Liberty Global plc (“Liberty Global” or the “Company”) (NASDAQ: LBTYA,
LBTYB and LBTYK), today announces financial and operating results for
the three months ended March 31, 2014 (“Q1”). Some of the information
below concerning Virgin Media relates to periods prior to our ownership
of the business. Please also note that we sold substantially all of our
content business on January 31, 2014 (the “Chellomedia Sale”) and,
accordingly, we have presented the disposed business as a discontinued
operation for all periods presented. Highlights for Q1 2014 compared to
the same period in 2013 (unless noted) include:
-
Total RGUs of 49 million, including organic RGU2 additions
of 345,000 during Q1
-
Innovations in video and broadband speeds fueling subscriber gains
-
Launching new products across footprint including mobile and WiFi
-
Revenue of $4.5 billion, reflecting rebased3 growth of 2%
-
Reflects 4% rebased growth in total subscription revenue
-
Operating Cash Flow4 of $2.1 billion, representing rebased
growth of 8%
-
Strong underlying performance in Belgium, Germany and the U.K.
-
Adjusted Free Cash Flow increased 47% to $350 million during Q1
-
Operating income of $582 million, a 10% increase
-
Share repurchase activity continued aggressively in April
-
Completion of Ziggo transaction on track for second half of 2014
Mike Fries, Chief Executive Officer stated, "We’re off to an excellent
start this year with robust subscriber and cash flow growth. We added
over 235,000 internet RGUs in Q1, driven by continued demand for our
market-leading broadband speeds. We also added over 250,000
next-generation Horizon TV and TiVo customers in Q1. As a result, we now
have 20% of our digital TV customers enjoying great functionality,
content and compelling multi-screen services. We’re also making
significant progress on the wireless front, with the recent launch of
mobile services in Switzerland, the introduction of new and improved
quad-play offers in the U.K. and the expansion of our WiFi-spots in
Belgium and the Netherlands to over 1.5 million locations. Building on
this momentum, we expect to continue to launch MVNO and WiFi services in
more markets throughout our footprint, which will further enhance the
customer experience.”
“Our first quarter financial performance in OCF and Adjusted FCF was
particularly strong, as we generated 8% rebased OCF growth and a 47%
increase in Adjusted FCF on a combined basis. Based on this strong start
to 2014, we remain confident in our ability to achieve our public
guidance targets, which include an acceleration of rebased OCF growth
and the delivery of $2.0 billion of Adjusted FCF for the full year.”
“On the M&A front, we understand that the European Commission has nearly
completed its phase one investigation into our proposed acquisition of
Ziggo N.V. (“Ziggo”), the largest cable operator in the Netherlands, and
that the case is likely to move to a second phase at the EU level. No
final decision has been taken, but we continue to expect closing to
occur in the second half of 2014. We plan to officially launch the
tender offer in about one month's time, and look forward to
demonstrating the benefits that this strategic combination will bring to
Dutch consumers and businesses."
"We have been particularly active in the debt markets over recent
months, capitalizing on favorable conditions to strengthen our maturity
profile, reduce interest rates and create a new Chilean credit pool. In
terms of our repurchase activity, we bought back nearly $400 million of
our equity during the first quarter. Given the recent softness in the
stock market, we became significantly more aggressive during the month
of April. From April 1, 2014 until December 31, 2015, our plans call for
us to purchase approximately $3.1 billion of additional equity and we
remain fully committed to doing so, despite the fact that we will be out
of the market while our offer for Ziggo is outstanding.”
Subscriber Statistics
At March 31, 2014, we provided 49 million subscription services ("RGUs")
to our 25 million unique customers. On a product level, our RGU base
consisted of 22 million video, 15 million broadband internet and 12
million telephony subscriptions. As compared to our subscriber base at
December 31, 2013, our RGUs increased by 370,000 during the first
quarter of 2014, resulting from 345,000 organic RGU additions and two
small in-market acquisitions in the U.K. and Austria. From a customer
perspective, we lost only 6,000 customers on an organic basis in Q1 2014
with customer gains in half of our markets, including the U.K. and
Germany. Driven by the continued success of our market-leading bundles,
we crossed the 10 million triple-play customer mark during the quarter,
ending Q1 2014 with aggregate bundled customers of 14 million or 57% of
our total customer base.
Our 345,000 organic RGU additions in Q1 2014 were supported by
particularly low video attrition of 71,000 RGUs, in combination with
broadband internet and telephony RGU additions of 239,000 and 177,000,
respectively. In terms of broadband, our first quarter gains were the
second highest Q1 result in the history of our company, and were
modestly higher than Q1 2013. Capitalizing on our speed advantage, our
Q1 2014 broadband additions were driven by our German and British
operations, which added 82,000 and 35,000 RGUs, respectively. With
respect to telephony, our RGU additions of 177,000 were down as compared
to our Q1 2013 RGU additions of 231,000, due in part to slower growth in
our triple-play customer base in our German and Polish operations.
From a video standpoint, our Q1 2014 video RGU loss of 71,000 was our
lowest Q1 video attrition rate since 2007 and a strong improvement as
compared to the 92,000 RGU loss in Q1 2013. Of note, the Netherlands
nearly halved its video loss to 17,000, our best quarterly Dutch video
result in three years, and our Swiss operation posted its strongest
video result in six years with a video gain of 5,000. At March 31, 2014,
we had 13.3 million digital video subscribers and digital penetration5
of 64%. With respect to our next-generation video products, we added
over 250,000 subscribers in Q1 and ended the quarter with over 550,000
Horizon TV subscribers across four countries, and over 2.1 million TiVo
subscribers in the U.K. As a result, our next-generation video base
exceeds 2.6 million subscribers, reflecting 20% penetration of our
digital cable base.
From a regional perspective, our organic additions were led by our
Western European operations, which added 251,000 RGUs, followed by Latin
America6 and Central and Eastern Europe ("CEE"), which
generated 49,000 and 46,000 subscriber additions, respectively. In
Western Europe, three of our operations are highlighted below. First,
our German operation delivered 127,000 RGU additions in Q1 2014, with
steady additions in both broadband and telephony, and improved video
churn. Next, our British operation, which implemented a price increase
during the quarter, added 35,000 RGUs in Q1 2014, as compared to 25,000
in Q1 2013, prior to Liberty Global's ownership. Rounding out Western
Europe, our Dutch business added 7,000 RGUs in the quarter, which builds
upon the positive momentum initiated in the second half of last year.
Our Latin American operations contributed 14% or 49,000 of our total Q1
2014 RGU additions, with 32,000 net additions in Chile and 17,000 in
Puerto Rico. Although our Chilean subscriber additions were below the Q1
record of 50,000 achieved in 2013, they reflect our second strongest
first quarter result in the last six years. Turning to Puerto Rico, we
delivered record quarterly RGU additions, due in part to the
particularly strong traction of our Spanish language tier.
In addition to our triple-play business, we had 4.1 million mobile
subscribers7 at March 31, 2014, an increase of 65,000 during
the quarter. Of this increase, our Belgian and German operations
contributed mobile gains of 29,000 and 16,000, respectively, with our
Chilean and British operations generating increases of 12,000 and 8,000,
respectively. Although our overall Q1 gain in the U.K. was modest,
Virgin Media increased its high-value postpaid mobile subscribers by
79,000 during the quarter, helped in part by the addition of the Apple
iPhone and the success of our SIM-only offers.
Revenue
Our consolidated revenue increased to $4.5 billion for the three months
ended March 31, 2014, as compared to $2.7 billion for the corresponding
prior year period, which represented year-over-year growth of 70%. This
result was due primarily to the inclusion of Virgin Media in Q1 2014
and, to a lesser extent, positive foreign currency movements ("FX") as
our key European currencies strengthened against the U.S. dollar.
Adjusting for both the impact of acquisitions and FX, we recorded
year-over-year rebased revenue growth of 2% during Q1 2014, which was
in-line with our Q4 2013 rebased result.
Geographically, we generated 5% rebased revenue growth in our Chilean
operation during the first quarter and, similar to our fourth quarter
2013 results, our European operations delivered 2% rebased revenue
growth, with Western Europe up 2% and CEE posting a modest decline of
1%. Our German operation substantially improved from Q4 and was our
strongest European performer, delivering 8% rebased revenue growth. This
performance was driven by volume growth of more than 500,000 organic RGU
additions in the last twelve months, increased ARPU from digital cable
and broadband internet as a result of our higher-priced bundled
portfolio offering and an $11 million increase in non-subscription
revenue resulting from the settlement of prior period network usage
fees. Meanwhile, our Swiss and Belgium operations, helped by certain
price increases, achieved rebased revenue growth of 4% and 3%,
respectively.
Rounding out our large European markets, Virgin Media improved over its
Q4 2013 result, producing 1% rebased revenue growth in the quarter. Our
cable subscription business, which accounts for 70% of our U.K. revenue,
produced 4% year-over-year rebased growth, as we were supported by an
average price increase of approximately 6.7% that took effect on
February 1, 2014. Despite the price increase, we have not experienced
any material changes to our churn levels. Additionally, our mobile
business showed improvement, as we produced 5% rebased growth in the
quarter. The strong result from our cable and mobile subscription
businesses was largely offset by a decrease in revenue from our off-net
business and interconnect charges, with the latter decline resulting
from lower usage and regulated rate decreases, as well as a modest
decline in business-to-business ("B2B") revenue. Meanwhile our Dutch
business experienced a 3% rebased revenue reduction, a slight
improvement as compared to the previous two quarters.
Operating Cash Flow
Our Q1 2014 OCF increased by 69% to $2.1 billion, as compared to OCF of
$1.3 billion for the corresponding prior year period. Similar to our
top-line result, our reported year-over-year OCF increase primarily
reflects the contribution from the inclusion of Virgin Media in Q1 2014,
organic growth and favorable FX movements. Adjusting for both
acquisitions and currencies, we delivered rebased OCF growth of 8% for
Q1 2014. Our strong rebased OCF performance during Q1 2014 included the
favorable net impact of non-recurring items, the most significant of
which include the impact of accrual releases related to the settlement
of operational contingencies of $17 million in Belgium and $7 million in
Poland and the aforementioned favorable revenue settlement in Germany.
As compared to rebased OCF growth in Q1 2013, we delivered improved
performance in Chile, Western Europe and CEE, with rebased OCF growth of
14%, 8% and 4%, respectively. Our year-over-year performance in Chile
was positively impacted by our transition to a new MVNO contract, which
enabled us to further reduce the OCF deficit generated by our mobile
business. Western European OCF results were powered by our Belgian,
German and Swiss operations, which recorded particularly strong rebased
OCF growth contributions of 17%, 15% and 8%, respectively.
In addition, Virgin Media delivered a solid result with 6% rebased OCF
growth, helped by the positive impact of cost savings, the
aforementioned price increase and lower interconnect and mobile handset
costs. Rounding out Western Europe, the 10% rebased OCF growth of our
top four countries was partially negated by the 4% rebased OCF
contraction at our Dutch operation. While this decline was an
improvement as compared to the rebased OCF declines during Q3 and Q4
2013, we expect that this market will remain challenging for the rest of
2014.
Our consolidated OCF margin8 for Q1 2014 was 47%, in line
with our OCF margin for the corresponding prior year period. Excluding
Virgin Media, which delivered an OCF margin of 43%, our Q1 OCF margin
would have been approximately 50%, as compared to our reported 47% in Q1
2013. Besides our Dutch business, each of our other reportable segments
produced year-over-year margin gains, with our German and Swiss
businesses reaching system level OCF margins of 62% and 59%,
respectively.
During March, the U.K. government announced a change in legislation with
respect to charging VAT in connection with prompt payment discounts. We
currently believe this change will result in a reduction in Virgin
Media's revenue, OCF and operating income of approximately $47 to $50
million from the effective date of May 1, 2014 through the end of 2014.
However, in light of our strong Q1 OCF performance, we remain confident
in our ability to deliver mid-single digit rebased OCF growth at Virgin
Media in 2014.
Operating Income
For the three months ended March 31, 2014, our operating income
increased 10% to $582 million, as compared to $528 million for the three
months ended March 31, 2013. On a comparative basis, our OCF growth more
than offset increases in depreciation and amortization expense and
share-based compensation expense, each of which was mainly driven by our
acquisition of Virgin Media, and an increase in impairment,
restructuring and other items.
Net Loss Attributable to Liberty Global Shareholders
We reported a net loss attributable to Liberty Global shareholders (“Net
Loss”) of $79 million or $0.10 per basic and diluted share for the three
months ended March 31, 2014. This compares to a Net Loss of $1 million
or nil per basic and diluted share9 for the three months
ended March 31, 2013. In addition to the operating income changes noted
above, the Net Loss in Q1 2014, as compared to the prior year period,
was driven to a large extent by realized and unrealized losses on
derivative instruments, which more than offset a $340 million gain on
the Chellomedia Sale.
At April 30, 2014, we had 786 million shares outstanding. Our share
count reflects (i) the impact of the 2014 Share Dividend (as defined in
footnote 9), (ii) the impact of 10.1 million Class C ordinary shares
issued in connection with the acquisition of the 20% minority interests
in both our Chilean cable distribution and wireless businesses and (iii)
the impact of share repurchase activity.
Property and Equipment Additions
Measured as a percentage of revenue, our property and equipment ("P&E")
additions10 on a reported basis were 20% of revenue for each
of the three-month periods ending March 31, 2014 and 2013. In absolute
terms, we reported P&E additions of $910 million for Q1 2014, as
compared to $531 million for Q1 2013. This year-over-year increase was
primarily related to the inclusion of Virgin Media, which accounted for
$344 million of our P&E additions in Q1 2014, as compared to nil in the
prior year period. Adjusting our Q1 2013 results for the inclusion of
Virgin Media, our prior year combined P&E additions would have been $873
million or 20% of combined revenue. In terms of a breakdown of our Q1
2014 spend, approximately 56% was related to customer premises equipment
and scalable infrastructure, 27% was attributable to line extensions and
upgrade/rebuild activity and 17% was due to support capital including
information technology upgrades and general support systems.
Free Cash Flow & Adjusted Free Cash Flow
For the three months ended March 31, 2014, we generated Free Cash Flow
of $329 million and Adjusted Free Cash Flow, which excludes certain
costs associated with our Chilean wireless operation, of $350 million.
These results compare favorably to our reported FCF and Adjusted FCF
results during Q1 2013 of $22 million and $66 million, respectively. The
growth in both FCF and Adjusted FCF over the prior year was helped
substantially by the inclusion of Virgin Media and, to a much lesser
extent, favorable foreign currency movements, the impacts of which more
than offset a decline associated with the net impact of our vendor
financing and capital lease arrangements.
Additionally, our Adjusted FCF of $350 million for Q1 2014 reflects a
47% increase over the Adjusted FCF of $238 million for Q1 2013 if we
were to combine the Adjusted FCF of both Liberty Global and Virgin Media
for the prior year period. With respect to the remainder of 2014, we
expect our Adjusted FCF to be weighted toward Q4.
Leverage & Liquidity
At March 31, 2014, we had total debt11 of $44.5 billion, as
compared to $44.7 billion at December 31, 2013. The Q1 decrease in gross
debt was primarily due to net debt repayments, which more than offset
the translation effect associated with a weakening U.S. dollar relative
to the British pound. Our Q1 2014 repayments included the repayment of
all of the Ziggo margin loan and a portion of the Ziggo collar loan. We
were also active in the capital markets during Q1, raising $1.4 billion
principal amount of senior secured notes at VTR Finance B.V., a new
credit pool for us. We used the net proceeds from this issuance,
combined with existing cash, to repay approximately $1.7 billion of
outstanding indebtedness under the UPC Broadband Holding Bank Facility
and, in so doing, extracted our Chilean cable business from the UPC
credit group.
We opportunistically tapped the debt capital markets for Virgin Media in
Q1, as we raised approximately $1.5 billion principal amount of debt
(the “VM March Financing”) at a blended average interest rate of 5.7%.
The net proceeds were used in April to redeem Virgin Media’s £875
million ($1.5 billion) of 7.0% senior secured notes, including the
related redemption premium. Subsequent to Q1, we also completed a small
tap-on bond at Virgin Media, completed credit facility-related
refinancing transactions at both Telenet and Virgin Media and repaid
$400 million principal amount of 9.875% senior notes due 2018 at our UPC
credit group.
With respect to our cash position, we finished Q1 with $3.1 billion of
cash and cash equivalents, as compared to $2.7 billion at Q4 2013. Our
cash position increased during the quarter largely as a result of the
net proceeds from the VM March Financing, the net proceeds from the
Chellomedia Sale and our free cash flow generation, offset in large part
by cash used for net debt repayments and share repurchase activity. At
March 31, 2014, we had approximately $6.7 billion of consolidated
liquidity12 including cash and cash equivalents of $3.1
billion and aggregate maximum undrawn commitments under our credit
facilities13 of $3.6 billion. As mentioned above, we used
some of this liquidity to repay debt in April.
After excluding $1.6 billion of debt backed by the shares we hold in
Sumitomo Corporation and Ziggo, we finished the quarter with
consolidated gross and net leverage ratios14 of 5.1x and
4.8x, respectively. If we take into account the April repayment of
Virgin Media’s senior secured notes as discussed above, our gross
leverage would decrease to 5.0x. Our fully-swapped borrowing cost15
increased from 6.6% at December 31, 2013 to 6.8% at March 31, 2014,
primarily reflecting the associated impact of our VTR financing and the
repayment of lower cost debt. In terms of our debt profile as of March
31, 2014, over 80% of our total debt was due beyond 2018.
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
2014 and future prospects, including our expectations for continued
organic growth in subscribers, higher rebased OCF growth, growth in
Adjusted FCF, the penetration of our advanced services, increased
broadband internet speeds and acceptance of our product bundles
including our mobile offers; 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, investments and continued share 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 mobile,
WiFi, Horizon TV and, in the U.K., TiVo; our insight and expectations
regarding competitive and economic factors in our markets, including the
Netherlands, statements regarding the acquisition of Ziggo and the
anticipated benefits of such combination, 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 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, law and regulation, our ability to satisfy regulatory
conditions associated with 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 deliver
quality products, as well as other factors detailed from time to time in
our filings with the Securities and Exchange Commission including the
most recently filed Forms 10-K/A and 10-Q. 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.
About Liberty Global
Liberty Global is the largest international cable company with
operations in 14 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 connected 25 million
customers subscribing to 49 million television, broadband internet and
telephony services at March 31, 2014.
Liberty Global's consumer brands include Virgin Media, UPC, Unitymedia,
Kabel BW, Telenet and VTR. Our operations also include Liberty Global
Business Services, our commercial division and Liberty Global Ventures,
our investment fund. For more information, please visit www.libertyglobal.com
or contact:
_______________________________________
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1
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Please see page 16 for information on Free Cash Flow (“FCF”) and
Adjusted Free Cash Flow ("Adjusted FCF") and the required
reconciliations. The Adjusted Free Cash Flow growth rate of 47% is
calculated by comparing our reported Adjusted FCF during Q1 2014
to the combined Adjusted FCF of our company and Virgin Media
during Q1 2013, as calculated on page 17.
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2
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Please see page 22 for the definition of 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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3
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Please see page 12 for information on rebased growth.
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4
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Please see page 14 for our OCF definition and the required
reconciliation.
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5
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Digital penetration is calculated by dividing the number of digital
cable RGUs by the total number of digital and analog cable RGUs.
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6
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Latin America includes our broadband communications operations in
both Chile and Puerto Rico.
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7
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Our mobile subscriber count represents the number of active
subscriber identification module (“SIM”) cards in service rather
than services provided. For example, if a mobile subscriber has both
a data and voice plan on a smartphone this would equate to one
mobile subscriber. Alternatively, a subscriber who has a voice and
data plan for a mobile handset and a data plan for a laptop (via a
dongle) would be counted as two mobile subscribers. Customers who do
not pay a recurring monthly fee are excluded from our mobile
telephony subscriber counts after periods of inactivity ranging from
30 to 90 days, based on industry standards within the respective
country. Our March 31, 2014 mobile subscriber counts for the U.K.
and Chile include 1,040,800 and 29,200 prepaid mobile subscribers,
respectively.
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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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All share and per share amounts presented herein have been
retroactively adjusted to give effect to the March 3, 2014 share
split in the form of a share dividend ("2014 Share Dividend"), which
constitutes a bonus issue under our articles of association and
English law, of one Liberty Global Class C ordinary share for each
outstanding Class A, Class B and Class C ordinary share.
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10
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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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11
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Total debt includes capital lease obligations.
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12
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Consolidated liquidity refers to our consolidated cash and cash
equivalents plus the maximum undrawn commitments under our
subsidiaries' borrowing facilities without regard to covenant
compliance calculations.
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13
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The $3.6 billion reflects the aggregate unused borrowing capacity,
as represented by the maximum undrawn commitments under our
subsidiaries' applicable facilities without regard to covenant
compliance calculations. Upon completion of the relevant March 31,
2014 compliance reporting requirements have been completed for our
credit facilities and the April 2014 redemption of Virgin Media’s
£875 million ($1.5 billion) of 7.0% senior secured notes, and
assuming no other changes from quarter-end borrowing levels, we
anticipate that our subsidiaries' borrowing availability will be
limited to $3.1 billion.
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14
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Our gross and net debt ratios are defined as total debt and net debt
to annualized OCF of the latest quarter. Net debt is defined as
total debt less cash and cash equivalents. For purposes of these
calculations, debt excludes the loans backed by the shares we hold
in Sumitomo Corp. and Ziggo and is measured using swapped foreign
currency rates, consistent with the covenant calculation
requirements of our subsidiary debt agreements.
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15
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Our fully-swapped debt borrowing cost represents the weighted
average interest rate on our aggregate variable and fixed rate
indebtedness (excluding capital lease obligations), including the
effects of derivative instruments, original issue premiums or
discounts and commitment fees, but excluding the impact of financing
costs.
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Liberty Global plc
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Condensed Consolidated Balance Sheets (unaudited)
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March 31,
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December 31,
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2014
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2013
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in millions
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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3,092.1
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$
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2,701.9
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Trade receivables, net
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1,529.2
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1,588.7
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Derivative instruments
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502.1
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|
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252.1
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Deferred income taxes
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270.0
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|
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226.1
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Prepaid expenses
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260.8
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|
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238.2
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Current assets of discontinued operation
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—
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238.7
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Other current assets
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245.5
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236.9
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Total current assets
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5,899.7
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5,482.6
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Investments
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3,438.4
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3,491.2
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Property and equipment, net
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23,813.8
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23,974.9
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Goodwill
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23,782.7
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23,748.8
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Intangible assets subject to amortization, net
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5,560.5
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5,795.4
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Long-term assets of discontinued operation
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—
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513.6
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Other assets, net
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4,765.2
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4,707.8
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Total assets
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$
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67,260.3
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$
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67,714.3
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LIABILITIES AND EQUITY
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Current liabilities:
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|
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Accounts payable
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$
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1,104.5
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$
|
1,072.9
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Deferred revenue and advance payments from subscribers and others
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|
1,559.0
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|
1,406.2
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Current portion of debt and capital lease obligations
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|
3,470.8
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|
|
1,023.4
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Derivative instruments
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|
1,237.6
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|
|
751.2
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Accrued interest
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|
608.4
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|
|
598.7
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Accrued programming
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|
369.1
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|
|
359.1
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Current liabilities of discontinued operation
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|
—
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|
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127.5
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Other accrued and current liabilities
|
|
2,323.3
|
|
|
2,344.0
|
|
Total current liabilities
|
|
10,672.7
|
|
|
7,683.0
|
|
|
|
|
|
|
Long-term debt and capital lease obligations
|
|
41,000.8
|
|
|
43,680.9
|
|
Long-term liabilities of discontinued operation
|
|
—
|
|
|
19.8
|
|
Other long-term liabilities
|
|
4,629.2
|
|
|
4,789.1
|
|
Total liabilities
|
|
56,302.7
|
|
|
56,172.8
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
Total Liberty Global shareholders
|
|
11,649.9
|
|
|
12,025.8
|
|
Noncontrolling interests
|
|
(692.3
|
)
|
|
(484.3
|
)
|
Total equity
|
|
10,957.6
|
|
|
11,541.5
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
67,260.3
|
|
|
$
|
67,714.3
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Global plc
|
Condensed Consolidated Statements of Operations (unaudited)
|
|
|
|
|
|
Three months ended
|
|
|
March 31,
|
|
|
2014
|
|
2013
|
|
|
in millions, except per share amounts
|
|
|
|
|
|
Revenue
|
|
$
|
4,533.7
|
|
|
$
|
2,671.9
|
|
|
|
|
|
|
Operating costs and expenses:
|
|
|
|
|
Operating (other than depreciation and amortization) (including
share-based compensation)
|
|
1,698.8
|
|
|
966.8
|
|
Selling, general and administrative (SG&A) (including share-based
compensation)
|
|
762.5
|
|
|
471.4
|
|
Depreciation and amortization
|
|
1,377.1
|
|
|
684.6
|
|
Impairment, restructuring and other operating items, net
|
|
113.6
|
|
|
20.9
|
|
|
|
3,952.0
|
|
|
2,143.7
|
|
Operating income
|
|
581.7
|
|
|
528.2
|
|
|
|
|
|
|
Non-operating income (expense):
|
|
|
|
|
Interest expense
|
|
(653.5
|
)
|
|
(471.5
|
)
|
Interest and dividend income
|
|
13.8
|
|
|
13.7
|
|
Realized and unrealized gains (losses) on derivative instruments, net
|
|
(376.6
|
)
|
|
195.5
|
|
Foreign currency transaction losses, net
|
|
(20.8
|
)
|
|
(136.3
|
)
|
Realized and unrealized gains (losses) due to changes in fair values
of certain investments, net
|
|
(60.2
|
)
|
|
70.8
|
|
Losses on debt modification and extinguishment, net
|
|
(20.9
|
)
|
|
(158.3
|
)
|
Other expense, net
|
|
(0.5
|
)
|
|
(1.7
|
)
|
|
|
(1,118.7
|
)
|
|
(487.8
|
)
|
Earnings (loss) from continuing operations before income taxes
|
|
(537.0
|
)
|
|
40.4
|
|
Income tax benefit (expense)
|
|
117.0
|
|
|
(20.3
|
)
|
Earnings (loss) from continuing operations
|
|
(420.0
|
)
|
|
20.1
|
|
Discontinued operation:
|
|
|
|
|
Earnings from discontinued operation, net of taxes
|
|
0.8
|
|
|
1.8
|
|
Gain on disposal of discontinued operation, net of taxes
|
|
339.9
|
|
|
—
|
|
|
|
340.7
|
|
|
1.8
|
|
Net earnings (loss)
|
|
(79.3
|
)
|
|
21.9
|
|
Net loss (earnings) attributable to noncontrolling interests
|
|
0.5
|
|
|
(22.9
|
)
|
Net loss attributable to Liberty Global shareholders
|
|
$
|
(78.8
|
)
|
|
$
|
(1.0
|
)
|
|
|
|
|
|
Basic and diluted earnings (loss) attributable to Liberty Global
shareholders per share:
|
|
|
|
|
Continuing operations
|
|
$
|
(0.53
|
)
|
|
$
|
(0.01
|
)
|
Discontinued operation
|
|
0.43
|
|
|
0.01
|
|
|
|
$
|
(0.10
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Global plc
|
Condensed Consolidated Statements of Cash Flows (unaudited)
|
|
|
|
|
|
Three months ended
|
|
|
March 31,
|
|
|
2014
|
|
2013
|
|
|
in millions
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
Net earnings (loss)
|
|
$
|
(79.3
|
)
|
|
$
|
21.9
|
|
Earnings from discontinued operation
|
|
(340.7
|
)
|
|
(1.8
|
)
|
Earnings (loss) from continuing operations
|
|
(420.0
|
)
|
|
20.1
|
|
Adjustments to reconcile earnings (loss) from continuing operations
to net cash provided by operating activities
|
|
1,740.4
|
|
|
531.6
|
|
Net cash provided (used) by operating activities of discontinued
operation
|
|
(9.6
|
)
|
|
6.0
|
|
Net cash provided by operating activities
|
|
1,310.8
|
|
|
557.7
|
|
Cash flows from investing activities:
|
|
|
|
|
Capital expenditures
|
|
(735.0
|
)
|
|
(499.4
|
)
|
Proceeds received upon disposition of discontinued operation, net of
disposal costs
|
|
993.0
|
|
|
—
|
|
Cash paid in connection with acquisitions, net of cash acquired
|
|
(23.2
|
)
|
|
—
|
|
Other investing activities, net
|
|
(3.1
|
)
|
|
5.6
|
|
Net cash used by investing activities of discontinued operation
|
|
(3.8
|
)
|
|
(4.6
|
)
|
Net cash provided (used) by investing activities
|
|
227.9
|
|
|
(498.4
|
)
|
Cash flows from financing activities:
|
|
|
|
|
Repayments and repurchases of debt and capital lease obligations
|
|
(2,051.6
|
)
|
|
(1,019.8
|
)
|
Borrowings of debt
|
|
1,547.8
|
|
|
1,103.9
|
|
Repurchase of Liberty Global and LGI shares
|
|
(376.8
|
)
|
|
(185.5
|
)
|
Net cash received (paid) associated with call option contracts on
Liberty Global and LGI shares
|
|
(156.0
|
)
|
|
55.5
|
|
Net cash paid related to derivative instruments
|
|
(98.2
|
)
|
|
(11.1
|
)
|
Payment of financing costs and debt premiums
|
|
(39.1
|
)
|
|
(181.7
|
)
|
Decrease in restricted cash related to the Telenet Tender
|
|
—
|
|
|
1,539.7
|
|
Purchase of additional Telenet shares
|
|
—
|
|
|
(454.5
|
)
|
Other financing activities, net
|
|
11.6
|
|
|
(11.4
|
)
|
Net cash used by financing activities of discontinued operation
|
|
(1.2
|
)
|
|
(4.2
|
)
|
Net cash provided (used) by financing activities
|
|
(1,163.5
|
)
|
|
830.9
|
|
Effect of exchange rate changes on cash:
|
|
|
|
|
Continuing operations
|
|
15.0
|
|
|
(21.5
|
)
|
Discontinued operation
|
|
—
|
|
|
(0.8
|
)
|
Total
|
|
15.0
|
|
|
(22.3
|
)
|
Net increase in cash and cash equivalents:
|
|
|
|
|
Continuing operations
|
|
404.8
|
|
|
871.5
|
|
Discontinued operation
|
|
(14.6
|
)
|
|
(3.6
|
)
|
Net increase in cash and cash equivalents
|
|
390.2
|
|
|
867.9
|
|
Cash and cash equivalents:
|
|
|
|
|
Beginning of period
|
|
2,701.9
|
|
|
2,038.9
|
|
End of period
|
|
$
|
3,092.1
|
|
|
$
|
2,906.8
|
|
|
|
|
|
|
Cash paid for interest - continuing operations
|
|
$
|
631.1
|
|
|
$
|
467.6
|
|
|
|
|
|
|
Net cash paid for taxes:
|
|
|
|
|
Continuing operations
|
|
$
|
32.5
|
|
|
$
|
16.9
|
|
Discontinued operation
|
|
0.9
|
|
|
3.6
|
|
Total
|
|
$
|
33.4
|
|
|
$
|
20.5
|
|
|
|
|
|
|
|
|
|
|
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, 2014, 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 fixed-line telephony services. Most of our reportable
segments also provide B2B services and certain of our reportable
segments provide mobile services. During the second quarter of 2013, we
began presenting our Belgium (Telenet) segment within our European
Operations Division as a result of our decision to change how Telenet
reports into our management structure. Segment information for all
periods has been retrospectively revised to reflect this change and to
present the disposed Chellomedia operations as a discontinued operation.
Unless otherwise noted, we present only the reportable segments of our
continuing operations in the tables below. For additional information,
see note 14 to the condensed consolidated financial statements included
in our most recently filed Form 10-Q.
At March 31, 2014, our operating segments in the European Operations
Division provided broadband communications services in 12 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 European Operations 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
European Operations Division. In Chile, the VTR Group includes VTR
GlobalCom, which provides video, broadband internet and fixed-line
telephony services, and VTR Wireless, which provides mobile services
through a third-party wireless access arrangement. Our corporate and
other category includes (a) less significant consolidated operating
segments that provide (1) broadband communications services in Puerto
Rico and (2) programming and other services and (b) our corporate
category. Intersegment eliminations primarily represent the elimination
of intercompany transactions between our broadband communications and
programming operations.
For purposes of calculating rebased growth rates on a comparable basis
for all businesses that we owned during 2014, we have adjusted our
historical revenue and OCF for the three months ended March 31, 2013 to
(i) include the pre-acquisition revenue and OCF of certain entities
acquired during 2013 and 2014 in our rebased amounts for the three
months ended March 31, 2013 to the same extent that the revenue and OCF
of such entities are included in our results for the three months ended
March 31, 2014, (ii) remove intercompany eliminations for the applicable
period in 2013 to conform to the presentation during the 2014 period
following the disposal of the Chellomedia operations, which resulted in
previously eliminated intercompany costs becoming third-party costs and
(iii) reflect the translation of our rebased amounts for the three
months ended March 31, 2013 at the applicable average foreign currency
exchange rates that were used to translate our results for the three
months ended March 31, 2014. 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, 2013 include Virgin Media
and four small entities. We have reflected the revenue and OCF of the
acquired entities in our 2013 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 Generally
Accepted Accounting Principles in the United States (“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:
|
|
Three months ended
|
|
Increase
|
|
|
Increase
|
|
|
March 31,
|
|
(decrease)
|
|
|
(decrease)
|
Revenue
|
|
2014
|
|
2013
|
|
$
|
|
%
|
|
Rebased %
|
|
|
in millions, except % amounts
|
|
European Operations Division:
|
|
|
|
|
|
|
|
|
|
|
U.K. (Virgin Media)
|
|
$
|
1,727.9
|
|
|
$
|
—
|
|
|
$
|
1,727.9
|
|
|
N.M.
|
|
1.0
|
|
Germany (Unitymedia KabelBW)
|
|
695.9
|
|
|
618.2
|
|
|
77.7
|
|
|
12.6
|
|
|
8.4
|
|
Belgium (Telenet)
|
|
574.2
|
|
|
536.2
|
|
|
38.0
|
|
|
7.1
|
|
|
3.2
|
|
The Netherlands
|
|
318.1
|
|
|
314.8
|
|
|
3.3
|
|
|
1.0
|
|
|
(2.6
|
)
|
Switzerland
|
|
352.8
|
|
|
326.0
|
|
|
26.8
|
|
|
8.2
|
|
|
3.6
|
|
Other Western Europe
|
|
230.6
|
|
|
222.6
|
|
|
8.0
|
|
|
3.6
|
|
|
(0.5
|
)
|
Total Western Europe
|
|
3,899.5
|
|
|
2,017.8
|
|
|
1,881.7
|
|
|
93.3
|
|
|
2.4
|
|
Central and Eastern Europe
|
|
289.2
|
|
|
287.8
|
|
|
1.4
|
|
|
0.5
|
|
|
(0.5
|
)
|
Central and other
|
|
33.9
|
|
|
31.8
|
|
|
2.1
|
|
|
6.6
|
|
|
*
|
Total European Operations Division
|
|
4,222.6
|
|
|
2,337.4
|
|
|
1,885.2
|
|
|
80.7
|
|
|
2.2
|
|
Chile (VTR Group)
|
|
225.3
|
|
|
250.4
|
|
|
(25.1
|
)
|
|
(10.0
|
)
|
|
5.1
|
|
Corporate and other
|
|
93.1
|
|
|
93.0
|
|
|
0.1
|
|
|
0.1
|
|
|
*
|
Intersegment eliminations
|
|
(7.3
|
)
|
|
(8.9
|
)
|
|
1.6
|
|
|
N.M.
|
|
*
|
Total
|
|
$
|
4,533.7
|
|
|
$
|
2,671.9
|
|
|
$
|
1,861.8
|
|
|
69.7
|
|
|
2.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Information:
|
|
|
|
|
|
|
|
|
|
|
Total Liberty Global (excluding Virgin Media)
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Increase
|
|
|
Increase
|
|
|
March 31,
|
|
(decrease)
|
|
|
(decrease)
|
Operating Cash Flow
|
|
2014
|
|
2013
|
|
$
|
|
%
|
|
Rebased %
|
|
|
in millions, except % amounts
|
|
European Operations Division:
|
|
|
|
|
|
|
|
|
|
|
U.K. (Virgin Media)
|
|
$
|
736.5
|
|
|
$
|
—
|
|
|
$
|
736.5
|
|
|
N.M.
|
|
5.8
|
|
Germany (Unitymedia KabelBW)
|
|
429.0
|
|
|
360.0
|
|
|
69.0
|
|
|
19.2
|
|
|
14.7
|
|
Belgium (Telenet)
|
|
302.1
|
|
|
247.5
|
|
|
54.6
|
|
|
22.1
|
|
|
17.4
|
|
The Netherlands
|
|
183.3
|
|
|
184.8
|
|
|
(1.5
|
)
|
|
(0.8
|
)
|
|
(4.4
|
)
|
Switzerland
|
|
206.4
|
|
|
182.2
|
|
|
24.2
|
|
|
13.3
|
|
|
8.3
|
|
Other Western Europe
|
|
113.1
|
|
|
104.8
|
|
|
8.3
|
|
|
7.9
|
|
|
3.6
|
|
Total Western Europe
|
|
1,970.4
|
|
|
1,079.3
|
|
|
891.1
|
|
|
82.6
|
|
|
8.4
|
|
Central and Eastern Europe
|
|
147.0
|
|
|
140.6
|
|
|
6.4
|
|
|
4.6
|
|
|
3.8
|
|
Central and other
|
|
(59.7
|
)
|
|
(45.8
|
)
|
|
(13.9
|
)
|
|
(30.3
|
)
|
|
*
|
Total European Operations Division
|
|
2,057.7
|
|
|
1,174.1
|
|
|
883.6
|
|
|
75.3
|
|
|
7.6
|
|
Chile (VTR Group)
|
|
82.7
|
|
|
85.2
|
|
|
(2.5
|
)
|
|
(2.9
|
)
|
|
13.6
|
|
Corporate and other
|
|
(16.9
|
)
|
|
(10.6
|
)
|
|
(6.3
|
)
|
|
(59.4
|
)
|
|
*
|
Intersegment eliminations
|
|
4.0
|
|
|
11.3
|
|
|
(7.3
|
)
|
|
N.M.
|
|
*
|
Total
|
|
$
|
2,127.5
|
|
|
$
|
1,260.0
|
|
|
$
|
867.5
|
|
|
68.8
|
|
|
7.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Information:
|
|
|
|
|
|
|
|
|
|
|
Total Liberty Global (excluding Virgin Media)
|
8.6
|
|
|
|
|
* - Omitted; N.M. - Not Meaningful
Operating Cash Flow Definition and Reconciliation
OCF is the primary measure used by our chief operating decision maker to
evaluate segment operating performance. OCF 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, OCF is defined as revenue less operating and
SG&A expenses (excluding share-based compensation, depreciation and
amortization, provisions and provision releases related to significant
litigation and impairment, restructuring and other operating
items). Other operating items include (a) gains and losses on the
disposition of long-lived assets, (b) third-party costs directly
associated with successful and unsuccessful acquisitions and
dispositions, including legal, advisory and due diligence fees, as
applicable, and (c) 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 U.S. GAAP measures because it represents a
transparent view of our recurring operating performance that is
unaffected by our capital structure and allows management to (1) readily
view operating trends, (2) perform analytical comparisons and
benchmarking between segments and (3) 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. OCF 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,
|
|
|
2014
|
|
2013
|
|
in millions
|
Total segment operating cash flow
|
|
$
|
2,127.5
|
|
|
$
|
1,260.0
|
|
Share-based compensation expense
|
|
(55.1
|
)
|
|
(26.3
|
)
|
Depreciation and amortization
|
|
(1,377.1
|
)
|
|
(684.6
|
)
|
Impairment, restructuring and other operating items, net
|
|
(113.6
|
)
|
|
(20.9
|
)
|
Operating income
|
|
$
|
581.7
|
|
|
$
|
528.2
|
|
|
|
|
|
|
|
|
|
|
Summary of Debt, Capital Lease Obligations and Cash and Cash
Equivalents
The following table1 details the U.S. dollar equivalent
balances of our third-party consolidated debt, capital lease obligations
and cash and cash equivalents at March 31, 2014:
|
|
|
|
Capital
|
|
Debt & Capital
|
|
Cash
|
|
|
|
|
Lease
|
|
Lease
|
|
and Cash
|
|
|
Debt2
|
|
Obligations
|
|
Obligations
|
|
Equivalents
|
|
|
in millions
|
Liberty Global and unrestricted subsidiaries
|
|
$
|
1,710.1
|
|
|
$
|
40.7
|
|
|
$
|
1,750.8
|
|
|
$
|
1,043.8
|
Virgin Media3
|
|
15,076.2
|
|
|
360.2
|
|
|
15,436.4
|
|
|
1,576.7
|
UPC Holding
|
|
11,194.2
|
|
|
32.0
|
|
|
11,226.2
|
|
|
31.4
|
Unitymedia KabelBW
|
|
7,721.2
|
|
|
943.9
|
|
|
8,665.1
|
|
|
27.9
|
Telenet
|
|
4,870.4
|
|
|
462.9
|
|
|
5,333.3
|
|
|
297.6
|
VTR Finance
|
|
1,400.0
|
|
|
0.8
|
|
|
1,400.8
|
|
|
105.8
|
Liberty Puerto Rico
|
|
657.6
|
|
|
1.4
|
|
|
659.0
|
|
|
8.9
|
Total Liberty Global
|
|
$
|
42,629.7
|
|
|
$
|
1,841.9
|
|
|
$
|
44,471.6
|
|
|
$
|
3,092.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
2014
|
|
2013
|
|
|
in millions, except % amounts
|
Customer premises equipment
|
|
$
|
344.5
|
|
|
$
|
242.8
|
|
Scalable infrastructure
|
|
168.8
|
|
|
75.4
|
|
Line extensions
|
|
106.8
|
|
|
67.4
|
|
Upgrade/rebuild
|
|
134.8
|
|
|
74.8
|
|
Support capital & other
|
|
155.3
|
|
|
70.6
|
|
Property and equipment additions
|
|
910.2
|
|
|
531.0
|
|
Assets acquired under capital-related vendor financing arrangements
|
|
(170.5
|
)
|
|
(76.1
|
)
|
Assets acquired under capital leases
|
|
(49.0
|
)
|
|
(18.3
|
)
|
Changes in current liabilities related to capital expenditures
|
|
44.3
|
|
|
62.8
|
|
Capital expenditures4
|
|
$
|
735.0
|
|
|
$
|
499.4
|
|
|
|
|
|
|
Property and equipment additions as % of revenue
|
|
20.1
|
%
|
|
19.9
|
%
|
_________________________________
|
|
1
|
|
Except as otherwise indicated, the amounts reported in the table
include the named entity and its subsidiaries.
|
2
|
|
Debt amounts for UPC Holding and Telenet include senior secured
notes issued by special purpose entities that are consolidated by
each.
|
3
|
|
The Virgin Media borrowing group includes certain subsidiaries of
Virgin Media Inc. ("Virgin Media"), but excludes Virgin Media. The
cash and cash equivalents amount includes cash and cash equivalents
held by the Virgin Media borrowing group, but excludes $116 million
of cash and cash equivalents held by Virgin Media. This amount is
included in the amount shown for Liberty Global and unrestricted
subsidiaries. In addition, the $57 million carrying value of the
6.5% convertible notes of Virgin Media is excluded from the debt of
the Virgin Media borrowing group and included in the debt of Liberty
Global and unrestricted subsidiaries. In April 2014, the Virgin
Media borrowing group used $1.5 billion of its cash and cash
equivalents to redeem all the 7.0% senior secured notes due 2018,
including the related redemption premium.
|
4
|
|
The capital expenditures that we report in our condensed
consolidated statements of cash flows 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
share-based incentive awards and (ii) cash payments for third-party
costs directly associated with successful and unsuccessful acquisitions
and dispositions, less (a) capital expenditures, as reported in our
consolidated statements of cash flows, (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 operations. We also present Adjusted FCF, which adjusts FCF
to eliminate the incremental FCF deficit associated with the VTR
Wireless mobile initiative and certain financing and other costs
associated with the Virgin Media acquisition. 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 statements of cash flows. 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,
|
|
|
2014
|
|
2013
|
|
in millions
|
Net cash provided by operating activities of our continuing
operations
|
|
$
|
1,320.4
|
|
|
$
|
551.7
|
|
Excess tax benefits from share-based compensation5
|
|
—
|
|
|
1.3
|
|
Cash payments for direct acquisition and disposition costs6
|
|
11.2
|
|
|
8.4
|
|
Capital expenditures
|
|
(735.0
|
)
|
|
(499.4
|
)
|
Principal payments on vendor financing obligations
|
|
(220.8
|
)
|
|
(37.0
|
)
|
Principal payments on certain capital leases
|
|
(46.4
|
)
|
|
(3.1
|
)
|
FCF
|
|
$
|
329.4
|
|
|
$
|
21.9
|
|
FCF
|
|
$
|
329.4
|
|
|
$
|
21.9
|
|
FCF deficit of VTR Wireless
|
|
20.6
|
|
|
44.4
|
|
Adjusted FCF
|
|
$
|
350.0
|
|
|
$
|
66.3
|
|
|
|
|
|
|
|
|
|
|
______________________________________
|
|
5
|
|
Excess tax benefits from share-based compensation represent the
excess of tax deductions over the related financial reporting
share-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.
|
6
|
|
Represents costs paid during the period to third parties directly
related to acquisitions and dispositions.
|
|
|
|
Combined Free Cash Flow, Adjusted Free Cash Flow and Other
Information for Historical Q1 2013
The combined amounts presented below have been included in this release
to provide a means for comparison. The Liberty Global amounts presented
below are on a reported basis. The Virgin Media pre-acquisition amounts
presented below are on a reported basis for the period from January 1,
2013 to March 31, 2013, as adjusted to conform to the FCF and Adjusted
FCF definitions of Liberty Global as set forth earlier. The Virgin Media
pre-acquisition amounts have been converted into U.S. dollars at the
average GBP/USD foreign exchange rate for the pre-acquisition period in
2013 as applicable. The combined Liberty Global/Virgin Media results
have not been prepared with a view towards complying with Article 11 of
Regulation S-X. In addition, the combined Liberty Global/Virgin Media
results are not necessarily indicative of the FCF and Adjusted FCF that
would have occurred if the Liberty Global/Virgin Media transaction had
occurred on the dates assumed for purposes of calculating the combined
results, or the FCF and Adjusted FCF that will occur in the future. The
below FCF and Adjusted FCF table should be read in conjunction with the
information included in the footnotes to the tables on page 16.
|
|
|
Three months ended
|
|
|
March 31, 2013
|
|
|
Liberty Global
|
|
Virgin Media Pre- acquisition
|
|
Combined
|
|
in millions
|
Net cash provided by operating activities of our continuing
operations
|
|
$
|
551.7
|
|
|
$
|
472.3
|
|
|
$
|
1,024.0
|
|
Excess tax benefits from share-based compensation
|
|
1.3
|
|
|
—
|
|
|
1.3
|
|
Cash payments for direct acquisition and disposition costs
|
|
8.4
|
|
|
3.3
|
|
|
11.7
|
|
Capital expenditures
|
|
(499.4
|
)
|
|
(269.2
|
)
|
|
(768.6
|
)
|
Principal payments on vendor financing obligations
|
|
(37.0
|
)
|
|
—
|
|
|
(37.0
|
)
|
Principal payments on certain capital leases
|
|
(3.1
|
)
|
|
(35.0
|
)
|
|
(38.1
|
)
|
FCF
|
|
$
|
21.9
|
|
|
$
|
171.4
|
|
|
$
|
193.3
|
|
FCF
|
|
$
|
21.9
|
|
|
$
|
171.4
|
|
|
$
|
193.3
|
|
FCF deficit of VTR Wireless
|
|
44.4
|
|
|
—
|
|
|
44.4
|
|
Adjusted FCF
|
|
$
|
66.3
|
|
|
$
|
171.4
|
|
|
$
|
237.7
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
March 31, 2013
|
|
|
Liberty Global
|
|
Virgin Media Pre- acquisition
|
|
Combined
|
|
|
in millions
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
2,671.9
|
|
|
$
|
1,615.5
|
|
|
$
|
4,287.4
|
|
Property & Equipment Additions
|
|
$
|
531.0
|
|
|
$
|
341.8
|
|
|
$
|
872.8
|
|
|
|
|
|
|
|
|
Property & Equipment Additions as a percentage of Revenue
|
|
19.9
|
%
|
|
21.2
|
%
|
|
20.4
|
%
|
|
|
|
|
|
|
|
|
|
|
ARPU per Customer Relationship
The following table provides ARPU per customer relationship8
for the indicated periods:
|
|
Three months ended March 31,
|
|
%
|
|
FX-Neutral
|
|
|
2014
|
|
2013
|
|
Change
|
|
% Change10
|
Liberty Global Consolidated9
|
|
$
|
|
49.08
|
|
|
$
|
|
38.68
|
|
|
26.9
|
%
|
|
24.8
|
%
|
European Operations Consolidated9
|
|
€
|
|
35.19
|
|
|
€
|
|
27.55
|
|
|
27.7
|
%
|
|
28.1
|
%
|
U.K. (Virgin Media)
|
|
£
|
|
49.26
|
|
|
£
|
|
—
|
|
|
—
|
|
|
—
|
|
Germany (Unitymedia KabelBW)
|
|
€
|
|
21.04
|
|
|
€
|
|
19.81
|
|
|
6.2
|
%
|
|
6.2
|
%
|
Belgium (Telenet)
|
|
€
|
|
49.96
|
|
|
€
|
|
47.40
|
|
|
5.4
|
%
|
|
5.4
|
%
|
Other Europe
|
|
€
|
|
29.58
|
|
|
€
|
|
28.93
|
|
|
2.2
|
%
|
|
2.9
|
%
|
VTR
|
|
CLP
|
|
31,673
|
|
|
CLP
|
|
30,721
|
|
|
3.1
|
%
|
|
3.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mobile Statistics11
The following tables provide ARPU per mobile subscriber12 and
mobile subscribers for the indicated periods:
|
|
ARPU per Mobile Subscriber
|
|
|
Three months ended March 31,
|
|
%
|
|
FX-Neutral
|
|
|
2014
|
|
2013
|
|
Change
|
|
% Change10
|
Liberty Global Consolidated:9
|
|
|
|
|
|
|
|
|
Excluding interconnect revenue
|
|
$
|
20.86
|
|
|
$
|
23.18
|
|
|
(10.0
|
)%
|
|
(11.8
|
)%
|
Including interconnect revenue
|
|
$
|
25.79
|
|
|
$
|
31.87
|
|
|
(19.1
|
)%
|
|
(20.8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mobile Subscribers
|
|
|
|
|
Mar. 31, 2014
|
|
Dec. 31, 2013
|
|
Change
|
|
|
European Operations:
|
|
|
|
|
|
|
|
|
U.K. (Virgin Media)
|
|
2,998,500
|
|
|
2,990,200
|
|
|
8,300
|
|
|
|
Germany (Unitymedia KabelBW)
|
|
255,300
|
|
|
239,500
|
|
|
15,800
|
|
|
|
Belgium (Telenet)
|
|
779,800
|
|
|
750,500
|
|
|
29,300
|
|
|
|
The Netherlands
|
|
3,500
|
|
|
3,000
|
|
|
500
|
|
|
|
Total Western Europe
|
|
4,037,100
|
|
|
3,983,200
|
|
|
53,900
|
|
|
|
Poland
|
|
14,600
|
|
|
16,500
|
|
|
(1,900
|
)
|
|
|
Hungary
|
|
8,500
|
|
|
7,700
|
|
|
800
|
|
|
|
Total CEE
|
|
23,100
|
|
|
24,200
|
|
|
(1,100
|
)
|
|
|
Total European Operations
|
|
4,060,200
|
|
|
4,007,400
|
|
|
52,800
|
|
|
|
VTR Wireless (Chile)
|
|
83,000
|
|
|
71,300
|
|
|
11,700
|
|
|
|
Grand Total
|
|
4,143,200
|
|
|
4,078,700
|
|
|
64,500
|
|
|
|
_________________________________
|
|
8
|
|
Average Revenue Per Unit (“ARPU”) 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, interconnect 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
Liberty Global Consolidated, the European Operations Division and
Other Europe are not adjusted for currency impacts.
|
9
|
|
The amounts for the three months ended March 31, 2013 do not include
the impact of the Virgin Media acquisition.
|
10
|
|
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.
|
11
|
|
Please see page 8 for the definition of mobile subscriber.
|
12
|
|
Our ARPU per mobile subscriber calculation that excludes
interconnect revenue refers to the average monthly mobile
subscription revenue per average mobile subscribers in service and
is calculated by dividing the average monthly mobile subscription
revenue (excluding activation, handset fees and late fees) for the
indicated period, by the average of the opening and closing balances
of mobile subscribers in service for the period. Our ARPU per mobile
subscriber calculation that includes interconnect revenue increases
the numerator in the above-described calculation by the amount of
mobile interconnect revenue during the period.
|
|
|
|
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, 2014, December 31, 2013 and March 31, 2013:13
|
|
|
|
|
|
|
|
|
|
|
|
|
Mar. 31,
|
|
Dec. 31,
|
|
Mar. 31,
|
|
Q1’14 / Q4’13
|
|
Q1’14 / Q1’13
|
|
|
2014
|
|
2013
|
|
2013
|
|
(% Change)
|
|
(% Change)
|
Total RGUs
|
|
|
|
|
|
|
|
|
|
|
Total Video RGUs
|
|
21,727,400
|
|
|
21,787,600
|
|
|
18,210,300
|
|
|
(0.3
|
%)
|
|
19.3
|
%
|
Total Broadband Internet RGUs
|
|
14,611,800
|
|
|
14,365,000
|
|
|
9,488,300
|
|
|
1.7
|
%
|
|
54.0
|
%
|
Total Telephony RGUs
|
|
12,298,100
|
|
|
12,115,200
|
|
|
7,513,300
|
|
|
1.5
|
%
|
|
63.7
|
%
|
Liberty Global Consolidated
|
|
48,637,300
|
|
|
48,267,800
|
|
|
35,211,900
|
|
|
0.8
|
%
|
|
38.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total Customers
|
|
|
|
|
|
|
|
|
|
|
European Operations Division
|
|
23,018,600
|
|
|
23,024,500
|
|
|
18,304,600
|
|
|
—
|
|
|
25.8
|
%
|
VTR
|
|
1,210,300
|
|
|
1,199,800
|
|
|
1,167,900
|
|
|
0.9
|
%
|
|
3.6
|
%
|
Other
|
|
275,300
|
|
|
272,800
|
|
|
273,200
|
|
|
0.9
|
%
|
|
0.8
|
%
|
Liberty Global Consolidated
|
|
24,504,200
|
|
|
24,497,100
|
|
|
19,745,700
|
|
|
—
|
|
|
24.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total Single-Play Customers
|
|
10,468,700
|
|
|
10,646,000
|
|
|
10,466,600
|
|
|
(1.7
|
%)
|
|
—
|
|
Total Double-Play Customers
|
|
3,937,900
|
|
|
3,931,400
|
|
|
3,092,000
|
|
|
0.2
|
%
|
|
27.4
|
%
|
Total Triple-Play Customers
|
|
10,097,600
|
|
|
9,919,700
|
|
|
6,187,100
|
|
|
1.8
|
%
|
|
63.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
% Double-Play Customers
|
|
|
|
|
|
|
|
|
|
|
European Operations Division
|
|
15.7
|
%
|
|
15.7
|
%
|
|
15.1
|
%
|
|
—
|
|
|
4.0
|
%
|
VTR
|
|
21.2
|
%
|
|
21.1
|
%
|
|
20.8
|
%
|
|
0.5
|
%
|
|
1.9
|
%
|
Liberty Global Consolidated
|
|
16.1
|
%
|
|
16.0
|
%
|
|
15.7
|
%
|
|
0.6
|
%
|
|
2.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
% Triple-Play Customers
|
|
|
|
|
|
|
|
|
|
|
European Operations Division
|
|
40.9
|
%
|
|
40.2
|
%
|
|
30.5
|
%
|
|
1.7
|
%
|
|
34.1
|
%
|
VTR
|
|
46.7
|
%
|
|
46.3
|
%
|
|
46.0
|
%
|
|
0.9
|
%
|
|
1.5
|
%
|
Liberty Global Consolidated
|
|
41.2
|
%
|
|
40.5
|
%
|
|
31.3
|
%
|
|
1.7
|
%
|
|
31.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
RGUs per Customer Relationship
|
|
|
|
|
|
|
|
|
|
|
European Operations Division
|
|
1.98
|
|
|
1.96
|
|
|
1.76
|
|
|
1.0
|
%
|
|
12.5
|
%
|
VTR
|
|
2.15
|
|
|
2.14
|
|
|
2.13
|
|
|
0.5
|
%
|
|
0.9
|
%
|
Liberty Global Consolidated
|
|
1.98
|
|
|
1.97
|
|
|
1.78
|
|
|
0.5
|
%
|
|
11.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________________________
|
|
13
|
|
The March 31, 2013 amounts do not include the impact of the Virgin
Media acquisition.
|
|
|
|
|
|
Consolidated Operating Data — March 31, 2014
|
|
|
|
|
|
|
|
|
|
|
Video
|
|
|
|
|
|
|
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
|
|
Internet Subscribers(9)
|
|
Telephony Subscribers(10)
|
|
|
European Operations Division:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K.
|
|
12,572,000
|
|
|
12,572,000
|
|
|
4,929,700
|
|
|
12,311,300
|
|
|
—
|
|
|
3,748,600
|
|
|
—
|
|
|
—
|
|
|
3,748,600
|
|
|
4,415,800
|
|
|
4,146,900
|
Germany
|
|
12,639,900
|
|
|
12,311,200
|
|
|
7,080,800
|
|
|
11,825,300
|
|
|
4,337,700
|
|
|
2,247,100
|
|
|
—
|
|
|
—
|
|
|
6,584,800
|
|
|
2,661,200
|
|
|
2,579,300
|
Belgium
|
|
2,899,400
|
|
|
2,899,400
|
|
|
2,082,400
|
|
|
4,651,700
|
|
|
573,300
|
|
|
1,509,100
|
|
|
—
|
|
|
—
|
|
|
2,082,400
|
|
|
1,480,900
|
|
|
1,088,400
|
The Netherlands(11)
|
|
2,840,800
|
|
|
2,827,400
|
|
|
1,617,600
|
|
|
3,690,200
|
|
|
501,400
|
|
|
1,114,000
|
|
|
—
|
|
|
—
|
|
|
1,615,400
|
|
|
1,085,000
|
|
|
989,800
|
Switzerland(11)
|
|
2,153,200
|
|
|
1,884,200
|
|
|
1,459,400
|
|
|
2,560,100
|
|
|
747,500
|
|
|
674,200
|
|
|
—
|
|
|
—
|
|
|
1,421,700
|
|
|
675,400
|
|
|
463,000
|
Austria
|
|
1,336,900
|
|
|
1,336,900
|
|
|
650,600
|
|
|
1,320,800
|
|
|
183,800
|
|
|
341,900
|
|
|
—
|
|
|
—
|
|
|
525,700
|
|
|
440,400
|
|
|
354,700
|
Ireland
|
|
857,900
|
|
|
750,600
|
|
|
530,600
|
|
|
1,084,000
|
|
|
47,800
|
|
|
339,000
|
|
|
—
|
|
|
35,900
|
|
|
422,700
|
|
|
348,300
|
|
|
313,000
|
Total Western Europe
|
|
35,300,100
|
|
|
34,581,700
|
|
|
18,351,100
|
|
|
37,443,400
|
|
|
6,391,500
|
|
|
9,973,900
|
|
|
—
|
|
|
35,900
|
|
|
16,401,300
|
|
|
11,107,000
|
|
|
9,935,100
|
Poland
|
|
2,725,000
|
|
|
2,630,000
|
|
|
1,431,000
|
|
|
2,682,000
|
|
|
353,300
|
|
|
868,200
|
|
|
—
|
|
|
—
|
|
|
1,221,500
|
|
|
933,500
|
|
|
527,000
|
Hungary
|
|
1,542,000
|
|
|
1,526,600
|
|
|
1,055,000
|
|
|
1,889,200
|
|
|
246,300
|
|
|
388,000
|
|
|
266,800
|
|
|
—
|
|
|
901,100
|
|
|
528,200
|
|
|
459,900
|
Romania
|
|
2,281,200
|
|
|
2,096,900
|
|
|
1,179,500
|
|
|
1,862,200
|
|
|
350,400
|
|
|
493,100
|
|
|
329,200
|
|
|
—
|
|
|
1,172,700
|
|
|
395,000
|
|
|
294,500
|
Czech Republic
|
|
1,360,900
|
|
|
1,259,200
|
|
|
718,000
|
|
|
1,181,900
|
|
|
83,700
|
|
|
376,200
|
|
|
103,000
|
|
|
—
|
|
|
562,900
|
|
|
441,000
|
|
|
178,000
|
Slovakia
|
|
502,800
|
|
|
480,000
|
|
|
284,000
|
|
|
429,000
|
|
|
54,600
|
|
|
133,900
|
|
|
65,800
|
|
|
600
|
|
|
254,900
|
|
|
110,700
|
|
|
63,400
|
Total CEE
|
|
8,411,900
|
|
|
7,992,700
|
|
|
4,667,500
|
|
|
8,044,300
|
|
|
1,088,300
|
|
|
2,259,400
|
|
|
764,800
|
|
|
600
|
|
|
4,113,100
|
|
|
2,408,400
|
|
|
1,522,800
|
Total Europe
|
|
43,712,000
|
|
|
42,574,400
|
|
|
23,018,600
|
|
|
45,487,700
|
|
|
7,479,800
|
|
|
12,233,300
|
|
|
764,800
|
|
|
36,500
|
|
|
20,514,400
|
|
|
13,515,400
|
|
|
11,457,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chile
|
|
2,933,200
|
|
|
2,412,300
|
|
|
1,210,300
|
|
|
2,596,600
|
|
|
127,900
|
|
|
870,900
|
|
|
—
|
|
|
—
|
|
|
998,800
|
|
|
899,400
|
|
|
698,400
|
Puerto Rico
|
|
704,700
|
|
|
704,700
|
|
|
275,300
|
|
|
553,000
|
|
|
—
|
|
|
214,200
|
|
|
—
|
|
|
—
|
|
|
214,200
|
|
|
197,000
|
|
|
141,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total
|
|
47,349,900
|
|
|
45,691,400
|
|
|
24,504,200
|
|
|
48,637,300
|
|
|
7,607,700
|
|
|
13,318,400
|
|
|
764,800
|
|
|
36,500
|
|
|
21,727,400
|
|
|
14,611,800
|
|
|
12,298,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriber Variance Table - March 31, 2014 vs. December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
Video
|
|
|
|
|
|
|
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
|
|
Internet Subscribers(9)
|
|
Telephony Subscribers(10)
|
|
|
European Operations Division:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K.
|
|
51,900
|
|
|
51,900
|
|
|
21,200
|
|
|
49,600
|
|
|
—
|
|
|
(1,000
|
)
|
|
—
|
|
|
—
|
|
|
(1,000
|
)
|
|
40,100
|
|
|
10,500
|
|
Germany
|
|
5,600
|
|
|
16,000
|
|
|
11,000
|
|
|
126,800
|
|
|
(28,800
|
)
|
|
12,200
|
|
|
—
|
|
|
—
|
|
|
(16,600
|
)
|
|
81,600
|
|
|
61,800
|
|
Belgium
|
|
5,600
|
|
|
5,600
|
|
|
(10,100
|
)
|
|
29,300
|
|
|
(27,800
|
)
|
|
17,700
|
|
|
—
|
|
|
—
|
|
|
(10,100
|
)
|
|
16,000
|
|
|
23,400
|
|
The Netherlands(11)
|
|
2,200
|
|
|
2,100
|
|
|
(16,300
|
)
|
|
7,200
|
|
|
(22,500
|
)
|
|
5,900
|
|
|
—
|
|
|
—
|
|
|
(16,600
|
)
|
|
16,900
|
|
|
6,900
|
|
Switzerland(11)
|
|
7,900
|
|
|
9,100
|
|
|
4,200
|
|
|
21,400
|
|
|
(17,200
|
)
|
|
22,500
|
|
|
—
|
|
|
—
|
|
|
5,300
|
|
|
11,600
|
|
|
4,500
|
|
Austria
|
|
10,900
|
|
|
10,900
|
|
|
7,900
|
|
|
16,300
|
|
|
2,400
|
|
|
(900
|
)
|
|
—
|
|
|
—
|
|
|
1,500
|
|
|
8,300
|
|
|
6,500
|
|
Ireland
|
|
(1,700
|
)
|
|
2,000
|
|
|
(2,400
|
)
|
|
24,300
|
|
|
(3,300
|
)
|
|
700
|
|
|
—
|
|
|
(2,600
|
)
|
|
(5,200
|
)
|
|
10,000
|
|
|
19,500
|
|
Total Western Europe
|
|
82,400
|
|
|
97,600
|
|
|
15,500
|
|
|
274,900
|
|
|
(97,200
|
)
|
|
57,100
|
|
|
—
|
|
|
(2,600
|
)
|
|
(42,700
|
)
|
|
184,500
|
|
|
133,100
|
|
Poland
|
|
7,300
|
|
|
13,700
|
|
|
(5,600
|
)
|
|
9,000
|
|
|
(33,700
|
)
|
|
19,900
|
|
|
—
|
|
|
—
|
|
|
(13,800
|
)
|
|
17,600
|
|
|
5,200
|
|
Hungary
|
|
2,700
|
|
|
2,600
|
|
|
4,200
|
|
|
26,600
|
|
|
(11,000
|
)
|
|
11,100
|
|
|
2,200
|
|
|
—
|
|
|
2,300
|
|
|
9,900
|
|
|
14,400
|
|
Romania
|
|
8,600
|
|
|
16,600
|
|
|
(8,800
|
)
|
|
19,300
|
|
|
(13,700
|
)
|
|
15,400
|
|
|
(11,800
|
)
|
|
—
|
|
|
(10,100
|
)
|
|
14,000
|
|
|
15,400
|
|
Czech Republic
|
|
1,500
|
|
|
1,500
|
|
|
(7,600
|
)
|
|
(7,100
|
)
|
|
2,100
|
|
|
(3,000
|
)
|
|
(3,800
|
)
|
|
—
|
|
|
(4,700
|
)
|
|
1,000
|
|
|
(3,400
|
)
|
Slovakia
|
|
1,600
|
|
|
1,700
|
|
|
(3,600
|
)
|
|
(2,200
|
)
|
|
(4,500
|
)
|
|
900
|
|
|
(700
|
)
|
|
—
|
|
|
(4,300
|
)
|
|
1,300
|
|
|
800
|
|
Total CEE
|
|
21,700
|
|
|
36,100
|
|
|
(21,400
|
)
|
|
45,600
|
|
|
(60,800
|
)
|
|
44,300
|
|
|
(14,100
|
)
|
|
—
|
|
|
(30,600
|
)
|
|
43,800
|
|
|
32,400
|
|
Total Europe
|
|
104,100
|
|
|
133,700
|
|
|
(5,900
|
)
|
|
320,500
|
|
|
(158,000
|
)
|
|
101,400
|
|
|
(14,100
|
)
|
|
(2,600
|
)
|
|
(73,300
|
)
|
|
228,300
|
|
|
165,500
|
|
Chile
|
|
5,900
|
|
|
6,200
|
|
|
10,500
|
|
|
31,800
|
|
|
(6,900
|
)
|
|
16,300
|
|
|
—
|
|
|
—
|
|
|
9,400
|
|
|
13,700
|
|
|
8,700
|
|
Puerto Rico
|
|
100
|
|
|
100
|
|
|
2,500
|
|
|
17,200
|
|
|
—
|
|
|
3,700
|
|
|
—
|
|
|
—
|
|
|
3,700
|
|
|
4,800
|
|
|
8,700
|
|
Grand Total
|
|
110,100
|
|
|
140,000
|
|
|
7,100
|
|
|
369,500
|
|
|
(164,900
|
)
|
|
121,400
|
|
|
(14,100
|
)
|
|
(2,600
|
)
|
|
(60,200
|
)
|
|
246,800
|
|
|
182,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Change Summary:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe (excl. U.K., DE and BE)
|
|
30,500
|
|
|
49,700
|
|
|
(35,000
|
)
|
|
105,100
|
|
|
(108,300
|
)
|
|
72,500
|
|
|
(14,100
|
)
|
|
(2,600
|
)
|
|
(52,500
|
)
|
|
88,300
|
|
|
69,300
|
|
U.K.
|
|
7,000
|
|
|
7,000
|
|
|
15,200
|
|
|
34,900
|
|
|
—
|
|
|
(4,700
|
)
|
|
—
|
|
|
—
|
|
|
(4,700
|
)
|
|
34,800
|
|
|
4,800
|
|
Germany
|
|
13,600
|
|
|
24,000
|
|
|
11,000
|
|
|
126,800
|
|
|
(28,800
|
)
|
|
12,200
|
|
|
—
|
|
|
—
|
|
|
(16,600
|
)
|
|
81,600
|
|
|
61,800
|
|
Belgium
|
|
5,600
|
|
|
5,600
|
|
|
(10,100
|
)
|
|
29,300
|
|
|
(27,800
|
)
|
|
17,700
|
|
|
—
|
|
|
—
|
|
|
(10,100
|
)
|
|
16,000
|
|
|
23,400
|
|
Total Europe
|
|
56,700
|
|
|
86,300
|
|
|
(18,900
|
)
|
|
296,100
|
|
|
(164,900
|
)
|
|
97,700
|
|
|
(14,100
|
)
|
|
(2,600
|
)
|
|
(83,900
|
)
|
|
220,700
|
|
|
159,300
|
|
Chile
|
|
5,900
|
|
|
6,200
|
|
|
10,500
|
|
|
31,800
|
|
|
(6,900
|
)
|
|
16,300
|
|
|
—
|
|
|
—
|
|
|
9,400
|
|
|
13,700
|
|
|
8,700
|
|
Puerto Rico
|
|
100
|
|
|
100
|
|
|
2,500
|
|
|
17,200
|
|
|
—
|
|
|
3,700
|
|
|
—
|
|
|
—
|
|
|
3,700
|
|
|
4,800
|
|
|
8,700
|
|
Total Organic Change
|
|
62,700
|
|
|
92,600
|
|
|
(5,900
|
)
|
|
345,100
|
|
|
(171,800
|
)
|
|
117,700
|
|
|
(14,100
|
)
|
|
(2,600
|
)
|
|
(70,800
|
)
|
|
239,200
|
|
|
176,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2014 Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition - U.K.
|
|
44,900
|
|
|
44,900
|
|
|
6,000
|
|
|
14,700
|
|
|
—
|
|
|
3,700
|
|
|
—
|
|
|
—
|
|
|
3,700
|
|
|
5,300
|
|
|
5,700
|
|
Acquisition - Austria
|
|
10,500
|
|
|
10,500
|
|
|
7,000
|
|
|
9,700
|
|
|
6,900
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,900
|
|
|
2,300
|
|
|
500
|
|
Germany adjustments
|
|
(8,000
|
)
|
|
(8,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net Adjustments
|
|
47,400
|
|
|
47,400
|
|
|
13,000
|
|
|
24,400
|
|
|
6,900
|
|
|
3,700
|
|
|
—
|
|
|
—
|
|
|
10,600
|
|
|
7,600
|
|
|
6,200
|
|
Net Adds (Reductions)
|
|
110,100
|
|
|
140,000
|
|
|
7,100
|
|
|
369,500
|
|
|
(164,900
|
)
|
|
121,400
|
|
|
(14,100
|
)
|
|
(2,600
|
)
|
|
(60,200
|
)
|
|
246,800
|
|
|
182,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 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 11) we do not report homes
passed for Switzerland's and the Netherlands' partner networks.
|
(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.
|
(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. 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,
2014 RGU counts exclude our separately reported postpaid and prepaid
mobile subscribers in the U.K., Belgium, Germany, Chile, Poland,
Hungary and the Netherlands of 2,998,500, 779,800, 255,300, 83,000,
14,600, 8,500 and 3,500, respectively. Our mobile subscriber count
represents the number of active SIM cards in service.
|
(5)
|
|
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 109,100 “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 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.
|
(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 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 exclude 120,400 asymmetric digital subscriber line
(“ADSL”) subscribers within our U.K. segment and 71,600 digital
subscriber line (“DSL”) subscribers within our Austria segment 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 31,900 subscribers who
have requested and received a modem that enables the receipt of this
2 Mbps internet service.
|
(10)
|
|
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
exclude 83,600 and 52,600 subscribers within our segments in the
U.K. and Austria, respectively, that are not serviced over our
networks.
|
(11)
|
|
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. At March 31, 2014, Switzerland's partner networks account
for 144,200 Customer Relationships, 282,000 RGUs, 112,100 Digital
Cable Subscribers, 99,300 Internet Subscribers, and 70,600 Telephony
Subscribers.
|
|
|
|
Additional General Notes to Tables:
All of our broadband communications subsidiaries provide telephony,
broadband internet, data, video or other 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 and residential multiple dwelling units 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 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.
Copyright Business Wire 2014