2,642m of Senior
Secured Notes, £583m of Convertible Senior Notes and £236m of capital leases
and other indebtedness. Cash and cash equivalents were £319m.

Interest expense in the quarter was £89.7m, down 15% due to a lower level of
debt and lower average interest rates.

Notes

Please see Appendix F for a reconciliation of all non-GAAP financial measures
to their nearest GAAP equivalents.

As discussed elsewhere, on February 5, 2013, we entered in to a Merger
Agreement with Liberty Global, Inc., and certain of its direct or indirect
wholly-owned subsidiaries. As the merger has not yet been consummated, we have
not modified our accounting to consider the potential effects on certain
arrangements that may arise upon consummation, including those relating to
long term debt, derivative financial instruments and stock based compensation
plans.

^1 OCF is operating income before depreciation, amortization, goodwill and
intangible asset impairments and restructuring and other charges. OCF before
merger-related costs is operating income before depreciation, amortization,
goodwill and intangible asset impairments and restructuring and other charges,
and merger-related costs. OCF and OCF before merger-related costs are non-GAAP
financial measures and the most directly comparable GAAP measure is operating
income.
^2 Free Cash Flow, or FCF, is OCF reduced by purchase of fixed and intangible
assets, as reported in our statements of cash flows, and net interest expense,
as reported in our statements of operations. FCF is a non-GAAP financial
measure and the most directly comparable GAAP measure is net cash provided by
operating activities.
^3 Paying TV customer base is our total TV customer base less those on
packages which include a free TV service provided with a non-TiVo set top box.
^4 Gross margin is revenue less operating costs. Gross margin percentage is
revenue less operating costs, divided by revenue.
^5 Fixed asset additions (accrual basis) is the purchase of fixed and
intangible assets as measured on an accrual basis, excluding asset retirement
obligation related assets. Fixed asset additions (accrual basis) is a non-GAAP
financial measure and the most directly comparable GAAP measure is purchase of
fixed and intangible assets.


Appendices:

A)    Financial Statements
        •       Condensed Consolidated Statements of Comprehensive Income
        •        Condensed Consolidated Balance Sheets
        •        Condensed Consolidated Statements of Cash Flows
B1)     Quarterly Segment Revenue and Contribution, OCF and Operating Income
B2)     Quarterly Costs and Expenses
C1)     Cable Operations Statistics
C2)     Non-Cable Operations Statistics
C3)     Mobile Operations Statistics
D)      Free Cash Flow Calculation (FCF)
E1)     Fixed Asset Additions (Accrual Basis)
E2)     Capital Lease Activity
F)      Use of Non-GAAP Financial Measures and Reconciliations to GAAP
        

A) FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

                                                  Three months ended
                                                     March 31,
                                                     2013         2012
                                                                     
                                                                     
Revenue                                              £ 1,042.5       £ 1,006.2
                                                                     
Costs and expenses
Operating costs (exclusive of depreciation           427.4           416.9
shown separately below)
Selling, general and administrative expenses         216.6           212.8
Restructuring and other charges                      0.4             5.4
Depreciation                                         248.3           240.2
                                                     892.7           875.3
Operating income                                     149.8           130.9
                                                                     
Other income (expense)
Interest expense                                     (89.7)          (105.6)
Loss on extinguishment of debt                       -               (58.6)
Gain on derivative instruments                       103.6           44.5
Foreign currency loss                                (2.2)           (4.4)
Interest income and other, net                       0.1             0.3
Income before income taxes                           161.6           7.1
Income tax expense                                   (22.7)          (0.1)
Net income                                           £ 138.9         £ 7.0
                                                                     
Per share amounts
                                                                     
                                                                     
Net income
Basic earnings per share                             £ 0.51          £ 0.02
                                                                     
Diluted earnings per share                           £ 0.46          £ 0.02
                                                                     
Dividends per share (in U.S. Dollars)                $0.04           $0.04
                                                                     
                                                                    
Total comprehensive income                           £ 123.8         £ 11.9
                                                                     

CONDENSED CONSOLIDATED BALANCE SHEETS

(in £ millions, except par value)

                                            March 31,      December 31,
                                               2013              2012 (Note 1)
                                                                 
                                               (unaudited)
Assets
Current assets
Cash and cash equivalents                      £ 318.6           £ 206.3
Restricted cash                                1.9               1.9
Accounts receivable - trade, less
allowances for doubtful accounts of            428.0             443.8
£10.5
(2013) and £9.0 (2012)
Derivative financial instruments               7.3               6.1
Prepaid expenses and other current             101.5             103.2
assets
Deferred income taxes                          57.8              58.1
Total current assets                           915.1             819.4
Fixed assets, net                              4,485.3           4,512.2
Goodwill and other indefinite-lived            2,017.5           2,017.5
assets
Derivative financial instruments               655.9             461.6
Deferred financing costs, net of
accumulated amortization of £54.3 (2013)       58.7              61.5
and £50.6 (2012)
Deferred income taxes                          2,622.9           2,641.7
Other assets                                   51.0              51.2
Total assets                                   £ 10,806.4        £ 10,565.1
                                                                 
Liabilities and shareholders' equity
Current liabilities
Accounts payable                               £ 292.9           £ 349.3
Accrued expenses and other current             338.4             319.6
liabilities
Derivative financial instruments               7.1               8.1
VAT and employee taxes payable                 98.4              85.5
Interest payable                               94.7              67.7
Deferred revenue                               294.0             316.7
Current portion of long term debt              81.6              77.1
Total current liabilities                      1,207.1           1,224.0
Long term debt, net of current portion         6,029.3           5,852.0
Derivative financial instruments               44.2              101.9
Deferred revenue and other long term           174.1             168.8
liabilities
Total liabilities                              7,454.7           7,346.7
                                                                 
Commitments and contingent liabilities
                                                                 
Shareholders' equity
Common stock - $0.01 par value;
authorized 1,000.0 (2013 and 2012)
shares;                                        1.5               1.4
issued and outstanding 270.5 (2013) and
269.3 (2012) shares
Additional paid-in capital                     3,677.2           3,658.9
Accumulated other comprehensive income         (20.9)            (5.8)
Accumulated deficit                            (306.1)           (436.1)
Total shareholders' equity                     3,351.7           3,218.4
Total liabilities and shareholders'            £ 10,806.4        £ 10,565.1
equity
                                                                 

Note 1 - The December 31, 2012, condensed consolidated balance sheet includes
an increase of £60.8m to our previously reported deferred income tax assets,
total assets, total liabilities and shareholders' equity to adjust an
understatement that was identified subsequent to the filing of our Annual
Report on Form 10-K for the year ended December 31, 2012. We have assessed
this non-cash adjustment and concluded that it is not material to the
consolidated financial statements for the year ended December 31, 2012. There
is no impact on the condensed consolidated statements of comprehensive income
or condensed consolidated statements of cash flows for the three months ended
March 31, 2012 or March 31, 2013.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in £ millions) (unaudited)

                                                      Three months ended,
                                                         March 31,
                                                         2013       2012
                                                                       
Operating activities:
Net income                                               £ 138.9       £ 7.0
                                                                       
Adjustments to reconcile income from continuing
operations to net cash
provided by operating activities:
Depreciation                                             248.3         240.2
Non-cash interest                                        38.1          17.9
Share based compensation                                 7.5           7.6
Loss on extinguishment of debt, net of cash              -             10.5
prepayment premiums
Unrealized gains on derivative instruments, net of       (104.9)       (46.5)
cash settlements
Unrealized foreign currency loss (gain)                  0.5           (0.7)
Income taxes                                             22.7          1.4
Changes in operating assets and liabilities, net         (45.1)        (25.3)
of effect from business disposals
Net cash provided by operating activities                306.0         212.1
                                                                       
Investing activities:
Purchase of fixed and intangible assets                  (174.4)       (184.1)
Proceeds from sale of fixed assets                       1.5           0.9
Acquisitions, net of cash acquired                       -             (0.6)
Disposal of equity investments, net                      -             (2.5)
Net cash used in investing activities                    (172.9)       (186.3)
                                                                       
Financing activities:
New borrowings, net of financing costs                   -             315.9
Repurchase of common stock                               -             (157.3)
Proceeds from employee stock option exercises, net       9.6           (2.1)
of taxes reimbursed
Principal payments on long term debt                     (1.5)         (314.1)
Principal payments on capital leases                     (22.6)        (21.3)
Proceeds from settlement of cross currency               -             2.3
interest rate swaps
Dividends paid                                           (7.1)         (7.0)
Net cash used in financing activities                    (21.6)        (183.6)
                                                                       
Effect of exchange rate changes on cash and cash         0.8           (1.5)
equivalents
Increase (decrease) in cash and cash equivalents         112.3         (159.3)
Cash and cash equivalents, beginning of period           206.3         300.4
Cash and cash equivalents, end of period                 £ 318.6       £ 141.1
                                                                       
Supplemental disclosure of cash flow information
Cash paid during the period for interest                 £ 53.2        £ 90.9
Income taxes paid                                        £ 0.0         £ 0.0
                                                                       

B1) QUARTERLY SEGMENT REVENUE AND CONTRIBUTION, OCF AND OPERATING INCOME

(in £ millions) (unaudited)

                                       Three months ended
                                          March 31,    March 31,
                                          2013            2012
                                                          
Revenue
Consumer segment
Cable                                     £ 725.8         £ 678.3
Mobile                                    137.8           138.5
Non-cable                                 15.5            19.0
Total                                     879.1           835.8
Business segment
Business                                  163.4           170.4
                                                         
Total revenue                             £ 1,042.5       £ 1,006.2
                                                          
Segment contribution
Consumer segment                          £ 521.9         £ 486.7
Business segment                          85.5            91.2
Total segment contribution                607.4           577.9
Other operating and corporate costs       (208.9)         (201.4)
OCF (1)                                   398.5           376.5
Depreciation                              (248.3)         (240.2)
Restructuring and other charges           (0.4)           (5.4)
Operating income                          £ 149.8         £ 130.9
                                                          

(1) OCF is a non-GAAP financial measure. See Appendix F for a discussion of
the use of OCF as a non-GAAP financial measure and the reconciliation of OCF
to GAAP operating income.

B2) QUARTERLY COSTS AND EXPENSES

(in £ millions) (unaudited)

                                                  Three months ended
                                                     March 31,    March 31,
                                                     2013            2012
                                                                     
Costs and expenses
Operating costs
Consumer cost of sales                               £ 266.2         £ 255.5
Business cost of sales                               58.2            61.6
Network and other operating costs (1)                103.0           99.8
Total operating costs                                £ 427.4         £ 416.9
                                                                     
Selling, general and administrative expenses

Employee and outsourcing costs (2)                   £ 114.9         £ 116.0
Marketing costs (3)                                  48.6            52.6
Facilities (4)                                       15.4            14.4
Other (5)                                            37.7            29.8
Total selling, general and administrative            £ 216.6         £ 212.8
expenses
                                                                     

(1) Network and other operating costs includes costs associated with the
provision of the network and operating platforms including associated
employee, outsourcing and facilities costs and certain other operating
expenses.
(2) Employee and outsourcing costs includes remuneration and benefits,
temporary and contract staff, training and stock-based compensation costs
together with costs of all major outsourced business activities.
(3) Marketing costs includes advertising, brand costs, agency fees, support
and research, public relations and internal communications costs.
(4) Facilities costs include building costs, service costs, repairs and
maintenance and utilities costs.
(5) Other costs include billing, collections and bad debt, IT, legal and
professional, license, insurance, and other indirect costs.

C1) CABLE OPERATIONS STATISTICS (excl Non-cable and Mobile Operations)

(data in 000’s except percentages, products and ARPU)

                                         Three months ended
                                            March 31,    March 31,
                                            2013            2012
Customers
Opening Customers                           4,894.3         4,805.6
Gross adds                                  176.1           189.3
Gross disconnects                           (167.5)         (168.1)
Net customer adds (disconnects)             8.6             21.2
Closing Customers                           4,902.9         4,826.8
                                                            
Monthly Cable customer churn %              1.1%            1.2%
                                                            
Products
Opening products                            12,246.8        11,998.7
Net product adds                            24.5            72.8
Closing products                            12,271.3        12,071.5
                                                            
Net product adds (disconnects)
Telephone                                   0.5             14.9
Television                                  (13.4)          12.2
Broadband                                   37.4            45.7
Total Net product adds (disconnects)        24.5            72.8
                                                            
Products
Telephone                                   4,179.6         4,147.6
Television                                  3,782.1         3,775.3
Broadband                                   4,309.6         4,148.6
Total products                              12,271.3        12,071.5
                                                            
Products / Customer                         2.50            2.50
                                                            
Bundled Customers
Dual products                               984.7           1,062.0
Triple products                             3,191.8         3,091.3
Percentage of dual or triple products       85.2%           86.0%
Percentage of triple products               65.1%           64.0%
                                                            
Cable ARPU (1)                              £ 49.38         £ 46.95
ARPU calculation:
Consumer cable revenue (millions)           £ 725.8         £ 678.3
Average customers                           4,898.8         4,816.6
                                                            

(1) Cable monthly 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
together with revenue generated from our customers using our virginmedia.com
website, exclusive of VAT, by the average number of customers directly
connected to our network in that period divided by three. The average number
of customers is calculated by adding the number of customers at the start of
the quarter and at the end of each month of the quarter and dividing by four.

C2) NON-CABLE OPERATIONS STATISTICS

(data in 000’s)

                            Three months ended
                               March 31,    March 31,
                               2013            2012
Customers
Opening Customers              192.8           248.2
Net customer disconnects       (11.9)          (15.2)
Closing Customers              180.9           233.0
                                               
Products
Opening products
Telephone                      130.5           163.3
Broadband                      192.8           248.2
                               323.3           411.5
                                               
Net product disconnects
Telephone                      (7.7)           (8.0)
Broadband                      (11.9)          (15.2)
                               (19.6)          (23.2)
                                               
Closing products
Telephone                      122.8           155.3
Broadband                      180.9           233.0
                               303.7           388.3
                                               

C3) MOBILE OPERATIONS STATISTICS

(data in 000’s except revenue and ARPU)

                                           Three months ended
                                              March 31,    March 31,
                                              2013            2012
Contract Customers (1)(2)
Opening Contract Customers                    1,708.9         1,523.9
Net contract customer adds                    35.1            64.1
Closing Contract Customers (1)                1,744.0         1,588.0
                                                              
Prepay Customers (2)
Opening Prepay Customers                      1,328.6         1,513.4
Net prepay customer disconnects               (75.8)          (93.4)
Closing Prepay Customers                      1,252.8         1,420.0
                                                             
Total Closing Customers (2)                   2,996.8         3,008.0
                                                              
Mobile Revenue
Contract service revenue (millions) (3)       £ 99.3          £ 98.7
Prepay service revenue (millions) (3)         32.7            36.4
Equipment revenue (millions)                  5.8             3.4
                                              £ 137.8         £ 138.5
                                                              
Mobile ARPU (4)                               £ 14.60         £ 14.96
ARPU calculation:
Service revenue (millions)                    £ 132.0         £ 135.1
Average customers                             3,013.4         3,009.7
                                                              

(1) Contract customers represents the number of contracts relating to either a
mobile service or a mobile broadband contract.
(2) Mobile customer information is for active customers. Prepay customers are
defined as active customers if they have made an outbound call or text in the
preceding 30 days. Contract customers are defined as active customers if they
have entered into a contract with Virgin Mobile for a minimum 30-day period
and have not been disconnected.
(3) Amounts reported for contract service revenue have been reduced by £1.2m
for the three months ended March 31, 2012 to reflect credits applied to
contract customer accounts that had been reported against prepay service
revenue. A corresponding increase has been included in prepay service revenue.
(4) Mobile ARPU is calculated on a quarterly basis by dividing service revenue
(contract and prepay) for the period by the average number of active customers
(contract and prepay) for the period, divided by three. The average number of
customers is calculated by adding the number of customers at the start of the
quarter and at the end of each month of the quarter and dividing by four.

D) FREE CASH FLOW CALCULATION

(in £ millions) (unaudited)

FCF is defined as OCF reduced by purchase of fixed and intangible assets, as
reported in our statements of cash flows, and net interest expense, as
reported in our statements of comprehensive income. See Appendix F for a
discussion of the use of FCF as a non-GAAP financial measure and the
reconciliation of FCF to GAAP net cash provided by operating activities.

                                                  Three months ended
                                                     March 31,    March 31,
                                                     2013            2012
                                                                     .
Operating income before depreciation,
amortization,                                        £ 398.5         £ 376.5
goodwill and intangible asset impairments and
restructuring and other charges (OCF)
Purchase of fixed and intangible assets              (174.4)         (184.1)
Interest expense (net)                               (89.6)          (105.3)
                                                                    
Free Cash Flow (FCF)                                 £ 134.5         £ 87.1
                                                                     

E1) FIXED ASSET ADDITIONS (ACCRUAL BASIS)

(in £ millions) (unaudited)

Virgin Media is not a member of NCTA (National Cable Telecommunications
Association) and is providing this information solely for comparative
purposes. See Appendix F for a discussion of the use of Fixed Asset Additions
(Accrual Basis) as a non-GAAP financial measure and the reconciliation of
Fixed Asset Additions (Accrual Basis) to GAAP purchase of fixed and intangible
assets.

                                                 Three months ended
                                                    March 31,    March 31,
                                                    2013            2012
                                                                    
NCTA Fixed Asset Additions
Customer premises equipment (CPE)                   £ 80.6          £ 96.2
Scaleable infrastructure                            64.4            62.9
Commercial                                          39.3            41.7
Line extensions                                     2.2             2.5
Upgrade/rebuild                                     7.5             7.3
Support capital                                     25.6            21.5
Total NCTA Fixed Asset Additions                    219.6           232.1
Non NCTA Fixed Asset Additions                      1.0             1.0
Total Fixed Asset Additions (Accrual Basis)         220.6           233.1
                                                                    
Fixed assets acquired under capital leases          (29.7)          (23.5)
Changes in liabilities related to:
Fixed Asset Additions (Accrual Basis)               (16.5)          (25.5)
Total Purchase of Fixed and Intangible Assets       £ 174.4         £ 184.1
                                                                    
Comprising:
Purchase of Fixed Assets                            174.4           184.1
Purchase of Intangible Assets                       -               -
                                                    £ 174.4         £ 184.1

E2) CAPITAL LEASE ACTIVITY

(in £ millions) (unaudited)

                                        Three months ended
                                           March 31,    March 31,
                                           2013            2012
                                                           
Opening capital lease liability            £ 229.0         £ 258.0
Additions                                  29.7            23.5
Principal payments on capital leases       (22.6)          (21.3)
Closing capital lease liability            £ 236.1         £ 260.2
                                                          
Interest expense on capital leases         £ 3.1           £ 4.4
                                                           

F) USE OF NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS TO GAAP

Virgin Media uses certain financial measures with a view to providing
investors with a better understanding of the operating results and underlying
trends to measure past and future performance and liquidity. These measures
which are not calculated and presented in accordance with U.S. generally
accepted accounting principles (“GAAP”) are defined as follows:

  *OCF is operating income before depreciation, amortization, goodwill and
    intangible asset impairments and restructuring and other charges.
  *OCF before merger-related costs is operating income before depreciation,
    amortization, goodwill, intangible asset impairments, restructuring and
    other charges and merger-related costs. Merger-related costs are defined
    as incremental costs arising directly as a result of activities relating
    to the proposed merger with Liberty Global, Inc., as announced on February
    5, 2013.
  *Free Cash Flow (FCF) is OCF reduced by purchase of fixed and intangible
    assets, as reported in our statements of cash flows, and net interest
    expense, as reported in our statements of comprehensive income. Our
    definition of FCF excludes the impact of working capital fluctuations and
    restructuring costs.
  *Fixed Asset Additions (Accrual Basis) is the purchase of fixed and
    intangible assets as measured on an accrual basis, excluding asset
    retirement obligation related assets.

Our management considers OCF is an important indicator of our operational
strength and performance during the relevant periods. This measure excludes
the impact of costs and expenses that do not directly affect our cash flows.
Other charges, including restructuring charges, are also excluded from this
measure as management believes they are not characteristic of our underlying
business operations. Our management considers OCF before merger-related costs
is an important indicator of our underlying operational strength and
performance during the relevant periods, after costs incurred solely as a
result of the proposed merger with Liberty Global, Inc. have been excluded.
Our management considers FCF as a helpful measure in assessing our liquidity
and prospects for the future. We believe FCF is useful to investors as a basis
for comparing our performance and coverage ratios and is an additional way of
viewing aspects of our operations that provide a more complete understanding
of factors and trends affecting our business. Our management considers Fixed
Asset Additions (Accrual Basis) an important component in evaluating our
liquidity and financial condition since purchases of fixed assets are a
necessary component of ongoing operations.

Some of the significant limitations associated with the use of OCF and OCF
before merger-related costs as compared to operating income are that OCF does
not consider the amount of required reinvestment in depreciable fixed assets
and ignores the impact on our results of operations of items that management
believes are not characteristic of our underlying business operations. FCF
should not be understood to represent our ability to fund discretionary
amounts, as we have various contractual obligations which are not deducted to
arrive at FCF. We compensate for this limitation by separately measuring and
forecasting working capital. The significant limitations associated with the
use of Fixed Asset Additions (Accrual Basis) as compared to purchase of fixed
and intangible assets is that Fixed Asset Additions (Accrual Basis) excludes
timing differences from payments of liabilities, including finance leases,
related to purchase of fixed and intangible assets. We exclude these amounts
from Fixed Asset Additions (Accrual Basis) because timing differences from
payments of liabilities, including the use of finance leases, are more related
to the cash management treasury function than to our management of fixed asset
purchases for long term operational performance and liquidity.

OCF and OCF before merger-related costs are most directly comparable to the
GAAP financial measure operating income. FCF is most directly comparable to
the GAAP financial measure net cash provided by operating activities. Fixed
Asset Additions (Accrual Basis) is most directly comparable to the GAAP
financial measure purchase of fixed and intangible assets, as reported in our
statements of cash flows. Since these measures are not calculated in
accordance with GAAP, they should not be considered as substitutes for
operating income, net cash provided by operating activities and purchase of
fixed and intangible assets, respectively. Because non-GAAP financial measures
are not standardized, it may not be possible to compare our OCF, OCF before
merger-related costs, FCF or Fixed Asset Additions (Accrual Basis) with other
companies’ non-GAAP financial measures that have the same or similar names.

The presentation of this supplemental information is not meant to be
considered in isolation or as a substitute for other measures of financial
performance reported in accordance with GAAP. These non-GAAP financial
measures reflect an additional way of viewing aspects of our operations that,
when viewed with our GAAP results and the accompanying reconciliations to
corresponding GAAP financial measures, provide a more complete understanding
of factors and trends affecting our business. We encourage investors to review
our financial statements and publicly-filed reports in their entirety and to
not rely on any single financial measure.

The following tables present the reconciliations of OCF, OCF before
merger-related costs, FCF and Fixed Asset Additions (Accrual Basis) to their
nearest measure of financial performance in accordance with GAAP.

Reconciliations of OCF and OCF before merger-related costs to GAAP operating
income

(in £ millions) (unaudited)

                                                  Three months ended
                                                     March 31,    March 31,
                                                     2013            2012
                                                                     
Operating income before depreciation,
amortization, goodwill and
intangible asset impairments, restructuring          406.3           376.5
and other charges and
merger-related costs (OCF before
merger-related costs)
                                                                     
Less:
Merger-related costs                                 (7.8)           -
                                                                    
Operating income before depreciation,
amortization, goodwill and                           398.5           376.5
intangible asset impairments, restructuring
and other charges (OCF)
                                                                     
Reconciling items:
Depreciation and amortization                        (248.3)         (240.2)
Restructuring and other charges                      (0.4)           (5.4)
Operating income                                     149.8           130.9
                                                                     

Reconciliations of Free Cash Flow (FCF) to GAAP net cash provided by operating
activities

(in £ millions) (unaudited)

                                               Three months ended
                                                  March 31,    March 31,
                                                  2013            2012
                                                                  
                                                                  
Free Cash Flow (FCF)                              £ 134.5         £ 87.1
                                                                  
Reconciling items (see Note below):
Purchase of fixed and intangible assets           174.4           184.1
Changes in operating assets and liabilities       (45.1)          (25.3)
Non-cash compensation                             7.5             7.6
Non-cash interest                                 38.1            17.9
Realized foreign exchange (losses) gains          (1.7)           (5.1)
Realized losses on derivatives                    (1.3)           (2.0)
Restructuring and other charges                   (0.4)           (5.4)
Income taxes                                      -               1.3
Debt redemption premium cost                      -               (48.1)
Net cash provided by                              £ 306.0         £ 212.1
operating activities
                                                                  

Reconciliation of Fixed Asset Additions (Accrual Basis) to GAAP purchase of
fixed and intangible assets

(in £ millions) (unaudited)

                                              Three months ended
                                                 March 31,    March 31,
                                                 2013            2012
                                                                 
                                                                 
Fixed Asset Additions (Accrual Basis)            £ 220.6         £ 233.1
                                                                 
Fixed assets acquired under capital leases       (29.7)          (23.5)
Changes in liabilities related to fixed          (16.5)          (25.5)
asset additions
Total Purchase of Fixed and
Intangible Assets                                £ 174.4         £ 184.1
Comprising:
Purchase of fixed assets                         174.4           184.1
Purchase of intangible assets                    -               -
                                                 £ 174.4         £ 184.1

Contact:

Virgin Media Inc.