United Group 9M 2016 HIGH YIELD BONDHOLDER REPORT 9M 2016 HIGH YIELD REPORT CONTENTS Page Summary ................................................................................................................. 3 Key Operating Measures ......................................................................................... 6 Results of Operations .............................................................................................. 8 Liquidity and Capital Resources ............................................................................ 14 Subsequent (Material Recent) Events .................................................................. 18 Mergers & Acquisitions ......................................................................................... 19 Group Background ................................................................................................ 20 Appendices ............................................................................................................ 24 9M 2016 HIGH YIELD REPORT Disclaimer THIS REPORT (THIS “REPORT”) IS NOT AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL SECURITIES. IT IS SOLELY FOR INFORMATION PURPOSES. BY READING THIS REPORT, ATTENDING A PRESENTATION OF THIS REPORT (THE “PRESENTATION”) AND/OR READING THE SLIDES USED FOR THE PRESENTATION (THE “PRESENTATION SLIDES”) YOU AGREE TO BE BOUND AS FOLLOWS: This Report, the Presentation and/or the Presentation contains forward-looking statements, which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or including the words “targets”, “believes”, “expects”, “aims”, “intends”, “may”, “anticipates”, “estimates”, “would”, “will”, “could”, “should” or similar expressions or the negative thereof. Such forward- looking statements involve known and unknown risks, uncertainties and other important factors beyond our control that could cause our actual performance or achievements to be materially different from future performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding our present and future strategies and the environment in which we will operate in the future. These forward-looking statements speak only as at the date of this Report, and/or the Presentation. We expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any of such statements are based. This Report, and/or the Presentation contains summary unaudited condensed financial information for Adria Midco B.V. and its subsidiaries for the nine months ended September 30, 2016. The interim statement of financial position for Adria Midco B.V. and its subsidiaries as at 30 September 2016 and as at 30 September 2015, as well as the condensed consolidated interim statements of profit or loss and cash flows for Adria Midco B.V. and its subsidiaries for the nine months periods then ended have been reviewed by our independent auditors in accordance with the International Standard on Review Engagements 2410 and have been prepared in accordance with IFRS. Certain financial measures and ratios related thereto in this Report, and/or the Presentation, including EBITDA, Adjusted EBITDA, Adjusted EBITDA minus capital expenditure, RGUs and ARPU (collectively, the ‘‘Non-IFRS Measures’’) are not specifically defined under IFRS or any other generally accepted accounting principles. These measures are presented here because we believe that they and similar measures are widely used in our industry as a means of evaluating a company’s operating performance and financing structure. Our management believes this information, along with comparable IFRS measures, is useful to investors because it provides a basis for measuring the operating performance in the periods presented. These measures are used in the internal management of our business, along with the most directly comparable IFRS financial measures, in evaluating the operating performance. These measures may not be comparable to other similarly titled measures of other companies and are not measurements under IFRS or other generally accepted accounting principles, and you should not consider such items as alternatives to net income (loss), operating income or any other performance measures derived in accordance with IFRS, and they may be different from similarly titled measures used by other companies. 2 9M 2016 HIGH YIELD REPORT Summary 29 November 2016 – United Group, the leading cable and pay-TV operator in South Eastern Europe, today reports its financial results for the first nine months of 2016. Operational Highlights Homes passed up by 4% to 1,553 thousand compared to 9M 2015, primarily as a result of network expansion and the acquisition of M-Kabl in Montenegro Number of unique cable subscribers increased to 958 thousand RGUs up by 10% year-on-year to 3,060 thousand, driven by organic growth and acquisitions Blended Cable ARPU for 9M 2016 up by 5% year-on-year to €19.3 (9M 2015: €18.5), driven by migration from lower-priced to higher-priced service packages, growth in subscribers for the multi-play offering, and price increases in Serbia, Slovenia and Bosnia and Herzegovina Financial Highlights Consolidated Group revenue for 9M 2016 up 23% year-on-year to €336.4 million (9M 2015: €273.4 million) Consolidated Group adjusted EBITDA up by 21%1 in 9M 2016 to €140.9 million (9M 2015: €116.8 million) Net cash inflow of €22.8 million against an inflow of €9.1 million in 9M 2015 Net leverage (ratio of Group Net Debt to Annualised Last Two Quarters Adjusted Pro Forma EBITDA2) as at September 30, 2016 up to 4.15x (3.97x as at June 30, 2016) 1 Year-on-year comparison is affected by the positive effect of the Tušmobil acquisition, and Bosnia and Herzegovinian entities acquired during 2015, as well as M-Kabl acquisition in 2016 and changes in FX rates 2 Pro Forma Ajusted EBITDA is calculated as two times Q2 2016+Q3 2016 Adjusted EBITDA plus €425 thousand of expected synergies with Tušmobil and €210 thousand of expected synergies with Bosnian entities 3 9M 2016 HIGH YIELD REPORT The following summary describes the operations in each of our current business segments: SBB Serbia includes the results of cable services in Serbia and DTH operations in Serbia, Croatia and Macedonia, including the results of EUnet (acquired in May 2015). Absolut Solutions and Totalna TV Croatia results are included in the SBB Serbia segment, however their results are not reflected in the statutory consolidated results of the SBB Serbia Group. Telemach Slovenia includes the results of our cable and mobile services in Slovenia and DTH operations in Slovenia; Telemach BH includes the results of our cable and DTH services in Bosnia and Herzegovina; United Media Group (formerly Adria Media Group) includes the results of our media and content business including the results of N1 Info, Grand Production and Orlando Kids and Bambino; and Other Businesses includes our other operating businesses, such as NetTV and Telemach Podgorica (renamed from Broadband Montenegro) including DTH services in Montenegro and acquired M-Kabl (as of August 1, 2016). United Group generated consolidated revenues of €336.4 million during 9M 2016, up 23% year-on-year. Growth of our business operations resulted primarily from organic growth of our subscriber base, migration of subscribers to multi-play packages and the positive impact of companies acquired in 2015. Adjusted EBITDA generated during 9M 2016 increased by 21% year-on-year to €140.9 million. Summary financials table in € m 9M 2015 9M 2016 Change Revenue 273.4 336.4 23% Adjusted EBITDA 116.8 140.9 21% Result from operating activities 30.8 42.6 39% Profit before tax (6.9) (6.7) (2%) 4 9M 2016 HIGH YIELD REPORT Revenue % of total Adj. EBITDA % of total 9M 2016 in m SBB Serbia Segment 136.2 40.5% 56.4 40.0% Telemach Slo Segment 139.3 41.4% 46.1 32.7% Telemach BH Segment 39.7 11.8% 13.9 9.9% United Media Segment 53.0 15.7% 17.8 12.7% Other Businesses 22.5 6.7% 6.9 4.9% Intra Company (54.2) (16.1%) (0.3) (0.2%) Total 336.4 100% 140.9 100% As of September 30, 2016, United Group had 3.06 million RGUs, up by 10% compared to the same period last year (9M 2015: 2.78 million) and an increase of 109 thousand quarter-on-quarter (H1 2016: 2.95 million). This positive trend was driven by organic growth and acquisitions. Blended cable ARPU for the period was €19.3 compared to €18.3 for 9M 2015, with the 5% increase primarily driven by the migration of existing subscribers from lower-priced to higher-priced service packages, growth in subscribers for the multi-play offering, and price increases in Serbia, Slovenia, and Bosnia and Herzegovina. The year-on-year blended cable ARPU growth would have been higher without the acquisitions completed in Bosnia and Herzegovina, which had lower ARPU than Telemach BH. However, gradual improvement in ARPU levels at these companies has commenced in line with their increasing integration with Telemach BH. The trend of subscriber migration to multi-play packages is expected to continue with further development of the cable market. Capital expenditure (including capitalized inventory3) in 9M 2016 amounted to €96.7 million, compared to €92.8 million in 9M 2015. The majority of investments during the period