[August 07, 2017] |
|
Liberty Global Reports Q2 and H1 2017 Results
Liberty Global plc ("Liberty Global") (NASDAQ: LBTYA, LBTYB, LBTYK, LILA
and LILAK), today announces financial and operating results for
the three months ("Q2") and six months ("YTD" or "H1") ended June 30,
2017 for the Liberty Global Group1 and the LiLAC Group1.
CEO Mike Fries stated, "During the first six months of the year, we
added 406,000 RGUs2 across our European markets, including a
16%3 year-over-year improvement in Western Europe,
underpinned by our strongest H1 video performance since 2006 and
continued network expansion. Our next-generation4 video
platforms, which include elegant user-interfaces, in-and-out of the home
viewing capabilities and robust content line-ups, continue resonating
with consumers, as we've added 1 million subscribers across Europe
during the last twelve months. In the U.K., we have been proactively
rolling out our new 4k-enabled, Virgin TV V6 set-top box, where
we are seeing strong demand from both new and existing customers. In our
other markets, we continue expanding the reach of Horizon TV and over
40% of our video base in Europe now subscribes to one of our
next-generation TV platforms. On the connectivity front, nearly
one-third of our 15 million broadband subscribers enjoy our high-speed
Connect Box, which provides an impeccable WiFi user experience
throughout the home, and our subscribers can now seamlessly access 10
million WiFi spots across Europe."
"From a financial perspective, our Q2 rebased5 OCF6
result in Europe showed both sequential and year-over-year improvement,
as we delivered 6% rebased OCF growth. This result was fueled by strong
performances in Germany, Belgium and CEE, which delivered Q2 rebased OCF
growth of 6%, 5% and 7%, respectively, and was further supported by our
company-wide indirect cost efficiencies. On top-line growth, we reported
a 2% rebased improvement as our B2B7 business delivered 14%
rebased revenue growth in the quarter, partly offset by continued
challenges in our mobile business which contracted 6%. As expected,
cable ARPU8 and revenue growth at Virgin Media remained soft,
as the discounting and mix effects that impacted growth in Q1 continued
in the second quarter. At the same time, we are seeing some early signs
of progress and expect the ARPU headwind in the U.K. to lessen in Q4 of
this year. We continue to anticipate approximately 5% rebased OCF growth
for Liberty Global Group in 2017."
"With respect to Project Lightning, we've made significant strides in
solidifying the foundation of the program through the appointment of a
dedicated new leadership team9, as well as an overhaul of key
processes and procedures. During Q2, we built 127,000 new premises at
Virgin Media, including a record monthly build performance in June, and
our cumulative total now stands at nearly 800,000 premises since the
project's inception. Meanwhile, on the European continent, the number of
new build and upgraded homes in markets like Germany and CEE continue to
broadly track our expectations. In these regions, we have added a
cumulative total of 1.4 million newly marketable premises over the last
2 years."
"At LiLAC, we delivered 10.5% rebased OCF growth in Q2 due to
double-digit improvements at both VTR and CWC10. In the case
of CWC, we've taken actions that should help drive organic revenue
growth and cost efficiencies in the future. With regard to our planned
spin-off of the LiLAC Group, we are pleased to report that we submitted
a draft registration statement with the SEC on a confidential basis in
July, and we still expect to complete the transaction around the end of
the year. We believe the spin-off will benefit LiLAC shareholders by
creating a stand-alone, asset-backed equity, while enhancing its
potential attractiveness as an acquisition currency for consolidation
opportunities in the highly-fragmented Latin American and Caribbean
telecommunications markets. In terms of guidance, we continue to
anticipate approximately $1.5 billion11 of OCF for full-year
2017 at LiLAC."
"We remained active in the credit markets during the first half of the
year, refinancing over $11 billion of long-term debt in Europe and Latin
America combined. At the end of June, our fully-swapped borrowing cost12
for Liberty Global plc was 4.8%, our average tenor13 exceeded
seven years and we had substantial liquidity14 of over $6
billion. With respect to our share buyback programs, we took advantage
of recent trading levels and repurchased a record $2.2 billion of LBTY
equity, as well as $41 million of LiLAC Group stock during the first
half of 2017. Going forward, we will continue to manage our business
through the lens of our long-standing levered-equity strategy, and will
continue to be opportunistic when our stock prices look especially
attractive."
European Highlights Q2 2017
-
162,000 RGU adds as softer broadband & voice growth was partially
offset by better video trends
-
99,000 organic Q2 postpaid mobile additions15, driven by a
strong performance at Telenet
-
35% of our Virgin Media postpaid mobile base has migrated to 4G
-
Closed the acquisition of SFR in Belgium in mid-June, adding 91,000
customers
-
German analog switch-off successfully finalized in early July with
limited video churn
-
Rebased revenue increased 2%, impacted by lower growth at Virgin Media
and Switzerland
-
Residential fixed16 of $2.7 billion, up 1%
year-over-year
-
B2B up 14% year-over-year to $0.5 billion
-
Residential mobile (incl. handset & interconnect) declined 6% YoY
to $0.4 billion
-
Operating income decreased 5% year-over-year
-
Rebased OCF growth of 6% with improved sequential growth
from nearly all segments
-
Includes a $32 million nonrecurring benefit associated with a
telecom operator's agreement to compensate Virgin Media for
prior-period contractual breaches
-
Connected/built new premises totaling around 500,000 YTD and 295,000
in Q2, of which 127,000 were at Virgin Media in Q2
Liberty Global Group (Europe)
|
|
|
Q2 2017
|
|
|
YOY Growth/(Decline)*
|
|
|
YTD 2017
|
|
|
YOY Growth/(Decline)*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscribers
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic RGU Net Additions
|
|
|
161,900
|
|
|
|
(37.5
|
%)
|
|
|
406,200
|
|
|
|
(6.3
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial (in USD millions, unless noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
$
|
3,664
|
|
|
|
1.6
|
%
|
|
|
$
|
7,183
|
|
|
|
1.9
|
%
|
OCF
|
|
|
$
|
1,733
|
|
|
|
6.0
|
%
|
|
|
$
|
3,338
|
|
|
|
5.0
|
%
|
Operating income
|
|
|
$
|
483
|
|
|
|
(5.0
|
%)
|
|
|
$
|
914
|
|
|
|
(11.7
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted FCF(17)
|
|
|
$
|
325
|
|
|
|
N.M.
|
|
|
$
|
(8
|
)
|
|
|
N.M.
|
Cash provided by operating activities
|
|
|
$
|
1,509
|
|
|
|
|
|
|
$
|
2,412
|
|
|
|
|
Cash provided (used) by investing activities
|
|
|
$
|
(926
|
)
|
|
|
|
|
|
$
|
965
|
|
|
|
|
Cash used by financing activities
|
|
|
$
|
(1,662
|
)
|
|
|
|
|
|
$
|
(3,445
|
)
|
|
|
|
* For the RGU growth rate, the Netherlands is excluded from the 2016
figures; Revenue and OCF YoY growth rates are on a rebased basis. N.M.
- Not Meaningful
LiLAC Highlights Q2 2017
-
Added 8,000 organic customers18, bringing the H1 total to
41,000
-
Subscriber additions of 16,000 in Q2 2017 & 58,000 in H1 2017
-
VTR's 34,000 net adds partially offset by losses totaling 18,000
at CWC & LCPR
-
Rebased revenue growth of 2%, including 8% in Chile and 1% at CWC and
LCPR
-
Operating income of $159 million versus a $21 million operating loss
in Q2 2016
-
Rebased OCF growth of 10.5%
-
CWC & VTR each delivered 11% rebased growth
-
LCPR delivered 7% rebased OCF growth despite macroeconomic
headwinds
-
Lowering P&E additions as a % of revenue forecast to 19%-21% for 2017
Liberty Latin America & Caribbean
|
|
|
Q2 2017
|
|
|
YOY Growth/(Decline)*
|
|
|
YTD 2017
|
|
|
YOY Growth/(Decline)*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscribers
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic RGU Net Additions
|
|
|
15,700
|
|
|
|
(65.6
|
%)
|
|
|
57,600
|
|
|
|
(14.0
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial (in USD millions, unless noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
$
|
921
|
|
|
|
2.4
|
%
|
|
|
$
|
1,832
|
|
|
|
0.8
|
%
|
OCF
|
|
|
$
|
368
|
|
|
|
10.5
|
%
|
|
|
$
|
722
|
|
|
|
(0.4
|
%)
|
Operating income
|
|
|
$
|
159
|
|
|
|
N.M.
|
|
|
$
|
297
|
|
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted FCF
|
|
|
$
|
114
|
|
|
|
N.M.
|
|
|
$
|
56
|
|
|
|
N.M.
|
Cash provided by operating activities
|
|
|
$
|
224
|
|
|
|
|
|
|
$
|
299
|
|
|
|
|
Cash used by investing activities
|
|
|
$
|
(123
|
)
|
|
|
|
|
|
$
|
(253
|
)
|
|
|
|
Cash provided (used) by financing activities
|
|
|
$
|
(27
|
)
|
|
|
|
|
|
$
|
2
|
|
|
|
|
* Revenue and OCF YoY growth rates are on a rebased basis. N.M. -
Not Meaningful
Subscriber Growth - Liberty Global Group (Europe)
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
Organic RGU net additions (losses) by product
|
|
|
|
|
|
(excluding NL)(3)
|
|
|
|
|
|
(excluding NL)(3)
|
Video
|
|
|
(16,100
|
)
|
|
|
(39,500
|
)
|
|
|
(31,200
|
)
|
|
|
(137,200
|
)
|
Data
|
|
|
100,100
|
|
|
|
150,800
|
|
|
|
254,500
|
|
|
|
296,000
|
|
Voice
|
|
|
77,900
|
|
|
|
147,700
|
|
|
|
182,900
|
|
|
|
274,700
|
|
Total Liberty Global Group
|
|
|
161,900
|
|
|
|
259,000
|
|
|
|
406,200
|
|
|
|
433,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic RGU net additions (losses) by market
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K./Ireland
|
|
|
78,100
|
|
|
|
50,100
|
|
|
|
236,100
|
|
|
|
143,000
|
|
Germany
|
|
|
53,800
|
|
|
|
109,300
|
|
|
|
106,200
|
|
|
|
132,900
|
|
Belgium
|
|
|
(15,300
|
)
|
|
|
17,600
|
|
|
|
(27,300
|
)
|
|
|
23,900
|
|
Switzerland/Austria
|
|
|
10,600
|
|
|
|
(9,700
|
)
|
|
|
8,200
|
|
|
|
(21,700
|
)
|
Central and Eastern Europe
|
|
|
34,700
|
|
|
|
91,700
|
|
|
|
83,000
|
|
|
|
155,400
|
|
Total Liberty Global Group
|
|
|
161,900
|
|
|
|
259,000
|
|
|
|
406,200
|
|
|
|
433,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Mobile SIM additions (losses) by product
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
98,700
|
|
|
|
94,700
|
|
|
|
189,900
|
|
|
|
183,300
|
|
Prepaid
|
|
|
(92,900
|
)
|
|
|
(52,500
|
)
|
|
|
(165,900
|
)
|
|
|
(119,000
|
)
|
Total Liberty Global Group
|
|
|
5,800
|
|
|
|
42,200
|
|
|
|
24,000
|
|
|
|
64,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Mobile SIM additions (losses) by market
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K./Ireland
|
|
|
(7,500
|
)
|
|
|
25,300
|
|
|
|
(4,100
|
)
|
|
|
9,200
|
|
Belgium
|
|
|
(6,300
|
)
|
|
|
(8,700
|
)
|
|
|
400
|
|
|
|
9,100
|
|
Other
|
|
|
19,600
|
|
|
|
25,600
|
|
|
|
27,700
|
|
|
|
46,000
|
|
Total Liberty Global Group
|
|
|
5,800
|
|
|
|
42,200
|
|
|
|
24,000
|
|
|
|
64,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Cable Product Performance: we added
406,000 RGUs in H1, down 6% year-over-year. During Q2 we gained
162,000 RGUs, a decline of 37% over the prior-year period due to lower
additions in CEE, Germany and Belgium. From a Q2 product perspective,
our video RGU performance improved, while our broadband and telephony
growth slowed year-over-year
-
The better video result was primarily driven by Virgin Media,
which improved its Q2 performance by 50,000 RGUs supported by the
relaunch of Virgin TV and the successful rollout of our Virgin
TV V6 set-top box. The overall video performance was
particularly strong given our focus on the completion of the
analog switch-off in Germany, which caused only minimal disruption
to our German operations
-
Next-Generation TV platforms (including
Horizon TV, Horizon-Lite, TiVo, Virgin TV V6 and Yelo TV): we
added 302,000 subscribers in Q2, as our next-generation subscriber
base reached 7.2 million, representing 41% of our total cable video
base (excluding DTH). Notable Q2 performances included the U.K.
(78,000 additions), Belgium (69,000 additions) and Poland (53,000
additions)
-
Our new 4K enabled Virgin TV V6 set-top box is resonating
with consumers in the U.K. and by June 30, 2017 nearly 10% of
video subscribers in the U.K. had a new box. Subscribers to the Virgin
TV V6 box have significantly higher NPS scores than those on
legacy boxes
-
WiFi Connect Box: we increased the number
of WiFi Connect boxes by more than 800,000 during Q2, ending the
quarter with 4.5 million boxes installed across Europe. This
represents a 31% penetration of our broadband base of 14.7 million
-
U.K./Ireland: posted RGU growth of 78,000
additions in Q2, up 56% YoY in a seasonally slower quarter, and
improved in both Lightning new build areas and our existing footprint.
Similar to Q1, our U.K. video performance materially improved on a
year-over-year basis with 35,000 RGU additions, a 42,000 subscriber
improvement. Our Q2 U.K. internet RGU growth of 31,000 slowed due to
higher year-over-year churn levels but still took an estimated 46%
share of national broadband net adds and an even higher share of
broadband net adds on our cable footprint in the U.K. during Q2. Our
Irish RGU performance returned to positive territory with improvements
across all products due to our latest spring campaign
-
Germany: reported 54,000 RGU additions in
Q2, around half of our Q2 2016 result. The main operational focus in
Q2 was the switch-off of the analog TV signal across our video base of
6 million subscribers. The migration to a digital-only video
experience was successful, including better year-over-year video
performance. We experienced weaker internet and fixed voice RGU
growth, partially as a result of (1) a more competitive environment
and (2) certain delays in installations for new customers as truck
rolls were prioritized for existing customers to assist with the
analog switch-off in June. In addition, we have reduced discounts
since February 2017, while in the prior-year period we ran our
"Highspeed Weeks" promotion
-
Belgium: Q2 attrition of 15,000 RGUs was
broadly in-line with Q1 results, but down year-over-year primarily due
to intensified competition. While video losses improved sequentially,
internet and telephony performance softened. Our all-in-one converged
package "WIGO" reached 224,000 subscribers at June 30, 2017, including
a robust Q2 inflow of 36,000 net new "WIGO" subscribers. In addition,
Telenet closed its acquisition of SFR Belux in June, resulting in
190,000 nonorganic fixed subscriber additions in Q2 2017
-
Switzerland/Austria: 11,000 RGU additions
in Q2, supported by a sequential and year-over-year improvement across
all fixed-line products. This result was driven by our refreshed Swiss
Connect & Play portfolio, which launched in mid-May. With respect to
this new portfolio, we lowered price points of our high-tier bundles,
while lifting price points on the low-end to drive a better tier-mix.
We expect to launch our MySports channels in early September featuring
exclusive content, such as Swiss, Russian and Swedish ice hockey, and
German and Portuguese soccer
-
CEE: delivered 35,000 RGU additions in
Q2, a decline versus the 92,000 gained in Q2 2016. This weaker
performance was primarily due to softer RGU performances in Poland,
Slovakia and our DTH business. Hungary's strong RGU additions
partially offset these weaker results
-
Mobile15: added 6,000 mobile
subscribers in total in Q2, as our 99,000 postpaid subscriber
additions, were largely offset by attrition in the prepaid subscriber
base
-
Virgin Media's Q2 subscriber base in the U.K. declined by 20,000
as low-ARPU prepaid subscriber losses of 30,000 more than offset
the 10,000 postpaid additions. Of note, 4G subscriptions in the
U.K. increased by 347,000 in Q2 and now represent 34% of the
U.K.'s total postpaid mobile base. Ireland delivered a record
13,000 additions during Q2, supported by our attractive SIM-only
postpaid mobile promotion
-
Telenet in Belgium gained 60,000 postpaid additions in Q2,
supported by the continued success of "WIGO" and a refreshed BASE19
postpaid offering with doubled data allowance. This sequential and
year-over-year improvement was offset by a decline in our prepaid
base of 63,000 during Q2, mainly due to the deactivation of 53,000
prepaid SIM cards following a legislative change to register all
legacy prepaid SIMs by June 15, 2017
-
Switzerland/Austria posted 15,000 postpaid SIM additions on the
back of the continued "10 for 10" promotion in Austria and a
refreshed mobile portfolio in Switzerland, now including free EU
roaming
Revenue Highlights - Liberty Global Group (Europe)
The following table presents (i) revenue of each of our consolidated
reportable segments for the comparative periods, and (ii) the percentage
change from period to period on a reported and a rebased basis:
|
|
|
Three months ended
|
|
Increase/(decrease)
|
|
Six months ended
|
|
Increase/(decrease)
|
|
|
|
June 30,
|
|
|
June 30,
|
|
Revenue
|
|
|
2017
|
|
2016
|
|
%
|
|
Rebased %
|
|
2017
|
|
2016
|
|
%
|
|
Rebased %
|
|
|
|
in millions, except % amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
European Division:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K./Ireland
|
|
|
$
|
1,566.1
|
|
|
$
|
1,717.7
|
|
|
(8.8
|
)
|
|
0.9
|
|
|
$
|
3,070.5
|
|
|
$
|
3,404.2
|
|
|
(9.8
|
)
|
|
1.3
|
|
Belgium
|
|
|
686.0
|
|
|
707.3
|
|
|
(3.0
|
)
|
|
0.7
|
|
|
1,347.4
|
|
|
1,317.5
|
|
|
2.3
|
|
|
0.9
|
|
Germany
|
|
|
655.8
|
|
|
643.5
|
|
|
1.9
|
|
|
4.6
|
|
|
1,284.9
|
|
|
1,260.6
|
|
|
1.9
|
|
|
5.1
|
|
Switzerland/Austria
|
|
|
435.1
|
|
|
447.0
|
|
|
(2.7
|
)
|
|
(1.5
|
)
|
|
858.8
|
|
|
880.4
|
|
|
(2.5
|
)
|
|
(1.4
|
)
|
The Netherlands
|
|
|
-
|
|
|
678.8
|
|
|
N.M.
|
|
N.M.
|
|
-
|
|
|
1,348.6
|
|
|
N.M.
|
|
N.M.
|
Total Western Europe
|
|
|
3,343.0
|
|
|
4,194.3
|
|
|
(20.3
|
)
|
|
1.2
|
|
|
6,561.6
|
|
|
8,211.3
|
|
|
(20.1
|
)
|
|
1.6
|
|
Central and Eastern Europe
|
|
|
288.6
|
|
|
274.0
|
|
|
5.3
|
|
|
6.4
|
|
|
559.9
|
|
|
540.1
|
|
|
3.7
|
|
|
5.8
|
|
Central and other
|
|
|
31.6
|
|
|
(0.9
|
)
|
|
N.M.
|
|
N.M.
|
|
60.3
|
|
|
(3.3
|
)
|
|
N.M.
|
|
N.M.
|
Total European Division
|
|
|
3,663.2
|
|
|
4,467.4
|
|
|
(18.0
|
)
|
|
1.6
|
|
|
7,181.8
|
|
|
8,748.1
|
|
|
(17.9
|
)
|
|
1.9
|
|
Corporate and other
|
|
|
0.5
|
|
|
15.2
|
|
|
(96.7
|
)
|
|
N.M.
|
|
0.9
|
|
|
29.8
|
|
|
(97.0
|
)
|
|
N.M.
|
Intersegment eliminations
|
|
|
-
|
|
|
(11.4
|
)
|
|
N.M.
|
|
N.M.
|
|
-
|
|
|
(22.6
|
)
|
|
N.M.
|
|
N.M.
|
Total Liberty Global Group
|
|
|
$
|
3,663.7
|
|
|
$
|
4,471.2
|
|
|
(18.1
|
)
|
|
1.6
|
|
|
$
|
7,182.7
|
|
|
$
|
8,755.3
|
|
|
(18.0
|
)
|
|
1.9
|
|
N.M. - Not Meaningful
-
Reported revenue for the three and six months ended June 30, 2017,
declined 18% year-over-year in each period
-
These results were primarily driven by the net impact of (i) the
deconsolidation of our operations in the Netherlands in connection
with the completion of our joint venture with Vodafone Group plc
(the "VodafoneZiggo JV"), (ii) negative foreign exchange ("FX")
movements, mainly related to the strengthening of the U.S. dollar
against the British pound, and (iii) our organic revenue growth
-
Rebased revenue grew 2% during each of the Q2 and H1 2017 periods and
included the net negative impact of certain items, the most
significant of which included:
-
A reduction in cable subscription revenue of $3 million and $12
million, respectively, resulting from a change in U.K. regulations
governing payment handling fees that Virgin Media charges its
customers
-
The favorable $6 million impact in the YTD period of the expected
recovery of VAT paid in prior periods with respect to copyright
fees in Belgium, which benefited revenue in Q1 2017
-
In Q2 and H1 2017, we recognized $32 million and $63 million of
revenue from the VodafoneZiggo JV pursuant to the framework services
agreement. Our rebased growth calculations include an estimate of the
revenue from the framework agreement for the Q2 and H1 2016 periods,
as if the framework agreement had been in place at the beginning of
2016
-
Effective April 1, 2017, we changed the categories that we present in
our product revenue table in order to align with our internal
reporting. These changes were retroactively reflected in the
prior-year periods. The new table presents Residential Cable,
Residential Mobile and B2B (Fixed and Mobile) sections, with each
section including subscription and non-subscription elements. Our
definitions of subscription revenue and ARPU have not changed. For
additional details and definitions of our product revenue, see note 15
to the condensed consolidated financial statements included in our
quarterly report on Form 10-Q filed on August 7, 2017 (the "Form 10-Q")
-
Our B2B7 business (including SOHO and non-subscription
revenue) reported rebased revenue growth of 14% and 12% in Q2 2017 and
H1 2017, respectively
-
Our residential mobile (including interconnect and handset sales)
business posted 6% and 7% rebased revenue contractions during Q2 2017
and H1 2017, respectively
-
Contraction of mobile revenue was due to rebased revenue declines
in Belgium and the U.K., which together represent over 90% of our
mobile business
-
The U.K. declines were mainly related to reductions in revenue
from Virgin Media's subsidized handset base of $31 million and
$67 million, respectively, which more than offset increases
related to growth in Virgin Media's split-contract program of
$14 million and $29 million, respectively
-
Additionally, declines in mobile interconnect revenue
negatively impacted mobile revenue in both the U.K. and Belgium
Q2 2017 Rebased Revenue Growth - Segment Highlights
-
U.K./Ireland: the rebased revenue growth
of 1% in Q2 2017 was driven by:
-
Rebased residential cable revenue (~70% of total revenue) growth
of 2%, driven by the net effect of (i) growth in subscription
revenue resulting from RGU additions and (ii) a relatively flat
year-over-year Q2 ARPU performance on an FX-neutral basis
-
Rebased residential mobile revenue (including interconnect and
mobile handset revenue) decline of 8%, primarily due to the net
reduction in revenue in the U.K., as mentioned above
-
Rebased business revenue growth of 4%, mainly driven by SOHO and
SME
-
Belgium: rebased revenue growth rate of
1% in Q2 was mainly driven by the net effect of (i) strong growth in
B2B, (ii) mobile headwinds, partly related to lower mobile subscribers
and handset sales and (iii) lower cable revenue, primarily due to RGU
attrition
-
Germany: Q2 rebased revenue growth of 5%
was mainly driven by (i) higher cable subscription revenue (~90% of
total revenue), as a result of a larger subscriber base and an
increase in ARPU per RGU, (ii) higher low-margin mobile handset
revenue and (iii) B2B growth in the SOHO segment. Looking ahead, we
expect H2 2017 to be adversely impacted by the analog switch-off, as
the related loss of analog carriage fees is expected to result in a
reduction of revenue and OCF of approximately €7.5 ($8.6) million per
quarter
-
Switzerland/Austria: rebased revenue
declined by 1.5% in Q2, mainly driven by the net effect of (i) lower
ARPU per RGU, primarily related to a weaker tier-mix and competitive
pressures and (ii) a higher contribution from B2B. At the same time,
mobile revenue growth was limited as the contribution from the mobile
subscriber growth was offset by lower handset sales
-
CEE: rebased revenue growth of 6% in Q2
driven mainly by (i) strong growth in our B2B business and (ii) higher
cable revenue supported by solid RGU additions totaling 302,000 over
the LTM period, partly offset by a 1% decline in the ARPU per RGU on
an FX-neutral basis
Operating Income - Liberty Global Group (Europe)
-
Operating income of $483 million and $509 million in Q2 2017 and Q2
2016, respectively, representing a decrease of 5%. For the six months
ended June 30, 2017, the operating income of $914 million reflects a
decline of 12% as compared to $1.0 billion in H1 2016
-
The decreases in operating income during both periods primarily
resulted from lower OCF, as further described below, and declines in
depreciation and amortization. The declines in OCF and depreciation
and amortization are primarily attributable to the fact that our
Netherlands segment is not included in our 2017 consolidated results
Operating Cash Flow Highlights - Liberty Global Group (Europe)
The following table presents (i) OCF of each of our consolidated
reportable segments for the comparative periods, and (ii) the percentage
change from period to period on a reported and a rebased basis:
|
|
|
Three months ended
|
|
Increase/(decrease)
|
|
Six months ended
|
|
Increase/(decrease)
|
|
|
|
June 30,
|
|
|
June 30,
|
|
OCF
|
|
|
2017
|
|
2016
|
|
%
|
|
Rebased %
|
|
2017
|
|
2016
|
|
%
|
|
Rebased %
|
|
|
|
in millions, except % amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
European Division:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K./Ireland
|
|
|
$
|
709.8
|
|
|
$
|
765.5
|
|
|
(7.3
|
)
|
|
3.9
|
|
|
$
|
1,358.3
|
|
|
$
|
1,510.1
|
|
|
(10.1
|
)
|
|
2.4
|
Belgium
|
|
|
317.8
|
|
|
311.3
|
|
|
2.1
|
|
|
5.4
|
|
|
615.7
|
|
|
581.1
|
|
|
6.0
|
|
|
6.8
|
Germany
|
|
|
412.8
|
|
|
400.3
|
|
|
3.1
|
|
|
5.8
|
|
|
795.6
|
|
|
779.7
|
|
|
2.0
|
|
|
5.2
|
Switzerland/Austria
|
|
|
266.9
|
|
|
263.6
|
|
|
1.3
|
|
|
2.3
|
|
|
522.0
|
|
|
521.7
|
|
|
0.1
|
|
|
1.0
|
The Netherlands
|
|
|
-
|
|
|
364.1
|
|
|
N.M.
|
|
N.M.
|
|
-
|
|
|
732.0
|
|
|
N.M.
|
|
N.M.
|
Total Western Europe
|
|
|
1,707.3
|
|
|
2,104.8
|
|
|
(18.9
|
)
|
|
4.4
|
|
|
3,291.6
|
|
|
4,124.6
|
|
|
(20.2
|
)
|
|
3.7
|
Central and Eastern Europe
|
|
|
122.9
|
|
|
114.6
|
|
|
7.2
|
|
|
7.2
|
|
|
233.9
|
|
|
225.5
|
|
|
3.7
|
|
|
5.5
|
Central and other
|
|
|
(51.2
|
)
|
|
(82.1
|
)
|
|
37.6
|
|
|
4.8
|
|
|
(93.2
|
)
|
|
(166.4
|
)
|
|
44.0
|
|
|
14.3
|
Total European Division
|
|
|
1,779.0
|
|
|
2,137.3
|
|
|
(16.8
|
)
|
|
4.9
|
|
|
3,432.3
|
|
|
4,183.7
|
|
|
(18.0
|
)
|
|
4.4
|
Corporate and other
|
|
|
(45.7
|
)
|
|
(62.7
|
)
|
|
27.1
|
|
|
25.0
|
|
|
(94.3
|
)
|
|
(115.5
|
)
|
|
18.4
|
|
|
14.6
|
Total Liberty Global Group
|
|
|
$
|
1,733.3
|
|
|
$
|
2,074.6
|
|
|
(16.5
|
)
|
|
6.0
|
|
|
$
|
3,338.0
|
|
|
$
|
4,068.2
|
|
|
(17.9
|
)
|
|
5.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OCF Margin
|
|
|
47.3
|
%
|
|
46.4
|
%
|
|
|
|
|
|
46.5
|
%
|
|
46.5
|
%
|
|
|
|
|
N.M. - Not Meaningful
-
Reported OCF for the three and six months ended June 30, 2017,
declined 16.5% and 18% year-over-year, respectively
-
These results were primarily driven by the net impact of (i) the
deconsolidation of our operations in the Netherlands, (ii) the
aforementioned adverse impact of FX movements and (iii) our
organic OCF growth
-
Rebased OCF growth of 6% and 5% in Q2 and H1 2017, respectively,
included the net positive impact of certain items, the most
significant of which included:
-
The net unfavorable revenue items discussed in the "Revenue
Highlights" section above
-
A favorable $32 million benefit recognized in Q2 associated with a
telecom operator's agreement to compensate Virgin Media for
prior-period contractual breaches related to network charges
-
A $13 million network tax increase following an April 1, 2017
increase in the rateable value of our existing U.K. and Irish
networks
-
The negative impact of an $8 million favorable MVNO settlement in
Belgium in Q2 2016
-
As compared to the prior-year periods, our Q2 and H1 2017 OCF margins20
were up 90 basis points to 47.3% and flat at 46.5% year-over-year,
respectively. Of note, the OCF margins during the 2017 periods were
negatively impacted by the deconsolidation of the Netherlands
Q2 2017 Rebased Operating Cash Flow Growth -
Segment Highlights
-
U.K./Ireland: OCF increased 4% in Q2 on a
rebased basis, including the favorable impact of the $32 million
benefit mentioned above. Excluding this benefit, OCF declined
marginally on a rebased basis as revenue growth was offset by the
aforementioned network tax increase, as well as higher marketing and
programming costs
-
Belgium: rebased OCF growth of 5% in Q2
was largely driven by less mobile handset subsidies, lower sales and
marketing, lower integration costs and indirect cost containment
following the BASE acquisition
-
Germany: increased OCF by 6% in Q2 on a
rebased basis, primarily due to the net effect of (i) an increase in
revenue, (ii) higher direct costs, primarily due to higher mobile
handset sales, partially offset by lower fixed-line telephony call
volumes and interconnect rates and (iii) cost containment of indirect
costs
-
Switzerland/Austria: rebased OCF growth
of 2% in Q2 as the rebased revenue contraction of 1.5% was more than
offset by lower direct and indirect costs across the various functions
-
CEE: rebased OCF growth of 7% in Q2 was
largely driven by the aforementioned revenue growth
-
Central and other: the Q2 year-over-year
improvement on a rebased basis was driven by general cost containment,
including lower consultancy and contingent labor costs, and savings
arising from the establishment of our group-wide Technology &
Innovation organization. Of note, in the prior-year period, we
incurred higher nonrecurring costs associated with the implementation
of our Liberty Go initiative
Net Loss - Liberty Global Group (Europe)
-
Net loss was $637 million for the three months ended June 30, 2017, as
compared to net earnings of $204 million for the prior-year period. On
a YTD basis, the net loss was $930 million and $126 million, in H1
2017 and H1 2016, respectively
Property and Equipment Additions - Liberty Global Group (Europe)
The details of our property and equipment additions21 are as
follows:
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
in millions, except % amounts
|
Customer premises equipment
|
|
|
$
|
304.2
|
|
|
|
$
|
229.9
|
|
|
|
$
|
600.2
|
|
|
|
$
|
466.1
|
|
New Build & Upgrade
|
|
|
305.5
|
|
|
|
203.6
|
|
|
|
495.3
|
|
|
|
354.6
|
|
Capacity
|
|
|
163.0
|
|
|
|
159.8
|
|
|
|
279.6
|
|
|
|
266.1
|
|
Baseline
|
|
|
200.9
|
|
|
|
219.2
|
|
|
|
357.2
|
|
|
|
393.7
|
|
Product & Enablers
|
|
|
230.2
|
|
|
|
142.9
|
|
|
|
355.9
|
|
|
|
260.3
|
|
Property and equipment additions (excluding the Netherlands(3))
|
|
|
1,203.8
|
|
|
|
955.4
|
|
|
|
2,088.2
|
|
|
|
1,740.8
|
|
The Netherlands
|
|
|
-
|
|
|
|
143.1
|
|
|
|
-
|
|
|
|
283.2
|
|
Total property and equipment additions
|
|
|
$
|
1,203.8
|
|
|
|
$
|
1,098.5
|
|
|
|
2,088.2
|
|
|
|
2,024.0
|
|
Property and equipment additions as % of revenue (excluding NL(3))
|
|
|
32.9
|
%
|
|
|
25.2
|
%
|
|
|
29.1
|
%
|
|
|
23.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Increases in property and equipment additions in absolute terms and as
a percentage of revenue in both the Q2 and YTD periods were primarily
driven by (i) increased new build activities across our footprint,
particularly in the U.K., (ii) higher CPE spend year-over-year and
(iii) higher product & enablers spend, due in part to a new DTH
transponder lease agreement in CEE, partly offset by (iv) lower
baseline spend
Consolidated Statements of Cash Flows - Liberty Global Group
(Europe)
|
|
|
|
|
Six months ended
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
Variance
|
|
|
|
|
|
in millions
|
|
|
|
Net cash provided (used) by:
|
|
|
|
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
$
|
2,411.5
|
|
|
|
$
|
2,564.0
|
|
|
|
$
|
(152.5
|
)
|
Investing Activities
|
|
|
|
|
$
|
964.7
|
|
|
|
$
|
(2,402.9
|
)
|
|
|
$
|
3,367.6
|
|
Financing Activities
|
|
|
|
|
$
|
(3,444.8
|
)
|
|
|
$
|
(112.4
|
)
|
|
|
$
|
(3,332.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Operating Activities: the decrease in
cash provided was primarily attributable to the net effect of (i) a
decrease in cash provided by OCF and related working capital items due
to the completion of the VodafoneZiggo JV transaction, (ii) an
increase in cash provided due to (a) lower payments of interest, (b)
higher cash receipts related to derivative instruments and (c) higher
cash dividends primarily received from the VodafoneZiggo JV and (iii)
a decrease due to unfavorable movements in FX
-
Investing Activities: the change
in net cash provided (used) by investing activities was primarily
attributable to an increase in cash related to (i) higher
distributions received from affiliates, (ii) lower payments for
acquisitions and (iii) the equalization payment received in Q1 2017 in
connection with the completion of the VodafoneZiggo JV transaction
-
Financing Activities: the increase in net
cash used by financing activities was primarily attributable to
increases associated with (i) the repurchase of shares, (ii) higher
net repayments of debt and (iii) an increase in cash collateral
associated with a June 2017 debt transaction
Adjusted Free Cash Flow - Liberty Global Group (Europe)
|
|
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
in millions
|
|
|
in millions
|
Adjusted Free Cash Flow
|
|
|
|
|
$
|
325.1
|
|
|
|
$
|
516.4
|
|
|
|
$
|
(7.5
|
)
|
|
|
$
|
411.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
The adjusted free cash flow17 decrease of $191 million in
Q2 and $419 million in H1 2017, as compared to the prior-year periods,
was attributable to the net effect of:
-
Lower cash provided from OCF and related working capital items
-
Lower interest payments (including related derivative instruments)
-
Favorable movements in FX
-
Higher dividends received
-
Lower capital expenditures
-
Lower cash taxes in the Q2 period and higher cash taxes in the H1
period
-
The impact of the VodafoneZiggo JV transaction accounted for a
significant portion of these items
-
On a net basis, our vendor financing programs resulted in
approximately $59 million and $84 million higher adjusted free cash
flow in Q2 and H1 2017, respectively, as compared to the prior-year
periods
Leverage and Liquidity - Liberty Global Group (Europe - at June
30, 2017)
-
Total capital leases and principal amount of
third-party debt: $40.7 billion
-
Leverage ratios: our adjusted gross and
net leverage ratios22 at June 30, 2017 were 5.2x and 5.1x,
respectively
-
Average debt tenor13 : 7.5
years, with ~90% not due until 2021 or beyond
-
Borrowing costs12 : blended
fully-swapped borrowing cost of our third-party debt was 4.5%
-
Liquidity: $4.7 billion, including (i)
$1.1 billion of cash at June 30, 2017 and (ii) aggregate unused
borrowing capacity23 under our credit facilities of
$3.6 billion
VodafoneZiggo Joint Venture (not consolidated) - Liberty
Global Group
Our noncontrolling 50% interest in the VodafoneZiggo JV is attributed to
Liberty Global Group. VodafoneZiggo is a leading Dutch company that
provides fixed, mobile and integrated communication and entertainment
services to consumers and businesses. The unaudited financial and
operating information set forth below is preliminary and subject to
change. All financial and operating information presented in this
section is presented in accordance with VodafoneZiggo's policies.
VodafoneZiggo highlights for Q2 2017(a):
-
Lower fixed RGU attrition with a loss of 10,000 RGUs in Q2 as compared
to a loss of 28,000 in Q2 2016; mobile contract net additions improved
to 19,000, compared to a pro forma loss of 2,000 in Q2 2016
-
Total revenue declined by 3% on a pro forma basis in Q2 to €997
million, reflecting continuing mobile competition, notably in the B2B
segment; fixed-line performance was stable
-
Consumer cable revenue declined by 1% on a pro forma basis as ARPU
growth was offset by a lower customer base
-
Consumer mobile service revenue declined by 7% on a pro forma basis in
Q2 driven by increased competition and lower roaming revenue
-
B2B revenue declined by 7% on a pro forma basis in Q2 as mobile
pressures were only partially offset by cable growth (led by SOHO
subscribers)
-
Operating income of €46 million in Q2; remained flat on a pro forma
basis compared with Q2 2016
-
Q2 OCF(b) declined by 1% on a pro forma basis to €428
million as lower revenue was partially offset by lower marketing
expenses, reduced handset costs driven by a higher proportion of
SIM-only sales and lower interconnect costs driven by lower voice and
SMS usage
-
Successful launch in April of converged offer to 633,000 households
with 872,000 mobile SIMs. Offer includes double mobile data allowance,
an extra premium TV package and an internet security package at no
incremental cost
(a)
|
|
VodafoneZiggo (formerly known as Ziggo Group Holding B.V.) is a
wholly-owned subsidiary of VodafoneZiggo Group Holding B.V.
("VodafoneZiggo JV"), a 50:50 joint venture between Vodafone Group
plc ("Vodafone") and Liberty Global. Prior to December 31, 2016, the
predecessor of VodafoneZiggo was a wholly-owned subsidiary of
Liberty Global. On December 31, 2016, Liberty Global and Vodafone
completed a transaction (the "JV Transaction") whereby (i)
VodafoneZiggo became a wholly-owned subsidiary of the VodafoneZiggo
JV and (ii) Vodafone Libertel B.V. ("Vodafone NL"), the entity that
owns Vodafone's mobile operations in the Netherlands, became a
wholly-owned subsidiary of VodafoneZiggo. In connection with the
closing of the JV Transaction, the VodafoneZiggo JV recorded all of
its assets and liabilities at fair value. As the entity contributed
to the VodafoneZiggo JV by Liberty Global is considered to be the
predecessor of VodafoneZiggo for financial reporting purposes, the
historical consolidated financial statements for VodafoneZiggo do
not include Vodafone NL for periods prior to December 31, 2016. In
order to provide meaningful comparisons, the preliminary financial
and operating information presented herein for the 2016 periods are
presented on a pro forma basis that gives effect to, among other
items, (i) the inclusion of the financial and operating information
of Vodafone NL (excluding Vodafone Thuis) as of and for the three
and six months ended June 30, 2016, (ii) the impacts of the fair
value accounting applied to the opening balance sheet of
VodafoneZiggo in connection with the closing of the JV Transaction,
(iii) the services provided to VodafoneZiggo by Vodafone and Liberty
Global pursuant to a "Framework Agreement" that was entered into in
connection with the JV Transaction; (iv) the elimination of
historical related-party charges from Vodafone and Liberty that will
not continue in the periods following the JV Transaction, with each
adjustment recorded as if the JV Transaction had occurred on January
1, 2016. The pro forma depreciation and amortization amounts for the
2016 periods are based on the fair values and estimated useful lives
assigned to VodafoneZiggo's long-lived assets in the preliminary
acquisition accounting and do not provide for the impacts of
property and equipment additions or retirements during the
applicable 2016 periods. VodafoneZiggo financial information is
denominated in euro, its functional currency, and reported in
accordance with U.S. GAAP. The pro forma financial information has
not been prepared with a view towards complying with Article 11 of
Regulation S-X.
|
|
|
|
(b)
|
|
OCF for VodafoneZiggo is defined on a basis consistent with Liberty
Global. For the definition of OCF see note 6. A reconciliation of
operating income to OCF is presented below (in millions).
|
|
|
|
|
|
Three months ended June 30,
|
|
|
Six months ended June 30,
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
Pro forma
|
|
|
|
|
|
Pro forma
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
€
|
46.1
|
|
|
|
€
|
45.9
|
|
|
|
€
|
99.3
|
|
|
|
€
|
121.9
|
Share-based compensation expense
|
|
|
|
|
1.5
|
|
|
|
2.8
|
|
|
|
4.2
|
|
|
|
5.6
|
Depreciation and amortization
|
|
|
|
|
378.0
|
|
|
|
378.2
|
|
|
|
753.3
|
|
|
|
755.0
|
Impairment, restructuring and other operating items, net
|
|
|
|
|
2.5
|
|
|
|
5.6
|
|
|
|
2.7
|
|
|
|
8.3
|
OCF
|
|
|
|
|
€
|
428.1
|
|
|
|
€
|
432.5
|
|
|
|
€
|
859.5
|
|
|
|
€
|
890.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table sets forth selected operating statistics of
VodafoneZiggo:
|
|
|
|
|
June 30,
|
|
|
|
|
|
2017
|
|
|
2016
|
Fixed-line Subscribers (RGUs)
|
|
|
|
|
|
|
|
|
Basic Video
|
|
|
|
|
592,500
|
|
|
|
720,200
|
Enhanced Video
|
|
|
|
|
3,341,100
|
|
|
|
3,291,500
|
Total Video
|
|
|
|
|
3,933,600
|
|
|
|
4,011,700
|
Internet
|
|
|
|
|
3,197,200
|
|
|
|
3,118,400
|
Telephony
|
|
|
|
|
2,544,800
|
|
|
|
2,530,500
|
Total RGUs
|
|
|
|
|
9,675,600
|
|
|
|
9,660,600
|
|
|
|
|
|
|
|
|
|
Fixed Customer Relationships
|
|
|
|
|
3,936,300
|
|
|
|
4,033,300
|
|
|
|
|
|
|
|
|
|
Mobile Subscribers (pro forma for June
30, 2016)
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
|
|
4,085,800
|
|
|
|
4,059,800
|
Prepaid (c)
|
|
|
|
|
964,200
|
|
|
|
1,184,600
|
Total Mobile subscribers
|
|
|
|
|
5,050,000
|
|
|
|
5,244,400
|
____________________________
(c)
|
|
Under the VodafoneZiggo definition of prepaid subscribers, customers
who do not pay a recurring monthly fee are excluded from
VodafoneZiggo's prepaid mobile telephony subscriber counts after a
period of inactivity of 15 months.
|
|
|
|
|
|
|
Subscriber Growth - LiLAC Group
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
Organic RGU net additions (losses) by product
|
|
|
|
|
|
|
|
|
|
|
|
|
Video
|
|
|
6,300
|
|
|
|
9,700
|
|
|
|
11,500
|
|
|
|
13,200
|
|
Data
|
|
|
23,200
|
|
|
|
30,700
|
|
|
|
61,800
|
|
|
|
56,200
|
|
Voice
|
|
|
(13,800
|
)
|
|
|
5,300
|
|
|
|
(15,700
|
)
|
|
|
(2,400
|
)
|
Total LiLAC Group
|
|
|
15,700
|
|
|
|
45,700
|
|
|
|
57,600
|
|
|
|
67,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic RGU net additions (losses) by market
|
|
|
|
|
|
|
|
|
|
|
|
|
CWC
|
|
|
(15,600
|
)
|
|
|
6,500
|
|
|
|
(5,700
|
)
|
|
|
6,500
|
|
Chile
|
|
|
33,800
|
|
|
|
36,800
|
|
|
|
59,200
|
|
|
|
53,000
|
|
Puerto Rico
|
|
|
(2,500
|
)
|
|
|
2,400
|
|
|
|
4,100
|
|
|
|
7,500
|
|
Total LiLAC Group
|
|
|
15,700
|
|
|
|
45,700
|
|
|
|
57,600
|
|
|
|
67,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Mobile SIM additions (losses) by product
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
10,400
|
|
|
|
10,600
|
|
|
|
22,500
|
|
|
|
11,600
|
|
Prepaid
|
|
|
(44,300
|
)
|
|
|
(4,800
|
)
|
|
|
(17,300
|
)
|
|
|
(5,800
|
)
|
Total LiLAC Group
|
|
|
(33,900
|
)
|
|
|
5,800
|
|
|
|
5,200
|
|
|
|
5,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Mobile SIM additions (losses) by market
|
|
|
|
|
|
|
|
|
|
|
|
|
CWC
|
|
|
(48,200
|
)
|
|
|
(1,200
|
)
|
|
|
(21,600
|
)
|
|
|
(1,200
|
)
|
Chile
|
|
|
14,300
|
|
|
|
7,000
|
|
|
|
26,800
|
|
|
|
7,000
|
|
Puerto Rico
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total LiLAC Group
|
|
|
(33,900
|
)
|
|
|
5,800
|
|
|
|
5,200
|
|
|
|
5,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Product Additions: organic RGU additions
of 16,000 in Q2 2017
-
Net additions in Chile, were offset by losses at CWC and in Puerto
Rico. Across all three businesses we saw declines in voice
subscribers
-
Chile: VTR added 34,000 RGUs driven by
26,000 broadband subscriber adds, with over 60% of new sales taking
packages containing speeds of 120 Mbps or higher. We also delivered
12,000 additional video RGUs during Q2, our strongest quarterly video
performance in two years, as our best-in-class HD channel offering and
cutting-edge video-on-demand user interface attracted customers
-
Puerto Rico: LCPR reported subscriber
losses of 3,000 as our telephony performance weakened and we saw
slightly greater video subscriber decline relative to the prior-year
period. Broadband RGU performance was marginally better year-over-year
as our market-leading speeds, including 400 Mbps for our top-tier
offering, continue to resonate with our customer base
-
Panama: we added 10,000 organic RGUs
during the quarter, including 4,000 internet and 3,000 cable video
RGUs, as we continued to generate momentum behind our refreshed
bundled offers and network improvement activities which enabled faster
speeds of up to 300 Mbps. We also continued to grow our DTH base,
adding 3,000 organic RGUs in Q2
-
Jamaica: RGUs decreased by 12,000 as
subscribers declined across all fixed-line categories
-
Bahamas: we reported a small RGU decline
of 1,000 in Q2 as continued penetration of our growing
Fiber-to-the-Home (FttH) network, which generated 2,000 video adds,
was offset by a decline of 3,000 voice subscribers
-
Barbados: RGUs declined by 4,000,
primarily due to lower fixed-line telephony subscribers and, to a
lesser extent, declines in broadband and video caused by competition
-
Mobile: mobile subscribers declined by
34,000 in the second quarter as continued postpaid success in Chile
(15,000) and prepaid gains in Jamaica (3,000) were more than offset by
losses across other CWC businesses, including Panama (18,000) and the
Bahamas (24,000)
-
Panama: an 18,000 decline in
subscribers was mainly driven by reduced low-ARPU prepaid
subscribers
-
Jamaica: subscribers grew by 3,000 as
we continued to target increased market share
-
Bahamas: our subscriber base fell by
24,000 following the entry of a new competitor into the market in
late 2016
-
Chile: added 14,000 subscribers in
total, a record quarter, as we continued to successfully focus on
penetrating our fixed subscriber base with our postpaid product
Revenue Highlights - LiLAC Group
On May 16, 2016, a subsidiary of Liberty Global acquired CWC.
Accordingly, CWC has been included in our financial results under our
U.S. GAAP accounting policies since the acquisition date. The following
table presents (i) revenue of each of our consolidated reportable
segments for the comparative periods and (ii) the percentage change from
period to period on a reported and a rebased basis:
|
|
|
Three months ended
|
|
Increase
|
|
Six months ended
|
|
Increase/(decrease)
|
|
|
|
June 30,
|
|
|
June 30,
|
|
Revenue
|
|
|
2017
|
|
2016
|
|
%
|
|
Rebased %
|
|
2017
|
|
2016
|
|
%
|
|
Rebased %
|
|
|
|
in millions, except % amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LiLAC Division:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CWC
|
|
|
$
|
582.7
|
|
|
$
|
285.6
|
|
|
104.0
|
|
|
0.7
|
|
|
$
|
1,158.3
|
|
|
$
|
285.6
|
|
|
305.6
|
|
|
(1.8
|
)
|
Chile
|
|
|
231.1
|
|
|
210.6
|
|
|
9.7
|
|
|
7.6
|
|
|
460.4
|
|
|
410.6
|
|
|
12.1
|
|
|
7.4
|
|
Puerto Rico
|
|
|
108.3
|
|
|
106.9
|
|
|
1.3
|
|
|
1.3
|
|
|
215.0
|
|
|
210.8
|
|
|
2.0
|
|
|
2.0
|
|
Total LiLAC Division
|
|
|
922.1
|
|
|
603.1
|
|
|
52.9
|
|
|
2.4
|
|
|
1,833.7
|
|
|
907.0
|
|
|
102.2
|
|
|
0.8
|
|
Intersegment eliminations
|
|
|
(1.2
|
)
|
|
(0.2
|
)
|
|
N.M.
|
|
N.M.
|
|
(1.9
|
)
|
|
(0.2
|
)
|
|
N.M.
|
|
N.M.
|
Total LiLAC Group
|
|
|
$
|
920.9
|
|
|
$
|
602.9
|
|
|
52.7
|
|
|
2.4
|
|
|
$
|
1,831.8
|
|
|
$
|
906.8
|
|
|
102.0
|
|
|
0.8
|
|
N.M. - Not Meaningful
-
Reported revenue for the three and six months ended June 30, 2017
increased by 53% and 102%, respectively
-
The Q2 and YTD results were primarily driven by the acquisition of
CWC and organic growth
-
From a rebased perspective, revenue increased 2% and 1% for the three
and six months ended June 30, 2017, respectively, and included a
favorable $6 million and $8 million impact in each of the Q2 and YTD
periods, respectively, for wholesale revenue recognized on a cash
basis related to services provided to a significant customer in prior
quarters
Q2 2017 Rebased Revenue Growth - Segment Highlights
-
CWC: rebased revenue grew 1% overall. Our
Caribbean region reported rebased revenue growth of 3% in Q2,
including growth of 15% in Jamaica, with strength across all products,
in particular mobile and managed services, more than offsetting
weakness in other markets. Revenue from wholesale connectivity across
our sub-sea and terrestrial networks and B2B in Latin American markets
also grew strongly, rising by 13% on a rebased basis. Revenue declined
by 2% on a rebased basis in Panama, as growing fixed-line services
were offset by lower managed services, and by 12% on a rebased basis
in the Bahamas, primarily due to weak mobile performance caused by the
increased competition mentioned above
-
Chile: robust rebased revenue growth of
8% for Q2 2017 primarily related to higher ARPU per RGU and an
increase in the average number of subscribers as well as increased
mobile subscription revenue, driven by subscriber growth
-
Puerto Rico: rebased revenue growth of 1%
was driven by subscriber growth over the last twelve months and Puerto
Rico's B2B business
Operating Income - LiLAC Group
-
Operating income (loss) of $159 million and ($21 million) in Q2 2017
and Q2 2016, respectively, and $297 million and $39 million for the
six months ended June 30, 2017 and 2016, respectively
-
These increases were primarily driven by the net effect of (i)
increases in OCF, as further described below, (ii) increases in
depreciation and amortization, largely due to the inclusion of CWC,
and (iii) declines in impairment, restructuring and other operating
items, net
Operating Cash Flow Highlights - LiLAC Group
The following table presents (i) OCF of each of our consolidated
reportable segments for the comparative periods and (ii) the percentage
change from period to period on a reported and a rebased basis:
|
|
|
Three months ended
|
|
Increase/(decrease)
|
|
Six months ended
|
|
Increase/(decrease)
|
|
|
|
June 30,
|
|
|
June 30,
|
|
OCF
|
|
|
2017
|
|
2016
|
|
%
|
|
Rebased %
|
|
2017
|
|
2016
|
|
%
|
|
Rebased %
|
|
|
|
in millions, except % amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LiLAC Division:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CWC
|
|
|
$
|
224.1
|
|
|
$
|
101.0
|
|
|
121.9
|
|
|
11.4
|
|
|
$
|
437.2
|
|
|
$
|
101.0
|
|
|
332.9
|
|
|
(6.1
|
)
|
Chile
|
|
|
92.3
|
|
|
81.8
|
|
|
12.8
|
|
|
10.6
|
|
|
183.9
|
|
|
158.1
|
|
|
16.3
|
|
|
11.3
|
|
Puerto Rico
|
|
|
53.8
|
|
|
50.0
|
|
|
7.6
|
|
|
7.4
|
|
|
105.1
|
|
|
96.8
|
|
|
8.6
|
|
|
8.6
|
|
Total LiLAC Division
|
|
|
370.2
|
|
|
232.8
|
|
|
59.0
|
|
|
10.6
|
|
|
726.2
|
|
|
355.9
|
|
|
104.0
|
|
|
(0.2
|
)
|
Corporate and other
|
|
|
(2.2
|
)
|
|
(1.7
|
)
|
|
(29.4
|
)
|
|
(37.5
|
)
|
|
(4.3
|
)
|
|
(2.9
|
)
|
|
(48.3
|
)
|
|
(53.6
|
)
|
Total segment OCF
|
|
|
$
|
368.0
|
|
|
$
|
231.1
|
|
|
59.2
|
|
|
10.5
|
|
|
$
|
721.9
|
|
|
$
|
353.0
|
|
|
104.5
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OCF Margin
|
|
|
40.0
|
%
|
|
38.3
|
%
|
|
|
|
|
|
39.4
|
%
|
|
38.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Reported OCF for the three and six months ended June 30, 2017
increased 59% and 105%, respectively, primarily as a result of the
acquisition of CWC
-
From a rebased perspective, OCF increased 10.5% and remained flat for
the three and six months ended June 30, 2017, respectively
Q2 2017 Rebased OCF Growth - Segment Highlights
-
CWC: rebased OCF growth of 11% was driven
by (i) the aggregate favorable impact of higher integration costs and
higher bad debts in Q2 2016 and the reassessment of certain accruals
in Q2 2017, (ii) an increased gross margin contribution from our
managed services business, boosted by an improved mix of services in
Q2 2017, and (iii) reduced pension, consultancy, travel and office
expenses. These factors were partially offset by higher content costs,
primarily related to the Premier League rights
-
Chile: rebased OCF increase of 11% was
driven by the aforementioned revenue growth and ongoing cost
efficiencies
-
Puerto Rico: rebased OCF growth of 7% was
primarily supported by lower direct costs and an increase in revenue
Net Loss - LiLAC Group
-
Net losses were $22 million and $115 million for the three months
ended June 30, 2017 and 2016, respectively, and $33 million and $154
million for the six months ended June 30, 2017 and 2016, respectively
Property and Equipment Additions - LiLAC Group
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
in millions, except % amounts
|
Customer premises equipment
|
|
|
$
|
36.2
|
|
|
|
$
|
33.1
|
|
|
|
$
|
81.6
|
|
|
|
$
|
71.7
|
|
New Build & Upgrade
|
|
|
12.0
|
|
|
|
10.7
|
|
|
|
26.6
|
|
|
|
24.5
|
|
Capacity
|
|
|
8.3
|
|
|
|
14.7
|
|
|
|
17.7
|
|
|
|
22.3
|
|
Baseline
|
|
|
8.7
|
|
|
|
17.3
|
|
|
|
16.3
|
|
|
|
22.3
|
|
Product & Enablers
|
|
|
5.3
|
|
|
|
4.0
|
|
|
|
7.0
|
|
|
|
10.5
|
|
CWC
|
|
|
100.4
|
|
|
|
53.6
|
|
|
|
160.9
|
|
|
|
53.6
|
|
Property and equipment additions
|
|
|
$
|
170.9
|
|
|
|
$
|
133.4
|
|
|
|
$
|
310.1
|
|
|
|
$
|
204.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment additions as % of revenue
|
|
|
18.6
|
%
|
|
|
22.1
|
%
|
|
|
16.9
|
%
|
|
|
22.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
The increase in property and equipment additions in absolute terms was
driven primarily by (i) an increase due to the impact of the CWC
acquisition and (ii) an increase in expenditures for the purchase and
installation of customer premises equipment
-
We now expect the percentage of revenue represented by our property
and equipment additions to range from 19% to 21% for the LiLAC Group
in 2017. This represents a decrease from our previous guidance of 21%
to 23%
Consolidated Statements of Cash Flows - LiLAC Group
|
|
|
|
|
Six months ended
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
Variance
|
|
|
|
|
|
in millions
|
Net cash provided (used) by:
|
|
|
|
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
$
|
299.4
|
|
|
|
$
|
105.8
|
|
|
|
$
|
193.6
|
|
Investing Activities
|
|
|
|
|
$
|
(252.6
|
)
|
|
|
$
|
(170.8
|
)
|
|
|
$
|
(81.8
|
)
|
Financing Activities
|
|
|
|
|
$
|
2.2
|
|
|
|
$
|
282.9
|
|
|
|
$
|
(280.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Operating Activities: the increase in
cash provided was primarily attributable to the net effect of (i) an
increase in cash provided by OCF and related working capital items and
(ii) higher interest payments
-
Investing Activities: the increase in
cash used was primarily due to higher payments for capital expenditures
-
Financing Activities: the decrease in net
cash provided was primarily attributable to lower net borrowings of
debt, partially offset by higher cash payments associated with the
repurchase of shares
The inclusion of CWC in the 2017 period accounted for the majority of
these changes.
Adjusted Free Cash Flow - LiLAC Group
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
in millions
|
Adjusted Free Cash Flow
|
|
|
$
|
114.0
|
|
|
|
$
|
(35.3
|
)
|
|
|
$
|
56.0
|
|
|
|
$
|
(15.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
The Q2 increase, as compared to the prior-year period, was
attributable to:
-
Higher cash provided from OCF and related working capital items
-
Lower cash taxes, partially driven by a $27 million tax refund
received from the Chilean government
-
Lower interest payments (including related derivative instruments)
-
Lower capital expenditures
-
The YTD increase, as compared to the prior-year period, was
attributable to the net effect of:
-
Higher cash provided from OCF and related working capital items
-
Higher interest payments (including related derivative instruments)
-
Higher capital expenditures
-
Lower cash taxes
-
The inclusion of CWC in the full-2017 periods impacted the variances
mentioned above
-
On a net basis, our vendor financing programs resulted in
approximately $21 million and $26 million of higher adjusted free cash
flow in Q2 and YTD 2017, respectively, as compared to the prior-year
periods
-
All three LiLAC Group credit pools generated positive Adjusted FCF in
H1 2017
Leverage and Liquidity - LiLAC Group (at June 30, 2017)
-
Total capital leases and principal amount of
third-party debt: $6.2 billion
-
Leverage ratios: consolidated gross and
net leverage ratios22 of 4.2x and 3.8x, respectively
-
Average debt tenor13: over 5.0
years, with over 90% not due until 2021 or beyond
-
Borrowing costs12: blended
fully-swapped borrowing cost of our third-party debt was 6.4%
-
Liquidity: approximately $1.6 billion,
including $599 million of cash and $1.0 billion of aggregate unused
borrowing capacity23 under our credit facilities
Forward-Looking Statements and Disclaimer
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements with respect to our strategies, future growth
prospects and opportunities; our expectations with respect to
subscribers, revenue, ARPU per RGU, OCF and Adjusted FCF; expectations
with respect to the development, enhancement and expansion of our
superior networks and innovative and advanced products and services;
statements regarding our planned spin-off of the businesses attributed
to the LiLAC Group and the anticipated impacts and benefits of such
transaction; future P&E additions as a percentage of revenue;
expectations regarding our share buyback programs; the strength of our
balance sheet and tenor of our third-party debt; statements regarding
our JV in the Netherlands 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 and our affiliates' services and their
willingness to upgrade to our more advanced offerings; our and our
affiliates' ability to meet challenges from competition, to manage rapid
technological change or to maintain or increase rates to subscribers or
to pass through increased costs to subscribers; the effects of changes
in laws or regulation; general economic factors; our and our affiliates'
ability to obtain regulatory approval and satisfy regulatory conditions
associated with acquisitions and dispositions; our and affiliates'
ability to successfully acquire and integrate new businesses and realize
anticipated efficiencies from acquired businesses; the availability of
attractive programming for our and our affiliates' video services and
the costs associated with such programming; our and our affiliates'
ability to achieve forecasted financial and operating targets; the
outcome of any pending or threatened litigation; the ability of our
operating companies and affiliates to access cash of their respective
subsidiaries; the impact of our operating companies' and affiliates'
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 and our affiliates' ability to adequately
forecast and plan future network requirements including the costs and
benefits associated with network expansions; 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, as amended, and
Form 10-Q. These forward-looking statements speak only as of the date of
this release. We expressly disclaim any obligation or undertaking to
disseminate any updates or revisions to any forward-looking statement
contained herein to reflect any change in our expectations with regard
thereto or any change in events, conditions or circumstances on which
any such statement is based.
Nothing in this press release constitutes an offer of any securities for
sale.
About Liberty Global
Liberty Global is the world's largest international TV and broadband
company, with operations in more than 30 countries across Europe, Latin
America and the Caribbean. We invest in the infrastructure that empowers
our customers to make the most of the digital revolution. Our scale and
commitment to innovation enable us to develop market-leading products
delivered through next-generation networks that connect our 25 million
customers who subscribe to 51 million television, broadband internet and
telephony services. We also serve over 10 million mobile subscribers and
offer WiFi service across 10 million access points.
Liberty Global's businesses are comprised of two stocks: the Liberty
Global Group (NASDAQ: LBTYA, LBTYB and LBTYK) for our European
operations, and the LiLAC Group (NASDAQ: LILA and LILAK, OTC Link:
LILAB), which consists of our operations in Latin America and the
Caribbean.
The Liberty Global Group operates in 12 European countries under the
consumer brands Virgin Media, Unitymedia, Telenet and UPC. The Liberty
Global Group also owns 50% of VodafoneZiggo, a Dutch joint venture,
which has 4 million customers, 10 million fixed-line subscribers and 5
million mobile subscribers. The LiLAC Group operates in over 20
countries in Latin America and the Caribbean under the consumer brands
VTR, Flow, Liberty, Más Móvil and BTC. In addition, the LiLAC Group
operates a sub-sea fiber network throughout the region connecting over
40 markets.
For more information, please visit www.libertyglobal.com
or contact:
Investor Relations:
|
|
|
|
|
|
Corporate Communications:
|
Oskar Nooij
|
|
|
+1 303 220 4218
|
|
|
Matt Beake
|
|
|
+44 20 8483 6428
|
Christian Fangmann
|
|
|
+49 221 84 62 5151
|
|
|
Rebecca Pike
|
|
|
+44 20 8483 6216
|
John Rea
|
|
|
+1 303 220 4238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes
1
|
|
The Liberty Global ordinary shares 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 "track" the economic performance of
the Liberty Global Group and the LiLAC Group, respectively (each as
defined and described below). For more information regarding the
tracking shares, see note 1 to our condensed consolidated financial
statements included in our Form 10-Q. While the LiLAC Group and the
Liberty Global Group have separate collections of businesses, assets
and liabilities attributed to them, neither group is a separate
legal entity. The LiLAC Group comprises our operations in Latin
America and the Caribbean and has attributed to it CWC, VTR and
Liberty Puerto Rico. The Liberty Global Group comprises our
businesses, assets and liabilities not attributed to the LiLAC
Group, including Virgin Media, Unitymedia, UPC Holding, Telenet and,
through December 31, 2016, Ziggo Group Holding. The condensed
consolidated financial statements of Liberty Global are included in
our Form 10-Q. For attributed financial information of the Liberty
Global Group and the LiLAC Group, see Exhibit 99.1 to our Form 10-Q.
|
2
|
|
Please see Footnotes for Operating Data and Subscriber Variance
Tables for the definition of RGUs. Organic figures exclude
RGUs of acquired entities at the date of acquisition and other
nonorganic adjustments, 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.
|
3
|
|
As we no longer consolidate the Netherlands effective December 31,
2016, we have removed the Netherlands from certain information
presented for periods prior to December 31, 2016 to enhance
comparability.
|
4
|
|
Our next-generation video base consists of Horizon TV, TiVo (in the
U.K.), Digital TV with a Horizon-like user interface (Yelo in
Belgium) as well as Horizon-Lite set-top boxes.
|
5
|
|
Please see Revenue and Operating Cash Flow for information
on rebased growth.
|
6
|
|
Please see OCF Definition and Reconciliation for our
Operating Cash Flow ("OCF") definition and the required
reconciliations.
|
7
|
|
Total B2B includes subscription (SOHO) and non-subscription revenue.
|
8
|
|
Average Revenue Per Unit ("ARPU") refers to the average monthly
subscription revenue (subscription revenue excludes interconnect,
channel carriage fees, mobile handset sales, late fees and
installation fees) per average customer relationship or mobile
subscriber, as applicable. ARPU per average customer relationship is
calculated by dividing the average monthly subscription revenue from
residential cable and SOHO services by the average of the opening
and closing balances for customer relationships for the period. ARPU
per average mobile subscriber is calculated by dividing residential
mobile and SOHO revenue for the indicated period by the average of
the opening and closing balances for mobile subscribers for the
period. Unless otherwise indicated, ARPU per customer relationship
or mobile subscriber is not adjusted for currency impacts. ARPU per
RGU refers to average monthly revenue per average RGU, which is
calculated by dividing the average monthly subscription revenue from
residential and SOHO services for the indicated period, by the
average of the opening and closing balances of the applicable RGUs
for the period. Unless otherwise noted, ARPU in this release is
considered to be ARPU per average customer relationship or mobile
subscriber, as applicable. Customer relationships, mobile
subscribers and RGUs of entities acquired during the period are
normalized.
|
9
|
|
Please see Liberty Global's 8-K/A filed on March 28, 2017.
|
10
|
|
On May 16, 2016, we acquired Cable & Wireless Communications Limited
("CWC").
|
11
|
|
A reconciliation of our LiLAC OCF guidance for 2017 to a U.S. GAAP
measure is not provided due to the fact that not all elements of the
reconciliation is projected as part of our forecasting process, as
certain items may vary significantly from one period to another. For
example, impairments or other operating charges such as direct
acquisition costs are contingent upon the underlying activity, which
cannot be reasonably forecasted. FX rates as of February 12, 2017.
|
12
|
|
Our blended fully-swapped debt borrowing cost represents the
weighted average interest rate on our aggregate variable- and
fixed-rate indebtedness (excluding capital leases and including
vendor financing obligations), including the effects of derivative
instruments, original issue premiums or discounts and commitment
fees, but excluding the impact of financing costs.
|
13
|
|
For purposes of calculating our average tenor, total third-party
debt excludes vendor financing.
|
14
|
|
Liquidity refers to cash and cash equivalents plus the maximum
undrawn commitments under subsidiary borrowing facilities, without
regard to covenant compliance calculations.
|
15
|
|
Please see Footnotes for Operating Data and Subscriber Variance
Tables for the definition of mobile subscribers.
|
16
|
|
Our residential fixed business consists of our fixed-line
triple-play and DTH businesses, but excludes SOHO services.
Residential fixed also excludes the framework services revenue from
the VodafoneZiggo JV and our small Irish broadcasting businesses.
|
17
|
|
Please see Adjusted Free Cash Flow Definition and Reconciliation
for information on Adjusted Free Cash Flow ("FCF") and the
required reconciliations. For more detailed information concerning
our operating, investing and financing cash flows, see the
condensed consolidated statements of cash flows included in our
Form 10-Q. A reconciliation of our 2017 FCF guidance to a U.S.
GAAP measure is not provided due to the fact that not all elements
of the reconciliation are projected as part of our forecasting
process, as certain items may vary significantly from one period
to another. Adjusted FCF guidance is based on FX rates as of
February 12, 2017.
|
18
|
|
Please see Footnotes for Operating Data and Subscriber Variance
Tables for the definition of Customer Relationships.
|
19
|
|
On February 11, 2016, Telenet acquired Telenet Group BVBA ("BASE").
|
20
|
|
OCF margin is calculated by dividing OCF by total revenue for the
applicable period.
|
21
|
|
Our property and equipment additions include our capital
expenditures on an accrual basis and amounts financed under vendor
financing or capital lease arrangements.
|
22
|
|
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 or secured by the shares we hold in
ITV plc, Sumitomo Corporation and Lions Gate Entertainment Corp. For
Liberty Global Group, our gross and net leverage ratios are adjusted
to reflect the €600 million ($685 million) redemption of certain UPC
Holding senior notes that took place on July 7, 2017. The net
proceeds from the June financing transaction used to redeem these
notes were held in escrow at June 30, 2017.
|
23
|
|
Our aggregate unused borrowing capacity of $4.6 billion represents
the maximum undrawn commitments under our subsidiaries' applicable
facilities without regard to covenant compliance calculations. This
consists of $3.6 billion attributed to the Liberty Global Group and
$1.0 billion attributed to the LiLAC Group. Upon completion of the
relevant June 30, 2017 compliance reporting requirements for our
credit facilities, and assuming no further changes from quarter-end
borrowing levels, with the exception of (i) the €600 million ($685
million) redemption of certain UPC Holding senior notes that took
place on July 7, 2017 and (ii) the July 3, 2017 drawdown of $50.0
million under the CWC Revolving Credit Facility and the removal of
the limitation related to letters of credit issued in connection
with certain CWC pension obligations, we anticipate that our
subsidiaries' borrowing capacity would be $4.5 billion. This
consists of $3.5 billion attributed to the Liberty Global Group and
$958 million attributed to the LiLAC Group. LiLAC cash of $599
million includes $325 million of cash held by CWC, substantially all
of which is held by CWC subsidiaries. For information regarding
limitations on CWC's ability to access this cash, see the discussion
under "Material Changes in Financial Condition" in our Form 10-Q.
|
|
|
|
|
|
|
Balance Sheets, Statements of Operations and Statements of Cash Flows
The 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.
Rebase Information
For purposes of calculating rebased growth rates on a comparable basis
for all businesses that we owned during 2017, we have adjusted our
historical revenue and OCF for the three and six months ended June 30,
2016 to (i) include the pre-acquisition revenue and OCF of certain
entities acquired during 2016 and 2017 in our rebased amounts for the
three and six months ended June 30, 2016 to the same extent that the
revenue and OCF of such entities are included in our results for the
three and six months ended June 30, 2017, (ii) exclude the revenue and
OCF of Ziggo Group Holding and a sports channel that were contributed to
the VodafoneZiggo JV at the end of December 31, 2016, (iii) include
revenue for the framework services agreement with the VodafoneZiggo JV
and certain associated operating and SG&A expenses that had been
allocated to our Netherlands segment during the 2016 periods in our
rebased amounts for the three and six months ended June 30, 2016 as if
the framework services agreement had been in place at the beginning of
2016, (iv) exclude the revenue and OCF of multi-channel multi-point
(microwave) distribution system subscribers in Ireland that have
disconnected since we announced the switch-off of this service effective
April 2016 for the six months ended June 30, 2016 to the same extent
that the revenue and OCF of these subscribers is excluded from our
results for the six months ended June 30, 2017 (v) exclude the revenue
and OCF of two small disposals made in Belgium during Q1 2017 to the
same extent that the revenue and OCF of these disposed businesses is
excluded from our results for the three and six months ended June 30,
2017 and (vi) reflect the translation of our rebased amounts for the
three and six months ended June 30, 2016 at the applicable average
foreign currency exchange rates that were used to translate our results
for the three and six months ended June 30, 2017. We have included CWC,
SFR and five small entities in whole or in part in the determination of
our rebased revenue and OCF for the three months ended June 30, 2016. We
have included CWC, SFR, BASE and five small entities in whole or in part
in the determination of our rebased revenue and OCF for the six months
ended June 30, 2016. We have reflected the revenue and OCF of the
acquired entities in our 2016 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 ("U.S. 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 nonrecurring 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.
The following table provides adjustments made to the 2016 amounts to
derive our rebased growth rates for the Liberty Global Group and the
LiLAC Group:
|
|
|
Revenue
|
|
|
OCF
|
|
|
|
Three months ended June 30,
|
|
|
Six months ended June 30,
|
|
|
Three months ended June 30,
|
|
|
Six months ended June 30,
|
|
|
|
2016
|
|
|
2016
|
|
|
2016
|
|
|
2016
|
Liberty Global Group
|
|
|
in millions
|
Acquisitions
|
|
|
$
|
18.1
|
|
|
|
$
|
104.2
|
|
|
|
$
|
0.2
|
|
|
|
$
|
13.9
|
|
Contribution of Ziggo Group Holding to the VodafoneZiggo JV and
other dispositions (a)
|
|
|
(659.7
|
)
|
|
|
(1,308.9
|
)
|
|
|
(341.5
|
)
|
|
|
(686.4
|
)
|
Foreign Currency
|
|
|
(224.9
|
)
|
|
|
(501.3
|
)
|
|
|
(97.7
|
)
|
|
|
(218.1
|
)
|
Total decrease
|
|
|
$
|
(866.5
|
)
|
|
|
$
|
(1,706.0
|
)
|
|
|
$
|
(439.0
|
)
|
|
|
$
|
(890.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LiLAC Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions
|
|
|
$
|
296.9
|
|
|
|
$
|
902.5
|
|
|
|
$
|
101.6
|
|
|
|
$
|
368.8
|
|
Foreign Currency
|
|
|
(0.7
|
)
|
|
|
7.6
|
|
|
|
0.2
|
|
|
|
2.8
|
|
Total increase
|
|
|
$
|
296.2
|
|
|
|
$
|
910.1
|
|
|
|
$
|
101.8
|
|
|
|
$
|
371.6
|
|
(a)
|
|
In connection with the December 31, 2016 closing of the
VodafoneZiggo JV transaction, we entered into a Framework Agreement
that provides for the terms under which we provide services to the
VodafoneZiggo JV. These adjustments to revenue and OCF are net of
$32 million and $63 million of revenue for Q2 and YTD 2016,
respectively, that we assumed would have been earned if the
Framework Agreement had been in place on January 1, 2016.
|
|
|
|
|
|
|
OCF Definition and Reconciliation
As used herein, OCF has the same meaning as the term "Adjusted OIBDA"
that is referenced in our Form 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 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 U.S.
GAAP measures of income or cash flows. A reconciliation of our operating
income to total segment OCF is presented in the following table:
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
in millions
|
Consolidated Liberty Global
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
$
|
641.9
|
|
|
|
$
|
487.8
|
|
|
|
$
|
1,211.1
|
|
|
|
$
|
1,074.4
|
|
Share-based compensation expense
|
|
|
56.4
|
|
|
|
74.6
|
|
|
|
95.4
|
|
|
|
143.6
|
|
Depreciation and amortization
|
|
|
1,371.4
|
|
|
|
1,553.0
|
|
|
|
2,693.6
|
|
|
|
2,988.5
|
|
Impairment, restructuring and other operating items, net
|
|
|
31.6
|
|
|
|
190.3
|
|
|
|
59.8
|
|
|
|
214.7
|
|
Total segment OCF
|
|
|
$
|
2,101.3
|
|
|
|
$
|
2,305.7
|
|
|
|
$
|
4,059.9
|
|
|
|
$
|
4,421.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Global Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
$
|
483.2
|
|
|
|
$
|
508.7
|
|
|
|
$
|
914.4
|
|
|
|
$
|
1,035.3
|
|
Share-based compensation expense
|
|
|
53.4
|
|
|
|
71.4
|
|
|
|
86.8
|
|
|
|
138.6
|
|
Inter-group fees and allocations
|
|
|
(3.0
|
)
|
|
|
(2.1
|
)
|
|
|
(6.0
|
)
|
|
|
(4.2
|
)
|
Depreciation and amortization
|
|
|
1,178.5
|
|
|
|
1,426.9
|
|
|
|
2,306.8
|
|
|
|
2,810.1
|
|
Impairment, restructuring and other operating items, net
|
|
|
21.2
|
|
|
|
69.7
|
|
|
|
36.0
|
|
|
|
88.4
|
|
Total segment OCF
|
|
|
$
|
1,733.3
|
|
|
|
$
|
2,074.6
|
|
|
|
$
|
3,338.0
|
|
|
|
$
|
4,068.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LiLAC Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
$
|
158.7
|
|
|
|
$
|
(20.9
|
)
|
|
|
$
|
296.7
|
|
|
|
$
|
39.1
|
|
Share-based compensation expense
|
|
|
3.0
|
|
|
|
3.2
|
|
|
|
8.6
|
|
|
|
5.0
|
|
Inter-group fees and allocations
|
|
|
3.0
|
|
|
|
2.1
|
|
|
|
6.0
|
|
|
|
4.2
|
|
Depreciation and amortization
|
|
|
192.9
|
|
|
|
126.1
|
|
|
|
386.8
|
|
|
|
178.4
|
|
Impairment, restructuring and other operating items, net
|
|
|
10.4
|
|
|
|
120.6
|
|
|
|
23.8
|
|
|
|
126.3
|
|
Total segment OCF
|
|
|
$
|
368.0
|
|
|
|
$
|
231.1
|
|
|
|
$
|
721.9
|
|
|
|
$
|
353.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Debt, Capital Lease Obligations and Cash and Cash
Equivalents
The following table1 details the U.S. dollar equivalent
balances of the outstanding principal amount of our debt, capital lease
obligations and cash and cash equivalents at June 30, 2017:
|
|
|
|
|
|
Capital
|
|
|
Debt & Capital
|
|
|
Cash
|
|
|
|
|
|
|
Lease
|
|
|
Lease
|
|
|
and Cash
|
|
|
|
Debt2
|
|
|
Obligations
|
|
|
Obligations
|
|
|
Equivalents
|
|
|
|
in millions
|
Liberty Global and Liberty Global Group unrestricted subsidiaries
|
|
|
$
|
2,254.0
|
|
|
|
$
|
71.9
|
|
|
|
$
|
2,325.9
|
|
|
|
$
|
991.6
|
Virgin Media3
|
|
|
15,461.2
|
|
|
|
77.2
|
|
|
|
15,538.4
|
|
|
|
46.6
|
UPC Holding
|
|
|
7,892.2
|
|
|
|
91.1
|
|
|
|
7,983.3
|
|
|
|
22.0
|
Unitymedia
|
|
|
8,531.3
|
|
|
|
698.4
|
|
|
|
9,229.7
|
|
|
|
3.2
|
Telenet
|
|
|
5,229.8
|
|
|
|
415.7
|
|
|
|
5,645.5
|
|
|
|
27.3
|
Total Liberty Global Group
|
|
|
39,368.5
|
|
|
|
1,354.3
|
|
|
|
40,722.8
|
|
|
|
1,090.7
|
LiLAC Group unrestricted subsidiaries
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
58.6
|
CWC
|
|
|
3,729.1
|
|
|
|
19.9
|
|
|
|
3,749.0
|
|
|
|
325.1
|
VTR Finance
|
|
|
1,473.1
|
|
|
|
0.9
|
|
|
|
1,474.0
|
|
|
|
165.2
|
Liberty Puerto Rico
|
|
|
942.5
|
|
|
|
-
|
|
|
|
942.5
|
|
|
|
50.0
|
Total LiLAC Group
|
|
|
6,144.7
|
|
|
|
20.8
|
|
|
|
6,165.5
|
|
|
|
598.9
|
Total
|
|
|
$
|
45,513.2
|
|
|
|
$
|
1,375.1
|
|
|
|
$
|
46,888.3
|
|
|
|
$
|
1,689.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 reconcile those additions to the capital
expenditures that are presented in the attributed statement of cash
flows information included in Exhibit 99.1 to our 10-Q.
Liberty Global Group
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
in millions, except % amounts
|
Customer premises equipment
|
|
|
$
|
304.2
|
|
|
|
$
|
229.9
|
|
|
|
$
|
600.2
|
|
|
|
$
|
466.1
|
|
New Build & Upgrade
|
|
|
305.5
|
|
|
|
203.6
|
|
|
|
495.3
|
|
|
|
354.6
|
|
Capacity
|
|
|
163.0
|
|
|
|
159.8
|
|
|
|
279.6
|
|
|
|
266.1
|
|
Baseline
|
|
|
200.9
|
|
|
|
219.2
|
|
|
|
357.2
|
|
|
|
393.7
|
|
Product & Enablers
|
|
|
230.2
|
|
|
|
142.9
|
|
|
|
355.9
|
|
|
|
260.3
|
|
Property and equipment additions (excluding the Netherlands(3))
|
|
|
1,203.8
|
|
|
|
955.4
|
|
|
|
2,088.2
|
|
|
|
1,740.8
|
|
The Netherlands
|
|
|
-
|
|
|
|
143.1
|
|
|
|
-
|
|
|
|
283.2
|
|
Total property and equipment additions
|
|
|
1,203.8
|
|
|
|
1,098.5
|
|
|
|
2,088.2
|
|
|
|
2,024.0
|
|
Reconciliation of property and equipment additions to capital
expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding the Netherlands:
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets acquired under capital-related vendor financing arrangements4
|
|
|
(664.1
|
)
|
|
|
(424.1
|
)
|
|
|
(1,278.5
|
)
|
|
|
(822.6
|
)
|
Assets acquired under capital leases
|
|
|
(72.5
|
)
|
|
|
(13.7
|
)
|
|
|
(103.9
|
)
|
|
|
(41.6
|
)
|
Changes in current liabilities related to capital expenditures
|
|
|
(23.0
|
)
|
|
|
(81.9
|
)
|
|
|
238.8
|
|
|
|
28.5
|
|
The Netherlands
|
|
|
-
|
|
|
|
(71.4
|
)
|
|
|
-
|
|
|
|
(93.8
|
)
|
Total capital expenditures5
|
|
|
$
|
444.2
|
|
|
|
$
|
507.4
|
|
|
|
$
|
944.6
|
|
|
|
$
|
1,094.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment additions as % of revenue (excluding the
Netherlands(3))
|
|
|
32.9
|
%
|
|
|
25.2
|
%
|
|
|
29.1
|
%
|
|
|
23.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LiLAC Group
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
in millions, except % amounts
|
Customer premises equipment
|
|
|
$
|
36.2
|
|
|
|
$
|
33.1
|
|
|
|
$
|
81.6
|
|
|
|
$
|
71.7
|
|
New Build & Upgrade
|
|
|
12.0
|
|
|
|
10.7
|
|
|
|
26.6
|
|
|
|
24.5
|
|
Capacity
|
|
|
8.3
|
|
|
|
14.7
|
|
|
|
17.7
|
|
|
|
22.3
|
|
Baseline
|
|
|
8.7
|
|
|
|
17.3
|
|
|
|
16.3
|
|
|
|
22.3
|
|
Product & Enablers
|
|
|
5.3
|
|
|
|
4.0
|
|
|
|
7.0
|
|
|
|
10.5
|
|
CWC P&E Additions
|
|
|
100.4
|
|
|
|
53.6
|
|
|
|
160.9
|
|
|
|
53.6
|
|
Property and equipment additions
|
|
|
170.9
|
|
|
|
133.4
|
|
|
|
310.1
|
|
|
|
204.9
|
|
Assets acquired under capital-related vendor financing arrangements
|
|
|
(20.1
|
)
|
|
|
(17.0
|
)
|
|
|
(34.2
|
)
|
|
|
(17.0
|
)
|
Assets acquired under capital leases
|
|
|
(1.6
|
)
|
|
|
(0.2
|
)
|
|
|
(2.5
|
)
|
|
|
(0.2
|
)
|
Changes in current liabilities and cash derivatives related to
capital expenditures
|
|
|
(25.3
|
)
|
|
|
15.4
|
|
|
|
(25.1
|
)
|
|
|
(6.1
|
)
|
Capital expenditures
|
|
|
$
|
123.9
|
|
|
|
$
|
131.6
|
|
|
|
$
|
248.3
|
|
|
|
$
|
181.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment additions as % of revenue
|
|
|
18.6
|
%
|
|
|
22.1
|
%
|
|
|
16.9
|
%
|
|
|
22.6
|
%
|
______________________________
1
|
|
Except as otherwise indicated, the amounts reported in the
table include the named entity and its subsidiaries.
|
2
|
|
Debt amounts for UPC Holding and Telenet include notes issued
by special purpose entities that are consolidated by the respective
subsidiary.
|
3
|
|
The Virgin Media borrowing group includes certain subsidiaries
of Virgin Media, but excludes Virgin Media Inc. The cash and cash
equivalents amount includes cash and cash equivalents held by the
Virgin Media borrowing group, but excludes cash and cash equivalents
held by Virgin Media Inc. This amount is included in the amount
shown for Liberty Global and Liberty Global Group unrestricted
subsidiaries.
|
4
|
|
Amounts exclude related VAT of $103 million and $73 million
during the three months ended June 30, 2017 and 2016, respectively,
and $201 million and $129 million during the six months ended June
30, 2017 and 2016, respectively, that were also financed by our
vendors under these arrangements.
|
5
|
|
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.
|
|
|
|
|
|
|
Adjusted Free Cash Flow Definition and Reconciliation
We define Adjusted Free Cash Flow as net cash provided by our operating
activities, plus (i) cash payments for third-party costs directly
associated with successful and unsuccessful acquisitions and
dispositions and (ii) expenses financed by an intermediary, less (a)
capital expenditures, as reported in our 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 Adjusted 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. Adjusted 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
Adjusted Free Cash Flow as a supplement to, and not a substitute for,
U.S. GAAP measures of liquidity included in our consolidated statements
of cash flows. We changed our definition of adjusted free cash flow
effective January 1, 2017 to remove the add-back of excess tax benefits
from share-based compensation. This change, which was given effect for
all periods presented, was made to accommodate our January 1, 2017
adoption of ASU 2016-09, Compensation - Stock Compensation,
Improvements to Employee Share-Based Payment Accounting, pursuant to
which we retrospectively revised the presentation of our condensed
consolidated statements of cash flows to remove the operating cash
outflows and financing cash inflows associated with excess tax benefits
from share-based compensation. The following table provides the
reconciliation of our net cash provided by operating activities to
Adjusted Free Cash Flow for the indicated periods:
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
in millions
|
Consolidated Liberty Global
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
$
|
1,732.2
|
|
|
|
$
|
1,579.1
|
|
|
|
$
|
2,710.9
|
|
|
|
$
|
2,669.8
|
|
Cash payments for direct acquisition and disposition costs
|
|
|
4.8
|
|
|
|
77.8
|
|
|
|
7.5
|
|
|
|
86.0
|
|
Expenses financed by an intermediary6
|
|
|
383.9
|
|
|
|
239.7
|
|
|
|
692.0
|
|
|
|
393.2
|
|
Capital expenditures
|
|
|
(568.1
|
)
|
|
|
(639.0
|
)
|
|
|
(1,192.9
|
)
|
|
|
(1,276.1
|
)
|
Principal payments on amounts financed by vendors and intermediaries
|
|
|
(1,088.3
|
)
|
|
|
(748.0
|
)
|
|
|
(2,121.3
|
)
|
|
|
(1,420.9
|
)
|
Principal payments on certain capital leases
|
|
|
(25.4
|
)
|
|
|
(28.5
|
)
|
|
|
(47.7
|
)
|
|
|
(55.9
|
)
|
Adjusted FCF
|
|
|
$
|
439.1
|
|
|
|
$
|
481.1
|
|
|
|
$
|
48.5
|
|
|
|
$
|
396.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Global Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
$
|
1,508.7
|
|
|
|
$
|
1,543.2
|
|
|
|
$
|
2,411.5
|
|
|
|
$
|
2,564.0
|
|
Cash payments for direct acquisition and disposition costs
|
|
|
4.2
|
|
|
|
16.8
|
|
|
|
6.0
|
|
|
|
24.9
|
|
Expenses financed by an intermediary
|
|
|
346.8
|
|
|
|
239.7
|
|
|
|
644.6
|
|
|
|
393.2
|
|
Capital expenditures
|
|
|
(444.2
|
)
|
|
|
(507.4
|
)
|
|
|
(944.6
|
)
|
|
|
(1,094.5
|
)
|
Principal payments on amounts financed by vendors and intermediaries
|
|
|
(1,067.1
|
)
|
|
|
(748.0
|
)
|
|
|
(2,081.3
|
)
|
|
|
(1,420.9
|
)
|
Principal payments on certain capital leases
|
|
|
(23.3
|
)
|
|
|
(27.9
|
)
|
|
|
(43.7
|
)
|
|
|
(55.2
|
)
|
Adjusted FCF
|
|
|
$
|
325.1
|
|
|
|
$
|
516.4
|
|
|
|
$
|
(7.5
|
)
|
|
|
$
|
411.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LiLAC Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
$
|
223.5
|
|
|
|
$
|
35.9
|
|
|
|
$
|
299.4
|
|
|
|
$
|
105.8
|
|
Cash payments for direct acquisition and disposition costs
|
|
|
0.6
|
|
|
|
61.0
|
|
|
|
1.5
|
|
|
|
61.1
|
|
Expenses financed by an intermediary
|
|
|
37.1
|
|
|
|
-
|
|
|
|
47.4
|
|
|
|
-
|
|
Capital expenditures
|
|
|
(123.9
|
)
|
|
|
(131.6
|
)
|
|
|
(248.3
|
)
|
|
|
(181.6
|
)
|
Principal payments on amounts financed by vendors and intermediaries
|
|
|
(21.2
|
)
|
|
|
-
|
|
|
|
(40.0
|
)
|
|
|
-
|
|
Principal payments on certain capital leases
|
|
|
(2.1
|
)
|
|
|
(0.6
|
)
|
|
|
(4.0
|
)
|
|
|
(0.7
|
)
|
Adjusted FCF
|
|
|
$
|
114.0
|
|
|
|
$
|
(35.3
|
)
|
|
|
$
|
56.0
|
|
|
|
$
|
(15.4
|
)
|
______________________________
6
|
|
For purposes of our 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 consolidated statements of
cash flows. For purposes of our Adjusted 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.
|
|
|
|
|
|
|
ARPU per Customer Relationship
The following table provides ARPU per customer relationship for the
indicated periods:
|
|
|
Three months ended June 30,
|
|
|
%
|
|
|
FX-Neutral7
|
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Global Consolidated (excluding the Netherlands(3))*
|
|
|
$
|
41.75
|
|
|
|
$
|
43.83
|
|
|
|
(4.7
|
%)
|
|
|
1.5
|
%
|
Liberty Global Group (excluding the Netherlands(3))
|
|
|
€
|
37.39
|
|
|
|
€
|
38.04
|
|
|
(1.7
|
%)
|
|
|
1.2
|
%
|
U.K. & Ireland (Virgin Media)
|
|
|
£
|
49.70
|
|
|
|
£
|
49.61
|
|
|
|
0.2
|
%
|
|
|
(0.4
|
%)
|
Germany (Unitymedia)
|
|
|
€
|
25.11
|
|
|
|
€
|
24.24
|
|
|
3.6
|
%
|
|
|
3.6
|
%
|
Belgium (Telenet)
|
|
|
€
|
54.93
|
|
|
|
€
|
53.43
|
|
|
|
2.8
|
%
|
|
|
2.8
|
%
|
Other Europe (UPC Holding)
|
|
|
€
|
27.09
|
|
|
|
€
|
26.76
|
|
|
|
1.2
|
%
|
|
|
(0.1
|
%)
|
LiLAC Group*
|
|
|
$
|
52.28
|
|
|
|
$
|
52.23
|
|
|
|
0.1
|
%
|
|
|
(1.0
|
%)
|
Chile (VTR)
|
|
|
CLP
|
33,831
|
|
|
|
CLP
|
33,078
|
|
|
|
2.3
|
%
|
|
|
2.3
|
%
|
CWC*
|
|
|
$
|
42.53
|
|
|
|
$
|
39.75
|
|
|
|
7.0
|
%
|
|
|
8.5
|
%
|
Puerto Rico
|
|
|
$
|
79.84
|
|
|
|
$
|
79.54
|
|
|
0.4
|
%
|
|
|
0.4
|
%
|
N.M. - Not Meaningful
______________________________
7
|
|
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.
|
|
|
|
|
|
|
Mobile ARPU
The following tables provide ARPU per mobile subscriber8 for
the indicated periods:
|
|
|
ARPU per Mobile Subscriber
|
|
|
|
Three months ended June 30,
|
|
|
%
|
|
|
FX-Neutral
|
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
% Change
|
Liberty Global Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
Including interconnect revenue
|
|
|
$
|
17.94
|
|
|
|
$
|
20.10
|
|
|
|
(10.7
|
%)
|
|
|
(3.5
|
%)
|
Excluding interconnect revenue
|
|
|
$
|
14.83
|
|
|
|
$
|
16.54
|
|
|
|
(10.3
|
%)
|
|
|
(2.8
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LiLAC Group*:
|
|
|
|
|
|
|
|
|
|
|
|
|
Including interconnect revenue
|
|
|
$
|
16.70
|
|
|
|
$
|
17.68
|
|
|
|
(5.5
|
%)
|
|
|
(5.8
|
%)
|
Excluding interconnect revenue
|
|
|
$
|
15.46
|
|
|
|
$
|
16.47
|
|
|
|
(6.1
|
%)
|
|
|
(6.4
|
%)
|
______________________________
8
|
|
Our ARPU per mobile subscriber calculation that excludes
interconnect revenue refers to the average monthly mobile
subscription revenue per average mobile subscriber 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.
|
|
*
|
|
As a part of our ongoing effort to conform CWC's subscriber
counting policies to our policies, we have reflected nonorganic
reductions totaling 224,000 to CWC's customer count during the
twelve months ended June 30, 2017. In order to provide a more
meaningful comparison of ARPU, we have reflected all of these
nonorganic reductions in the customer figures used to calculate
ARPU for the three months ended June 30, 2017 and 2016.
|
RGUs, Customers and Bundling9
The following table provides information on the breakdown of our RGUs
and customer base and highlights our customer bundling metrics at June
30, 2017 and March 31, 2017:
|
|
|
June 30, 2017
|
|
|
March 31, 2017
|
|
|
Q2'17 / Q1'17 (% Change)
|
Liberty Global Group
|
|
|
|
|
|
|
|
|
|
Total RGUs
|
|
|
|
|
|
|
|
|
|
Video RGUs
|
|
|
18,546,700
|
|
|
|
18,472,500
|
|
|
|
0.4
|
%
|
Broadband Internet RGUs
|
|
|
14,652,600
|
|
|
|
14,486,300
|
|
|
|
1.1
|
%
|
Telephony RGUs
|
|
|
12,194,300
|
|
|
|
12,065,900
|
|
|
|
1.1
|
%
|
Total Liberty Global Group
|
|
|
45,393,600
|
|
|
|
45,024,700
|
|
|
|
0.8
|
%
|
|
|
|
|
|
|
|
|
|
|
Customers
|
|
|
|
|
|
|
|
|
|
Single-Play Customers
|
|
|
8,262,300
|
|
|
|
8,330,700
|
|
|
|
(0.8
|
%)
|
Dual-Play Customers
|
|
|
3,956,500
|
|
|
|
3,925,700
|
|
|
|
0.8
|
%
|
Triple-Play Customers
|
|
|
9,739,500
|
|
|
|
9,614,200
|
|
|
|
1.3
|
%
|
Total Liberty Global Group
|
|
|
21,958,300
|
|
|
|
21,870,600
|
|
|
|
0.4
|
%
|
|
|
|
|
|
|
|
|
|
|
Bundling
|
|
|
|
|
|
|
|
|
|
% of Single-Play Customers
|
|
|
37.6
|
%
|
|
|
38.1
|
%
|
|
|
(1.3
|
%)
|
% of Dual-Play Customers
|
|
|
18.0
|
%
|
|
|
17.9
|
%
|
|
|
0.6
|
%
|
% of Triple-Play Customers
|
|
|
44.4
|
%
|
|
|
44.0
|
%
|
|
|
0.9
|
%
|
|
|
|
|
|
|
|
|
|
|
RGUs per customer relationship
|
|
|
2.07
|
|
|
|
2.06
|
|
|
|
0.5
|
%
|
|
|
|
|
|
|
|
|
|
|
LiLAC Group
|
|
|
|
|
|
|
|
|
|
Total RGUs
|
|
|
|
|
|
|
|
|
|
Video RGUs
|
|
|
1,714,200
|
|
|
|
1,717,100
|
|
|
|
(0.2
|
%)
|
Broadband Internet RGUs
|
|
|
2,061,600
|
|
|
|
2,061,500
|
|
|
|
-
|
%
|
Telephony RGUs
|
|
|
1,452,700
|
|
|
|
1,639,300
|
|
|
|
(11.4
|
%)
|
Total LiLAC Group
|
|
|
5,228,500
|
|
|
|
5,417,900
|
|
|
|
(3.5
|
%)
|
|
|
|
|
|
|
|
|
|
|
Customers
|
|
|
|
|
|
|
|
|
|
Single-Play Customers
|
|
|
1,116,300
|
|
|
|
1,271,800
|
|
|
|
(12.2
|
%)
|
Dual-Play Customers
|
|
|
781,100
|
|
|
|
801,200
|
|
|
|
(2.5
|
%)
|
Triple-Play Customers
|
|
|
850,000
|
|
|
|
847,900
|
|
|
|
0.2
|
%
|
Total LiLAC Group
|
|
|
2,747,400
|
|
|
|
2,920,900
|
|
|
|
(5.9
|
%)
|
|
|
|
|
|
|
|
|
|
|
Bundling
|
|
|
|
|
|
|
|
|
|
% of Single-Play Customers
|
|
|
40.7
|
%
|
|
|
43.6
|
%
|
|
|
(6.7
|
%)
|
% of Dual-Play Customers
|
|
|
28.4
|
%
|
|
|
27.4
|
%
|
|
|
3.6
|
%
|
% of Triple-play Customers
|
|
|
30.9
|
%
|
|
|
29.0
|
%
|
|
|
6.6
|
%
|
|
|
|
|
|
|
|
|
|
|
RGUs per customer relationship
|
|
|
1.90
|
|
|
|
1.85
|
|
|
|
2.7
|
%
|
______________________________
9
|
|
The June 30, 2017 and March 31, 2017 figures for the Liberty
Global Group do not include Ziggo Group Holding, which was
contributed to the VodafoneZiggo JV on December 31, 2016.
|
|
|
|
|
|
|
|
|
Consolidated Operating Data - June 30, 2017
|
|
|
|
|
|
|
|
|
Video
|
|
|
|
|
|
|
|
|
|
|
Homes Passed(1)
|
|
Two-way Homes Passed(2)
|
|
Fixed-line Customer Relationships(3)
|
|
Basic Video Subscribers(5)
|
|
Enhanced Video Subscribers(6)
|
|
DTH Subscribers(7)
|
|
Total Video
|
|
Internet Subscribers(8)
|
|
Telephony Subscribers(9)
|
|
Total RGUs(4)
|
|
Total Mobile Subscribers(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K.
|
|
13,675,600
|
|
|
13,663,500
|
|
|
5,373,000
|
|
|
-
|
|
|
3,809,800
|
|
|
-
|
|
|
3,809,800
|
|
|
5,028,300
|
|
|
4,437,100
|
|
|
13,275,200
|
|
|
2,995,600
|
Germany
|
|
12,935,600
|
|
|
12,831,100
|
|
|
7,175,000
|
|
|
4,756,700
|
|
|
1,632,800
|
|
|
-
|
|
|
6,389,500
|
|
|
3,389,500
|
|
|
3,166,200
|
|
|
12,945,200
|
|
|
340,400
|
Belgium/Luxembourg
|
|
3,328,000
|
|
|
3,328,000
|
|
|
2,212,400
|
|
|
265,500
|
|
|
1,796,500
|
|
|
-
|
|
|
2,062,000
|
|
|
1,668,400
|
|
|
1,304,000
|
|
|
5,034,400
|
|
|
2,838,700
|
Switzerland(10)
|
|
2,255,900
|
|
|
2,255,900
|
|
|
1,271,400
|
|
|
560,900
|
|
|
671,900
|
|
|
-
|
|
|
1,232,800
|
|
|
752,600
|
|
|
524,300
|
|
|
2,509,700
|
|
|
92,500
|
Austria
|
|
1,399,000
|
|
|
1,399,000
|
|
|
652,400
|
|
|
99,600
|
|
|
372,500
|
|
|
-
|
|
|
472,100
|
|
|
508,500
|
|
|
441,700
|
|
|
1,422,300
|
|
|
47,200
|
Ireland
|
|
865,900
|
|
|
822,700
|
|
|
452,100
|
|
|
27,500
|
|
|
269,000
|
|
|
-
|
|
|
296,500
|
|
|
366,100
|
|
|
354,900
|
|
|
1,017,500
|
|
|
40,500
|
Total Western Europe
|
|
34,460,000
|
|
|
34,300,200
|
|
|
17,136,300
|
|
|
5,710,200
|
|
|
8,552,500
|
|
|
-
|
|
|
14,262,700
|
|
|
11,713,400
|
|
|
10,228,200
|
|
|
36,204,300
|
|
|
6,354,900
|
Poland
|
|
3,224,100
|
|
|
3,164,000
|
|
|
1,429,200
|
|
|
198,200
|
|
|
1,013,900
|
|
|
-
|
|
|
1,212,100
|
|
|
1,117,500
|
|
|
627,900
|
|
|
2,957,500
|
|
|
4,600
|
Romania
|
|
2,984,800
|
|
|
2,940,800
|
|
|
1,297,100
|
|
|
254,100
|
|
|
654,900
|
|
|
352,100
|
|
|
1,261,100
|
|
|
553,700
|
|
|
503,200
|
|
|
2,318,000
|
|
|
-
|
Hungary
|
|
1,748,500
|
|
|
1,731,000
|
|
|
1,111,200
|
|
|
109,400
|
|
|
563,700
|
|
|
277,900
|
|
|
951,000
|
|
|
654,600
|
|
|
605,100
|
|
|
2,210,700
|
|
|
74,700
|
Czech Republic
|
|
1,498,700
|
|
|
1,465,400
|
|
|
715,600
|
|
|
159,500
|
|
|
355,300
|
|
|
105,100
|
|
|
619,900
|
|
|
486,400
|
|
|
152,700
|
|
|
1,259,000
|
|
|
-
|
Slovakia
|
|
596,100
|
|
|
576,500
|
|
|
268,900
|
|
|
25,300
|
|
|
138,400
|
|
|
76,200
|
|
|
239,900
|
|
|
127,000
|
|
|
77,200
|
|
|
444,100
|
|
|
-
|
Total CEE
|
|
10,052,200
|
|
|
9,877,700
|
|
|
4,822,000
|
|
|
746,500
|
|
|
2,726,200
|
|
|
811,300
|
|
|
4,284,000
|
|
|
2,939,200
|
|
|
1,966,100
|
|
|
9,189,300
|
|
|
79,300
|
Total Liberty Global Group
|
|
44,512,200
|
|
|
44,177,900
|
|
|
21,958,300
|
|
|
6,456,700
|
|
|
11,278,700
|
|
|
811,300
|
|
|
18,546,700
|
|
|
14,652,600
|
|
|
12,194,300
|
|
|
45,393,600
|
|
|
6,434,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chile
|
|
3,319,300
|
|
|
2,817,200
|
|
|
1,375,500
|
|
|
73,000
|
|
|
992,100
|
|
|
-
|
|
|
1,065,100
|
|
|
1,143,400
|
|
|
646,200
|
|
|
2,854,700
|
|
|
193,000
|
Puerto Rico
|
|
1,103,600
|
|
|
1,103,600
|
|
|
405,900
|
|
|
-
|
|
|
258,700
|
|
|
-
|
|
|
258,700
|
|
|
334,200
|
|
|
210,300
|
|
|
803,200
|
|
|
-
|
Panama
|
|
528,400
|
|
|
472,100
|
|
|
187,600
|
|
|
-
|
|
|
45,200
|
|
|
36,200
|
|
|
81,400
|
|
|
101,300
|
|
|
124,500
|
|
|
307,200
|
|
|
1,765,300
|
Jamaica
|
|
426,500
|
|
|
416,500
|
|
|
261,200
|
|
|
-
|
|
|
95,200
|
|
|
-
|
|
|
95,200
|
|
|
148,200
|
|
|
196,200
|
|
|
439,600
|
|
|
933,900
|
Trinidad
|
|
312,900
|
|
|
312,900
|
|
|
161,100
|
|
|
-
|
|
|
111,600
|
|
|
-
|
|
|
111,600
|
|
|
123,400
|
|
|
38,000
|
|
|
273,000
|
|
|
-
|
Barbados
|
|
123,100
|
|
|
123,100
|
|
|
97,400
|
|
|
-
|
|
|
17,400
|
|
|
-
|
|
|
17,400
|
|
|
61,900
|
|
|
77,600
|
|
|
156,900
|
|
|
125,600
|
Bahamas
|
|
128,900
|
|
|
128,900
|
|
|
52,000
|
|
|
-
|
|
|
5,500
|
|
|
-
|
|
|
5,500
|
|
|
27,200
|
|
|
52,000
|
|
|
84,700
|
|
|
285,200
|
Other CWC
|
|
356,300
|
|
|
336,500
|
|
|
206,700
|
|
|
11,300
|
|
|
68,000
|
|
|
-
|
|
|
79,300
|
|
|
122,000
|
|
|
107,900
|
|
|
309,200
|
|
|
391,300
|
Total LiLAC Group
|
|
6,299,000
|
|
|
5,710,800
|
|
|
2,747,400
|
|
|
84,300
|
|
|
1,593,700
|
|
|
36,200
|
|
|
1,714,200
|
|
|
2,061,600
|
|
|
1,452,700
|
|
|
5,228,500
|
|
|
3,694,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total
|
|
50,811,200
|
|
|
49,888,700
|
|
|
24,705,700
|
|
|
6,541,000
|
|
|
12,872,400
|
|
|
847,500
|
|
|
20,260,900
|
|
|
16,714,200
|
|
|
13,647,000
|
|
|
50,622,100
|
|
|
10,128,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriber Variance Table - June 30, 2017 vs March 31, 2017
|
|
|
|
|
|
|
|
|
Video
|
|
|
|
|
|
|
|
|
|
|
Homes Passed(1)
|
|
Two-way Homes Passed(2)
|
|
Fixed-line Customer Relationships(3)
|
|
Basic Video Subscribers(5)
|
|
Enhanced Video Subscribers(6)
|
|
DTH Subscribers(7)
|
|
Total Video
|
|
Internet Subscribers(8)
|
|
Telephony Subscribers(9)
|
|
Total RGUs(4)
|
|
Total Mobile Subscribers(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K.
|
|
121,200
|
|
|
121,300
|
|
|
21,500
|
|
|
-
|
|
|
34,500
|
|
|
-
|
|
|
34,500
|
|
|
30,900
|
|
|
11,400
|
|
|
76,800
|
|
|
(20,100
|
)
|
Germany
|
|
19,400
|
|
|
23,700
|
|
|
1,500
|
|
|
(41,100
|
)
|
|
33,300
|
|
|
-
|
|
|
(7,800
|
)
|
|
32,400
|
|
|
29,200
|
|
|
53,800
|
|
|
(6,300
|
)
|
Belgium/Luxembourg
|
|
331,300
|
|
|
331,300
|
|
|
78,200
|
|
|
(3,200
|
)
|
|
68,900
|
|
|
-
|
|
|
65,700
|
|
|
60,300
|
|
|
45,800
|
|
|
171,800
|
|
|
1,200
|
|
Switzerland(10)
|
|
4,800
|
|
|
4,800
|
|
|
(10,000
|
)
|
|
(8,100
|
)
|
|
(300
|
)
|
|
-
|
|
|
(8,400
|
)
|
|
8,100
|
|
|
6,400
|
|
|
6,100
|
|
|
7,200
|
|
Austria
|
|
4,500
|
|
|
4,500
|
|
|
(800
|
)
|
|
(10,000
|
)
|
|
4,900
|
|
|
-
|
|
|
(5,100
|
)
|
|
2,600
|
|
|
7,000
|
|
|
4,500
|
|
|
8,200
|
|
Ireland
|
|
9,600
|
|
|
10,600
|
|
|
(400
|
)
|
|
(900
|
)
|
|
(500
|
)
|
|
-
|
|
|
(1,400
|
)
|
|
1,700
|
|
|
1,000
|
|
|
1,300
|
|
|
12,600
|
|
Total Western Europe
|
|
490,800
|
|
|
496,200
|
|
|
90,000
|
|
|
(63,300
|
)
|
|
140,800
|
|
|
-
|
|
|
77,500
|
|
|
136,000
|
|
|
100,800
|
|
|
314,300
|
|
|
2,800
|
|
Poland
|
|
40,000
|
|
|
40,400
|
|
|
(1,300
|
)
|
|
(5,200
|
)
|
|
3,400
|
|
|
-
|
|
|
(1,800
|
)
|
|
6,000
|
|
|
(2,300
|
)
|
|
1,900
|
|
|
(300
|
)
|
Romania
|
|
62,300
|
|
|
63,800
|
|
|
6,200
|
|
|
(900
|
)
|
|
7,500
|
|
|
(4,300
|
)
|
|
2,300
|
|
|
9,700
|
|
|
14,900
|
|
|
26,900
|
|
|
-
|
|
Hungary
|
|
10,400
|
|
|
10,400
|
|
|
4,200
|
|
|
(9,000
|
)
|
|
18,100
|
|
|
(6,900
|
)
|
|
2,200
|
|
|
13,000
|
|
|
15,300
|
|
|
30,500
|
|
|
7,600
|
|
Czech Republic
|
|
14,700
|
|
|
14,700
|
|
|
(1,400
|
)
|
|
6,600
|
|
|
100
|
|
|
(4,000
|
)
|
|
2,700
|
|
|
4,900
|
|
|
5,800
|
|
|
13,400
|
|
|
-
|
|
Slovakia
|
|
7,400
|
|
|
9,700
|
|
|
(10,000
|
)
|
|
(1,800
|
)
|
|
(6,500
|
)
|
|
(400
|
)
|
|
(8,700
|
)
|
|
(3,300
|
)
|
|
(6,100
|
)
|
|
(18,100
|
)
|
|
-
|
|
Total CEE
|
|
134,800
|
|
|
139,000
|
|
|
(2,300
|
)
|
|
(10,300
|
)
|
|
22,600
|
|
|
(15,600
|
)
|
|
(3,300
|
)
|
|
30,300
|
|
|
27,600
|
|
|
54,600
|
|
|
7,300
|
|
Total Liberty Global Group
|
|
625,600
|
|
|
635,200
|
|
|
87,700
|
|
|
(73,600
|
)
|
|
163,400
|
|
|
(15,600
|
)
|
|
74,200
|
|
|
166,300
|
|
|
128,400
|
|
|
368,900
|
|
|
10,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chile
|
|
47,800
|
|
|
58,600
|
|
|
22,700
|
|
|
(2,700
|
)
|
|
14,900
|
|
|
-
|
|
|
12,200
|
|
|
25,600
|
|
|
(4,000
|
)
|
|
33,800
|
|
|
14,300
|
|
Puerto Rico
|
|
8,600
|
|
|
8,600
|
|
|
(800
|
)
|
|
-
|
|
|
(2,200
|
)
|
|
-
|
|
|
(2,200
|
)
|
|
300
|
|
|
(600
|
)
|
|
(2,500
|
)
|
|
-
|
|
Panama
|
|
600
|
|
|
18,900
|
|
|
(155,700
|
)
|
|
-
|
|
|
2,700
|
|
|
(6,300
|
)
|
|
(3,600
|
)
|
|
3,600
|
|
|
(151,400
|
)
|
|
(151,400
|
)
|
|
(17,900
|
)
|
Jamaica
|
|
2,200
|
|
|
2,200
|
|
|
(33,700
|
)
|
|
-
|
|
|
(2,800
|
)
|
|
-
|
|
|
(2,800
|
)
|
|
(26,200
|
)
|
|
(27,600
|
)
|
|
(56,600
|
)
|
|
(1,000
|
)
|
Trinidad
|
|
1,200
|
|
|
1,200
|
|
|
(2,300
|
)
|
|
-
|
|
|
(2,500
|
)
|
|
-
|
|
|
(2,500
|
)
|
|
(100
|
)
|
|
4,600
|
|
|
2,000
|
|
|
-
|
|
Barbados
|
|
600
|
|
|
600
|
|
|
7,900
|
|
|
-
|
|
|
(700
|
)
|
|
-
|
|
|
(700
|
)
|
|
(1,100
|
)
|
|
(1,900
|
)
|
|
(3,700
|
)
|
|
(3,000
|
)
|
Bahamas
|
|
-
|
|
|
-
|
|
|
(2,700
|
)
|
|
-
|
|
|
1,800
|
|
|
-
|
|
|
1,800
|
|
|
400
|
|
|
(2,700
|
)
|
|
(500
|
)
|
|
(24,200
|
)
|
Other
|
|
-
|
|
|
-
|
|
|
(8,900
|
)
|
|
(700
|
)
|
|
(4,400
|
)
|
|
-
|
|
|
(5,100
|
)
|
|
(2,400
|
)
|
|
(3,000
|
)
|
|
(10,500
|
)
|
|
(6,000
|
)
|
Total LiLAC Group
|
|
61,000
|
|
|
90,100
|
|
|
(173,500
|
)
|
|
(3,400
|
)
|
|
6,800
|
|
|
(6,300
|
)
|
|
(2,900
|
)
|
|
100
|
|
|
(186,600
|
)
|
|
(189,400
|
)
|
|
(37,800
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total
|
|
686,600
|
|
|
725,300
|
|
|
(85,800
|
)
|
|
(77,000
|
)
|
|
170,200
|
|
|
(21,900
|
)
|
|
71,300
|
|
|
166,400
|
|
|
(58,200
|
)
|
|
179,500
|
|
|
(27,700
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continued below
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriber Variance Table - June 30, 2017 vs March 31, 2017
|
|
|
|
|
|
|
|
|
Video
|
|
|
|
|
|
|
|
|
|
|
Homes Passed(1)
|
|
Two-way Homes Passed(2)
|
|
Fixed-line Customer Relationships(3)
|
|
Basic Video Subscribers(5)
|
|
Enhanced Video Subscribers(6)
|
|
DTH Subscribers(7)
|
|
Total Video
|
|
Internet Subscribers(8)
|
|
Telephony Subscribers(9)
|
|
Total RGUs(4)
|
|
Total Mobile Subscribers(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Change Summary:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K.
|
|
121,200
|
|
|
121,300
|
|
|
21,500
|
|
|
-
|
|
|
34,500
|
|
|
-
|
|
|
34,500
|
|
|
30,900
|
|
|
11,400
|
|
|
76,800
|
|
|
(20,100
|
)
|
Germany
|
|
19,400
|
|
|
23,700
|
|
|
1,500
|
|
|
(41,100
|
)
|
|
33,300
|
|
|
-
|
|
|
(7,800
|
)
|
|
32,400
|
|
|
29,200
|
|
|
53,800
|
|
|
(6,300
|
)
|
Belgium/Luxembourg
|
|
12,200
|
|
|
12,200
|
|
|
(12,600
|
)
|
|
(10,500
|
)
|
|
(4,700
|
)
|
|
-
|
|
|
(15,200
|
)
|
|
1,400
|
|
|
(1,500
|
)
|
|
(15,300
|
)
|
|
(3,100
|
)
|
Other Europe
|
|
146,700
|
|
|
151,900
|
|
|
(24,600
|
)
|
|
(33,200
|
)
|
|
21,200
|
|
|
(15,600
|
)
|
|
(27,600
|
)
|
|
35,400
|
|
|
38,800
|
|
|
46,600
|
|
|
35,300
|
|
Total Liberty Global Group
|
|
299,500
|
|
|
309,100
|
|
|
(14,200
|
)
|
|
(84,800
|
)
|
|
84,300
|
|
|
(15,600
|
)
|
|
(16,100
|
)
|
|
100,100
|
|
|
77,900
|
|
|
161,900
|
|
|
5,800
|
|
Chile
|
|
47,800
|
|
|
58,600
|
|
|
22,700
|
|
|
(2,700
|
)
|
|
14,900
|
|
|
-
|
|
|
12,200
|
|
|
25,600
|
|
|
(4,000
|
)
|
|
33,800
|
|
|
14,300
|
|
Puerto Rico
|
|
8,600
|
|
|
8,600
|
|
|
(800
|
)
|
|
-
|
|
|
(2,200
|
)
|
|
-
|
|
|
(2,200
|
)
|
|
300
|
|
|
(600
|
)
|
|
(2,500
|
)
|
|
-
|
|
Panama
|
|
600
|
|
|
18,900
|
|
|
5,200
|
|
|
-
|
|
|
2,700
|
|
|
2,900
|
|
|
5,600
|
|
|
3,600
|
|
|
300
|
|
|
9,500
|
|
|
(17,900
|
)
|
Jamaica
|
|
2,200
|
|
|
2,200
|
|
|
(13,100
|
)
|
|
-
|
|
|
(2,800
|
)
|
|
-
|
|
|
(2,800
|
)
|
|
(3,100
|
)
|
|
(6,500
|
)
|
|
(12,400
|
)
|
|
2,900
|
|
Trinidad
|
|
1,200
|
|
|
1,200
|
|
|
(2,300
|
)
|
|
-
|
|
|
(2,500
|
)
|
|
-
|
|
|
(2,500
|
)
|
|
(100
|
)
|
|
4,600
|
|
|
2,000
|
|
|
-
|
|
Barbados
|
|
600
|
|
|
600
|
|
|
7,900
|
|
|
-
|
|
|
(700
|
)
|
|
-
|
|
|
(700
|
)
|
|
(1,100
|
)
|
|
(1,900
|
)
|
|
(3,700
|
)
|
|
(3,000
|
)
|
Bahamas
|
|
-
|
|
|
-
|
|
|
(2,700
|
)
|
|
-
|
|
|
1,800
|
|
|
-
|
|
|
1,800
|
|
|
400
|
|
|
(2,700
|
)
|
|
(500
|
)
|
|
(24,200
|
)
|
Other
|
|
-
|
|
|
-
|
|
|
(8,900
|
)
|
|
(700
|
)
|
|
(4,400
|
)
|
|
-
|
|
|
(5,100
|
)
|
|
(2,400
|
)
|
|
(3,000
|
)
|
|
(10,500
|
)
|
|
(6,000
|
)
|
Total LiLAC Group
|
|
61,000
|
|
|
90,100
|
|
|
8,000
|
|
|
(3,400
|
)
|
|
6,800
|
|
|
2,900
|
|
|
6,300
|
|
|
23,200
|
|
|
(13,800
|
)
|
|
15,700
|
|
|
(33,900
|
)
|
Total Organic Change
|
|
360,500
|
|
|
399,200
|
|
|
(6,200
|
)
|
|
(88,200
|
)
|
|
91,100
|
|
|
(12,700
|
)
|
|
(9,800
|
)
|
|
123,300
|
|
|
64,100
|
|
|
177,600
|
|
|
(28,100
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2017 Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2017 Acquisition - Hungary
|
|
-
|
|
|
-
|
|
|
7,100
|
|
|
400
|
|
|
5,500
|
|
|
-
|
|
|
5,900
|
|
|
5,300
|
|
|
3,200
|
|
|
14,400
|
|
|
-
|
|
Q2 2017 Acquisition - Romania
|
|
7,000
|
|
|
7,000
|
|
|
4,000
|
|
|
3,500
|
|
|
-
|
|
|
-
|
|
|
3,500
|
|
|
2,000
|
|
|
-
|
|
|
5,500
|
|
|
-
|
|
Q2 2017 Acquisition - Belgium
|
|
319,100
|
|
|
319,100
|
|
|
90,800
|
|
|
7,500
|
|
|
74,700
|
|
|
-
|
|
|
82,200
|
|
|
60,100
|
|
|
48,100
|
|
|
190,400
|
|
|
4,300
|
|
Q2 2017 Belgium adjustments
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(200
|
)
|
|
(1,100
|
)
|
|
-
|
|
|
(1,300
|
)
|
|
(1,200
|
)
|
|
(800
|
)
|
|
(3,300
|
)
|
|
-
|
|
Q2 2017 Panama adjustments(12)
|
|
-
|
|
|
-
|
|
|
(160,900
|
)
|
|
-
|
|
|
-
|
|
|
(9,200
|
)
|
|
(9,200
|
)
|
|
-
|
|
|
(151,700
|
)
|
|
(160,900
|
)
|
|
-
|
|
Q2 2017 Jamaica adjustments(13)
|
|
-
|
|
|
-
|
|
|
(20,600
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(23,100
|
)
|
|
(21,100
|
)
|
|
(44,200
|
)
|
|
(3,900
|
)
|
Net Adjustments
|
|
326,100
|
|
|
326,100
|
|
|
(79,600
|
)
|
|
11,200
|
|
|
79,100
|
|
|
(9,200
|
)
|
|
81,100
|
|
|
43,100
|
|
|
(122,300
|
)
|
|
1,900
|
|
|
400
|
|
Net Adds (Reductions)
|
|
686,600
|
|
|
725,300
|
|
|
(85,800
|
)
|
|
(77,000
|
)
|
|
170,200
|
|
|
(21,900
|
)
|
|
71,300
|
|
|
166,400
|
|
|
(58,200
|
)
|
|
179,500
|
|
|
(27,700
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes for Operating Data and Subscriber Variance Tables
1
|
|
Homes Passed are homes, residential multiple dwelling units or
commercial units that can be connected to our networks without
materially extending the distribution plant, except for DTH homes.
Certain of 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. Due to the fact that
we do not own the partner networks (defined below) used in
Switzerland (see note 10) we do not report homes passed for
Switzerland's 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
|
|
Fixed-line 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
|
|
RGU is separately a Basic Video Subscriber, Enhanced Video
Subscriber, DTH Subscriber, Internet Subscriber or Telephony
Subscriber (each as defined and described below). 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, fixed-line
telephony service and broadband internet service, the customer would
constitute three RGUs. Total RGUs is the sum of Basic Video,
Enhanced Video, DTH, 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 or 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 June 30, 2017 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 179,600 "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 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
|
|
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 42,100 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 88,200 subscribers who have requested and
received this service.
|
9
|
|
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 32,200 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
112,400 subscribers who have requested and received this service.
|
10
|
|
Pursuant to service agreements, Switzerland offers 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 June 30, 2017, Switzerland's partner networks
account for 132,400 Customer Relationships, 290,200 RGUs, 104,500
Enhanced Video Subscribers, 107,700 Internet Subscribers, and 78,000
Telephony Subscribers.
|
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. In a number of countries, our mobile subscribers receive
mobile services pursuant to prepaid contracts. As of June 30, 2017,
the prepaid mobile subscriber count included the following: Panama
(1,599,200), Jamaica (914,900), Belgium (620,100), U.K. (575,500),
Bahamas (255,600), Barbados (96,800), Chile (7,100) and twelve
remaining CWC geographies (333,100).
|
12
|
|
During the quarter ended June 30, 2017, we discontinued counting
customers of Panama's prepaid fixed-line voice service and certain
inactive customers of Panama's DTH video service.
|
13
|
|
During the quarter ended June 30, 2017, we discontinued counting
certain inactive customers of Jamaica's fixed line and mobile
services.
|
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." To the extent our
existing customers upgrade from a residential product offering to a SOHO
product offering, the number of SOHO RGUs or SOHO customers will
increase, but there is no impact to our total RGU or customer counts.
Due to system limitations, SOHO customers of CWC are not included in our
respective RGU and customer counts as of June 30, 2017. 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, including CWC, 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170807006043/en/
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