Virgin Media 2012 Annual Report Download - page 21

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ITEM 1A. - RISK FACTORS
OVERVIEW
In addition to the information contained in this annual report on Form 10-K, you should consider the following risk
factors in evaluating our results of operations, financial condition, business and operations or an investment in our
stock.
The risk factors described in this section have been separated into three groups:
• risks relating to our business and industry;
• risks relating to our financial indebtedness and structure; and
• risks relating to our common stock.
In addition to the information presented in this annual report, there may be other unknown or unpredictable economic,
business, competitive, regulatory or other factors that could have material adverse effects on our results of operations,
financial condition, business or operations in the future. In addition, past financial performance may not be a reliable
indicator of future performance and historical trends should not be used to anticipate results or trends in future periods.
If any of the events described below were to occur, our businesses, prospects, financial condition, results of operations
and/or cash flows could be materially adversely affected.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
We have entered in to a Merger Agreement with Liberty Global, Inc., which is subject to certain conditions,
and as a result the merger may not be consummated; our operations both before and after consummation of
the merger will be impacted.
On February 5, 2013, we entered into a Merger Agreement with Liberty Global, Inc., or Liberty Global, pursuant to
which we agreed to be acquired by Liberty Global subject to the terms and conditions in the Merger Agreement. The
consummation of the Merger pursuant to the Merger Agreement is subject to regulatory approval, the affirmative
approval of our shareholders and those of Liberty Global and other customary conditions. In addition, the Merger
Agreement may be terminated under certain conditions by Liberty Global or us. As a result the merger may not be
consummated.
Whether or not the merger is consummated, the announcement and pendency of the transaction could cause disruptions
to our business, which could have an adverse effect on our business and financial condition and results of operations.
Under the Merger Agreement, we have agreed to certain covenants that place restrictions on our ability to, among
other things, dispose of properties or assets, make unbudgeted capital expenditures, acquire substantial assets, make
substantial investments, increase the salary of certain of our employees or directors, pay certain bonuses or incentive
compensation, grant new equity or non-equity based compensation awards, hire new employees, redeem equity
interests, declare or pay dividends or make other distributions in respect of our capital stock, other than a quarterly
dividend of up to $0.04 per share, incur indebtedness, enter into certain transactions with related parties or enter into
new material contracts outside the ordinary course of business, in each case, until the earlier of the termination of the
Merger Agreement and the effective time of the Merger.
Once consummated, the combined company may be unable to successfully integrate operations and realize the full
anticipated synergies of the Merger, which may have an adverse impact on our financial condition and results of
operations.
We operate in highly competitive markets which may lead to a decrease in our revenue, increased costs,
increased customer churn or a reduction in the rate of customer acquisition.
The markets for broadband internet, television, telephony and business services in which we operate are highly
competitive and, in certain markets, we compete with established companies that hold positions of market power in
these and/or closely related markets. We face competition from these companies, other established companies and
potential new entrants. Technological advances may increase competition or alter the competitive dynamics of markets
in which we operate. For example, the distribution of entertainment and other information over the internet, as well
as the distribution of entertainment through mobile phones and other devices that continue to increase in popularity
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