Liberty Global Annual Report 2017

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FY2017 Annual Report · Liberty Global

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-35961

Liberty Global plc
(Exact name of Registrant as specified in its charter)

England and Wales
(State or other jurisdiction of incorporation or organization)

98-1112770
(I.R.S. Employer Identification No.)

Griffin House, 161 Hammersmith Rd, London, United Kingdom
(Address of principal executive offices)

W6 8BS
(Zip Code)

Registrant’s telephone number, including area code: +44.208.483.6449 or 303.220.6600

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Liberty Global Class A Ordinary Shares, nominal value $0.01 per
Liberty Global Class B Ordinary Shares, nominal value $0.01 per
Liberty Global Class C Ordinary Shares, nominal value $0.01 per

Securities registered pursuant to Section 12(g) of the Act: none

Name of Each Exchange on Which Registered
NASDAQ Global Select Market
NASDAQ Global Select Market
NASDAQ Global Select Market

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months. Yes

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and
“emerging growth company” in Rule 12b-2 of the Exchange Act. Check one:

Large Accelerated Filer

Accelerated Filer

Non-Accelerated Filer

Smaller Reporting Company

Emerging Growth Company

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes

State the aggregate market value of the voting and non-voting common equity held by non-affiliates, computed by reference to the price at
which the common equity was last sold, or the average bid and ask price of such common equity, as of the last business day of the
Registrant’s most recently completed second fiscal quarter: $28.9 billion.

The number of outstanding ordinary shares of Liberty Global plc as of February 7, 2018 was: 219,723,236 shares of class A ordinary shares,
11,102,619 shares of class B ordinary shares and 578,424,685 shares of class C ordinary shares.

Portions of the definitive proxy statement for the Registrant’s 2018 Annual General Meeting of Shareholders are incorporated by reference in
Part III of this Form 10-K.

DOCUMENTS INCORPORATED BY REFERENCE

**This copy of our 2017 Annual Report on Form 10-K omits certain items. See Table of Contents for additional information**

LIBERTY GLOBAL PLC

2017 ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

Item 1.

Item 1A.

Item 1B.

Item 2.

Item 3.

Item 4.

Item 5.

Item 6.

Item 7.

Item 7A.

Item 8.

Item 9.

Item 9A.

Item 9B.

Item 10.

Item 11.

Item 12.

Item 13.

Item 14.

Item 15.

Item 16.

PART I
Business ........................................................................................................................................................
Risk Factors...................................................................................................................................................
Unresolved Staff Comments .........................................................................................................................
Properties ......................................................................................................................................................
Legal Proceedings .........................................................................................................................................
Mine Safety Disclosures ...............................................................................................................................

PART II
Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity

Securities ...................................................................................................................................................
Selected Financial Data.................................................................................................................................
Management’s Discussion and Analysis of Financial Condition and Results of Operations .......................
Quantitative and Qualitative Disclosures About Market Risk ......................................................................
Financial Statements and Supplementary Data.............................................................................................
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure .......................
Controls and Procedures ...............................................................................................................................
Other Information .........................................................................................................................................

PART III
Directors, Executive Officers and Corporate Governance............................................................................
Executive Compensation...............................................................................................................................
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.....
Certain Relationships and Related Transactions, and Director Independence..............................................
Principal Accountant Fees and Services .......................................................................................................

PART IV
Exhibits, Financial Statement Schedules ......................................................................................................
Form 10-K Summary ....................................................................................................................................

Page
Number

I-1

I-35

I-46

II-1

II-5

II-6

II-57

II-62

III-1

IV-1

IV-6

* This copy of our 2017 Annual Report on Form 10-K omits the exhibits and financial statement schedules that are included
in Part IV of our complete Annual Report, as filed with the Securities and Exchange Commission on February 14, 2018. A
complete copy of our 2017 Annual Report on Form 10-K that includes the omitted items, other than the exhibits, is available
upon request.

Item 1. BUSINESS

Who We Are

PART I

We are Liberty Global plc (Liberty Global), the world's largest international television and broadband company. We
are focused on building a strong convergence of fixed and mobile communication opportunities and we are constantly
striving to enhance and simplify our customers’ lives through quality services and products that give them the freedom to
connect, converse, work and be entertained anytime, anywhere they choose.

Liberty Global has consolidated operations in 12 European countries serving 22.0 million customers at December 31,
2017. Our primary business operations are listed below, all of which we consolidate, with the exception of the VodafoneZiggo
JV (defined below).

Brand

Entity

Location

Ownership

Virgin Media

United Kingdom & Ireland

100.0%

Unitymedia

Germany

100.0%

Telenet

Belgium & Luxembourg

57.4%

UPC Holding

Switzerland, Austria, Poland,
Hungary, Romania, Czech
Republic, Slovakia

VodafoneZiggo

Netherlands

100.0%

50.0%

General Development of Business

As a result of a series of mergers that were completed on June 7, 2013, Liberty Global became the publicly-held parent
company of the successors by merger of Liberty Global, Inc. (the predecessor to Liberty Global) and Virgin Media Inc.
(Virgin Media). In the following text, the terms “we”, “our”, “our company” and “us” may refer, as the context requires,
to Liberty Global (or its predecessor) or collectively to Liberty Global (or its predecessor) and its subsidiaries. Unless
otherwise indicated, convenience translations into United States (U.S.) dollars are calculated as of December 31, 2017, and
operational data, including subscriber statistics and ownership percentages, are as of December 31, 2017.

On December 29, 2017, we effected the split-off of our LiLAC Group (the Split-off Transaction) by distributing 100%
of the common shares of Liberty Latin America Ltd. (Liberty Latin America) to holders of our then LiLAC ordinary shares
(the LiLAC Shares). The “LiLAC Group” consisted of our businesses, assets and liabilities in Latin America and the
Caribbean, including Cable & Wireless Communications Limited (C&W), VTR.com SpA, a 60% interest in Liberty
Cablevision of Puerto Rico LLC (Liberty Puerto Rico) and related cash and cash equivalents and indebtedness. Just prior
to the completion of the Split-off Transaction, all of the businesses, assets and liabilities of the LiLAC Group were transferred
to Liberty Latin America, which was then a wholly-owned subsidiary of Liberty Global. Following such distribution, the
LiLAC Shares were redesignated as deferred shares (with virtually no economic rights) and Liberty Latin America became
a separate publicly traded company. As a result, we no longer own Liberty Latin America and the former operations of the
LiLAC Group. As a result of the Split-off Transaction, the entities attributed to the LiLAC Group are reflected as discontinued
operations in our consolidated financial statements for all applicable periods presented. Unless otherwise noted, the below
discussion of our business focuses on our continuing operations.

I-1

Expansion and Acquisitions

We have expanded our broadband footprint through new build projects and strategically selected acquisitions. Our new
build projects consist of network extension programs pursuant to which we connect additional homes and businesses to our
broadband communications network (Network Extensions). Our investment in Network Extensions is critical not only for
our business to grow, but also for the countries and communities in which we operate. The Network Extensions, together
with upgrades to our existing networks and next generation customer premises equipment, provide our customers the means
to enter the gigaworld society. During 2015 and 2016, we initiated Network Extensions in the United Kingdom (U.K.),
Germany, Ireland, Central and Eastern Europe and certain other markets. During 2017, through our Network Extensions,
our continuing operations connected approximately 1,177,000 additional residential and commercial premises (excluding
upgrades) to our two-way networks, including approximately 536,000 residential and commercial premises connected by
Virgin Media in the U.K. and Ireland through Project Lightning. We expect to continue the Network Extensions in 2018.
Depending on a variety of factors, however, including the financial and operations results of our new build programs, any
Network Extensions may be continued, modified or cancelled at our discretion.

Over the past five years, we have also completed several strategic acquisitions. We made these acquisitions in order to
deliver the scale that allows us to innovate effectively and invest in great content and the best products. This enables us to
deliver quality services to our customers. Our significant acquisitions include:

(cid:149) On June 19, 2017, Telenet Group Holding N.V. (Telenet) acquired Coitel Brabant sprl, operating under the brand
name SFR BeLux (SFR BeLux), which provided broadband operations in Belgium (Brussels and Wallonia) and
Luxembourg.

(cid:149) On May 16, 2016, we acquired C&W, a provider of telecommunication services, including mobile and high-speed
broadband, focused in Latin America and the Caribbean (the C&W Acquisition). In connection with the Split-off
Transaction, we transferred C&W to Liberty Latin America.

(cid:149) On February 11, 2016, Telenet acquired BASE Company N.V. (BASE), the third-largest mobile network operator

in Belgium.

(cid:149) On June 3, 2015, we acquired, together with investment funds affiliated with Searchlight Capital Partners, L.P.,
Choice Cable TV, a cable and broadband services provider in Puerto Rico, which was integrated into the operations
of Liberty Puerto Rico. In connection with the Split-off Transaction, we transferred Liberty Puerto Rico to Liberty
Latin America.

(cid:149)

In November 2014, we gained control of Ziggo Holding B.V. (Ziggo), a provider of video, broadband internet,
fixed-line telephony and mobile services in the Netherlands, and integrated Ziggo into our Netherlands broadband
operations. This business was contributed to form the VodafoneZiggo JV (as defined below), a 50:50 joint venture,
on December 31, 2016.

For additional information on our more recent acquisitions see note 4 to our consolidated financial statements included
in Part II of this Annual Report on Form 10-K. In addition, we have completed various other smaller acquisitions in the
normal course of business.

Pending Acquisitions

In October 2016, through a subsidiary of UPC Holding B.V. (UPC Holding), we entered into an agreement to acquire
the cable business of Multimedia Polska S.A. (Multimedia), a broadband communications provider in Poland. We are
currently uncertain as to the timing of closing this transaction.

For additional information on the above proposed acquisition, see note 4 to our consolidated financial statements

included in Part II of this Annual Report on Form 10-K.

Dispositions

In addition to the Split-off Transaction, we completed the following dispositions during the past five years:

(cid:149) On December 31, 2016, our company and Vodafone Group Plc (Vodafone) contributed our respective operations
in the Netherlands to VodafoneZiggo Group Holding B.V., a 50:50 joint venture (referred to herein as the
“VodafoneZiggo JV”). We treat the VodafoneZiggo JV as an equity investment.

(cid:149) On January 31, 2014, we sold substantially all of our programming interest held through Chellomedia B.V.

I-2

For additional information on our more recent dispositions, see note 5 to our consolidated financial statements included
in Part II of this Annual Report on Form 10-K. We have also completed various other smaller dispositions in the normal
course of business and as required by regulatory authorities in connection with approving the BASE and Ziggo acquisitions.

Pending Dispositions

Recently we entered into an agreement to sell our Austrian operations (UPC Austria). Closing of the transaction is

subject to regulatory approvals, which are not expected until the second half of 2018.

For additional information on the above proposed disposition, see note 5 to our consolidated financial statements

included in Part II of this Annual Report on Form 10-K.

Equity Transactions

Pursuant to our share repurchase programs authorized by our board of directors, we have repurchased a significant

amount of our shares since our inception in 2005. During 2017, our share repurchases were:

Title of shares

Number of
shares

Average price
paid per
share*

Aggregate
purchase
price*

in millions

Liberty Global Class A..........................................................................
Liberty Global Class C..........................................................................
LiLAC Class A......................................................................................
LiLAC Class C......................................................................................

34,881,510

52,523,651

2,062,233

285,572

33.73

32.71

22.84

22.25

1,176.9

1,717.8

47.1

6.4

_______________

* Includes direct acquisition costs and the effects of derivative instruments.

At December 31, 2017, the remaining amount authorized for repurchases of Liberty Global Shares was $2.1 billion.
From November 2016 through the completion of the Split-off Transaction, we were authorized to repurchase LiLAC Shares.
For a further description of our share repurchases, see note 12 to our consolidated financial statements included in Part II
of this Annual Report on Form 10-K.

Financial Information About Operating Segments

Financial information about our reportable segments is provided in note 18 to our consolidated financial statements

included in Part II of this Annual Report on Form 10-K.

I-3

Forward Looking Statements

Certain statements in this Annual Report constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. To the extent that statements in this Annual Report are not recitations of historical
fact, such statements constitute forward-looking statements, which, by definition, involve risks and uncertainties that could
cause actual results to differ materially from those expressed or implied by such statements. In particular, statements under
Item 1. Business, Item 1A. Risk Factors, Item 2. Properties, Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations and Item 7A. Quantitative and Qualitative Disclosures About Market Risk may contain
forward-looking statements, including statements regarding our business, product, foreign currency and finance strategies
in 2018, our property and equipment additions in 2018 (including with respect to Network Extensions), subscriber growth
and retention rates, competitive, regulatory and economic factors, the timing and impacts of proposed transactions, the
maturity of our markets, the anticipated impacts of new legislation (or changes to existing rules and regulations), anticipated
changes in our revenue, costs or growth rates, our liquidity, credit risks, foreign currency risks, target leverage levels, our
future projected contractual commitments and cash flows and other information and statements that are not historical fact.
Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation
or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation
or belief will result or be achieved or accomplished. In evaluating these statements, you should consider the risks and
uncertainties discussed under Item 1A. Risk Factors and Item 7A. Quantitative and Qualitative Disclosures About Market
Risk, as well as the following list of some but not all of the factors that could cause actual results or events to differ materially
from anticipated results or events:

(cid:149)

economic and business conditions and industry trends in the countries in which we or our affiliates operate;

the competitive environment in the industries in the countries in which we or our affiliates operate, including
competitor responses to our products and services;

fluctuations in currency exchange rates and interest rates;

instability in global financial markets, including sovereign debt issues and related fiscal reforms;

consumer disposable income and spending levels, including the availability and amount of individual consumer
debt;

changes in consumer television viewing preferences and habits;

consumer acceptance of our existing service offerings, including our cable television, broadband internet, fixed-
line telephony, mobile and business service offerings, and of new technology, programming alternatives and other
products and services that we may offer in the future;

our ability to manage rapid technological changes;

our ability to maintain or increase the number of subscriptions to our cable television, broadband internet, fixed-
line telephony and mobile service offerings and our average revenue per household;

our ability to provide satisfactory customer service, including support for new and evolving products and services;

our ability to maintain or increase rates to our subscribers or to pass through increased costs to our subscribers;

the impact of our future financial performance, or market conditions generally, on the availability, terms and
deployment of capital;

changes in, or failure or inability to comply with, government regulations in the countries in which we or our
affiliates operate and adverse outcomes from regulatory proceedings;

government intervention that requires opening our broadband distribution networks to competitors, such as the
obligations imposed in Belgium;

our ability to obtain regulatory approval and satisfy other conditions necessary to close acquisitions and dispositions
and the impact of conditions imposed by competition and other regulatory authorities in connection with
acquisitions;

our ability to successfully acquire new businesses and, if acquired, to integrate, realize anticipated efficiencies
from, and implement our business plan with respect to, the businesses we have acquired or that we expect to
acquire;

changes in laws or treaties relating to taxation, or the interpretation thereof, in the U.K., the U.S. or in other countries
in which we or our affiliates operate;

I-4

(cid:149)

changes in laws and government regulations that may impact the availability and cost of capital and the derivative
instruments that hedge certain of our financial risks;

the ability of suppliers and vendors (including our third-party wireless network providers under our mobile virtual
network operator (MVNO) arrangements) to timely deliver quality products, equipment, software, services and
access;

the availability of attractive programming for our video services and the costs associated with such programming,
including retransmission and copyright fees payable to public and private broadcasters;

uncertainties inherent in the development and integration of new business lines and business strategies;

our ability to adequately forecast and plan future network requirements, including the costs and benefits associated
with the planned Network Extensions;

the availability of capital for the acquisition and/or development of telecommunications networks and services;

problems we may discover post-closing with the operations, including the internal controls and financial reporting
process, of businesses we acquire;

the leakage of sensitive customer data;

the outcome of any pending or threatened litigation;

the loss of key employees and the availability of qualified personnel;

changes in the nature of key strategic relationships with partners and joint venturers;

our equity capital structure; and

events that are outside of our control, such as political unrest in international markets, terrorist attacks, malicious
human acts, natural disasters, pandemics and other similar events.

The broadband distribution and mobile service industries are changing rapidly and, therefore, the forward-looking
statements of expectations, plans and intent in this Annual Report are subject to a significant degree of risk. These forward-
looking statements and the above-described risks, uncertainties and other factors speak only as of the date of this Annual
Report, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-
looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in
events, conditions or circumstances on which any such statement is based. Readers are cautioned not to place undue reliance
on any forward-looking statement.

I-5

Narrative Description of Business

We are a leading international telecommunications company with a commitment to providing our customers the “best
in class” communications and entertainment services. These services are delivered to our residential and business customers
over our networks and include video, broadband internet, telephony and mobile services. We also deliver mobile services
over our own networks and through third-party networks as MVNOs. We design these services to enable our customers to
access the digital world on their own terms and at their own pace. In most of our footprint, the core of our offer is “triple-
play”, which we use to describe bundled services of digital video, internet and telephony in one subscription. We are
enhancing this offer by expanding our services to include mobile services for a “quad-play” or fixed-mobile convergence
service in most of our markets. Available service offerings depend on the bandwidth capacity of a particular system and
whether it has been upgraded for two-way communications. In certain markets, we also offer video services through direct-
to-home satellite (DTH) and fiber-to-the-home (FTTH) networks.

Following the completion of the Split-off Transaction, our consolidated operations are in the U.K., Ireland, Germany,
Belgium, Luxembourg, Switzerland, Austria and Central and Eastern Europe. In terms of video subscribers, we operate the
largest cable network in each of Austria, Belgium, the Czech Republic, Hungary, Ireland, Poland, Slovakia, Switzerland
and the U.K. and the second largest cable network in each of Germany and Romania. We also have investments in the
VodafoneZiggo JV, which operates the largest cable network in the Netherlands, and in various content businesses.

In connecting our customers through our telecommunication services, we recognize that we are a global corporate
citizen—that we play a role in addressing the environmental impacts generated through our business. By seeking to address
these issues, we strengthen our company and positively influence the communities in which we operate. This includes
enhancing the energy efficiency of all our operations, with a focus on energy use, carbon emissions and management of
electronic waste. We also recognize that coding skills are essential to our industry and other technology-based jobs of the
future. As a result, we have partnered with the CoderDojo Foundation, a global community of free coding clubs for children
age 7-17. Our support for CoderDojo is enabling the next generation of creators, improving their long-term career prospects.
We are also working with European Schoolnet to raise awareness of teachers on educational resources available for them
to help address online issues teenagers are facing. Corporate responsibility is a key part of our business.

I-6

Liberty Global Statistics

The following tables present certain operating data as of December 31, 2017, with respect to the networks of our consolidated subsidiaries. The following tables reflect

100% of the data applicable to each of our subsidiaries regardless of our ownership percentage. Percentages are rounded to the nearest whole number.

Consolidated Operating Data - December 31, 2017

Homes
Passed
(1)

Two-way
Homes
Passed
(2)

Cable
Customer
Relationships
(3)

Total
RGUs
(4)

Basic Video
Subscribers
(5)

Video

Enhanced
Video
Subscribers
(6)

DTH
Subscribers
(7)

Total
Video

Internet
Subscribers
(8)

Telephony
Subscribers
(9)

Mobile
Subscribers
(10)

United Kingdom ..............................

13,979,000

13,967,200

5,432,600

13,371,600

—

3,827,200

Germany ..........................................

12,981,300

12,900,400

7,160,200

13,068,400

4,687,200

1,653,600

Belgium ...........................................

3,317,100

2,190,400

5,008,000

Switzerland (11) ..............................

2,281,600

1,236,800

2,487,500

Austria .............................................

1,410,800

654,100

1,433,900

Ireland..............................................

893,900

855,300

454,300

1,021,200

Poland..............................................

3,354,100

3,296,900

1,434,900

2,982,200

Romania...........................................

3,077,100

3,034,200

1,345,600

2,416,900

Hungary ...........................................

1,789,400

1,772,000

1,110,900

2,263,000

Czech Republic................................

1,533,900

1,509,400

717,000

1,288,800

Slovakia ...........................................

604,100

589,400

270,500

452,200

244,700

520,600

93,200

24,600

188,800

260,700

92,200

171,600

25,400

1,786,600

679,900

367,500

268,100

1,023,800

673,200

590,900

356,000

140,600

—

3,827,200

5,104,300

4,440,100

3,002,800

6,340,800

3,476,600

3,251,000

320,400

2,031,300

1,674,100

1,302,600

2,803,800

1,200,500

460,700

292,700

749,300

515,600

372,200

1,212,600

1,139,700

365,900

1,299,800

265,900

100,600

76,400

949,000

628,200

242,400

581,700

675,300

497,500

131,100

537,700

457,600

356,300

629,900

535,400

638,700

163,100

78,700

114,800

64,100

49,900

4,000

—

88,400

—

Total ............................................

45,222,300

44,934,300

22,007,300

45,793,700

6,309,000

11,367,400

808,800

18,485,200

14,917,400

12,391,100

6,448,200

I-7

__________________

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

Homes Passed are homes, residential multiple dwelling units or commercial units that can be connected to our networks without
materially extending the distribution plant, except for DTH homes. Certain of our Homes Passed counts are based on census data that
can change based on either revisions to the data or from new census results. We do not count homes passed for DTH. Due to the fact
that we do not own the partner networks (defined below) used in Switzerland (see note 11 below), we do not report homes passed for
Switzerland’s partner networks.

Two-way Homes Passed are Homes Passed by those sections of our networks that are technologically capable of providing two-way
services, including video, internet and telephony services.

Cable Customer Relationships are the number of customers who receive at least one of our video, internet or telephony services that
we count as Revenue Generating Units (RGUs), without regard to which or to how many services they subscribe. To the extent that
RGU counts include equivalent billing unit (EBU) adjustments, we reflect corresponding adjustments to our Cable Customer
Relationship counts. For further information regarding our EBU calculation, see Additional General Notes to Tables below. Cable
Customer Relationships generally are counted on a unique premises basis. Accordingly, if an individual receives our services in two
premises (e.g., a primary home and a vacation home), that individual generally will count as two Cable Customer Relationships. We
exclude mobile-only customers from Cable Customer Relationships.

RGU is separately a Basic Video Subscriber, Enhanced Video Subscriber, DTH Subscriber, Internet Subscriber or Telephony Subscriber
(each as defined and described below). A home, residential multiple dwelling unit, or commercial unit may contain one or more RGUs.
For example, if a residential customer in our U.K. market subscribed to our enhanced video service, fixed-line telephony service and
broadband internet service, the customer would constitute three RGUs. Total RGUs is the sum of Basic Video, Enhanced Video, DTH,
Internet and Telephony Subscribers. RGUs generally are counted on a unique premises basis such that a given premises does not count
as more than one RGU for any given service. On the other hand, if an individual receives one of our services in two premises (e.g., a
primary home and a vacation home), that individual will count as two RGUs for that service. Each bundled cable, internet or telephony
service is counted as a separate RGU regardless of the nature of any bundling discount or promotion. Non-paying subscribers are
counted as subscribers during their free promotional service period. Some of these subscribers may choose to disconnect after their
free service period. Services offered without charge on a long-term basis (e.g., VIP subscribers or free service to employees) generally
are not counted as RGUs. We do not include subscriptions to mobile services in our externally reported RGU counts. In this regard,
our December 31, 2017 RGU counts exclude our separately reported postpaid and prepaid mobile subscribers.

Basic Video Subscriber is a home, residential multiple dwelling unit or commercial unit that receives our video service over our
broadband network either via an analog video signal or via a digital video signal without subscribing to any recurring monthly service
that requires the use of encryption-enabling technology. Encryption-enabling technology includes conditional access security cards
or “smart cards”, or other integrated or virtual technologies that we use to provide our enhanced service offerings. With the exception
of RGUs that we count on an EBU basis, we count RGUs on a unique premises basis. In other words, a subscriber with multiple outlets
in one premises is counted as one RGU and a subscriber with two homes and a subscription to our video service at each home is
counted as two RGUs. In Europe, we have approximately 192,700 “lifeline” customers that are counted on a per connection basis,
representing the least expensive regulated tier of video cable service, with only a few channels.

Enhanced Video Subscriber is a home, residential multiple dwelling unit or commercial unit that receives our video service over our
broadband network or through a partner network via a digital video signal while subscribing to any recurring monthly service that
requires the use of encryption-enabling technology. Enhanced Video Subscribers that are not counted on an EBU basis are counted
on a unique premises basis. For example, a subscriber with one or more set-top boxes that receives our video service in one premises
is generally counted as just one subscriber. An Enhanced Video Subscriber is not counted as a Basic Video Subscriber. As we migrate
customers from basic to enhanced video services, we report a decrease in our Basic Video Subscribers equal to the increase in our
Enhanced Video Subscribers. Subscribers to enhanced video services provided by our operations in Switzerland over partner networks
receive basic video services from the partner networks as opposed to our operations.

DTH Subscriber is a home, residential multiple dwelling unit or commercial unit that receives our video programming broadcast
directly via a geosynchronous satellite.

Internet Subscriber is a home, residential multiple dwelling unit or commercial unit that receives internet services over our networks,
or that we service through a partner network. Our Internet Subscribers exclude 39,100 digital subscriber line (DSL) subscribers within
Austria that are not serviced over our networks. Our Internet Subscribers do not include customers that receive services from dial-up
connections. In Switzerland, we offer a 2 Mbps internet service to our Basic and Enhanced Video Subscribers without an incremental
recurring fee. Our Internet Subscribers in Switzerland include 83,900 subscribers who have requested and received this service.

Telephony Subscriber is a home, residential multiple dwelling unit or commercial unit that receives voice services over our networks,
or that we service through a partner network. Telephony Subscribers exclude mobile telephony subscribers. Our Telephony Subscribers
exclude 30,000 subscribers within Austria that are not serviced over our networks. In Switzerland, we offer a basic phone service to
our Basic and Enhanced Video Subscribers without an incremental recurring fee. Our Telephony Subscribers in Switzerland include
131,000 subscribers who have requested and received this service.

(10) Our Mobile Subscriber count represents the number of active subscriber identification module (SIM) cards in service rather than
services provided. For example, if a Mobile Subscriber has both a data and voice plan on a smartphone this would equate to one Mobile

I-8

Subscriber. Alternatively, a subscriber who has a voice and data plan for a mobile handset and a data plan for a laptop (via a dongle)
would be counted as two Mobile Subscribers. Customers who do not pay a recurring monthly fee are excluded from our Mobile
Subscriber counts after periods of inactivity ranging from 30 to 90 days, based on industry standards within the respective country.
In a number of countries, our Mobile Subscribers receive mobile services pursuant to prepaid contracts. As of December 31, 2017,
our Mobile Subscriber count included 515,200 and 514, 300 prepaid Mobile Subscribers in Belgium and the U.K., respectively.

(11)

Pursuant to service agreements, Switzerland offers enhanced video, broadband internet and telephony services over networks owned
by third-party cable operators (partner networks). A partner network RGU is only recognized if there is a direct billing relationship
with the customer. At December 31, 2017, Switzerland’s partner networks account for 138,100 Cable Customer Relationships, 315,800
RGUs, 113,700 Enhanced Video Subscribers, 116,000 Internet Subscribers and 86,100 Telephony Subscribers.

Additional General Notes to Table:

Most of our broadband communications subsidiaries provide telephony, broadband internet, data, video or other business services.
Certain of our business service revenue is derived from small or home office (SOHO) subscribers that pay a premium price to receive
enhanced service levels along with video, internet or telephony services that are the same or similar to the mass marketed products
offered to our residential subscribers. All mass marketed products provided to SOHOs, whether or not accompanied by enhanced service
levels and/or premium prices, are included in the respective RGU and customer counts of our broadband communications operations,
with only those services provided at premium prices considered to be “SOHO RGUs” or “SOHO customers”. To the extent our existing
customers upgrade from a residential product offering to a SOHO product offering, the number of SOHO RGUs or SOHO customers
will increase but there is no impact to our total RGU or customer counts. With the exception of our business SOHO subscribers, we
generally do not count customers of business services as customers or RGUs for external reporting purposes.

Certain of our residential and commercial RGUs are counted on an EBU basis, including residential multiple dwelling units and
commercial establishments (with the exception of Germany and Belgium, where we do not count any RGUs on an EBU basis). Our
EBUs are generally calculated by dividing the bulk price charged to accounts in an area by the most prevalent price charged to non-
bulk residential customers in that market for the comparable tier of service. As such, we may experience variances in our EBU counts
solely as a result of changes in rates. In Germany, homes passed reflect the footprint and two-way homes passed reflect the technological
capability of our network up to the street cabinet, with drops from the street cabinet to the building generally added, and in-home wiring
generally upgraded, on an as needed or success-based basis. In Belgium, Telenet leases a portion of its network under a long-term capital
lease arrangement. These tables include operating statistics for Telenet’s owned and leased networks.

While we take appropriate steps to ensure that subscriber statistics are presented on a consistent and accurate basis at any given balance
sheet date, the variability from country to country in (1) the nature and pricing of products and services, (2) the distribution platform,
(3) billing systems, (4) bad debt collection experience and (5) other factors add complexity to the subscriber counting process. We
periodically review our subscriber counting policies and underlying systems to improve the accuracy and consistency of the data reported
on a prospective basis. Accordingly, we may from time to time make appropriate adjustments to our subscriber statistics based on those
reviews.

Subscriber information for acquired entities is preliminary and subject to adjustment until we have completed our review of such
information and determined that it is presented in accordance with our policies.

I-9

Network & Product Penetration Data (%) - December 31, 2017

U.K.

Germany

Belgium Switzerland

Austria

Ireland

Poland

Hungary

Romania

Czech
Republic

Slovakia

Network Data:

Two-way homes passed

percentage (1)..........................

100

Digital video availability

percentage (2)..........................

100

Broadband internet availability

percentage (2)..........................

Fixed-line telephony availability
percentage (2)..........................

Bandwidth percentage (3):

at least 860 MHz .....................

750 MHz to 859 MHz .............

less than 750 MHz...................

Product Penetration:

Cable television penetration (4) ..

Enhanced video penetration (5)...

Broadband internet

penetration (6) .........................

Fixed telephony penetration (6) ..

Double-play penetration (7) ........

Triple-play penetration (7) ..........

100

Fixed-Mobile Convergence

penetration (8) .........................

100(9)

99(9)

—

100(9)

100

—

100

--(10)
--(10)

--(11)

--(10)

—

100

—

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__________________

(1)

Percentage of total homes passed that are two-way homes passed.

(2)

Percentage of total homes passed to which digital video, broadband internet or fixed-line telephony services, as applicable, are made
available.

(3)

Percentage of total homes passed served by a network with the indicated bandwidth.

(4)

Percentage of total homes passed that subscribe to cable television services (Basic Video or Enhanced Video).

(5)

Percentage of cable television subscribers (Basic Video and Enhanced Video Subscribers) that are Enhanced Video Subscribers.

(6)

Percentage of two-way homes passed that subscribe to broadband internet or fixed-line telephony services, as applicable.

(7)

(8)

Percentage of total customers that subscribe to two services (double-play customers) or three services (triple-play customers) offered
by our operations (video, broadband internet and fixed-line telephony).

Fixed-Mobile Convergence penetration represents the number of customers who subscribe to both our internet service and our postpaid
mobile service, divided by the number of customers who subscribe to our internet service.

(9)

Assuming the contractual right to serve the building exists in the case of multiple dwelling units.

(10) Less than 1%.

(11)

Fixed-Mobile Convergence penetration in Hungary is less than 1%.

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Video, Broadband Internet, Fixed-Line Telephony and Mobile Services - December 31, 2017

U.K.

Germany

Belgium

Switzerland

Austria

Ireland

Poland

Hungary

Romania

Czech
Republic

Slovakia

Video services (excluding DTH):

Next Generation Video Platform .................

TiVo

Horizon

Digital TV(5)

Horizon

Horizon
Lite(5)

Horizon/
Horizon
Lite(5)

Horizon
Lite(5)

Number of Next Generation Video

percentage(1) .............................................
Number of out-of-home channels available
(second screen) ........................................

Availability of Replay TV............................

Number of channels in basic digital tier ......

110

—

117

—

Broadband internet service:

Maximum download speed offered (Mbps)

300(3)

400

400(3)

Fixed-line telephony and mobile services:

VoIP Fixed-line ............................................
Number of Mobile SIM cards (in 000’s)(2) ..

Prepaid .....................................................

(4)

3,003

514

Postpaid ...................................................

2,489

320

—

320

2,804

515

2,289

110

107

100

131

112

300

360(3)

500(3)(6)

500

—

X
4(7)

—

123

500

115

—

115

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__________________

(1)

Percentage of total cable television subscribers that have next generation video.

(2)

(3)

Represents the number of active SIM cards in service. See note 10 to Consolidated Operating Data table above for how these are
counted.

For business customers, speeds of up to: 350 Mbps in the U.K., 500 Mbps in Belgium, 400 Mbps in Ireland and 600 Mbps in Poland,
are available.

(4)

Voice-over-internet-protocol (VoIP) services are available only to business customers.

(5)

Refers to an upgraded set-top box system that provides several features of Horizon TV (defined below) in the home.

(6)

Speeds of up to 600 Mbps available in limited areas.

(7)

Limited to legacy subscribers.

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Products and Services

Video Services

Our video service is, and continues to be, one of the key foundations of our product offerings in our markets. Our cable
operations offer multiple tiers of digital video programming and audio services starting with a basic video service. Subscribers to
our basic video service pay a fixed monthly fee and receive digital or analog video channels (including a limited number of high
definition (HD) channels) and several digital and analog radio channels and an electronic programming guide. In our markets
where our basic digital service is unencrypted (Germany, Austria, Poland, Hungary, the Czech Republic and Romania), the cost
of our digital service is the same cost as the monthly fee of our analog service. In the markets where we encrypt our basic digital
service, our digital service is generally offered at an incremental cost equal to or slightly higher than the monthly fee for our basic
analog service. We tailor our video services in each country of operation based on programming preferences, culture, demographics
and local regulatory requirements.

We also offer a variety of premium channel packages to meet the special interests of our subscribers. For an additional monthly
charge, a subscriber may upgrade to one of our extended digital tier services and receive an increased number of video and radio
channels, including the channels in the basic tier service and additional HD channels. Digital subscribers may also subscribe to
one or more packages of premium channels for an additional monthly charge. Our channel offerings include general entertainment,
sports, movies, documentaries, lifestyles, news, adult, children and ethnic and foreign channels.

Subscribers to our digital services also receive the channels available through our analog service. We offer limited analog
video services in all of our broadband markets, except in the U.K., Germany, Switzerland and Austria. In all of our broadband
operations, we continue to upgrade our systems to expand our digital services and encourage our analog subscribers to convert to
a digital or premium digital service.

Discounts to our monthly service fees are available to any subscriber who selects a bundle of two or more of our services
(Bundled services): video, internet, fixed-line telephony and, in certain markets, mobile services. Bundled services consist of
double-play for two services, triple-play for three services and, where available, quad-play for four services.

To meet customer demands, we have enhanced our video services with various products that enable our customers to control
when, where and how they watch their programming. These products range from digital video recorders (DVRs) to multimedia
home gateway systems such as "Horizon TV", as well as various mobile applications (apps). Horizon TV is a next generation
multimedia home gateway (decoder box) based on a digital television platform that is capable of distributing video, voice and data
content throughout the home and to multiple devices. It has a sophisticated user interface that enables customers to view and share,
across multiple devices, linear channels, video-on-demand (VoD) programming and personal media content and to pause, replay
and record programming. The Horizon TV gateway can act as an internet router that allows access to digital video content available
on the television via other devices, such as laptops, smart phones and tablets.

For our Horizon TV subscribers, we offer various features and functionalities, including television apps for various online
services (such as YouTube, Netflix, social platforms, sports experience, music, news and games). In almost all of our operations,
we also offer an online mobile app for viewing on a second screen called “Horizon Go”. Horizon Go is available on mobile devices
(iOS, Android and Windows) and via an internet portal and allows video customers to view linear channels and VoD, with a
substantial part of this content available outside of the home. For Horizon TV customers, when in the home the second screen
device can act as a remote control. Through Horizon Go, customers have the ability to remotely schedule the recording of a
television program on their Horizon TV box at home.

We offer Horizon TV in Germany, Switzerland, Austria, Ireland, Poland and the Czech Republic. In several of our other
European operations, we provide a Horizon TV-like experience through a remote upgrade of the software on the customer’s set-
top box. After the upgrade, these boxes offer several features of the Horizon TV product. We refer to this upgrade as “Horizon
Lite”, although it is locally marketed as Horizon TV, except in Belgium where it is marketed as “Digital TV”. Some of the Horizon
TV features are not available on our Horizon Lite systems, such as recommendation-based content and the ability to access video
content on other devices in the home. We intend to continue to improve the Horizon TV user experience with new functionality
and software updates.

In the U.K., we offer a multimedia home gateway based on the TiVo platform under a strategic partnership agreement with
TiVo Inc. The TiVo set-top boxes provide television and broadband internet capabilities. In late 2016, we launched a new set-top
box in the U.K. called the Virgin Media V6 box. This device combines ultra high-definition 4K video, including high dynamic
range, with improved streaming functionalities and more processing power. The Virgin Media V6 box allows customers to record
six channels simultaneously while watching a seventh. Customers can also start watching programming on one television and pick
up where they left off on other TiVo boxes in another room or through an app on their smart phones and tablets. In addition to the

I-14

video service on their TiVo gateway device, our customers in the U.K. also have access to a comprehensive internet streaming
video service called “Virgin TV Go”. This service, which is available via a mobile app or an internet portal, allows our video
customers to stream real-time TV channels and watch VoD content anywhere they have a broadband connection.

We intend to roll out a counterpart of the Virgin Media V6 in our other operations, which we call “EOS”. EOS will carry the

next generation Horizon TV user interface and will be marketed under respective local brands where it is deployed.

In Belgium, the digital video product offered by Telenet is marketed as “Digital TV”. It functions similarly to our Horizon
Lite service and is available to Telenet's enhanced video subscribers for no additional charge. Telenet also offers customers access
to live TV streaming and various other content sources such as VoD via the “Yelo Play” app, which is available via iOS, Android
and Windows smart phones and tablets. Digital TV set-top boxes and Yelo Play offer a Horizon-like user interface that allow
Telenet's enhanced video customers to remotely manage their DVR, view programs remotely (up to seven days after the original
broadcast) and access VoD with a laptop, smart phone or tablet in or out of the home.

One of our key video services is “Replay TV”. Replay TV records virtually all programs across numerous linear channels in
the countries where this service is available. The recordings are available up to seven days after the original broadcast. This allows
our customers to catch up on their favorite television shows without having to set their DVR or browse separate menus on their
set-top boxes. Instead, customers can open the electronic programing guide, scroll back and replay linear programming instantly.
Replay TV also allows our customers to replay a television program from the start even while the live broadcast is in progress. Replay
TV is accessible in all of our markets, except in the U.K. and Germany, through Horizon TV or Horizon Lite, and in some of our
markets also via Horizon Go.

In most of our markets, we offer transactional VoD giving subscribers access to thousands of movies and television series. In
several of our markets, our subscription VoD service is included in our enhanced video services accessed through the Horizon TV
platform. This service is tailored to the specific market based on available content, consumer preferences and competitive offers
and includes various programming, such as music, kids, documentaries, adult, sports and TV series. In Germany, subscription VoD
is available through a partnership with maxdome, and in Belgium, the service is marketed as “Play” and “Play More”. We continue
to develop our VoD services to provide a growing collection of programming from local and international suppliers, such as ABC/
Disney, A+E Networks, NBC/Universal, CBS/Paramount, Discovery, the BBC, Warner and Sony, among others. Customers who
subscribe to an extended digital tier generally receive a VoD enabled set-top box without an additional monthly charge.

Subscribers access our enhanced video service by renting a set-top box with a smart card from our operators, or without a
set-top box if a subscriber is only using our basic video service. Where Horizon TV is available, a subscriber to our enhanced
video services has the option, for an incremental monthly charge, to upgrade the standard digital set-top box to a Horizon TV box
(which has HD DVR capabilities and other additional features). No set-top box or smart card, however, is required to receive our
basic digital services in our unencrypted footprints. In addition, expanded channel packages and premium channels and services
are available for an incremental monthly fee in all of our markets.

WiFi and Internet Services

Connectivity is a building block for vibrant communities. As the largest international cable company, our fiber-rich broadband
network is the backbone of our business and the basis of our connectivity strategy. To meet our customers’ expectations to be
seamlessly connected, we are investing in the expansion of our broadband network, mobile and WiFi solutions and customer
premises equipment.

Internet speed is of crucial importance to our customers, as they spend more time streaming video and other bandwidth-heavy
services on multiple devices. Our extensive broadband network enables us to deliver ultra high-speed internet service across our
markets. Our residential subscribers access the internet via cable modems connected to their internet capable devices, or wirelessly
via a WiFi gateway device. We offer multiple tiers of broadband internet service ranging from a basic service of 10 Mbps in
Germany and Switzerland to an ultra high-speed internet service of 500 Mbps in Switzerland, Poland, Hungary, Romania, Slovakia
and the Czech Republic. The speed of service depends on the location and the tier of service selected. In addition, by leveraging
our existing fiber-rich broadband networks and our Network Extension programs, we are in position to deliver gigabit services by
deploying the next generation DOCSIS 3.1 technology. We plan to launch this technology in 2018. By using DOCSIS 3.1, we
have the potential to extend our download speeds to at least 1 Gbps when fully deployed. DOCSIS technology is an international
standard that defines the requirements for data transmission over a cable system. Currently, our ultra high-speed internet service
is based primarily on DOCSIS 3.0 technology.

Our internet service generally includes email, address book and parental controls. We offer value-added broadband services
in certain of our markets for an incremental charge. These services include security (e.g., anti-virus, anti-spyware, firewall and

I-15

spam protection) and online storage solutions and web spaces. In many of our markets, we offer mobile broadband services with
internet access as described below. Subscribers to our internet service pay a monthly fee based on the tier of service selected. In
addition to the monthly fee, customers pay an activation service fee upon subscribing to an internet service. This one-time fee may
be waived for promotional reasons. We determine pricing for each different tier of internet service through an analysis of speed,
market conditions and other factors.

Our "Connect Box" is a dedicated connectivity device that delivers superior in-home WiFi coverage. It is our next generation
WiFi and telephony gateway that enables us to maximize the impact of our ultrafast broadband networks by providing reliable
wireless connectivity anywhere in the home. It has an automatic WiFi optimization function, which selects the best possible wireless
frequency at any given time. This gateway can be self-installed and allows customers to customize their home WiFi service. Our
Connect Box is available in all our markets. Robust wireless connectivity is increasingly important with our customers spending
more and more time using bandwidth-heavy services on multiple devices. In Belgium and Switzerland, we also offer a connect
app that allows our customers to find their best WiFi access.

In almost all of our markets, we have deployed community WiFi via routers in the home (the Community WiFi), which
provides a secure access to the internet for our customers. Community WiFi is enabled by a cable modem WiFi access point (WiFi
modem) in the Connect Box, the set-top box or the Horizon TV box of our internet customers. The Community WiFi is created
through the sharing of access to the public channel of our customers’ home wireless routers. Use of the Community WiFi does not
affect the internet speeds of our customers. The public channel is a separate network from the secure private network used by the
customer within the home and is automatically enabled when the WiFi modem is installed. Access is free for our internet customers.
At December 31, 2017, we had 9.1 million WiFi access points in our footprint. In addition, our internet customers continue to
have access to the Community WiFi in the Netherlands. We continue to expand our Community WiFi service throughout our
markets, including access points covering public places.

Public WiFi access points (covering train stations, hotels, bars, restaurants and other public places) are available to Virgin
Media customers in the U.K., Unitymedia GmbH (Unitymedia) customers in Germany and to Telenet customers in Belgium. In
Switzerland, Belgium, Hungary, Poland, Ireland and Romania, we are expanding our Community WiFi through access points
covering public places. Our Community WiFi is branded as “Wi-Free” in most of our markets. Through an agreement with Comcast
Corporation, our internet customers also have access to millions of WiFi access points in the U.S. and across various European
countries for no additional cost.

Mobile Services

Mobile services are another key building block for us to provide customers with seamless connectivity. We offer mobile
services as an MVNO over third-party networks in the U.K., Germany, Belgium, Switzerland, Austria, Ireland, Poland and Hungary.
Following the February 2016 acquisition of BASE, Telenet became a mobile network provider in Belgium and is migrating its
mobile subscribers to the BASE network prior to the termination of its MVNO agreement with a third-party provider at the end
of 2018. Although, Telenet’s MVNO arrangement continues through 2018, Telenet aims to complete the migration of its MVNO
subscribers by the end of the first half of 2018. We plan to add MVNO arrangements and, where appropriate, acquire or partner
with mobile service providers with their own networks in all our broadband communication markets.

In Switzerland, Austria, Ireland, Hungary and, through 2018, Belgium, we provide our mobile telephony services as full
MVNOs through partnerships with a third-party mobile network operator in their respective footprints of our country operations.
All of these operations lease the third-party’s radio access network and own the core network, including switching, backbone and
interconnections. These arrangements permit us to offer our customers in these markets mobile services without having to build
and operate a cellular radio tower network. In 2017, our mobile operations in the U.K. moved from a light MVNO to a full MVNO
arrangement due to a revised agreement with the third-party network provider. The migration of our U.K. mobile customers to
the full MVNO arrangement is expected to be completed in 2019. In Germany and Poland, we provide mobile telephony as a light
MVNO. In this case, we lease the core network as well as the radio access network from a mobile network operator. This arrangement
permits our German customers to have access to the third-party mobile communications services while we maintain the customer
relationship.

I-16

Our MVNO partners are:

Country
U.K............................................................................................................................................................ EE
Switzerland ............................................................................................................................................... Salt (1)
Austria....................................................................................................................................................... Three (Hutchison)
Ireland ....................................................................................................................................................... Three (Hutchison)
Hungary .................................................................................................................................................... Vodafone
Germany ................................................................................................................................................... Telefonica
Poland ....................................................................................................................................................... Orange/Play

Partner

____________
(1) UPC Switzerland will migrate to the Swisscom AG (Swisscom) network the beginning of 2019.

Where mobile services are available subscribers pay varying monthly fees depending on whether the mobile service is combined
with our cable services or includes mobile data services via mobile phones, tablets or laptops. We offer our customers the option
to purchase mobile handsets and, in most of our markets, make such purchase pursuant to a contract independent of their mobile
services contract. We refer to these arrangements as split contracts. In Belgium, for those subscribers on Telenet’s own network,
it is offering more flexible bundles adjusted to customers’ needs so they can use the full capacity of their package, regardless of
their appetite to use either more data, minutes or text messages.

Our mobile services typically include voice, short message service (or SMS) and internet access. Calls, both within and out
of network, incur a charge or are covered under a postpaid monthly service plan. Our mobile services are primarily on a postpaid
basis with customers subscribing to services for periods ranging from activation for a SIM-only contract to up to 24 months (or
36 months in the U.K.), with the latter often taken with a subsidized mobile handset. In Belgium, Switzerland and Austria, however,
our postpaid service is offered without a minimum contract term. In the U.K. and Belgium, we also offer a prepaid service, where
the customers pay in advance for a pre-determined amount of airtime or data and generally have no minimum contract term. In
almost all of our markets, subscribers to a double- or triple-play bundle receive a discount on their mobile service fee.

Telephony Services

Multi-feature telephony services are available through VoIP technology in most of our broadband communication markets.
In the U.K. and Hungary, we also provide traditional circuit-switched telephony services. We pay interconnect fees to other
telephony and internet providers when calls by our subscribers terminate on another network and receive similar fees from providers
when calls by their users terminate on our network through interconnection points.

Our telephony service may be selected in several of our markets on a standalone basis and in all of our markets in combination
with one or more of our other services. Our telephony service includes a basic fixed-line telephony product for line rental and
various calling plans, which may consist of any of the following: unlimited network, national or international calling, unlimited
off-peak calling and minute packages, including calls to fixed and mobile phones. We also offer value added services, such as a
personal call manager, unified messaging and a second or third phone line at an incremental cost.

Multiple Dwelling Units and Partner Networks

Approximately two-thirds of Unitymedia’s video customers are in multiple dwelling units where Unitymedia has the billing
relationship with the landlord or housing association or with a third-party (Professional Operator) that operates and administers
the in-building network on behalf of housing associations. Many of these agreements allow Unitymedia to offer its digital video,
broadband internet and fixed-line telephony services directly to the end customer. Professional Operators may procure the basic
video signals from Unitymedia at volume-based discounts and will generally resell them to housing associations with whom the
operator maintains the customer relationship. Unitymedia has entered into agreements with Professional Operators, such as Tele
Columbus Multimedia GmbH, that allow Unitymedia to market its digital video, broadband internet and fixed-line telephony
services directly to the Professional Operator’s subscriber base.

Pursuant to an agreement executed on June 28, 2008 (the PICs Agreement) with four associations of municipalities in Belgium
(the pure intercommunales or PICs), Telenet leases the PICs broadband communications network and, accordingly, makes its
services available to all of the homes passed by the cable network owned by the PICs. Telenet has a direct customer relationship
with the basic and enhanced video subscribers on the PICs network. Pursuant to the PICs Agreement, Telenet has full rights to use
substantially all of the PICs network under a long-term capital lease. Unless extended, the PICs Agreement will expire on

I-17

September 23, 2046, and cannot be terminated earlier (except in the case of non-payment or bankruptcy of Telenet). For additional
information on the PICs Agreement, see note 17 to our consolidated financial statements included in Part II of this Annual Report
on Form 10-K.

For approximately two-thirds of the basic video subscribers in UPC Holding’s Switzerland operations (UPC Switzerland),
UPC Switzerland maintains billing relationships with landlords or housing associations and provides basic video service to the
tenants. The landlord or housing association administers the billing for the basic video service with their tenants and manages
service terminations for their rental units. When tenants select triple-play bundles with or without mobile service from UPC
Switzerland, they then migrate to a direct billing relationship with us.

UPC Switzerland offers enhanced video, broadband internet and telephony services directly to the video cable subscribers of
those partner networks that enter into service operating contracts with UPC Switzerland. UPC Switzerland has the direct customer
billing relationship with these subscribers. By permitting UPC Switzerland to offer some or all of its enhanced video, broadband
internet and telephony products directly to those partner network subscribers, UPC Switzerland’s service operating contracts have
expanded the addressable markets for UPC Switzerland’s digital products. In exchange for the right to provide digital products
directly to the partner network subscribers, UPC Switzerland pays to the partner network a share of the revenue generated from
those subscribers. UPC Switzerland also provides network maintenance services and engineering and construction services to its
partner networks.

Business Services

In addition to our residential services, we offer business services in all of our operations. For business and public sector
organizations, we provide a complete range of voice, advanced data, video, wireless and cloud-based services, as well as mobile
and converged fixed-mobile services. Our business customers include SOHO (generally up to five employees), small business
and medium and large enterprises. We also provide business services on a wholesale basis to other operators.

Our business services are designed to meet the specific demands of our business customers with a wide range of services,

including increased data transmission speeds and virtual private networks. These services fall into five broad categories:

(cid:149) VoIP and circuit-switch telephony, hosted private branch exchange solutions and conferencing options;

(cid:149)

data services for internet access, virtual private networks and high capacity point-to-point services;

(cid:149) wireless services for mobile voice and data, as well as managed WiFi networks;

(cid:149)

video programming packages and select channel lineups for targeted industries; and

value added services, including webhosting, managed security systems and storage and cloud enabled software.

Our intermediate to long-term strategy is to enhance our capabilities and offerings in the business sector so we become a
preferred provider in the business market. To execute this strategy, customer experience and strategic marketing play a key role.

Our business services are provided to customers at contractually established prices based on the size of the business, type of
services received and the volume and duration of the service agreement. SOHO and small business customers pay business market
prices on a monthly subscription basis to receive enhanced service levels and business features that support their needs. For more
advanced business services, these customers generally enter into a service agreement. For medium to large business customers,
we enter into individual agreements that address their needs. These agreements are generally for a period of at least one year.

Investments—VodafoneZiggo JV

We own a 50% interest in the VodafoneZiggo JV, which is a leading Dutch company that provides fixed, mobile and integrated
communication and entertainment services to consumers and businesses in the Netherlands. In connection with the formation of
the VodafoneZiggo JV, we entered into a shareholders agreement with Vodafone providing for the governance of the VodafoneZiggo
JV, including decision-making process, information access, dividend policy and non-compete provisions. It also provides for
restrictions on transfer of interests in the VodafoneZiggo JV and exit arrangements. Under the dividend policy, the VodafoneZiggo
JV is required to distribute all unrestricted cash to Vodafone and us, subject to minimum cash requirements and financing
arrangements. We also entered into a framework agreement with the VodafoneZiggo JV to provide access to each partner’s expertise
in the telecommunications business. For additional information on the above agreements, see note 6 to our consolidated financial
statements included in Part II of this Annual Report on Form 10-K.

The fiber-rich broadband network of the VodafoneZiggo JV passes 7.1 million homes. The VodafoneZiggo JV also offers
nationwide mobile coverage. At December 31, 2017, the VodafoneZiggo JV had nearly 14.6 million subscribers of which nearly
4.0 million were video, over 3.0 million were fixed broadband internet, approximately 2.5 million were fixed-line telephony and
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5.0 million were mobile (including 4.1 million postpaid). In addition to its residential services, the VodafoneZiggo JV offers
extensive business services throughout the Netherlands. The operations of the VodafoneZiggo JV are subject to various regulations,
which are described below under Regulatory Matters—The Netherlands.

The VodafoneZiggo JV’s customers continue to have access to Horizon TV and its functionalities (marketed as Ziggo TV),
including Replay TV, 400 Mbps nationwide broadband internet and an extensive WiFi Community network. They also have access
to Vodafone’s nationwide long-term evolution wireless service, also called “4G” (referred to herein as LTE) services, under either
a prepaid or postpaid service plan. With its mobile services, the VodafoneZiggo JV is able to offer its customers quad-play bundles
and converged services to residential and business customers.

For all its services, the VodafoneZiggo JV competes primarily with the provision of similar services from the incumbent
telecommunications operator Koninklijke KPN N.V. (KPN). KPN offers (1) internet protocol television (IPTV) over fiber optic
lines where the fiber is to the home, cabinet, or building or to the node networks (fiber-to-the-home/-cabinet/-building/-node is
referred to herein as FTTx) networks and through broadband internet connections using DSL or very high-speed DSL technology
(VDSL) or an enhancement to VDSL called “vectoring”, (2) digital terrestrial television (DTT), and (3) LTE services. Where KPN
has enhanced its VDSL system, it offers broadband internet with download speeds of up to 100 Mbps and on its FTTx networks,
it offers download speeds of up to 500 Mbps. Its ability to offer a bundled triple-play of video, broadband internet and telephony
services and fixed-mobile convergence services, creates significant competitive pressure on the VodafoneZiggo JV’s operations,
including the pricing and bundling of its video products. KPN’s video services include many of the interactive features the
VodafoneZiggo JV offers its subscribers. Portions of the VodafoneZiggo JV’s network have been overbuilt by KPN’s and other
providers’ FTTx networks and expansion of these networks is expected to continue.

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Additional Business Information

Technology

In most of our markets, our video, broadband internet and fixed-line telephony services are transmitted over a hybrid fiber
coaxial cable network. This network is composed primarily of national and regional fiber networks, which are connected to the
home over the last few hundred meters by coaxial cable. Over 99% of our network allows for two-way communications and is
flexible enough to support our current services as well as new services.

We closely monitor our network capacity and customer usage. Where necessary, we increase our capacity incrementally, for
instance by splitting nodes in our cable network. We also continue to explore improvements to our services and new technologies
that will enhance our customer’s connected entertainment experience. These actions include:

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recapturing bandwidth and optimizing our networks by:

increasing the number of nodes in our markets;

increasing the bandwidth of our hybrid fiber coaxial cable network to 1 GHz;

converting analog channels to digital;

bonding additional DOCSIS 3.0 channels;

deploying VDSL over our fixed telephony network;

replacing copper lines with modern optic fibers; and

using digital compression technologies.

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freeing spectrum for high-speed internet, VoD and other services by encouraging customers to move from analog to
digital services;

increasing the efficiency of our networks by moving headend functions (encoding, transcoding and multiplexing) to cloud
storage systems;

enhancing our network to accommodate business services;

using wireless technologies to extend our services outside of the home;

offering remote access to our video services through laptops, smart phones and tablets;

expanding the availability of Horizon TV and related products and developing and introducing online media sharing and
streaming or cloud-based video; and

testing new technologies.

As stated under General Development of Business—Expansion and Acquisitions above, we are expanding our hybrid fiber
coaxial cable network through our Network Extension programs. In addition, we are seeking mobile service opportunities where
we have established cable networks and expanding our fixed-line networks where we have a strong mobile offering. This will
allow us to offer converged fixed-line and mobile services to our customers.

We deliver high-speed data and fixed-line telephony over our broadband network in our markets. The cable networks of our
operations in Europe are connected to our “Aorta” backbone. The Aorta backbone is recognized as a Tier 1 Carrier, which permits
us to serve our customers through settlement free collaboration with other carriers without the cost of using a third-party network.

In support of our connectivity strategy, we are moving our customers into a gigabit society. Almost all of our broadband
networks are already capable of supporting the next generation of ultra high-speed internet service at gigabit speeds. To provide
these speeds to our subscribers, we are launching our next generation gateways that will enable DOCSIS 3.1 technology throughout
our footprint. The launch of DOCSIS 3.1 technology will provide us significantly higher efficiencies on our networks and allow
us to offer faster speeds, in-home WiFi and better services. Our Unitymedia operations have already demonstrated that download
speeds of 2 Gbps can be achieved on our network. The new gateways and the continued upgrades to our network in the coming
years will allow us to maximize high-speed connectivity over our broadband networks and deliver gigabit services in a cost-
effective manner. It will also allow us to meet the expectations of our customers for high-speed internet access both in cities and
rural areas of our footprint.

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Supply Sources

Content. With telecommunication companies increasingly offering similar services, content is one of the deciding factors for
customers in selecting a video services provider. Therefore, in addition to providing services that allow our customers to view
programming when and where they want, we are investing in content that customers want. Our content strategy is based on:

(cid:149)

proposition (exceeding our customers' entertainment desires and expectations);

product (delivering the best content available);

procurement (investment in the best brands, shows and sports); and

partnering (strategic alignment, acquisitions and growth opportunities).

We license almost all of our programming and on-demand offerings from content providers and third-party rights holders,
including broadcasters and cable programming networks. For such licenses, we generally pay a monthly fee on a per channel or
per subscriber basis, with minimum pay guarantees in certain cases. We generally enter into long-term programming licenses with
volume discounts and marketing support. For on-demand programming and streaming services, we generally enter into shorter-
term agreements. For our distribution agreements, we seek to include the rights to offer the licensed programming to our customers
through multiple delivery platforms and through our apps for smart phones and tablets.

In seeking licenses for content, our primary focus is on partnering with leading international providers, such as Disney, Time
Warner (including HBO), Fox, the BBC and Discovery. We also seek to carry in each of our markets key public and private
broadcasters and in some markets we acquire local premium programing through select relationships with companies such as Sky
plc (Sky) (U.K., Ireland, Germany and Austria) and British Telecom (BT). For our VoD services, we license a variety of
programming, including box sets of television series, movies, music, kids and documentaries. In addition, we have entered into a
multi-year arrangement with Netflix Inc. (Netflix) to provide our customers with premium OTT services. Through this
arrangement, Netflix's content is available via set-top boxes to our video customers across many of our markets. The Netflix app
is available to our customers in the U.K., Germany, Ireland and Switzerland. It is also available to the VodafoneZiggo JV’s
customers.

Exclusive content is another element of our content strategy. To support this approach, we are investing in content assets. We
have invested in various content companies, including ITV plc, All3Media Ltd., LionsGate Entertainment, STX, TV3 Group
(Ireland, to be rebranded as Virgin Media TV in the first half of 2018) and De Vijver Media. We are also investing in sports, both
as a broadcaster and as a rights owner. We have launched our own exclusive sports channels, Play Sports in Belgium, and MySports
in Switzerland, and the VodafoneZiggo JV owns the Ziggo Sport channel, which is available exclusively to the VodafoneZiggo
JV’s customers.

In addition, we are commissioning our own exclusive drama series content. Through All3Media Ltd., which we own jointly
with Discovery Communications Inc., we are co-producing television series for all our markets. The first of these series, The Feed,
is expected to be released in 2019. In addition, we have produced the Swiss sitcom Fassler-Kunz, the Swiss series Im Heimatland
and the original Belgium series Chaussee d'Amour with local production companies. With LionsGate Entertainment, we are a
partner in the production of a new spy thriller series The Rook. For each of these programs, the content will be available on demand
to our customers.

Customer Premises Equipment. We purchase each type of customer premises equipment from a number of different suppliers
with at least two or more suppliers providing our high-volume products. Customer premises equipment includes set-top boxes,
modems, WiFi routers, DVRs, tuners and similar devices. For each type of equipment, we retain specialists to provide customer
support. For our broadband services, we use a variety of suppliers for our network equipment and the various services we offer.
Similarly, we use a variety of suppliers for mobile handsets to offer our customers mobile services.

Software Licenses. We license software products, including email and security software, and content, such as news feeds,
from several suppliers for our internet services. The agreements for these products require us to pay a per subscriber fee for software
licenses and a share of advertising revenue for content licenses. For our TiVo service in the U.K., we have a partnership arrangement
where TiVo is the exclusive provider of the user interface software for our next generation set-top boxes, which provides converged
television and broadband internet capabilities, and we are the exclusive distributor of the TiVo services and technology in the U.K.
In 2017, we entered into a multi-year extension of our agreements with Tivo. For our mobile network operations and our fixed-
line telephony services, we license software products, such as voicemail, text messaging and caller ID, from a variety of suppliers.
For these licenses we seek to enter into long-term contracts, which generally require us to pay based on usage of the services.

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Access Arrangements. Through Unitymedia, we have entered into various long-term agreements with the incumbent
telecommunications operator, Deutsche Telekom AG (Deutsche Telekom), for the lease of cable duct space and hubs, as well as
use of fiber optic transmission systems, towers and facility space. In addition, Unitymedia purchases a portion of the electricity
required for the operation of its networks through Deutsche Telekom under such agreements. Unitymedia’s ability to offer its
broadband communications services to customers is dependent on the agreements with Deutsche Telekom. These agreements are
long-term and may only be terminated under certain limited exceptions. Any termination, however, would have a material adverse
effect on the operations of Unitymedia. For information on a legal action that Unitymedia commenced against Deutsche Telekom
in December 2012 regarding these agreements, see note 17 to our consolidated financial statements included in Part II of this
Annual Report on Form 10-K.

For our mobile services provided through MVNO arrangements, we are dependent on third-party wireless network providers.
Each of our MVNO operations has an agreement with such a provider to carry the mobile communications traffic of our customers.
We seek to enter into medium to long-term arrangements for these services. Any termination of these arrangements could
significantly impact our mobile services.

Competition

All of our businesses operate in highly competitive and rapidly evolving markets. Technological advances and product
innovations have increased and are likely to continue to increase giving customers several options for the provision of their
telecommunications services. Our customers want access to high quality telecommunication services that allow for seamless
connectivity. Accordingly, our ability to offer converged services (video, internet, fixed telephony and mobile) is a key component
of our strategy. In many of our markets, we compete with companies that provide fixed-mobile convergence bundles, as well as
companies that are established in one or more communication products and services. Consequently, our businesses face significant
competition. In all markets, we seek to differentiate our telecommunication services by focusing on customer service, competitive
pricing and offering quality high-speed internet. In this section, we begin with an overview on the competitive nature of the video,
broadband internet, and mobile and fixed-line telephony services in our markets, and then provide information on key competitors
in our more material markets.

We believe that our deep-fiber access provides us with several competitive advantages. For instance, our cable networks allow
us to concurrently deliver internet access, together with real-time television and VoD content, without impairing our high-speed
internet service. In addition, our cable infrastructure allows us to provide triple-play bundled services of broadband internet,
television and fixed-line telephony services without relying on a third-party service provider or network. Where mobile is available,
our mobile networks, together with our fixed fiber-rich networks, allow us to provide a comprehensive set of converged mobile
and fixed-line services. Our capacity is designed to support peak consumer demand. In serving the business market, many aspects
of the network can be leveraged at very low incremental costs given that business demand peaks at a time when consumer demand
is low, and peaks at lower levels than consumer demand.

Overall, we are experiencing increased convergence as customers look to receive all their media and communication services
from one provider. In our largest video markets, our key competitors for the the provision of converged services are: BT (U.K.),
Deutsche Telekom (Germany), Proximus NV/SA (Proximus) (Belgium) and Swisscom (Switzerland). Each of these competitors
have extensive resources allowing them to offer competitively priced bundled services. As a result, our ability to offer triple-play
or quad-play bundles and fixed-mobile convergence bundles is one of our key strategies to attract and retain customers. We seek
to distinguish ourselves through our multimedia gateway services, interactive services (such as Replay TV and VoD), expanded
content offers (for both in and out of the home) and our download speeds.

Portions of our European systems have been overbuilt by FTTx networks and other cable operations. These systems are a
significant competitive factor primarily for our Central and Eastern Europe operations. Based on research of various
telecommunication publications, including by the Organization for Economic Cooperation and Development (OECD) and internal
estimates, parts of our Central and Eastern Europe operations are overbuilt by FTTx networks, including almost all of our operations
in Romania. Other fiber and cable operators have also overbuilt approximately three-quarters of our combined footprint in the
Czech Republic and Slovakia, two-thirds of our foot print in Poland and half of our cable networks in Hungary. Although we have
extensive FTTx overbuild in Switzerland, connectivity to the FTTx network is not available at all locations. In addition, government
and quasi-government entities in certain of the countries in which we operate in Europe continue to invest in FTTx networks,
creating another source of competition.

In order to achieve download speeds of up to 100 Mbps or greater for customers, incumbent telecommunications operators
are adopting VDSL with vectoring and bonding technologies as a more cost efficient solution compared to FTTx initiatives. Our
primary competitor in Germany, Deutsche Telekom, has implemented VDSL technology in almost all of our footprint in Germany
and is currently in the process of implementing vectoring technology. Swisscom is also implementing vectoring in Switzerland.

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Vectoring is a transmission method that coordinates line signals to reduce crosstalk levels and improve performance. Bonding is
a method of taking channels on either DSL or cable plant and bonding those channels together for a higher bandwidth throughput.

Video Distribution

Our video services compete primarily with traditional free-to-air (FTA) broadcast television services, DTH satellite service
providers and other fixed-line telecommunications carriers and broadband providers, including incumbent telephony operations
offering (1) DTH satellite services, (2) IPTV over broadband internet connections using asymmetric DSL or VDSL or an
enhancement to VDSL called "vectoring", (3) IPTV over FTTx networks, or (4) LTE Services. Many of these competitors have
a national footprint and offer features, pricing and video services individually and in bundles comparable to what we offer. In
certain markets, we also compete with other cable providers who have overbuilt portions of our systems. Mobile broadband has
gained noticeable share of video subscribers, which is another competitive factor.

OTT video content aggregators utilizing our or our competitors' high-speed internet connections are also a significant
competitive factor as are other video service providers that overlap our service areas. The OTT video aggregators (such as HBO
Now, Amazon Prime and Netflix) offer VoD service for television series and movies, catch-up television and programming from
broadcasters. Generally, the content libraries of such services are offered for a monthly fee. Typically these services are available
on multiple devices in and out of the home. In some cases, OTT services are provided free-of-charge. To enhance our competitive
position, we provide our subscribers with TV everywhere products and premium OTT video services through our online mobile
apps, VoD and Replay TV services or our arrangement with Netflix. Our businesses also compete to varying degrees with other
sources of information and entertainment, such as online entertainment, newspapers, magazines, books, live entertainment/concerts
and sporting events.

Our ability to continue to attract and retain customers depends on our continued ability to acquire appealing content and
services on acceptable terms and to have such content available on multiple devices and outside the home. Some competitors have
obtained long-term exclusive contracts for certain programming, which limits the opportunities for other providers to offer such
programs. Other competitors also have obtained long-term exclusive contracts for programs, but our operations have limited access
to certain of such programming through select contracts with these companies, including Sky Deutschland AG, a subsidiary of
Sky, in Germany and Austria and Sky and BT in the U.K. and Ireland. If exclusive content offerings increase through other providers,
programming options could be a deciding factor for subscribers on selecting a video service.

Similar to our technological advances to enhance our video services, our competitors are also improving their video platforms
with next generation set-top boxes, TV everywhere products and other interactive services. Similarly, VDSL, which is either
provided directly by the owner of the network or by a third-party, is a significant part of the competitive environment in many of
our markets as are FTTx networks. In all of our markets, competitive video services are offered by the incumbent
telecommunications operator, whose video strategies include IPTV over DSL, VDSL and FTTx networks and, in some cases, DTH
and DTT. The ability of incumbent operators to offer the triple-play of video, broadband internet and fixed-line telephony services
and, in most countries, a quad-play with mobile services, is exerting competitive pressure on our operations, including the pricing
and bundling of our video products. In order to gain video market share, the incumbent operators and alternative service providers
in a number of our larger markets are pricing their DTT, IPTV or DTH video packages at a discount to the retail price of the
comparable digital cable service.

In most of our Central and Eastern European markets, we face intense competition from DTH services. These DTH companies
offer aggressively-priced packages of video content and in some cases offer triple-play packages. FTA broadcasters are also
significant competitors in the Central and Eastern Europe markets. To stay competitive, UPC Holding’s DTH operations offer
advanced services and functionality, including DVR and premium content, in most of our Central and Eastern European markets.
It has also expanded these services to include a triple-play offer in Hungary. Our cable operations stay competitive by offering
enhanced digital services, such as HD channel offerings, Horizon Go and expanded VoD services. These operations have also
increased broadband internet speeds in their triple-play bundles to up to 500 Mbps. Promotional discounts are available, particularly
on bundled options.

We compete on value by offering advanced digital services, such as DVR functionality, HD, VoD, catch-up television, Replay
TV, online mobile apps and multiscreen services and multimedia gateways. We also compete by accelerating the migration of our
customers from analog to digital services, offering advanced digital features and attractive content packages, as well as bundled
services, at reasonable prices. In each of the countries in which we operate, we also tailor our packages to include attractive channel
offerings and offer recurring discounts for bundled services and loyalty contracts. In addition, from time to time, we modify our
digital channel offerings to improve the quality of our programming. Where mobile voice and data are available, we focus on our
converged service offerings at attractive prices. In our other operations, we use the triple-play bundle as a means of driving video,
as well as other products where convenience and price can be leveraged across the portfolio of services. We also continue to

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enhance our Horizon TV product to meet our customers desire to view programming anytime and anywhere, such as new applications
and expanding its availability in our markets.

(cid:149) Virgin Media. Virgin Media’s digital television services compete primarily with FTA television and with Sky, the primary
pay satellite television provider. Sky offers competitively priced triple-play and quad-play services in the U.K. and Ireland.
Other significant competitors are BT and TalkTalk Telecom Group plc (TalkTalk) in the U.K. and Eircom Limited in
Ireland, each of which offer triple-play services, as well as IPTV video services. Each of these competitors have multimedia
home gateways.

Sky owns the U.K. rights to various entertainment, sports and movie programming content and channels. Sky is both a
principal competitor in the pay-television market and an important supplier of content to us. Various Sky channels,
including Sky Sports, are available over Sky’s satellite system and our cable networks, as well as via Sky’s apps and
online players and other television platforms, and some of the channels are available on BT and TalkTalk platforms.
Virgin Media distributes several basic and premium video channels supplied by Sky. BT is also both a principal competitor
and an important supplier of content to us. BT owns premium BT Sport channels, providing a range of sports content,
including football (soccer) from the English Premier League and exclusive rights to the UEFA Champions League and
the UEFA Europa League. The BT Sport channels are available on our cable network as well as our competitors’ networks.

In this competitive market, Virgin Media is expanding its broadband network and promotes its 4K enabled Virgin Media
V6 set-top box in the UK. In Ireland it offers Horizon TV and its functionalities (marketed as Virgin TV). The on-line
streaming service Virgin TV Go is available throughout the Virgin Media footprint. In addition, Virgin Media’s ability
to include mobile for its U.K. and Ireland customers for a low incremental fee creating a fixed-mobile convergence bundle
is a key market offer.

(cid:149) Unitymedia. Unitymedia’s primary competition is from FTA television received via satellite. Unitymedia’s primary
competitor for pay TV services is the IPTV services over VDSL and FTTx and DTH of the incumbent telecommunications
operator, Deutsche Telekom. Deutsche Telekom’s VDSL network covers approximately 68% of German homes and it
continues to expand this coverage with plans to reach approximately 80% of German homes in 2018.

Deutsche Telekom offers competitively-priced bundles, including fixed-mobile convergence, and since 2016 became
more aggressive on price, significantly lowering their promotional prices for double-play offers. In addition, Vodafone,
also a competitor in Germany, bundles its IPTV service with its broadband offerings through Deutsche Telekom’s DSL
network under a resell agreement making it a significant competitor in the double-play and triple-play market in our
footprint. It also has expanded its bundle offers to include mobile products. These converged offerings may enable
Deutsche Telekom and Vodafone to reduce churn and attract new customers.

Deutsche Telekom and Professional Operators compete with Unitymedia for housing association contracts. Professional
Operators typically procure the broadcast signals they distribute from Unitymedia or from FTA television received via
satellite. Certain Professional Operators may also use such opportunities to build their own distribution networks or to
install their own head-ends for receiving satellite signals.

To enhance its competitive position, Unitymedia offers Horizon TV and the Horizon family of products, including Horizon
Go. It also makes mobile available creating converged bundles. Mobile customers receive a discount when they also
subscribe to certain bundles.

(cid:149) Telenet. Telenet’s principal competitor is Proximus, the incumbent telecommunications operator, which has interactive
digital television, replay television, VoD and HD service as part of its video offer, as well as a remote access service.
Proximus offers customers a wide range of both individual and bundled services at competitive prices. Also, Telenet and
other Belgian cable operators must give alternative providers access to their cable networks. Orange Belgium N.V. (Orange
Belgium) gained such access in 2016 and currently offers its mobile subscribers a dual play bundle, including enhanced
video and broadband internet services. Telenet may face increased competition from other providers of video services
who take advantage of the wholesale access and may be able to offer triple- and quad-play services. For more information
on wholesale access, see Regulatory Matters—Belgium.

In order to compete effectively against alternative providers, Telenet leverages its extensive cable network, the broad
acceptance of its basic cable television services and Yelo Play and its additional features, such as HD and DVR functionality,
VoD offerings and its Play Sports channel. Telenet is able to offer international, national, regional and local content,
including Dutch-language broadcasts, to its subscribers. It is also using mobile services to drive its other products through
its converged offerings. In addition, Telenet continues to enhance its Yelo Play app and programming, including extending
its rights to the English Premier League through 2019 and the addition of other sports rights.

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(cid:149) UPC Switzerland. Our main competitor in Switzerland is Swisscom, the incumbent telecommunications operator, which
provides IPTV services over DSL, VDSL and FTTx networks. Swisscom offers VoD services, DVR and replay
functionality and HD channels, as well as the functionality to allow remote access to its video services, and has exclusive
rights to distribute certain sports programming. To compete effectively in Switzerland, UPC Switzerland promotes Horizon
TV and its family of products together with Replay TV and VoD, giving subscribers the ability to personalize their
programming and viewing preferences. It also uses its high-speed internet of up to 50, 200 or 500 Mbps to promote its
extended digital tier bundles.

Internet

With respect to broadband internet services and online content, our businesses face competition in a rapidly evolving
marketplace from incumbent and non-incumbent telecommunications companies, mobile operators and cable-based ISPs, many
of which have substantial resources. The internet services offered by these competitors include both fixed-line broadband internet
services using cable, DSL or FTTx networks and wireless broadband internet services. These competitors have a range of product
offerings with varying speeds and pricing, as well as interactive services, data and other non-video services offered to homes and
businesses. With the demand for mobile internet services increasing, competition from wireless services using various advanced
technologies is a competitive factor. In several of our markets, competitors offer high-speed mobile data via LTE wireless networks.
In addition, other wireless technologies, such as WiFi, are available in almost all of our markets. In this intense competitive
environment, speed and pricing are key drivers for customers.

Our strategy is speed leadership. Our focus is on increasing the maximum speed of our connections as well as offering varying
tiers of service, prices and a variety of bundled product offerings and a range of value added services. We update our bundles and
packages on an ongoing basis to meet the needs of our customers. Our top download internet speeds range from up to 300 Mbps
in the U.K. and Austria to speeds of up to 500 Mbps available in Switzerland, Poland, Hungary, Romania, Slovakia and the Czech
Republic. We use our ultra high-speed internet services with access to Community WiFi and competitively priced bundles to
encourage customers from other providers to switch to our services. The focus is on high-end internet products to safeguard our
high-end customer base and allow us to become more aggressive at the low- and medium-end of the internet market. By fully
utilizing the technical capabilities of DOCSIS 3.0 technology on our cable systems, we can compete with local FTTx initiatives
and create a competitive advantage compared to DSL infrastructures and LTE initiatives on a national level. With the commercial
deployment of our next generation gateways that will enable DOCSIS 3.1 on our cable networks, we plan to further improve our
high-speed internet offers.

Across Europe, our key competition in this product market is from the offering of broadband internet products using various
DSL-based technologies by the incumbent phone companies and third parties. The introduction of cheaper and ever faster fixed-
line broadband offerings is further increasing the competitive pressure in this market. Wireless broadband services, such as LTE,
are also significant competitors using high-speed mobile networks. We are expanding our ultra high-speed services and increasing
our download speeds. In most of our markets, we offer our internet service on a standalone basis or through bundled offerings that
include video, fixed-line telephony and mobile services. Mobile data is also increasingly important and we are addressing this
through our wide range of mobile products, including expanding our LTE service area and offering SIM-only mobile products, as
well as expanding our Community WiFi network.

(cid:149) Virgin Media. In the U.K., we have a number of significant competitors in the market for broadband internet services,
including fixed-line incumbent telecommunications providers. Of these broadband internet providers, BT is the largest,
which provides broadband internet access services to both its own retail customers and third-party retail providers over
its own DSL network. BT has announced its intention to rollout ultrafast speeds of up to at least 300 Mbps by the end of
2020 to up to 10.0 million premises using G.fast technology, a DSL standard applied over copper local loops. BT has
also announced that it intends to rollout a FTTx service supporting 1 Gbps to two million homes and businesses by 2020.
As a result of these objectives, BT recently launched a range of ultrafast packages offering speeds of up to 150 Mbps and
300 Mbps, respectively, using a combination of G.fast and FTTx technology, which are currently available to 250,000
U.K. homes.

Operators such as Sky and TalkTalk deploy their own network access equipment in BT exchanges via a process known
as local loop unbundling (LLU). This allows an operator to reduce the recurring operating costs charged by BT by reducing
the proportion of traffic that must travel directly over BT’s network. LLU deployment requires a substantial capital
investment to implement and requires a large customer base to deliver a return on investment. In addition to the competition
and pricing pressure in the broadband market arising from LLU, competition from mobile broadband developments, such
as LTE mobile services and WiFi services, is significant. Mobile providers continue to gain market share from fixed-line
providers. These providers offer a range of mobile services.

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(cid:149) Unitymedia. In Germany, the market for broadband internet services is highly competitive. For broadband internet access,
DSL is the dominant technology and Deutsche Telekom is the primary provider. Other major competitors to our services
are resellers of Deutsche Telekom’s DSL and VDSL services. We also face increased competition from mobile broadband
operators, including Deutsche Telekom, and other network providers, many of which offer mobile services through LTE
wireless systems and are increasing their coverage areas. Deutsche Telekom plans to cover approximately 80% of German
homes with its VDSL network by 2018. Within its footprint, Deutsche Telekom is implementing vectoring technology,
which increases broadband speeds to up to 100 Mbps from the current speeds of up to 50 Mbps. Deutsche Telekom further
announced its ambition to implement super vectoring technology, enhancing broadband speeds to up to 250 Mbps.With
its (vectored) VDSL expansion plan, competition from Deutsche Telekom will increase.

(cid:149) Telenet. In the Flanders region of Belgium, Telenet is the leading provider of residential broadband internet services.
Telenet’s primary competitor is the DSL service provider Proximus. Proximus is a well-established competitor offering
quad-play bundles. Proximus’ DSL and VDSL service provide download speeds up to 100 Mbps. Mobile broadband
penetration is increasing as well, reaching nearly 66% of the total population based on the BIPT 2016 Annual Report.
Similar to its video services, Telenet faces competition in the provision of internet services from other providers who
have wholesale access to Telenet’s cable network. Through such access, Orange Belgium currently offers its mobile
subscribers a dual-play bundle including enhanced video and broadband internet services. In this competitive market,
Telenet is using its fixed-mobile converged offers to promote its internet and other services.

(cid:149) UPC Switzerland. In Switzerland, Swisscom is the largest provider of broadband internet services, and is our primary
competitor. Swisscom internet customers have access to its basic video content free of charge through its internet portal.
It is also expanding its FTTx network and rolling out G.fast technology. At year end 2016, it had 2.5 million new connections
through these technologies. Swisscom offers download speeds ranging from 40 Mbps to up to 1 Gbps. Swisscom’s internet
speeds include 40 Mbps to 100 Mbps on its VDSL network and up to 1 Gbps in areas served by its FTTx network.
Swisscom continues to expand its FTTx network to Switzerland households in our footprint, as well as in our partner
network footprints. It has built its FTTH network in several cities in cooperation with municipality-owned utility
companies and, where no cooperation agreement has been reached, Swisscom is building its own FTTH network. With
respect to subscribers on partner networks, UPC Switzerland competes with other service providers for the contracts to
serve these subscribers. In this competitive market, UPC Switzerland increased it introductory speed to 50 Mbps and is
promoting its broadband services through its bundled offers.

Mobile and Telephony Services

Consumers are increasingly moving to mobile services. In Belgium, as a mobile network operator, and in the U.K. through
an MVNO arrangement, we are one of the largest mobile providers in each of these countries based on number of SIM cards. In
our other European markets, however, we currently have minimal mobile presence. In the markets where we are a large mobile
provider, we continue to seek additional bandwidth to deliver our wide range of services to our customers and increase our LTE
services. Where we are a small mobile provider, we face significant competition from other mobile telephony providers, many of
whom offer LTE services and are making significant advances in obtaining customers. In all of our markets competition is intense.
We offer various calling plans, such as unlimited network, national or international calling, unlimited off-peak calling and minute
packages, including calls to fixed and mobile phones. In addition, we use our bundled offers with our video and ultra high-speed
internet services to gain mobile subscribers. Our ability to offer fixed-mobile convergence services is a key driver. In several of
our markets we provide converged services, including mobile, fixed-line, broadband and video. We are also exploring opportunities
to offer mobile services in our other markets and mobility applications to our other services.

The market for fixed-line telephony services is mature in almost all of our markets. Changes in market share are driven by
the combination of price and quality of services provided and the inclusion of telephony services in bundled offerings. Our fixed-
line telephony services compete against the incumbent telecommunications operator in the applicable market. In these markets,
the operators have substantially more experience in providing fixed-line telephony and mobile services, greater resources to devote
to the provision of fixed-line telephony services and long-standing customer relationships. In all of our markets, we also compete
with other VoIP operators offering service across broadband lines. OTT telephony is also a competitive factor. Our businesses also
face competition from other cable telephony providers, FTTx-based providers or other indirect access providers.

Competition in both the residential and business fixed-line telephony markets is extremely competitive due to market trends,
the offering of carrier pre-select services, number portability, the replacement of fixed-line with mobile telephony and the growth
of VoIP services, as well as continued deregulation of telephony markets and general price competition. Carrier pre-select allows
the end user to choose the voice services of operators other than the incumbent while using the incumbent’s network. Our fixed-
line telephony strategy is focused around value leadership, and we position our services as “anytime” or “any destination”. Our
portfolio of calling plans include a variety of innovative calling options designed to meet the needs of our subscribers. In many

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of our markets, we provide product innovation, such as telephone apps that allow customers to make and receive calls from their
fixed-line call packages on smart phones. In addition, we offer varying plans to meet customer needs and, similar to our mobile
services, we use our telephony bundle options with our digital video and internet services to help promote our telephony services
and flat rate offers are standard.

The incumbent telecommunication companies remain our key competitors but mobile operators and other VoIP operators,
including ISPs, offering service across broadband lines are also significant competitors in these markets. Due to the maturity of
the telephony market, competition is particularly intense in all our markets with price often the deciding factor. To maintain or
increase market share, we and our competitors focus on bundling telephony services with quality broadband offerings and other
services. In each of our markets, we face competition with a dominant fixed-line telephony provider, most of which also have
competitive mobile offers based on LTE services. In our largest markets, the key dominant telephony providers are BT (UK),
Deutsche Telekom (Germany), Proximus (Belgium) and Swisscom (Switzerland). These telephony competitors are also the largest
mobile operators in these markets based on number of SIM cards, except in Germany where Telefonica O2 is the largest. These
competitors include their mobile products in bundles with fixed-line services. Generally, we expect telephony markets to remain
extremely competitive.

Regulatory Matters

Overview

Video distribution, broadband internet, fixed-line telephony and mobile businesses are regulated in each of the countries in
which we operate. The scope of regulation varies from country to country, although in some significant respects regulation in
European markets is harmonized under the regulatory structure of the European Union (E.U.).

Adverse regulatory developments could subject our businesses to a number of risks. Regulation, including conditions imposed
on us by competition or other authorities as a requirement to close acquisitions or dispositions, could limit growth, revenue and
the number and type of services offered and could lead to increased operating costs and property and equipment additions. In
addition, regulation may restrict our operations and subject them to further competitive pressure, including pricing restrictions,
interconnect and other access obligations, and restrictions or controls on content, including content provided by third parties.
Failure to comply with current or future regulation could expose our businesses to various penalties.

Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece,
Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia,
Spain, Sweden and the U.K. are the Member States of the E.U. as of December 31, 2017. As such, these countries are required to
harmonize certain of their laws with certain E.U. rules. In addition, other types of E.U. rules are directly enforceable in those
countries without any implementation at the national level. Certain E.U. rules are also applicable across the European Economic
Area, whose Member States are the E.U. Member States (excluding Croatia) as well as Iceland, Liechtenstein and Norway as of
December 31, 2017.

On June 23, 2016, the U.K. held a referendum in which U.K. citizens voted in favor of, on an advisory basis, an exit from the
E.U. commonly referred to as “Brexit”. The terms of Brexit are subject to a negotiation period that could take until March 2019.
The potential impacts, if any, of the uncertainty relating to Brexit or the resulting terms of Brexit on the free movement of goods,
services and people and capital between the U.K. and the E.U., customer behavior, economic conditions, interest rates, currency
exchange rates, availability of capital or other matters are unclear. In addition, the value of the British pound sterling relative to
the U.S. dollar remains at levels that are significantly below pre-Brexit levels. The effects of Brexit could adversely affect our
business, results of operations and financial condition.

In the broadcasting and communications sectors, there has been extensive E.U.-level legislative action. As a result, most of
the markets in Europe in which our businesses operate have been significantly affected by the regulatory framework that has been
developed by the E.U. Regulation in Switzerland, which is not a Member State of the E.U. and is not part of the European Economic
Area, is discussed separately below, as well as regulation in certain Member States in which we face regulatory issues that may
have a material impact on our business.

E.U. Communications Regulation

The body of E.U. law that deals with communications regulation consists of a variety of legal instruments and policies
(collectively, the Regulatory Framework). The key elements of the Regulatory Framework are various legal measures and
directives that require Member States to harmonize their laws, as well as certain other instruments and regulations that have direct
effect without any specific adoption at the national level.

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The Regulatory Framework primarily seeks open communication services in markets within Europe. It harmonizes the rules
within the E.U. for the establishment and operation of electronic communication networks, including cable television and traditional
telephony networks, and the offer of electronic communication services, such as telephony, internet and, to some degree, television
services.

Set forth below are certain key provisions included in the current Regulatory Framework, as revised. This description is not

intended to be a comprehensive or exhaustive description of all regulation in this area.

(cid:149) Licensing and Exclusivity. The Regulatory Framework requires Member States to abolish exclusivities on communication
networks and services in their territory and allow operators into their markets based on a simple registration. The Regulatory
Framework sets forth an exhaustive list of conditions that may be imposed on communication networks and services.
Possible obligations include, among other things, financial charges for universal service or for the costs of regulation,
environmental requirements, data privacy and other consumer protection rules, “must carry” obligations, provision of
customer information to law enforcement agencies and access obligations.

(cid:149)

Significant Market Power. Certain of the obligations allowed by the Regulatory Framework apply only to operators or
service providers with “Significant Market Power” (defined below) in a relevant market. For example, the provisions
of the Access Directive allow the National Regulatory Authority (NRA) in E.U. Member States to mandate certain access
obligations only for those operators and service providers that are deemed to have Significant Market Power. For purposes
of the Regulatory Framework, an operator or service provider will be deemed to have Significant Market Power where,
either individually or jointly with others, it enjoys a position of significant economic strength affording it the power to
behave to an appreciable extent independently of competitors, customers and consumers.

As part of the implementation of certain provisions of the Regulatory Framework, each Member State’s NRA is required
to analyze certain markets predefined by the European Commission to determine if any operator or service provider has
Significant Market Power. The European Commission has currently recommended that there be four such predefined
markets, which are subject to periodic review. NRAs may, however, perform analysis of markets not listed in the
recommendation, which requires the NRA to prove that additional requirements, the so called three-criteria test, are met.

NRAs might seek to define us as having Significant Market Power in any of these predefined markets or they may define
and analyze additional markets. In the event that we are found to have Significant Market Power in any particular market,
an NRA could impose certain conditions on us. Under the Regulatory Framework, the European Commission has the
power to veto a finding by an NRA of Significant Market Power (or the absence thereof), which power also applies with
respect to market definition, in any market, regardless of whether it is a market predefined by the European Commission
or an additional market defined by an NRA. We have been found to have Significant Market Power in certain markets
in which we operate and further findings of Significant Market Power are possible. In particular, we have been found to
have Significant Market Power in the market for termination of calls on our network.

(cid:149) Video Services. The regulation of distribution, but not the content, of television services to the public is harmonized by
the Regulatory Framework. Member States are allowed to impose on certain operators under their jurisdiction reasonable
must carry obligations for the transmission of specified radio and television broadcast channels. Such obligations are
required to be based on clearly defined general interest objectives, be proportionate and be transparent and subject to
periodic review. We are subject to must carry regulations in all markets in which we operate. Must carry regulations are
significantly different among Member States. In some cases, these obligations go beyond what we believe is allowable
under the Regulatory Framework. To date, however, the European Commission has taken very limited steps to enforce
E.U. law in this area, leaving must carry obligations intact in certain Member States. We do not expect the European
Commission or the Member States to curtail such obligations in the foreseeable future.

(cid:149) Net Neutrality/Traffic Management/Roaming. In October 2015, the European Parliament adopted the regulation on the
first E.U.-wide net neutrality regime. The regulation, which is directly applicable in all Member States, permits the
provision of specialized services, optimized for specific content and subjects operators to reasonable traffic management
requirements. The regulation also abolished roaming tariffs beginning in June 2017.

On May 6, 2015, the European Commission published its Digital Single Market strategy document. The strategy is an
aggregation of many different policy areas with the purpose of creating a digital single market to expand jobs and stimulate growth.
The strategy includes policy review in the areas of E.U. communications regulation, broadcasting law, copyright reform and anti-
competitive geo-blocking practices.

On September 14, 2016, the European Commission published a proposal for the European Electronic Communications Code,
which would replace the Regulatory Framework. The proposal recognizes the need for greater incentives to boost private sector

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investment in very high capacity networks. The proposal maintains the key elements of the Regulatory Framework, notably market
analysis with remedies only being imposed on operators with Significant Market Power. The European Council and European
Parliament are discussing other forms of access—extending the system of symmetrical access powers and the notion of joint
Significant Market Power. The proposal captures all types of services that are relevant to consumers, not only the traditional
electronic communication services as captured under the current Regulatory Framework but also OTT services. The proposal
brings greater harmonization to the timetables for spectrum licensing and renewal that will encourage investment in mobile networks
and will result in more advanced services. The negotiations among the European Commission, European Council and European
Parliament on the proposal are currently in process. The adoption of the proposal for the European Electronic Communications
Code and its implementation in to national laws by Member States is not expected before the third quarter of 2018.

Broadcasting Law

Although the distribution of video channels by a cable operator is within the scope of the Regulatory Framework, the activities
of a broadcaster are harmonized by other elements of E.U. law, in particular the Audiovisual Media Services Directive (AVMS).
Generally, broadcasts originating in and intended for reception within an E.U. Member State must respect the laws of that Member
State. Pursuant to AVMS, however, E.U. Member States are required to allow broadcast signals of broadcasters established in
another E.U. Member State to be freely transmitted within their territory, so long as the broadcaster complies with the law of their
home state. This is referred to as the country of origin principle. Under AVMS, the country of origin principle applies also to non-
linear services, such as VoD. Accordingly, we should be able, if we so elect, to offer our own VoD services across the European
Economic Area based on the regulation of the country of origin. As a result, we could structure our business to have a single
regulatory regime for all of our VoD services offered in Europe. In addition, when we offer third-party VoD services on our network,
it should be the business of the third-party, in its capacity as provider of the services, and not us as the local distributor, that is
regulated in respect of these services.

AVMS also establishes quotas for the transmission of European-produced programming and programs made by European

producers who are independent of broadcasters.

In May 2016, as part of its Digital Single Market strategy,the European Commission proposed revisions to the AVMS. The
proposal maintains key elements of AVMS, notably the country of origin principle and European works quota. The adoption of
the proposal for the revision of the AVMS is expected in mid-2018. Once adopted, its implementation into national laws by Member
States will take place 12 to 24 months thereafter.

According to the regulation of the European Commission addressing the portability of online audiovisual content services
adopted in June 2017 and effective in April 2018, commercial providers of online content services (including OTT service providers)
are required to enable subscribers who are temporarily present in any Member State with access and use of online content services
in substantially the same manner as in the Member State of residence.

Other European Level Regulation

In addition to the industry-specific regimes discussed above, our operating companies must comply with both specific and
general legislation concerning, among other matters, data retention and electronic commerce. In December 2015, the E.U. approved
the E.U. General Data Protection Regulation (GDPR) with respect to data protection and retention. The GDPR enhanced existing
legal requirements through several new rules and includes stiff penalties for organizations that fail to comply. The GDPR will be
directly applicable in all Member States commencing in 2018. In addition, following the adoption of the GDPR, the European
Commission published on January 11, 2017 a proposal for an e-Privacy regulation, replacing the current e-Privacy Directive that
regulates privacy related issues in the electronic communications sector. The adoption of this proposal is not expected before June
2018.

Our operating companies are also subject to both national and European level regulations on competition and on consumer
protection, which are broadly harmonized at the E.U. level. For example, while our operating companies may offer their services
in bundled packages in European markets, they are sometimes not permitted to make a subscription to one service, such as cable
television, conditional upon a subscription to another service, such as telephony. They may also face restrictions on the degree to
which they may discount certain products included in the bundled packages.

The European Commission is imposing more mandatory requirements and encouraging voluntary solutions regarding energy
consumption of the telecommunications equipment we provide our customers. We have been participating in discussions and
studies regarding energy consumption with the European Commission and with experts working on their behalf. In addition, we
are working with suppliers of our digital set-top boxes to lower power consumption, as well as looking at possibilities through
software to lower the power consumption of the existing fleet of digital set-top boxes. We also worked with a large group of
companies to create a voluntary agreement on set-top box power consumption as an alternative to regulation, which has been

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formally recognized by the European Commission. Nevertheless, legislation in this area may be adopted that could adversely
affect the cost and/or the functionality of equipment we deploy to customers.

Pursuant to an E.U. Regulation on standby power (the Standby Regulation), many devices are required to have either a low
power standby mode or off mode, unless it is inappropriate to have either such mode on the device. Furthermore, the Networked
Standby amendment to the Standby Regulation, effective as of January 1, 2015, regulates, among others, the maximum power
consumption of networked consumer equipment while in the so-called “Networked Standby” mode. As a result, all of the devices
we purchase and/or develop, including Horizon TV set-top boxes, Connect Boxes and certain other equipment, operate under the
power management requirements of the Standby Regulation.

As part of the E.U.’s Radio Spectrum Policy Program, spectrum made available through the switch off of analog television
has been approved for mobile broadband use beginning January 1, 2013. This spectrum, known as the “digital dividend”, is in the
700 - 862 MHz band. The terms under which this spectrum will become available will vary among the European countries in
which we operate. Certain uses of this spectrum may interfere with services carried on our cable networks. If this occurs, we may
need to: (1) avoid using certain frequencies on our cable networks for certain or all of our services, (2) make some changes to our
networks, or (3) change the equipment that we deploy. In approving mobile broadband, however, the Radio Spectrum Policy
Program states that the new mobile services must co-exist with existing services, such as cable and DTT, to avoid harmful
interference. As a result, we are in ongoing discussions with relevant Member States and the European Commission to be included
in LTE mobile trials in order to develop mitigation techniques and to engage NRAs to launch regulatory dialog with equipment
manufacturers and mobile operators to develop co-existing networks. We have also requested Member States and the European
Commission to prepare comprehensive national impact assessments when spectrum conditions are changed to ensure that the costs
to prevent interference between the various services are balanced.

United Kingdom

In the U.K., the Regulatory Framework is implemented through (1) the Communications Act 2003, which regulates all forms
of communications technology, whether used for telecommunications or broadcasting, and (2) the Wireless Telegraphy Act 2006,
which regulates radio communications in the U.K. (including spectrum, licensing arrangements, usage conditions and charges,
license bidding and trading and enforcement and penalties). In addition, the Privacy and Electronic Communications Regulations
2003, as amended, implemented E.U. Directive 2002/58, which regulates the processing of personal data and the protection of
privacy in the electronic communications sector.

Telecommunications companies in the U.K., including Virgin Media, are also subject to regulation under the U.K. Broadcasting
Acts 1990 and 1996 and other U.K. statutes and subordinate legislation, including the Competition Act 1998, the Enterprise Act
2002 and the Enterprise and Regulatory Reform Act 2013. The U.K. Office of Communications (Ofcom) regulates both linear
and on-demand programming, with regulatory requirements derived from the AVMS.

Ofcom is the key regulatory authority for the communications sector in which Virgin Media operates in the U.K. It is responsible
for furthering the interests of citizens in relation to communications matters and furthering the interests of consumers in relevant
markets where appropriate by promoting competition. From April 1, 2017, Ofcom also assumed the responsibilities of regulating
the BBC, a role previously undertaken by the BBC Trust. The U.K. Competition and Markets Authority has jurisdiction with
respect to competition matters.

Broadband Expansion. At the end of 2017, super-fast broadband was available to almost 95% of the U.K. population. The

U.K. government plans to reach 98% of the population by 2020. To stimulate private investment in this endeavor, the U.K.
government is using money from the publicly funded BBC license fee, under-spend from the Analogue TV Switch-Off Project
and other sources of public investment. The state aid measure permitting this subsidy was renewed (and amended) in 2016 and is
expected, through amendments to its “underspend” provisions, to result in up to an additional 1% to 2% super-fast coverage.

The U.K. government supports the market rollout of full fiber and 5G services. Such support includes public funding for the
creation of a match-funded “full fiber deployment” fund, business rate relief for the deployment of new full fiber networks and
public funding for a strategic program of full fiber and 5G trials. As a result, the U.K. government’s November 2017 budget
includes £190.0 million ($257.0 million) for the first and second phases of its local full fiber deployment fund and £160.0 million
($216.4 million) for the first phase of the 5G trials. The Telecommunications Infrastructure Bill, which establishes the funding for
these objectives. is expected to receive Royal Assent in early 2018. This will give effect to the U.K. government’s plans to provide
full business rate relief for new fiber infrastructure built for the 2017-2022 rating period. Secondary legislation is expected to
follow, which will define what network assets are in scope. The U.K. government also announced in November 2017, a Telecoms
Market Review to explore whether the conditions for investment in fiber are optimal in the U.K. and what policy changes it should
consider to encourage greater investment in new digital infrastructure. The results of the review are expected in mid-2018.

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In November 2015, the U.K. government announced that everyone will, by 2020, have a legal right to request a broadband
connection of at least 10 Mbps regardless of where they live. The government intends to achieve this by introducing a broadband
Universal Service Obligation (USO). The USO is aimed, in particular, at addressing the final 5% of the population in the U.K.
without access to a broadband connection of a reasonable speed. The U.K. government introduced legislation in July 2017, to
facilitate the introduction of a broadband USO in conjunction with the effect of the relevant provisions of the Digital Economy
Act 2017. At the same time, BT made an alternative offer to invest approximately £600.0 million ($811.5 million) to provide
ubiquitous minimum broadband speeds of 10 Mbps by 2022. The U.K. government formally rejected BT’s proposal in December
2017, favoring the imposition of a regulated USO. The U.K. government is expected to set out the design for the USO in secondary
legislation in early 2018, with Ofcom’s implementation expected to take two years from that point.

Television and VoD Services. In the U.K., Virgin Media is required to hold individual licenses under the Broadcasting Acts
1990 and 1996 for any television channels (including barker channels and any electronic programme guides), which Virgin Media
owns or operates and for the provision of certain other services on its cable television platform, such as electronic program guides.
These television licensable content service (TLCS) licenses are granted and administered by Ofcom. Under these licenses, each
covered service must comply with a number of Ofcom codes, including the Broadcasting Code, and with all directions issued by
Ofcom. Breach of any of the terms of a TLCS license may result in the imposition of fines on the license holder and, ultimately,
the license being revoked.

As a provider of an on-demand program service (ODPS), Virgin Media must comply with a number of statutory obligations
in relation to “editorial content” and notify Ofcom of its intention to provide an ODPS. Failure to notify Ofcom or comply with
the relevant statutory obligations may result in the imposition of fines or, ultimately, the prohibition on providing an ODPS.

Strategic Review of Digital Communications. In March 2015, Ofcom launched a strategic review of U.K. digital
communications. A discussion document was published in July 2015, inviting stakeholder comment and input. Key focus areas
of Ofcom were: investment and innovation, delivering widespread availability of services; sustainable competition; empowering
consumers; and, targeted regulation where necessary and deregulation elsewhere. Virgin Media responded to the discussion
document emphasizing the importance of investment for competition, innovation and consumer interest. A key area of consideration
was the future regulatory treatment of BT, in particular whether BT should be fully (structurally) separated, with the Openreach
network division becoming a separate, independent company. Openreach is the operator of the backbone of Britain’s broadband
internet network.

An “emerging thinking” document was published on February 25, 2016, setting out conclusions and Ofcom’s proposed policy
position relating to a number of aspects of the U.K. regulatory regime. Key conclusions included: no structural separation of BT
at the present time; an intention to improve quality of service across all providers; a requirement for BT to enhance its wholesale
duct and pole access product; and an intention to advance further consumer protection measures. These will be implemented
through forthcoming market reviews and other specific activity.

On November 29, 2016, Ofcom issued an update on its plans to reform Openreach, stating that it intended to proceed with a
formal notification to the European Commission to require the legal separation of Openreach from BT. In March 2017, Ofcom
announced that it had reached a voluntary agreement with BT for the legal separation of Openreach. This means that Openreach
will become a distinct company with its own staff and management, together with its own strategy and budget and a legal purpose
to serve all of its customers equally. Assets will be controlled by Openreach, including the physical access network. Under the
terms of the voluntary agreement, Openreach will be obliged to consult formally with customers, such as Sky, TalkTalk and
Vodafone on large-scale investments. As a result of reaching a voluntary agreement, Ofcom will no longer need to impose these
changes through regulation or seek the approval of the European Commission. To reach the agreement, the existing Crown Guarantee
has been maintained in respect of the BT pension scheme. In addition, Ofcom released BT from its previous undertakings once
its new commitments are fully in place and setting out how compliance with the new arrangements will be measured.

Regulation of Broadband Markets. In 2017, Ofcom commenced its next triennial review of the Fixed Access markets, including
the Wholesale Local Access market (incorporating physical or passive network access via methods such as LLU and duct access)
and the Wholesale Broadband Access market (virtual or active network access via methods such as provision of wholesale managed
service products). A key area of focus is the regulation of BT’s FTTx based wholesale products (specifically the pricing thereof)
and improving the existing physical infrastructure access (allowing third parties access to BT’s duct and pole estate). This followed
Ofcom’s issuance on December 6, 2016, of a consultation on making the physical infrastructure access remedy more effective.
Ofcom is expected to publish its final statement on its Fixed Access markets review in early 2018, with new measures taking effect
on April 1, 2018

Ofcom Review of Business Connectivity Markets. Ofcom concluded its latest review of the U.K. business connectivity markets
(leased lines and dedicated business connections, among others) in the spring of 2016. Ofcom found BT held Significant Market
Power in certain markets and proposed consequential regulatory remedies. These remedies included an obligation on BT to provide

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access to its dark fiber. BT, CityFibre and TalkTalk appealed Ofcom’s decision, with Virgin Media intervening. In July 2017, the
Competition Appeal Tribunal found against Ofcom on all grounds and remitted the matter back to Ofcom for reconsideration. In
response, Ofcom published the following on November 23, 2017: (1) a statement introducing a new market for business circuits
at 1 Gbps and below, with "standard" remedies (including charge controls) imposed on BT; and (2) a consultation on the introduction
of a dark fiber remedy in this new market. Ofcom’s consultation period closed on December 29, 2017, and a statement by Ofcom
is expected early in 2018.

Mobile Service. As an MVNO, Virgin Media is subject to E.U. regulations relating to retail prices for roaming services. These
regulations: set limits on certain wholesale and retail tariffs for international mobile voice roaming, SMS tariffs and data roaming
within the E.U.; provide for greater levels of transparency of retail pricing information; impose measures to guard against bill
shock in respect of data roaming; and set maximum roaming rates within the E.U. Effective June 2017, the E.U. abolished roaming
tariffs.

Mobile termination charges applied by mobile network operators are regulated by Ofcom under a Significant Market Power
charge control condition. Under Virgin Media’s MVNO agreement, these changes in mobile termination charges are passed on to
Virgin Media. Ofcom has set mobile termination charges for the period of 2015-2018, with rates reducing to approximately half
of their starting levels by the end of this period. As a result, Virgin Media has experienced a reduction in revenue from such charges,
although with some off-setting reductions in cost.

Fixed voice termination. Virgin Media has been designated as a provider with Significant Market Power on fixed voice
termination. As a result, the rates it charges other providers for termination on its network are subject to regulation. This requires,
among other things, the provision of termination on fair and reasonable terms, conditions and charges, which must be no higher
than BT’s regulated charges, unless certain conditions are met. Ofcom commenced a review of mobile termination charges in June
2017 and has proposed that, in the U.K., mobile call termination remain regulated, with the majority of providers subject to at
least some obligations. Ofcom is expected to publish its final statement in the first quarter of 2018.

Germany

Germany has incorporated the E.U. laws into national laws, although under the German legal system competency is split
between the Federal State (telecommunication law) and the German federal states (Bundesländer) (media law). The German
Telecommunications Act broadly implemented the Regulatory Framework and covers the distribution of any signal by
telecommunications networks encompassing television signals, internet data and telephony. The German Federal Network Agency
(Bundesnetzagentur) is responsible inter alia for the regulation of the German telecommunications market. The Federal Cartel
Office (the FCO), the national competition authority (Bundeskartellamt), plays an important role with respect to infrastructure
and media regulation. The FCO has powers to address competition issues in all markets, although in some cases, competition
issues will be addressed by the German Federal Network Agency.

Regulation of the media falls within the authority of the German federal states (Bundesländer). The media laws of all 16
federal states have been partially harmonized by the State Broadcasting Treaty (Rundfunkstaatsvertrag). The State Broadcasting
Treaty establishes the main framework of the German regulation of broadcast. Nearly every German state has established its own
independent regulatory body, the state media authority (Landesmedienanstalt) for the regulation of the private broadcasting sector.
The state media authorities are primarily responsible for licensing and supervision of commercial broadcasters and the allocation
of transmission capacities for radio and television channels. They also have authority with respect to the regulation of channel
carriage fees, conditional access systems, interfaces, electronic programming guides, the bundling of programs and price regulation.

The allocation and use of analog cable transmission capacities for both radio and television channels in Germany is governed
by the must carry rules of the respective German federal states. The allocation of digital transmission capacities for digital television
and radio channels is primarily governed by the must carry rules of the State Broadcasting Treaty. Unitymedia has ceased the
distribution of analog television channels in June 2017, but still continues to carry analog radio channels. Therefore, the media
law in the states of Baden-Württemberg, North Rhine-Westphalia and Hesse, where Unitymedia operates, requires Unitymedia to
carry several analog radio channels, until Unitymedia decides to cease distribution of analog radio channels.

The operation of conditional access systems for television services is governed by both the State Broadcasting Treaty and the
German Telecommunications Act. Generally, operators must not unfairly obstruct or discriminate against broadcasters and other
content providers through conditional access systems.

Unitymedia has been declared an operator with Significant Market Power on the market for call termination on an individual
fixed public telephone network. Since November 2013, reciprocal termination rates for exchanging calls via Unitymedia’s IP-
interface have been imposed, which results in Unitymedia, like every other telecommunications provider in Germany, charging
the interconnection rate of the incumbent telecommunications operator, Deutsche Telekom, when receiving traffic via the IP-

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interface. The level of termination rates applicable to Unitymedia with respect to calls terminating on its IP-interface is currently
set at €0.1 cents/minute, which rate will expire on December 31, 2018.

Belgium

Belgium has broadly transposed the Regulatory Framework into law. According to the electronic communications law of
June 13, 2005, the Belgisch Instituut voor Post en Telecommunicate (the BIPT), the Belgian NRA, should perform a market
analysis to determine which, if any, operator or service provider has Significant Market Power. In addition, the Federal Parliament
prepared legislation to transpose the 2009 revisions to the Regulatory Framework, which became effective as of August 4, 2012.

Telenet has been declared an operator with Significant Market Power on the market for call termination on an individual fixed
public telephone network. Since April 1, 2012, reciprocal termination rates have been imposed, which results in Telenet charging
the interconnection rate of the incumbent telecommunications operator, Proximus. Following a court annulment of a final decision
on wholesale tariffs issued by BIPT in 2016, BIPT issued a new draft decision in 2017 that proposes a wholesale tariff of €0.103
cents per minute, subject to public comment.

Although no determination has been made on whether Telenet, as an MVNO, has Significant Market Power on the market
for call termination on individual mobile networks, its rates have been affected by rate limitations implemented by BIPT. As of
January 1, 2013, mobile termination rates have been set by BIPT at €1.08 cents per minute, and to date, 2015 rates have not been
set. In May 2017, BIPT published its latest decision on the relevant market for “call termination on individual mobile networks”.
Telenet, as an mobile network operator, has also been designated in the draft decision as having Significant Market Power by
BIPT. In the draft decision, BIPT adopts a bottom-up long run incremental cost model to calculate tariffs for call termination on
individual mobile networks, resulting in a nominal value of €0.99 cents per minute as of July 1, 2017.

In 2011, BIPT and the regional regulators for the media sectors (together, the Belgium Regulatory Authorities) found Telenet
to have significant market power in the broadcasting market (the 2011 Decision). The 2011 Decision imposed on Telenet an
obligation to provide third-party operators, at specified tariff rates, with (1) a resale offer of an analog television package, (2)
access to digital television platforms and (3) a resale offer of broadband internet access in combination with the digital television
access obligation. We refer to the tariff portion of the 2011 Decision as the “Retail Minus Rules”. On November 12, 2014, the
2011 Decision was upheld by the Court of Appeal, and the Court of Appeal also accepted Proximus’ claim that Proximus should
be allowed access the digital television platforms of other operators, including Telenet, for the purpose of reselling bundles of
digital video and broadband internet services. On November 30, 2015, Telenet filed an appeal of the Court of Appeal’s ruling with
the Belgian Supreme Court. As required by the 2011 Decision, Telenet has implemented the access obligations at the rates specified
by the Retail Minus Rules, and on March 1, 2016, Orange Belgium launched a commercial offer combining a cable TV package
with broadband internet access for certain of their mobile customers. On October 2, 2017, in a separate action, the Court of Appeal
annulled the Retail Minus Rules, but maintained the effects of the Retail Minus Rules until April 30, 2018. Accordingly, as of May
1, 2018, the tariff rates for Telenet’s resale obligations will be unregulated until a new decision from the Belgium Regulatory
Authorities is adopted.

On July 7, 2017, the Belgium Regulatory Authorities published a draft market review decision (the 2017 Draft Decision)
that, once adopted, will replace the 2011 Decision. The 2017 Draft Decision proposed a finding of significant market power of
Telenet in the wholesale broadband market. Proposed obligations include (1) providing third-party operators with access to the
digital television platform (including basic digital video and analog video) and (2) making available to third-party operators a
bitstream offer of broadband internet access (including fixed voice as an option). The 2017 Draft Decision is expected to be
submitted to the European Commission in the first quarter of 2018. Telenet considers the 2017 Draft Decision to be inconsistent
with the principle of technology-neutral regulation and the European Single Market Strategy to stimulate further investments in
broadband networks.

The 2011 Decision and the 2017 Draft Decision aim to, and in their application, may strengthen Telenet’s competitors by
granting them resale access to Telenet’s network to offer competing products and services notwithstanding Telenet’s substantial
historical financial outlays in developing the infrastructure. In addition, any resale access granted to competitors could (1) limit
the bandwidth available to Telenet to provide new or expanded products and services to the customers served by its network and
(2) adversely impact Telenet’s ability to maintain or increase its revenue and cash flows. The extent of any such adverse impacts
ultimately will be dependent on the extent that competitors take advantage of the resale access afforded to Telenet’s network, the
rates that Telenet receives for such access and other competitive factors or market developments.

Switzerland

Switzerland has a regulatory system that partially reflects the principles of the E.U., but otherwise is distinct from the European
regulatory system of telecommunications. The Telecommunications Act (Fernmeldegesetz) regulates, in general, the transmission

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of information, including the transmission of radio and television signals. Most aspects of the distribution of radio and television,
however, are regulated under the Radio and Television Act (Bundesgesetz über Radio und Fernsehen). In addition, the Competition
Act, the Data Protection Act and the Act on the Surveillance of Post and Telecommunications are potentially relevant to our
business. With respect to energy consumption of electronic home devices, the Energy Act and the Energy Ordinance are applicable
to set-top boxes.

Under the Telecommunications Act, any provider of telecommunication services needs to register with the Federal Office of
Communications. Dominant providers have to grant access to third parties, including LLU access; however, it is restricted to the
copper wire network of the incumbent, Swisscom. Therefore, such unbundling obligations do not apply to our business in
Switzerland and other cable operators. Also, any dominant provider has to grant access to its ducts, subject to sufficient capacity
being available in the relevant duct. At this time, only Swisscom has been determined to be dominant in this regard. Dominant
operators are obliged to provide interconnection and all providers of services forming part of the universal service in Switzerland
have to ensure interoperability of services.

In regards to call termination as part of interconnection agreements, Swisscom as market dominant provider, must offer these
services at cost-oriented prices and disclose the conditions and prices for their individual access services. In interconnection
agreements with Swisscom, reciprocal termination rates are imposed.

In September 2017, a draft of the revised Telecommunications Act was published by the Federal Council. They plan to introduce
measures to allow for easier access to the incumbent’s network, better consumer and youth protection measures (such as decreasing
roaming fees, measures to prevent spoofing) and a change to the regulatory regime giving the Federal Communications Commission
partial ex officio rights to impose obligations on market dominant providers. In terms of net neutrality, the draft foresees more
transparency for the customer—he/she must be informed of traffic if treated unequally. The proposal is now subject to parliamentary
debates and will not be legally binding prior to 2020.

Under the Radio and Television Act and the corresponding ordinance, cable network operators are obliged to distribute certain
programs that contribute in a particular manner to media diversity. The Federal Government and the Federal Office of
Communications can select up to 25 programs that have to be distributed without the cable operator being entitled to compensation.

Public Service broadcasters in Switzerland (SRG and regional channels) are currently funded through both public funds (TV
license fee called BILLAG) and commercial advertising revenue. This model is currently being challenged by a group that started
an initiative to abolish the license fee. In March 2018, the Swiss population will vote on this matter. If the initiative gets accepted,
this would change the Swiss TV landscape significantly.

In September 2016, the Intelligence Agencies Act was approved by the Swiss population and became effective in September
2017. For Telecommunications service providers, the Intelligence Agencies Act set forth new obligations regulating cable traffic.

The revised version of the Data Protection Act foresees more transparency regarding the processing of data. One example is
by reinforcing the information duties when processing personal data. Furthermore, the new version follows the developments in
the E.U. This revised version was subject to public consultation until April 2017. The Federal Council published the draft in
September 2017. It is now up for discussion in parliament.

The Netherlands

The Netherlands’ electronic communications law broadly implements the Regulatory Framework. Pursuant to the electronic
communications law, the Autoriteit Consument & Markt (ACM), the Netherlands NRA, performed a market analysis to determine
which, if any, operator or service provider has Significant Market Power. In December 2011, ACM completed its analysis of the
television market and concluded that there were no grounds for regulation of that market. As a result, no new regulations relating
to the television market may be proposed without a new analysis. Similar to our other operations, VodafoneZiggo JV is subject to
must carry obligations, including a number of regional and local broadcasting channels, as well as public broadcasting channels.

On August 5, 2013, ACM published a market analysis decision on call termination, which combines both the fixed termination
market and the mobile termination market. Following various administrative actions, which resulted in the Dutch Supreme
Administrative Court upholding the ACM decision in July 2017, a new ACM market analysis decision on call termination became
effective for the period 2017-2019. The new decision has been appealed by various operators, including Ziggo, with a hearing
scheduled for March 22, 2018.

In July 2015, the Dutch incumbent telecommunications operator KPN filed an appeal against the European Commission
regarding its decision to approve the acquisition of Ziggo, which we completed in November 2014. In October 2017, the court,

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upheld the appeal; thereby annulling the European Commission’s clearance of the Ziggo acquisition. We are currently in the process
of re-notifying this merger and expect to finish this process in 2018. The annulment of the European Commission’s decision does
not have any effect on the VodafoneZiggo JV transaction and there is no impact on the day-to-day operations of the VodafoneZiggo
JV.

On October 31, 2014, ACM published a draft of market analysis decision on LLU, which became final with certain revisions
in December 2015. ACM concluded that KPN is dominant on the wholesale LLU market and imposed obligations on KPN. ACM
concluded that Ziggo is not part of the relevant wholesale market. As a result, ACM imposed obligations on KPN only. ACM has
indicated that as a result of the formation of the VodafoneZiggo JV, it started working on a new analysis of the LLU market. ACM
intends to publish a draft decision for national consultation in the first quarter of 2018.

Employees

As of December 31, 2017, we, including our consolidated subsidiaries, had an aggregate of approximately 26,700 full-time
equivalent employees, certain of whom belong to organized unions and works councils, and includes contractors and temporary
employees. We believe that our employee relations are good.

Financial Information About Geographic Areas

Financial information related to the geographic areas in which we do business appears in note18 to our consolidated financial

statements included in Part II of this Annual Report on Form 10-K.

Available Information

All our filings with the SEC, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, as well as amendments to such filings are available on our internet website free of charge generally within
24 hours after we file such material with the SEC. Our website address is www.libertyglobal.com. The information on our website
is not part of this Annual Report and is not incorporated by reference herein.

Item 1A. RISK FACTORS

In addition to the other information contained in this Annual Report, you should consider the following risk factors in evaluating

our results of operations, financial condition, business and operations or an investment in the shares of our company.

The risk factors described in this section have been separated into four groups:

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risks that relate to the competition we face and the technology used in our businesses;

risks that relate to our operating in overseas markets and being subject to foreign regulation;

risks that relate to certain financial matters; and

other risks, including risks that, among other things, relate to the obstacles that may be faced by anyone who may seek
to acquire us.

Although we describe below and elsewhere in this Annual Report the risks we consider to be the most material, there may be
other unknown or unpredictable economic, business, competitive, regulatory or other factors that also 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, individually or in combination, were to occur, our businesses, prospects, financial

condition, results of operations and/or cash flows could be materially adversely affected.

Factors Relating to Competition and Technology

We operate in increasingly competitive markets, and there is a risk that we will not be able to effectively compete with other
service providers. The markets for cable television, broadband internet, telephony and mobile services are highly competitive. In
the provision of video services, we face competition from FTA and DTT broadcasters, video provided via satellite platforms,
networks using DSL, VDSL or vectoring technology, multi-channel multipoint distribution system operators, FTTx networks,
OTT video content aggregators, and, in some countries where parts of our systems are overbuilt, cable networks, among others.

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Our operating businesses are facing increasing competition from video services provided by, or over the networks of, incumbent
telecommunications operators and other service providers. As the availability and speed of broadband internet increases, we also
face competition from OTT video content providers utilizing our or our competitors’ high-speed internet connections. In the
provision of telephony and broadband internet services, we are experiencing increasing competition from the incumbent
telecommunications operators and other service providers in each country in which we operate, as well as mobile providers of
voice and data. The incumbent telecommunications operators typically dominate the market for these services and have the
advantage of nationwide networks and greater resources than we have to devote to the provision of these services. Many of the
incumbent operators offer double-play, triple-play and quadruple-play bundles of services. In many countries, we also compete
with other operators using LLU to provide these services, other facilities-based operators and wireless providers. Developments
in the DSL and other technology used by the incumbent telecommunications operators and alternative providers have improved
the attractiveness of our competitors’ products and services and strengthened their competitive position. Developments in wireless
technologies, such as LTE and WiFi, are creating additional competitive challenges.

In some of our markets, national and local government agencies may seek to become involved, either directly or indirectly,
in the establishment of FTTx networks, DTT systems or other communications systems. We intend to pursue available options to
restrict such involvement or to ensure that such involvement is on commercially reasonable terms. There can be no assurance,
however, that we will be successful in these pursuits. As a result, we may face competition from entities not requiring a normal
commercial return on their investments. In addition, we may face more vigorous competition than would have been the case if
there were no government involvement.

We expect the level and intensity of competition to continue to increase from both existing competitors and new market
entrants as a result of changes in the regulatory framework of the industries in which we operate, advances in technology, the
influx of new market entrants and strategic alliances and cooperative relationships among industry participants. Increased
competition could result in increased customer churn, reductions of customer acquisition rates for some products and services and
significant price and promotional competition in our markets. In combination with difficult economic environments, these
competitive pressures could adversely impact our ability to increase or, in certain cases, maintain the revenue, average revenue
per RGU or mobile subscriber, as applicable (ARPU), RGUs, mobile subscribers, adjusted operating income before depreciation
and amortization (Adjusted OIBDA), Adjusted OIBDA margins and liquidity of our operating segments.

Changes in technology may limit the competitiveness of and demand for our services. Technology in the video,
telecommunications and data services industries is changing rapidly, including advances in current technologies and the emergence
of new technologies. New technologies, products and services may impact consumer behavior and therefore demand for our
products and services. The ability to anticipate changes in technology and consumer tastes and to develop and introduce new and
enhanced products and services on a timely basis will affect our ability to continue to grow, increase our revenue and number of
subscribers and remain competitive. New products and services, once marketed, may not meet consumer expectations or demand,
can be subject to delays in development and may fail to operate as intended. A lack of market acceptance of new products and
services that we may offer, or the development of significant competitive products or services by others, could have a material
adverse impact on our revenue and Adjusted OIBDA.

Our significant property and equipment additions, namely in connection with our Network Extensions, may not generate
a positive return. Significant additions to our property and equipment are, or in the future may be, required to add customers to
our networks and to upgrade or expand our broadband communications networks and upgrade customer premises equipment to
enhance our service offerings and improve the customer experience. Additions to our property and equipment, which are currently
underway, including in connection with our Network Extensions, require significant capital expenditures for equipment and
associated labor costs to build out and/or upgrade our networks as well as for related customer premises equipment. Additionally,
significant competition, the introduction of new technologies, the expansion of existing technologies, such as FTTx and advanced
DSL technologies, the impact of natural disasters, or adverse regulatory developments could cause us to decide to undertake
previously unplanned builds or upgrades of our networks and customer premises equipment.

No assurance can be given that any rebuilds, upgrades or extensions of our network (including the Network Extensions) will
increase penetration rates, increase average monthly subscription revenue per average cable RGU or mobile subscriber, as
applicable, or otherwise generate positive returns as anticipated, or that we will have adequate capital available to finance such
rebuilds, upgrades or extensions. Additionally, costs related to our Network Extensions and property and equipment additions
could end up being greater than originally anticipated or planned. If this is the case, we may require additional financing sooner
than anticipated or we may have to delay or abandon some or all of our development and expansion plans or otherwise forego
market opportunities. Additional financing may not be available on favorable terms, if at all, and our ability to incur additional
debt will be limited by our debt agreements. If we are unable to, or elect not to, pay for costs associated with adding new customers,
expanding, extending or upgrading our networks or making our other planned or unplanned additions to our property and equipment,
or are delayed in making such investments, our growth could be limited and our competitive position could be harmed.

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We depend almost exclusively on our relationships with third-party programming providers and broadcasters for
programming content, and a failure to acquire a wide selection of popular programming on acceptable terms could adversely
affect our business. The success of our video subscription business depends, in large part, on our ability to provide a wide selection
of popular programming to our subscribers. We generally do not produce our own content and we depend on our agreements,
relationships and cooperation with public and private broadcasters and collective rights associations to obtain such content. If we
fail to obtain a diverse array of popular programming for our pay television services, including a sufficient selection of HD channels
as well as non-linear content (such as a selection of attractive VoD content and rights for ancillary services such as DVR and catch
up or 'Replay' services), on satisfactory terms, we may not be able to offer a compelling video product to our customers at a price
they are willing to pay. Additionally, we are frequently negotiating and renegotiating programming agreements and our annual
costs for programming can vary. There can be no assurance that we will be able to renegotiate or renew the terms of our programming
agreements on acceptable terms or at all. We expect that programming and copyright costs will continue to rise in future periods
as a result of (1) higher costs associated with the expansion of our digital video content, including rights associated with ancillary
product offerings and rights that provide for the broadcast of live sporting events, (2) rate increases and (3) growth in the number
of our enhanced video subscribers.

If we are unable to obtain or retain attractively priced competitive content, demand for our existing and future television
services could decrease, thereby limiting our ability to attract new customers, maintain existing customers and/or migrate customers
from lower tier programming to higher tier programming, thereby inhibiting our ability to execute our business plans. Furthermore,
we may be placed at a competitive disadvantage if certain of our competitors obtain exclusive programming rights, particularly
with respect to popular sports and movie programming, and as certain entrants in the OTT market, for example Netflix, Amazon
and even Disney, increasingly produce their own exclusive content.

We depend on third-party suppliers and licensors to supply necessary equipment, software and certain services required
for our businesses. We rely on third-party vendors for the equipment, software and services that we require in order to provide
services to our customers. Our suppliers often conduct business worldwide and their ability to meet our needs is subject to various
risks, including political and economic instability, natural calamities, interruptions in transportation systems, terrorism and labor
issues. As a result, we may not be able to obtain the equipment, software and services required for our businesses on a timely basis
or on satisfactory terms. Any shortfall in customer premises equipment could lead to delays in completing extensions to our
networks and in connecting customers to our services and, accordingly, could adversely impact our ability to maintain or increase
our RGUs, revenue and cash flows. Also, if demand exceeds the suppliers’ and licensors’ capacity or if they experience financial
difficulties, the ability of our businesses to provide some services may be materially adversely affected, which in turn could affect
our businesses’ ability to attract and retain customers. Although we actively monitor the creditworthiness of our key third-party
suppliers and licensors, the financial failure of a key third-party supplier or licensor could disrupt our operations and have an
adverse impact on our revenue and cash flows. We rely upon intellectual property that is owned or licensed by us to use various
technologies, conduct our operations and sell our products and services. Legal challenges could be made against our use of our
or our licensed intellectual property rights (such as trademarks, patents and trade secrets) and we may be required to enter into
licensing arrangements on unfavorable terms, incur monetary damages or be enjoined from use of the intellectual property rights
in question.

Certain of our businesses that offer mobile telephony and data services rely on the radio access networks of third-party
wireless network providers to carry our mobile communications traffic. Our services to mobile customers in many jurisdictions
in which we operate rely on the use of MVNO arrangements in which we utilize the radio access networks of third-party wireless
network providers to carry our mobile communications traffic. If any of our MVNO arrangements are terminated, or if the respective
third-party wireless network provider fails to provide the services required under an MVNO arrangement, or if a third-party wireless
network provider fails to deploy and maintain its network, and we are unable to find a replacement network operator on a timely
and commercially reasonable basis or at all, we could be prevented from continuing the mobile services relying on such MVNO
arrangement. Additionally, as our MVNO arrangements come to term, we may not be able to renegotiate renewal or replacement
MVNO arrangements on the same or more favorable terms.

Failure in our technology or telecommunications systems or leakage of sensitive customer data could significantly disrupt
our operations, which could reduce our customer base and result in lost revenue. Our success depends, in part, on the continued
and uninterrupted performance of our information technology and network systems as well as our customer service centers. The
hardware supporting a large number of critical systems for our cable network in a particular country or geographic region is housed
in a relatively small number of locations. Our systems and equipment (including our routers and set-top boxes) are vulnerable to
damage or security breach from a variety of sources, including telecommunications failures, power loss, malicious human acts,
security flaws, and natural disasters. Moreover, despite security measures, our servers, systems and equipment are potentially
vulnerable to physical or electronic break-ins, computer viruses, worms, phishing attacks and similar disruptive actions.
Furthermore, our operating activities could be subject to risks caused by misappropriation, misuse, leakage, falsification or
accidental release or loss of information maintained in our information technology systems and networks and those of our third-

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party vendors, including customer, personnel and vendor data. As a result of the increasing awareness concerning the importance
of safeguarding personal information, the potential misuse of such information and legislation that has been adopted or is being
considered across all of our markets regarding the protection, privacy and security of personal information, information-related
risks are increasing, particularly for businesses like ours that handle a large amount of personal customer data. Failure to comply
with these data protection laws may result in, among other consequences, fines.

Despite the precautions we have taken, unanticipated problems affecting our systems could cause failures in our information
technology systems or disruption in the transmission of signals over our networks or similar problems. Any disruptive situation
that causes loss, misappropriation, misuse or leakage of data could damage our reputation and the credibility of our operations.
Further, sustained or repeated system failures that interrupt our ability to provide service to our customers or otherwise meet our
business obligations in a timely manner could adversely affect our reputation and result in a loss of customers and an adverse
impact on revenue.

The “Virgin” brand is used by our subsidiary Virgin Media under licenses from Virgin Enterprises Limited and is not
under the control of Virgin Media. The activities of the group of companies utilizing the “Virgin” brand and other licensees
could have a material adverse effect on the goodwill of customers towards Virgin Media as a licensee and the licenses from
Virgin Enterprises Limited can be terminated in certain circumstances. The “Virgin” brand is integral to Virgin Media’s corporate
identity. Virgin Media is reliant on the general goodwill of consumers towards the Virgin brand. Consequently, adverse publicity
in relation to the group of companies utilizing the “Virgin” brand or its principals, particularly Sir Richard Branson, who is closely
associated with the brand, or in relation to another licensee of the “Virgin” name and logo (particularly in the U.K., where Virgin
Media does business) could have a material adverse effect on Virgin Media’s reputation and on Virgin Media’s and our business
and results of operations. In addition, the licenses from Virgin Enterprises Limited can be terminated in certain circumstances.
For example, Virgin Enterprises Limited can terminate the licenses, after providing Virgin Media with an opportunity to cure, (1)
if Virgin Media or any of its affiliates commits persistent and material breaches or a flagrant and material breach of the licenses,
(2) if Virgin Enterprises Limited has reasonable grounds to believe that the use (or lack of use) of the licensed trademarks by
Virgin Media has been or is likely to result in a long-term and material diminution in the value of the “Virgin” brand, or (3) if a
third-party who is not (or one of whose directors is not) a “fit and proper person”, such as a legally disqualified director or a
bankrupt entity, acquires “control” of Liberty Global. Such a termination could have a material adverse effect on Virgin Media’s
and our business and results of operations.

Factors Relating to Overseas Operations and Foreign Regulation

Our businesses are conducted almost exclusively outside of the U.S., which gives rise to numerous operational risks. Our

businesses operate almost exclusively in countries outside the U.S. and are thereby subject to the following inherent risks:

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fluctuations in foreign currency exchange rates;

difficulties in staffing and managing international operations;

potentially adverse tax consequences;

export and import restrictions, custom duties, tariffs and other trade barriers;

increases in taxes and governmental fees;

economic and political instability; and

changes in foreign and domestic laws and policies that govern operations of foreign-based companies.

Operational risks that we may experience in certain countries include disruptions of services or loss of property or equipment
that are critical to overseas businesses due to expropriation, nationalization, war, insurrection, terrorism or general social or political
unrest.

We are exposed to foreign currency exchange rate risk. We are exposed to foreign currency exchange rate risk with respect
to our consolidated debt in situations where our debt is denominated in a currency other than the functional currency of the
operations whose cash flows support our ability to repay or refinance such debt. Although we generally seek to match the
denomination of our and our subsidiaries’ borrowings with the functional currency of the operations that are supporting the
respective borrowings, market conditions or other factors may cause us to enter into borrowing arrangements that are not
denominated in the functional currency of the underlying operations (unmatched debt). In these cases, our policy is to provide for
an economic hedge against foreign currency exchange rate movements by using derivative instruments to synthetically convert

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unmatched debt into the applicable underlying currency. At December 31, 2017, substantially all of our debt was either directly
or synthetically matched to the applicable functional currencies of the underlying operations.

In addition to the exposure that results from the mismatch of our borrowings and underlying functional currencies, we are
exposed to foreign currency risk to the extent that we enter into transactions denominated in currencies other than our or our
subsidiaries’ respective functional currencies (non-functional currency risk), such as equipment purchases, programming contracts,
notes payable and notes receivable (including intercompany amounts). Changes in exchange rates with respect to amounts recorded
in our consolidated balance sheets related to these items will result in unrealized (based upon period-end exchange rates) or realized
foreign currency transaction gains and losses upon settlement of the transactions. Moreover, to the extent that our revenue, costs
and expenses are denominated in currencies other than our respective functional currencies, we will experience fluctuations in
our revenue, costs and expenses solely as a result of changes in foreign currency exchange rates. In this regard, we currently expect
that during 2018, (1) less than 1% of our revenue, (2) approximately 2% to 4% of our direct costs of services and our other operating
and SG&A expenses (exclusive of share-based compensation expense) and (3) approximately 10% to 12% of our property and
equipment additions will be denominated in non-functional currencies, including amounts denominated in U.S. dollars, euros and
British pound sterling. Our expectations with respect to our non-functional currency transactions in 2018 may differ from actual
results. Generally, we will consider hedging non-functional currency risks when the risks arise from agreements with third parties
that involve the future payment or receipt of cash or other monetary items to the extent that we can reasonably predict the timing
and amount of such payments or receipts and the payments or receipts are not otherwise hedged. In this regard, we have entered
into foreign currency forward contracts to hedge certain of these risks. Certain non-functional currency risks related to our revenue,
direct costs of services and other operating and SG&A expenses and property and equipment additions were not hedged as of
December 31, 2017. For additional information concerning our foreign currency forward contracts, see note 7 to our consolidated
financial statements included in Part II of this Annual Report on Form 10-K.

We also are exposed to unfavorable and potentially volatile fluctuations of the U.S. dollar (our reporting currency) against
the currencies of our operating subsidiaries when their respective financial statements are translated into U.S. dollars for inclusion
in our consolidated financial statements. Cumulative translation adjustments are recorded in accumulated other comprehensive
earnings or loss as a separate component of equity. Any increase (decrease) in the value of the U.S. dollar against any foreign
currency that is the functional currency of one of our operating subsidiaries will cause us to experience unrealized foreign currency
translation losses (gains) with respect to amounts already invested in such foreign currencies. Accordingly, we may experience a
negative impact on our comprehensive earnings or loss and equity with respect to our holdings solely as a result of foreign currency
translation. Our primary exposure to foreign currency translation risk during the three months ended December 31, 2017 was to
the euro and British pound sterling as 44.8% and 39.5% of our reported revenue during the period was derived from subsidiaries
whose functional currencies are the euro and British pound sterling, respectively. In addition, our reported operating results are
impacted by changes in the exchange rates for the Swiss franc and other local currencies in Europe. We generally do not hedge
against the risk that we may incur non-cash losses upon the translation of the financial statements of our subsidiaries and affiliates
into U.S. dollars.

Our businesses are subject to risks of adverse regulation. Our businesses are subject to the unique regulatory regimes of the
countries in which they operate. Video distribution, broadband internet, telephony and mobile businesses are subject to licensing
or registration eligibility rules and regulations, which vary by country. The provision of electronic communications networks and
services requires our licensing from, or registration with, the appropriate regulatory authorities and, for telephony services, entrance
into interconnection arrangements with other phone companies, including the incumbent phone company. It is possible that countries
in which we operate may adopt laws and regulations regarding electronic commerce, which could dampen the growth of the
internet services being offered and developed by these businesses. In a number of countries, our ability to increase the prices we
charge for our cable television service or make changes to the programming packages we offer is limited by regulation or conditions
imposed by competition authorities or is subject to review by regulatory authorities or is subject to termination rights of customers.
In addition, regulatory authorities may grant new licenses to third parties and, in any event, in most of our markets new entry is
possible without a license, although there may be registration eligibility rules and regulations, resulting in greater competition in
territories where our businesses may already be active. More significantly, regulatory authorities may require us to grant third
parties access to our bandwidth, frequency capacity, facilities or services to distribute their own services or resell our services to
end customers. Consequently, our businesses must adapt their ownership and organizational structure as well as their pricing and
service offerings to satisfy the rules and regulations to which they are subject. A failure to comply with applicable rules and
regulations could result in penalties, restrictions on our business or loss of required licenses or other adverse conditions.

Adverse changes in rules and regulations could:

(cid:149)

impair our ability to use our bandwidth in ways that would generate maximum revenue and Adjusted OIBDA;

create a shortage of capacity on our networks, which could limit the types and variety of services we seek to provide our
customers;

I-39

(cid:149)

impact our ability to access spectrum for our mobile services;

strengthen our competitors by granting them access and lowering their costs to enter into our markets; and

have a significant adverse impact on our results of operations.

Businesses, including ours, that offer multiple services, such as video distribution as well as internet, telephony, and/or mobile
services, or that are vertically integrated and offer both video distribution and programming content, often face close regulatory
scrutiny from competition authorities in several countries in which they operate. This is particularly the case with respect to any
proposed business combinations, which will often require clearance from national competition authorities. The regulatory
authorities in several countries in which we do business have considered from time to time what access rights, if any, should be
afforded to third parties for use of existing cable television networks and have imposed access obligations in certain countries.
This has resulted, for example, in obligations with respect to call termination for our telephony business in Europe, video must
carry obligations in many markets in which we operate and video and broadband internet access obligations in Belgium.

When we acquire additional communications companies, these acquisitions may require the approval of governmental
authorities (either at country or, in the case of the E.U., European level), which can block, impose conditions on, or delay an
acquisition, thus hampering our opportunities for growth. In the event conditions are imposed and we fail to meet them in a timely
manner, the governmental authority may impose fines and, if in connection with a merger transaction, may require restorative
measures, such as mandatory disposition of assets or divestiture of operations.

New legislation may significantly alter the regulatory regime applicable to us, which could adversely affect our competitive
position and profitability, and we may become subject to more extensive regulation if we are deemed to possess significant
market power in any of the markets in which we operate. Significant changes to the existing regulatory regime applicable to the
provision of cable television, telephony, internet and mobile services have been and are still being introduced. For example, in the
E.U. a large element of regulation affecting our business derives from a number of Directives that are the basis of the regulatory
regime concerning many of the services we offer across the E.U. The various Directives require Member States to harmonize their
laws on communications and cover issues such as access, user rights, privacy and competition. These Directives are reviewed by
the E.U. from time to time and any changes to them could lead to substantial changes in the way in which our businesses are
regulated and to which we would have to adapt. In addition, we are subject to review by competition or national regulatory
authorities in certain countries concerning whether we exhibit Significant Market Power. A finding of Significant Market Power
can result in our company becoming subject to pricing, open access, unbundling and other requirements that could provide a more
favorable operating environment for existing and potential competitors.

The U.K. referendum advising for the exit of the U.K. from the E.U. could have a material adverse effect on our business,
financial condition, results of operations or liquidity. On June 23, 2016, the U.K. held a referendum in which voters approved,
on an advisory basis, an exit from the E.U., commonly referred to as “Brexit”. The terms of Brexit are subject to a negotiation
period that could take until March 2019. The potential impacts, if any, of the uncertainty relating to Brexit or the resulting terms
of the withdrawal of the U.K. from the E.U. on the free movement of goods, services, people and capital between the U.K. and
the E.U., customer behavior, economic conditions, interest rates, currency exchange rates, availability of capital or other matters
are unclear. Examples of the impact Brexit could have on our business, financial condition or results of operations include:

(cid:149)

changes in foreign currency exchange rates and disruptions in the capital markets. For example, a sustained period of
weakness in the British pound sterling or the euro could have an adverse impact on our liquidity, including our ability to
fund repurchases of our equity securities and other U.S. dollar-denominated liquidity requirements;

legal uncertainty and potentially divergent national laws and regulations as the U.K. determines which E.U. laws and
directives to replace or replicate, or where previously implemented by enactment of U.K. laws or regulations, to retain,
amend or repeal; and

various geopolitical forces may impact the global economy and our business, including, for example, other E.U. member
states (in particular those member states where we have operations) proposing referendums to, or electing to, exit the
E.U.

We cannot be certain that we will be successful in acquiring new businesses or integrating acquired businesses with our
existing operations, or that we will achieve the expected returns on our acquisitions. Historically, our businesses have grown,
in part, through selective acquisitions that enabled them to take advantage of existing networks, local service offerings and region-
specific management expertise. We expect to seek to continue growing our businesses through acquisitions in selected markets,
such as the BASE acquisition in February 2016, the acquisition of SFR BeLux in June 2017, and the pending acquisition of
Multimedia. Our ability to acquire new businesses may be limited by many factors, including availability of financing, debt

I-40

covenants, the prevalence of complex ownership structures among potential targets, government regulation and competition from
other potential acquirers, including private equity funds. Even if we are successful in acquiring new businesses, the integration of
these businesses, such as BASE, Multimedia and SFR BeLux, may present significant costs and challenges associated with:
realizing economies of scale in interconnection, programming and network operations; eliminating duplicative overheads;
integrating personnel, networks, financial systems and operational systems; greater than anticipated expenditures required for
compliance with regulatory standards or for investments to improve operating results, and failure to achieve the business plan
with respect to any such acquisition. We cannot be assured that we will be successful in acquiring new businesses or realizing the
anticipated benefits of any completed acquisition, including, for example, the acquisitions of BASE and SFR BeLux, and the
pending acquisition of Multimedia.

In addition, we anticipate that most, if not all, companies acquired by us will be located outside the U.S. Foreign companies
may not have disclosure controls and procedures or internal controls over financial reporting that are as thorough or effective as
those required by U.S. securities laws. While we intend to conduct appropriate due diligence and to implement appropriate controls
and procedures as we integrate acquired companies, we may not be able to certify as to the effectiveness of these companies’
disclosure controls and procedures or internal controls over financial reporting until we have fully integrated them.

We may have exposure to additional tax liabilities. We are subject to income taxes as well as non-income based taxes, such
as value added tax (VAT) in the U.K., the U.S. and many other jurisdictions around the world. In addition, most tax jurisdictions
that we operate in have complex and subjective rules regarding the valuation of intercompany services, cross-border payments
between affiliated companies and the related effects on income tax, VAT and transfer tax. Significant judgment is required in
determining our worldwide provision for income taxes and other tax liabilities. In the ordinary course of our business, there are
many transactions and calculations where the ultimate tax determination is uncertain. We are regularly under audit by tax authorities
in many of the jurisdictions in which we operate. Although we believe that our tax estimates are reasonable, any material differences
as a result of final determinations of tax audits or tax disputes could have an adverse effect on our financial position and results
of operations in the period or periods for which determination is made.

We are subject to changing tax laws, treaties and regulations in and between countries in which we operate, including treaties
between and among the U.K., the U.S. and many other jurisdictions in which we have a presence. Also, various income tax
proposals in the jurisdictions in which we operate could result in changes to the existing laws on which our deferred taxes are
calculated. A change in these tax laws, treaties or regulations, or in the interpretation thereof, could result in a materially higher
income or non-income tax expense, and any such material changes could cause a material change in our effective tax rate. In this
regard, on December 22, 2017, new U.S. federal tax reform legislation (the 2017 U.S. Tax Act) was enacted, resulting in significant
changes from previous U.S. tax law. Given the timing of the enactment as well as the effort and complexity involved in applying
the provisions of the 2017 U.S. Tax Act, we are still in the process of evaluating the impact on us, including for example, the
amount of taxes that might be imposed as a result of a one-time deemed mandatory repatriation of earnings and profits of foreign
corporations. The 2017 U.S. Tax Act could have a material impact on our income tax expense. For additional information regarding
the impact of the 2017 U.S. Tax Act, see note 11 to our consolidated financial statements included in Part II of this Annual Report
on Form 10-K.

Further changes in the tax laws of the foreign jurisdictions in which we operate could arise as a result of the base erosion and
profit shifting (BEPS) project being undertaken by the OECD or the European Commission Anti-Tax Avoidance Package. The
OECD, which represents a coalition of member countries that encompass most of the jurisdictions in which we operate, and the
European Commission have undertaken studies and are publishing action plans that include recommendations aimed at addressing
what they believe are issues within tax systems that may lead to tax avoidance by companies. It is possible that jurisdictions in
which we do business could react to these initiatives or their own concerns by enacting tax legislation that could adversely affect
us or our shareholders through increasing our tax liabilities.

I-41

Factors Relating to Certain Financial Matters

Our substantial leverage could limit our ability to obtain additional financing and have other adverse effects. We seek to
maintain our debt at levels that provide for attractive equity returns without assuming undue risk. In this regard, we generally seek
to cause our operating subsidiaries to maintain their debt at levels that result in a consolidated debt balance that is between four
and five times our consolidated Adjusted OIBDA. As a result, we are highly leveraged. At December 31, 2017, the outstanding
principal amount of our consolidated debt, together with our capital lease obligations aggregated $42.4 billion, including $4,165.4
million that is classified as current in our consolidated balance sheet and $37.3 billion that is not due until 2021 or thereafter. We
believe that we have sufficient resources to repay or refinance the current portion of our debt and capital lease obligations and to
fund our foreseeable liquidity requirements during the next 12 months. However, as our maturing debt grows in later years, we
anticipate that we will seek to refinance or otherwise extend our debt maturities. In this regard, we completed refinancing transactions
during 2017 that, among other things, resulted in the extension of certain of our subsidiaries’ debt maturities. No assurance can
be given that we will be able to complete these refinancing transactions or otherwise extend our debt maturities. In this regard, it
is not possible to predict how political and economic conditions, sovereign debt concerns or any adverse regulatory developments
could impact the credit and equity markets we access and, accordingly, our future liquidity and financial position.

Our ability to service or refinance our debt and to maintain compliance with the leverage covenants in the credit agreements
and indentures of our borrowing groups is dependent primarily on our ability to maintain or increase the Adjusted OIBDA of our
operating subsidiaries and to achieve adequate returns on our property and equipment additions and acquisitions. In addition, our
ability to obtain additional debt financing is limited by the incurrence-based leverage covenants contained in the various debt
instruments of our borrowing groups. For example, if the Adjusted OIBDA of our subsidiary, UPC Holding were to decline, our
ability to obtain additional debt could be limited. Accordingly, if our cash provided by operations declines or we encounter other
material liquidity requirements, we may be required to seek additional debt or equity financing in order to meet our debt obligations
and other liquidity requirements as they come due. In addition, our current debt levels may limit our ability to incur additional
debt financing to fund working capital needs, acquisitions, property and equipment additions, or other general corporate
requirements. We can give no assurance that any additional debt or equity financing will be available on terms that are as favorable
as the terms of our existing debt or at all. Further, our board of directors has approved share repurchase programs for Liberty
Global Shares. Any cash used by our company in connection with any future purchases of our ordinary shares would not be
available for other purposes, including the repayment of debt. For additional information concerning our share repurchase programs,
see note 12 to our consolidated financial statements included in Part II of this Annual Report on Form 10-K.

Certain of our subsidiaries are subject to various debt instruments that contain restrictions on how we finance our operations
and operate our businesses, which could impede our ability to engage in beneficial transactions. Certain of our subsidiaries are
subject to significant financial and operating restrictions contained in outstanding credit agreements, indentures and similar
instruments of indebtedness. These restrictions will affect, and in some cases significantly limit or prohibit, among other things,
the ability of those subsidiaries to:

(cid:149)

incur or guarantee additional indebtedness;

pay dividends or make other upstream distributions;

(cid:149) make investments;

(cid:149)

transfer, sell or dispose of certain assets, including subsidiary stock;

(cid:149) merge or consolidate with other entities;

(cid:149)

engage in transactions with us or other affiliates; or

create liens on their assets.

As a result of restrictions contained in these debt instruments, the companies party thereto, and their subsidiaries, could be

unable to obtain additional capital in the future to:

(cid:149)

fund property and equipment additions or acquisitions that could improve their value;

(cid:149) meet their loan and capital commitments to their business affiliates;

(cid:149)

invest in companies in which they would otherwise invest;

fund any operating losses or future development of their business affiliates;

I-42

(cid:149)

obtain lower borrowing costs that are available from secured lenders or engage in advantageous transactions that monetize
their assets; or

(cid:149)

conduct other necessary or prudent corporate activities.

In addition, most of the credit agreements to which these subsidiaries are parties include financial covenants that require them,
in certain circumstances, to maintain certain leverage and other financial ratios. Their ability to meet these financial covenants
may be affected by adverse economic, competitive, or regulatory developments and other events beyond their control, and we
cannot assure you that these financial covenants will be met. In the event of a default under such subsidiaries’ credit agreements
or indentures, the lenders may accelerate the maturity of the indebtedness under those agreements or indentures, which could
result in a default under other outstanding credit facilities or indentures. We cannot assure you that any of these subsidiaries will
have sufficient assets to pay indebtedness outstanding under their credit agreements and indentures. Any refinancing of this
indebtedness is likely to contain similar restrictive covenants.

We are exposed to interest rate risks. Shifts in such rates may adversely affect the debt service obligation of our subsidiaries.
We are exposed to the risk of fluctuations in interest rates, primarily through the credit facilities of certain of our subsidiaries,
which are indexed to EURIBOR, LIBOR or other base rates. Although we enter into various derivative transactions to manage
exposure to movements in interest rates, there can be no assurance that we will be able to continue to do so at a reasonable cost
or at all. If we are unable to effectively manage our interest rate exposure through derivative transactions, any increase in market
interest rates would increase our interest rate exposure and debt service obligations, which would exacerbate the risks associated
with our leveraged capital structure.

We are subject to increasing operating costs and inflation risks, which may adversely affect our results of operations. While
our operations attempt to increase our subscription rates to offset increases in programming and operating costs, there is no
assurance that they will be able to do so. In certain countries in which we operate, our ability to increase subscription rates is
subject to regulatory controls. Also, our ability to increase subscription rates may be constrained by competitive pressures.
Therefore, operating costs may rise faster than associated revenue, resulting in a material negative impact on our cash flow and
net earnings (loss). We are also impacted by inflationary increases in salaries, wages, benefits and other administrative costs in
certain of our markets.

Continuing uncertainties and challenging conditions in the global economy and in the countries in which we operate may
adversely impact our business, financial condition and results of operations. The current macroeconomic environment is highly
volatile, and continuing instability in global markets, including the ongoing struggles in Europe related to sovereign debt issues,
the risk of deflation and the stability of the British pound sterling and the euro, has contributed to a challenging global economic
environment. Future developments are dependent upon a number of political and economic factors, including the effectiveness of
measures by the E.U. Commission to address debt burdens of certain countries in Europe and the overall stability of the eurozone.
As a result, we cannot predict how long challenging conditions will exist or the extent to which the markets in which we operate
may deteriorate. Additional risks arising from the ongoing economic challenges in Europe are described below under the Risk
Factor titled: We are exposed to sovereign debt and currency instability risks in Europe that could have an adverse impact on our
liquidity, financial condition and cash flows.

Unfavorable economic conditions may impact a significant number of our subscribers and/or the prices we are able to charge
for our products and services, and, as a result, it may be (1) more difficult for us to attract new subscribers, (2) more likely that
subscribers will downgrade or disconnect their services and (3) more difficult for us to maintain ARPUs at existing levels. Countries
may also seek new or increased revenue sources due to fiscal deficits. Such actions may further adversely affect our company.
Accordingly, our ability to increase, or, in certain cases, maintain, the revenue, ARPUs, RGUs, mobile subscribers, Adjusted
OIBDA, Adjusted OIBDA margins and liquidity of our operating segments could be adversely affected if the macroeconomic
environment remains uncertain or declines further. We are currently unable to predict the extent of any of these potential adverse
effects.

We are exposed to sovereign debt and currency instability risks that could have an adverse impact on our liquidity, financial
condition and cash flows. Our operations are subject to macroeconomic and political risks that are outside of our control. For
example, high levels of sovereign debt in the U.S. and several countries in which we or our affiliates operate, combined with weak
growth and high unemployment, could potentially lead to fiscal reforms (including austerity measures), tax increases, sovereign
debt restructurings, currency instability, increased counterparty credit risk, high levels of volatility and disruptions in the credit
and equity markets, as well as other outcomes that might adversely impact our company. With regard to currency instability issues,
concerns exist in the eurozone with respect to individual macro-fundamentals on a country-by-country basis, as well as with respect
to the overall stability of the European monetary union and the suitability of a single currency to appropriately deal with specific
fiscal management and sovereign debt issues in individual eurozone countries. The realization of these concerns could lead to the
exit of one or more countries from the European monetary union and the re-introduction of individual currencies in these countries,

I-43

or, in more extreme circumstances, the possible dissolution of the European monetary union entirely, which could result in the
redenomination of a portion or, in the extreme case, all of our euro-denominated assets, liabilities and cash flows to the new
currency of the country in which they originated. This could result in a mismatch in the currencies of our assets, liabilities and
cash flows. Any such mismatch, together with the capital market disruption that would likely accompany any such redenomination
event, could have a material adverse impact on our liquidity and financial condition. Furthermore, any redenomination event would
likely be accompanied by significant economic dislocation, particularly within the eurozone countries, which in turn could have
an adverse impact on demand for our products and services, and accordingly, on our revenue and cash flows. Moreover, any
changes from euro to non-euro currencies within the countries in which we operate would require us to modify our billing and
other financial systems. No assurance can be given that any required modifications could be made within a time frame that would
allow us to timely bill our customers or prepare and file required financial reports. In light of the significant exposure that we have
to the euro through our euro-denominated borrowings, derivative instruments, cash balances and cash flows, a redenomination
event could have a material adverse impact on our company.

We may not freely access the cash of our operating companies. Our operations are conducted through our subsidiaries. Our
current sources of corporate liquidity include (1) our cash and cash equivalents and (2) interest and dividend income received on
our cash and cash equivalents and investments. From time to time, we also receive (1) proceeds in the form of distributions or
loan repayments from our subsidiaries or affiliates, (2) proceeds upon the disposition of investments and other assets and
(3) proceeds in connection with the incurrence of debt or the issuance of equity securities. The ability of our operating subsidiaries
to pay dividends or to make other payments or advances to us depends on their individual operating results and any statutory,
regulatory or contractual restrictions to which they may be or may become subject and in some cases our receipt of such payments
or advances may be limited due to tax considerations or the presence of noncontrolling interests. Most of our operating subsidiaries
are subject to credit agreements or indentures that restrict sales of assets and prohibit or limit the payment of dividends or the
making of distributions, loans or advances to shareholders and partners, including us. In addition, because these subsidiaries are
separate and distinct legal entities they have no obligation to provide us funds for payment obligations, whether by dividends,
distributions, loans or other payments.

We are exposed to the risk of default by the counterparties to our derivative and other financial instruments, undrawn debt
facilities and cash investments. Although we seek to manage the credit risks associated with our derivative and other financial
instruments, cash investments and undrawn debt facilities, we are exposed to the risk that our counterparties will default on their
obligations to us. Also, even though we regularly review our credit exposures, defaults may arise from events or circumstances
that are difficult to detect or foresee. At December 31, 2017, our exposure to counterparty credit risk included (1) derivative assets
with an aggregate fair value of $330.8 million, (2) cash and cash equivalent and restricted cash balances of $1,682.8 million and
(3) aggregate undrawn debt facilities of $3,239.3 million. While we currently have no specific concerns about the creditworthiness
of any counterparty for which we have material credit risk exposures, we cannot rule out the possibility that one or more of our
counterparties could fail or otherwise be unable to meet its obligations to us. Any such instance could have an adverse effect on
our cash flows, results of operations, financial condition and/or liquidity. In this regard, (1) the financial failure of any of our
counterparties could reduce amounts available under committed credit facilities and adversely impact our ability to access cash
deposited with any failed financial institution, thereby causing a default under one or more derivative contracts, and (2) tightening
of the credit markets could adversely impact our ability to access debt financing on favorable terms, or at all. For additional
information on our derivative contracts, see note 7 to our consolidated financial statements included in Part II of this Annual Report
on Form 10-K.

The risks we would face in the event of a default by a counterparty to one of our derivative instruments might be eliminated
or substantially mitigated if we were able to novate the relevant derivative contracts to a new counterparty following the default
of our counterparty. While we anticipate that, in the event of the insolvency of one of our derivative counterparties, we would seek
to effect such novations, no assurance can be given that we would obtain the necessary consents to do so or that we would be able
to do so on terms or pricing that would be acceptable to us or that any such novation would not result in substantial costs to us.
Furthermore, the underlying risks that are the subject of the relevant derivative contracts would no longer be effectively hedged
due to the insolvency of our counterparty, unless and until we novate or replace the derivative contract.

Our interest in the VodafoneZiggo JV is held pursuant to a Shareholders Agreement that contains provisions relating to
governance as well as transfer and exit rights, which, depending on the circumstances, may not be in the best interest of our
company. Our non-controlling interest in the VodafoneZiggo JV is held pursuant to a shareholders’ agreement (the Shareholders
Agreement), which provides the terms of the governance of the VodafoneZiggo JV, including among others, decision-making
process, information access, dividend policy and non-compete provisions. These provisions may prevent the VodafoneZiggo JV
from making decisions or taking actions that would protect or advance the interests of our company, and could even result in the
VodafoneZiggo JV making decisions or taking actions that adversely impact our company. Further, our ability to access the cash
of the VodafoneZiggo JV pursuant to the dividend policy contained in the Shareholders Agreement may be restricted in certain
circumstances. The Shareholders Agreement also provides for restrictions on the transfer of interests in the VodafoneZiggo JV,

I-44

which could adversely affect our ability to sell our interest in the VodafoneZiggo JV and/or the prices at which our interest may
be sold, as well as certain exit arrangements, which could force us to sell our interest. For additional information on the
VodafoneZiggo JV and the Shareholders Agreement, see note 6 to our consolidated financial statements included in Part II of this
Annual Report on Form 10-K.

We may not report net earnings. We reported net earnings (loss) from continuing operations of ($1,865.5 million), $1,994.5
million and ($1,101.2 million) during 2017, 2016 and 2015, respectively. In light of our historical financial performance, we cannot
assure you that we will report net earnings in the near future.

Other Factors

We have not historically paid any cash dividends, and we may not pay dividends equally or at all on any class of our
ordinary shares. We do not presently intend to pay cash dividends on any class of our ordinary shares for the foreseeable future.
However, we have the right to pay dividends, effect securities distributions or make bonus issues on Liberty Global Shares. In
addition, any dividends or distributions on, or repurchases of Liberty Global Shares will reduce our “distributable reserves” (defined
as our accumulated, realized profits less accumulated, realized losses, as measured for U.K. statutory purposes) legally available
to be paid as dividends by our company under English law on any of our ordinary shares.

The loss of certain key personnel could harm our business. We have experienced employees at both the corporate and
operational levels who possess substantial knowledge of our business and operations. We cannot assure you that we will be
successful in retaining their services or that we would be successful in hiring and training suitable replacements without undue
costs or delays. As a result, the loss of any of these key employees could cause significant disruptions in our business operations,
which could materially adversely affect our results of operations.

John C. Malone has significant voting power with respect to corporate matters considered by our shareholders. John C.
Malone beneficially owns outstanding ordinary shares of Liberty Global representing 28.0% of our aggregate voting power as of
February 7, 2018. By virtue of Mr. Malone’s voting power in our company, as well as his position as Chairman of our board of
directors, Mr. Malone may have significant influence over the outcome of any corporate transaction or other matters submitted to
our shareholders for approval. For example, under English law and our articles of association, certain matters (including
amendments to the articles of association) require the approval of 75% of the shareholders who vote (in person or by proxy) on
the relevant resolution, and other certain corporate transactions or matters may require the approval of at least 75% of the outstanding
shares of each class of our ordinary shares. Because Mr. Malone beneficially owns approximately 28.0% of our aggregate voting
power and more than 75% of the outstanding Class B ordinary shares of Liberty Global, he has the ability to prevent the requisite
approval threshold from being met even though the other shareholders may determine that such action or transaction is beneficial
for the company. Mr. Malone’s rights to vote or dispose of his equity interests in our company are not subject to any restrictions
in favor of us other than as may be required by applicable law and except for customary transfer restrictions pursuant to equity
award agreements.

It may be difficult for a third-party to acquire us, even if doing so may be beneficial to our shareholders. Certain provisions
of our articles of association and of English law may discourage, delay, or prevent a change in control of our company that a
shareholder may consider favorable. These provisions include the following:

(cid:149)

authorizing a capital structure with multiple classes of ordinary shares; a Class B that entitles the holders to 10 votes per
share; a Class A that entitles the holders to one vote per share; and a Class C that, except as otherwise required by applicable
law, entitles the holders to no voting rights;

authorizing the issuance of “blank check” shares (both ordinary and preference), which could be issued by our board of
directors to increase the number of outstanding shares and thwart a takeover attempt;

classifying our board of directors with staggered three-year terms, which may lengthen the time required to gain control
of our board of directors, although under English law, shareholders of our company can remove a director without cause
by ordinary resolution;

prohibiting shareholder action by written resolution, thereby requiring all shareholder actions to be taken at a meeting of
the shareholders;

requiring the approval of 75% in value of the shareholders (or class of shareholders) and/or English court approval for
certain statutory mergers or schemes of arrangements; and

I-45

(cid:149)

establishing advance notice requirements for nominations of candidates for election to our board of directors or for
proposing matters that can be acted upon by shareholders at shareholder meetings.

Change in control provisions in our incentive plans and related award agreements or in executive employment agreements
may also discourage, delay, or prevent a change in control of our company, even if such change of control would be in the best
interests of our shareholders.

The enforcement of civil liabilities against us may be more difficult. Because we are a public limited company incorporated
under the laws of England and Wales, investors could experience more difficulty enforcing judgments obtained against us in U.S.
courts than would currently be the case for U.S. judgments obtained against a U.S. company. It may also be more difficult (or
impossible) to bring some types of claims against us in courts sitting in England than it would be to bring similar claims against
a U.S. company in a U.S. court. In particular, English law significantly limits the circumstances under which shareholders of
English companies may bring derivative actions. Under English law generally, only the company can be the proper plaintiff in
proceedings in respect of wrongful acts committed against us. Our articles of association provide for the exclusive jurisdiction of
the English courts for shareholder lawsuits against us or our directors.

Item 1B. UNRESOLVED STAFF COMMENTS

None.

Item 2. PROPERTIES

We lease our corporate offices in London, U.K., in Denver, Colorado, U.S. and in Amsterdam, the Netherlands. All of our

other real or personal property is owned or leased by our subsidiaries and affiliates.

Our subsidiaries and affiliates own or lease the fixed assets necessary for the operation of their respective businesses, including
office space, transponder space, headend facilities, rights of way, cable television and telecommunications distribution equipment,
telecommunications switches, base stations, cell towers and customer premises equipment and other property necessary for their
operations. The physical components of their broadband networks require maintenance and periodic upgrades to support the new
services and products they introduce. Subject to these maintenance and upgrade activities, our management believes that our
current facilities are suitable and adequate for our business operations for the foreseeable future.

Item 3. LEGAL PROCEEDINGS

From time to time, our subsidiaries and affiliates have become involved in litigation relating to claims arising out of their
operations in the normal course of business. For additional information, see note 17 to our consolidated financial statements in
Part II of this Annual Report on Form 10-K.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

I-46

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER

PURCHASES OF EQUITY SECURITIES

PART II

General

The capitalized terms used in Part II of this Annual Report on Form 10-K are defined in the notes to our consolidated financial
statements. In the following text, the terms “we,” “our,” “our company” and “us” may refer, as the context requires, to Liberty
Global or collectively to Liberty Global and its subsidiaries.

Market Information

Prior to the completion of the Split-off Transaction on December 29, 2017, our share capital comprised Liberty Global Class
A, Class B and Class C ordinary shares and LiLAC Class A, Class B and Class C ordinary shares. Upon completion of the Split-
off Transaction, our share capital no longer includes LiLAC Shares. Our Liberty Global Class A, Class B and Class C ordinary
shares trade on the NASDAQ Global Select Market under the symbols “LBTYA,” “LBTYB,” and “LBTYK,” respectively. The
following table sets forth the range of high and low sales prices of Liberty Global Class A, Class B and Class C and LiLAC Class
A, Class B and Class C ordinary shares for the periods indicated.

Class A

Class B

Class C

High

Low

High

Low

High

Low

Liberty Global Shares (a):

Year ended December 31, 2017

First quarter.................................................................

$ 37.69

$ 30.43

$ 39.85

$ 32.32

$ 37.00

$ 29.58

Second quarter ............................................................

$ 36.26

$ 28.17

$ 37.30

$ 29.05

$ 35.41

$ 27.36

Third quarter ...............................................................

$ 35.01

$ 31.10

$ 36.55

$ 31.30

$ 33.86

$ 30.22

Fourth quarter .............................................................

$ 35.90

$ 29.13

$ 35.55

$ 30.50

$ 34.18

$ 28.17

Year ended December 31, 2016

First quarter.................................................................

$ 36.97

$ 26.91

$ 43.54

$ 31.34

$ 35.27

$ 26.19

Second quarter ............................................................

$ 34.99

$ 26.19

$ 40.42

$ 27.34

$ 33.88

$ 26.24

Third quarter ...............................................................

$ 34.63

$ 26.16

$ 44.39

$ 27.60

$ 33.58

$ 25.86

Fourth quarter .............................................................

$ 34.65

$ 28.50

$ 37.52

$ 29.95

$ 33.50

$ 27.82

LiLAC Shares (a):

Year ended December 31, 2017

First quarter.................................................................

$ 27.35

$ 21.44

$ 24.83

$ 24.69

$ 27.20

$ 21.17

Second quarter ............................................................
Third quarter ...............................................................

$ 22.94
$ 26.99

$ 20.08
$ 22.05

$ 23.38
$ 28.81

$ 20.96
$ 23.28

$ 23.79
$ 26.82

$ 19.81
$ 21.59

Fourth quarter .............................................................

$ 25.62

$ 20.15

$ 27.50

$ 20.72

$ 25.54

$ 19.89

Year ended December 31, 2016

First quarter.................................................................

$ 39.10

$ 32.01

$ 39.98

$ 41.30

$ 34.22

Second quarter ............................................................

$ 41.17

$ 32.06

$ 55.00

$ 35.62

$ 42.98

$ 32.07

Third quarter ...............................................................

$ 36.27

$ 26.54

$ 35.62

$ 27.01

$ 36.67

$ 27.23

Fourth quarter .............................................................

$ 28.38

$ 19.10

$ 28.80

$ 20.48

$ 28.74

$ 19.37

_______________

(a) On July 1, 2016, we completed the LiLAC Distribution. The share price information presented herein for periods prior to
July 1, 2016 has not been retroactively revised. Prices for LiLAC Class B ordinary shares reflect inter-dealer prices without
retail mark-up, mark-down or actual transactions.

II-1

Holders

As of February 7, 2018, there were 608, nine and 696 record holders of Liberty Global Class A, Class B and Class C ordinary
shares, respectively. These amounts do not include the number of shareholders whose shares are nominally held by banks, brokerage
houses or other institutions, but include each such institution as one record holder.

Dividends

We have not paid any cash dividends on any of our ordinary shares, and we have no present intention of doing so. Any future
payment of cash dividends will be determined by our board of directors in light of our earnings, financial condition and other
relevant considerations including applicable laws in England and Wales. The credit facilities to which certain of our subsidiaries
are parties restrict our ability to access their cash for, among other things, our payment of cash dividends. There are currently no
other contractual restrictions on our ability to pay dividends in cash or shares.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

None.

Issuer Purchase of Equity Securities

The following table sets forth information regarding our company’s purchase of its own equity securities during the three

months ended December 31, 2017:

Total number of
shares repurchased

Average price
paid per share (a)

Total number of shares
repurchased as part of
publicly-announced
programs

Value
of shares
that may
yet be
repurchased
under the
programs

Liberty Global Shares:

October 1, 2017 through

October 31, 2017....................

November 1, 2017 through

November 30, 2017................

December 1, 2017 through

December 31, 2017 ................

Total Liberty Global Shares —
October 1, 2017 through
December 31, 2017 ................

_______________

Class A:

Class C:

Class A:

Class C:

Class A:

Class C:

Class A:

Class C:

1,438,600

Class A: $

31.99

Class A:

1,438,600

3,901,600

Class C:

31.21

Class C:

3,901,600

224,000

Class A: $

30.74

Class A:

224,000

3,692,400

Class C:

29.54

Class C:

3,692,400

521,100

Class A: $

32.18

Class A:

118,800

Class C:

32.58

Class C:

521,100

118,800

2,183,700

Class A: $

31.91

Class A:

2,183,700

7,712,800

Class C:

30.43

Class C:

7,712,800

(b)

(a) Average price paid per share includes direct acquisition costs and the effects of derivative instruments, where applicable.

(b) As of December 31, 2017, the remaining amount authorized for repurchases of Liberty Global Shares was $2.1 billion.

II-2

Liberty Global Shares

Stock Performance Graphs

The following graph compares the changes in the cumulative total shareholder return on our Liberty Global Class A, Class
B and Class C ordinary shares from January 1, 2013 to December 31, 2017, to the change in the cumulative total return on the
ICB 6500 Telecommunications and the Nasdaq US Benchmark TR Index (assuming reinvestment of dividends, where applicable).
The performance presented below includes (i) the share prices of Liberty Global Inc’s Series A, Series B and Series C common
stock prior to the June 7, 2013 acquisition of Virgin Media and (ii) the retrospective impact of the July 1, 2015 LiLAC Transaction.
The performance presented below for periods prior to July 1, 2016 has not been retroactively revised for the LiLAC Distribution.
The graph assumes that $100 was invested on January 1, 2013.

2013

2014

2015

2016

2017

December 31,

Liberty Global Shares - Class/Series A.................................. $
Liberty Global Shares - Class/Series B.................................. $
Liberty Global Shares - Class/Series C.................................. $
ICB 6500 Telecommunications.............................................. $
Nasdaq US Benchmark TR Index.......................................... $

141.36

140.54

143.52

113.40
133.48

$
$

153.38

155.49

161.49

116.49
150.12

$
$

129.41

124.59

136.28

120.68
150.84

$
$

93.45

96.40

99.28

149.37
170.46

$
$

109.49

108.96

113.12

149.23
206.91

II-3

LiLAC Shares

The following graph compares the changes in the cumulative total shareholder return on our LiLAC Class A, Class B and
Class C ordinary shares from July 2, 2015 (the day following the creation of the LiLAC Group tracking shares) to December 31,
2017, to the change in the cumulative total return on the ICB 6500 Telecommunications and the Nasdaq US Benchmark TR Index
(assuming reinvestment of dividends, where applicable). The performance presented below for periods prior to July 1, 2016 has
not been retroactively revised for the LiLAC Distribution. The graph assumes that $100 was invested on July 2, 2015. Upon
completion of the Split-off Transaction, our share capital no longer includes LiLAC Shares.

December 31,

2015

2016

2017

LiLAC Shares - Class A .............................................................................................

LiLAC Shares - Class B .............................................................................................

LiLAC Shares - Class C .............................................................................................

ICB 6500 Telecommunications..................................................................................

Nasdaq US Benchmark TR Index ..............................................................................

83.39

81.93

89.40

99.06

98.05

44.27

41.97

44.01

122.61

110.81

47.33

42.46

48.71

122.49

134.50

II-4

Item 6. SELECTED FINANCIAL DATA

The following tables present the selected historical financial information of our continuing operations (unless otherwise
indicated), which was derived from our consolidated financial statements as of and for the years ended December 31, 2017, 2016,
2015, 2014 and 2013. This information is only a summary and should be read together with our Management’s Discussion and
Analysis of Financial Condition and Results of Operations and consolidated financial statements included elsewhere herein.

Summary Balance Sheet Data (a):

2017

2016

December 31,
2015
in millions

2014

2013

Investments...................................................................... $
6,671.4
Property and equipment, net............................................ $ 19,535.4
Goodwill .......................................................................... $ 18,547.4
Total assets (including discontinued operations)............. $ 57,596.8
Debt and capital lease obligations, including current

portion .......................................................................... $ 42,214.9
6,393.0

Total equity...................................................................... $

6,388.7

2,839.6

1,808.2

3,492.1

$ 17,249.3

$ 20,840.5

$ 23,016.0

$ 22,733.6

$ 17,063.7

$ 26,244.8

$ 28,214.3

$ 22,180.9

$ 68,684.1

$ 67,559.0

$ 72,496.4

$ 67,321.5

$ 37,510.8

$ 44,444.8

$ 43,782.0

$ 43,739.8

$ 14,732.0

$ 10,174.3

$ 14,116.0

$ 11,541.5

Summary Statement of Operations Data (a):

2017

Year ended December 31,
2015
in millions, except per share amounts

2016

2014

2013

Revenue ........................................................................... $ 15,048.9
Operating income ............................................................ $
$
1,947.5
Earnings (loss) from continuing operations (b)............... $ (1,865.5) $
Earnings (loss) from continuing operations attributable

to Liberty Global shareholders..................................... $ (1,943.6) $

$ 17,285.0

$ 17,062.7

$ 17,043.7

$ 13,186.7

2,482.2

1,994.5

$
$
2,101.1
$ (1,101.2) $

1,999.8
$
(990.6) $

1,989.2
(829.0)

1,960.8

$ (1,196.4) $ (1,040.5) $

(898.5)

Basic earnings (loss) from continuing operations

attributable to Liberty Global shareholders per share:
Liberty Global Shares (c) ........................................... $
Old Liberty Global Shares (d)....................................

Diluted earnings (loss) from continuing operations

attributable to Liberty Global shareholders per share:
Liberty Global Shares (c) ........................................... $
Old Liberty Global Shares (d)....................................

_______________

(2.29) $

2.20

(2.29) $

2.18

(0.19)
(1.16) $

(1.30) $

(1.34)

(1.30) $

(1.34)

(a) We acquired BASE on February 11, 2016, Ziggo on November 11, 2014 and Virgin Media on June 7, 2013. Our continuing
operations also completed a number of less significant acquisitions during the years presented. On December 31, 2016, we
completed the VodafoneZiggo JV Transaction, pursuant to which we contributed VodafoneZiggo Holding to the
VodafoneZiggo JV. In addition, we acquired C&W on May 16, 2016 and a less significant cable and broadband services
provider in Puerto Rico on June 3, 2015, each of which was attributed to the LiLAC Group. Effective December 31, 2017,
we completed the Split-off Transaction, pursuant to which the businesses, assets and liabilities of the LiLAC Group were
transferred to an independent publicly-traded company. On January 31, 2014, we sold substantially all of the assets of
Chellomedia B.V. (the Chellomedia Disposal Group). Accordingly, the selected financial data included in this table presents
the LiLAC Group and the Chellomedia Disposal Group as discontinued operations for all applicable periods. For information
regarding our acquisitions and dispositions during the past three years, see notes 4 and 5, respectively, to our consolidated
financial statements.

(b)

Includes earnings from continuing operations attributable to noncontrolling interests of $78.1 million, $33.7 million, $95.2
million, $49.9 million and $69.5 million, respectively.

(c)

The amounts presented for 2015 relate to the period from July 1, 2015 through December 31, 2015.

(d)

The amounts presented for 2015 relate to the period from January 1, 2015 through June 30, 2015.

II-5

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

The following discussion and analysis, which should be read in conjunction with our consolidated financial statements, is
intended to assist in providing an understanding of our results of operations and financial condition and is organized as follows:

(cid:149) Overview. This section provides a general description of our business and recent events.

(cid:149) Results of Operations. This section provides an analysis of our results of operations for the years ended December 31,

2017, 2016 and 2015.

(cid:149)

Liquidity and Capital Resources. This section provides an analysis of our corporate and subsidiary liquidity, consolidated
statements of cash flows and contractual commitments.

(cid:149) Critical Accounting Policies, Judgments and Estimates. This section discusses those material accounting policies that

involve uncertainties and require significant judgment in their application.

(cid:149) Quantitative and Qualitative Disclosures about Market Risk. This section provides discussion and analysis of the foreign

currency, interest rate and other market risk that our company faces.

Unless otherwise indicated, convenience translations into U.S. dollars are calculated, and operational data (including subscriber

statistics) is presented, as of December 31, 2017.

Overview

General

We are an international provider of video, broadband internet, fixed-line telephony, mobile and other communications services
to residential customers and businesses, with consolidated operations at December 31, 2017 in 12 European countries. We provide
residential and B2B communication services in (i) the U.K. and Ireland through Virgin Media, (ii) Germany through Unitymedia,
(iii) Belgium and Luxembourg through Telenet and (iv) seven other European countries through UPC Holding. In addition, through
the December 31, 2016 completion of the VodafoneZiggo JV Transaction, we provided residential and B2B communications
services in the Netherlands through VodafoneZiggo Holding. Following the completion of the VodafoneZiggo JV Transaction, we
own a 50% noncontrolling interest in the VodafoneZiggo JV, which provides video, broadband internet, fixed-line telephony,
mobile and B2B communications services in the Netherlands.

As further described in note 5, we completed the Split-off Transaction on December 29, 2017. Accordingly, the entities
comprising the LiLAC Group are reflected as discontinued operations in our consolidated financial statements for all applicable
periods presented. In the following discussion and analysis, the operating statistics, results of operations, cash flows and financial
condition that we present and discuss are those of our continuing operations unless otherwise indicated.

Operations

At December 31, 2017, we owned and operated networks that passed 45,222,300 homes and served 45,793,700 revenue
generating units (RGUs), consisting of 18,485,200 video subscribers, 14,917,400 broadband internet subscribers and 12,391,100
fixed-line telephony subscribers. In addition, at December 31, 2017, we served 6,448,200 mobile subscribers.

Video services. We provide video services, including various enhanced products that enable our customers to control when
they watch their programming. These products range from digital video recorders to multimedia home gateway systems capable
of distributing video, voice and data content throughout the home and to multiple devices.

Broadband internet services. We offer multiple tiers of broadband internet service with available maximum download speeds
as high as 500 Mbps or more depending on location. We continue to invest in new technologies that allow us to increase the internet
speeds we offer to our customers.

Fixed-line telephony services. We offer fixed-line telephony services via either voice-over-internet-protocol or “VoIP”

technology or circuit-switched telephony, depending on location.

Mobile services. We offer voice and data mobile services through MVNO networks or our own networks. We offer mobile
services as an MVNO over third-party networks in the U.K., Germany, Belgium, Switzerland, Austria, Ireland and Hungary. In
connection with the BASE Acquisition, Telenet acquired BASE’s mobile network in Belgium. As a result, Telenet is migrating its
II-6

mobile subscribers from an MVNO arrangement to the BASE mobile network and expects to complete this migration by the end
of the first half of 2018. Telenet’s MVNO agreement expires at the end of 2018.

B2B services. Our B2B services include voice, broadband internet, data, video, wireless and cloud services.

For additional information regarding the details of our products and services, see Item 1. Business included in Part I of this

Annual Report on Form 10-K.

Strategy and management focus

From a strategic perspective, we are seeking to build broadband communications and mobile businesses that have strong
prospects for future growth. As discussed further under Liquidity and Capital Resources — Capitalization below, we also seek to
maintain our debt at levels that provide for attractive equity returns without assuming undue risk.

We strive to achieve organic revenue and customer growth in our operations by developing and marketing bundled
entertainment and information and communications services, and extending and upgrading the quality of our networks where
appropriate. As we use the term, organic growth excludes foreign currency translation effects (FX) and the estimated impact of
acquisitions and dispositions. While we seek to increase our customer base, we also seek to maximize the average revenue we
receive from each household by increasing the penetration of our digital video, broadband internet, fixed-line telephony and mobile
services with existing customers through product bundling and upselling.

During 2015 and 2016, we initiated network extension programs in the U.K., Ireland, Central and Eastern Europe, Germany
and certain other markets. We collectively refer to these network extension programs as the “Network Extensions.” During 2017,
pursuant to the Network Extensions, our continuing operations connected approximately 1,177,000 additional residential and
commercial premises (excluding upgrades) to our two-way networks, including approximately 536,000 residential and commercial
premises connected by Virgin Media in the U.K. and Ireland. During 2017, we have experienced increased construction costs
related to the Network Extensions in the U.K., and similar increases could occur in the U.K. and elsewhere in future periods.
However, we will only continue to extend our footprint through new construction to the extent we believe we can
obtain attractive returns on our investments. We expect to continue the Network Extensions in 2018. Depending on a variety of
factors, including the financial and operational results of the programs, the Network Extensions may be continued, modified or
cancelled at our discretion.

The capital costs associated with the Network Extensions, which include the costs to build out the networks and the purchase
and installation of related customer premises equipment, are expected to be significant. For information regarding our expected
property and equipment additions during 2018, see Liquidity and Capital Resources — Consolidated Statements of Cash Flows
below.

Our assessment of the impacts of the Network Extensions are subject to competitive, economic, regulatory and other factors

outside of our control.

Competition and other external factors

We are experiencing significant competition from incumbent telecommunications operators, DTH operators and/or other
providers in all of our markets, particularly in Switzerland and the U.K. For additional information regarding the competition we
face, see Item 1. Business - Competition and - Regulatory Matters included in Part I of this Annual Report on Form 10-K. The
significant competition we are experiencing, together with macroeconomic factors, has adversely impacted our revenue, RGUs
and/or average monthly subscription revenue per average cable RGU or mobile subscriber, as applicable (ARPU), particularly in
Switzerland. In addition, the VodafoneZiggo JV is facing significant competition in the Netherlands, particularly with respect to
its mobile operations. For additional information regarding the revenue impact of changes in the RGUs and ARPU of our
consolidated reportable segments, see Discussion and Analysis of our Reportable Segments below.

In addition to competition, our operations are subject to macroeconomic, political and other risks that are outside of our
control. For example, on June 23, 2016, the U.K. held a referendum in which U.K. citizens voted in favor of, on an advisory basis,
an exit from the E.U. commonly referred to as “Brexit.” Brexit is currently scheduled to occur on March 29, 2019. The potential
impacts, if any, of the uncertainty relating to Brexit or the resulting terms of Brexit on the free movement of goods, services,
people and capital between the U.K.. and the E.U., customer behavior, economic conditions, interest rates, currency exchange
rates, availability of capital or other matters are unclear. In addition, the value of the British pound sterling relative to the U.S.

II-7

dollar remains at levels that are significantly below pre-Brexit levels. The effects of Brexit could adversely affect our business,
results of operations, financial condition and liquidity.

In addition, high levels of sovereign debt in the U.S. and several countries in which we or our affiliates operate, combined
with weak growth and high unemployment, could potentially lead to fiscal reforms (including austerity measures), tax increases,
sovereign debt restructurings, currency instability, increased counterparty credit risk, high levels of volatility and disruptions in
the credit and equity markets, as well as other outcomes that might adversely impact our company. The occurrence of any of these
events, especially within the eurozone countries given our significant exposure to the euro and pound sterling, could have an
adverse impact on, among other matters, our liquidity and cash flows.

Results of Operations

We have completed a number of transactions that impact the comparability of our 2017, 2016 and 2015 results of operations,
including the SFR BeLux Acquisition on June 19, 2017, the BASE Acquisition on February 11, 2016 and a number of less significant
acquisitions during 2017, 2016 and 2015. For additional information, see note 4 to our consolidated financial statements.

On December 31, 2016, we completed the VodafoneZiggo JV Transaction, whereby we contributed VodafoneZiggo Holding
and its subsidiaries (including Ziggo Sport) to the VodafoneZiggo JV. Accordingly, our results of operations for 2016 and 2015
include the operations of VodafoneZiggo Holding and its subsidiaries. In our segment presentation for 2016 and 2015,
VodafoneZiggo Holding (exclusive of Ziggo Sport, which became a subsidiary of VodafoneZiggo Holding in October 2016) is
separately reported as “The Netherlands”, and Ziggo Sport is included in Central and Corporate. For additional information
regarding the VodafoneZiggo JV Transaction, see note 5 to our consolidated financial statements.

For further information regarding our pending and completed acquisitions and dispositions, see notes 4 and 5, respectively,

to our consolidated financial statements.

In the following discussion, we quantify the estimated impact of acquisitions (the Acquisition Impact) on our operating
results. The Acquisition Impact represents our estimate of the difference between the operating results of the periods under
comparison that is attributable to an acquisition. In general, we base our estimate of the Acquisition Impact on an acquired entity’s
operating results during the first three to twelve months following the acquisition date, as adjusted to remove integration costs
and any other material unusual or nonoperational items, such that changes from those operating results in subsequent periods are
considered to be organic changes. Accordingly, in the following discussion, (i) organic variances attributed to an acquired entity
during the first 12 months following the acquisition date represent differences between the Acquisition Impact and the actual
results and (ii) the calculation of our organic change percentages includes the organic activity of an acquired entity relative to the
Acquisition Impact of such entity. In the following discussion of organic changes, we also quantify the impact of the VodafoneZiggo
JV Transaction on our results of operations. In this regard, the organic changes of Liberty Global are adjusted to exclude (a) the
operations of VodafoneZiggo Holding and Ziggo Sport for 2016 and 2015, (b) the revenue earned during 2017 from services
provided to VodafoneZiggo JV and (c) certain operating and SG&A expenses incurred during 2017 that were allocated to our
Netherlands segment during 2016 and 2015.

Changes in foreign currency exchange rates have a significant impact on our reported operating results as all of our operating
segments have functional currencies other than the U.S. dollar. Our primary exposure to FX risk during the three months ended
December 31, 2017 was to the euro and British pound sterling as 44.8% and 39.5% of our reported revenue during the period was
derived from subsidiaries whose functional currencies are the euro and British pound sterling, respectively. In addition, our reported
operating results are impacted by changes in the exchange rates for other local currencies in Europe. The portions of the changes
in the various components of our results of operations that are attributable to changes in FX are highlighted under Discussion and
Analysis of our Reportable Segments and Discussion and Analysis of our Consolidated Operating Results below. For information
regarding our foreign currency risks and the applicable foreign currency exchange rates in effect for the periods covered by this
Annual Report on Form 10-K, see Quantitative and Qualitative Disclosures about Market Risk — Foreign Currency Risk below.

The amounts presented and discussed below represent 100% of each of our consolidated reportable segment’s revenue and
Adjusted OIBDA. As we have the ability to control Telenet, we consolidate 100% of the revenue and expenses of this entity in
our consolidated statements of operations despite the fact that third parties own significant interests in this entity. The noncontrolling
owners’ interests in the operating results of Telenet and other less significant majority-owned subsidiaries are reflected in net
earnings or loss attributable to noncontrolling interests in our consolidated statements of operations.

II-8

Discussion and Analysis of our Reportable Segments

General

All of the reportable segments set forth below derive their revenue primarily from residential and B2B communications
services, including video, broadband internet, fixed-line telephony and mobile services. For detailed information regarding the
composition of our reportable segments and how we define and categorize our revenue components, see note 18 to our consolidated
financial statements. For more information regarding the results of operations of the VodafoneZiggo JV, refer to Discussion and
Analysis of our Consolidated Operating Results - Share of losses of affiliates below.

The tables presented below in this section provide the details of the revenue and Adjusted OIBDA of our consolidated reportable
segments for (i) 2017, as compared to 2016, and (ii) 2016, as compared to 2015. These tables present (a) the amounts reported for
the current and comparative periods, (b) the reported U.S. dollar change and percentage change from period to period and (c) the
organic U.S. dollar change and percentage change from period to period. The comparisons that exclude FX assume that exchange
rates remained constant at the prior-year rate during the comparative periods that are included in each table. We also provide a
table showing the Adjusted OIBDA margins of our consolidated reportable segments for 2017, 2016 and 2015 at the end of this
section.

Most of our revenue is derived from jurisdictions that administer VAT or similar revenue-based taxes. Any increases in these
taxes could have an adverse impact on our ability to maintain or increase our revenue to the extent that we are unable to pass such
tax increases on to our customers. In the case of revenue-based taxes for which we are the ultimate taxpayer, we will also experience
increases in our operating costs and expenses and corresponding declines in our Adjusted OIBDA and Adjusted OIBDA margins
to the extent of any such tax increases.

We pay interconnection fees to other telephony providers when calls or text messages from our subscribers terminate on
another network, and we receive similar fees from such providers when calls or text messages from their customers terminate on
our networks or networks that we access through MVNO or other arrangements. The amounts we charge and incur with respect
to fixed-line telephony and mobile interconnection fees are subject to regulatory oversight. To the extent that regulatory authorities
introduce fixed-line or mobile termination rate changes, we would experience prospective changes and, in very limited cases, we
could experience retroactive changes in our interconnect revenue and/or costs. The ultimate impact of any such changes in
termination rates on our Adjusted OIBDA would be dependent on the call or text messaging patterns that are subject to the changed
termination rates.

We are subject to inflationary pressures with respect to certain costs and foreign currency exchange risk with respect to costs
and expenses that are denominated in currencies other than the respective functional currencies of our consolidated reportable
segments (non-functional currency expenses). Any cost increases that we are not able to pass on to our subscribers through rate
increases would result in increased pressure on our operating margins. For additional information regarding our foreign currency
exchange risks see Quantitative and Qualitative Disclosures about Market Risk — Foreign Currency Risk below.

II-9

Revenue of our Reportable Segments

General. While not specifically discussed in the below explanations of the changes in the revenue of our consolidated reportable
segments, we are experiencing significant competition in all of our markets. This competition has an adverse impact on our ability
to increase or maintain our RGUs and/or ARPU.

Variances in the subscription revenue that we receive from our customers are a function of (i) changes in the number of RGUs
or mobile subscribers outstanding during the period and (ii) changes in ARPU. Changes in ARPU can be attributable to (a) changes
in prices, (b) changes in bundling or promotional discounts, (c) changes in the tier of services selected, (d) variances in subscriber
usage patterns and (e) the overall mix of cable and mobile products within a segment during the period. In the following discussion,
we discuss ARPU changes in terms of the net impact of the above factors on the ARPU that is derived from our video, broadband
internet, fixed-line telephony and mobile products.

Revenue — 2017 compared to 2016

Year ended December 31,

Increase (decrease)

Organic
increase (decrease)

2017

2016

in millions, except percentages

U.K./Ireland...................................................... $ 6,398.7
Belgium ............................................................
2,865.3

Germany ...........................................................

Switzerland/Austria ..........................................

Central and Eastern Europe..............................

The Netherlands ...............................................

Central and Corporate (a) .................................

2,705.4

1,766.0

1,183.6

—

144.8

Intersegment eliminations ................................

(14.9)
Total........................................................... $ 15,048.9

_______________

$ 6,508.8

2,691.1

2,539.7

1,755.6

1,088.4

2,690.8

73.2
(62.6)
$ 17,285.0

(110.1)
174.2

165.7

10.4

95.2
(2,690.8)
71.6

(1.7) $
6.5

6.5

0.6

8.7
(100.0)
97.8

47.7
$ (2,236.1)

N.M.
(12.9) $

151.8

36.3

109.5
(5.0)
57.6

—

3.4
(0.6)
353.0

2.3

1.3

4.3
(0.3)
5.2

—

2.5

N.M.

2.4

(a)

The amount presented for 2017 primarily includes the revenue earned from services provided to the VodafoneZiggo JV.
For additional information, see note 6 to our consolidated financial statements. The amount presented for 2016 primarily
includes the revenue of Ziggo Sport, which was contributed to the VodafoneZiggo JV as part of the VodafoneZiggo JV
Transaction.

N.M. — Not Meaningful.

II-10

U.K./Ireland. The details of the decrease in U.K./Ireland’s revenue during 2017, as compared to 2016, are set forth below:

Subscription
revenue

Non-
subscription
revenue
in millions

Total

Increase in residential cable subscription revenue due to change in:

Average number of RGUs (a)................................................................................... $
ARPU (b)..................................................................................................................
Increase in residential cable non-subscription revenue (c) ..........................................
Total increase in residential cable revenue ............................................................
Increase (decrease) in residential mobile revenue (d)..................................................
Increase in B2B revenue (e).........................................................................................
Increase in other revenue (f) ........................................................................................
Total organic increase ............................................................................................
Impact of acquisitions ..................................................................................................
Impact of disposals ......................................................................................................
Impact of FX ................................................................................................................

Total ....................................................................................................................... $

_______________

— $

80.0

18.2

—

98.2
(52.9)
34.6

—

79.9

—

—
(230.0)
(150.1) $

—

18.9

38.9

7.0

7.1

71.9

31.4
(2.9)
(60.4)
40.0

80.0

18.2

18.9

117.1
(14.0)
41.6

7.1

151.8

31.4
(2.9)
(290.4)
(110.1)

(a)

(b)

(c)

(d)

The increase in residential cable subscription revenue related to a change in the average number of RGUs is primarily
attributable to (i) increases in the average number of broadband internet, video and fixed-line telephony RGUs in the U.K.
and (ii) a decrease in the average number of video RGUs in Ireland.

The increase in residential cable subscription revenue related to a change in ARPU is attributable to (i) the net effect of (a)
higher ARPU from broadband internet services and (b) lower ARPU from video and fixed-line telephony services and (ii)
an improvement in RGU mix. In addition, ARPU from video, broadband internet and fixed-line telephony services was
adversely impacted by an aggregate revenue decrease of $12.4 million associated with an April 2016 change in the regulations
governing payment handling fees that Virgin Media charges to its customers in the U.K.

The increase in residential cable non-subscription revenue is primarily attributable to the net effect of (i) an increase in
installation revenue in the U.K. and (ii) a decrease in early termination fees in the U.K.

The decrease in residential mobile subscription revenue is primarily attributable to the net effect of (i) a decrease in the
U.K., due primarily to lower ARPU, and (ii) an increase in Ireland, mainly due to an increase in the average number of
mobile subscribers. The lower ARPU in the U.K. includes the net effect of (a) a decline of $104.8 million attributable to a
lower number of customers under higher-ARPU subsidized handset contracts and (b) an increase of $42.5 million attributable
to growth in the number of customers under the lower-ARPU Split-contract Program. For additional information regarding
Split-contract Programs, see note 3 to our consolidated financial statements. The increase in residential mobile non-
subscription revenue is primarily due to (1) an increase in revenue from mobile handset sales in the U.K. and (2) a decrease
in interconnect revenue, as a decrease in the U.K. was only partially offset by a volume-related increase in Ireland. The
decrease in interconnect revenue in the U.K. is primarily due to (I) a decline in mobile short message service or “SMS”
termination volumes and (II) lower mobile termination rates and volumes.

(e)

The increase in B2B subscription revenue is primarily due to an increase in the average number of broadband internet
SOHO RGUs in the U.K. The increase in B2B non-subscription revenue is primarily due to the net effect of (i) an increase
in early termination fees in the U.K. and (ii) lower revenue from data services in the U.K.

(f)

The increase in other revenue is largely due to an increase in broadcasting revenue in Ireland.

For information regarding certain regulatory developments that could have an adverse impact on our revenue in the U.K., see

note 17 to our consolidated financial statements.

II-11

Belgium. The details of the increase in Belgium’s revenue during 2017, as compared to 2016, are set forth below:

Subscription
revenue

Non-
subscription
revenue
in millions

Total

Increase (decrease) in residential cable subscription revenue due to change in:

Average number of RGUs (a)................................................................................... $
ARPU (b)..................................................................................................................
Increase in residential cable non-subscription revenue (c) ..........................................
Total increase (decrease) in residential cable revenue...........................................
Decrease in residential mobile revenue (d)..................................................................
Increase in B2B revenue (e).........................................................................................
Decrease in other revenue............................................................................................
Total organic increase ............................................................................................
Impact of acquisitions ..................................................................................................
Impact of disposals ......................................................................................................
Impact of FX ................................................................................................................

(35.7) $
23.3

—
(12.4)
(28.4)
46.7

—

5.9

74.9
(21.0)
44.9

— $

—

6.7

6.7
(25.6)
49.5
(0.2)
30.4

33.7
(9.0)
14.4

Total ....................................................................................................................... $

104.7

69.5

(35.7)
23.3

6.7
(5.7)
(54.0)
96.2
(0.2)
36.3

108.6
(30.0)
59.3

174.2

_______________

(a)

(b)

(c)

(d)

(e)

The decrease in residential cable subscription revenue related to a change in the average number of RGUs is attributable
to decreases in the average number of video, broadband internet and fixed-line telephony RGUs.

The increase in residential cable subscription revenue related to a change in ARPU is attributable to (i) the net effect of (a)
higher ARPU from video and broadband internet services and (b) lower ARPU from fixed-line telephony services and (ii)
an improvement in RGU mix.

The increase in residential cable non-subscription revenue is attributable to the net effect of (i) an increase of $5.8 million
due to adjustments recorded during 2017 to reflect the expected recovery of certain prior-period VAT payments and (ii) a
decrease in revenue from services provided over third-party networks.

The decrease in residential mobile subscription revenue is primarily due to the net effect of (i) a decline in the average
number of mobile subscribers, as a decrease in the average number of prepaid mobile subscribers was only partially offset
by an increase in the average number of postpaid mobile subscribers, and (ii) higher ARPU. The decrease in residential
mobile non-subscription revenue is primarily due to (a) a decrease in revenue from sales of mobile handsets and other
devices and (b) a decrease in interconnect revenue due to the net effect of lower SMS termination volumes, higher roaming
revenue and lower mobile termination rates.

The increase in B2B subscription revenue is attributable to increases in the average number of broadband internet, video,
mobile and fixed-line telephony SOHO subscribers. The increase in B2B non-subscription revenue is primarily due to (i)
higher revenue from wholesale services, (ii) an increase in interconnect revenue driven by higher mobile volumes and (iii)
an increase in revenue from hosting and managed security services.

For information concerning certain regulatory developments that could have an adverse impact on our revenue in Belgium,

see note 17 to our consolidated financial statements.

II-12

Germany. The details of the increase in Germany’s revenue during 2017, as compared to 2016, are set forth below.

Subscription
revenue (a)

Non-
subscription
revenue
in millions

Total

Increase in residential cable subscription revenue due to change in:

Average number of RGUs (b)...................................................................................... $
ARPU (c) .....................................................................................................................
Decrease in residential cable non-subscription revenue (d)............................................
Total increase (decrease) in residential cable revenue ..............................................
Increase (decrease) in residential mobile revenue (e) .....................................................
Increase in B2B revenue (f) ............................................................................................
Decrease in other revenue ...............................................................................................
Total organic increase................................................................................................
Impact of FX ...................................................................................................................

45.0

27.7

—

72.7
(3.4)
14.6

—

83.9

50.4

— $

45.0

—
(14.9)
(14.9)
26.7

15.2
(1.4)
25.6

5.8

27.7
(14.9)
57.8

23.3

29.8
(1.4)
109.5

56.2

Total........................................................................................................................... $

134.3

31.4

$ 165.7

_______________

(a)

(b)

(c)

(d)

Residential cable subscription revenue includes revenue from multi-year bulk agreements with landlords or housing
associations or with third parties that operate and administer the in-building networks on behalf of housing associations.
These bulk agreements, which generally allow for the procurement of the basic video signals at volume-based discounts,
provide access to approximately two-thirds of Germany’s video subscribers. Germany’s bulk agreements are, to a significant
extent, medium- and long-term contracts. As of December 31, 2017, bulk agreements covering approximately 36% of the
video subscribers that Germany serves expire by the end of 2018 or are terminable on 30-days notice. During the three
months ended December 31, 2017, Germany’s 20 largest bulk agreement accounts generated approximately 9% of its total
revenue (including estimated amounts billed directly to the building occupants for digital video, broadband internet and
fixed-line telephony services). No assurance can be given that Germany’s bulk agreements will be renewed or extended on
financially equivalent terms, or at all.

The increase in residential cable subscription revenue related to a change in the average number of RGUs is attributable to
the net effect of (i) increases in the average number of broadband internet and fixed-line telephony RGUs and (ii) a decline
in the average number of video RGUs.

The increase in residential cable subscription revenue related to a change in ARPU is attributable to (i) an improvement in
RGU mix and (ii) a net increase due to (a) higher ARPU from video and broadband internet services and (b) lower ARPU
from fixed-line telephony services.

The decrease in residential cable non-subscription revenue is primarily due to the net effect of (i) a decrease in channel
carriage fee revenue, (ii) a decrease in interconnect revenue, primarily due to a decline in fixed-line telephony termination
rates and volumes, and (iii) an increase in installation revenue. Channel carriage revenue relates to fees received for the
carriage of certain channels included in Germany’s basic and enhanced video offerings. This channel carriage fee revenue
is subject to contracts that expire or are otherwise terminable by either party on various dates ranging from 2018 through
2022. The aggregate amount of revenue related to these channel carriage contracts represented approximately 4% of
Germany’s total revenue during the three months ended December 31, 2017. No assurance can be given that these contracts
will be renewed or extended on financially equivalent terms, or at all. The decrease in channel carriage fee revenue is
primarily due to the June 2017 discontinuation of our analog video service in Germany, which resulted in a revenue decrease
of $17.5 million.

(e)

The increase in residential mobile non-subscription revenue is primarily due to an increase in revenue from mobile handset
sales of $26.4 million associated with the fourth quarter 2016 launch of a wholesale handset program. These mobile handset
sales typically generate relatively low margins. Beginning in 2018, Germany’s wholesale handset program will be included
within a broader program that will be administered by a subsidiary within Central and Corporate. Accordingly, Germany’s
low-margin mobile handset sales are expected to decline significantly in 2018.

(f)

The increase in B2B subscription revenue is primarily attributable to increases in the average number of fixed-line telephony

II-13

and broadband internet SOHO RGUs. The increase in B2B non-subscription revenue is partially due to (i) higher interconnect
revenue, mainly due to higher fixed-line telephony volumes, and (ii) an increase in revenue from data services.

Switzerland/Austria. The details of the increase in Switzerland/Austria’s revenue during 2017, as compared to 2016, are set

forth below.

Subscription
revenue

Non-
subscription
revenue
in millions

Total

Decrease in residential cable subscription revenue due to change in:

Increase in residential cable non-subscription revenue (c)

Total increase (decrease) in residential cable revenue...........................................
Increase in residential mobile revenue (d) ...................................................................
Increase in B2B revenue (e).........................................................................................
Total organic increase (decrease)...........................................................................
Impact of acquisitions ..................................................................................................
Impact of FX ................................................................................................................

Total ....................................................................................................................... $

_______________

(4.5) $
(43.6)
—
(48.1)
16.8

4.4
(26.9)
1.6

6.9
(18.4) $

— $

—

14.9

0.4

6.6

21.9

4.8

2.1

28.8

(4.5)
(43.6)
14.9
(33.2)
17.2

11.0
(5.0)
6.4

9.0

10.4

(a)

(b)

(c)

(d)

(e)

The decrease in residential cable subscription revenue related to a change in the average number of RGUs is attributable
to the net effect of (i) a decline in the average number of video RGUs and (ii) increases in the average number of fixed-
line telephony and broadband internet RGUs.

The decrease in residential cable subscription revenue related to a change in ARPU is attributable to (i) a decrease due to
lower ARPU from fixed-line telephony, broadband internet and video services and (ii) an adverse change in RGU mix.

The increase in residential cable non-subscription revenue is primarily attributable to the net effect of (i) a $19.3 million
increase associated with distribution revenue that we earned following the September 2017 launch of our Swiss sports
channels, (ii) a decrease in installation revenue in Switzerland and (iii) a decrease in equipment sales in Switzerland. In
addition, the increase in residential cable non-subscription revenue includes a $6.5 million favorable impact of the release
of unclaimed customer credits in Switzerland during the first half of 2017.

The increase in residential mobile subscription revenue is due to the net impact of (i) an increase in the average number of
mobile subscribers and (ii) lower ARPU from mobile services.

The increase in B2B subscription revenue is primarily attributable to an increase in the average number of broadband
internet SOHO RGUs. The increase in B2B non-subscription revenue is primarily due to (i) higher revenue from data
services, primarily in Switzerland, (ii) higher revenue from construction services provided to our partner networks in
Switzerland and (iii) an increase in interconnect revenue in Switzerland.

II-14

Central and Eastern Europe. The details of the increase in Central and Eastern Europe’s revenue during 2017, as compared

to 2016, are set forth below:

Subscription
revenue

Non-
subscription
revenue
in millions

Total

Increase (decrease) in residential cable subscription revenue due to change in:

Average number of RGUs (a)................................................................................... $
ARPU (b)..................................................................................................................
Increase in residential cable non-subscription revenue (c) ..........................................
Total increase in residential cable revenue ............................................................
Increase in residential mobile revenue (d) ...................................................................
Increase in B2B revenue (e).........................................................................................
Increase in other revenue .............................................................................................
Total organic increase ............................................................................................
Impact of FX ................................................................................................................

Total ....................................................................................................................... $

29.7
(9.8)
—

19.9

2.9

8.3

—

31.1

33.8

64.9

— $

—

6.3

0.5

19.5

0.2

26.5

3.8

30.3

29.7
(9.8)
6.3

26.2

3.4

27.8

0.2

57.6

37.6

95.2

_______________

(a)

(b)

(c)

(d)

(e)

The increase in residential cable subscription revenue related to a change in the average number of RGUs is attributable to
(i) an increase in the average number of broadband internet RGUs, primarily due to increases in Hungary, the Czech Republic,
Romania and Poland, (ii) an increase in the average number of video RGUs, primarily due to increases in the Czech Republic,
Hungary and Romania that were only partially offset by decreases in Slovakia and UPC DTH and (iii) an increase in the
average number of fixed-line telephony RGUs, due primarily to increases in Hungary and Romania.

The decrease in residential cable subscription revenue related to a change in ARPU is primarily attributable to (i) the net
effect of (a) higher ARPU from video services, primarily due to increases in Poland, Hungary and UPC DTH that were
only partially offset by a decrease in the Czech Republic, (b) lower ARPU from fixed-line telephony services, primarily
driven by decreases in Poland, Romania and Hungary and (c) lower ARPU from broadband internet services, as decreases
in Poland and Hungary were only partially offset by an increase in Romania, and (ii) an improvement in RGU mix.

The increase in residential cable non-subscription revenue is primarily attributable to increases in Hungary, Poland and
UPC DTH.

The increase in residential mobile subscription revenue is primarily due to an increase in the average number of mobile
subscribers in Hungary.

The increase in B2B subscription revenue is primarily attributable to (i) an increase in the average number of broadband
internet SOHO RGUs, most notably in Hungary and Poland, and (ii) an increase in the average number of video SOHO
RGUs. The increase in B2B non-subscription revenue is primarily due to (a) higher revenue from fixed-line telephony
services, primarily in the Czech Republic, (b) higher interconnect revenue, primarily due to higher volumes in Poland and
Hungary, and (c) higher revenue from data services, primarily in Poland and Romania.

II-15

Revenue — 2016 compared to 2015

Year ended December 31,

Increase (decrease)

Organic
increase (decrease)

2016

2015

in millions, except percentages

U.K./Ireland...................................................... $ 6,508.8
Belgium (a).......................................................
2,691.1

The Netherlands ...............................................

Germany ...........................................................

Switzerland/Austria ..........................................

Central and Eastern Europe..............................

Central and Corporate (b).................................

2,690.8

2,539.7

1,755.6

1,088.4

73.2

Intersegment eliminations ................................

(62.6)
Total........................................................... $ 17,285.0

$ 7,058.7

2,021.0

2,745.3

2,399.5

1,758.2

1,066.6

51.5
(38.1)
$ 17,062.7

(549.9)
670.1
(54.5)
140.2
(2.6)
21.8

21.7
(24.5)
222.3

(7.8) $
33.2
(2.0)
5.8
(0.1)
2.0

42.1

N.M.

1.3

195.5

97.8
(45.9)
148.4

29.1

40.2

34.2
(25.0)
474.3

2.8

3.8
(1.7)
6.2

1.7

3.8

86.6

N.M.

2.7

_______________

(a)

The amount presented for 2016 includes the post-acquisition revenue of BASE, which was acquired on February 11, 2016.

(b)

The amounts presented for 2016 and 2015 primarily include the revenue of Ziggo Sport, which was contributed to the
VodafoneZiggo JV as part of the VodafoneZiggo JV Transaction.

N.M. — Not Meaningful.

U.K./Ireland. The details of the decrease in U.K./Ireland’s revenue during 2016, as compared to 2015, is set forth below:

Subscription
revenue

Non-
subscription
revenue
in millions

Total

Increase in residential cable subscription revenue due to change in:

Total ....................................................................................................................... $

_______________

— $

89.7

92.6

—

182.3
(86.8)
12.5

—

108.0

—

—
(616.7)
(508.7) $

—

16.1

41.7

16.8

12.9

87.5

44.7
(11.8)
(161.6)
(41.2) $

89.7

92.6

16.1

198.4
(45.1)
29.3

12.9

195.5

44.7
(11.8)
(778.3)
(549.9)

(a)

The increase in residential cable subscription revenue related to a change in the average number of RGUs is primarily
attributable to the net effect of (i) increases in the average number of broadband internet and fixed-line telephony RGUs
in the U.K. and (ii) a decline in the average number of video RGUs.

II-16

(b)

(c)

(d)

The increase in residential cable subscription revenue related to a change in ARPU is primarily attributable to the net effect
of (i) a net increase primarily due to the net effect of (a) higher ARPU from broadband internet and video services and (b)
lower ARPU from fixed-line telephony services in the U.K. and (ii) an adverse change in RGU mix. In addition, ARPU
was adversely impacted by an April 2016 change in the regulations governing payment handling fees that Virgin Media
charges to its customers in the U.K., which reduced revenue by $29.4 million.

The increase in residential cable non-subscription revenue is primarily related to (i) an increase in installation revenue, (ii)
an increase in early termination fees and (iii) higher revenue from late fees.

The decrease in residential mobile subscription revenue is primarily attributable to the net effect of (i) a decrease in the
U.K., due primarily to lower ARPU, and (ii) an increase in Ireland, mainly due to an increase in the average number of
mobile subscribers. The lower ARPU in the U.K. includes the net effect of (a) a decline of $158.8 million attributable to a
lower number of customers under higher-ARPU subsidized handset contracts, (b) an increase of $61.6 million attributable
to growth in the number of customers under the lower-ARPU Split-contract Program, (c) an increase of $15.7 million
attributable to growth in the number of customers under subscriber identification module or “SIM”-only contracts and (d)
a decrease in revenue due to the impact of a $4.2 million favorable adjustment to VAT recorded during the fourth quarter
of 2015. The increase in residential mobile non-subscription revenue is primarily due to the net effect of (1) an increase in
revenue from mobile handset sales, primarily attributable to an increase of $63.5 million associated with the U.K. Split-
contract Program, (2) a decrease in interconnect revenue in the U.K., primarily due to (A) a decline in mobile SMS termination
volumes and (B) lower fixed-line telephony termination volumes, and (3) a decrease in early termination fees in the U.K.
The increase in revenue from mobile handset sales pursuant to the U.K. Split-contract Program is due to the net effect of
(I) increased volume and (II) lower average revenue per handset sold.

(e)

The increase in B2B subscription revenue is primarily due to an increase in the average number of broadband internet
SOHO RGUs, primarily in the U.K. The increase in B2B non-subscription revenue is primarily due to the net effect of (i)
lower revenue from fixed-line telephony services in the U.K., due in part to the impact of a $17.4 million favorable adjustment
recorded during the fourth quarter of 2015 related to the settlement of disputes with mobile operators over amounts charged
for voice traffic, including $15.6 million related to years prior to 2015, (ii) an increase in data services, including an increase
of $13.1 million in the U.K.’s amortization of deferred upfront fees on B2B contracts, and (iii) an increase in installation
revenue in the U.K.

(f)

The increase in other revenue is primarily attributable to higher broadcasting revenue in Ireland.

Belgium. The details of the increase in Belgium's revenue during 2016, as compared to 2015, is set forth below:

Subscription
revenue

Non-
subscription
revenue
in millions

Total

Increase (decrease) in residential cable subscription revenue due to change in:

Average number of RGUs (a)................................................................................... $
ARPU (b)..................................................................................................................
Increase in residential cable non-subscription revenue (c) ..........................................
Total increase in residential cable revenue ............................................................
Increase in residential mobile revenue (d) ...................................................................
Increase in B2B revenue (e).........................................................................................
Total organic increase ............................................................................................
Impact of acquisitions ..................................................................................................
Impact of FX ................................................................................................................

Total ....................................................................................................................... $

_______________

(11.3) $
38.4
—

27.1

3.2

44.9

75.2

348.4
(4.9)
418.7

— $

—
1.8

1.8

8.4

12.4

22.6

231.1
(2.3)
251.4

(11.3)
38.4
1.8

28.9

11.6

57.3

97.8

579.5
(7.2)
670.1

(a)

The decrease in residential cable subscription revenue related to a change in the average number of RGUs is attributable
to the net effect of (i) decreases in the average number of video and broadband internet RGUs and (ii) an increase in the
average number of fixed-line telephony RGUs.

II-17

(b)

(c)

(d)

(e)

The increase in residential cable subscription revenue related to a change in ARPU is attributable to (i) higher ARPU from
video, broadband internet and fixed-line telephony services and (ii) an improvement in RGU mix.

The increase in residential cable non-subscription revenue is attributable to the net effect of (i) an increase in equipment
sales, (ii) a decrease in interconnect revenue and (iii) a decrease in installation revenue.

The increase in residential mobile subscription revenue is due to the net effect of (i) an increase in the average number of
postpaid mobile subscribers and (ii) lower ARPU, primarily due to (a) a decline of $12.4 million in mobile services revenue
due to the June 2015 introduction of a Split-contract Program and (b) a decline in usage. The increase in residential mobile
non-subscription revenue is primarily due to higher revenue from sales of mobile handsets and other devices.

The increase in B2B subscription revenue is largely attributable to increases in the average number of video, broadband
internet and mobile SOHO RGUs. The increase in B2B non-subscription revenue is primarily due to higher revenue from
managed security services and related equipment sales.

The Netherlands. The details of the decrease in the Netherlands’ revenue during 2016, as compared to 2015, is set forth below:

Subscription
revenue

Non-
subscription
revenue
in millions

Total

Decrease in residential cable subscription revenue due to change in:

Average number of RGUs (a)................................................................................... $
ARPU (b)..................................................................................................................
Increase in residential cable non-subscription revenue ...............................................
Total increase (decrease) in residential cable revenue ...........................................
Increase in residential mobile revenue (c) ...................................................................
Increase (decrease) in B2B revenue (d) .......................................................................
Total organic increase (decrease)...........................................................................
Impact of FX ................................................................................................................

Total ....................................................................................................................... $

_______________

(51.8) $
(17.1)
—
(68.9)
3.3

19.0
(46.6)
(7.8)
(54.4) $

— $

—

0.2

0.8
(0.3)
0.7
(0.8)
(0.1) $

(51.8)
(17.1)
0.2
(68.7)
4.1

18.7
(45.9)
(8.6)
(54.5)

(a)

(b)

(c)

(d)

The decrease in residential cable subscription revenue related to a change in the average number of RGUs is attributable
to declines in the average number of video and fixed-line telephony RGUs that were only partially offset by an increase in
the average number of broadband internet RGUs.

The decrease in residential cable subscription revenue related to a change in ARPU is attributable to the net effect of (i) a
net decrease due to (a) lower ARPU from fixed-line telephony and broadband internet services and (b) higher ARPU from
video services and (ii) an improvement in RGU mix.

The increase in residential mobile subscription revenue is due to the net effect of (i) an increase in the average number of
mobile subscribers and (ii) lower ARPU.

The increase in B2B subscription revenue is primarily due to increases in the average number of video and broadband
internet SOHO RGUs.

II-18

Germany. The details of the increase in Germany’s revenue during 2016, as compared to 2015, is set forth below:

Subscription
revenue

Non-
subscription
revenue
in millions

Total

Increase in residential cable subscription revenue due to change in:

Average number of RGUs (a) ................................................................................. $
ARPU (b) ................................................................................................................
Decrease in residential cable non-subscription revenue (c) .......................................
Total increase (decrease) in residential cable revenue .........................................
Increase in residential mobile revenue (d) .................................................................
Increase in B2B revenue (e) .......................................................................................
Decrease in other revenue ..........................................................................................
Total organic increase...........................................................................................
Impact of FX ..............................................................................................................

Total...................................................................................................................... $

_______________

— $

51.3

72.8

—
124.1

1.7

10.2

—

136.0
(7.0)
129.0

—
(1.7)

(1.7)
10.7

4.3
(0.9)
12.4
(1.2)
11.2

51.3

72.8
(1.7)
122.4

12.4

14.5
(0.9)
148.4
(8.2)
140.2

(a)

(b)

(c)

(d)

(e)

The increase in residential cable subscription revenue related to a change in the average number of RGUs is attributable to
increases in the average number of broadband internet and fixed-line telephony RGUs that were only partially offset by a
decline in the average number of video RGUs.

The increase in residential cable subscription revenue related to a change in ARPU is attributable to (i) a net increase due
to (a) higher ARPU from video and broadband internet services and (b) lower ARPU from fixed-line telephony services
and (ii) an adverse change in RGU mix.

The decrease in residential cable non-subscription revenue is largely due to the net effect of (i) an increase in installation
revenue and (ii) a decrease due to legislative developments that have reduced the fees Germany can charge late-paying
customers.

The increase in residential mobile non-subscription revenue is primarily due to an increase of $11.5 million in mobile
handset sales associated with the fourth quarter 2016 launch of a wholesale handset program.

The increase in B2B subscription revenue is primarily due to increases in the average number of broadband internet and
fixed-line telephony SOHO RGUs. The increase in B2B non-subscription revenue is primarily due to higher revenue from
data services.

II-19

Switzerland/Austria. The details of the decrease in Switzerland/Austria’s revenue during 2016, as compared to 2015, is set

forth below:

Subscription
revenue

Non-
subscription
revenue
in millions

Total

Increase (decrease) in residential cable subscription revenue due to change in:

Average number of RGUs (a)................................................................................... $
ARPU (b)..................................................................................................................
Decrease in residential cable non-subscription revenue (c).........................................
Total increase (decrease) in residential cable revenue...........................................
Increase in residential mobile revenue (d) ...................................................................
Increase in B2B revenue (e).........................................................................................
Decrease in other revenue............................................................................................
Total organic increase ............................................................................................
Impact of acquisitions ..................................................................................................
Impact of FX ................................................................................................................

Total ....................................................................................................................... $

_______________

(10.4) $
10.9

—

0.5

16.5

4.8

—

21.8

—
(26.8)
(5.0) $

— $

—
(5.3)
(5.3)
11.3

1.4
(0.1)
7.3

1.6
(6.5)
2.4

(10.4)
10.9
(5.3)
(4.8)
27.8

6.2
(0.1)
29.1

1.6
(33.3)
(2.6)

(a)

(b)

(c)

(d)

The decrease in residential cable subscription revenue related to a change in the average number of RGUs is primarily
attributable to a decline in the average number of video RGUs that was mostly offset by increases in the average number
of broadband internet and fixed-line telephony RGUs.

The increase in residential cable subscription revenue related to a change in ARPU is attributable to the net effect of (i) a
net increase due to (a) higher ARPU from video and broadband internet services and (b) lower ARPU from fixed-line
telephony services and (ii) an adverse change in RGU mix.

The decrease in residential cable non-subscription revenue is primarily attributable to (i) lower revenue from late fees and
(ii) a decrease in revenue from services provided through third-party networks.

The increase in residential mobile subscription revenue is due to the net effect of (i) an increase in the average number of
mobile subscribers and (ii) lower ARPU. The increase in residential mobile non-subscription revenue is primarily due to
(a) an increase in revenue from mobile handset sales and (b) an increase in mobile interconnect revenue.

(e)

The increase in B2B subscription revenue is primarily attributable to an increase in the average number of broadband
internet SOHO RGUs.

II-20

Central and Eastern Europe. The details of the increase in Central and Eastern Europe’s revenue during 2016, as compared

to 2015, is set forth below:

Subscription
revenue

Non-
subscription
revenue
in millions

Total

Increase (decrease) in residential cable subscription revenue due to change in:

Average number of RGUs (a)................................................................................... $
ARPU (b)..................................................................................................................
Increase in residential cable non-subscription revenue ...............................................
Total increase in residential cable revenue ............................................................
Increase in residential mobile revenue.........................................................................
Increase in B2B revenue (c).........................................................................................
Total organic increase ............................................................................................
Impact of acquisitions ..................................................................................................
Impact of FX ................................................................................................................

Total ....................................................................................................................... $

53.7
(34.7)
—

19.0

3.9

8.5

31.4

3.1
(19.7)
14.8

— $

—

3.4

0.9

4.5

8.8

0.3
(2.1)
7.0

53.7
(34.7)
3.4

22.4

4.8

13.0

40.2

3.4
(21.8)
21.8

_______________

(a)

(b)

The increase in residential cable subscription revenue related to a change in the average number of RGUs is primarily
attributable to (i) an increase in the average number of broadband internet RGUs, primarily due to increases in Poland,
Hungary and Romania, (ii) an increase in the average number of video RGUs, primarily due to increases in Poland, UPC
DTH, Romania, the Czech Republic and Hungary, and (iii) an increase in the average number of fixed-line telephony RGUs,
primarily due to increases in Poland, Hungary and Romania.

The decrease in residential cable subscription revenue related to a change in ARPU is attributable to (i) a net decrease due
to (a) lower ARPU from broadband internet services, primarily due to a decrease in Poland that was only partially offset
by an increase in Romania, (b) lower ARPU from fixed-line telephony services, primarily due to decreases in Poland,
Romania and Hungary, and (c) higher ARPU from video services, as increases in Poland, Hungary, UPC DTH and Romania
were only partially offset by decreases in the Czech Republic and Slovakia, and (ii) an adverse change in RGU mix.

(c)

The increase in B2B subscription revenue is primarily attributable to an increase in broadband internet SOHO RGUs, mainly
in Poland and the Czech Republic.

II-21

Programming and Other Direct Costs of Services, Other Operating Expenses and SG&A Expenses of our Reportable

Segments

For information regarding the changes in our (i) programming and other direct costs of services, (ii) other operating expenses

and (iii) SG&A expenses, see Discussion and Analysis of our Consolidated Operating Results below.

Adjusted OIBDA of our Reportable Segments

Adjusted OIBDA is the primary measure used by our chief operating decision maker to evaluate segment operating
performance. For the definition of this performance measure and for a reconciliation of total Adjusted OIBDA of our consolidated
reportable segments to our earnings (loss) from continuing operations before income taxes, see note 18 to our consolidated financial
statements.

Adjusted OIBDA — 2017 compared to 2016

Year ended December 31,

Increase (decrease)

Organic
increase (decrease)

2017

2016

in millions, except percentages

U.K./Ireland...................................................... $ 2,894.5
Belgium ............................................................
1,299.7

Germany ...........................................................

Switzerland/Austria ..........................................

Central and Eastern Europe..............................

The Netherlands ...............................................

1,700.3

1,054.3

516.2

—

Central and Corporate ......................................

(379.4)
Total ............................................................. $ 7,085.6

Adjusted OIBDA — 2016 compared to 2015

$ 2,930.9

1,173.4

1,586.4

1,069.3

471.5

1,472.7
(540.5)
$ 8,163.7

(36.4)
126.3

113.9
(15.0)
44.7
(1,472.7)
161.1
$ (1,078.1)

(1.2) $
10.8

7.2
(1.4)
9.5
(100.0)
(29.8)
(13.2) $

93.0

71.0

77.2
(23.6)
25.1

—

49.6

292.3

3.2

5.9

4.9
(2.2)
5.4

—

7.4

4.3

Year ended December 31,

Increase (decrease)

2016

2015

in millions, except percentages

Organic
increase (decrease)

U.K./Ireland...................................................... $ 2,930.9
Belgium (a).......................................................
1,173.4
1,472.7

The Netherlands ...............................................

Germany ...........................................................

Switzerland/Austria ..........................................

Central and Eastern Europe..............................

1,586.4

1,069.3

471.5

Central and Corporate ......................................

(540.5)
Total ............................................................. $ 8,163.7

$ 3,162.1

990.3
1,519.5

1,502.1

1,040.1

474.0
(511.8)
$ 8,176.3

(231.2)
183.1
(46.8)
84.3

29.2
(2.5)
(28.7)
(12.6)

(7.3) $
18.5
(3.1)
5.6

2.8
(0.5)
5.6
(0.2) $

138.5

49.3
(42.1)
89.0

50.0

6.7
(35.2)
256.2

4.4

4.4
(2.8)
5.9

4.8

1.4
(6.6)
3.1

_______________

(a)

The amount presented for 2016 includes the post-acquisition Adjusted OIBDA of BASE, which was acquired on February
11, 2016.

II-22

Adjusted OIBDA Margin — 2017, 2016 and 2015

The following table sets forth the Adjusted OIBDA margins (Adjusted OIBDA divided by revenue) of each of our reportable

segments:

2017

Year ended December 31,
2016
%

2015

U.K./Ireland ................................................................................................................

Belgium .......................................................................................................................

Germany......................................................................................................................

Switzerland/Austria.....................................................................................................

Central and Eastern Europe.........................................................................................

The Netherlands ..........................................................................................................

45.2

45.4

62.8

59.7

43.6

—

45.0

43.6

62.5

60.9

43.3

54.7

44.8

49.0

62.6

59.2

44.4

55.3

In addition to organic changes in the revenue, operating and SG&A expenses of our consolidated reportable segments, the
Adjusted OIBDA margins presented above include the impact of acquisitions, the most significant of which was the BASE
Acquisition in February 2016. In this regard, the Adjusted OIBDA margins of Belgium during 2017 and 2016 have been adversely
impacted by the inclusion since February 2016 of BASE, which generates lower margins than Telenet’s legacy operations. For
discussion of the factors contributing to other changes in the Adjusted OIBDA margins of our reportable segments, see the analysis
of our revenue included in Discussion and Analysis of our Reportable Segments above and the analysis of our expenses included
in Discussion and Analysis of our Consolidated Operating Results below.

II-23

Discussion and Analysis of our Consolidated Operating Results

General

For more detailed explanations of the changes in our revenue, see Discussion and Analysis of our Reportable Segments above.

2017 compared to 2016

Revenue

Our revenue by major category is set forth below:

Year ended December 31,

Increase (decrease)

Organic
increase (decrease)

2017

2016

in millions, except percentages

Residential revenue:

Residential cable revenue (a):

Subscription revenue (b):

Video ......................................................... $ 4,437.8
Broadband internet ....................................
4,019.9

Fixed-line telephony .................................

2,176.8

$ 5,655.6

4,523.4

2,709.3

Total subscription revenue......................

10,634.5

12,888.3

Non-subscription revenue............................

504.9

516.4

Total residential cable revenue .............

11,139.4

13,404.7

$ (1,217.8)
(503.5)
(532.5)
(2,253.8)
(11.5)
(2,265.3)

Residential mobile revenue (c):

Subscription revenue (b)..............................

Non-subscription revenue............................

Total residential mobile revenue ...............

1,035.2

656.3

1,691.5

1,135.2

608.4

1,743.6

Total residential revenue.........................

12,830.9

15,148.3

(100.0)
47.9
(52.1)
(2,317.4)

B2B revenue (d):

Subscription revenue......................................

Non-subscription revenue ..............................

Total B2B revenue .......................................

498.3

1,492.4

1,990.7

Other revenue (e)..............................................

227.3
Total ........................................................ $ 15,048.9

476.5

1,569.6

2,046.1

90.6

$ 17,285.0

21.8
(77.2)
(55.4)
136.7
$ (2,236.1)

_______________

(21.5) $
(11.1)
(19.7)
(17.5)
(2.2)
(16.9)

(8.8)
7.9
(3.0)
(15.3)

4.6
(4.9)
(2.7)
150.9
(12.9) $

(65.6)
240.8
(44.9)
130.3

32.1

162.4

(65.0)
40.9
(24.1)
138.3

108.6

98.5

207.1

7.6

353.0

(1.5)
6.3
(2.0)
1.2

6.8

1.5

(5.8)
6.6
(1.4)
1.1

28.5

6.9

11.3

3.6

2.4

(a)

Residential cable subscription revenue includes amounts received from subscribers for ongoing services. Residential cable
non-subscription revenue includes, among other items, channel carriage fees, installation revenue, late fees and revenue
from the sale of equipment.

(b) Residential subscription revenue from subscribers who purchase bundled services at a discounted rate is generally allocated
proportionally to each service based on the standalone price for each individual service. As a result, changes in the standalone
pricing of our cable and mobile products or the composition of bundles can contribute to changes in our product revenue
categories from period to period.

(c)

Residential mobile subscription revenue includes amounts received from subscribers for ongoing services. Residential
mobile non-subscription revenue includes, among other items, interconnect revenue and revenue from sales of mobile
handsets and other devices. Residential mobile interconnect revenue was $279.1 million and $281.9 million during 2017
and 2016, respectively.

II-24

(d) B2B subscription revenue represents revenue from SOHO subscribers. SOHO subscribers pay a premium price to receive
expanded service levels along with video, broadband internet, fixed-line telephony or mobile services that are the same or
similar to the mass marketed products offered to our residential subscribers. A portion of the increases in our B2B subscription
revenue is attributable to the conversion of certain residential subscribers to SOHO subscribers. B2B non-subscription
revenue includes revenue from business broadband internet, video, fixed-line telephony, mobile and data services offered
to medium to large enterprises and, on a wholesale basis, to other operators.

(e) Other revenue includes, among other items, revenue earned from services provided to the VodafoneZiggo JV.

Total revenue. Our consolidated revenue decreased $2,236.1 million during 2017, as compared to 2016. This decrease includes
(i) a decrease of $2,577.8 million attributable to the impact of the VodafoneZiggo JV Transaction, (ii) an increase of $146.6 million
attributable to the impact of the BASE Acquisition and other less significant acquisitions and (iii) a decrease of $33.0 million
attributable to the impact of dispositions. On an organic basis, our consolidated revenue increased $353.0 million.

Residential revenue. The details of the changes in our consolidated residential revenue for 2017, as compared to 2016, are as

follows (in millions):

Organic increase (decrease) in residential cable subscription revenue due to change in:

Average number of RGUs ...................................................................................................................................... $
ARPU .....................................................................................................................................................................
Organic increase in residential cable non-subscription revenue...............................................................................
Total organic increase in residential cable revenue ..........................................................................................
Organic decrease in residential mobile subscription revenue...................................................................................
Organic increase in residential mobile non-subscription revenue ............................................................................
Total organic increase in residential revenue....................................................................................................
Impact of acquisitions...............................................................................................................................................
Impact of the VodafoneZiggo JV Transaction and disposals....................................................................................
Impact of FX.............................................................................................................................................................

Total decrease in residential revenue ................................................................................................................ $

157.5
(27.2)
32.1

162.4
(65.0)
40.9

138.3

57.2
(2,408.9)
(104.0)
(2,317.4)

On an organic basis, our consolidated residential cable subscription revenue increased $130.3 million or 1.2% during 2017,
as compared to 2016. This increase is attributable to the net effect of (i) an increase from broadband internet services of $240.8
million or 6.3%, attributable to an increase in the average number of RGUs and higher ARPU, (ii) a decrease from video services
of $65.6 million or 1.5%, attributable to a decrease in the average number of RGUs and lower ARPU, and (iii) a decrease from
fixed-line telephony services of $44.9 million or 2.0%, attributable to the net effect of lower ARPU and an increase in the average
number of RGUs.

On an organic basis, our consolidated residential cable non-subscription revenue increased $32.1 million or 6.8% during 2017,
as compared to 2016. This increase is primarily attributable to the net effect of (i) increases in the U.K., Switzerland and Belgium
and (ii) a decrease in Germany.

On an organic basis, our consolidated residential mobile subscription revenue decreased $65.0 million or 5.8% during 2017,
as compared to 2016. This decrease is primarily due the net effect of (i) declines in the U.K. and Belgium and (ii) an increase in
Switzerland.

On an organic basis, our consolidated residential mobile non-subscription revenue increased $40.9 million or 6.6% during
2017, as compared to 2016. This increase is primarily due to increases in the U.K. and Germany that were only partially offset by
a decrease in Belgium.

B2B revenue. On an organic basis, our consolidated B2B subscription revenue increased $108.6 million or 28.5% during 2017
respectively, as compared to 2016. This increase is primarily due to increases in SOHO revenue in Belgium, the U.K. and Germany.

On an organic basis, our consolidated B2B non-subscription revenue increased $98.5 million or 6.9% during 2017 respectively,

as compared to 2016. This increase is primarily due to increases in Belgium, Germany and the Czech Republic.

II-25

For additional information concerning the changes in our residential, B2B and other revenue, see Discussion and Analysis of
our Reportable Segments above. For information regarding the competitive environment in certain of our markets, see Overview
above.

Programming and other direct costs of services

Programming and other direct costs of services include programming and copyright costs, interconnect and access costs, costs
of mobile handsets and other devices and other direct costs related to our operations. Programming and copyright costs, which
represent a significant portion of our operating costs, are expected to rise in future periods as a result of (i) higher costs associated
with the expansion of our digital video content, including rights associated with ancillary product offerings and rights that provide
for the broadcast of live sporting events, (ii) rate increases and (iii) growth in the number of our enhanced video subscribers.

The details of our programming and other direct costs of services are as follows:

Year ended December 31,

Increase (decrease)

Organic
increase (decrease)

2017

2016

in millions, except percentages

U.K./Ireland...................................................... $ 1,868.8
Belgium ............................................................
743.6

Germany ...........................................................

Switzerland/Austria ..........................................

Central and Eastern Europe..............................

The Netherlands ...............................................

Central and Corporate ......................................

262.5

274.8

299.1

—

4.7

Intersegment eliminations ................................

(4.1)
Total........................................................... $ 3,449.4

$ 1,946.4

734.9

228.7

245.4

254.8

509.1

64.6
(54.9)
$ 3,929.0

(77.6)
8.7

33.8

29.4

44.3
(509.1)
(59.9)
50.8
(479.6)

(4.0) $
1.2

14.8

12.0

17.4
(100.0)
(92.7)
N.M.
(12.2) $

(8.1)
(20.7)
27.8

27.4

35.1

—

1.6

2.8

65.9

(0.4)
(2.8)
12.2

11.1

13.8

—

61.5

N.M.

1.9

_______________

N.M. — Not Meaningful.

Our programming and other direct costs of services decreased $479.6 million or 12.2% during 2017, as compared to 2016.
This decrease includes (i) a decrease of $522.7 million attributable to the impact of the VodafoneZiggo JV Transaction, (ii) an
increase of $51.1 million attributable to the BASE Acquisition and other less significant acquisitions and (iii) a decrease of $18.3
million attributable to the impact of dispositions. On an organic basis, our programming and other direct costs of services increased
$65.9 million or 1.9%. This increase includes the following factors:

(cid:149) An increase in programming and copyright costs of $89.3 million or 4.9%, primarily due to increases in U.K./Ireland,
Switzerland/Austria and Hungary. These increases are primarily due to (i) higher costs for certain premium and/or basic
content, including higher costs for sports rights, primarily in U.K./Ireland and Switzerland, and (ii) growth in the number
of enhanced video subscribers, primarily due to increases in Germany, Hungary, U.K./Ireland, Romania and Poland that
were only partially offset by a decrease in Belgium. The cost for sports rights increased by $28.9 million in Switzerland
due to the acquisition of the rights to carry live sporting events in connection with the September 2017 launch of our
Swiss sports channels. Approximately half of these programming costs and the operating and capital costs associated
with the production of the related Swiss sports channels are recovered from the revenue earned from the distribution of
these sports channels to other cable operators;

(cid:149) A decrease in interconnect and access costs of $56.7 million or 5.7%. The lower costs are primarily due to the net effect
of (i) a $42.1 million decrease (including $32.3 million and $9.8 million recorded in the second and fourth quarters of
2017, respectively) in U.K./Ireland, primarily associated with a telecommunications operator’s agreement to compensate
communications providers, including Virgin Media, for certain contractual breaches related to network charges, (ii) lower
MVNO costs, as decreases in Belgium and U.K./Ireland were only partially offset by an increase in Switzerland/Austria,
(iii) a decline resulting from lower interconnect rates, primarily in Germany, (iv) an increase of $6.8 million due to the
release of an accrual during the second quarter of 2016 related to the settlement of an operational contingency in Belgium

II-26

and (v) slightly lower fixed-line telephony call volumes, as declines in U.K./Ireland, Switzerland/Austria and Germany
were largely offset by an increase in the Czech Republic; and

(cid:149) An increase in mobile handset and other device costs of $23.1 million or 6.7%, primarily due to the net effect of (i) a
higher average cost per handset sold in U.K./Ireland and (ii) lower mobile handset and other device sales volume, primarily
due to decreases in Belgium and U.K./Ireland that were largely offset by an increase in Germany.

Other operating expenses

Other operating expenses include network operations, customer operations, customer care, share-based compensation and
other costs related to our operations. We do not include share-based compensation in the following discussion and analysis of the
other operating expenses of our reportable segments as share-based compensation expense is not included in the performance
measures of our reportable segments. Share-based compensation expense is discussed below.

The details of our other operating expenses are as follows:

Year ended December 31,

Increase (decrease)

Organic
increase (decrease)

2017

2016

in millions, except percentages

U.K./Ireland...................................................... $
Belgium ............................................................

Germany ...........................................................

Switzerland/Austria ..........................................

Central and Eastern Europe..............................

The Netherlands ...............................................

Central and Corporate ......................................

Intersegment eliminations ................................

Total other operating expenses excluding

share-based compensation expense..........

859.5

836.9

395.5

363.0

221.4

192.0

—

170.7

4.9

361.9

350.9

225.1

195.5

346.9

144.6

4.8

2,207.0

2,466.6

Share-based compensation expense .................

4.8
Total........................................................... $ 2,211.8

3.3

$ 2,469.9

22.6

33.6

12.1
(3.7)
(3.5)
(346.9)
26.1

0.1

(259.6)
1.5
(258.1)

2.7

9.3

3.4
(1.6)
(1.8)
(100.0)
18.0

N.M.

(10.5) $
45.5
(10.4)

58.6

10.8

4.6
(6.6)
(7.5)
—

4.1
(0.9)

63.1

7.0

2.9

1.3
(2.9)
(3.8)
—

3.2

N.M.

2.9

_______________

N.M. — Not Meaningful.

Our other operating expenses (exclusive of share-based compensation expense) decreased $259.6 million or 10.5% during
2017, as compared to 2016. This decrease includes (i) a decrease of $327.6 million attributable to the impact of the VodafoneZiggo
JV Transaction and (ii) an increase of $23.0 million attributable to the impact of the BASE Acquisition and other less significant
acquisitions. On an organic basis, our other operating expenses increased $63.1 million or 2.9%. This increase includes the following
factors:

(cid:149) An increase in network-related expenses of $65.2 million or 8.6%, primarily due to the net effect of (i) an increase of
$34.0 million in U.K./Ireland related to network infrastructure charges following an April 1, 2017 increase in the rateable
value of existing assets, (ii) higher network maintenance costs, primarily in Belgium, Central and Corporate and U.K./
Ireland, (iii) higher energy costs, primarily in U.K./Ireland and Germany, (iv) a $5.9 million increase in U.K./Ireland
associated with the impact of the settlement of an operational contingency during the first quarter of 2016 and (v) lower
expenses resulting from the capitalization of UPC DTH’s satellite capacity costs following the April 2017 renegotiation
of the underlying agreement. For additional information regarding the increased network infrastructure charges in U.K./
Ireland, see note 17 to our consolidated financial statements;

(cid:149) A decrease in personnel costs of $34.0 million or 4.9%, due primarily to the net effect of (i) lower staffing levels, as
decreases in Germany, Central and Corporate and U.K./Ireland were only partially offset by an increase in Belgium, (ii)
annual wage increases, (iii) decreased costs in U.K./Ireland and Belgium resulting from higher capitalized labor costs,

II-27

(iv) lower incentive compensation costs, primarily in U.K./Ireland, (v) higher costs related to certain employee benefits
in Belgium and Central and Corporate and (vi) lower costs for employee vehicles related to the impact of the conversion
of certain operating leases on company vehicles to capital leases, primarily in Central and Corporate and Germany. The
higher capitalized labor costs in U.K./Ireland are associated with (a) the Network Extensions and (b) increased installations
of new customer premises equipment. The higher capitalized labor costs in Belgium are primarily associated with a
project to upgrade Telenet’s mobile network;

(cid:149) An increase in outsourced labor and professional fees of $16.8 million or 6.3%, as higher call center costs in U.K./Ireland
and Germany were only partially offset by lower consulting costs, primarily in U.K./Ireland. The higher call center costs
were largely driven by increased call volumes;

(cid:149) A decrease in vehicle expenses of $9.4 million or 47.1%, a portion of which is due to the impact of the conversion of

certain operating leases on company vehicles to capital leases, primarily in U.K./Ireland; and

(cid:149) An increase in information technology-related expenses of $8.7 million or 8.0%, primarily due to higher software and

other information technology-related maintenance costs in U.K./Ireland and Central and Corporate.

SG&A expenses

SG&A expenses include human resources, information technology, general services, management, finance, legal, external
sales and marketing costs, share-based compensation and other general expenses. We do not include share-based compensation
in the following discussion and analysis of the SG&A expenses of our reportable segments as share-based compensation expense
is not included in the performance measures of our reportable segments. Share-based compensation expense is discussed below.

The details of our SG&A expenses are as follows:

Year ended December 31,

Increase (decrease)

2017

2016

in millions, except percentages

Organic
increase (decrease)

8.3
(24.8)
(0.1)
(2.2)
4.9

—
(51.9)
(2.5)

1.0
(5.6)
—
(1.0)
2.9

—
(13.0)
N.M.

(68.3)

(2.9)

(2.4)
1.3

1.6
(0.1)
5.8
(100.0)
(13.8)
N.M.

(15.4)
(39.2)
(17.6)

U.K./Ireland...................................................... $
Belgium ............................................................

Germany ...........................................................

Switzerland/Austria ..........................................

Central and Eastern Europe..............................

The Netherlands ...............................................

Central and Corporate ......................................

Intersegment eliminations ................................

775.9

794.6

426.5

379.6

215.5

176.3

—

348.8

(15.7)

420.9

373.7

215.8

166.6

362.1

404.5
(12.5)

Total SG&A expenses excluding share-

based compensation expense ...................

2,306.9

Share-based compensation expense .................

169.1
Total........................................................... $ 2,476.0

2,725.7

278.2

$ 3,003.9

(18.7)
5.6

5.9
(0.3)
9.7
(362.1)
(55.7)
(3.2)

(418.8)
(109.1)
(527.9)

______________

N.M. — Not Meaningful.

II-28

Supplemental SG&A expense information:

Year ended December 31,

Decrease

Organic
decrease

2017

2016

in millions, except percentages

General and administrative (a) .......................... $ 1,591.5
715.4
External sales and marketing.............................
Total................................................................. $ 2,306.9

$ 1,905.4

820.3

$ 2,725.7

(313.9)
(104.9)
(418.8)

(16.5) $
(12.8)
(15.4) $

(68.0)
(0.3)
(68.3)

(4.1)
—
(2.9)

______________

(a) General and administrative expenses include all personnel-related costs within our SG&A expenses, including personnel-

related costs associated with our sales and marketing function.

Our SG&A expenses (exclusive of share-based compensation expense) decreased $418.8 million or 15.4% during 2017, as
compared to 2016. This decrease includes (i) a decrease of $368.0 million attributable to the impact of the VodafoneZiggo JV
Transaction and (ii) an increase of $32.4 million attributable to the impact of the BASE Acquisition and other less significant
acquisitions. On an organic basis, our SG&A expenses decreased $68.3 million or 2.9%. This decrease includes the following
factors:

(cid:149) A decrease in outsourced labor and professional fees of $36.6 million or 17.3%, primarily due to the net effect of (i) a
decrease in consulting costs, primarily in Belgium and Central and Corporate, (ii) an increase in call center costs, primarily
in U.K./Ireland, and (iii) lower audit and legal fees. The decrease in consulting costs in Belgium includes an aggregate
decrease of $6.3 million related to costs incurred during 2016 associated with the integration of BASE with our operations
in Belgium; and

(cid:149) A decrease in personnel costs of $36.3 million or 3.5% due primarily to the net effect of (i) decreased staffing levels, as
decreases in Central and Corporate and Belgium were only partially offset by increases in Germany and Switzerland/
Austria, (ii) lower incentive compensation costs, primarily due to decreases in Central and Corporate, U.K./Ireland and
Germany that were only partially offset by increases in Belgium and Switzerland/Austria, and (iii) annual wage increases.
The lower incentive compensation costs include a decrease of $12.5 million, primarily in Central and Corporate,
attributable to our decision to issue Liberty Global Shares to settle a portion of our 2017 annual incentive compensation.

II-29

Share-based compensation expense (included in other operating and SG&A expenses)

Our share-based compensation expense primarily relates to the share-based incentive awards issued by Liberty Global to its
employees and employees of its subsidiaries. A summary of our aggregate share-based compensation expense is set forth below:

Liberty Global:

Performance-based incentive awards (a).......................................................................................... $
Non-performance based share-based incentive awards ...................................................................

Other (b) ...........................................................................................................................................

Total Liberty Global shares (c) .....................................................................................................

Telenet share-based incentive awards (d) ...........................................................................................

Other ...................................................................................................................................................

Total ........................................................................................................................................... $

Included in:

Other operating expenses ................................................................................................................. $
Total SG&A expenses ......................................................................................................................

Total ............................................................................................................................................. $

_______________

Year ended December 31,

2017

2016

in millions

29.0

108.6

14.2

151.8

20.7

1.4

173.9

4.8

169.1

173.9

160.8

108.1

—

268.9

12.2

0.4

281.5

3.3

278.2

281.5

(a)

Includes share-based compensation expense related to PSUs, the Challenge Performance Awards and PGUs.

(b) Represents annual incentive compensation and defined contribution plan liabilities that have been or will be settled with

Liberty Global Shares.

Modifications.

(d) Represents the share-based compensation expense associated with Telenet’s share-based incentive awards, which, at
December 31, 2017, included performance- and non-performance-based stock option awards with respect to 3,693,753
Telenet shares. These stock option awards had a weighted average exercise price of €48.26 ($58.02).

For additional information concerning our share-based compensation, see note 13 to our consolidated financial statements.

Depreciation and amortization expense

Our depreciation and amortization expense was $4,857.0 million and $5,213.8 million during 2017 and 2016, respectively.
Excluding the effects of FX, depreciation and amortization expense decreased $301.8 million or 5.8% during 2017, as compared
to 2016. This decrease is primarily due to the net effect of (i) an increase associated with property and equipment additions related
to the installation of customer premises equipment, the expansion and upgrade of our networks and other capital initiatives, (ii) a
decrease associated with certain assets becoming fully depreciated, primarily in U.K./Ireland, Central and Corporate, Germany
and, to a lesser extent, Switzerland/Austria and Belgium, (iii) a decrease associated with the VodafoneZiggo JV Transaction and
(iv) an increase due to accelerated depreciation, primarily in U.K./Ireland.

Impairment, restructuring and other operating items, net

We recognized impairment, restructuring and other operating items, net, of $107.2 million during 2017, as compared to $186.2

million during 2016.

The total for 2017 primarily includes (i) restructuring charges of $69.2 million, including $56.0 million of employee severance
and termination costs related to certain reorganization activities, primarily in U.K./Ireland, Germany and Central and Corporate
and (ii) a $40.0 million legal settlement recorded during the third quarter of 2017.

As further discussed in note 14 to our consolidated financial statements, the migration of Telenet’s mobile subscribers will

II-30

result in additional charges under the MVNO agreement in excess of usage-based charges. These incremental charges will be
recognized as restructuring costs during 2018, and are expected to range between $30 million and $40 million.

The total for 2016 primarily includes (i) restructuring charges of $154.7 million, including (a) $127.1 million of employee
severance and termination costs related to certain reorganization activities, primarily in Germany, U.K./Ireland, Central and
Corporate and the Netherlands, and (b) $24.2 million of contract termination charges, primarily in Central and Corporate and (ii)
direct acquisition costs of $45.3 million, related to the VodafoneZiggo JV Transaction and the BASE Acquisition.

If, among other factors, (i) our equity values were to decline significantly or (ii) the adverse impacts of economic, competitive,
regulatory or other factors were to cause our results of operations or cash flows to be worst than anticipated, we could conclude
in future periods that impairment charges are required in order to reduce the carrying values of our goodwill and, to a lesser extent,
other long-lived assets. Any such impairment charges could be significant.

For information regarding our acquisitions, see note 4 to our consolidated financial statements. For information regarding the

VodafoneZiggo JV Transaction, see note 5 to our consolidated financial statements.

For additional information regarding our restructuring charges, see note 14 to our consolidated financial statements. For
additional information regarding our impairments, see Critical Accounting Policies, Judgments and Estimates — Impairment of
Property and Equipment and Intangible Assets below.

Interest expense

We recognized interest expense of $1,889.6 million and $2,324.4 million during 2017 and 2016, respectively. Excluding the
effects of FX, interest expense decreased $417.7 million or 18.0% during 2017, as compared to 2016. This decrease is primarily
attributable to (i) lower average outstanding debt balances, largely due to a decrease related to the VodafoneZiggo JV Transaction
and (ii) lower weighted average interest rates related to the completion of certain refinancing transactions that resulted in extended
maturities and decreases to certain of our interest rates. For additional information regarding our outstanding indebtedness, see
note 10 to our consolidated financial statements.

It is possible that the interest rates on (i) any new borrowings could be higher than the current interest rates on our existing
indebtedness and (ii) our variable-rate indebtedness could increase in future periods. As further discussed in note 7 to our
consolidated financial statements and under Qualitative and Quantitative Disclosures about Market Risk below, we use derivative
instruments to manage our interest rate risks.

II-31

Realized and unrealized gains (losses) on derivative instruments, net

Our realized and unrealized gains or losses on derivative instruments include (i) unrealized changes in the fair values of our
derivative instruments that are non-cash in nature until such time as the derivative contracts are fully or partially settled and (ii)
realized gains or losses upon the full or partial settlement of the derivative contracts. The details of our realized and unrealized
gains (losses) on derivative instruments, net, are as follows:

Year ended December 31,

2017

2016

in millions

Cross-currency and interest rate derivative contracts (a) ................................................................... $
Equity-related derivative instruments:

(1,506.1) $

716.2

ITV Collar ........................................................................................................................................

Sumitomo Collar ..............................................................................................................................

Lionsgate Forward............................................................................................................................

Other.................................................................................................................................................

Total equity-related derivative instruments (b)..............................................................................

Foreign currency forward and option contracts..................................................................................

Other ...................................................................................................................................................

Total ............................................................................................................................................. $

215.0
(77.4)
(11.4)
(3.9)
122.3
(29.0)
0.8
(1,412.0) $

351.5
(25.6)
10.1

1.6

337.6

18.1
(0.9)
1,071.0

_______________

(a)

The loss during 2017 is primarily attributable to the net effect of (i) a net loss associated with changes in the relative value
of certain currencies and (ii) a net gain associated with changes in certain market interest rates. In addition, the loss during
2017 includes a net gain of $233.7 million resulting from changes in our credit risk valuation adjustments. The gain during
2016 is attributable to the net effect of (a) a net gain associated with changes in the relative value of certain currencies and
(b) a net loss associated with changes in certain market interest rates. In addition, the gain during 2016 includes a net loss
of $28.1 million resulting from changes in our credit risk valuation adjustments.

(b)

For information concerning the factors that impact the valuations of our equity-related derivative instruments, see note 8
to our consolidated financial statements.

For additional information concerning our derivative instruments, see notes 7 and 8 to our consolidated financial statements

and Quantitative and Qualitative Disclosures about Market Risk below.

II-32

Foreign currency transaction gains (losses), net

Our foreign currency transaction gains or losses primarily result from the remeasurement of monetary assets and liabilities
that are denominated in currencies other than the underlying functional currency of the applicable entity. Unrealized foreign
currency transaction gains or losses are computed based on period-end exchange rates and are non-cash in nature until such time
as the amounts are settled. The details of our foreign currency transaction gains (losses), net, are as follows:

Year ended December 31,

2017

2016

in millions

892.0

(481.6)

U.S. dollar denominated debt issued by euro functional currency entities ........................................ $
Intercompany payables and receivables denominated in a currency other than the entity’s

functional currency (a) ....................................................................................................................
U.S. dollar denominated debt issued by British pound sterling functional currency entities.............
British pound sterling denominated debt issued by a U.S. dollar functional currency entity ............
Cash and restricted cash denominated in a currency other than the entity’s functional currency ......
Yen denominated debt issued by a U.S. dollar functional currency entity.........................................
Euro denominated debt issued by British pound sterling functional currency entities ......................
Other ...................................................................................................................................................

(874.5)
351.9
(125.5)
(104.8)
(20.9)
20.2

28.0

Total ............................................................................................................................................... $

166.4

_______________

731.6
(954.4)
251.2

203.5
(40.3)
(75.7)
(34.4)
(400.1)

(a) Amounts primarily relate to (i) loans between certain of our non-operating subsidiaries in the U.S. and Europe and (ii) loans
between certain of our non-operating and operating subsidiaries in Europe, which generally are denominated in the currency
of the applicable operating subsidiary.

For information regarding how we manage our exposure to foreign currency risk, see Quantitative and Qualitative Disclosures

about Market Risk — Foreign Currency Risk below.

Realized and unrealized gains (losses) due to changes in fair values of certain investments and debt, net

Our realized and unrealized gains or losses due to changes in fair values of certain investments and debt include unrealized
gains or losses associated with changes in fair values that are non-cash in nature until such time as these gains or losses are realized
through cash transactions. For additional information regarding our investments, fair value measurements and debt, see notes 6,
8 and 10, respectively, to our consolidated financial statements. The details of our realized and unrealized gains (losses) due to
changes in fair values of certain investments and debt, net, are as follows:

Year ended December 31,

2017

2016

in millions

Investments:

Sumitomo ......................................................................................................................................... $
ITV ...................................................................................................................................................

Casa ..................................................................................................................................................

Lionsgate ..........................................................................................................................................

Other, net (a).....................................................................................................................................

Total investments ...........................................................................................................................

Debt.....................................................................................................................................................

Total............................................................................................................................................ $

238.2
(123.5)
47.9

35.3

30.2

228.1
(191.2)
36.9

67.2
(608.6)
23.9
(33.4)
112.0
(438.9)
(22.6)
(461.5)

_______________

(a) Amounts for 2017 and 2016 include gains of $12.7 million and $84.4 million, respectively, related to investments that were

sold during the respective year.

II-33

Losses on debt modification and extinguishment, net

We recognized net losses on debt modification and extinguishment of $343.3 million and $238.1 million during 2017 and

2016, respectively.

The loss during 2017 is primarily attributable to (i) the payment of $214.1 million of redemption premiums and (ii) the write-

off of $130.8 million of net unamortized deferred financing costs, discounts and premiums.

The loss during 2016 is primarily attributable to (i) the payment of $132.2 million of redemption premiums and (ii) the write-

off of $96.3 million of net unamortized deferred financing costs, discounts and premiums.

For additional information concerning our losses on debt modification and extinguishment, net, see note 10 to our consolidated

financial statements.

Share of losses of affiliates, net

The following table sets forth the details of our share of losses of affiliates, net:

Year ended December 31,

2017

2016

in millions

VodafoneZiggo JV (a)......................................................................................................................... $
Other ...................................................................................................................................................

Total ............................................................................................................................................... $

70.1

25.1

95.2

—

111.6

_______________

(a) Amount in 2017 includes the net effect of (i) $64.3 million, representing 100% of the interest income earned on the
VodafoneZiggo JV Receivable, (ii) 100% of the share-based compensation expense associated with Liberty Global awards
held by VodafoneZiggo JV employees who were formerly employees of Liberty Global, as these awards remain our
responsibility, and (iii) our 50% share of the remaining results of operations of the VodafoneZiggo JV. During 2017, the
VodafoneZiggo JV generated (a) revenue of $4,537.7 million, (b) Adjusted OIBDA of $1,908.8 million, (c) operating income
of $217.0 million, (d) net non-operating expenses of $588.9 million (including $643.7 million of interest expense) and (e)
a net loss of $265.7 million. The VodafoneZiggo JV’s operating income includes depreciation and amortization of $1,677.3
million.

The mobile and fixed-line operations of the VodafoneZiggo JV are experiencing significant competition. In particular, the
mobile operations of the VodafoneZiggo JV continue to experience competitive pressure on pricing, characterized by aggressive
promotion campaigns, heavy marketing efforts and increasing or unlimited data bundles. If the adverse impacts of economic,
competitive, regulatory or other factors were to cause significant deterioration of the results of operations or cash flows of the
VodafoneZiggo JV, we could conclude in future periods that our investment in the VodafoneZiggo JV is impaired or management
of the VodafoneZiggo JV could conclude that an impairment of the VodafoneZiggo JV goodwill and, to a lesser extent, long-lived
assets, is required. Any such impairment of the VodafoneZiggo JV’s goodwill or our investment in the VodafoneZiggo JV would
be reflected as a component of share of results of affiliates, net, in our consolidated statement of operations. Our share of any such
impairment charges could be significant.

For additional information regarding our equity method investments, see note 6 to our consolidated financial statements.

Gain on VodafoneZiggo JV Transaction

In connection with the VodafoneZiggo JV Transaction, we recognized a pre-tax gain during 2016 of $520.8 million, net of
the recognition of a cumulative foreign currency translation loss of $714.5 million. In connection with the finalization of the
equalization payment from Vodafone associated with the VodafoneZiggo JV Transaction, we recognized an additional pre-tax gain
of $4.5 million during the second quarter of 2017. For additional information, see note 5 to our consolidated financial statements.

II-34

Other income, net

We recognized other income, net, of $28.8 million and $109.2 million during 2017 and 2016, respectively. These amounts
include interest and dividend income of $31.0 million and $36.4 million, respectively. In addition, the 2016 amount includes
income of $69.8 million, representing our share of the settlement of certain litigation.

Income tax benefit (expense)

We recognized income tax benefit (expense) of ($309.5 million) and $1,347.0 million during 2017 and 2016, respectively.

The income tax expense during 2017 differs from the expected income tax benefit of $299.5 million (based on the U.K.
statutory income tax rate of 19.25%), primarily due to the net negative impact of (i) an increase in valuation allowances, (ii) non-
deductible or non-taxable foreign currency exchange results, (iii) certain permanent differences between the financial and tax
accounting treatment of interest and other items and (iv) certain permanent differences between the financial and tax accounting
treatment of items associated with investments in subsidiaries. The net negative impact of these items was partially offset by the
net positive impact of statutory tax rates in certain jurisdictions in which we operate that are different than the U.K. statutory
income tax rate.

The income tax benefit during 2016 differs from the expected income tax expense of $129.5 million (based on the U.K.
statutory income tax rate of 20.0%) primarily due to the net positive impact of (i) a decrease in valuation allowances, including
tax benefits of $1.1 billion recognized in the Netherlands upon the release of valuation allowances in the fourth quarter of 2016,
(ii) the recognition of previously unrecognized tax benefits, (iii) non-deductible or non-taxable foreign currency exchange results,
(iv) the tax effect of intercompany financing and (v) statutory tax rates in certain jurisdictions in which we operate that are different
than the U.K. statutory income tax rate. The release of valuation allowances in the Netherlands is attributable to a significant
improvement in our forecast of taxable income in the Netherlands, due to, among other factors, the impacts of contributing
VodafoneZiggo Holding to the VodafoneZiggo JV on December 31, 2016, as further described in note 5 to our consolidated
financial statements. The net positive impact of these items was partially offset by the net negative impact of a reduction in net
deferred tax assets in the U.K. and other countries due to enacted changes in tax law.

For additional information concerning our income taxes, see note 11 to our consolidated financial statements.

Earnings (loss) from continuing operations

During 2017 and 2016, we reported earnings (loss) from continuing operations of ($1,865.5 million) and $1,994.5 million,
respectively, consisting of (i) operating income of $1,947.5 million and $2,482.2 million, respectively, (ii) net non-operating
expense of $3,503.5 million and $1,834.7 million, respectively, and (iii) income tax benefit (expense) of ($309.5 million) and
$1,347.0 million, respectively.

Gains or losses associated with (i) changes in the fair values of derivative instruments, (ii) movements in foreign currency
exchange rates and (iii) the disposition of assets and changes in ownership are subject to a high degree of volatility and, as such,
any gains from these sources do not represent a reliable source of income. In the absence of significant gains in the future from
these sources or from other non-operating items, our ability to achieve earnings is largely dependent on our ability to increase our
aggregate Adjusted OIBDA to a level that more than offsets the aggregate amount of our (a) share-based compensation expense,
(b) depreciation and amortization, (c) impairment, restructuring and other operating items, (d) interest expense, (e) other non-
operating expenses and (f) income tax expenses.

Due largely to the fact that we seek to maintain our debt at levels that provide for attractive equity returns, as discussed under
Material Changes in Financial Condition — Capitalization below, we expect that we will continue to report significant levels of
interest expense for the foreseeable future. For information concerning our expectations with respect to trends that may affect
certain aspects of our operating results in future periods, see the discussion under Overview above. For information concerning
the reasons for changes in specific line items in our consolidated statements of operations, see Discussion and Analysis of our
Reportable Segments and Discussion and Analysis of our Consolidated Operating Results above.

Earnings (loss) from discontinued operations, net of taxes

Our loss from discontinued operations, net of taxes, of $855.1 million and $227.2 million during 2017 and 2016, respectively,

relates to the operations of the LiLAC Group. For additional information, see note 5 to our consolidated financial statements.

II-35

Net earnings attributable to noncontrolling interests

Net earnings attributable to noncontrolling interests includes the noncontrolling interests’ share of the results of our continuing
and discontinued operations. Our net earnings attributable to noncontrolling interests were $57.5 million and $62.0 million during
2017 and 2016, respectively. The decrease is primarily attributable to the net effect of an improvement in the results of operations
of Telenet and declines in the results of operations of Liberty Puerto Rico and certain C&W subsidiaries.

2016 compared to 2015

Revenue

Our revenue by major category is set forth below:

Year ended December 31,

Increase (decrease)

Organic
increase (decrease)

2016

2015

in millions, except percentages

Residential revenue:

Residential cable revenue (a):

Subscription revenue (b):

Video ......................................................... $ 5,655.6
Broadband internet ....................................
4,523.4

Fixed-line telephony .................................

2,709.3

$ 5,786.4

4,495.1

2,926.0

Total subscription revenue......................

12,888.3

13,207.5

Non-subscription revenue............................

516.4

521.0

Total residential cable revenue .............

13,404.7

13,728.5

Residential mobile revenue (c):

Subscription revenue (b)..............................

Non-subscription revenue............................

Total residential mobile revenue ...............

1,135.2

608.4

1,743.6

993.3

432.1

1,425.4

Total residential revenue.........................

15,148.3

15,153.9

B2B revenue (d):

Subscription revenue......................................

Non-subscription revenue ..............................

Total B2B revenue .......................................

476.5

1,569.6

2,046.1

304.9

1,572.0

1,876.9

Other revenue ...................................................

90.6
Total ........................................................ $ 17,285.0

31.9
$ 17,062.7

(130.8)
28.3
(216.7)
(319.2)
(4.6)
(323.8)

141.9

176.3

318.2
(5.6)

171.6
(2.4)
169.2

58.7
222.3

_________________

(2.3) $
0.6
(7.4)
(2.4)
(0.9)
(2.4)

14.3

40.8

22.3

—

56.3
(0.2)
9.0

184.0
1.3

69.2

267.3
(52.5)
284.0

14.6

298.6

(58.1)
73.8

15.7

314.3

100.0

35.5

135.5

24.5
474.3

1.2

5.9
(1.8)
2.1

2.8

2.2

(4.6)
12.9

0.9

2.0

26.2

2.1

6.6

37.7
2.7

(a)

(c)

Residential mobile subscription revenue includes amounts received from subscribers for ongoing services. Residential
mobile non-subscription revenue includes, among other items, interconnect revenue and revenue from sales of mobile
handsets and other devices. Residential mobile interconnect revenue was $281.9 million and $209.1 million during 2016
and 2015, respectively.

II-36

Total revenue. Our consolidated revenue increased $222.3 million during 2016, as compared to 2015. This increase includes
(i) an increase of $575.9 million attributable to the impact of acquisitions and (ii) a decrease of $29.5 million attributable to the
non-cable subscribers in the U.K. that we sold in the fourth quarter of 2014 and migrated to a third party during the first nine
months of 2015 (the U.K. Non-Cable Disposal) and another less significant disposition. On an organic basis, our consolidated
revenue increased $474.3 million or 2.7%.

Residential revenue. The details of the change in our consolidated residential revenue for 2016, as compared to 2015, are as

follows (in millions):

Organic increase in residential cable subscription revenue due to change in:

Average number of RGUs ...................................................................................................................................... $
ARPU .....................................................................................................................................................................
Organic increase in residential cable non-subscription revenue...............................................................................
Total organic increase in residential cable revenue ..........................................................................................
Organic decrease in residential mobile subscription revenue...................................................................................
Organic increase in residential mobile non-subscription revenue ............................................................................
Total organic increase in residential revenue....................................................................................................
Impact of acquisitions...............................................................................................................................................
Impact of disposals ...................................................................................................................................................
Impact of FX.............................................................................................................................................................

Total decrease in residential revenue ................................................................................................................ $

189.4

94.6

14.6

298.6
(58.1)
73.8

314.3

428.9
(17.5)
(731.3)
(5.6)

On an organic basis, our consolidated residential cable subscription revenue increased $284.0 million or 2.1% during 2016,
as compared to 2015. This increase is attributable to (i) an increase from broadband internet services of $267.3 million or 5.9%,
attributable to an increase in the average number of RGUs and higher ARPU, (ii) an increase from video services of $69.2 million
or 1.2%, attributable to the net effect of higher ARPU and a decrease in the average number of RGUs, and (iii) a decrease from
fixed-line telephony services of $52.5 million or 1.8%, attributable to the net effect of lower ARPU and an increase in the average
number of RGUs.

On an organic basis, our consolidated residential cable non-subscription revenue increased $14.6 million or 2.8% during 2016,
as compared to 2015. This increase is primarily attributable to the net effect of (i) an increase in the U.K. and (ii) a decrease in
Switzerland.

On an organic basis, our consolidated residential mobile subscription revenue decreased $58.1 million or 4.6% during 2016,
as compared to 2015. This decrease is primarily due the net effect of (i) a decline in the U.K. and (ii) increases in Switzerland,
Hungary and Belgium.

On an organic basis, our consolidated residential mobile non-subscription revenue increased $73.8 million or 12.9% during

2016, as compared to 2015. This increase is primarily due to an increase in the U.K., Germany, Switzerland and Belgium.

B2B revenue. On an organic basis, our consolidated B2B subscription revenue increased $100.0 million or 26.2% during

2016, as compared to 2015. This increase is primarily due to increases in SOHO revenue in Belgium, the U.K. and Germany.

On an organic basis, our consolidated B2B non-subscription revenue increased $35.5 million or 2.1% during 2016, as compared

to 2015. This increase is primarily due to increases in the U.K., Belgium and Germany.

For additional information concerning the changes in our residential, B2B and other revenue, see Discussion and Analysis of

our Reportable Segments above.

II-37

Programming and other direct costs of services

The details of our programming and other direct costs of services are as follows:

Year ended December 31,

Increase (decrease)

Organic
increase (decrease)

2016

2015

in millions, except percentages

U.K./Ireland.......................................................... $ 1,946.4
Belgium (a)...........................................................
734.9

The Netherlands ...................................................

Germany ...............................................................

Switzerland/Austria ..............................................

Central and Eastern Europe..................................

Central and Corporate ..........................................

509.1

228.7

245.4

254.8

64.6

Intersegment eliminations ....................................

(54.9)
Total ................................................................. $ 3,929.0

_______________

$ 2,070.7

526.8

468.6

203.5

236.9

234.1

40.5

25.2

8.5

20.7

52.1
(26.4)
$ 3,766.3

12.5
(28.5)
162.7

(124.3)
208.1

(6.0) $
39.5

86.1

4.0

42.3

25.9

12.8

24.8

26.0
(27.8)
194.1

4.1

0.5

9.0

12.7

5.4

10.5

66.7

N.M.

4.9

8.6

12.4

3.6

8.8

24.0

N.M.

4.3

(a)

The amount presented for 2016 includes the post-acquisition direct costs of BASE, which was acquired on February 11,
2016.

N.M. — Not Meaningful.

Our programming and other direct costs of services increased $162.7 million or 4.3% during 2016, as compared to 2015. This
increase includes (i) an increase of $241.1 million attributable to the impact of the BASE Acquisition and other less significant
acquisitions and (ii) a decrease of $21.6 million attributable to the U.K. Non-Cable Disposal and another less significant disposition.
On an organic basis, our programming and other direct costs of services increased $194.1 million or 4.9%. This increase includes
the following factors:

(cid:149) An increase in programming and copyright costs of $234.7 million or 10.9%, primarily due to increases in U.K./Ireland,
the Netherlands and, to a lesser extent, Central and Corporate, Belgium and Germany. These increases are primarily
attributable to higher costs for certain premium and/or basic content, including increases of (i) $55.1 million associated
with a sports programming contract entered into in August 2015 in U.K./Ireland and (ii) $19.2 million associated with a
new Europe-wide programming contract that was entered into in June 2016 with retrospective impact to January 1, 2016.
The increase in programming and copyright costs also includes the net effect of (a) higher costs at Ziggo Sport, (b) an
increase of $5.6 million in the Netherlands resulting from adjustments related to the settlement of operational contingencies
recorded during the third and fourth quarters of 2015 and (c) a decrease of $3.5 million in U.K./Ireland associated with
the reassessment of an accrual during the fourth quarter of 2016. In addition, growth in the number of enhanced video
subscribers contributed to the increases in Germany and Belgium;

(cid:149) A decrease in interconnect and access costs of $53.1 million or 4.8%, primarily due to the net effect of (i) lower fixed-
line telephony call volumes in U.K./Ireland and, to a lesser extent, the Netherlands, Belgium and Germany, (ii) a decline
resulting from lower rates, primarily in U.K./Ireland, (iii) higher mobile usage in Switzerland/Austria and Belgium, (iv)
a $6.6 million decrease in Belgium due to the release of an accrual during the second quarter of 2016 as a result of the
settlement of an operational contingency, (v) a decrease of $4.2 million in U.K./Ireland related to the settlement of disputes
with mobile operators over amounts charged for voice traffic during the fourth quarter of 2015, (vi) an increase of $3.9
million in Switzerland/Austria related to the settlement of an operational contingency during the third quarter of 2015
and (vii) slightly lower MVNO costs, as decreases in U.K./Ireland and Belgium were largely offset by increases in
Switzerland/Austria, Hungary and the Netherlands; and

(cid:149) An increase in mobile handset and other device costs of $17.2 million, primarily due to the net effect of (i) higher mobile
handset and other device sales volumes, as increases in U.K./Ireland and, to a lesser extent, Germany and Switzerland/
Austria were only partially offset by lower handset sales in Belgium and (ii) a lower average cost per handset sold in

II-38

U.K./Ireland. The lower number of handsets sold in Belgium is primarily attributable to a reduction in subsidized handset
promotions.

Other operating expenses

The details of our other operating expenses are as follows:

Year ended December 31,

Increase (decrease)

Organic
increase (decrease)

2016

2015

in millions, except percentages

U.K./Ireland.......................................................... $
Belgium (a)...........................................................

The Netherlands ...................................................

Germany ...............................................................

Switzerland/Austria ..............................................

Central and Eastern Europe..................................

Central and Corporate ..........................................

Intersegment eliminations ....................................

Total other operating expenses excluding

share-based compensation expense ...........

836.9

961.7

361.9

346.9

350.9

225.1

195.5

144.6

4.8

248.3

373.9

357.8

252.8

195.6

118.7
(4.8)

2,466.6

2,504.0

Share-based compensation expense .....................

3.3
Total ............................................................ $ 2,469.9

3.1

$ 2,507.1

(124.8)
113.6
(27.0)
(6.9)
(27.7)
(0.1)
25.9

(13.0) $
45.8
(7.2)
(1.9)
(11.0)
(0.1)
21.8

9.6

N.M.

(37.4)
0.2
(37.2)

(1.5) $
6.5
(1.5)

(39.1)
16.3
(26.2)
(5.1)
(24.2)
2.5

28.2

9.5

(4.0)
4.7
(7.0)
(1.4)
(9.6)
1.3

20.7

N.M.

(38.1)

(1.5)

_______________

(a)

The amount presented for 2016 includes the post-acquisition other operating expenses of BASE, which was acquired on
February 11, 2016.

N.M. — Not Meaningful.

Our other operating expenses (exclusive of share-based compensation expense) decreased $37.4 million or 1.5% during 2016,
as compared to 2015. This decrease includes an increase of $109.5 million attributable to the impact of the BASE Acquisition and
other less significant acquisitions. On an organic growth basis, our other operating expenses decreased $38.1 million or 1.5%.
This decrease includes the following factors:

(cid:149) A decrease in personnel costs of $29.9 million or 3.2%, due primarily to the net effect of (i) decreased staffing levels, as
decreases in Switzerland/Austria, U.K./Ireland and the Netherlands were only partially offset by increases in Central and
Corporate and Belgium, (ii) annual wage increases, (iii) decreased costs in U.K./Ireland resulting from higher proportions
of capitalized labor costs, primarily associated with the Network Extensions, (iv) lower costs related to certain employee
benefits in U.K./Ireland and Central and Corporate and (v) lower incentive compensation costs, primarily in U.K./Ireland;

(cid:149) An increase in outsourced labor and professional fees of $17.0 million or 5.4%, primarily due to (i) an increase in call
center costs, as higher costs in U.K./Ireland were only partially offset by lower costs in Switzerland/Austria and the
Netherlands, and (ii) higher consulting costs, as increases in Switzerland/Austria, Central and Corporate and the
Netherlands were only partially offset by decreases in Poland and Belgium. The lower call center costs in the Netherlands
are attributable to a decrease of $12.7 million associated with third-party costs related to network and product
harmonization activities and certain other third-party customer care costs following the acquisition of Ziggo;

(cid:149) A decrease in bad debt and collection expenses of $13.8 million or 9.9%, primarily related to declines in U.K./Ireland,
the Netherlands, Belgium, Hungary and Switzerland/Austria that were only partially offset by increases in Germany and
Poland;

II-39

(cid:149) An increase in network-related expenses of $13.2 million or 1.7%, primarily due to the net effect of (i) an $18.1 million
increase resulting from retroactive adjustments recorded during the first and second quarters of 2015 to reflect lower
local authority charges for certain elements of network infrastructure in the U.K., (ii) lower outsourced labor costs primarily
associated with customer-facing activities in Germany and U.K./Ireland, (iii) higher network maintenance costs, as
increases in Belgium, U.K./Ireland, Hungary and Poland were only partially offset by decreases in the Netherlands and
Switzerland/Austria, (iv) a $6.2 million decrease in U.K./Ireland associated with the settlement of an operational
contingency during the first quarter of 2016, (v) higher energy costs, as increases in Belgium, the Netherlands and Germany
were only partially offset by lower costs in U.K./Ireland, (vi) a net decrease of $5.5 million in Germany associated with
certain reassessments of an accrual during 2016 and 2015 and (vii) a decrease of $2.5 million as a result of costs incurred
during the first half of 2015 associated with network harmonization activities following the acquisition of Ziggo;

(cid:149) A decrease in facilities expenses of $7.1 million or 12.7%, primarily due to lower costs in U.K./Ireland and the Netherlands;

and

(cid:149) A decrease in vehicle expenses of $4.8 million or 10.7%, primarily related to lower costs for company vehicles in U.K./
Ireland, the Netherlands, Switzerland/Austria and Hungary due largely to fewer vehicles and the impact of the conversion
of certain operating leases to capital leases.

SG&A expenses

The details of our SG&A expenses are as follows:

Year ended December 31,

Increase (decrease)

Organic
increase (decrease)

2016

2015

in millions, except percentages

U.K./Ireland...................................................... $
Belgium ............................................................

The Netherlands ...............................................

Germany ...........................................................

Switzerland/Austria ..........................................

Central and Eastern Europe..............................

Central and Corporate ......................................

Intersegment eliminations ................................

794.6

864.2

420.9

362.1

373.7

215.8

166.6

404.5

(12.5)

255.6

383.3

336.1

228.4

162.9

392.5
(6.9)

Total SG&A expenses excluding share-

based compensation expense ...................

2,725.7

Share-based compensation expense .................

278.2
Total........................................................... $ 3,003.9

2,616.1

312.7

$ 2,928.8

(69.6)
165.3
(21.2)
37.6
(12.6)
3.7

12.0
(5.6)

109.6
(34.5)
75.1

______________

10.0

28.2
(19.9)
38.6
(9.5)
6.2

15.2
(6.7)

62.1

(8.1) $
64.7
(5.5)
11.2
(5.5)
2.3

3.1

N.M.

4.2
(11.0)
2.6

1.1

7.2
(5.2)
11.5
(4.2)
3.8

4.5

N.M.

2.4

(a)

The amount presented for 2016 includes the post-acquisition SG&A expenses of BASE, which was acquired on February
11, 2016.

N.M. — Not Meaningful.

Supplemental SG&A expense information:

Year ended December 31,

Increase (decrease)

Organic
increase (decrease)

2016

2015

in millions, except percentages

General and administrative (a)........................... $ 1,905.4
820.3
External sales and marketing .............................
Total ................................................................. $ 2,725.7

$ 1,766.0

850.1

$ 2,616.1

139.4
(29.8)
109.6

7.9
(3.5)
4.2

62.9
(0.8)
62.1

3.5
(0.1)
2.4

II-40

______________

(a) General and administrative expenses include all personnel-related costs within our SG&A expenses, including personnel-

related costs associated with our sales and marketing function.

Our SG&A expenses (exclusive of share-based compensation expense) increased $109.6 million or 4.2% during 2016, as
compared to 2015. This increase includes $152.8 million attributable to the impact of the BASE Acquisition and other less significant
acquisitions. On an organic basis, our SG&A expenses increased $62.1 million or 2.4%. This increase includes the following
factors:

(cid:149) An increase in personnel costs of $57.7 million or 5.2%, primarily due to (i) increased staffing levels, as increases in
Central and Corporate, U.K./Ireland, Germany and, to a lesser extent, Switzerland/Austria were only partially offset by
decreased staffing levels in the Netherlands and (ii) annual wage increases;

(cid:149) A decrease in external sales and marketing costs of $12.5 million or 1.5%, primarily due to the net effect of (i) lower
costs associated with advertising campaigns, as decreases in U.K./Ireland, the Netherlands and Switzerland/Austria were
only partially offset by higher costs in Belgium, (ii) higher third-party sales commissions, as increases in Germany and
U.K./Ireland were only partially offset by a decline in the Netherlands, and (iii) lower third-party costs in the Netherlands
of $4.0 million related to the impact of rebranding costs incurred during 2015 following the acquisition of Ziggo;

(cid:149) An increase in facilities expenses of $9.5 million or 4.6%, primarily due to higher rent and other facilities-related expenses,
as increases in Central and Corporate, Germany, U.K./Ireland, Belgium and the Netherlands were only partially offset
by a decrease in Switzerland/Austria;

(cid:149) An increase in information technology-related expenses of $9.2 million or 12.4%, primarily due to higher software and
other information technology-related maintenance costs in Germany, Central and Corporate and Belgium that were only
partially offset by a decrease in the Netherlands;

(cid:149) An increase of $8.4 million due to the impact of an accrual release during the second quarter of 2015 related to the

resolution of a contingency associated with universal service obligations in Belgium; and

(cid:149) A decrease in outsourced labor and professional fees of $4.9 million or 1.8%, due to the net effect of (i) increased legal
costs in Central and Corporate and Belgium, (ii) a decrease in consulting costs, as decreases in Central and Corporate
and U.K./Ireland were only partially offset by increases in Belgium and the Netherlands, and (iii) an increase in call
center costs, primarily in the Netherlands and Belgium. The decrease in consulting costs includes (a) a decrease of $8.3
million associated with declines in the integration costs incurred in connection with the acquisitions of Ziggo and BASE
and (b) a decrease of $2.6 million in U.K./Ireland associated with consulting fees incurred during the fourth quarter of
2015 in connection with the settlement of disputes with mobile operators over amounts charged for voice traffic.

II-41

Share-based compensation expense (included in other operating and SG&A expenses)

A summary of our aggregate share-based compensation expense is set forth below:

Liberty Global:

Performance-based incentive awards (a).......................................................................................... $
Other share-based incentive awards .................................................................................................

Total Liberty Global shares (b).......................................................................................................

Telenet share-based incentive awards (c) ...........................................................................................

Other ...................................................................................................................................................

Total.............................................................................................................................................. $

Included in:

Total ............................................................................................................................................. $

________________

Year ended December 31,

2016

2015

in millions

160.8

108.1

268.9

12.2

0.4

281.5

3.3

278.2

281.5

157.6

148.2

305.8

9.2

0.8

315.8

3.1

312.7

315.8

(a)

Includes share-based compensation expense related to PSUs, the Challenge Performance Awards and PGUs.

(b) Amounts include incremental expense of $16.1 million and $69.3 million, respectively, related to the 2015 Award

Modifications.

(c)

Represents the share-based compensation expense associated with Telenet’s share-based incentive awards.

For additional information concerning our share-based compensation, see note 13 to our consolidated financial statements.

Depreciation and amortization expense

Our depreciation and amortization expense was $5,213.8 million and $5,609.4 million during 2016 and 2015, respectively.
Excluding the effects of FX, depreciation and amortization expense decreased $97.8 million or 1.7% during 2016, as compared
to 2015. This decrease is primarily due to the net effect of (i) an increase associated with property and equipment additions related
to the installation of customer premises equipment, the expansion and upgrade of our networks and other capital initiatives, (ii) a
decrease associated with certain assets becoming fully depreciated, primarily in U.K./Ireland, the Netherlands and, to a lesser
extent, Switzerland/Austria, Belgium and Germany, (iii) a decrease in the Netherlands as a result of the held-for-sale presentation
of VodafoneZiggo Holding and Ziggo Sport from August 3, 2016 through the December 31, 2016 completion of the VodafoneZiggo
JV Transaction, and (iv) an increase associated with acquisitions, primarily as a result of the BASE Acquisition.

Impairment, restructuring and other operating items, net

We recognized impairment, restructuring and other operating items, net, of $186.2 million during 2016, as compared to $150.0

million during 2015.

The total for 2016 primarily includes (i) restructuring charges of $154.7 million, including (a) $127.1 million of employee
severance and termination costs related to certain reorganization activities, primarily in Germany, U.K./Ireland, Central and
Corporate and the Netherlands, and (b) $24.2 million of contract termination charges, primarily in Central and Corporate, and (ii)
direct acquisition costs of $45.3 million related to the VodafoneZiggo JV Transaction and the BASE Acquisition.

The total for 2015 primarily includes (i) restructuring charges of $90.2 million, including (a) $99.2 million of employee
severance and termination costs related to certain reorganization activities, primarily in the Netherlands, U.K./Ireland, Germany,
and Switzerland/Austria, (b) contract termination charges of $8.2 million, primarily in Belgium, and (c) a credit of $17.0 million
recorded by Telenet during the fourth quarter following the settlement of its DTT capacity contract obligations, the fair value of
which were originally recorded during 2014 when Telenet discontinued the provision of DTT services, (ii) direct acquisition costs
of $42.4 million, primarily related to the BASE Acquisition and our acquisition of additional shares of ITV and Ziggo, (iii)

II-42

impairment charges of $23.1 million, primarily in U.K./Ireland, the Netherlands and Switzerland/Austria, and (iv) a $23.1 million
loss on the divestiture of our Film1 channels.

For additional information regarding our restructuring charges, see note 14 to our consolidated financial statements.

Interest expense

We recognized interest expense of $2,324.4 million and $2,284.1 million during 2016 and 2015, respectively. Excluding the
effects of FX, interest expense increased $149.9 million or 6.6% during 2016, as compared to 2015. This increase is primarily
attributable to the net effect of (i) higher average outstanding debt balances, largely due to debt incurred in connection with the
BASE Acquisition and debt issued by Ziggo Group Holding B.V. in advance of the our acquisition of Ziggo, and (ii) lower weighted
average interest rates related to the completion of certain financing transactions that resulted in extended maturities and decreases
to certain of our interest rates. For additional information regarding our outstanding indebtedness, see note 10 to our consolidated
financial statements.

Realized and unrealized gains (losses) on derivative instruments, net

The details of our realized and unrealized gains on derivative instruments, net, are as follows:

Year ended December 31,

2016

2015

in millions

Cross-currency and interest rate derivative contracts (a) ................................................................... $
Equity-related derivative instruments:

716.2

855.7