Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Liberty Global's First Quarter 2017 Investor Call. As a reminder, the first portion of the call will focus on Liberty’s European results and the second portion to begin at approximately 10:30 AM Eastern Time will focus on the results of the LiLAC Group. This call and the associated webcast are the property of Liberty Global, and any redistribution, retransmission or rebroadcast of this call or webcast in any form without the express written consent of Liberty Global is strictly prohibited. At this time, all participants are in a listen only mode. Today's formal presentation materials can be found under the Investor Relations section of Liberty Global's website at www.libertyglobal.com. [Operator Instructions] As a reminder, this investor call is being recorded on this date, May 8, 2017. Page 2 of the slides details the company's Safe Harbor Statements regarding forward-looking statements. Today's presentation materials may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the company's expectations with respect to its outlook and future growth prospects and other information and statements that are not historical facts. These forward-looking statements involve certain risks that could cause actual results to differ materially from those expressed or implied by these statements. These risks include those detailed from time to time in Liberty Global's filings with the Securities and Exchange Commission, including its most recently filed Forms 10-Q and 10-K as amended. Liberty Global disclaims any obligation to update any of these forward-looking statements to reflect any change in its expectations or in the conditions on which any such statements is based. I would now like to turn the call over to Mr. Mike Fries.

Thank you, operator, and welcome, everyone to Part 1 of our Q1 Investor call for Liberty Global. The next hour or so we will be focusing on our European operations for Liberty Global Group shareholders and then as a reminder, right after this call we will be rolling into a similar call for LiLAC shareholders, which of course you are all welcome to join even if don’t own shares yet. I have got a lot of folks on this call today and we’ve got a lot to talk about. So, I will do a quick overview of the results and Charlie Bracken will drill down into the financials briefly and then we will get right into your questions. We are both speaking from slides today. So I hope you have been access those. There is quite a bit of information that we are going to be covering, always easier if you have those in front on you. Now I am going to begin on Slide 4, with some key European highlights. There is good news in this quarter, but as you will see, we have work to do in a number of areas, which we will talk about. I’ll start with a positive, which is that we continue to experience accelerated subscriber growth with a 40% increase in quarterly RGU additions in Q1 versus last year. The major driver of that growth was Virgin Media in the UK, which represented a 163,000 or two-thirds of our 244,000 new RGU’s that’s the best quarterly result for Virgin since we bought the business four years ago. We will talk quite a bit about the UK on this call, on both in prepared remarks and I suspect in Q&A. I will just say upfront that we remain highly confident in this market, which…

Thanks Mike. So turning to Slide 10. We present the Q1 financial results for the Liberty Global Group. Now two quick reminders before I start. First of all, our results include BASE in Belgium from a year-over-year gross perspective as of February 11, 2016. And secondly, Ziggo's not at all consolidated in our financial results, effective from the beginning of 2017 as well. So for the purposes of computing rebased growth rates, we've also excluded Ziggo from our prior year results, while including the estimated prior year revenue from the framework services agreement with the Dutch JV. Kicking off with revenue in the top left chart, we reported $3.5 billion of revenue in Q1 2017, which is a 2% rebased increase over Q1 2016. Meanwhile, our rebased OCF grew 4.1% to $1.6 billion in Q1, as softer OCF growth of Virgin Media was partially offset by stronger OCF growth at Telenet. Now I'm going to provide a bit more color on our country results in a minute, but let me turn to our capital spend. This increased to 25% of revenue in Q1, totaling $884 million. In terms of breaking down our property and equipment additions, one-third of the additions in Q1 were related to CPE, which includes the incremental spend for the Connect Box, which is the next-gen TV boxes, with the balance in our other categories of new build and upgrade, capacity baseline and product enablers. For the full-year, we expect our property and equipment additions to be at the lower end of our guidance range of 29% to 31% of revenue. Moving to the bottom left. Our adjusted free cash flow was negative $333 million during Q1, and this is in line with our phasing expectations. When comparing our adjusted free cash flow from Q1 2016, keep…

[Operator Instructions] And we will take our first question from Ben Swinburne with Morgan Stanley.

Thank you, good morning guys. Mike, when you think about the new team you put in place on Lightning. What are the things that you're expecting them to be able to execute on for the remainder of this year? So give us a sense to help us track sort of their performance as you guys have reset expectations here. And maybe you could put into context also how much of the ARPU pressure and sort of tier mix, you think, was competitive versus sort of execution based on sort of what the call centers were doing or what policies they had in place, if there's any way to quantify how much you chalk up to the competitive dynamics in the U.K. versus some of the things you think you guys can do better?

Sure. Thanks, Ben. And Balan and Tom are on, so I'll let the chime in here. On Lightning, it's all the things I described just a moment ago in my remarks, which is mostly coordinating with our build teams and our local communities, but also getting the planning, the engineering and the design and the construction to sync up appropriately. So it sounds simple. You might say, what the heck happened? And the truth is that the business was doing well, and we were building at a pretty reasonable clip. It's really when we decided or not decided, but planned to increase the pace of builds that these sorts of issues arose or that they became discovered by us, I would say. And things to look for are just the clip - the pace at which we're building. It's going to take some time for us to get all the right people, processes in line and lined up, so it's not going to be an immediate bump in the build project, but this is a massive investment and a massive construction program. So it's more important for us to retool, reboot and get it right for the next three years than to worry too much about quarterly adds. I mean, I know it's an important metric for you and for others, how many homes have you built, what's the penetration rate. Those are things we'll continue to report. I'm much more concerned and much more focused on the next three years and the next three months. And I feel really good about the change we've made. I think Balan and his team have stepped in immediately and effectively. And Tom, of course, remains in charge of all of the business as a whole. But I think it's a good partnership and one that we think will bear fruit. Balan or Tom, do you want to add to the Lightning point at all?

I think just to build on what you said Mike, we are retooling the whole organization as well, a lot of the processes, the work flows, and we are doing, I think a really good job working with our construction partners as well and we are feeling pretty good about where it’s headed and it will take a little to retool the whole organization there, but we are feeling pretty good about where this is going to go.

And just as a quick follow-up, are you guys changing the construction partners that you have or are you happy these are the same folks you have been working with some of the getting and one thing out of your control Mike is sort of the municipalities and how they are helping or not helping, I know that is lot of a red tape, so how are you feeling about that?

Well, they're not out of our control. They're squarely in our control if we manage the process properly, which we were doing in the limited amount of construction that we've been conducting here in the last 24 months. But as we ramp up construction, we had to be and need to be much more proactive, much more thoughtful, much more engaged. And with those organizations and those local municipalities and that's exactly what Balan and Tom are focused on now. You guys want to add to that, please?

We are going to be using a lot of the same construction partners. We are being a lot more clear with them on the allocation of activities to each one of them. We'll be adding maybe one or two to it. And one of our key managing directors here, Rob Evans, is working a lot closer with the local authorities as well to clean up some of the previous changes that we've had and issues. And I think our partners would say that the relationship is getting stronger, and the guidance to them around the jobs are getting a lot more clearer.

Tom, you want to speak to the ARPU tier mix issue?

Yes, Mike. Thank you. To be direct, I think we can tag it on the team as our execution wasn't good enough. I think people are aware that we took two price rises last year. We saw an opportunity late last year, particularly our competitors have done this in the past. And frankly, the second price rise is just proving a bit too aggressive that has driven churn and spin down over and above our expectation. Now of course, there's competition out there, and this market is always competitive. But I think, in this case, there were internal issues with the double price rise. At the same time, problems emerged, so those living in the U.K. might be aware on our Compass box, the historic TiVo box we've had in the marketplace that we deployed. The functionality of the box slowed up. That's now been addressed with the help of Balan and the T&I group, but that was clearly a point of friction with our customer base. And we had network congestion, as we're adding customers and adding Lightning, and we had to overcome that, and we're progressively overcoming that. So, I think there were issues within our agreement that exacerbated what was a natural market reaction.

Thank you guys for your answer.

And we will take our next question from Jeff Wlodarczak with Pivotal.

Good morning. I was hoping you could provide additional color on your previous post 2017 EBITDA guidance and the wake of the move to 5%, do you still anticipate being able to get to the high single digits and then I have a follow-up.

Yes, Jeff. I think in our minds, that range is achievable. What we've learned is saying it means nothing. I mean, I think, as you would know, you know us well, we have historically set aggressive internal targets. That's how we manage our business. That's how we manage each other. The difference and then, perhaps, the mistake we've made is we started talking about those targets. And in the end, we appreciate guidance is important for those who follow the stock, and it's important for a number of reasons. And as you've taken on ambitious programs, like Project Lightning and things of that nature and Liberty GO, you're inclined you want to give transparency and visibility to the things that you're doing and the things that you're trying to achieve, which we did. And I mean, the punchline is we believe that range is achievable. We prefer to perform and get there, then talk about it. Certainly, all of the things that we're doing in our minds allow us to get to that point much more effectively, much more predictably in a much more competent way. The truth is that Q1, here, which we appreciate is a welcome disclosure for those. It was a bump in the road, not a change in direction or detour. And we've discussed what the reasons are and what the issues are, and we've made appropriate changes to personnel and management, where needed, and we're off to the races. So, I think the answer is yes. We think it's achievable, but we're going to start focusing a lot less on guiding folks, and a lot more just on getting our business done, if that makes sense to you.

Fair enough and then if could you could provide more color on Switzerland, you know as the market is beginning more competitive, it is fully penetrated, is there any danger that markets return to the Netherlands and in your opinion is that a market you think the reason you will be able to generate EBITDA growth over the medium or long-term?

Eric's on. I'll let him chime in. My personal view is no. It's not - it doesn't have the same characteristics of the Netherlands, and the biggest difference is the main telecom actor itself. Swisscom, I would describe as, of course, competitive, effective and aggressive, but highly rational, focused on certain market share approach, and maintaining balance in that market. So all the things that we're doing we believe will continue to have the benefits in the second half of the year, principally changing the Connect & Play portfolio, launching more aggressive mobile products. We've got a sports channel coming out. So I think, no, it doesn't appear to us to be that kind of market, but we have a lot of work to do to keep the growth engine moving there. We had a good fourth quarter. First quarter, not as good as we'd like, but we haven't yet seen price increases kick in there. That just happened in April. We haven't launched the new portfolio yet. That's happening shortly. We haven't launched the new sports channel yet. We've just launched the mobile bundle. So it's still early days in terms of how we're responding to market pressure. It would have been more of in the receiving mode in the first quarter. Eric, do you want to add something to that?

No. I mean, I think, Mike, you touched on all the major points. I think the market is rational. We've seen our competitors in Q1, in particular, really go aggressive on promotions, Sunrise with free TV and Swisscom with 50% to 75% deep, deep promotions, and you've seen it in the Swisscom results. They had one of their worst quarters in history, minus 5% in sequential quarter, and I think approaching minus 3% on prior year quarter. So I think that the remaining part of the year will improve because the price increase, going effective in April, April 1. One other point, the tier mix in Q4, we saw more at the low end of the Connect & Play bundles, and we've improved the acquisition ARPU from 71 in Q4 up to 81 in Q1. And the new portfolio coming into play in May will also improve volume, we believe, as well as the ARPU through the rest of the year.

Thank you.

And we’ll take our next question from Simon Weeden with Citi.

Thank you. Just on the guidance, I had a question relating to the status of your midterm OCF guidance that you gave last quarter, whether you're reiterating that or putting that on in the filing for later in the year perhaps. And on the same sort of theme, the 15-month penetration level through Lightning seems to be declining a bit, so I wondered how that makes you think about your longer-term penetration ambition toward the new build areas. Thank you.

I just answered the guidance question, which was we believe we can achieve that range, but we're focused on execution not conversation. Do you want to, Tom, discuss the penetration ranges?

Yes. Look, I think the penetration charges we've shown, we've adapted from the previous earnings releases. We are now showing our net penetrations, so I think that's better understood. I think the 15-month period you see there is a moving base as a greater number of premises built move into that 15 month or 15-month period, as we've obviously progressed for the build. And if we go to - and so that will move the base around, I think, in particular, this case, it's pulled in some homes in a relatively lesser demographic, but still good building penetration. And if we look at the quarterly penetration rates from the premises built into sales in 2015, two of those quarters were already comfortably above 30%. So, I think we see that trend line of the penetration continuing towards our target.

Okay, thank you.

And we will take the next question from Michael Bishop with Goldman Sachs.

Yes, thanks. Just 2 questions. Firstly, maybe stand back on Project Lightning, and think about the comments you made around the potential returns still being very attractive. I just wanted to dig a bit deeper to see whether those potential returns are now lower because of some of the issues you've had, but also the recent Ofcom decision to regulate BT's fiber. Potentially, if you take slightly longer to deliver Project Lightning, then BT might be further along with G.fast in those areas as well. And then secondly, just digging deeper onto some of the comments you made around the second quarter in the U.K. being better with the new offers. It seems like you're giving the mid-tier bundles more value with higher speeds. So I was just wondering how this is improving the mix. Thanks very much.

On Project Lightning, when we calculate returns on an investment of this size and that requires this much capital, of course we are looking at over a period of time, and when you spend the money is when the clock starts ticking. So remember if we are not building as many homes in a quarter as somebody thought we should build, we might have originally hoped to build for us we are spending less capital. So the clock starts ticking when you spend the capital. You can imagine that we are discussing that there will be free cash flow impacts if you don't spend that much capital, positive impact. So the returns from our point of view are a function of when you spend that capital, how much in fact it costs you to achieve the construction of a certain number of premises and then there are two of penetration rates you can achieve over a reasonable period of time. As we look at the project the pace of the build does not impact the overall return because as we slow down pace if we were to do that, we spend less capital. So the returns in our minds are the same, even if you flex those returns what you can expect that we do regularly, if you reduce ARPU, if you reduce penetration rates by certain amounts, the returns are still incredibly good, and still support investment, I'm not giving you specifics, except to say that there is room in this particular project to achieve great return on capital even if you flex some of those assumptions and some of the execution we have been already achieving. In terms of the competitive environment, we don't believe that the Ofcom announcements or BT's approach to G.fast materially impact our ability to achieve the overall project objectives. Clearly, I can't predict the future, how quickly will they roll out their networks, what will happen to pricing. But based on what we understand today and based on the fact that there is flexibility in the assumption that you can make that still support investment in the project, it's not going to change our position or quite frankly, how confident we are in continuing to spend the capital. You want to hit the Q2 issue, Tom?

In Q2, in terms of the offers, we're seeing continued good sales. Early days, obviously, and we are seeing a moderation in churn from what we had in Q1, and of course, the period when we had the price rise. I think we had pulled back a bit on the discounts, as we discussed earlier, so we're trying to address that issue. But broadly, we are positive about the immediate growth prospects.

All right. And then we will take our next question from Vijay Jayant with Evercore ISI.

Thanks. So Mike, based on your comments, it looks like it's an execution blip in the U.K. But one of the questions we keep getting, given your guidance over the last couple of years and what the performance has been, is that there is a structural difference in Europe in terms of customers not really willing to pay for much faster speeds or really willing to pay up for more advanced video products. And this mix shift that we're seeing is, despite your admission that maybe an execution could be more structure-related. Can you just help us sort of differentiate between those two because you're implying that this is sort of a road bump, and then that things are going to get better, so that will be really helpful. And second, obviously, every time there's a headline about ITV, Liberty Global's name comes up as a potential buyer. Obviously, you can't talk about M&A, but just strategically owning advertising assets in the U.K. and any synergies or strategic advantage of having that, can you sort of help us think through that?

Sure. It's a good question, and on the first one and the second one. On the execution point, I think as Tom mentioned, and as we've tried to be clear, all of the things that have occurred are explainable, and they're explainable principally by decisions or action or inaction that we have taken or teams working for us have taken. In the case of Project Lightning, we've identified those issues. We've rectified those issues. We've put new leadership and management in place that we have confidence in can turn those particular problems around, and we are now sort of at a new level of execution, and time will tell, we'll have to prove to you that that's the case. But in terms of Project Lightning, it's on us, as Tom said. And when you look at the penetration rates we're achieving, the ARPUs we're achieving, the build costs that we're achieving, this was merely a matter of blocking and tackling on the construction end of the project. And now I feel like with Balan's support and the team from Europe diving in, we've got the right sort of folks working on that. In terms of the other matters, and what Tom referenced around the hangover from Q4, the manner in which we dealt with customer churn in Q1 and the competitive factors in Q1, those are decisions we make. But we are in a competitive business, don't get me wrong. We are in a competitive business, but we rely on the teams on the ground and Tom's team and his marketing team and his customer operations team to make decisions quickly on the fly around retention, around pricing and discounts, and we've been doing this a long time, decades. So sometimes, you get it right. Sometimes, you don't get it…

Thanks so much.

Yes.

We will take our next question from Ulrich Rathe with Jefferies.

Thanks very much. And I'd like to ask Tom a question on the U.K., first of all, if that's all right. You just sort of described the first quarter as a bit of an execution blip, trying to contain the churn on the price rise. Just wondering, have you changed tactics compared to what you've used in the past in the first quarter? And is there really an alternative rollout, an alternative scenario that would have led to a much better outcome? In other words, is it really the execution of the churn mitigation in the first quarter that's the issue or is it the price rise in the fourth quarter and the way that has been executing that's at the heart of the issue? And that then leads into my sort of additional question. How much room do you really see in the U.K. to continue the price inflation? I mean there's major consumer advisor organizations out there that provide you with haggling scripts. They publish success rates for the different operators, and it just sounds as if the environment, given the price inflation over the years, has become such that it's increasingly more difficult to push these things through. So those would be my two questions, please. Thank you.

Well, a couple of points there. I think the - clearly, the change was we took an early price rise, having taken two price rises in 2016. That was the big change we took. In hindsight, that's proven to be too aggressive. And as I said, we had the - in conjunction with that, service issues, which were impactful, which have been fundamentally correct, but were impactful. I think, going forward, yes, there are things to do different. We have increased the top speed for consumers here to 300 meg. We're actually selling at a minimum speed, 100 meg. We're progressively rolling out the new Liberty Global Group EOS box, which we have branded as V6, and the NPS performance of that box is just incredibly positive compared to our historic Compass box, and we are progressively improving on our TV upgrades. It's been a long project, and frankly, behind where we had hoped it to be in terms of additional VoD and additional capability. So the product continues to improve and as we pass through some of these jobs. All these things do give us a degree of confidence in terms of what we're offering the customer. I think the point you made about our customer base digitizing is completely true, and I think we had a job in front of us to make sure we keep pace with our customers. We have investments in place now. We're rolling out a new contact center system, right across our contact centers to give our call center operators a better ability to make the best offer and making retention offers, and using the digital knowledge we have in our own business to help them make positive decisions for the business and for our customers. So, I think it's a whole range of those things, which come together. And in the medium-term, going forward, we're going to continue to offer increased value to our customers if we're going to expect to get modest, but worthwhile rental increases going forward. So we'll be focused on all of those things.

Thank you.

And we will take our next question from Steven Malcom with Arete Research.

Good morning guys. I had a couple of questions. First of all, just some Lightning-related questions, I just wanted to get your sense of what you thought current broadband penetration in the Lightning footprint is, and also what you think churn is and where you think that has to get to, to get your 40%. Because for now, the numbers, it looks to me like churn would have to double to get enough gross adds to get up to the sort of 40%. And then just a question on the central cost, I think at the Q - at the full year results, Mike, you said that the -sort of bringing in the service charges from Ziggo would depress OCF growth by a couple of hundred basis points. In Q1, it seems to add 100 basis points. Was that just phasing, and how should we think about the impact of those service charges from VodafoneZiggo to the rest of the year? Thanks a lot.

Yes, the impact of the service charges, and I'll let Jason or Charlie chime in here, have been rebased. So what we've assumed is when you look at - when we show our growth rates year-over-year in OCF, we assume we received those service charges in the prior year as well. There might be some changes here or there in terms of how much we are, in fact, receiving, but we aren't benefiting from those service charges or those framework agreement payments. They're essentially in both quarters, this quarter and in the prior year quarter on a pro forma basis. But Tom, you want to hit the Lightning point?

Yes. I think on that point, we're finding typically the penetration of broadband in the new build areas is not atypical to the rest of the U.K. So it's 80%-plus, maybe fractionally low because there's been less competitive intensity in those areas, but all those people in these Lightning areas are today serviced by BT in one form or the other, so either BT directly or by Openreach. And therefore, they're all limited to a maximum product of 76 meg. But yes, we have to turn them out from existing supply. There's no question about that, and that often they are in contract and they want their contract to come through. And they might be buying other services, particularly TV, so we got to turn out the bundle. I think we are proving we can turn them out. If you compare it with marketing again, it's - you've got to have the negotiations. You've got to offer more product. I think we are showing we can get those penetrations and offer them a better service at the same time.

Okay. Thanks a lot.

And we will take our final question today from Jonathan Dann with Royal Bank of Canada.

Hi there, if I - basically on convergence that ratios are relatively low even in the UK, is the take away that you're expecting sort of the attachment great of mobile to broadband and TV to go up across the markets?

Well, it's early days for us. Well, a lot of market - a lot of companies but certainly early days for us if you're talking about fixed mobile convergence penetration rates. I mean, we're averaging about 14% in Europe. Some markets are higher. The U.K. is about 20. Belgium is in the 30s if you include the Telenet business, as well as the BASE business. And I think Holland starts out, lies somewhere in the 20% range, 20%-plus range. So it's early days in terms of products in overlap of fixed to mobile customers. But the magic happens when in a place like Belgium, you start to converge, not just the customer accounts, but the actual products and services you sell. We haven't really done that anywhere else yet. I mean, in Holland, we simply are offering three or four different benefits to overlapping customers to keep them happy and sticky. We haven't yet launched a true quad-play product where data bundles and unlimited voice bundles and services are truly converged. We have done that in Belgium with WIGO, and we've got - going on 200,000 subs there, almost 190,000 subs, I think. And that has become a very sticky, very attractive product, where - it's where we all need to head in terms of making this particular investment in mobile payoff. The payoff, of course, is reduced churn in the fixed business. The payoff is additional margin, and the payoff is having your finger on that connectivity pulse, so that you're always able to understand where your customers are, what their needs are, what their data consumption is, and you can monetize that across multiple platforms. That's where we're going, but we are - it is a little bit of a wake-up call in mobile business, as you all know, because I'm guessing most of you are investors in the mobile business. It's not an easy business. There's a reason why we haven't bought mobile assets everywhere in Europe because I think that, that business is still in transition, and the mobile sector itself is still in transition, and we'll pick our spot. In the meantime, our MVNO deals give us the ability to compete, create stickiness and churn reduction without, in most cases, a massive investment. So, we're all in it, but we're also, as we've told you all along, very opportunistic and taking a one-size-does-not-fit-all approach to mobility in Europe. Does that answer your question?

It does, yes.

Okay, great.

All right. Well, thanks, everybody. Appreciate you being on the call today and hearing us out. Clearly, as I said earlier, and I think as Tom mentioned too, the ball is in our court here. We take it on the chin, and it wasn't the best quarter. But having delivered, I don't know, 46 straight quarters of growth, we know we're not going to be perfect in every particular operating period, but I have confidence in the team. On this call, I also, especially given the changes we've made to management in some of the core areas in the U.K. and so leave it to us. We're focused on growth. We're incented around growth, and we have high optimism and confidence so that we can achieve that growth, and we look forward to showing you that through the rest of the year. Thanks for being on the call.

Ladies and gentlemen, this concludes Liberty Global's first quarter 2017 investor call for its European operations. As a reminder, a replay of the call will be available in the Investor Relations section of Liberty Global's website at www.libertyglobal.com. There, you can also find a copy of today's presentation materials.