Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Liberty Global’s 2015 Results Investor Call. This call and the associated webcast are the property of Liberty Global, and any redistribution, retransmission or rebroadcast of this call or webcast in any form without the expressed written consent of Liberty Global is strictly prohibited. At this time, all participants are in a listen-only mode. Today's formal presentation materials can be found under the Investor Relations section of Liberty Global's website at www.libertyglobal.com. Following today's formal presentation, instructions will be given for a question-and-answer session. As a reminder, this investor call is being recorded on this date, February 16, 2016. Page 2 of the slides details the Company's Safe Harbor statement regarding forward-looking statements. Today's presentation may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including the Company's expectations with respect to its outlooks and future growth prospects and other information and statements that are not historical facts. These forward-looking statements involve certain risks that could cause actual results to differ materially from those expressed or implied by these statements. These risks include those detailed from time to time in Liberty Global's filings with the Securities and Exchange Commission, including its most recently filed forms, 10-K. Liberty Global disclaims any obligation to update any of these forward-looking statements to reflect any change in its expectations or in the conditions on which any such statement is based. I would now like to turn the call over to Mr. Mike Fries.

Thank you, operator, and welcome, everybody. We certainly appreciate you joining our call today. I have with me, as usual, a whole host of management folks that I will call upon and will help chime in today and get all your questions answered. I’ll provide an overview. So, traditional agenda and then Bernie will take us through the numbers and then we will get right to your questions. And we are talking from slides and it might be benefit so you can get a hold of those because we will be referring to them throughout the course of our prepared remarks. So I am going to kick it off on Slide 4 with what I believe are the key messages you are going to want to takeaway from this call. We know there is a lot of noise and activity in the market right now, in our sector in particular. So to keep it simple, these are the things we think you need to know about our business. First, and I think foremost, we are very fortunate that the foundation of our story continues to be growth. Since the formation of Liberty Global over ten years ago, we have delivered 42 straight quarters of positive growth in subscribers, revenue, and operating cash flow. And as we look out, we actually see a long runway for us to keep delivering those great results. In fact, we think the trend is actually improving from here. If you look at 2015, our second half of the year was better than the first half across the board. I’ll walk you through those numbers in a moment. If you look at our OCF guidance for 2016, you’ll see improved growth compared to last year and if you look out the next three years, we are…

Thanks, Mike. A quick note before I start. First, I will present the financial results of the Liberty Global Group, which includes our European operations followed by an overview of the performance of the LiLAC Group, which includes our operations in Chile and Puerto Rico. On Slide 13, we present financial results for the Liberty Global Group. For the full year ended December 31, 2015, we reported total revenue of $17 billion when adjusting for FX and the impacts of acquisitions and dispositions, we grew the top-line by 3% while our rebased OCF growth was 3.5%. As expected, our growth rates improved in the second half of the year and we reported Q4 rebased growth of 3.5% for revenue and 6% for OCF. On the next slide, I will give you more detail on the performance of our key markets. Our European operations reported a 2015 OCF margin of 47.9% marking a 70 basis point improvement over 2014, which was partly driven by operating leverage and cost controls. Moving to our property and equipment adds, we ended the year within our guidance range of 23% of revenue and above the 21% of revenue we reported in 2014. The step-up in our absolute P&E additions was due principally to increases associated with the acquisition of Ziggo, as well as higher spend for line extensions, new builds and upgrade projects. These increases were partially offset by the impact of the strengthening of the US dollar against all of our European currencies. The increase in the year-over-year ratio was mainly due to higher new build investments. And finally, our European business delivered $2.4 billion of free cash flow in 2015, up 16% year-over-year on a reported basis, and over 20% after adjusting for Ziggo and FX. The improvement in our reported free cash…

[Operator Instructions] And we will take our first question from Michael Bishop with RBC Capital Markets.

Yes, hi, good morning guys. I just wanted to ask when you think about the JV with Vodafone, if you think back to the purchase price of Ziggo and the implied 14 billion EV of the transaction today. I was just keen to get a sense of how fast through the original 25 million of synergies you are through and how you thought about the equalized Asian payments from Vodafone versus as I am obviously guessing 50% of the future synergies which might include some of those original Ziggo’s synergies. And then, just following on from that, do you have any specific thoughts about the use of cash from the Vodafone JV you mentioned it’s a deleveraging event. Clearly, we have seen the buyback on guidance slightly increased, but is there room for more buyback on top of that with the extra cash? Thanks very much.

Hey, thanks, Michael. First of all, the synergy numbers that we provided and provided some detail on in the press release reflects the synergies between the two entities post-JV. So they are on top of the synergies, we are already pursuing and are well underway in achieving from the Ziggo, UPC NL merger while back. So they are on top of that. Your second question, what was your second question, Michael?

It was just about on the potential use of cash, or that’s a deleveraging event, so you are obviously getting the equalization payment plus the releveraging of the JV?

Well, I mean, we did announced today an increase in our buyback plan of 1.6 billion or 4 billion that could be potential use of cash obviously. But we haven’t – deleveraging in the sense that we are taking over €7 billion of debt off the balance sheet. I didn’t mean to imply that we would use that extra cash to delever as such, but it’s delevering from our Group balance sheet and the uses of cash are to be determined. Of course, we have been and continue to be very focused on our capital structure and buyback. So you can assume that that’s a use of cash and just generally running our business the way we run it. So, I don’t see any material difference and we haven’t specified a specific use of proceeds for that number. But, the 2.5 billion is not meaningfully different than the increase in the buyback we just authorized, but an necessarily related item. So, I think it’s business as usual.

Great, thanks so much.

We will take our next question from James Britton with Nomura.

Thanks very much. Firstly, on the deal in The Netherlands, given you’ve got a very good valuation for the Vodafone asset in your negotiations, can you just explain why you prefer not to buy the Vodafone business outright and secure 100% synergies for yourself? And then, this is a follow-up on the Ziggo business, when do you expect the network problems of Ziggo to be fully behind you? And on what timeframe can we expect you to push price again in that market? Thanks.

So, on the Ziggo business, we have seen continued and sustained improvement in almost all of our network statistics and service statistics from – really from September and I think I’ve reported on that. We’ve talked about that in our previous calls and we continue to see that. The network is highly stable today and we’ve actually seen a nice uptick in the beginning of the year and our sales and net adds, on pricing, we are a rational pricer and we did of course make some moves recently in the market to reduce the number of pre-months and continue to believe that products in this particular market are fairly valued and fairly priced. So, we are not really pushing that competitive position too aggressively. We are trying to be reasonable on how we price it, manage our products and I think you might have noticed today we’ve done that very thing. So, I think the business is stabilizing. The network and all the service metrics are clearly stabilizing and have through the third and fourth quarter of the year with the launch of Ziggo Sports and the massive uptake of Replay TV and the other things that are really having a positive impact on MPS in this market. We are really pleased. So, this particular operating business has been doing quite well. And in terms of your first question, I think the deal we have done is the right deal to do. In this particular market, combining these businesses, and working together to jointly achieve the synergies that exists, that we know exists in this particular combination. That’s the right way to do it. So that’s all – I mean, I am not going to go back, say what, this or that, this is the transaction made the most sense for us and I believe for Vodafone and for shareholders and for consumers. So, that’s how we ended up here.

Thanks.

And our next question comes from Amy Young with Macquarie.

Thanks. Michael, I was wondering if you can just talk a little bit more about the pros and cons on the wireless side, MVNO versus owning and clearly as you are keeping your expertise, can you just talk a little bit more about the unit economics of controlling your subscriber a little bit more and some of the metrics that you are focused on whether it’s churn and ARPU? And then lastly, if you can talk about your wireless strategy in the UK, given some of the regulatory changes there and then also Germany? Thank you

Sure, so, I mean, I said that in my remarks, so, I’ve been clear that we have taken – I would say an opportunistic but disciplined approach in how we’ve dealt with the wireless opportunity in all of our markets and in many instances MVNO deals work well for us where we have full MVNOs to all of our customer, use of our own core network, and access to 4G, we have been satisfied and continue to be satisfied with those types of opportunity and the economics look good to us in many of the markets we are in as we forecast consumption and demand and penetration of products. So, from our perspective, if you look at how we’ve tackled mobile throughout Europe, it’s a hybrid and that hybrid makes sense to us. In the case of Belgium where we purchased BASE, the synergies were material. The network overlap and plan was material and the asset was relatively small. So we really felt that this was a way of perhaps improving the economics a bit through greater synergies, but also having even greater control in a market where we felt it was necessary. The JV here in Holland is a third approach and one that we think also makes a lot of sense given our relative positions in this particular marketplace. The quality of the Vodafone network the number two network by market share, but by far the best network we believe in Holland. So it made terrific sense for us and this was the deal that we are able to get done. I think you should expect as you look forward which is the really the basis of your question that we will continue to be opportunistic and disciplined in terms of how we look at the mobile opportunity…

Great. Thank you.

Our next question comes from Ulrich Rathe with Jefferies.

Thanks very much. I was wondering whether you could comment a bit more on the interim period in The Netherlands before the deal was closed you have a method out of the guidance which now interpret on one to – and interpret that one could maybe suspect that you are either on target sure, or that maybe there are particular risks that you don’t want to expose yourself from the guidance. Could you just describe your views on that a bit? And also whether you have shifted management priorities, I mean, in the interim for example, by deemphasizing your own mobile push in anticipation of the JV and focusing maybe more on the fixed line side of things or any other changes in the way you approach The Netherlands and while you are going for this period? Thank you.

Yes, I can’t – I would like to provide you with detail on the Dutch market, specifically for Ziggo, but I am precluded from doing that. I am told by our lawyers because of the cable and wireless transaction in the UK takeover panel. So we can’t do that today. I apologize and you might be able to discern that number on your own, but I can’t provide guidance for Ziggo specifically and in terms of management priorities, remember Vodafone is our MVNO provider. So, in the end, from our perspective that will be business as usual for both parties and we will – we are not quite sure how long the regulatory process will take. We’ve said publicly we think by the end of the year, if not sooner, so, each party I am sure and Vodafone I am sure with discern the same thing, we are going to run our businesses as we would expect to run them and deliver to the joint venture the most robust and successful business as we can manage. So, I don’t see any meaningful change in how we run and operate our business through the course of the year. I’ll say that, I have been pleased with the turnaround in Ziggo and I can describe it as a turnaround. If you look at our ability to continue to deliver broadband subs and we’ve had good success through the first part of the year. If you look at our ability to prove the customer experience which was a critical issue for us over the summer and you look at our discipline around pricing and the new products we’ve launched which had a material impact on customer satisfaction and demand, I think we are in good shape. So, it’s just business as usual for us.

Thanks. Could I follow-up, just as a follow-up on Germany please? I mean, given you have announced – I think to your customers some price increases, what gives you the confidence that the churn issues this year would be contained compared to the experience on the price increases last year? Thank you.

We have learned quite a bit about price increases through 2015 and Diederik might answer comment on that as well, but, we have become much smarter about how we manage prices and looking at our acquisition prices in particular in relation to our back book prices. The experience in Germany last year was really mostly driven around an acquisition price increase which impacted sales of course and the prices this year are lower and I think certainly we believe implemented more appropriately across the sub base yet still impactful to cash flow. So price increases are - continue to be an important part of our growth in cash flow and free cash flow as you might expect. But I think we are much more intelligent and certainly we believe more effective in how we are implementing those price increases and we learned a bit about Germany for sure the last year and you can expect we won’t make those same mistakes. So, the increases are across the different part of our sub base, less focused on acquisition prices, more on finding the areas within our back book and existing customer base that we think we can manage and improve or normalize pricing and it’s plenty to be gained in the revenue line from those types of activities. Diederik do you want to add anything to that?

No, Mike, I think, absolutely right and looking at price increases it’s so better balanced between different segments and if you look at the early reception, it seems they were indeed more intelligent than last year, that’s also how it seems they were perceived in a market on this.

Thank you very much. Sorry, thank you.

And our next question comes from Matthew Harrigan with Wunderlich Securities.

Thank you. There was a lot of excitement out of CTE on Wi-Fi first chance as some of that’s dissipated T-Mobile’s Bright House trial getting pulled. But could you talk about some of the things on the roadmap for wireless that make that even going out to 5G where you need to have lower latencies and all that where it makes the deal make even more sets and maybe that’s kind of a follow-on question. And then secondly, when you look at your video pricing, do you think you are going to get any halo from the advent of 4G hopefully – and all that, because it feels like maybe you could price segment a little bit more aggressively? Thank you.

Hi, Matt. I’ll let Balan circling to your wireless question. We have certainly done work on Wi-Fi first as you know, we’ve talked about that publicly and the roadmap, the technology roadmap for mobile is something that we are monitoring. We are not of course launching 5G anywhere. We don’t have a particular plan to do that and we are sort of in the – if you will, in the wake up our mobile MVNO providers in the markets that we have those arrangements. But in terms of video pricing, I don’t know whether 4K is going to make material difference, Matt. To be honest with you, I think we are in a wait an see mode. It does have – been in CES where there too I am sure it has certainly an impact obviously marginally on the viewer and its experience. So I think it’s too soon to say, we’ve got to have content, we’ve got – in terms of what will it mean to our broadband delivery and things of that nature, we are also in a wait and see mode. So, I am – we haven’t taken any action today per se to anticipate meaningful consumption of 4K. I’ll let Balan jump in if he has a different view on that, but it’s something that we are in a wait and see mode on and it will be more impactful than 3D which everybody felt was going to have some material impact on consumer satisfaction and it didn’t but I think we are still in the early stages of knowing what that might mean to us. Balan, do you want to add anything to that?

Sure, Mike. On the 4K, for sure, beginning next year, I would devices, the set-top boxes that we have put out there will be 4K capable. So we will be ready for it when the content catches up with it. In the 5G front, we think that that most of the standards will be done around next year, 2018, perhaps and deployments in the network perhaps after 2020, you’ll probably start seeing handsets right about 2020 and beyond and there is opportunity for us for sure it allows us to reform spectrum and perhaps give more spectrum back to LTE offerings. I think, on the Wi-Fi first question, we’ve done trials on it. We can get it working, but the more you do on the MNO side, the less the need for Wi-Fi for its solution.

Thanks, Mike, Thanks, Balan.

And our next question comes from Jeffrey Wlodarczak with Pivotal.

Good morning guys. Can you use the remaining 2.9 billion or so in NOLs to shield your income from the JV or kind of JV effectively purchase your NOL and you want to shield their chance?

We want to be careful about being too specific about the tax arrangements here. I think it’s – you are spot on that the 2.9 billion of NOLs that remain outside the JV could be put into JV, but that would require some measure of compensation and what we might do with those NOLs I think is something we have to just see in time what the best use that would be, so.

Okay, thanks and then, I think it was 350 million of dis-synergies how should we think about the timing of how those cost hit in 2017, in 2018?

Yes, I mean, in this case, we’ve been a little – it’s a slightly longer timeframe for synergies that I think that’s part of – just because they are substantial and if you look at them as a percent of OpEx or CapEx or even revenue synergies are material here, probably larger than most people thought and so, we’ve been appropriately conservative about the timeframe closer to four five years and what we would typically do two or three years. I don’t think we are not providing annual guidance on that today, Jeff. But of course, as time goes by and we have greater visibility and working more closely we can provide a bit more transparency, but, so that’s all I can say. But the negative synergies would layer in, in the early part of any synergy plan of course and the timeframe we provided here is little longer than normal on the upside. So, that’s all the color I can provide at this point.

And then, one last quick one. At some point, are you going to be restricted from share repurchases around the close of the deal?

The only restriction I am aware of – I’ll let Rick or Bryan, chime in here. When we file the proxy for cable and wireless deal, we will be out of the market from the point in time if that is filed until – that get closes with the shareholder vote, I am not sure, but, we are in the market if you will clear of course as of today and through the date of that filing which we anticipate to part. So, Bernie, do you want to anything to that which you spoke about it?

No, and I don’t think there is any restriction around the Vodafone closing transaction as you can see that restatement.

Okay, great. Thanks very much.

Our next question comes from Michelle Morris with Morgan Stanley.

Yes, thanks. Good morning. I just wanted to touch on LiLAC and your guidance. You’ve talked about 5% to 7% OCF growth with limited free cash flow. So I am assuming it implies slightly higher CapEx, just can you explain a little bit what’s going on there? Perhaps it’s a currency effect. And then your mid-term guidance calls for an acceleration and I was wondering if you could give us a little bit more color to whether or not that would also be true for revenues or that’s really coming on the cost side. And my second question would be on Chile and your mobile net adds that you can recur in the second half of the year, so just wondering if you can comment as to what’s going on there? Again, then it’s still relatively incipient – if you know there? Thank you.

Sure, that was I’ll again work up the Chile answer. In terms of the mid-term guidance that we provided and we’ve been somewhat clear on that in the past, but generally speaking the increase if you will, over our run rate growth, we attribute about 60% to revenue and 40% to efficiency. So, the plan that we’ve been talking about publicly is always been a - primarily a revenue-driven plan and I talked about in my remarks that the core revenue drivers B2B, mobile and market share gains and price increases where appropriate. So, for sure, you should expect that this is not a cost-cutting exercise, in fact, if you look at our indirect cost, we expect them to be flat, that’s not really cost-cutting, that’s really cost maintenance. And of course our direct expenses would go up because many of those are variable and driven by revenue. So, as you anticipate and forecast greater revenue growth, you are going to see an increasing in direct cost, but if we maintain that indirect cost line, relatively flat, that allows you to generate obviously incremental margin which is what’s driving our expected increase in growth. So it is definitely a revenue – primarily revenue-driven business opportunity. In terms of LiLAC, the free cash flow posture of that business has always been a little bit different and that has to do as much as anything with the CapEx profile we are in today, partially currencies, but we do anticipate free cash flow in that market – in that region of course to ramp and with the cable and wireless deal, the synergies we anticipated in that particular deal we did say that we saw double-digit OCF growth over the medium-term post closing and you would expect that that would also have a positive impact on free cash flow. We just didn’t provide any guidance on that. That’s about – do you have the Chile mobile net adds figure?

Good morning. What we see in the Chilean market is an entrance of a new player one, that came very aggressive, but despite that, we were able to grow our base by 30,000 postpaid subs focusing as we were doing for the last years on our base expanding into a quadruple play. So, I think that the other players were impacted more partly by the new player. We will keep on focusing on our expanding our base into a four-play.

All right. Thank you. That’s helpful.

Our next question comes from Daniel Morris with Barclays.

Good morning and thanks for taking the question. It’s on CapEx really. I just wanted to understand how best to bridge between the kind of 22%, 23% runrate and the 25% to 28% you are talking about for the next three years. I mean, if I look at your incremental build plans, it looks like it’s at least 1 million a year of extra household you are planning to build out versus, certainly my expectations and if we think about a kind of 600, 700 CapEx per home pass that seems to – you’ll be 3 to 4 percentage points of extra CapEx to sales. So, is it kind of as simple as that and there is nothing else really going on in the CapEx line? And then I have a follow-up please. Thanks.

I think you are looking at it correctly, Daniel. Charlie, you can chime here, or Balan, but I would say the vast majority if not all of the increase in our CapEx to revenue ratio as we put in the 10-K is attributable to incremental new build which we estimated at 7 million homes over the next few years. So, that’s a lot of activity, it’s a lot of CapEx and you should obviously anticipate that that is going to impact the CapEx figure and we did say for 2016, the vast majority of the 700 million increase in PP&E is going to be attributed to the incremental new build activity, but remember, these are in our experience, 30% IRR, huge cash-on-cash returns, self-financing after a period of time and easily financed, vendor financed. So, from the point of view of free cash flow, we can manage that and they do become accretive very rapidly, but certainly there is some impact on the accounting figure and I think you’ve correctly assessed it.

That’s very clear.

I’d say – the only thing I would say is, there was a little bit of an increase in CPE because clearly the new hire and you’ll need more net adds we have, but otherwise the other major cost categories are flat. That is all coming out of new builds and CPE just to make them.

That’s very clear. So, it’s great CapEx. Just as a follow-up, can you just let us know you obviously had a lot of big build in the second half of 2015 in terms of the UK lightning. I just wonder has the take rate going there any surprises either on the upside or is it or downside or is it really running inline with expectations?

Well, it’s running inline and I think we said that in our remarks, but Tom if you are on I’ll let you address more specifically.

Yes, good morning all. I think as Mike mentioned earlier, the numbers are generally running ahead of our expectation in terms of take up we are finding in new – probably developments whereas the new construction after six to 12 months we are getting penetrations as high as 50%. In the infill areas where we are filling in those gaps and the network that we had previously after six to 12 months we are getting 20% and that continues to rise over time. So, we are very pleased about the take up we are getting and certainly it’s lightning which has supported the record growth in subscribers that Virgin Media had in Q4, not only lightning because we had a good quarter as well, but we see both those contributing to continuing growth in the first six weeks of the new fiscal year.

Great. Thanks for that.

And we will take our final question from Ben Swinburne with Morgan Stanley.

Thank you. Good morning. Mike, I think we’ve historically thought about, kind of mid-teen’s free cash flow growth from Liberty and you’ve laid out this three-year plan for OCF. I wondering if you have anymore you can add to help us at least think directionally about the free cash flow CAGR? I would imagine that it’s probably pretty back-end loaded, but you’ve got a lot of moving pieces between the new builds and the vendor financing piece that I think ultimately sort of reverse itself. So, any color you can help us and think about the free cash flow CAGR and along those lines, can you help us with the 7 million new build homes will be the homes in Germany and any other markets you are thinking about build about be less expensive than in the UK? Just any color on sort of regional differences to help us fine tune would be helpful. Thanks.

Yes, sure, Ben. Certainly on the new build, you should expect that the most expensive construction we are undertaking today is in the UK and we’ve been public about those numbers, 400 pounds to 600 pounds and you should expect that those numbers are lower in Germany and lower in other markets like CEE, or Central Eastern Europe which is also a component of the 7 million. I don’t know that we provided any specific guidance. But perhaps we can think about that for the next call or on the next occasion in terms of translating or maybe Bernie, tell me if we put any specific figures in 10-K. But they are going to be lower than the UK. That’s for sure.

Yes, we didn’t disclose anyway.

Yes, on the free cash flow figure, I mean, we did say this year, even with the 700 million increase in CapEx mostly attributed to the new build activity, we still think we can generate 2 billion of free cash and we didn’t provide free cash flow guidance over the three year period, but – you I think have also correctly assessed that it’s partially back-end loaded, because that expenditure is obviously driving growth and driving scale and giving us the opportunity to impact the cash flows as we expect to. So the 6% of the 3.0 value accretion if you will coming from revenue does take capital. So, it is – we are not providing that guidance today, but you can bet, Ben, because you know this, we are highly focused on free cash flow, that for us, free cash flow per share and having access to that free cash flow is critical and as we get – perhaps in the next call we’ll be a little more specific as we are farther into 3.0 we have greater transparency on the joint venture, et cetera. But, I think you are correct in saying that it’s partially back-loaded, back-ended.

Okay, thank you.

I think that’s our last call. So really thanks everybody for joining the call today. We are – as I sit here, never been more excited about where we are headed. If you look at the three things that we have talked to you about consistently for a decade, growth scale and sort of prudent management of our capital structure, all three of those things are in great shape today. I mean, on the growth front, the fact that we are telling you we see an acceleration and an improvement in our growth profile over the next one to three years. That hopefully gives you confidence that the trajectory is improving that we are committed to 3.0 and that we are all incented properly to achieve those sorts of numbers. With the new build program, even with the JV in Holland, our ability to optimize and maximize scale across our European footprint has never been more important and quite frankly, I feel really good about the things we are doing to achieve that. And then lastly, whether it’s free cash flow or commitments to leverage – appropriately leverage our derisked balance sheet and then lastly – probably just importantly our commitment to the buyback program increased today, all that should give you the confidence that we believe in what we are doing. And that we feel really good about the next three years and the medium-term. So, appreciate your support and I am sure there will be plenty of questions and opportunity to chat about this over the next couple of months before our next call, but thanks as always and we’ll speak to you soon.