UPC Holding B.V. (“UPC Holding”) is today providing selected,
preliminary unaudited financial and operating information for the three
months (“Q4”) and year ended December 31, 2012. UPC Holding is a
wholly-owned subsidiary of Liberty Global, Inc. (“Liberty Global”)
(NASDAQ: LBTYA, LBTYB and LBTYK). A copy of this press release will be
posted to Liberty Global’s website (www.lgi.com).
In addition, UPC Holding’s consolidated financial statements with the
accompanying notes are expected to be posted prior to the end of March
2013.
Financial and operating highlights for the year ended December 31, 2012,
as compared to the results for the same period last year (unless noted),
include:
-
Organic RGU1 additions increased 7% to 711,000, including
222,000 in Q4
-
Highest annual RGU additions since 2007
-
Revenue increased 6% to €4.27 billion, representing rebased2
growth of 3%
-
Operating cash flow (“OCF”)3 improved 7% to €2.07 billion,
reflecting rebased growth of 4%
-
Achieved Q4 rebased OCF growth of 6%
-
Operating income increased by 11% year-over-year to €1.0 billion
-
Capital expenditures as a percentage of revenue declined to 17%
-
Over 75% of consolidated third-party debt is due in 2017 and beyond
Financial Results
For the three months and year ended December 31, 2012, our consolidated
revenue increased by 7% to €1.09 billion and 6% to €4.27 billion
respectively, as compared to the corresponding prior year periods.
Besides acquisitions, including Aster in Poland, and favorable foreign
currency (“FX”) movements, our revenue growth for both periods primarily
resulted from continued volume growth in RGUs. Neutralizing the impact
of acquisitions and FX, we achieved year-over-year rebased revenue
growth of 3% for both the three-month and full-year 2012 periods. For
the last three years, our annual rebased revenue growth has consistently
averaged 3%.
Geographically, our European operations (“UPC Europe”) achieved rebased
growth of 3% in 2012, with our Western European and our Central and
Eastern European (“CEE”) regions posting rebased revenue growth of 4%
and a modest decline of 1%, respectively. Our top-performing European
markets for 2012 in terms of rebased revenue growth were our Irish and
our Dutch businesses. One particular highlight in 2012 was the
performance of UPC Cablecom in Switzerland. Gaining momentum throughout
the year, our Swiss business delivered rebased revenue growth of 4% in
2012, up from 2% in 2011. Turning to South America, our Chilean
operations (“VTR”) realized rebased revenue growth of 4%, matching the
result of our Western European region.
We increased our OCF by 10% to €537 million and 7% to €2.07 billion for
the three months and year ended December 31, 2012, respectively, as
compared to the corresponding prior year periods. This OCF growth
reflects the positive impact of our organic growth, acquisitions and, to
a lesser extent, favorable FX movements. On a rebased basis, we
delivered year-over-year growth of 6% for Q4 and 4% for the full year.
For 2012, we delivered year-over-year rebased OCF growth of 5% in our
Western European region with particularly strong contributions from our
Irish and Dutch businesses, which grew 11% and 6%, respectively. In
addition, our Swiss operation improved its rebased OCF growth to 5% in
2012, its strongest result in the last four years. Rounding out our
other operations, CEE’s rebased OCF was flat for the second year in a
row, and in Chile, we posted rebased OCF growth of 8% for 2012, its
strongest showing since 2008.
Our consolidated OCF margins4 increased by 130 basis points
to 49.2% in Q4 and 50 basis points to 48.6% for full-year 2012, as
compared to the corresponding prior year periods. Specifically, for
full-year 2012, our Western European and CEE businesses attained OCF
margins of 55.8% and 49.8%, respectively, with each experiencing
year-over-year OCF margin improvement of approximately 100 basis points.
With respect to Western Europe, each of our operations delivered
improved OCF margins. Moving to Chile, we achieved a 44.0% OCF margin in
2012, which reflected a 160 basis point improvement over Chile’s OCF
margin of 42.4% in 2011. The overall OCF margin improvements for UPC
Holding were partially offset by increased costs in our European central
and other operations during the 2012 periods as compared to the
corresponding periods in 2011.
For the year ended December 31, 2012, we reported capital expenditures
of €724 million, reflecting a decline of approximately €58 million from
2011. As a percentage of revenue, our capital expenditures decreased
from 19% of revenue in 2011 to 17% of revenue in 2012. This was in the
middle of our target range of 16% to 18% on a consolidated basis. The
annual decline was attributable in large part to our working capital
efforts, as our non-cash vendor financing arrangements were €87 million
higher year-over-year. Additionally, our total property and equipment
additions, which include our capital expenditures on an accrual basis
and our vendor financing, capital lease and other non-cash additions,
declined year-over-year from 22% of revenue in 2011 to 21% of revenue in
2012, despite our stronger subscriber growth in 2012 compared to the
prior year.
Subscriber Statistics
At December 31, 2012, we provided our 10.3 million unique customers with
18.7 million services, consisting of 9.3 million video, 5.5 million
broadband internet and 4.0 million telephony subscriptions. As compared
to year-end 2011, we increased our RGU base by 5% or over 900,000 RGUs.
This growth was driven by over 700,000 organic RGU additions, as well as
RGUs from the inclusion of our historical small office home office
(“SOHO”) business5 and from multiple small in-market
acquisitions. During 2012, we increased our combined double- and
triple-play customers by 388,000 or 8% (inclusive of acquisitions) to
over 5 million bundled customers, or 50% of our customer base. As a
result, our bundling ratio increased from 1.73x RGUs per customer at the
end of 2011 to 1.81x RGUs per customer at the end of 2012.
Our subscriber additions increased by 7% year-over-year to 711,000 RGUs
in 2012, with 222,000 RGUs added in the fourth quarter. Our 2012 result
represents our strongest performance since 2007 and our Q4 2012 result
reflects our second highest quarterly total since Q4 2007. Our
subscriber additions for the three months and year ended 2012 include
23,000 and 71,000 RGUs, respectively, relating to SOHO RGUs.
Geographically, our European operations accounted for over 85% of our
total RGU additions in 2012. Our Western European businesses added
278,000 RGUs during the year, which was largely flat as compared to
2011. We had strong performances in both Switzerland and Austria, which
added 123,000 RGUs on a combined basis in 2012 versus 46,000 RGUs in
2011. In particular, our Swiss operation reported its best subscriber
performance since 2006 with 80,000 RGU additions. Offsetting our Swiss
and Austrian improved performances, our Dutch business faced a more
competitive environment in the second half of 2012 and, as a result,
added 55,000 RGUs in 2012 as compared to 137,000 in 2011. Rounding out
our European footprint, our CEE operations grew their RGU additions by
24% in 2012, gaining 329,000 RGUs. This was our highest annual total
since 2007 in that region, with both our Romanian and Hungarian
operations showing dramatic year-over-year improvement. Finally, our
Chilean operation realized a 7% decline in RGU additions to 105,000 in
2012.
In terms of our TV business, we lost 169,000 video subscribers
(including just 12,000 in Q4) in 2012, which is slightly better than our
2011 result, and represented our lowest annual RGU attrition since 2006.
We finished 2012 with a digital video base of 5.2 million RGUs, as we
added 497,000 digital cable RGUs (including 141,000 in Q4) during the
year. As a result of our growth in digital subscribers, we achieved a
digital penetration6 of 61%, as compared to 54% at year-end
2011. We expect that our opportunity to continue driving digital
upgrades will be enhanced by our recently launched Horizon TV product
and with over 3 million analog video subscribers, we remain confident in
the video growth opportunity. The take-up of Horizon TV in the Dutch
market remained robust during the fourth quarter and within five short
months we have sold over 100,000 Horizon TV subscriptions and have over
200,000 unique users enjoying our on-line and multiscreen services. In
January 2013, we introduced Horizon TV in Switzerland and the early
results so far have been very positive and we look forward to launching
Horizon TV in Ireland later this year.
Overall subscriber growth was powered by our market-leading double- and
triple-play bundles, with our superior broadband internet products
serving as the key competitive differentiator. As a result of continued
strong demand from within our customer base, we added 403,000 broadband
internet subscribers (including 113,000 in Q4) and 477,000 telephony
subscribers (including 122,000 in Q4), reflecting a year-over-year
decline of 4% for broadband internet, but an increase of 16% for
telephony, which represents a record level for annual telephony
additions.
Summary of Third-Party Debt and Cash and Cash Equivalents
At December 31, 2012, we reported €9.6 billion of third-party debt and
€58 million of cash and cash equivalents. As compared to September 30,
2012, our third-party debt remained relatively constant, decreasing €62
million. At December 31, 2012, over 75% of our third-party debt was due
in 2017 and beyond, while our fully-swapped borrowing cost7
declined to approximately 7.8% at Q4 2012 from 8.8% at Q4 2011, due to a
combination of attractive pricing on our new debt issuances and lower
costs associated with our derivative instruments.
During 2012, we completed several opportunistic financing transactions,
which enabled us to extend our maturity profile, lower our borrowing
cost, and raise new capital. In the fourth quarter, we rolled our
existing $500 million of commitments under Facility AB due 2017 into a
new Facility AF, which matures in 2021.
The following table details our consolidated third-party debt and cash
and cash equivalents as of the dates indicated:8
|
|
December 31,
|
|
September 30,
|
|
|
2012
|
|
2012
|
|
|
in millions
|
UPC Broadband Holding Bank Facility
|
|
€
|
4,142.5
|
|
€
|
4,170.6
|
UPCB Finance Limited 7.625% Senior Secured Notes due 2020
|
|
|
496.6
|
|
|
496.5
|
UPCB Finance II Limited 6.375% Senior Secured Notes due 2020
|
|
|
750.0
|
|
|
750.0
|
UPCB Finance III Limited 6.625% Senior Secured Notes due 2020
|
|
|
757.7
|
|
|
776.7
|
UPCB Finance V Limited 7.25% Senior Secured Notes due 2021
|
|
|
568.3
|
|
|
582.5
|
UPCB Finance VI Limited 6.875% Senior Secured Notes due 2022
|
|
|
568.3
|
|
|
582.5
|
UPC Holding 8.00% Senior Notes due 2016
|
|
|
300.0
|
|
|
300.0
|
UPC Holding 9.75% Senior Notes due 2018
|
|
|
380.5
|
|
|
379.8
|
UPC Holding 9.875% Senior Notes due 2018
|
|
|
286.8
|
|
|
293.4
|
UPC Holding 8.375% Senior Notes due 2020
|
|
|
640.0
|
|
|
640.0
|
UPC Holding 6.375% Senior Notes due 2022
|
|
|
594.7
|
|
|
594.6
|
Other debt, including vendor financing and capital lease obligations
|
|
|
108.3
|
|
|
89.2
|
Total third-party debt
|
|
€
|
9,593.7
|
|
€
|
9,655.8
|
|
|
|
|
|
Cash and cash equivalents
|
|
€
|
58.3
|
|
€
|
71.0
|
|
|
|
|
|
|
|
UPC Broadband Holding Bank Facility
The following table details the key terms of the UPC Broadband Holding
Bank Facility at December 31, 2012:
|
|
|
|
As of December 31, 2012
|
Facility
|
|
Final maturity
|
|
Interest rate
|
|
Facility amount9
|
|
Unused borrowing capacity
|
|
Carrying value10
|
|
|
|
|
|
|
in millions
|
|
|
|
|
|
|
|
|
|
|
|
Facility Q
|
|
July 31, 2014
|
|
E + 2.75%
|
|
€
|
30.0
|
|
€
|
30.0
|
|
€
|
—
|
|
Facility R
|
|
Dec. 31, 2015
|
|
E + 3.25%
|
|
€
|
290.7
|
|
|
—
|
|
|
290.7
|
|
Facility S
|
|
Dec. 31, 2016
|
|
E + 3.75%
|
|
€
|
1,204.5
|
|
|
—
|
|
|
1,204.5
|
|
Facility T
|
|
Dec. 31, 2016
|
|
L + 3.50%
|
|
$
|
260.2
|
|
|
—
|
|
|
196.1
|
|
Facility U
|
|
Dec. 31, 2017
|
|
E + 4.00%
|
|
€
|
750.8
|
|
|
—
|
|
|
750.8
|
|
Facility V
|
|
Jan. 15, 2020
|
|
7.625%
|
|
€
|
500.0
|
|
|
—
|
|
|
500.0
|
|
Facility W
|
|
Mar. 31, 2015
|
|
E + 3.00%
|
|
€
|
144.1
|
|
|
144.1
|
|
|
—
|
|
Facility X
|
|
Dec. 31, 2017
|
|
L + 3.50%
|
|
$
|
1,042.8
|
|
|
—
|
|
|
790.2
|
|
Facility Y
|
|
July 1, 2020
|
|
6.375%
|
|
€
|
750.0
|
|
|
—
|
|
|
750.0
|
|
Facility Z
|
|
July 1, 2020
|
|
6.625%
|
|
$
|
1,000.0
|
|
|
—
|
|
|
757.7
|
|
Facility AA
|
|
July 31, 2016
|
|
E + 3.25%
|
|
€
|
904.0
|
|
|
904.0
|
|
|
—
|
|
Facility AC
|
|
Nov. 15, 2021
|
|
7.250%
|
|
$
|
750.0
|
|
|
—
|
|
|
568.3
|
|
Facility AD
|
|
Jan. 15, 2022
|
|
6.875%
|
|
$
|
750.0
|
|
|
—
|
|
|
568.3
|
|
Facility AE
|
|
Dec. 31, 2019
|
|
E + 3.75%
|
|
€
|
535.5
|
|
|
—
|
|
|
535.5
|
|
Facility AF
|
|
Jan. 31, 2021
|
|
L + 3.00%11
|
|
$
|
500.0
|
|
|
—
|
|
|
374.7
|
|
Elimination of Facilities V, Y, Z, AC and AD in consolidation
|
|
|
—
|
|
|
(3,144.3
|
)
|
Total
|
|
€
|
1,078.1
|
|
€
|
4,142.5
|
|
|
|
|
|
|
|
|
|
Borrowing Capacity & Covenant Calculations
UPC Broadband Holding B.V. (“UPC Broadband Holding”), our wholly-owned
subsidiary, is a borrower of outstanding indebtedness under the UPC
Broadband Holding Bank Facility, which we guarantee. As of December 31,
2012, UPC Broadband Holding had maximum undrawn commitments under
Facilities Q, W and AA of the UPC Broadband Holding Bank Facility of
€1.1 billion. We estimate that approximately €789 million of this amount
will be available upon completion of our fourth quarter compliance
reporting requirements.
Based on the results ended December 31, 2012 and subject to the
completion of our fourth quarter bank reporting requirements, (i) the
ratio of Senior Debt to Annualized EBITDA (last two quarters
annualized), as defined and calculated in accordance with the UPC
Broadband Holding Bank Facility, was 3.64x and (ii) the ratio of Total
Debt to Annualized EBITDA (last two quarters annualized), as defined and
calculated in accordance with the UPC Broadband Holding Bank Facility,
was 4.66x.12
About UPC Holding
UPC Holding connects people to the digital world and enables them to
discover and experience its endless possibilities. Our market-leading
television, broadband internet and telephony services are provided
through next-generation networks and innovative technology platforms in
10 countries that connect 10 million customers who subscribe to 19
million services as of December 31, 2012.
Disclaimer
This press release contains forward-looking statements, including our
expectations with respect to our strategy and future growth prospects,
including our continued ability to increase our organic RGU additions
and further grow the penetration of our advanced services and our
assessment of our liquidity and access to capital markets, including our
borrowing availability; our expectations with respect to the timing and
impact of our expanded roll-out of advanced products and services,
including Horizon TV; our insight and expectations regarding competitive
and economic factors in our markets; the impact of our M&A activity on
our operations and financial performance; and other information and
statements that are not historical fact. These forward-looking
statements involve certain risks and uncertainties that could cause
actual results to differ materially from those expressed or implied by
these statements. These risks and uncertainties include the continued
use by subscribers and potential subscribers of our services and their
willingness to upgrade to our more advanced offerings, our ability to
meet challenges from competition and economic factors, the continued
growth in services for digital television at a reasonable cost, the
effects of changes in technology and regulation, our ability to achieve
expected operational efficiencies and economies of scale, our ability to
generate expected revenue and operating cash flow, control property and
equipment additions as measured by a percentage of revenue and achieve
assumed margins, the impact of our future financial performance, or
market conditions generally, on the availability, terms and deployment
of capital, as well as other factors detailed from time to time in
Liberty Global's filings with the Securities and Exchange Commission
including Liberty Global’s most recently filed Form 10-K. These
forward-looking statements speak only as of the date of this release. We
expressly disclaim any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statement contained herein
to reflect any change in our expectations with regard thereto or any
change in events, conditions or circumstances on which any such
statement is based.
We are required under the terms of the indentures for the UPC Holding
senior notes and the UPCB Finance Limited, UPCB Finance II Limited, UPCB
Finance III Limited, UPCB Finance V Limited and UPCB Finance VI Limited
senior secured notes to provide certain financial information regarding
UPC Holding to bondholders on a quarterly basis. UPC Broadband Holding,
our wholly-owned subsidiary, is a borrower and we are a guarantor of
outstanding indebtedness under the UPC Broadband Holding Bank Facility,
which also requires the provision of certain financial and related
information to the lenders. This press release is being issued at this
time, in connection with those obligations, due to the contemporaneous
release by Liberty Global of its December 31, 2012 results. The
financial information contained herein is preliminary and subject to
change. We presently expect to issue our December 31, 2012 audited
consolidated financial statements prior to the end of March 2013, at
which time they will be posted to the investor relations section of the
Liberty Global website (www.lgi.com)
under the fixed income heading. Copies will also be available from the
Trustee for the senior notes and the senior secured notes.
|
|
|
1 |
|
Please see footnotes to the operating data table for the definition
of revenue generating units (“RGUs”). Organic figures exclude RGUs
of acquired entities at the date of acquisition, but include the
impact of changes in RGUs from the date of acquisition. All
subscriber/RGU additions or losses refer to net organic changes,
unless otherwise noted.
|
2 |
|
For purposes of calculating rebased growth rates on a comparable
basis for all businesses that we owned during 2011 and 2012, we have
adjusted our historical revenue and OCF for the three months and
year ended December 31, 2011 to (i) include the pre-acquisition
revenue and OCF of certain entities acquired during 2011 and 2012 in
the respective 2011 rebased amounts to the same extent that the
revenue and OCF of such entities are included in our 2012 results
and (ii) reflect the translation of our rebased amounts for the 2011
periods at the applicable average exchange rates that were used to
translate our 2012 results. Please see page 7 for supplemental
information on rebased growth.
|
3 |
|
Please see page 10 for our definition of operating cash flow and a
reconciliation to operating income.
|
4 |
|
OCF margin is calculated by dividing OCF by total revenue for the
applicable period.
|
5 |
|
Certain of our business-to-business (“B2B”) revenue is derived from
SOHO subscribers that pay a premium price to receive enhanced
service levels along with video, internet or telephony services that
are the same or similar to the mass marketed products offered to our
residential subscribers. Effective January 1, 2012, we recorded
non-organic adjustments to begin including the SOHO subscribers of
UPC Europe in our RGU and customer counts. As a result, all mass
marketed products provided to SOHOs, whether or not accompanied by
enhanced service levels and/or premium prices, are now included in
the respective RGU and customer counts of our broadband
communications operations, with only those services provided at
premium prices considered to be “SOHO RGUs” or “SOHO customers.”
With the exception of our B2B SOHO subscribers, we generally do not
count customers of B2B services as customers or RGUs for external
reporting purposes. RGU, customer, bundling and ARPU amounts
presented for periods prior to January 1, 2012 have not been
restated to reflect this change.
|
6 |
|
Digital penetration is calculated by dividing the number of digital
cable RGUs by the total number of digital and analog cable RGUs.
|
7 |
|
Our fully swapped debt borrowing cost represents the weighted
average interest rate on our aggregate variable and fixed rate
indebtedness, including the effects of derivative instruments,
discounts and commitment fees, but excluding the impact of financing
costs.
|
8 |
|
UPCB Finance Limited, UPCB Finance II Limited, UPCB Finance III
Limited, UPCB Finance V Limited and UPCB Finance VI Limited are
special purpose financing companies created for the primary purpose
of issuing senior secured notes and are owned 100% by charitable
trusts. We used the proceeds from the senior secured notes to fund
Facilities V, Y, Z, AC and AD under the UPC Broadband Holding Bank
Facility, with UPC Financing, our direct subsidiary, as the
borrower. These special purpose financing companies are dependent on
payments from UPC Financing under Facilities V, Y, Z, AC and AD in
order to service their payment obligations under the senior secured
notes. As such, these companies are variable interest entities and
UPC Financing and its parent entities, including UPC Holding, are
required by accounting principles generally accepted in the U.S.
(“GAAP”) to consolidate these companies. Accordingly, the amounts
outstanding under Facilities V, Y, Z, AC and AD eliminate within our
condensed consolidated financial statements.
|
9
|
|
Except as described in note 8 above, amounts represent total
third-party commitments at December 31, 2012 without giving effect
to the impact of discounts.
|
10
|
|
Facilities T and AF carrying values include the impact of discounts.
|
11
|
|
The Facility AF interest rate includes a LIBOR floor of 1.00%.
|
12 |
|
Our covenant calculations are based on debt amounts which take into
account currency swaps calculated at weighted average FX rates
across the period. Thus, the debt used in the calculations may
differ from the debt balances reported within the financial
statements.
|
|
|
|
Revenue and Operating Cash Flow
In the following tables, we present revenue and operating cash flow by
reportable segment for the three months and year ended December 31,
2012, as compared to the corresponding prior year periods. All of the
reportable segments derive their revenue primarily from broadband
communications services, including video, broadband internet and
telephony services. Most reportable segments also provide B2B services.
At December 31, 2012, our operating segments in UPC Europe provided
broadband communications services in nine European countries and
direct-to-home (“DTH”) services to customers in the Czech Republic,
Hungary, Romania and Slovakia through a Luxembourg-based organization
that we refer to as "UPC DTH." Our Other Western Europe segment includes
our broadband communications operating segments in Austria and Ireland.
Our Central and Eastern Europe segment includes our broadband
communications operating segments in the Czech Republic, Hungary,
Poland, Romania and Slovakia. UPC Europe’s central and other category
includes (i) the UPC DTH operating segment, (ii) costs associated with
certain centralized functions, including billing systems, network
operations, technology, marketing, facilities, finance and other
administrative functions and (iii) intersegment eliminations within UPC
Europe. VTR provides video, broadband internet and telephony services in
Chile.
Beginning in the fourth quarter of 2012, the management responsibility
for certain of our operations in Switzerland was transferred to our
Austrian operations and, accordingly, such operations are now reported
within our Other Western Europe segment. Segment information for all
periods presented has been retrospectively revised to reflect this
change. We present only the reportable segments of our continuing
operations in the tables below.
For purposes of calculating rebased growth rates on a comparable basis
for all businesses that we owned during 2012, we have adjusted our
historical revenue and OCF for the three months and year ended December
31, 2011 to (i) include the pre-acquisition revenue and OCF of certain
entities acquired during 2011 and 2012 in our rebased amounts for the
three months and year ended December 31, 2011 to the same extent that
the revenue and OCF of such entities are included in our results for the
three months and year ended December 31, 2012 and (ii) reflect the
translation of our rebased amounts for the three months and year ended
December 31, 2011 at the applicable average foreign currency exchange
rates that were used to translate our results for the three months and
year ended December 31, 2012. The acquired entities that have been
included in whole or in part in the determination of our rebased revenue
and OCF for the three months ended December 31, 2011 include four small
entities in Europe. The acquired entities that have been included in
whole or in part in the determination of our rebased revenue and OCF for
the year ended December 31, 2011 include Aster and six small entities in
Europe.
We have reflected the revenue and OCF of the acquired entities in our
2011 rebased amounts based on what we believe to be the most reliable
information that is currently available to us (generally pre-acquisition
financial statements), as adjusted for the estimated effects of (i) any
significant differences between GAAP and local generally accepted
accounting principles, (ii) any significant effects of acquisition
accounting adjustments, (iii) any significant differences between our
accounting policies and those of the acquired entities and (iv) other
items we deem appropriate. We do not adjust pre-acquisition periods to
eliminate non-recurring items or to give retroactive effect to any
changes in estimates that might be implemented during post-acquisition
periods. As we did not own or operate the acquired businesses during the
pre-acquisition periods, no assurance can be given that we have
identified all adjustments necessary to present the revenue and OCF of
these entities on a basis that is comparable to the corresponding
post-acquisition amounts that are included in our historical results or
that the pre-acquisition financial statements we have relied upon do not
contain undetected errors. The adjustments reflected in our rebased
amounts have not been prepared with a view towards complying with
Article 11 of Regulation S-X. In addition, the rebased growth
percentages are not necessarily indicative of the revenue and OCF that
would have occurred if these transactions had occurred on the dates
assumed for purposes of calculating our rebased amounts or the revenue
and OCF that will occur in the future. The rebased growth percentages
have been presented as a basis for assessing growth rates on a
comparable basis, and are not presented as a measure of our pro forma
financial performance. Therefore, we believe our rebased data is not a
non-GAAP financial measure as contemplated by Regulation G or Item 10 of
Regulation S-K.
The selected financial data contained herein is preliminary and unaudited
and subject to possible adjustments in connection with the
publication of UPC Holding’s December 31, 2012 consolidated financial
statements. In each case, the following tables present (i) the amounts
reported by each of our reportable segments for the comparative periods,
(ii) the euro change and percentage change from period to period and
(iii) the percentage change from period to period on a rebased basis:
Revenue
|
|
Three months ended
December 31,
|
|
Increase
(Decrease)
|
|
Increase
(Decrease)
|
|
|
2012
|
|
2011
|
|
€
|
|
%
|
|
Rebased %
|
|
|
in millions, except % amounts
|
UPC Europe:
|
|
|
|
|
|
|
|
|
|
|
The Netherlands
|
|
€
|
242.2
|
|
€
|
232.8
|
|
€
|
9.4
|
|
4.0
|
|
3.9
|
|
Switzerland
|
|
|
250.9
|
|
|
236.7
|
|
|
14.2
|
|
6.0
|
|
3.8
|
|
Other Western Europe
|
|
|
169.3
|
|
|
162.2
|
|
|
7.1
|
|
4.4
|
|
4.4
|
|
Total Western Europe
|
|
|
662.4
|
|
|
631.7
|
|
|
30.7
|
|
4.9
|
|
4.0
|
|
Central and Eastern Europe
|
|
|
220.4
|
|
|
211.6
|
|
|
8.8
|
|
4.2
|
|
(0.9
|
)
|
Central and other
|
|
|
24.1
|
|
|
21.2
|
|
|
2.9
|
|
13.7
|
|
—
|
|
Total UPC Europe
|
|
|
906.9
|
|
|
864.5
|
|
|
42.4
|
|
4.9
|
|
3.0
|
|
VTR (Chile)
|
|
|
184.7
|
|
|
159.9
|
|
|
24.8
|
|
15.5
|
|
3.8
|
|
Total
|
|
€
|
1,091.6
|
|
€
|
1,024.4
|
|
€
|
67.2
|
|
6.6
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
December 31,
|
|
Increase
(Decrease)
|
|
Increase
(Decrease)
|
|
|
2012
|
|
2011
|
|
€
|
|
%
|
|
Rebased %
|
|
|
in millions, except % amounts
|
UPC Europe:
|
|
|
|
|
|
|
|
|
|
|
The Netherlands
|
|
€
|
955.6
|
|
€
|
914.9
|
|
€
|
40.7
|
|
4.4
|
|
4.4
|
|
Switzerland
|
|
|
979.6
|
|
|
921.3
|
|
|
58.3
|
|
6.3
|
|
3.8
|
|
Other Western Europe
|
|
|
659.5
|
|
|
641.8
|
|
|
17.7
|
|
2.8
|
|
2.7
|
|
Total Western Europe
|
|
|
2,594.7
|
|
|
2,478.0
|
|
|
116.7
|
|
4.7
|
|
3.7
|
|
Central and Eastern Europe
|
|
|
867.5
|
|
|
806.6
|
|
|
60.9
|
|
7.6
|
|
(0.6
|
)
|
Central and other
|
|
|
91.2
|
|
|
89.3
|
|
|
1.9
|
|
2.1
|
|
—
|
|
Total UPC Europe
|
|
|
3,553.4
|
|
|
3,373.9
|
|
|
179.5
|
|
5.3
|
|
2.6
|
|
VTR (Chile)
|
|
|
718.2
|
|
|
639.4
|
|
|
78.8
|
|
12.3
|
|
4.3
|
|
Total
|
|
€
|
4,271.6
|
|
€
|
4,013.3
|
|
€
|
258.3
|
|
6.4
|
|
2.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Cash Flow
|
|
Three months ended
December 31,
|
|
Increase
(Decrease)
|
|
Increase
(Decrease)
|
|
|
2012
|
|
2011
|
|
€
|
|
%
|
|
Rebased %
|
|
|
in millions, except % amounts
|
UPC Europe:
|
|
|
|
|
|
|
|
|
|
|
The Netherlands
|
|
€
|
147.7
|
|
|
€
|
137.4
|
|
|
€
|
10.3
|
|
|
7.5
|
|
|
7.5
|
Switzerland
|
|
|
142.9
|
|
|
|
132.7
|
|
|
|
10.2
|
|
|
7.7
|
|
|
5.5
|
Other Western Europe
|
|
|
84.4
|
|
|
|
74.6
|
|
|
|
9.8
|
|
|
13.1
|
|
|
13.1
|
Total Western Europe
|
|
|
375.0
|
|
|
|
344.7
|
|
|
|
30.3
|
|
|
8.8
|
|
|
7.9
|
Central and Eastern Europe
|
|
|
111.6
|
|
|
|
99.9
|
|
|
|
11.7
|
|
|
11.7
|
|
|
6.2
|
Central and other
|
|
|
(34.1
|
)
|
|
|
(25.0
|
)
|
|
|
(9.1
|
)
|
|
(36.4
|
)
|
|
—
|
Total UPC Europe
|
|
|
452.5
|
|
|
|
419.6
|
|
|
|
32.9
|
|
|
7.8
|
|
|
5.8
|
VTR (Chile)
|
|
|
84.4
|
|
|
|
70.8
|
|
|
|
13.6
|
|
|
19.2
|
|
|
7.0
|
Total
|
|
€
|
536.9
|
|
|
€
|
490.4
|
|
|
€
|
46.5
|
|
|
9.5
|
|
|
6.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
December 31,
|
|
Increase
(Decrease)
|
|
Increase
(Decrease)
|
|
|
2012
|
|
2011
|
|
€
|
|
%
|
|
Rebased %
|
|
|
in millions, except % amounts
|
UPC Europe:
|
|
|
|
|
|
|
|
|
|
|
The Netherlands
|
|
€
|
573.1
|
|
|
€
|
542.5
|
|
|
€
|
30.6
|
|
|
5.6
|
|
|
5.6
|
Switzerland
|
|
|
558.4
|
|
|
|
518.5
|
|
|
|
39.9
|
|
|
7.7
|
|
|
5.2
|
Other Western Europe
|
|
|
316.9
|
|
|
|
300.6
|
|
|
|
16.3
|
|
|
5.4
|
|
|
5.4
|
Total Western Europe
|
|
|
1,448.4
|
|
|
|
1,361.6
|
|
|
|
86.8
|
|
|
6.4
|
|
|
5.4
|
Central and Eastern Europe
|
|
|
431.7
|
|
|
|
393.5
|
|
|
|
38.2
|
|
|
9.7
|
|
|
0.0
|
Central and other
|
|
|
(122.2
|
)
|
|
|
(95.3
|
)
|
|
|
(26.9
|
)
|
|
(28.2
|
)
|
|
—
|
Total UPC Europe
|
|
|
1,757.9
|
|
|
|
1,659.8
|
|
|
|
98.1
|
|
|
5.9
|
|
|
2.8
|
VTR (Chile)
|
|
|
316.0
|
|
|
|
271.0
|
|
|
|
45.0
|
|
|
16.6
|
|
|
8.2
|
Total
|
|
€
|
2,073.9
|
|
|
€
|
1,930.8
|
|
|
€
|
143.1
|
|
|
7.4
|
|
|
3.6
|
|
|
|
|
|
|
|
|
|
|
|
Operating Cash Flow Definition and Reconciliation
Operating cash flow is the primary measure used by our chief operating
decision maker to evaluate segment operating performance. Operating cash
flow is also a key factor that is used by our internal decision makers
to (i) determine how to allocate resources to segments and (ii) evaluate
the effectiveness of our management for purposes of annual and other
incentive compensation plans. As we use the term, operating cash flow is
defined as revenue less operating and selling, general and
administrative expenses (excluding stock-based compensation, related
party fees and allocations, depreciation and amortization, and
impairment, restructuring and other operating items). Other operating
items include (i) gains and losses on the disposition of long-lived
assets, (ii) direct acquisition costs, such as third-party due
diligence, legal and advisory costs, and (iii) other acquisition-related
items, such as gains and losses on the settlement of contingent
consideration. Our internal decision makers believe operating cash flow
is a meaningful measure and is superior to available GAAP measures
because it represents a transparent view of our recurring operating
performance that is unaffected by our capital structure and allows
management to (i) readily view operating trends, (ii) perform analytical
comparisons and benchmarking between segments and (iii) identify
strategies to improve operating performance in the different countries
in which we operate. We believe our operating cash flow measure is
useful to investors because it is one of the bases for comparing our
performance with the performance of other companies in the same or
similar industries, although our measure may not be directly comparable
to similar measures used by other public companies. Operating cash flow
should be viewed as a measure of operating performance that is a
supplement to, and not a substitute for, operating income, net earnings
(loss), cash flow from operating activities and other GAAP measures of
income or cash flows. A reconciliation of total segment operating cash
flow to our operating income is presented below.
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
in millions
|
Total segment operating cash flow
|
|
€
|
536.9
|
|
|
€
|
490.4
|
|
|
€
|
2,073.9
|
|
|
€
|
1,930.8
|
|
Stock-based compensation expense
|
|
|
(3.7
|
)
|
|
|
(3.6
|
)
|
|
|
(17.8
|
)
|
|
|
(13.5
|
)
|
Depreciation and amortization
|
|
|
(246.5
|
)
|
|
|
(247.3
|
)
|
|
|
(1,037.3
|
)
|
|
|
(970.2
|
)
|
Related party fees and allocations, net
|
|
|
(13.8
|
)
|
|
|
(6.8
|
)
|
|
|
2.4
|
|
|
|
(5.9
|
)
|
Impairment, restructuring and other operating items, net
|
|
|
(5.9
|
)
|
|
|
(12.5
|
)
|
|
|
(8.2
|
)
|
|
|
(26.8
|
)
|
Operating income
|
|
€
|
267.0
|
|
|
€
|
220.2
|
|
|
€
|
1,013.0
|
|
|
€
|
914.4
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures
The following table provides property and equipment additions for UPC
Holding for the indicated periods:
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
in millions, except % amounts
|
UPC Europe:
|
|
|
|
|
|
|
|
|
The Netherlands
|
|
€
|
51.7
|
|
|
€
|
45.8
|
|
|
€
|
172.3
|
|
|
€
|
166.6
|
|
Switzerland
|
|
|
44.1
|
|
|
|
55.7
|
|
|
|
173.2
|
|
|
|
169.5
|
|
Other Western Europe
|
|
|
29.7
|
|
|
|
43.5
|
|
|
|
112.7
|
|
|
|
139.4
|
|
Total Western Europe
|
|
|
125.5
|
|
|
|
145.0
|
|
|
|
458.2
|
|
|
|
475.5
|
|
Central and Eastern Europe
|
|
|
54.0
|
|
|
|
42.0
|
|
|
|
176.7
|
|
|
|
144.9
|
|
Central and other
|
|
|
35.2
|
|
|
|
37.8
|
|
|
|
120.2
|
|
|
|
120.7
|
|
Total UPC Europe
|
|
|
214.7
|
|
|
|
224.8
|
|
|
|
755.1
|
|
|
|
741.1
|
|
VTR (Chile)
|
|
|
33.9
|
|
|
|
32.4
|
|
|
|
160.6
|
|
|
|
132.1
|
|
Total UPC Holding
|
|
€
|
248.6
|
|
|
€
|
257.2
|
|
|
€
|
915.7
|
|
|
€
|
873.2
|
|
|
|
|
|
|
|
|
|
|
Total property and equipment additions as % of revenue
|
|
|
22.8
|
%
|
|
|
25.1
|
%
|
|
|
21.4
|
%
|
|
|
21.8
|
%
|
|
|
|
|
|
|
|
|
|
The table below highlights the categories of our property and equipment
additions for the indicated periods and reconciles those additions to
the capital expenditures that we present in our consolidated statements
of cash flows:
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
in millions, except % amounts
|
Customer premises equipment
|
|
€
|
91.9
|
|
|
€
|
71.6
|
|
|
€
|
400.5
|
|
|
€
|
326.5
|
|
Scalable infrastructure
|
|
|
49.7
|
|
|
|
64.2
|
|
|
|
165.0
|
|
|
|
196.1
|
|
Line extensions
|
|
|
28.9
|
|
|
|
29.4
|
|
|
|
102.2
|
|
|
|
98.0
|
|
Upgrade/rebuild
|
|
|
25.5
|
|
|
|
31.7
|
|
|
|
82.0
|
|
|
|
93.7
|
|
Support capital
|
|
|
52.6
|
|
|
|
60.3
|
|
|
|
166.0
|
|
|
|
158.9
|
|
Property and equipment additions
|
|
|
248.6
|
|
|
|
257.2
|
|
|
|
915.7
|
|
|
|
873.2
|
|
Assets acquired under capital-related vendor financing arrangements
(including related-party amounts)1
|
|
|
(48.8
|
)
|
|
|
(31.8
|
)
|
|
|
(160.6
|
)
|
|
|
(73.2
|
)
|
Assets acquired under capital leases1
|
|
|
(0.5
|
)
|
|
|
(0.3
|
)
|
|
|
(1.9
|
)
|
|
|
(1.4
|
)
|
Assets contributed by parent company2
|
|
|
(3.7
|
)
|
|
|
—
|
|
|
|
(10.2
|
)
|
|
|
—
|
|
Changes in current liabilities related to capital expenditures (including
related-party amounts)
|
|
|
(29.5
|
)
|
|
|
(39.1
|
)
|
|
|
(19.2
|
)
|
|
|
(17.0
|
)
|
Total capital expenditures
|
|
€
|
166.1
|
|
|
€
|
186.0
|
|
|
€
|
723.8
|
|
|
€
|
781.6
|
|
|
|
|
|
|
|
|
|
|
Total Capital Expenditures:
|
|
|
|
|
|
|
|
|
UPC Europe
|
|
€
|
137.0
|
|
|
€
|
170.4
|
|
|
€
|
571.6
|
|
|
€
|
663.6
|
|
VTR (Chile)
|
|
|
29.1
|
|
|
|
15.6
|
|
|
|
152.2
|
|
|
|
118.0
|
|
Total UPC Holding
|
|
€
|
166.1
|
|
|
€
|
186.0
|
|
|
€
|
723.8
|
|
|
€
|
781.6
|
|
|
|
|
|
|
|
|
|
|
Total Capital Expenditures as % of
Revenue:
|
|
|
|
|
|
|
|
|
UPC Europe
|
|
|
15.1
|
%
|
|
|
19.7
|
%
|
|
|
16.1
|
%
|
|
|
19.7
|
%
|
VTR (Chile)
|
|
|
15.8
|
%
|
|
|
9.8
|
%
|
|
|
21.2
|
%
|
|
|
18.5
|
%
|
Total UPC Holding
|
|
|
15.2
|
%
|
|
|
18.2
|
%
|
|
|
16.9
|
%
|
|
|
19.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RGUs, Customers and Bundling3
The following table provides information on the breakdown of our RGUs
and customer base and highlights our customer bundling metrics at
December 31, 2012, September 30, 2012 and December 31, 2011:
|
|
December 31, 2012
|
|
September 30, 2012
|
|
December 31,
2011
|
|
Q4’12 / Q3’12 (% Change)
|
|
Q4’12 / Q4’11 (% Change)
|
Total RGUs
|
|
|
|
|
|
|
|
|
|
|
Video
|
|
9,290,400
|
|
|
9,294,500
|
|
|
9,375,500
|
|
|
—
|
|
|
(0.9
|
%)
|
Broadband Internet
|
|
5,458,400
|
|
|
5,343,800
|
|
|
4,968,000
|
|
|
2.1
|
%
|
|
9.9
|
%
|
Telephony
|
|
3,986,700
|
|
|
3,865,000
|
|
|
3,464,100
|
|
|
3.1
|
%
|
|
15.1
|
%
|
UPC Holding RGUs
|
|
18,735,500
|
|
|
18,503,300
|
|
|
17,807,600
|
|
|
1.3
|
%
|
|
5.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total Customers
|
|
|
|
|
|
|
|
|
|
|
Total Single-Play Customers
|
|
5,188,700
|
|
|
5,269,700
|
|
|
5,517,000
|
|
|
(1.5
|
%)
|
|
(6.0
|
%)
|
Total Double-Play Customers
|
|
1,923,900
|
|
|
1,953,300
|
|
|
2,015,700
|
|
|
(1.5
|
%)
|
|
(4.6
|
%)
|
Total Triple-Play Customers
|
|
3,233,000
|
|
|
3,109,000
|
|
|
2,753,100
|
|
|
4.0
|
%
|
|
17.4
|
%
|
UPC Holding Customers
|
|
10,345,600
|
|
|
10,332,000
|
|
|
10,285,800
|
|
|
0.1
|
%
|
|
0.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
% Double-Play Customers
|
|
|
|
|
|
|
|
|
|
|
UPC Europe
|
|
18.3
|
%
|
|
18.7
|
%
|
|
19.4
|
%
|
|
(2.1
|
%)
|
|
(5.7
|
%)
|
VTR (Chile)
|
|
20.7
|
%
|
|
20.5
|
%
|
|
21.2
|
%
|
|
1.0
|
%
|
|
(2.4
|
%)
|
UPC Holding
|
|
18.6
|
%
|
|
18.9
|
%
|
|
19.6
|
%
|
|
(1.6
|
%)
|
|
(5.1
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
% Triple-Play Customers
|
|
|
|
|
|
|
|
|
|
|
UPC Europe
|
|
29.4
|
%
|
|
28.0
|
%
|
|
24.6
|
%
|
|
5.0
|
%
|
|
19.5
|
%
|
VTR (Chile)
|
|
46.1
|
%
|
|
46.7
|
%
|
|
45.2
|
%
|
|
(1.3
|
%)
|
|
2.0
|
%
|
UPC Holding
|
|
31.3
|
%
|
|
30.1
|
%
|
|
26.8
|
%
|
|
4.0
|
%
|
|
16.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
RGUs per Customer Relationship
|
|
|
|
|
|
|
|
|
|
|
UPC Europe
|
|
1.77
|
|
|
1.75
|
|
|
1.69
|
|
|
1.1
|
%
|
|
4.7
|
%
|
VTR (Chile)
|
|
2.13
|
|
|
2.14
|
|
|
2.12
|
|
|
(0.5
|
%)
|
|
0.5
|
%
|
UPC Holding
|
|
1.81
|
|
|
1.79
|
|
|
1.73
|
|
|
1.1
|
%
|
|
4.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
ARPU per Customer Relationship4
The following table provides ARPU per customer relationship for the
indicated periods:
|
|
Three months ended Dec. 31,
|
|
|
|
FX Neutral
|
|
|
2012
|
|
2011
|
|
% Change
|
|
% Change5
|
UPC Europe
|
|
€
|
28.91
|
|
€
|
27.43
|
|
5.4
|
%
|
|
3.8
|
%
|
VTR (Chile)
|
|
CLP
|
30,830
|
|
CLP
|
30,572
|
|
0.8
|
%
|
|
0.8
|
%
|
UPC Holding
|
|
€
|
31.20
|
|
€
|
29.23
|
|
6.7
|
%
|
|
3.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
The capital expenditures that we report in our consolidated cash
flow statements do not include amounts that are financed under
vendor financing or capital lease arrangements. Instead, these
expenditures are reflected as non-cash additions to our property and
equipment when the underlying assets are delivered and as repayments
of debt when the principal is repaid.
|
2 |
|
Represents non-cash contributions of property and equipment that we
received from our parent company. These amounts are excluded from
the capital expenditures that we report in our consolidated cash
flow statements.
|
3
|
|
The RGU, customer and bundling statistics reported for periods prior
to January 1, 2012 have not been restated to reflect the January 1,
2012 change in our reporting of SOHO RGUs.
|
4
|
|
ARPU per customer relationship refers to the average monthly
subscription revenue per average customer relationship and is
calculated by dividing the average monthly subscription revenue
(excluding installation, late fees and mobile service revenue) for
the indicated period, by the average of the opening and closing
balances for customer relationships for the period. Customer
relationships of entities acquired during the period are normalized.
Unless otherwise indicated, ARPU per customer relationship for UPC
Europe and UPC Holding are not adjusted for currency impacts. ARPU
per customer relationship amounts reported for periods prior to
January 1, 2012 have not been restated to reflect the January 1,
2012 change in our reporting of SOHO RGUs.
|
5 |
|
The FX-neutral change represents the percentage change on a
year-over-year basis adjusted for FX impacts and is calculated by
adjusting the prior year figures to reflect translation at the
foreign currency rates used to translate the current year amounts.
|
|
|
|
|
|
Consolidated Operating Data – December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
Video
|
|
Internet
|
|
Telephony
|
|
|
Homes
Passed(1)
|
|
Two-way Homes
Passed(2)
|
|
Customer
Relationships(3)
|
|
Total
RGUs(4)
|
|
Analog Cable
Subscribers(5)
|
|
Digital Cable
Subscribers(6)
|
|
DTH
Subscribers(7)
|
|
MMDS
Subscribers(8)
|
|
Total
Video
|
|
Homes
Serviceable(9)
|
|
Subscribers(10) |
|
Homes
Serviceable(11)
|
|
Subscribers(12) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UPC Europe:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Netherlands(13) |
|
2,825,200
|
|
2,810,800
|
|
1,731,800
|
|
3,685,500
|
|
651,600
|
|
1,078,000
|
|
—
|
|
—
|
|
1,729,600
|
|
2,823,500
|
|
1,025,400
|
|
2,820,700
|
|
930,500
|
Switzerland(13) |
|
2,074,700
|
|
1,825,400
|
|
1,485,600
|
|
2,464,400
|
|
842,500
|
|
606,000
|
|
—
|
|
—
|
|
1,448,500
|
|
2,292,000
|
|
594,500
|
|
2,323,900
|
|
421,400
|
Austria
|
|
1,313,400
|
|
1,297,400
|
|
733,000
|
|
1,408,000
|
|
199,400
|
|
335,900
|
|
—
|
|
—
|
|
535,300
|
|
1,297,300
|
|
490,700
|
|
1,265,400
|
|
382,000
|
Ireland
|
|
862,900
|
|
737,200
|
|
538,800
|
|
988,800
|
|
63,000
|
|
337,800
|
|
—
|
|
45,600
|
|
446,400
|
|
737,200
|
|
304,300
|
|
715,000
|
|
238,100
|
Total Western Europe
|
|
7,076,200
|
|
6,670,800
|
|
4,489,200
|
|
8,546,700
|
|
1,756,500
|
|
2,357,700
|
|
—
|
|
45,600
|
|
4,159,800
|
|
7,150,000
|
|
2,414,900
|
|
7,125,000
|
|
1,972,000
|
Poland
|
|
2,667,900
|
|
2,537,600
|
|
1,472,000
|
|
2,616,000
|
|
546,000
|
|
756,300
|
|
—
|
|
—
|
|
1,302,300
|
|
2,537,600
|
|
854,700
|
|
2,527,600
|
|
459,000
|
Hungary
|
|
1,525,700
|
|
1,508,300
|
|
1,029,600
|
|
1,760,300
|
|
306,900
|
|
327,100
|
|
242,900
|
|
—
|
|
876,900
|
|
1,508,300
|
|
486,600
|
|
1,510,700
|
|
396,800
|
Romania
|
|
2,082,800
|
|
1,708,000
|
|
1,177,600
|
|
1,733,900
|
|
428,700
|
|
423,600
|
|
319,700
|
|
—
|
|
1,172,000
|
|
1,708,000
|
|
333,000
|
|
1,646,200
|
|
228,900
|
Czech Republic
|
|
1,345,200
|
|
1,236,900
|
|
745,300
|
|
1,217,300
|
|
76,100
|
|
406,000
|
|
102,200
|
|
—
|
|
584,300
|
|
1,236,900
|
|
439,900
|
|
1,234,200
|
|
193,100
|
Slovakia
|
|
495,500
|
|
464,800
|
|
287,500
|
|
425,600
|
|
84,100
|
|
123,100
|
|
54,300
|
|
1,100
|
|
262,600
|
|
433,600
|
|
103,800
|
|
431,800
|
|
59,200
|
Total CEE
|
|
8,117,100
|
|
7,455,600
|
|
4,712,000
|
|
7,753,100
|
|
1,441,800
|
|
2,036,100
|
|
719,100
|
|
1,100
|
|
4,198,100
|
|
7,424,400
|
|
2,218,000
|
|
7,350,500
|
|
1,337,000
|
Total UPC Europe
|
|
15,193,300
|
|
14,126,400
|
|
9,201,200
|
|
16,299,800
|
|
3,198,300
|
|
4,393,800
|
|
719,100
|
|
46,700
|
|
8,357,900
|
|
14,574,400
|
|
4,632,900
|
|
14,475,500
|
|
3,309,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VTR (Chile)
|
|
2,861,100
|
|
2,330,400
|
|
1,144,400
|
|
2,435,700
|
|
163,200
|
|
769,300
|
|
—
|
|
—
|
|
932,500
|
|
2,330,400
|
|
825,500
|
|
2,322,100
|
|
677,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total
|
|
18,054,400
|
|
16,456,800
|
|
10,345,600
|
|
18,735,500
|
|
3,361,500
|
|
5,163,100
|
|
719,100
|
|
46,700
|
|
9,290,400
|
|
16,904,800
|
|
5,458,400
|
|
16,797,600
|
|
3,986,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriber Variance Table – December 31, 2012 vs. September 30,
2012
|
|
|
|
|
|
|
|
|
|
|
Video
|
|
Internet
|
|
Telephony
|
|
|
Homes
Passed(1)
|
|
Two-way Homes
Passed(2)
|
|
Customer
Relationships(3)
|
|
Total
RGUs(4)
|
|
Analog Cable
Subscribers(5)
|
|
Digital Cable
Subscribers(6)
|
|
DTH
Subscribers(7)
|
|
MMDS
Subscribers(8)
|
|
Total
Video
|
|
Homes
Serviceable(9)
|
|
Subscribers(10) |
|
Homes
Serviceable(11)
|
|
Subscribers(12) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UPC Europe:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Netherlands(13) |
|
5,800
|
|
|
6,600
|
|
|
(30,200
|
)
|
|
2,000
|
|
|
(42,600
|
)
|
|
12,200
|
|
|
—
|
|
—
|
|
|
(30,400
|
)
|
|
6,500
|
|
|
12,100
|
|
|
6,700
|
|
20,300
|
|
Switzerland(13) |
|
(46,200
|
)
|
|
(15,200
|
)
|
|
(58,500
|
)
|
|
(30,300
|
)
|
|
(79,500
|
)
|
|
21,200
|
|
|
—
|
|
—
|
|
|
(58,300
|
)
|
|
(16,100
|
)
|
|
8,800
|
|
|
15,800
|
|
19,200
|
|
Austria
|
|
51,100
|
|
|
35,100
|
|
|
31,900
|
|
|
50,100
|
|
|
22,000
|
|
|
8,500
|
|
|
—
|
|
—
|
|
|
30,500
|
|
|
35,000
|
|
|
11,600
|
|
|
3,100
|
|
8,000
|
|
Ireland
|
|
(900
|
)
|
|
3,800
|
|
|
600
|
|
|
19,600
|
|
|
(4,500
|
)
|
|
1,700
|
|
|
—
|
|
(2,300
|
)
|
|
(5,100
|
)
|
|
3,800
|
|
|
10,000
|
|
|
7,300
|
|
14,700
|
|
Total Western Europe
|
|
9,800
|
|
|
30,300
|
|
|
(56,200
|
)
|
|
41,400
|
|
|
(104,600
|
)
|
|
43,600
|
|
|
—
|
|
(2,300
|
)
|
|
(63,300
|
)
|
|
29,200
|
|
|
42,500
|
|
|
32,900
|
|
62,200
|
|
Poland
|
|
18,200
|
|
|
24,100
|
|
|
8,200
|
|
|
56,200
|
|
|
(46,700
|
)
|
|
40,900
|
|
|
—
|
|
—
|
|
|
(5,800
|
)
|
|
24,100
|
|
|
34,600
|
|
|
24,600
|
|
27,400
|
|
Hungary
|
|
7,200
|
|
|
5,800
|
|
|
10,300
|
|
|
37,500
|
|
|
(13,600
|
)
|
|
13,300
|
|
|
10,900
|
|
—
|
|
|
10,600
|
|
|
5,800
|
|
|
9,100
|
|
|
5,800
|
|
17,800
|
|
Romania
|
|
4,100
|
|
|
7,400
|
|
|
25,300
|
|
|
58,300
|
|
|
(17,700
|
)
|
|
19,400
|
|
|
23,600
|
|
—
|
|
|
25,300
|
|
|
7,400
|
|
|
16,300
|
|
|
7,500
|
|
16,700
|
|
Czech Republic
|
|
3,200
|
|
|
3,200
|
|
|
1,000
|
|
|
2,800
|
|
|
3,800
|
|
|
(4,700
|
)
|
|
6,000
|
|
—
|
|
|
5,100
|
|
|
3,200
|
|
|
300
|
|
|
3,300
|
|
(2,600
|
)
|
Slovakia
|
|
9,000
|
|
|
5,400
|
|
|
10,100
|
|
|
16,900
|
|
|
700
|
|
|
4,800
|
|
|
2,900
|
|
400
|
|
|
8,800
|
|
|
6,000
|
|
|
5,400
|
|
|
4,100
|
|
2,700
|
|
Total CEE
|
|
41,700
|
|
|
45,900
|
|
|
54,900
|
|
|
171,700
|
|
|
(73,500
|
)
|
|
73,700
|
|
|
43,400
|
|
400
|
|
|
44,000
|
|
|
46,500
|
|
|
65,700
|
|
|
45,300
|
|
62,000
|
|
Total UPC Europe
|
|
51,500
|
|
|
76,200
|
|
|
(1,300
|
)
|
|
213,100
|
|
|
(178,100
|
)
|
|
117,300
|
|
|
43,400
|
|
(1,900
|
)
|
|
(19,300
|
)
|
|
75,700
|
|
|
108,200
|
|
|
78,200
|
|
124,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VTR (Chile)
|
|
41,500
|
|
|
52,000
|
|
|
14,900
|
|
|
19,100
|
|
|
(9,400
|
)
|
|
24,600
|
|
|
—
|
|
—
|
|
|
15,200
|
|
|
52,000
|
|
|
6,400
|
|
|
52,400
|
|
(2,500
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total
|
|
93,000
|
|
|
128,200
|
|
|
13,600
|
|
|
232,200
|
|
|
(187,500
|
)
|
|
141,900
|
|
|
43,400
|
|
(1,900
|
)
|
|
(4,100
|
)
|
|
127,700
|
|
|
114,600
|
|
|
130,600
|
|
121,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ORGANIC CHANGE SUMMARY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UPC Europe
|
|
40,500
|
|
|
72,000
|
|
|
(9,900
|
)
|
|
203,000
|
|
|
(184,900
|
)
|
|
116,500
|
|
|
43,400
|
|
(2,300
|
)
|
|
(27,300
|
)
|
|
71,700
|
|
|
106,100
|
|
|
75,900
|
|
124,200
|
|
VTR (Chile)
|
|
41,500
|
|
|
52,000
|
|
|
14,900
|
|
|
19,100
|
|
|
(9,400
|
)
|
|
24,600
|
|
|
—
|
|
—
|
|
|
15,200
|
|
|
52,000
|
|
|
6,400
|
|
|
52,400
|
|
(2,500
|
)
|
Total Organic Change
|
|
82,000
|
|
|
124,000
|
|
|
5,000
|
|
|
222,100
|
|
|
(194,300
|
)
|
|
141,100
|
|
|
43,400
|
|
(2,300
|
)
|
|
(12,100
|
)
|
|
123,700
|
|
|
112,500
|
|
|
128,300
|
|
121,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2012 ADJUSTMENTS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition - HU
|
|
1,300
|
|
|
1,000
|
|
|
600
|
|
|
1,000
|
|
|
200
|
|
|
400
|
|
|
—
|
|
—
|
|
|
600
|
|
|
800
|
|
|
400
|
|
|
800
|
|
—
|
|
Acquisition - SK
|
|
7,000
|
|
|
1,700
|
|
|
8,000
|
|
|
9,100
|
|
|
6,600
|
|
|
400
|
|
|
—
|
|
400
|
|
|
7,400
|
|
|
1,700
|
|
|
1,700
|
|
|
—
|
|
—
|
|
PL adjustment
|
|
2,700
|
|
|
1,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1,500
|
|
|
—
|
|
|
1,500
|
|
—
|
|
CH adjustment(14) |
|
(47,900
|
)
|
|
(31,900
|
)
|
|
(30,700
|
)
|
|
(35,600
|
)
|
|
(30,700
|
)
|
|
—
|
|
|
—
|
|
—
|
|
|
(30,700
|
)
|
|
(31,900
|
)
|
|
(4,900
|
)
|
|
—
|
|
—
|
|
AT adjustment(14) |
|
47,900
|
|
|
31,900
|
|
|
30,700
|
|
|
35,600
|
|
|
30,700
|
|
|
—
|
|
|
—
|
|
—
|
|
|
30,700
|
|
|
31,900
|
|
|
4,900
|
|
|
—
|
|
—
|
|
Net Adjustments
|
|
11,000
|
|
|
4,200
|
|
|
8,600
|
|
|
10,100
|
|
|
6,800
|
|
|
800
|
|
|
—
|
|
400
|
|
|
8,000
|
|
|
4,000
|
|
|
2,100
|
|
|
2,300
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Adds (Reductions)
|
|
93,000
|
|
|
128,200
|
|
|
13,600
|
|
|
232,200
|
|
|
(187,500
|
)
|
|
141,900
|
|
|
43,400
|
|
(1,900
|
)
|
|
(4,100
|
)
|
|
127,700
|
|
|
114,600
|
|
|
130,600
|
|
121,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes for Operating Data and Subscriber Variance Tables
|
|
|
|
(1)
|
|
Homes Passed are homes, residential multiple dwelling units or
commercial units that can be connected to our networks without
materially extending the distribution plant, except for
direct-to-home (“DTH”) and Multi-channel Multipoint (“microwave”)
Distribution System (“MMDS”) homes. Our Homes Passed counts are
based on census data that can change based on either revisions to
the data or from new census results. We do not count homes passed
for DTH. With respect to MMDS, one MMDS customer is equal to one
Home Passed. Due to the fact that we do not own the partner networks
(defined below) used in Switzerland and the Netherlands (see note
13) or the unbundled loop and shared access network used by one of
our Austrian subsidiaries, UPC Austria GmbH (“Austria GmbH”), we do
not report homes passed for Switzerland’s and the Netherlands’
partner networks or the unbundled loop and shared access network
used by Austria GmbH.
|
(2)
|
|
Two-way Homes Passed are Homes Passed by those sections of our
networks that are technologically capable of providing two-way
services, including video, internet and telephony services. Due to
the fact that we do not own the partner networks used in Switzerland
and the Netherlands or the unbundled loop and shared access network
used by Austria GmbH, we do not report two-way homes passed for
Switzerland’s or the Netherlands’ partner networks or the unbundled
loop and shared access network used by Austria GmbH.
|
(3)
|
|
Customer Relationships are the number of customers who receive at
least one of our video, internet or telephony services that we count
as Revenue Generating Units (“RGUs”), without regard to which or to
how many services they subscribe. To the extent that RGU counts
include equivalent billing unit (“EBU”) adjustments, we reflect
corresponding adjustments to our Customer Relationship counts. For
further information regarding our EBU calculation, see Additional
General Notes to Tables below. Customer Relationships generally are
counted on a unique premises basis. Accordingly, if an individual
receives our services in two premises (e.g., a primary home and a
vacation home), that individual generally will count as two Customer
Relationships. We exclude mobile customers from Customer
Relationships.
|
(4)
|
|
Revenue Generating Unit is separately an Analog Cable Subscriber,
Digital Cable Subscriber, DTH Subscriber, MMDS Subscriber, Internet
Subscriber or Telephony Subscriber. A home, residential multiple
dwelling unit, or commercial unit may contain one or more RGUs. For
example, if a residential customer in our Austrian system subscribed
to our digital cable service, telephony service and broadband
internet service, the customer would constitute three RGUs. Total
RGUs is the sum of Analog Cable, Digital Cable, DTH, MMDS, Internet
and Telephony Subscribers. RGUs generally are counted on a unique
premises basis such that a given premises does not count as more
than one RGU for any given service. On the other hand, if an
individual receives one of our services in two premises (e.g. a
primary home and a vacation home), that individual will count as two
RGUs for that service. Each bundled cable, internet or telephony
service is counted as a separate RGU regardless of the nature of any
bundling discount or promotion. Non-paying subscribers are counted
as subscribers during their free promotional service period. Some of
these subscribers may choose to disconnect after their free service
period. Services offered without charge on a long-term basis (e.g.,
VIP subscribers, free service to employees) generally are not
counted as RGUs. We do not include subscriptions to mobile services
in our externally reported RGU counts. In this regard, our December
31, 2012 RGU counts exclude 34,500, 3,500 and 2,800 postpaid
subscriber identification module (“SIM”) cards in service in Poland,
the Netherlands and Hungary, respectively.
|
(5)
|
|
Analog Cable Subscriber is a home, residential multiple dwelling
unit or commercial unit that receives our analog cable service over
our broadband network. The Analog Cable Subscriber count reported
for Switzerland also include subscribers who may use a purchased
set-top box or other non-verifiable means to receive our basic
digital cable channels without subscribing to any services that
would require the payment of recurring monthly fees in addition to
the basic analog service fee (“Basic Digital Cable Subscriber”). In
Europe, we have approximately 400,500 “lifeline” customers that are
counted on a per connection basis, representing the least expensive
regulated tier of video cable service, with only a few channels.
|
(6)
|
|
Digital Cable Subscriber is a home, residential multiple dwelling
unit or commercial unit that receives our digital cable service over
our broadband network or through a partner network. We count a
subscriber with one or more digital converter boxes that receives
our digital cable service in one premises as just one subscriber. A
Digital Cable Subscriber is not counted as an Analog Cable
Subscriber. As we migrate customers from analog to digital cable
services, we report a decrease in our Analog Cable Subscribers equal
to the increase in our Digital Cable Subscribers. As discussed in
further detail in note 5 above, Basic Digital Cable Subscribers are
not included in the respective Digital Cable Subscriber count
reported for Switzerland. Subscribers to digital cable services
provided by our operations in Switzerland and the Netherlands over
partner networks receive analog cable services from the partner
networks as opposed to our operations.
|
(7)
|
|
DTH Subscriber is a home, residential multiple dwelling unit or
commercial unit that receives our video programming broadcast
directly via a geosynchronous satellite.
|
(8)
|
|
MMDS Subscriber is a home, residential multiple dwelling unit or
commercial unit that receives our video programming via MMDS.
|
(9)
|
|
Internet Homes Serviceable are Two-way Homes Passed that can be
connected to our network, or a partner network with which we have a
service agreement, for the provision of broadband internet services
if requested by the customer, building owner or housing association,
as applicable. With respect to Austria GmbH, we do not report as
Internet Homes Serviceable those homes served either over an
unbundled loop or over a shared access network.
|
(10)
|
|
Internet Subscriber is a home, residential multiple dwelling unit or
commercial unit that receives internet services over our networks,
or that we service through a partner network. Our Internet
Subscribers in Austria include 73,000 digital subscriber line
(“DSL”) subscribers of Austria GmbH that are not serviced over our
networks. Our Internet Subscribers do not include customers that
receive services from dial-up connections.
|
(11)
|
|
Telephony Homes Serviceable are Two-way Homes Passed that can be
connected to our network, or a partner network with which we have a
service agreement, for the provision of telephony services if
requested by the customer, building owner or housing association, as
applicable. With respect to Austria GmbH, we do not report as
Telephony Homes Serviceable those homes served over an unbundled
loop rather than our network.
|
(12)
|
|
Telephony Subscriber is a home, residential multiple dwelling unit
or commercial unit that receives voice services over our networks,
or that we service through a partner network. Telephony Subscribers
exclude mobile telephony subscribers. Our Telephony Subscribers in
Austria include 59,000 subscribers of Austria GmbH that are not
serviced over our networks.
|
(13)
|
|
Pursuant to service agreements, Switzerland and, to a much lesser
extent, the Netherlands offer digital cable, broadband internet and
telephony services over networks owned by third-party cable
operators (“partner networks”). A partner network RGU is only
recognized if there is a direct billing relationship with the
customer. Homes Serviceable for partner networks represent the
estimated number of homes that are technologically capable of
receiving the applicable service within the geographic regions
covered by the applicable service agreements. Internet and Telephony
Homes Serviceable with respect to partner networks have been
estimated by our Switzerland operations. These estimates may change
in future periods as more accurate information becomes available. At
December 31, 2012, Switzerland’s partner networks account for
125,500 Customer Relationships, 236,500 RGUs, 91,900 Digital Cable
Subscribers, 466,600 Internet and Telephony Homes Serviceable,
83,500 Internet Subscribers, and 61,100 Telephony Subscribers. In
addition, partner networks account for 454,100 of Switzerland’s
digital cable homes serviceable that are not included in Homes
Passed or Two-way Homes Passed in our December 31, 2012 subscriber
table.
|
(14)
|
|
During the fourth quarter of 2012, the management responsibility for
certain of our operations in Switzerland was transferred to our
Austrian operations resulting in a non-organic adjustment to record
the transfer between these two operating segments.
|
|
|
|
Additional General Notes to Tables:
All of our subsidiaries provide telephony, broadband internet, data,
video or other business-to-business (“B2B”) services. Certain of our B2B
revenue is derived from small or home office (“SOHO”) subscribers that
pay a premium price to receive enhanced service levels along with video,
internet or telephony services that are the same or similar to the mass
marketed products offered to our residential subscribers. Effective
January 1, 2012, we recorded non-organic adjustments to begin including
the SOHO subscribers of UPC Europe in our RGU and customer counts. As a
result, all mass marketed products provided to SOHOs, whether or not
accompanied by enhanced service levels and/or premium prices, are now
included in the respective RGU and customer counts of our broadband
communications operations, with only those services provided at premium
prices considered to be “SOHO RGUs” or “SOHO customers.” With the
exception of our B2B SOHO subscribers, we generally do not count
customers of B2B services as customers or RGUs for external reporting
purposes.
Certain of our residential and commercial RGUs are counted on an EBU
basis, including residential multiple dwelling units and commercial
establishments, such as bars, hotels and hospitals, in Chile and certain
commercial establishments in Europe. Our EBUs are generally calculated
by dividing the bulk price charged to accounts in an area by the most
prevalent price charged to non-bulk residential customers in that market
for the comparable tier of service. As such, we may experience variances
in our EBU counts solely as a result of changes in rates.
While we take appropriate steps to ensure that subscriber statistics are
presented on a consistent and accurate basis at any given balance sheet
date, the variability from country to country in (i) the nature and
pricing of products and services, (ii) the distribution platform, (iii)
billing systems, (iv) bad debt collection experience and (v) other
factors add complexity to the subscriber counting process. We
periodically review our subscriber counting policies and underlying
systems to improve the accuracy and consistency of the data reported on
a prospective basis. Accordingly, we may from time to time make
appropriate adjustments to our subscriber statistics based on those
reviews.
Subscriber information for acquired entities is preliminary and subject
to adjustment until we have completed our review of such information and
determined that it is presented in accordance with our policies.