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Liberty Global Reports Preliminary Fiscal 2012 Results

Liberty Global, Inc. (“Liberty Global,” “LGI,” or the “Company”) (NASDAQ: LBTYA, LBTYB and LBTYK), today announces its preliminary unaudited consolidated financial and operating results for the year and three months (“Q4”) ended December 31, 2012. We expect to publish our final consolidated results for 2012 on February 13, 2013 after market close and conduct our 2012 earnings call on February 14, 2013. In addition, Liberty Global announced today that it had signed an agreement to acquire Virgin Media. The details regarding this acquisition are described in a separate press release issued today by Liberty Global and Virgin Media.

Highlights for the full year and Q4 compared to the same period for 2011 (unless noted), include: 1

  • Organic RGU 2 additions increased 34% to 1.6 million in 2012, including 465,000 in Q4
  • Revenue of $10.31 billion, including $2.73 billion in Q4
    • 2012 rebased 3 revenue growth of 5.8%, including 6.5% in Q4
  • Operating Cash Flow (“OCF”) 4 of $4.87 billion in 2012, including $1.25 billion in Q4
    • 2012 rebased OCF growth of 4.1%, including 5.6% in Q4
    • Excluding VTR Wireless, 5 2012 rebased OCF growth was 5.2% and Q4 rebased OCF growth was 6.5%
  • Operating income increased 9% to $1.98 billion for 2012 and 23% to $501 million for Q4
  • Capital expenditures as a percentage of revenue of 16% for Q4 and 18% for 2012, both reflecting significant declines over the corresponding prior year periods
  • 2012 Adjusted Free Cash Flow (“Adjusted FCF”) 6 of $1.03 billion, including $594 million in Q4
    • Reflects year-over-year growth of 31% for 2012 and 62% for Q4

Key Subscriber Statistics 7

      Organic Net Adds
Q4 2012                     FY 2012
in thousands
Video (27.8 ) (286.5 )
Internet 249.1 909.1
Telephony 243.8   971.4  
Total 465.1   1,594.0  
 
Totals
FY 2011 FY 2012
Total RGUs: in thousands
Video 18,405.5 18,308.5
Internet 8,159.3 9,244.3

Telephony 8

6,225.3   7,281.7  
Total 32,790.1   34,834.5  
 

Homes Passed

33,262.1 34,193.5
2-Way Homes Passed 31,023.0 32,190.4
 
Customer Relationships 19,538.2 19,788.2
 

Summary of Debt, Capital Lease Obligations and Cash and Cash Equivalents

The following table 9 details the U.S. dollar equivalent balances of our third-party consolidated debt, capital lease obligations and cash and cash equivalents at December 31, 2012:

            Capital       Debt and       Cash
Lease Capital Lease and Cash

Debt 10

Obligations Obligations Equivalents
in millions
LGI and its non-operating subsidiaries $ 1,243.4 $ 13.6 $ 1,257.0 $ 701.3
UPC Holding (excluding VTR Group) 12,627.5 32.9 12,660.4 41.6
Unitymedia KabelBW 6,841.6 937.1 7,778.7 26.7
Telenet 4,666.2 405.1 5,071.3 1,196.0
Liberty Puerto Rico 663.9 0.6 664.5 2.4

VTR Group 11

91.9 0.3 92.2 44.3
Other operating subsidiaries   0.4     0.4   26.6
Total LGI $ 26,134.9 $ 1,389.6 $ 27,524.5   2,038.9
 

Restricted cash for LGI Telenet Tender released on 2/1/13 12

  1,069.0
Adjusted Cash Position   3,107.9
 

Unused Borrowing Capacity 13

  2,237.5
Total Consolidated Liquidity $ 5,345.4
 

Summary of Consolidated Liquidity and Leverage Ratios

The following table highlights our consolidated leverage ratios 14 at December 31, 2012:

      Gross                     Net
Consolidated Leverage Ratios 5.5x 4.9x
Adjusted Consolidated Leverage Ratios 5.3x 4.6x
 

Operating Cash Flow Reconciliation

      Three months ended

December 31,

          Year ended

December 31,

2012       2011 2012       2011
in millions
Total segment operating cash flow from continuing operations $ 1,254.4 $ 1,099.5 $ 4,869.6 $ 4,482.3
Stock-based compensation expense (21.9 ) (25.6 ) (112.4 ) (131.3 )
Depreciation and amortization (681.4 ) (618.7 ) (2,691.1 ) (2,457.0 )
Impairment, restructuring and other operating items, net   (50.4 )   (47.1 )   (83.0 )   (75.6 )
Operating income $ 500.7   $ 408.1   $ 1,983.1   $ 1,818.4  
 

Free Cash Flow and Adjusted Free Cash Flow Reconciliation

      Three months ended

December 31,

          Year ended

December 31,

2012       2011 2012       2011
in millions
Net cash provided by operating activities of continuing operations $ 1,033.5 $ 837.6 $ 2,858.5 $ 2,562.7

Excess tax benefits from stock-based compensation 15

3.5 4.4 7.2 37.7

Cash payments for direct acquisition costs 16

14.3 2.6 33.8 19.6
Capital expenditures (432.9 ) (511.3 ) (1,883.6 ) (1,927.0 )
Principal payments on vendor financing obligations (44.8 ) (6.6 ) (104.7 ) (10.0 )
Principal payments on certain capital leases   (8.1 )   (3.2 )   (17.5 )   (11.4 )
FCF $ 565.5   $ 323.5   $ 893.7   $ 671.6  
 
FCF $ 565.5 $ 323.5 $ 893.7 $ 671.6

Payments associated with Old Unitymedia’s pre-acquisition capital structure 17

12.9
FCF deficit of VTR Wireless   28.3     44.1     139.8     106.5  
Adjusted FCF $ 593.8   $ 367.6   $ 1,033.5   $ 791.0  
 

Capital Expenditures

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

December 31,

         

Year ended

December 31,

2012       2011 2012       2011
in millions, except % amounts
Property and equipment additions $ 638.4 $ 674.1 $ 2,274.1 $ 2,131.6
Assets acquired under capital-related vendor financing arrangements (94.2 ) (42.7 ) (246.5 ) (101.4 )
Assets acquired under capital leases (17.6 ) (11.5 ) (63.1 ) (38.2 )
Changes in current liabilities related to capital expenditures   (93.7 )   (108.6 )   (80.9 )   (65.0 )

Total capital expenditures 18

$ 432.9   $ 511.3   $ 1,883.6   $ 1,927.0  
 
Property and equipment additions as % of revenue 23.4 % 28.0 % 22.1 % 22.4 %
Capital expenditures as % of revenue 15.9 % 21.3 % 18.3 % 20.3 %
 

Additional Information and Where to Find it

Nothing in this press release shall constitute a solicitation to buy or subscribe for or an offer to sell any securities of Liberty Global, Virgin Media or the new Liberty Global holding company. In connection with the proposed transaction, Liberty Global and Virgin Media will file a joint proxy statement/prospectus with the SEC, and the new Liberty Global holding company will file a Registration Statement on Form S-4 with the SEC. STOCKHOLDERS OF EACH COMPANY AND OTHER INVESTORS ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) REGARDING THE PROPOSED TRANSACTION WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders will be able to obtain a free copy of the registration statement and joint proxy statement/prospectus, as well as other filings containing information about Liberty Global, Virgin Media and the new Liberty Global holding company, without charge, at the SEC's Internet site ( http://www.sec.gov). Copies of the registration statement and joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference therein can also be obtained, without charge, by directing a request to Liberty Global, Inc., 12300 Liberty Boulevard, Englewood, Colorado, 80112, USA, Attention: Investor Relations, Telephone: +1 303 220 6600, or to Virgin Media Limited, Communications House, Bartley Wood Business Park, Bartley Way, Hook, RG27 9UP, United Kingdom, Attn: Investor Relations Department, Telephone +44 (0) 1256 753037.

Participants in Solicitation

The respective directors and executive officers of Liberty Global and Virgin Media and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Liberty Global's directors and executive officers is available in its proxy statement filed with the SEC by Liberty Global on April 27, 2012, and information regarding Virgin Media's directors and executive officers is available in its proxy statement filed with the SEC by Virgin Media on April 30, 2012. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available. These documents can be obtained free of charge from the sources indicated above.

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