Liberty Global, Inc. (“Liberty Global,” “LGI,” or the “Company”)
(NASDAQ: LBTYA, LBTYB and LBTYK), today announces financial and
operating results for the first quarter ended March 31, 2013 (“Q1
2013”). Highlights for Q1 2013 as compared to the same period for 2012
(“Q1 2012”) (unless noted) include:
-
Total RGUs1 of 35.2 million, including organic RGU
additions of 373,000 during Q1 2013
-
Revenue of $2.8 billion, representing rebased2 growth of 6%
-
Operating Cash Flow (“OCF”)3 of $1.3 billion, reflecting
rebased growth of 4%
-
Operating income of $525 million, an increase of 6%
Liberty Global’s President and CEO Mike Fries commented, “Our track
record of strong operating and financial performance from 2012 continued
into the first quarter of 2013. We delivered mid-single-digit rebased
revenue and OCF growth of 6% and 4%, respectively, with both results
comparing favorably to the prior year period. Fueled by the addition of
1.5 million RGUs and over 500,000 mobile subscriptions over the last
twelve months, we posted our fifth consecutive quarter with rebased
revenue growth of better than 5%, led by Belgium and Germany.”
“Innovation remains a core focus this year as we continue to invest in
the development of new product offerings. We launched our Horizon TV
platform in Switzerland in Q1, with Ireland and Germany to follow later
this year. Through April, we had over 200,000 Horizon TV subscribers in
the Netherlands and Switzerland. In addition, we have significantly
increased our broadband speeds in markets like the Netherlands, where we
have key bundles positioned with 100 Mbps and a top-tier bundle at 200
Mbps.”
“We remain on track to complete the acquisition of Virgin Media4
before the end of the second quarter. We recently received regulatory
approval from the European Commission and both companies have scheduled
their respective shareholder votes for early June to approve the
transaction. With a combined customer base of 25 million and an
aggregate reach of over 45 million homes passed, we are excited about
our collective growth potential and we will remain focused on delivering
superior value to customers and shareholders.”
“Year-to-date, we have been active in the capital markets, raising the
necessary financing to fund the Virgin Media acquisition, as well as
opportunistically refinancing roughly $5 billion of debt at the UPC
Holding and Unitymedia KabelBW credit pools. Upon completion of the
Virgin Media transaction, we expect to have more than sufficient
liquidity to fulfill our $3.5 billion share buyback target over the
ensuing two years.”
Subscriber Statistics
At March 31, 2013, our 19.7 million unique customers received 35.2
million total services, an increase of over 5% (inclusive of
acquisitions) in our RGU base since March 31, 2012. On a product level,
our RGU base consisted of 18.2 million video, 9.5 million broadband
internet and 7.5 million telephony subscriptions at quarter-end.
Bundling remains an important driver of our subscriber growth,
particularly sales of our triple-play product offerings, as over 30% of
our customer base, or approximately 6.2 million customers, subscribed to
triple-play packages at March 31, 2013. In total, we finished the first
quarter with aggregate bundled customers of 9.3 million (or 47% of our
total customer base), which reflects an increase of over 920,000
(inclusive of acquisitions) over the last twelve months.
During Q1 2013, we added 373,000 RGUs as compared to 445,000 RGUs in Q1
2012. Geographically, our RGU additions in Central and Eastern Europe
(“CEE”) grew year-over-year by 30% to 70,000 and Latin America5
increased by 88% to 63,000, while western Europe6 experienced
a decline of 33% to 240,000. The lower comparative western European
result was directly attributable to our German and Dutch businesses, as
each had their best quarterly subscriber performance of 2012 in the
first quarter. With respect to Germany, we added 169,000 RGUs during Q1
2013 as compared to the record 219,000 we achieved in Q1 2012. A portion
of this lower result is due to a housing association contract that we
lost in Germany in December 2011, as approximately 16,000 of the
impacted RGUs were transferred to the new provider during the quarter.
With respect to our Dutch operation, we lost 3,000 RGUs in Q1 2013, as
compared to a gain of 42,000 in Q1 2012. However, this result is
consistent with our Dutch subscriber performance in both the third and
fourth quarters of 2012, as the Dutch market remains very competitive.
To that point and subsequent to quarter-end, we further strengthened our
customer proposition in the Netherlands, as we introduced basic digital
unencryption and launched new triple-play bundles that include increased
broadband speeds with our primary bundle offering 100 Mbps along with
the introduction of a 200 Mbps internet product in certain areas.
In terms of broadband internet, we added 233,000 RGUs during the quarter
with key contributions from our German, Swiss, Belgian and Chilean
operations. In particular, our 22,000 Swiss broadband internet additions
in Q1 2013 resulted partly from the market-leading speeds included in
our recently launched Horizon bundles. From a voice perspective, we
added 231,000 telephony subscribers in Q1 2013, largely mirroring our
broadband growth, as we upsell our single- and double-play customer base
to triple-play services.
From a video standpoint, we lost 92,000 video subscribers during the
quarter, broadly in line with the corresponding prior year period. Our
Chilean, CEE and Belgian operations all improved their year-over-year
video subscriber performance. A key development that has taken shape
over the last six months is that we have introduced basic digital
unencryption to promote the digitalization process and enhance our
competitive position in a number of markets, including Switzerland, the
Netherlands (as noted earlier), Austria, Romania, Czech Republic and in
Germany’s Unitymedia footprint. By unencrypting the digital signal, we
are providing our customers with incremental value and an easy
introduction to our basic digital video services.
We continue to promote Horizon TV in the Dutch market and we launched
this platform in January 2013 in Switzerland. Currently we have over
200,000 Horizon TV subscribers with more than 145,000 in the Netherlands
and over 55,000 in Switzerland. In addition, we launched our unique
Horizon Online platform with 45 channels in Ireland in mid-April and
have plans to launch the full Horizon TV platform this summer in the
Irish market, followed by Germany later in the year.
Revenue
For the three months ended March 31, 2013, our consolidated revenue
increased 9% or $231 million to $2.77 billion, as compared to $2.54
billion in the prior year period. Our organic growth, led by volume
growth in broadband internet and mobile, fueled the majority of our
year-over-year top-line expansion. In addition, we also benefitted from
the positive contribution of acquisitions, principally OneLink in Puerto
Rico, and to a lesser extent, foreign exchange (“FX”) movements.
Adjusting for both the impact of acquisitions and FX, we achieved
year-over-year rebased revenue growth of 6% in Q1 2013, our best first
quarter result in six years.
Our western European operations, which accounted for over 70% of our
consolidated revenue in the quarter, achieved year-over-year rebased
growth of 7%. This strong performance resulted largely from our Belgian
and German operations, which delivered rebased growth of 12% and 10%,
respectively. Our German result was particularly impressive given the
fact that in the first quarter of 2013 we did not recognize revenue
associated with public broadcaster carriage fees, which had contributed
approximately $8 million of revenue in Q1 2012.
Furthermore, within western Europe, our businesses in Ireland and
Switzerland generated rebased revenue growth of 9% and 5%, respectively,
as each benefitted from more than 100,000 advanced service RGU additions7
during the last twelve months. Our Swiss operation continued to
demonstrate strong quarterly top-line growth, supported not only by
volume growth but also by a video price increase in the quarter. Turning
to CEE, our cable business in this region, which represents
approximately 10% of our consolidated revenue, posted 1% rebased revenue
growth for the three months ended March 31, 2013. Finally, moving beyond
Europe, our Chilean business, aided by the positive contribution from
mobile services, delivered 8% rebased revenue growth in Q1 2013.
Operating Cash Flow
As compared to the corresponding prior year period, total OCF increased
6% to $1.27 billion for the three months ended March 31, 2013. Our
reported increase in OCF was largely due to continued organic growth,
while acquisitions and FX movements played a smaller role. After
adjusting for both acquisitions and FX, our year-over-year rebased OCF
growth was 4%, with our Chilean, western European and CEE operations
reporting rebased OCF growth of 10%, 6% and 1%, respectively.
Our strong performance in western Europe was led by our operations in
Ireland and Germany, which reported rebased OCF growth of 12% and 11%,
respectively. With respect to our German business, it was our third
consecutive quarter of double-digit rebased OCF growth, as we continue
to generate strong revenue growth and streamline our cost structure in
the region. In addition to our Irish and German businesses, our Belgian
and Swiss operations generated rebased OCF growth of 4% in the quarter,
while our Dutch operation reported flat rebased results, due largely to
increased competition over the last three quarters. Within Europe, we
also realized a $9 million year-over-year increase in costs in our
central and other category resulting in part from our centralization and
procurement initiatives.
Our consolidated OCF margin8 for Q1 2013 was 45.9%, as
compared to 47.1% for the corresponding prior year period. This 120
basis point decline was attributable in part to our Belgian operation,
which experienced a 320 basis point decrease in year-over-year OCF
margin to 46.2% in Q1 2013. This decrease was a result of higher handset
and other subscriber acquisition costs associated with the rapid
expansion of Telenet’s mobile business. Excluding our Belgian operation,
our remaining European distribution businesses posted a collective OCF
margin of 51.4%, which was lower year-over-year by 30 basis points, as
both our Western European and CEE operations achieved relatively flat
year-over-year OCF margins of 56.1% and 48.9%, respectively.
Operating Income
For the three months ended March 31, 2013, our reported operating income
increased by 6% to $525 million as compared to $494 million for the
three months ended March 31, 2012. The year-over-year improvement was
driven by our 9% increase in revenue and lower selling, general and
administrative expenses and depreciation and amortization, each of which
are measured as a percentage of revenue. These factors were partially
offset by higher operating expenses measured as a percentage of revenue
and increased expenses relating to impairment, restructuring and other
operating items.
Net Loss Attributable to LGI Stockholders
We reported a net loss attributable to LGI stockholders (“Net Loss”) of
$1 million or nil per basic and diluted share for the three months ended
March 31, 2013. This compares favorably to a Net Loss of $25 million or
$0.09 per basic and diluted share for the same period last year. The
year-over-year improvement in our Net Loss resulted from, among other
factors, positive changes in the fair value adjustments associated with
our derivative instruments and increased operating income, partially
offset by increased losses from foreign currency transactions and debt
modification and extinguishment, as well as higher interest expense.
For the three months ended March 31, 2013 and 2012, our basic and
diluted per share calculations utilized weighted average common shares
of 257 million and 273 million, respectively. At April 30, 2013, we had
257 million shares outstanding. During the first quarter of 2013, we
repurchased $169 million of our equity.
Property and Equipment Additions, Capital Expenditures and Free Cash
Flow
Measured as a percentage of revenue, our property and equipment additions9
and capital expenditures10 declined for the three months
ended March 31, 2013, as compared to the prior year period. We reported
property and equipment additions of $536 million, which represented 19%
of revenue for Q1 2013, as compared to $507 million or 20% of revenue
for the corresponding prior year period. Our aggregate spend in the
quarter was slightly weighted towards customer premises equipment, which
accounted for 45% of our property and equipment additions as compared to
41% in Q1 2012. This was due in part to spend attributable to our
Horizon TV roll-outs in the Netherlands and Switzerland.
We remain focused on optimizing working capital and improving our
capital efficiency. To that point, we continue to increase our use of
non-cash vendor financing and capital lease arrangements, which were $57
million higher in Q1 2013 as compared to Q1 2012. These arrangements
contributed to a reduction in our capital expenditures in Q1 2013, as we
reported capital expenditures of $504 million or 18% of revenue,
compared to $521 million or 21% of revenue for the corresponding prior
year period.
For the three months ended March 31, 2013, we reported Free Cash Flow
(“FCF”) of $23 million and Adjusted Free Cash Flow (“Adjusted FCF”),11
which excludes costs associated with our Chilean wireless project, of
$68 million. This compares to FCF and Adjusted FCF of $242 million and
$279 million, respectively, for the three months ended March 31, 2012.
The lower FCF and Adjusted FCF in Q1 2013, as compared to the
corresponding prior year period, was primarily attributable to a
decrease of approximately $200 million or 26% in cash provided by the
operating activities of our continuing operations, even though our OCF
was higher by $74 million. The decrease was due primarily to the
expected reversal of favorable working capital movements during the
fourth quarter of 2012 and, to a lesser extent, higher cash outflow in
the quarter relating to cash paid for interest expense. Vendor financing
and capital lease arrangements provided a $22 million net benefit to the
year-over-year comparison of our FCF and Adjusted FCF. In this regard,
the positive impacts of vendor financing and capital lease arrangements
on capital expenditures, as noted above, more than offset a $35 million
increase in cash payments on the vendor financing and capital lease
obligations that we had entered into last year.
Leverage and Liquidity
At March 31, 2013, we had total debt12 of $30.7 billion,
including $3.6 billion relating to senior secured and senior notes
(collectively, the “Lynx Bonds”) that were issued in February 2013 by
certain of our subsidiaries in connection with the announced Virgin
Media acquisition. We intend to push down the Lynx Bonds to the Virgin
Media level upon completion of the acquisition. Excluding the impact of
the Lynx Bonds, our aggregate debt was down $0.4 billion as compared to
our debt at December 31, 2012, resulting primarily from the translation
impact associated with a strengthening U.S. dollar.
Year-to-date, we have completed a number of opportunistic financing
transactions at Unitymedia KabelBW and UPC Holding, our two primary
credit pools. As a result of these transactions, we have refinanced
total debt of approximately $5 billion at these two credit pools and in
April, we raised incremental debt of approximately $450 million at
Unitymedia KabelBW. Collectively, these transactions further extended
our maturity schedule and lowered our consolidated borrowing rate. As of
March 31, 2013 and adjusting for the aforementioned transactions that
occurred subsequent to Q1, we estimate that approximately 90% of our
total debt is due in 2017 and beyond, and that our fully-swapped
borrowing cost13 is approximately 6.9%.
In addition, we have made an opportunistic and strategic investment in
publicly-traded Ziggo N.V. (“Ziggo”), the largest cable operator in the
Netherlands. We have purchased 36.4 million shares of Ziggo for
approximately €926 million ($1,187 million) and as a result, we own
approximately 18.2% of the company based on shares outstanding at March
31, 2013. Of the shares purchased, we bought 25.3 million shares in
March 2013 (which were settled in April 2013), and the remaining 11.1
million shares were purchased near the end of April. We intend to fund a
significant portion of the aggregate investment through a limited
recourse margin loan.
In terms of our consolidated liquidity,14 we had reported
cash and cash equivalents of $2.9 billion, including $1.6 billion at the
parent level,15 at March 31, 2013. Including $2.2 billion in
aggregate borrowing capacity, as represented by the maximum undrawn
commitments under each of our credit facilities,16 we had
consolidated liquidity of approximately $5.1 billion at March 31, 2013.
This liquidity amount excludes $3.5 billion of cash attributable to the
net proceeds from the Lynx Bonds that is held as restricted cash on our
balance sheet.
We ended Q1 2013 with reported gross and net leverage ratios17
of 6.0x and 4.8x, respectively. After excluding the $1.0 billion loan
that is backed by the shares we hold in Sumitomo Corporation and the
$3.6 billion of Lynx Bonds and related net proceeds in escrow accounts,
our adjusted gross and net leverage ratios decline to 5.1x and 4.6x.
These adjusted ratios are down modestly from our ratios at December 31,
2012.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including our expectations with respect to our operating momentum and
2013 prospects, including our expectations for continued organic growth
in subscribers, the penetration of our advanced services, and our ARPU
per customer; our assessment of the strength of our balance sheet, our
liquidity and access to capital markets, including our borrowing
availability, potential uses of our excess capital, including for
acquisitions and continued stock buybacks, our ability to continue to do
opportunistic refinancings and debt maturity extensions and the adequacy
of our currency and interest rate hedges; our expectations with respect
to the timing and impact of our expanded roll-out of advanced products
and services, including Horizon TV; our assessment of the impacts of the
unencryption of our basic digital channels; our insight and expectations
regarding competitive and economic factors in our markets, statements
regarding the acquisition of Virgin Media, including the anticipated
consequences and benefits of the acquisition and the targeted quarter in
which we expect to close the transaction, the availability of accretive
M&A opportunities and 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 the Company's services and 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, law and regulation, our ability to obtain regulatory
approval and satisfy the conditions necessary to close acquisitions and
dispositions, 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 percentage of revenue, achieve assumed margins and control
the phasing of our FCF, our ability to access cash of our subsidiaries
and the impact of our future financial performance and market conditions
generally, on the availability, terms and deployment of capital,
fluctuations in currency exchange and interest rates, the continued
creditworthiness of our counterparties, the ability of vendors and
suppliers to timely meet delivery requirements, as well as other factors
detailed from time to time in the Company's filings with the Securities
and Exchange Commission including our most recently filed Forms 10-K/A
and 10-Q. These forward-looking statements speak only as of the date of
this release. The Company expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in the
Company's expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.
About Liberty Global
Liberty Global is the leading international cable company, with
operations in 13 countries. We connect people to the digital world and
enable them to discover and experience its endless possibilities. Our
market-leading triple-play services are provided through next-generation
networks and innovative technology platforms that connect 20 million
customers subscribing to 35 million television, broadband internet and
telephony services as of March 31, 2013.
Liberty Global’s consumer brands include UPC, Unitymedia, KabelBW,
Telenet and VTR. Our operations also include Chellomedia, our content
division, Liberty Global Business Services, our commercial division and
Liberty Global Ventures, our investment fund. For more information,
please visit www.lgi.com.
_______________________________________
1 |
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Please see page 19 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.
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2 |
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For purposes of calculating rebased growth rates on a comparable
basis for all businesses that we owned during 2012 and 2013, we have
adjusted our historical revenue and OCF for the three months ended
March 31, 2012 to (i) include the pre-acquisition revenue and OCF of
certain entities acquired during 2012 and 2013 in the respective
2012 rebased amounts to the same extent that the revenue and OCF of
such entities are included in our 2013 results and (ii) reflect the
translation of our rebased amounts for the 2012 period at the
applicable average exchange rates that were used to translate our
2013 results. Please see page 11 for supplemental information.
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3 |
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Please see page 13 for our operating cash flow definition and the
required reconciliation.
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4 |
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On February 5, 2013, Liberty Global and Virgin Media Inc. (“Virgin
Media”) (NASDAQ: VMED; LSE: VMED) announced that they have entered
into an agreement, subject to shareholder and regulatory approvals,
pursuant to which Liberty Global will acquire Virgin Media in a
stock and cash merger. Under the terms of the agreement, Virgin
Media shareholders will receive $17.50 in cash, 0.2582 Liberty
Global Series A shares and 0.1928 Liberty Global Series C shares for
each Virgin Media share that they hold. Please see our press release
dated February 5, 2013 for further details.
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5 |
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Latin America includes both our broadband communications operations
in Chile and Puerto Rico.
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6 |
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References to western Europe include our operations in Germany, the
Netherlands, Switzerland, Austria and Ireland, as well as in
Belgium. References to our Western Europe reporting segment include
the aforementioned countries, with the exception of Belgium.
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7 |
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Advanced service RGUs represent our services related to digital
video, including digital cable and direct-to-home satellite,
broadband internet and telephony.
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8 |
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OCF margin is calculated by dividing OCF by total revenue for the
applicable period.
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9 |
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Our property and equipment additions include our capital
expenditures on an accrual basis and amounts financed under vendor
financing or capital lease arrangements.
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10 |
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Capital expenditures refer to capital expenditures on a cash basis,
as reported in our condensed consolidated statements of cash flows.
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11 |
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Free Cash Flow is defined as net cash provided by our operating
activities, plus (i) excess tax benefits related to the exercise of
stock incentive awards and (ii) cash payments for direct acquisition
costs, less (a) capital expenditures, as reported in our
consolidated cash flow statements, (b) principal payments on vendor
financing obligations and (c) principal payments on capital leases
(exclusive of the portions of the network lease in Belgium and the
duct leases in Germany that we assumed in connection with certain
acquisitions), with each item excluding any cash provided or used by
our discontinued operation. We also present Adjusted FCF, which
adjusts FCF to eliminate the incremental FCF deficit associated with
the VTR Wireless mobile initiative. Please see page 15 for more
information on FCF and Adjusted FCF and the required reconciliations.
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12 |
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Total debt includes capital lease obligations.
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13 |
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Our fully-swapped debt borrowing cost represents the weighted
average interest rate on our aggregate variable and fixed rate
indebtedness (excluding capital lease obligations), including the
effects of derivative instruments, original issue premiums or
discounts and commitment fees, but excluding the impact of financing
costs.
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14 |
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Liquidity refers to our consolidated cash and cash equivalents plus
our aggregate unused borrowing capacity, as represented by the
maximum undrawn commitments under our subsidiaries’ applicable
facilities without regard to covenant compliance calculations,
excluding $740 million attributable to our Binan Facility.
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15 |
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Refers to cash at the parent and non-operating subsidiaries.
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16 |
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The $2.2 billion amount reflects the aggregate unused borrowing
capacity, as represented by the maximum undrawn commitments under
our subsidiaries’ applicable facilities without regard to covenant
compliance calculations, excluding $740 million attributable to our
Binan Facility. Upon completion of Q1 2013 compliance reporting, we
would expect to be able to borrow approximately $1.4 billion of this
aggregate borrowing capacity.
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17 |
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Our gross and net debt ratios are defined as total debt and net debt
to annualized OCF of the latest quarter. Net debt is defined as
total debt less cash and cash equivalents and $3.5 billion of
restricted cash in segregated escrow accounts related to the pending
Virgin Media acquisition. For our adjusted ratios, the debt amount
excludes the loan that is backed by the shares we hold in Sumitomo
Corporation and the Lynx Bonds while the cash excludes the net
proceeds from the Lynx Bonds that are held in escrow accounts.
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Liberty Global, Inc. Condensed Consolidated Balance
Sheets (unaudited)
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March 31, 2013
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December 31, 2012
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ASSETS
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in millions
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Current assets:
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Cash and cash equivalents
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$
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2,906.8
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$
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2,038.9
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Trade receivables, net
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|
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893.4
|
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|
1,031.0
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Deferred income taxes
|
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|
78.0
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98.4
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Other current assets
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651.2
|
|
|
557.5
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Total current assets
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|
4,529.4
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|
3,725.8
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Restricted cash
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|
3,556.4
|
|
|
1,516.7
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Investments
|
|
|
1,807.1
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|
950.1
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Property and equipment, net
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|
13,018.5
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|
13,437.6
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Goodwill
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|
13,449.9
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|
13,877.6
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Intangible assets subject to amortization, net
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2,397.8
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|
2,581.3
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Other assets, net
|
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|
2,213.2
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|
|
2,218.6
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Total assets
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$
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40,972.3
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$
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38,307.7
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LIABILITIES AND EQUITY
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Current liabilities:
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Accounts payable
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$
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578.9
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$
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774.0
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Deferred revenue and advance payments from subscribers and others
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903.5
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849.7
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Current portion of debt and capital lease obligations
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1,065.8
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|
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363.5
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Derivative instruments
|
|
|
538.0
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|
|
569.9
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Accrued interest
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324.7
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|
351.8
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Accrued programming
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276.8
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251.0
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Other accrued and current liabilities
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2,232.0
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|
1,460.4
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Total current liabilities
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5,919.7
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|
4,620.3
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Long-term debt and capital lease obligations
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29,600.1
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27,161.0
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Other long-term liabilities
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|
3,883.8
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|
4,441.3
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Total liabilities
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|
39,403.6
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|
36,222.6
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Commitments and contingencies
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Equity:
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Total LGI stockholders
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1,597.5
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2,210.0
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Noncontrolling interests
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(28.8)
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(124.9)
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Total equity
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|
1,568.7
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|
|
2,085.1
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|
|
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Total liabilities and equity
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$
|
40,972.3
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|
$
|
38,307.7
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Liberty Global, Inc. Condensed Consolidated Statements of
Operations (unaudited)
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Three months ended March 31,
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2013
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2012
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in millions, except per share amounts
|
Revenue
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$
|
2,767.7
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|
$
|
2,537.0
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Operating costs and expenses:
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|
|
Operating (other than depreciation and amortization) (including
stock-based compensation)
|
|
|
1,027.0
|
|
|
|
897.7
|
|
Selling, general and administrative (including stock-based
compensation)
|
|
|
497.9
|
|
|
|
471.4
|
|
Depreciation and amortization
|
|
|
693.1
|
|
|
|
670.7
|
|
Impairment, restructuring and other operating items, net
|
|
|
24.3
|
|
|
|
2.9
|
|
|
|
|
2,242.3
|
|
|
|
2,042.7
|
|
Operating income
|
|
|
525.4
|
|
|
|
494.3
|
|
|
|
|
|
|
Non-operating income (expense):
|
|
|
|
|
Interest expense
|
|
|
(470.1
|
)
|
|
|
(418.1
|
)
|
Interest and dividend income
|
|
|
13.9
|
|
|
|
19.0
|
|
Realized and unrealized gains (losses) on derivative instruments, net
|
|
|
195.8
|
|
|
|
(614.1
|
)
|
Foreign currency transaction gains (losses), net
|
|
|
(134.9
|
)
|
|
|
479.0
|
|
Realized and unrealized gains due to changes in fair values of
certain investments, net
|
|
|
72.2
|
|
|
|
50.9
|
|
Losses on debt modification and extinguishment, net
|
|
|
(158.3
|
)
|
|
|
(6.8
|
)
|
Other expense, net
|
|
|
(1.6
|
)
|
|
|
(0.3
|
)
|
|
|
|
(483.0
|
)
|
|
|
(490.4
|
)
|
Earnings from continuing operations before income taxes
|
|
|
42.4
|
|
|
|
3.9
|
|
Income tax expense
|
|
|
(20.5
|
)
|
|
|
(33.1
|
)
|
Earnings (loss) from continuing operations
|
|
|
21.9
|
|
|
|
(29.2
|
)
|
Earnings from discontinued operation, net of taxes
|
|
|
—
|
|
|
|
38.1
|
|
Net earnings
|
|
|
21.9
|
|
|
|
8.9
|
|
Net earnings attributable to noncontrolling interests
|
|
|
(22.9
|
)
|
|
|
(34.0
|
)
|
Net loss attributable to LGI stockholders
|
|
$
|
(1.0
|
)
|
|
$
|
(25.1
|
)
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings (loss) attributable to LGI stockholders
per share:
|
|
|
|
|
Continuing operations
|
|
$
|
—
|
|
|
$
|
(0.17
|
)
|
Discontinued operation
|
|
|
—
|
|
|
|
0.08
|
|
|
|
$
|
—
|
|
|
$
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
|
Liberty Global, Inc. Condensed Consolidated Statements of
Cash Flows (unaudited)
|
|
|
|
|
Three months ended March 31,
|
|
|
2013
|
|
2012
|
Cash flows from operating activities:
|
|
in millions
|
Net earnings
|
|
$
|
21.9
|
|
|
$
|
8.9
|
|
Earnings from discontinued operation
|
|
|
—
|
|
|
|
(38.1
|
)
|
Earnings (loss) from continuing operations
|
|
|
21.9
|
|
|
|
(29.2
|
)
|
|
|
|
|
|
Adjustments to reconcile earnings (loss) from continuing
operations to net cash provided by operating activities
|
|
|
535.8
|
|
|
|
784.0
|
|
Net cash provided by operating activities of discontinued operation
|
|
|
—
|
|
|
|
51.0
|
|
Net cash provided by operating activities
|
|
|
557.7
|
|
|
|
805.8
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
Capital expenditures
|
|
|
(504.3
|
)
|
|
|
(521.3
|
)
|
Cash paid in connection with acquisitions, net of cash acquired
|
|
|
—
|
|
|
|
(32.3
|
)
|
Other investing activities, net
|
|
|
5.9
|
|
|
|
12.2
|
|
Net cash used by investing activities of discontinued operation
|
|
|
—
|
|
|
|
(53.0
|
)
|
Net cash used by investing activities
|
|
|
(498.4
|
)
|
|
|
(594.4
|
)
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
Decrease in restricted cash related to the LGI Telenet Tender
|
|
|
1,539.7
|
|
|
|
—
|
|
Borrowings of debt
|
|
|
1,103.9
|
|
|
|
1,054.6
|
|
Repayments and repurchases of debt and capital lease obligations
|
|
|
(1,019.9
|
)
|
|
|
(1,106.4
|
)
|
Shares acquired related to LGI Telenet Tender
|
|
|
(454.5
|
)
|
|
|
—
|
|
Repurchase of LGI common stock
|
|
|
(185.5
|
)
|
|
|
(230.5
|
)
|
Payment of financing costs and debt premiums
|
|
|
(181.7
|
)
|
|
|
(20.0
|
)
|
Payment of net settled employee withholding taxes on stock incentive
awards
|
|
|
(13.6
|
)
|
|
|
(6.6
|
)
|
Change in cash collateral
|
|
|
(0.2
|
)
|
|
|
64.0
|
|
Other financing activities, net
|
|
|
42.7
|
|
|
|
0.2
|
|
Net cash provided (used) by financing activities
|
|
|
830.9
|
|
|
|
(244.7
|
)
|
|
|
|
|
|
Effect of exchange rate changes on cash:
|
|
|
|
|
Continuing operations
|
|
|
(22.3
|
)
|
|
|
42.5
|
|
Discontinued operation
|
|
|
—
|
|
|
|
2.0
|
|
Total
|
|
|
(22.3
|
)
|
|
|
44.5
|
|
|
|
|
|
|
Net increase in cash and cash equivalents:
|
|
|
|
|
Continuing operations
|
|
|
867.9
|
|
|
|
11.2
|
|
Discontinued operation
|
|
|
—
|
|
|
|
—
|
|
Net increase in cash and cash equivalents
|
|
|
867.9
|
|
|
|
11.2
|
|
|
|
|
|
|
Cash and cash equivalents:
|
|
|
|
|
Beginning of period
|
|
|
2,038.9
|
|
|
|
1,651.2
|
|
End of period
|
|
$
|
2,906.8
|
|
|
$
|
1,662.4
|
|
|
|
|
|
|
Cash paid for interest:
|
|
|
|
|
Continuing operations
|
|
$
|
467.6
|
|
|
$
|
377.8
|
|
Discontinued operation
|
|
|
—
|
|
|
|
12.5
|
|
Total
|
|
$
|
467.6
|
|
|
$
|
390.3
|
|
Net cash paid (refunded) for taxes – continuing operations
|
|
$
|
20.5
|
|
|
$
|
(1.7
|
)
|
|
|
|
|
|
|
|
|
|
Revenue and Operating Cash Flow
In the following tables, we present revenue and operating cash flow by
reportable segment of our continuing operations for the three months
ended March 31, 2013, as compared to the corresponding prior year
period. All of our reportable segments derive their revenue primarily
from broadband communications services, including video, broadband
internet and telephony services. All of our reportable segments also
provide business-to-business services. At March 31, 2013, our operating
segments in the UPC/Unity Division provided broadband communications
services in 10 European countries and 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. The UPC/Unity Division’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 the UPC/Unity Division. Telenet provides video, broadband
internet and telephony services in Belgium. In Chile, the VTR Group
includes VTR, which provides video, broadband internet and telephony
services, and VTR Wireless, which provides mobile services through a
combination of its own wireless network and certain third-party wireless
access arrangements. Our corporate and other category includes (i) less
significant consolidated operating segments that provide (a) broadband
communications services in Puerto Rico and (b) programming and other
services primarily in Europe and Latin America and (ii) our corporate
category. Intersegment eliminations primarily represent the elimination
of intercompany transactions between our broadband communications and
programming operations, primarily in Europe.
For purposes of calculating rebased growth rates on a comparable basis
for all businesses that we owned during 2013, we have adjusted our
historical revenue and OCF for the three months ended March 31, 2012 to
(i) include the pre-acquisition revenue and OCF of certain entities
acquired during 2012 and 2013 in our rebased amounts for the three
months ended March 31, 2012 to the same extent that the revenue and OCF
of such entities are included in our results for the three months ended
March 31, 2013 and (ii) reflect the translation of our rebased amounts
for the three months ended March 31, 2012 at the applicable average
foreign currency exchange rates that were used to translate our results
for the three months ended March 31, 2013. 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 March 31, 2012
include OneLink and five small entities. We have reflected the revenue
and OCF of the acquired entities in our 2012 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.
In each case, the following tables present (i) the amounts reported by
each of our reportable segments for the comparative periods, (ii) the
U.S. dollar 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 March 31,
|
|
Increase (decrease)
|
|
Increase (decrease)
|
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|
Rebased %
|
|
|
in millions, except % amounts
|
UPC/Unity Division:
|
|
|
|
|
|
|
|
|
|
|
Germany
|
|
$
|
618.2
|
|
|
$
|
560.7
|
|
|
$
|
57.5
|
|
10.3
|
|
9.5
|
The Netherlands
|
|
|
314.8
|
|
|
|
310.7
|
|
|
|
4.1
|
|
1.3
|
|
0.5
|
Switzerland
|
|
|
326.0
|
|
|
|
313.3
|
|
|
|
12.7
|
|
4.1
|
|
5.0
|
Other Western Europe
|
|
|
222.6
|
|
|
|
211.9
|
|
|
|
10.7
|
|
5.0
|
|
4.5
|
Total Western Europe
|
|
|
1,481.6
|
|
|
|
1,396.6
|
|
|
|
85.0
|
|
6.1
|
|
5.8
|
Central and Eastern Europe
|
|
|
287.8
|
|
|
|
280.9
|
|
|
|
6.9
|
|
2.5
|
|
0.9
|
Central and other
|
|
|
32.0
|
|
|
|
28.2
|
|
|
|
3.8
|
|
13.5
|
|
*
|
Total UPC/Unity Division
|
|
|
1,801.4
|
|
|
|
1,705.7
|
|
|
|
95.7
|
|
5.6
|
|
5.1
|
Telenet (Belgium)
|
|
|
536.2
|
|
|
|
477.5
|
|
|
|
58.7
|
|
12.3
|
|
11.5
|
VTR Group (Chile)
|
|
|
250.4
|
|
|
|
224.5
|
|
|
|
25.9
|
|
11.5
|
|
7.7
|
Corporate and other
|
|
|
199.3
|
|
|
|
151.4
|
|
|
|
47.9
|
|
31.6
|
|
*
|
Intersegment eliminations
|
|
|
(19.6
|
)
|
|
|
(22.1
|
)
|
|
|
2.5
|
|
11.3
|
|
*
|
Total
|
|
$
|
2,767.7
|
|
|
$
|
2,537.0
|
|
|
$
|
230.7
|
|
9.1
|
|
5.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Cash Flow
|
|
Three months ended March 31,
|
|
Increase (decrease)
|
|
Increase (decrease)
|
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|
Rebased %
|
|
|
in millions, except % amounts
|
UPC/Unity Division:
|
|
|
|
|
|
|
|
|
|
|
|
Germany
|
|
$
|
360.0
|
|
|
$
|
323.0
|
|
|
$
|
37.0
|
|
|
11.5
|
|
|
10.8
|
The Netherlands
|
|
|
184.8
|
|
|
|
182.7
|
|
|
|
2.1
|
|
|
1.1
|
|
|
0.4
|
Switzerland
|
|
|
182.2
|
|
|
|
177.0
|
|
|
|
5.2
|
|
|
2.9
|
|
|
3.9
|
Other Western Europe
|
|
|
104.8
|
|
|
|
98.6
|
|
|
|
6.2
|
|
|
6.3
|
|
|
5.4
|
Total Western Europe
|
|
|
831.8
|
|
|
|
781.3
|
|
|
|
50.5
|
|
|
6.5
|
|
|
6.1
|
Central and Eastern Europe
|
|
|
140.6
|
|
|
|
137.6
|
|
|
|
3.0
|
|
|
2.2
|
|
|
0.6
|
Central and other
|
|
|
(45.6
|
)
|
|
|
(37.1
|
)
|
|
|
(8.5
|
)
|
|
(22.9
|
)
|
|
*
|
Total UPC/Unity Division
|
|
|
926.8
|
|
|
|
881.8
|
|
|
|
45.0
|
|
|
5.1
|
|
|
4.6
|
Telenet (Belgium)
|
|
|
247.5
|
|
|
|
235.8
|
|
|
|
11.7
|
|
|
5.0
|
|
|
4.3
|
VTR Group (Chile)
|
|
|
85.2
|
|
|
|
75.2
|
|
|
|
10.0
|
|
|
13.3
|
|
|
9.5
|
Corporate and other
|
|
|
10.1
|
|
|
|
2.8
|
|
|
|
7.3
|
|
|
N.M.
|
|
|
*
|
Total
|
|
$
|
1,269.6
|
|
|
$
|
1,195.6
|
|
|
$
|
74.0
|
|
|
6.2
|
|
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Total (excluding VTR Wireless)1
|
|
|
|
|
|
|
|
|
|
|
4.4
|
N.M. - Not Meaningful
* - Omitted
_______________________________________
1 |
|
Represents our consolidated rebased growth rate, excluding the
incremental OCF deficit of VTR Wireless.
|
|
|
|
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,
depreciation and amortization, provisions for litigation 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 March 31,
|
|
|
2013
|
|
2012
|
|
|
in millions
|
Total segment operating cash flow from continuing operations
|
|
$
|
1,269.6
|
|
|
$
|
1,195.6
|
|
Stock-based compensation expense
|
|
|
(26.8
|
)
|
|
|
(27.7
|
)
|
Depreciation and amortization
|
|
|
(693.1
|
)
|
|
|
(670.7
|
)
|
Impairment, restructuring and other operating items, net
|
|
|
(24.3
|
)
|
|
|
(2.9
|
)
|
Operating income
|
|
$
|
525.4
|
|
|
$
|
494.3
|
|
|
|
|
|
|
|
|
|
|
Summary of Debt, Capital Lease Obligations and Cash and Cash
Equivalents
The following table2 details the U.S. dollar equivalent
balances of our third-party consolidated debt, capital lease obligations
and cash and cash equivalents at March 31, 2013:
|
|
|
|
Capital
|
|
Debt and
|
|
Cash
|
|
|
|
|
Lease
|
|
Capital Lease
|
|
and Cash
|
|
|
Debt3
|
|
Obligations
|
|
Obligations
|
|
Equivalents
|
|
|
in millions
|
LGI and its non-operating subsidiaries
|
|
$
|
1,148.2
|
|
$
|
17.6
|
|
$
|
1,165.8
|
|
$
|
1,603.0
|
UPC Holding (excluding VTR Group)
|
|
|
12,524.4
|
|
|
31.1
|
|
|
12,555.5
|
|
|
50.1
|
Lynx I and II
|
|
|
3,580.5
|
|
|
—
|
|
|
3,580.5
|
|
|
—
|
Unitymedia KabelBW
|
|
|
6,752.1
|
|
|
904.2
|
|
|
7,656.3
|
|
|
33.9
|
Telenet
|
|
|
4,535.6
|
|
|
406.2
|
|
|
4,941.8
|
|
|
1,152.5
|
Liberty Puerto Rico
|
|
|
662.8
|
|
|
0.6
|
|
|
663.4
|
|
|
4.9
|
VTR Group4
|
|
|
101.8
|
|
|
0.5
|
|
|
102.3
|
|
|
33.9
|
Other operating subsidiaries
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
28.5
|
Total LGI
|
|
$
|
29,305.7
|
|
$
|
1,360.2
|
|
$
|
30,665.9
|
|
$
|
2,906.8
|
|
|
|
|
|
|
|
|
|
Restricted cash in segregated escrow accounts for the Virgin Media
acquisition
|
|
$
|
3,548.8
|
|
|
|
|
Property and Equipment Additions and Capital Expenditures
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 condensed consolidated
statements of cash flows:
|
|
Three months ended March 31,
|
|
|
2013
|
|
2012
|
|
|
in millions, except % amounts
|
Customer premises equipment
|
|
$
|
242.8
|
|
|
$
|
207.4
|
|
Scalable infrastructure
|
|
|
75.4
|
|
|
|
79.4
|
|
Line extensions
|
|
|
67.4
|
|
|
|
64.6
|
|
Upgrade/rebuild
|
|
|
74.8
|
|
|
|
84.6
|
|
Support capital
|
|
|
70.6
|
|
|
|
70.2
|
|
Other, including Chellomedia
|
|
|
4.8
|
|
|
|
1.2
|
|
Property and equipment additions
|
|
|
535.8
|
|
|
|
507.4
|
|
Assets acquired under capital-related vendor financing arrangements
|
|
|
(76.1
|
)
|
|
|
(24.7
|
)
|
Assets acquired under capital leases
|
|
|
(18.3
|
)
|
|
|
(12.7
|
)
|
Changes in current liabilities related to capital expenditures
|
|
|
62.9
|
|
|
|
51.3
|
|
Total capital expenditures5
|
|
$
|
504.3
|
|
|
$
|
521.3
|
|
|
|
|
|
|
Property and equipment additions as % of revenue
|
|
|
19.4
|
%
|
|
|
20.0
|
%
|
Capital expenditures as % of revenue
|
|
|
18.2
|
%
|
|
|
20.5
|
%
|
|
|
|
|
|
|
|
|
|
_______________________________________
2
|
|
Except as otherwise indicated, the amounts reported in the table
include the named entity and its subsidiaries.
|
3
|
|
Debt amounts for UPC Holding and Telenet include senior secured
notes issued by special purpose entities that are consolidated by
each.
|
4
|
|
Of these amounts, VTR Wireless accounts for $102 million of the debt
and $10 million of the cash of the VTR Group.
|
5
|
|
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 related principal is repaid.
|
|
|
|
Free Cash Flow and Adjusted Free Cash Flow Definition and
Reconciliation
We define free cash flow as net cash provided by our operating
activities, plus (i) excess tax benefits related to the exercise of
stock incentive awards and (ii) cash payments for direct acquisition
costs, less (a) capital expenditures, as reported in our consolidated
cash flow statements, (b) principal payments on vendor financing
obligations and (c) principal payments on capital leases (exclusive of
the portions of the network lease in Belgium and the duct leases in
Germany that we assumed in connection with certain acquisitions), with
each item excluding any cash provided or used by our discontinued
operation. We also present Adjusted FCF, which adjusts FCF to eliminate
the incremental FCF deficit associated with the VTR Wireless mobile
initiative. We believe that our presentation of free cash flow provides
useful information to our investors because this measure can be used to
gauge our ability to service debt and fund new investment opportunities.
Free cash flow should not be understood to represent our ability to fund
discretionary amounts, as we have various mandatory and contractual
obligations, including debt repayments, which are not deducted to arrive
at this amount. Investors should view free cash flow as a supplement to,
and not a substitute for, GAAP measures of liquidity included in our
consolidated cash flow statements. The following table provides the
reconciliation of our continuing operations’ net cash provided by
operating activities to FCF and Adjusted FCF for the indicated periods:
|
|
Three months ended March 31,
|
|
|
2013
|
|
2012
|
|
|
in millions
|
Net cash provided by operating activities of our continuing
operations
|
|
$
|
557.7
|
|
|
$
|
754.8
|
|
Excess tax benefits from stock-based compensation6
|
|
|
1.3
|
|
|
|
0.5
|
|
Cash payments for direct acquisition costs7
|
|
|
8.5
|
|
|
|
12.9
|
|
Capital expenditures
|
|
|
(504.3
|
)
|
|
|
(521.3
|
)
|
Principal payments on vendor financing obligations
|
|
|
(37.0
|
)
|
|
|
(2.0
|
)
|
Principal payments on certain capital leases
|
|
|
(3.1
|
)
|
|
|
(3.0
|
)
|
FCF
|
|
$
|
23.1
|
|
|
$
|
241.9
|
|
|
|
|
|
|
FCF
|
|
$
|
23.1
|
|
|
$
|
241.9
|
|
FCF deficit of VTR Wireless
|
|
|
44.4
|
|
|
|
37.4
|
|
Adjusted FCF
|
|
$
|
67.5
|
|
|
$
|
279.3
|
|
|
|
|
|
|
|
|
|
|
ARPU per Customer Relationship
The following table provides ARPU per customer relationship8
for the indicated periods:
|
|
Three months ended Mar. 31,
|
|
|
|
FX Neutral
|
|
|
2013
|
|
2012
|
|
% Change
|
|
% Change9
|
UPC/Unity Division
|
|
€
|
24.96
|
|
€
|
23.76
|
|
5.1
|
%
|
|
5.3
|
%
|
Telenet
|
|
€
|
47.40
|
|
€
|
45.42
|
|
4.4
|
%
|
|
4.4
|
%
|
VTR
|
|
CLP
|
30,721
|
|
CLP
|
30,613
|
|
0.4
|
%
|
|
0.4
|
%
|
LGI Consolidated
|
|
$
|
38.68
|
|
$
|
36.36
|
|
6.4
|
%
|
|
5.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________________________________
6 |
|
Excess tax benefits from stock-based compensation represent the
excess of tax deductions over the related financial reporting
stock-based compensation expense. The hypothetical cash flows
associated with these excess tax benefits are reported as an
increase to cash flows from financing activities and a corresponding
decrease to cash flows from operating activities in our consolidated
cash flow statements.
|
7 |
|
Represents costs paid during the period to third parties directly
related to acquisitions.
|
8
|
|
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 services 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 the UPC/Unity Division and LGI Consolidated are
not adjusted for currency impacts.
|
9 |
|
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.
|
|
|
|
RGUs, Customers and Bundling
The following table provides information on the breakdown of our RGUs
and customer base and highlights our customer bundling metrics at March
31, 2013, December 31, 2012 and March 31, 2012:
|
|
March 31, 2013
|
|
December 31, 2012
|
|
March 31, 201210
|
|
Q1’13 / Q4’12 (% Change)
|
|
Q1’13 / Q1’12 (% Change)
|
Total RGUs
|
|
|
|
|
|
|
|
|
|
|
Total Video RGUs
|
|
18,210,300
|
|
|
18,308,500
|
|
|
18,349,200
|
|
|
(0.5
|
%)
|
|
(0.8
|
%)
|
Total Broadband Internet RGUs
|
|
9,488,300
|
|
|
9,244,300
|
|
|
8,480,700
|
|
|
2.6
|
%
|
|
11.9
|
%
|
Total Telephony RGUs
|
|
7,513,300
|
|
|
7,281,700
|
|
|
6,546,500
|
|
|
3.2
|
%
|
|
14.8
|
%
|
Liberty Global Consolidated
|
|
35,211,900
|
|
|
34,834,500
|
|
|
33,376,400
|
|
|
1.1
|
%
|
|
5.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total Customers
|
|
|
|
|
|
|
|
|
|
|
UPC/Unity Division
|
|
16,198,400
|
|
|
16,250,300
|
|
|
16,174,600
|
|
|
(0.3
|
%)
|
|
0.1
|
%
|
Telenet
|
|
2,106,200
|
|
|
2,122,700
|
|
|
2,180,700
|
|
|
(0.8
|
%)
|
|
(3.4
|
%)
|
VTR
|
|
1,167,900
|
|
|
1,144,400
|
|
|
1,108,900
|
|
|
2.1
|
%
|
|
5.3
|
%
|
Other
|
|
273,200
|
|
|
270,800
|
|
|
122,700
|
|
|
0.9
|
%
|
|
122.7
|
%
|
Liberty Global Consolidated
|
|
19,745,700
|
|
|
19,788,200
|
|
|
19,586,900
|
|
|
(0.2
|
%)
|
|
0.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total Single-Play Customers
|
|
10,466,600
|
|
|
10,727,200
|
|
|
11,231,600
|
|
|
(2.4
|
%)
|
|
(6.8
|
%)
|
Total Double-Play Customers
|
|
3,092,000
|
|
|
3,075,700
|
|
|
2,920,700
|
|
|
0.5
|
%
|
|
5.9
|
%
|
Total Triple-Play Customers
|
|
6,187,100
|
|
|
5,985,300
|
|
|
5,434,600
|
|
|
3.4
|
%
|
|
13.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
% Double-Play Customers
|
|
|
|
|
|
|
|
|
|
|
UPC/Unity Division
|
|
13.2
|
%
|
|
13.1
|
%
|
|
12.7
|
%
|
|
0.8
|
%
|
|
3.9
|
%
|
Telenet
|
|
30.4
|
%
|
|
29.9
|
%
|
|
28.3
|
%
|
|
1.7
|
%
|
|
7.4
|
%
|
VTR
|
|
20.8
|
%
|
|
20.7
|
%
|
|
20.6
|
%
|
|
0.5
|
%
|
|
1.0
|
%
|
Liberty Global Consolidated
|
|
15.7
|
%
|
|
15.5
|
%
|
|
14.9
|
%
|
|
1.3
|
%
|
|
5.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
% Triple-Play Customers
|
|
|
|
|
|
|
|
|
|
|
UPC/Unity Division
|
|
29.0
|
%
|
|
27.9
|
%
|
|
25.2
|
%
|
|
3.9
|
%
|
|
15.1
|
%
|
Telenet
|
|
41.7
|
%
|
|
40.5
|
%
|
|
37.0
|
%
|
|
3.0
|
%
|
|
12.7
|
%
|
VTR
|
|
46.0
|
%
|
|
46.1
|
%
|
|
46.2
|
%
|
|
(0.2
|
%)
|
|
(0.4
|
%)
|
Liberty Global Consolidated
|
|
31.3
|
%
|
|
30.2
|
%
|
|
27.7
|
%
|
|
3.6
|
%
|
|
13.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
RGUs per Customer Relationship
|
|
|
|
|
|
|
|
|
|
|
UPC/Unity Division
|
|
1.71
|
|
|
1.69
|
|
|
1.63
|
|
|
1.2
|
%
|
|
4.9
|
%
|
Telenet
|
|
2.14
|
|
|
2.11
|
|
|
2.02
|
|
|
1.4
|
%
|
|
5.9
|
%
|
VTR
|
|
2.13
|
|
|
2.13
|
|
|
2.13
|
|
|
—
|
|
|
—
|
|
Liberty Global Consolidated
|
|
1.78
|
|
|
1.76
|
|
|
1.70
|
|
|
1.1
|
%
|
|
4.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
_______________________________________
10 |
|
The March 31, 2012 amounts do not include the impacts of the
November 8, 2012 OneLink transaction in Puerto Rico.
|
|
|
|
|
|
Consolidated Operating Data – March 31, 2013
|
|
|
|
|
|
|
|
|
|
|
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/Unity Division:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Germany
|
|
12,582,500
|
|
12,174,800
|
|
7,059,300
|
|
11,309,600
|
|
4,489,400
|
|
2,177,800
|
|
—
|
|
—
|
|
6,667,200
|
|
12,174,800
|
|
2,319,100
|
|
12,174,800
|
|
2,323,300
|
The Netherlands(13) |
|
2,828,100
|
|
2,814,900
|
|
1,699,100
|
|
3,682,600
|
|
607,600
|
|
1,089,300
|
|
—
|
|
—
|
|
1,696,900
|
|
2,827,600
|
|
1,036,200
|
|
2,824,800
|
|
949,500
|
Switzerland(13) |
|
2,077,700
|
|
1,835,500
|
|
1,471,600
|
|
2,492,700
|
|
820,200
|
|
613,000
|
|
—
|
|
—
|
|
1,433,200
|
|
2,302,800
|
|
626,800
|
|
2,302,800
|
|
432,700
|
Austria
|
|
1,315,500
|
|
1,299,500
|
|
729,100
|
|
1,410,700
|
|
191,900
|
|
339,300
|
|
—
|
|
—
|
|
531,200
|
|
1,299,500
|
|
493,100
|
|
1,299,500
|
|
386,400
|
Ireland
|
|
863,000
|
|
742,100
|
|
540,300
|
|
1,012,600
|
|
59,900
|
|
338,400
|
|
—
|
|
43,900
|
|
442,200
|
|
742,100
|
|
315,700
|
|
723,900
|
|
254,700
|
Total Western Europe
|
|
19,666,800
|
|
18,866,800
|
|
11,499,400
|
|
19,908,200
|
|
6,169,000
|
|
4,557,800
|
|
—
|
|
43,900
|
|
10,770,700
|
|
19,346,800
|
|
4,790,900
|
|
19,325,800
|
|
4,346,600
|
Poland
|
|
2,672,200
|
|
2,544,400
|
|
1,466,100
|
|
2,654,900
|
|
494,400
|
|
797,400
|
|
—
|
|
—
|
|
1,291,800
|
|
2,544,400
|
|
874,800
|
|
2,534,800
|
|
488,300
|
Hungary
|
|
1,528,200
|
|
1,511,200
|
|
1,035,500
|
|
1,784,000
|
|
288,200
|
|
342,400
|
|
250,600
|
|
—
|
|
881,200
|
|
1,511,200
|
|
493,600
|
|
1,513,600
|
|
409,200
|
Romania
|
|
2,085,300
|
|
1,715,800
|
|
1,169,600
|
|
1,750,200
|
|
409,300
|
|
435,100
|
|
319,800
|
|
—
|
|
1,164,200
|
|
1,715,800
|
|
343,200
|
|
1,654,000
|
|
242,800
|
Czech Republic
|
|
1,346,800
|
|
1,238,400
|
|
740,200
|
|
1,204,900
|
|
71,200
|
|
397,700
|
|
105,700
|
|
—
|
|
574,600
|
|
1,238,400
|
|
439,900
|
|
1,238,300
|
|
190,400
|
Slovakia
|
|
496,200
|
|
465,800
|
|
287,600
|
|
429,000
|
|
77,700
|
|
126,300
|
|
56,600
|
|
700
|
|
261,300
|
|
434,900
|
|
106,300
|
|
433,200
|
|
61,400
|
Total CEE
|
|
8,128,700
|
|
7,475,600
|
|
4,699,000
|
|
7,823,000
|
|
1,340,800
|
|
2,098,900
|
|
732,700
|
|
700
|
|
4,173,100
|
|
7,444,700
|
|
2,257,800
|
|
7,373,900
|
|
1,392,100
|
Total UPC/Unity
|
|
27,795,500
|
|
26,342,400
|
|
16,198,400
|
|
27,731,200
|
|
7,509,800
|
|
6,656,700
|
|
732,700
|
|
44,600
|
|
14,943,800
|
|
26,791,500
|
|
7,048,700
|
|
26,699,700
|
|
5,738,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telenet (Belgium)(14)
|
|
2,875,100
|
|
2,875,100
|
|
2,106,200
|
|
4,503,100
|
|
673,100
|
|
1,433,100
|
|
—
|
|
—
|
|
2,106,200
|
|
2,875,100
|
|
1,409,200
|
|
2,875,100
|
|
987,700
|
VTR (Chile)
|
|
2,867,800
|
|
2,337,400
|
|
1,167,900
|
|
2,485,800
|
|
155,000
|
|
799,900
|
|
—
|
|
—
|
|
954,900
|
|
2,337,400
|
|
846,500
|
|
2,329,400
|
|
684,400
|
Puerto Rico
|
|
703,000
|
|
703,000
|
|
273,200
|
|
491,800
|
|
—
|
|
205,400
|
|
—
|
|
—
|
|
205,400
|
|
703,000
|
|
183,900
|
|
703,000
|
|
102,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total
|
|
34,241,400
|
|
32,257,900
|
|
19,745,700
|
|
35,211,900
|
|
8,337,900
|
|
9,095,100
|
|
732,700
|
|
44,600
|
|
18,210,300
|
|
32,707,000
|
|
9,488,300
|
|
32,607,200
|
|
7,513,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriber Variance Table – March 31, 2013 vs. 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/Unity Division:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Germany
|
|
14,600
|
|
12,400
|
|
10,200
|
|
168,900
|
|
(14,200)
|
|
(8,100)
|
|
—
|
|
—
|
|
(22,300)
|
|
12,400
|
|
99,900
|
|
12,400
|
|
91,300
|
The Netherlands(13) |
|
2,900
|
|
4,100
|
|
(32,700)
|
|
(2,900)
|
|
(44,000)
|
|
11,300
|
|
—
|
|
—
|
|
(32,700)
|
|
4,100
|
|
10,800
|
|
4,100
|
|
19,000
|
Switzerland(13) |
|
3,000
|
|
10,100
|
|
(14,000)
|
|
28,300
|
|
(22,300)
|
|
7,000
|
|
—
|
|
—
|
|
(15,300)
|
|
10,800
|
|
32,300
|
|
(21,100)
|
|
11,300
|
Austria
|
|
2,100
|
|
2,100
|
|
(3,900)
|
|
2,700
|
|
(7,500)
|
|
3,400
|
|
—
|
|
—
|
|
(4,100)
|
|
2,200
|
|
2,400
|
|
34,100
|
|
4,400
|
Ireland
|
|
100
|
|
4,900
|
|
1,500
|
|
23,800
|
|
(3,100)
|
|
600
|
|
—
|
|
(1,700)
|
|
(4,200)
|
|
4,900
|
|
11,400
|
|
8,900
|
|
16,600
|
Total Western Europe
|
|
22,700
|
|
33,600
|
|
(38,900)
|
|
220,800
|
|
(91,100)
|
|
14,200
|
|
—
|
|
(1,700)
|
|
(78,600)
|
|
34,400
|
|
156,800
|
|
38,400
|
|
142,600
|
Poland
|
|
4,300
|
|
6,800
|
|
(5,900)
|
|
38,900
|
|
(51,600)
|
|
41,100
|
|
—
|
|
—
|
|
(10,500)
|
|
6,800
|
|
20,100
|
|
7,200
|
|
29,300
|
Hungary
|
|
2,500
|
|
2,900
|
|
5,900
|
|
23,700
|
|
(18,700)
|
|
15,300
|
|
7,700
|
|
—
|
|
4,300
|
|
2,900
|
|
7,000
|
|
2,900
|
|
12,400
|
Romania
|
|
2,500
|
|
7,800
|
|
(8,000)
|
|
16,300
|
|
(19,400)
|
|
11,500
|
|
100
|
|
—
|
|
(7,800)
|
|
7,800
|
|
10,200
|
|
7,800
|
|
13,900
|
Czech Republic
|
|
1,600
|
|
1,500
|
|
(5,100)
|
|
(12,400)
|
|
(4,900)
|
|
(8,300)
|
|
3,500
|
|
—
|
|
(9,700)
|
|
1,500
|
|
—
|
|
4,100
|
|
(2,700)
|
Slovakia
|
|
700
|
|
1,000
|
|
100
|
|
3,400
|
|
(6,400)
|
|
3,200
|
|
2,300
|
|
(400)
|
|
(1,300)
|
|
1,300
|
|
2,500
|
|
1,400
|
|
2,200
|
Total CEE
|
|
11,600
|
|
20,000
|
|
(13,000)
|
|
69,900
|
|
(101,000)
|
|
62,800
|
|
13,600
|
|
(400)
|
|
(25,000)
|
|
20,300
|
|
39,800
|
|
23,400
|
|
55,100
|
Total UPC/Unity
|
|
34,300
|
|
53,600
|
|
(51,900)
|
|
290,700
|
|
(192,100)
|
|
77,000
|
|
13,600
|
|
(2,100)
|
|
(103,600)
|
|
54,700
|
|
196,600
|
|
61,800
|
|
197,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telenet (Belgium)(14)
|
|
6,300
|
|
6,300
|
|
(16,500)
|
|
24,000
|
|
123,900
|
|
(140,400)
|
|
—
|
|
—
|
|
(16,500)
|
|
6,300
|
|
21,500
|
|
6,300
|
|
19,000
|
VTR (Chile)
|
|
6,700
|
|
7,000
|
|
23,500
|
|
50,100
|
|
(8,200)
|
|
30,600
|
|
—
|
|
—
|
|
22,400
|
|
7,000
|
|
21,000
|
|
7,300
|
|
6,700
|
Puerto Rico
|
|
600
|
|
600
|
|
2,400
|
|
12,600
|
|
—
|
|
(500)
|
|
—
|
|
—
|
|
(500)
|
|
600
|
|
4,900
|
|
600
|
|
8,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total
|
|
47,900
|
|
67,500
|
|
(42,500)
|
|
377,400
|
|
(76,400)
|
|
(33,300)
|
|
13,600
|
|
(2,100)
|
|
(98,200)
|
|
68,600
|
|
244,000
|
|
76,000
|
|
231,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ORGANIC CHANGE SUMMARY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UPC/Unity (excl. Germany)
|
|
18,900
|
|
39,700
|
|
(61,200)
|
|
112,100
|
|
(177,900)
|
|
86,400
|
|
13,600
|
|
(2,100)
|
|
(80,000)
|
|
40,800
|
|
86,000
|
|
47,900
|
|
106,100
|
Germany
|
|
14,600
|
|
12,400
|
|
10,200
|
|
168,900
|
|
(14,200)
|
|
(8,100)
|
|
—
|
|
—
|
|
(22,300)
|
|
12,400
|
|
99,900
|
|
12,400
|
|
91,300
|
Total UPC/Unity
|
|
33,500
|
|
52,100
|
|
(51,000)
|
|
281,000
|
|
(192,100)
|
|
78,300
|
|
13,600
|
|
(2,100)
|
|
(102,300)
|
|
53,200
|
|
185,900
|
|
60,300
|
|
197,400
|
Telenet (Belgium)
|
|
6,300
|
|
6,300
|
|
(11,400)
|
|
29,100
|
|
(44,700)
|
|
33,300
|
|
—
|
|
—
|
|
(11,400)
|
|
6,300
|
|
21,500
|
|
6,300
|
|
19,000
|
VTR (Chile)
|
|
6,700
|
|
7,000
|
|
23,500
|
|
50,100
|
|
(8,200)
|
|
30,600
|
|
—
|
|
—
|
|
22,400
|
|
7,000
|
|
21,000
|
|
7,300
|
|
6,700
|
Puerto Rico
|
|
600
|
|
600
|
|
2,400
|
|
12,600
|
|
—
|
|
(500)
|
|
—
|
|
—
|
|
(500)
|
|
600
|
|
4,900
|
|
600
|
|
8,200
|
Total Organic Change
|
|
47,100
|
|
66,000
|
|
(36,500)
|
|
372,800
|
|
(245,000)
|
|
141,700
|
|
13,600
|
|
(2,100)
|
|
(91,800)
|
|
67,100
|
|
233,300
|
|
74,500
|
|
231,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2013 ADJUSTMENTS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Poland adjustments
|
|
800
|
|
1,500
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,500
|
|
—
|
|
1,500
|
|
—
|
Belgium adjustments(14) |
|
—
|
|
—
|
|
(5,100)
|
|
(5,100)
|
|
168,600
|
|
(173,700)
|
|
—
|
|
—
|
|
(5,100)
|
|
—
|
|
—
|
|
—
|
|
—
|
Switzerland adjustments
|
|
—
|
|
—
|
|
(1,300)
|
|
9,500
|
|
—
|
|
(1,300)
|
|
—
|
|
—
|
|
(1,300)
|
|
—
|
|
10,800
|
|
(31,900)
|
|
—
|
Austria adjustments
|
|
—
|
|
—
|
|
400
|
|
200
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(100)
|
|
31,900
|
|
300
|
Net Adjustments
|
|
800
|
|
1,500
|
|
(6,000)
|
|
4,600
|
|
168,600
|
|
(175,000)
|
|
—
|
|
—
|
|
(6,400)
|
|
1,500
|
|
10,700
|
|
1,500
|
|
300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Adds (Reductions)
|
|
47,900
|
|
67,500
|
|
(42,500)
|
|
377,400
|
|
(76,400)
|
|
(33,300)
|
|
13,600
|
|
(2,100)
|
|
(98,200)
|
|
68,600
|
|
244,000
|
|
76,000
|
|
231,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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. For Belgium, Customer Relationships only include
customers who subscribe to an analog or digital cable service due to
billing system limitations.
|
|
(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 March 31,
2013 RGU counts exclude 625,000, 152,800, 47,500, 27,600, 4,100 and
3,300 postpaid subscriber identification module (“SIM”) cards in
service in Belgium, Germany, Chile, Poland, Hungary and the
Netherlands, respectively, and 93,100 prepaid SIM cards in service
in Chile
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(5)
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Analog Cable Subscriber is a home, residential multiple dwelling
unit or commercial unit that receives our analog cable service over
our broadband network. Our Analog Cable Subscriber counts also
include subscribers who may use a purchased set-top box or other
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”). Our Basic Digital Cable
Subscribers are attributable to the fact that our basic digital
cable channels are not encrypted in certain portions of our
footprint and the use of purchased digital set-top boxes in Belgium.
In Europe, we have approximately 382,400 “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.
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(6)
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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 counts.
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.
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(7)
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DTH Subscriber is a home, residential multiple dwelling unit or
commercial unit that receives our video programming broadcast
directly via a geosynchronous satellite.
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(8)
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MMDS Subscriber is a home, residential multiple dwelling unit or
commercial unit that receives our video programming via MMDS.
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(9)
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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.
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(10)
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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 80,300 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. In Switzerland, we offer
a 2 Mbps internet service to our Analog and Digital Cable
Subscribers without an incremental recurring fee. Our Internet
Subscribers in Switzerland include 17,200 subscribers who have
requested and received a modem that enables receipt of this 2 Mbps
internet service. In certain portions of our German market, we offer
a 128 Kbps wholesale internet service to housing associations on a
bulk basis. Our Internet Subscribers in Germany include 6,600
subscribers within such housing associations who have requested and
received a modem that enables the receipt of this 128 Kbps wholesale
internet service.
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(11)
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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.
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(12)
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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 57,800 subscribers of Austria GmbH that are not
serviced over our networks.
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(13)
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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
March 31, 2013, Switzerland’s partner networks account for 127,400
Customer Relationships, 244,700 RGUs, 92,700 Digital Cable
Subscribers, 467,300 Internet and Telephony Homes Serviceable,
88,000 Internet Subscribers, and 64,000 Telephony Subscribers. In
addition, partner networks account for 438,700 of Switzerland’s
digital cable homes serviceable that are not included in Homes
Passed or Two-way Homes Passed in our March 31, 2013 subscriber
table.
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(14)
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Effective January 1, 2013, we reclassified 173,300 Digital Cable
Subscribers in Belgium to Analog Cable Subscribers to reflect a
change in our definition of Basic Digital Cable Subscribers to
include all Subscribers who access our basic digital television
channels without subscribing to services that would require the
payment of recurring monthly fees in addition to the basic analog
service fee.
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Additional General Notes to Tables:
All of our broadband communications 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. All mass marketed products provided to SOHOs,
whether or not accompanied by enhanced service levels and/or premium
prices, are 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 Puerto
Rico and certain commercial establishments in Europe (with the exception
of Germany and Belgium, where we do not count any RGUs on an EBU
basis). 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. In Germany, homes passed reflect the
footprint, and two-way homes passed and internet and telephony homes
serviceable reflect the technological capability, of our network up to
the street cabinet, with drops from the street cabinet to the building
generally added, and in-home wiring generally upgraded, on an as needed
or success-based basis. In Belgium, Telenet leases a portion of its
network under a long-term capital lease arrangement. These tables
include operating statistics for Telenet’s owned and leased networks.
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.