Investor & Analyst Day

New York
November 11, 2008
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, among others,
include: (1) the ability to compete with a range of other communications and content providers; (2) the ability to manage customer churn; (3) the
continued right to use the Virgin name and logo; (4) the ability to maintain and upgrade our networks in a cost-effective and timely manner; (5)
possible losses in revenues due to systems failures; (6) the ability to provide attractive programming at a reasonable cost; (7) the ability to
control unauthorized access to our network; (8) the effect of technological changes on our businesses; (9) the reliance on single-source
suppliers for some equipment, software and services and third party distributors of our mobile services; (10) the ability to achieve our business
plans; (11) the ability to fund debt service obligations through operating cash flow; (12) the ability to obtain additional financing in the future and
react to competitive and technological changes; (13) the ability to comply with restrictive covenants in our indebtedness agreements; (14) the
extent to which our future cash flow will be sufficient to cover our fixed charges; and (15) general economic conditions.

These and other factors are discussed in more detail under “Risk Factors” and elsewhere in Virgin Media’s Annual Report on Form 10-K for the
year ended December 31, 2007, as filed with the Securities and Exchange Commission, or SEC, on February 29, 2008, as amended, and Virgin
Media’s Quarterly Reports on Form 10-Q for the quarter ended March 31, 2008, as filed with the SEC on May 8, 2008, for the quarter ended
June 30, 2008, as filed with the SEC on August 7, 2008 and for the quarter ended September 30, 2008, as filed with the SEC on November 10,
2008. Virgin Media assumes no obligation to update forward looking statements to reflect actual results, changes in assumptions or changes in
factors affecting these statements.

1
Introduction

Jim Mooney – Chairman

Agenda

9:40 Neil Berkett: Strategy for Growth and Performance to Date

– Why Virgin Media is best positioned in a new converging digital world
10:20 Mark Schweitzer: Consumer Growth Initiatives
10:40 Q&A
11:00 Break
11:15 Howard Watson: Network Strength
– Technical and competitive advantages of our network now and in the future
Building a Customer Focused Organization
– Proposed operational transformation program
11:40 Q&A
12:00 Charles Gallagher: Financial Structure & Flexibility
– Non-consumer assets
– Financial implications of operational transformation
– Investing for growth
– Flexible capital structure

12:20 Neil Berkett: Regulatory Progress and Summary

12:30 Q&A
12.45 Close

3
Management

Neil Berkett
CEO

Howard Watson
Andrew Barron Mark Schweitzer Charles Gallagher
Chief Transformation
Chief Customer and Chief Commercial Senior Vice
& Technology Officer
Operations Officer Officer President Finance

Elisa Nardi Bryan H. Hall Malcolm Wall

Chief People Officer General Counsel CEO – Content

4
Leveraging our strengths since the
mergers
• Cable merger in 2006 resulted in £250m annualized cost savings

• Reinvestment in highly competitive bundled pricing offers

• Acquired Virgin Mobile and re-branded in Feb 2007

• Strong progress in fundamentals

– Churn, product quality, reliability and customer service

• Today we are refocusing the business to exploit network capability for renewed growth
– Lead in next generation broadband
– Lead on-demand TV revolution
– Leverage mobile as our third screen in the home

• Building a more efficient customer focused organization through proposed operational

transformation

– Objective of over £120m of annualized P&L savings by 2012

5
Strategy for Growth and
Performance to Date

Neil Berkett – CEO

7
Align operating model with strategy

Building a customer focused organization able to respond

effectively to fast moving changes in the market,
technology and consumer demands

• Expect proposed new operating model will deliver significant improvements in

– Customer focus, product management/delivery, and clearer accountabilities
leading to streamlined decision-making
• Supported by better processes with a view to achieving annualized P&L
savings of over £120m by 2012
• Strategic growth initiatives mean capex expected to be at top end of 13-15%
guidance range
– Targeting 10Mb growth, intelligently expanding our network, strengthening
TV, DPI, behavioural advertising, leveraging mobile

8
 The world is changing!

UK penetration of integrated PVRs, VOD

Forecast global consumer IP traffic 2005-2011
& HD services
Consumer IP traffic will quadruple in 4 years driven by video
TB/mo
8 Exabytes/mo Web 3.0 Video to STB & TV
Switch to HD delivery 100% PVR VOD HD
IPTV 90%
Core to Casual MMOG
DVD Digital Retail 80%
Global consumer IP traffic

Rise of Streaming 70%

Multimedia enabled UGC
60%
Broadcasters go online
50%
MMOG 40%
UGC sites e.g. YouTube 30%
Social Networking
20%
2 Exabytes/mo Web 2.0 SaaS – Salesforce.com
Broadband Adoption 10%
Web 1.0 0%
eCommerce e.g. Amazon 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Web-based email
1970 1980 1990 2000 2005 2006 2007 2008 2009 2010 2011 Yahoo! & Google emerge
Netscape Browser
Source: Cisco, 2008 Source: 3reasons ltd, spring 2008

• Changing habits of consumption

• Overall traffic per user is growing rapidly across the world
• Consumer IP traffic will quadruple by 2011 driven by video – Cisco estimate (see graph)
– UK faces unique iPlayer issues
• Ofcom suggest 400% increase in VOD in next three years
• Virgin Media broadband customers’ average data consumption up 81% from 4.7 to 8.6Gbytes per month in 18 months

9
Application strength is key

• Levelling the linear content playing field versus Sky

– Possible regulatory intervention from Ofcom Market Investigation
– Economic wholesale access to premium
– Access to Premium HD
– Return of Sky Basics
– Largely funded through increase in VMtv licence payments
– Plan to add linear HD channels
• Content increasingly delivered "over the top"
– iPlayer online
– Studio movies/TV increasingly delivered over internet
– You Tube, Google Video, iTunes etc
• Consumers increasingly demanding On-Demand content

IP and TV world converging; Virgin Media best placed to exploit

10
Our priorities

Refocus growth strategy on leveraging our network advantage

Strategic
Strategic
Lead next generation Lead on-demand TV Leverage mobile as the 3rd
broadband revolution screen in the home

No.1 priority reducing churn

Billing system migration

Operational Improve product quality and reliability
Operational
Customer service
Address backbook
Develop analytical tools
to enhance understanding of the market and our customers

Addressing our capital structure

Financial
Financial Capture 0perational efficiencies

Regulatory
Regulatory Address imperfections in the Regulatory Framework
11
Cable has a clear technical advantage

Virgin Media BT
Network Network
LLU

Hub Exchange

Copper to the Cabinet

Fiber to the Cabinet (POTS & ADSL2+)

Cabinet Cabinet
Coax to the Home
(DVB-C & DOCSIS 3)
Copper to the Home
Copper to the Home (POTS & ADSL2+)
(POTS & VDSL2 capable)

2, 10, 20, 50 Mb/s >20 Mb/s to <5%

Plus DTV & VOD Home Home Includes any IPTV
12
Delivering the 3rd Screen with TV,
Broadband and Mobile
Entertainment
• Mobile portal and Virgin TV programme collaborations
– Sarah Connor Chronicles, Most Haunted
• Mobile Portal and TV Video On Demand collaborations –
joint music campaigns e.g., Jack Johnson artist takeover
simultaneously on both TV and Mobile platforms
• Cross portal and sponsorship programmes – V Festival
content, mobile gig list application, with live TV footage via
Channel
Web browsing
• Currently use Motricity for platform / search
• Provides simple mobile access to popular mobile web sites,
e.g., BBC, e-Bay, Amazon
• Redesigned mobile portal to promote games, music, TV
highlights,
• Cross platform advertising delivered via 4 screens
Communication and social networking
• Plan to launch ‘Free instant Windows Messenger’ for
customers with compatible handsets
• Instant Messenger expected to attract customers with
higher usage profiles
• Mobile access to Virgin broadband e-mail addresses
provides always-on mail, home or away
• New mobile portal launching Dec offering customer access
to social networking on mobile – quick access to Facebook,
My Space, Bebo, Yahoo!, new Yahoo! search engine
Handsets and pricing
• More 3G devices with larger touch screens to support
internet / video use
• Simple, affordable pricing
– Daily unlimited usage rate of 30p from early December
– Monthly data inclusive packages in 2009
13
We have the best broadband economics
Giving us a real competitive advantage

In-franchise share of revenue indexed to share of

Total & in-franchise share of broadband subscribers
subscribers
In-franchise market share National market share

48.7% 161

101 96 106
23.2%
22.2% 66
11.2% 17.9%
12.0% 45
11.3% 10.8% 8.0% 6.9%
6.5% 3.4%

Virgin BT Retail Sky Talk Talk Tiscali Orange Virgin BT Retail Sky Talk Talk Tiscali Orange
Media Media

Average cost per subscriber relative to Virgin Media • Our unique broadband proposition creates a
uniquely profitable combination:
– High share, strong ARPU and leading cost
248
193 210 217 base
179
• DSL competitors face an unenviable choice
100
– Growing market share, but with low
revenues on a high cost base (Sky)
Virgin BT Retail Sky Talk Talk Tiscali Orange – Falling market share, with high revenues
Media
on a high cost base (BT Retail)

14
Source: Oliver & Ohlbaum Analysis, October 2008; Costs weighted for LLU / Non LLU split
Strategic growth objectives

Consumer strategy YTD progress

• 4Mb to 10Mb upgrade completed in Sept 08

• Supported wireless router launched
Lead
Lead next
next • Migrating 20Mb customers onto Docsis 3.0 will improve service quality and
generation
generation broadband
broadband speed for all tiers
• Preparing for 50Mb launch (Q4)

• First and only TV platform to launch iPlayer

Lead
Lead on
on demand
demand TV
TV • Approx 12m iPlayer views per month, 1/3 of all iPlayer views
revolution
revolution • 96% growth in VOD views from Q3-07 to Q3-08
• Increased DVR (V+) penetration from 6% to 14% year-on-year

• Record contract cross-sell to cable base in Q3-08

Leverage
Leverage position
position in
in • Renegotiated wholesale voice and data rates with T-mobile
mobile
mobile • Launched mobile broadband in October
• Mobile sales integration

15
Customers are paying for quality

On-net broadband tier mix (‘000s / % of total) Tier mix at point of acquisition
"M" 2Mb "L" 10Mb "XL" 20Mb "M" 2Mb "L" 10Mb "XL" 20Mb

3,308 3,626
6% 4%
10% 12% Average ARPU uplift
18% 19%
19% – L to XL + £8
35%
– M to L + £3

76% 71% 77%

53%

Q3-07 Q3-08 Q3-07 Q3-08

• Huge success in driving upsell to higher speed, higher priced broadband at point of sale
• Upsell is central to our broadband strategy, given high market penetration but low penetration of high speed
– Higher ARPU
– Lower churn
– Increased differentiation versus competition
16
The on-demand world is here

Monthly VOD views (m) VOD views per user iPlayer/BBC views (m)

45 27
11.9

9.1
17
23

Q3-07 Q3-08 Q3-07 Q3-08 Q2-08 Q3-08

• VOD usage is continuing to grow – nearly half of our TV homes use this service monthly
– Catch-up TV, music and TV on demand are the most viewed products
• VOD reduces churn
• Leverage growing usage through VOD advertising capability
– 3 month trial underway in North London
– Adverts from Kellogs, John Lewis and Royal Mail are being inserted around selected on-demand
programs from VMtv, Channel 4 and Warner TV
• Opportunity to further improve user interface through personalisation, search, visuals,
recommendations etc.
17
Strong operational trends since
merger
Broadband subscribers (000s) Mobile contract subscribers (000s)

3,563 3,626
3,308 3,414 3,502 579
3,192
3,059 3,146 492
2,902 2,980 436
376
329
299
246
192
121

Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08

Percentage of calls abandoned Fault rates

DTV Broadband Phone Combined

20% 14%
12%
15% 10%
8%
10%
6%
5% 4%
2%
0% 0%
Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08

18
Strong operational trends since
merger (cont’d)
Triple play¹ RGUs² (millions)

53.1% 54.7% 11.9 12.0 12.2

51.3% 11.7
49.5% 11.2 11.2 11.4
45.2% 47.0% 10.9 11.0
42.9%
40.6%
37.1% 38.7%

Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08

Cable RGU / customer Monthly on-net cable churn

2.36 2.38 1.8% 1.8%

2.32 1.7% 1.7%
2.29 1.6%
2.26 1.5% 1.5%
2.23 1.4%
1.3%
2.20 1.2%
2.17
2.12 2.14

Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08

1 Triple play is percentage of on-net customers who take all three cable TV, phone and broadband services
2 RGUs include on-net, off-net and contract mobile 19
Financial improvement since merger

SG&A (£m) OCF margin³ %

33.9% 33.6%
267 267
258 32.4% 32.8%
245 31.7%
238 31.0%
230 30.6%
223 29.9%
211 217
28.9%

Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08

OCF¹ less Capex² (£m) Net debt4 (£m)

225 5,905
218
204 209
199 5,794 5,816
184 182 5,741 5,736 5,732
5,677
5,637
155 153 5,597

Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08
1 OCF is operating income before depreciation, amortization, goodwill impairment and restructuring and other charges and is a non-GAAP financial measure
2 Capex is purchase of fixed assets and purchase of intangible assets
3 OCF margin is OCF divided by revenue
4 Net debt is a non-GAAP financial measure; See appendices for reconciliations of non-GAAP financial measures to their nearest GAAP equivalents 20
Growth and value drivers
Volume
• Broadband penetration
• Product differentiation
(50Mb BB, V+, VOD, mobile)
• Sales and marketing efficiency
– Segmentation
– Channel strategy
– Maximizing customer
touchpoints
• Building on Virgin brand
• Bundling drives RGU/customer
• Intelligently expanding our
footprint
Embedded key customer value metrics across the organization
ARPU
• Reduce backbook premium
whilst protecting ARPU and
margin
• Driving up-sell and cross-sell
• Improving depth and range
of products
• Price rises
• Manage telco usage decline
Tenure / Churn
• Fault reduction
• Product depth / quality
(50Mbs BB, V+, VOD, mobile)
• VFM enhancements via
cross-sell / up-sell to reduce
backbook premium
• Becoming more customer
centric and improving Net
Promoter Score (NPS)
21
Influences on revenue and ARPU

Telephony usage Potential market

Backbook decline pressure

Revenue and ARPU

Upsell New customers Cross-sell Price rises

Upsell, cross-sell and new customer growth underpinned by superior broadband,

VOD in TV and contract mobile
22
Backbook unwind slowing
Mitigated by up-sell/cross-sell

Breakdown of quarterly rate of migration from Back to

% Customers on backbook pricing
Front Book pricing (%)

100% Price migrate to Frontbook

Reduced by success of up-sell/cross-sell offers
90% Q2-07 backbook unwind estimate

80% Up-sell to Frontbook

up-sell offers used to migrate customers
70%
Cross-sell to Frontbook
60% Cross-sell offers used to migrate
customers; improved profitability of
50% offers in 2008

40%

30%

20%

10% Q3-08 backbook unwind estimate

0%
Apr-07
Jun-07
Aug-07

Apr-08
Jun-08
Aug-08

Apr-09
Jun-09
Aug-09
Feb-07

Oct-07
Dec-07
Feb-08

Oct-08
Dec-08
Feb-09

Oct-09
Dec-09

2007 2008 2009

23
Sources for sustained revenue growth

Next generation broadband subs (10Mb or more) Contract mobile subs

4.0m
1.6m

1.05m 0.6m

Q3-08 Q4-12 Q3-08 Q4-12

Average monthly VOD views

100m

45m

Q3-08 Q4-12
24
Intelligently expanding our cable
footprint
Significant low cost New Build opportunity

• New homes can be cabled for £200 or less per home

• Could add 40-50k per annum when house build market returns
• Strong take up in New Build areas with average penetration reaching 40% within 6 months
• 5 year payback and significant ongoing value generation
– through up-sell and cross-sell
• Developing relationships with national and regional developers to pitch Virgin Media’s
vision and negotiate favourable commercial agreements
• Opportunities of near-net infill and analogue overbuild also being investigated
• Accommodated within existing capex budget

New build program scales up on success basis

25
 National household opportunity

Non-cable coverage split between LLU and Non-LLU

Opportunity to expand
our cable footprint
All UK - 5,500 exchanges
(25.8 m homes) • C&W wholesale deal
gives us better cost
structure
• Enhanced products and
improved pricing
• Billing systems migration
Wholesale LLU (C&W) now completed
Cable on-net network 11m HH of which 4.3m
12m marketable homes homes incremental
to on-net • BT and BT Wholesale
products are only
competition to Virgin
Media
• WLR and NLA cut out
BT Wholesale Network BT relationship

• We are the only major provider who can bundle with mobile
• Better opportunity to capture cable “movers”
• We currently have low off-net penetration (<3%), meaning we can be more aggressive for growth
26
Reasons customers will choose Virgin

Can watch what I Great value

want when I want bundles
Fastest and most with 000’s of hours customized for my
Customer friendly
reliable broadband of VOD needs

Makes the digital

iPlayer on my TV!
world simple

Then only place I

Great value mobile can get mobile,
with my cable My favourite landline, TV and
services content across all broadband in one
Simple single bill
3 screens - TV, PC great package
and mobile

27
Consumer Growth Initiatives

Mark Schweitzer – CCO

Lead Next Generation
Broadband
Goal: 4m next generation broadband
subscribers by end 2012
The consumer broadband market
today
• Continued growth in overall broadband market (though slowing)
• Continued pricing pressure at low end; pricing and cost pressures likely to drive consolidation over time
• Cable to retain and deepen differentiation at the top end
– Virgin Media & Sky the only major players basing tiers on speed; others differentiate by usage caps
– Our unlimited fibre optic proposition will remain unique for foreseeable future

Consumer broadband market (000s) Consumer broadband market share

Virgin Media BT Other

Carphone Warehouse Tiscali 7%
Orange Virgin Media
Sky Orange 7% 23%
16,000 Other DSL & LLU
14,000
Sky
12,000
11%
10,000
8,000
6,000 Tiscali
4,000 12% BT
22%
2,000
Carphone
0
18%
Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2-
06 06 06 06 07 07 07 07 08 08
Source: Company reports and Virgin Media research Source: Company reports and Virgin Media research

30
Opportunity and strategic initiatives in
broadband
Characteristics Our positioning Opportunity

• Growth driven by price & • Lowest unit cost operator

Low tier broadband bundles 999
• Significant up-sell • 10Mb cable offering superior
Mid tier broadband opportunity to 16Mb DSL (latter reaches 999
only 10% of UK homes)

• Speed & quality important • Sustainable competitive

High tier broadband • Application driven advantage vs. ADSL 999

• Our 2, 10, 20, 50Mb tier structure drives upsell and better value acquisitions
– increasing share of broadband profit pool
• 50Mb drives upsell and wider appreciation of our ultra-fast broadband capability
• 2009 will focus on 10Mb, using Docsis 3.0 to dramatically reinforce our QoS and speed leadership
• Will launch a market-leading package of Value Added Services
• Plus ground-breaking new services, enabled by increased network intelligence
• Relaunch of virginmedia.com, enhancing quality of offering & customer experience

31
Leading in broadband speed delivery

Virgin Media continue to lead the market in broadband speed delivery, leading the
ADSL ISP’s in a number of key benchmarking studies throughout 2008
Virgin Media now tops the latest Point Topic research in the ratio of advertised speed to reported speeds
above 2Mb, leading Tiscali, Sky, BT, Car Phone Warehouse and Orange (Jan – July 2008)

Virgin Media have now comprehensively taken the crown for the Fastest broadband provider away from O2
who have held the position all year (Sept 2008)

With an average reliability of 50.5%, cable broadband continues to be far more reliable than ADSL as a
whole – which scored an average of only 38.8%. Broadband Choices also reported our 2Mb service
delivering 81.5% of headline speed, far superior to any ADSL providers 2Mb service (Aug 2008)

Virgin Media 20Mb average throughput is 3 times faster than the top speeds offered by BT, AOL, Tiscali,
Talk Talk and Pipex (Sept 2008)

Top 10 Broadband 2008 Awards: Virgin Media won the title of Best Broadband Bundle – “The award for
best broadband bundle went to Virgin Media whose range of fast, unlimited, cost-effective bundles stood
out from the crowd” (2008)

Recently the BACC, the body responsible for the clearance of TV adverts prior to transmission, have
cleared our 50Mb launch advertising which claims our 50Mb product is the ‘Fastest’ Broadband available in
the UK. This is a first time ever that the body has approved a ‘superlative’ speed claim for an ISP and
reinforces our dominant speed positioning in the UK market (Oct 2008)
32
Launch of 50Mb: the next generation
of UK broadband
• The best, fastest broadband product – by a mile! A tripling of Virgin Media’s cable network capacity
– Unbeatable speeds
– Broadband with robust VAS package DOCSIS 1.0 network DOCSIS 3.0 network
– Packaged with wireless kit 3.7 m customers Next Generation
in 2008

• 50Mb will be priced to drive premium user demand

– Targeted at power users & ‘premium purchasers’
– A compelling upsell price point
38 38 50 50 50 50
– Currently in final trials, launch late Q4 Mbit/s Mbit/s Mbit/s Mbit/s Mbit/s Mbit/s

• DOCSIS 3.0 a huge ‘halo’ for all customers

– DOCSIS 3.0 the largest UK network build since the
original launch of the cable network
– 4 new D/s channels on top of today’s 2 D/s
– The new home for our 10-20-50 customers
– Statistical gain of channel bonding deliver massive Each D1 modem can Each D3 modem can view
speed capability view one D/s channel all 4 D/s channel.
Theoretical capacity
– Dramatic reductions in cost of capacity 200 Mbit/s

33
Lead on Demand Television
Revolution
Goal: 100m VOD views per month by
end of 2012
The TV market today

• Growing share for “multi-channel” viewing driven by free-to-air DTT (Freeview)

• VOD is still a relatively new development, but iPlayer is driving growing usage

• Sky keeping churn low through Sky+ and other incremental services

• BT recently entered market with BT Vision (TV over ADSL)

Digital TV market growth (000s) Digital TV market share at Q2-08

Sky Freeview Virgin Media

Free Sat
Free Sat TV over ADSL 4%
25,000
Virgin Media
15%
20,000
Freeview
15,000 43%

10,000

5,000

0 Sky
38%
Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2-
06 06 06 06 07 07 07 07 08 08
Source: Company reports and Virgin Media research Source: Company reports and Virgin Media research

35
Opportunity and strategic initiatives in
TV
Characteristics Today’s positioning Opportunity

• Low growth • Poor content economics

Premium TV Limited
• Heavy investment • Sky owns c.80% market

• Decent growth • VOD to all

Basic pay-TV
• Choice / price driven • Setanta in XL TV tier 999
• Many subs dissatisfied • “Free TV + VOD” bundled
Free DTV
and want more choice with other products 999
• Creating linear parity following the return of Sky basics

• Exploit our VOD superiority

• Grow penetration of our best-in-class DVR service

• Build our HD offering

• Enhance the TV interface

• Regulatory progress on premium offers significant opportunity

– Today less than 20% TV subs take premium at negative margin
36
VOD content

Virgin Media offers over 4,600 hours of on-demand content

Cost

Catch Up
• Huge selection of shows from the last 7 days from: BBC, 4oD, LIVING, Bravo, Virgin1 Free
TV
• Includes 350 hours from BBC iPlayer
• ITV and Channel 5 are the only terrestrial channels missing on catch-up

• Over 2,000 comedy, drama, entertainment, factual, kids and sci-fi shows M&L–
TV Choice • 80 hours HD content £7/month
XL – Free

• Over 2,000 music videos M&L–

Music • Karaoke, playlists and concerts 20p/video
• Adds a live music component XL – Free

• Over 500 films – blockbusters, cult classics, family favourites Pay Per
Movies • 30 HD movies View:
£1.50-£4.50

More Free
• Current TV, Teachers TV, Real Estate TV, Baby Channel, New You Free
TV (Niche)

More On
• Bollywood movies: from £2 per view Various
Demand • Adult on demand: £5 per view; £6 HD per view
• Late night 24/7: 18 rated but not “Adult” rated, from £2.49

More to follow: catch-up, live music, enhance SVOD with premium TV content and expand HD VOD 37
Improving the interface

DVD cover navigation Advanced search

38
Growing V+ penetration and
enhancing HD
PVR penetration in Sky and cable digital TV homes • Significant DVR growth opportunity with
(as at 30 Sept 08)
only 14% V+ penetration
46%
• Our V+ box superior to current Sky+ box
– 3 tuners, 160GB storage, HD capable

• V+ customer churn is 57% lower than non

V+ TV customer churn

• Plans to enhance HD content

14%

– Will add HD broadcast channels

– Continue to grow on-demand HD

content
Sky Virgin Media

39
Telephony
Goal: 1.6m contract mobile customers by end
of 2012
Defending the cash cow

UK residential market call volumes (billions of minutes)

On-net telephone net adds (000s)
and year-on-year decline (%)

32 22% 39
29.8 29
30 17.8% 20%
28 26.8 26.3 18% 15
15.3% 25.1 25.1 6
26 16%
24 15.6% 15.4% 14%
14.4%
22 12% (1)
Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08
Source: OFCOM Telecommunications Report, Oct 2008

On-net telephone customers by type (millions)

• UK residential market call volumes declined 15% y-o-y
in Q1-08 Metered Unmetered

2.10 2.10
• Mitigate impact of usage declines through: 2.07
2.04
– Continued focus on migration to flat rate 2.02

– Bundling fixed line with broadband and TV 2.04

1.99
1.99 1.98
– Mobile cross-sell and bundling initiatives e.g.
bundle landline / mobile minutes
1.89
– Potential for line rental price increase
– Continued innovation e.g. Talk Anywhere Q3-07 Q4-07 Q1-08 Q2-08 Q3-08
41
Key strategic initiatives in mobile

Contract mobile customers (000s) Lower mobile churn by VMED cable customers
579

436 VMED
329 82.4%
customers
246
121

Non-VMED
56.4%
customers
Q3-06 Q1-07 Q3-07 Q1-08 Q3-08

Mobile subscribers retained at 12 months

• Fully integrate Cable / Mobile

• Drive higher contract penetration more aggressively into Cable base

• Exploit new T-Mobile wholesale rates to grow mobile data usage to handset

• Mobile broadband – opportunity to bundle with fixed broadband

• Mobile TV / Video is a growth opportunity, leveraging our existing TV platform

• Cross-sell and bundle with offnet more aggressively

42
Becoming More Knowledge
Driven
Developed customer insight tools which
help us understand the market…

Household
Gives us a comprehensive picture of a total
household’s use of communication services,
allowing us to segment the entire UK market to
identify “must succeed with” segments and
help us understand how to win in these spaces
Usage
Gives us a clear and detailed
picture of how our customers use
our services and provides valuable
insights into household and
subscriber lifestyle

Value

Ensures we understand the

differences between our highest
and lowest value customers and
are able to utilise this information
operationally
Subscriber
Gives us a comprehensive picture of the
consumer and segment the UK market to help
us understand the mapping between
household and individual needs
44
Our customer segment strategy
Aspiring Thriving Realigning
Young Young New Growing Teenage Nearly Older Older Empty
1 Utilise our quad play product Single Couple Family Family Family There Single Couple Nesters
Greys

Actively superiority, brand image and service

Doing Well 1
reliability to dominate the Thriving 2 2
orient our Family Market Doing OK
services to
the highest 2
Making Do
Exploit the natural “halo effect” from
value part of Single 2
our new focus to drive significant Parents
the market growth in the shoulder segments –
Surviving, Aspiring, Realigning
Emerging Nesting Surviving Retiring

Utilise a variety of Rather than leading on speed for the launch of 50Mb Broadband, position as the
only broadband services that will support fast simultaneous usage for multiple
levers to implement family members
the strategy
Ensure Provide clear reassurance on product reliability through guarantees, meeting
customer care concerns through clear communication of service levels
Marketing we
address
Communicate parental control levels available and clear instructions on how to
the needs apply
Proposition of our
“bulls eye” Provide integrated mobile and landline propositions which give clear benefits for
having family members on Virgin Mobile network (free calls to landline, reduced
Commercial segment calls between family members etc)

Utilise understanding of different TV preferences across family to produce family TV

Operations channel pack (Sport for Dad, Celebrity / Soaps for Mum / Cult USA viewing and films
for teens / CBeebies etc for children)
45
Q&A
Network Strength

Howard Watson – CTTO

Network Strength

• Video usage is now driving network bandwidth . . . all

usage trends are up
• Hybrid Fiber Coax remains extremely well placed to serve
this demand
• UK market has unique characteristics which favour cable

48
Our network advantage 2008

Virgin Media BT
Network LLU
Network
Hub Exchange

Copper to the Cabinet

Fiber to the Cabinet (POTS & ADSL2+)

Coax to the Home Cabinet Cabinet

(DVB-C & DOCSIS 3)

Copper to the Home Copper to the Home

(POTS & VDSL2 capable) (POTS & ADSL2+)

2, 10, 20, 50 Mb/s >20 Mb/s to <5%

Plus DTV & VOD Home Home
Includes any IPTV
49
Our network advantage 2012

Virgin Media BT
Network LLU ?
Network
Hub Exchange

Fiber to the Cabinet Fiber to the Cabinet

Coax to the Home Cabinet Cabinet

(DVB-C & DOCSIS 3)

Copper to the Home Copper to the Home

(POTS & VDSL2)
(POTS & VDSL2 capable)

Capable of 200 Mb/s Max Speed 40Mb/s

Plus DTV & VOD Home Home
Includes any IPTV
50
Our spectrum advantage

BT VDSL2 Copper spectrum used for VDSL2 is 12 or 30MHz

Copper Spectrum

Virgin Media
Coax spectrum is a min of 650MHz with c80% at >750MHz
Coax Spectrum

Broadband will Analog TV Digital TV VOD

use up to 48MHz approx 240MHz approx 216MHz approx 72MHz
after DOCSIS 3 will be freed up used By DVB-C used by DVB-C
rollout completed with switch off for linear TV for on-demand

Spectrum freed up from ATV provides plenty of scope for further

growth in Broadband, Linear DTV (SD & HD) and VOD
51
A superior quality of experience

You don’t lose If you want to

Broadband speed watch iPlayer on
when you watch your TV in full TV
on-demand TV quality – you can

Broadband + Digital TV + VOD

The independent spectrum allocations for Broadband, DTV and VOD mean
that each one can be engineered to deliver the right simultaneous QoE 52
Expansion into mobile broadband

Virgin Media
Communication & Entertainment

Virgin Media Virgin Mobile

Network MVNO

DTV & VOD Mobile Mobile

Telephony Broadband Broadband Voice & TXT

The UK’s leading Communication

& Entertainment network 53
Looking into the future …

Existing Existing
Ultra-fast Broadband Linear & On-Demand TV
(DOCSIS 3.0) (DVB-C)

Home
Home
Gateway

IP Home Network
PC or ipSTB Portable
Laptop TV Device

Bring both halves of our powerful access network together

into an integrated next generation entertainment experience
54
…next generation entertainment

Broadcasters & Advertisers

will be able to create an
entertainment experience
which can move effortlessly
between all of their TV assets
and all of their web assets

Its not about putting the

Internet on your TV nor about
putting the TV on your PC.
Its about enabling broadcasters
to create the next generation of
entertainment for whenever and
wherever you want to enjoy it55
Building a Customer Focused
Organization
2008 – 2012 operational
transformation review
• To create a new operating model for our organisation which delivers significant improvements in:
– Customer focus
Our – Product delivery and management
Ourvision
vision
– Clearer accountabilities leading to streamlined decision making
• Supported by better processes, making considerable savings

Proposed key initiatives

• Refocus organization on product delivery

• Invest in holistic approach to sales channels supported by “customer insight”
Customer
Customergrowth
growth • Converge mobile and cable marketing
• Drive efficiencies across operations
• Further cable and mobile operational integration

• Call volume reduction through removal of root cause quality issues

• Focus on first call resolution
Customer
Customerservice
service • Improve resource management – work scheduling and despatch
• Supply chain transformation

• Transformation of IT support
Support
Supportfunctions
functions
• Rationalization of property portfolio
• Review support functions: Transaction services

Total annual P&L savings by 2012 >£120m

Goals
Goals
Net reduction in roles in the organization by 2012 2,200
57
2008 – 2012 operational transformation:
Proposed new operating model

Customer

Provide Platform
Operations
Customer Contract Management

Research and Consumer Insight

Sales & Marketing

TV / On Demand

Broadband

Telephony
Develop Proposition
Integrated Product
Work
Install & Strategy

development
Management
Shared Services

Repair

Product
and
Operations Delivery

Connection Product Proposition

Scheduling & Pricing

Product Planning &

Implementation

Operations Delivery

Network Planning
Network
Monitoring and
Provision & Maintain Core Network Fault
Management

Operations Support

Programme People & Org Procurement &

IT CTO Facilities Finance Legal
office Development Supplier Mgt

58
Strategic objectives for growth

• Guides our people and

Brand is front customer experiences

and centre • Drives our cultural

development

Build growth
Manage our
plans around
business more
segment
effectively
strategies

• Integrated planning and performance • Insight and knowledge led

management
Excite and delight people with
• Based around customers needs
our easy to use, irresistible and wants from acquisition through
the full customer journey
customer propositions that
drive profitable growth

End to end P&L

Execute
and Product
brilliantly
Management

• Multi-skilled growth contact centres • Manage product P&Ls

• Integrated customer journey and interface • Drive strategy, innovation, delivery

with Care
Strengthen our and customer experience
delivery • Clear accountability
• Multi-channel distribution
capability
• Invest in Online experience • Faster deployment of
products and services 59
2008 – 2012 operational transformation
review: Customer growth

• Focus on high value channels: invest in on-line channel

• Maximize demand through multi-distribution approach
Optimize
Optimizesales
saleschannel
channel • Segment intelligence based approach to reduce subscriber acquisition costs
• Maximize complimentary channel approaches (e.g. Telesales scheduling lead closing visit)

• Operate multi-skilled, in-house call centres

Call • Review possible off shoring high volume, low complexity enquiries
Callcentres
centres
• Maximize revenue at each customer touchpoint

• Leverage brand: Deliver Virgin customer experience at all customer touchpoints

Marketing
Marketing • Focused, integrated approach across all products: Media and Mobile
efficiency
efficiency • Optimize marketing spend change to reflect awareness and consideration gains and focus
on high value segments

• Combined reward structures

• More integrated channel approach to selling e.g. field selling mobile with targets embedded
Cable
Cableand
andmobile
mobile in commission plans
integration
integration
• Increased bundling and maximize upsell through segmentation and contact strategy work
• Use Cable Broadband leadership to deliver complementary Mobile Broadband growth

60
Strategic objectives for Customer
Service
Customer touch points:
Take control of • Call centres
our customer • Install and service
experience • Network

Reduce costs
through better Improve product
processes and reliability
systems

• Supply Chain • Reduce defect rate

Enable growth through
• Customer self service • Equip staff
providing a service to our
• Consolidation
• Automate
customers that is always on
• Service levels
and being unbelievably easy
to do business with

Understand
Manage change
segment and
brilliantly
customer value

• Multi-skilling • Differentiate service:

• Product introduction
• Invest in Online experience
• Higher value customers
Get things right • Complexity of customer contact
first time • Customer education
• Review our suppliers
• Staff multi-skilling 61
Customer Service
Proposed operating model vision

Serve: Self Care

in house in house
outsource Offshore onshore In
multi- service 1st
house
install
skilled Will work closely with line
INDICATIVE MIX Tiered Customer
Product to agree and
in house Care delivering
ensure delivery of target 2nd
Offshore onshore In 95% first contact
multi-skilled line house
NPS set by Proposition team resolution
Network / Business
5% case
in house management
Data specialists Work closely with Sales
Multi-skilled engineering teams and Marketing to
Delivering end to end service cross sell and up sell
to customers in geographic units

Activate &
Single Service and fault management Operate
Field Resource & Supply Chain function responsible for network
Management management and outage screening to
Network
improve network responsiveness
Forecast Despatch
Schedule Planning and Provisioning
Demand

Single end to end planning

and provisioning Plan Design Build
Resource planning and despatch services responsibility
across regional field organisation

Working closely with Technology to drive down obsolescence and continuously improve performance 62
2008 – 2012 operational transformation
review: Customer Service

• Call reduction through simplification of billing and pricing

• Improve 1st call resolution through investment in product reliability
Reduce
Reducecall
callvolume
volume • Provide and promote self service on-line
• Redefine install process and reduce defects

• Integrate activities through multi-skilling first line agents

Improve
Improveinbound
inboundcall
call • Differentiate high value, high complexity calls
experience
experience • Review outsourcing and off-shoring of lower value, lower complexity calls

• Schedule and support teams to provide improved customer appointment times

• Fewer hand-offs as schedule and support team own customer contact once job is
Improve
Improveresource
resource scheduled to field
management
management • Field delivery – take control of customer activity
and
andfield
fielddelivery
delivery
• “Perfect visit” initiative to improve efficiencies and customer experience
• “Premium install” initiatives to differentiate service to higher value customers

• Consider consolidation of warehouses

Supply
Supplychain
chain • Improved control of CPE and recovery of assets
transformation
transformation • Review efficiency of suppliers and purchasing

• Improve planning process to update inventory systems with network asset data
Planning
Planning&&network
network
management • Integrate outage surveillance to improve network responsiveness to customer impacting
management
faults 63
2008 – 2012 operational transformation
review: Support functions

• Reduced volume through improved prioritization and efficiency

Transform • Consider transformational outsourcing of tech services
TransformIT
ITsupport
support
and
and technicaldelivery
technical delivery • Review duplication of functions e.g. local tech teams, program mgt
• Improved permanent: contract staff ratio

• Consider consolidation of multiple sites

• Property strategy developed alongside growth and customer operations plans to maximise
Rationalize
Rationalizeproperty
property benefit
portfolio
portfolio • Consider home-working solutions with meeting facilities at local sites where possible
• Increase quality and utilization of biggest regional offices

• Review of support functions: Finance, HR, Corporate Function

Review • Introduce new integrated shared services function
Reviewsupport
support
functions
functions • Consider outsourcing certain transaction services
• Create a single employee service group

64
Q&A
Non-Consumer Assets,
Financial Structure and
Flexibility

Charles Gallagher – SVP Finance

Overview

• Valuable non-Consumer assets

• Seeking significant cost savings from Operational Transformation

• Sensibly investing for growth

• Successfully secured senior credit facility amendment

• Strong cash flow generation

67
Content overview

Content revenue (£m)¹ Share of viewing Q3-08²

Sit-up VMTV VMTV 2.4%

UKTV 3.6%
Sky Basics 2.9%
34 Viacom 1.9%
33 35 37
Discovery 1.2%
32 35
87
48 53 55 51 51 Commercial impacts growth

YoY
Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 VMTV 6.5%
UKTV 9.7%
Cash from UKTV (£m) Sky Branded 3.3%
Viacom 11.9%
15
12 Discovery 2.2%
11
9
8 Share of viewing growth²
7
YoY
VMTV 5.2%
UKTV 13.6%
1
Sky Basics 2.1%
Viacom 3.9%
Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08
Discovery (0.8)%
1 Before intersegment eliminations
2 Share of viewing in all homes, Q3-08 BARB 68
Content strategic initiatives

• New Sky carriage agreement for VMtv channels

– £30m licence fee pa plus performance based adjustment
• VMtv and UKTV exploring re-branding of key channels to capitalize on success of
launching Dave in attracting key demographic targets.
– Watch, Alibi and G.O.L.D launched
• Using existing Virgin1 Freeview presence to promote and cross-sell pay-TV offerings
and to increase share of ad-sale revenue market
• A new gambling channel, Challenge Jackpot, introduced to strengthen channel line-up
and portfolio
• Virginmedia.com Portal: maintain position in top 10 most popular UK sites
• Investigating alternatives for Sit-up

69
Business – competitive strengths and
strategy
• Network passes within 40 meters of 52% Market shares in UK business retail private target market
of all UK businesses and could serve Global Vanco
over 75% of all regional / local Verizon Crossing 1% Other
2%
authorities 3% 1%
CPW (Opal)
3%
Affiniti
• Further consolidation expected in the 8%
industry, favouring companies with
technical advantage BT
VMED
59%
10%
• Targets medium-sized corporates and
public sector organisations in both retail
and wholesale markets C&W/Thus
13%

• Offering multi-site, managed network

data solutions tailored to the specific
Source: Virgin Media estimate of target market
requirements of customers

70
Business services

Business revenue mix (£m/% of total) • Shift from lower margin voice to higher
Retail Voice Retail Data margin data services
Retail Other Wholesale
• Continued growth in high-margin Retail
163 156 160 163 161 157 153 Data product lines
– Data growth products include IPVPN,
31% 30% 29% 29% 29% 29% 28% Ethernet and internet services

9% 11% 11% 9% • Balanced revenue streams, including

9% 13% 12%
next-generation Voice products

27%
25% 27%
27% 28% 30% 32% • Low margin Heathrow T5 contract
winding down from Q3-08
35% 34% 33% 32% 31% 31%
30%

Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08

71
UK tax attributes

• Virgin Media has significant UK tax assets

– Capital allowances: ~ £13.1bn
– Capital losses: ~ £12.1bn
– Net operating losses: ~ £3.2bn
• Using these tax attributes, we should be able to substantially shield income from UK
taxes for at least 10 years
• Virgin Media has a track record of creating value through effective tax planning and
utilization of tax assets in other transaction structures – such as ntl:Telewest merger and
Virgin Mobile acquisition
• Virgin Media can use its capital allowances to shelter the UK tax of businesses it may
acquire
• An acquirer with a UK business should be able to use our capital allowances to shield
UK taxable income of that UK business

72
Operational transformation goals

Net P&L Savings/Costs (£m)

>£120m annual savings
£100 - £115m

£50 - £60m

£(30) - £(40)m

2009 2010 2011 2012

• Create new operating model for our organisation which delivers significant improvements in:
– Customer focus
Our
Ourvision
vision – Product delivery and management
– Clearer accountabilities leading to streamlined decision making
• Supported by better processes, making considerable savings

• Customer growth

Initiatives
Initiatives • Customer service

• Support functions

Note: Chart shows our goal for operating expense and SG&A net costs/savings 73
Investing in growth

Capex expected to be at top of 13-15% revenue range

• Targeting growth for 10Mb and above
– Differentiates broadband service
– Improves upsell and pricing opportunity
– Reduces churn
• Deep Packet Inspection
– Enables certain Value Added Services for ARPU
– Improves traffic management and cost
• Behavioural advertising
– Monetising our customer relationships
• Strengthen L and XL TV to improve mix and ARPU
– TV interface and infrastructure enhancement
– Differentiate TV service
– VOD advertising
– Expand content incl HD
• Leverage mobile
– Continue to aggressively cross-sell contract to cable base, reducing churn and driving revenue
– Mobile broadband
• Intelligently expand network
– Offnet and New Build expands opportunity 74
Amendment improves flexibility

Amortization profile before amendment (£m) Amortization profile after amendment (£m)¹

TLA TLB TLC TLA TLB TLC

1,981
1,910

1,167

966

579
526

300 288 300

172
4 33

Q3-09 Q1-10 Q3-10 Q1-11 Q3-12 Q1-13 Q3-09 Q1-10 Q3-10 Q1-11 Q2-12 Q3-12 Q1-13

1 Assumes 20% paydown of A tranches and non-consenting B lenders, and 70.3% A roll and 81.6% B roll 75
Net debt

Q3-08
£m
Senior credit facility • Amendment passed: 70.3% of A holders and
81.6% of B holders agreed to “roll” into new
Tranche A-A1 2,076
tranches
Tranche B1-B6 1,981
Tranche C 300 – Change of A amortization contingent on
High yield bonds
20% paydown condition
Due 2014 791 • 1.375% margin increase on new A tranches
Due 2016 309 upon satisfaction of 20% paydown condition
Convertible note due 2016 562
Capital leases / other 141
• 1.5% margin increase on new B tranches,
effective immediately
Long term debt¹ 6,160
• Amendment fees of up to £70m, some of
Current portion of long-term debt 38 which is payable only upon satisfaction of 20%
Cash (521) paydown condition
Net debt² 5,677
• High Yield and Bank debt is fully hedged for
foreign currency movements; Convert
Net debt / annualized OCF³ 4.4x principal is not
• 80% debt hedged for interest rate
movements
¹ Net of current portion
² Net debt is a non-GAAP financial measure. See above for reconciliation of net debt to long-term debt (net of current portion) 76
³ Annualized OCF is quarterly OCF multiplied by four
Covenants – headroom and
deleveraging
Interest covenant Interest actual Leverage covenant Leverage actual
6

0
Q3-06

Q4-06

Q1-07

Q2-07

Q3-07

Q4-07

Q1-08

Q2-08

Q3-08

Q4-08

Q1-09

Q2-09

Q3-09

Q4-09

Q1-10

Q2-10

Q3-10

Q4-10

Q1-11

Q2-11

Q3-11

Q4-11

Q1-12

Q2-12
• Leverage covenant measures Net Debt / OCF for the Bank Group
• Interest covenant measures OCF / Net Cash Interest for the Bank Group
• Also, Debt Service Coverage Ratio requires OCF less Capex plus/minus Working Capital to exceed
Consolidated Debt Service for previous 12 month period

Note: Covenant definitions above are summary explanations. Exact definitions can be found in the Company’s Senior Credit Facility as filed with the SEC 77
Strong cash flow

OCF-capex (£m) Net interest expense (£m)

250
225 218
204 209
199
200 184 182
155 153
146
150
114 120 117 117 114 115
106 112
100

50

0
Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08

We have generated significant cash flow since the merger

Note: OCF is operating income before depreciation, amortization, goodwill impairment and restructuring and other charges and is a non-GAAP financial measure; See appendices for reconciliations of non-GAAP
financial measures to their nearest GAAP equivalents; Capex is purchase of fixed assets and purchase of intangible assets 78
Flexibility before 2012
Cash sources
• £521m cash at Q3-08
• £80m untapped revolver
• Record of strong cash generation
ability
Cash requirements
• Up to £70m due in Amendment fees
• £487m Paydown due before Aug-09
• No bank amortization payment in 2009
• £204m due in 2010
• £288m due in 2011
79
Regulatory and Summary

Neil Berkett – CEO

The regulatory opportunity –
broadband
• Commitment to 50 Mb/s has successfully positioned Virgin Media at the heart of the policy agenda
– “But as so often when one player kick starts the investment and the competitive position which it
enables, then others must or will follow. Here, one large player – Virgin Media – is ahead of the
game and has committed to focusing its competitive positioning on the core characteristics of the
cable network itself by offering speeds to residential consumers of up to 50 Mb/s”
Stephen Timms, Former Minister for Competitiveness, September 2007
– “There are strong indications that the market is delivering investment in next generation access.
Virgin Media … is on course to make up to 50 Mb/s available to around 12.5 million homes by
2009”
Francesco Caio, author of the government’s Independent Review of Barriers to Investment in Next
Generation Access, September ’08
– “Others have lobbied for open access to (the Virgin Media) network. We have given cable the
predictability that, absent a market review and a finding of significant market power – highly
unlikely in the foreseeable future – network access is a commercial decision for Virgin not a
regulatory one for us.“
Lord Currie, Chairman of Ofcom, October ‘08

81
The regulatory opportunity –
premium content
• Increasing focus on concentration of content rights presents opportunity to re-shape the
pay TV market
• Ofcom has provisionally concluded that Sky has market power in core premium content
which gives Sky the incentive and ability to distort competition
– Proposed ex-ante wholesale regime for key sports and movie channels
– Ofcom’s current preference is to use their powers under the Communications Act:
potentially removes need for lengthy Competition Commission investigation
– More detailed proposals expected H1 ’09
• Decision on Sky’s Picnic license application now explicitly linked to resolution of broader
market investigation
• Kangaroo joint venture under consideration by the Competition Commission
– Decision now expected Q1 ‘09

82
The regulatory opportunity – an
increasingly “converged” agenda
• Ofcom CEO Stephen Carter appointed to new post of Minister for Communications,
Technology & Broadcasting
– Portfolio bridges traditionally discreet spheres of content and distribution
– “Convergence, the coming together of different means of delivering content… has
already arrived… policy approaches need to reflect that fact”
• Digital Britain Report expected in H1 ’09
– Likely to set the agenda and priorities for the foreseeable future
• As UK’s most converged operator, opportunity for Virgin Media to lead the debate
– 50Mb and pro-active action on key internet-related issues (e.g. on-line copyright
protection) has helped establish Virgin Media’s leadership credentials

83
Conclusion
Attractive fundamentals & growth
opportunity
• Disciplined focus on execution and improving fundamentals

• Superior network provides significant technical, product and economic advantage now
and in future

– Superior 10/20/50Mb broadband offering positioned to take a disproportionate share

of economic profit pool

– Leading position in On-Demand TV, centred on VOD

• Creating a new operating model for a customer focused organisation and extracting
substantial savings

• Senior facility amendment provides increased flexibility

• Sensibly investing for growth

• Valuable non-consumer assets

85
Q&A
Appendices
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.
We evaluate operating performance based on several non-GAAP financial measures, including (i)
operating income before depreciation, amortization, goodwill impairment and restructuring and other
charges (OCF) and (ii) net debt, 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 a substitute for operating income (loss) and long-term debt (net of current portion),
respectively.
This presentation further includes another non-GAAP financial measure, net LQA leverage multiple,
which is the ratio of net debt to annualized OCF (four times the OCF for the relevant quarter). We
believe that this ratio is potentially of interest to our investors in assessing our cash flows and liquidity.
The amounts used in this calculation should not be considered a substitute for measures calculated in
accordance with GAAP, as discussed above.

88
Operating income before depreciation,
amortization, goodwill impairment and restructuring
and other charges (OCF)

• Operating income before depreciation, amortization, goodwill impairment and restructuring and other
charges, which we refer to as OCF, is not a financial measure recognized under GAAP. OCF
represents our operating revenue before depreciation, amortization, goodwill impairment and
restructuring and other charges. Our management, including our chief executive officer, who is our
chief operating decision maker, considers OCF as an important indicator of our operational strength
and performance. OCF excludes the impact of costs and expenses that do not directly affect our cash
flows. Restructuring and other charges are also excluded from OCF as management believes they
are not characteristic of our underlying business operations. OCF is most directly comparable to the
GAAP financial measure operating income (loss). Some of the significant limitations associated with
the use of OCF as compared to operating income (loss) 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.

• We believe OCF is helpful for understanding our performance and assessing our prospects for the
future, and that it provides useful supplemental information to investors. In particular, this non-GAAP
financial measure reflects an additional way of viewing aspects of our operations that, when viewed
with our GAAP results and the reconciliation to operating income (loss) shown below, provides a
more complete understanding of factors and trends affecting our business. Because non-GAAP
financial measures are not standardised, it may not be possible to compare OCF with other
companies' non-GAAP financial measures that have the same or similar names.

89
 Non-GAAP reconciliation

Reconciliation of operating income before depreciation, amortization,

goodwill impairment and restructuring and other charges (OCF) to GAAP
operating income (loss)

(in £ millions) (unaudited) Three months ended

Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30,
2006 2006 2007 2007 2007 2007 2008 2008 2008
Operating income before depreciation,
amortization, goodwill impairment
and restructuring and other charges (OCF) 317.8 313.0 305.7 315.3 341.5 321.0 324.2 332.9 325.0
Reconciling items
Depreciation and amortization (296.5) (288.2) (309.4) (309.2) (303.7) (315.9) (324.2) (301.5) (280.4)
Goodwill impairment - - - - - - - (366.2) 4.0
Restructuring and other income (charges) (30.9) (15.6) (11.6) (3.1) 8.9 (22.9) (4.6) 1.7 -
Operating income (loss) (9.6) 9.2 (15.3) 3.0 46.7 (17.8) (4.6) (333.1) 48.6

Operating margin - 0.9% - 0.3% 4.6% - - - 4.9%

Note: Operating margin is operating income divided by total revenue 90

Net debt

• Net debt is defined as long-term debt inclusive of current portion, less cash and cash equivalents. Our
management, including our chief operating decision-maker, consider this measure as potentially of
interest to our investors in assessing our financing obligations.
• Net debt is not a financial measure recognised under GAAP. This measure is most directly
comparable to the GAAP financial measure, long term debt, net of current portion. The significant
limitation associated with the use of net debt as compared to long term debt, net of current portion is
that net debt includes the current portion of long term debt. This measure also assumes that all of the
cash and cash equivalents are available to service debt.
• We believe this measure may be helpful for understanding our debt funding obligations and provides
useful supplemental information to investors. Because non-GAAP financial measures are not
standardised, it may not be possible to compare net debt 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 long term debt, net of current portion or
other measures of financial performance or liquidity reported in accordance with GAAP.

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 Non-GAAP reconciliation

Reconciliation of net debt to GAAP long-term debt (net of current portion)

(in £ millions) (unaudited) Three months ended

Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30,
2006 2006 2007 2007 2007 2007 2008 2008 2008

Net debt 5,904.8 5,740.6 5,794.2 5,816.1 5,735.8 5,637.1 5,732.3 5,596.7 5,676.9

Current portion of long-term debt (151.5) (141.9) (27.8) (30.4) (28.7) (29.1) (31.8) (33.3) (37.9)
Cash 302.2 418.5 365.1 277.1 364 321.4 282.3 426.8 521.4
Long-term debt (net of current portion) 6,055.5 6,017.2 6,131.5 6,062.8 6,071.1 5,929.4 5,982.8 5,990.2 6,160.4

92