TIDMVMED
Virgin Media Announces Next Phase of Capital Return
Programme
LONDON, December 14, 2012 - Virgin Media Inc. ("Virgin Media")
(NASDAQ:VMED) (LSE:VMED) today announced the next phase of its
Capital Return programme.
Virgin Media's results over recent years have demonstrated our
ability to grow revenue, control costs, refinance debt and generate
cash. Since beginning our share repurchase programme in July 2010,
we have repurchased 73 million shares of common stock for
GBP1.127bn, representing around 22% of our share count at that
time.
We have also made significant progress in refinancing high
coupon debt, having issued GBP2.2bn of low coupon bonds and
deleveraging the business since we set our circa 3.0x leverage
target two-and-a-half years ago. As a result, we are announcing
today that going forward we plan to manage the business in a
leverage range of 3.0x to 3.25x Net Debt to OCF1 and we expect to
progressively achieve this range over the coming quarters.
With the near completion of our existing authorised capital
returns programme, we are also announcing that our Board of
Directors has authorised a new share buyback programme of at least
GBP1.122bn to be completed before the end of 2014. This represents
approximately 19% of our current market capitalisation and includes
the GBP122m remaining under our pre-existing Board authority.
Our Board has also authorised the use of up to GBP200m in
transactions related to our debt and convertible debt, which may be
effected through open market, privately negotiated, and/or
derivative transactions until the end of 2014. Our present
intention is to maintain our existing dividend of 4 cents per share
per quarter in 2013.
Today's announcement further underscores our commitment to both
financial discipline and to offering attractive returns to
investors. Together with our leverage range, this will allow for
meaningful flexibility to reinvest in our business, maintain our
strong credit quality, complete our likely refinancing activity and
maximise the total returns to our stockholders.
The transactions described above may be implemented by brokers
for the company within certain pre-set parameters and purchases may
continue during closed periods in accordance with applicable
restrictions. The stock so acquired will be held in treasury or
cancelled. Also, in connection with certain derivative and
accelerated buyback transactions, the associated counterparties may
hedge their liabilities through transactions in our common
stock.
Notes
1 Net Debt to OCF is Net Debt on a hedged basis divided by OCF
for the last twelve months. Net Debt and Net Debt to OCF are
non-GAAP financial measures. OCF is operating income before
depreciation, amortization, goodwill and intangible asset
impairments and restructuring and other charges. OCF is a non-GAAP
financial measure and the most directly comparable GAAP measure is
operating income. Net Debt is long term debt inclusive of current
portion, less cash and cash equivalents. Net debt is a non-GAAP
financial measure and the most directly comparable GAAP measure is
long term debt (net of current portion.) The hedged amount is
defined as the amount in sterling we would repay at maturity
relating to debt obligations, net of any payments or receipts on
related derivative instruments.
Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995
Various statements contained in this press release constitute
"forward-looking statements" as that term is defined under the
Private Securities Litigation Reform Act of 1995. Works like
"believe", "anticipate", "should", "intend", "plan", "will",
"expects", "estimates", "projects", "positioned", "strategy", and
similar expressions identify these forward-looking statements,
which involve known and unknown risks, uncertainties and other
factors that may cause our actual results, performance or
achievements or budgeted, whether expressed or implied, by these
forward-looking statements.
These factors, among others, include the following:
* We operate in highly competitive markets which may lead to a
decrease in our revenue, increased costs, customer churn or a
reduction in the rate of customer acquisition;
* The sectors in which we compete are subject to rapid and
significant changes in technology, and the effect of technological
changes on our businesses cannot be predicted;
* Our fixed line telephony is in decline and unlikely to
improve;
* A failure in our network and information systems could
significantly disrupt our operations, which could have a material
adverse effect on those operations, our business, our results of
operations and financial conditions;
* Unauthorized access to our network resulting in piracy could
result in a loss of revenue;
* We rely on third-party suppliers and contractors to provide
necessary hardware, software or operational support and are
sometimes reliant on them in a way which could economically
disadvantage us;
* The "Virgin" brand is not under our control and the activities
of the Virgin Group and other licensees could have a material
adverse effect on the goodwill towards us as a licensee;
* Our inability to provide popular programming or to obtain it
at a reasonable cost could potentially have a material adverse
effect on the number of customers or reduce margins;
* Adverse economic developments could reduce customer spending
for our TV, broadband and telephony services and could therefore
have a material adverse effect on our revenue;
* We are subject to currency and interest rate risks;
* We are subject to tax in more than one jurisdiction and our
structure poses various tax risks;
* Virgin Mobile relies on Everything Everywhere's networks to
carry its communications traffic;
* We do not insure the underground portion of our cable network
and various pavement-based electronics associated with our cable
networks;
* We are subject to significant regulation, and changes in the
U.K. and EU laws, regulations or governmental policy affecting the
conduct of our business may have a material adverse effect on our
ability to set prices, enter new markets or control our costs;
* We have substantial indebtedness which may have a material
adverse effect on our available cash flow, our ability to obtain
additional financing if necessary in the future, our flexibility in
reacting to competitive and technological changes and our
operations;
* We may not be able to fund our debt service obligations in the
future; and
* The covenants under our debt agreements place certain
limitations on our ability to finance future operations and how we
manage our business;
These and other factors are discussed in more detail under "Risk
Factors" and elsewhere in our annual report on Form 10-K for the
year ended December 31, 2011, or the 2011 Annual Report, as filed
with the U.S. Securities and Exchange Commission, or SEC, on
February 21, 2012 and on Form 10-Q as filed with the SEC, on
October 31, 2012. We assume no obligation to update our
forward-looking statements to reflect actual results, changes in
assumptions or changes in factors affecting these statements.
For further information, contact:
Virgin Media Investor Relations
Richard Williams: +44 (0) 1256 753037 /
richard.williams@virginmedia.co.uk
Vani Bassi: +44 (0) 1256 752347 /
vani.bassi@virginmedia.co.uk
Phil Rudman: +44 (0) 1256 752677 /
phil.rudman@virginmedia.co.uk
Media - Tavistock Communications
Lulu Bridges: +44 (0) 20 7920 3150 /
lbridges@tavistock.co.uk
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