All 2016 Guidance Targets Achieved for LBTY and LiLAC
One Million RGU Additions in 2016, up 20% YoY, incl. 324,000
in Q4
Operating Income of $683 Million in Europe in Q4, up 22%
YoY
Q4 Rebased OCF Growth Accelerated to 7.5% in Europe (ex
Ziggo)
European Stock Buyback Increased by $1 Billion to $3 Billion
for 2017
Liberty Global plc ("Liberty Global") (NASDAQ: LBTYA, LBTYB,
LBTYK, LILA and LILAK) today announces financial and operating
results for the three months ("Q4") and fiscal year ("2016", "FY
2016" or "FY16") ended December 31, 2016 for the Liberty Global
Group1 and the LiLAC Group1.
CEO Mike Fries stated, "As expected, we finished 2016 on a high
note, delivering rebased2 OCF3 growth in Europe of 7.5% in the
fourth quarter, excluding Ziggo. This performance was driven by
solid results across our European operations, including Virgin
Media, which delivered its best quarterly result in two years with
8% rebased OCF growth. As promised, the key 2016 drivers of our
Liberty Go plan are kicking in - new build accelerated, B2B
performed well and we kept indirect operating expenses relatively
flat. We expect the collective impact of these drivers to continue
ramping in 2017 and beyond, underpinning accelerating growth over
the medium term."
"On the subscriber front, we increased our 2016 RGU4 additions
in Europe by 24% year-over-year and finished the year with 946,000
new subscribers. This improved performance can be credited to the
wide range of innovative new products that we've launched,
including our superior and ever-increasing broadband speeds, and
our aggressive network expansion program, which delivered over 1.4
million5 new gigabit-ready homes in 2016, including nearly half a
million at Virgin Media6 alone."
"Looking ahead, we will continue to enrich our bundled
portfolios with compelling 4G mobile offers and the addition of new
content and functionality, including the launch of Netflix across
our footprint. We will also expand the deployment of exciting new
products like our 4K cloud-based set-top and our WiFi Connect Box.
Also, in late 2017, we will start field trials of the unrivaled
DOCSIS 3.1 technology, which will provide gigabit speeds. On the
guidance front, we expect to deliver 6% to 7% rebased OCF growth in
Europe in 2017, stepping up to 7% to 8%7 annual growth over the
medium-term with upside in 2018. Finally, we are guiding towards
Adjusted FCF16 of $1.5 billion8 from our European operations for
2017. This target includes the impact of our capital plan to
connect 1.4 million new homes in 20179, which will help support our
growth ambition over the coming years."
"On the M&A front, 2016 was a busy year. We completed our
joint venture with Vodafone in the Netherlands at year-end, which
was a terrific transaction for shareholders as total cash proceeds
were nearly $3 billion10 over 2016 and we now own 50% of the most
innovative converged player in the market. In October, we announced
the proposed acquisition of Multimedia Polska, the third largest
cable operator in Poland, and expect that deal to boost our
market-leading position when it closes around year-end 2017. With
regards to LiLAC, our Latin American and Caribbean business, we
closed the acquisition of Cable & Wireless ('CWC') in May 2016.
Despite some initial challenges, we believe in the prospects for
this business as we exploit our organic growth potential and scale
efficiencies across the region."
"The LiLAC Group delivered 6% rebased OCF growth in 2016,
including 9% growth from our legacy LiLAC operations, which exclude
Cable & Wireless. CWC11 delivered $226 million of OCF in Q4,
just above the high-end of our expectations for the quarter. From
an organizational perspective, we have changed CWC's operating
model and recently placed a number of key personnel in critical
roles within the business, including the confirmation of John Reid
as CEO. As we head into 2017, we are laser focused on improving the
results at CWC and expect the LiLAC Group to deliver approximately
$1.5 billion12,8 of OCF for the full year."
"We ended 2016 with a strong balance sheet, purposely geared at
4.8x13 net leverage in Europe and 3.6x in LatAm. Our debt remains
hedged against virtually all currency and interest rate exposures,
and we don't have any material maturities until 2021. With total
Liberty Global plc liquidity14 of $8 billion, we are in a great
position heading into 2017. During Q4, we were active with
repurchases of both stocks. For Liberty Global Group, we purchased
over $450 million of equity at attractive price levels in Q4,
ending 2016 with total buybacks of $2 billion. And today, we are
announcing a $1 billion increase to our previously planned $2
billion buyback target for our Liberty Global Group equity in 2017.
For LiLAC, we initiated a $300 million repurchase program in early
November and LiLAC bought over $20 million of stock before year
end. The valuation of LiLAC looks very attractive, and we are keen
to continue repurchasing stock under this $300 million
program."
European Highlights
- 2016 RGU additions of 946,000 were up
24% or 186,000 year-over-year on an organic basis
- Increase driven by materially lower
video churn and higher broadband gains
- YoY improvement fueled by 304,000 U.K.
adds and turnaround in the Netherlands
- Q4 organic customer relationship15
additions of 46,000 drove full-year increase of 25,000
- Gained 402,000 organic mobile postpaid
subscribers in 2016, driven by the U.K. and Belgium
- Q4 Operating income up 22% YoY, rebased
OCF growth excluding Ziggo of 7.5% in Q4
- 2016 Operating income increased 18%,
while rebased OCF (excl. Ziggo) grew 4.3%
- Delivered $2.0 billion of Adjusted FCF
in 2016, beating our guidance of $1.8 billion16
- Achieved our new build program17 target
of >1.3 million European homes during 2016
- Added 1.4 million5 new homes in 2016,
including 465,0006 in U.K./Ireland
Liberty Global Group (Europe) Q4 2016
YOY Growth/(Decline)*
FY 2016
YOY Growth/(Decline)*
Subscribers
Organic RGU Net Additions 323,700 (3.6 %) 946,100 24.5 %
Financial (in USD
millions, unless noted)
Revenue $ 4,217 2.2 % $ 17,285 2.5 % Revenue (excluding Ziggo)
3,556 2.6 % 14,594 3.3 % OCF 2,036 5.0 % 8,164 3.0 % OCF (excluding
Ziggo) 1,670 7.5 % 6,691 4.3 % Operating income 683 22.4 % 2,482
18.1 % Adjusted FCF 1,009 29.5 % 1,979 (18.6 %) Cash
provided by operating activities 1,653 - 5,467 - Cash used by
investing activities (642 ) - (3,475 ) - Cash used by financing
activities (420 ) - (1,634 ) -
* Revenue and OCF YoY growth rates are
rebased growth rates
LiLAC Group Highlights
- Gained 94,000 organic RGUs in 2016,
powered by strong broadband additions
- Reported 47,400 mobile subscriber
additions in 2016, with majority on postpaid
- Stabilized CWC revenue YoY in Q4
2016
- Delivered solid 2016 rebased revenue
growth of 6% in Chile
- Operating income for LiLAC Group
increased 29% in 2016
- LiLAC Group delivered 6% rebased OCF
growth in 2016, including 9% growth excluding CWC
- CWC Q4 U.S. GAAP OCF reported $226
million, ahead of Q4 target
- Closed CWC deal in May of 2016;
integration ongoing
- Expecting $150 million of synergies due
to LiLAC/CWC integration by 2020
Liberty Latin America & Caribbean
Q4 2016
YOY Growth/(Decline)*
FY 2016
YOY Growth/(Decline)*
Subscribers
Organic RGU Net Additions (200 ) - 94,000 (14.4 %)
Financial (in USD
millions, unless noted)
Revenue $ 923 1.8 % $ 2,724 1.2 % OCF 377 7.3 % 1,084 5.9 %
Operating income 141 123.1 % 319 28.6 % Adjusted FCF 116
144.3 % 62 (29.3 %) Cash provided by operating activities 241 - 468
- Cash used by investing activities (133 ) - (441 ) - Cash provided
(used) by financing activities (23 ) - 247 -
* Revenue and OCF YoY growth rates are
rebased growth rates
Subscriber Growth - Liberty Global
Group (Europe)
Three months ended
Year ended December 31, December 31,
2016 2015 2016
2015 Organic RGU net additions (losses) by
product Video (24,400 ) (59,100 ) (276,900 ) (400,300 ) Data
230,600 207,600 721,600 645,600 Voice 117,500 187,300
501,400 514,800 Total Liberty Global Group 323,700
335,800 946,100 760,100
Organic RGU net additions (losses) by market U.K./Ireland
28,200 116,400 251,600 202,500 The Netherlands 51,100 (51,900 )
(27,800 ) (203,200 ) Germany 98,000 93,800 320,300 316,400 Belgium
700 25,800 28,300 80,200 Switzerland/Austria 25,000 (13,100 ) (400
) 15,600 Central and Eastern Europe 120,700 164,800
374,100 348,600 Total Liberty Global Group 323,700
335,800 946,100 760,100
Organic Mobile SIM additions (losses) by product Postpaid
72,800 106,000 402,100 433,900 Prepaid (69,200 ) (52,600 ) (245,200
) (187,800 ) Total Liberty Global Group 3,600 53,400
156,900 246,100
Organic Mobile SIM
additions (losses) by market U.K./Ireland (1,800 ) (4,400 )
16,200 (29,000 ) Belgium (28,100 ) 24,000 (6,900 ) 106,900 Other
33,500 33,800 147,600 168,200 Total
Liberty Global Group 3,600 53,400 156,900
246,100
- Cable Product
Additions: for the full-year 2016, our 31% reduction in
video attrition (123,000 RGUs less) and higher broadband gains
(76,000 RGUs more) boosted our organic RGU performance in Europe by
24% year-over-year to 946,000 additions
- Supported by investments in our
next-generation video products and new build program, the improved
video RGU performance in 2016 was driven by the Netherlands
(88,000), Switzerland (43,000) and the U.K. (35,000)
- Our superior broadband speeds helped
elevate the total broadband RGU additions across our existing and
new footprint, and we recorded year-over-year increases in the U.K.
(64,000), the Netherlands (52,000) and Central and Eastern European
("CEE") (21,000)
- Next-Generation
TV platforms18 (includes Horizon TV, Horizon-Lite, TiVo and
Yelo TV): organically added 313,000 and 1.2 million subscribers in
Q4 and 2016, respectively. Following the deconsolidation of Ziggo
on December 31, 2016, we ended the year with 6.7 million
next-generation subscribers, representing 38% of our total video
base, excluding DTH, in Europe
- In Q4 2016, we launched our latest
innovation, the new 4K enabled V6 set-top box in the U.K. and
completed the roll-out of Horizon TV across our European operations
with the launch of Horizon TV in Austria and Horizon-Lite in
Romania
- U.K./Ireland: we posted a 39% increase in organic
RGU additions to 304,000 in the U.K. in 2016, delivering our best
annual result since 2009, helped by our network extension program.
Subscriber additions in Q4 in the U.K. were impacted by increased
churn related to our second price increase in 2016, while sales
remained strong throughout the quarter. In Ireland, intensified
competition increased RGU attrition by 36,000 in 2016
- Netherlands: with 51,000 RGU additions in Q4,
Ziggo delivered its fourth consecutive quarterly improvement. This
turnaround was driven by our product investments (like Ziggo Sport,
Connect Box and Replay TV) and customer-focused initiatives,
supported by effective sales campaigns and strong upsell
results
- Germany:
we posted 320,000 RGU additions in 2016, including 98,000 in Q4,
with better combined voice and broadband gains compared to
prior-year periods, in part due to the success of our "Highspeed
Weeks" promotion in the second half of 2016, but offset by modestly
higher video attrition following our 2016 video price increase,
which took place in Q1 2016
- Belgium:
RGU additions of 28,000 in 2016 were lower YoY as a result of the
intense competitive environment. The "WIGO" all-in-one converged
offering had 151,000 subscribers by the end of year, following the
introduction of this cutting-edge bundle in June 2016
- Switzerland/Austria: delivered its fourth
consecutive quarter of improved RGU performance with 16,000 RGU
additions in Switzerland in Q4. This represents the region's best
quarterly result since Q1 2014, boosted by the success of our new
Swiss "Connect" and "Connect & Play" portfolios
- CEE:
delivered a 7% improvement in RGU gains in 2016, mainly related to
our new build program, and includes 60,000 video additions across
the region for 2016. Our Q4 result was lower YoY due to lower DTH
gains (19,000), mainly related to Romania, and softer telephony
additions
- Mobile19:
added 157,000 mobile subscribers on an organic basis in 2016;
402,000 postpaid mobile subscribers added, including 73,000 in Q4,
partially offset by 245,000 prepaid subscriber losses
- Launched 4G services in the U.K. in
November and renewed our MVNO agreement with BT for five years with
attractive terms, which enables a stable transition to
full-MVNO
- U.K./Ireland: 2016 postpaid adds of
110,000 in the U.K. and 10,000 in Ireland were offset by the
104,000 prepaid losses in the U.K. in-line with our strategic focus
on growing postpaid
- Belgium: solid postpaid adds of 135,000
in 2016 (Q4: 33,000), supported by "WIGO", were more than offset by
BASE-related prepaid churn of 142,000, mainly in non-Flanders
areas
- Other: Lower 2016 mobile additions YoY,
driven by a small decline of the subscriber base in Germany (54,000
additions in 2015 versus 2,000 attrition in 2016), only partially
offset by improvements in Switzerland (23,000 more additions)
Revenue Highlights - Liberty Global Group (Europe)
The following table presents (i) revenue of each of our
reportable segments for the comparative periods, and (ii) the
percentage change from period to period on a reported and rebased
basis:
Three months ended
Increase/(decrease) Year ended
Increase/(decrease) December 31, December
31, Revenue 2016 2015
% Rebased % 2016
2015 %
Rebased % in millions, except
% amounts European Division: U.K./Ireland $ 1,523.2 $ 1,804.4
(15.6 ) 0.8 $ 6,508.8 $ 7,058.7 (7.8 ) 2.6 Belgium 680.2 505.5 34.6
2.5 2,691.1 2,021.0 33.2 2.9 The Netherlands 660.4 672.6 (1.8 )
(0.3 ) 2,690.8 2,745.3 (2.0 ) (1.6 ) Germany 639.7 607.1 5.4 7.0
2,539.7 2,399.5 5.8 6.2 Switzerland/Austria 435.9 432.2
0.9 1.5 1,755.6 1,758.2 (0.1 )
1.6 Total Western Europe 3,939.4 4,021.8 (2.0 ) 1.9 16,186.0
15,982.7 1.3 2.4 Central and Eastern Europe 273.8 265.0 3.3 5.6
1,088.4 1,066.6 2.0 3.9 Central and other (2.8 ) (1.7 ) N.M. * (8.0
) (5.4 ) (48.1 ) * Total European Division 4,210.4 4,285.1 (1.7 )
2.1 17,266.4 17,043.9 1.3 2.5 Corporate and other 18.9 8.4 N.M. *
66.7 42.3 57.7 * Intersegment eliminations (12.7 ) (3.6 ) N.M. *
(48.1 ) (23.5 ) N.M. * Total Liberty Global Group $ 4,216.6
$ 4,289.9 (1.7 ) 2.2 $ 17,285.0 $ 17,062.7
1.3 2.5 Total Liberty Global Group
excluding the Netherlands^ (1.7 ) 2.6 1.9 3.3
* - Omitted; N.M. - Not Meaningful
^ - We provide a rebased revenue growth rate for the Liberty
Global Group that excludes the Netherlands in light of the
deconsolidation of the Netherlands that occurred on December 31,
2016 in connection with the closing of our joint venture in the
Netherlands with Vodafone Group.
- Reported revenue for the three months
and year ended December 31, 2016 declined 2% and increased 1%,
respectively
- Both changes were primarily driven by
negative foreign exchange ("FX") movements, mainly related to the
strengthening of the U.S. dollar against the British pound, the
inclusion of the former BASE business in Belgium and our organic
revenue growth.
- For the Q4 2016 period, the negative FX
effects exceeded the impacts of the BASE20 acquisition and organic
growth, while for full-year 2016 the positive acquisition impact
and organic growth exceeded the decline caused by the adverse FX
movements
- Excluding the Netherlands, rebased
revenue grew 3% during both the Q4 and 2016 periods despite the net
negative impact of certain items, the most significant of which
include:
- The net negative impact of our mobile
split-contract programs21 in the U.K., Belgium and Switzerland of
$36 million and $43 million, respectively, as the net positive
impact of these programs declined from the prior-year periods
- A reduction in cable subscription
revenue of $11 million and $29 million, respectively, resulting
from a change in U.K. regulations governing payment handling fees
that Virgin Media charges its customers
- The negative impact of $17 million and
$16 million, respectively, related to the prior-period favorable
settlement of disputes with mobile operators over amounts charged
for voice traffic in the U.K.
- The favorable impact of $2 million and
$13 million, respectively, related to higher amortization of
deferred upfront fees on B2B contracts in the U.K. in 2016
- Our B2B (including SOHO)22 and mobile
(including interconnect and handset sales)23 businesses reported 7%
and relatively flat rebased revenue growth, respectively, in
2016
- Geographically, we delivered 3% rebased
revenue growth in Western Europe (excluding the Netherlands) both
in Q4 and 2016, while our CEE operations generated 6% and 4%
rebased revenue growth, respectively
2016 Rebased Revenue Growth - Segment
Highlights
- U.K./Ireland: overall growth includes:
- Cable subscription (~70% of revenue)
rebased growth of 3.5% in 2016 and 4% in Q4 driven by (i) over
250,000 new RGUs in 2016 and (ii) an increase in ARPU per RGU24,
partially offset by (iii) $29 million and $11 million reductions in
the full-year and Q4 2016 periods, respectively, related to a
reduction in revenue from a change in the regulations governing
payment handling fees
- Mobile business (including interconnect
and mobile handset revenue) delivered rebased revenue declines of
2% for 2016 and 9% in Q4. Both periods were impacted by (i) a
reduction in revenue associated with the U.K.'s Freestyle
proposition and (ii) continued declines in mobile interconnect
revenue
- Business revenue growth, driven by
higher underlying data volumes and an increase in amortization of
deferred upfront fees on B2B contracts. This growth was more than
offset in Q4 and partially offset in fiscal year 2016 by a $17
million revenue benefit recorded in Q4 2015 related to the
settlement of disputes with mobile operators
- Belgium:
rebased growth for the cable business was 5% in 2016, driven by
higher cable subscription revenue (~60% of revenue) related to an
increase in ARPU per RGU and, to a lesser extent, volume
growth
- The
Netherlands: Q4 performance was flat compared to prior year
as higher ARPU per RGU for cable subscription revenue was offset by
lower subscribers, while the full-year 2016 decline was primarily
driven by lower cable subscription revenue due to a decrease in the
average number of RGUs and lower ARPU per RGU
- Germany:
solid rebased revenue growth for both periods was primarily
attributable to higher cable subscription revenue (~90% of revenue)
as a result of an increase in ARPU per RGU and adding over 300,000
new subscribers in 2016. Q4 growth also benefited from higher
wholesale mobile handset sales, which typically generate relatively
low margins
- Switzerland/Austria: growth was primarily driven
by mobile volume growth and higher cable subscription revenue,
where higher ARPU per RGU more than offset the lower average number
of subscribers during the 2016 period
- CEE:
quarterly rebased revenue growth accelerated throughout the year
driven by new build related subscriber growth, partially offset by
lower ARPU per RGU in most CEE countries
Operating Income - Liberty Global Group (Europe)
- Operating income of $683 million and
$558 million in Q4 2016 and Q4 2015, respectively, and $2,482
million and $2,101 million during full-year 2016 and 2015,
respectively, representing increases of 22% and 18%,
respectively
- Operating income results were impacted
by OCF changes as further described below
- In addition, the operating income
result was impacted by (i) decreases in depreciation and
amortization, (ii) higher restructuring charges, as increases in
Germany, the European Division's central operations, Belgium and
Virgin Media were only partially offset by decreases in the
Netherlands, and (iii) changes in share-based compensation
expense
Operating Cash Flow Highlights - Liberty Global Group
(Europe)
The following table presents (i) OCF of each of our reportable
segments for the comparative periods, and (ii) the percentage
change from period to period on a reported and rebased basis:
Three months ended
Increase/(decrease) Year ended
Increase/(decrease) December 31, December
31, OCF 2016 2015 %
Rebased % 2016
2015 % Rebased % in millions,
except % amounts European Division: U.K./Ireland $ 724.8
$ 816.2 (11.2 ) 7.9 $ 2,930.9 $ 3,162.1 (7.3 ) 4.6 Belgium 281.2
224.2 25.4 8.8 1,173.4 990.3 18.5 3.7 The Netherlands 365.2 392.0
(6.8 ) (5.4 ) 1,472.7 1,519.5 (3.1 ) (2.7 ) Germany 398.7 390.3 2.2
3.8 1,586.4 1,502.1 5.6 5.9 Switzerland/Austria 274.2 262.0
4.7 5.5 1,069.3 1,040.1 2.8
4.8 Total Western Europe 2,044.1 2,084.7 (1.9 ) 4.3
8,232.7 8,214.1 0.2 3.3 Central and Eastern Europe 125.6 118.5 6.0
8.8 471.5 474.0 (0.5 ) 1.5 Central and other (83.5 ) (74.6 ) (11.9
) * (327.2 ) (289.2 ) (13.1 ) * Total European Division 2,086.2
2,128.6 (2.0 ) 4.3 8,377.0 8,398.9 (0.3 ) 2.9 Corporate and other
(50.7 ) (62.9 ) 19.4 * (213.3 ) (222.6 ) 4.2 * Total
Liberty Global Group $ 2,035.5 $ 2,065.7 (1.5 ) 5.0
$ 8,163.7 $ 8,176.3 (0.2 ) 3.0
Total Liberty Global Group excluding the Netherlands^ — 7.5 — 4.3
OCF Margin 48.3 % 48.2 % 47.2 % 47.9 %
* - Omitted; N.M. - Not Meaningful
^ - We provide a rebased OCF growth rate for the Liberty Global
Group that excludes the Netherlands in light of the deconsolidation
of the Netherlands that occurred on December 31, 2016 in connection
with the closing of our joint venture in the Netherlands with
Vodafone Group. This is also the basis on which we provided our
2016 OCF guidance for the Liberty Global Group.
- Reported OCF for the three months ended
December 31, 2016 declined 1.5%, while full year 2016 OCF was
relatively unchanged
- Both results were the result of organic
OCF growth, the inclusion of BASE and the adverse impact of FX
movements mentioned above
- Excluding the Netherlands, rebased OCF
growth was 7.5% in Q4 and 4% in FY16, respectively, and included
the net negative impact of certain items, the most significant of
which included;
- The net unfavorable revenue items
discussed in the "Revenue Highlights" above
- For Q4, an $8 million benefit
representing the reversal of pylon taxes recorded during the first
three quarters of 2016 in connection with a Q4 settlement in
Belgium
- For the full-year 2016 period, (i) the
$26 million positive impact of lower Ziggo integration expenses in
the Netherlands in 2016 and (ii) the $18 million negative impact of
local authority charges for certain elements of network
infrastructure in the U.K. in 2015
- Our 2016 OCF margins25 were positively
impacted by efficiencies across most of our operations and Liberty
Go efficiency gains, but adversely impacted by the inclusion of
BASE, which has structurally lower OCF margins than our fixed-line
cable business
2016 Rebased Operating Cash Flow Growth -
Segment Highlights
- U.K./Ireland: OCF growth benefited from increased
revenue and operating cost controls, offset by higher programming
spend
- Belgium:
growth supported by revenue growth, lower interconnect cost and
operating efficiencies, partially offset by higher programming and
copyright expenses
- The
Netherlands: rebased OCF contraction is mainly driven by the
aforementioned revenue trend in combination with higher direct
costs year-over-year, primarily programming costs. The FY16 period
benefited from lower integration costs
- Germany:
grew primarily as a result of the previously mentioned revenue
growth drivers, offset by the impact of higher staff related costs
and higher programming and copyright expenses
- Switzerland/Austria: growth was primarily
attributable to the aforementioned revenue increases, and tight
cost controls
- CEE:
growth primarily driven by revenue growth acceleration during
2016
- Corporate and
other: 2016 corporate spend increased year-over-year driven
by our investments in Liberty Go including further centralization
of various functions. In the second half of 2016, benefits from the
new operating model started to emerge
Net Earnings (Loss) - Liberty Global Group (Europe)
- Net earnings of $2.2 billion and $2.0
billion for the three months and year ended December 31, 2016,
respectively, as compared to net losses of $0.2 billion and $1.1
billion, respectively, during the corresponding prior-year
periods
- The net earnings during the 2016
periods include a $1.1 billion income tax benefit recognized in the
Netherlands upon the release of valuation allowances in the fourth
quarter of 2016 and a pre-tax gain of $521 million that we
recognized in connection with the December 31, 2016 closing of our
joint venture in the Netherlands with Vodafone Group
Property and Equipment Additions -
Liberty Global Group (Europe)
Three months ended Year
ended December 31, December 31, 2016
2015 2016 2015
in millions, except % amounts Customer premises equipment $
292.4 $ 233.7 $ 1,148.6 $ 1,057.1 Scalable infrastructure 334.4
223.4 965.0 807.2 Line extensions 318.8 167.4 808.6 493.3
Upgrade/rebuild 131.1 131.0 465.1 519.4 Support capital & other
452.3 333.9 1,251.3 1,033.2 Property
and equipment additions 1,529.0 1,089.4 4,638.6 3,910.2
Property and equipment additions as % of revenue 36.3 % 25.4 % 26.8
% 22.9 %
- Increases in Property and Equipment
additions26 in absolute terms and as a percentage of revenue was
primarily driven by the increased new build activities across our
footprint and in the U.K. in particular
Consolidated Statements of Cash Flows -
Liberty Global Group (Europe)
Year ended
December 31, 2016 2015
Variance in millions Net cash provided (used)
by: Operating Activities $ 5,467.3 $ 5,399.3 $ 68.0 Investing
Activities $ (3,475.2 ) $ (3,429.0 ) $ (46.2 ) Financing Activities
$ (1,634.4 ) $ (2,311.3 ) $ 676.9
- Operating
Activities: increase in cash provided is primarily
attributable to the net effect of (i) higher payments for interest,
(ii) an increase in cash provided by OCF and related working
capital, (iii) higher cash receipts related to derivative
instruments and (iv) higher payments for taxes
- Investing
Activities: increase in cash used is primarily due to the
net effect of (i) higher payments for acquisitions, (ii) lower
investments in and loans to affiliates and (iii) proceeds from sale
of investments
- Financing
Activities: decrease in cash used is primarily due to the
net effect of (i) lower cash payments associated with the
repurchase of shares, (ii) lower net borrowings of debt, (iii)
lower payments for financing costs and debt premiums and (iv)
changes in cash collateral
Adjusted Free Cash Flow - Liberty Global Group
(Europe)
Three months ended
Year ended December 31, December 31,
2016 2015 2016
2015 in millions in millions Adjusted Free
Cash Flow $ 1,009.1 $ 779.0 $ 1,978.9 $ 2,432.1
- Q4 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, including benefits from operating
expense-related vendor financing activities
- Lower benefits from capital-related
vendor financing activities
- Higher cash taxes
- Lower interest payments (including
related derivative instruments)
- Favorable movements in FX
- 2016 decrease, as compared to the
prior-year period, was attributable to the net effect of:
- Lower benefits from capital-related
vendor financing activities
- Higher cash provided from OCF and
related working capital items, including benefits from operating
expense-related vendor financing activities
- Higher interest payments (including
related derivative instruments)
- Higher cash taxes
- Favorable movements in FX
Leverage and Liquidity - Liberty Global Group (Europe - at
December 31, 2016)
- Total capital
leases and principal amount of third-party debt: $37.8
billion
- Leverage:
Excluding the OCF of Ziggo Group Holding, as our December 31, 2016
consolidated debt does not include the debt associated with this
entity, our adjusted gross and net leverage ratios at December 31,
2016 were 5.0x and 4.8x, respectively. As adjusted for the cash we
received on January 4, 2017 in connection with the closing of the
joint venture in the Netherlands with Vodafone Group, our net
leverage ratio would be 4.5x
- Average debt
tenor:27 approximately 7.5 years, with ~90% not due until
2021 or beyond
- Borrowing
costs:28 blended fully-swapped borrowing cost of our
third-party debt was 4.7%
- Liquidity:
$6.4 billion, including (i) $1.1 billion of cash at December 31,
2016, (ii) $2.3 billion of cash received on January 4, 2017
following the closing of the joint venture in the Netherlands and
(iii) the aggregate unused borrowing capacity29 under our credit
facilities of $3.0 billion
- The $2.3 billion of cash received on
January 4, 2017 includes (i) the $2.9 billion of net
recapitalization proceeds from VodafoneZiggo, with each party
receiving a 50% share, and (ii) an equalization payment from
Vodafone Group of $841 million
Subscriber Growth - LiLAC Group
Three months ended
Year ended December 31, December 31,
2016 2015 2016
2015 Organic RGU net additions (losses) by
product Video (6,200 ) (1,300 ) 11,600 7,900 Data 14,500 15,000
100,200 88,400 Voice (8,500 ) (5,900 ) (17,800 ) 13,500
Total LiLAC Group (200 ) 7,800 94,000 109,800
Organic RGU net additions (losses) by market CWC
(20,400 ) — (4,700 ) — Chile 10,300 200 76,500 79,700 Puerto Rico
9,900 7,600 22,200 30,100 Total LiLAC
Group (200 ) 7,800 94,000 109,800
Organic Mobile SIM additions (losses) by product Postpaid
3,300 (900 ) 33,100 30,400 Prepaid 58,600 (1,100 ) 14,300
(8,900 ) Total LiLAC Group 61,900 (2,000 ) 47,400
21,500
Organic Mobile SIM additions
(losses) by market CWC 48,500 — 13,200 — Chile 13,400 (2,000 )
34,200 21,500 Puerto Rico — — — — Total
LiLAC Group 61,900 (2,000 ) 47,400 21,500
- Product
Additions: full-year 2016 RGU additions were powered by our
broadband gains of 100,000 RGUs and supported by total video
additions of 12,000. This result was partially offset by on-going
weakness in fixed-line telephony resulting in losses of 18,000 RGUs
- As compared to full-year 2015, our
broadband and video additions improved by 12,000 and 4,000 RGUs,
respectively, offset by a 31,000 RGU contraction in our total
fixed-line telephony subscriber growth
- CWC's organic RGU losses were driven by
an adjustment that we recorded in Q4 to eliminate 30,000 non-paying
subscribers from CWC's subscriber counts
- Chile: our
attractive “Vive” bundles, featuring the best HD channel line-up in
Chile and super-fast broadband speeds of up to 160 Mbps, fueled
77,000 RGU additions in 2016. This was in-line with our prior-year
performance, as year-over-year improvements in broadband and video
were offset by fixed-line voice attrition
- Puerto
Rico: operating in a tough economic environment, LCPR
delivered 22,000 subscriber additions in 2016 supported by
market-leading broadband speeds of up to 400 Mbps and a rich
variety of video packages, including cost-effective Spanish
speaking bundles, and the successful introduction of the UPick
"skinny bundles" in the fall of 2016
- Panama: we
added 8,000 video subscribers on an organic basis since May 2016,
including an acceleration in video subscriber additions in Q4
following the launch of our new “Mast3r” product in September 2016.
Telephony and internet subscribers declined due to continued fixed
to mobile substitution as well as churn from our copper network.
Since May 2016, we upgraded 64,000 of the 528,000 total homes
passed from one-way hybrid fiber coaxial ("HFC") to two-way HFC.
Total RGUs declined by 6,000 in the post-acquisition period
- Jamaica:
following the acquisition of CWC, we posted 20,000 organic RGU
additions with growth across our internet and telephony services
driven by improved bundling propositions
- Bahamas:
although still early stages, we are steadily building our video and
broadband RGU base (3,000 for post acquisition 2016) through the
penetration of our newly constructed Fiber-to-the-Home (FTTH)
network of 26,000 homes. We ended the post-acquisition 2016 period
with 5,000 fewer fixed-line voice RGUs
- Barbados:
RGUs declined by 13,000 in total during the post-acquisition 2016
period, due to competitive intensity combined with customer
experience challenges during our ongoing program to upgrade
customers from our legacy copper to nationwide fiber based
network
- Mobile: we
added 47,000 mobile subscribers in the post-acquisition 2016
period, driven by 62,000 additions in Q4, including by solid
prepaid gains in Jamaica (62,000) and Bahamas (12,000), and
accelerating postpaid subscriber additions at VTR (37,000), that
were only partially offset by prepaid losses in Panama (58,000)
- Panama: in
our largest, but also our most competitive market, we lost 1,000
postpaid subscribers in post acquisition 2016. Our prepaid base was
down by 58,000 subscribers since the acquisition of CWC due to
continued intense competition
- Jamaica:
mobile subscriber momentum drove the Jamaican business during the
year with particularly strong growth in Q4, where we saw prepaid
subscriber additions of 56,000 driven by Christmas promotions,
bringing the total since May 2016 to 62,000
- Bahamas:
despite the entry of our first mobile competitor during November
2016, we were able to grow our subscriber base by 11,000 since May
2016, including 6,000 in Q4 2016, through increased promotional
activity focused on data offers
- Chile:
mobile subscribers increased by 34,000 during the full year 2016.
The year-over-year improvement of 13,000 was driven by refreshed 4G
mobile packages
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
Liberty Global's U.S. GAAP accounting policies since May 16,
2016.
The following table presents (i) revenue of each of our
reportable segments for the comparative periods and (ii) the
percentage change from period to period on a reported and rebased
basis:
Three months ended
Increase Year ended
Increase/(decrease) December 31, December 31,
Revenue 2016 2015 %
Rebased % 2016
2015 % Rebased % in millions,
except % amounts LiLAC Division: CWC $ 590.7 $ — * 0.5 $
1,444.8 $ — * (1.4 ) Chile 227.6 204.2 11.5 6.2 859.5 838.1 2.6 6.0
Puerto Rico 105.2 105.1 0.1 0.1 420.8
379.2 11.0 1.1 Total LiLAC Division
923.5 309.3 198.6 1.8 2,725.1 1,217.3 123.9 1.2 Intersegment
eliminations (0.6 ) — N.M. * (1.3 ) — N.M. * Total
LiLAC Group $ 922.9 $ 309.3 198.4 1.8 $
2,723.8 $ 1,217.3 123.8 1.2
LiLAC Group excluding CWC^ 7.6 4.2 5.2 4.3
* - Omitted; N.M. - Not Meaningful
^ - We provide a rebased revenue growth rate for the LiLAC Group
that excludes CWC in light of the fact that CWC is only included in
our 2016 results from the May 16, 2016 acquisition date.
- Reported revenue for the three months
and year ended December 31, 2016 increased by 199% and 124%,
respectively
- The Q4 result was primarily driven by
the acquisition of CWC and, to a lesser extent, organic growth and
the beneficial movements of the Chilean peso relative to the U.S.
dollar
- The full-year result was primarily
driven by the acquisitions of CWC and Choice and, to a lesser
extent, organic growth, partially offset by the adverse movements
of the Chilean peso relative to the U.S. dollar
- From a rebased perspective, revenue
increased 2% and 1% for the three months and year ended December
31, 2016, respectively
2016 Rebased Revenue Growth - Segment
Highlights
- CWC:
modest rebased revenue growth in Q4 2016 was driven by robust
results in our managed services business, driven by large
project-related contract wins in Panama, growth in our wholesale
capacity business and stable broadband performance, mostly offset
by revenue weakness in our mobile and fixed-line telephony
segments. The rebased revenue contraction for the 2016
post-acquisition period was the result of growth in managed
services and broadband that was more than offset by declines in
mobile and fixed-line telephony. The decrease in mobile revenue was
primarily attributable to declines in the Bahamas and certain other
smaller markets that were only partially offset by strong growth in
our Jamaica business
- Chile:
solid rebased revenue growth for both the Q4 and FY 2016 periods
was primarily attributable to higher cable subscription revenue
(~90% of revenue) as a result of an increase in ARPU per RGU and
the addition of 77,000 new subscribers in 2016. This growth was
enhanced by our mobile business, which benefited from accelerating
year-over-year volume growth and higher ARPU
- Puerto
Rico: the revenue result in both periods was driven by solid
growth in our B2B business, centered around data connectivity, and
was further supported by subscriber growth. A portion of this
growth was offset by a decline in ARPU per RGU
Operating Income - LiLAC Group
- Operating income of $141 million and
$63 million during Q4 2016 and Q4 2015, respectively, and $319
million and $248 million during 2016 and 2015, respectively,
representing increases of 123% and 29%, respectively
- Operating income was impacted by OCF
changes as further described below
- In addition, the operating income
results were impacted by (i) increases in depreciation and
amortization, primarily due to the inclusion of CWC, and (ii)
increases in restructuring charges in Chile and Puerto Rico and,
for the full year comparison, higher direct acquisition costs
attributable to the acquisition of CWC
Operating Cash Flow Highlights - LiLAC Group
The following table presents (i) OCF of each of our reportable
segments for the comparative periods, and (ii) the percentage
change from period to period on a reported and rebased basis:
Three months ended
Increase Year ended
Increase December 31, December 31, OCF
2016 2015 %
Rebased % 2016 2015 %
Rebased % in millions, except % amounts
LiLAC Division: CWC $ 226.4 $ — N.M. 3.2 $ 541.9 $ — N.M.
3.0 Chile 94.3 82.0 15.0 9.7 339.3 328.1 3.4 6.8 Puerto Rico 58.9
46.5 26.7 26.7 211.8
167.2 26.7 15.0 Total LiLAC Division 379.6 128.5
195.4 7.9 1,093.0 495.3 120.7 6.3 Corporate and other (3.1 ) (1.1 )
N.M. * (8.9 ) (4.3 ) N.M. * Total segment OCF $ 376.5 $
127.4 195.5 7.3 $ 1,084.1 $ 491.0
120.8 5.9 LiLAC Group excluding CWC^ 14.2 8.9
OCF Margin 40.8 % 41.2 % 39.8 % 40.3 %
* - Omitted; N.M. - Not Meaningful
^ - We provide a rebased OCF growth rate for the LiLAC Group
that excludes CWC in light of the fact that CWC is only included in
our 2016 results from the May 16, 2016 acquisition date. This is
also the basis on which we provided our 2016 OCF guidance for the
LiLAC Group.
- Reported OCF for the three months and
year ended December 31, 2016 increased 196% and 121%, respectively,
both of which were the result of the aforementioned revenue
drivers
- From a rebased perspective, OCF
increased 7% and 6% for the three months and year ended December
31, 2016, respectively
2016 Rebased OCF Growth - Segment
Highlights
- CWC: in
both periods, rebased OCF growth was primarily driven by reduced
integration costs, the realization of staff- and network-related
synergies following the Columbus acquisition, and further cost
discipline across CWC’s markets. These improvements were partly
offset by higher charges for doubtful accounts and increased
programming costs primarily related to the Premier League
- Chile:
both periods grew primarily as a result of the aforementioned
revenue growth drivers, partially offset by the impact of higher
programming, call center and mobile handset costs
- Puerto
Rico: the Q4 and full-year 2016 rebased OCF growth was
primarily driven by the favorable impacts of $8 million and $13
million in Q4 and 2016, respectively, related to the settlement of
a legal matter and the related receipt of indemnification
reimbursements. We also benefited from ongoing cost containment
across the business
Net Earnings (Loss) - LiLAC Group
- Net losses of $5 million and $227
million for the three months and year ended December 31, 2016,
respectively, as compared to net earnings (loss) of ($10 million)
and $52 million, respectively, during the corresponding prior-year
periods
Property and Equipment Additions -
LiLAC Group
Three months ended Year ended
December 31, December 31, 2016
2015 2016 2015 in millions, except %
amounts Customer premises equipment $ 27.9 $ 16.1 $ 140.2 $
111.5 Scalable infrastructure 13.2 9.8 48.6 48.6 Line extensions
7.2 5.4 37.8 21.0 Upgrade/rebuild 1.7 1.3 9.4 6.3 Support capital
& other 15.5 9.7 49.6 39.7 CWC P&E Additions 137.7 —
282.6 — Property and equipment additions 203.2
42.3 568.2 227.1 Property and equipment additions as % of
revenue 22.0 % 13.7 % 20.9 % 18.7 %
- For both periods, the increase in
property and equipment additions in absolute terms was driven
primarily by the acquisition of CWC and, to a lesser extent,
increases in CPE and new build activities across the legacy LiLAC
footprint
Consolidated Statements of Cash Flows -
LiLAC Group
Year ended
December 31, 2016
2015 Variance in millions Net cash provided
(used) by: Operating Activities $ 468.2 $ 306.5 $ 161.7
Investing Activities $ (441.1 ) $ (490.6 ) $ 49.5 Financing
Activities $ 247.3 $ 363.7 $ (116.4 )
- 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 mainly from the acquisition of
CWC and (ii) higher payments for interest and taxes
- Investing
Activities: the decrease in cash used was primarily due to
the net effect of (i) an increase in cash received from
acquisitions and (ii) higher payments for capital expenditures
- Financing
Activities: the decrease in cash provided was primarily
attributable to (i) higher net borrowings of debt, (ii) higher net
inter-group payments and (iii) higher distributions to
noncontrolling interest owners
Adjusted Free Cash Flow - LiLAC
Group
Three months ended
Year ended December 31, December
31, 2016 2015 2016
2015 in millions in millions
Adjusted Free Cash Flow $ 116.3 $ 47.6 $ 61.6 $ 87.1
- The Q4 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, mainly related to our acquisition of
CWC
- Higher capital expenditures
- Higher interest payments (including
related derivative instruments)
- Favorable movements in FX
- The 2016 decrease, as compared to the
prior-year period, was attributable to the net effect of:
- Higher cash provided from OCF and
related working capital items, mainly related to our acquisition of
CWC
- Higher capital expenditures
- Higher interest payments (including
related derivative instruments)
- Higher cash taxes
- Favorable movements in FX
Leverage and Liquidity - LiLAC Group (at December 31,
2016)
- Total capital
leases and principal amount of third-party debt: $6.0
billion
- Leverage:
consolidated gross and net leverage ratios of 4.0x and 3.6x,
respectively
- Average debt
tenor: approximately 5.5 years, with less than 10% due prior
to 2021
- Borrowing
costs: blended fully-swapped borrowing cost of our
third-party debt was 6.8%
- Liquidity:
approximately $1.5 billion, including $553 million of cash and $989
million of aggregate unused borrowing capacity under our credit
facilities
Forward-Looking Statements
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; expected RGU additions; our
expectations with respect to revenue, OCF and Adjusted FCF;
expectations with respect to the development, enhancement and
expansion of our superior networks and innovative and advanced
products and services, including the roll-out of our 4G mobile
product and cloud-based products; plans and expectations relating
to new build and network extension opportunities; the timing of
proposed acquisitions and the anticipated benefits, costs and
synergies in connection with acquisitions, including the CWC
acquisition and the proposed acquisition of Multimedia Polska;
expectations with respect to our joint venture in the Netherlands;
expectations regarding our share buyback program; the strength of
our balance sheet and tenor of our third-party debt; and other
information and statements that are not historical fact. These
forward-looking statements involve certain risks and uncertainties
that could cause actual results to differ materially from those
expressed or implied by these statements. These risks and
uncertainties include the continued use by subscribers and
potential subscribers of our services and their willingness to
upgrade to our more advanced offerings; our ability to meet
challenges from competition, to manage rapid technological change
or to maintain or increase rates to our subscribers or to pass
through increased costs to our subscribers; the effects of changes
in laws or regulation; general economic factors; our ability to
obtain regulatory approval and satisfy regulatory conditions
associated with acquisitions and dispositions; our ability to
successfully acquire and integrate new businesses and realize
anticipated efficiencies from businesses we acquire; the
availability of attractive programming for our video services and
the costs associated with such programming; our ability to achieve
forecasted financial and operating targets; the outcome of any
pending or threatened litigation; the ability of our operating
companies to access cash of their respective subsidiaries; the
impact of our operating companies' future financial performance, or
market conditions generally, on the availability, terms and
deployment of capital; fluctuations in currency exchange and
interest rates; the ability of suppliers and vendors (including our
third-party wireless network providers under our MVNO arrangements)
to timely deliver quality products, equipment, software, services
and access; our ability to adequately forecast and plan future
network requirements including the costs and benefits associated
with network 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. These forward-looking
statements speak only as of the date of this release. We expressly
disclaim any obligation or undertaking to disseminate any updates
or revisions to any forward-looking statement contained herein to
reflect any change in our expectations with regard thereto or any
change in events, conditions or circumstances on which any such
statement is based.
About Liberty Global
Liberty Global is the 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 over 50 million television, broadband internet and
telephony services. We also serve over 10 million mobile
subscribers and offer WiFi service across 5 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 11 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 in over 30 markets.
For more information, please visit www.libertyglobal.com
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 reflect or
“track” the economic performance of the Liberty Global Group and
the LiLAC Group (each as defined and described below),
respectively. For more information regarding the tracking shares,
see note 1 to our consolidated financial statements included in our
annual report on Form 10-K filed on February 15, 2017 (the "10-K").
“Liberty Global Group” does not represent a separate legal entity,
rather it represents those businesses, assets and liabilities that
have been attributed to that group. The Liberty Global Group
comprises our businesses, assets and liabilities not attributed to
the LiLAC Group, including Virgin Media, Unitymedia, UPC Holding
BV, Telenet and, through December 31, 2016, Ziggo Group Holding.
“LiLAC Group” does not represent a separate legal entity, rather it
represents those businesses, assets and liabilities that have been
attributed to that group. The LiLAC Group comprises our operations
in Latin America and the Caribbean and has attributed to it CWC,
VTR and Liberty Puerto Rico. The consolidated financial statements
of Liberty Global are included in our 10-K. For attributed
financial information of the Liberty Global Group and the LiLAC
Group, see Exhibit 99.1 to our 10-K. 2
Please see Revenue and Operating Cash Flow
for information on rebased growth.
3
Please see OCF Definition and
Reconciliation for our Operating Cash Flow ("OCF") definition and
the required reconciliations.
4
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.
5 Figure includes upgrades in Germany and U.K./Ireland. 6 The
465,000 premises added by Virgin Media in 2016 include 142,000
inactive premises at December 31, 2016 that have not yet received
power and/or where head-end capacity upgrades or connection
activities are required. These inactive premises are planned to be
connected during the first quarter of 2017. Most of these inactive
premises were related to fourth quarter 2016 activity. As of
February 13, 2017, the number of these inactive premises had
declined to 110,000. In addition, the 465,000 premises added
include 25,000 technical upgrades and 18,000 commercial premises. 7
A reconciliation to a U.S. GAAP measure of the Liberty Global Group
2017 and medium-term OCF figures that underly our guidance ranges
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.
For example, impairments or other operating charges such as direct
acquisition costs are contingent upon the underlying activity,
which cannot be reasonably forecasted. 8 FX rates as of February
12, 2017. 9 The amounts presented for our 2017 new build programs
in Europe, which exclude upgrades, include homes, residential
multiple dwelling units and commercial premises that potentially
could subscribe to our residential or SOHO services. 10 The nearly
$3 billion of proceeds that are related to the joint venture with
Vodafone comprise (i) amounts received in connection with the
closing of the transaction, including (a) our 50% share of the $2.9
billion of net proceeds from the recapitalization transactions
completed by VodafoneZiggo Holding B.V., formerly known as Ziggo
Group Holding B.V. ("Ziggo Group Holding"), during the third
quarter of 2016 and (b) an equalization payment from Vodafone of
$841 million, and (ii) over $500 million of cash generated and
up-streamed by Ziggo Group Holding from the date the deal was
announced in February 2016 through December 31, 2016. 11 On May 16,
2016, we acquired Cable & Wireless Communications Limited
(formerly Cable & Wireless Communications Plc) ("CWC"). 12 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. 13 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 ratios are adjusted to exclude debt and OCF of
Ziggo Sport and Ziggo and its subsidiaries. 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 Customer
Relationships.
16
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 consolidated statements of cash flows included in
our 10-K. A reconciliation of our 2017 and 2016 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.
17 Consistent with how our guidance was developed, the 1.4 million
new homes that we built across Europe through year-end 2016
included 139,000 upgraded homes in Germany. 18 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. 19 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. 20
On February 11, 2016, Telenet acquired Telenet Group BVBA, formerly
known as BASE Company NV ("BASE"). 21 In the U.K., Belgium and
Switzerland we now offer our customers the option to purchase a
mobile handset pursuant to a contract that is independent of a
mobile airtime services contract ("split-contract programs").
Revenue associated with handsets sold under our split-contract
programs is recognized upfront and included in other
non-subscription revenue. We generally recognize the full sales
price for the mobile handset upon delivery, regardless of whether
the sales price is received upfront or in installments. Revenue
associated with the airtime services is recognized as mobile
subscription revenue over the contractual term of the airtime
services contract. Prior to our split-contract programs, all
revenue from handset sales that was contingent upon delivering
future airtime services was recognized over the life of the
customer contract as part of the monthly fee and included in mobile
subscription revenue. 22 Total B2B includes subscription (SOHO) and
non-subscription revenue. Non-subscription revenue includes the
amortization of deferred upfront installation fees and deferred
nonrecurring fees received on B2B contracts where we maintain
ownership of the installed equipment. Most of this deferred revenue
relates to Virgin Media's B2B contracts, and in connection with the
application of the Virgin Media acquisition accounting, we
eliminated all of Virgin Media's B2B deferred revenue as of the
June 7, 2013 acquisition date. Due primarily to this acquisition
accounting, the amortization of Virgin Media's B2B deferred revenue
is accounting for $1.5 million and $13.1 million of the increase in
Liberty Global Group's total B2B revenue for the three months and
year ended December 31, 2016, respectively. 23 Liberty Global
Group's (3.4%) rebased mobile contraction (including interconnect
and mobile handset sales revenue) and 0.3% growth for Q4 2016 and
full-year 2016, respectively, includes the impact of our
split-contract and non-subsidized handset sale programs in the
U.K., Belgium, Switzerland, Ireland and Hungary, as further
described above. Our split-contract and non-subsidized handset sale
programs in the U.K., Belgium and Switzerland had net negative
effects on our mobile subscription and handset revenue of $36.2
million in Q4 2016 and $42.7 million in 2016. The net negative
effects of the split-contract and non-subsidized handset sale
programs are comprised of (i) a decrease of $1.4 million and an
increase of $76.6 million in handset revenue and (ii) decreases in
mobile subscription revenue of $34.8 million and $119.3 million
during Q4 2016 and full-year 2016, respectively. 24 Average Revenue
Per Unit (“ARPU”) refers to the average monthly subscription
revenue per average customer relationship or mobile subscriber, as
applicable, and is calculated by dividing the average monthly cable
subscription revenue (excluding mobile services, B2B services,
interconnect, channel carriage fees, mobile handset sales and
installation fees) or mobile subscription revenue, as applicable,
for the indicated period, by the average of the opening and closing
balances for customer relationships or mobile subscribers, as
applicable, for the period. Customer relationships of entities
acquired during the period are normalized. Unless otherwise
indicated, ARPU per customer relationship or mobile subscriber, as
applicable, for the Liberty Global Group and LiLAC Group are not
adjusted for currency impacts. ARPU per RGU refers to average
monthly subscription revenue per average RGU, which is calculated
by dividing the average monthly cable subscription revenue for the
indicated period, by the average of the opening and closing
balances of RGUs for the period. Unless otherwise noted, ARPU in
this release is considered to be ARPU per average customer
relationship or mobile subscriber, as applicable. 25 OCF margin is
calculated by dividing OCF by total revenue for the applicable
period. 26 Our property and equipment additions include our capital
expenditures on an accrual basis and amounts financed under vendor
financing or capital lease arrangements. 27 For purposes of
calculating our average tenor, total third-party debt excludes
vendor financing. 28 Our blended fully-swapped debt borrowing cost
represents the weighted average interest rate on our aggregate
variable- and fixed-rate indebtedness (excluding capital lease 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. 29
Our aggregate unused borrowing capacity of $3.9 billion represents
the maximum undrawn commitments under our subsidiaries' applicable
facilities without regard to covenant compliance calculations. This
consists of $3.0 billion attributed to the Liberty Global Group and
$989 million attributed to the LiLAC Group. Upon completion of the
relevant December 31, 2016 compliance reporting requirements for
our credit facilities, and assuming no further changes from
quarter-end borrowing levels, we anticipate that our subsidiaries'
borrowing capacity would be $3.8 billion. This consists of $3.0
billion attributed to the Liberty Global Group and $845 million
attributed to the LiLAC Group. LiLAC cash of $553 million includes
$271 million of cash held by the consolidated CWC group,
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 "Liquidity and Capital Resources" in
our 10-K.
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-K. For attributed financial information of the Liberty Global
Group and the LiLAC Group, see Exhibit 99.1 to our 10-K.
Revenue and Operating Cash Flow
In the following tables, we present revenue and operating cash
flow by reportable segment for the three months and year ended
December 31, 2016, as compared to the corresponding prior-year
periods. All of our reportable segments derive their revenue
primarily from consumer and B2B services, including video,
broadband internet and fixed-line telephony services and, with the
exception of Puerto Rico, mobile services. For detailed information
regarding the composition of our reportable segments, see note 18
to our consolidated financial statements included in our 10-K.
For purposes of calculating rebased growth rates on a comparable
basis for all businesses that we owned during 2016, we have
adjusted our historical revenue and OCF for the three months and
year ended December 31, 2015 to (i) include the pre-acquisition
revenue and OCF of certain entities acquired during 2015 and 2016
in our rebased amounts for the three months and year ended December
31, 2015 to the same extent that the revenue and OCF of such
entities are included in our results for the three months and year
ended December 31, 2016, (ii) exclude the pre-disposition revenue
and OCF of "offnet" subscribers in the U.K. that were disposed in
the fourth quarter of 2014 and the first half of 2015 from our
rebased amounts for the year ended December 31, 2015 to the same
extent that the revenue and OCF of these disposed subscribers is
excluded from our results for the year ended December 31, 2016,
(iii) exclude the revenue and OCF related to a partner network
agreement that was terminated shortly after the Ziggo acquisition
from our rebased amounts for the year ended December 31, 2015 to
the same extent that the revenue and OCF from this partner network
is excluded from our results for the year ended December 31, 2016,
(iv) exclude the pre-disposition revenue, OCF and associated
intercompany eliminations of Film1, which was disposed in the third
quarter of 2015, from our rebased amounts for the year ended
December 31, 2015 to the same extent that the revenue, OCF and
associated intercompany eliminations are excluded from our results
for the year ended December 31, 2016, (v) 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 three
months and year ended December 31, 2015 to the same extent that the
revenue and OCF of these subscribers is excluded from our results
for the three months and year ended December 31, 2016 and (vi)
reflect the translation of our rebased amounts for the three months
and year ended December 31, 2015 at the applicable average foreign
currency exchange rates that were used to translate our results for
the three months and year ended December 31, 2016. We have included
CWC, BASE and five small entities in whole or in part in the
determination of our rebased revenue and OCF for the three months
ended December 31, 2015. We have included CWC, BASE, Choice and
five small entities in whole or in part in the determination of our
rebased revenue and OCF for the year ended December 31, 2015. We
have reflected the revenue and OCF of the acquired entities in our
2015 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 2015
amounts to derive our rebased growth rates for the Liberty Global
Group and the LiLAC Group:
Revenue OCF
Three monthsendedDecember
31,2015
Year endedDecember
31,2015
Three months
endedDecember 31,2015
Year endedDecember
31,2015
Liberty Global Group in millions Acquisitions $ 192.9
$ 667.4 $ 36.1 $ 136.2 Dispositions (3.1 ) (22.6 ) (2.0 ) (6.4 )
Foreign Currency (352.7 ) (839.3 ) (160.6 ) (380.4 ) Total decrease
$ (162.9 ) $ (194.5 ) $ (126.5 ) $ (250.6 )
LiLAC
Group Acquisitions $ 596.5 $ 1,523.1 $ 223.2 $ 550.0 Foreign
Currency 0.9 (49.7 ) 0.2 (17.2 ) Total increase $
597.4 $ 1,473.4 $ 223.4 $ 532.8
In each case, the following tables present (i) the amounts
reported by each of our reportable segments for the comparative
periods, (ii) the U.S. dollar change and percentage change from
period to period and (iii) the percentage change from period to
period on a rebased basis:
Three months ended
Increase Increase
December 31, (decrease) (decrease)
Revenue 2016 2015 $
% Rebased % in millions, except %
amounts Liberty Global Group: European Division:
U.K./Ireland $ 1,523.2 $ 1,804.4 $ (281.2 ) (15.6 ) 0.8 Belgium
680.2 505.5 174.7 34.6 2.5 The Netherlands 660.4 672.6 (12.2 ) (1.8
) (0.3 ) Germany 639.7 607.1 32.6 5.4 7.0 Switzerland/Austria 435.9
432.2 3.7 0.9 1.5 Total Western
Europe 3,939.4 4,021.8 (82.4 ) (2.0 ) 1.9 Central and Eastern
Europe 273.8 265.0 8.8 3.3 5.6 Central and other (2.8 ) (1.7 ) (1.1
) N.M. * Total European Division 4,210.4 4,285.1 (74.7 ) (1.7 ) 2.1
Corporate and other 18.9 8.4 10.5 125.0 * Intersegment eliminations
(12.7 ) (3.6 ) (9.1 ) N.M. * Total Liberty Global Group 4,216.6
4,289.9 (73.3 ) (1.7 ) 2.2 LiLAC Group: LiLAC
Division: CWC 590.7 — 590.7 * 0.5 Chile 227.6 204.2 23.4 11.5 6.2
Puerto Rico 105.2 105.1 0.1 0.1 0.1
Total LiLAC Division 923.5 309.3 614.2 198.6 1.8
Intersegment eliminations (0.6 ) — (0.6 ) N.M. * Total LiLAC
Group 922.9 309.3 613.6 198.4 1.8
Total $ 5,139.5 $ 4,599.2 $ 540.3 11.7
2.1 Liberty Global Group excluding the
Netherlands(1) 2.6 LiLAC Group excluding CWC(2) 4.2
* - Omitted; N.M. - Not Meaningful
(1) We provide a rebased revenue growth rate for the Liberty
Global Group that excludes the Netherlands in light of the
deconsolidation of the Netherlands that occurred on December 31,
2016 in connection with the closing of our joint venture in the
Netherlands with Vodafone Group.
(2) We provide a rebased revenue growth rate for the LiLAC Group
that excludes CWC in light of the fact that CWC is only included in
our 2016 results from the May 16, 2016 acquisition date.
Year ended Increase
Increase December 31, (decrease)
(decrease) Revenue 2016
2015 $ % Rebased % in
millions, except % amounts Liberty Global Group:
European Division: U.K./Ireland $ 6,508.8 $ 7,058.7 $ (549.9 ) (7.8
) 2.6 Belgium 2,691.1 2,021.0 670.1 33.2 2.9 The Netherlands
2,690.8 2,745.3 (54.5 ) (2.0 ) (1.6 ) Germany 2,539.7 2,399.5 140.2
5.8 6.2 Switzerland/Austria 1,755.6 1,758.2 (2.6 )
(0.1 ) 1.6 Total Western Europe 16,186.0 15,982.7 203.3 1.3
2.4 Central and Eastern Europe 1,088.4 1,066.6 21.8 2.0 3.9 Central
and other (8.0 ) (5.4 ) (2.6 ) (48.1 ) * Total European Division
17,266.4 17,043.9 222.5 1.3 2.5 Corporate and other 66.7 42.3 24.4
N.M. * Intersegment eliminations (48.1 ) (23.5 ) (24.6 ) N.M. *
Total Liberty Global Group 17,285.0 17,062.7 222.3
1.3 2.5 LiLAC Group: LiLAC Division: CWC
1,444.8 — 1,444.8 * (1.4 ) Chile 859.5 838.1 21.4 2.6 6.0 Puerto
Rico 420.8 379.2 41.6 11.0 1.1
Total LiLAC Division 2,725.1 1,217.3 1,507.8 123.9 1.2 Intersegment
eliminations (1.3 ) — (1.3 ) N.M. * Total LiLAC Group
2,723.8 1,217.3 1,506.5 123.8 1.2
Total $ 20,008.8 $ 18,280.0 $ 1,728.8
9.5 2.3 Liberty Global Group excluding the
Netherlands (1) 3.3 LiLAC Group excluding CWC (2) 4.3
* - Omitted; N.M. - Not Meaningful
(1) We provide a rebased revenue growth rate for the Liberty
Global Group that excludes the Netherlands in light of the
deconsolidation of the Netherlands that occurred on December 31,
2016 in connection with the closing of our joint venture in the
Netherlands with Vodafone Group.
(2) We provide a rebased revenue growth rate for the LiLAC Group
that excludes CWC in light of the fact that CWC is only included in
our 2016 results from the May 16, 2016 acquisition date.
Three months ended
Increase Increase December 31,
(decrease) (decrease) OCF 2016
2015 $ % Rebased %
in millions, except % amounts Liberty Global Group:
European Division: U.K./Ireland $ 724.8 $ 816.2 $ (91.4 ) (11.2 )
7.9 Belgium 281.2 224.2 57.0 25.4 8.8 The Netherlands 365.2 392.0
(26.8 ) (6.8 ) (5.4 ) Germany 398.7 390.3 8.4 2.2 3.8
Switzerland/Austria 274.2 262.0 12.2 4.7
5.5
Total Western Europe
2,044.1 2,084.7 (40.6 ) (1.9 ) 4.3 Central and Eastern Europe 125.6
118.5 7.1 6.0 8.8 Central and other (83.5 ) (74.6 ) (8.9 ) (11.9 )
* Total European Division 2,086.2 2,128.6 (42.4 ) (2.0 ) 4.3
Corporate and other (50.7 ) (62.9 ) 12.2 19.4 * Total
Liberty Global Group 2,035.5 2,065.7 (30.2 ) (1.5 )
5.0 LiLAC Group: LiLAC Division: CWC 226.4 — 226.4 N.M. 3.2
Chile 94.3 82.0 12.3 15.0 9.7 Puerto Rico 58.9 46.5
12.4 26.7 26.7 Total LiLAC Division
379.6 128.5 251.1 195.4 7.9 Corporate and other (3.1 ) (1.1 ) (2.0
) N.M. * Total LiLAC Group 376.5 127.4 249.1
195.5 7.3 Total $ 2,412.0 $ 2,193.1 $
218.9 10.0 5.3 Liberty Global Group
excluding the Netherlands (1) 7.5 LiLAC Group excluding CWC (2)
14.2
Operating Income Liberty Global Group $ 683.0 $
558.0 $ 125.0 22.4 LiLAC Group 141.2 63.3 77.9
123.1 Total $ 824.2 $ 621.3 $ 202.9
32.7
* - Omitted; N.M. - Not Meaningful
Year ended
Increase Increase December 31,
(decrease) (decrease) OCF 2016
2015 $ % Rebased %
in millions, except % amounts Liberty Global Group:
European Division: U.K./Ireland $ 2,930.9 $ 3,162.1 $ (231.2 ) (7.3
) 4.6 Belgium 1,173.4 990.3 183.1 18.5 3.7 The Netherlands 1,472.7
1,519.5 (46.8 ) (3.1 ) (2.7 ) Germany 1,586.4 1,502.1 84.3 5.6 5.9
Switzerland/Austria 1,069.3 1,040.1 29.2 2.8
4.8 Total Western Europe 8,232.7 8,214.1 18.6 0.2 3.3
Central and Eastern Europe 471.5 474.0 (2.5 ) (0.5 ) 1.5 Central
and other (327.2 ) (289.2 ) (38.0 ) (13.1 ) * Total European
Division 8,377.0 8,398.9 (21.9 ) (0.3 ) 2.9 Corporate and other
(213.3 ) (222.6 ) 9.3 4.2 * Total Liberty Global
Group 8,163.7 8,176.3 (12.6 ) (0.2 ) 3.0 LiLAC
Group: LiLAC Division: CWC 541.9 — 541.9 N.M. 3.0 Chile 339.3 328.1
11.2 3.4 6.8 Puerto Rico 211.8 167.2 44.6 26.7
15.0 Total LiLAC Division 1,093.0 495.3 597.7 120.7
6.3 Corporate and other (8.9 ) (4.3 ) (4.6 ) N.M. * Total LiLAC
Group 1,084.1 491.0 593.1 120.8 5.9
Total $ 9,247.8 $ 8,667.3 $ 580.5 6.7
3.3 Liberty Global Group excluding the
Netherlands (1) 4.3 LiLAC Group excluding CWC (2) 8.9
Operating Income Liberty Global Group $ 2,482.2 $ 2,101.1 $
381.1 18.1 LiLAC Group 319.1 248.1 71.0 28.6
Total $ 2,801.3 $ 2,349.2 $ 452.1 19.2
* - Omitted; N.M. - Not Meaningful
(1) We provide a rebased OCF growth rate for the
Liberty Global Group that excludes the Netherlands in light of the
deconsolidation of the Netherlands that occurred on December 31,
2016 in connection with the closing of our joint venture in the
Netherlands with Vodafone Group. This is also the basis on which we
provided our 2016 OCF guidance for the Liberty Global Group.
(2) We provide a rebased OCF growth rate for the LiLAC Group that
excludes CWC in light of the fact that CWC is only included in our
2016 results from the May 16, 2016 acquisition date. This is also
the basis on which we provided our 2016 OCF guidance for the LiLAC
Group.
OCF Definition and Reconciliation
As used herein, OCF has the same meaning as the term "Adjusted
OIBDA" that is referenced in our 10-K. 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 operating income to total segment
OCF is presented below.
Three months ended Year
ended December 31, December 31, 2016
2015 2016 2015
in millions in millions Consolidated Liberty
Global Operating income $ 824.2 $ 621.3 $ 2,801.3 $ 2,349.2
Share-based compensation expense 90.5 65.2 296.9 318.2 Depreciation
and amortization 1,395.7 1,438.2 5,801.1 5,825.8 Impairment,
restructuring and other operating items, net 101.6 68.4
348.5 174.1 Total segment OCF $ 2,412.0
$ 2,193.1 $ 9,247.8 $ 8,667.3
Liberty Global Group Operating income $ 683.0 $ 558.0 $
2,482.2 $ 2,101.1 Share-based compensation expense 85.8 65.0 281.5
315.8 Inter-group fees and allocations (2.1 ) (2.2 ) (8.5 ) (4.3 )
Depreciation and amortization 1,187.5 1,382.6 5,213.8 5,609.4
Impairment, restructuring and other operating items, net 81.3
62.3 194.7 154.3 Total segment OCF $
2,035.5 $ 2,065.7 $ 8,163.7 $ 8,176.3
LiLAC Group Operating income $ 141.2 $ 63.3 $ 319.1 $
248.1 Share-based compensation expense 4.7 0.2 15.4 2.4 Inter-group
fees and allocations 2.1 2.2 8.5 4.3 Depreciation and amortization
208.2 55.6 587.3 216.4 Impairment, restructuring and other
operating items, net 20.3 6.1 153.8 19.8
Total segment OCF $ 376.5 $ 127.4 $ 1,084.1
$ 491.0
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 December 31, 2016:
Capital Debt
& Capital Cash Lease
Lease and Cash Debt2 Obligations
Obligations Equivalents in millions Liberty
Global and Liberty Global Group unrestricted subsidiaries $ 2,190.6
$ 65.4 $ 2,256.0 $ 913.8 Virgin Media3 14,903.1 91.2 14,994.3 27.1
UPC Holding 6,784.0 33.5 6,817.5 28.2 Unitymedia 8,021.5 657.0
8,678.5 2.9 Telenet 4,658.2 374.0 5,032.2
104.6 Total Liberty Global Group 36,557.4 1,221.1
37,778.5 1,076.6 LiLAC Group unrestricted subsidiaries — — —
77.9 CWC 3,593.0 20.8 3,613.8 271.2 VTR Finance 1,448.9 0.7 1,449.6
125.0 Liberty Puerto Rico 942.5 0.2 942.7 78.5
Total LiLAC Group 5,984.4 21.7 6,006.1 552.6
Total $ 42,541.8 $ 1,242.8 $ 43,784.6 $
1,629.2
Property and Equipment Additions and Capital
Expenditures
The tables below highlight the categories of the property and
equipment additions attributed to the Liberty Global Group and the
LiLAC Group for the indicated periods and 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-K:
Liberty Global Group
Three months ended
Year ended December 31, December 31,
2016 2015 2016
2015 in millions, except % amounts Customer premises
equipment $ 292.4 $ 233.7 $ 1,148.6 $ 1,057.1 Scalable
infrastructure 334.4 223.4 965.0 807.2 Line extensions 318.8 167.4
808.6 493.3 Upgrade/rebuild 131.1 131.0 465.1 519.4 Support capital
& other 452.3 333.9 1,251.3 1,033.2
Property and equipment additions 1,529.0 1,089.4 4,638.6 3,910.2
Assets acquired under capital-related vendor financing
arrangements4 (613.1 ) (390.9 ) (2,018.7 ) (1,481.5 ) Assets
acquired under capital leases (31.2 ) (16.8 ) (104.2 ) (106.1 )
Changes in current liabilities related to capital expenditures
(333.3 ) (91.1 ) (361.8 ) (50.3 ) Capital expenditures5 $ 551.4
$ 590.6 $ 2,153.9 $ 2,272.3
Property and equipment additions as % of revenue 36.3 % 25.4 % 26.8
% 22.9 %
LiLAC Group
Three months ended
Year ended December 31, December 31,
2016 2015 2016
2015 in millions, except % amounts Customer premises
equipment $ 27.9 $ 16.1 $ 140.2 $ 111.5 Scalable infrastructure
13.2 9.8 48.6 48.6 Line extensions 7.2 5.4 37.8 21.0
Upgrade/rebuild 1.7 1.3 9.4 6.3 Support capital & other 15.5
9.7 49.6 39.7 CWC P&E Additions 137.7 — 282.6
— Property and equipment additions 203.2 42.3 568.2
227.1 Assets acquired under capital-related vendor financing
arrangements (11.8 ) — (45.5 ) — Assets acquired under capital
leases (2.4 ) — (7.4 ) — Changes in current liabilities and cash
derivatives related to capital expenditures (41.1 ) 15.1
(24.9 ) 0.1 Capital expenditures $ 147.9 $ 57.4
$ 490.4 $ 227.2 Property and equipment
additions as % of revenue 22.0 % 13.7 % 20.9 % 18.7 %
________________________________
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. The cash and cash
equivalents amount includes cash and cash equivalents held by the
Virgin Media borrowing group, but excludes $0.2 million of cash and
cash equivalents held by Virgin Media. This amount is included in
the amount shown for Liberty Global and Liberty Global Group
unrestricted subsidiaries. 4 Amounts exclude related VAT of $85
million and $50 million during the three months ended December 31,
2016 and 2015, respectively, and $278 million and $189 million
during the year ended December 31, 2016 and 2015, respectively,
that were also financed by our vendors under these arrangements. 5
The capital expenditures that we report in our 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) excess tax benefits related to the
exercise of share-based incentive awards, (ii) cash payments for
third-party costs directly associated with successful and
unsuccessful acquisitions and dispositions and (iii) expenses
financed by an intermediary, less (a) capital expenditures, as
reported in our 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. Beginning with the third quarter of 2016, we changed
the name of this metric from "Free Cash Flow" to "Adjusted Free
Cash flow." We have not changed how we calculate this metric. 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 Year
ended December 31, December 31, 2016
2015 2016 2015
in millions Consolidated Liberty Global Net cash
provided by operating activities $ 1,894.0 $ 1,546.5 $ 5,935.5 $
5,705.8 Excess tax benefits from share-based compensation6 0.4 (0.3
) 4.4 26.7 Cash payments for direct acquisition and disposition
costs 25.8 14.7 115.3 264.2 Expenses financed by an intermediary7
208.0 161.4 815.0 294.2 Capital expenditures (699.3 ) (648.0 )
(2,644.3 ) (2,499.5 ) Principal payments on amounts financed by
vendors and intermediaries (278.5 ) (215.7 ) (2,074.7 ) (1,125.4 )
Principal payments on certain capital leases (25.0 ) (32.0 ) (110.7
) (146.8 ) Adjusted FCF $ 1,125.4 $ 826.6 $ 2,040.5
$ 2,519.2
Liberty Global Group Net cash
provided by operating activities $ 1,653.3 $ 1,441.6 $ 5,467.3 $
5,399.3 Excess tax benefits from share-based compensation 0.4 (0.3
) 4.4 23.0 Cash payments for direct acquisition and disposition
costs 2.5 14.4 29.3 259.3 Expenses financed by an intermediary
206.1 161.4 812.0 294.2 Capital expenditures (551.4 ) (590.6 )
(2,153.9 ) (2,272.3 ) Principal payments on amounts financed by
vendors and intermediaries (278.5 ) (215.7 ) (2,074.7 ) (1,125.4 )
Principal payments on certain capital leases (23.3 ) (31.8 ) (105.5
) (146.0 ) Adjusted FCF $ 1,009.1 $ 779.0 $ 1,978.9
$ 2,432.1
LiLAC Group Net cash provided
by operating activities $ 240.7 $ 104.9 $ 468.2 $ 306.5 Excess tax
benefits from share-based compensation — — — 3.7 Cash payments for
direct acquisition and disposition costs 23.3 0.3 86.0 4.9 Expenses
financed by an intermediary 1.9 — 3.0 — Capital expenditures (147.9
) (57.4 ) (490.4 ) (227.2 ) Principal payments on certain capital
leases (1.7 ) (0.2 ) (5.2 ) (0.8 ) Adjusted FCF $ 116.3 $
47.6 $ 61.6 $ 87.1
________________________________
6 Excess tax benefits from share-based compensation
represent the excess of tax deductions over the related financial
reporting share-based compensation expense. The hypothetical cash
flows associated with these excess tax benefits are reported as an
increase to cash flows from financing activities and a
corresponding decrease to cash flows from operating activities in
our consolidated statements of cash flows. 7 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 Relationship8
The following table provides ARPU per customer relationship for
the indicated periods:
Three months ended Dec. 31,
% FX-Neutral9 2016
2015 Change % Change Liberty Global
Consolidated $ 42.04 $ 44.14 (4.8 )% 1.8 % Liberty Global Group10 €
38.39 € 39.68 (3.3 )% 2.7 % U.K. & Ireland (Virgin Media) £
50.15 £ 48.80 2.8 % 1.3 % The Netherlands (Ziggo) € 46.18
€ 44.97 2.7 % 2.7 % Germany (Unitymedia) € 24.65
€ 23.51 4.8 % 4.8 % Belgium (Telenet) € 53.96 € 51.23 5.3 % 5.3 %
Other Europe (UPC Holding) € 26.98 € 26.72 1.0 % 1.1 % LiLAC
Group11 $ 47.82 $ 55.12 (13.2 )% (16.0 )% Chile (VTR) CLP 33,953
CLP 33,382 1.7 % 1.7 % CWC $ 34.27 $ N/A N/A N/A Puerto Rico $
77.54 $ 78.13 (0.8 )% (0.8 )%
____________________________
8 The amounts presented for the 2016 period reflect the
post-acquisition revenue for CWC, which was acquired on May 16,
2016. The impact of CWC is not included in the three months ended
December 31, 2015. 9 The FX-neutral change represents the
percentage change on a year-over-year basis adjusted for FX impacts
and is calculated by adjusting the prior-year figures to reflect
translation at the foreign currency rates used to translate the
current year amounts. 10 Excluding the Netherlands, the Liberty
Global Group ARPU was €36.96 for the three months ended December
31, 2016. 11 The decrease in the LiLAC Group ARPU is primarily due
to the inclusion of CWC. Excluding CWC, the LiLAC Group ARPU was
$57.20 for the three months ended December 31, 2016.
Mobile Statistics
The following tables provide ARPU per mobile subscriber12 and
mobile subscribers13 for the indicated periods:
ARPU per Mobile Subscriber Three months
ended Dec. 31, %
FX-Neutral 2016 2015
Change % Change Liberty Global Group: Including
interconnect revenue $ 18.41 $ 21.38 (13.9 )% (1.6 )% Excluding
interconnect revenue $ 14.95 $ 17.66 (15.3 )% (2.5 )% LiLAC
Group: Including interconnect revenue $ 17.47 $ 24.91 (29.9 )%
(33.2 )% Excluding interconnect revenue $ 16.26 $ 22.84 (28.8 )%
(32.1 )%
Mobile Subscribers Dec 31,
2016 Sept. 30, 2016
Change Liberty Global Group: U.K. 3,022,300 3,028,400 (6,100
) Belgium 2,991,900 3,020,000 (28,100 ) Germany 353,100 356,400
(3,300 ) The Netherlands — 227,000 (227,000 ) Switzerland 80,300
70,100 10,200 Austria 30,500 24,300 6,200 Ireland 17,900
13,600 4,300 Total Western Europe 6,496,000
6,739,800 (243,800 ) Hungary 62,500 56,700 5,800 Poland
5,300 5,800 (500 ) Total CEE 67,800 62,500
5,300 Liberty Global Group 6,563,800 6,802,300
(238,500 ) LiLAC Group: Panama14 1,736,300 1,760,200 (23,900
) Jamaica 944,800 888,800 56,000 Bahamas 315,200 309,200 6,000
Barbados 131,500 129,000 2,500 Other 399,000 379,100
19,900 CWC Total 3,526,800 3,466,300 60,500 Chile 166,200
152,800 13,400 LiLAC Group 3,693,000
3,619,100 73,900 Grand Total 10,256,800
10,421,400 (164,600 )
_______________________________
12 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. The
amounts for the three months ended December 31, 2015 do not include
the impact of CWC and BASE in Belgium. The decrease in ARPU per
mobile subscriber for the Liberty Global Group is largely due to
our split-contract programs. The decrease in ARPU per mobile
subscriber for the LiLAC Group is primarily due to the inclusion of
CWC. Excluding CWC, the LiLAC Group ARPU per mobile subscriber for
the three months ended December 31, 2016 was $26.64 (including
interconnect) and $24.38 (excluding interconnect). 13 In a number
of countries, our mobile subscribers received mobile services
pursuant to prepaid contracts. As of December 31, 2016, the prepaid
mobile subscriber count included the following: Panama (1,566,500),
Jamaica (922,100), Belgium (880,800), U.K. (638,600), Bahamas
(282,600), Barbados (101,900), Chile (8,000) and twelve remaining
CWC geographies (342,900). 14 The decline includes a 30,200
nonorganic adjustment to prepaid mobile subscribers to comply with
Liberty Global subscriber counting policies.
RGUs, Customers and Bundling15
The following table provides information on the breakdown of our
RGUs and customer base and highlights our customer bundling metrics
at December 31, 2016, September 30, 2016, and December 31,
2015:
December 31,2016
September 30,2016
December 31,2015
Q4’16 / Q3’16(%
Change)
Q4’16 / Q4’15(% Change)
Liberty Global
Group
Total RGUs Video RGUs 18,483,800 22,477,000 22,756,100 (17.8
%) (18.8 %) Broadband Internet RGUs 14,334,600 17,287,900
16,798,400 (17.1 %) (14.7 %) Telephony RGUs 11,962,900
14,378,200 13,997,600 (16.8 %) (14.5 %) Total Liberty
Global Group 44,781,300 54,143,100 53,552,100 (17.3 %) (16.4 %)
Customers Single-Play Customers 8,417,300 9,297,700
9,777,100 (9.5 %) (13.9 %) Dual-Play Customers 3,889,900 4,536,600
4,316,500 (14.3 %) (9.9 %) Triple-Play Customers 9,528,100
11,924,100 11,714,000 (20.1 %) (18.7 %) Total Liberty
Global Group 21,835,300 25,758,400 25,807,600 (15.2 %) (15.4 %)
% of Single-Play Customers 38.6
%
36.1 % 37.9 % 6.9 % 1.8 % % of Dual-Play Customers 17.8 % 17.6 %
16.7 % 1.1 % 6.6 % % of Triple-Play Customers 43.6 % 46.3 % 45.4 %
(5.8 %) (4.0 %) RGUs per customer relationship 2.05 2.10
2.08 (2.4 %) (1.4 %)
LiLAC
Group
Total RGUs Video RGUs 1,714,300 1,733,700 1,289,900 (1.1 %)
32.9 % Broadband Internet RGUs 2,022,900 2,031,900 1,322,100 (0.4
%) 53.0 % Telephony RGUs 1,641,200 1,667,400 883,900
(1.6 %) 85.7 % Total LiLAC Group 5,378,400 5,433,000
3,495,900 (1.0 %) 53.8 %
Customers Single-Play
Customers 1,249,000 1,298,700 562,300 (3.8 %) 122.1 % Dual-Play
Customers 793,900 802,900 372,400 (1.1 %) 113.2 % Triple-Play
Customers 847,200 842,800 729,600 0.5 % 16.1 %
Total LiLAC Group 2,890,100 2,944,400 1,664,300 (1.8 %) 73.7 %
% of Single-Play Customers 43.2 % 44.1 % 33.8 % (2.0 %) 27.8
% % of Dual-Play Customers 27.5 % 27.3 % 22.4 % 0.7 % 22.8 % % of
Triple-play Customers 29.3 % 28.6 % 43.8 % 2.4 % (33.1 %)
RGUs per customer relationship 1.86 1.85 2.10 0.5 % (11.4 %)
_____________________________
15 The December 31, 2015 figures for the LiLAC Group do not
include the impact of the CWC acquisition and the December 31, 2016
figures for Liberty Global Group do not include Ziggo Group
Holding, which was contributed to the joint venture with Vodafone
on December 31, 2016.
Consolidated Operating Data — December
31, 2016
Video
HomesPassed(1)
Two-wayHomesPassed(2)
CustomerRelationships(3)
TotalRGUs(4)
Basic
VideoSubscribers(5)
Enhanced
VideoSubscribers(6)
DTHSubscribers(7)
TotalVideo
InternetSubscribers(8)
TelephonySubscribers(9)
U.K. 13,610,200 13,597,400 5,284,000 13,035,900 — 3,729,100
— 3,729,100 4,916,700 4,390,100 Germany 12,894,500 12,767,100
7,162,200 12,839,000 4,822,900 1,582,800 — 6,405,700 3,325,600
3,107,700 The Netherlands — — — — — — — — — — Belgium 2,987,600
2,987,600 2,149,300 4,874,600 284,600 1,732,900 — 2,017,500
1,601,700 1,255,400 Switzerland(10) 2,236,800 2,236,800 1,294,700
2,513,400 576,500 675,200 — 1,251,700 749,800 511,900 Austria
1,391,400 1,391,400 654,000 1,411,300 115,700 367,300 — 483,000
502,800 425,500 Ireland 852,300 807,500 454,700
1,020,700 29,700 275,100 —
304,800 363,500 352,400 Total Western Europe
33,972,800 33,787,800 16,998,900 35,694,900
5,829,400 8,362,400 — 14,191,800
11,460,100 10,043,000 Poland 3,157,600 3,094,900 1,439,200
2,954,100 209,600 1,004,900 — 1,214,500 1,105,100 634,500 Hungary
1,731,400 1,713,900 1,112,700 2,167,300 131,200 532,200 292,000
955,400 632,100 579,800 Romania 2,887,700 2,838,400 1,296,000
2,273,600 263,400 640,400 363,500 1,267,300 535,400 470,900 Czech
Republic 1,480,000 1,446,700 714,000 1,233,000 143,400 354,800
111,500 609,700 473,900 149,400 Slovakia 587,800 564,800
274,500 458,400 28,500 143,800
72,800 245,100 128,000 85,300 Total CEE
9,844,500 9,658,700 4,836,400 9,086,400
776,100 2,676,100 839,800 4,292,000
2,874,500 1,919,900
Total Liberty Global Group
43,817,300 43,446,500 21,835,300
44,781,300 6,605,500
11,038,500 839,800 18,483,800
14,334,600 11,962,900 Chile
3,216,600 2,710,500 1,328,900 2,795,500 79,500 967,800 — 1,047,300
1,091,200 657,000 CWC Panama 527,800 416,300 336,000 453,400 —
42,800 39,700 82,500 95,700 275,200 Jamaica 424,300 424,300 295,900
496,000 — 102,500 — 102,500 172,300 221,200 Trinidad & Tobago
310,500 310,500 166,400 271,400 — 117,200 — 117,200 123,500 30,700
Barbados 121,800 121,800 92,200 162,500 — 18,400 — 18,400 62,500
81,600 Bahamas 155,000 155,000 55,200 83,100 — 1,600 — 1,600 26,400
55,100 Other 354,300 334,500 211,800 317,400
10,100 73,400 — 83,500 122,300
111,600 Total CWC 1,893,700 1,762,400
1,157,500 1,783,800 10,100 355,900
39,700 405,700 602,700 775,400 Puerto Rico
1,092,300 1,092,300 403,700 799,100 —
261,300 — 261,300 329,000
208,800
Total LiLAC Group 6,202,600
5,565,200 2,890,100 5,378,400
89,600 1,585,000 39,700
1,714,300 2,022,900
1,641,200 Grand Total 50,019,900
49,011,700 24,725,400 50,159,700
6,695,100 12,623,500
879,500 20,198,100 16,357,500
13,604,100
Subscriber Variance Table - December
31, 2016 vs September 30, 2016
Video
HomesPassed(1)
Two-wayHomesPassed(2)
CustomerRelationships(3)
TotalRGUs(4)
Basic
VideoSubscribers(5)
EnhancedVideoSubscribers(6)
DTHSubscribers(7)
TotalVideo
InternetSubscribers(8)
TelephonySubscribers(9)
U.K. 455,700 458,300 34,100 35,700 — 5,600 — 5,600 48,800
(18,700 ) Germany 15,800 81,900 5,200 98,000 (42,900 ) 18,500 —
(24,400 ) 62,100 60,300 The Netherlands (7,070,000 ) (7,056,200 )
(4,013,100 ) (9,649,300 ) (703,500 ) (3,289,000 ) — (3,992,500 )
(3,132,700 ) (2,524,100 ) Belgium 13,900 13,900 (7,000 ) 700
(13,000 ) 1,900 — (11,100 ) 7,400 4,400 Switzerland(10) 9,900 9,900
4,900 28,400 (7,700 ) 14,800 — 7,100 5,200 16,100 Austria 5,600
5,600 1,200 9,300 (4,700 ) (1,000 ) — (5,700 ) 4,800 10,200 Ireland
10,200 14,900 (3,000 ) (7,500 ) 1,000 (8,400 )
— (7,400 ) (300 ) 200 Total Western Europe (6,558,900
) (6,471,700 ) (3,977,700 ) (9,484,700 ) (770,800 ) (3,257,600 ) —
(4,028,400 ) (3,004,700 ) (2,451,600 ) Poland 62,400 63,500
9,500 29,100 (7,200 ) 14,600 — 7,400 19,000 2,700 Hungary 39,200
39,200 400 20,500 (10,200 ) 12,900 (3,400 ) (700 ) 11,600 9,600
Romania 76,300 86,000 36,600 47,800 (8,700 ) 10,800 14,000 16,100
10,500 21,200 Czech Republic 34,900 34,900 4,200 15,100 9,300 1,800
(2,100 ) 9,000 8,200 (2,100 ) Slovakia 28,000 29,100
3,900 10,400 (1,600 ) 1,400 3,600 3,400
2,100 4,900 Total CEE 240,800 252,700
54,600 122,900 (18,400 ) 41,500 12,100
35,200 51,400 36,300 Total Liberty
Global Group (6,318,100 ) (6,219,000 ) (3,923,100 ) (9,361,800 )
(789,200 ) (3,216,100 ) 12,100 (3,993,200 ) (2,953,300 )
(2,415,300 ) Chile 18,200 21,200 11,100 10,300 (2,900 )
5,400 — 2,500 14,400 (6,600 ) CWC Panama 112,100 176,100 (60,100 )
(67,200 ) — (8,200 ) (3,800 ) (12,000 ) (28,900 ) (26,300 ) Jamaica
(45,500 ) (35,500 ) (5,200 ) (1,000 ) — (3,000 ) — (3,000 ) (900 )
2,900 Trinidad & Tobago — — (3,100 ) (700 ) — (4,400 ) — (4,400
) 100 3,600 Barbados — — (2,300 ) (7,400 ) — (1,500 ) — (1,500 )
(3,600 ) (2,300 ) Bahamas — — 200 2,300 — 700 — 700 1,500 100 Other
— — (700 ) (800 ) (2,000 ) (400 ) — (2,400 )
2,800 (1,200 ) Total CWC 66,600 140,600
(71,200 ) (74,800 ) (2,000 ) (16,800 ) (3,800 ) (22,600 ) (29,000 )
(23,200 ) Puerto Rico 6,500 6,500 5,800 9,900
— 700 — 700 5,600 3,600
Total LiLAC Group 91,300 168,300 (54,300 )
(54,600 ) (4,900 ) (10,700 ) (3,800 ) (19,400 ) (9,000 ) (26,200 )
Grand Total (6,226,800 )
(6,050,700 ) (3,977,400 )
(9,416,400 ) (794,100 )
(3,226,800 ) 8,300 (4,012,600
) (2,962,300 ) (2,441,500 )
Subscriber Variance Table - December
31, 2016 vs September 30, 2016
Video
HomesPassed(1)
Two-wayHomesPassed(2)
CustomerRelationships(3)
TotalRGUs(4)
Basic
VideoSubscribers(5)
EnhancedVideoSubscribers(6)
DTHSubscribers(7)
TotalVideo
InternetSubscribers(8)
TelephonySubscribers(9)
Organic Change
Summary:
U.K. 193,900 196,500 34,100 35,700 — 5,600 — 5,600 48,800 (18,700 )
Germany 22,100 86,800 5,200 98,000 (42,900 ) 18,500 — (24,400 )
62,100 60,300 The Netherlands 19,500 21,900 (24,000 ) 51,100
(34,300 ) 17,400 — (16,900 ) 55,800 12,200 Belgium 13,900 13,900
(7,000 ) 700 (13,000 ) 1,900 — (11,100 ) 7,400 4,400 Other Europe
251,500 268,100 37,200 138,200 (34,500
) 44,800 12,100 22,400 56,500 59,300
Total Liberty Global Group 500,900
587,200 45,500 323,700
(124,700 ) 88,200 12,100
(24,400 ) 230,600 117,500
Chile 18,200 21,200 11,100 10,300 (2,900 ) 5,400 — 2,500 14,400
(6,600 ) CWC Panama — 64,000 (42,400 ) (12,800 ) — 5,000 (3,800 )
1,200 (5,400 ) (8,600 ) Jamaica — — (5,200 ) (1,000 ) — (3,000 ) —
(3,000 ) (900 ) 2,900 Trinidad & Tobago — — (3,100 ) (700 ) —
(4,400 ) — (4,400 ) 100 3,600 Barbados — — (2,300 ) (7,400 ) —
(1,500 ) — (1,500 ) (3,600 ) (2,300 ) Bahamas — — 200 2,300 — 700 —
700 1,500 100 Other — — (700 ) (800 ) (2,000 ) (400 )
— (2,400 ) 2,800 (1,200 ) Total CWC — 64,000
(53,500 ) (20,400 ) (2,000 ) (3,600 ) (3,800 ) (9,400 )
(5,500 ) (5,500 ) Puerto Rico 6,500 6,500 5,800
9,900 — 700 — 700 5,600
3,600
Total LiLAC Group 24,700
91,700 (36,600 ) (200 )
(4,900 ) 2,500 (3,800 )
(6,200 ) 14,500 (8,500 )
Total Organic Change 525,600 678,900 8,900
323,500 (129,600 ) 90,700 8,300 (30,600 )
245,100 109,000
Q4 2016
Adjustments:
Q4 2016 UK adjustments 261,800 261,800 — — — — — — — — Q4 2016
Germany adjustments (6,300 ) (4,900 ) — — — — — — — — Q4 2016
Disposition - Netherlands (7,089,500 ) (7,078,100 ) (3,978,600 )
(9,689,900 ) (637,400 ) (3,338,000 ) — (3,975,400 ) (3,178,200 )
(2,536,300 ) Q4 2016 Netherlands adjustments — — (10,500 ) (10,500
) (31,800 ) 31,600 — (200 ) (10,300 ) — Q4 2016 Switzerland
adjustments — — — 12,700 3,000 2,100 — 5,100 4,100 3,500 Q4 2016
Acquisition - Hungary 12,900 12,900 — — — — — — — — Q4 2016
Acquisition - Romania 2,100 2,100 1,800 2,200 1,700 — — 1,700 500 —
Q4 2016 Romania adjustments — — 18,700 — — — — — — — Q4 2016 Panama
adjustments 112,100 112,100 (17,700 ) (54,400 ) — (13,200 ) —
(13,200 ) (23,500 ) (17,700 ) Q4 2016 Jamaica adjustments (45,500 )
(35,500 ) — — — — — — —
—
Net Adjustments (6,752,400 ) (6,729,600 )
(3,986,300 ) (9,739,900 ) (664,500 ) (3,317,500 ) —
(3,982,000 ) (3,207,400 ) (2,550,500 )
Net Adds (Reductions)
(6,226,800 ) (6,050,700 ) (3,977,400 ) (9,416,400 ) (794,100 )
(3,226,800 ) 8,300 (4,012,600 ) (2,962,300 ) (2,441,500 )
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. 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)
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, free service to employees) generally are not
counted as RGUs. We do not include subscriptions to mobile services
in our externally reported RGU counts. In this regard, our December
31, 2016 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 164,900
“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 45,700
and 45,600 digital subscriber line (“DSL”) subscribers within
Belgium and Austria, respectively, who 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 97,400 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 34,900
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 88,900 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 December 31, 2016, Switzerland’s partner networks
account for 138,600 Customer Relationships, 290,900 RGUs, 106,300
Enhanced Video Subscribers, 108,500 Internet Subscribers, and
76,100 Telephony Subscribers.
Additional General Notes to
Tables:
As a result of our decision to discontinue
our Multi-channel Multipoint Distribution System (“MMDS”) service
in Ireland, we have excluded subscribers to our MMDS service from
our externally reported operating statistics effective January 1,
2016, which resulted in a reduction to Homes Passed, RGUs, and
Customer Relationships in Ireland and Slovakia of 22,000 and 500,
respectively.
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.” SOHO customers of
CWC are not included in our respective RGU and customer counts as
of December 31, 2016. 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/20170215006338/en/
Liberty Global plcInvestor
Relations:Oskar Nooij, +1 303 220 4218orChristian
Fangmann, +49 221 84 62 5151orJohn Rea, +1 303 220
4238orCorporate
Communications:Matt Beake, +44 20 8483 6428orRebecca
Pike, +44 20 8483 6216
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