Virgin Media 2009 Annual Report Download - page 2

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Dear Stockholder,
2009 was a year of significant achievement for Virgin Media. We delivered strong financial and
operational performance, particularly in the second half of the year, and our leadership team and dedicated
employees have successfully delivered against our strategy. We are leveraging our superior network, have
substantially differentiated our products in a competitive market, and effectively exploited new and existing
distribution channels in order to deliver revenue, cash flow and customer growth.
We have established a leading position in next generation broadband access in the United Kingdom. As
one of the first cable companies in the world to complete the rollout of DOCSIS 3.0 technology, we have
successfully introduced our 50Mb broadband product and started a pilot for a 200Mb service.
As convergence gathers pace, we are focusing on differentiating our TV product and leveraging the use
of mobile as the third screen. Building on the success of our advanced video-on-demand service, we will
continue to improve our TV product so that our customers have access to the best digital entertainment
service available. We have expanded the range of our content to grow on-demand usage and customer
advocacy, and launched a suite of new HD channels. We have also entered into a strategic partnership with
TiVo to develop a next generation TV service that will redefine the user experience. We continue to leverage
our mobile offering by marketing to our cable customers and introducing a number of new high-end
handsets. As a consequence, our mobile contract base increased by 46% in 2009 to nearly one million
contract customers.
The strong popularity of the Virgin brand and our industry leading products helped drive record levels
of broadband, TV and contract mobile customers and resulted in strong customer and revenue growth in the
second half of the year. Whilst creating a fully-integrated, customer-focused organization, we are maintaining
our focus on cost control and using the savings to invest in future growth. We increased our network
footprint by over 100,000 new homes in 2009, and plan to reach a total of 500,000 additional homes by the
end of 2012. Separately, we are increasing our distribution channels by opening new Virgin Media branded
stores and retail lite stands that sell our cable and mobile products. The number of our retail outlets
increased by 49 to 72 by the end of 2009.
In our Business division, our focus on growing retail data services to medium and large companies and
public sector organizations is yielding results as retail data revenue continued to grow in 2009.
We continued to be proactive in the capital markets in 2009, significantly improving the maturity profile
of our senior debt. We raised a total of £1.7 billion through high yield offerings in June, July and November
2009, with the proceeds used to prepay a portion of our senior bank loans and 2014 bonds. In November, we
successfully amended the terms of our senior bank loans to provide increased flexibility. In January 2010, we
issued £1.5 billion equivalent of senior secured bonds to prepay a portion of our senior bank loans, and in
April 2010, we closed a new £1.9 billion senior bank facility. The refinancing activity was well received by the
financial markets and demonstrates the confidence investors have in our strategic plan and growth
opportunities. To increase our profile and presence in the U.K. and Europe, we launched a secondary listing
on the London Stock Exchange in October 2009. The listing has been very successful, with approximately
11% of our stock now held by U.K. investors, including a number of U.K. funds.
We are committed to demonstrating corporate responsibility across all of our business activities and our
key priority is to ensure that our customers can safely and confidently enjoy the benefits of our products.
Our ‘‘digital confidence’’ agenda has seen us provide strong leadership on a range of issues in what has
become a complex digital world and we are working to seamlessly integrate these rights and responsibilities
into our operational framework.
In summary, 2009 has been a year of sustained and significant progress for the business. We built upon
the foundations laid in previous years, and executed against a growth strategy that we believe will build
momentum into 2010 and enable us to deliver superior stockholder returns.
James F. Mooney Neil A. Berkett Chief Executive Officer
Chairman
April 29, 2010