##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    September 30, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number
    000-51360
   
   Liberty Global, Inc.
 (Exact name of Registrant as
    specified in its charter)
  State of Delaware

20-2197030(State or other jurisdiction
    of

(I.R.S. Employerincorporation or
    organization)

Identification No.)12300 Liberty Boulevard
    Englewood, Colorado(Address of principal
    executive offices)

80112(Zip
    Code)   Registrants telephone number, including area code:
 (303) 220-6600
   þ o
  Rule 12b-2
  Large
    Accelerated
    Filer þ
    Accelerated
    Filer o
    Non-Accelerated
    Filer o
    Smaller
    Reporting
    Company o   Rule 12b-2 o þ




---



##### 



LIBERTY
    GLOBAL, INC.
  INDEX
  PageNumberPART I  FINANCIAL INFORMATIONITEM 1.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTSCondensed Consolidated Balance Sheets as of
    September 30, 2008 and December 31, 2007
    (unaudited)


2Condensed Consolidated Statements of Operations
    for the Three and Nine Months Ended September 30, 2008 and
    2007 (unaudited)


4Condensed Consolidated Statements of
    Comprehensive Earnings (Loss) for the Three and Nine Months
    Ended September 30, 2008 and 2007 (unaudited)


5Condensed Consolidated Statement of
    Stockholders Equity for the Nine Months Ended
    September 30, 2008 (unaudited)


6Condensed Consolidated Statements of Cash Flows
    for the Nine Months Ended September 30, 2008 and 2007
    (unaudited)


7Notes to Condensed Consolidated Financial
    Statements (unaudited)


8ITEM 2.

MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


50ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
    MARKET RISK


80ITEM 4.

CONTROLS AND PROCEDURES


85PART II  OTHER INFORMATIONITEM 1.

LEGAL PROCEEDINGS


86ITEM 1A.

RISK FACTORS


86ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE
    OF PROCEEDS


87ITEM 6.

EXHIBITS


88EX-10.1EX-31.1EX-31.2EX-31.3EX-32   1




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  CONDENSED
    CONSOLIDATED BALANCE SHEETS
 (unaudited)
  September 30,


December 31,2008


2007in millionsASSETSCurrent assets:Cash and cash equivalents

$
1,581.4


$
2,035.5Trade receivables, net


765.8



1,003.7Deferred income taxes


289.7



319.1Derivative instruments (note 6)


372.4



230.5Other current assets


296.0



335.8Total current assets


3,305.3



3,924.6Restricted cash (note 9)


470.8



475.5Investments (note 5)


1,148.2



1,171.5Property and equipment, net (note 8)


10,703.2



10,608.5Goodwill (note 8)


12,707.0



12,626.8Intangible assets subject to amortization, net (note 8)


2,213.9



2,504.9Other assets, net


1,321.9



1,306.8Total assets

$
31,870.3


$
32,618.6     2




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  CONDENSED
    CONSOLIDATED BALANCE SHEETS  (Continued)
 (unaudited)
  September 30,


December 31,2008


2007in millionsLIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
671.5


$
804.9Deferred revenue and advance payments from subscribers and others


657.6



933.8Current portion of debt and capital lease obligations
    (note 9)


439.0



383.2Derivative instruments (note 6)


356.7



116.2Accrued interest


118.6



341.2Accrued capital expenditures


154.2



194.1Other accrued and current liabilities


1,235.7



1,084.1Total current liabilities


3,633.3



3,857.5Long-term debt and capital lease obligations (note 9)


18,823.2



17,970.2Other long-term liabilities


2,618.5



2,508.8Total liabilities


25,075.0



24,336.5Commitments and contingencies (note 13)Minority interests in subsidiaries


2,740.0



2,446.0Stockholders equity (note 10):Series A common stock, $.01 par value. Authorized
    500,000,000 shares; issued and outstanding 145,072,997 and
    174,687,478 shares, respectively


1.5



1.7Series B common stock, $.01 par value. Authorized
    50,000,000 shares; issued and outstanding 7,254,910 and
    7,256,353 shares, respectively


0.1



0.1Series C common stock, $.01 par value. Authorized
    500,000,000 shares; issued and outstanding 146,096,678 and
    172,129,524 shares, respectively


1.5



1.7Additional paid-in capital


4,394.3



6,293.2Accumulated deficit


(1,122.3
)


(1,319.1
)Accumulated other comprehensive earnings, net of taxes


780.2



858.5Total stockholders equity


4,055.3



5,836.1Total liabilities and stockholders equity

$
31,870.3


$
32,618.6    3




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  CONDENSED
    CONSOLIDATED STATEMENTS OF OPERATIONS
 (unaudited)
  Three months ended


Nine months endedSeptember 30,


September 30,2008


2007


2008


2007in millions, except share and per share amountsRevenue (note 12)

$
2,649.7


$
2,255.3


$
7,990.6


$
6,541.9Operating costs and expenses:Operating (other than depreciation and amortization) (including
    stock-based compensation) (notes 11 and 12)


1,013.3



921.4



3,105.1



2,704.9Selling, general and administrative (SG&A) (including
    stock-based compensation) (notes 11 and 12)


510.3



474.1



1,587.2



1,375.1Depreciation and amortization


711.9



615.4



2,160.0



1,819.6Provision for litigation (note 13)






146.0







146.0Impairment, restructuring and other operating charges, net


1.4



11.6



3.2



17.52,236.9



2,168.5



6,855.5



6,063.1Operating income


412.8



86.8



1,135.1



478.8Non-operating income (expense):Interest expense (note 12)


(293.4
)


(247.1
)


(863.7
)


(706.4
)Interest and dividend income


23.5



36.1



75.4



84.6Share of results of affiliates, net


2.4



5.9



5.2



29.0Realized and unrealized gains (losses) on derivative
    instruments, net (note 6)


18.2



(134.8
)


89.2



(71.2
)Foreign currency transaction gains (losses), net


(286.7
)


(31.7
)


96.3



41.6Unrealized losses due to changes in fair values of certain
    investments and debt, net (notes 5, 7 and 9)


(129.2
)


(0.3
)


(84.4
)


(230.5
)Gains (losses) on extinguishment of debt, net






1.6







(21.7
)Gains (losses) on disposition of assets, net


(0.4
)


552.8



(1.8
)


553.1Other income (expense), net


(0.5
)


1.0



1.8



(3.6
)(666.1
)


183.5



(682.0
)


(325.1
)Earnings (loss) before income taxes and minority interests


(253.3
)


270.3



453.1



153.7Income tax expense


(25.0
)


(178.4
)


(315.8
)


(123.8
)Minority interests in earnings of subsidiaries, net


(30.6
)


(51.5
)


(173.6
)


(255.3
)Net earnings (loss)

$
(308.9
)

$
40.4


$
(36.3
)

$
(225.4
)Basic earnings (loss) per share  Series A,
    Series B and Series C common stock (note 2)

$
(1.01
)

$
0.11


$
(0.11
)

$
(0.58
)Diluted earnings (loss) per share  Series A,
    Series B and Series C common stock (note 2)

$
(1.01
)

$
0.10


$
(0.11
)

$
(0.58
)Weighted average common shares outstanding  basic


306,400,856



380,820,488



323,952,314



385,518,890Weighted average common shares outstanding  diluted


306,400,856



414,288,951



323,952,314



385,518,890    4




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  CONDENSED
    CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
    (LOSS)
 (unaudited)
  Three months ended


Nine months endedSeptember 30,


September 30,2008


2007


2008


2007in millionsNet earnings (loss)

$
(308.9
)

$
40.4


$
(36.3
)

$
(225.4
)Other comprehensive earnings (loss), net of taxes:Foreign currency translation adjustments


(445.1
)


457.7



(40.9
)


506.9Reclassification adjustment for foreign currency translation
    losses included in net earnings (loss)


0.5



19.4



0.5



19.4Unrealized gains on
    available-for-sale
    securities






20.3







15.6Reclassification adjustment for losses on
    available-for-sale
    securities included in net loss














3.8Other


(1.2
)


(2.1
)


1.6



0.7Other comprehensive earnings (loss)


(445.8
)


495.3



(38.8
)


546.4Comprehensive earnings (loss)

$
(754.7
)

$
535.7


$
(75.1
)

$
321.0    5




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  CONDENSED
    CONSOLIDATED STATEMENT OF STOCKHOLDERS
    EQUITY
 (unaudited)
  AccumulatedotherAdditional





comprehensive


TotalCommon stock


paid-in


Accumulated


earnings,


stockholdersSeries A


Series B


Series C


capital


deficit


net of taxes


equityin millionsBalance at January 1, 2008, before effect of accounting
    changes

$
1.7


$
0.1


$
1.7


$
6,293.2


$
(1,319.1
)

$
858.5


$
5,836.1Accounting changes (note 3)


















233.1



(39.5
)


193.6Balance at January 1, 2008, as adjusted for accounting
    changes


1.7



0.1



1.7



6,293.2



(1,086.0
)


819.0



6,029.7Net loss


















(36.3
)






(36.3
)Other comprehensive loss, net of taxes






















(38.8
)


(38.8
)Repurchase and cancellation of common stock (note 10)


(0.2
)






(0.2
)


(1,938.5
)










(1,938.9
)Stock-based compensation, net of taxes (note 11)














37.1











37.1Stock issued in connection with equity incentive plans, net of
    employee tax withholding














10.9











10.9Adjustments due to changes in subsidiaries equity and
    other, net














(8.4
)










(8.4
)Balance at September 30, 2008

$
1.5


$
0.1


$
1.5


$
4,394.3


$
(1,122.3
)

$
780.2


$
4,055.3    6




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS
 (unaudited)
  Nine months endedSeptember 30,2008


2007in millionsCash flows from operating activities:Net loss

$
(36.3
)

$
(225.4
)Adjustments to reconcile net loss to net cash provided by
    operating activities:Stock-based compensation expense


125.3



141.3Depreciation and amortization


2,160.0



1,819.6Provision for litigation






146.0Impairment, restructuring and other operating charges, net


3.2



17.5Amortization of deferred financing costs and non-cash interest


35.3



63.9Share of results of affiliates, net of dividends


(5.2
)


(24.4
)Realized and unrealized losses (gains) on derivative
    instruments, net


(89.2
)


71.2Foreign currency transaction gains, net


(96.3
)


(41.6
)Unrealized losses due to changes in fair values of certain
    investments and debt, net of certain dividends


85.8



230.5Deferred income tax expense


162.3



2.0Losses on extinguishment of debt, net






21.7Losses (gains) on disposition of assets, net


1.8



(553.1
)Minority interests in earnings of subsidiaries, net


173.6



255.3Changes in operating assets and liabilities, net of the effects
    of acquisitions and dispositions


(296.2
)


(248.6
)Net cash provided by operating activities


2,224.1



1,675.9Cash flows from investing activities:Capital expended for property and equipment


(1,679.1
)


(1,451.2
)Cash paid in connection with acquisitions, net of cash acquired


(251.7
)


(985.0
)Proceeds received upon dispositions of assets


38.4



454.0Other investing activities, net


(16.9
)


(30.5
)Net cash used by investing activities


(1,909.3
)


(2,012.7
)Cash flows from financing activities:Borrowings of debt


1,971.9



2,556.9Repayments of debt and capital lease obligations


(747.4
)


(1,560.5
)Repurchase of LGI common stock


(1,955.5
)


(1,271.6
)Proceeds from issuance of stock by subsidiaries






122.5Other financing activities, net


(22.9
)


44.6Net cash used by financing activities


(753.9
)


(108.1
)Effect of exchange rates on cash


(15.0
)


82.2Net decrease in cash and cash equivalents


(454.1
)


(362.7
)Cash and cash equivalents:Beginning of period


2,035.5



1,880.5End of period

$
1,581.4


$
1,517.8Cash paid for interest

$
1,042.0


$
713.7Net cash paid for taxes

$
130.7


$
62.5    7




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 September 30, 2008
 (unaudited)
  (1)
    Basis
    of Presentation  and/or direct-to-home
  -
  Form 10-Q Regulation S-X Form 10-K.
       8




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  (2)
    Earnings
    (Loss) per Common Share (EPS)    Three months ended


Nine months endedSeptember 30,


September 30,2008


2007


2008


2007in millions, except share amountsNumerator:Net earnings (loss) (basic EPS computation)

$
(308.9
)

$
40.4


$
(36.3
)

$
(225.4
)Reversal of impact of certain obligations that may be settled in
    shares, net of taxes






(0.6
)






Reversal of impact of UGC Convertible Notes, net of taxes






2.2







Net earnings (loss) (diluted EPS computation)

$
(308.9
)

$
42.0


$
(36.3
)

$
(225.4
)Denominator:Weighted average common shares (basic EPS computation)


306,400,856



380,820,488



323,952,314



385,518,890Incremental shares attributable to the assumed conversion of the
    UGC Convertible Notes






22,169,280







Incremental shares attributable to obligations that may be
    settled in shares






715,393







Incremental shares attributable to the assumed exercise of
    outstanding stock options and stock appreciation rights (SARs)
    and the release of restricted shares and share units upon
    vesting (treasury stock method)






10,583,790







Weighted average common shares (diluted EPS calculation)


306,400,856



414,288,951



323,952,314



385,518,890      9




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
    (3)
    Accounting
    Changes and Recent Accounting Pronouncements  Accounting
    Changes
  SFAS 157
  Fair Value Measurements Goodwill and Other Intangible Assets
    (SFAS 142) and SFAS No. 144, Accounting for
    the Impairment or Disposal of Long-Lived Assets
  SFAS 159
  The
    Fair Value Option for Financial Assets and Financial Liabilities instrument-by-instrument available-for-sale available-for-sale
  EITF
    06-10
  No. 06-10, Accounting for Deferred Compensation and Postretirement
    Benefit Aspects of Collateral Assignment Split-Dollar Life
    Insurance Arrangements (EITF 06-10). EITF 06-10 Employers Accounting for Postretirement Benefits Other
    Than Pensions Omnibus Opinion EITF 06-10 EITF 06-10,
 10




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
    FSP
    157-3
  No. 157-3, Determining the Fair Value of a Financial Asset in a Market
    That Is Not Active (FSP 157-3). FSP 157-3 FSP 157-3 FSP 157-3 FSP 157-3
  Recent
    Accounting Pronouncements
  SFAS 141(R)
  Business Combinations Business
    Combinations Accounting for Income Taxes,
  SFAS 160
  Noncontrolling Interests in Consolidated Financial Statements
 11




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  SFAS 161
  Disclosures about Derivative Instruments and Hedging
    Activities  an amendment of FASB Statement No 133
  FSP
    142-3
  No. 142-3, Determination of the Useful Life of Intangible Assets (FSP 142-3). FSP 142-3 FSP 142-3 FSP 142-3 FSP 142-3
  (4)
    Acquisitions  2008
    Acquisition
  Acquisition
    of Spektrum
  (i) Spektrum-TV
  2007
    Acquisitions
  Telenet 
  JTV Thematics 
 12




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  share-for-share
  Pro
    Forma Information
    Three months ended


Nine months endedSeptember 30, 2007


September 30, 2007in millions, except per share amountsRevenue

$
2,270.3


$
6,600.7Net earnings (loss)

$
35.7


$
(226.7
)Basic earnings (loss) per share

$
0.09


$
(0.59
)Diluted earnings (loss) per share

$
0.09


$
(0.59
)   (5)
    Investments    September 30,


December 31,Accounting Method

2008


2007in millionsFair value (a)

$
880.4


$
Equity (b)


246.3



388.6Cost


21.5



22.1Available-for-sale






760.8Total

$
1,148.2


$
1,171.5     (a)
    
    As further discussed in note 3, we adopted SFAS 159
    effective January 1, 2008. Pursuant to SFAS 159, we
    elected the fair value option for certain of our investments,
    including our investments in Sumitomo, The News Corporation
    Limited (News Corp.) and Telewizyjna Korporacja Partycypacyjna
    S.A. The aggregate fair value of our fair value method
    investments as of January 1, 2008 was $1,138.8 million.(b)
    
    At September 30, 2008, investments accounted for using the
    equity method include our investments in Mediatti
    Communications, Inc. (Mediatti), Discovery Japan, Inc., JSports
    Broadcasting Corporation and XYZ Network Pty LTD. 13




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
     (6)
    Derivative
    Instruments    September 30,


December 31,2008


2007in millionsCross-currency and interest rate derivative contracts (a)

$
(480.4
)

$
(280.3
)Equity-related derivatives (b)


424.3



210.8Foreign exchange contracts


10.2



(5.9
)Other


4.2



5.0Total (c)

$
(41.7
)

$
(70.4
)Current asset

$
372.4


$
230.5Long-term asset


584.7



421.7Current liability


(356.7
)


(116.2
)Long-term liability


(642.1
)


(606.4
)Total (c)

$
(41.7
)

$
(70.4
)     (a)
    
    In 2008, we began considering credit risk in our fair value
    assessments in accordance with the provisions of SFAS 157.
    As of September 30, 2008, the fair values of our
    cross-currency and interest rate derivative contracts that
    represented assets have been reduced by credit risk valuation
    adjustments aggregating $4.6 million and the fair values of
    our cross-currency and interest rate derivative contracts that
    represented liabilities have been reduced by credit risk
    valuation adjustments aggregating $87.4 million. The
    adjustments to our derivative assets relate to the credit risk
    associated with counterparty nonperformance and the adjustments
    to our derivative liabilities relate to credit risk associated
    with our own nonperformance. In all cases, the adjustments take
    into account offsetting liability or asset positions within a
    given contract. Our determination of credit risk valuation
    adjustments generally is based on our and our
    counterparties credit risks, as observed in the credit
    default swap market and market quotations for certain of our
    subsidiaries debt instruments, as applicable. Net gains
    arising from credit risk valuation adjustments of
    $28.8 million and $82.8 million for the three and nine 14




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  months ended September 30, 2008, respectively, are included
    in realized and unrealized gains (losses) on derivative
    instruments, net, in our condensed consolidated statements of
    operations. For further information concerning our fair value
    measurements, see note 7.(b)
    
    The fair values of our equity-related derivatives primarily
    relate to the share collar (the Sumitomo Collar) with respect to
    the Sumitomo shares held by our company. The fair value amount
    as of September 30, 2008 does not include a credit risk
    valuation adjustment as any losses incurred by our company in
    the event of nonperformance by the counterparty would be fully
    offset against amounts we owe to the counterparty pursuant to
    the secured borrowing arrangements of the Sumitomo Collar.(c)
    
    Excludes the prepaid forward sale contract on our News Corp.
    Class A common stock, which is included in long-term debt
    and capital lease obligations in our condensed consolidated
    balance sheets. For reasons similar to those expressed in note
    (b) above, the fair value of the equity derivative embedded
    in this prepaid forward contract does not include a credit risk
    valuation adjustment.    Three months ended


Nine months endedSeptember 30,


September 30,2008


2007


2008


2007in millionsCross-currency and interest rate derivative contracts

$
(191.3
)

$
(132.1
)

$
(170.8
)

$
(60.1
)Equity-related derivatives (a)


184.6



15.8



241.1



6.4Foreign exchange contracts


25.8



(17.5
)


20.0



(19.3
)Other


(0.9
)


(1.0
)


(1.1
)


1.8Total

$
18.2


$
(134.8
)

$
89.2


$
(71.2
)     (a)
    
    Includes activity related to (i) the Sumitomo Collar,
    (ii) the prepaid forward sale contract on our News Corp.
    Class A common stock and (iii) the call options we
    held during the 2007 periods with respect to Telenet ordinary
    shares.    Nine months endedSeptember 30,2008


2007in millionsNet cash received (paid) related to derivative instruments:Operating activities

$
54.4


$
(80.2
)Investing activities


(2.2
)


(0.2
)Financing activities


(2.7
)


58.8Total

$
49.5


$
(21.6
)  15




---



##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  Cross-currency
    and Interest Rate Derivative Contracts
  Cross-currency
    Interest Rate Swaps:
    Notional amount


Notional amount


Interest rate

Interest ratedue from


due to


due from

due toSubsidiary (a)

counterparty


counterparty


counterparty

counterpartyin millionsUPC Broadband Holding:March 2013

$
200.0



150.9


6 mo. LIBOR + 2.0%

5.73%December 2014


885.0



668.0


6 mo. LIBOR + 1.75%

5.72%$
1,085.0



818.9July 2009


60.0


CZK
1,703.1


5.50%

5.15%July 2009  July 2010


60.0



1,703.1


5.50%

5.33%July 2010  December 2014


60.0



1,703.1


5.50%

6.05%February 2010


105.8



3,018.7


5.50%

4.88%February 2010  December 2014


105.8



3,018.7


5.50%

5.80%December 2014


200.0



5,800.0


5.46%

5.30%
591.6


CZK
16,946.7July 2009


25.0


SKK
951.1


5.50%

6.58%July 2009  July 2010


25.0



951.1


5.50%

5.67%September 2012


50.0



1,900.0


5.46%

6.04%
100.0


SKK
3,802.2July 2009


260.0


HUF
75,570.0


5.50%

8.75%July 2009  July 2010


260.0



75,570.0


5.50%

7.80%July 2010  December 2014


260.0



75,570.0


5.50%

9.40%December 2014


228.0



62,867.5


5.50%

8.98%
1,008.0


HUF
289,577.5July 2009


245.0


PLN
1,000.6


5.50%

7.00%July 2009  July 2010


245.0



1,000.6


5.50%

6.52%July 2010  December 2014


245.0



1,000.6


5.50%

7.60%December 2014


98.4



335.0


5.50%

7.12%
833.4


PLN
3,336.8December 2010


200.0


RON
709.1


5.50%

10.98%December 2010  December 2014


200.0



709.1


5.50%

10.69%December 2014


89.1



320.1


5.50%

10.27%
489.1


RON
1,738.3September 2012


229.1


CHF
355.8


6 mo. EURIBOR + 2.5%

6 mo. CHF LIBOR + 2.46%December 2014


898.4



1,466.0


6 mo. EURIBOR + 2.0%

6 mo. CHF LIBOR + 1.94%
1,127.5


CHF
1,821.8December 2014

$
340.0


CLP
181,322.0


6 mo. LIBOR + 1.75%

8.76%December 2014


134.3


CLP
107,800.0


6 mo. EURIBOR + 2.0%

10.0%December 2014

$
511.5


CHF
558.0


6 mo. LIBOR + 2.75%

6 MO. CHF LIBOR + 2.95% 16




---



##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  Notional amount


Notional amount


Interest rate

Interest ratedue from


due to


due from

due toSubsidiary (a)

counterparty


counterparty


counterparty

counterpartyin millionsChellomedia Programming Financing Holdco BV (Chellomedia PFH),
    an indirect subsidiary of Chellomedia:July 2013


32.5


HUF
8,632.0


5.50%

9.55%VTR:September 2014

$
465.5


CLP
257,654.3


6 mo. LIBOR + 3.0%

11.16%     (a)
    
    For each subsidiary, the notional amount of multiple derivative
    instruments that mature within the same calendar month are shown
    in the aggregate and interest rates are presented on a weighted
    average basis. For derivative instruments that were in effect as
    of September 30, 2008, we present a single date that
    represents the applicable final maturity date. For derivative
    instruments that become effective subsequent to
    September 30, 2008, we present a range of dates that
    represents the period covered by the applicable derivative
    instrument.  Interest
    Rate Swaps:
    Interest rate

Interest ratedue from

due toSubsidiary (a)

Notional amount


counterparty

counterpartyin millionsUPC Broadband Holding:January 2009


210.0


6 mo. EURIBOR

3.58%January 2009


1,000.0


1 mo. EURIBOR +2.0%

6 mo. EURIBOR + 1.89%January 2009


2,640.0


1 mo. EURIBOR + 2.1%

6 mo. EURIBOR + 2.0%January 2009  January 2010


3,640.0


1 mo. EURIBOR + 2.0%

6 mo. EURIBOR + 1.81%January 2010


250.0


1 mo. EURIBOR + 2.0%

6 mo. EURIBOR + 1.79%April 2010


1,000.0


6 mo. EURIBOR

3.28%April 2010  December 2014


1,000.0


6 mo. EURIBOR

4.66%January 2011


193.5


6 mo. EURIBOR

3.83%September 2012


500.0


3 mo. EURIBOR

2.96%December 2013


90.5


6 mo. EURIBOR

3.84%January 2014


185.0


6 mo. EURIBOR

4.04%October 2008  December 2014


449.5


6 mo. EURIBOR

4.78%
11,158.5December 2010

CHF
618.5


6 mo. CHF LIBOR

2.19%January 2011  December 2014


618.5


6 mo. CHF LIBOR

3.56%September 2012


711.5


6 mo. CHF LIBOR

2.33%October 2012  December 2014


711.5


6 mo. CHF LIBOR

3.65%December 2014


1,050.0


6 mo. CHF LIBOR

3.47%CHF
3,710.0July 2013

CLP
110,700.0


6.78%

6 mo. TABJanuary 2009

$
1,900.0


1 mo. LIBOR + 1.75%

6 mo. LIBOR + 1.64%January 2009  January 2010


1,900.0


1 mo LIBOR + 1.75%

6 mo. LIBOR + 1.54%$
3,800.0 17




---



##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  Interest rate

Interest ratedue from

due toSubsidiary (a)

Notional amount


counterparty

counterpartyin millionsChellomedia PFH:January 2010

$
88.2


1 mo. LIBOR + 3.0%

6 mo. LIBOR + 2.90%December 2013

$
88.2


6 mo. LIBOR

4.98%January 2010


152.7


1 mo. EURIBOR + 3.0%

6 mo. EURIBOR + 2.82%December 2013


152.7


6 mo. EURIBOR

4.13%Austar Entertainment Pty Ltd. (Austar Entertainment), a
    subsidiary of Austar:August 2011

AUD
250.0


3 mo. AUD BBSY

6.21%August 2013


430.0


3 mo. AUD BBSY

6.78%August 2011  August 2013


25.0


3 mo. AUD BBSY

6.97%AUD
705.0Liberty Cablevision of Puerto Rico Ltd. (Liberty Puerto Rico):June 2014

$
168.0


3 mo. LIBOR

5.14%VTR:July 2013

CLP
110,700.0


6 mo. TAB

7.78%Telenet NV, an indirect wholly owned subsidiary of Telenet:September 2010


50.0


3 mo. EURIBOR

4.70%January 2010  December 2011


50.0


3 mo. EURIBOR

5.29%
100.0Telenet Bidco NV (Telenet Bidco), an indirect wholly owned
    subsidiary of Telenet:December 2008


530.0


1 mo. EURIBOR + 2.25%

3 mo. EURIBOR + 1.96%September 2009


25.6


3 mo. EURIBOR

4.52%September 2012


300.0


3 mo. EURIBOR

4.35%
855.6LGJ Holdings LLC (LGJ Holdings):January 2010

¥
75,000.0


1 mo. TIBOR +3.25%

6 mo. TIBOR + 3.18%November 2012


75,000.0


6 mo. TIBOR

1.34%¥
150,000.0J:COM:September 2011

¥
2,000.0


6 mo. TIBOR

1.37%October 2011


10,000.0


6 mo. ¥ LIBOR

1.35%April 2013


20,000.0


6 mo. ¥ LIBOR

1.75%October 2013


19,500.0


6 mo. ¥ LIBOR

1.63%April 2014


10,000.0


3 mo. TIBOR

1.15%¥
61,500.0     (a)
    
    For each subsidiary, the notional amount of multiple derivative
    instruments that mature within the same calendar month are shown
    in the aggregate and interest rates are presented on a weighted
    average basis. For derivative instruments that were in effect as
    of September 30, 2008, we present a single date that
    represents the applicable final maturity date. For derivative
    instruments that become effective subsequent to
    September 30, 2008, we present a range of dates that
    represents the period covered by the applicable derivative
    instrument. 18




---



##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
   Telenet
    Interest Rate Caps:
    Telenet subsidiary / Final maturity date

Notional amount


Maximum ratein millionsTelenet NV:September 2009


19.0



4.0
%December 2017


4.8



6.5
%December 2017


4.8



5.5
%Telenet Bidco:September 2013


250.0



4.75
%September 2014


600.0



4.65
%September 2015


650.0



4.75
%   Telenet
    Interest Rate Collars:
    Telenet subsidiary / Final maturity date

Notional amount


Minimum rate


Maximum ratein millionsTelenet NV:December 2011


50.0



2.5
%


4.5
%December 2011


25.0



2.5
%


5.5
%   Foreign
    Exchange Contracts
    Currency


Currencypurchased


soldLGI subsidiary

forward


forward


Maturity datesin millionsUPC Broadband Holding

$
1.8



1.3


November 2008Liberty Global Europe Financing BV (the parent company of
    UPC Holding)

$
75.0



49.2


October 2008Liberty Global Europe Financing BV

$
21.0


CLP
10,877.0


December 2008Telenet NV

$
8.0



5.3


October 2008  December 2008J:COM

$
34.3


¥
3,709.0


October 2008  December 2010VTR

$
44.5


CLP
22,909.0


October 2008  August 2009Austar Entertainment

$
32.5


AUD
40.1


October 2008  December 2009  19




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  (7)
    Fair
    Value Measurements           20




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
        Fair value measurements at September 30, 2008 using:Quoted prices


Significantin active


other


Significantmarkets for


observable


unobservableSeptember 30,


identical assets


inputs


inputsDescription

2008


(Level 1)


(Level 2)


(Level 3)in millionsAssets:Derivative instruments (a)

$
980.0


$



$
523.3


$
456.7Investments


880.4



479.1







401.3Total assets

$
1,860.4


$
479.1


$
523.3


$
858.0Liabilities:UGC Convertible Notes

$
718.0


$



$



$
718.0Derivative instruments


998.8







989.2



9.6Total liabilities

$
1,716.8


$



$
989.2


$
727.6     (a)
    
    Includes the embedded derivative component of the prepaid
    forward sale contract on our News Corp. Class A common
    stock, which is included within long-term debt and capital lease
    obligations in our condensed consolidated balance sheets. 21




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
     Equity-related


UGCderivative


ConvertibleInvestments


instruments, net


Notes


Totalin millionsBalance of asset (liability) at January 1, 2008

$
378.0


$
199.6


$
(902.3
)

$
(324.7
)Gains included in net loss (a):Realized and unrealized gains on derivative instruments, net






241.1







241.1Unrealized gains due to changes in fair values of certain
    investments and debt, net


13.0







184.3



197.3Purchases, settlements and other


24.5



6.1







30.6Foreign currency translation adjustments


(14.2
)


0.3







(13.9
)Balance of asset (liability) at September 30, 2008

$
401.3


$
447.1


$
(718.0
)

$
130.4     (a)
    
    All of the gains recognized during the nine months ended
    September 30, 2008 relate to assets and liabilities that we
    continue to carry on our condensed consolidated balance sheet as
    of September 30, 2008.      (8)
    Long-lived
    Assets  Property
    and Equipment, Net
    September 30,


December 31,2008


2007in millionsDistribution systems

$
15,376.2


$
13,839.4Support equipment, buildings and land


2,125.6



1,926.417,501.8



15,765.8Accumulated depreciation


(6,798.6
)


(5,157.3
)Total property and equipment, net

$
10,703.2


$
10,608.5  22




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  Goodwill
    Release ofpre-acquisitionvaluation


Foreignallowance and


currencyAcquisition


other income


translationJanuary 1,


related


tax related


adjustments


September 30,2008


adjustments


adjustments


and other


2008in millionsUPC Broadband Division:The Netherlands

$
1,367.0


$
1.4


$
(38.2
)

$
(36.6
)

$
1,293.6Switzerland


2,519.8







(6.9
)


32.3



2,545.2Austria


872.4



1.0







(25.1
)


848.3Ireland


260.6







(0.3
)


(9.3
)


251.0Total Western Europe


5,019.8



2.4



(45.4
)


(38.7
)


4,938.1Hungary


421.2



0.2







3.0



424.4Other Central and Eastern Europe


1,109.2



35.6







(10.1
)


1,134.7Total Central and Eastern Europe


1,530.4



35.8







(7.1
)


1,559.1Total UPC Broadband Division


6,550.2



38.2



(45.4
)


(45.8
)


6,497.2Telenet (Belgium)


2,183.0



(1.2
)






(79.3
)


2,102.5J:COM (Japan)


2,677.3



37.3







130.8



2,845.4VTR (Chile)


534.3











(48.3
)


486.0Corporate and other


682.0



138.6







(44.7
)


775.9Total LGI

$
12,626.8


$
212.9


$
(45.4
)

$
(87.3
)

$
12,707.0  23




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  Intangible
    Assets Subject to Amortization, Net
    September 30,


December 31,2008


2007in millionsGross carrying amount:Customer relationships

$
2,788.0


$
2,746.3Other


460.8



507.7$
3,248.8


$
3,254.0Accumulated amortization:Customer relationships

$
(899.4
)

$
(655.3
)Other


(135.5
)


(93.8
)$
(1,034.9
)

$
(749.1
)Net carrying amount:Customer relationships

$
1,888.6


$
2,091.0Other


325.3



413.9$
2,213.9


$
2,504.9    24




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  (9)
    Debt
    and Capital Lease Obligations    September 30, 2008Weighted


Unused borrowingaverage


capacity (b)


Carrying valueinterest


Borrowing


U.S. $


September 30,


December 31,rate (a)


currency


equivalent


2008


2007in millionsDebt:UPC Broadband Holding Bank Facility (c)


6.70
%


393.0


$
552.7


$
8,647.2


$
7,208.2UPC Holding 7.75% Senior Notes due 2014


7.75
%










703.3



729.2UPC Holding 8.63% Senior Notes due 2014


8.63
%










422.0



437.5UPC Holding 8.0% Senior Notes due 2016


8.00
%










422.0



437.5UPC Holding Facility (c)


















364.6Telenet Credit Facility


7.66
%


315.0



443.0



2,791.9



2,770.8J:COM Credit Facility


1.21
%

¥
30,000.0



282.5



190.4



485.1Other J:COM debt


1.31
%

¥
26,847.0



252.8



1,336.3



1,010.2UGC Convertible Notes (d)


1.75
%










718.0



902.3Sumitomo Collar Loan


1.88
%










882.0



837.8Austar Bank Facility


9.38
%

AUD
65.6



51.8



618.7



678.3LGJ Holdings Credit Facility


3.97
%










706.3



670.9VTR Bank Facility (e)


5.39
%

CLP
136,391.6



248.1



465.5



470.3Chellomedia Bank Facility


7.57
%










302.9



313.8Liberty Puerto Rico Bank Facility


4.49
%

$
10.0



10.0



168.0



169.3Other (f)


8.69
%










232.8



263.9Total debt


6.06
%





$
1,840.9



18,607.3



17,749.7Capital lease obligations:J:COM


554.9



499.7Telenet


70.0



75.8Other subsidiaries


30.0



28.2Total capital lease obligations


654.9



603.7Total debt and capital lease obligations


19,262.2



18,353.4Current maturities


(439.0
)


(383.2
)Long-term debt and capital lease obligations

$
18,823.2


$
17,970.2     (a)
    
    Represents the weighted average interest rate in effect at
    September 30, 2008 for all borrowings outstanding pursuant
    to each debt instrument including the applicable margin. The
    interest rates presented do not include the impact of our
    interest rate derivative instruments, deferred financing costs
    or commitment fees, all of which affect our overall cost of
    borrowing. For information concerning our derivative
    instruments, see note 6. 25




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
   (b)
    
    Unused borrowing capacity represents the maximum availability
    under the applicable facility at September 30, 2008 without
    regard to covenant compliance calculations. At
    September 30, 2008, the full amount of unused borrowing
    capacity was available to be borrowed under each of the
    respective facilities except the UPC Broadband Holding Bank
    Facility, which was limited by covenant compliance calculations.
    Based on the September 30, 2008 covenant compliance
    calculations, the aggregate amount that will be available for
    borrowing under the UPC Broadband Holding Bank Facility when the
    September 30, 2008 bank reporting requirements have been
    completed is 250.8 million ($352.7 million).
    Subsequent to September 30, 2008, Austar borrowed the full
    remaining availability under the Austar Bank Facility.(c)
    
    Effective May 16, 2008, the commitments of the lenders
    under the 250.0 million ($351.6 million) UPC
    Holding Facility were rolled into Facility M under the UPC
    Broadband Holding Bank Facility.(d)
    
    The UGC Convertible Notes are measured at fair value. In
    accordance with SFAS 157, our assessment of the fair value
    of the UGC Convertible Notes includes a credit risk component.
    The estimated change in credit risk during the three and nine
    months ended September 30, 2008 resulted in gains of
    $18.3 million and $62.1 million, respectively, that
    are included in unrealized gains (losses) due to changes in fair
    values of certain investments and debt, net, in our condensed
    consolidated statements of operations. For information regarding
    our fair value measurements, see note 7.(e)
    
    Pursuant to the deposit arrangements with the lender in relation
    to the VTR Bank Facility, we are required to fund a cash
    collateral account in an amount equal to the outstanding
    principal and interest under the VTR Bank Facility. This cash
    collateral account had a balance of $465.5 million at
    September 30, 2008, of which $4.7 million is reflected
    as a current asset and $460.8 million is presented as a
    long-term asset in our condensed consolidated balance sheet.(f)
    
    Carrying values include the fair value of the embedded equity
    derivative and the unamortized discount related to the prepaid
    forward sale contract on our News Corp. Class A common
    stock.  UPC
    Broadband Holding Bank Facility
  sub-tranche sub-tranche, sub-tranches
 26




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
    September 30, 2008Facility amount


Unused


Outstanding(in borrowing


borrowing


principalFacility

Final maturity date


Interest rate


currency) (a) (b)


capacity (b)


amountin millionsI


April 1, 2010



EURIBOR + 2.50
%


48.0


$
67.5


$
L


July 3, 2012



EURIBOR + 2.25
%


830.0



485.2



682.2M


(c)



EURIBOR + 2.00
%


3,890.0







5,471.3N


(c)



LIBOR + 1.75
%

$
1,900.0







1,900.0O


July 31, 2013



(d)



(d)







82.2P


September 2, 2013



LIBOR + 2.75
%

$
511.5







511.5Total

$
552.7


$
8,647.2     (a)
    
    The total committed amount of Facility I is
    250.0 million, however, 202.0 million has
    been novated to Liberty Global Europe BV. Therefore, total
    third-party commitments at September 30, 2008 were
    48.0 million.(b)
    
    For Facility P, the $9.7 million that was not funded by one
    of our lenders has been excluded from the facility amount and
    unused borrowing capacity. Due to the financial difficulties of
    this lender, we do not believe that this amount represents a
    near-term source of liquidity. We have no further credit risk
    exposures to this particular financial institution. Subsequent
    to September 30, 2008, we borrowed 70.0 million
    ($98.5 million) of the Facility L availability.(c)
    
    The final maturity date for Facilities M and N is the earlier of
    (i) December 31, 2014 and (ii) the date falling
    90 days prior to the date on which UPC Holdings
    existing Senior Notes due 2014 fall due if such Senior Notes
    have not been repaid, refinanced or redeemed prior to such date.(d)
    
    The applicable interest payable under Facility O is 2.75% per
    annum plus the specified percentage rate per annum determined by
    the Polish Association of Banking Dealers  Forex
    Poland or the National Bank of Hungary, as appropriate for the
    relevant period. The principal amount of Facility O is comprised
    of (i) a HUF 5,962.5 million ($34.6 million)
    sub-tranche
    and (ii) a PLN 115.1 million ($47.6 million)
    sub-tranche.  Amendment
    of Telenet Credit Facility
   27




---



##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  Maturities
    of Debt and Capital Lease Obligations
    Debt:
  UPCHoldingdebt(excluding


VTR


Telenet


J:COM


AustarVTR)


debt


debt


debt


debt


Other (a)


Totalin millionsYear ended December 31:Fourth quarter 2008

$
3.7


$



$



$
80.3


$



$
0.8


$
84.82009


13.7



4.7



11.1



123.4







94.5



247.42010


1.3



4.8



10.7



116.3







5.2



138.32011


0.2



4.8



10.8



181.3



177.8



708.4



1,083.32012


682.4



4.7



756.0



99.8



79.0



746.7



2,368.62013


594.0



4.7



297.0



658.1



361.9



259.4



2,175.1Thereafter


8,918.4



441.8



1,818.3



267.5







1,074.9



12,520.9Total debt maturities


10,213.7



465.5



2,903.9



1,526.7



618.7



2,889.9



18,618.4Net embedded equity derivative, fair value adjustment and
    unamortized discount






















(11.1
)


(11.1
)Total debt

$
10,213.7


$
465.5


$
2,903.9


$
1,526.7


$
618.7


$
2.878.8


$
18,607.3Current portion

$
16.6


$
4.7


$
11.1


$
175.9


$



$
68.8


$
277.1Noncurrent portion

$
10,197.1


$
460.8


$
2,892.8


$
1,350.8


$
618.7


$
2,810.0


$
18,330.2     (a)
    
    The 2009 amount includes borrowings of $89.3 million under
    the prepaid forward sale contract on our shares of News Corp.
    Class A common stock. We expect that the source of
    repayment for this borrowing will be the underlying shares of
    News Corp. Class A common stock. The 2011 amount includes
    the 500.0 million ($703.2 million) principal
    amount outstanding under the UGC Convertible Notes. Although the
    final maturity date of the UGC Convertible Notes is
    April 15, 2024, holders have the right to tender all or
    part of their UGC Convertible Notes for purchase by UGC on
    April 15, 2011, April 15, 2014 and April 15,
    2019, for a purchase price in euros equal to 100% of the
    principal amount. 28




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
   Capital
    lease obligations:
  J:COM


Other (a)


Totalin millionsYear ended December 31:Fourth quarter 2008

$
43.0


$
3.4


$
46.42009


162.8



14.8



177.62010


143.9



13.4



157.32011


110.0



12.6



122.62012


77.2



11.8



89.02013


38.4



11.5



49.9Thereafter


26.0



78.4



104.4601.3



145.9



747.2Less: amount representing interest


(46.4
)


(45.9
)


(92.3
)Present value of net minimum lease payments

$
554.9


$
100.0


$
654.9Current portion

$
152.4


$
9.5


$
161.9Noncurrent portion

$
402.5


$
90.5


$
493.0     (a)
    
    Excludes Telenets existing obligations to the PICs (as
    defined in note 13) and the capital lease obligation
    incurred by Telenet on October 1, 2008 in connection with
    the PICs Acquisition, as described in note 15.  Non-cash
    Refinancing Transactions
    (10) Stockholders
    Equity
  Stock
    Repurchases
     29




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
      Austar
    Equity Transactions
    (11) Stock
    Incentive Awards
    Three months ended


Nine months endedSeptember 30,


September 30,2008


2007


2008


2007in millionsLGI common stock:LGI performance-based incentive plans

$
27.6


$
28.0


$
77.8


$
78.0Stock options, SARs, restricted stock and restricted stock units


11.3



10.5



34.2



35.3Total LGI common stock


38.9



38.5



112.0



113.3Austar performance-based incentive plan


3.7



3.9



11.4



5.8Other


(0.6
)


15.4



1.9



22.2Total

$
42.0


$
57.8


$
125.3


$
141.3Included in:Operating expense

$
1.9


$
4.1


$
7.4


$
8.9SG&A expense


40.1



53.7



117.9



132.4Total

$
42.0


$
57.8


$
125.3


$
141.3  30




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
    Stock options,SARs, restrictedstock and


LGIrestricted stock


Performanceunits (a)


Plans (b)Total compensation expense not yet recognized (in millions)

$
84.7


$
179.2Weighted average period remaining for expense recognition (in
    years)


2.7



3.0     (a)
    
    Amounts relate to (i) the Liberty Global, Inc. 2005
    Incentive Plan (the LGI Incentive Plan), (ii) the Liberty
    Global, Inc. 2006 Nonemployee Director Incentive Plan (the LGI
    Director Incentive Plan), (iii) the LMI Transitional Stock
    Adjustment Plan (the Transitional Plan) and (iv) certain
    UGC incentive plans. The LGI Incentive Plan had
    30,425,183 shares available for grant as of
    September 30, 2008. These shares may be awarded at or above
    fair value in any series of stock, except that no more than
    23,372,168 shares may be awarded in LGI Series B
    common stock. Any shares issued in satisfaction of our
    obligations under the LGI performance-based incentive plans will
    reduce the shares available for grant under the LGI Incentive
    Plan. The LGI Director Incentive Plan had 9,416,425 shares
    available for grant as of September 30, 2008. These shares
    may be awarded at or above fair value in any series of stock,
    except that no more than 5,000,000 shares may be awarded in
    LGI Series B common stock. No new grants will be made under
    the Transitional Plan and the UGC incentive plans.(b)
    
    Amounts relate to the LGI performance-based incentive plans.
    Compensation expense under these incentive plans is reported as
    stock-based compensation in our condensed consolidated
    statements of operations, notwithstanding the fact that the
    compensation committee of our board of directors could elect at
    a future date to cash settle all or any portion of the vested
    awards under these incentive plans. 31




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
     Nine months ended September 30,2008

2007LGI common stock:Assumptions used to estimate fair value of awards granted:Risk-free interest rate

2.63  3.96%

4.56  5.02%Expected life

4.5  6.0 years

4.5  6.0 yearsExpected volatility

24.00  26.10%

22.40  25.20%Expected dividend yield

none

noneWeighted average grant-date fair value per share of awards
    granted:Options

$10.90

$10.69SARs

$9.88

$10.19Restricted stock and restricted stock units

$35.43

$36.46Total intrinsic value of awards exercised (in millions):Options

$11.1

$36.1SARs

$10.0

$45.8Cash received from exercise of options (in millions)

$17.3

$34.4Income tax benefit related to the stock-based compensation (in
    millions)

$23.4

$20.6   Stock
    Award Activity  LGI Common Stock
    WeightedaverageWeighted


remainingNumber of


average


contractual


AggregateOptions  LGI Series A common stock:

shares


exercise price


term


intrinsic valuein years


in millionsOutstanding at January 1, 2008


5,894,850


$
21.90Granted


70,000


$
34.14Expired or canceled


(28,243
)

$
82.65Forfeited


(13,157
)

$
30.28Exercised


(427,580
)

$
20.84Outstanding at September 30, 2008


5,495,870


$
21.81



4.32


$
60.9Exercisable at September 30, 2008


4,034,594


$
20.37



3.99


$
51.4   32




---



##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  WeightedaverageWeighted


remainingNumber of


average


contractual


AggregateOptions  LGI Series B common stock:

shares


exercise price


term


intrinsic valuein years


in millionsOutstanding at January 1, 2008


3,066,716


$
20.01Granted





$Expired or canceled





$Forfeited





$Exercised





$Outstanding at September 30, 2008


3,066,716


$
20.01



4.09


$
30.7Exercisable at September 30, 2008


3,066,716


$
20.01



4.09


$
30.7   WeightedaverageWeighted


remainingNumber of


average


contractual


AggregateOptions  LGI Series C common stock:

shares


exercise price


term


intrinsic valuein years


in millionsOutstanding at January 1, 2008


8,797,137


$
20.11Granted


70,000


$
32.32Expired or canceled


(28,243
)

$
78.24Forfeited


(13,157
)

$
28.50Exercised


(413,988
)

$
20.32Outstanding at September 30, 2008


8,411,749


$
19.99



4.27


$
81.8Exercisable at September 30, 2008


6,950,473


$
19.06



4.07


$
73.7   Weighted


Weightedaverage


averagegrant-date fair


remainingNumber of


value


contractualRestricted stock and restricted stock units  LGI
    Series A common stock:

shares


per share


termin yearsOutstanding at January 1, 2008


634,917


$
28.00Granted


296,748


$
36.57Expired or canceled





$
Forfeited


(6,191
)

$
31.08Released from restrictions


(190,192
)

$
27.19Outstanding at September 30, 2008


735,282


$
31.63



2.64   33




---



##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  Weighted


Weightedaverage


averagegrant-date fair


remainingNumber of


value


contractualRestricted stock and restricted stock units  LGI
    Series B common stock:

shares


per share


termin yearsOutstanding at January 1, 2008


23,708


$
22.23Granted





$
Expired or canceled





$
Forfeited





$
Released from restrictions


(11,854
)

$
22.23Outstanding at September 30, 2008


11,854


$
22.23



0.67   Weighted


Weightedaverage


averagegrant-date fair


remainingNumber of


value


contractualRestricted stock and restricted stock units  LGI
    Series C common stock:

shares


per share


termin yearsOutstanding at January 1, 2008


658,285


$
26.34Granted


296,748


$
34.29Expired or canceled





$
Forfeited


(6,191
)

$
29.33Released from restrictions


(201,906
)

$
25.54Outstanding at September 30, 2008


746,936


$
29.66



2.61   WeightedaverageWeighted


remainingNumber of


average


contractual


AggregateSARs  LGI Series A common stock:

shares


base price


term


intrinsic valuein years


in millionsOutstanding at January 1, 2008


3,828,895


$
19.12Granted


1,042,609


$
36.57Expired or canceled





$
Forfeited


(34,860
)

$
19.46Exercised


(364,530
)

$
18.60Outstanding at September 30, 2008


4,472,114


$
23.25



5.33


$
31.0Exercisable at September 30, 2008


1,191,702


$
20.17



4.88


$
11.2   34




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  WeightedaverageWeighted


remainingNumber of


average


contractual


AggregateSARs  LGI Series C common stock:

shares


base price


term


intrinsic valuein years


in millionsOutstanding at January 1, 2008


3,830,352


$
18.09Granted


1,042,609


$
34.38Expired or canceled





$
Forfeited


(34,860
)

$
18.41Exercised


(345,456
)

$
17.61Outstanding at September 30, 2008


4,492,645


$
21.90



5.32


$
27.9Exercisable at September 30, 2008


1,212,206


$
19.10



4.87


$
10.1    35




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  (12)
    Related
    Party Transactions    Three months ended


Nine months endedSeptember 30,


September 30,2008


2007


2008


2007in millionsRevenue earned from related parties of:J:COM (a)

$
30.2


$
21.7


$
95.0


$
52.3LGI and consolidated subsidiaries other than J:COM (b)


2.7



2.8



8.5



7.4Total LGI

$
32.9


$
24.5


$
103.5


$
59.7Operating expenses charged by related parties of:J:COM (c)

$
34.7


$
22.6


$
97.9


$
61.4LGI and consolidated subsidiaries other than J:COM (d)


7.0



5.8



20.7



16.3Total LGI

$
41.7


$
28.4


$
118.6


$
77.7SG&A expenses charged by (to) related parties of:J:COM (e)

$
4.8


$
4.7


$
20.2


$
15.7LGI and consolidated subsidiaries other than J:COM (f)


(0.3
)






(1.0
)


Total LGI

$
4.5


$
4.7


$
19.2


$
15.7Interest expense charged by related parties of J:COM (g)

$
3.5


$
3.0


$
10.5


$
8.6Capital lease additions  related parties of
    J:COM (h)

$
34.6


$
44.8


$
98.7


$
114.8     (a)
    
    J:COM provides programming, construction, management,
    administrative, call center and distribution services to certain
    of its and LGIs affiliates. In addition, J:COM sells
    construction materials to certain of such affiliates and
    receives distribution fees from SC Media.(b)
    
    Amounts consist primarily of management, advisory and
    programming license fees and fees for uplink services charged to
    our equity method affiliates.(c)
    
    J:COM (i) purchases certain cable television programming
    from its affiliates, (ii) incurs rental expense for the use
    of certain vehicles and equipment under operating leases with
    certain subsidiaries of Sumitomo and (iii) incurs billing
    system expense from a Sumitomo subsidiary.(d)
    
    Amounts consist primarily of programming costs and interconnect
    fees charged by equity method affiliates.(e)
    
    J:COM has management service agreements with Sumitomo under
    which officers and management level employees are seconded from
    Sumitomo to J:COM. Pursuant to these agreements, Sumitomo
    charges service fees to J:COM based on the seconded
    employees payroll costs. Amounts also include rental and
    IT support expenses paid to certain subsidiaries of Sumitomo.(f)
    
    Amounts include reimbursements received by Austar for marketing
    and director fees incurred on behalf of one of its equity
    affiliates. 36




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
   (g)
    
    Amounts consist of related party interest expense, primarily
    related to assets leased from the aforementioned Sumitomo
    entities.(h)
    
    J:COM leases, in the form of capital leases, customer premise
    equipment, various office equipment and vehicles from certain
    subsidiaries of Sumitomo. At September 30, 2008 and
    December 31, 2007, capital lease obligations of J:COM
    aggregating ¥49.2 billion ($463.3 million) and
    ¥46.0 billion ($433.2 million), respectively,
    were owed to these Sumitomo subsidiaries.  (13)
    Commitments
    and Contingencies  Commitments
    Contingent
    Obligations
       37




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
    start-up
  Guarantees
    and Other Credit Enhancements
  and/or
  Legal
    and Regulatory Proceedings and Other Contingencies
  Cignal
   38




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
        Class Action Lawsuits Relating to the LGI
    Combination
 39




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
    Telenet PICs Network Negotiations point-to-point
    video-on-demand point-to-point point-to-point
  agreement-in-principle agreement-in-principle. agreement-in-principle. agreement-in-principle. agreement-in-principle agreement-in-principle. Cour de
    Cassation
  agreement-in-principle
 40




---



##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  agreement-in-principle
    and/or
  The Netherlands Regulatory Developments free-to-air
       41




---



##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
        Chilean Antitrust Matter 
  Other Regulatory Issues
  Other
 42




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
    (14)
    Segment
    Reporting     43




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
    
    UPC Broadband Division:              
    Telenet (Belgium)
    J:COM (Japan)
    VTR (Chile)  business-to-business
 44




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  Performance
    Measures of Our Reportable Segments
    RevenueThree months ended


Nine months endedSeptember 30,


September 30,2008


2007


2008


2007in millionsUPC Broadband Division:The Netherlands

$
297.3


$
262.7


$
909.0


$
775.3Switzerland


255.6



217.5



776.5



637.1Austria


136.0



124.2



419.7



366.4Ireland


91.1



75.9



275.1



224.3Total Western Europe


780.0



680.3



2,380.3



2,003.1Hungary


110.0



94.7



318.5



278.6Other Central and Eastern Europe


251.8



205.1



740.4



584.3Total Central and Eastern Europe


361.8



299.8



1,058.9



862.9Central and corporate operations


2.8



1.9



8.4



9.1Total UPC Broadband Division


1,144.6



982.0



3,447.6



2,875.1Telenet (Belgium)


374.8



325.3



1,137.1



938.6J:COM (Japan)


686.0



563.1



2,056.4



1,629.8VTR (Chile)


179.7



160.5



560.8



460.4Corporate and other


284.2



246.8



854.1



700.5Intersegment eliminations


(19.6
)


(22.4
)


(65.4
)


(62.5
)Total consolidated LGI

$
2,649.7


$
2,255.3


$
7,990.6


$
6,541.9   45




---



##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  Operating cash flowThree months ended


Nine months endedSeptember 30,


September 30,2008


2007


2008


2007in millionsUPC Broadband Division:The Netherlands

$
175.8


$
139.1


$
515.6


$
399.7Switzerland


137.8



106.8



408.4



312.6Austria


70.8



59.5



215.9



176.7Ireland


35.6



23.7



105.2



70.4Total Western Europe


420.0



329.1



1,245.1



959.4Hungary


57.6



47.4



163.8



140.6Other Central and Eastern Europe


135.1



105.7



386.0



293.1Total Central and Eastern Europe


192.7



153.1



549.8



433.7Central and corporate operations


(56.0
)


(57.2
)


(177.8
)


(171.4
)Total UPC Broadband Division


556.7



425.0



1,617.1



1,221.7Telenet (Belgium)


186.7



158.4



551.5



442.6J:COM (Japan)


290.0



228.6



849.4



660.3VTR (Chile)


72.0



64.0



229.5



178.0Corporate and other


62.7



41.6



176.1



100.6Total consolidated LGI

$
1,168.1


$
917.6


$
3,423.6


$
2,603.2  46




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
    Three months ended


Nine months endedSeptember 30,


September 30,2008


2007


2008


2007in millionsTotal segment operating cash flow

$
1,168.1


$
917.6


$
3,423.6


$
2,603.2Stock-based compensation expense


(42.0
)


(57.8
)


(125.3
)


(141.3
)Depreciation and amortization


(711.9
)


(615.4
)


(2,160.0
)


(1,819.6
)Provision for litigation






(146.0
)






(146.0
)Impairment, restructuring and other operating charges, net


(1.4
)


(11.6
)


(3.2
)


(17.5
)Operating income


412.8



86.8



1,135.1



478.8Interest expense


(293.4
)


(247.1
)


(863.7
)


(706.4
)Interest and dividend income


23.5



36.1



75.4



84.6Share of results of affiliates, net


2.4



5.9



5.2



29.0Realized and unrealized gains (losses) on derivative
    instruments, net


18.2



(134.8
)


89.2



(71.2
)Foreign currency transaction gains (losses), net


(286.7
)


(31.7
)


96.3



41.6Unrealized losses due to changes in fair values of certain
    investments and debt, net


(129.2
)


(0.3
)


(84.4
)


(230.5
)Gains (losses) on extinguishment of debt, net






1.6







(21.7
)Gains (losses) on disposition of assets, net


(0.4
)


552.8



(1.8
)


553.1Other income (expense), net


(0.5
)


1.0



1.8



(3.6
)Earnings (loss) before income taxes and minority interests

$
(253.3
)

$
270.3


$
453.1


$
153.7  47




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
  Geographic
    Segments
    Three months ended


Nine months endedSeptember 30,


September 30,2008


2007


2008


2007in millionsEurope:UPC Broadband Division:The Netherlands

$
297.3


$
262.7


$
909.0


$
775.3Switzerland


255.6



217.5



776.5



637.1Austria


136.0



124.2



419.7



366.4Hungary


110.0



94.7



318.5



278.6Ireland


91.1



75.9



275.1



224.3Poland


86.0



58.8



243.6



163.4Czech Republic


75.4



56.1



221.0



162.3Romania


53.9



60.6



169.3



177.8Slovakia


20.1



15.6



58.1



45.2Slovenia


16.4



14.0



48.4



35.6Central and corporate operations (a)


2.8



1.9



8.4



9.1Total UPC Broadband Division


1,144.6



982.0



3,447.6



2,875.1Belgium


374.8



325.3



1,137.1



938.6Chellomedia (b)


106.9



91.2



328.2



252.7Total Europe


1,626.3



1,398.5



4,912.9



4,066.4Japan


686.0



563.1



2,056.4



1,629.8The Americas:Chile


179.7



160.5



560.8



460.4Other (c)


35.9



33.5



101.6



103.9Total  The Americas


215.6



194.0



662.4



564.3Australia


141.4



122.1



424.3



343.9Intersegment eliminations


(19.6
)


(22.4
)


(65.4
)


(62.5
)Total consolidated LGI

$
2,649.7


$
2,255.3


$
7,990.6


$
6,541.9     (a)
    
    The UPC Broadband Divisions central and corporate
    operations are located primarily in the Netherlands.(b)
    
    Chellomedias geographic segments are located primarily in
    the United Kingdom, the Netherlands, Spain, Hungary and other
    European countries.(c)
    
    Includes certain less significant operating segments that
    provide broadband communications and video programming services. 48




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##### Table of Contents



LIBERTY
    GLOBAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 September 30,
    2008
 (unaudited)
   (15)
    Subsequent
    Events  PICs
    Acquisition
    agreement-in-principle 15-year
         49




---



##### Table of Contents



Item 2.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS.  Form 10-K,
  
    Forward-Looking Statements.  This section
    provides a description of certain of the factors that could
    cause actual results or events to differ materially from
    anticipated results or events.
    Overview.  This section provides a general
    description of our business and recent events.
    Material Changes in Results of
    Operations.  This section provides an analysis of
    our results of operations for the three and nine months ended
    September 30, 2008 and 2007.
    Material Changes in Financial Condition.  This
    section provides an analysis of our corporate and subsidiary
    liquidity, condensed consolidated cash flow statements and our
    off balance sheet arrangements.
    Quantitative and Qualitative Disclosures about Market
    Risk.  This section provides discussion and
    analysis of the foreign currency, interest rate and other market
    risk that our company faces.      Forward-Looking
    Statements
  Form 10-Q Managements Discussion
    and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market
    Risk Form 10-K,
  
    economic and business conditions and industry trends in the
    countries in which we, and the entities in which we have
    interests, operate;
    the competitive environment in the broadband communications and
    programming industries in the countries in which we, and the
    entities in which we have interests, operate;
    competitor responses to our products and services, and the
    products and services of the entities in which we have interests;
    fluctuations in currency exchange rates and interest rates;
    consumer disposable income and spending levels, including the
    availability and amount of individual consumer debt;
    changes in consumer television viewing preferences and habits; 50




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##### Table of Contents




    consumer acceptance of existing service offerings, including our
    digital video, voice and broadband internet services;
    consumer acceptance of new technology, programming alternatives
    and broadband services that we may offer;
    our ability to manage rapid technological changes;
    our ability to increase the number of subscriptions to our
    digital video, voice and broadband internet services and our
    average revenue per household;
    the impact of our future financial performance, or market
    conditions generally, on the availability, terms and deployment
    of capital;
    the outcome of any pending or threatened litigation;
    Telenets ability to complete the integration of the
    PICs analog and digital television activities and to
    favorably resolve the litigation related to the 2008 PICs
    Agreement;
    continued consolidation of the foreign broadband distribution
    industry;
    changes in, or failure or inability to comply with, government
    regulations in the countries in which we, and the entities in
    which we have interests, operate and adverse outcomes from
    regulatory proceedings;
    our ability to obtain regulatory approval and satisfy other
    conditions necessary to close acquisitions, as well as our
    ability to satisfy conditions imposed by competition and other
    regulatory authorities in connection with acquisitions;
    government intervention that opens our broadband distribution
    networks to competitors;
    our ability to successfully negotiate rate increases with local
    authorities;
    changes in laws or treaties relating to taxation, or the
    interpretation thereof, in countries in which we, or the
    entities in which we have interests, operate;
    uncertainties inherent in the development and integration of new
    business lines and business strategies;
    capital spending for the acquisition
    and/or
    development of telecommunications networks and services;
    our ability to successfully integrate and recognize anticipated
    efficiencies from the businesses we acquire;
    problems we may discover post-closing with the operations,
    including the internal controls and financial reporting process,
    of businesses we acquire;
    the ability of suppliers and vendors to timely deliver products,
    equipment, software or services;
    the availability of attractive programming for our digital video
    services at reasonable costs;
    the loss of key employees and the availability of qualified
    personnel;
    changes in the nature of key strategic relationships with
    partners and joint ventures; and
    events that are outside of our control, such as political unrest
    in international markets, terrorist attacks, natural disasters,
    pandemics or other similar events.   51




---



##### Table of Contents



Overview
  and/or
    Material
    Changes in Financial Condition  Capitalization
  video-on-demand,
     52




---



##### Table of Contents



(i)
    a decline in the organic growth rate for our consolidated
    revenue from 9.3% during the year ended December 31, 2007
    to 5.5% during the three months ended September 30, 2008,
    each as compared to the corresponding prior year period;  (ii)
    a decrease in the number of our consolidated net organic RGU
    additions during the three months ended September 30, 2008,
    as compared to the corresponding prior year period;  (iii)
    slight organic declines in RGUs in Romania and Ireland during
    the three months ended September 30, 2008;  (iv)
    organic declines in revenue in Austria, Romania and Hungary
    during the three months ended September 30, 2008, as
    compared to the corresponding prior year period;  (v)
    organic declines in revenue in Austria and Romania during the
    third quarter of 2008, as compared to the second quarter of 2008;  (vi)
    organic declines in the average monthly subscription revenue
    earned per average RGU (ARPU) in Austria, Hungary, the Czech
    Republic, Romania and Slovenia during the three months ended
    September 30, 2008, as compared to the corresponding prior
    year period; and  (vii)
    declines in subscriber retention rates in most of our European
    markets during the three months ended September 30, 2008,
    as compared to the corresponding prior year period.    Discussion and Analysis of our Reportable
    Segments
    Discussion and Analysis of our Reportable Segments
 53




---



##### Table of Contents



line-up pay-per-view video-on-demand video-on-demand),
    voice-over-internet-protocol,
    Material
    Changes in Results of Operations
    Discussion and Analysis of our
    Reportable Segments Discussion and Analysis of our
    Consolidated Operating Results Quantitative and Qualitative
    Disclosures about Market Risk  Foreign Currency Risk
   54




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##### Table of Contents



Discussion
    and Analysis of our Reportable Segments
      Quantitative and Qualitative Disclosures about Market Risk
     55




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##### Table of Contents



Revenue
    of our Reportable Segments
  IncreaseThree months ended





(decrease)September 30,


Increase


excluding FX2008


2007


$


%


%in millionsUPC Broadband Division:The Netherlands

$
297.3


$
262.7


$
34.6



13.2



3.6Switzerland


255.6



217.5



38.1



17.5



5.2Austria


136.0



124.2



11.8



9.5



0.2Ireland


91.1



75.9



15.2



20.0



9.8Total Western Europe


780.0



680.3



99.7



14.7



4.2Hungary


110.0



94.7



15.3



16.2



(0.4
)Other Central and Eastern Europe


251.8



205.1



46.7



22.8



4.6Total Central and Eastern Europe


361.8



299.8



62.0



20.7



3.0Central and corporate operations


2.8



1.9



0.9



47.4



28.6Total UPC Broadband Division


1,144.6



982.0



162.6



16.6



3.9Telenet (Belgium)


374.8



325.3



49.5



15.2



5.5J:COM (Japan)


686.0



563.1



122.9



21.8



11.4VTR (Chile)


179.7



160.5



19.2



12.0



11.6Corporate and other


284.2



246.8



37.4



15.2



9.1Intersegment eliminations


(19.6
)


(22.4
)


2.8



12.5



20.2Total consolidated LGI

$
2,649.7


$
2,255.3


$
394.4



17.5



7.3   IncreaseNine months ended


Increase


(decrease)September 30,


(decrease)


excluding FX2008


2007


$


%


%in millionsUPC Broadband Division:The Netherlands

$
909.0


$
775.3


$
133.7



17.2



3.6Switzerland


776.5



637.1



139.4



21.9



5.7Austria


419.7



366.4



53.3



14.5



1.2Ireland


275.1



224.3



50.8



22.6



8.3Total Western Europe


2,380.3



2,003.1



377.2



18.8



4.4Hungary


318.5



278.6



39.9



14.3



(0.3
)Other Central and Eastern Europe


740.4



584.3



156.1



26.7



6.3Total Central and Eastern Europe


1,058.9



862.9



196.0



22.7



4.2Central and corporate operations


8.4



9.1



(0.7
)


(7.7
)


(20.3
)Total UPC Broadband Division


3,447.6



2,875.1



572.5



19.9



4.2Telenet (Belgium)


1,137.1



938.6



198.5



21.1



7.1J:COM (Japan)


2,056.4



1,629.8



426.6



26.2



12.0VTR (Chile)


560.8



460.4



100.4



21.8



11.4Corporate and other


854.1



700.5



153.6



21.9



10.6Intersegment eliminations


(65.4
)


(62.5
)


(2.9
)


(4.6
)


7.5Total consolidated LGI

$
7,990.6


$
6,541.9


$
1,448.7



22.1



7.9  56




---



##### Table of Contents



The Netherlands.
  Switzerland.
  Austria. Overview
 57




---



##### Table of Contents



Ireland.
  Hungary. Overview
  Other Central and Eastern Europe.
 58




---



##### Table of Contents



Telenet. video-on-demand, fixed-to-mobile
  J:COM (Japan).
  VTR (Chile).
 59




---



##### Table of Contents



60




---



##### Table of Contents



Operating
    Expenses of our Reportable Segments
  IncreaseThree months ended


Increase


(decrease)September 30,


(decrease)


excluding FX2008


2007


$


%


%in millionsUPC Broadband Division:The Netherlands

$
88.5


$
89.7


$
(1.2
)


(1.3
)


(9.8
)Switzerland


78.9



74.8



4.1



5.5



(5.6
)Austria


44.6



43.7



0.9



2.1



(6.9
)Ireland


43.4



37.8



5.6



14.8



(5.1
)Total Western Europe


255.4



246.0



9.4



3.8



(5.7
)Hungary


40.6



34.4



6.2



18.0



1.2Other Central and Eastern Europe


87.6



74.6



13.0



17.4



2.7Total Central and Eastern Europe


128.2



109.0



19.2



17.6



2.2Central and corporate operations


14.2



19.5



(5.3
)


(27.2
)


(31.7
)Total UPC Broadband Division


397.8



374.5



23.3



6.2



(4.8
)Telenet (Belgium)


131.4



119.6



11.8



9.9



0.8J:COM (Japan)


262.1



223.2



38.9



17.4



7.3VTR (Chile)


71.4



63.4



8.0



12.6



12.0Corporate and other


167.4



158.9



8.5



5.3



(0.3
)Intersegment eliminations


(18.7
)


(22.3
)


3.6



16.1



23.5Total operating expenses excluding stock-based compensation
    expense


1,011.4



917.3



94.1



10.3



1.3Stock-based compensation expense


1.9



4.1



(2.2
)


(53.7
)Total consolidated LGI

$
1,013.3


$
921.4


$
91.9



10.0   IncreaseNine months ended


Increase


(decrease)September 30,


(decrease)


excluding FX2008


2007


$


%


%in millionsUPC Broadband Division:The Netherlands

$
284.3


$
268.3


$
16.0



6.0



(6.4
)Switzerland


242.4



217.9



24.5



11.2



(3.5
)Austria


137.4



131.0



6.4



4.9



(7.4
)Ireland


133.6



115.9



17.7



15.3



1.9Total Western Europe


797.7



733.1



64.6



8.8



(4.4
)Hungary


118.9



101.8



17.1



16.8



1.8Other Central and Eastern Europe


263.7



214.8



48.9



22.8



4.8Total Central and Eastern Europe


382.6



316.6



66.0



20.8



3.8Central and corporate operations


48.0



57.7



(9.7
)


(16.8
)


(26.0
)Total UPC Broadband Division


1,228.3



1,107.4



120.9



10.9



(3.2
)Telenet (Belgium)


407.0



350.0



57.0



16.3



2.9J:COM (Japan)


793.8



650.3



143.5



22.1



8.3VTR (Chile)


214.5



186.0



28.5



15.3



5.5Corporate and other


514.8



465.3



49.5



10.6



0.2Intersegment eliminations


(60.7
)


(63.0
)


2.3



3.7



14.7Total operating expenses excluding stock-based compensation
    expense


3,097.7



2,696.0



401.7



14.9



1.8Stock-based compensation expense


7.4



8.9



(1.5
)


(16.9
)Total consolidated LGI

$
3,105.1


$
2,704.9


$
400.2



14.8  61




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##### Table of Contents



General. Discussion and Analysis of Our
    Consolidated Operating Results
  UPC Broadband Division.
  
    Decreases in personnel costs of $3.2 million or 4.5% and
    $15.7 million or 7.1%, respectively, due largely to
    (i) decreased staffing levels, particularly in (a) the
    Netherlands, in connection with the integration of certain
    components of the Netherlands operations, and
    (b) Switzerland, in connection with the increased usage of
    third parties to manage excess call volume, and
    (ii) increases in personnel and related costs allocable to
    capital activities, such as the installation of customer premise
    equipment for digital cable services;
    Decreases in interconnect and access costs of $5.8 million
    or 11.5% and $13.0 million or 7.3%, respectively, due
    primarily to (i) lower interconnect and access rates in
    Austria, Switzerland and the Netherlands, (ii) lower B2B
    volume in the Netherlands and (iii) decreased telephony
    usage in Austria;
    Increases in outsourced labor and consulting fees of
    $2.1 million or 7.6% and $7.3 million or 9.1%,
    respectively, associated with the use of third parties to manage
    excess call center volume, primarily in Austria and Switzerland.
    These increases, which were due in part to growth in digital
    cable services, were partially offset by decreases in Ireland
    associated with higher costs during the 2007 periods related to
    a billing system conversion and the integration of certain call
    center operations;
    Decreases in network related expenses of $5.4 million or
    13.3% and $6.7 million or 5.7%, respectively, due primarily
    to cost containment efforts in Switzerland and the Netherlands;
    Increases in programming and copyright costs of
    $2.9 million or 3.6% and $6.7 million or 2.9%,
    respectively, primarily due to growth in digital cable services,
    predominately in the Netherlands, Austria and Switzerland;
    Decreases in management fees of $2.1 million or 37.5% and
    $6.2 million or 37.1%, respectively, primarily due to the
    renegotiation of an agreement with the minority interest owners
    of our primary operating subsidiary in Austria;
    Decreases in bad debt expense of $4.8 million and
    $4.6 million, respectively, due primarily to improved
    collection procedures in the Netherlands and
    Switzerland; and
    Individually insignificant net decreases in other operating
    expense categories.  Telenet (Belgium).
 62




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##### Table of Contents




    Decreases in the cost of set-top boxes sold to customers of
    $4.6 million or 57.1% and $8.5 million or 38.7%,
    respectively, due to Telenets increased emphasis on the
    rental, as opposed to the sale, of set-top boxes;
    Increases (decreases) in programming and related costs of
    ($0.2 million) or (1.1%) and $7.1 million or 9.6%,
    respectively. These changes include increases that primarily are
    associated with the growth in Telenets digital cable
    services, including a $1.7 million increase during the
    three-month period that was offset by individually insignificant
    nonrecurring decreases;
    Increases in outsourced labor and consulting fees of
    $2.7 million or 34.5% and $6.5 million or 29.0%,
    respectively, due primarily to (i) increased expenses
    associated with installation and other customer-facing
    activities and (ii) the temporary replacement of certain
    full time employees with outside contractors;
    Increases in call overflow fees of $0.5 million or 9.0% and
    $5.1 million or 34.9%, respectively, primarily due to the
    use of third parties to manage excess call center volume
    associated with digital video services; and
    Increases in personnel costs of $1.9 million or 8.7% and
    $0.1 million or 0.2%, respectively, as increases associated
    with (i) annual wage increases and (ii) increased
    severance costs were only partially offset by decreases
    associated with (a) reduced staffing levels related to the
    outsourcing of certain programming operations and
    (b) increases in personnel and related costs allocable to
    capital activities, such as the installation of customer premise
    equipment and network upgrades.  J:COM (Japan).
  
    Increases in programming and related costs of $1.0 million
    or 1.6% and $9.5 million or 5.1%, respectively, as a result
    of growth in the number of video RGUs and a higher proportion of
    subscribers selecting digital cable over analog cable services;
    Increases in interconnect and access charges of
    $2.8 million or 12.1% and $8.6 million or 13.3%,
    respectively, primarily due to a higher number of broadband
    internet and telephony subscribers; and
    Increases in personnel costs of $0.7 million or 1.6% and
    $4.1 million or 3.5%, respectively, primarily due to higher
    staffing levels and annual wage increases.  VTR (Chile).
  
    Increases in programming costs of $3.4 million or 18.6% and
    $5.8 million or 11.1%, respectively, due primarily to
    increases in the average number of VTRs video RGUs, an
    increasing proportion of which consists of digital cable RGUs.
    During the 2008 nine-month period, the impact of the RGU
    increase was partially offset by foreign currency exchange rate
    fluctuations with respect to VTRs programming contracts,
    most of which are denominated in U.S. dollars;
    Increases in interconnect and access charges of
    $1.9 million or 13.0% and $4.7 million or 11.6%,
    respectively, due primarily to (i) a higher volume of
    traffic associated with increases in VTRs telephony 63




---



##### Table of Contents



RGUs and (ii) increased costs associated with
    (a) increased usage of broadband internet services, due in
    part to speed upgrades that were completed in March 2008, and
    (b) an increase in VTRs broadband internet RGUs;  
    Increases in labor and related costs of $1.5 million or
    13.3% and $2.1 million or 6.0%, respectively, largely due
    to periodic wage increases, including inflation
    adjustments; and
    Increases (decreases) in bad debt expense of $1.0 million
    and ($0.6 million), respectively. The impacts of increases
    associated with VTRs RGU growth are reflected in both
    periods. However, during the nine-month period, this impact was
    more than offset by the second quarter 2008 reversal of a
    $3.2 million bad debt reserve in connection with the
    settlement of an interconnect fee dispute. 64




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SG&A
    Expenses of our Reportable Segments
  IncreaseThree months ended


Increase


(decrease)September 30,


(decrease)


excluding FX2008


2007


$


%


%in millionsUPC Broadband Division:The Netherlands

$
33.0


$
33.9


$
(0.9
)


(2.7
)


(10.6
)Switzerland


38.9



35.9



3.0



8.4



(2.6
)Austria


20.6



21.0



(0.4
)


(1.9
)


(10.5
)Ireland


12.1



14.4



(2.3
)


(16.0
)


(22.1
)Total Western Europe


104.6



105.2



(0.6
)


(0.6
)


(9.4
)Hungary


11.8



12.9



(1.1
)


(8.5
)


(21.2
)Other Central and Eastern Europe


29.1



24.8



4.3



17.3



1.2Total Central and Eastern Europe


40.9



37.7



3.2



8.5



(6.5
)Central and corporate operations


44.6



39.6



5.0



12.6



2.4Total UPC Broadband Division


190.1



182.5



7.6



4.2



(6.2
)Telenet (Belgium)


56.7



47.3



9.4



19.9



10.2J:COM (Japan)


133.9



111.3



22.6



20.3



10.0VTR (Chile)


36.3



33.1



3.2



9.7



9.1Corporate and other


54.1



46.3



7.8



16.8



12.9Inter-segment eliminations


(0.9
)


(0.1
)


(0.8
)


N.M.



N.M.Total SG&A expenses excluding stock-based compensation
    expense


470.2



420.4



49.8



11.8



3.1Stock-based compensation expense


40.1



53.7



(13.6
)


(25.3
)Total consolidated LGI

$
510.3


$
474.1


$
36.2



7.6   IncreaseNine months ended


Increase


(decrease)September 30,


(decrease)


excluding FX2008


2007


$


%


%in millionsUPC Broadband Division:The Netherlands

$
109.1


$
107.3


$
1.8



1.7



(10.3
)Switzerland


125.7



106.6



19.1



17.9



2.3Austria


66.4



58.7



7.7



13.1



Ireland


36.3



38.0



(1.7
)


(4.5
)


(15.2
)Total Western Europe


337.5



310.6



26.9



8.7



(4.6
)Hungary


35.8



36.2



(0.4
)


(1.1
)


(13.7
)Other Central and Eastern Europe


90.7



76.4



14.3



18.7



0.7Total Central and Eastern Europe


126.5



112.6



13.9



12.3



(3.9
)Central and corporate operations


138.2



122.8



15.4



12.5



(0.9
)Total UPC Broadband Division


602.2



546.0



56.2



10.3



(3.6
)Telenet (Belgium)


178.6



146.0



32.6



22.3



8.0J:COM (Japan)


413.2



319.2



94.0



29.4



14.8VTR (Chile)


116.8



96.4



20.4



21.2



10.7Corporate and other


163.2



134.6



28.6



21.2



12.7Inter-segment eliminations


(4.7
)


0.5



(5.2
)


N.M.



N.M.Total SG&A expenses excluding stock-based compensation
    expense


1,469.3



1,242.7



226.6



18.2



4.9Stock-based compensation expense


117.9



132.4



(14.5
)


(11.0
)Total consolidated LGI

$
1,587.2


$
1,375.1


$
212.1



15.4      65




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##### Table of Contents



General. Discussion and Analysis of Our
    Consolidated Operating Results Operating Expenses
  UPC Broadband Division.
  
    Decreases in sales and marketing costs of $8.1 million or
    16.7% and $12.2 million or 8.4%, respectively, due
    primarily to decreases related to (i) the Netherlands
    continued emphasis during the 2008 periods on more selective
    marketing strategies, (ii) decreased costs due to a UPC
    rebranding campaign during the 2007 periods, and (iii) cost
    containment efforts in Hungary. The decreases in the 2008
    nine-month period were partially offset by (i) increases in
    the costs incurred in certain markets in response to competition
    and/or to
    support the launch or further penetration of digital cable
    services and (ii) the impact of a favorable first quarter
    2007 settlement related to number porting charges in Switzerland;
    Decreases in outsourced labor and professional fees of
    $3.3 million or 19.5% and $9.3 million or 18.5%,
    respectively, due primarily to decreases in certain central and
    corporate costs and certain costs incurred in Switzerland and
    the Netherlands; and
    Decreases in personnel costs of $1.8 million or 2.3% and
    $5.1 million or 2.2%, respectively, as increases in
    personnel and related costs allocable to capital activities,
    such as the installation of billing and support systems were
    only partially offset by the impacts of increases in staffing
    levels and annual wage increases.  Telenet (Belgium).
  
    Increases in personnel costs of $3.9 million or 21.0% and
    $5.4 million or 9.7%, respectively, as the impacts of
    annual wage increases and higher severance costs were only
    partially offset by decreased costs associated with reduced
    staffing levels; and
    Increases in sales and marketing costs of $2.7 million or
    17.4% and $3.9 million or 7.5%, respectively, primarily due
    to increased sales commissions.  J:COM (Japan).
 66




---



##### Table of Contents



VTR (Chile).
  Operating
    Cash Flow of our Reportable Segments
   67




---



##### Table of Contents



Operating
    Cash Flow
  Three months ended





IncreaseSeptember 30,


Increase


excluding FX2008


2007


$


%


%in millionsUPC Broadband Division:The Netherlands

$
175.8


$
139.1


$
36.7



26.4



15.7Switzerland


137.8



106.8



31.0



29.0



15.4Austria


70.8



59.5



11.3



19.0



9.3Ireland


35.6



23.7



11.9



50.2



36.4Total Western Europe


420.0



329.1



90.9



27.6



15.9Hungary


57.6



47.4



10.2



21.5



4.0Other Central and Eastern Europe


135.1



105.7



29.4



27.8



6.7Total Central and Eastern Europe


192.7



153.1



39.6



25.9



5.9Central and corporate operations


(56.0
)


(57.2
)


1.2



2.1



10.0Total UPC Broadband Division


556.7



425.0



131.7



31.0



15.8Telenet (Belgium)


186.7



158.4



28.3



17.9



7.7J:COM (Japan)


290.0



228.6



61.4



26.9



16.0VTR (Chile)


72.0



64.0



8.0



12.5



12.4Corporate and other


62.7



41.6



21.1



50.7



40.7Total

$
1,168.1


$
917.6


$
250.5



27.3



15.3   Nine months ended


Increase


IncreaseSeptember 30,


(decrease)


excluding FX2008


2007


$


%


%in millionsUPC Broadband Division:The Netherlands

$
515.6


$
399.7


$
115.9



29.0



14.1Switzerland


408.4



312.6



95.8



30.6



13.4Austria


215.9



176.7



39.2



22.2



8.0Ireland


105.2



70.4



34.8



49.4



31.7Total Western Europe


1,245.1



959.4



285.7



29.8



14.0Hungary


163.8



140.6



23.2



16.5



1.6Other Central and Eastern Europe


386.0



293.1



92.9



31.7



8.9Total Central and Eastern Europe


549.8



433.7



116.1



26.8



6.5Central and corporate operations


(177.8
)


(171.4
)


(6.4
)


(3.7
)


8.3Total UPC Broadband Division


1,617.1



1,221.7



395.4



32.4



14.5Telenet (Belgium)


551.5



442.6



108.9



24.6



10.2J:COM (Japan)


849.4



660.3



189.1



28.6



14.2VTR (Chile)


229.5



178.0



51.5



28.9



17.9Corporate and other


176.1



100.6



75.5



75.0



56.1Total

$
3,423.6


$
2,603.2


$
820.4



31.5



15.5  68




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##### Table of Contents



Operating
    Cash Flow Margin
  Three months ended


Nine months endedSeptember 30,


September 30,2008


2007


2008


2007%


%


%


%UPC Broadband Division:The Netherlands


59.1



53.0



56.7



51.6Switzerland


53.9



49.1



52.6



49.1Austria


52.1



47.9



51.4



48.2Ireland


39.1



31.2



38.2



31.4Total Western Europe


53.8



48.4



52.3



47.9Hungary


52.4



50.1



51.4



50.5Other Central and Eastern Europe


53.7



51.5



52.1



50.2Total Central and Eastern Europe


53.3



51.1



51.9



50.3Total UPC Broadband Division, including central and corporate
    costs


48.6



43.3



46.9



42.5Telenet (Belgium)


49.8



48.7



48.5



47.2J:COM (Japan)


42.3



40.6



41.3



40.5VTR (Chile)


40.1



39.9



40.9



38.7   Overview Discussion and Analysis of our
    Reportable Segments  Revenue  Operating Expenses
  Discussion
    and Analysis of our Consolidated Operating Results
  General
  Discussion
    and Analysis of our Reportable Segments
  Revenue
  Discussion and Analysis of our Reportable
    Segments  Revenue Overview Discussion and Analysis of
    our Reportable Segments  Revenue
 69




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Operating
    expenses
  SG&A expenses Discussion and Analysis of our Reportable
    Segments  Operating Expenses
  SG&A
    expenses
  Discussion and Analysis of our Reportable
    Segments  SG&A Expenses
  Stock-based
    compensation expense (included in operating and SG&A
    expenses)
    Three months ended


Nine months endedSeptember 30,


September 30,2008


2007


2008


2007in millionsLGI common stock:LGI performance-based incentive plans

$
27.6


$
28.0


$
77.8


$
78.0Stock options, SARs, restricted stock and restricted stock units


11.3



10.5



34.2



35.3Total LGI common stock


38.9



38.5



112.0



113.3Austar performance-based incentive plan (a)


3.7



3.9



11.4



5.8Other (b)


(0.6
)


15.4



1.9



22.2Total

$
42.0


$
57.8


$
125.3


$
141.3Included in:Operating expense

$
1.9


$
4.1


$
7.4


$
8.9SG&A expense


40.1



53.7



117.9



132.4Total

$
42.0


$
57.8


$
125.3


$
141.3     (a)
    
    Austar began recording stock-based compensation under its
    performance-based incentive plan on May 2, 2007. 70




---



##### Table of Contents



(b)
    
    The 2007 nine-month period includes stock-based compensation
    related to restricted shares of Zonemedia Group Ltd. (Zonemedia)
    and LGI common stock held by certain Zonemedia employees of
    $15.3 million, of which $12.8 million was recognized
    on an accelerated basis in connection with the third quarter
    2007 execution of certain agreements between one of our
    subsidiaries and the holders of these restricted shares. No
    further compensation expense will be recognized in connection
    with these restricted stock awards.  Depreciation
    and amortization expense
    Impairment,
    restructuring and other operating charges, net
      Interest
    expense
    Qualitative and Quantitative Disclosures
    about Market Risk
  Interest
    and dividend income
   71




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##### Table of Contents



Share of
    results of affiliates, net
    Three months ended


Nine months endedSeptember 30,


September 30,2008


2007


2008


2007in millionsSC Media (a)

$



$
(1.2
)

$



$
16.7Other


2.4



7.1



5.2



12.3Total

$
2.4


$
5.9


$
5.2


$
29.0     (a)
    
    On July 2, 2007, SC Media was split into two separate
    companies through the spin-off of JTV Thematics. We exchanged
    our investment in SC Media for Sumitomo shares on July 3,
    2007 and J:COM acquired a 100% interest in JTV Thematics on
    September 1, 2007. As a result of these transactions, we no
    longer own an interest in SC Media.  Realized
    and unrealized gains (losses) on derivative instruments,
    net
    Three months ended


Nine months endedSeptember 30,


September 30,2008


2007


2008


2007in millionsCross-currency and interest rate derivative contracts (a)

$
(191.3
)

$
(132.1
)

$
(170.8
)

$
(60.1
)Equity-related derivatives (b)


184.6



15.8



241.1



6.4Foreign exchange contracts


25.8



(17.5
)


20.0



(19.3
)Other


(0.9
)


(1.0
)


(1.1
)


1.8Total

$
18.2


$
(134.8
)

$
89.2


$
(71.2
)     (a)
    
    The loss during the 2008 three-month period primarily is
    attributable to the net effect of (i) losses associated
    with decreases in market interest rates in all relevant
    currencies, (ii) gains associated with a decrease in value
    of the euro and the Chilean peso relative to the U.S. dollar,
    (iii) gains associated with decreases in the values of the 72




---



##### Table of Contents



Chilean peso, Polish zloty, Czech koruna and Hungarian forint
    relative to the euro and (iv) losses associated with an
    increase in the Swiss franc relative to the euro. The loss
    during the 2008 nine-month period primarily is attributable to
    the net effect of (i) losses associated with an increase in
    the value of the Hungarian forint, Swiss franc, Czech koruna,
    Polish zloty and Slovakian koruna relative to the euro,
    (ii) gains associated with a decrease in the value of the
    Chilean peso and the euro relative to the U.S. dollar,
    (iii) gains associated with a decrease in the value of the
    Romanian lei relative to the euro and (iv) losses
    associated with a decrease in Swiss franc, U.S. dollar and
    Australian dollar market interest rates. In addition, the losses
    during the three and nine months ended September 30, 2008
    include gains of $28.8 million and $82.8 million
    related to credit risk valuation adjustments, as further
    described in notes 6 and 7 to our condensed consolidated
    financial statements. The loss during the 2007 three-month
    period primarily is attributable to the net effect of
    (i) losses associated with a decrease in the value of the
    U.S. dollar relative to the euro, (ii) gains associated
    with a decrease in the value of the Romanian lei and Hungarian
    forint relative to the euro, (iii) losses associated with a
    decrease in Swiss franc market interest rates and
    (iv) losses associated with an increase in the value of the
    Czech koruna relative to the euro. The loss during the 2007
    nine-month period primarily is attributable to the net effect of
    (i) losses associated with a decrease in the value of the
    U.S. dollar relative to the euro, (ii) gains associated
    with an increase in euro market interest rates, (iii) gains
    associated with a decrease in the value of the Swiss franc
    relative to the euro and (iv) losses associated with an
    increase in the value of the Romanian lei and Hungarian forint
    relative to the euro.(b)
    
    Includes activity related to (i) the Sumitomo Collar,
    (ii) the prepaid forward sale contract on our News Corp.
    Class A common stock and (iii) the call options we
    held during the 2007 periods with respect to Telenet ordinary
    shares.  Quantitative and Qualitative Disclosure about Market Risk
  Foreign
    currency transaction gains (losses), net
    Three months ended


Nine months endedSeptember 30,


September 30,2008


2007


2008


2007in millionsU.S. dollar denominated debt issued by a European subsidiary

$
(230.8
)

$
97.0


$
(86.8
)

$
149.7Yen denominated debt issued by U.S. subsidiaries






(54.8
)


(79.5
)


(54.8
)Intercompany notes denominated in a currency other than the
    entitys functional currency (a)


(90.0
)


(56.2
)


302.9



(55.3
)Cash and restricted cash denominated in a currency other than
    the entitys functional currency


59.3



(42.3
)


(0.4
)


(49.5
)U.S. dollar denominated debt issued by a Latin American
    subsidiary


(22.8
)


14.7



(48.0
)


20.9Swiss franc denominated debt issued by a European subsidiary














21.5Other


(2.4
)


9.9



8.1



9.1Total

$
(286.7
)

$
(31.7
)

$
96.3


$
41.6     (a)
    
    Amounts are related to (i) loans between our non-operating
    and operating subsidiaries in Europe, which generally are
    denominated in the currency of the applicable operating
    subsidiary and (ii) for the 2008 periods, U.S. dollar and
    Japanese yen denominated loans between certain of our
    non-operating subsidiaries in the U.S. 73




---



##### Table of Contents



and Europe. Accordingly, these gains (losses) are a function of
    movements of (i) the euro against (a) the U.S. dollar
    and (b) other local currencies in Europe and (ii) for
    the 2008 periods, the U.S. dollar and the euro against the
    Japanese yen.  Quantitative and Qualitative Disclosure
    about Market Risk
  Unrealized
    losses due to changes in fair values of certain investments and
    debt, net
    Three months ended


Nine months endedSeptember 30,


September 30,2008


2007


2008


2007in millionsInvestments (a):Sumitomo

$
(186.5
)

$



$
(234.9
)

$
News Corp.


(16.8
)






(46.8
)


Other, net


2.9







13.0



Debt  UGC Convertible Notes (b)


71.2



(0.3
)


184.3



(230.5
)Total

$
(129.2
)

$
(0.3
)

$
(84.4
)

$
(230.5
)     (a)
    
    For additional information concerning our investments and fair
    value measurements, see notes 5 and 7 to our condensed
    consolidated financial statements.(b)
    
    Represents the changes in the fair value of the UGC Convertible
    Notes, including amounts attributable to the remeasurement of
    the UGC Convertible Notes into U.S. dollars. For additional
    information, see notes 7 and 9 to our condensed
    consolidated financial statements.  Gains
    (losses) on extinguishment of debt, net
    Gains
    (losses) on disposition of assets, net
    Income
    tax expense
     74




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##### Table of Contents



Accounting for
    Uncertainty in Income Taxes  an Interpretation of
    FASB Statement No. 109
          Minority
    interests in earnings of subsidiaries, net
   75




---



##### Table of Contents



Net
    earnings (loss)
  Material Changes in Financial
    Condition  Capitalization Overview Discussion and Analysis of our Reportable
    Segments Discussion and Analysis of our Consolidated
    Operating Results
  Material
    Changes in Financial Condition
  Sources
    and Uses of Cash
   76




---



##### Table of Contents



Cash and
    cash equivalents
    Cash and cash equivalents held by:LGI and non-operating subsidiaries:LGI

$
30.4Non-operating subsidiaries


749.4Total LGI and non-operating subsidiaries


779.8Operating subsidiaries:Telenet


367.6J:COM


339.9UPC Holding (excluding VTR)


29.6VTR


25.3Austar


16.3Chellomedia


13.6Liberty Puerto Rico


6.6Other operating subsidiaries


2.7Total operating subsidiaries


801.6Total cash and cash equivalents

$
1,581.4   Liquidity
    of LGI and its Non-operating Subsidiaries
         77




---



##### Table of Contents



Liquidity
    of Operating Subsidiaries
    Condensed Consolidated Cash Flow Statements
  Capitalization
    Quantitative and Qualitative Disclosures about Market
    Risk
   78




---



##### Table of Contents



Condensed
    Consolidated Cash Flow Statements
  Quantitative and Qualitative Disclosures about Market Risk Discussion and Analysis of our
    Consolidated Operating Results
  General.
  Operating Activities.
  Investing Activities.
     79




---



##### Table of Contents



Form 10-K,
  Financing Activities.
  Off
    Balance Sheet Arrangements
    Item 3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.    Cash
    and Investments
  Credit Risk
 80




---



##### Table of Contents



Foreign
    Currency Risk
       81




---



##### Table of Contents



September 30,


December 31,2008


2007Spot rates:Euro


0.7110



0.6857Swiss franc


1.1219



1.1360Japanese yen


106.19



111.79Chilean peso


549.80



498.10Hungarian forint


172.09



173.30Australian dollar


1.2655



1.1406   Three months ended


Nine months endedSeptember 30,


September 30,2008


2007


2008


2007Average rates:Euro


0.6667



0.7272



0.6579



0.7439Swiss franc


1.0740



1.1985



1.0579



1.2180Japanese yen


107.63



117.73



105.84



119.31Chilean peso


517.19



519.54



483.87



528.99Hungarian forint


157.59



183.20



163.07



186.58Australian dollar


1.1327



1.1811



1.0990



1.2187   Inflation
    and Foreign Investment Risk
    Interest
    Rate Risks
    agreed-upon
 82




---



##### Table of Contents



Weighted-Average Variable Interest Rate.
  Credit
    Risk
           83




---



##### Table of Contents



Sensitivity
    Information
    UPC
    Broadband Holding Cross-currency and Interest Rate Derivative
    Contracts
    VTR
    Cross-currency and Interest Rate Derivative Contracts
    Telenet
    Interest Rate Caps and Interest Rate Collars
    UGC
    Convertible Notes
   84




---



##### Table of Contents



Sumitomo
    Collar
    Item 4.
    CONTROLS
    AND PROCEDURES.  (a)
    Evaluation
    of disclosure controls and procedures  Rule 13a-15,
  (c)
    Changes
    in internal control over financial reporting  Form 10-Q
 85




---



##### Table of Contents



PART II 
    OTHER INFORMATION  Item 1.
    LEGAL
    PROCEEDINGS.    Form 10-Q
  Item 1A.
    RISK
    FACTORS.  Form 10-K:
  Weakening economic conditions may reduce subscriber
    spending for our video, internet and telephony services and
    reduce our rate of growth of subscriber additions
  Disruptions in the worldwide credit and equity markets
    have increased the risk of default by the counterparties to our
    financial instruments, undrawn debt facilities and cash
    investments
 86




---



##### Table of Contents



Item 2.
    UNREGISTERED
    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.  (c)
    Issuer Purchases of Equity Securities
    Approximatedollar value ofTotal number of shares

shares that maypurchased as part

yet be purchasedTotal number of

Average price

of publicly announced

under the plans orPeriod

shares purchased

paid per share (a)

plans or programs

programsJuly 1, 2008 through July 31, 2008:Series A





$








(b)Series C





$








(b)August 1, 2008 through August 31, 2008:Series A


2,085,800


$
33.32



2,085,800



(b)Series C


2,656,100


$
31.78



2,656,100



(b)September 1, 2008 through September 30, 2008:Series A


2,469,900


$
31.38



2,469,900



(b)Series C


4,936,900


$
29.61



4,936,900



(b)Total  July 1, 2008 through September 30,
    2008:Series A


4,555,700


$
32.27



4,555,700



(b)Series C


7,593,000


$
30.37



7,593,000



(b)     (a)
    
    Average price paid per share includes direct acquisition costs
    where applicable.(b)
    
    At September 30, 2008, we were authorized to purchase an
    additional $122.6 million of our LGI Series A and
    Series C common stock. Subsequent to September 30,
    2008, (i) the authorized amount under the July 2008
    Repurchase Plan was increased by $250 million and
    (ii) we acquired 541,800 shares of our LGI
    Series A common stock at a weighted average price of $22.74
    per share and 5,135,600 shares of our LGI Series C
    common stock at a weighted average price of $21.31, for an
    aggregate purchase price of $121.8 million, including
    direct acquisition costs. After giving effect to the increased
    authorization and these repurchases, the remaining amount
    authorized under the July 2008 Repurchase Plan was
    $250.8 million.   87




---



##### Table of Contents



Item 6.
    EXHIBITS.  Regulation S-K):
  3


Articles of Incorporation; Bylaws:3
.1

Restated Certificate of Incorporation of the Registrant, dated
    June 15, 2005 (incorporated by reference to
    Exhibit 3.1 to the Registrants Current Report on
    Form 8-K,
    dated June 15, 2005 (File
    No. 000-51360)
    (the Merger
    8-K))3
.2

Bylaws of the Registrant (incorporated by reference to
    Exhibit 3.2 to the Merger
    8-K)4


Instruments Defining the Rights of Securities Holders, including
    Indentures:4
.1

Additional Facility Accession Agreement dated September 9,
    2008, among UPC Financing Partnership as Borrower, Toronto
    Dominion (Texas) LLC as Facility Agent and TD Bank Europe
    Limited as Security Agent, and the banks and financial
    institutions listed therein as Additional Facility P Lenders
    under the senior secured credit agreement originally dated
    January 16, 2004, as amended and restated from time to time
    among UPC Broadband Holding BV, Toronto Dominion (Texas) LLC as
    facility agent and the other banks and financial institutions
    named therein (incorporated by reference to Exhibit 4.1 to
    the Registrants Current Report on
    Form 8-K
    dated September 12, 2008 (File
    No. 000-51360))4
.2

Additional Facility Accession Agreement dated August 12,
    2008, among UPC Broadband Holding BV as Borrower, Toronto
    Dominion (Texas) LLC as Facility Agent and TD Bank Europe
    Limited as Security Agent, and the banks and financial
    institutions listed therein as Additional Facility O Lenders
    under the senior secured credit agreement originally dated
    January 16, 2004, as amended and restated from time to time
    among UPC Broadband Holding BV, Toronto Dominion (Texas) LLC as
    facility agent and the other banks and financial institutions
    named therein (incorporated by reference to Exhibit 4.1 to
    the Registrants Current Report on
    Form 8-K
    dated August 20, 2008 (File
    No. 000-51360))4
.3

Letter dated May 7, 2008 from Telenet Bidco NV to BNP
    Paribas S.A. as Facility Agent which amends that certain
    2,300,000,000 Credit Agreement, originally dated
    August 1, 2007 and as amended and restated by supplemental
    agreements dated August 22, 2007, September 11, 2007,
    October 8, 2007 and November 19, 2007, among Telenet
    Bidco NV as Borrower, the parties listed therein as Original
    Guarantors, ABN AMRO Bank NV, BNP Paribus S.A. and JP Morgan PLC
    as Mandated Lead Arrangers , BNP Paribas S.A. as Facility Agent,
    KBC Bank NV as Security Agent and the financial institutions
    listed therein as Initial Original Lenders (the Telenet Credit
    Facility) (incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on
    Form 8-K/A
    filed May 28, 2008 (File
    No. 000-51360))4
.4

Letter dated May 7, 2008 from BNP Paribas S.A. as Facility
    Agent to Telenet Bidco NV, which amends the Telenet Credit
    Facility (incorporated by reference to Exhibit 4.2 to the
    Registrants
    Form 8-K/A
    filed May 28, 2008 (File
    No. 000-51360))10


Material Contracts:10
.1

Amendment to Employment Agreement, dated June 5, 2008,
    among UPC Broadband Holding Services B.V. (as assignee of
    Liberty Global Europe N.V.), Registrant (as assignee of
    UnitedGlobalCom, Inc.) and Gene Musselman*31


Rule 13a-14(a)/15d-14(a)
    Certification:31
.1

Certification of President and Chief Executive Officer*31
.2

Certification of Senior Vice President and Co-Chief Financial
    Officer (Principal Financial Officer)*31
.3

Certification of Senior Vice President and Co-Chief Financial
    Officer (Principal Accounting Officer)*32


Section 1350 Certification*     *
    
    Filed herewith 88




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##### Table of Contents



SIGNATURES
    LIBERTY GLOBAL, INC.Dated: November 5, 2008

/s/  Michael
    T. FriesMichael T. FriesPresident and Chief Executive OfficerDated: November 5, 2008

/s/  Charles
    H.R. BrackenCharles H.R. BrackenSenior Vice President and Co-Chief
    Financial Officer (Principal Financial Officer)Dated: November 5, 2008

/s/  Bernard
    G. DvorakBernard G. DvorakSenior Vice President and Co-Chief
    Financial Officer (Principal Accounting Officer)  89




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##### Table of Contents



EXHIBIT INDEX
 3
    
    Articles of Incorporation; Bylaws:3.1
    
    Restated Certificate of Incorporation of the Registrant, dated June 15, 2005 (incorporated by
reference to Exhibit 3.1 to the Registrants Current Report on Form 8-K, dated June 15, 2005 (File
No. 000-51360) (the Merger 8-K))3.2
    
    Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Merger 8-K)4
    
    Instruments Defining the Rights of Securities Holders, including Indentures:4.1
    
    Additional Facility Accession Agreement dated September 9, 2008, among UPC Financing Partnership as
Borrower, Toronto Dominion (Texas) LLC as Facility Agent and TD Bank Europe Limited as Security
Agent, and the banks and financial institutions listed therein as Additional Facility P Lenders
under the senior secured credit agreement originally dated January 16, 2004, as amended and restated
from time to time among UPC Broadband Holding BV, Toronto Dominion (Texas) LLC as facility agent and
the other banks and financial institutions named therein (incorporated by reference to Exhibit 4.1
to the Registrants Current Report on Form 8-K dated September 12, 2008 (File No. 000-51360))4.2
    
    Additional Facility Accession Agreement dated August 12, 2008, among UPC Broadband Holding BV as
Borrower, Toronto Dominion (Texas) LLC as Facility Agent and TD Bank Europe Limited as Security
Agent, and the banks and financial institutions listed therein as Additional Facility O Lenders
under the senior secured credit agreement originally dated January 16, 2004, as amended and restated
from time to time among UPC Broadband Holding BV, Toronto Dominion (Texas) LLC as facility agent and
the other banks and financial institutions named therein (incorporated by reference to Exhibit 4.1
to the Registrants Current Report on Form 8-K dated August 20, 2008 (File No. 000-51360))4.3
    
    Letter dated May 7, 2008 from Telenet Bidco NV to BNP Paribas S.A. as Facility Agent which amends
that certain 2,300,000,000 Credit Agreement, originally dated August 1, 2007 and as amended and
restated by supplemental agreements dated August 22, 2007, September 11, 2007, October 8, 2007 and
November 19, 2007, among Telenet Bidco NV as Borrower, the parties listed therein as Original
Guarantors, ABN AMRO Bank NV, BNP Paribus S.A. and JP Morgan PLC as Mandated Lead Arrangers , BNP
Paribas S.A. as Facility Agent, KBC Bank NV as Security Agent and the financial institutions listed
therein as Initial Original Lenders (the Telenet Credit Facility) (incorporated by reference to
Exhibit 4.1 to the Registrants Current Report on Form 8-K/A filed May 28, 2008 (File No.
000-51360))4.4
    
    Letter dated May 7, 2008 from BNP Paribas S.A. as Facility Agent to Telenet Bidco NV, which amends
the Telenet Credit Facility (incorporated by reference to Exhibit 4.2 to the Registrants Form 8-K/A
filed May 28, 2008 (File No. 000-51360))10
    
    Material Contracts:10.1
    
    Amendment to Employment Agreement, dated June 5, 2008, among UPC Broadband Holding Services B.V. (as
assignee of Liberty Global Europe N.V.), Registrant (as assignee of UnitedGlobalCom, Inc.) and Gene
Musselman*31
    
    Rule 13a-14(a)/15d-14(a) Certification:31.1
    
    Certification of President and Chief Executive Officer*31.2
    
    Certification of Senior Vice President and Co-Chief Financial Officer (Principal Financial Officer)*31.3
    
    Certification of Senior Vice President and Co-Chief Financial Officer (Principal Accounting Officer)*32
    
    Section 1350 Certification*
 
 *
    
    Filed herewith