ziggo_halfjaarcijfers_2010 eng_tcm50-11040

8/7/2019 Ziggo_Halfjaarcijfers_2010 ENG_tcm50-11040

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Ziggo half year 2010 results

Strong growth driven by continued uptake oftriple play bundles and digital TV

Utrecht, July 29, 2010

Continued strong conversion to bundles and digital television drivesrevenue growth by 7%

EBITDA increased by 13% Ongoing focus on service innovation and customer satisfaction

as long term growth drivers Continued progress on further deleveraging

Highlights H1 2010

Broadband Internet speeds increased to 80/5 Mbit/s across Ziggos service area and120/10 Mbit/s in nine major cities;

Strong growth in triple play All-in-1 Bundle (+58,000 in Q2); Continued success of bundles and digital offerings contributes to solid Q2 net additions

for Broadband Internet (+20,000), Fixed Telephony (+40,000) and Digital TV

(+55,000); Revenue of 676.7 million, up 7% versus prior year; Adjusted EBITDA of 388.0 million, up 13% versus prior year, yielding a 57.3%

margin;

Free cash flow of 271.8 million, up 23% versus prior year; Net Debt to adjusted EBITDA leverage ratio down to 4.96x as of June 30, 2010 vs.

5.39x at December 31, 2009.

Ziggo CEO Bernard Dijkhuizen:

Our focus on customer satisfaction, product improvements and network infrastructureinvestments continues to deliver robust subscriber additions and revenue growth.Combined with strict cost control this results in a solid financial performance. We areconfident to achieve our full year objectives.


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Please note that the results published are the consolidated results of Ziggo Bond Company B.V., hereafterZiggo. As a consequence of the issue of the Senior Notes, Ziggo is now reporting quarterly and on the level ofthe entity which has issued the Senior Notes, being Ziggo. So far we published the consolidated results of ZeskoHolding B.V. The main differences are caused by the fact that the reports of Zesko Holding B.V. includeshareholder loans outstanding, which amounted to 1,870 million as per December 31, 2009. The proceeds ofthese shareholder loans have been invested in 2005-2007 as equity in the Amsterdamse Beheer andConsultingmaatschappij B.V., hereafter ABC, which is now a direct subsidiary of Ziggo. As a result thereof,Zesko Holding B.V. recognizes interest costs whilst Ziggo does not recognize these interest costs. In the annualreport 2009 for Zesko Holding B.V. interest costs on the shareholders loans amounted to 176.6 million. Pleasealso note that Ziggo was incorporated on March 30, 2010. Ziggo acquired all of the issued and outstanding

shares of ABC on March 30, 2010. Because of the limited historical information of Ziggo, the H1 and Q2 2009figures of ABC have been used for comparison.

Definitions/ Footnotes

(1) Adjusted EBITDA refers to EBITDA, as adjusted to remove the effects of operating expenses incurred in connection withthe integration of our predecessor businesses, which were 1.8 million and 21.7 million in the periods ended June 30,2010 and June 30, 2009 respectively;

(2) EBITDA represents operating income plus depreciation and amortization. Although EBITDA should not be considered asubstitute for operating income and net cash flow from operating activities, we believe that it provides useful informationregarding our ability to meet future debt service requirements;

(3) Operating data related to our footprint and RGUs are presented as of the end of the period indicated;(4) Digital television RGUs equals the total number of standard cable subscribers who have activated smart cards as of the

periods indicated. As a result, digital television RGUs represents the number of subscribers who have access to ourdigital television services. In any given period, not all of these digital television RGUs will have purchased additional paytelevision services. As per June 30, 2010 808,000 of our total digital television RGUs subscribed to one or more of ourdigital pay television services;

(5) Besides the 797,000 customers who have taken up the All-in 1 Bundle, we have approximately another 221,000

customers who have subscribed to Analog TV and/or Digital TV, Broadband Internet and Telephony on an individualproduct basis instead of an All-in-1 Bundle;(6) RGUs are calculated as the sum of the total TV customers, customers who have activated their digital smartcard,

Broadband Internet and Telephony;(7) RGU per customer is the total number of RGUs divided by the total number of TV customers;(8) Average Revenue per customer (ARPU) is calculated as the sum of total standard TV, digital pay television, broadband

Internet, telephony (including call charges), All-in-1 subscription revenue and interconnection revenues for the perioddivided by 6 (the number of months used) and divided by the periods average monthly total standard TV RGUs. Itexcludes installation fees and set-top box sales.

About Ziggo - Ziggo is a leading provider of entertainment, information and communication through television,broadband internet and telephony, primarily to residential customers in the Dutch market. The company servesapproximately 3.1 million households with standard TV services, including approximately 1.7 million digital televisioncustomers, 1.5 million broadband internet customers and 1 million telephony customers. Business-to-businesscustomers use services such as data communication, telephony, internet and television. The company owns a next-generation network capable of providing the bandwidth for all future services and requirements currently foreseen. Themajority of the share capital of the company is held (through holding companies) by two private equity firms: Cinvenand Warburg Pincus.


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Operations

In the second quarter of 2010, we added 96,000 net new RGUs for our core products in theresidential market. At the end of June 30, 2010, total RGUs reached 7,363,000, an increaseof 1.3% compared to prior quarter and 6.7% compared to the prior years level. Thisgrowth was driven by our triple play All-in-1 Bundle and digital television. Penetration ofdigital television increased by 2.1% compared to March 31, 2010 and by 10.8% comparedto June 30, 2009, resulting in a digital penetration of 53.8% of the total televisionsubscriber base at the end of the first half year.

NetworkIn the second quarter we upgraded High Speed Internet (HSI) download speeds to 80Mbit/s for all our All-in-1 Extra subscribers and we continued to roll-out download speeds of

up to 120 Mbps in nine major cities. The HSI program provides our broadband customerswith the highest internet speeds available in our service area and further strengthens ourposition as the premier Internet Service Provider in the market. This investment in our nextgeneration network has also a positive effect on customer satisfaction.

Products & servicesIn the second quarter of 2010 our primary focus was on sustaining growth in the numberof subscribers to our triple play All-in-1 Bundle. A successful switch now campaign whichemphasized our support in switching from another provider to us, increased the number ofsubscribers in the second quarter by 58,000, the number of RGUs by 96,000.

In the second quarter we further emphasized the quality of our customer service. Weoffered an all-inclusive installation of our All-in-1 Bundle services, which we have foundfurther improves customer satisfaction. In addition, we promoted the availability ofService+, a service that offers customers in-house installation services and support beyondour regular service domain.

Prior to the world cup football tournament, Ziggo expanded its offering of HD channels andstarted an extensive retail campaign to promote HD. At the end of the second quarter thenumber of HDTV package subscribers increased by 70,000 to over 117,000 subscriptions.As we see growth of more than 30,000 additional HD receivers per month, there remainsconsiderable potential for growth in HDTV subscriptions.

The number of internet subscribers grew to 1,492,000 in the second quarter. On July 1,2010 the download speed of our broadband services in almost our entire service area wasincreased to 80 Mbit/s for our highest All-in-1 Bundle subscribers and later this year anincrease to 120 Mbit/s will take place in the entire service area. Internet speeds for allother products increased as well. With these speeds we offer higher broadband speedsthan our competitors. By doing so we are already ahead of the European Commissionersobjectives for broadband internet speed for 2020.

Through an auction organized by the Dutch government in April, we acquired a nationalmobile license for 2 X 20 MHz in the 2.6 GHz spectrum band through a joint venture withUPC Netherlands for approximately 1 million. We are currently reviewing our options for

entering the mobile market as an evolution of our current service offerings.


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Financial performanceRevenues

In the first half of 2010 we generated revenues of 676.7 million, an increase of 7% over 630.8 million in revenue during the prior year period. In the residential market wegenerated revenues of 639.0 million, a growth of over 8.3% compared to the first half of2009. This was primarily driven by paid digital television and increased uptake of ourAll-in-1 Bundle. The number of digital television subscribers increased from 1.4 million as ofJune 30, 2009 to 1.7 million at the end of the first half in 2010. This increased revenuefrom paid digital television services by 36% to 60.2 million.

As of June 30, 2010 we had 797,000 subscribers to the All-in-1 Bundle, an increase of over67% from June 30, 2009.

Blended ARPU in the second quarter of 2010 was 32.80, an increase of 0.25 comparedto the first quarter of 2010. Blended ARPU for the first six months of 2010 was 32.67, anincrease of 3.28 (11.2%) compared to the prior year period. The increase in blendedARPU was partly a result of a price increase as per January 1, 2010 for our All-in-1 Bundleand our standard Television product (Z1), and partly by the growth in digital television andthe increased uptake of our All-in-1 Bundle compared to the prior year period, resulting inan increase in RGUs from 6.9 million as of June 30, 2009 to 7.4 million as of June 30, 2010,or an 9.9% increase in the RGU per customer from 2.15 to 2.36.

Our business services division realized revenues of 37.7 million in the first half of 2010, adecline of 7.8% compared to the prior year period revenue of 40.8 million. This was dueto a substantial component of non-recurring revenue during the first quarter of 2009. Inthe second quarter revenue was 19.1 million, in line with the prior year period ( 19.2million).

Going forward, our business services division has refocused its strategy on a productportfolio aimed at the small and midsized B2B segment, based on the strength of ourinfrastructure. The roll-out of EuroDocsis 3.0 across our entire network enables us to offervery attractive high speed internet and high quality telephony services to this market.

Cost of goods sold

Cost of goods sold includes the costs for purchases of materials and services directlyrelated to revenues and consists of author rights, signal costs and royalties that we pay toprocure our content, interconnection fees that we pay to other network operators, materialsand logistics costs relating to the sale of set-top boxes and materials used to connectcustomers to our network. The increase in cost of goods sold by 6.4% to 127.6 million inthe first half of 2010 is primarily driven by the growth in digital television and paid digitaltelevision. The gross margin of 81.1% for the first half of 2010 was in line with previousyear period (81.0%).


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Operating expenses

Operating expenses decreased to 161.0 million in the first half of 2010 from 168.0million in the comparable period in 2009. As a result of the decrease in operating expensesand the increase in revenue, operating expenses as a percentage of revenue furtherimproved to 23.8% versus 26.6% for the comparable period in 2009. Spending onmarketing & sales increased from 12.2 million in the first quarter to 17.2 million in thesecond quarter. For the second half we expect a further increase in marketing & salesprograms compared to the first half as a result of the competitive environment. We willcontinue to focus on further cost improvements.

Adjusted EBITDA and operating profit

For the first half of 2010 we realized a recurring EBITDA of 388.0 million, an increase of

13.1% compared to the prior year period. The recurring EBITDA margin improved to 57.3%compared to 54.4% for the prior year period.Integration expenses for the period were 1.8 million compared to 21.7 million for theprior year period. We expect to finish the integration of the three predecessor businessesin the second half of the year and expect to incur approximately 8 million costs in relationto the integration in 2010 in total compared to 47.1 million in 2009.

Operating income increased by 46.3% to 139.6 million compared to 95.4 million forprior year period.

Net Income

Interest expenses decreased to 135.1 million compared to 154.3 million for prior yearperiod. A lower average balance for interest bearing debt, the refinancing of the Mezzaninewith Senior Notes against a lower interest rate and a lower average EURIBOR resulted indecreased interest costs, although 74% of the Companys borrowings are at fixed rate ofinterest taking into account the effect of interest rate swaps. An amount of 8.3 millionwas allocated as borrowing costs on Work-in-Process for the first six months resulting in aninterest income. Last year these borrowing costs were only recognized in December.

Banking and financing fees have increased to 17.1 million as a result of fees of 15.1 million paid to the lenders of the Senior Debt in order to obtain consent for theissuance of the Senior Notes to refinance the Mezzanine facility. Excluding these consentfees, Banking and financing fees would have increased by 38%.

The amortization of funding cost have increased to 20.4 million from 8.7 million in theprior year period. As a result of the issuance of the Senior Notes to refinance the Mezzaninefacility, the remaining balance for capitalized funding costs for the Mezzanine facility of 11.4 million are fully amortized in the second quarter.

In the second quarter we have recognized a loss of 11.5 million for value gains and losseson our Interest Rate Swaps (IRS) in fair value of financial derivatives. As a result of theissuance of the Senior Notes to refinance the Mezzanine facility, the floating interestposition has decreased by 1.2 billion. Consequently, we have adjusted our hedge positionby partly offsetting our existing IRS position in order to offset the over hedged position.


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The over-hedged position of the IRS as well as the offset IRS are not subject to hedgeaccounting (IFRS) and therefore any change in fair value must be recognized as financial

income and expense.

For the first half of 2010 we recognized an income tax credit of 11.4 million compared toan income tax credit of 17.7 million for the prior year period. A lower loss before incometaxes resulted in a lower income tax credit.

We recorded a net loss of 33.2 million compared to a net loss of 51.3 million for theprior year period. The net loss includes an amortization charge of 93.4 million before taxon the intangible assets which resulted from the acquisition of the three predecessorbusiness. Without this amortization charge net of taxes, we would have reported a netprofit of approximately 36 million.

Cash flow and liquidity

Cash flow provided by operating activities

Although EBITDA including integration costs increased by 20.2%, cash flow from operatingactivities only increased by 11.5% to 356.8 million compared to 320.0 million in theprior year period. A significant decrease in current liabilities in the first half of 2010 resultedin a negative cash flow of 24.3 million due to a change in working capital compared to acash outflow of 3.3 million in the same period of 2009. A high balance for currentliabilities at December 31, 2009 resulting from relative high spending on capital

expenditures in the last months of 2009 explains the high decrease in current liabilitiesduring the first half of 2010.

Capital expenditure

Our capital expenditure and investments relate primarily to extending, upgrading andmaintaining our network, installation of new customers and the cost of cable modems.Capital expenditure also includes increases in intangible assets, primarily expenditures onsoftware, which we capitalize. Decoders and set top boxes are sold to customers andtherefore recognized as cost of goods sold and not capitalized.

During the first half of 2010 we made investments of 84.9 million, including 12.9million of capital expenditure for the integration of the three networks and companies. Inthe first six months of 2009 we made investments of 98.9 million, of which 17.1 millionwas integration capital expenditure. For the full year 2010 we anticipate investingapproximately 200 million ( 251.7 million in 2009), including integration capital ofapproximately 25 million ( 42.3 million in 2009). In the course of this year we expect tocomplete the integration and harmonization of the three networks and systems of thepredecessor businesses of Ziggo.


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Free cash flow and net cash used in financing activities

The EBITDA-Capex improved considerably by 35.5% to 301.3 million from 222.4 millionfor the prior year period. Free cash flow increased by 22.7% due to a change in networking capital position compared to prior year with a cash flow impact of 24.3 millionwhile in prior year period a net cash outflow from the change in working capital of 3.3million was realized.

Net cash used in financing activities in the first half comprised Interest costs, banking andfinancing fees related to our loan facilities, repayments on the Senior credit facilities andthe refinancing of the Mezzanine facility by the issuance of Senior Notes.

Interest paid decreased by 4.7% to 122.1 million compared to 128.1 million for theprior year period. This decrease is primarily the result of the reduction of the net SeniorDebt by 280 million since June 30, 2009 on which we pay cash interest and the decreaseof the EURIBOR rate compared to the prior year period, which determines the borrowingcosts of approximately 26% of our borrowings with financial institutions.

On May 7, 2010 we completed successfully the refinancing of our Mezzanine facility by theplacement of 1,209 million Senior Notes (the unsecured bond) and repaid theMezzanine of 1,181 million, including PIK-interest and regular cash interest accrued untilMay 7. The refinancing incurred financing fees of 41 million, comprising 15.1 million forfees paid to the lenders of the Senior Debt in order to get their consent for the issuance ofthe Senior Notes and 25.9 million in banking- and advisory fees paid in relation to theissuance of the Senior Notes.

During the first six months we have made voluntary repayments of 120 million on ourSenior Debt.

On June 30, 2010, we held 71.1 million in cash and cash equivalents, compared to 65.3million as of December 31, 2009 and have access to a committed undrawn revolving creditfacility of 150 million, expiring in 2013.

Net debt and financing structure

On June 30, 2010 the outstanding balance of our Senior Credit Facilities amounted to 2,535 million, a reduction of 280 million compared to 2,815 million as of June 30,2009 due to scheduled and voluntary repayments of principal made since June 30, 2009.

On May 7, 2010 we completed successfully the refinancing of our Mezzanine facility by theplacement of 1,209 million Senior Notes (the unsecured bond) and repaid theMezzanine of 1,181 million, including PIK-interest and regular cash interest accrued untilMay 7. The Senior Notes are due May 2018 and have a coupon of 8% per annum and wereissued at a price equal to 99.271% of their face value to yield around 8.125% per annum.Interest on the Senior Notes is due semi-annually and as per June 30, 2010 an amount of 14.1 million has been accrued as current liability.

The refinancing led to reduced financing costs for the Company, reduced risk to changes inmarket interest rates and extension of the debt maturity.


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Per the balance sheet of June 30, 2010, the unsecured bond amounts to 1,175 millionand is stated at amortized costs, including principal amount, capitalized funding costs and

discount on issuance date. The financing fees for the Notes issuance amount to 25.8million and will be amortized in 8 years. As per June 30, 2010 an amount of 0.5 millionhas been amortized. Therefore the financing fees per June 30, 2010 amount to 25.3million.

Loans from financial institutions amount to 2,452 million as at the end of Q2 2010. Theseloans include 82.7 million of capitalized financing fees.

Exposure to the risk of changes in market interest relates primarily to Ziggos long-termdebt obligation with a floating interest rate. Ziggo manages its exposure to changes ininterest rates and its overall cost for financing by using interest rate swap (IRS)agreements. They are used to transform the interest exposure on the senior credit facility

loans. As a result of the repayment of our Mezzanine Loan and the issuance of ourunsecured bond, the floating interest position has decreased by 1.2 billion. Consequentlywe have adjusted our hedge position by entering into IRS to partly offset existing IRS. Theover hedged position per May 7, 2010 has been offset.

At 30 June 2010 approximately 74% of Ziggos floating interest borrowings have beenswapped. The fair value of the IRS amounts to - 111.5M, compared to - 102.3M as peryear end 2009.

The over hedged position of the IRS as well as the offset IRS are not subject to hedgeaccounting (IFRS) and therefore any change in fair value must be recognized as financial

income and expense.In Q2 2010 the financial income and expense include an amount of 11.5 million (loss) forvalue gains and losses on IRS in fair value of financial derivatives.

Hedge accounting is applied for the effective part of the IRS. Any change in fair value isrecorded in the hedge reserve (equity). The hedge reserve per June 30, 2010 amounts to - 25.4 million.

As of June 30, 2010 our Net Debt to Adjusted EBITDA leverage ratio (as defined under ourSenior Credit Facilities) was 4.96x, down from 5.39x as at December 31, 2009. Ouraverage debt maturity is 5.5 years as of June 30, 2010 and we have no maturities in the

next 33 months.

Outlook

Looking to our achievements in the first half year, we are well on track to meet ourobjectives for the full year.


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Consolidated income statement for Ziggo Bond Company B.V.

(unaudited)

Quar te r ended June 30 (in thousands) Q2 2010 Q2 2009Change

%HY 2010 HY 2009

Change

%

Total Revenues 337,886 316,436 6.8% 676,674 630,833 7.3%

Cost of goods sold 64,112 61,671 4.0% 127,597 119,874 6.4%

Personnel 40,491 45,704 -11.4% 83,299 95,554 -12.8%

Contracted work 10,634 15,099 -29.6% 21,131 27,962 -24.4%

Marketing & Sales 17,194 17,770 -3.2% 29,393 31,461 -6.6%

Office expense 12,255 14,045 -12.7% 25,328 27,223 -7.0%

Other operating expenses 1,739 5,069 -65.7% 3,694 7,463 -50.5%

Depreciation 70,577 63,214 11.6% 137,589 124,390 10.6%

Amortisation Software 9,043 4,977 81.7% 15,631 9,810 59.3%

Amortisation Other Intangible Assets(2)

44,474 43,836 1.5% 93,435 91,710 1.9%

Total operating expenses 270,518 271,385 -0.3% 537,097 535,447 0.3%

Operating income 67,368 45,051 49.5% 139,577 95,386 46.3%

Net financial income (expense)

- Interest -62,710 -78,447 -20.1% -135,117 -154,278 -12.4%

- Banking and financing fees -16,265 -703 2213.7% -17,073 -1,416 1105.7%

- Amortization funding costs -15,987 -4,337 268.7% -20,424 -8,674 135.5%

- Fair value losses on derivative fin. instruments -11,550 0 -11,550

Loss before income taxes -39,144 -38,435 1.8% -44,588 -68,981 -35.4%

Income tax benefit (expense) 9,924 9,888 0.4% 11,381 17,672 -35.6%

Net loss -29,220 -28,547 2.4% -33,207 -51,309 -35.3%

(1) Financial Information - The condensed consolidated income statement has been prepared in accordance with

International Financial Reporting Standards (IFRS), as adopted by the European Union

(2) Amortisation Other Intangible Assets includes amortisation on customer lists. Please note that goodwill and customer

list have been capitalized as a result of applying purchase accounting (IFRS 3).


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Consolidated balance sheet for Ziggo Bond Company B.V. (unaudited)

Quar te r ended June 30 (in thousands)30 June

2010

31 Dec

2009

30 June

2009

31 Dec

2008

ASSETS

Intangible assets 3,438,384 3,529,521 3,619,800 3,709,809

Capitalized software 46,450 63,539 28,055 28,172

Property and equipment 1,505,048 1,549,665 1,589,966 1,626,874

Other financial assets 455 368 509 899

Deferred income tax asset 131,602 138,513 108,827 129,313

Total non-current assets 5,121,939 5,281,605 5,347,156 5,495,067

Inventories 27,022 25,542 26,752 13,978

Trade accounts receivable 37,259 43,592 54,523 48,719

Other current assets 25,400 27,184 27,315 30,102

Cash and cash equivalents 71,086 65,271 134,478 42,541

Total current assets 160,767 161,589 243,068 135,340

TOTAL ASSETS 5,282,705 5,443,194 5,590,224 5,630,407

EQUITY AND LIABILITIES

Issued share capital 18 18 18 18

Share premium 840,982 840,982 840,982 840,982

Retained earnings 2,365 617 85,635 133,265

Net Income (loss) for the period -33,207 -51,308

Equity attributable to equity holders 810,158 841,617 875,327 974,265

Loans from financial institutions 2,452,619 3,712,042 3,836,095 3,801,283

Unsecured Bond 1,174,919

Derivative financial instruments 111,465 102,261 121,571 73,935

Deferred income tax liability 429,836 447,529 445,573 483,731

Total non-current liabilities 4,168,839 4,261,831 4,403,238 4,358,949

Trade accounts payable 71,085 102,950 72,571 60,242

Deferred revenue 106,388 106,247 107,361 97,407

Current liabilities related parties 948 948 876 877

Provisions 18,632 23,694 21,097 19,101

Taxes and social securities 17,962 19,613 11,066 8,077

Personnel related liabilities 10,912 12,107 12,664 14,464

Accrued interest 14,138 1,603 13,469 2,737

Other current liabilities 63,644 72,585 72,555 94,288

Total current liabilities 303,709 339,746 311,659 297,193

TOTAL EQUITY AND LIABILITIES 5,282,705 5,443,194 5,590,224 5,630,407

(1) Financial Information - The condensed consolidated balance sheet has been prepared in accordance with International

Financial Reporting Standards, (IFRS), as adopted by the European Union.


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Consolidated cash flow statement for Ziggo Bond Company B.V. (unaud ited)

Quar te r ended June 30 (in thousands) Q2 2010 Q2 2009Change

%HY 2010 HY 2009

Change

%

Operating Activities

Operating Income 67,368 45,051 49.5% 139,577 95,386 46.3%

Adjustments to reconcile operating profit to net cash flow

Depreciation 70,577 63,214 11.6% 137,589 124,390 10.6%

Amortisation 53,516 48,813 9.6% 109,066 101,520 7.4%

Movement in provisions -1,067 2,531 -142.1% -5,062 1,996 -353.6%

Working Capital adjustments

(Increase)/Decrease in Current assets 7,775 -35,292 -122.0% 6,637 -15,790 -142.0%

Increase/(Decrease) in Current liabilities 12,500 3,868 223.1% -30,976 12,470 -348.4%

Change in Working Capital 20,275 -31,424 -164.5% -24,339 -3,320 633.1%

Net cash flow from operating activities 210,669 128,185 64.3% 356,831 319,972 11.5%

Investing activities:

Capital expenditures -44,242 -46,714 -5.3% -84,948 -98,876 -14.1%

Change in financial assets 548 833 -34.2% -87 390 -122.3%

Net cash flow from (used in) investing activities -43,694 -45,881 -4.8% -85,035 -98,486 -13.7%

Financing activities:

Issuance of Senior Notes 1,200,037 1,200,037

Repayment Mezzanine -1,181,143 -1,181,143

Repayment on Senior Credit Facility loans -119,949 -119,949

Interest -63,252 -65,156 -2.9% -122,053 -128,135 -4.7%

Banking and financing fees -42,065 -703 5886.3% -42,873 -1,416 2928.4%

Net cash flow from (used in) financing activities -206,372 -65,859 213.4% -265,981 -129,551 105.3%

Net increase (decrease) in cash and cash equivalents -39,396 16,445 -339.6% 5,815 91,935 -93.7%

(1) Financial Information - The condensed consolidated cash flow statement has been prepared in accordance with International Financial Reporting

Standards, (IFRS), as adopted by the European Union.

(2) Free Cash flow = Net Cash flow from operating activities + net cash flow from (used in) investing activities. For the HY ending June 30, 2010 the free

cash flow amounts to 271,796 (June 30,2009: 221,485)


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Details consolidated Income Statement adjusted for integration expenses

Quar te r ended June 30 (in thousands) Q2 2010 Q2 2009 Change

%

HY 2010 HY 2009 Change

%

(A) Income Statement

Revenue by segment(2 )

Standard cable subscription revenue 94,627 110,873 -14.7% 192,799 225,718 -14.6%

Digital pay television services revenue 30,644 22,440 36.6% 60,203 44,393 35.6%

Total video revenues 125,272 133,313 -6.0% 253,002 270,111 -6.3%

Broadband Internet subscription revenue 44,626 59,379 -24.8% 91,196 127,299 -28.4%

Telephony subscription revenue 6,081 8,224 -26.1% 12,468 18,220 -31.6%

Telephony usage revenue 37,091 31,446 18.0% 76,080 65,589 16.0%

Total telephony revenues 43,173 39,670 8.8% 88,548 83,809 5.7%

Bundles subscription revenues 94,885 54,578 73.9% 182,803 89,414 104.4%

Revenue from other sources 10,805 10,249 5.4% 23,438 19,354 21.1%

Business services revenues 19,127 19,246 -0.6% 37,688 40,845 -7.7%

Total revenues337,886 316,436 6.8% 676,674 630,833 7.3%

Cost of goods sold 64,112 61,671 4.0% 127,597 119,874 6.4%

Personnel 40,571 41,961 -3.3% 83,034 84,707 -2.0%

Contracted work 9,720 13,710 -29.1% 20,217 23,974 -15.7%

Marketing & Sales 17,194 17,501 -1.8% 29,393 31,192 -5.8%

Office expense 11,662 13,253 -12.0% 24,735 24,431 1.2%

Other expenses 1,695 1,265 34.0% 3,650 3,659 -0.2%

Total operating expenses144,955 149,361 -3.0% 288,626 287,837 0.3%

Adjusted EBITDA(3)

192,931 167,075 15.5% 388,048 342,996 13.1%

Integration operating expenses(4)

1,471 9,996 -85.3% 1,816 21,700 -91.6%

EBITDA 191,461 157,078 21.9% 386,232 321,296 20.2%

Depreciation and amortisation 124,092 112,027 10.8% 246,655 225,910 9.2%

Operating income 67,369 45,051 49.5% 139,577 95,386 46.3%

Net financial income (expense) 106,513 83,487 27.6% 184,165 164,367 12.0%

Loss before income taxes -39,144 -38,435 1.8% -44,588 -68,981 -35.4%

Income tax benefit (expense) 9,924 9,888 0.4% 11,381 17,672 -35.6%

Net loss -29,220 -28,547 2.4% -33,207 -51,309 -35.3%

(1) Financial Information - The condensed consolidated income statement has been prepared in accordance with International Financial Reporting

Standards, (IFRS), as adopted by the European Union.

(2) Revenue for each of our segments is derived from our internal accounts and is not presented in audited financial statements.

(3) Under IFRS, EBITDA is defined as profit before net finance expense, income taxes, depreciation, amortisation and impairment. Adjusted EBITDA is

defined as EBITDA before Integration operating expenses.

(4) Integration operating expenses are operating expenses incurred in connection with the integration of our predecessor businesses.


14/15

14

Details on Working Capital

(C) Change in net working capital in the first HY

Inventories 27,022 25,542 26,752 13,978



89,681 96,318 108,589 92,799








285,077 316,053 290,562 278,092

Net working capital -195,396 -219,735 -181,973 -185,293

Change in net working capital first HY -24,339 -3,320

(C) Change in net working capital in Q2

Inventories 27,022 25,622 26,752 13,568



89,681 97,456 108,589 73,297








285,077 272,577 290,562 286,694

Net working capital -195,396 -175,121 -181,973 -213,397

Change in net working capital Q2 20,275 -31,424

2nd Quar ter (in thousands)

As of

June 30,

2010

As of

Mar. 31,

2010

As of

June 30,

2009

As of

Mar. 31

2009

As of

Dec. 31

20081s t HY (in thousands)

As of

Dec. 31,

2009

As of

June 30,

2010

As of

June 30,

2009


15/15

Disclaimer

Various statements contained in this document constitute forward-looking statements as that term is defined by U.S.federal securities laws. Words like aim, anticipate, believe, continue, could, estimate, expect, intend, may,

plan, potential, predict, project, should, and will and similar words identify these forward-looking statements. Bytheir nature, forward-looking statements are subject to numerous assumptions, risks and uncertainties. Many of theseassumptions, risks and uncertainties are beyond our control. Accordingly, actual results may differ materially from thoseexpressed or implied by the forward-looking statements. Such forward-looking statements are based on numerousassumptions regarding our present and future business strategies and the environment in which we operate. The followinginclude some but not all of the factors that could cause actual results or events to differ materially from those anticipatedresults or events: general economic trends and trends in the cable television and telecommunications industries; thecompetitive environment in which we operate; fluctuations in interest rates; consumer disposable income and spendinglevels, including the availability and amount of individual consumer credit; changes in consumer television viewingpreferences and habits; consumer acceptance of existing service offerings, including our standard cable, digital pay

television, broadband Internet and telephony services; consumer acceptance of new technology, programming alternativesand broadband services that we may offer; our ability to manage rapid technological changes; our ability to maintain orincrease the number of subscriptions to our standard cable, digital pay television, broadband Internet and telephony servicesand our average monthly revenue per user; our ability to maintain or increase rates to our subscribers or to pass through

increased costs to our subscribers; the outcome of any pending or threatened litigation; changes in, or failure or inability tocomply with, government regulations in the countries in which we, and the entities in which we have interests, operate andadverse outcomes from regulatory proceedings; government intervention that opens our distribution network to competitors;uncertainties inherent in the development and integration of new business lines and business strategies; capital spending forthe acquisition and/or development of telecommunications networks and services; the availability of attractive programmingfor our digital video services at reasonable costs; the loss of key employees and the availability of qualified personnel; andevents that are outside of our control, such as terrorist attacks, natural disasters or other events that may damage ournetwork. We caution readers not to place undue reliance on the forward-looking statements contained herein, which speakonly as of the date of this document, and we expressly disclaim any obligation or undertaking to disseminate any updates orrevisions to any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto,or any other change in events, conditions or circumstances on which any such statement is based.

Details Loans

Q uar t e r ended J une 30 (in thousands) 30-Jun-10 31-Dec-09 30-Jun-09

Senior Debt 2,535,301 2,655,250 2,815,510

Mezzanine 0 1,159,360 1,131,827

Capitalized financing fees -82,683 -102,568 -111,242

Loans from financial institutions 2,452,619 3,712,042 3,836,095

Senior Notes (principal amount) 1,208,850

Capitalized discount at issuance (price 99.271) -8,629

Capitalized financing fees -25,301

Senior Notes 1,174,920

Total Loans 3,627,538 3,712,042 3,836,095

ziggo_halfjaarcijfers_2010 eng_tcm50-11040

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