Unitedglobalcom — UGC Europe — Merger or Acquisition (October 2003)
43 slides from Unitedglobalcom's merger presentation, Oct 16, 2003
Slide 1: UnitedGlobalCom October 16, 2003
Filed by UnitedGlobalCom, Inc. pursuant to Rule 425 under the Securities Act of 1993 Subject Company: UGC Europe, Inc. Commission File No. 393-109496 UNITED Bee V-NBCOM October 16, 2003
Slide 2: Safe Harbor Statement
“Safe Harbor” Statement > Under the Private Securities Litigation Reform Act of 199: Certain matters discussed in the following presentation, including those items identified as guidance, are based upon the consummation of previously announced acquisitions and transactions and may contain forward-lo
Slide 3: Agenda
Agenda What’s New? European Operations Financial Update Q&A Appendix
Slide 4: Overview
Overview Bon e Largest MSO outside the U.S. ® 9million RGUs in 15 countries e@ Substantial voice and data business — 1.5 million RGUs and 40% of revenue ® Significant financial and balance sheet improvement over the last 18 months ® $2.8 billion equity market value
Slide 5: What's New? Liberty to purchase controlling interest
What’s New? wn e Liberty to purchase controlling interest from Founders » Increases ownership of UGC to 75% » Strengthens strategic and operating flexibility European subsidiary completes debt restructuring Group leverage) now below 6.0x
Slide 6: What's New? Exchange Offer for Minority Interest in UGC Europe
What’s New? oe = Exchange Offer for Minority Interest in UGC Europe, Inc. UnitedGlobalcom Listed on NASDAQ on 33.25% September 3" + Ticker: UGCE Ucc + 60 million shares ne issued Exchange offer launched Oct. 6" at carparan : ratio of 9.0 UCOMA UPC Sendces, chellomedia shares for each share of UGCE ©
Slide 7: What's New? Strong 2nd Quarter Results
What's New? oD Strong 2"¢ Quarter Results usc | UGC Adjusted EBITDA | EBITDA $149 $122 ‘iilil i! ta ($42)
Slide 8: Europe
Europe @ Footprint ®@ Networks e@ Products e Bundling ® Key Initiatives
Slide 9: Footprint
Footprint ee Largest Cable Television MSO in Europe Homes Total UGCE UGCE | Country Cable (millions) Passed ideo Subs Position | Penetration 1343 85.3 66 1 64% The Netherlands 69 64 23 1 94% Austria 19 12 0s 1 65% France a7 36 0s 4 41% 90.4 645 40 2 71% 440 20.9 26 1 47% 103.7 63.0 nM nM 70% Somce:
Slide 10: Networks: Last Mile Upgrade
Networks Des Last Mile Upgrade in Core European Markets Largely Complete: Upgraded HFC Plant (Mhz) 5.6 Million 2-Way Homes!) Hm 860 f [i 550-860 a Tr. NL / Austria { Total Homes Passed (mm) HH 2. Way Homes Passed 40, (1) Asof June so,2003
Slide 11: Networks: IP Backbone
“ Networks IP Backbone Supports Triple Play Roll Out: IP Backbone ° 10 GBIP backbone connecting 12 countries. 2” largest carrier of data traffic in Europe. 150+ routers and global class switches. 30 terabytes of storage; 450+ large scale servers 6.0 million e-mailsiday. (1) As of June 30,2003 Capita
Slide 12: Analogue TV
Analogue TV oe QD ® Service > 25-35 broadcast and satellite television channels ® Statistics (o00's) 2000 2001 + 2002 + 6/03 RGUs 6,548 6,622 6,633 6,609 Pen% 66% 65% 65% 64% ARPU €8.43 €8.94 €9.11 €9.35 GM % 78% 78% 82% 84% e Strategy > Drive rate increases (3%-30% per year) >» Up-sell new services
Slide 13: Digital
Digital Be ® Service > Additional 50+ channels of “pay” TV. » NVOD, EPG, T-Mail, ITV, digital music ® Statistics (000's 2000 2001 2002 6/03 RGUs 24 «78 = 126129 Pen% 1% 2% 2% 2% ARPUO na. €13.18 €17.03 €20.59 GM % na. -160% 8% 23% ® Strategy > Stabilize network; drive down CPE costs » Secure key con
Slide 14: Digital (Netherlands)
14 Digital (Netherlands) Analogue Digital Basic ‘Analogue Channels: Bonus Channel Nederland 1,2, 3,889.6, Net, V8, | BBC 1, BBC 2, Rai Uno, TV. 5, VRT Nat Gea, CNN, TMF, MTF, Euronews, ) TV, Ketnet, ARD, ZDF, RTM, TRT, Nickeladeon, BEC World Arte, France 2, WOR, TVE, TEN Digital Only Channek Eurospo
Slide 15: Data: The Market is Evolving
Data The Market is Evolving Consumer & Product Product > Customer > Positioning > 16 We are approaching this point ‘\ © Value Added Content » Home networks, gamers, music buffs Speed, best online entertainment * Multiple tiers * Price sensitivity * Value for money ® Single tier ® Early adopters * Hi
Slide 16: Data
16 Data ® Service ® Statistics ® Strategy » Europe’s largest cable broadband provider (“chello”) (00's) 2000 §=2001 2002 RGUs 343 524 676 Pen% 8% 10% 13% ARPU = €29.35 €33.78 €37.48 GM % x = o » Maintain dominant share vs. ADSL » Migrate to tiered services by market » Improve content offer over time
Slide 17: Data: Speed, Price and Data Limits
a Data Be Speed, Price and Data Limits are Key Product Differentiators Today chello lite Standard access features chello classic Subscription fee (month) Modem speed settings down/up (kbps) chello plus Number of ernail boxes 1 1 3 ‘Webspace (MB) 10 10 20 Number of PCs allowed 1 3 3 Date Lint (GB ee
Slide 18: Data: Tiered Services Are Expanding the Market
18 Data > Tiered Services Are Expanding the Market 3000 Weekly Sales (Netherlands) 2500 2000 1500 1000 500 ‘week 28 Wek 20 week a0 Week at Week Wek Week at Wek 25 Oi chello “lite” sales now represent 45% of total I chello “classic” sales are steady Il total sales are up 66%
Slide 19: Voice
Voice ® Service ® Statistics ® Strategy » Switched cable-telephony with broad range of advanced services (00's) 2000 2001 2002 6/03 RGUs 288 384 395 391 Pen% 10% 11% 12% 12% ARPU €33.78 €35.50 €37.73 €35.30 GM % 42% 57% 62% 66% » Continue to improve gross margins » Maintain price integrity on line r
Slide 20: Bundling: Where are we today?
20 a.) Bundling Where are we today? Data, Voice & Digital Services Only (thousands) Paustian Cust’s Svcs RGU’s % Cust’s Svcs RGU’s % 176 1.0 176 66% 353 1.0 353 82% 90 24 185 34% 86 24 477 18% 266 14 361 100% 439 12 530 100% » 34% take 2 or more of services » 40% of data subs take telephony » Digita
Slide 21: Bundling: New Packaging & Pricing
Bundling ii, New Packaging & Pricing (Netherlands) Competition UPC Offer Discounts Ala Carte chello classic + telephony ot 80 telephony + digital ee) chello classic "+ digital €64.90 chello classic + telephony €79.85 + digital = = = = == = 7. as 6. ay «| 10.0% “oo = (1) Note: inthe abeance of atrus
Slide 22: Bundling
2 Bundling Bij afname van meerdere UPC diensten profiteert u van blijvend voordeet \Vraag onze medewerkers naar de voorwaarden 0 commankate eral upc ‘ofornatle communicatie entertainment (UIP
Slide 23: ARPU Upside
2 ARPU Upside Euro 66.4 62.2 60.2 58.5 x 8 (3) Telewest Comcast NTL ONO UGCE Primacom 02.2003 ARPU by country Euro 21.2 Austria RoWE CEE
Slide 24: Other Key Initiatives
24 Other Key Initiatives woe e Additional new services (VOD, Docsis 2.0, VOIP, France HITS) ® Acquisition of content for digital (e.g. Champions League) ®@ Specific expansion opportunities ® Continued cost reductions where appropriate
Slide 25: Operating Leverage
25 Operating Leverage UGC Europe vs. US. MSOs” Metric Cox Mediacom ucc® RGUs (mm) 10.7 2.2 10.5 8.1 FTE (000’s) 21.6 3.3 17.9 7.8 RGUs / FTE ©) 497 651 585 1,034 Opex / RGU $83 $68 $69 [ew | Capex / RGU $31 $32 $15 €7.5 Capex/EBITDA® 0.6x 0.7x 0.3x 0.5x (1) All data.as of June 30,2003, except employ
Slide 26: Europe Recap
28 Europe Recap e@ Revenue opportunity is substantial » Rate increases » Broadband data market » Bundling e Above average EBITDA growth » High gross margins » Efficient cost structure e Future looks bright
Slide 27: Chile
Chile Nationwide network: 1.7m homes, 1.0m upgraded to 2-way Largest video provider: 65% market share, 478,000 subscribers Second largest telephone provi: 245,000 subscribers Rapidly growing broadband provider: 99,000 subscribers Un-levered balance sheet: 1.4x Net Debt/EBITDA” Forecasting over $60 i
Slide 28: Financial Overview
28 Financial Overview ® YTD Financial Results ® Balance Sheet Analysis ® Conclusions
Slide 29: Financial Results: Revenue
Financial Results ome QD (S Millions) Six Months Ended 2003 Jun 30°03 Jun 30°02 sae Triple Play 29% Other @) 6% Germany “) nm. Total 24% (1) Consolidated operations of video, voice, and Internet. (2) Primarily Prionty Telecom and UPC Media (@) Represents the sum of consolidated revenuefram ongoing o
Slide 30: Financial Results: Adjusted EBITDA
Financial Results Bos (S Millions) Six Months Ended 2003 A BITDA (1) Jun 30 703 Jun 30 702 2002 Triple Play @ $288.1 $144.5 99% Other ® (16.6) (30.4) 45% Ongoing Ops m5 1144 138% Germany “ na. 11.0 nm. Total $271.5 $125.1 117% EBITDA Margin 30% 17% 76% (1) Please see Appendix for definition of Adjus
Slide 31: European EBITDA Guidance
a European EBITDA Guidance ~@ Annualized [i % of 2003 Status Impact Guidance as of G2 64% (€ Millions) Q4'02 Annualized...... Increase from Q4: -Priority .. - chello media. Rate Increases......... RGU Growth Cost Savings. . 2003 Guidance €337 12 20 49 11 a1 64 €525 2% 4% 9% 2% 8% 10% Executed Shortf
Slide 32: Capital Expenditures
2 Capital Expenditures iQ Cap Ex ers: e Reduced upgrade and new build activity ® Tail-end of IT system development e Declining CPE costs e Modems (<$50) © NIUs (< $250) © Digital (< $150) $1847 [Merc ID ve lh [Bi ctner $335 Bizie# = HAE >
Slide 33: Free Cash Flow
Free Cash Flow ome QD (S Millions) Six Months Ended Free Cash Flow Jun 30 °03 Jun 30°02 From Operations $174.7 $(246.4) 171% Less Capex (132.9) (189.6) 30% Free Cash Flow 2 41.8 Ending Cash $370.2 44% (1) Represents net oach flows from operating activities par the Statemant of Cash Flow. (2) Please
Slide 34: Entity Debt Structure
Entity Debt Structure ($ Millions) UnitedGlobalcom [iennal (Parent Only) Debt Cash'2) Debt EBITDA®) Net DebVEBITDA, UGC Europe Cash VTR GlobalCom Bt EBITDA!) Net DebVEBITDA, Cash @) UnitedGlobalcom [EI EiGl (Consolidated) EBITDA Net DebvEBITDA, Actual 1273102 $ 193.9 $ 127.0 € 234 8741.5 € 2708 313%
Slide 35: Leverage Reduction
Leverage Reduction woe UGC Consolidated Pro Forma Net Debt / Adjusted EBITDA ® Chile at 1.4x e Europe De-leveraging ex through EBITDA Growth [| a e Leverage Expected To Fall Below 5.0x in 2004 zone Actual Full 1603 Annualized’ 2008 Annualized! Year (1) Net Debt / Adjusted EBITDA for UGC consolidated
Slide 36: Comparable Leverage
6 Comparable Leverage LQAM °“@e= | | i | charter Medscom eight wee) Cameast (3) 41. Pereach company's respective 100 as of June 30,2003 (net debt[G2 ‘C8 EBITDA "AD, Please note that hese companies may compute EBITDA difeenty than USC computes Agusted EBITDA. 2, Pro foma fer UPC and UPC Poaca restruc
Slide 37: Conclusions
Conclusions oo Des ; » World Class Networks and Scale Operations are > Triple Play is Driving Growth Solid a... : > Significant Margin Expansion ; ; > Impressive Cash Flow Turnaround ren et > Debt Reduction Completed ratte sti eh > Moving Rapidly to Free Cash Flow > Economies of Scale & Op-Ex Saving
Slide 38: UnitedGlobalCom
UNITED Be) eV BCOM October 16, 2003
Slide 39: Appendix: Definitions
Appendix unrreof on, 1. Adjusted EBITDA is the primary measure used by cur chief operating decision makers to evaluale segment operating perfomance and to decide how to allocate resources to segments. EBITDA is an actonyn for earnings before intrest, taxes, depredation and amortization. Acwe use the
Slide 40: Appendix: Non-GAAP Reconciliations
Appendix woe D>, Non-GAAP Reconciliations For the three months ended, |gemounte in thousands) 9203 103 02 02 Ore2 ‘Adjusted EBITDA 149,431 122071 970,372 954,704 Loss on disposal of Poland DTH Business 000) 2 3 ‘ SStack-based compensation 275) e111) e548) @703) Depreciation & &mortization a 11 487)
Slide 41: Appendix: Supplemental Financial Data
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Slide 42: Pro-Forma Leverage
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Slide 43: Searchable text section of graphics
Searchable text section of graphics shown above Filed by UnitedGlobal Com, Inc. pursuant to Rule 425 under the Securities Act of 1933 Subject Company: UGC Europe, Inc. Commission File No. 333-109496 [GRAPHIC] UNITED GLOBAL COM [LOGO] October 16, 2003 “Safe Harbor” Statement [LOGO] Under the Private