2. Forward looking statements
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:
Various statements contained in this document constitute “forward looking statements” as that term is defined under the Private
Securities Litigation Reform Act of 1995. Words like “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expects,” “estimates,”
“projects,” “positioned,” “strategy,” and similar expressions identify these forward looking statements, which involve known and
unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements or industry results to
be materially different from those contemplated, projected, forecasted, estimated or budgeted, whether expressed or implied, by
these forward looking statements. These factors include: (1) the ability to compete with a range of other communications and content
providers; (2) the ability to control customer churn; (3) the effect of technological changes on our businesses; (4) the ability to use
the Virgin name and logo; (5) the ability to maintain and upgrade our networks in a cost-effective and timely manner; (6) possible
losses in revenues due to systems failures; (7) the ability to provide attractive programming at a reasonable cost; (8) the reliance on
single-source suppliers for some equipment, software and services and third party distributors of our mobile services; (9) the
functionality or market acceptance of new products that we may introduce; (10) the failure to obtain and retain expected synergies
from the merger of our legacy NTL and Telewest businesses and the acquisition of Virgin Mobile; (11) the rate of success in
executing, managing and integrating key acquisitions, including the merger with Telewest and the acquisition of Virgin Mobile; (12)
the ability to achieve business plans for the combined company; (13) the ability to fund debt service obligations through operating
cash flow; (14) the ability to obtain additional financing in the future and react to competitive and technological changes; (15) the
ability to comply with restrictive covenants in our indebtedness agreements; and (16) the extent to which our future earnings will be
sufficient to cover our fixed charges.
These and other factors are discussed in more detail under “Risk Factors” and elsewhere in Virgin Media’s Form 10-K filed with the
SEC on February 28, 2006, Virgin Media Holdings Inc.’s Form 10-K filed with the SEC on March 1, 2006 and Virgin Media’s Forms
10-Q filed with the SEC on May 10, 2006, August 9, 2006 and November 9, 2006. We assume no obligation to update our forward
looking statements to reflect actual results, changes in assumptions or changes in factors affecting these statements.
2
4. Major achievements in last 12 months
• Telewest merger
– Delivered synergy savings and headcount reductions
– Completed first billing system integration
• Virgin Mobile acquisition
– merged retail channels
– cross-sell
• Rebranded to Virgin Media
• Significant cable ARPU growth
• New products bundles (eg 4 for £40, VIP)
• Completed roll-out of superior products: VOD, HDTV and DVR
• Improved customer care
• New management team established
4
5. Fourth quarter highlights
• Revenue growth in all segments
• Strong broadband net adds despite entry of Sky / Carphone
• Excellent TV net adds
• Triple play penetration up to record 40.6%
• Continued significant ARPU growth
• Reduced churn
• Continued customer care improvements
• Strong advertising revenue growth
• Cable OCF growth
5
6. Priorities for 2007
• Deliver on promises of new Virgin brand
– choice, quality, service, value, simplicity, convenience
• Targeting competitor customer bases
• Complete cable integration and secure synergy savings
• Continue to drive efficiency and further improve customer care
• Differentiate TV product through VOD
• More aggressive off-net to leverage Virgin Media brand
• Further exploit cross-sell to and from Virgin Mobile
• Further enhance content assets
• Deliver strong cashflow growth
6
7. Virgin Media Rebrand - Feb 8th
• Virgin challenges established competitors by focus on customer
• On Rebrand day, we announced to consumers
– Launch of revolutionary new VOD channel, Virgin Central
– Simpler pricing
– Unveiling of eye-catching national advertising
– National roll-out via off-net
– Extensive retail distribution
– Improved customer care
7
9. Group RGU growth
Group RGUs in ’000s (pro forma combined*)
15,348
15,271
15,100
15,015
14,806
Off-net
4,523
4,512
4,389
4,346 4,332
Mobile
Cable
10,526
10,428 10,474
10,406
10,200
Q4-05 Q1-06 Q2-06 Q3-06 Q4-06
Growth in consumer businesses driven by compelling packages, cross-
sell and reinvigorated marketing
* pro forma for the cable merger and the Virgin Mobile acquisition
9
10. Driving ARPU growth
Cable ARPU (£) Triple play cable penetration
(pro forma combined*) (pro forma combined*)
£42.82
£42.48 41%
£42.21
39%
£41.50
£41.27 37%
35%
32%
Q4-05 Q1-06 Q2-06 Q3-06 Q4-06 Q4-05 Q1-06 Q2-06 Q3-06 Q4-06
ARPU growth due to
• Triple play and RGU/customer growth
• TV product enhancements
• Selected price increases
* pro forma for the cable merger and the Virgin Mobile acquisition
10
11. Cable customer additions
Gross customer adds (on-net) ‘000s
• Our value proposition remains
(pro forma combined*)
competitive
229
218 214
– Aligned marketing & products
192
– Compelling offers
– 2 for £20, 3 for £30, 4 for £40, VIP
– Enhanced products - VOD, V+,
HDTV, Virgin Central
• Q4 gross adds impacted by
– install shutdown for billing
migration
Q1-06 Q2-06 Q3-06 Q4-06
– Christmas shutdown
* pro forma for the cable merger and the Virgin Mobile acquisition
11
12. Broadband, TV, mobile contract growth
71
96
39
86
18
8 Off-net
On-net
22
78 78 25
(55)
(64)
Q3-06 Q4-06
Q3-06 Q4-06 Q3-06 Q4-06
Q3-06 Q4-06
Mobile contract
TV Broadband Home phone
• TV growth through new products and compelling offers
• Strong broadband growth due to product quality and compelling offers
• Mobile contract growth boosted by cable cross-sell
• Telephony impacted by increased competition and policy/process changes
12
13. Returning to customer growth
Growing gross adds
• Rebrand and reinvigorate marketing
• Compelling value - 2 for £20, 3 for £30, 4 for £40, VIP
• Superior products eg VOD, V+, 20 Mb Broadband
• Improve sales efficiency and processes
• Improve customer advocacy through better customer care
Reducing churn
• Rebrand and reinvigorate marketing
• Improve processes eg collections / movers
• Increase direct debit %
• Improve service quality
• Product enhancements
13
14. Growth potential from alignment
Triple play
ARPU
46.5%
£46.55
£40.43
36.9%
NTL Telewest NTL Telewest
Churn Customer penetration
2.0% 40.5%
37.8%
1.3%
NTL Telewest NTL Telewest
Revenue difference from aligning NTL ARPU and churn
with Telewest is over £250m pa
14 Note: data shown is for Q4-06
15. Offnet strategy
• Continued strong broadband growth
– 31% broadband sub growth in year
– 18,000 broadband net adds in Q4-06
– 260,800 broadband subs at year-end
• Launch fixed line (WLR) in Q2-07
• Launch off-net quad-play in Q2-07
– TV product to initially be Virgin Media DTT with branded EPG
• Wholesale unbundler to provide access to exchanges by year-end
– allows IPTV launch in 2008
– Pay TV and VOD capability
– modest capital investment
• Virgin Media quad-play will be 97% available
• Leverages brand and mitigates cable movers impact
15
16. Virgin Media On Demand v Sky Anytime
Virgin Media On Demand Sky Anytime
• Available to 3m digital subs • Available to <15% subscribers
• Free digital set top box – requires £299 HD box or
up-to-date £99 Sky+ box
• >500 Hollywood movies
• 2,000 hrs + top TV content • Up to 40 hours selected by Sky
– eg Sopranos, West Wing,
• Downloaded overnight
CSI, Little Britain, Lost,
• Content restricted by type of
Desperate Housewives
TV package taken
• Free catch-up TV from BBC,
Channel4 and others
• Immediately available
“The one-way nature of satellite broadcasting
makes it harder for Sky to provide a true on-
• HD VOD content
demand service to its customers”
• Music, Adult, Kids, Specialist BBC - 3rd February 2007
Note: Source of Sky information is BSkyB website - February 27, 2007
16
17. V+ versus Sky+ and Sky HD
V+ Sky+ and Sky HD
• 80 hours recording time • 20 or 40 hours recording time
• 3 tuners • 2 tuners
• Free box • £99 Sky+ box
• Free HD compatibility • £299 Sky HD box
• Thousands of hours of free and • Up to 40 hours selected on-
pay VOD content demand content
• £25 install – if you have up-to-date box
• £60 install
Note: Source of Sky information is BSkyB website - February 27, 2007
17
19. Content Strategy
Increase scale and leverage of content assets as a strategic tool versus
competition - Sky, Freeview, BT Vision and DSL resellers
• Seek strategic control or access to enhanced content
– eg VOD deals, sports rights, acquisitions, partnerships
• Leverage content across multiple platforms
– Freeview, Basic, Premium, VOD, HDTV, Broadband, Mobile
• Differentiate through VOD and Virgin Central
• Exclusive content
19
21. Delivering on our natural strengths
TV Broadband
• Full range of TV services • Reliable & consistent speeds
• Exploit VOD advantage • No reliance on BT on-net
• Launched Virgin Central • 2/4/10/20Mb tiers; 50Mb trial
• HD and DVR fully rolled out • Improved content
eg Premiership clips
Home Phone Mobile
• Talk Anywhere (Bundled Minutes) • Grow underpenetrated contract
business
• Prepare for Fixed/Mobile
• Cross-sell into cable base
convergence
• Grow retail channels
Brand Bundles
• Fun, easy to use & understand • Flexible and attractive offers
• Competitively & simply priced • Multi-product capability
• Brilliant customer service institutionalised
• Innovative
21
22. Better Value from Virgin Media
Price comparison showing value of 2 for £20 TV and Broadband
Year 1 Year 2
Television Broadband
Monthly Subs Monthly Subs
TV Size: L
Broadband =
+ ’000s hrs of £20 £20
+ Size: M (2Mb)
VOD content
£25 engineer install
Sky
Broadband
= £29 £29
Sky TV 4 mix
+ Base (up to
2Mb)
£18 Free + £11 BT line £40 connection + £50 engineer install*
rental
£173 £108
ANNUAL SAVING =
Note: Price comparisons based on nearest equivalent BSkyB product to the service included in the cable value pack.
Source of Sky pricing information: BSkyB website -February 27, 2007. * Engineer install optional
22
23. Better Value from Virgin Media
Price comparison showing value of 2 for £20 TV and Telephony
Year 1 Year 2
Television Telephony
Monthly Subs Monthly Subs
TV Size: L Phone Size:
=
+ ’000s hrs of £20 £20
M (Talk
+
VOD content Weekends)
£25 engineer install
Sky Talk
Freetime
= £29 £29
Sky TV 4 mix
+ (Evenings &
weekends)
£18 Free + £11 BT line
rental
£83 £108
ANNUAL SAVING =
Note: Price comparisons based on nearest equivalent BSkyB product to the service included in the cable value pack.
Source of Sky pricing information: BSkyB website -February 27, 2007.
23
24. Better Value from Virgin Media
Price comparison showing value of 3 for £30
Year 1 Year 2
Television Broadband Telephony Monthly Subs Monthly Subs
TV Size: L Phone Size:
Broadband =
+ ’000s hrs of £30 £30
M (Talk
+ +
Size: M (2Mb)
VOD content Weekends)
£25 engineer install
Sky Sky Talk
Broadband Freetime
= £29 £29
Sky TV 4 mix
+ +
Base (up to (Evenings &
2Mb) weekends)
£18 Free Free + £11 BT line £40 connection fee + £50
rental engineer install*
£53 £41
CUMULATIVE SAVING =
Note: Price comparisons based on nearest equivalent BSkyB product to the service included in the cable value pack.
Source of Sky pricing information: BSkyB website -February 27, 2007. * Engineer install optional
24
25. Better Value from Virgin Media
Price comparison showing value of 4 for £40
Year 1 Year 2
Television Broadband Mobile
Telephony
Monthly Subs Monthly Subs
300 texts &
TV Size: L Broadband Phone Size: 300 cross =
£40 £40
+ ’000s hrs of Size: M + +
M (Talk
VOD content + network
(2Mb) Weekends) minutes
£25 engineer install
Sky Sky Talk Equivalent
Sky TV 4 Broadband Freetime offer from = £49 £49
+ Base (up to + (Evenings & +
mix
Vodafone
2Mb) weekends)
£18 Free £40 connection fee + £50
£20
Free + £11 BT
engineer install
line rental
£108
£173
ANNUAL SAVING =
Note: Price comparisons based on nearest equivalent BSkyB product to the service included in the cable value pack.
Source of Sky pricing information: BSkyB website -February 27, 2007. * Engineer install optional
25
28. Major improvements in customer care
Average Speed of Answer (secs)
• Improved customer satisfaction ratings
• Complaints down 19% since Q1-06
207
• Staff attrition rates down 35% at old NTL
• Customer care improvements through
– increased investment
85
– improved training
40
– increased headcount
– process changes
Q4-05 Q3-06 Q4-06
– billing system migrations
– new and improved EPG
Note: statistics for Q4-05 are prepared on pro forma combined basis. Q4-06 exclude impact of December billing migration
28
29. Further efficiency improvements
• Revised and reinvigorated marketing
– benefit led messages
– more confident and anti-competitor
– more proactive PR
– Acquisition costs per install fallen as result
• Reduced direct sales headcount
– Improved sale productivity
• Reduced costs per truck roll
• Increased service technician jobs per day
• Reduced cost per bill
29
31. Segment Revenue
Q4-06 Q3-06
£m £m
Revenue
Consumer 644 643 ARPU growth partially offset by customer losses
Business 169 162 Growth in wholesale and data revenue
Total Cable 813 805
Mobile 152 140 ARPU and subscriber growth
Content 117 79 Strong advertising and Sit-up revenue
1,082 1,025
*Note: OCF is operating income before depreciation, amortization and other charges and is a non-GAAP financial measure. See Appendices
31 for reconciliations of non-GAAP financial measures to their nearest GAAP equivalents
32. Segmental OCF
Q4-06 Q3-06 Q2-06 Q1-06** Q4-05**
£m £m £m £m £m
Cable 297 296 285 268 283
Mobile 14 16 - - -
Content 2 6 9 9 9
313 318 293 277 292
Merger, brand and other costs
Merger implementation 19 14 14 6 2
Telewest merger fees 16
Rebrand costs 5
M&A costs 2
*Note: OCF is operating income before depreciation, amortization and other charges and is a non-GAAP financial measure. See Appendices
for reconciliations of non-GAAP financial measures to their nearest GAAP equivalents ** pro forma for cable merger
32
33. Synergy run-rate on target
Annual synergy* run-rate
• Majority of savings are headcount
(£m)
250
related
50
• Labour costs have fallen 350 bps as %
Capex
Opex
of revenue (excl Mobile) since Q1-06
152
• 4,750 reduction to date
36
112
– 2,550 redundancies and attrition
200
32
– 2,200 outsourced
60
116
16
• Targeting 6,000 total by end of 2007
80
44
– cost equivalent to 3,500 FTEs
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
• Other main synergies from
2006 2007
– billing integration
– procurement savings
* synergies are estimated figures
33
34. Virgin Mobile
• Q4 ARPU up from £10.28 to £10.59
Revenue (£m)
• Q4 net adds of 11k, lower than expected
151.7
– increased price competition
140.4 9.9 Equipment
– high competitor ad spend
7.9 Service
• Strong contract growth
• 60,000 sales of 4 for £40 to date
• 2007 sub growth to come from
– Reinvigorated “value” messaging
141.8 – Continued contract growth
132.5
– Cross-sell to cable
– Exploit Virgin Media rebrand spend
– Further retail store openings
• Significant Q1 negative net adds expected
due to normal seasonal weakness
Q3-06 Q4-06
34
35. Business services
Business Revenue (£m)
• Strong revenue growth through data
169
and low margin wholesale related to
162
completion of network build contract
• Q1 wholesale revenues expected to be
72
65
£10m-£15m lower due to contract
completion
39 • Experiencing strong demand for data
41
products
• Long-term cashflow outlook remains
59 56
promising through focus on data
Q3-06 Q4-06
Voice Data Wholesale & Other
35
36. Content segment
Content revenue
Virgin Media TV Revenue (£m)
(pro forma combined) • Virgin Media TV (ex-Flextech)
35
35 – growth through ad revenue
34
33 4 32 5
4 – 2007 subscription revenue impacted by
5 4
new Sky contract
9
9 9
• Sit-up
9 9
– Q4 revenue of £82m, up £34m on Q3 due
to seasonally strong sales
– Q1 revenue to be approx £30m lower due
22 21 21 to normal seasonality
19 19
Content OCF
• Q4 OCF of £2m, down £3.5m on Q3 due to
– seasonally high programming expense
Q4-05 Q1-06 Q2-06 Q3-06 Q4-06
– partially offset by seasonally strong Sit-up
Advertising Subscription Other
* After intersegment elimination.
36
38. Non-GAAP measures
Virgin Media uses non-GAAP 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.
Virgin Media evaluates operating performance based on several non-GAAP measures, including (i) operating income
before depreciation, amortization and other charges (OCF), and (ii) pro forma operating income before depreciation,
amortization and other charges (OCF), as we believe these are important measures of the operational strength of our
business. Since these measures are not calculated in accordance with GAAP, they should not be considered as
substitutes for operating income (loss), and total liabilities, respectively, as indicators of our operating performance, pro
forma operating income (loss), and total liabilities.
Pro forma information
Pro forma results for the quarter ended March 31, 2006 assume that the NTL-Telewest merger took place on January 1,
2006. Pro forma results for 2005 assume that the merger took place on January 1, 2005. The pro forma financial
information contained herein does not include the results of Virgin Mobile.
The pro forma presentation contained herein is non-GAAP financial information. We have included the pro forma
information to provide a useful basis for evaluating developments in our business over time, but it should not be viewed
as a substitute for our GAAP financial information. Please see following appendices.
38
39. Non-GAAP reconciliation (i)
Reconciliation of operating income before depreciation, amortization and
other charges (OCF) to GAAP operating income (loss)
Three months ended
(in £ millions) (unaudited)
Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
2006 2006 2006 2006 2005
Operating income before depreciation,
amortization and other charges (OCF) 313.0 317.8 293.3 198.4 154.7
Reconciling items
Other charges (15.6) (30.9) (12.1) (8.4) (22.4)
Depreciation and amortization (288.2) (296.5) (274.9) (186.1) (166.7)
Operating income (loss) 9.2 (9.6) 6.3 3.9 (34.4)
39
40. Non-GAAP reconciliation (ii)
Reconciliation of pro forma operating income before depreciation,
amortization and other charges (OCF) to pro forma GAAP operating
income (loss)
Three months ended
(in £ millions) (unaudited)
Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
2006 2006 2006 2006 2005
(Reported) (Reported) (Reported) (Pro Forma) (Pro Forma)
Pro forma operating income before depreciation,
amortization and other charges (OCF) 313.0 317.8 293.3 277.0 292.0
Reconciling items
Depreciation and amortization (288.2) (296.5) (274.9) (186.1) (166.7)
Other charges (15.6) (30.9) (12.1) (8.4) (22.4)
Telewest pro forma operating loss(income) 4.8 (15.0)
- - -
Telewest pro forma depreciation and
amortization (82.9) (122.3)
- - -
Telewest pro forma other charges (0.5)
- - - -
Operating income (loss) 9.2 (9.6) 6.3 3.9 (34.4)
40
