320,000 RGU Additions in Q3, including 296,000 in Europe
Q3 Rebased Revenue Growth of 4%, including 7% for LiLAC
Free Cash Flow Surges to $770 Million in Q3, $1.7 Billion YTD
All Full-Year 2015 Financial Guidance Confirmed
Liberty Global plc ("Liberty Global") (NASDAQ: LBTYA, LBTYB, LBTYK, LILA
and LILAK), today announces financial and operating results1
for the three months ("Q3") and nine months ("YTD") ended September 30,
2015 for the Liberty Global Group2 and the LiLAC Group2.
Key highlights for the consolidated operations of Liberty Global plc:
-
Subscriber additions accelerated sequentially to 320,000 in Q3,
increasing our total organic RGU3 additions to 526,000
for the YTD period
-
Strong take-up of our superior broadband products with 222,000 net
additions in Q3
-
Our quarterly video attrition halved in Q3, as compared to the
average of Q1 and Q2
-
Project Lightning on track in the U.K.; exploring network extension
programs in Germany, CEE and Chile
-
Total opportunity of over 10 million homes across our regional
footprints
-
Rebased4 revenue increased to 4% in Q3, up from 3% in prior
two quarters to $13.7 billion YTD
-
Improvement in revenue growth driven by Germany, Belgium, the U.K.
and LiLAC
-
Rebased OCF5 growth of 3% for both Q3 and YTD, reaching
$6.5 billion YTD
-
OCF growth adversely impacted by the underperformance of Ziggo
-
Excluding Ziggo, rebased OCF growth would have been 4% in Q3
-
Operating income of $1.7 billion YTD, including $546 million in Q3
-
Free Cash Flow ("FCF")6 increased 24% to $1.7
billion YTD, including $770 million in Q3, which was more than double
Q3 2014
Operating and financial highlights for the Liberty Global Group, our
European business:
-
Leveraging our superior fiber-rich network to provide customers with
best-in-class connectivity and entertainment
-
Q3 organic RGU additions rebounded to 296,000, up 3x compared to Q2
-
Added 102,000 RGUs in Germany, 68,000 in the U.K. and 26,000 in
Belgium
-
Speed leadership across our footprint with top tiers of 200 to 500
Mbps across Europe
-
Germany and U.K. key contributors to 200,000 new broadband RGUs in
Q3
-
Introduced new WiFi & Telephony gateway to deliver best-in-class
WiFi experience
-
Quality program has supported operational improvements at Ziggo,
resulting in lower attrition
-
Q3 RGU losses of 18,000 over 70% lower versus H1 average
-
Differentiating our products with Replay TV and launch of new
sports channel
-
Executing aggressive new product roadmap
-
Record Horizon quarter and continued TiVo traction, adding 339,000
new subscribers in Q3, surpassing the 4 million milestone
-
Launched mobile service in Ireland and enhanced our offerings in
Switzerland and the Netherlands, adding 4G speeds and more data
-
Improved revenue trends driving financial results; balance sheet
remains strong
-
Rebased revenue growth of 3.5% and rebased OCF growth of 3% in Q3
-
Q3 rebased revenue growth of 7% in Germany, 6% in Belgium and 5%
in the U.K.
-
Net leverage7 of 4.9x, extended maturity profile and
nearly $5 billion in total liquidity8
Operating and financial highlights for the LiLAC Group:
-
Customer and RGU gains continue to support robust financial performance
-
Third straight quarter of customer growth driven by Chile, up
10,000 in Q3
-
Organic RGU additions of 102,000 YTD, including 24,000 in Q3,
fueled by 73,000 broadband additions YTD
-
Strong financial results across the board
-
Q3 rebased revenue growth of 7%, reaching $908 million YTD
-
Second consecutive quarter of double-digit rebased OCF growth,
including Q3 at 10%
-
Net leverage of 3.9x with minimal debt maturities prior to 2022
-
Reduced fully-swapped borrowing cost by 230 bps to 6.4% at
September 30 following a series of transactions relating to a
re-strike of our derivative position
CEO Mike Fries commented, "Subscriber growth is back on track with
320,000 RGU additions in the third quarter, including 220,000 new
broadband subscribers. This acceleration in volume growth was fueled by
our operations in Germany and the U.K. Continued traction of our
cutting-edge Horizon TV platform resulted in a record quarter of almost
250,000 new subscriptions. The execution of our aggressive technology
roadmap continues delivering innovative products like our recently
launched Replay TV functionality and next-generation WiFi gateway."
"In the Netherlands, our renewed focus on service quality and product
launches since the Ziggo rebrand resulted in better subscriber
performance as compared to the first half. With momentum continuing
across the rest of our business, we are targeting up to one million
organic RGU additions for 2015, and look forward to a strong Q4. On the
mobile front, we improved our product portfolio with the launch of
data-rich 4G offerings in Switzerland, the Netherlands and Chile. In
total, we added over 450,000 postpaid subscribers in the last twelve
months and together with our successful split-contract mobile offering,
drove our Q3 rebased mobile revenue by 18% year-over-year.”
"From a financial perspective, in Europe we reported 3.5% rebased
revenue growth in Q3, our best quarterly performance in two years, led
by top-line growth in Germany, Belgium and the U.K. Our YTD rebased OCF
growth came in at 3%. As we continue to expect to meet full-year
guidance of mid-single-digit rebased growth, we anticipate a higher OCF
growth rate in Q4 than the YTD growth rate for our European operations.
Finally, we generated Free Cash Flow of $1.7 billion during the first
nine months of 2015, a 24% improvement year-over-year."
"In Latin America and the Caribbean, we reported another strong set of
results, including robust subscriber growth, 7% rebased revenue and 10%
rebased OCF growth in Q3. Our fast-growing LiLAC operations in Chile and
Puerto Rico, together with our scale opportunity and improving
demographics in this region of the world, make this an exciting
investment vehicle."
"Our levered-equity approach, which includes targeted gearing in the
4-5x range, remains a core pillar of our value creation strategy. The
debt on our balance sheet has an average maturity of nearly eight years
and we have no material repayments until 2021. With nearly $5 billion of
total liquidity, we have a solid foundation on which to launch our major
initiatives such as a ramping Liberty 3.0 program9, which
includes, among other items, our new build Project Lightning in the U.K."
Subscriber Statistics - Liberty Global Group (Europe)
At September 30, 2015, we provided a total of 53.2 million subscription
services ("RGUs") across our footprint of 48.8 million homes passed in
Europe. From a product perspective, these services consisted of 22.8
million video, 16.6 million broadband internet and 13.8 million
telephony subscriptions. During the quarter, we increased our RGUs by
300,000, including 296,000 organic RGU additions and a small in-market
acquisition in the Czech Republic. Driven by record Q3 customer growth
in the U.K. of 42,000 and strong customer additions in Germany of
14,000, our customer base in Europe expanded by 5,000 on an organic
basis to 25.8 million in total. We ended Q3 with a bundling ratio of
2.06 RGUs per customer as 45% of our customers subscribed to a
triple-play product, 16% subscribed to a double-play product and 39%
subscribed to only one of our products.
As expected, our Q3 organic additions showed a strong improvement from
the modest subscriber gains in the first half of 2015. From a regional
standpoint, our Q3 organic additions consisted of 178,000 RGUs in
Western Europe and 118,000 in CEE. In Germany, we gained 102,000 RGUs in
Q3, driven by our broadband momentum and low video attrition. In the
Netherlands, Ziggo significantly improved its quarterly RGU performance,
paring RGU losses to 18,000 in Q3, as compared to RGU losses of 87,000
in Q2. This improvement was primarily driven by broadband growth and
lower overall video and telephony attrition. Ziggo's progress in the
highly competitive Dutch market, which occurred despite the fact that we
implemented a July 1 price increase in the former UPC footprint, is
partly due to the benefits of the quality program that we initiated in
July, and the introduction of more aggressive promotional offers to new
subscribers in mid-July.
Elsewhere in Western Europe, Virgin Media added 68,000 RGUs in the U.K.
during Q3, as higher year-over-year broadband internet and telephony
growth more than offset a weaker video result that was impacted by a £3
per month price increase in September on our TV XL package, which has
included BT Sport Europe since August. In Belgium, Telenet added 26,000
subscribers on the back of attractive triple-play promotions throughout
the summer months, and a campaign that highlighted several monetary
advantages that both new and existing customers enjoy. Rounding out our
key Western European operations, the net attrition of 13,000 RGUs in
Switzerland was driven by lower sales and elevated churn, due in part to
our announced basic cable price increase of 7% on average for our
customers, effective January 1, 2016. This price increase is supported
by network investments and product improvements, such as more HD
channels in our basic digital offer and the expansion of our Replay TV
functionality.
Turning to our product performance, our organic subscriber growth was
powered by our 201,000 broadband RGU additions in Q3, with nine out of
our 12 European countries reporting higher organic broadband gains as
compared to the second quarter. Of particular note, our Dutch business
added 29,000 broadband RGUs during the quarter, a strong sequential
improvement as compared to 11,000 RGU losses in Q2 2015. In the U.K.,
our Q3 broadband RGU additions increased 14% year-over-year to 56,000
and included some early benefits from Project Lightning. In Germany,
Belgium and Switzerland, we added 58,000, 13,000 and 4,000 broadband
RGUs during the quarter, respectively. With respect to our fixed
telephony business, we gained 159,000 new subscribers in Q3, an increase
versus 147,000 additions in Q3 2014, as improvements in Romania, the
U.K., Switzerland and Austria more than offset lower additions in our
other European markets.
During Q3, we continued investing in our next-generation video
platforms, including the expansion of our out-of-home video capabilities
and the successful roll-out of our Replay TV functionality in the
Netherlands and Switzerland. We experienced our strongest quarterly
Horizon TV performance on record, partly driven by solid Ziggo results.
In total, we increased our next-generation TV subscriber base by
339,000, of which Horizon TV contributed 248,000 and TiVo delivered
91,000. This brings the combined base to 4.3 million at the end of Q3.
As only 20% of our total cable video base subscribed to our
next-generation platforms at the end of Q3, we see ample up-sell
potential ahead of us. In terms of our overall video performance, we
lost 64,000 organic RGUs, the lowest quarterly net attrition in 2015,
but above the 49,000 loss we reported in Q3 2014. The Q3 year-over-year
variance was primarily the result of continued elevated video churn at
Ziggo (44,000) and a weaker result in Switzerland (22,000), partially
offset by improvements in CEE and Germany. At September 30, 2015, we had
14.1 million enhanced video subscribers, representing enhanced video
penetration10 of 64%, and 7.9 million basic video subscribers.
In addition to our triple-play business, we finished Q3 2015 with 4.6
million mobile subscribers11, an increase of 65,000 during
the quarter. This growth was led by our Western European operations,
which added 61,000 subscribers, including 24,000 in Belgium and 13,000
in Germany. Virgin Media added 13,000 mobile subscribers in the U.K.,
including 55,000 postpaid gains and 42,000 prepaid losses. The postpaid
result at Virgin Media represented our best quarterly performance since
Q2 2014, driven by the continued success of our split-contract program12.
At the end of Q3 2015, over 82% of our mobile subscribers were postpaid
subscribers, up from 77% in Q3 2014. We have recently expanded our
mobile capabilities with two key developments. First, we commenced the
full launch of our mobile service in Ireland in October, where we are a
full-MVNO, offering unlimited data, text and national calls. Secondly,
we delivered on our promise to offer our customers the best connectivity
wherever they are by introducing our new 4G mobile service at UPC
Cablecom in September and in the Netherlands at the end of October.
Revenue - Liberty Global Group (Europe)
For the three and nine months ended September 30, 2015, Liberty Global
Group revenue increased 2% to $4.3 billion and remained flat at $12.8
billion, respectively, as compared to the corresponding prior year
periods. The principal drivers of our reported revenue growth for Q3
were the inclusion of Ziggo and, to a lesser extent, organic revenue
growth, mostly offset by negative foreign currency ("FX") movements
related to the strengthening of the U.S. dollar against all of our
functional currencies. For the YTD period, the negative impact of FX
movements roughly offset the inclusion of Ziggo and our organic revenue
growth during the period. Adjusted for acquisitions, dispositions and
FX, our operations attributed to the Liberty Global Group achieved
year-over-year rebased revenue growth of 3.5% and 3% during the Q3 and
YTD 2015 periods, respectively.
Our rebased revenue performance during the Q3 and YTD periods included
the net effects of certain non-recurring and non-operational items, the
most significant of which were: (i) the net positive impacts of $43
million and $84 million, respectively, from the upfront recognition of
mobile handset revenue in connection with our split-contract programs in
the U.K. and Belgium, (ii) the negative impacts of $20 million and $83
million, respectively, of increased VAT obligations, comprised of $16
million and $71 million, respectively, in the U.K. and $4 million and
$13 million, respectively, at our direct-to-home ("DTH") business, (iii)
the favorable impacts of $5 million and $18 million, respectively, of
higher amortization of deferred upfront business-to-business ("B2B"13)
fees in the U.K. and (iv) the $12 million negative impact of a Q1 2014
favorable revenue settlement in Germany during the YTD period.
From a product perspective, broadband internet services remained the
primary driver of our overall rebased revenue growth in the Q3 and YTD
2015 periods. Our revenue performance was further bolstered by strong
B2B (including SOHO) and mobile (including interconnect and handset
sales) growth, which delivered rebased revenue growth rates in Q3 of 8%
and 20.5%14, respectively.
In terms of regional results, Western Europe, which accounts for over
90% of Liberty Global Group's revenue, delivered 4% rebased revenue
growth for the three months ended September 30, 2015, an improvement
from 3% in the prior year period. Our operations in the CEE region
posted 2% rebased top-line growth in Q3 2015, in line with last year's
Q3 rebased revenue result.
On a country specific level, our Q3 Western European performance was led
by our German operation, which delivered 7% rebased revenue growth, its
best growth in six quarters. This result was primarily driven by a
well-balanced combination of growth in ARPU15 per RGU and
subscribers. Our Belgian operations benefited from targeted promotions
that resulted in subscriber additions to enhanced fixed services, which
contributed to Telenet's 6% rebased revenue growth for Q3. Additionally,
Virgin Media in the U.K. delivered 5% rebased revenue growth, our
highest quarterly growth rate since the acquisition. The principal
growth drivers in the U.K. were cable subscription revenue, primarily
due to ARPU per RGU improvements and subscriber growth, and the
aforementioned benefit from our split-contract program, which was partly
offset by the adverse change in VAT in January 2015.
Elsewhere in Western Europe, our operation in Switzerland/Austria
delivered 3% rebased revenue growth in Q3, which is in line with prior
quarters. Meanwhile, our Dutch business posted a rebased revenue
contraction of 2%. The decline primarily resulted from RGU losses.
Looking ahead, given the lack of recent subscriber growth and the
current competitive environment, we expect the fourth quarter of 2015 to
remain challenging with respect to the rebased revenue growth of Ziggo.
Operating Cash Flow - Liberty Global Group (Europe)
Liberty Global Group's reported OCF increased 4% to $2.1 billion and 1%
to $6.1 billion for the three and nine months ended September 30, 2015,
respectively, as compared to the corresponding prior-year periods. The
underlying reasons for our reported OCF growth were consistent with the
aforementioned revenue drivers, including the negative impact of FX
movements and the contribution from Ziggo. On a rebased basis, the
operations attributed to the Liberty Global Group delivered 3% OCF
growth for each of the three and nine month periods ended September 30,
2015.
Our rebased OCF performance for the YTD period included the net negative
impact of certain items, the most significant of which were: (i) $31
million of additional integration-related expenses, primarily in the
Netherlands and Belgium and (ii) $17 million of Liberty 3.0 program
costs in the Corporate and other segment. Turning to the Q3 period, our
rebased OCF performance included the net favorable revenue items
mentioned above, but these were more than offset by the net unfavorable
impact of certain items. The most significant headwind in Q3 was the
non-recurring net benefit of $28 million relating to network
infrastructure charges at Virgin Media that benefited Q3 2014, and we
also incurred $7 million in incremental costs related to our Liberty 3.0
program during Q3.
From a regional basis, our Western European operations delivered 4%
rebased OCF growth in Q3 2015, while our CEE region posted a 1% rebased
OCF contraction. CEE was negatively affected by the recurring $4 million
quarterly increase in VAT payments related to our Luxembourg-based DTH
operation that took effect on January 1, 2015.
Turning back to Western Europe, our Q3 OCF performance was fueled by our
German operation, which delivered 9% rebased growth in the third
quarter. This result is primarily due to the aforementioned revenue
growth drivers that outpaced an increase in Germany's expenses, largely
due to higher staff-related costs and programming and copyright costs.
Belgium and Switzerland/Austria each delivered 7% rebased OCF growth.
Telenet's growth was primarily driven by solid cable and mobile
subscriber growth and the continuing benefits from the Q1 2015 price
increase. Growth in Switzerland/Austria was supported by revenue growth
and lower marketing spend in Q3 2015, as compared to Q3 2014.
Moving to our largest operation, we posted 4% rebased OCF growth in
U.K./Ireland, driven by the aforementioned revenue performance in the
U.K., partly offset by an increase in total operating costs, including
higher sports programming expenses, and the nonrecurring reduction in
network infrastructure charges in 2014 mentioned above. Finally, in the
Netherlands, our Q3 OCF declined 1% on a rebased basis, primarily due to
the previously-mentioned revenue decreases. We achieved a sequential
improvement in OCF during Q3 of $18 million, mainly due to lower
integration-related expenses. We are delivering on the Ziggo synergy
plan, which we expect to deliver a favorable impact on the OCF
performance in Q4 2015.
For the three and nine months ended September 30, 2015, we reported OCF
margins16 of 48.1% and 47.8%, respectively. These represent
improvements of 60 and 40 basis points, respectively, from the 47.5% and
47.4% margins we reported for the corresponding prior year periods.
Property and Equipment Additions - Liberty Global Group (Europe)
For Q3 2015, the Liberty Global Group incurred property and equipment
("P&E") additions17 of $981 million or 22.9% of
revenue, as compared to $845 million or 20.1% of revenue in the
corresponding prior-year period. From a YTD perspective, the Liberty
Global Group reported P&E additions of $2.8 billion or 22.1% of revenue,
as compared to $2.6 billion or 20.4% in the YTD 2014 period.
The increase in absolute P&E additions for both the Q3 and YTD periods
is primarily related to increases associated with the acquisition of
Ziggo and higher spend for new build and upgrade projects. These
increases were partially offset by the impact of the strengthening of
the U.S. dollar against all of our European currencies. In terms of our
YTD P&E additions by category, 48% was related to CPE and scalable
infrastructure, 25% was related to line extensions and upgrade/rebuild
activity and 27% was related to support capital, including IT upgrades
and general support systems.
Pursuant to our Liberty 3.0 program, we have initiated a detailed review
to explore medium-term network extension opportunities in several of our
other markets, including Germany, Poland, Romania and Hungary.
Free Cash Flow - Liberty Global Group (Europe)
We generated Q3 and YTD Free Cash Flow from operations attributed to the
Liberty Global Group of $759 million and $1,653 million, respectively,
as compared to the $344 million and $1,334 million in the corresponding
prior-year periods. The increase in our FCF generation in Q3, as
compared to Q3 2014, is attributable to organic OCF growth, benefits
from our vendor financing program, the effect of lower interest rates
and the inclusion of Ziggo, partially offset by the adverse impact of
FX. The improvement of our YTD FCF performance in 2015, as compared to
the corresponding 2014 period, is attributable to the inclusion of
Ziggo, the effect of lower interest rates and benefits related to
organic OCF growth, partially offset by adverse movements in FX and the
impact of higher tax payments, primarily in Belgium.
Leverage, Liquidity & Shares Outstanding - Liberty Global
Group (Europe)
At September 30, 2015, we had attributed total third-party debt18
of $44.7 billion and cash and cash equivalents of $873 million to the
Liberty Global Group. As compared to June 30, 2015, such debt increased
by $1 billion primarily due to a $938 million increase in the principal
amount of debt associated with our position in ITV plc ("ITV").
With respect to our leverage position at September 30, 2015, and after
excluding $2.4 billion of debt backed by shares we hold in Sumitomo
Corporation and ITV, the consolidated adjusted gross and net leverage
ratios associated with the debt attributed to the Liberty Global Group
was 5.0x and 4.9x, respectively, as of the end of Q3. The average tenor
of third-party debt attributed to the Liberty Global Group was nearly
eight years at the end of Q3, with only 10% due before 2020. The blended
fully-swapped borrowing cost19 of such debt was 5.1%.
We finished the third quarter of 2015 with total liquidity of $4.7
billion, including $873 million of cash as noted above, and aggregate
borrowing capacity of $3.8 billion, as represented by the maximum
undrawn commitments under each of the credit facilities20
attributed to the Liberty Global Group.
At October 30, 2015, we had 860 million Liberty Global Group shares
outstanding, including 253 million Class A ordinary shares, 10 million
Class B ordinary shares and 597 million Class C ordinary shares.
Subscriber Statistics - LiLAC Group
At September 30, 2015, we provided a total of 3.5 million subscription
services across our cable footprint of 4.1 million homes passed within
Chile and Puerto Rico. From a product perspective, these services
consisted of 1.3 million video, 1.3 million broadband internet and 0.9
million telephony subscriptions. During the third quarter of 2015, we
increased our subscriber base by 24,000 organic RGU additions, which
consisted of 17,000 in Chile and 6,000 in Puerto Rico. During Q3, we
experienced our third consecutive quarter of customer growth as we
increased our unique customers by 10,000 to 1.7 million. From a bundling
perspective, 66% of our customers subscribe to more than one product
from us, and our bundling ratio was 2.1x at the end of the quarter.
Our Q3 organic additions of 24,000 RGUs were in-line with the same
period last year. From a geographic perspective, we nearly doubled our
Q3 year-over-year organic subscriber growth in Chile, with 17,000 RGU
additions in the current quarter. This operating momentum was due in
part to the continued success of our "Vive Más" bundles and our expanded
HD line-up. We delivered year-over-year improvements in all three
products, including our best Q3 broadband growth in four years. In
Puerto Rico, we added 6,000 RGUs in Q3, in-line sequentially from Q2
2015, but a decline from Q3 2014. The year-over-year decline was due in
part to a strong triple-play proposition in H2 2014 that included higher
speeds, an enhanced video product and an attractive voice offer that was
well received in the market.
In Chile, we added 5,000 mobile subscribers during Q3, increasing our
total mobile subscribers at quarter-end to 134,000. The competitive
landscape has intensified recently with the entrance of a low-priced
competitor, which tempered our growth in mobile net adds in the quarter.
However, we believe that our competitive position has improved with the
successful launch of our LTE mobile service during Q3.
Revenue - LiLAC Group
For the three and nine months ended September 30, 2015, the reported
revenue of our operations attributed to the LiLAC Group increased 3% to
$309 million and remained relatively flat at $908 million, respectively,
as compared to the corresponding prior-year periods. Our reported
increases for the Q3 and YTD periods include the positive impacts of the
inclusion of Choice in Puerto Rico, organic revenue growth and the
negative impact of FX movements related to declines of 17% and 14%,
respectively, of the Chilean peso against the U.S. dollar. When
adjusting to neutralize the impact of acquisitions and FX, the
businesses attributed to the LiLAC Group delivered year-over-year
rebased revenue growth of 7% in Q3 and 6% for the YTD period.
From a country perspective, Chile posted rebased revenue growth of 7%
and 6% for the three and nine months ended September 30, 2015,
respectively, fueled by continued volume growth, higher ARPU per RGU and
strong growth in mobile subscription revenue. In Puerto Rico, we
generated a 7% rebased revenue increase YTD, including 6% growth in Q3,
due primarily to the net impact of volume gains, ARPU per RGU declines
and the success of our B2B business (including SOHO), which grew over
20% on a rebased basis year-over-year.
Operating Cash Flow - LiLAC Group
The businesses attributed to the LiLAC Group delivered OCF of $128
million and $364 million for the three and nine months ended September
30, 2015, reflecting year-over-year increases of 8% and 4.5%,
respectively. Our reported growth for the LiLAC Group also included the
impact of FX headwinds related to the Chilean peso (as noted above), as
well as the positive impact of including Choice beginning in June 2015.
From a rebased perspective, we delivered 10% year-over-year OCF growth
for the LiLAC Group in each of the three and nine month periods ended
September 30, 2015.
In Chile, VTR reported rebased OCF growth of 11% and 10% for the three
and nine months ended September 30, 2015, respectively, as compared to
the corresponding prior-year periods. Rounding out our LiLAC Group
operations, Puerto Rico generated rebased OCF growth of 9% for Q3 2015
and 11% for YTD 2015.
The LiLAC Group's reported OCF margin increased by 190 and 160 basis
points year-over-year to 41.4% and 40.0% for the three and nine months
ended September 30, 2015, respectively. These improvements were
supported by revenue growth and improved operational leverage.
Property and Equipment Additions - LiLAC Group
Operations attributed to the LiLAC Group reported P&E additions of $59
million or 19.1% of revenue for the three months ended September 30,
2015, as compared to $64 million or 21.3% of revenue in Q3 2014. On a
YTD basis, we reported P&E additions of $185 million or 20.4% of revenue
during 2015 as compared to $198 million or 21.9% of revenue for the
corresponding prior-year period.
The declines in our absolute P&E additions were partially due to the
decline in the value of the Chilean peso versus the U.S. dollar and a
decline in upgrade/rebuild expenditures. In terms of allocation in the
YTD 2015 period, 67% of our spend was related to CPE and scalable
infrastructure, 19% to line extensions and upgrade/rebuild activity and
14% to support capital, including IT upgrades and general support
systems.
Pursuant to our Liberty 3.0 program, we have initiated a detailed review
to explore medium-term network extension opportunities in our markets.
Free Cash Flow - LiLAC Group
For the three and nine months ended September 30, 2015, the operations
attributed to the LiLAC Group generated FCF of $11.5 million and $39.5
million, respectively. This compares to negative FCF of $34 million and
positive FCF of $29 million during the respective prior-year periods.
For both periods, our modest year-over-year FCF increase was derived
largely from trade working capital improvement and OCF growth, partially
offset by higher interest payments in the YTD period. The higher YTD
interest payments were directly attributable to interest and related
derivative payments of approximately $67 million in January 2015 on the
$1.4 billion in bonds at VTR Finance B.V., as similar payments were not
required to be made in the corresponding prior-year period.
Leverage, Liquidity & Shares Outstanding - LiLAC Group
At the end of Q3 2015, we had attributed total third-party debt of $2.3
billion and cash and cash equivalents of $239 million to the LiLAC
Group. As compared to June 30, 2015, the carrying value of our debt
attributed to the LiLAC Group was unchanged, while the cash balance
attributed to the LiLAC Group improved by $6 million.
At September 30, 2015, the average tenor of our third-party debt
attributed to the LiLAC Group was nearly eight years, with minimal
maturities prior to 2022. Our blended fully-swapped borrowing cost of
such debt was 6.4% at the end of Q3 2015, as compared to 8.7% at June
30, 2015. The reduction in our borrowing cost reflects the impact of a
series of transactions that we undertook in our Chilean credit pool
during Q3 2015, relating to a re-strike of a large portion of
derivatives associated with our $1.4 billion principal amount of our
senior secured notes. The net impact of these transactions resulted in a
reduction in the annual swapped coupon (as noted above) that we pay
going forward, with the notional amount of our leverage on a swapped
basis increasing from CLP 760 billion to CLP 911 billion.
As a result of the re-strike, the gross and net leverage ratios
associated with the debt attributed to the LiLAC Group increased to 4.4x
and 3.9x, respectively, as compared to adjusted ratios of 3.9x and 3.5x
in Q2 2015, respectively, after giving pro forma effect to the OCF
impact of the Choice transaction.
At October 30, 2015, we had 44 million LiLAC shares outstanding,
including 13 million Class A ordinary shares, 0.5 million Class B
ordinary shares and 31 million Class C ordinary shares.
Profit Forecast for Liberty Global for the Year ending December 31,
2015
Liberty Global is currently in an offer period (as defined in the City
Code on Takeovers and Mergers (the “Code”)) with respect to Cable &
Wireless Communications Plc. Accordingly, pursuant to the requirements
of Rule 28 of the Code, by publishing an ordinary course "profit
forecast" in this release Liberty Global is required to include a
statement by the Directors that such profit forecast remains valid. In
addition, we must include in this release a confirmation by our
Directors that the profit forecast has been properly compiled on the
basis of the assumptions stated and that the basis of accounting used is
consistent with Liberty Global’s accounting policies.
As noted in the release, Liberty Global today is confirming all
full-year 2015 financial guidance targets, which includes the following
statements:
-
Full-year guidance of mid-single-digit rebased OCF growth for Liberty
Global Group
-
Full-year guidance of mid-single-digit rebased OCF growth for LiLAC
Group
The above statements for the year ending December 31, 2015, constitute
profit forecasts for the purposes of the Code (the “Liberty Global
Profit Forecast”). Please see pages 15 and 18 for our Operating Cash
Flow (“OCF”) definition and the required reconciliation and how we
calculate rebased growth rates.
The Liberty Global Profit Forecast has been prepared on a basis
consistent with the accounting policies for Liberty Global, which are in
accordance with generally accepted accounting standards in the U.S. and
those which Liberty Global anticipates will be applicable for the full
year ending December 31, 2015. Liberty Global has prepared the Liberty
Global Profit Forecast based on unaudited interim financial results for
the nine months ended September 30, 2015, and an internal management
forecast to December 31, 2015.
In accordance with Rule 28.4(a) of the Code, the principal assumptions
upon which the profit forecast is based are included below. In
accordance with Rule 28.4(c) of the Code, there is a clear distinction
made between assumptions which the Directors of Liberty Global (or other
members of Liberty Global’s management) can influence and those which
they cannot influence.
Liberty Global has prepared the Liberty Global Profit Forecast on the
basis of the following assumptions:
Factors outside the influence or control of Liberty Global and its
Directors:
-
economic and business conditions and industry trends in the countries
in which we operate;
-
the competitive environment in the industries in the countries in
which we operate, including competitor responses to our products and
services;
-
fluctuations in currency exchange rates and interest rates;
-
instability in global financial markets, including sovereign debt
issues and related fiscal reforms;
-
consumer disposable income and spending levels, including the
availability and amount of individual consumer debt;
-
changes in consumer television viewing preferences and habits;
-
consumer acceptance of our existing service offerings, including our
digital video, broadband internet,fixed-line telephony, mobile and
business service offerings, and of new technology,
programmingalternatives and other products and services that we may
offer in the future;
-
changes in laws or treaties relating to taxation, or the
interpretation thereof, in the U.K., U.S. or in other countries in
which we operate;
-
changes in laws and government regulations that may impact the
availability and cost of capital and the derivative instruments that
hedge certain of our financial risks;
-
the ability of suppliers and vendors (including our third-party
wireless network providers under our MVNO arrangements) to timely
deliver quality products, equipment, software, services and access; and
-
events that are outside of our control, such as political unrest in
international markets, terrorist attacks, malicious human acts,
natural disasters, pandemics and other similar events.
Factors within the influence or control of Liberty Global and its
Directors:
-
the Liberty Global Profit Forecast excludes any one-time costs or
benefits associated with any transaction with Cable & Wireless
Communications plc;
-
our ability to maintain or increase the number of subscriptions to our
digital video, broadband internet, fixed-line telephony and mobile
service offerings and our average revenue per household;
-
our ability to maintain or increase rates to our subscribers or to
pass through increased costs to our subscribers;
-
there will be no material change in the present management or control
of Liberty Global or its existing operational strategy; and
-
Liberty Global’s accounting policies will be consistently applied in
the financial year to December 31, 2015.
The Directors of Liberty Global have considered the Liberty Global
Profit Forecast and confirm that it is valid as at the date of this
document and has been properly compiled on the basis of the assumptions
set out above and that the basis of the accounting used is consistent
with Liberty Global’s accounting policies.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding our operations, strategies, future growth
prospects and opportunities (in particular with respect to upselling and
bundling of products); our expected revenue, OCF (including any profit
forecasts) and FCF growth; 2016 initiatives, including the Liberty 3.0
program; subscriber and RGU growth, including our expectations for
organic RGU additions in 2015; opportunities and demographics in Latin
America and the Caribbean; our expectations with respect to our Ziggo
synergy plan; the strength of our balance sheet, targeted leverage ratio
and tenor of our third-party debt; plans and expectations with respect
to new build and network extension opportunities; 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, to manage rapid technological change
or to maintain or increase rates to our subscribers or to pass through
increased costs to our subscribers; the effects of changes in laws or
regulation; general economic factors; our ability to obtain regulatory
approval and satisfy regulatory conditions associated with acquisitions
and dispositions; our ability to successfully acquire and integrate new
businesses and realize anticipated efficiencies from businesses we
acquire; the availability of attractive programming for our digital
video services and the costs associated with such programming; our
ability to achieve forecasted financial and operating targets; the
outcome of any pending or threatened litigation; our ability to access
cash of our subsidiaries and the impact of our future financial
performance, or market conditions generally, on the availability, terms
and deployment of capital, fluctuations in currency exchange and
interest rates; the ability of suppliers and vendors (including our
third-party wireless network providers under our MVNO arrangements) to
timely deliver quality products, equipment, software, services and
access; our ability to adequately forecast and plan future network
requirements including the costs and benefits associated with network
extension; and other factors detailed from time to time in our filings
with the Securities and Exchange Commission, including our most recently
filed Form 10-K and our 2015 Form 10-Qs. 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 products are provided through next-generation networks
and innovative technology platforms that connected 27 million customers
subscribing to 57 million television, broadband internet and telephony
services at September 30, 2015. In addition, we served five million
mobile subscribers and offered WiFi service across six million access
points.
Liberty Global’s businesses are currently attributed to two tracking
stock groups: the Liberty Global Group (NASDAQ: LBTYA, LBTYB and LBTYK),
which primarily comprises our European operations, and the LiLAC Group
(NASDAQ: LILA and LILAK, OTC Link: LILAB), which comprises our
operations in Latin America and the Caribbean.
Liberty Global's consumer brands are Virgin Media, Ziggo, Unitymedia,
Telenet, UPC, VTR and Liberty. Our operations also include Liberty
Global Business Services and Liberty Global Ventures. For more
information, please visit www.libertyglobal.com.
_______________________________________
|
1
|
|
We sold substantially all of our legacy content business on January
31, 2014 (the "Chellomedia Sale"). Accordingly, we have presented
the disposed business as a discontinued operation for the nine
months ended September 30, 2014.
|
2
|
|
On July 1, 2015, Liberty Global completed the "LiLAC Transaction"
pursuant to which each holder of Liberty Global’s then-outstanding
ordinary shares remained a holder of the same amount and class of
new Liberty Global ordinary shares and received one share of the
corresponding class of LiLAC ordinary shares for each 20
then-outstanding Liberty Global ordinary shares held as of the
record date for such distribution, with cash issued in lieu of
fractional LiLAC ordinary shares. The Liberty Global ordinary shares
following the LiLAC Transaction and the LiLAC ordinary shares are
tracking shares. Tracking shares are intended by the issuing company
to reflect or “track” the economic performance of a particular
business or “group,” rather than the economic performance of the
company as a whole. The Liberty Global ordinary shares and the LiLAC
ordinary shares are intended to reflect or “track” the economic
performance of the Liberty Global Group and the LiLAC Group (each as
defined and described below), respectively. For more information
regarding the tracking shares, see note 1 to our condensed
consolidated financial statements included in our quarterly report
on Form 10-Q filed on November 5, 2015 (the "10-Q"). “Liberty Global
Group” does not represent a separate legal entity, rather it
represents those businesses, assets and liabilities that have been
attributed to that group. The Liberty Global Group comprises our
businesses, assets and liabilities not attributed to the LiLAC
Group, including Virgin Media, Unitymedia, UPC Holding BV, Telenet
and Ziggo Group Holding. “LiLAC Group” does not represent a separate
legal entity, rather it represents those businesses, assets and
liabilities that have been attributed to that group. The LiLAC Group
comprises our operations in Latin America and the Caribbean and has
attributed to it VTR and Liberty Puerto Rico.
|
3
|
|
Please see page 28 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.
|
4
|
|
Please see page 15 for information on rebased growth.
|
5
|
|
Please see page 18 for our Operating Cash Flow ("OCF") definition
and the required reconciliation.
|
6
|
|
Please see page 21 for information on Free Cash Flow (“FCF”) and the
required reconciliations.
|
7
|
|
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 is measured using swapped foreign
currency rates, consistent with the covenant calculation
requirements of our subsidiary debt agreements, and, in the case
of the Liberty Global Group, excludes the loans backed by the
shares we hold in Sumitomo Corp. and ITV plc.
|
8
|
|
Liquidity refers to cash and cash equivalents plus the maximum
undrawn commitments under subsidiary borrowing facilities, without
regard to covenant compliance calculations.
|
9
|
|
"Liberty 3.0” is a comprehensive plan to drive our top line growth,
while maintaining tight control of our costs. We have looked
expansively at our opportunities to accelerate new sources of
revenue growth, including mobile, B2B and network extension, coupled
with driving greater efficiencies in our business by leveraging our
scale more effectively. Underpinning this program is a genuine
commitment to customer centricity, which we believe is key to
succeeding in an ever more demanding consumer market. We expect this
transformation to occur over the next several years, and as with any
program of this scale, the benefits will materialize over time
rather than immediately. We believe that the successful
implementation of Liberty 3.0 will ultimately lead to rebased growth
rates for OCF in the high-single-digits over the medium term.
Nevertheless, our ability to achieve these goals is subject to
competitive, economic, regulatory and other factors outside of our
control and no assurance can be given that we will be successful in
delivering these growth rates.
|
10
|
|
Enhanced video penetration is calculated by dividing the number of
enhanced video RGUs by the total number of basic and enhanced
video RGUs.
|
11
|
|
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.
|
12
|
|
In the U.K. and Belgium, we now offer our customers the option to
purchase a mobile handset pursuant to a contract that is independent
of a mobile airtime services contract ("split-contract programs").
Revenue associated with handsets sold under our split-contract
programs is recognized upfront and included in other
non-subscription revenue. We generally recognize the full sales
price for the mobile handset upon delivery, regardless of whether
the sales price is received upfront or in installments. Revenue
associated with the airtime services is recognized as mobile
subscription revenue over the contractual term of the airtime
services contract. Prior to our split-contract programs, all revenue
from handset sales that was contingent upon delivering future
airtime services was recognized over the life of the customer
contract as part of the monthly fee and included in mobile
subscription revenue.
|
13
|
|
Total B2B includes subscription (SOHO) and non-subscription revenue.
Non-subscription revenue includes the amortization of deferred
upfront installation fees and deferred non-recurring fees received
on B2B contracts where we maintain ownership of the installed
equipment. Most of this deferred revenue relates to Virgin Media's
B2B contracts, and in connection with the application of the Virgin
Media acquisition accounting, we eliminated all of Virgin Media's
B2B deferred revenue as of the June 7, 2013 acquisition date. Due
primarily to this acquisition accounting, the amortization of Virgin
Media's deferred revenue is accounting for $5 million and $18
million of the rebased increases in Liberty Global Group's total B2B
revenue for the three and nine months ended September 30, 2015,
respectively.
|
14
|
|
Liberty Global Group's 20.5% and 17% rebased mobile revenue growth
for each of the Q3 and YTD 2015 periods includes the positive impact
of our split-contract programs in the U.K. and Belgium, as further
described in footnote 13. Excluding the impact of mobile handset
revenue (which includes a $57 million and $109 million benefit from
our split-contract programs in Q3 and YTD 2015, respectively), our
rebased mobile revenue growth would have been 2% and 4%,
respectively.
|
15
|
|
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 mobile services, B2B services, interconnect, channel
carriage fees, mobile handset sales and installation fees) 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
Group and LiLAC Group are not adjusted for currency impacts. ARPU
per RGU refers to average monthly subscription revenue per average
RGU, which is calculated by dividing the average monthly
subscription revenue (excluding mobile services, B2B services,
interconnect, channel carriage fees, mobile handset sales and
installation fees) for the indicated period, by the average of the
opening and closing balances of RGUs for the period. Unless
otherwise noted, ARPU in this release is considered to be ARPU per
average customer relationship.
|
16
|
|
OCF margin is calculated by dividing OCF by total revenue for the
applicable period.
|
17
|
|
Our property and equipment additions include our capital
expenditures on an accrual basis and amounts financed under vendor
financing or capital lease arrangements.
|
18
|
|
Total debt includes capital lease obligations.
|
19
|
|
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.
|
20
|
|
Our aggregate unused borrowing capacity of $4.0 billion represents
the maximum undrawn commitments under our subsidiaries' applicable
facilities without regard to covenant compliance calculations. This
consists of $3.8 billion attributed to the Liberty Global Group and
$232 million attributed to LiLAC Group. Upon completion of the
relevant September 30, 2015 compliance reporting requirements for
our credit facilities, and assuming no further changes from
quarter-end borrowing levels, we anticipate that our subsidiaries'
borrowing capacity would be $3.6 billion. This consists of $3.4
billion attributed to the Liberty Global Group and $232 million
attributed to the LiLAC Group.
|
|
|
|
Balance Sheets, Statements of Operations and Statements of Cash Flows
The condensed consolidated balance sheets, statements of operations and
statements of cash flows of Liberty Global are included in our 10-Q. For
attributed financial information of the Liberty Global Group and the
LiLAC Group, see Exhibit 99.1 to our 10-Q.
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 and nine
months ended September 30, 2015, 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 and mobile services. For detailed
information regarding the composition of our reportable segments,
including information regarding certain changes to our reportable
segments that we made during the fourth quarter of 2014 and the second
quarter of 2015, see note 15 to our condensed consolidated financial
statements included in our 10-Q.
For purposes of calculating rebased growth rates on a comparable basis
for all businesses that we owned during 2015, we have adjusted our
historical revenue and OCF for the three and nine months ended September
30, 2014 to (i) include the pre-acquisition revenue and OCF of certain
entities acquired during 2014 and 2015 in our rebased amounts for the
three and nine months ended September 30, 2014 to the same extent that
the revenue and OCF of such entities are included in our results for the
three and nine months ended September 30, 2015, (ii) remove intercompany
eliminations for the applicable periods in 2014 to conform to the
presentation during the 2015 periods following the disposal of the
Chellomedia operations, which resulted in previously eliminated
intercompany costs becoming third-party costs, (iii) exclude the
pre-disposition revenue and OCF of "offnet" subscribers in the U.K. that
were disposed in the fourth quarter of 2014 and the first half of 2015
from our rebased amounts for the three and nine months ended September
30, 2014 to the same extent that the revenue and OCF of these disposed
subscribers is excluded from our results for the three and nine months
ended September 30, 2015, (iv) exclude the revenue and OCF related to a
partner network agreement that was terminated shortly after the Ziggo
acquisition from our rebased amounts for the three and nine months ended
September 30, 2014 to the same extent that the revenue and OCF from this
partner network is excluded from our results for the three and nine
months ended September 30, 2015, (v) exclude the pre-disposition
revenue, OCF and associated intercompany eliminations of Film 1, which
was disposed in the third quarter of 2015, from our rebased amounts for
the three and nine months ended September 30, 2014 to the same extent
that the revenue, OCF and associated intercompany eliminations are
excluded from our results for the three and nine months ended September
30, 2015 and (vi) reflect the translation of our rebased amounts for the
three and nine months ended September 30, 2014 at the applicable average
foreign currency exchange rates that were used to translate our results
for the three and nine months ended September 30, 2015. We have included
Ziggo, Choice and two small entities in whole or in part in the
determination of our rebased revenue and OCF for the three months ended
September 30, 2014. We have included Ziggo, Choice and three small
entities in whole or in part in the determination of our rebased revenue
and OCF for the nine months ended September 30, 2014. We have reflected
the revenue and OCF of the acquired entities in our 2014 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 (a) any
significant differences between Generally Accepted Accounting Principles
in the United States (“GAAP”) and local generally accepted accounting
principles, (b) any significant effects of acquisition accounting
adjustments, (c) any significant differences between our accounting
policies and those of the acquired entities and (d) 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
|
|
|
|
September 30,
|
|
|
(decrease)
|
|
|
(decrease)
|
Revenue
|
|
|
2015
|
|
|
2014
|
|
|
$
|
|
|
%
|
|
|
Rebased %
|
|
|
|
in millions, except % amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Global Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
European Operations Division:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K./Ireland
|
|
|
$
|
1,783.3
|
|
|
|
$
|
1,863.4
|
|
|
|
$
|
(80.1
|
)
|
|
|
(4.3
|
)
|
|
|
4.5
|
|
The Netherlands
|
|
|
681.4
|
|
|
|
301.6
|
|
|
|
379.8
|
|
|
|
125.9
|
|
|
|
(2.1
|
)
|
Germany
|
|
|
603.5
|
|
|
|
671.7
|
|
|
|
(68.2
|
)
|
|
|
(10.2
|
)
|
|
|
7.0
|
|
Belgium
|
|
|
512.5
|
|
|
|
575.7
|
|
|
|
(63.2
|
)
|
|
|
(11.0
|
)
|
|
|
6.1
|
|
Switzerland/Austria
|
|
|
437.9
|
|
|
|
460.6
|
|
|
|
(22.7
|
)
|
|
|
(4.9
|
)
|
|
|
2.7
|
|
Total Western Europe
|
|
|
4,018.6
|
|
|
|
3,873.0
|
|
|
|
145.6
|
|
|
|
3.8
|
|
|
|
3.6
|
|
Central and Eastern Europe
|
|
|
266.2
|
|
|
|
312.0
|
|
|
|
(45.8
|
)
|
|
|
(14.7
|
)
|
|
|
1.6
|
|
Central and other
|
|
|
0.1
|
|
|
|
2.5
|
|
|
|
(2.4
|
)
|
|
|
N.M.
|
|
|
*
|
|
Total European Operations Division
|
|
|
4,284.9
|
|
|
|
4,187.5
|
|
|
|
97.4
|
|
|
|
2.3
|
|
|
|
3.5
|
|
Corporate and other
|
|
|
8.3
|
|
|
|
19.0
|
|
|
|
(10.7
|
)
|
|
|
(56.3
|
)
|
|
|
*
|
|
Intersegment eliminations
|
|
|
(4.6
|
)
|
|
|
(9.3
|
)
|
|
|
4.7
|
|
|
|
N.M.
|
|
|
*
|
|
Total Liberty Global Group
|
|
|
4,288.6
|
|
|
|
4,197.2
|
|
|
|
91.4
|
|
|
|
2.2
|
|
|
|
3.5
|
|
LiLAC Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chile
|
|
|
204.3
|
|
|
|
223.7
|
|
|
|
(19.4
|
)
|
|
|
(8.7
|
)
|
|
|
7.0
|
|
Puerto Rico
|
|
|
104.5
|
|
|
|
76.3
|
|
|
|
28.2
|
|
|
|
37.0
|
|
|
|
6.3
|
|
Total LiLAC Group
|
|
|
308.8
|
|
|
|
300.0
|
|
|
|
8.8
|
|
|
|
2.9
|
|
|
|
6.7
|
|
Total
|
|
|
$
|
4,597.4
|
|
|
|
$
|
4,497.2
|
|
|
|
$
|
100.2
|
|
|
|
2.2
|
|
|
|
3.7
|
|
* - Omitted; N.M. - Not Meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
|
|
|
Increase
|
|
|
Increase
|
|
|
|
September 30,
|
|
|
(decrease)
|
|
|
(decrease)
|
Revenue
|
|
|
2015
|
|
|
2014
|
|
|
$
|
|
|
%
|
|
|
Rebased %
|
|
|
|
in millions, except % amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Global Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
European Operations Division:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K./Ireland
|
|
|
$
|
5,254.3
|
|
|
|
$
|
5,607.6
|
|
|
|
$
|
(353.3
|
)
|
|
|
(6.3
|
)
|
|
|
3.5
|
|
The Netherlands
|
|
|
2,072.7
|
|
|
|
936.0
|
|
|
|
1,136.7
|
|
|
|
121.4
|
|
|
|
(1.2
|
)
|
Germany
|
|
|
1,792.4
|
|
|
|
2,056.4
|
|
|
|
(264.0
|
)
|
|
|
(12.8
|
)
|
|
|
5.9
|
|
Belgium
|
|
|
1,515.5
|
|
|
|
1,732.3
|
|
|
|
(216.8
|
)
|
|
|
(12.5
|
)
|
|
|
6.3
|
|
Switzerland/Austria
|
|
|
1,326.0
|
|
|
|
1,401.1
|
|
|
|
(75.1
|
)
|
|
|
(5.4
|
)
|
|
|
3.1
|
|
Total Western Europe
|
|
|
11,960.9
|
|
|
|
11,733.4
|
|
|
|
227.5
|
|
|
|
1.9
|
|
|
|
3.3
|
|
Central and Eastern Europe
|
|
|
801.6
|
|
|
|
960.4
|
|
|
|
(158.8
|
)
|
|
|
(16.5
|
)
|
|
|
1.2
|
|
Central and other
|
|
|
(3.7
|
)
|
|
|
0.5
|
|
|
|
(4.2
|
)
|
|
|
N.M.
|
|
|
*
|
|
Total European Operations Division
|
|
|
12,758.8
|
|
|
|
12,694.3
|
|
|
|
64.5
|
|
|
|
0.5
|
|
|
|
3.1
|
|
Corporate and other
|
|
|
33.9
|
|
|
|
55.0
|
|
|
|
(21.1
|
)
|
|
|
(38.4
|
)
|
|
|
*
|
|
Intersegment eliminations
|
|
|
(19.9
|
)
|
|
|
(22.5
|
)
|
|
|
2.6
|
|
|
|
N.M.
|
|
|
*
|
|
Total Liberty Global Group
|
|
|
12,772.8
|
|
|
|
12,726.8
|
|
|
|
46.0
|
|
|
|
0.4
|
|
|
|
3.1
|
|
LiLAC Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chile
|
|
|
633.9
|
|
|
|
678.8
|
|
|
|
(44.9
|
)
|
|
|
(6.6
|
)
|
|
|
6.3
|
|
Puerto Rico
|
|
|
274.1
|
|
|
|
227.6
|
|
|
|
46.5
|
|
|
|
20.4
|
|
|
|
6.7
|
|
Total LiLAC Group
|
|
|
908.0
|
|
|
|
906.4
|
|
|
|
1.6
|
|
|
|
0.2
|
|
|
|
6.4
|
|
Inter-group eliminations
|
|
|
—
|
|
|
|
(0.1
|
)
|
|
|
0.1
|
|
|
|
N.M.
|
|
|
*
|
|
Total
|
|
|
$
|
13,680.8
|
|
|
|
$
|
13,633.1
|
|
|
|
$
|
47.7
|
|
|
|
0.3
|
|
|
|
3.3
|
|
* - Omitted; N.M. - Not Meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Increase
|
|
|
Increase
|
|
|
|
September 30,
|
|
|
(decrease)
|
|
|
(decrease)
|
OCF
|
|
|
2015
|
|
|
2014
|
|
|
$
|
|
|
%
|
|
|
Rebased %
|
|
|
|
in millions, except % amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Global Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
European Operations Division:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K./Ireland
|
|
|
$
|
777.0
|
|
|
|
$
|
812.2
|
|
|
|
$
|
(35.2
|
)
|
|
|
(4.3
|
)
|
|
|
3.8
|
|
The Netherlands
|
|
|
388.6
|
|
|
|
175.1
|
|
|
|
213.5
|
|
|
|
121.9
|
|
|
|
(1.2
|
)
|
Germany
|
|
|
380.9
|
|
|
|
417.5
|
|
|
|
(36.6
|
)
|
|
|
(8.8
|
)
|
|
|
8.7
|
|
Belgium
|
|
|
258.3
|
|
|
|
287.9
|
|
|
|
(29.6
|
)
|
|
|
(10.3
|
)
|
|
|
6.9
|
|
Switzerland/Austria
|
|
|
269.6
|
|
|
|
272.4
|
|
|
|
(2.8
|
)
|
|
|
(1.0
|
)
|
|
|
6.6
|
|
Total Western Europe
|
|
|
2,074.4
|
|
|
|
1,965.1
|
|
|
|
109.3
|
|
|
|
5.6
|
|
|
|
4.4
|
|
Central and Eastern Europe
|
|
|
119.0
|
|
|
|
143.7
|
|
|
|
(24.7
|
)
|
|
|
(17.2
|
)
|
|
|
(1.3
|
)
|
Central and other
|
|
|
(74.0
|
)
|
|
|
(71.7
|
)
|
|
|
(2.3
|
)
|
|
|
N.M.
|
|
|
*
|
|
Total European Operations Division
|
|
|
2,119.4
|
|
|
|
2,037.1
|
|
|
|
82.3
|
|
|
|
4.0
|
|
|
|
3.5
|
|
Corporate and other
|
|
|
(55.3
|
)
|
|
|
(45.0
|
)
|
|
|
(10.3
|
)
|
|
|
(22.9
|
)
|
|
|
*
|
|
Total Liberty Global Group
|
|
|
2,064.1
|
|
|
|
1,992.1
|
|
|
|
72.0
|
|
|
|
3.6
|
|
|
|
3.0
|
|
LiLAC Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LiLAC Division:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chile
|
|
|
82.5
|
|
|
|
86.6
|
|
|
|
(4.1
|
)
|
|
|
(4.7
|
)
|
|
|
11.2
|
|
Puerto Rico
|
|
|
46.4
|
|
|
|
32.7
|
|
|
|
13.7
|
|
|
|
41.9
|
|
|
|
8.9
|
|
Total LiLAC Division
|
|
|
128.9
|
|
|
|
119.3
|
|
|
|
9.6
|
|
|
|
8.0
|
|
|
|
10.4
|
|
Corporate and other
|
|
|
(1.1
|
)
|
|
|
(0.8
|
)
|
|
|
(0.3
|
)
|
|
|
N.M.
|
|
|
*
|
|
Total LiLAC Group
|
|
|
127.8
|
|
|
|
118.5
|
|
|
|
9.3
|
|
|
|
7.8
|
|
|
|
10.2
|
|
Total
|
|
|
$
|
2,191.9
|
|
|
|
$
|
2,110.6
|
|
|
|
$
|
81.3
|
|
|
|
3.9
|
|
|
|
3.4
|
|
* - Omitted; N.M. - Not Meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
|
|
|
Increase
|
|
|
Increase
|
|
|
|
September 30,
|
|
|
(decrease)
|
|
|
(decrease)
|
OCF
|
|
|
2015
|
|
|
2014
|
|
|
$
|
|
|
%
|
|
|
Rebased %
|
|
|
|
in millions, except % amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Global Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
European Operations Division:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K./Ireland
|
|
|
$
|
2,345.9
|
|
|
|
$
|
2,433.3
|
|
|
|
$
|
(87.4
|
)
|
|
|
(3.6
|
)
|
|
|
6.0
|
|
The Netherlands
|
|
|
1,127.5
|
|
|
|
543.5
|
|
|
|
584.0
|
|
|
|
107.5
|
|
|
|
(3.2
|
)
|
Germany
|
|
|
1,111.8
|
|
|
|
1,277.5
|
|
|
|
(165.7
|
)
|
|
|
(13.0
|
)
|
|
|
5.8
|
|
Belgium
|
|
|
766.1
|
|
|
|
877.9
|
|
|
|
(111.8
|
)
|
|
|
(12.7
|
)
|
|
|
6.2
|
|
Switzerland/Austria
|
|
|
778.1
|
|
|
|
814.2
|
|
|
|
(36.1
|
)
|
|
|
(4.4
|
)
|
|
|
3.7
|
|
Total Western Europe
|
|
|
6,129.4
|
|
|
|
5,946.4
|
|
|
|
183.0
|
|
|
|
3.1
|
|
|
|
3.9
|
|
Central and Eastern Europe
|
|
|
355.5
|
|
|
|
449.1
|
|
|
|
(93.6
|
)
|
|
|
(20.8
|
)
|
|
|
(3.9
|
)
|
Central and other
|
|
|
(214.6
|
)
|
|
|
(214.5
|
)
|
|
|
(0.1
|
)
|
|
|
N.M.
|
|
|
*
|
|
Total European Operations Division
|
|
|
6,270.3
|
|
|
|
6,181.0
|
|
|
|
89.3
|
|
|
|
1.4
|
|
|
|
2.9
|
|
Corporate and other
|
|
|
(159.7
|
)
|
|
|
(150.1
|
)
|
|
|
(9.6
|
)
|
|
|
(6.4
|
)
|
|
|
*
|
|
Intersegment eliminations
|
|
|
—
|
|
|
|
4.0
|
|
|
|
(4.0
|
)
|
|
|
N.M.
|
|
|
*
|
|
Total Liberty Global Group
|
|
|
6,110.6
|
|
|
|
6,034.9
|
|
|
|
75.7
|
|
|
|
1.3
|
|
|
|
2.6
|
|
LiLAC Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LiLAC Division:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chile
|
|
|
246.1
|
|
|
|
255.1
|
|
|
|
(9.0
|
)
|
|
|
(3.5
|
)
|
|
|
9.7
|
|
Puerto Rico
|
|
|
120.7
|
|
|
|
95.4
|
|
|
|
25.3
|
|
|
|
26.5
|
|
|
|
11.2
|
|
Total LiLAC Division
|
|
|
366.8
|
|
|
|
350.5
|
|
|
|
16.3
|
|
|
|
4.7
|
|
|
|
10.2
|
|
Corporate and other
|
|
|
(3.2
|
)
|
|
|
(2.4
|
)
|
|
|
(0.8
|
)
|
|
|
N.M.
|
|
|
*
|
|
Total LiLAC Group
|
|
|
363.6
|
|
|
|
348.1
|
|
|
|
15.5
|
|
|
|
4.5
|
|
|
|
10.0
|
|
Total
|
|
|
$
|
6,474.2
|
|
|
|
$
|
6,383.0
|
|
|
|
$
|
91.2
|
|
|
|
1.4
|
|
|
|
3.0
|
|
* - Omitted; N.M. - Not Meaningful
Operating Cash Flow Definition and Reconciliation
As used herein, OCF has the same meaning as the term "Adjusted OIBDA"
that is referenced in our 10-Q. 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 operating income before depreciation and amortization,
share-based compensation, 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 OCF 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 (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 OCF 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 or 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
|
|
|
Nine months ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
in millions
|
Total segment operating cash flow
|
|
|
$
|
2,191.9
|
|
|
|
$
|
2,110.6
|
|
|
|
$
|
6,474.2
|
|
|
|
$
|
6,383.0
|
|
Share-based compensation expense
|
|
|
(125.0
|
)
|
|
|
(73.1
|
)
|
|
|
(253.0
|
)
|
|
|
(182.6
|
)
|
Depreciation and amortization
|
|
|
(1,458.4
|
)
|
|
|
(1,313.5
|
)
|
|
|
(4,387.6
|
)
|
|
|
(4,084.0
|
)
|
Impairment, restructuring and other operating items, net
|
|
|
(63.0
|
)
|
|
|
(20.3
|
)
|
|
|
(105.7
|
)
|
|
|
(161.5
|
)
|
Operating income
|
|
|
$
|
545.5
|
|
|
|
$
|
703.7
|
|
|
|
$
|
1,727.9
|
|
|
|
$
|
1,954.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 September 30, 2015:
|
|
|
|
|
|
Capital
|
|
|
Debt & Capital
|
|
|
Cash
|
|
|
|
|
|
|
Lease
|
|
|
Lease
|
|
|
and Cash
|
|
|
|
Debt2
|
|
|
Obligations
|
|
|
Obligations
|
|
|
Equivalents
|
|
|
|
in millions
|
Liberty Global and Liberty Global Group unrestricted
subsidiaries
|
|
|
$
|
2,482.7
|
|
|
$
|
64.7
|
|
|
$
|
2,547.4
|
|
|
$
|
272.9
|
Virgin Media3
|
|
|
14,651.2
|
|
|
182.6
|
|
|
14,833.8
|
|
|
198.3
|
UPC Holding
|
|
|
6,669.4
|
|
|
26.2
|
|
|
6,695.6
|
|
|
54.4
|
Unitymedia
|
|
|
7,605.8
|
|
|
730.0
|
|
|
8,335.8
|
|
|
2.8
|
Ziggo Group Holding
|
|
|
8,103.9
|
|
|
0.3
|
|
|
8,104.2
|
|
|
13.0
|
Telenet
|
|
|
3,822.9
|
|
|
382.5
|
|
|
4,205.4
|
|
|
331.2
|
Total Liberty Global Group
|
|
|
43,335.9
|
|
|
1,386.3
|
|
|
44,722.2
|
|
|
872.6
|
LiLAC Group unrestricted subsidiaries
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
99.1
|
VTR Finance
|
|
|
1,400.0
|
|
|
0.3
|
|
|
1,400.3
|
|
|
88.1
|
Liberty Puerto Rico
|
|
|
933.5
|
|
|
0.7
|
|
|
934.2
|
|
|
51.4
|
Total LiLAC Group
|
|
|
2,333.5
|
|
|
1.0
|
|
|
2,334.5
|
|
|
238.6
|
Total
|
|
|
$
|
45,669.4
|
|
|
$
|
1,387.3
|
|
|
$
|
47,056.7
|
|
|
$
|
1,111.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and Equipment Additions and Capital Expenditures
The tables below highlight the categories of the property and equipment
additions attributed to the Liberty Global Group and the LiLAC Group for
the indicated periods and reconciles those additions to the capital
expenditures that are presented in the attributed statements of cash
flows included in Exhibit 99.1 to our 10-Q:
Liberty Global Group
|
|
|
Three months ended
|
|
|
Nine months ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
in millions, except % amounts
|
Customer premises equipment
|
|
|
$
|
271.8
|
|
|
|
$
|
264.4
|
|
|
|
$
|
823.4
|
|
|
|
$
|
887.7
|
|
Scalable infrastructure
|
|
|
190.8
|
|
|
|
166.7
|
|
|
|
518.8
|
|
|
|
495.6
|
|
Line extensions
|
|
|
125.4
|
|
|
|
89.4
|
|
|
|
325.9
|
|
|
|
270.2
|
|
Upgrade/rebuild
|
|
|
139.9
|
|
|
|
124.8
|
|
|
|
388.4
|
|
|
|
385.4
|
|
Support capital & other
|
|
|
253.3
|
|
|
|
199.2
|
|
|
|
764.3
|
|
|
|
552.1
|
|
Property and equipment additions
|
|
|
981.2
|
|
|
|
844.5
|
|
|
|
2,820.8
|
|
|
|
2,591.0
|
|
Assets acquired under capital-related vendor financing arrangements
|
|
|
(414.7
|
)
|
|
|
(276.1
|
)
|
|
|
(1,090.6
|
)
|
|
|
(677.9
|
)
|
Assets acquired under capital leases
|
|
|
(14.8
|
)
|
|
|
(16.8
|
)
|
|
|
(89.3
|
)
|
|
|
(106.6
|
)
|
Changes in current liabilities related to capital expenditures
|
|
|
(21.0
|
)
|
|
|
24.7
|
|
|
|
40.8
|
|
|
|
64.2
|
|
Capital expenditures4
|
|
|
$
|
530.7
|
|
|
|
$
|
576.3
|
|
|
|
$
|
1,681.7
|
|
|
|
$
|
1,870.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment additions as % of revenue
|
|
|
22.9
|
%
|
|
|
20.1
|
%
|
|
|
22.1
|
%
|
|
|
20.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LiLAC Group
|
|
|
Three months ended
|
|
|
Nine months ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
in millions, except % amounts
|
Customer premises equipment
|
|
|
$
|
26.5
|
|
|
|
$
|
27.9
|
|
|
|
$
|
92.7
|
|
|
|
$
|
90.1
|
|
Scalable infrastructure
|
|
|
13.4
|
|
|
|
13.8
|
|
|
|
32.0
|
|
|
|
30.1
|
|
Line extensions
|
|
|
9.7
|
|
|
|
11.0
|
|
|
|
32.3
|
|
|
|
41.3
|
|
Upgrade/rebuild
|
|
|
1.7
|
|
|
|
2.8
|
|
|
|
2.7
|
|
|
|
10.6
|
|
Support capital & other
|
|
|
7.6
|
|
|
|
8.3
|
|
|
|
25.1
|
|
|
|
26.2
|
|
Property and equipment additions
|
|
|
58.9
|
|
|
|
63.8
|
|
|
|
184.8
|
|
|
|
198.3
|
|
Changes in current liabilities related to capital expenditures
|
|
|
(0.5
|
)
|
|
|
4.2
|
|
|
|
(15.0
|
)
|
|
|
(22.7
|
)
|
Capital expenditures
|
|
|
$
|
58.4
|
|
|
|
$
|
68.0
|
|
|
|
$
|
169.8
|
|
|
|
$
|
175.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment additions as % of revenue
|
|
|
19.1
|
%
|
|
|
21.3
|
%
|
|
|
20.4
|
%
|
|
|
21.9
|
%
|
______________________________
|
1
|
|
Except as otherwise indicated, the amounts reported in the table
include the named entity and its subsidiaries.
|
2
|
|
Debt amounts for UPC Holding, Ziggo Group Holding and Telenet
include notes issued by special purpose entities that are
consolidated by each.
|
3
|
|
The Virgin Media borrowing group includes certain subsidiaries of
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 $0.2 million of cash and
cash equivalents held by Virgin Media. This amount is included in
the amount shown for Liberty Global and Liberty Global Group
unrestricted subsidiaries. In addition, the $56 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 Liberty Global Group unrestricted
subsidiaries.
|
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 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, (ii) cash payments for third-party costs
directly associated with successful and unsuccessful acquisitions and
dispositions and (iii) expenses financed by an intermediary, less (a)
capital expenditures, as reported in our condensed consolidated
statements of cash flows, (b) principal payments on amounts financed by
vendors and intermediaries 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 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 condensed consolidated statements of cash flows. The
following table provides the reconciliation of our continuing
operations' net cash provided by operating activities to FCF for the
indicated periods:
|
|
|
Three months ended
|
|
|
Nine months ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
in millions
|
Consolidated Liberty Global
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities of our continuing
operations
|
|
|
$
|
1,473.5
|
|
|
|
$
|
1,153.4
|
|
|
|
$
|
4,159.3
|
|
|
|
$
|
4,070.1
|
|
Increases in excess tax benefits from share-based compensation5
|
|
|
9.1
|
|
|
|
—
|
|
|
|
27.0
|
|
|
|
—
|
|
Cash payments for direct acquisition and disposition costs6
|
|
|
10.7
|
|
|
|
4.9
|
|
|
|
249.5
|
|
|
|
25.3
|
|
Expenses financed by an intermediary7
|
|
|
81.1
|
|
|
|
6.9
|
|
|
|
132.8
|
|
|
|
21.2
|
|
Capital expenditures
|
|
|
(589.1
|
)
|
|
|
(644.3
|
)
|
|
|
(1,851.5
|
)
|
|
|
(2,046.3
|
)
|
Principal payments on amounts financed by vendors and intermediaries
|
|
|
(177.6
|
)
|
|
|
(167.5
|
)
|
|
|
(909.7
|
)
|
|
|
(566.9
|
)
|
Principal payments on certain capital leases
|
|
|
(37.4
|
)
|
|
|
(43.6
|
)
|
|
|
(114.8
|
)
|
|
|
(140.8
|
)
|
FCF
|
|
|
$
|
770.3
|
|
|
|
$
|
309.8
|
|
|
|
$
|
1,692.6
|
|
|
|
$
|
1,362.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Global Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities of our continuing
operations
|
|
|
$
|
1,405.6
|
|
|
|
$
|
1,120.6
|
|
|
|
$
|
3,957.7
|
|
|
|
$
|
3,867.2
|
|
Increases in excess tax benefits from share-based compensation
|
|
|
7.3
|
|
|
|
—
|
|
|
|
23.3
|
|
|
|
—
|
|
Cash payments for direct acquisition and disposition costs
|
|
|
10.1
|
|
|
|
3.3
|
|
|
|
244.9
|
|
|
|
23.3
|
|
Expenses financed by an intermediary
|
|
|
81.1
|
|
|
|
6.9
|
|
|
|
132.8
|
|
|
|
21.2
|
|
Capital expenditures
|
|
|
(530.7
|
)
|
|
|
(576.3
|
)
|
|
|
(1,681.7
|
)
|
|
|
(1,870.7
|
)
|
Principal payments on amounts financed by vendors and intermediaries
|
|
|
(177.6
|
)
|
|
|
(167.5
|
)
|
|
|
(909.7
|
)
|
|
|
(566.9
|
)
|
Principal payments on certain capital leases
|
|
|
(37.0
|
)
|
|
|
(43.4
|
)
|
|
|
(114.2
|
)
|
|
|
(140.2
|
)
|
FCF
|
|
|
$
|
758.8
|
|
|
|
$
|
343.6
|
|
|
|
$
|
1,653.1
|
|
|
|
$
|
1,333.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LiLAC Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities of our continuing
operations
|
|
|
$
|
67.9
|
|
|
|
$
|
32.8
|
|
|
|
$
|
201.6
|
|
|
|
$
|
202.9
|
|
Increases in excess tax benefits from share-based compensation
|
|
|
1.8
|
|
|
|
—
|
|
|
|
3.7
|
|
|
|
—
|
|
Cash payments for direct acquisition and disposition costs
|
|
|
0.6
|
|
|
|
1.6
|
|
|
|
4.6
|
|
|
|
2.0
|
|
Capital expenditures
|
|
|
(58.4
|
)
|
|
|
(68.0
|
)
|
|
|
(169.8
|
)
|
|
|
(175.6
|
)
|
Principal payments on certain capital leases
|
|
|
(0.4
|
)
|
|
|
(0.2
|
)
|
|
|
(0.6
|
)
|
|
|
(0.6
|
)
|
FCF
|
|
|
$
|
11.5
|
|
|
|
$
|
(33.8
|
)
|
|
|
$
|
39.5
|
|
|
|
$
|
28.7
|
|
______________________________
|
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 condensed
consolidated statements of cash flows.
|
6
|
Represents costs paid during the period to third parties directly
related to acquisitions and dispositions.
|
7
|
For purposes of our condensed consolidated statements of cash flows,
expenses financed by an intermediary are treated as hypothetical
operating cash outflows and hypothetical financing cash inflows when
the expenses are incurred. When we pay the financing intermediary,
we record financing cash outflows in our condensed consolidated
statements of cash flows. For purposes of our free cash flow
definition, we add back the hypothetical operating cash outflow when
these financed expenses are incurred and deduct the financing cash
outflows when we pay the financing intermediary. The inclusion of
this adjustment represents a change in our definition of free cash
flow that we implemented effective January 1, 2015. The free cash
flow reported for the 2014 period has been revised to calculate free
cash flow on a basis that is consistent with the new definition.
|
|
|
ARPU per Customer Relationship8
The following table provides ARPU per customer relationship for the
indicated periods:
|
|
|
Three months ended Sept. 30,
|
|
|
%
|
|
|
FX-Neutral9
|
|
|
|
2015
|
|
|
2014
|
|
|
Change
|
|
|
% Change
|
Liberty Global Consolidated
|
|
|
$
|
44.75
|
|
|
|
$
|
48.33
|
|
|
|
(7.4
|
)%
|
|
|
4.9
|
%
|
Liberty Global Group
|
|
|
€
|
39.59
|
|
|
|
€
|
35.89
|
|
|
|
10.3
|
%
|
|
|
5.0
|
%
|
U.K. & Ireland (Virgin Media)
|
|
|
£
|
48.74
|
|
|
|
£
|
48.27
|
|
|
|
1.0
|
%
|
|
|
1.8
|
%
|
Germany (Unitymedia)
|
|
|
€
|
23.10
|
|
|
|
€
|
21.52
|
|
|
|
7.3
|
%
|
|
|
7.3
|
%
|
Belgium (Telenet)
|
|
|
€
|
50.77
|
|
|
|
€
|
48.23
|
|
|
|
5.3
|
%
|
|
|
5.3
|
%
|
The Netherlands
|
|
|
€
|
44.62
|
|
|
|
€
|
43.48
|
|
|
|
2.6
|
%
|
|
|
2.6
|
%
|
Other Europe
|
|
|
€
|
27.00
|
|
|
|
€
|
25.05
|
|
|
|
7.8
|
%
|
|
|
1.8
|
%
|
LiLAC Group
|
|
|
$
|
56.00
|
|
|
|
$
|
60.68
|
|
|
|
(7.7
|
)%
|
|
|
3.6
|
%
|
Chile (VTR)
|
|
|
CLP
|
33,042
|
|
|
|
CLP
|
32,006
|
|
|
|
3.2
|
%
|
|
|
3.2
|
%
|
Liberty Puerto Rico
|
|
|
$
|
78.66
|
|
|
|
$
|
84.09
|
|
|
|
(6.5
|
)%
|
|
|
(6.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mobile Statistics10
The following tables provide ARPU per mobile subscriber11 and
mobile subscribers12 for the indicated periods:
|
|
|
ARPU per Mobile Subscriber
|
|
|
|
Three months ended Sept. 30,
|
|
|
%
|
|
|
FX-Neutral
|
|
|
|
2015
|
|
|
2014
|
|
|
Change
|
|
|
% Change
|
Liberty Global Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
Including interconnect revenue
|
|
|
$
|
22.80
|
|
|
|
$
|
26.53
|
|
|
|
(14.1
|
)%
|
|
|
(4.8
|
)%
|
Excluding interconnect revenue
|
|
|
$
|
19.03
|
|
|
|
$
|
21.78
|
|
|
|
(12.6
|
)%
|
|
|
(3.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LiLAC Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
Including interconnect revenue
|
|
|
$
|
25.53
|
|
|
|
$
|
25.13
|
|
|
|
1.6
|
%
|
|
|
19.0
|
%
|
Excluding interconnect revenue
|
|
|
$
|
23.31
|
|
|
|
$
|
23.07
|
|
|
|
1.0
|
%
|
|
|
18.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mobile Subscribers
|
|
|
|
Sept. 30, 2015
|
|
|
June 30, 2015
|
|
|
Change
|
Liberty Global Group:
|
|
|
|
|
|
|
|
|
|
U.K.
|
|
|
3,027,300
|
|
|
|
3,014,400
|
|
|
|
12,900
|
|
Belgium
|
|
|
977,200
|
|
|
|
953,700
|
|
|
|
23,500
|
|
Germany
|
|
|
349,700
|
|
|
|
336,300
|
|
|
|
13,400
|
|
The Netherlands
|
|
|
180,900
|
|
|
|
178,800
|
|
|
|
2,100
|
|
Switzerland
|
|
|
24,800
|
|
|
|
19,500
|
|
|
|
5,300
|
|
Austria
|
|
|
8,000
|
|
|
|
4,900
|
|
|
|
3,100
|
|
Ireland
|
|
|
1,100
|
|
|
|
—
|
|
|
|
1,100
|
|
Total Western Europe
|
|
|
4,569,000
|
|
|
|
4,507,600
|
|
|
|
61,400
|
|
Hungary
|
|
|
24,700
|
|
|
|
20,400
|
|
|
|
4,300
|
|
Poland
|
|
|
7,900
|
|
|
|
8,600
|
|
|
|
(700
|
)
|
Total CEE
|
|
|
32,600
|
|
|
|
29,000
|
|
|
|
3,600
|
|
Liberty Global Group
|
|
|
4,601,600
|
|
|
|
4,536,600
|
|
|
|
65,000
|
|
LiLAC Group - Chile
|
|
|
134,000
|
|
|
|
129,200
|
|
|
|
4,800
|
|
Grand Total
|
|
|
4,735,600
|
|
|
|
4,665,800
|
|
|
|
69,800
|
|
__________________________________
|
8
|
|
Please see page 13 for the definition of ARPU per customer. The
amounts for the three months ended September 30, 2014 do not include
the impact of the Ziggo and Choice acquisitions.
|
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.
|
10
|
|
Please see page 13 for the definition of mobile subscriber.
|
11
|
|
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 fees, handset sales 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.
|
12
|
|
With the exception of the U.K. and Chile, all of our mobile
subscribers receive mobile services pursuant to postpaid contracts.
As of September 30, 2015 and June 30, 2015, the mobile subscriber
count in the U.K. included 808,400 and 850,500 prepaid mobile
subscribers, respectively, and the mobile subscriber count in Chile
included 12,000 and 13,200 prepaid mobile subscribers, respectively.
|
|
|
|
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
September 30, 2015, June 30, 2015 and September 30, 2014: 13
|
|
|
Sept. 30, 2015
|
|
|
June 30, 2015
|
|
|
Sept. 30, 2014
|
|
|
Q3’15 / Q2’15 (% Change)
|
|
|
Q3’15 / Q3’14 (% Change)
|
Liberty Global Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total RGUs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Video RGUs
|
|
|
22,789,100
|
|
|
|
22,849,400
|
|
|
|
20,383,900
|
|
|
|
(0.3
|
%)
|
|
|
11.8
|
%
|
Broadband Internet RGUs
|
|
|
16,572,700
|
|
|
|
16,372,000
|
|
|
|
13,926,100
|
|
|
|
1.2
|
%
|
|
|
19.0
|
%
|
Telephony RGUs
|
|
|
13,809,400
|
|
|
|
13,650,300
|
|
|
|
11,714,700
|
|
|
|
1.2
|
%
|
|
|
17.9
|
%
|
Total Liberty Global Group
|
|
|
53,171,200
|
|
|
|
52,871,700
|
|
|
|
46,024,700
|
|
|
|
0.6
|
%
|
|
|
15.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Single-Play Customers
|
|
|
9,937,500
|
|
|
|
10,084,900
|
|
|
|
9,650,900
|
|
|
|
(1.5
|
%)
|
|
|
3.0
|
%
|
Dual-Play Customers
|
|
|
4,216,300
|
|
|
|
4,194,600
|
|
|
|
3,644,500
|
|
|
|
0.5
|
%
|
|
|
15.7
|
%
|
Triple-Play Customers
|
|
|
11,600,400
|
|
|
|
11,465,900
|
|
|
|
9,694,900
|
|
|
|
1.2
|
%
|
|
|
19.7
|
%
|
Total Liberty Global Group
|
|
|
25,754,200
|
|
|
|
25,745,400
|
|
|
|
22,990,300
|
|
|
|
—
|
%
|
|
|
12.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Single-Play Customers
|
|
|
38.6
|
%
|
|
|
39.2
|
%
|
|
|
41.9
|
%
|
|
|
(1.5
|
%)
|
|
|
(7.9
|
%)
|
% of Dual-Play Customers
|
|
|
16.4
|
%
|
|
|
16.3
|
%
|
|
|
15.9
|
%
|
|
|
0.6
|
%
|
|
|
3.1
|
%
|
% of Triple-Play Customers
|
|
|
45.0
|
%
|
|
|
44.5
|
%
|
|
|
42.2
|
%
|
|
|
1.1
|
%
|
|
|
6.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RGUs per customer relationship
|
|
|
2.06
|
|
|
|
2.05
|
|
|
|
2.00
|
|
|
|
0.5
|
%
|
|
|
3.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LiLAC Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total RGUs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Video RGUs
|
|
|
1,291,200
|
|
|
|
1,290,700
|
|
|
|
1,226,900
|
|
|
|
—
|
%
|
|
|
5.2
|
%
|
Broadband Internet RGUs
|
|
|
1,307,100
|
|
|
|
1,285,900
|
|
|
|
1,137,900
|
|
|
|
1.6
|
%
|
|
|
14.9
|
%
|
Telephony RGUs
|
|
|
889,800
|
|
|
|
888,000
|
|
|
|
859,600
|
|
|
|
0.2
|
%
|
|
|
3.5
|
%
|
Total LiLAC Group
|
|
|
3,488,100
|
|
|
|
3,464,600
|
|
|
|
3,224,400
|
|
|
|
0.7
|
%
|
|
|
8.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Single-Play Customers
|
|
|
561,200
|
|
|
|
559,400
|
|
|
|
489,800
|
|
|
|
0.3
|
%
|
|
|
14.6
|
%
|
Dual-Play Customers
|
|
|
367,400
|
|
|
|
365,100
|
|
|
|
322,100
|
|
|
|
0.6
|
%
|
|
|
14.1
|
%
|
Triple-Play Customers
|
|
|
730,700
|
|
|
|
725,000
|
|
|
|
696,800
|
|
|
|
0.8
|
%
|
|
|
4.9
|
%
|
Total LiLAC Group
|
|
|
1,659,300
|
|
|
|
1,649,500
|
|
|
|
1,508,700
|
|
|
|
0.6
|
%
|
|
|
10.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Single-Play Customers
|
|
|
33.9
|
%
|
|
|
33.9
|
%
|
|
|
32.5
|
%
|
|
|
—
|
%
|
|
|
4.3
|
%
|
% of Dual-Play Customers
|
|
|
22.1
|
%
|
|
|
22.1
|
%
|
|
|
21.3
|
%
|
|
|
—
|
%
|
|
|
3.8
|
%
|
% of Triple-play Customers
|
|
|
44.0
|
%
|
|
|
44.0
|
%
|
|
|
46.2
|
%
|
|
|
—
|
%
|
|
|
(4.8
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RGUs per customer relationship
|
|
|
2.10
|
|
|
2.10
|
|
|
2.14
|
|
|
—
|
%
|
|
|
(1.9
|
%)
|
_____________________________________________
13 The September 30, 2014 amounts do not include the impact
of the Ziggo and Choice acquisitions.
|
|
|
|
|
|
|
Consolidated Operating Data — September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Video
|
|
|
|
|
|
|
|
|
|
Homes Passed(1)
|
|
|
Two-way Homes Passed(2)
|
|
|
Customer Relationships(3)
|
|
|
Total RGUs(4)
|
|
|
Basic Video Subscribers(5)
|
|
|
Enhanced Video Subscribers(6)
|
|
|
DTH Subscribers(7)
|
|
|
MMDS Subscribers(8)
|
|
|
Total Video
|
|
|
Internet Subscribers(9)
|
|
|
Telephony Subscribers(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K.
|
|
|
12,745,800
|
|
|
|
12,724,800
|
|
|
|
5,060,400
|
|
|
|
12,606,000
|
|
|
|
—
|
|
|
|
3,726,100
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,726,100
|
|
|
|
4,625,800
|
|
|
|
4,254,100
|
Germany
|
|
|
12,749,700
|
|
|
|
12,538,200
|
|
|
|
7,134,300
|
|
|
|
12,424,900
|
|
|
|
5,052,400
|
|
|
|
1,462,400
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,514,800
|
|
|
|
3,044,600
|
|
|
|
2,865,500
|
The Netherlands(11)
|
|
|
7,014,700
|
|
|
|
7,000,500
|
|
|
|
4,141,700
|
|
|
|
9,780,100
|
|
|
|
803,400
|
|
|
|
3,336,400
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,139,800
|
|
|
|
3,094,900
|
|
|
|
2,545,400
|
Belgium
|
|
|
2,930,800
|
|
|
|
2,930,800
|
|
|
|
2,180,000
|
|
|
|
4,820,500
|
|
|
|
356,200
|
|
|
|
1,703,500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,059,700
|
|
|
|
1,556,800
|
|
|
|
1,204,000
|
Switzerland(11)
|
|
|
2,194,500
|
|
|
|
2,194,000
|
|
|
|
1,380,800
|
|
|
|
2,593,700
|
|
|
|
646,900
|
|
|
|
684,600
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,331,500
|
|
|
|
759,700
|
|
|
|
502,500
|
Austria
|
|
|
1,365,700
|
|
|
|
1,365,700
|
|
|
|
650,200
|
|
|
|
1,365,200
|
|
|
|
141,300
|
|
|
|
362,700
|
|
|
|
—
|
|
|
|
—
|
|
|
|
504,000
|
|
|
|
479,200
|
|
|
|
382,000
|
Ireland
|
|
|
853,700
|
|
|
|
764,300
|
|
|
|
503,600
|
|
|
|
1,104,800
|
|
|
|
33,300
|
|
|
|
318,400
|
|
|
|
—
|
|
|
|
23,900
|
|
|
|
375,600
|
|
|
|
371,300
|
|
|
|
357,900
|
Total Western Europe
|
|
|
39,854,900
|
|
|
|
39,518,300
|
|
|
|
21,051,000
|
|
|
|
44,695,200
|
|
|
|
7,033,500
|
|
|
|
11,594,100
|
|
|
|
—
|
|
|
|
23,900
|
|
|
|
18,651,500
|
|
|
|
13,932,300
|
|
|
|
12,111,400
|
Poland
|
|
|
2,868,300
|
|
|
|
2,797,400
|
|
|
|
1,415,500
|
|
|
|
2,784,000
|
|
|
|
249,700
|
|
|
|
936,400
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,186,100
|
|
|
|
1,019,500
|
|
|
|
578,400
|
Hungary
|
|
|
1,602,000
|
|
|
|
1,585,500
|
|
|
|
1,086,700
|
|
|
|
2,023,900
|
|
|
|
182,500
|
|
|
|
461,400
|
|
|
|
285,700
|
|
|
|
—
|
|
|
|
929,600
|
|
|
|
576,500
|
|
|
|
517,800
|
Romania
|
|
|
2,571,200
|
|
|
|
2,491,400
|
|
|
|
1,206,800
|
|
|
|
2,038,800
|
|
|
|
290,500
|
|
|
|
580,400
|
|
|
|
326,300
|
|
|
|
—
|
|
|
|
1,197,200
|
|
|
|
471,000
|
|
|
|
370,600
|
Czech Republic
|
|
|
1,411,600
|
|
|
|
1,354,600
|
|
|
|
718,100
|
|
|
|
1,193,700
|
|
|
|
98,800
|
|
|
|
361,500
|
|
|
|
118,700
|
|
|
|
—
|
|
|
|
579,000
|
|
|
|
451,700
|
|
|
|
163,000
|
Slovakia
|
|
|
519,500
|
|
|
|
496,400
|
|
|
|
276,100
|
|
|
|
435,600
|
|
|
|
33,800
|
|
|
|
143,500
|
|
|
|
67,900
|
|
|
|
500
|
|
|
|
245,700
|
|
|
|
121,700
|
|
|
|
68,200
|
Total CEE
|
|
|
8,972,600
|
|
|
|
8,725,300
|
|
|
|
4,703,200
|
|
|
|
8,476,000
|
|
|
|
855,300
|
|
|
|
2,483,200
|
|
|
|
798,600
|
|
|
|
500
|
|
|
|
4,137,600
|
|
|
|
2,640,400
|
|
|
|
1,698,000
|
Total Liberty Global Group
|
|
|
48,827,500
|
|
|
|
48,243,600
|
|
|
|
25,754,200
|
|
|
|
53,171,200
|
|
|
|
7,888,800
|
|
|
|
14,077,300
|
|
|
|
798,600
|
|
|
|
24,400
|
|
|
|
22,789,100
|
|
|
|
16,572,700
|
|
|
|
13,809,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chile
|
|
|
3,034,900
|
|
|
|
2,518,000
|
|
|
|
1,259,800
|
|
|
|
2,718,800
|
|
|
|
97,500
|
|
|
|
928,700
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,026,200
|
|
|
|
993,600
|
|
|
|
699,000
|
Puerto Rico
|
|
|
1,068,200
|
|
|
|
1,068,200
|
|
|
|
399,500
|
|
|
|
769,300
|
|
|
|
—
|
|
|
|
265,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
265,000
|
|
|
|
313,500
|
|
|
|
190,800
|
Total LiLAC Group
|
|
|
4,103,100
|
|
|
|
3,586,200
|
|
|
|
1,659,300
|
|
|
|
3,488,100
|
|
|
|
97,500
|
|
|
|
1,193,700
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,291,200
|
|
|
|
1,307,100
|
|
|
|
889,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total
|
|
|
52,930,600
|
|
|
|
51,829,800
|
|
|
|
27,413,500
|
|
|
|
56,659,300
|
|
|
|
7,986,300
|
|
|
|
15,271,000
|
|
|
|
798,600
|
|
|
|
24,400
|
|
|
|
24,080,300
|
|
|
|
17,879,800
|
|
|
|
14,699,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriber Variance Table - September 30, 2015 vs. June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Video
|
|
|
|
|
|
|
|
|
|
Homes Passed(1)
|
|
|
Two-way Homes Passed(2)
|
|
|
Customer Relationships(3)
|
|
|
Total RGUs(4)
|
|
|
Basic Video Subscribers(5)
|
|
|
Enhanced Video Subscribers(6)
|
|
|
DTH Subscribers(7)
|
|
|
MMDS Subscribers(8)
|
|
|
Total Video
|
|
|
Internet Subscribers(9)
|
|
|
Telephony Subscribers(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K.
|
|
|
40,300
|
|
|
|
40,700
|
|
|
|
41,800
|
|
|
|
67,500
|
|
|
|
—
|
|
|
|
(10,700
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(10,700
|
)
|
|
|
55,500
|
|
|
|
22,700
|
|
Germany
|
|
|
16,900
|
|
|
|
77,700
|
|
|
|
14,000
|
|
|
|
102,200
|
|
|
|
(59,800
|
)
|
|
|
57,200
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,600
|
)
|
|
|
58,000
|
|
|
|
46,800
|
|
The Netherlands(11)
|
|
|
7,800
|
|
|
|
8,200
|
|
|
|
(43,600
|
)
|
|
|
(18,000
|
)
|
|
|
(32,100
|
)
|
|
|
(11,400
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(43,500
|
)
|
|
|
29,200
|
|
|
|
(3,700
|
)
|
Belgium
|
|
|
4,800
|
|
|
|
4,800
|
|
|
|
(1,400
|
)
|
|
|
25,800
|
|
|
|
(13,700
|
)
|
|
|
9,600
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,100
|
)
|
|
|
13,400
|
|
|
|
16,500
|
|
Switzerland(11)
|
|
|
—
|
|
|
|
100
|
|
|
|
(21,200
|
)
|
|
|
(12,500
|
)
|
|
|
(18,400
|
)
|
|
|
(3,100
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(21,500
|
)
|
|
|
4,000
|
|
|
|
5,000
|
|
Austria
|
|
|
4,400
|
|
|
|
4,400
|
|
|
|
(100
|
)
|
|
|
7,300
|
|
|
|
(2,300
|
)
|
|
|
(1,200
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,500
|
)
|
|
|
4,000
|
|
|
|
6,800
|
|
Ireland
|
|
|
600
|
|
|
|
4,400
|
|
|
|
(1,600
|
)
|
|
|
5,800
|
|
|
|
(1,500
|
)
|
|
|
(500
|
)
|
|
|
—
|
|
|
|
(1,700
|
)
|
|
|
(3,700
|
)
|
|
|
4,000
|
|
|
|
5,500
|
|
Total Western Europe
|
|
|
74,800
|
|
|
|
140,300
|
|
|
|
(12,100
|
)
|
|
|
178,100
|
|
|
|
(127,800
|
)
|
|
|
39,900
|
|
|
|
—
|
|
|
|
(1,700
|
)
|
|
|
(89,600
|
)
|
|
|
168,100
|
|
|
|
99,600
|
|
Poland
|
|
|
42,200
|
|
|
|
47,400
|
|
|
|
(2,900
|
)
|
|
|
19,200
|
|
|
|
(9,600
|
)
|
|
|
10,900
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,300
|
|
|
|
8,800
|
|
|
|
9,100
|
|
Hungary
|
|
|
13,300
|
|
|
|
13,300
|
|
|
|
6,300
|
|
|
|
22,600
|
|
|
|
(11,200
|
)
|
|
|
12,900
|
|
|
|
2,800
|
|
|
|
—
|
|
|
|
4,500
|
|
|
|
8,600
|
|
|
|
9,500
|
|
Romania
|
|
|
40,100
|
|
|
|
57,200
|
|
|
|
14,400
|
|
|
|
67,700
|
|
|
|
(10,500
|
)
|
|
|
11,800
|
|
|
|
13,500
|
|
|
|
—
|
|
|
|
14,800
|
|
|
|
10,200
|
|
|
|
42,700
|
|
Czech Republic
|
|
|
12,600
|
|
|
|
25,600
|
|
|
|
3,500
|
|
|
|
6,800
|
|
|
|
6,600
|
|
|
|
(2,200
|
)
|
|
|
1,000
|
|
|
|
—
|
|
|
|
5,400
|
|
|
|
3,300
|
|
|
|
(1,900
|
)
|
Slovakia
|
|
|
11,700
|
|
|
|
11,300
|
|
|
|
(400
|
)
|
|
|
5,100
|
|
|
|
2,500
|
|
|
|
(100
|
)
|
|
|
900
|
|
|
|
—
|
|
|
|
3,300
|
|
|
|
1,700
|
|
|
|
100
|
|
Total CEE
|
|
|
119,900
|
|
|
|
154,800
|
|
|
|
20,900
|
|
|
|
121,400
|
|
|
|
(22,200
|
)
|
|
|
33,300
|
|
|
|
18,200
|
|
|
|
—
|
|
|
|
29,300
|
|
|
|
32,600
|
|
|
|
59,500
|
|
Total Liberty Global Group
|
|
|
194,700
|
|
|
|
295,100
|
|
|
|
8,800
|
|
|
|
299,500
|
|
|
|
(150,000
|
)
|
|
|
73,200
|
|
|
|
18,200
|
|
|
|
(1,700
|
)
|
|
|
(60,300
|
)
|
|
|
200,700
|
|
|
|
159,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chile
|
|
|
35,600
|
|
|
|
36,800
|
|
|
|
9,200
|
|
|
|
17,300
|
|
|
|
(4,700
|
)
|
|
|
8,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,300
|
|
|
|
15,900
|
|
|
|
(1,900
|
)
|
Puerto Rico
|
|
|
3,000
|
|
|
|
3,000
|
|
|
|
600
|
|
|
|
6,200
|
|
|
|
—
|
|
|
|
(2,800
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,800
|
)
|
|
|
5,300
|
|
|
|
3,700
|
|
Total LiLAC Group
|
|
|
38,600
|
|
|
|
39,800
|
|
|
|
9,800
|
|
|
|
23,500
|
|
|
|
(4,700
|
)
|
|
|
5,200
|
|
|
|
—
|
|
|
|
—
|
|
|
|
500
|
|
|
|
21,200
|
|
|
|
1,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total
|
|
|
233,300
|
|
|
|
334,900
|
|
|
|
18,600
|
|
|
|
323,000
|
|
|
|
(154,700
|
)
|
|
|
78,400
|
|
|
|
18,200
|
|
|
|
(1,700
|
)
|
|
|
(59,800
|
)
|
|
|
221,900
|
|
|
|
160,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Change Summary:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K.
|
|
|
40,300
|
|
|
|
40,700
|
|
|
|
41,800
|
|
|
|
67,500
|
|
|
|
—
|
|
|
|
(10,700
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(10,700
|
)
|
|
|
55,500
|
|
|
|
22,700
|
|
Germany
|
|
|
16,900
|
|
|
|
18,500
|
|
|
|
14,000
|
|
|
|
102,200
|
|
|
|
(52,800
|
)
|
|
|
50,200
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,600
|
)
|
|
|
58,000
|
|
|
|
46,800
|
|
The Netherlands
|
|
|
7,800
|
|
|
|
8,200
|
|
|
|
(43,600
|
)
|
|
|
(18,000
|
)
|
|
|
(32,100
|
)
|
|
|
(11,400
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(43,500
|
)
|
|
|
29,200
|
|
|
|
(3,700
|
)
|
Belgium
|
|
|
4,800
|
|
|
|
4,800
|
|
|
|
(1,400
|
)
|
|
|
25,800
|
|
|
|
(13,700
|
)
|
|
|
9,600
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,100
|
)
|
|
|
13,400
|
|
|
|
16,500
|
|
Other Europe
|
|
|
119,300
|
|
|
|
163,700
|
|
|
|
(5,400
|
)
|
|
|
118,600
|
|
|
|
(47,800
|
)
|
|
|
28,500
|
|
|
|
18,200
|
|
|
|
(1,700
|
)
|
|
|
(2,800
|
)
|
|
|
44,600
|
|
|
|
76,800
|
|
Total Liberty Global Group
|
|
|
189,100
|
|
|
|
235,900
|
|
|
|
5,400
|
|
|
|
296,100
|
|
|
|
(146,400
|
)
|
|
|
66,200
|
|
|
|
18,200
|
|
|
|
(1,700
|
)
|
|
|
(63,700
|
)
|
|
|
200,700
|
|
|
|
159,100
|
|
Chile
|
|
|
35,600
|
|
|
|
36,800
|
|
|
|
9,200
|
|
|
|
17,300
|
|
|
|
(4,700
|
)
|
|
|
8,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,300
|
|
|
|
15,900
|
|
|
|
(1,900
|
)
|
Puerto Rico
|
|
|
3,000
|
|
|
|
3,000
|
|
|
|
600
|
|
|
|
6,200
|
|
|
|
—
|
|
|
|
(2,800
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,800
|
)
|
|
|
5,300
|
|
|
|
3,700
|
|
Total LiLAC Group
|
|
|
38,600
|
|
|
|
39,800
|
|
|
|
9,800
|
|
|
|
23,500
|
|
|
|
(4,700
|
)
|
|
|
5,200
|
|
|
|
—
|
|
|
|
—
|
|
|
|
500
|
|
|
|
21,200
|
|
|
|
1,800
|
|
Total Organic Change
|
|
|
227,700
|
|
|
|
275,700
|
|
|
|
15,200
|
|
|
|
319,600
|
|
|
|
(151,100
|
)
|
|
|
71,400
|
|
|
|
18,200
|
|
|
|
(1,700
|
)
|
|
|
(63,200
|
)
|
|
|
221,900
|
|
|
|
160,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2015 Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2015 Acquisition - Czech Republic
|
|
|
5,600
|
|
|
|
—
|
|
|
|
3,400
|
|
|
|
3,400
|
|
|
|
3,400
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,400
|
|
|
|
—
|
|
|
|
—
|
|
Q3 2015 - Germany Adjustments
|
|
|
—
|
|
|
|
59,200
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(7,000
|
)
|
|
|
7,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Net Adjustments
|
|
|
5,600
|
|
|
|
59,200
|
|
|
|
3,400
|
|
|
|
3,400
|
|
|
|
(3,600
|
)
|
|
|
7,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,400
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Adds (Reductions)
|
|
|
233,300
|
|
|
|
334,900
|
|
|
|
18,600
|
|
|
|
323,000
|
|
|
|
(154,700
|
)
|
|
|
78,400
|
|
|
|
18,200
|
|
|
|
(1,700
|
)
|
|
|
(59,800
|
)
|
|
|
221,900
|
|
|
|
160,900
|
|
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-only customers from Customer
Relationships.
|
(4)
|
|
Revenue Generating Unit or "RGU" is separately a Basic Video
Subscriber, Enhanced Video 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 market subscribed to our enhanced video service, telephony
service and broadband internet service, the customer would
constitute three RGUs. Total RGUs is the sum of Basic Video,
Enhanced Video, 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 September 30, 2015 RGU counts exclude
our separately reported postpaid and prepaid mobile subscribers.
|
(5)
|
|
Basic Video Subscriber is a home, residential multiple dwelling unit
or commercial unit that receives our video service over our
broadband network either via an analog video signal or via a digital
video signal without subscribing to any recurring monthly service
that requires the use of encryption-enabling technology.
Encryption-enabling technology includes smart cards, or other
integrated or virtual technologies that we use to provide our
enhanced service offerings. With the exception of RGUs that we count
on an EBU basis, we count RGUs on a unique premises basis. In other
words, a subscriber with multiple outlets in one premises is counted
as one RGU and a subscriber with two homes and a subscription to our
video service at each home is counted as two RGUs. In Europe, we
have approximately 120,700 “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)
|
|
Enhanced Video Subscriber is a home, residential multiple dwelling
unit or commercial unit that receives our video service over our
broadband network or through a partner network via a digital video
signal while subscribing to any recurring monthly service that
requires the use of encryption-enabling technology. Enhanced Video
Subscribers that are not counted on an EBU basis are counted on a
unique premises basis. For example, a subscriber with one or more
set-top boxes that receives our video service in one premises is
generally counted as just one subscriber. An Enhanced Video
Subscriber is not counted as a Basic Video Subscriber. As we migrate
customers from basic to enhanced video services, we report a
decrease in our Basic Video Subscribers equal to the increase in our
Enhanced Video Subscribers. Subscribers to enhanced video services
provided by our operations in Switzerland and the Netherlands over
partner networks receive basic video 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 a
Multi-channel Multipoint (“microwave”) Distribution System.
|
(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 60,200 digital subscriber line (“DSL”)
subscribers within Austria 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 Basic and Enhanced Video Subscribers without
an incremental recurring fee. Our Internet Subscribers in
Switzerland include 98,200 subscribers who have requested and
received this 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 44,700 subscribers within Austria that are not
serviced over our networks. In Switzerland, we offer a basic phone
service to our Basic and Enhanced Video Subscribers without an
incremental recurring fee. Our Telephony Subscribers in
Switzerland include 51,000 subscribers who have requested and
received this service.
|
(11)
|
|
Pursuant to service agreements, Switzerland and, to a much lesser
extent, the Netherlands offer enhanced video, 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 September 30, 2015, Switzerland's partner networks
account for 140,900 Customer Relationships, 282,700 RGUs, 104,800
Enhanced Video Subscribers, 105,400 Internet Subscribers, and 72,500
Telephony Subscribers.
|
|
|
|
Additional General Notes to Tables:
Most 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.
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