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TABLE OF CONTENTS 2006 Highlights ...... 2 Letter to Shareholders ...... 4 Global Operations ...... 6 Global Overview ...... 7 Europe ...... 9 Western Europe ...... 11 Central and Eastern Europe ...... 15 Asia/Pacific ...... 19 The Americas ...... 23 Consolidated Operating Data ...... 26 Condensed Consolidated Financial Statements ...... 28 Corporate Responsibility ...... 32 Board of Directors, Executive Officers, Shareholder Information ...... Inside Back Cover Unless otherwise indicated in this report, (i) subscriber statistics and related growth rates exclude subscribers added as of the business acquisition date, but include any subsequent changes in subscribers for the acquired entity, and (ii) growth rates reported for revenue and operating cash flow (OCF) are rebased to neutralize the effects of acquisitions and foreign The financial information in this Summary Annual Report is condensed. The Summary currency exchange rate fluctuations (FX). For purposes of calculating rebased growth rates Annual Report should be read in conjunction with our Annual Report on Form 10-K for the on a comparable basis for all businesses that we owned during 2006, we have adjusted year ended December 31, 2006, as filed with the Securities and Exchange Commission, our historical revenue and OCF for the year ended December 31, 2005 to (i) include the which provides more detailed information regarding our company, including (i) our complete pre-acquisition revenue and OCF of certain entities acquired during 2005 and 2006 in our consolidated financial statements and accompanying notes, which have been audited by rebased amounts for the year ended December 31, 2005 to the same extent that the revenue KPMG LLP, (ii) our Management’s Discussion and Analysis of Financial Condition and Results and OCF of such entities are included in our results for the year ended December 31, 2006 of Operations, and (iii) our Management’s Annual Report on Internal Control over Financial and (ii) reflect the translation of our rebased amounts for the year ended December 31, 2005 Reporting. Investors may request at no charge, our company Annual Report on Form 10-K at the applicable average exchange rates that were used to translate our results for the year by contacting Investor Relations, as provided under “Shareholder Information” in this ended December 31, 2006. For additional information concerning these calculations, please Summary Annual Report. This Summary Annual Report also contains forward looking see our earnings release dated February 28, 2007. For our definition of OCF and the related statements that are subject to various risks and uncertainties as explained in more detail on reconciliation, see page 31 of this report. In addition, certain terms used in our subscriber page 31 of this Summary Annual Report. table and elsewhere in the text are explained on pages 26 and 27 of this report. 2 oa Gs1,3 69011,381 16,920 19,432 T Total RGUs 2006 HIGHLIGHTS LIBERTY GLOBAL e anns(os 0 8)$(22) $ (80) $ 706 $ Net earnings(loss) Ear 1,759 1,450 2,786 8,173 2,053 Revenu $ 3,784 FINANCIAL HIGHLIGHT 12,080 2,706 17,080 13,040 12,943 13,056 10,755 24,910 17,616 17,999 15,370 2006 27,637 Internet Subscribers 21,283 21,246 20,463 Voice Subscribers Video Subscribers Internet –HomesServiceable Voice –HomesServiceable Two-way HomesPassed Homes Passed in thousands: OPERATING HIGHLIGHTS Operating CashFlow(O otal CustomerRelationships nmlin:2006 in millions: etr uoe$115$77$640 207 $ 737 $ 292 1,105 $ 412 : J:COM Central andEasternEurope Western Europe Japan: J:COM lmnto feut fiit (589) – – (208) (1,505) (204) (17) Elimination ofequityaffiliate – (206) (45) Central andcorporateoperations – (71) Elimination ofequityaffiliate Intersegment eliminations Central andcorporateoperations 13% 16% RGUs percustomer 18% Penetration (ofhomesserviceable) etr uoe$242$157$1,193 $ 1,537 $ 2,422 $ Central andEaster Western Europe 13% 48% 13% 48% 13% 47% Penetration (ofhomesserviceable) Penetration (ofhomespassed) hl:VR1812109 (20) 152 (25) 198 88 300 166 444 Corporate andother 264 Chile: VTR 559 769 Corporate andother Chile: VTR nings (loss)fr oa G ,3 ,8 728 $ 1,588 $ 2,336 $ 639 825 Total LGI 1,311 UPC BroadbandDivision 1,664 2,192 T 3,325 UPC BroadbandDivision tlLI$648$457$2,113 $ 4,517 $ 6,488 $ otal LGI e om continuingoperations Eur CF p 8 5 470 652 885 ope ) S $ (2) 3831,3 8,732 12,838 13,843 (2) 1,906 (334 1.40 739 18 (1) (1) 6)$7 $ (60) $ ) 2005 2005 1,662 1.32 636 (1) (1) 3 1,505 2004 2004 1.30 589 1 (1) in ourForm 10-K. For additionalinformation, seenote5toourconsolidated financialstatements We alsocompletedanumberofotheracquisitions during2006and2005. (Super Media)andJupi Prior to2005,weaccounted for ourinterest inLGI/Sumisho SuperMediaLLC Media andJ:COMasconsol Media thatoccurred onFebruary 18,2005,webeganaccounting for Super equity method.Asaresult ofachangeinthecorporate governance ofSuper HOMES PASSED (in thousands) ( $ EVENUE in mi ter T l lions) elecommunications Co., Ltd.(J:COM)usingthe idated subsidiariesef f ectiv T O e T AL RGU January 1,2005. O PERATING CASH FLOW ( (in thousands) $ in mi l lions) (2) in ourForm 10-K. For additionalinformation, seenote5toourconsolidated financialstatements company from consolidatingSuperMedia/J:COMafterFebruary 2010. category) andthatanotherpart CommunicationsLimitedUnited (Austar) (includedinourcorporate andother interests inSuperMedia/J:COM,VTRGlobalComS.A. (VTR),andAustar important tok When reviewing andanalyzingouroperating results is andstatistics,it S eep inmindthatotherthir UTMRRELATIONSHIPS CUSTOMER R EVENUE BYREGION (in thousands) ( $ in mi y l lions) ef f ectiv ely hastheabi d party ownsignificant entities lity toprevent our 3 A DAY IN THE DIGITAL HOME 4 LIBERTY GLOBAL John C.Malone Chairman President andCEO Michael T. Fries Eur consolidated ourmarket-leading positionsinCentralandEastern proceeds andsoldallthree assets atattractivemultiples.We also Sweden. Intotal,wegenerated approximately$2.5billionofafter-tax high-growth marketsbysellingouroperationsinFrance,Norway, and On theM&Afront,werebalancedourEuropeanfootprintto focuson It shouldbeanothergreatyear. the perio equally impor wereup44%and47%,respectively.and $2.3billionofOCF Perhaps cur (O drovefull-yearrevenueandoperatingcashflow efficient coststructure Targeted bundlingstrategiesandan executionofourmulti-product customerserviceandtechnologyplatformsoverthepastyear.product, Much ofthisgrowthcanbeattributedtocontinuedinvestmentinour pr began experiencingouradvancedserviceslikehighdefinition million ofourvideosubscribersmadetheleapintodigitalageand now marketingdigitalphonein13ofour16markets.Andnearlyone phone ser subscriber basetonearly3.8million.Ourhigh-quality, low-costdigital the fastestInternetspeedsavailable,helpingtogrowourbroadband Acr through acquisitions.OurRGUbasenowsitsat19.4millionsubscribers. subscribers toourglobalbroadbandfootprintandanother900,000 Operationally share buybacks.We fronts. hitthemarkonallthree appropriateleverageand and acommitmenttoequityreturnsthrough revolves aroundsuperiororganicgrowth,opportunisticM&Aactivity, Company’s accomplishments.Ourfundamentalbusinessstrategy ofthe 2006 markedourfirstfullyearasLibertyGlobalandweareproud SHAREHOLDERS TO OUR ogramming, digitalvideor CF) incr r ope andJapanthr oss mostofourmarkets,weoutpacedthecompetitionbypr ency movements.Onareportedbasis,our$6.5billionofrevenue d vices positivelyimpactedsales,revenueandchurnweare eases of11%and16%,afteradjustingforacquisitions and entered2007withsignificantoperatingmomentum. , tant, weexceededallofourpublicguidanceestimatesfor we addedar ough aseriesofaccr ecor ecor d 1.6 millionnewvideo,voiceanddata ders, andvideo-on-demandser etive acquisitions.Andin oviding vices. Mar Chair John C.Malone Sincerely, the beginningoflastyear have repurchasedover$2.0billion,orroughly17%,ofourequitysince range,andinclusiveofourtenderoffersthatclosedinJanuary,OCF we isrightinthemiddleofourfourtofivetimes valuations. Leveragetoday leverageandinvestmentinourownstock,givencurrent moderate Over 12monthsago,wearticulatedafinancialstrategybasedupon operatingregions. growth inourcore reflected adisciplinedcommitmenttoaddingscale,synergiesand , thelargestcableoperatorinBelgium.Eachofthesetransactions Western whatisnowacontrollinginterestin Europe,wepurchased 50%. Whilewecan’ So, onbehalfofourboar financial growthforward. no oneisleftbehind,wewillimproveourabilitytomoveoperatingand incr services easiertouseforourcustomers—allowingthemnavigatethis liesinmakingentertainmentandcommunications greatest opportunity evolve. Aswesurveythelandscape,continuetobelievethatour is To besure,likemanyofourpeerswefacechallengesahead.Ourindustry this aggr ability todeliveronthatpr is reallyjustbeginningandwehaveneverbeenmoreconfident ofour you foryoursupportofLibertyGlobalthispastyear. Thedigitaljourney moving quicklyandcompetitionisintensifyingastechnologies easingly complexdigitalworldattheirownpace.Byensuringthat ch 22,2007 man oftheBoar essive appr d oach to our capital structure throughout 2007. oach toourcapitalstructurethroughout t make pr . d In thattimeperio of omise in2007andbeyond. dir edictions, wecer ectors and20,000employees,wethank Pr Michael T. Fries esident andChiefExecutiveOf d our shar tainly intendtomaintain e price isupnearly ficer 5 A DAY IN THE DIGITAL HOME 6 LIBERTY GLOBAL GLOBAL OPERATIONS THE AMERICAS Peru Puerto Rico Chile WESTERN EUROPE CENTRAL Ireland Austria Switzerland The Slovenia Slovakia Czech Republic Poland Romania Hungary ASIA/PACIFIC AND Japan EASTERN EUROPE daily enter Americas andAustraliawereusingourservicestomeettheir GLOBAL OVERVIEW compared totheprioryear. r from oursubscriberbase.In2006,averagemonthly theamountofrevenue wegenerate services, weareincreasing our coreanalogTVcustomerbasetoadvanceddigital overthesamenetwork.Byup-selling provide allthreeproducts Our triple-playstrategyleveragesourabilitytoseamlessly the 30-40%range. we ar r atotalof19.4million average of1.4serviceseach,representing to theCzechRepublic,SwitzerlandandJapansubscribean our fiber-rich, Chile high-capacitynetworks.Customersfrom seamlesslydeliveredover and broadbandInternetservicesare Liberty Global’s triple-playofdigital ,digitalphone 14 millioncustomersacr 27 millionhomesaroundtheglobe.Atendof2006,nearly Liberty Globalmakesthisworldpossibleandaccessibletoover to usethem.Astheleadinginternationalcablecompany, decide whichservicestheywanttouse,andwhenwhere rapidly fadingandconsumersincreasinglycalltheshots.They are connect people.Buttheboundariesamongtheseproducts world, thetelevision,telephoneandInternetunite the Digital technologyispartofeverydaylife.Allaround evenue generatingunits(RGUs).Acrossmostofourmarkets, evenue (ARPU)percustomerincr e the payTVleaderintermsofmarketshare,typically tainment andcommunicationsneeds. oss 16countriesinEur eased 6%to$34.67 ope, Japan,the our ownstock R in Japan Acquir R a OCF of$2.34billion, • totalRGUadditions driven2.5 million by: 2 a Revenue of$6.49billion, • • • 006 MILESTONES epur ebalanced European footprint Internet additions 759,000 organic broadband 900,000 RGUsfrom acquisitions 263,000 organic videoadditions 609,000 organic additions rebased increase of16% r ebased incr chased nearly$2.0bi ed third largest cableoperator e ase of11% llion of llion 7 A DAY IN THE DIGITAL HOME 8 LIBERTY GLOBAL E UTMR. 1.4 CUSTOMER PER AVERAGE PRODUCTS L CUSTOMER PRODUCTBUNDLING IBERTY GLOBAL CONSOLIDATED markets, Liber tomeettheindividualneeds ofconsumersinour products By continuingtoinnovateand offerattractivebroadband andservices. deliver excitingnewproducts world, whichenablesustoformpartnershipsbuildand partner forthebestmediaandtechnologycompaniesin networks ar leveraging ourglobalplatfor Liberty Globalenjoyssignificanteconomiesofscaleby telephony servicestoover13millionhomesacrossourfootprint. several additionalmarkets.We are now capableofofferingVoIP a additional 1.7millionhomesfortwo-waycapabilitiesand,as speeds, dependingonthemarket.Lastyear, weupgradedan packages of20,30oreven100Mbpsdownstreambroadband additions. Inmanycountries,wear performer, representing nearly50%offull-yearsubscriber In 2006,broadbandInternetwasourstrongestproduct recorders, video-on-demandandhighdefinitionofferings. ofadvancedservicessuchasdigitalvideo the introduction total cablesubscriberbase.Oursuccesswasdrivenpartlyby digital cablesubscribersworldwide,representing19%ofour 2005 additions.Inourvideobusiness,wenowserve2.2million 1.63 millionRGUsorganically, over a45%increase our lines.Wedigital servicesacrossallproduct addedarecord In 2006,wesawsignificantgrowthinthetake-upof ahead. Per competitive advantageagainstourrivals,nowandintheyears procurement andoperatingcosts.Thisgivesusanimportant among r arestandardized infrastructures, andourtechnologyroadmaps result, wewereabletolaunchdigitalphoneservicesin egions tostr haps mostimpor e ty Globaldeliversonitsdigitalpr far superiortoexistingDSL,DTTandsatellite eamline product rolloutsandsaveon eamline product tantly , ms. Ourhybrid-fiber-coax our sizemakesusar e the “speedleader”with omises ever espected y day . Chellomedia istheEur and isknownasCablecominSwitzerland. Romania, Poland,CzechRepublic,SlovakiaandSlovenia, UPC brandintheNetherlands,Austria,Ireland,Hungary, business.UPCBroadbandisknownunderthe largest regional 9.7 millioncustomersand12.6RGUs,makingitour operation. UPCBroadbandisactivein10countrieswithover In Europe,UPCBroadbandisLibertyGlobal’s primary EUROPE Chellomedia focusesitsactivityonthr television channels,interactivecontentanddigitalservices. Global andaleadinginternationalproviderdistributorof advantage ofthesechangesat their ownpace. complex technologyenvironment, sothatconsumerscantake to beahelpinghand,humantouchinanother exciting digitalworld,nooneshouldbeleftbehind.We aim customers, basedonanempoweringvisionthatinto several countries.We arebuildinganewconnectionwithour In 2007,UPCwillbegraduallyrepositioningitsbrandin operating cashflowrose18%to$1.3billion. flow in2006.Revenueincr andoperatingcash significant organicgrowthinbothrevenue of UPC’ high-quality continued demandforfasterbroadbandInternetspeeds,our In 2006,UPCBr 131 millionhouseholdsworldwide. Sports Channel.TheseChellomediachannelsreachatotalof the inter businesses compriseaportfolioof22TVbrands,including TV, RegionalTVandDigitalServices.Chellomedia’s content s nationally-distributed ZoneRealityandExtr bundled offers.Asaresult,UPCBroadbandsaw , low-cost digitalphoneservices,andthestrength oadband added930,000RGUsdrivenby opean-based mediadivisionofLiber eased 11%to$3.33billion,and ee mainar eas: Global day’ wise eme ty s • 1 U 2006 MILESTONES Acquisi UPC France S a Operating CashFlowof$1.31billion, a R • • E UTMR. 1.3 CUSTOMER PER A CUST interestsignificant inTelenet inBelgium Czech Republic, INODEinAustria anda • VERAGE PRODUCTS PC BROADBAND .2 million totalRGUadditions driven.2 million by: old UPCNorway, UPCSweden and evenue of$3.33billion, I 527,000 organic broadband 305,000 RGUsfrom acquisitions 79,000 organic videoadditions 324 rebased increase of18% rebased increase of11% nternet additions OMER PRODUCTBUNDLING ,000 organic telephony additions tions includedK arnev al in 9 A DAY IN THE DIGITAL HOME 7:28 - UPC’s DVR service allows you to watch your favorite soccer game for days, weeks or months to come, any time of day! management andpr the nerve centerfortechnologydevelopment,network first. OurEuropeanheadquartersinAmsterdamhasbecome andservicesareintroduced market, wheremostnewproducts customers infourcountries.TheNetherlandsisourlargest In Western LibertyGlobalservesoverfivemillion Europe, WESTERN EUROPE untapped potentialasTVconsumersacr digital television.We arebeginning toexploitthemassive, of Liberty Globalisfirmlycommittedtothebreakthrough 24 hoursaday network fromtheNetworkMonitoringCenterinAmsterdam Europe. AndweareabletomonitorourentireEuropean the sourceofdigitaltelevisionformillionshouseholdsin As thelocationofourDigitalMediaCenter, Amsterdamis with planstolaunchinAustriaandIreland2007. Western Europeanmarkets,theNetherlandsandSwitzerland, inLibertyGlobal’svideo recorder(DVR)products twolargest UPC Netherlands.Br Western than400,000ofthosecamethrough Europeandmore Liberty Globalworldwidein2006,over500,000wereadded nearly onemillionnewdigitalcablecustomersaddedby through ourdigitalplatformintheNetherlands.Of investments inther consumer acceptance,UPCBr migrate todigital.To helpacceleratechangeand , seven daysaweek. oduct developmentacrossthecontinent. oduct oll-out ofdigitaltelevision,specifically oadband alsolauncheddigital oadband hasmadesignificant oss W ester n Eur ope UPC -WESTERNEUROPE TOTAL RGU (3) NV onDecember31,2006. wasBelgium soldtoTelenet HoldingsGroup Ex c luding UPC Belgium forluding UPCBelgium periods.UPC all IRELAND S NETHERLANDS SWITZERLAND (3) AUSTRIA 11 A DAY IN THE DIGITAL HOME 12 LIBERTY GLOBAL Over 500,000digital TVcustomers 1 2,200,900 customerrelationships ,560,600 customerrelationships F More than400,000broadband irst operator inSwitzerland to CABLECOM -SWITZERLAND 2 Launched DVRservices 006 MILESTONES U PC -NETHERLANDS I nternet customers offer quad-play which weoperate. gover Liberty Globalhasdedicated resources forpublicpolicyand the entir the interestsof Brussels-based tradeassociationthatrepresents also anactiveandfoundingmemberofCableEurope,the public policydebatesandtothelegislativeprocess.We are Commission inBr closetothe European permanent governmentaffairsoffice and publicpolicyefforts.Since1999,wehavehad a W initiative inour2007financialperformance. infrastr in futuregrowthwithamajorpushtogrowitsdigital Meanwhile, theNetherlandsmadesignificantinvestment these results,alongwithbothIrelandandAustria. Our operationinSwitzerlandwasasubstantialcontributorto $2.4 billionandoperatingcashflowgrew13%to$1.1billion. solid r In 2006,ourWestern European operationsdelivered several years. commer of anewtechnology(Eur for theyear. We areexcitedabouttheplannedintroduction base by22%,resultingin253,000newInternetsubscribers areinstrongdemand,asweincreasedoursubscriber products 27% increasein2006.Ourhigh-speedbroadbandInternet where weadded168,000phonesubscribers,representinga now availableineachofourWestern countries, European phone inAustriaandIreland,ourdigitalservicesare in Western during2006.With Europe thelaunchofdigital wasalsostrong growthforvoiceandInternetservices Product ester nment affairs firmly rooted inthelocalcommunities nment affairsfirmlyrooted esults onanor n ucture, and we are already seeing the benefits from that ucture, andwearealreadyseeingthebenefitsfrom cial speedsofover200Mbpspossiblethenext e Europe isalsohometoLibertyGlobal’s regulatory Eur opean cablesector. Throughtheseactivities, ussels. Ourgoalistoaddvalue ganic basis.Revenueincr oDO CSIS 3.0),whichwillmake eased 9%to Netherlands, wher manages channelsspecificallyforregionalmarketssuchasthe for UPCBroadband.Chellomediaalsodevelopsand pr In Western Liberty Global’s Europe, Chellomediaisakey sour unlimited entertainmentandcommunicationsfromasingle Liber including brandssuchasPanda,CanalCocinaandOdisea. thematic channelstohouseholdsinSpainandPortugal, Peninsula, ChellomediarunsMulticanal,adistributorofseven such asLiveShopandtheWeather Channel.OntheIberian sports bouquetFilm1andSport1,aswellthematicchannels from the moment they wake up, every digitalday.from themomenttheywakeup,every ovider ofcontentandpr ce, givingcustomersinW ty Global’s line-upoffersvirtually superiorproduct e it cur r ently r ogramming ser estern Europewhattheywant uns thepremiummovieand vices, inpar ticular low broadband penetration Significant upsidedueto Launched digital phoneservices 599,300 customerrelationships U INODE acquisi Launched digital phoneservices 698,300 customerrelationships UPC -AUSTRIA PC -IREL A ND tion added80,000customers Amsterdam 13 A DAY IN THE DIGITAL HOME 12:41 - BUDAPEST Digital phone service, along with broadband Internet access, keep busy parents connected all day, every day. ending theyearwith285,000subscribers. telephony subscribers,r with156,000 new Europe deliveredthestrongestgrowth its one-millionthtelephonycustomer. CentralandEastern growth nearlydoubledin2006andthecompanyalsosigned customer loyalty pr Digital phoneservicehasbecomeanimportantelementofour Easter digital phoneservicesacrossallourmarketsinCentraland Slovenia followinginearly2007,completingther launched theirowndigitalphoneservicesin2006,with Hungary’s Both theCzechRepublicandSlovakia rollout. and Romania,furtheringtheearlysuccessgeneratedbyUPC 2006 wasthefirstfullyearofdigitalphoneser (DTH) satelliteplatforms. utilizing bothourowncablenetworksanddirect-to-home countries, services insixCentralandEasternEuropean we pr Warsaw, inbetween.Inthisregion, Bucharest,andanywhere widelyavailabletocustomersin services becomemore of opportunityforLibertyGlobal,asadvanceddigital regions, CentralandEasternEuroperepresentsawealth One ofourmostculturallydiverseandrapidlydeveloping CENTRAL oduct bundlingstrategyandacontributortolong-term oduct n ovide television,broadbandInternetandtelephony Eur ope. . UPC Br epr esenting a122%incr oadband’ AND s telephony customer EASTERN EUROPE vices inPoland ease in2006, oll-out of U TOTAL RGU PC -CENTRALANDEASTERN EUROPE ZC REPUBLIC CZECH SLOVENIA S HUNGARY POLAND ROMANIA SLOVAKIA 15 A DAY IN THE DIGITAL HOME 16 LIBERTY GLOBAL L aunched VideoGizmo, asocialvideosharing Strong startfor phonewithover digital O ver 80,000digital phonesubscribers p 1,058,900 customerrelationships 1,419,400 customerr 1,019,000 customerrelationships I ortal with linkstoourTVservice ortal with mplementing onecustomercar Ov I 2006 MILESTONES ntegr er 200,000br Focus Satacquisitions I platform nationwide nternet subscribers a 60,000 customers tion ofAstral and U U PC –HUNGARY PC –ROMANIA UPC –POLAND e lationships oadband e Liber to $412millionfortheyear, contributingstronglyto 16% to$885million,andoperatingcashflowgrew22% region’s increased organicfinancialperformanceasrevenue This strongsubscribergrowthwasreflectedinthe Internet subscribers,andweadded75,000videosubscribers. followed bya64%increase,or274,000newbroadband We sawthesteepestincreaseindigitalphonesubscribers, linesin2006,an11%increasefortheyear.across allproduct Central andEasternEuropeaddedatotalof505,000RGUs Br way homespassedtonearlyfivemillionintheregion. cable operator, Karneval,Liberty Globalexpandeditstwo- W Hungar joint venturewithMGM,bothofwhicharedistributedin has aninvestmentinMinimax,achildren’s channel,anda 3.9 millionhouseholdsacr Czech Republic,RomaniaandSlovakia,reachingatotalof is theleadingspor Chellomedia, acquir In CentralandEasternEurope,ourprogrammingoperation, services atyear-end. more than777,000subscribersusingUPCbroadbandInternet two-way footprintinCentralandEasternEurope,with oadband Inter ith theacquisitionofCzechRepublic’ ty Global’ y , the CzechRepublic,RomaniaandSlovakia. s net ser overall financialperformance. ts entertainmentchannelinHungary, the ed an80%stakeinSport12006. vices ar oss ther e available tonearlytheentire egion. Chellomediaalso s second lar gest customers subscribetoanalogvideoser With digitalcablestillinitsinfancy, fourmillion morethan balance betweenworkandhomelife. customers’ livesthroughuser-friendly thatimprove the services advanced triple-playpr the region,wewillbeabletoofferourcustomersmost With across theupcomingroll-outofdigitalvideoservices markets soontofollow platforms intheCzechRepublicandRomania,withother 2007, UPCBroadbandplanstorolloutdigitaltelevision . o ducts available,helpingtosimplify vices. However , in Launched digital telephony o Launched digital telephony inFebruary 2007 113,200 customerr UPC -SL Of Launched digital telephony 304,900 customerrelationships UPC -SL cable oper Acquired Karneval, secondlargest 744,500 customerrelationships UPC -CZECHREPUBLIC v fering 10MbpsInternet product er 330,000RGUs OVENIA OV A KIA ator inthecountry elationships , wi th Budapest 17 A DAY IN THE DIGITAL HOME 18:57 - TOKYO J:COM offers a variety of high definition programming — from the latest Hollywood blockbusters to this weekend’s golf tournament — all in stunning, HD clarity. looking formor offering exclusive,well-knownchannelsfordigitalcustomers expanding itsline-upofhighdefinitionpr the yearwith4.3millionRGUs. options fueledan11%increaseinsubscribersasJ:COMended advanced digitalcableservicesandsuperhigh-speedInternet 200 increased itsdigitalpenetrationto52%from37%atyear-end worldwide digitalcableadditions.Asar subscribers andaccountedfor32%ofLibertyGlobal’s During 2006,J:COMaddedover300,000digitalcable (DTH) satelliteinr serves over600,000subscribers,primarilyviadirect-to-home Liberty Globalownsa53%controllingstakeinAustar, which Sapporo, Kanto,KansaiandKyushuregions.InAustralia, over 2.5millioncustomersincommunitiesthroughoutthe bundled enter Japan’s of largestcableoperatorandaleadingprovider Liberty Globalownsa37%indirectinterestinJ:COM, value theirexpandingentertainmentchoices.InJapan, Australia, LibertyGlobalconsumersintheAsia/Pacificregion From thebullettrainsofTokyo totheparklandsofregional ASIA/PACIFIC (4) Digital penetrationDigital measures cablesubscribersasapercentage digital oftotalcablesubscribers. 5 (4 ) . J:COM hasbeenplacingstr tainment, dataandcommunicationsservicesto e choice andvariety. Theavailabilityof egional andr ural markets. ong emphasison ogramming by esult, J:COM T OTAL J:COMRGU S AUSTRALIA JAPAN 19 A DAY IN THE DIGITAL HOME 20 LIBERTY GLOBAL Launched lowerpriceentry-level product L aunched exclusive HDservices and tapping intokey Australian interest A I 2,512,200 customerrelationships cquired CableWest, third largest ntroduced mobile phoneservice, Launched newsportschannels, to br 601,200 videosubscribers with overwith 440,000 RGUs 2006 MILESTONES c able operator inJapan, AUSTAR -AUSTRALIA oaden customerbase H D quad-play bundle video r J :COM -JAPAN ecor ders subscribers atyear over600,000 grew itsvideosubscriberbaseby12%andserved Subscription televisionisbecominganewforceinAustralian and operatingcashflowgrewby4%to$102millionin2006. developing long-ter In 2006,Austarfocusedonacceleratingcustomergr the Asia/Pacificregion. Liberty Global’s technologyandentertainment leadershipin theyear—andasignificantpartof growth throughout andcustomer strong contributortoitsrevenue,product J:COM’ to$739million. organically overthesameperiod, J:COM’s operatingcashflowgrew animpressive13% basis to$1.9billioncompar In 2006,revenueforJ:COMincreased12%onanorganic J:COM and22%subscribedtoourfulltriple-playpackage. its customerssubscribedtomorethanoneservicefrom bundling.Attheendof2006,50% too doesitsproduct options. AsJ:COM’s servicemenucontinuestogrow, so definition videorecorders(HDVRs),anddigitalphone demand, highdefinition(HD)TVprogramming, ofleading-edgetechnologiessuchasvideo-on- introduction advanced markets.J:COM’s growthhasbeendrivenbythe Japan isoneofLibertyGlobal’s mosttechnologically s emphasis onavalue-drivenpackagedof -end. Revenuegr m retention strategies.Asaresult,Austar ed totheprioryear ew by11%to$377million, . Meanwhile, fering isa owth and Global’ Movie Plus,J-SportsandLaLaTV. InAustralia,Liberty 18 channelswithpopularcontentsuchasShopChannel, Global owns50%ofJupiterTV, whichownsinterestsin intensifying competitionintheAsia/Pacificregion.Liberty Ensuring highqualitycontentisalsovitaltostayingaheadof with twopilotmarketsalreadyinoperation. also exploringoptionstobuildaWiMAX broadbandnetwork, 11 channelsnationally. in XYZNetworks,theexclusiveownerand/ordistributorof plans tointr culture, withpenetrationsteadilygrowing.In2007,Austar s content operationisthroughAustar’s jointventure o duce MyStar , its digitalvideor ecor der . Austar is E UTMR. 1.7 CUSTOMER PER AVERAGE PRODUCTS CUSTOMER PRODUCTBUNDLING Tokyo 21 A DAY IN THE DIGITAL HOME 21:36 - SANTIAGO Having a connected, high-speed digital home is a virtual necessity when it comes to getting homework done. organic increasesof14%and23%over2005,respectively. nearly $200millionofoperatingcashflow, representing accounted for$559millionofLiber finishing theyearwith467,000subscribers.In2006,VTR VTR increaseditstelephonycustomerbase28%during2006, by 37%,endingtheyearwith414,000subscribers.Inaddition, In 2006,VTRincreaseditsbroadbandInternetsubscriberbase markets acr the high-speedbroadbandInternetandfixedlinetelephony market shareinthecapitalcityofSantiago.VTR’s of share share ofvideoservicesthroughoutChilewithabout98% local telephoneser provider, andChile’s secondlargestproviderofresidential 800,000 videosubscribers,aleadingbr VTR isthelargestcabletelevisionproviderinChilewithover customers in2006. innovative video,voiceandInternetaccessservicestoits operation inChile,VTR,continueditstraditionofbringing Pacific Oceantothewest,LibertyGlobal’s 80%-owned by thetoweringAndesmountainstoeastandvast In acountrythatis4,300kmlongand180wide,framed THE AMERICAS oss Chileis41%and15%,r vices. VTRhasappr ty Global’ oximately 80%market espectively oadband Inter s r evenue and . net T O T AL VTRRGU PERU CHILE S URORICO PUERTO BRAZIL 23 A DAY IN THE DIGITAL HOME 24 LIBERTY GLOBAL LIBER T N 100% digital operation, recaptured Y S amed “Best Broadband andVideo Broadband amed “Best -PUER ervice inChile” for thethird year F 126,300 customerrelationships 940,700 customerrelationships irst operator inChile tolaunch 3 2% 2006 MILESTONES triple-play customers, al T l 1 v O analog spectrum .8 bundling ratio ideo-on-demand RICO V TR -CHILE subscribe tomor 2006. Morethan30%ofLibertyPuertoRico’s customers subscribers and18,000digitalvoiceattheendof had 108,000videosubscribers,47,000Inter communications providerontheisland.LibertyPuertoRico Puer Liber the highestinworld. penetration acrossVTR’s two-way footprintis32%,oneof over itsbroadbandnetworksbackin1997.Today, voice was oneofthefirstinworldtooffertelephonyservices VTR hasalongtraditionoftechnologicalinnovation,and WiMAX licensetoexplorefuturetechnologyoptions. video-on-demand services,whilealsosecuringanationwide In 2006,VTRwasthefirstcompanyinChiletolaunch technology leadershipisalsoahallmarkofthecompany. initiatives,VTR’sBeyond itssuccesswithproduct overall bundling ratioamongLibertyGlobal’s operationsworldwide. customer subscribingto1.8servicesfromVTR,thehighest of VTR’s customersaretriple-playcustomers,withtheaverage simplified bundledoffersacrossourfootprint.Morethan32% cost-effective manner. newdigitaland In2006,weintroduced and communicationstoourcustomersinasimple our primarygoalisbringingtheworldofentertainment Like ourotheroperationsaroundtheglobe,inChile to RicoLtd.(LibertyPuertoRico),aleadingbroadband ty Globalalsoowns100%ofLibertyCablevision e than oneser vice, r esulting inabundling net access pr Liberty Globalalsohassubsidiariesthatarebroadband rural communities. not beenabletosatisfythedemandofisland’ thathave from competingtelecomandInternetproviders capacity toprovideadvancedservicesandgainingsubscribers transitioned toa100%digitalplatfor ratio of1.4servicespercustomer. Rico In 2006,LibertyPuerto simple ashelpingoutwithhomeworkassignments. —evensomething as from itscompetitorsinthisregion needs oflocalcustomersiswhatdif Staying aheadofthetechnologycurveandinsyncwith pr 79% ownershipinter joint ventureinterestinMGMNetworksLatinAmerica,anda oviders operatinginBrazilandPer ogramming targetedtotheLatinAmericanmarket. est inPramerS.C.A.,bothprovidersof fer u. Inaddition,wehavea entiates Liber m, r ecapturing analog ty Global s lar gely E UTMR. 1.8 CUSTOMER PER AVERAGE PRODUCTS CUSTOMER PRODUCTBUNDLING Santiago 25 A DAY IN THE DIGITAL HOME 26 LIBERTY GLOBAL A fDcme 1 06 Passed UPC Broadband (As ofDecember31,2006) UTAI:Austar AUSTRALIA: THE AMERICAS: J:COM JAPAN: CONSOLIDATED OPERATING DATA (8) (7) (6) (5) rzl&Pr 3106,0 8503,0 110——1,0 6106,0 ,0 — — — 5,800 467,100 — 65,800 300 1,465,100 413,800 26,100 24,000 165,600 63,600 25,400 400 1,499,900 15,000 89,400 173,200 32,400 1,259,400 56,400 961,800 803,500 — 91,800 941,000 113,200 206,300 243,100 1,135,400 — 186,400 — 1,304,600 — 55,300 398,400 302,200 119,000 964,700 — 388,700 1,005,600 974,900 18,600 307,700 1,191,300 — 691,100 — 2,478,600 1,419,200 106,300 19,600 504,900 595,200 — — 565,700 — — — — 117,800 2,589,700 134,500 — 50,300 — — 27,300 2,197,000 11,100 6,600 — 198,600 49,200 31,900 697,200 — 113,200 28,500 1,684,400 264,000 501,800 137,200 940,700 529,300 65,800 1,005,600 334,900 278,800 1,362,300 735,900 113,200 1,499,900 455,700 902,900 1,275,500 304,900 83,100 1,594,600 650,900 1,254,800 89,400 2,343,700 1,058,900 1,076,500 744,500 260,200 1,419,400 1,019,000 599,300 1,695,200 1,304,600 698,300 133,200 964,700 Brazil &Peru 1,316,600 441,700 Puer 1,049,100 307,700 3,151,400 Chile: VTR 1,940,800 974,900 1,258,000 1,988,900 1,125,100 2,200,900 858,300 978,200 Slovenia 2,589,700 Slovakia Czech Republic Poland Romania 2,677,400 Hungary Ireland Austria Switzerland The Netherlands customers f See note17below.See we donotr or theunbundledloopandshared access networkusedby INODEinAustria, do notownthepartnernetworks(definedbelow)usedby Cablecom inSwitzerland, MMDS, oneHome Passed isequaltooneMMDSsubscriber. Duetothefact thatwe the areas thatAustar isauthorized toserve asHomesPassed. respect With to do notcounthomespassedfor DTH. respect With toAustar, homes in wecountall r of servicewi extending thedistributionplant,ex Homes P Mul choose todisconnectafter theirfree service period. subscribers duringtheirf and Subscribers.In somecases,non-paying subscribersare countedas RGUs. Total RGUs isthesumofAnalogCable,,DTH, MMDS, Internet service andbr customer inourAustrian systemsubscribedtoourdigital cable service,telephone Subscriber. Ahomemay containoneormore RGUs.For aresidential example,if Subscriber Revenue Generating Unit isseparately anAnalog CableSubscriber, DigitalCable Customer R or for INODE. Austria, wedonotreport two-way homespassedfor Cablecom’s partnernetworks Switzerland ortheunbundledloopandshared access networkusedby INODEin Due tothefact thatwedonotownthepartnernetworksusedby Cablecomin provision ofvideoandInternet servicesand,insomecases,telephoneservices. cable ,transceiver and/orvoice portwhich,inmostcases,allowsfor the request andreceive ofatwo-way theinstallation addressable set-top converter, Two-way HomesPassed are HomesPassed by ournetworkswhere customerscan Homes P GRAND TOT evisions tothedataorf TOTAL THEAMERICAS UPCBROADBAND TOTAL AND CENTRAL TOTAL WESTERNEUROPE TOTAL ATR EUROPE EASTERN ti-channel Mul to Rico assed countsar assed ar , rom customerrelationships. elationships ar D eport homespassedf thout r (17) TH Subscriber, MMDSSubscriber, Internet SubscriberorTelephone oadband I e tipoint (micr AL homes thatcanbeconnectedtoournetworkswi egar nternet access service, the customer would constitute threenternet access service,thecustomerwouldconstitute d rom new censusresults. theexception With ofAustar, we e r ee promotional ofthesesubscribers serviceperiod.Some e to whichservice(s)theysubscribe.W based oncensusdatathatcanchangeei the numberofcustomerswhor ow a or Cablecom’ v e) DistributionS cept f 27,637,400 328701,4,0 ,1,0 2631078060920035301640924301,4,0 ,0,0 ,9,0 1,100,400 9,497,800 2,208,400 10,146,700 9,294,300 136,400 375,300 922,000 7,860,600 12,603,100 9,719,000 10,140,300 13,228,700 ,4,0 1,0 0,0 ,0 9,0 0,0 04020—— — 200 485,300 30,400 1,799,200 601,200 466,500 1,119,900 — 9,166,400 1,899,800 284,700 937,900 1,108,800 4,554,200 592,400 9,206,100 15,000 777,100 8,800 2,109,300 — 253,400 4,842,200 — 1,432,200 4,438,100 214,600 815,700 18,600 411,900 — 4,943,600 375,300 1,432,200 1,088,900 4,856,2005,304,500 1,431,300 33,900 — 1,559,100 117,800 — — 601,400 708,300 — 888,100 516,500 1,889,700 138,500 1,020,400 1,095,500 — 4,010,300 4,338,000 1,899,800 5,499,900 2,512,200 2,441,700 2,760,900 4,659,900 3,850,300 9,206,100 4,984,600 1,420,600 7,103,200 9,206,100 6,887,700 2,224,400 5,059,100 1,560,600 5,155,700 1,283,400 6,341,000 1,827,100 oe TowyHmsCsoe nlgCbe iia al T MS oa oe Homes Homes Total MMDS DTH DigitalCable AnalogCable Customer Two-way Homes Homes 334,100 s or direct-to-home (DTH) and partner networksorfor INODE. ystem (MMDS)homes.Our (5) eceiv e e at leastonelev ex clude mobi thout f 21,246,200 Passed 3,0 2,0 7,0 0,0 0,0 3,0 690341018,200 334,100 46,900 334,100 108,300 — — 108,300 — 173,400 126,300 334,100 urther ther le el (6) (13) (12) (11) (10) (9) only af basis, r appr on aperconnectionorequiv Analog CableSubscriberiscomprisedofanalogcablecustomersthatar digital converter boxes. Cable SubscribersatDecember31,2006have accepted their butnotinstalled months tothree months.Anestimated10%to15%oftheNetherlandsDigital service. Effective January1,2007, thispromotional periodwas reduced from six digital serviceorpay anadditionalamounttocontinuereceive thedigital rate for sixmonthsafterwhichthesubscriberhadoptiontodiscontinue digital videoserviceandthe converter box were provided attheanalog begins toreceive ourdigitalvideoservice.Through December31,2006,the box andagrees toaccept videoserviceregardless digital ofwhenthesubscriber Subscriber countwhensuchsubscriberaccepts delivery ofourdigitalconverter br customers canrequest andreceive broadband Internet access services. With whichwehavenetworks, orapartnernetwork with aserviceagreement, where Internet are HomesServiceable homes thatcanbeconnectedtoourbroadband programming viaamulti-channel multipoint(microwave) distributionsystem. MMDS Subscriberisahomeorcommercial unit that receives ourvideo D a Subscribers. In TheNetherlandswhere ourdigital migration project isunderway, decrease inourAnalogCableSubscribersequaltotheincrease inourDigital Cable As wemigrate customersfrom analogtodigital videoservices,wereport a r videoservicesprovidedSubscribers todigital by Cablecomover partnernetworks subscriber. A Digital CableSubscriberisnotcountedasanAnalogSubscriber. digi that receives ourdigitalvideoservice.We oneor more countasubscriberwith CableSubscriberisacustomerwithDigital oneormore converter digital boxes eceive analogvideoservicesfrom thepartnernetworksasopposedtoCablecom. TH Subscriberisahomeorcommer subscriber ismoved from theAnalogCableSubscribercounttoDigital Cable oadcast dir o tal converter boxes thatreceives ourdigitalvideoserviceasjustone ximately 748,400“l epresenting theleastexpensive regulated tierofbasiccableservice,with ew channels. Relationships 383201,3,0 ,8,0 ,3,0 6,0 5,0 292702,8,0 ,8,0 043402,705,600 20,463,400 3,783,900 21,283,000 12,942,700 151,400 967,700 2,234,300 9,589,300 19,432,200 13,843,200 ect ly tothehomeviaageosynchr i (7) f eline” customersthatareeline” countedonaperconnection alent bi Total RGUs cial uni l l ing uni t that r t onous satel (EBU) basis.I (8) eceiv es ourvideoprogramming l i te. VIDEO Subscribers n Eur ope weha e counted (9) v e — Subscribers iia al T MS oa oe Homes Homes Total MMDS DTH Digital Cable 2,234,300 ,8,0 ,0,0 ,0,0 ,0,0 ,6,0 1,119,900 9,166,400 1,108,800 9,206,100 2,109,300 — — 1,088,900 (17) (16) (15) (14) 1,0 500979018980465017920485,300 467,100 1,799,200 1,465,100 466,500 413,800 1,899,800 1,100,400 1,499,900 937,900 9,497,800 400 803,500 15,000 2,208,400 — 253,400 91,800 10,146,700 — 388,700 1,432,200 9,294,300 — 2,478,600 55,300 214,600 815,700 136,400 411,900 108,300 565,700 307,700 106,300 4,943,600 375,300 1,432,200 2,589,700 4,856,2005,304,500 922,000 595,200 1,431,300 1,559,100 117,800 2,197,000 117,800 — — — — — — 888,100 198,600 138,500 501,800 Customer Relationships withrespect topartnernetworkshave beenestimatedby Cablecom’ r represent theestimatednumberofhomesthatare capableof technologically bi dial-up connections. networks. access andtelephony servicesover networksownedby third partiesor“partner 39035301,0 ,3,0 ,4,0 7,0 ,5,0 284,700 4,554,200 777,100 4,842,200 4,438,100 18,600 375,300 33,900 7301450—611094701640918025,400 961,800 173,200 186,400 941,000 964,700 398,400 691,100 974,900 — 504,900 134,500 — 27,300 — 49,200 Pursuant toserviceagr residential subscribersofINODE. At December31,2006,ourTelephone SubscribersinAustria included22,600 do notincludecustomersthatreceive servicesviaresale arrangements. subscribers intheNetherlandsandAustralia. Also, ourTelephone Subscribers December 31,2006,exclude anaggregate of149,100mobile telephone requested andisreceiving voice services.Telephone Subscribersasof networks, orthatweservicethrough apartnernetwork,where acustomerhas Telephone Subscriberisahomeorcommercial unit orEBUconnected toour than ournetwork. telephone homesserviceableasserviceisdelivered over anunbundledlooprather can r whichwehaveor apartnernetworkwith aserviceagreement, where customers Telephone are HomesServiceable homesthatcanbeconnectedto ournetworks, not includecustomersthatr INODE thatare notservicedover ournetworks.OurInternet Subscribersdo Austria included 89,200residential digital subscriberlinesorDSLsubscribersof I partner network,where acustomerhasrequested andisreceiving broadband modem connectionstoourbroadband networks,orthatweservicethrough a Internet Subscriberisahomeorcommercial unitoneormore orEBUwith cable r unbundled loop service isnotdel eceiving theappl espect toINODE,wedonotr nternet access services.At December31,2006,ourInternet Subscribersin l ,0 9,0 0,0 04020—— — 200 30,400 601,200 56,400 — 1,135,400 592,400 119,000 8,800 1,191,300 1,419,200 — 50,300 6,600 l ing r equest andreceive voice respect services.With toINODE,wedonotreport 5002,0 580580—— — — 5,800 — 65,800 24,000 26,100 15,000 89,400 — 113,200 — — — — 9601,0 0,0 4,0 2401560300 63,600 165,600 1,259,400 32,400 206,300 243,100 1,304,600 302,200 1,005,600 — 18,600 19,600 — — — — elationship wi (10) s ” service agr A partner networkRGUisonlyr , Subscribers or incertaincases,o 967,700 icable service within thegeographicicable servicewithin regions covered by ivered over ournetworkbutinsteadisdelivered over an 7,0 0,0 ,4,0 0,0 1,032,000139,000 209,000 1,049,100 906,800 — 170,900 th thecustomer eements. I eements, Cablecomof — eceiv (11) nternet andT eport I e . v services viar Subscribers er ashar Homes Serviceable forHomes Serviceable partnernetworks nternet homesserviceableasINODE’ 151,400 ecognized Cablecomhasadirect if f ers digi elephone HomesS ed ac — esale arr (12) tal video cess network. 12,942,700 , angements orfrom br 0,0 3,0 690341018,200 334,100 46,900 334,100 108,300 oadband Internet ie Serviceable Video erviceable and s 12300373902,6,0 2,705,600 20,463,400 3,783,900 21,283,000 NENTTELEPHONE INTERNET pr unti Subscriber information for acquired ispreliminary entities andsubjecttoadjustment mak ac review oursubscribercountingpolicies andunderlying systemstoimprove the other f distribution platf country toin(i)thenature andpricingofproducts andservices,(ii)the a Whi generally donotcountcustomersoftheseservicesassubscribers,orRGUs. businesses, primari esented inac basis, certainofoursubsidiariespr customers inthatmarket for thecomparable tierofservice.Onabusiness-to-business ac cur basis b patrons ofsuchestablishments, thesubscribercountisgenerally calculatedonanEBU hotels andhospi counted onanEBUbasis.Wi discounted pricingstructure for video, broadband Internet ortelephony servicesare Wi consistent andac l counts inanar e th r we ha le wetak acy andconsistencyofthedatar appr tional Gener actors addscomplexi espect toChi y opriate adjustmentstooursubscriberstatisticsbased onthoser Addi v our subsidiaries.EBUiscalculatedb e (13) e Two-way HomesPassed inourDecember31,2006subscribertable. 490,000 digital videohomesserviceablethatare notincludedinHomesPassed or and 19,700 Telephone Subscribers.In addition,partnernetworksaccount for 148,800 Internet andTelephone 35,000Internet HomesServiceable, Subscribers, 46,000 CustomerR December 31,2006,subscribertable,Cablecom’s partner networksaccount for December 31,2006subscribertableisbasedonS is pr completed ourr inf cor Cablecom. Theseestimatesma appr orm, (i ormation becomesa al NotestoT dance wi tals, towhichwepr esented onequarterinarr ly intheNetherlands,S cur opriate stepstoensur ea b le, JapanandPuertoRico Subscribers ate basisatan i i) bi y th ourpol the mostpr lling systems,(iv)baddebtcollection experience, and(v) lling ables: t y eview ofsuchinformation anddeterminedthatit is th r to thesubscribercountingpr elationships, 74,800 RGUs,20,100Digital CableSubscribers, espect tocommer icies. (14) v eported. Ac y ai o o giv ev lable. Cablecom’ vide videoandotherservicesprimari vide data,telephon e alent pricechar wi en balancesheetdate,thev that subscriberstatisticsare presented on tz erland, A , Serviceable y r esidential mul ears suchthatinf cordingly, wemay from time totime y change infuture periods asmore accurate dividing thebulkpricechar cial establ ustria, I s partner networkinf ged tonon-bulkr y (15) tiple dwel r ocess. W eland andRomania. We and otherservicesto ishments, suchasbars, eptember 30,2006data.In our ormation includedinour Subscribers l ariabi e ing units with a ing units with periodical eviews. l ormation gener esidential i ly f ty from ged to or the ly (16) 27 A DAY IN THE DIGITAL HOME al ly 28 LIBERTY GLOBAL Long-ter eerdtxlaiiis571546.0 537.1 Long-ter Deferred taxliabilities Current assets: Assets BALANCE SHEETS CONDENSED CONSOLIDATED te ogtr iblte 1237933.6 1,283.7 597.0 631.6 Stockholders’ equity: Minority inter Other long-termliabilities Current liabilities: Liabilities andStockholders’Equity Other assets,net Commitments andcontingencies 569.0 7,991.3 477.6 8,136.9 Long-ter 9,020.1 Intangible assetssubjecttoamor Franchise rightsandotherintangibleassets 9,942.6 Goodwill Property andequipment,net Other investments Investments inaffiliates,accountedforusing $702.3 millionmeasur o ujc oaotzto 7. 218.0 177.1 789.0 1,062.7 not subjecttoamortization andrelatedreceivables the equitymethod, T 270.0 1,384.9 278.3 Current portionofdebtandcapitalleaseobligations 349.1 Other currentassets etitdcs 9. 56.8 112.5 496.1 597.9 14.7 110.3 726.5 1,202.2 $ — 1,880.5 $ Current assetsofdiscontinuedoperations Restricted cash Other receivables,net Trade receivables,net Cash andcashequivalents eerdcmesto (15.6) — (1,732.5) 9,992.2 (1,020.3) 8,093.5 0.1 2.3 0.1 2.0 (262.9) 145.5 169.8 257.0 715.6 Deferred compensation $ 35.3 Accumulated othercomprehensiveearnings(loss),netoftaxes Accumulated deficit 710.7 Additional paid-incapital Series Ccommonstock,$.01parvalue $ Series Bcommonstock,$.01parvalue — Series Acommonstock,$.01parvalue Current liabilitiesofdiscontinuedoperations Accrued interest Deferred revenueandadvancepayments Accr Accounts payable rmsbciesadohr 4. 596.0 640.1 from subscribersandothers esr tc,a ot (169.6) — reasury stock,atcost oa iblte 640713,765.6 16,410.7 T Total liabilities 2,262.4 3,562.5 T Total currentassets T otal stockholders’equity otal assets otal cur ued liabilitiesandother m m m oa iblte n tchles qiy$2,6. 23,378.5 $ 25,569.3 $ Total liabilitiesandstockholders’equity assets ofdiscontinuedoperations liabilities ofdiscontinuedoperations debt andcapitalleaseobligations(including ests insubsidiaries etlaiiis37472,431.4 3,744.7 rent liabilities ed atfairvalueDecember31,2006) iain e 15831,601.8 1,578.3 tization, net $ 10,845.2 25,569.3 062005 2006 7,247.1 ,1. 1,796.5 1,911.5 752.0 amounts inmillions 2.0 December 31, — 329.9 — $ 23,378.5 7,816.4 9,845.0 669.0 9.6 2.4 Other income(expense): eeu ,8. 4,517.3 $ 6,487.5 $ Operating costsandexpenses: Revenue STATEMENTS OFOPERATIONS CONDENSED CONSOLIDATED e anns(os 0. (80.1) $ 706.2 $ (59.6) (334.0) Historical earnings(loss)percommonshare— Net earnings(loss) Discontinued operations: Loss fromcontinuingoperations Minority inter noetxbnft(xes) . (28.7) 7.9 Income taxbenefit(expense) Ear basic anddiluted: and discontinuedoperations neetaddvdn noe 5476.8 85.4 Shar Interest anddividendincome Inter an ndsoiino ses e 264115.2 (33.7) 206.4 (40.8) (3.4) (13.8) Gains ondispositionofassets,net Losses onextinguishmentofdebt Other-than-temporary declinesinfairvaluesofinvestments For Realized andunr ano ipslo icniudoeain 1034— (0.6) 1,033.4 12.2 Discontinued operations Gain ondisposalofdiscontinuedoperations (3.8) Other income(expense),net 13.7 net Restructuring andotheroperatingcharges(credits), mareto oglvdast 1. 8.3 1,274.0 15.5 1,884.7 Impairment oflong-livedassets Depreciation andamortization Selling, generalandadministrative(SG&A)(including Operating (otherthandepreciation)(including otnigoeain 07)$(0.14) $ (0.76) $ Continuing operations Earnings (loss)fromoperations,netoftaxexpensenil nings (loss)beforeincometaxes,minorityinterests eiaieisrmns e (4.)310.0 (347.6) derivative instruments,net n 4. ilo,rsetvl)14941,059.5 1,929.2 1,439.4 2,781.9 and $49.1million,respectively) stock-based compensationchargesof$63.0million and $9.9million,respectively) stock-based compensationchargesof$7.0million n 17mlin epciey . (20.5) 6.8 and $1.7million,respectively eign cur e prtn noe 5. 250.1 352.3 Operating income s xes 634 (396.1) (673.4) est expense of r esults ofaf ests inear r ency transactiongains(losses),net ealized gains(losses)onfinancialand iits e 1. (23.0) 13.0 filiates, net nings ofsubsidiaries .1$(0.19) $ 1.61 $ ,3. 4,267.2 6,135.2 ,4. (20.5) 1,040.2 Year EndedDecember31, except pershareamounts 062005 2006 525 (164.0) (170.2 (522.5) (171.7 236.1 amounts inmillions, 2.37 ) ) (209.2 (117.0) (0.05) 86.1 ) 29 A DAY IN THE DIGITAL HOME 30 LIBERTY GLOBAL Cash flowsfromfinancingactivities: Cash flowsfromoperatingactivities: STATEMENTS OFCASH FLOWS CONDENSED CONSOLIDATED ahpi o neet$446$286.7 $ 474.6 $ Net cashpaidfortaxes Cash paidforinterest Cash flowsfrominvestingactivities: te netn ciiis e (7.)108.2 (178.7) Other investingactivities,net te iacn ciiis e 687.8 16.8 (101.3) (78.9) 873.6 (91.9) (1,756.9) 18.5 — (95.3) Other financingactivities,net Proceeds fromissuanceofstockbysubsidiaries Cash distributionsbysubsidiariestominorityinterestowners Payment ofdeferredfinancingcosts Change incashcollateral Repurchase ofcommonstock Repayments ofdebtandcapitalleaseobligations Bor e anns(os 0. (80.1) $ 706.2 $ Net earnings(loss) aia xeddfrpoet n qimn 1579 (1,046.2) (1,507.9) (4,289.8) (1,254.2) Pr Cash paidinconnectionwithacquisitions,netofcashacquired Capital expendedforpropertyandequipment Proceeds receivedupondispositionofdiscontinued e osfo otnigoeain 340 (59.6) (334.0) 20.5 (1,040.2) Net cashprovidedbyoperatingactivitiesof Changes inoperatingassetsandliabilities,netoftheeffects Net adjustmentstoreconcilelossfromcontinuing Net lossfromcontinuingoperations Net loss(earnings)fromdiscontinuedoperations Net cashusedbyfinancingactivitiesofdiscontinuedoperations (171.4) (92.5) Net cashusedbyinvestingactivitiesofdiscontinuedoperations prtos e fdsoa ot ,4. — 2,548.1 operations, netofdisposalcosts faqiiin n ipstos4. (3.9) 47.5 1,326.8 2,089.6 of acquisitionsanddispositions operations tonetcashprovidedbyoperatingactivities icniudoeain 49312.8 74.9 discontinued operations oceeds r Cash andcashequivalents: feto xhnertso ah165(160.1) 116.5 2,191.8 (1,211.8) Net incr Effect ofexchangeratesoncash Net cashprovided(used)byfinancingactivities 1,576.1 1,878.0 Net cashusedbyinvestingactivities Net cashprovidedbyoperatingactivities icniudoeain 1.)133.1 (17.6) Discontinued operations oig fdb ,7. 6,968.4 7,774.5 rowings ofdebt n fpro ,8. 1,202.2 $ 2,529.1 1,880.5 $ 1,202.2 End ofperiod Beginning ofperiod otnigoeain 9. (1,460.0) 695.9 Continuing operations Net incr cie pndsoiin fast 8. 464.5 380.8 eceived upondispositionsofassets ease (decrease)incashandequivalents: ae(erae ncs n aheuvlns683(1,326.9) 678.3 ease (decrease)incashandequivalents $ (6,683.3 062005 2006 (394.2 (104.4 amounts inmillions 65.9 — December 31, (5,412.3) ) ) ) 35.6 $ (4,934.7 (57.2 (8.3 ) ) ) neetepne(7.)(9.)(264.6) 65.3 38.7 (396.1) 117.4 76.8 (23.0) (673.4) (209.2) (783.8) 13.0 85.4 (142.6) 236.1 (26.3) (1,274.0) (59.0) Other income(expense),net (1,884.7) 3.8 (70.0) Other Foreign currencytransactiongains(losses),net Realized andunr (13.7) Share ofresultsaffiliates,net Interest anddividendincome Interest expense net Restructuring andotheroperatingcredits(charges), Impair Depreciation andamortization Stock-based compensationexpense T an ndsoiino ses e 0. 1. 43.7 24.1 115.2 (33.7) 206.4 (40.8) Gains onexchangeinvestmentsecurities Gains ondispositionofassets,net Gains (losses)onextinguishmentofdebt filings withtheSecuritiesandExchange Commissionincludingourmostr operating cashflowandachieve assumedmargins,aswellotherfactorsdetailedfromtime to timeintheCompany’s and willingnesstoupgradeouradvancedpr These risksanduncertaintiesincludethecontinuedusebysubscribers andpotentialsubscribersoftheCompany’s services any changeintheCompany’ toreflect disseminate anyupdatesorrevisions toanyguidanceandotherforward-lookingstatementcontained herein statements speakonlyasofthe dateofthisr ability toachieveexpectedoperationalef FORWARD-LOOKING STATEMENTS which anysuchstatementisbased. and uncer statementsinvolvecertainrisks other informationandstatementsthatarenothistoricalfact. Theseforward-looking regarding competitioninourmarkets,theimpactofM&A activity onouroperationsandfinancialperformance 1995, includingourplanstoupgradeanalogcustomers advanceddigitalser Actof This Reportcontainsforward-lookingstatementswithinthemeaning ofthePrivateSecuritiesLitigationReform anddiscontinuedoperations,ispresentedbelow.to ourconsolidatedearnings(loss)beforeincometaxes,minorityinterests flow fromoperatingactivitiesandotherGAAPmeasuresofincome.Areconciliationtotalsegmentcash a providedbyotherpubliccompanies.Operatingcashflowshouldbeviewedas flow maydifferfromcashmeasurements toothercompaniesinourindustry.investors useittocompareourperformance However, ourdefinitionofoperatingcash In addition,ourinternaldecisionmakersbelievemeasureofoperatingcashflowisimportantbecauseanalystsand operatingtrendsinoursegments. operating cashflowwoulddistorttheabilitytoefficientlyassessandviewcore chargeswithin For example,ourinternaldecisionmakersbelievethattheinclusionofimpairmentandrestructuring operatingperformance. segments inthedifferentcountrieswhichweoperateandidentifystrategiestoimprove analyticalcomparisonsandbenchmarkingbetween and allowsmanagementtoreadilyviewoperatingtrends,perform atransparentviewofourrecurringoperatingperformance superior tootheravailableGAAPmeasuresbecauseitrepresents andis our internaldecisionmakers.Ourmakersbelieveoperatingcashflowisameaningfulmeasure evaluate theoperatingperformanceofoursegmentsandcompanyonanongoingbasisusingcriteriathatisusedby operating chargesorcredits).We believeoperatingcashflowismeaningfulbecauseitprovidesinvestorsameansto andother expenses (excludingdepreciationandamortization,stock-basedcompensationimpairment,restructuring operatingcashflowisdefinedasrevenuelessandSG&A allocate resourcestosegments.Asweusetheterm, andtodecidehow measure usedbyourchiefoperatingdecisionmakertoevaluatesegmentperformance Operating cashflowisnotagenerallyacceptedaccountingprinciple(GAAP)measure.theprimary OPERATING CASH FLOW DEFINITIONANDRECONCILIATIONS otal segmentoperatingcashflow prtn noe(os 5. 5. (275.8) 250.1 352.3 derivative instr Operating income(loss) Earnings (loss) before income taxes, minority interests Earnings (loss)beforeincometaxes,minorityinterests measure of operating performance thatisasupplementto,andnotsubstitutefor,measure ofoperatingperformance operatingincome,netearnings,cash n icniudoeain 102 61$(136.4) $ 86.1 $ (170.2) $ and discontinuedoperations -than-temporar ment oflong-livedassets tainties thatcouldcauseactualr uments, net ealized gains(losses)onfinancialand y declines infairvaluesofinvestments s expectations withr ficiencies andeconomiesofscale,ourabilitytogenerateexpected r esults todif elease. TheCompanyexpr o duct of egar d fer materiallyfr ther ferings, changesintechnology eto oranychangeinevents,conditions orcir $ om thoseexpressedorimpliedbythesestatements. ,3. ,8. 727.7 $ 1,587.6 $ 2,336.2 0620 2004 2005 2006 (347.6 essly disclaimsanyobligationor under (15.5 (13.8 ecently filedFor 12.2 178.8 — — 1. (35.8) 310.0 ) ) ) Year endedDecember31, vices, ourinsightsandexpectations amounts inmillions , r egulation andcompetition,our m 10-K. Thesefor (0.6 (8.3 34 (18.5) (3.4) ) ) cumstances on war evenue and d-looking taking to (50.8 (9.7) ) 31 A DAY IN THE DIGITAL HOME 32 LIBERTY GLOBAL Europe, AsiaandtheAmericasprovide educational insti education andinclusionofseniorci or discountedvideoanddataproducts to pan-European Internet safety activities Eur A I n member ofInsafe and Safer Internet Day, aEuropean Commissionfunded number ofLiberty Globalaffiliates in I opean countries,UPCDigi Japan, J:COMhaspioneered digital In anumberofCentral andEastern nternet saf Liberty Globalisthefirstcorporate and bestpractices across Europe. Centers provide free computer and non-pr tutions, hospitals,libraries, et 2 006 HIGHLIGHTS y and Internet courses. portal thatpr ofi t organizations. tal S omotes tiz chool ens. network, gives thepeopleofAntofagasta access tothetoolstheyneedparticipateindigital world. The Antofagasta Cybertrain, amoveable classroom equippedwith computersandconnectedtotheVTR impacts ofLiber development ofobjectivesand targetsaimedatmitigatingtheenvironmental Initiative,thisassessmentisexpectedtoresultinthe Greenhouse GasProtocol Business CouncilforSustainableDevelopment/W energy consumptionandwaste.Conductedinaccordance withtheWorld W • • • under acommonprogramwiththreeobjectives: one shouldbeleftbehind.In2007,wear where weoperate,andforthepeoplewhoselivestouch.We believethatno Community” programstrivestopromotedigitalinclusioninthecommunities based onexistingcommunityinitiativesinourfootprint.Our“Inthe In 2006,webeganbuildingagr CORPORA Creating opportunities: Enhancing skills: Widening access: products andservicessafely,products securely, andeffectively. to participateinthedigitalworld. individuals andsocietiesasawhole. Global’s andservices,howtousethemforthebenefitof digitalproducts e ar e also assessingLiber ty Globalanditsassociatedbusinesses. TE RESPONSIBILIT Giving everyoneaccesstothetoolsandequipmenttheyneed, Ensuring thatpeopleareableandqualifiedtouseourdigital Teaching peoplehow tomakethemostofLiberty ty Global’s greenhousegasemissionsassociatedwith oup-wide corporater e launching severalnewinitiatives Y esponsibility program,inpart orld ResourcesInstitute’s BOARD OF DIRECTORS

JOHN C. MALONE DAVID E. RAPLEY Chairman of the Board Retired Executive Vice President Chairman of the Board of Liberty Media Corporation VECO Corp. – Alaska Chairman of the Board and Chief Executive Officer LARRY E. ROMRELL of Discovery Holding Company Retired Executive Vice President of Tele-Communications, Inc. MICHAEL T. FRIES GENE W. SCHNEIDER President and Chief Executive Officer Retired Chairman of the Board, Chief Executive Officer JOHN P. COLE, JR. and founder of UnitedGlobalCom, Inc. Founder and retired partner of Cole, Raywid & Braverman J.C. SPARKMAN JOHN W. DICK Retired Chairman of the Board of Broadband Services, Inc. Non-executive Chairman of Hooper Industries Group J. DAVID WARGO PAUL A. GOULD President of Wargo & Company, Inc. Managing Director, Allen & Company, LLC

EXECUTIVE OFFICERS

JOHN C. MALONE ELIZABETH M. MARKOWSKI Chairman of the Board Senior Vice President, Secretary, General Counsel MICHAEL T. FRIES GENE M. MUSSELMAN President and Chief Executive Officer President and Chief Operating Officer, AMY M. BLAIR UPC Broadband SHANE O’NEILL Senior Vice President, Global Human Resources CHARLES H.R. BRACKEN Senior Vice President, Chief Strategy Officer, and President, Chellomedia Senior Vice President, Co-Chief Financial Officer MAURICIO RAMOS (Principal Financial Officer) MIRANDA CURTIS President, Liberty Global and Chief Executive Officer, VTR Global Com S.A. President, Liberty Global Japan FREDERICK G. WESTERMAN III BERNARD G. DVORAK Senior Vice President, Investor Relations Senior Vice President, Co-Chief Financial Officer and Corporate Communications (Principal Accounting Officer)

SHAREHOLDER INFORMATION

Liberty Global’s Series A, B and C Common Stock trade on the NASDAQ Stock Market under the symbols LBTYA, LBTYB, and LBTYK, respectively. CORPORATE HEADQUARTERS – Liberty Global, Inc. – 12300 Liberty Boulevard, Englewood, Colorado 80112 – 303.220.6600 TRANSFER AGENT: INDEPENDENT CERTIFIED ANNUAL REPORT ON FORM 10-K PUBLIC ACCOUNTANTS: Computershare Liberty Global’s Annual Report on Form 10-K P.O. Box 43023 KPMG LLP as filed with the Securities and Exchange Providence, RI 02940 707 Seventeenth Street, Suite 2700 Commission is available without charge (except 888.218.4391 Denver, Colorado 80202 for exhibits). Please contact Investor Relations. (Outside the U.S.) +1 781.575.3919

INVESTOR RELATIONS CONTACTS: CORPORATE COMMUNICATIONS CONTACTS:

CHRISTOPHER NOYES IVÁN NASH VILA HANNE WOLF BERT HOLTKAMP 303.220.6693 +41 44 277 97 38 303.220.6678 +31 20 778 9447 12300 Liberty Boulevard Englewood, CO 80112 USA www.lgi.com