Best quarterly revenue growth in two years driven by
U.K.
Q4 operating income down $187 million & $535 million in
FY '17
Full-year rebased OCF growth of 4.5%, Adj. FCF to $1.6
billion
Announced sale of UPC Austria & completed LatAm
split-off
Announced new $2 billion share repurchase plan for
2018
________________________________________________________________
Q4 2017 REVENUE & YOY GROWTH2$4.0bn |
+2.9%
Q4 2017 OCF & YOY GROWTH2$1.9bn | +4.3%
--------------------------------
2017 REVENUE & YOY GROWTH2$15.0bn | +2.3%
2017 OCF & YOY GROWTH2$7.1bn | +4.5%
NASDAQ:LBTYA | NASDAQ:LBTYB | NASDAQ:LBTYK
Liberty Global plc today announced its Q4 and full-year 2017
financial results1. Please note that as a result of the completion
of the LatAm split-off, the information included in this release
represents our continuing operations, unless otherwise noted.
CEO Mike Fries stated, "We ended 2017 on a high note, as
we delivered our best rebased revenue growth of the year in Q4,
along with 4.5% rebased2 OCF3 growth for the full year and $1.6
billion of Adjusted Free Cash Flow4. These results were driven by
solid performances in Germany and the U.K., together with continued
cost efficiencies from our Liberty GO program."
"Virgin Media, our largest operation, steadily improved
throughout 2017 and posted 5% rebased OCF growth in Q4, its best
performance of the year. We successfully executed the price
increase last November and continued rolling out cutting-edge
products like our WiFi Connect and V6 set-top boxes, which we will
continue to aggressively deploy in 2018. Early last year, we
overhauled Project Lightning and subsequently reported
progressively improved new build totals, including the delivery of
nearly 160,000 premises in Q4 2017, a quarterly record.
In Switzerland, Q4 and full-year OCF results were impacted by
costs associated with the launch of MySports, our new sports
channel that is available exclusively to cable customers. This
investment has transformed UPC Switzerland into the premier
provider of televised athletic events, featuring access to Swiss
ice hockey and Bundesliga matches. We expect that our OCF results
in this market will continue to be under pressure in the coming
quarters, as we continue to invest in MySports."
"Our balance sheet remains in great shape with an average
long-term debt tenor9 of nearly eight years, a fully-swapped
borrowing cost of 4.2% and substantial liquidity10 of $5 billion.
We recently announced a stock repurchase plan of $2 billion for
2018 which, when completed, will push our total buybacks since 2005
above $20 billion.
On the M&A front, a couple transactions have highlighted our
continued focus on shareholder value creation. At the end of the
year we completed the split-off of our Latin American business,
which created two attractive, asset-backed securities. In December,
we announced the sale of UPC Austria to T-Mobile Austria at an ~11x
EV/OCF exit multiple, highlighting the strategic value of our
networks in a rapidly converging world.
Looking ahead, in 2018 we expect to deliver around 5% rebased
OCF growth, Adjusted Free Cash Flow of $1.6 billion and P&E
additions of $5.1 billion, including $1.2 billion8 of spend for new
build and upgrade for the full year. These investments, which
underpin our customer-centric focus, leave us well placed to
deliver long-term sustainable growth.”
Full-Year 2017 Highlights 2018 Guidance
Targets
•
NEW PREMISES BUILT OVER 1.1 MM
•
REBASED OCF GROWTH ~5%7
•
B2B5 REVENUE
GROWTH2 +12%
•
ADJUSTED FREE CASH FLOW $1.6BN8
•
ORGANIC RGU6 ADDITIONS 760,000
•
P&E ADDITIONS OF $5.1 BN8
About Liberty Global
Liberty Global (NASDAQ: LBTYA, LBTYB and LBTYK) is the world’s
largest international TV and broadband company, with operations in
12 European countries under the consumer brands Virgin Media,
Unitymedia, Telenet and UPC. We invest in the infrastructure and
digital platforms that empower our customers to make the most of
the video, internet and communications revolution. Our substantial
scale and commitment to innovation enable us to develop
market-leading products delivered through next-generation networks
that connect over 22 million customers subscribing to 46 million
TV, broadband internet and telephony services. We also serve over 6
million mobile subscribers and offer WiFi service through
10 million access points across our footprint.
In addition, Liberty Global owns 50% of VodafoneZiggo, a joint
venture in the Netherlands with 4 million customers subscribing to
10 million fixed-line and 5 million mobile services, as well as
significant content investments in ITV, All3Media, LionsGate, the
Formula E racing series and several regional sports networks.
Highlights
- Full-year rebased revenue growth of 2%,
including 3% growth in Q4
- Q4 rebased revenue growth was driven by
a 4% increase at Virgin Media
- Q4 residential cable business11 of $3.0
billion was up 1% year-over-year
- Q4 residential mobile business11 up 5%
year-over-year to $0.5 billion
- Q4 B2B business11 increased 13%
year-over-year to $0.5 billion
- Full-year operating income decreased
22% year-over-year, down 27% in Q4
- Full-year rebased OCF growth of 4.5% to
$7.1 billion
- Q4 rebased OCF growth of 4%, supported
by 5% growth at Virgin Media
- 760,000 organic RGU additions in 2017,
including 149,000 in Q4
- Results supported by new build
initiatives and continued penetration of our next-generation
broadband and video products
- Built over 350,000 new premises in Q4,
YTD total exceeded 1.1 million
- Virgin Media delivered 159,000 new
premises in Q4 and 536,000 for 2017
- Solid balance sheet with $5 billion of
liquidity
- Net leverage12 of 4.9x at December 31,
2017
- Fully-swapped borrowing cost of 4.2%,
down from 4.7% in Q4 '16
Liberty Global
Q4 2017
YoYGrowth/(Decline)*
FY 2017
YoYGrowth/(Decline)*
Subscribers
Organic RGU Net Additions 149,200 (45.3 %) 759,800 (22.0 %)
Financial (in USD
millions)
Revenue $ 3,988 2.9 % $ 15,049 2.3 % OCF $ 1,912 4.3 % $ 7,086 4.5
% Operating income $ 496 (27.4 %) $ 1,947 (21.6 %) Adjusted
FCF $ 844 (16.4 %) $ 1,551 (21.6 %) Cash provided by operating
activities^ $ 1,495 $ 5,135 Cash provided (used) by investing
activities^ $ (428 ) $ 79 Cash used by financing activities^ $ (927
) $ (4,721 ) * For the RGU growth rates, the Netherlands is
excluded from our 2016 figures; Revenue and OCF YoY growth rates
are on a rebased basis. ^ Cash flow from continuing operations
Subscriber Growth
Three months ended Year
ended December 31, December 31, 2017
2016 2017 2016
Organic RGU net additions (losses) by product
(excluding NL13) (excluding NL13) Video (54,500 ) (7,500 ) (116,500
) (164,000 ) Data 116,000 174,800 503,400 634,500 Voice 87,700
105,300 372,900 503,400 Total 149,200
272,600 759,800 973,900
Organic RGU net additions (losses) by market U.K./Ireland
7,700 28,200 336,200 251,600 Belgium (11,800 ) 700 (53,700 ) 28,300
Germany 55,100 98,000 229,400 320,300 Switzerland/Austria (19,100 )
25,000 (18,200 ) (400 ) Central and Eastern Europe 117,300
120,700 266,100 374,100 Total 149,200
272,600 759,800 973,900
Organic
Mobile SIM additions (losses) by product Postpaid 118,700
57,700 384,000 343,200 Prepaid (23,400 ) (69,200 ) (216,900 )
(245,200 ) Total 95,300 (11,500 ) 167,100 98,000
Organic Mobile SIM additions (losses) by
market U.K./Ireland 32,800 (1,800 ) 12,500 16,200 Belgium
50,800 (28,100 ) 94,600 (6,900 ) Other 11,700 18,400
60,000 88,700 Total 95,300 (11,500 ) 167,100
98,000
- Cable Product
Performance: During Q4 we added 149,000 RGUs, a 45% decline
over the prior-year period due to lower gross additions across all
European operations. On the fixed product side, all three products
showed year-over-year declines
- U.K./Ireland: Q4 RGU additions of 8,000 were lower
than the prior year, as improved performance in new build areas was
offset by reduced growth in our existing footprint, reflecting our
structured approach to promotions. As a result, broadband net
additions of 25,000, were down year-over-year, while our RGU
performance improved across video and fixed-telephony
- Belgium:
RGU attrition of 12,000 in Q4, consistent with prior 2017 quarters,
was primarily due to intensified competition. However, our
converged quad-play package additions continued to grow, as we
gained nearly 39,000 new "WIGO" subscribers during Q4
- Germany:
Reported 55,000 RGU additions in Q4, which was below our Q4 2016
result. The prior-year period was boosted by a successful
"high-speed weeks" promotion, which offered higher discounts on our
core double and triple-play bundles. Additionally, video attrition
of 37,000 RGUs was driven by a large MDU contract disconnect
- Switzerland/Austria: Lost 19,000 RGUs in Q4,
compared to a Q4 2016 gain of 25,000, which was largely due to the
launch of Connect&Play. The performance was largely due to
losses of 29,000 video and 2,000 broadband subscribers, partially
offset by 12,000 telephony RGU additions
- CEE:
Delivered 117,000 RGU additions in Q4, largely in-line with the
prior-year period
- Next-Generation
Video Penetration (including Horizon TV, Horizon-Lite, TiVo, Virgin
TV V6 and Yelo TV): Added 210,000 subscribers to our
advanced platforms in Q4 and reached 7.7 million or 43% of our
total cable video base (excluding DTH) by the end of the year
- WiFi Connect
Box: Deployments of our latest WiFi Connect box increased by
more than 1 million in Q4, ending the quarter with an installed
base of over 6.4 million or 43% of broadband subscribers across
Europe
- Mobile:
Added 95,000 mobile subscribers in Q4, as 119,000 postpaid
additions were partially offset by continued attrition in our
low-ARPU prepaid base
- Belgium added 51,000 new mobile
subscribers during Q4, a strong year-over-year improvement. This
was driven by the continued success of our converged "WIGO" offers
and a competitive BASE14 postpaid proposition
- UK/Ireland added 63,000 postpaid mobile
subscribers in Q4, 10x higher than the prior-year result, driven by
exceptionally strong take-up of innovative 36-month Freestyle
contracts. Total mobile net additions increased by 33,000 in the
quarter as postpaid growth was partially offset by low-ARPU prepaid
losses. The penetration of 4G at Virgin Media increased to 55% at
the end of Q4
- Switzerland/Austria gained 18,000
mobile subscribers in Q4, as our Swiss offerings (including free EU
roaming since June) continue to gain traction. Also announced a new
MVNO contract with Swisscom with subscriber transition by early
2019
Revenue Highlights
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) Year ended
Increase/(decrease) December 31, December
31, Revenue 2017 2016
% Rebased % 2017
2016 %
Rebased % in millions, except
% amounts U.K./Ireland $ 1,711.1 $ 1,523.2 12.3 4.4 $
6,398.7 $ 6,508.8 (1.7 ) 2.1 Belgium 758.8 680.2 11.6 0.9 2,865.3
2,691.1 6.5 1.2 Germany 716.8 639.7 12.1 2.5 2,705.4 2,539.7 6.5
4.3 Switzerland/Austria 451.2 435.9 3.5 0.4 1,766.0 1,755.6 0.6
(0.3 ) Central and Eastern Europe 317.1 273.8 15.8 4.6 1,183.6
1,088.4 8.7 5.2 The Netherlands — 660.4 (100.0 )
N.M.
— 2,690.8 (100.0 ) N.M. Central and Corporate 38.7 20.7 87.0 0.5
144.8 73.2 97.8 2.1 Intersegment eliminations (6.0 ) (17.3 ) N.M.
N.M. (14.9 ) (62.6 )
N.M.
N.M. Total $ 3,987.7 $ 4,216.6 (5.4 ) 2.9 $
15,048.9 $ 17,285.0 (12.9 ) 2.3
N.M. - Not Meaningful
- Reported revenue for the three months
and full-year ended December 31, 2017, declined 5% and 13%
year-over-year in each period, respectively
- These Q4 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)
positive foreign exchange ("FX") movements, mainly related to the
strengthening of the Euro and British Pound against the U.S.
dollar, and (iii) organic revenue growth
- These full-year 2017 results were
primarily driven by the net impact of (i) the deconsolidation of
our operations in the Netherlands in connection with the
VodafoneZiggo JV transaction, (ii) negative foreign exchange ("FX")
movements, mainly related to the strengthening of the U.S. dollar
against the British Pound, and (iii) organic revenue growth
- Rebased revenue grew 3% in Q4 and 2%
for the full-year 2017 period. These results included:
- A reduction in cable subscription
revenue of $12 million for the full-year 2017 period resulting from
a change in U.K. regulations governing payment handling fees that
we charge our customers
- The favorable $7 million YTD impact due
to the release of unclaimed customer credits in Switzerland
- A reduction in channel carriage fee
revenue primarily related to the June 2017 discontinuation of our
analog video service in Germany, which resulted in revenue
decreases of $7 million in Q4 and $18 million in the full-year 2017
period
- The favorable $6 million impact in the
full-year 2017 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 Q4 and full-year 2017 periods, respectively
- Our residential mobile business
(including interconnect and handset sales) posted a 6% rebased
revenue gain and 2% rebased contraction in the Q4 and full-year
2017 periods, respectively
Q4 2017 Rebased Revenue Growth - Segment
Highlights
- U.K./Ireland: Rebased revenue growth of 4% in Q4
reflects (i)17% rebased growth in residential mobile revenue
(including interconnect and mobile handset revenue), reflecting
higher revenue from mobile handset sales that was partially offset
by lower mobile subscription revenue (ii) 2% rebased growth in our
residential cable business, and (iii) 6% rebased revenue growth in
our B2B business, largely driven by continued growth in the SOHO
segment
- Belgium:
Rebased revenue growth of 1% in Q4 was mainly driven by the net
effect of (i) growth in our B2B segment, driven by increased MVNO
revenue on Telenet's mobile network and (ii) lower mobile and cable
revenue
- Germany:
Q4 rebased revenue growth of 2.5% reflects the net effect of (i)
higher residential cable subscription revenue as a result of
increases in subscribers and higher ARPU per RGU, (ii) B2B revenue
growth, largely driven by an increase in B2B non-subscription
revenue, (iii) lower analog video channel carriage revenue of $7
million and (iv) lower fixed-line telephony interconnect
revenue.
- Switzerland/Austria: Rebased revenue growth in Q4
was relatively flat, primarily related to the net effect of (i)
lower ARPU per RGU, mainly due to competitive pressures, (ii)
higher revenue from the distribution of MySports channels and (iii)
increased mobile revenue
- CEE:
Rebased revenue growth of 5% in Q4, driven by the net effect of (i)
growth in our B2B business, (ii) higher cable revenue supported by
solid RGU additions throughout 2017, and (iii) a small decline in
ARPU per RGU
Operating Income
- Operating income was $496 million and
$683 million in Q4 2017 and Q4 2016, respectively, representing a
decrease of 27% year over year. For the year ended December 31,
2017, operating income was $1,948 million, reflecting a decline of
22% as compared to $2,482 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 twelve-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
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) Year ended
Increase/(decrease) December 31, December
31, OCF 2017 2016 %
Rebased % 2017
2016 % Rebased % in millions,
except % amounts U.K./Ireland $ 815.0 $ 724.8 12.4 5.2 $
2,894.5 $ 2,930.9 (1.2 ) 3.6 Belgium 327.3 281.2 16.4 4.9 1,299.7
1,173.4 10.8 6.1 Germany 460.1 398.7 15.4 5.6 1,700.3 1,586.4 7.2
4.9 Switzerland/Austria 260.0 274.2 (5.2 ) (8.0 ) 1,054.3 1,069.3
(1.4 ) (2.3 ) Central and Eastern Europe 144.7 125.6 15.2 3.4 516.2
471.5 9.5 5.4 The Netherlands — 365.2 (100.0 ) N.M. — 1,472.7
(100.0 ) N.M. Central and Corporate (95.2 ) (134.2 ) (29.1 ) 12.3
(379.4 ) (540.5 ) (29.8 ) 11.4 Total $ 1,911.9
$ 2,035.5 (6.1 ) 4.3 $ 7,085.6 $ 8,163.7
(13.2 ) 4.5 OCF Margin 47.9 % 48.3 % 47.1 %
47.2 %
N.M. - Not Meaningful
- Reported OCF for the three months and
year ended December 31, 2017, declined 6% and 13% year-over-year,
respectively
- These results were primarily driven by
the net impact of (i) the deconsolidation of our operations in the
Netherlands, (ii) organic OCF growth and (iii) the aforementioned
impact of FX movements
- Rebased OCF growth of 4% and 4.5% in Q4
and full-year 2017, respectively, included:
- The net unfavorable impact on our
revenue of certain items, as discussed in the "Revenue Highlights"
section above
- An unfavorable $11 million (Q4) and $34
million (full year) network tax increase following an April 1, 2017
increase in the rateable value of our existing U.K. and Irish
networks
- A favorable $10 million (Q4) and $42
million (full year) benefit associated with a telecom operator's
agreement to compensate Virgin Media for prior-period contractual
breaches related to network charges
- A favorable $13 million benefit in both
the Q4 and full-year period due to our decision to issue Liberty
Global shares to satisfy a portion of our 2017 annual incentive
compensation
- A $6 million headwind from the
settlement of an operational contingency in the U.K. during Q1
2016
- As compared to the prior-year periods,
our Q4 and full-year 2017 OCF margins were down 30 and 10 basis
points to 47.9% and 47.1%, respectively. Our OCF margins during the
2017 periods were negatively impacted by the deconsolidation of the
Netherlands
Q4 2017 Rebased Operating Cash Flow Growth
- Segment Highlights
- U.K./Ireland: Rebased OCF growth of 5% reflects
the net effect of (i) revenue growth, (ii) higher handset and
programming costs, (iii) increased network taxes, (iv) the
aforementioned compensation for prior-period contractual breaches
related to network charges and (v) lower marketing spend
- Belgium:
Rebased OCF growth of 5% in Q4, largely driven by the net effect of
(i) lower MVNO costs (migrating subscribers to our own mobile
network), (ii) higher network related costs and (iii) lower
integration costs associated with the BASE acquisition
- Germany:
Increased OCF by 6% in Q4 on a rebased basis, primarily due to the
net effect of (i) an increase in revenue, (ii) lower SG&A
costs, primarily due to lower spend for marketing and advertising,
(iii) higher direct costs, due to higher programming and copyright
cost and interconnect and access cost and (iv) lower indirect
costs, due to the net effect of higher outsourced call center
costs, lower bad debt expense and lower staff-related costs. Growth
was adversely impacted by the aforementioned loss of analog
carriage fees, which reduced OCF by approximately $7 million in
Q4
- Switzerland/Austria: Rebased OCF declined 8% in
Q4, primarily due to continuing competition and an increase in the
net expenses associated with the MySports Platform. These net
expenses are more heavily weighted to the first and fourth quarters
of the year
- CEE:
Rebased OCF grew by 3% in Q4, largely driven by the aforementioned
revenue growth, partially offset by higher direct and staff-related
costs
Net Earnings (Loss) Attributable to Liberty Global
Shareholders
- Net earnings (loss) attributable to
Liberty Global shareholders (including discontinued operations)
were ($992 million) and $2,223 million for the three months ended
December 31, 2017 and 2016, respectively, and ($2,778 million) and
$1,705 million for the twelve months ended December 31, 2017 and
2016, respectively
Leverage and Liquidity
- Total capital
leases and principal amount of third-party debt: $42.4
billion
- Leverage
ratios: Our adjusted gross and net leverage ratios at
December 31, 2017 were 5.1x and 4.9x, respectively
- Average debt
tenor : Nearly 8 years, with ~88% not due until 2021 or
beyond
- Borrowing
costs: Blended fully-swapped borrowing cost of our
third-party debt was 4.2%
- Liquidity:
$4.9 billion, including (i) $1.7 billion of cash at December 31,
2017 and (ii) aggregate unused borrowing capacity15 under our
credit facilities of $3.2 billion
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; expectations with respect to
our OCF growth, as well as OCF results in Switzerland, our Adjusted
FCF and our P&E additions, including P&E additions
attributable to new build and upgrades; expectations with respect
to the development, enhancement and deployment of our innovative
and advanced products and services, including WiFi Connect and V6
set-top boxes at Virgin Media; expectations with respect to our new
MVNO arrangement in Switzerland; 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 events that are outside of
our control, such as 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 ("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.
Nothing in this press release constitutes an offer of any
securities for sale.
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 in our 10-K.
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 months and
year ended December 31, 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 months and year ended December
31, 2016 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, 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 months and year ended December
31, 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 year
ended December 31, 2016 to the same extent that the revenue and OCF
of these subscribers is excluded from our results for the year
ended December 31, 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 months and year ended December 31,
2017 and (vi) reflect the translation of our rebased amounts for
the three months and year ended December 31, 2016 at the applicable
average foreign currency exchange rates that were used to translate
our results for the three months and year ended December 31, 2017.
We have included SFR and three small entities in whole or in part
in the determination of our rebased revenue and OCF for the three
months ended December 31, 2016. We have included SFR, BASE and four
small entities in whole or in part in the determination of our
rebased revenue and OCF for the year ended December 31, 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:
Revenue OCF
Three monthsendedDecember
31,
Full year endedDecember
31,
Three monthsendedDecember
31,
Full year endedDecember
31,
2016 2016 2016 2016 in millions
Acquisitions $ 57.6 $ 291.2 $ 35.2 $ 137.9
Contribution of Ziggo Group Holding
to the VodafoneZiggo JV and
other dispositions (i)
(674.4 ) (2,741.6 ) (362.7 ) (1,478.4 ) Foreign Currency 275.0
(127.5 ) 125.9 (45.6 ) Total decrease $ (341.8 ) $
(2,577.9 ) $ (201.6 ) $ (1,386.1 ) ______________________________
(i) 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 $131 million of revenue for Q4 and
full-year 2016, respectively, that we assumed would have been
earned if the framework services agreement had been in place on
January 1, 2016.
Summary of Debt, Capital Lease Obligations & Cash and
Cash Equivalents
The following table(i) 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,
2017:
Capital Debt &
Capital Cash Lease Lease and
Cash Debt(ii) Obligations
Obligations Equivalents in millions Liberty
Global and unrestricted subsidiaries $ 2,404.1 $ 67.2 $ 2,471.3 $
1,557.6 Virgin Media(iii) 17,218.7 79.1 17,297.8 32.0 Unitymedia
8,776.4 722.4 9,498.8 2.8 UPC Holding 7,304.3 95.7 7,400.0 33.1
Telenet 5,314.1 456.1 5,770.2 46.9 Total $
41,017.6 $ 1,420.5 $ 42,438.1 $ 1,672.4
______________________________ (i) Except as otherwise
indicated, the amounts reported in the table include the named
entity and its subsidiaries. (ii) Debt amounts for UPC Holding and
Telenet include notes issued by special purpose entities that are
consolidated by the respective subsidiary. (iii) The Virgin Media
borrowing group includes certain subsidiaries of Virgin Media, but
excludes the parent entity, 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 unrestricted subsidiaries.
Property and Equipment Additions and Capital
Expenditures
The tables below highlight the categories of the property and
equipment additions for the indicated periods and reconcile those
additions to the capital expenditures that are presented in the
statement of cash flows information in our 10-K.
Three months ended Year
ended December 31, December 31, 2017
2016 2017 2016
in millions, except % amounts Customer premises equipment $
258.3 $ 247.0 $ 1,161.4 $ 920.4 New Build & Upgrade 339.0 356.7
1,158.0 930.1 Capacity 190.9 233.2 625.9 637.0 Product &
Enablers 305.4 238.5 875.8 674.2 Baseline 294.8 284.9
943.7 887.0 Property and equipment additions
(excluding the Netherlands) 1,388.4 1,360.3 4,764.8 4,048.7 The
Netherlands — 168.7 — 589.9 Total
property and equipment additions 1,388.4 1,529.0 4,764.8 4,638.6
Reconciliation of property and equipment additions to capital
expenditures: Excluding the Netherlands: Assets acquired under
capital-related vendor financing arrangements(i) (701.7 ) (571.8 )
(2,635.8 ) (1,818.9 ) Assets acquired under capital leases (34.0 )
(31.2 ) (169.8 ) (104.2 ) Changes in current liabilities related to
capital expenditures (77.0 ) (310.2 ) (6.1 ) (341.3 ) The
Netherlands — (64.4 ) — (220.3 ) Total capital
expenditures(ii) $ 575.7 $ 551.4 $ 1,953.1 $
2,153.9 Property and equipment additions as % of
revenue (excluding the Netherlands) 34.8 % 38.3 % 31.7 % 27.7 %
______________________________ (i) Amounts exclude related
VAT of $112 million and $84 million during the three months ended
December 31, 2017 and 2016, respectively, and $420 million and $278
million during the year ended December 31, 2017 and 2016,
respectively, that were also financed by our vendors under these
arrangements. (ii) 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.
ARPU per Cable Customer Relationship
The following table provides ARPU per cable customer
relationship for the indicated periods:
Three months ended December 31,
% Rebased 2017
2016 Change % Change Liberty Global
(excluding the Netherlands) $ 43.41 $ 39.97 8.6 % 0.9 % U.K. &
Ireland (Virgin Media) £ 50.29 £ 50.37 (0.2 %) (0.5 %) Germany
(Unitymedia) € 25.35 € 24.64 2.9 % 2.9 % Belgium (Telenet) € 55.01
€ 53.96 1.9 % 3.2 % Other Europe (UPC Holding) € 25.94 € 26.98 (3.9
%) (1.2 %)
Mobile ARPU
The following tables provide ARPU per mobile subscriber for the
indicated periods:
ARPU per Mobile Subscriber Three months
ended December 31, %
Rebased 2017 2016 Change
% Change Liberty Global (excluding the Netherlands):
Including interconnect revenue $ 19.03 $ 18.04 5.5 % (4.7 %)
Excluding interconnect revenue $ 15.25 $ 14.77 3.2 % (5.1 %)
Consolidated Operating Data — December 31,
2017 Video
HomesPassed
Two-wayHomesPassed
CableCustomerRelationships
Basic
VideoSubscribers(i)
EnhancedVideoSubscribers
DTHSubscribers
TotalVideo
InternetSubscribers(ii)
TelephonySubscribers(iii)
TotalRGUs
Total
MobileSubscribers(iv)
U.K. 13,979,000 13,967,200 5,432,600 — 3,827,200 — 3,827,200
5,104,300 4,440,100 13,371,600 3,002,800 Germany 12,981,300
12,900,400 7,160,200 4,687,200 1,653,600 — 6,340,800 3,476,600
3,251,000 13,068,400 320,400 Belgium 3,317,100 3,317,100 2,190,400
244,700 1,786,600 — 2,031,300 1,674,100 1,302,600 5,008,000
2,803,800 Switzerland(v) 2,281,600 2,281,600 1,236,800 520,600
679,900 — 1,200,500 749,300 537,700 2,487,500 114,800 Austria
1,410,800 1,410,800 654,100 93,200 367,500 — 460,700 515,600
457,600 1,433,900 64,100 Ireland 893,900 855,300 454,300 24,600
268,100 — 292,700 372,200 356,300 1,021,200 49,900 Poland 3,354,100
3,296,900 1,434,900 188,800 1,023,800 — 1,212,600 1,139,700 629,900
2,982,200 4,000 Romania 3,077,100 3,034,200 1,345,600 260,700
673,200 365,900 1,299,800 581,700 535,400 2,416,900 — Hungary
1,789,400 1,772,000 1,110,900 92,200 590,900 265,900 949,000
675,300 638,700 2,263,000 88,400 Czech Republic 1,533,900 1,509,400
717,000 171,600 356,000 100,600 628,200 497,500 163,100 1,288,800 —
Slovakia 604,100 589,400
270,500 25,400 140,600
76,400 242,400
131,100 78,700
452,200 —
Total 45,222,300
44,934,300
22,007,300 6,309,000
11,367,400 808,800
18,485,200
14,917,400 12,391,100
45,793,700 6,448,200
Subscriber Variance Table - December 31, 2017 vs
September 30, 2017
Video
HomesPassed
Two-wayHomesPassed
CableCustomerRelationships
Basic
VideoSubscribers(i)
EnhancedVideoSubscribers
DTHSubscribers
TotalVideo
InternetSubscribers(ii)
TelephonySubscribers(iii)
TotalRGUs
Total
MobileSubscribers(iv)
U.K. 180,400 180,400 14,400 — 4,900 — 4,900 24,200 (15,700 ) 13,400
27,300 Germany 24,500 44,000 (16,100 ) (36,600 ) (300 ) — (36,900 )
45,800 46,200 55,100 (13,200 ) Belgium 10,000 10,000 (11,400 )
(11,000 ) (4,600 ) — (15,600 ) 3,700 100 (11,800 ) (78,300 )
Switzerland(v) 13,000 13,000 (23,400 ) (21,900 ) 100 — (21,800 )
(5,500 ) 4,800 (22,500 ) 9,800 Austria 6,500 6,500 100 (2,000 )
(5,100 ) — (7,100 ) 3,100 7,400 3,400 8,400 Ireland 13,500 16,600
(1,300 ) (1,800 ) (2,800 ) — (4,600 ) 800 (1,900 ) (5,700 ) 5,500
Poland 91,400 93,000 8,500 (3,500 ) 7,300 — 3,800 16,700 3,400
23,900 (300 ) Romania 25,600 26,100 23,700 (3,100 ) 9,800 10,800
17,500 13,000 15,800 46,300 — Hungary 25,000 25,100 1,700 (8,400 )
13,900 (4,000 ) 1,500 10,400 17,000 28,900 7,000 Czech Republic
18,000 26,700 1,100 6,000 300 (1,600 ) 4,700 5,400 10,400 20,500 —
Slovakia 3,300 8,200
1,300 (300 ) 2,000
600 2,300 2,800
1,900 7,000
—
Total 411,200
449,600 (1,400 )
(82,600 ) 25,500
5,800 (51,300
) 120,400
89,400 158,500 (33,800
)
Subscriber Variance
Table - December 31, 2017 vs September 30, 2017 Video
HomesPassed
Two-way HomesPassed
CableCustomerRelationships
Basic
VideoSubscribers(i)
EnhancedVideoSubscribers
DTHSubscribers
TotalVideo
InternetSubscribers(ii)
TelephonySubscribers(iii)
TotalRGUs
Total
MobileSubscribers(iv)
Organic Change
Summary:
U.K. 180,400 180,400 14,400 — 4,900 — 4,900 24,200 (15,700 ) 13,400
27,300 Germany 24,500 44,000 (16,100 ) (36,600 ) (300 ) — (36,900 )
45,800 46,200 55,100 (13,200 ) Belgium 10,000 10,000 (11,400 )
(11,000 ) (4,600 ) — (15,600 ) 3,700 100 (11,800 ) 50,800 Other
Europe 192,500 202,700
6,400 (36,300 ) 23,600
5,800 (6,900 )
42,300 57,100 92,500
30,400 Total Organic Change 407,400
437,100 (6,700 ) (83,900
) 23,600 5,800
(54,500 ) 116,000 87,700
149,200 95,300
Q4 2017
Adjustments:
Q4 2017 Acquisitions - Romania 7,600 7,600 3,300 1,200 — — 1,200
2,800 — 4,000 — Q4 2017 Acquisition - Hungary 4,900 4,900 2,000 100
1,900 — 2,000 1,600 1,700 5,300 — Q4 2017 Czech Republic
Adjustments (8,700 ) — — — — — — — — — — Q4 2017 Acquisition -
Belgium — — —
— — —
— —
— — (129,100 )
Net Adjustments
3,800 12,500 5,300
1,300 1,900
— 3,200 4,400
1,700 9,300 (129,100 )
Net Adds (Reductions) 411,200 449,600
(1,400 ) (82,600 )
25,500 5,800 (51,300 )
120,400 89,400
158,500 (33,800 )
Footnotes for Consolidated Operating
Data and Subscriber Variance Tables
(i) We have approximately 192,700 “lifeline” customers that
are counted on a per connection basis, representing the least
expensive regulated tier of video cable service, with only a few
channels. (ii) Our Internet Subscribers exclude 39,100 digital
subscriber line (“DSL”) subscribers within Austria that are not
serviced over our networks. Our Internet Subscribers do not include
customers that receive services from dial-up connections. In
Switzerland, we offer a 2 Mbps internet service to our Basic and
Enhanced Video Subscribers without an incremental recurring fee.
Our Internet Subscribers in Switzerland include 83,900 subscribers
who have requested and received this service. (iii) Our Telephony
Subscribers exclude 30,000 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 131,000 subscribers who have requested and received this
service. (iv) In a number of countries, our mobile subscribers
receive mobile services pursuant to prepaid contracts. As of
December 31, 2017, our mobile subscriber count included 515,200 and
514,300 prepaid mobile subscribers in Belgium and the U.K.,
respectively. (v) 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,
2017, Switzerland’s partner networks account for 138,100 Cable
Customer Relationships, 315,800 RGUs, 113,700 Enhanced Video
Subscribers, 116,000 Internet Subscribers, and 86,100 Telephony
Subscribers. Subscribers to enhanced video services provided by
partner networks receive basic video services from the partner
networks as opposed to our operations. Due to the fact that we do
not own these partner networks, we do not report homes passed for
Switzerland’s partner networks.
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 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. 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.
In Germany, homes passed reflect the footprint and two-way homes
passed reflect the technological capability of our network up to
the street cabinet, with drops from the street cabinet to the
building generally added, and in-home wiring generally upgraded, on
an as needed or success-based basis. In Belgium, Telenet leases a
portion of its network under a long-term capital lease arrangement.
These tables include operating statistics for Telenet's owned and
leased networks.
While we take appropriate steps to ensure that subscriber
statistics are presented on a consistent and accurate basis at any
given balance sheet date, the variability from country to country
in (i) the nature and pricing of products and services, (ii) the
distribution platform, (iii) billing systems, (iv) bad debt
collection experience and (v) other factors add complexity to the
subscriber counting process. We periodically review our subscriber
counting policies and underlying systems to improve the accuracy
and consistency of the data reported on a prospective basis.
Accordingly, we may from time to time make appropriate adjustments
to our subscriber statistics based on those reviews.
Subscriber information for acquired entities is preliminary and
subject to adjustment until we have completed our review of such
information and determined that it is presented in accordance with
our policies.
Footnotes
1 The former LiLAC Group has been treated as a discontinued
operation and accordingly, the information in this release focuses
only on our continuing operations unless otherwise noted. For
additional information, see note 5 to the consolidated financial
statements included in our 10-K. 2 The indicated growth rates are
rebased for acquisitions, dispositions and FX. Please see Rebase
Information for information on rebased growth. 3 Please see
Glossary for our Operating Cash Flow ("OCF") definition and the
required reconciliations. 4 Please see Glossary 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. 5 Total B2B includes subscription
(SOHO) and non-subscription revenue. B2B and SOHO growth rates
include upsell from our residential businesses. 6 Please see
Glossary 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 For
purposes of measuring our rebased OCF growth in 2018, our 2017 OCF
will be rebased to reflect the adoption of the new revenue
recognition guidance that we will begin applying on January 1,
2018. For additional information, see note 2 to the consolidated
financial statements included in our 10-K. 8 Based on FX rates as
of February 13, 2018. New build and upgrade spend excludes related
CPE. 9 For purposes of calculating our average tenor, total
third-party debt excludes vendor financing. 10 Liquidity refers to
cash and cash equivalents plus the maximum undrawn commitments
under subsidiary borrowing facilities, without regard to covenant
compliance calculations. 11 Includes subscription and
non-subscription revenue. For additional information regarding how
we define our revenue categories, see note 18 to the consolidated
financial statements included in our 10-K. 12 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 excludes the loans backed or secured by the shares
we hold in ITV plc, Sumitomo Corporation and Lions Gate
Entertainment Corp. 13 As we no longer consolidate the Netherlands
effective December 31, 2016, we have removed the Netherlands from
certain information presented for periods ended on or prior to
December 31, 2016 to enhance comparability. 14 On February 11,
2016, Telenet acquired Telenet Group BVBA ("BASE"). 15 Our
aggregate unused borrowing capacity of $3.2 billion represents the
maximum undrawn commitments under our subsidiaries' applicable
facilities without regard to covenant compliance calculations. Upon
completion of the relevant December 31, 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 will remain at $3.2 billion.
Glossary
Adjusted Free Cash Flow: 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 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 Year
ended December 31, December 31, 2017
2016 2017 2016
in millions Net cash provided by operating activities
of our continuing operations $ 1,494.6 $ 1,653.7 $ 5,134.6 $
5,471.7 Cash payments for direct acquisition and disposition costs
1.8 2.5 8.7 29.3 Expenses financed by an intermediary(i) 439.8
206.1 1,506.9 812.0 Capital expenditures (575.7 ) (551.4 ) (1,953.1
) (2,153.9 ) Principal payments on amounts financed by vendors and
intermediaries (496.5 ) (278.5 ) (3,059.3 ) (2,074.7 ) Principal
payments on certain capital leases (19.9 ) (23.3 ) (86.6 ) (105.5 )
Adjusted FCF $ 844.1 $ 1,009.1 $ 1,551.2 $
1,978.9
________________________________
(i) 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: Average Revenue Per Unit is
the average monthly subscription revenue (subscription revenue
excludes interconnect fees, 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 number of 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
number of 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 number 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. In addition, for purposes of
calculating the percentage change in ARPU on a rebased basis, we
adjust the prior-year subscription revenue, customer relationships,
mobile subscribers and RGUs, as applicable, to reflect
acquisitions, dispositions and FX on a comparable basis with the
current year, consistent with how we calculate our rebased growth
for revenue and OCF, as further described in the body of this
release.
ARPU per Mobile Subscriber: Our
ARPU per mobile subscriber calculation that excludes interconnect
revenue refers to the average monthly mobile subscription revenue
per average mobile subscriber 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.
Basic Video Subscriber: 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.
Blended fully-swapped debt borrowing
cost: 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.
Cable Customer Relationships: the
number of customers who receive at least one of our video, internet
or telephony services that we count as RGUs, without regard to
which or to how many services they subscribe. To the extent that
RGU counts include EBU adjustments, we reflect corresponding
adjustments to our Cable Customer Relationship counts. For further
information regarding our EBU calculation, see Footnotes for
Consolidated Operating Data and Subscriber Variance Tables. Cable
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 Cable Customer
Relationships. We exclude mobile-only customers from Cable Customer
Relationships.
DTH Subscriber: a home, residential
multiple dwelling unit or commercial unit that receives our video
programming broadcast directly via a geosynchronous satellite.
EBU: Equivalent Billing Unit.
Certain of our residential and commercial RGUs are counted on an
EBU basis, including residential multiple dwelling units and
commercial establishments (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.
Enhanced Video Subscriber: 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.
Homes Passed: 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.
Internet Subscriber: 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 do not include customers
that receive services from dial-up connections.
Mobile Subscriber Count: the number
of active 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 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.
MVNO: Mobile Virtual Network
Operator.
NPS: Net Promoter Score.
OCF: As used herein, OCF has the
same meaning as the term "Adjusted OIBDA" that is referenced in our
Form 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 our operating income to total OCF
is presented in the following table:
Three months ended Year
ended December 31, December 31, 2017
2016 2017 2016
in millions Operating income $ 495.8 $ 683.0 $
1,947.5 $ 2,482.2 Share-based compensation expense 63.9 85.8 173.9
281.5 Depreciation and amortization 1,333.7 1,187.5 4,857.0 5,213.8
Impairment, restructuring and other operating items, net 18.5
79.2 107.2 186.2
Total OCF
$ 1,911.9 $ 2,035.5 $ 7,085.6 $ 8,163.7
OCF margin: calculated by dividing
OCF by total revenue for the applicable period.
Property and equipment additions:
includes capital expenditures on an accrual basis, amounts financed
under vendor financing or capital lease arrangements and other
non-cash additions.
RGU: A Revenue Generating Unit is
separately a Basic Video Subscriber, Enhanced Video Subscriber, DTH
Subscriber, Internet Subscriber or Telephony Subscriber. A home,
residential multiple dwelling unit, or commercial unit may contain
one or more RGUs. For example, if a residential customer in our
U.K. 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 December 31, 2017 RGU counts
exclude our separately reported postpaid and prepaid mobile
subscribers.
SIM: Subscriber Identification
Module.
SOHO: Small or Home Office
Subscribers.
Telephony Subscriber: 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.
Two-way Homes Passed: homes passed
by those sections of our networks that are technologically capable
of providing two-way services, including video, internet and
telephony services.
U.S. GAAP: United States Generally
Accepted Accounting Principles.
YoY: Year over year.
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version on businesswire.com: http://www.businesswire.com/news/home/20180214006416/en/
Liberty GlobalInvestor RelationsMatt Coates, +44
20 8483 6333John Rea, +1 303 220 4238Stefan Halters, +1 303 784
4528orCorporate CommunicationsMatt Beake, +44 20 8483
6428Julia Hart, +31 6 1121 2871orCorporate
Websitewww.libertyglobal.com
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