All full-year 2017 guidance targets confirmed for Liberty
Global Group
Operating income down $227 million in Europe & $340
million at LiLAC
Q3 rebased OCF growth of 4% for Europe
LiLAC results impacted by hurricanes; guidance
revised
LiLAC appoints new CEO; split-off on track for year-end
2017
Q3 LBTY REVENUE & YOY
GROWTH3$3.9 bn I +3%
Q3 LBTY OCF & YOY GROWTH3$1.8
bn I +4%
NASDAQ:LBTYA | NASDAQ:LBTYB |
NASDAQ:LBTYK
Q3 LiLAC REVENUE & YOY
GROWTH3$0.9 bn I 0%
Q3 LiLAC OCF & YOY
GROWTH3$0.4 bn I 0%
NASDAQ:LILA | OTC5:LILAB |
NASDAQ:LILAK
Liberty Global plc today announced its Q3 financial and
operating results for the Liberty Global Group1 and the LiLAC
Group1.
CEO Mike Fries stated, "In Europe, we generated better
top-line growth in the third quarter underpinned by continued
double-digit revenue increases in our B2B2 business and sequential
improvements in the U.K. and Belgium. Rebased3 OCF4 was up 4% in
Q3, bringing year-to-date growth to 5% and supporting our guidance
of 'around 5%' in Europe for the full year.
"The European market remains highly competitive, but our
investments in the fastest broadband speeds, the coolest video apps
and compelling quad-play bundles are allowing us to win share
across our footprint. Organic RGU additions have exceeded 600,000
YTD, with a 60%7 improvement in video losses year over year.
Meanwhile our mobile business delivered positive revenue growth in
Q3, as we drive fixed-mobile convergence and upgrade our MNO
networks and MVNO platforms.
"Virgin Media continues to gain operating momentum with rebased
OCF growth of 4% in Q3, which represents our best performance this
year. We had another record quarter of Project Lightning
construction, which now reaches nearly 1 million marketable homes.
The initial response to our November 2017 price increase has been
encouraging, with reduced NPS8 impact and fewer price-related
disconnects than a year ago. Growth in our Lightning areas and
investment in our core subscriber base with products like the V6
box (now in ~20% of U.K. video homes) and our WiFi Connect Box (now
in >40% of broadband homes), pushed U.K. RGU additions up to
322,000 YTD, a nearly four-fold increase from two years ago. With
new prices taking effect in the fourth quarter we expect ARPU9
uplift to drive better top-line results in the final months of the
year and into 2018."
Concerning LiLAC, Mike Fries stated, "I am very pleased
to have announced Balan Nair as the new President and CEO of our
Latin American business. He will add tremendous value and focus,
especially as we manage through the damage from Hurricanes Maria
and Irma. We've begun the work of restoring our fixed and mobile
networks in the affected markets, primarily Puerto Rico, as we make
good operational strides elsewhere in the region with 40,000
organic RGU additions in Q3. VTR in Chile had a particularly strong
quarter across the board, adding 19,000 RGUs while delivering 6%
rebased revenue and 9% rebased OCF growth.
Our long-term opportunity in Latin America continues to be
exciting and we remain on track for the split-off to LiLAC
shareholders around the end of the year."
Liberty Global Group Highlights
LiLAC Group Highlights
• NEW HOMES BUILT YTD 2017
800k+
• VTR Q3 OCF GROWTH3 +9%
• Q3 B2B REVENUE GROWTH3 +13%
• Q3 ORGANIC RGU ADDITIONS
40,000
• Q3 ORGANIC RGU6 ADDITIONS
204,000
• BALAN NAIR APPOINTED LILAC
CEO
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 over 24 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 10 million access
points.
Liberty Global’s businesses are comprised of two stocks: the
Liberty Global Group (NASDAQ: LBTYA, LBTYB and LBTYK) for our
European operations, and the LiLAC Group (NASDAQ: LILA and LILAK,
OTC Link: LILAB), which consists of our operations in Latin America
and the Caribbean.
The Liberty Global Group operates in 12 European countries under
the consumer brands Virgin Media, Unitymedia, Telenet and UPC. The
Liberty Global Group also owns 50% of VodafoneZiggo, a Dutch joint
venture, which has 4 million customers, 10 million fixed-line
subscribers and 5 million mobile subscribers. The LiLAC Group
operates in over 20 countries in Latin America and the Caribbean
under the consumer brands VTR, Flow, Liberty, Más Móvil and BTC. In
addition, the LiLAC Group operates a sub-sea fiber network
throughout the region connecting over 40 markets.
European Highlights Q3
2017
- 204,000 organic RGU additions as a
result of our new build programs and continued demand for our
next-generation10 broadband and video services across Europe
- Successful launch of the MySports
channel in Switzerland during September
- Rebased revenue growth of 2.5% to $3.9
billion; sequential acceleration came primarily from the U.K. and
Belgium
- Residential fixed11 of $2.7 billion,
flat year-over-year (YoY)
- Residential mobile (incl. handsets
& interconnect) up 1% YoY to $0.4 billion
- B2B up 13% year-over-year to $0.5
billion
- Operating income decreased 30%
year-over-year
- Rebased OCF growth of 4%, supported by
4% rebased OCF growth at Virgin Media
- Built 310,000 new premises in Q3, YTD
total over 800,000
- Virgin Media delivered a record
quarterly result of 147,000 new premises in Q3
- Solid balance sheet with nearly $4.8
billion of liquidity12, 16
- Net leverage13 of 5.0x at
quarter-end
- Fully-swapped borrowing cost14 of 4.5%,
down from 4.8% in Q3 '16
Liberty Global Group (Europe)
Q3 2017
YoYGrowth/(Decline)*
YTD 2017
YoYGrowth/(Decline)*
Subscribers
Organic RGU Net Additions 204,400 (23.7 %) 610,600 (12.9 %)
Financial (in USD
millions, unless noted)
Revenue $ 3,879 2.5 % $ 11,061 2.1 % OCF $ 1,836 3.9 % $ 5,174 4.6
% Operating income $ 537 (29.7 %) $ 1,452 (19.3 %) Adjusted
FCF15 $ 715 28.0 % $ 707 (27.1 %) Cash provided by operating
activities $ 1,229 $ 3,640 Cash provided (used) by investing
activities $ (458 ) $ 507 Cash used by financing activities $ (295
) $ (3,740 )
* For the RGU growth rates, the Netherlands is excluded from the
2016 figures; Revenue and OCF YoY growth rates are on a rebased
basis.
LiLAC Highlights Q3 2017
- Hurricanes Irma and Maria negatively
impacted certain operations during the quarter
- Q3 organic RGU additions of 40,000
- Driven by improvements across Cable
& Wireless ("C&W") and continued strength at VTR
- Rebased revenue flat YoY, with growth
in Chile & C&W offset by hurricane-related declines in
Puerto Rico
- Operating loss of $202 million in Q3
down substantially year-over-year
- Rebased OCF flat YoY, including $24
million hurricane impact
- VTR and C&W delivered rebased
growth of 9% and 3%, respectively. C&W growth dampened by $9
million hurricane related OCF reduction
- Puerto Rico had a rebased OCF
contraction of 29% due to minimal revenue generation after
Hurricane Maria and a difficult year-over-year comparison due to
positive legal related one-offs in Q3 2016
- Approximately $1.5 billion of
liquidity12, 16 across LiLAC
- Net leverage of 4.1x at
quarter-end
- Simplified capital structure
- Refinanced Columbus subsidiary debt at
C&W
- Fully-swapped borrowing cost of 6.3%
for LiLAC, down from 6.5% in Q3 '16
LiLAC Group Guidance
Update
- ~$1.35 billion of U.S. GAAP17 OCF in
2017
- Adjusted Free Cash Flow for 2017
expected to be negative
- P&E additions as a percentage of
revenue remains at 19%-21% range for 2017
Liberty Latin America &
Caribbean
Q3 2017
YoYGrowth/(Decline)*
YTD 2017
YoYGrowth/(Decline)*
Subscribers
Organic RGU Net Additions 39,500 45.2 % 97,100 3.1 %
Financial (in USD
millions, unless noted)
Revenue $ 908 0.4 % $ 2,740 0.7 % OCF $ 359 0.2 % $ 1,081 (0.2 %)
Operating income (loss) $ (202 ) N.M. $ 95 (46.5 %) Adjusted
FCF $ (110 ) N.M. $ (54 ) N.M. Cash provided by operating
activities $ 94 $ 393 Cash used by investing activities $ (201 ) $
(454 ) Cash provided by financing activities $ 35 $ 37
* Revenue and OCF YoY growth rates are on a rebased basisN.M. -
Not Meaningful
Subscriber Growth - Liberty Global
Group (Europe)
Three months ended
Nine months ended September 30, September 30,
2017 2016 2017
2016 Organic RGU net additions (losses) by product
(excluding NL7) (excluding NL7) Video (30,800 ) (19,300 ) (62,000 )
(156,500 ) Data 132,900 163,700 387,400 459,700 Voice 102,300
123,400 285,200 398,100 Total Liberty
Global Group 204,400 267,800 610,600 701,300
Organic RGU net additions (losses) by market
U.K./Ireland 92,400 80,400 328,500 223,400 Belgium/Luxembourg
(14,600 ) 3,700 (41,900 ) 27,600 Germany 68,100 89,400 174,300
222,300 Switzerland/Austria (7,300 ) (3,700 ) 900 (25,400 ) Central
and Eastern Europe 65,800 98,000 148,800
253,400 Total Liberty Global Group 204,400 267,800
610,600 701,300
Organic Mobile
SIM18 additions (losses) by product Postpaid
75,400 102,200 265,300 285,500 Prepaid (27,600 ) (57,000 ) (193,500
) (176,000 ) Total Liberty Global Group 47,800 45,200
71,800 109,500
Organic Mobile SIM additions
(losses) by market U.K./Ireland (16,200 ) 8,800 (20,300 )
18,000 Belgium 43,400 12,100 43,800 21,200 Other 20,600
24,300 48,300 70,300 Total Liberty Global
Group 47,800 45,200 71,800 109,500
- Cable Product
Performance: During Q3 we added 204,000 RGUs, a 24% decline
over the prior-year period due to lower additions in CEE, Germany
and Belgium. On the fixed product side, our video RGU attrition
slightly increased year-over-year, while our broadband and
telephony growth slowed
- U.K./Ireland: Q3 net additions increased 15%
year-over-year to 92,000 RGUs driven by new build and a return to
positive growth in Ireland. Within the mix, broadband RGUs grew
57,000, while video growth continued the positive 2017 trend with a
14,000 improvement in additions, as compared with the prior
year
- Belgium:
Q3 RGU attrition of 15,000 RGUs was consistent with prior quarters
this year and primarily due to intensified competition. The
sequential trend was relatively flat for all fixed products.
However, our converged quad-play package additions accelerated
sequentially as we gained 41,000 new "WIGO" subscribers during
Q3
- Germany:
Reported 68,000 RGU additions in Q3, up sequentially but below our
Q3 2016 result. RGU additions were supported by our reintroduced
"high-speed weeks" promotion in September, offering discounts on
our core double and triple-play bundles while still facing a higher
than usual backlog of broadband/voice subscriber installations as a
result of prioritizing truck rolls to existing video subscribers
due to a channel line-up change. Video attrition of 12,000 RGUs
improved slightly year-over-year
- Switzerland/Austria: Net additions in Q3 were
slightly below our prior-year performance, reflecting a 21,000 RGU
contraction in video, somewhat compensated by 13,000 fixed
telephony gains and a flat broadband performance. We launched our
MySports channel platform in early September featuring exclusive
content and have seen early signs of success, including 26,000
MySports Pro premium subscriptions
- CEE:
Delivered 66,000 RGU additions in Q3, a softer performance compared
to the prior-year period, primarily related to lower video and
fixed telephony results
- Next-Generation
Video Penetration (including Horizon TV, Horizon-Lite, TiVo, Virgin
TV V6 and Yelo TV): We added 216,000 subscribers to our
advanced platforms in Q3 that reached 7.5 million or 42% of our
total cable video base (excluding DTH)
- WiFi Connect
Box: Deployments of our latest WiFi Connect box increased by
more than 820,000 units in Q3, ending the quarter with over 5.3
million or 37% of our broadband base on the platform across
Europe
- Mobile:
Added 48,000 mobile subscribers in Q3, with 75,000 postpaid
subscriber additions offset by attrition in our prepaid base
- Telenet in Belgium added 43,000 new
mobile subscribers during Q3, a strong year-over-year improvement.
The continued success of "WIGO" and a more competitive BASE19
postpaid offering generated 40,000 postpaid additions while our
prepaid performance turned slightly positive
- Virgin Media's mobile subscriber base
declined by 16,000 in Q3, as 15,000 postpaid subscriber additions
were more than offset by low-ARPU prepaid losses. The penetration
of 4G in the U.K. increased to over 40% at the end of Q3
- Switzerland/Austria gained 21,000
mobile subscribers in Q3 on the back of a refreshed offering in
Switzerland including free EU roaming and continued traction in
Austria
Revenue Highlights - Liberty Global Group (Europe)
The following table presents (i) revenue of each of our
consolidated reportable segments for the comparative periods, and
(ii) the percentage change from period to period on both a reported
and rebased basis:
Three months ended
Increase/(decrease) Nine months ended
Increase/(decrease) September 30, September
30, Revenue 2017 2016 %
Rebased % 2017 2016
%
Rebased % in millions, except % amounts
European Division: U.K./Ireland $ 1,617.1 $ 1,581.4 2.3 1.5 $
4,687.6 $ 4,985.6 (6.0 ) 1.3 Belgium 759.1 693.4 9.5 2.5 2,106.5
2,010.9 4.8 1.5 Germany 703.7 639.4 10.1 4.6 1,988.6 1,900.0 4.7
4.9 Switzerland/Austria 456.0 439.3 3.8 1.1 1,314.8 1,319.7 (0.4 )
(0.5 ) The Netherlands — 681.8 (100.0 ) N.M. —
2,030.4 (100.0 ) N.M. Total Western Europe 3,535.9 4,035.3
(12.4 ) 2.2 10,097.5 12,246.6 (17.5 ) 1.8 Central and Eastern
Europe 306.6 274.5 11.7 4.9 866.5 814.6 6.4 5.5 Central and other
35.4 (1.9 ) N.M. 10.3 95.7 (5.2 ) N.M. 3.9
Total European Division 3,877.9 4,307.9 (10.0 ) 2.5 11,059.7
13,056.0 (15.3 ) 2.1 Corporate and other 0.8 18.0 (95.6 ) (42.9 )
1.7 47.8 (96.4 ) 13.3 Intersegment eliminations (0.2 ) (12.8 ) N.M.
N.M. (0.2 ) (35.4 ) N.M. N.M. Total Liberty Global Group $ 3,878.5
$ 4,313.1 (10.1 ) 2.5 $ 11,061.2 $
13,068.4 (15.4 ) 2.1
N.M. - Not Meaningful
- Reported revenue for the three and nine
months ended September 30, 2017, declined 10% and 15%
year-over-year in each period, respectively
-
These results were primarily driven by the net impact of (i) the
deconsolidation of our operations in the Netherlands in connection
with the completion of our joint venture with Vodafone Group plc
(the "VodafoneZiggo JV"), (ii) negative foreign exchange ("FX")
movements on a YTD basis, mainly related to the strengthening of
the U.S. dollar against the British pound and positive FX movements
in Q3, mainly related to the strengthening of the Euro against the
U.S. dollar, and (iii) organic revenue growth
- Rebased revenue grew 2.5% in Q3 and 2%
for the YTD period. The result for the YTD period included:
- A reduction in cable subscription
revenue of $12 million YTD resulting from a change in U.K.
regulations governing payment handling fees that we charge our
customers
- The favorable $6 million impact in the
YTD period for the expected recovery of VAT paid in prior periods
with respect to copyright fees in Belgium, which benefited revenue
in H1 2017
- Our B2B business (including SOHO and
non-subscription revenue) reported rebased revenue growth of 13%
and 12% in the Q3 and YTD periods, respectively
- Our residential mobile business
(including interconnect and handset sales) posted a 1% rebased
revenue gain and 5% rebased contraction in the Q3 and YTD 2017
periods, respectively
Q3 2017 Rebased Revenue Growth - Segment
Highlights
- U.K./Ireland: Rebased revenue grew 1.5% in Q3.
Within the mix, rebased residential cable revenue (72% of total
revenue) grew 2%, driven by increased subscription revenue
resulting from RGU additions and relatively flat year-over-year Q3
ARPU per customer performance on an FX-neutral basis. Rebased
residential mobile revenue (including interconnect and mobile
handset revenue) decreased 2.5%, reflecting lower mobile
subscription revenue that was only partially offset by higher
revenue from mobile handset sales. Rebased B2B revenue also grew
2%, mainly driven by SOHO revenue that was partially offset by
lower data and voice non-subscription revenue
- Belgium:
Rebased revenue growth of 2.5% in Q3 was mainly driven by B2B,
slightly offset by lower mobile revenue
- Germany:
Q3 rebased revenue growth of 5% reflects (i) higher residential
cable subscription revenue, as a result of volume growth and an
increase in ARPU per RGU, (ii) higher low-margin mobile handset
revenue and (iii) B2B growth, largely in the SOHO segment.
Residential cable growth slowed sequentially due to the anticipated
loss of analog carriage fees, which reduced revenue and OCF by
approximately $7.5 million in Q3
- Switzerland/Austria: Rebased revenue increased by
1% in Q3, resulting from the net effect of (i) lower ARPU per RGU,
primarily related to weaker tier-mix and competitive pressures,
(ii) higher growth in B2B and (iii) higher mobile revenue
contribution
- CEE:
Rebased revenue growth was 5% in Q3 due mainly to (i) strong growth
in our B2B business and (ii) higher cable revenue supported by RGU
additions and a small decline in ARPU per RGU on an FX-neutral
basis
Operating Income - Liberty Global Group (Europe)
- Operating income was $537 million and
$764 million in Q3 2017 and Q3 2016, respectively, representing a
decrease of 30% year over year. For the nine months ended September
30, 2017, operating income was $1,452 million, reflecting a decline
of 19% as compared to $1,799 million in YTD 2016
- The decreases in operating income for
both periods primarily resulted from the net effect of lower OCF,
as further described below, and for the nine-month comparison, a
decline in depreciation and amortization. The declines in OCF and
depreciation and amortization were primarily attributable to the
fact that our Netherlands segment is not included in our 2017
consolidated results
Operating Cash Flow Highlights - Liberty Global Group
(Europe)
The following table presents (i) OCF of each of our consolidated
reportable segments for the comparative periods, and (ii) the
percentage change from period to period on both a reported and
rebased basis:
Three months ended
Increase/(decrease) Nine months ended
Increase/(decrease) September 30, September
30, OCF 2017 2016 %
Rebased % 2017 2016
%
Rebased % in millions, except % amounts
European Division: U.K./Ireland $ 721.2 $ 696.0 3.6 4.1 $ 2,079.5 $
2,206.1 (5.7 ) 3.0 Belgium 356.7 311.1 14.7 6.1 972.4 892.2 9.0 6.6
Germany 444.6 408.0 9.0 3.5 1,240.2 1,187.7 4.4 4.6
Switzerland/Austria 272.3 273.4 (0.4 ) (2.8 ) 794.3 795.1 (0.1 )
(0.3 ) The Netherlands — 375.5 (100.0 ) N.M. —
1,107.5 (100.0 ) N.M. Total Western Europe 1,794.8 2,064.0
(13.0 ) 3.3 5,086.4 6,188.6 (17.8 ) 3.5 Central and Eastern Europe
137.6 120.4 14.3 6.8 371.5 345.9 7.4 6.0 Central and other (46.0 )
(77.0 ) (40.3 ) 12.7 (139.2 ) (243.7 ) (42.9 ) 13.9
Total European Division 1,886.4 2,107.4 (10.5 ) 4.0 5,318.7 6,290.8
(15.5 ) 4.2 Corporate and other (50.7 ) (47.4 ) 7.0 (7.6 )
(145.0 ) (162.6 ) (10.8 ) 7.7 Total Liberty Global Group $
1,835.7 $ 2,060.0 (10.9 ) 3.9 $ 5,173.7
$ 6,128.2 (15.6 ) 4.6 OCF Margin20 47.3 % 47.8
% 46.8 % 46.9 %
N.M. - Not Meaningful
- Reported OCF for the three and nine
months ended September 30, 2017, declined 11% and 16%
year-over-year, respectively
- Rebased OCF growth of 4% and 5% in Q3
and YTD 2017, respectively, included:
- The net unfavorable impact on our YTD
revenue of certain items, as discussed in the "Revenue Highlights"
section above
- A $10 million (Q3) and $23 million
(YTD) network tax increase following an April 1, 2017 increase in
the rateable value of our existing U.K. and Irish networks
- The negative impact of a $7 million
favorable MVNO settlement in Belgium in Q2 2016
- A favorable $32 million benefit in the
YTD period associated with a telecom operator's agreement to
compensate Virgin Media for prior-period contractual breaches
related to network charges
- As compared to the prior-year periods,
our Q3 and YTD 2017 OCF margins were down 50 and 10 basis points to
47.3% and 46.8%, respectively. Our OCF margins during the 2017
periods were negatively impacted by the deconsolidation of the
Netherlands
Q3 2017 Rebased Operating Cash Flow Growth
- Segment Highlights
- U.K./Ireland: Rebased OCF growth of 4% reflected
revenue growth and a reduction in total costs, which include lower
marketing and employee costs, offsetting higher network taxes and
programming costs
- Belgium:
Rebased OCF growth of 6% in Q3 was largely driven by lower mobile
handset subsidies, lower MVNO costs (as we are migrating to our own
mobile network), lower integration costs and indirect cost
containment following the BASE acquisition
- Germany:
Increased OCF by 3.5% in Q3 on a rebased basis, primarily due to
the net effect of (i) increased revenue, (ii) higher direct costs,
primarily due to higher mobile handset sales, partially offset by
lower fixed-line telephony interconnect rates and call volumes and
(iii) higher indirect costs, mainly driven by higher call center
costs. Growth slowed sequentially due to the aforementioned loss of
analog carriage fees, which reduced OCF by approximately $7.5
million in Q3
- Switzerland/Austria: Rebased Segment OCF
contracted 3% in Q3, mainly as a result of increased content costs
related to the launch of our MySports platform that more than
offset revenue growth
- CEE:
Rebased OCF growth of 7% in Q3 was largely driven by the
aforementioned revenue growth as well as cost efficiencies across
the region
Net Loss Attributable to Liberty Global Shareholders -
Liberty Global Group (Europe)
- Net losses attributable to Liberty
Global Group shareholders were $460 million and $168 million for
the three months ended September 30, 2017 and 2016, respectively,
and $1,390 million and $294 million for the nine months ended
September 30, 2017 and 2016, respectively
Leverage and Liquidity - Liberty Global Group (at
September 30, 2017)
- Total capital
leases and principal amount of third-party debt: $41.9
billion
- Leverage
ratios: Our adjusted gross and net leverage ratios at
September 30, 2017 were 5.2x and 5.0x, respectively
- Average debt
tenor21 : 7.5 years, with ~88% not due until 2021 or
beyond
- Borrowing
costs: Blended fully-swapped borrowing cost of our
third-party debt was 4.5%
- Liquidity:
$4.8 billion, including (i) $1.6 billion of cash at September 30,
2017 and (ii) aggregate unused borrowing capacity16 under our
credit facilities of $3.2 billion
Subscriber Growth - LiLAC
Group*
Three months ended
Nine months ended September 30, September 30,
2017 2016 2017
2016 Organic RGU net additions (losses) by product
Video (3,900 ) 4,600 7,600 17,800 Data 34,700 29,500 96,500 85,700
Voice 8,700 (6,900 ) (7,000 ) (9,300 )
Total LiLAC Group
39,500 27,200 97,100 94,200
Organic RGU net additions by segment C&W 20,200 9,200
14,500 15,700 Chile 19,000 13,200 78,200 66,200 Puerto Rico 300
4,800 4,400 12,300 Total LiLAC Group
39,500 27,200 97,100 94,200
Organic Mobile SIM additions (losses) by product Postpaid
6,300 18,200 28,800 29,800 Prepaid (36,000 ) (38,500 ) (53,300 )
(44,300 )
Total LiLAC Group
(29,700 ) (20,300 ) (24,500 ) (14,500 )
Organic Mobile
SIM additions (losses) by segment C&W (42,900 ) (34,100 )
(64,500 ) (35,300 ) Chile 13,200 13,800 40,000 20,800 Puerto Rico —
— — — Total LiLAC Group (29,700 )
(20,300 ) (24,500 ) (14,500 )
*For Puerto Rico and certain C&W markets that were
significantly impacted by Hurricanes Irma and Maria, the net
additions (losses) reflected in this section include Q3 activity
through August 31, 2017. For additional information, see note 12 to
the subscriber tables at the end of this release.
- Product
Additions: Organic fixed RGU additions of 40,000 in Q3
2017
- C&W:
Added 20,000 RGUs during Q3, including 10,000 internet and 14,000
fixed telephony RGUs
- Broadband additions were driven by
network upgrades and improved product offerings leading to gains of
4,000 and 6,000 RGUs in Panama and Jamaica, respectively
- Fixed voice additions resulted from
traction with refreshed bundles in Jamaica, Trinidad and
Panama
- Video RGUs declined by 4,000 as the
benefit from our new bundles was more than offset by underlying OTT
headwinds. In Panama, cable video gains were offset by DTH
losses
- Mobile:
Mobile subscribers declined by 43,000 in Q3. Subscribers fell by
22,000 in Panama as we repositioned our offers to focus on higher
ARPU customers. Competition in the Bahamas drove a 19,000 reduction
in mobile subscribers
- Chile: VTR
added 19,000 RGUs driven by continued strong broadband and video
gains, partially offset by fixed-line voice attrition
- Mobile: We
added 13,000 subscribers in Q3, primarily by penetrating our fixed
subscriber base with our postpaid mobile product
- Puerto
Rico: Our subscriber activity was flat up to August 31,
2017, as 4,000 broadband RGU additions were offset by video
losses
Revenue Highlights - LiLAC Group
On May 16, 2016, a subsidiary of Liberty Global acquired
C&W. Accordingly, C&W has been included in our financial
results under our U.S. GAAP accounting policies since the
acquisition date. The following table presents (i) revenue of each
of our consolidated reportable segments for the comparative periods
and (ii) the percentage change from period to period on both a
reported and rebased basis:
Three months ended
Increase/(decrease)
Nine months ended Increase/(decrease)
September 30, September 30, Revenue
2017 2016 % Rebased %
2017 2016 % Rebased %
in millions, except % amounts LiLAC Division: C&W $
578.9 $ 568.5 1.8 1.2 $ 1,737.2 $ 854.1 103.4 (0.8 ) Chile 242.2
221.3 9.4 6.1 702.6 631.9 11.2 6.9 Puerto Rico 88.6 104.8
(15.5 ) (15.5 ) 303.6 315.6 (3.8 ) (3.8 )
Total LiLAC Division 909.7 894.6 1.7 0.5 2,743.4 1,801.6 52.3 0.7
Intersegment eliminations (1.6 ) (0.5 ) N.M. N.M. (3.5 ) (0.7 )
N.M. N.M. Total LiLAC Group $ 908.1 $ 894.1 1.6
0.4 $ 2,739.9 $ 1,800.9 52.1 0.7
N.M. - Not Meaningful
- Reported revenue for the three and nine
months ended September 30, 2017 increased by 2% and 52%,
respectively
- In September 2017, Hurricanes Irma and
Maria impacted a number of our markets in the Caribbean. During the
three months ended September 30, 2017, the effects of the
hurricanes negatively impacted Liberty Puerto Rico’s and C&W's
revenue by an estimated $19 million and $3 million,
respectively
- From a rebased perspective, revenue was
flat and increased 1% for the three and nine months ended September
30, 2017, respectively, and included favorable $1 million and $9
million impacts in Q3 and YTD, respectively, for wholesale revenue
recognized on a cash basis related to services provided to a
significant customer in prior quarters
Q3 2017 Rebased Revenue Growth - Segment
Highlights
- C&W:
Rebased revenue grew 1% overall
-
Revenue grew across all regions with the exception of the
Bahamas where we continue to be impacted by the entry of a new
mobile competitor
-
By product: revenue growth was driven by (i) new contracts and
increasing demand for bandwidth in our networks business, (ii)
increased penetration of high-speed services in broadband and video
and (iii) growth in managed services. This growth was partly offset
by: (i) a decline in mobile where the impact of competition in the
Bahamas was greater than our growth in Jamaica, and (ii) the
structural decline in fixed voice services
-
We estimate that the negative impact from Hurricanes Irma and
Maria on C&W's revenue in Q3 2017 was $3 million
- Chile:
Rebased revenue growth of 6% for Q3 2017 is primarily related to
(i) higher residential cable subscription revenue, mainly from
higher ARPU per RGU and an increase in the average number of
subscribers, (ii) higher B2B subscription revenue driven by SOHO,
and (iii) higher mobile subscription revenue, driven by subscriber
growth
- Puerto
Rico: Rebased revenue decline of 15.5% was driven by impacts
related to Hurricanes Irma and Maria. We estimate that the negative
impacts from these hurricanes on revenue in Q3 2017 were
approximately $19 million
Operating Income (Loss) - LiLAC Group
- Operating income (loss) was ($202
million) and $139 million in Q3 2017 and Q3 2016, respectively, and
$95 million and $178 million for the nine months ended September
30, 2017 and 2016, respectively
- These decreases were primarily driven
by the net effect of (i) increases in OCF, as further described
below, (ii) increases in impairment, restructuring and other
operating items, net, primarily due to impairment charges recorded
during Q3 2017 to reflect the impacts of Hurricanes Irma and Maria,
and (iii) for the nine-month comparison, increases in depreciation
and amortization, largely due to the inclusion of C&W
Operating Cash Flow Highlights - LiLAC Group
The following table presents (i) OCF of each of our consolidated
reportable segments for the comparative periods and (ii) the
percentage change from period to period on both a reported and
rebased basis:
Three months ended
Increase/(decrease) Nine months ended
Increase/(decrease) September 30, September
30, OCF 2017 2016 %
Rebased % 2017 2016 %
Rebased % in millions, except % amounts LiLAC
Division: C&W $ 223.9 $ 214.5 4.4 3.6 $ 661.1 $ 315.5 109.5
(3.0 ) Chile 98.0 86.9 12.8 9.4 281.9 245.0 15.1 10.6 Puerto Rico
39.6 56.1 (29.4 ) (29.4 ) 144.7 152.9
(5.4 ) (5.4 )
Total LiLAC Division
361.5 357.5 1.1 — 1,087.7 713.4 52.5 (0.1 ) Corporate and other
(2.1 ) (2.9 ) (27.6 ) (27.6 ) (6.4 ) (5.8 ) 10.3 10.3
Total segment OCF $ 359.4 $ 354.6 1.4 0.2
$ 1,081.3 $ 707.6 52.8 (0.2 )
OCF Margin 39.6 % 39.7 % 39.5 % 39.3 %
- Reported OCF for the three and nine
months ended September 30, 2017 increased 1% and 53%, respectively.
The nine month movement was primarily as a result of the
acquisition of C&W
- In September 2017, Hurricanes Irma and
Maria impacted a number of our markets in the Caribbean. During the
three months ended September 30, 2017, the effects of the
hurricanes negatively impacted Liberty Puerto Rico’s and C&W's
OCF by an estimated $15 million and $9 million
- From a rebased perspective, including
the aforementioned negative impact from Hurricanes Irma and Maria,
OCF remained flat for the three and nine months ended September 30,
2017
Q3 2017 Rebased OCF Growth - Segment
Highlights
- C&W:
Rebased OCF growth of 4% was driven by (i) lower marketing costs as
the prior year period had higher sponsorship activities associated
with the Summer Olympic Games, (ii) reductions in other costs,
including integration, consultancy and travel costs, (iii) higher
net pension credits at C&W due primarily to higher expected
returns on plan assets, and (iv) an increased gross margin
contribution from our wholesale business. These factors were
partially offset by (i) the reduction in OCF caused by Hurricanes
Irma and Maria and (ii) higher content costs, primarily related to
the Premier League rights
- Chile:
Rebased OCF increase of 9% was driven by the aforementioned solid
revenue growth and ongoing cost focus
- Puerto
Rico: Rebased OCF declined 29% driven by the impacts of
Hurricanes Irma and Maria, which are estimated to have reduced OCF
by approximately $15 million in Q3 2017, and the negative impact
from the aforementioned legal ruling in the prior-year period
Net Loss Attributable to Liberty Global Shareholders - LiLAC
Group
- Net losses attributable to LiLAC Group
shareholders were $331 million and $82 million for the three months
ended September 30, 2017 and 2016, respectively, and $396 million
and $223 million for the nine months ended September 30, 2017 and
2016, respectively
Leverage and Liquidity - LiLAC Group (at September 30,
2017)
- Total capital
leases and principal amount of third-party debt: $6.4
billion
- Leverage
ratios: Consolidated gross and net leverage ratios of 4.5x
and 4.1x, respectively
- Average debt
tenor: 6.3 years, with over 90% not due until 2021 or
beyond
- Borrowing
costs: Blended, fully-swapped borrowing cost of our
third-party debt was 6.3%
- Liquidity:
Approximately $1.5 billion, including $531.0 million of cash and
$1.0 billion of aggregate unused borrowing capacity under our
credit facilities
Update on Impacts of Hurricanes Irma and Maria
Hurricanes Irma and Maria impacted a number of our markets in
the Caribbean in September of 2017, resulting in varying degrees of
damage to homes, businesses and infrastructure in these markets.
The most extensive damage occurred in Puerto Rico and certain
markets within C&W
We are committed to helping people across the Caribbean recover
and rebuild. To that end:
- We have made good progress with the
restoration of our mobile networks across the impacted region and
mobile services have now been largely restored
- Our fixed networks suffered significant
damage across these markets. Although we are working to
re-establish connectivity as quickly as possible, we cannot predict
when and to what extent we will be able to restore services across
the region. The damage to our sub-sea systems was limited and they
are fully functional today
- We have provided credits to mobile
customers in impacted C&W markets, as well as establishing free
WiFi hotspots and a free mobile "WiFi tour" in Puerto Rico. The
"WiFi tour" features three mobile units specifically designed for
first aid communications after a natural disaster and are equipped
with satellite antennas that provide internet to rural communities.
The three mobile WiFi vehicles are leading a caravan of services
and providers including FEMA, banking, insurance, food, water,
medical supplies and doctors to 29 remote towns that do not
currently have internet connectivity
- Launched the Cable & Wireless
Charitable Foundation and Liberty Foundation which together have
raised over $1.8 million to date and will distribute funds to
assist in hurricane relief across the region
Our assessment of the losses attributable to the hurricanes is
ongoing and we expect to incur additional costs and losses in Q4
2017 and beyond, as we restore the damaged networks and reconnect
customers. We are uncertain as to the timing and extent of our
restoration and reconnection efforts. The estimates below are
preliminary and are subject to change.
Liberty Puerto Rico
- We currently estimate that more than
$100 million of property and equipment additions would be required
to restore 100% of Liberty Puerto Rico’s broadband communications
network
- We currently estimate that the effects
of the hurricanes (before considering any insurance recoveries)
will negatively impact Liberty Puerto Rico’s revenue by between $80
million to $100 million and OCF by between $60 million to $80
million during the fourth quarter of 2017 and will result in
negative OCF for that quarter
Cable & Wireless
- We currently estimate that more than
$50 million of property and equipment additions would be required
to restore 100% of the damaged networks in the impacted C&W
markets
- We currently estimate that the effects
of the hurricanes (before considering any insurance recoveries)
will negatively impact C&W’s revenue and OCF between $15
million to $25 million during the fourth quarter of 2017
LiLAC Insurance Program
- We maintain an integrated group
property and business interruption insurance program covering all
impacted markets up to a limit of $75 million per occurrence, which
is generally subject to approximately $15 million per occurrence of
self-insurance
- Although we are in the early stages of
assessing the alternatives under our insurance policy, we currently
believe that the hurricanes will result in at least two
occurrences. This policy is subject to the normal terms and
conditions applicable to this type of insurance. We expect that the
insurance recovery will only cover a portion of the incurred losses
of each of our impacted businesses
- We have not recognized any potential
insurance proceeds related to the hurricane losses, and we do not
currently expect to receive any significant reimbursements in
2017
Forward-Looking Statements and Disclaimer
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements with respect to our strategies, future
growth prospects and opportunities; our expectations with respect
to subscribers, revenue, ARPU per RGU, OCF and Adjusted FCF;
statements regarding the impact of Hurricanes Irma and Maria on our
operations in the Caribbean, our plans regarding the markets
impacted by the hurricanes, the time it will take to restore
services in the markets impacted by the hurricanes and the amount
and timing of insurance proceeds; expectations with respect to the
development, enhancement and expansion of our superior networks and
innovative and advanced products and services; statements regarding
our planned split-off of the businesses attributed to the LiLAC
Group and the anticipated impacts and benefits of such transaction;
future P&E additions as a percentage of revenue; expectations
regarding our share buyback programs; the strength of our balance
sheet and tenor of our third-party debt; 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 events
that are outside of our control, such as hurricanes and other
natural disasters, the continued use by subscribers and potential
subscribers of our and our affiliates’ services and their
willingness to upgrade to our more advanced offerings; our and our
affiliates’ ability to meet challenges from competition, to manage
rapid technological change or to maintain or increase rates to
subscribers or to pass through increased costs to subscribers; the
effects of changes in laws or regulation; general economic factors;
our and our affiliates’ ability to obtain regulatory approval and
satisfy regulatory conditions associated with acquisitions and
dispositions; our and affiliates’ ability to successfully acquire
and integrate new businesses and realize anticipated efficiencies
from acquired businesses; the availability of attractive
programming for our and our affiliates’ video services and the
costs associated with such programming; our and our affiliates’
ability to achieve forecasted financial and operating targets; the
outcome of any pending or threatened litigation; the ability of our
operating companies and affiliates to access cash of their
respective subsidiaries; the impact of our operating companies' and
affiliates’ future financial performance, or market conditions
generally, on the availability, terms and deployment of capital;
fluctuations in currency exchange and interest rates; the ability
of suppliers and vendors (including our third-party wireless
network providers under our MVNO arrangements) to timely deliver
quality products, equipment, software, services and access; our and
our affiliates’ ability to adequately forecast and plan future
network requirements including the costs and benefits associated
with network expansions; and other factors detailed from time to
time in our filings with the Securities and Exchange Commission,
including our most recently filed Form 10-K, as amended, and Form
10-Q. These forward-looking statements speak only as of the date of
this release. We expressly disclaim any obligation or undertaking
to disseminate any updates or revisions to any forward-looking
statement contained herein to reflect any change in our
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is
based.
Nothing in this press release constitutes an offer of any
securities for sale.
Footnotes
1 The Liberty Global ordinary shares and the LiLAC ordinary
shares are tracking shares. Tracking shares are intended by the
issuing company to reflect or “track” the economic performance of a
particular business or “group,” rather than the economic
performance of the company as a whole. The Liberty Global ordinary
shares and the LiLAC ordinary shares are intended to “track” the
economic performance of the Liberty Global Group and the LiLAC
Group, respectively (each as defined and described below). For more
information regarding the tracking shares, see note 1 to our
condensed consolidated financial statements included in our Form
10-Q. While the LiLAC Group and the Liberty Global Group have
separate collections of businesses, assets and liabilities
attributed to them, neither group is a separate legal entity. The
LiLAC Group comprises our operations in Latin America and the
Caribbean and has attributed to it C&W, VTR and Liberty Puerto
Rico. The Liberty Global Group comprises our businesses, assets and
liabilities not attributed to the LiLAC Group, including Virgin
Media, Unitymedia, UPC Holding, Telenet, our 50% interest in the
VodafoneZiggo JV (from December 31, 2016) and Ziggo Group Holding
(up to December 31, 2016). The condensed consolidated financial
statements of Liberty Global are included in our Form 10-Q. For
attributed financial information of the Liberty Global Group and
the LiLAC Group, see Exhibit 99.1 to our Form 10-Q. 2 Total B2B
includes subscription (SOHO) and non-subscription revenue. 3 The
indicated growth rates are rebased for acquisitions, dispositions
and FX. Please see Revenue and Operating Cash Flow for information
on rebased growth. 4 Please see OCF Definition and Reconciliation
for our Operating Cash Flow ("OCF") definition and the required
reconciliations. 5 The Liberty Latin America and Caribbean
("LiLAC") B shares trade on the Over-the-Counter ("OTC") market. 6
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. 7 As we no longer
consolidate the Netherlands effective December 31, 2016, we have
removed the Netherlands from certain information presented for
periods prior to December 31, 2016 to enhance comparability. 8 NPS
stands for Net Promoter Score. 9 Average Revenue Per Unit (“ARPU”)
refers to the average monthly subscription revenue (subscription
revenue excludes interconnect, channel carriage fees, mobile
handset sales, late fees and installation fees) per average
customer relationship or mobile subscriber, as applicable. ARPU per
average customer relationship is calculated by dividing the average
monthly subscription revenue from residential cable and SOHO
services by the average of the opening and closing balances for
customer relationships for the period. ARPU per average mobile
subscriber is calculated by dividing residential mobile and SOHO
revenue for the indicated period by the average of the opening and
closing balances for mobile subscribers for the period. Unless
otherwise indicated, ARPU per customer relationship or mobile
subscriber is not adjusted for currency impacts. ARPU per RGU
refers to average monthly revenue per average RGU, which is
calculated by dividing the average monthly subscription revenue
from residential and SOHO services for the indicated period, by the
average of the opening and closing balances of the applicable RGUs
for the period. Unless otherwise noted, ARPU in this release is
considered to be ARPU per average customer relationship or mobile
subscriber, as applicable. Customer relationships, mobile
subscribers and RGUs of entities acquired during the period are
normalized. 10 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.
11 Our residential fixed business consists of our fixed-line
triple-play and DTH businesses, but excludes SOHO services.
Residential fixed also excludes the framework services revenue from
the VodafoneZiggo JV and our small Irish broadcasting businesses.
12 Liquidity refers to cash and cash equivalents plus the maximum
undrawn commitments under subsidiary borrowing facilities, without
regard to covenant compliance calculations. 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. 14 Our
blended fully-swapped debt borrowing cost represents the weighted
average interest rate on our aggregate variable- and fixed-rate
indebtedness (excluding capital leases and including vendor
financing obligations), including the effects of derivative
instruments, original issue premiums or discounts and commitment
fees, but excluding the impact of financing costs. 15 Please see
Adjusted Free Cash Flow Definition and Reconciliation for
information on Adjusted Free Cash Flow (“FCF”) and the required
reconciliations. For more detailed information concerning our
operating, investing and financing cash flows, see the condensed
consolidated statements of cash flows included in our Form 10-Q. 16
Our aggregate unused borrowing capacity of $4.2 billion represents
the maximum undrawn commitments under our subsidiaries' applicable
facilities without regard to covenant compliance calculations. This
consists of $3.2 billion attributed to the Liberty Global Group and
$1.0 billion attributed to the LiLAC Group. Upon completion of the
relevant September 30, 2017 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 $4.1 billion. This consists of $3.1
billion attributed to the Liberty Global Group and $1.0 billion
attributed to the LiLAC Group. LiLAC cash of $531 million includes
$286 million of cash held by C&W, substantially all of which is
held by C&W subsidiaries. For information regarding limitations
on C&W's ability to access this cash, see the discussion under
"Material Changes in Financial Condition" in our Form 10-Q. 17
United States Generally Accepted Accounting Principles. 18 Please
see Footnotes for Operating Data and Subscriber Variance Tables for
the definition of mobile subscribers. 19 On February 11, 2016,
Telenet acquired Telenet Group BVBA ("BASE"). 20 OCF margin is
calculated by dividing OCF by total revenue for the applicable
period. 21 For purposes of calculating our average tenor, total
third-party debt excludes vendor financing.
Balance Sheets, Statements of Operations and Statements of
Cash Flows
The consolidated balance sheets, statements of operations and
statements of cash flows of Liberty Global are included in our
10-Q. For attributed financial information of the Liberty Global
Group and the LiLAC Group, see Exhibit 99.1 to our 10-Q.
Rebase Information
For purposes of calculating rebased growth rates on a comparable
basis for all businesses that we owned during 2017, we have
adjusted our historical revenue and OCF for the three and nine
months ended September 30, 2016 to (i) include the pre-acquisition
revenue and OCF of certain entities acquired during 2016 and 2017
in our rebased amounts for the three and nine months ended
September 30, 2016 to the same extent that the revenue and OCF of
such entities are included in our results for the three and nine
months ended September 30, 2017, (ii) exclude the revenue and OCF
of Ziggo Group Holding and a sports channel that were contributed
to the VodafoneZiggo JV at the end of December 31, 2016, (iii)
include revenue for the framework services agreement with the
VodafoneZiggo JV and certain associated operating and SG&A
expenses that had been allocated to our Netherlands segment during
the 2016 periods in our rebased amounts for the three and nine
months ended September 30, 2016 as if the framework services
agreement had been in place at the beginning of 2016, (iv) exclude
the revenue and OCF of multi-channel multi-point (microwave)
distribution system subscribers in Ireland that have disconnected
since we announced the switch-off of this service effective April
2016 for the nine months ended September 30, 2016 to the same
extent that the revenue and OCF of these subscribers is excluded
from our results for the nine months ended September 30, 2017 (v)
exclude the revenue and OCF of two small disposals made in Belgium
during Q1 2017 to the same extent that the revenue and OCF of these
disposed businesses is excluded from our results for the three and
nine months ended September 30, 2017 and (vi) reflect the
translation of our rebased amounts for the three and nine months
ended September 30, 2016 at the applicable average foreign currency
exchange rates that were used to translate our results for the
three and nine months ended September 30, 2017. We have included
SFR and five small entities in whole or in part in the
determination of our rebased revenue and OCF for the three months
ended September 30, 2016. We have included C&W, SFR, BASE and
five small entities in whole or in part in the determination of our
rebased revenue and OCF for the nine months ended September 30,
2016. We have reflected the revenue and OCF of the acquired
entities in our 2016 rebased amounts based on what we believe to be
the most reliable information that is currently available to us
(generally pre-acquisition financial statements), as adjusted for
the estimated effects of (a) any significant differences between
U.S. GAAP and local generally accepted accounting principles, (b)
any significant effects of acquisition accounting adjustments, (c)
any significant differences between our accounting policies and
those of the acquired entities and (d) other items we deem
appropriate. We do not adjust pre-acquisition periods to eliminate
nonrecurring items or to give retroactive effect to any changes in
estimates that might be implemented during post-acquisition
periods. As we did not own or operate the acquired businesses
during the pre-acquisition periods, no assurance can be given that
we have identified all adjustments necessary to present the revenue
and OCF of these entities on a basis that is comparable to the
corresponding post-acquisition amounts that are included in our
historical results or that the pre-acquisition financial statements
we have relied upon do not contain undetected errors. The
adjustments reflected in our rebased amounts have not been prepared
with a view towards complying with Article 11 of Regulation S-X. In
addition, the rebased growth percentages are not necessarily
indicative of the revenue and OCF that would have occurred if these
transactions had occurred on the dates assumed for purposes of
calculating our rebased amounts or the revenue and OCF that will
occur in the future. The rebased growth percentages have been
presented as a basis for assessing growth rates on a comparable
basis, and are not presented as a measure of our pro forma
financial performance.
The following table provides adjustments made to the 2016
amounts to derive our rebased growth rates for the Liberty Global
Group and the LiLAC Group:
Revenue OCF
Three months endedSeptember
30,
Nine months endedSeptember
30,
Three months endedSeptember
30,
Nine months endedSeptember 30,
2016 2016 2016 2016 Liberty Global
Group in millions Acquisitions $ 66.6 $ 233.6 $ 36.7 $
102.7 Contribution of Ziggo Group Holding to the VodafoneZiggo JV
and other dispositions (a) (695.4 ) (2,067.2 ) (377.2 ) (1,115.7 )
Foreign Currency 99.2 (402.1 ) 47.4 (171.3 ) Total
decrease $ (529.6 ) $ (2,235.7 ) $ (293.1 ) $ (1,184.3 )
LiLAC Group Acquisitions $ 6.0 $ 908.5 $ 2.1 $ 370.9 Foreign
Currency 4.5 12.3 2.0 4.9
Total increase
$ 10.5 $ 920.8 $ 4.1 $ 375.8
______________________________
(a) In connection with the December 31, 2016 closing of the
VodafoneZiggo JV transaction, we entered into a framework services
agreement that provides for the terms under which we provide
services to the VodafoneZiggo JV. These adjustments to revenue and
OCF are net of $34 million and $97 million of revenue for Q3 and
YTD 2016, respectively, that we assumed would have been earned if
the framework services agreement had been in place on January 1,
2016.
OCF Definition and Reconciliation
As used herein, OCF has the same meaning as the term "Adjusted
OIBDA" that is referenced in our Form 10-Q. OCF is the primary
measure used by our chief operating decision maker to evaluate
segment operating performance. OCF is also a key factor that is
used by our internal decision makers to (i) determine how to
allocate resources to segments and (ii) evaluate the effectiveness
of our management for purposes of annual and other incentive
compensation plans. As we use the term, OCF is defined as operating
income before depreciation and amortization, share-based
compensation, provisions and provision releases related to
significant litigation and impairment, restructuring and other
operating items. Other operating items include (a) gains and
losses on the disposition of long-lived assets, (b) third-party
costs directly associated with successful and unsuccessful
acquisitions and dispositions, including legal, advisory and due
diligence fees, as applicable, and (c) other acquisition-related
items, such as gains and losses on the settlement of contingent
consideration. Our internal decision makers believe OCF is a
meaningful measure because it represents a transparent view of our
recurring operating performance that is unaffected by our capital
structure and allows management to (1) readily view operating
trends, (2) perform analytical comparisons and benchmarking between
segments and (3) identify strategies to improve operating
performance in the different countries in which we operate. We
believe our OCF measure is useful to investors because it is one of
the bases for comparing our performance with the performance of
other companies in the same or similar industries, although our
measure may not be directly comparable to similar measures used by
other public companies. OCF should be viewed as a measure of
operating performance that is a supplement to, and not a substitute
for, operating income, net earnings or loss, cash flow from
operating activities and other U.S. GAAP measures of income or cash
flows. A reconciliation of our operating income to total
segment OCF is presented in the following table:
Three months ended Nine
months ended September 30, September 30,
2017 2016 2017
2016 in millions Consolidated Liberty Global
Operating income $ 335.8 $ 902.7 $ 1,546.9 $ 1,977.1 Share-based
compensation expense 26.5 62.8 121.9 206.4 Depreciation and
amortization 1,416.2 1,416.9 4,109.8 4,405.4 Impairment,
restructuring and other operating items, net 416.6 32.2
476.4 246.9 Total segment OCF $ 2,195.1
$ 2,414.6 $ 6,255.0 $ 6,835.8
Liberty Global Group Operating income $ 537.3 $ 763.9 $
1,451.7 $ 1,799.2 Share-based compensation expense 23.2 57.1 110.0
195.7 Inter-group fees and allocations (3.0 ) (2.2 ) (9.0 ) (6.4 )
Depreciation and amortization 1,216.5 1,216.2 3,523.3 4,026.3
Impairment, restructuring and other operating items, net 61.7
25.0 97.7 113.4 Total segment OCF $
1,835.7 $ 2,060.0 $ 5,173.7 $ 6,128.2
LiLAC Group Operating income (loss) $ (201.5 ) $
138.8 $ 95.2 $ 177.9 Share-based compensation expense 3.3 5.7 11.9
10.7 Inter-group fees and allocations 3.0 2.2 9.0 6.4 Depreciation
and amortization 199.7 200.7 586.5 379.1 Impairment, restructuring
and other operating items, net 354.9 7.2 378.7
133.5 Total segment OCF $ 359.4 $ 354.6 $
1,081.3 $ 707.6
Summary of Debt, Capital Lease Obligations & 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 September 30,
2017:
Capital Debt
& Capital Cash Lease
Lease and Cash Debt2 Obligations
Obligations Equivalents in millions Liberty
Global and Liberty Global Group unrestricted subsidiaries $ 2,344.7
$ 70.5 $ 2,415.2 $ 1,456.5 Virgin Media3 16,858.2 78.3 16,936.5
57.1 UPC Holding 7,295.4 95.9 7,391.3 20.1 Unitymedia 8,771.7 715.1
9,486.8 1.7 Telenet 5,232.2 437.9 5,670.1 43.7
Total Liberty Global Group 40,502.2 1,397.7 41,899.9
1,579.1 LiLAC Group unrestricted subsidiaries — — — 40.6
C&W 3,917.8 18.0 3,935.8 285.6 VTR Finance 1,487.2 0.8 1,488.0
158.8 Liberty Puerto Rico 942.5 — 942.5 46.0
Total LiLAC Group 6,347.5 18.8 6,366.3 531.0
Total $ 46,849.7 $ 1,416.5 $ 48,266.2 $
2,110.1
Property and Equipment Additions and Capital
Expenditures
The tables below highlight the categories of the property and
equipment additions attributed to the Liberty Global Group and the
LiLAC Group for the indicated periods and reconcile those additions
to the capital expenditures that are presented in the attributed
statement of cash flows information included in Exhibit 99.1 to our
10-Q.
Liberty Global Group
Three months ended Nine
months ended September 30, September 30,
2017 2016 2017
2016 in millions, except % amounts Customer premises
equipment $ 302.9 $ 207.3 $ 903.1 $ 673.4 New Build & Upgrade
323.7 218.8 819.0 573.4 Capacity 173.2 137.7 452.8 403.8 Baseline
291.7 208.4 648.9 602.1 Product & Enablers 196.7 175.4
552.6 435.7 Property and equipment additions
(excluding the Netherlands) 1,288.2 947.6 3,376.4 2,688.4 The
Netherlands — 138.0 — 421.2 Total
property and equipment additions 1,288.2 1,085.6 3,376.4 3,109.6
Reconciliation of property and equipment additions to capital
expenditures: Excluding the Netherlands: Assets acquired under
capital-related vendor financing arrangements4 (655.6 ) (424.5 )
(1,934.1 ) (1,247.1 ) Assets acquired under capital leases (31.9 )
(31.4 ) (135.8 ) (73.0 ) Changes in current liabilities related to
capital expenditures (167.9 ) (59.6 ) 70.9 (31.1 ) The Netherlands
— (62.1 ) — (155.9 ) Total capital expenditures5 $
432.8 $ 508.0 $ 1,377.4 $ 1,602.5
Property and equipment additions as % of revenue (excluding
the Netherlands) 33.2 % 26.1 % 30.5 % 24.4 %
LiLAC Group
Three months ended Nine
months ended September 30, September 30,
2017 2016 2017
2016 in millions, except % amounts Customer premises
equipment $ 32.6 $ 38.4 $ 114.2 $ 110.1 New Build & Upgrade
12.8 10.3 39.4 34.8 Capacity 7.3 8.2 25.0 30.5 Baseline 10.0 8.5
26.3 30.8 Product & Enablers 11.0 3.4 18.0 13.9 C&W P&E
Additions 119.7 91.3 280.6 144.9
Property and equipment additions 193.4 160.1 503.5 365.0 Assets
acquired under capital-related vendor financing arrangements (13.0
) (16.7 ) (47.2 ) (33.7 ) Assets acquired under capital leases (1.2
) (4.8 ) (3.7 ) (5.0 ) Changes in current liabilities and cash
derivatives related to capital expenditures 20.0 22.3
(5.1 ) 16.2 Capital expenditures $ 199.2 $ 160.9
$ 447.5 $ 342.5 Property and equipment
additions as % of revenue 21.3 % 17.9 % 18.4 % 20.3 %
______________________________
1 Except as otherwise indicated, the amounts reported in the
table include the named entity and its subsidiaries. 2 Debt amounts
for UPC Holding, Telenet and C&W include notes issued by
special purpose entities that are consolidated by the respective
subsidiary.
3
The Virgin Media borrowing group includes certain subsidiaries of
Virgin Media, but excludes Virgin Media Inc. The cash and cash
equivalents amount includes cash and cash equivalents held by the
Virgin Media borrowing group, but excludes cash and cash
equivalents held by Virgin Media Inc. This amount is included in
the amount shown for Liberty Global and Liberty Global Group
unrestricted subsidiaries. 4 Amounts exclude related VAT of $110
million and $64 million during the three months ended September 30,
2017 and 2016, respectively, and $311 million and $193 million
during the nine months ended September 30, 2017 and 2016,
respectively, that were also financed by our vendors under these
arrangements. 5 The capital expenditures that we report in our
condensed consolidated statements of cash flows do not include
amounts that are financed under vendor financing or capital lease
arrangements. Instead, these expenditures are reflected as non-cash
additions to our property and equipment when the underlying assets
are delivered, and as repayments of debt when the related principal
is repaid.
Adjusted Free Cash Flow Definition and Reconciliation
We define Adjusted Free Cash Flow as net cash provided by our
operating activities, plus (i) cash payments for third-party costs
directly associated with successful and unsuccessful acquisitions
and dispositions and (ii) expenses financed by an intermediary,
less (a) capital expenditures, as reported in our consolidated
statements of cash flows, (b) principal payments on amounts
financed by vendors and intermediaries and (c) principal payments
on capital leases (exclusive of the portions of the network lease
in Belgium and the duct leases in Germany that we assumed in
connection with certain acquisitions), with each item excluding any
cash provided or used by our discontinued operations. We believe
that our presentation of Adjusted Free Cash Flow provides useful
information to our investors because this measure can be used to
gauge our ability to service debt and fund new investment
opportunities. Adjusted Free Cash Flow should not be understood to
represent our ability to fund discretionary amounts, as we have
various mandatory and contractual obligations, including debt
repayments, which are not deducted to arrive at this amount.
Investors should view Adjusted Free Cash Flow as a supplement to,
and not a substitute for, U.S. GAAP measures of liquidity included
in our consolidated statements of cash flows. We changed our
definition of adjusted free cash flow effective January 1, 2017 to
remove the add-back of excess tax benefits from share-based
compensation. This change, which was given effect for all periods
presented, was made to accommodate our January 1, 2017 adoption of
ASU 2016-09, Compensation - Stock Compensation, Improvements to
Employee Share-Based Payment Accounting, pursuant to which we
retrospectively revised the presentation of our condensed
consolidated statements of cash flows to remove the operating cash
outflows and financing cash inflows associated with excess tax
benefits from share-based compensation. The following table
provides the reconciliation of our net cash provided by operating
activities to Adjusted Free Cash Flow for the indicated
periods:
Three months ended Nine
months ended September 30, September 30,
2017 2016 2017
2016 in millions Consolidated Liberty Global
Net cash provided by operating activities $ 1,322.2 $ 1,375.7 $
4,033.1 $ 4,045.5 Cash payments for direct acquisition and
disposition costs 2.2 3.5 9.7 89.5 Expenses financed by an
intermediary6 432.0 213.8 1,124.0 607.0 Capital expenditures (632.0
) (668.9 ) (1,824.9 ) (1,945.0 ) Principal payments on amounts
financed by vendors and intermediaries (493.6 ) (375.3 ) (2,614.9 )
(1,796.2 ) Principal payments on certain capital leases (25.7 )
(29.8 ) (73.4 ) (85.7 ) Adjusted FCF $ 605.1 $ 519.0
$ 653.6 $ 915.1
Liberty Global Group
Net cash provided by operating activities $ 1,228.5 $ 1,254.0 $
3,640.0 $ 3,818.0 Cash payments for direct acquisition and
disposition costs 0.9 1.9 6.9 26.8 Expenses financed by an
intermediary 422.5 212.7 1,067.1 605.9 Capital expenditures (432.8
) (508.0 ) (1,377.4 ) (1,602.5 ) Principal payments on amounts
financed by vendors and intermediaries (481.5 ) (375.3 ) (2,562.8 )
(1,796.2 ) Principal payments on certain capital leases (23.0 )
(27.0 ) (66.7 ) (82.2 ) Adjusted FCF $ 714.6 $ 558.3
$ 707.1 $ 969.8
LiLAC Group Net cash
provided by operating activities $ 93.7 $ 121.7 $ 393.1 $ 227.5
Cash payments for direct acquisition and disposition costs 1.3 1.6
2.8 62.7 Expenses financed by an intermediary 9.5 1.1 56.9 1.1
Capital expenditures (199.2 ) (160.9 ) (447.5 ) (342.5 ) Principal
payments on amounts financed by vendors and intermediaries (12.1 )
— (52.1 ) — Principal payments on certain capital leases (2.7 )
(2.8 ) (6.7 ) (3.5 ) Adjusted FCF $ (109.5 ) $ (39.3 ) $ (53.5 ) $
(54.7 )
________________________________
6
For purposes of our consolidated
statements of cash flows, expenses financed by an intermediary are
treated as hypothetical operating cash outflows and hypothetical
financing cash inflows when the expenses are incurred. When we pay
the financing intermediary, we record financing cash outflows in
our consolidated statements of cash flows. For purposes of our
Adjusted Free Cash Flow definition, we add back the hypothetical
operating cash outflow when these financed expenses are incurred
and deduct the financing cash outflows when we pay the financing
intermediary.
ARPU per Customer Relationship
The following table provides ARPU per customer relationship for
the indicated periods:
Three months ended September 30,
% FX-Neutral7 2017
2016 Change % Change Liberty
Global Consolidated (excluding the Netherlands)8,9 $ 44.09 $ 42.44
3.9 % 1.2 % Liberty Global Group (excluding the Netherlands) €
36.64 € 37.08 (1.2 %) 1.2 % U.K. & Ireland (Virgin Media) £
49.92 £ 49.90 — % (0.4 %) Germany (Unitymedia) € 25.25 € 24.45 3.3
% 3.3 % Belgium (Telenet) € 54.87 € 53.47 2.6 % 2.6 % Other Europe
(UPC Holding) € 26.34 € 26.96 (2.3 %) (1.1 %) LiLAC Group8,9 $
52.56 $ 50.90 3.3 % 1.8 % Chile (VTR) CLP 33,630 CLP 33,670 (0.1 %)
(0.1 %) C&W8 $ 42.12 $ 40.38 4.3 % 5.0 % Puerto Rico9 $ 77.74 $
78.12 (0.5 %) (0.5 %)
___________________________
7 The FX-neutral change represents the percentage change on
a year-over-year basis adjusted for FX impacts and is calculated by
adjusting the prior-year figures to reflect translation at the
foreign currency rates used to translate the current year amounts.
8 As a part of our ongoing effort to conform C&W's subscriber
counting policies to our policies, we have reflected nonorganic
reductions totaling 201,600 to C&W's customer count during the
twelve months ended September 30, 2017. In order to provide a more
meaningful comparison of ARPU, we have reflected all of these
nonorganic reductions in the customer figures used to calculate
ARPU for the three months ended September 30, 2017 and 2016. 9 In
order to provide a more meaningful comparison of ARPU, the ARPU for
the three months ended September 30, 2017 for Puerto Rico is based
on the pre-hurricane results through August 31, 2017 only.
Mobile ARPU
The following tables provide ARPU per mobile subscriber10 for
the indicated periods:
ARPU per Mobile Subscriber Three months
ended September 30, %
FX-Neutral 2017 2016
Change % Change Liberty Global Group: Including
interconnect revenue $ 19.49 $ 19.12 1.9 % (1.0 %) Excluding
interconnect revenue $ 15.89 $ 15.86 0.2 % (2.6 %) LiLAC
Group8: Including interconnect revenue $ 17.23 $ 17.91 (3.8 %) (3.9
%) Excluding interconnect revenue $ 16.01 $ 16.72 (4.2 %) (4.4 %)
_______________________________
10 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.
Consolidated Operating Data — September 30,
2017 Video
HomesPassed(1)
Two-wayHomesPassed(2)
Fixed-lineCustomerRelationships(3)
BasicVideoSubscribers(5)
EnhancedVideoSubscribers(6)
DTHSubscribers(7)
TotalVideo
InternetSubscribers(8)
TelephonySubscribers(9)
TotalRGUs(4)
TotalMobileSubscribers(11)
U.K. 13,798,600 13,786,800 5,418,200 — 3,822,300 — 3,822,300
5,080,100 4,455,800 13,358,200 2,975,500 Germany 12,956,800
12,856,400 7,176,300 4,723,800 1,653,900 — 6,377,700 3,430,800
3,204,800 13,013,300 333,600 Belgium/Luxembourg 3,307,100 3,307,100
2,201,800 255,700 1,791,200 — 2,046,900 1,670,400 1,302,500
5,019,800 2,882,100 Switzerland(10) 2,268,600 2,268,600 1,260,200
542,500 679,800 — 1,222,300 754,800 532,900 2,510,000 105,000
Austria 1,404,300 1,404,300 654,000 95,200 372,600 — 467,800
512,500 450,200 1,430,500 55,700 Ireland 880,400 838,700
455,600 26,400 270,900 — 297,300
371,400 358,200 1,026,900 44,400 Total
Western Europe 34,615,800 34,461,900 17,166,100
5,643,600 8,590,700 — 14,234,300
11,820,000 10,304,400 36,358,700 6,396,300
Poland 3,262,700 3,203,900 1,426,400 192,300 1,016,500 — 1,208,800
1,123,000 626,500 2,958,300 4,300 Romania 3,051,500 3,008,100
1,321,900 263,800 663,400 355,100 1,282,300 568,700 519,600
2,370,600 — Hungary 1,764,400 1,746,900 1,109,200 100,600 577,000
269,900 947,500 664,900 621,700 2,234,100 81,400 Czech Republic
1,515,900 1,482,700 715,900 165,600 355,700 102,200 623,500 492,100
152,700 1,268,300 — Slovakia 600,800 581,200 269,200
25,700 138,600 75,800 240,100
128,300 76,800 445,200 — Total CEE 10,195,300
10,022,800 4,842,600 748,000 2,751,200
803,000 4,302,200 2,977,000 1,997,300
9,276,500 85,700
Total Liberty Global Group
44,811,100 44,484,700 22,008,700
6,391,600 11,341,900
803,000 18,536,500 14,797,000
12,301,700 45,635,200
6,482,000 Chile 3,360,700 2,868,100 1,395,300 69,900
998,800 — 1,068,700 1,164,500 640,500 2,873,700 206,200 Puerto
Rico(12) 1,106,900 1,106,900 408,200 — 255,000 — 255,000 337,800
210,700 803,500 — Panama 535,100 510,200 186,600 — 45,600 34,000
79,600 105,100 127,100 311,800 1,743,200 Jamaica 433,500 423,500
262,500 — 97,200 — 97,200 153,700 206,600 457,500 930,500 Trinidad
315,100 315,100 157,200 — 108,300 — 108,300 123,400 46,400 278,100
— Barbados 123,700 123,700 85,000 — 16,800 — 16,800 60,800 74,500
152,100 124,300 Bahamas 128,900 128,900 49,500 — 5,900 — 5,900
26,200 49,500 81,600 266,100 Other C&W(12) 359,000
339,200 206,900 11,300 67,500 —
78,800 124,800 106,100 309,700 394,300
Total LiLAC Group 6,362,900 5,815,600
2,751,200 81,200
1,595,100 34,000 1,710,300
2,096,300 1,461,400
5,268,000 3,664,600 Grand Total
51,174,000 50,300,300 24,759,900
6,472,800 12,937,000
837,000 20,246,800 16,893,300
13,763,100 50,903,200
10,146,600 Subscriber Variance Table -
September 30, 2017 vs June 30, 2017
Video
HomesPassed(1)
Two-wayHomesPassed(2)
Fixed-lineCustomerRelationships(3)
BasicVideo
Subscribers(5)
EnhancedVideoSubscribers(6)
DTHSubscribers(7)
TotalVideo
InternetSubscribers(8)
TelephonySubscribers(9)
TotalRGUs(4)
TotalMobileSubscribers(11)
U.K. 123,000 123,300 45,200 — 12,500 — 12,500 51,800 18,700
83,000 (20,100 ) Germany 21,200 25,300 1,300 (32,900 ) 21,100 —
(11,800 ) 41,300 38,600 68,100 (6,800 ) Belgium/Luxembourg (20,900
) (20,900 ) (10,600 ) (9,800 ) (5,300 ) — (15,100 ) 2,000 (1,500 )
(14,600 ) 43,400 Switzerland(10) 12,700 12,700 (11,200 ) (18,400 )
7,900 — (10,500 ) 2,200 8,600 300 12,500 Austria 5,300 5,300 1,600
(4,400 ) 100 — (4,300 ) 4,000 8,500 8,200 8,500 Ireland 14,500
16,000 3,500 (1,100 ) 1,900 —
800 5,300 3,300 9,400 3,900
Total Western Europe 155,800 161,700 29,800
(66,600 ) 38,200 — (28,400 ) 106,600 76,200
154,400 41,400 Poland 38,600 39,900 (2,800 )
(5,900 ) 2,600 — (3,300 ) 5,500 (1,400 ) 800 (300 ) Romania 66,700
67,300 24,800 9,700 8,500 3,000 21,200 15,000 16,400 52,600 —
Hungary 15,900 15,900 (2,000 ) (8,800 ) 13,300 (8,000 ) (3,500 )
10,300 16,600 23,400 6,700 Czech Republic 17,200 17,300 300 6,100
400 (2,900 ) 3,600 5,700 — 9,300 — Slovakia 4,700 4,700
300 400 200 (400 ) 200 1,300
(400 ) 1,100 — Total CEE 143,100
145,100 20,600 1,500 25,000 (8,300 )
18,200 37,800 31,200 87,200 6,400
Total Liberty Global Group
298,900 306,800 50,400 (65,100 ) 63,200
(8,300 ) (10,200 ) 144,400 107,400 241,600
47,800 Chile 41,400 50,900 19,800 (3,100 ) 6,700 —
3,600 21,100 (5,700 ) 19,000 13,200 Puerto Rico(12) 3,300 3,300
2,300 — (3,700 ) — (3,700 ) 3,600 400 300 — Panama 6,700 38,100
(1,000 ) — 400 (2,200 ) (1,800 ) 3,800 2,600 4,600 (22,100 )
Jamaica 7,000 7,000 1,300 — 2,000 — 2,000 5,500 10,400 17,900
(3,400 ) Trinidad 2,200 2,200 (3,900 ) — (3,300 ) — (3,300 ) —
8,400 5,100 — Barbados 600 600 (12,400 ) — (600 ) — (600 ) (1,100 )
(3,100 ) (4,800 ) (1,300 ) Bahamas — — (2,500 ) — 400 — 400 (1,000
) (2,500 ) (3,100 ) (19,100 ) Other C&W(12) 2,700 2,700
200 — (500 ) — (500 ) 2,800
(1,800 ) 500 3,000 Total LiLAC Group 63,900
104,800 3,800 (3,100 ) 1,400 (2,200 ) (3,900 )
34,700 8,700 39,500 (29,700 )
Grand
Total 362,800 411,600 54,200
(68,200 ) 64,600 (10,500
) (14,100 ) 179,100
116,100 281,100 18,100
Continued below Subscriber Variance
Table - September 30, 2017 vs June 30, 2017
Video
HomesPassed(1)
Two-wayHomes
Passed(2)
Fixed-lineCustomer
Relationships(3)
BasicVideo
Subscribers(5)
EnhancedVideo
Subscribers(6)
DTH Subscribers(7)
TotalVideo Internet
Subscribers(8) Telephony
Subscribers(9) Total RGUs(4)
TotalMobile
Subscribers(11)
Organic Change
Summary:
U.K. 123,000 123,300 45,200 — 12,500 — 12,500 51,800 18,700 83,000
(20,100 ) Germany 21,200 25,300 1,300 (32,900 ) 21,100 — (11,800 )
41,300 38,600 68,100 (6,800 ) Belgium/Luxembourg 8,500 8,500
(10,600 ) (9,800 ) (5,300 ) — (15,100 ) 2,000 (1,500 ) (14,600 )
43,400 Other Europe 153,600 157,100 (6,400 ) (36,200
) 28,100 (8,300 ) (16,400 ) 37,800 46,500
67,900 31,300
Total Liberty Global Group
306,300 314,200 29,500
(78,900 ) 56,400 (8,300 )
(30,800 ) 132,900 102,300
204,400 47,800 Chile 41,400 50,900
19,800 (3,100 ) 6,700 — 3,600 21,100 (5,700 ) 19,000 13,200 Puerto
Rico(12) 3,300 3,300 2,300 — (3,700 ) — (3,700 ) 3,600 400 300 —
Panama 6,700 38,100 (1,000 ) — 400 (2,200 ) (1,800 ) 3,800 2,600
4,600 (22,100 ) Jamaica 7,000 7,000 1,300 — 2,000 — 2,000 5,500
10,400 17,900 (3,400 ) Trinidad 2,200 2,200 (3,900 ) — (3,300 ) —
(3,300 ) — 8,400 5,100 — Barbados 600 600 (12,400 ) — (600 ) — (600
) (1,100 ) (3,100 ) (4,800 ) (1,300 ) Bahamas — — (2,500 ) — 400 —
400 (1,000 ) (2,500 ) (3,100 ) (19,100 ) Other C&W(12) 2,700
2,700 200 — (500 ) — (500 )
2,800 (1,800 ) 500 3,000
Total LiLAC
Group 63,900 104,800 3,800
(3,100 ) 1,400 (2,200
) (3,900 ) 34,700 8,700
39,500 (29,700 ) Total Organic
Change 370,200 419,000 33,300 (82,000 ) 57,800
(10,500 ) (34,700 ) 167,600 111,000 243,900
18,100
Q3 2017
Adjustments:
Q3 2017 Acquisition - Switzerland — — 6,000 — 5,800 — 5,800 5,900
4,100 15,800 — Q3 2017 Acquisition - Hungary 2,000 2,000 1,200 100
1,000 — 1,100 800 1,000 2,900 — Q3 2017 Acquisition - Romania
20,000 20,000 13,700 13,700 — — 13,700 4,800 — 18,500 — Q3 2017
Belgium adjustments (29,400 ) (29,400 ) — — —
— — — — — —
Net
Adjustments (7,400 ) (7,400 ) 20,900 13,800 6,800
— 20,600 11,500 5,100 37,200
—
Net Adds (Reductions) 362,800 411,600
54,200 (68,200 ) 64,600 (10,500 ) (14,100 )
179,100 116,100 281,100 18,100
Footnotes for Operating Data and Subscriber Variance Tables
1 Homes Passed are homes, residential multiple dwelling
units or commercial units that can be connected to our networks
without materially extending the distribution plant, except for DTH
homes. Certain of our Homes Passed counts are based on census data
that can change based on either revisions to the data or from new
census results. We do not count homes passed for DTH. Due to the
fact that we do not own the partner networks (defined below) used
in Switzerland (see note 10) we do not report homes passed for
Switzerland’s partner networks. 2 Two-way Homes Passed are Homes
Passed by those sections of our networks that are technologically
capable of providing two-way services, including video, internet
and telephony services. 3 Fixed-line Customer Relationships are the
number of customers who receive at least one of our video, internet
or telephony services that we count as Revenue Generating Units
(“RGUs”), without regard to which or to how many services they
subscribe. To the extent that RGU counts include equivalent billing
unit (“EBU”) adjustments, we reflect corresponding adjustments to
our Customer Relationship counts. For further information regarding
our EBU calculation, see Additional General Notes to Tables.
Customer Relationships generally are counted on a unique premises
basis. Accordingly, if an individual receives our services in two
premises (e.g., a primary home and a vacation home), that
individual generally will count as two Customer Relationships. We
exclude mobile-only customers from Customer Relationships. 4 RGU is
separately a Basic Video Subscriber, Enhanced Video Subscriber, DTH
Subscriber, Internet Subscriber or Telephony Subscriber (each as
defined and described below). A home, residential multiple dwelling
unit, or commercial unit may contain one or more RGUs. For example,
if a residential customer in our Austrian market subscribed to our
enhanced video service, fixed-line telephony service and broadband
internet service, the customer would constitute three RGUs. Total
RGUs is the sum of Basic Video, Enhanced Video, DTH, Internet and
Telephony Subscribers. RGUs generally are counted on a unique
premises basis such that a given premises does not count as more
than one RGU for any given service. On the other hand, if an
individual receives one of our services in two premises (e.g., a
primary home and a vacation home), that individual will count as
two RGUs for that service. Each bundled cable, internet or
telephony service is counted as a separate RGU regardless of the
nature of any bundling discount or promotion. Non-paying
subscribers are counted as subscribers during their free
promotional service period. Some of these subscribers may choose to
disconnect after their free service period. Services offered
without charge on a long-term basis (e.g., VIP subscribers or free
service to employees) generally are not counted as RGUs. We do not
include subscriptions to mobile services in our externally reported
RGU counts. In this regard, our September 30, 2017 RGU counts
exclude our separately reported postpaid and prepaid mobile
subscribers. 5 Basic Video Subscriber is a home, residential
multiple dwelling unit or commercial unit that receives our video
service over our broadband network either via an analog video
signal or via a digital video signal without subscribing to any
recurring monthly service that requires the use of
encryption-enabling technology. Encryption-enabling technology
includes smart cards, or other integrated or virtual technologies
that we use to provide our enhanced service offerings. With the
exception of RGUs that we count on an EBU basis, we count RGUs on a
unique premises basis. In other words, a subscriber with multiple
outlets in one premises is counted as one RGU and a subscriber with
two homes and a subscription to our video service at each home is
counted as two RGUs. In Europe, we have approximately 186,400
“lifeline” customers that are counted on a per connection basis,
representing the least expensive regulated tier of video cable
service, with only a few channels. 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 40,700
digital subscriber line (“DSL”) subscribers within Austria that are
not serviced over our networks. Our Internet Subscribers do not
include customers that receive services from dial-up connections.
In Switzerland, we offer a 2 Mbps internet service to our Basic and
Enhanced Video Subscribers without an incremental recurring fee.
Our Internet Subscribers in Switzerland include 86,500 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 31,300 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
122,900 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 September 30, 2017,
Switzerland’s partner networks account for 139,300 Customer
Relationships, 313,000 RGUs, 112,800 Enhanced Video Subscribers,
115,600 Internet Subscribers, and 84,600 Telephony Subscribers. 11
Our mobile subscriber count represents the number of active
subscriber identification module (“SIM”) cards in service rather
than services provided. For example, if a mobile subscriber has
both a data and voice plan on a smartphone this would equate to one
mobile subscriber. Alternatively, a subscriber who has a voice and
data plan for a mobile handset and a data plan for a laptop (via a
dongle) would be counted as two mobile subscribers. Customers who
do not pay a recurring monthly fee are excluded from our mobile
telephony subscriber counts after periods of inactivity ranging
from 30 to 90 days, based on industry standards within the
respective country. In a number of countries, our mobile
subscribers receive mobile services pursuant to prepaid contracts.
As of September 30, 2017, the prepaid mobile subscriber count
included the following: Panama (1,581,400), Jamaica (911,200),
Belgium (623,300), U.K. (544,700), Bahamas (238,200), Barbados
(96,900), Chile (6,900) and twelve remaining C&W geographies
(336,100). 12 During September 2017, Hurricanes Irma and Maria
caused significant damage to our operations in Puerto Rico, as well
as certain geographies within CWC, including the British Virgin
Islands and Dominica, and to a lesser extent Turks & Caicos,
the Bahamas, Anguilla, Antigua and other smaller markets, resulting
in disruptions to our telecommunications services within these
islands. With the exception of the Bahamas, all of these CWC
markets are included in the “Other LiLAC Group” category in the
accompanying table. The homes passed and subscriber counts for
Puerto Rico, British Virgin Islands, Dominica, Anguilla and Turks
& Caicos reflect the pre-hurricane homes passed and subscriber
counts as of August 31, 2017 as we are still in the process of
assessing the impacts of the hurricanes on our networks and
subscriber counts in these markets. As of October 25, 2017, we
estimate that we have been able to restore services to a small
portion of our fixed-line customers in Puerto Rico, and to less
than half of our aggregate fixed-line customers in the British
Virgin Islands, Dominica, Anguilla and Turks & Caicos. While
mobile services have been largely restored in these markets, we are
still in the process of completing the restoration of our mobile
network infrastructure.
Additional General Notes to
Tables:
Most of our broadband communications subsidiaries provide
telephony, broadband internet, data, video or other B2B services.
Certain of our B2B revenue is derived from small or home office
(“SOHO”) subscribers that pay a premium price to receive enhanced
service levels along with video, internet or telephony services
that are the same or similar to the mass marketed products offered
to our residential subscribers. All mass marketed products provided
to SOHOs, whether or not accompanied by enhanced service levels
and/or premium prices, are included in the respective RGU and
customer counts of our broadband communications operations, with
only those services provided at premium prices considered to be
“SOHO RGUs” or “SOHO customers.” To the extent our existing
customers upgrade from a residential product offering to a SOHO
product offering, the number of SOHO RGUs or SOHO customers will
increase, but there is no impact to our total RGU or customer
counts. Due to system limitations, SOHO customers of C&W are
not included in our respective RGU and customer counts as of
September 30, 2017. With the exception of our B2B SOHO subscribers,
we generally do not count customers of B2B services as customers or
RGUs for external reporting purposes.
Certain of our residential and commercial RGUs are counted on an
EBU basis, including residential multiple dwelling units and
commercial establishments, such as bars, hotels, and hospitals, in
Chile and Puerto Rico and certain commercial and residential
multiple dwelling units in Europe (with the exception of Germany
and Belgium, where we do not count any RGUs on an EBU
basis). Our EBUs are generally calculated by dividing the bulk
price charged to accounts in an area by the most prevalent price
charged to non-bulk residential customers in that market for the
comparable tier of service. As such, we may experience variances in
our EBU counts solely as a result of changes in rates. In Germany,
homes passed reflect the footprint and two-way homes passed reflect
the technological capability of our network up to the street
cabinet, with drops from the street cabinet to the building
generally added, and in-home wiring generally upgraded, on an as
needed or success-based basis. In Belgium, Telenet leases a portion
of its network under a long-term capital lease arrangement. These
tables include operating statistics for Telenet's owned and leased
networks.
While we take appropriate steps to ensure that subscriber
statistics are presented on a consistent and accurate basis at any
given balance sheet date, the variability from country to country
in (i) the nature and pricing of products and services, (ii) the
distribution platform, (iii) billing systems, (iv) bad debt
collection experience and (v) other factors add complexity to the
subscriber counting process. We periodically review our subscriber
counting policies and underlying systems to improve the accuracy
and consistency of the data reported on a prospective basis.
Accordingly, we may from time to time make appropriate adjustments
to our subscriber statistics based on those reviews.
Subscriber information for acquired entities, including C&W,
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/20171101006911/en/
Liberty Global plcInvestor RelationsOskar Nooij,
+1 303 220 4218orChristian Fangmann, +49 221 8462 5151orJohn Rea,
+1 303 220 4238orCorporate CommunicationsMatt Beake, +44 20
8483 6428orRebecca Pike, +44 20 8483 6216www.libertyglobal.com
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