virgin media.final_q4_06_presentation_vmed

Fourth Quarter 2006February 28, 2007

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.

3

Jim Mooney, Chairman

3

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

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

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

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

8

Steve Burch, CEO

8

9

Group RGU growth

14,806 15,015 15,100 15,271 15,348

Growth in consumer businesses driven by compelling packages, cross-sell and reinvigorated marketing

10,200 10,406

4,346 4,389 4,512 4,523

10,52610,47410,428

4,332

Q4-05 Q1-06 Q2-06 Q3-06 Q4-06

Off-net

Mobile

Cable

Group RGUs in ’000s (pro forma combined*)

* pro forma for the cable merger and the Virgin Mobile acquisition9

10

Driving ARPU growth

32%35%

37%39%

41%

Q4-05 Q1-06 Q2-06 Q3-06 Q4-06

£41.27 £41.50£42.21 £42.48

£42.82

Q4-05 Q1-06 Q2-06 Q3-06 Q4-06

Cable ARPU (£)(pro forma combined*)

Triple play cable penetration(pro forma combined*)

ARPU growth due to

• Triple play and RGU/customer growth

• TV product enhancements

• Selected price increases

10 * pro forma for the cable merger and the Virgin Mobile acquisition

11

Cable customer additions

Gross customer adds (on-net) ‘000s(pro forma combined*) • Our value proposition remains

competitive

– Aligned marketing & products

– 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

– Christmas shutdown

218

192

229214

Q1-06 Q2-06 Q3-06 Q4-06

11 * pro forma for the cable merger and the Virgin Mobile acquisition

12

Broadband, TV, mobile contract growth

• 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

TV Broadband Mobile contract

12

Home phone

39

22

Q3-06 Q4-06

78 78

818

Q3-06 Q4-06

Off-net

On-net

71

25

Q3-06 Q4-06

(55)(64)

Q3-06 Q4-06

86

96

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

14

Growth potential from alignment

ARPUTriple play

Churn Customer penetration

Revenue difference from aligning NTL ARPU and churnwith Telewest is over £250m pa

Note: data shown is for Q4-06

£40.43£46.55

NTL Telewest

36.9%

46.5%

NTL Telewest

2.0%

1.3%

NTL Telewest

37.8%40.5%

NTL Telewest

14

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

16

Virgin Media On Demand v Sky Anytime

Virgin Media On Demand

• Available to 3m digital subs

• Free digital set top box

• >500 Hollywood movies• 2,000 hrs + top TV content

– eg Sopranos, West Wing, CSI, Little Britain, Lost, Desperate Housewives

• Free catch-up TV from BBC, Channel4 and others

• Immediately available

• HD VOD content

• Music, Adult, Kids, Specialist

“The one-way nature of satellite broadcasting makes it harder for Sky to provide a true on-demand service to its customers”

BBC - 3rd February 2007

Sky Anytime

• Available to <15% subscribers

– requires £299 HD box or up-to-date £99 Sky+ box

• Up to 40 hours selected by Sky

• Downloaded overnight

• Content restricted by type of TV package taken

Note: Source of Sky information is BSkyB website - February 27, 2007

17

V+ versus Sky+ and Sky HD

V+

• 80 hours recording time

• 3 tuners

• Free box

• Free HD compatibility

• Thousands of hours of free and pay VOD content

• £25 install

Sky+ and Sky HD

• 20 or 40 hours recording time

• 2 tuners

• £99 Sky+ box

• £299 Sky HD box

• Up to 40 hours selected on-demand content

– if you have up-to-date box

• £60 install

Note: Source of Sky information is BSkyB website - February 27, 2007

19

Content Strategy

• 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

Increase scale and leverage of content assets as a strategic tool versus competition - Sky, Freeview, BT Vision and DSL resellers

20

Neil Berkett, COO

20

21

Delivering on our natural strengthsTV• Full range of TV services • Exploit VOD advantage• Launched Virgin Central• HD and DVR fully rolled out

Home Phone• Talk Anywhere (Bundled Minutes)• Prepare for Fixed/Mobile

convergence

Mobile• Grow underpenetrated contract business• Cross-sell into cable base• Grow retail channels

Broadband• Reliable & consistent speeds • No reliance on BT on-net• 2/4/10/20Mb tiers; 50Mb trial• Improved content

eg Premiership clips

Brand• Fun, easy to use & understand• Competitively & simply priced• Brilliant customer service• Innovative

Bundles• Flexible and attractive offers• Multi-product capability

institutionalised

22

Better Value from Virgin MediaPrice comparison showing value of 2 for £20 TV and Broadband

TV Size: L+ ’000s hrs ofVOD content

Sky TV 4 mix

Television Broadband

Broadband Size: M (2Mb)

Sky Broadband Base (up to

2Mb)

Year 1 Monthly Subs

Year 2 Monthly Subs

£20 £20

£29 £29

£173 £108ANNUAL SAVING

=

=

=

+

+

£25 engineer install

£40 connection + £50 engineer install*£18 Free + £11 BT line rental

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

23

Better Value from Virgin MediaPrice comparison showing value of 2 for £20 TV and Telephony


Sky TV 4 mix

Television Telephony

Phone Size: M (Talk

Weekends)

Sky Talk Freetime

(Evenings & weekends)

Year 1 Monthly Subs

Year 2 Monthly Subs

£20 £20

£29 £29


=

=

=

+

+


£18 Free + £11 BT line rental

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.

24

Better Value from Virgin MediaPrice comparison showing value of 3 for £30


Sky TV 4 mix

Television Telephony

Phone Size: M (Talk

Weekends)

Sky Talk Freetime


Year 1 Monthly Subs

Year 2 Monthly Subs

£30 £30

£29 £29

£53 £41CUMULATIVE SAVING

=

=

=

+

+


£18 Free + £11 BT line rental



2Mb)

Broadband

+

+

Free £40 connection fee + £50 engineer install*


25

Better Value from Virgin MediaPrice comparison showing value of 4 for £40


Sky TV 4 mix

Television Mobile

300 texts & 300 cross network minutes

Equivalent offer from Vodafone

Year 1

Monthly Subs

Year 2

Monthly Subs

£40 £40

£49 £49


=

=

=

+

+


£18 £20



2Mb)

Broadband

+

+

Free

Telephony

Phone Size: M (Talk

Weekends)

Sky Talk Freetime


Free + £11 BT line rental

+

+

£40 connection fee + £50 engineer install


28

Major improvements in customer care

207

85

40

Q4-05 Q3-06 Q4-06

Average Speed of Answer (secs)

Note: statistics for Q4-05 are prepared on pro forma combined basis. Q4-06 exclude impact of December billing migration

• Improved customer satisfaction ratings

• Complaints down 19% since Q1-06

• Staff attrition rates down 35% at old NTL

• Customer care improvements through

– increased investment

– improved training

– increased headcount

– process changes

– billing system migrations

– new and improved EPG

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

30

Jacques Kerrest, CFO

30

31

Segment Revenue

Q4-06 Q3-06£m £m

RevenueConsumer 644 643 ARPU growth partially offset by customer losses

Business 169 162 Growth in wholesale and data revenue

Total Cable 813 805Mobile 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 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 283Mobile 14 16 - - -Content 2 6 9 9 9

313 318 293 277 292

Merger, brand and other costsMerger implementation 19 14 14 6 2Telewest merger fees 16Rebrand costs 5M&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

33

Synergy run-rate on target

* synergies are estimated figures

4480

116

32

36

50

200

16

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

CapexOpex

Annual synergy* run-rate(£m)

60

112

152

250 • Majority of savings are headcount related

• Labour costs have fallen 350 bps as % of revenue (excl Mobile) since Q1-06

• 4,750 reduction to date

– 2,550 redundancies and attrition

– 2,200 outsourced

• Targeting 6,000 total by end of 2007

– cost equivalent to 3,500 FTEs

• Other main synergies from

– billing integration

– procurement savings

2006 2007

33

34

Virgin Mobile

Revenue (£m)

140.4

• Q4 ARPU up from £10.28 to £10.59

• Q4 net adds of 11k, lower than expected– increased price competition– high competitor ad spend

• Strong contract growth

• 60,000 sales of 4 for £40 to date

• 2007 sub growth to come from– Reinvigorated “value” messaging– Continued contract growth– Cross-sell to cable– Exploit Virgin Media rebrand spend– Further retail store openings

• Significant Q1 negative net adds expected due to normal seasonal weakness

151.7

132.5 141.8

9.97.9

Q3-06 Q4-06

EquipmentService

34

35

Business services

Business Revenue (£m)

162

• Strong revenue growth through data and low margin wholesale related to completion of network build contract

• Q1 wholesale revenues expected to be £10m-£15m lower due to contract completion

• Experiencing strong demand for data products

• Long-term cashflow outlook remains promising through focus on data

169

59 56

39 41

65 72

Q3-06 Q4-06Voice Data Wholesale & Other

35

36

1922 21 19 21

9

99

99

5

44

45

Q4-05 Q1-06 Q2-06 Q3-06 Q4-06

Advertising Subscription Other

Content segment

* After intersegment elimination.

Virgin Media TV Revenue (£m)(pro forma combined)

33

Content revenue

• Virgin Media TV (ex-Flextech)

– growth through ad revenue

– 2007 subscription revenue impacted by new Sky contract

• Sit-up

– Q4 revenue of £82m, up £34m on Q3 due to seasonally strong sales

– Q1 revenue to be approx £30m lower due to normal seasonality

Content OCF

• Q4 OCF of £2m, down £3.5m on Q3 due to

– seasonally high programming expense

– partially offset by seasonally strong Sit-up

35 3432

35

36

37

Q4-06 Financial Results AppendicesFebruary 28, 2007

37

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.

3939

Non-GAAP reconciliation (i)

Reconciliation of operating income before depreciation, amortization and other charges (OCF) to GAAP operating income (loss)

(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)

Three months ended

4040

Non-GAAP reconciliation (ii)

Reconciliation of pro forma operating income before depreciation, amortization and other charges (OCF) to pro forma GAAP operatingincome (loss)

(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)

Three months ended

virgin media.final_q4_06_presentation_vmed

Economy & Finance

acquisition of virgin

virgin challenges

virgin media brand

virgin media holdings

virgin medias forms

cable merger

forward looking statements

customer churn