2010 ANNUAL REPORT (1) (2) OPERATING HIGHLIGHTS in thousands: 2008 2009 2010 Homes Passed 21,809 22,189 31,193 Two-way Homes Passed 16,773 17,582 26,109 Voice - Homes Serviceable 16,478 17,614 26,335 Internet - Homes Serviceable 16,834 17,845 26,533 Video Subscribers 12,890 12,592 16,756 Table of Penetration (of homes passed) 59 % 57 % 54 % Contents Voice Subscribers 3,050 3,467 4,610 Penetration (of homes serviceable) 19 % 20 % 18 % Internet Subscribers 4,659 5,143 6,408 1 2010 Highlights Penetration (of homes serviceable) 28 % 29 % 24 % 2 Letter to Shareholders Total RGUs 20,599 21,201 27,774 5 Product Innovation Total Customer Relationships 13,580 13,367 17,643 and Technology Strategy RGUs per customer relationship 1.52 1.59 1.57 8 Corporate Responsibility 10 Our Operations (2) FINANCIAL HIGHLIGHTS Inside Back Cover $ in millions: 2008 2009 2010 Board of Directors, Revenue Executive Officers UPC Broadband Division: & Shareholder Information Western Europe $ 3,092 $ 2,996 $ 4,201 Central and Eastern Europe 1,301 1,121 1,109 Central operations 2 1 1 UPC Broadband Division 4,395 4,117 5,311 Telenet (Belgium) 1,501 1,675 1,727 VTR (Chile) 714 701 798 Forward-Looking Statements AUSTAR (Australia) 535 534 653 This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including our Corporate and other 576 549 609 expectations with respect to our future growth prospects. See pages I-6 and I-7 of the enclosed Annual Report on Form 10-K for a description Intersegment eliminations (85 ) (78 ) (80 ) of other forward-looking statements included in this report and certain Total LGI $ 7,636 $ 7,497 $ 9,017 of the risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Notes on defined terms Operating Cash Flow (OCF) Unless otherwise indicated in this report, subscriber growth statistics UPC Broadband Division: exclude subscribers of acquired entities at the date of acquisition, but include the impact of changes in subscribers from the date of acquisition. Western Europe $ 1,626 $ 1,622 $ 2,313 These statistics are presented on a net basis. Central and Eastern Europe 680 574 529 For our definition of operating cash flow or OCF and the related reconciliation, see note 19 to our consolidated financial statements Central operations (182 ) (165 ) (160 ) in the enclosed Annual Report on Form 10-K. Rebased OCF growth is presented to show growth on a comparable basis by neutralizing the UPC Broadband Division 2,123 2,031 2,682 effects of acquisitions and foreign currency exchange rate fluctuations. For purposes of calculating rebased OCF growth, we have adjusted our historical 2009 OCF to (i) include the pre-acquisition OCF of certain Telenet (Belgium) 727 833 873 entities acquired during 2009 and 2010 in the respective 2009 rebased amounts to the same extent that the OCF of such entities are included VTR (Chile) 296 288 328 in our 2010 results, (ii) exclude the pre-disposition OCF of certain entities that were disposed of during 2009 and 2010 from our rebased AUSTAR (Australia) 177 185 227 amounts to the same extent that such entities were excluded from Corporate and other (14 ) (6 ) (0 ) our results in 2010 and (iii) reflect the translation of our 2009 rebased amounts at the applicable average exchange rates that were used to Total LGI $ 3,309 $ 3,332 $ 4,109 translate our 2010 results. In addition, our rebased OCF growth rate reflects the impact of rebasing 2009 results for a new revenue-based tax that was imposed in Hungary in October 2010, with retroactive effect to the beginning of 2010. Our OCF margin is calculated by dividing Loss from continuing operations $ (764 ) $ (62 ) $ (876 ) OCF by total revenue for the applicable period. We define adjusted free cash flow as net cash provided by operating activities less capital Net earnings (loss) $ (602 ) $ 14.1 $ 564 expenditures, each as reported in our consolidated statements of cash flows, as adjusted (i) for the Unitymedia pre-acquisition Q1 2010 Net earnings (loss) attributable period and (ii) to eliminate certain material impacts of the Unitymedia acquisition and sale of our J:COM interests, specifically (a) the costs to LGI stockholders $ (789 ) $ (412 ) $ 388 associated with certain pre-acquisition debt of the acquired entity, (b) direct acquisition costs of the Unitymedia acquisition and (c) U.S. cash tax payments resulting from the gain on the sale of our J:COM interests. We also eliminate excess tax benefits from stock-based compensation, (1) Please see page I-10 of the enclosed Annual Report on Form 10-K for definitions of subscriber terms used in the which we began recording following the sale of our J:COM interests. Operating Highlights section. Adjusted free cash flow is not a GAAP measure of liquidity. For our (2) When reviewing and analyzing our operating results and statistics, it is important to keep in mind that other third definition of adjusted free cash flow and for additional information party entities own significant interests in Telenet Group Holding NV (Telenet), VTR Global Com SA. (VTR), and concerning the definitions and calculations mentioned above, please Austar United Communications Limited (AUSTAR). For additional information, see note 19 to our consolidated see our earnings release dated February 24, 2011. financial statements in the enclosed Annual Report on Form 10-K. $ 12,000 $ 5,000 $ 10,000 $ 4,000 $ 8,000 $ 3,000 $ 6,000 $ 2,000 $ 4,000 $ 1,000 $ 2,000 ‘09 ‘09 ‘090 08 09 10 08 09 10 ‘08‘08 ‘09‘09 ‘10 0 0 ‘ ‘08 ‘ ‘09 ‘10 ‘ Revenue Operating Cash Flow ($ in millions) ($ in millions) 35,000 30,000 30,000 25,000 25,000 20,000 20,000 15,000 15,000 10,000 10,000 5,000 5,000 ‘08 ‘09 ‘10 0 0 ‘08 ‘09 ‘10 Homes Passed Total RGUs (in thousands) (in thousands) Homes Passed Video Two-way Homes Passed Internet Voice Central & Eastern Europe $1,109 Chile $798 Double-Play Australia 15% $653 Single-Play Triple-Play Western Europe Other 64% 21% $5,928 $529 Revenue By Region Customer Product Bundling ($ in millions) Average Products Per Customer: 1.57 NEXT GENERATION NOW 1 n tio va o n In Dear Shareholders 2010 was a very successful and transformational year for Liberty Global. We experienced strong operating momentum throughout the year, as our ongoing John C. Malone investments in digital TV and broadband Chairman Michael T. Fries internet continued to drive solid growth President and CEO on all fronts. The acquisition of Unitymedia, the second-largest cable operator in Germany, has been a great success for us from the start, with results beating expectations across the board. The transaction also helped us further rebalance our business, with Europe now accounting for more than 80% of our subscriber base and revenue. Going forward, we will continue to seize accretive M&A opportunities to further expand our leadership position in Europe, and we’re fully capitalized to do so. Our operating focus remains on enhancing the digital lives of our customers through meaningful innovation, while driving incremental penetration of our advanced services. In 2010, our promise of speed, value and choice continued to gain recognition from customers across our footprint. We added nearly 2.4 million 2 LIBERTY GLOBaL – ‘10 Q u a l it y new subscribers to our digital TV, voice and broadband offerings. As a result, rebased revenue growth accelerated meaningfully to 5% year-on We’re making signicant progress year for a total of $9.0 billion. Meanwhile, rebased across each of our three key operating cash flow increased 6% to $4.1 billion and adjusted free cash flow rose more than 80% value drivers… to $680 million. M&A has been a key ingredient of our success in 2010. In January, we completed the acquisition ending the year with nearly $4 billion of cash on of Unitymedia, providing instant access to the hand. In 2010, we were very active in the capital rapidly growing German cable market. With markets, as we managed to extend the average our first year in Germany behind us, we’re even life of our debt to seven years. We also continued more convinced that Unitymedia is a fantastic our focus on stock buybacks as the most efficient addition to our growing European platform. way to return capital to our shareholders. Last In November, we agreed to buy Aster, one year alone, we repurchased nearly $1 billion of of Poland’s leading cable operators. This equity securities, lifting the total since 2005 to transaction will boost our presence in one of more than $7 billion, or approximately half of Europe’s best performing markets. With cable our outstanding equity. operations in 11 countries, we have great In summary, we’re making significant progress efficiencies and scale in continental Europe, across each of our three key value drivers: which we will continue to drive through add- industry-leading organic growth, accretive M&A on acquisitions. In that sense, 2011 could be yet and active management of our balance another busy year on the M&A front. sheet and capital structure. Our strategy Our exit from Japan, marked by the sale of our clearly resonates with investors, with our interest in J:COM early last year, significantly share price gaining over 60% last year, which increased our financial and strategic flexibility. was well above market averages as well as our Our balance sheet has never been stronger, peer group.