Virgin Media Reports Preliminary Q1 2016 Results

Investing for Growth: Strong Q1 Organic RGU Additions of 93,000

Rebased Revenue and Segment OCF Growth of 4% in Q1


Virgin Media Inc. ("Virgin Media") is the leading cable operator in the U.K and Ireland, delivering market leading ultrafast broadband, video and fixed-line telephony services to 5.6 million cable customers and mobile services to 3.0 million mobile subscribers.

Operating and financial highlights:

• Organic net customer additions of 48,000 in Q1 2016 compared to 5,000 in Q1 2015
◦ Delivered a record 55,000 net customer additions in the U.K, supported by record low churn

• Q1 organic RGU additions increased significantly to 93,000, compared to 16,000 in prior-year period
◦ Superior bundles and U.K new build driving improved YoY RGU performance across our portfolio, as evidenced by 67,000 internet4 and 44,000 fixed-line telephony additions in Q1
◦ U.K  RGU additions of 110,000 represents our best Q1 growth since 2010

• Improved growth in postpaid mobile additions to 47,000 in Q1, compared to 19,000 in Q1 2015 • Product enhancements in Q4 2015, including our U.K. speed boost and addition of Replay TV in Ireland, underpin our Q1 2016 price increases ◦ Continued improvement in customer churn trend with YoY reduction in the U.K and Ireland ◦ Q1 customer churn of 14.1% compared to 14.5% in Q1 2015; record low U.K churn of 14.0%

• On-track to add more than 500,000 Project Lightning premises in the U.K during 2016
◦ Added 70,000 Lightning premises in Q1
◦ Announced at least 25% of our Lightning build will be fibre-to-the-premises ("FTTP")
◦ Build cost per home, penetrations and ARPU in-line with business plan

• Investing for growth; targeted investments to enhance customer offer and drive sales

◦ Broadband speed leadership: 300 Mbps launch for Small Office / Home Office ("SOHO") in the U.K. and new 360 Mbps top speed tier for customers in Ireland during Q1
◦ Enhancing our TV platform in the U.K:
▪ Added new on-demand programming in Q1
▪ Working on further improvements to user-interface in the second half of 2016
▪ Preparing to launch new set-top box platform
▪ Sales & marketing: increased brand and sales activity supporting Project Lightning and SOHO

• Rebased revenue growth of 4% for Q1 to £1,178 million

• Q1 rebased Segment OCF growth of 4% to £520 million and Segment OCF margin of 44.2%

• Operating income of £89 million in Q1 2016 as compared to £97 million in Q1 2015

• Property and equipment additions as a percentage of revenue increased by 160 basis points to 22% in Q1 due to a higher level of new build