London, England, February 28, 2007 – Virgin Media Inc. (NASDAQ: VMED) announces results for the quarter ended December 31,
2006. Virgin Media changed its company name from NTL Incorporated on February 6, 2007. This earnings release contains historical financial information on both an actual reported basis and a pro forma basis. The pro forma results for the quarter ended
December 31, 2005 assume that the merger with Telewest took place on January 1, 2005. No pro forma financial information has been presented in respect of the acquisition of Virgin Mobile, which closed on July 4, 2006.
Highlights: Fourth Quarter 2006
• Rebranded from NTL:Telewest to Virgin Media
• Revenue growth in all segments
• 78,100 broadband net RGU additions, 38,500 TV net RGU additions
• Churn reduced to 1.7%
• Cable ARPU of £42.82, up £0.34 vs Q3-06
• Successfully completed first major billing system integration
• Underlying OCF growth. Impacted by cable merger implementation, other M&A activities and rebrand costs
OCF in the fourth quarter has been negatively impacted by £19.1m of implementation costs relating to the merger with Telewest
(Q3-06: £14.2m), £5.0m of rebrand expenses (Q3-06: £0m) and £2.3m of legal and professional costs related to M&A activity (Q306: £0m). OCF is operating income before depreciation, amortization and other charges and is a non-GAAP financial measure.
Please see Appendix F for reconciliations of non-GAAP financial measures to their nearest GAAP equivalents. The pro forma results for the quarter ended December 31, 2005 assume that the merger with Telewest took place on January 1, 2005. The pro forma presentation set forth above and elsewhere in this earnings release is non-GAAP financial information that management believes facilitates a comparative analysis of developments in our business. Please see Appendices E and F for a discussion of our pro forma financial information.
Review of 2006 – 12 months of building a strong platform for future growth
Completed Telewest merger and Virgin Mobile acquisition
Delivered synergy savings and headcount reductions
Completed first billing system integration
Announced rebranding to Virgin Media (implemented Feb 2007)
Significant ARPU growth
Launched innovative new product bundles (eg 4 for £40, VIP)
Completed roll-out of superior products VOD, HDTV and DVR
Made significant customer care improvements
Established new management team with track record of success
Steve Burch, Chief Executive Officer of Virgin Media, said:
“Our first set of figures released under our new name show continued improvement, with revenue growth across all segments, good growth in ARPU and triple play penetration, reduced churn and strong broadband and TV net additions. Underlying OCF growth was strong before the impact of merger implementation, rebrand and M&A costs.
Overall, the performance of the underlying business is on track and provides a strong foundation for the rebranding to Virgin Media. Consumer reaction to the rebrand, announced on February 8, has been very encouraging. Our rebrand and the ongoing improvements to our business that it reflects, signal a great opportunity for our customers and investors and poses a serious challenge to our competitors.”
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RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 2006