Commercial momentum across markets continued during
Q1
Convergence strategy added +80k broadband and +146k postpaid
mobile subscribers
U.K. JV with Telefonica's O2 set to close in June, subject to
final approval by the U.K. regulator
Liberty Global becomes founding member of European Green
Digital Coalition
Liberty Global plc today announced its Q1 2021 financial
results.
CEO Mike Fries stated, “As we continue to execute through the
challenges of COVID-19, we're hopeful that better and safer times
lie ahead for our employees and our customers. While the well-being
of our people and our customers' connectivity experience remain our
most important priorities, we're encouraged by the operational
progress made during the first quarter of 2021, allowing us to
carry forward the momentum we built last year.
Continued execution of our convergence strategy fueled a 3%
improvement in our aggregate FMC penetration rate. We also
generated continued growth in new customers, adding 38,000
relationships during the quarter. Clearly, consumer appetite for
our broadband and converged products remains robust. Meanwhile our
network reach expanded by 113,000 new homes built in Q1, now
totaling 3.9 million to date, paving the way for additional
relationships to be formed.
Liberty Global
Q1 2021
YoY
Operations
Organic Customer additions
38,000
+56,900
Organic Broadband net adds
79,600
+57,600
Organic Mobile Postpaid net
adds
145,600
+30,300
Fixed Mobile Convergence(a)
29.3
%
3.0
%
Financial (in
millions, except percentages)
Revenue as reported
$3,615.3
25.7
%
Rebased revenue1
$3,615.3
0.2
%
COVID impact on revenue2
~ $21.2
(0.6
%)
Net earnings
$1,440.3
41.5
%
Rebased Adjusted EBITDA1
$1,367.3
(1.7
%)
P&E additions
$746.6
14.1
%
Rebased OFCF1
$620.7
5.0
%
Cash provided by operating
activities(b)
$821.2
82.6
%
Adjusted FCF
$93.1
129.4
%
(a)
YoY FMC growth shown on a rebased
basis.
(b)
As reported cash flows used by investing
and financing activities for the three months ended March 31, 2021
were ($509.4 million) and ($699.7 million), respectively.
During the quarter, rebased 1 revenue increased 0.2%, including
adverse COVID impacts of around 0.6% primarily stemming from lower
mobile roaming and usage revenue. Rebased Adjusted EBITDA declined
1.7% for the quarter, including the impact of $19 million costs to
capture 3, while rebased OFCF increased 5% resulting from a 210
basis point decline in capital intensity year-over-year.
In Switzerland, commercial "Day 1" launched in March, a
watershed moment which marked the beginning of Sunrise UPC
operating as one company while best-in-market offerings helped
create customer awareness of the merger. Operational momentum
continues to strengthen with broadband and postpaid mobile growth
of 56,000 subscribers in Q1 as we execute our convergence strategy,
prioritize B2B growth and begin to generate synergies.
In the U.K., Virgin Media demonstrated solid operational
execution. We successfully landed a 4% price rise in March and
delivered our best customer adds in a price-rise quarter since Q4
2016. We also saw record-low Q1 cable churn, strong growth in
fixed-mobile converged bundles and a four-fold YoY boost in new
broadband subscribers.
Looking ahead to the VM-O2 joint venture4, the U.K. regulator
provisionally approved the combination in April and, subject to
their final approval, it's expected to close in June. We recently
confirmed our intention to appoint Lutz Schüler of Virgin Media as
CEO, and Patrica Cobian of O2 as CFO, once regulatory approval is
granted. Together they are building a strong, diverse and dynamic
team that will bring more choice, more value and world-class
innovation to over 46 million5 fixed and mobile connections across
the U.K.
We are reaffirming all of our original, full-year guidance
metrics, including $1.35 billion of Adjusted Free Cash Flow(i)
representing 26% YoY growth. Our balance sheet remains strong with
$2.9 billion(ii) of cash and $5.8 billion of liquidity6 to drive
future value creation. We continue to be aggressive buyers of our
stock this year, having repurchased $447 million through the end of
April.
I would also like to take this opportunity to note that we
demonstrated our continued dedication to sustainability in Q1 by
becoming a founding member of the European Green Digital Coalition.
As a result, we've committed to establishing science-based targets
to reduce greenhouse gas emissions by 2030 and becoming climate
neutral no later than 2040. Digital technologies have a huge role
to play in the fight against climate change, and we look forward to
utilizing our networks and expertise to help deliver a greener,
more sustainable future."
(i)
Adjusted Free Cash Flow is a non-GAAP
measure, see the Glossary for definitions. Quantitative
reconciliations to cash flow from operating activities for our
Adjusted FCF guidance cannot be provided without unreasonable
efforts as we do not forecast specific changes in working capital
that impact cash flows from operating activities. The items we do
not forecast may vary significantly from period to period. Absolute
full-year U.S. dollar guidance figures are based on FX rates of
EUR/USD 1.23, GBP/USD 1.36 and CHF/USD 1.12.
(ii)
Including amounts held under separately
managed accounts (SMAs).
Q1 Highlights
- Q1 revenue increased 25.7% YoY on a reported basis and
increased 0.2% on a rebased1 basis to $3,615.3 million
- Q1 net earnings increased 41.5% YoY to $1,440.3 million
- Q1 Adjusted EBITDA increased 18.9% YoY on a reported basis and
decreased 1.7% on a rebased basis to $1,367.3 million
- Q1 property & equipment additions were 20.7% of revenue, as
compared to 22.8% in Q1 2020
- FMC penetration increased to 29% from 23% in Q1 2020
- Built 113,000 new premises during Q1, including 80,000 in the
U.K. & Ireland
- Solid balance sheet with $5.8 billion of liquidity6 for the
Full Company7
- Comprised of $0.9 billion of cash, $2.0 billion of investments
held under SMAs and $2.9 billion of unused borrowing capacity8
- Gross and net leverage9 of 5.6x and 5.1x, respectively, on a
Full Company basis
- Fully-swapped borrowing cost of 4.2% on a debt balance of $30.9
billion for the Full Company
- Repurchased $447 million of stock through April 30
Liberty Global
Q1 2021
Q1 2020
YoY Change (reported)
YoY Change (rebased)
Customers
Organic customer additions
38,000
(18,900
)
301.1
%
Financial (in
millions, except percentages)
Revenue
$
3,615.3
$
2,875.8
25.7
%
0.2
%
Net earnings
$
1,440.3
$
1,017.7
41.5
%
Adjusted EBITDA
$
1,367.3
$
1,150.3
18.9
%
(1.7
%)
P&E additions
$
746.6
$
654.4
14.1
%
(6.5
%)
OFCF
$
620.7
$
495.9
25.2
%
5.0
%
Cash provided by operating activities
$
821.2
$
449.8
82.6
%
Cash used by investing activities
$
(509.4
)
$
(2,349.2
)
78.3
%
Cash used by financing activities
$
(699.7
)
$
(783.2
)
10.7
%
Adjusted FCF
$
93.1
$
(317.0
)
129.4
%
Customer Growth
Three months ended
March 31,
2021
2020
Organic customer net additions (losses)
by market
U.K./Ireland
31,000
(1,100
)
Belgium
(4,500
)
(7,500
)
Switzerland
4,400
(16,400
)
CEE (Poland and Slovakia)
7,100
6,100
Total
38,000
(18,900
)
- Customer Relationships: During Q1,
we gained 38,000 customer relationships, as compared to a loss of
19,000 in the prior-year period, primarily driven by strong
commercial momentum with FMC penetration up across all markets
- U.K./Ireland: Virgin Media gained
31,000 customer relationships in Q1, as compared to a loss of 1,000
in Q1 2020. We added 24,000 customers in our Lightning footprint
and 7,000 in our BAU footprint, representing our fourth consecutive
quarter of BAU growth
- Belgium: Telenet lost 5,000
customer relationships in Q1, which was an improvement compared to
a loss of 8,000 in Q1 2020, primarily driven by continued
commercial momentum
- Switzerland: Sunrise UPC gained
4,000 customer relationships in Q1, as broadband growth was
partially offset by legacy video losses
- CEE (Poland and Slovakia): CEE
added 7,000 customer relationships in Q1 2021 and 6,000 in Q1 2020,
primarily drivenby the cross sell of converged family offers and
growth in new build areas in Poland
Revenue Highlights
The following table presents (i) revenue of each of our
reportable segments, including the non-consolidated VodafoneZiggo
JV, 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)
March 31,
Revenue
2021
2020
Reported %
Rebased %
in millions, except %
amounts
U.K./Ireland
$
1,770.7
$
1,620.6
9.3
1.4
Belgium.
772.7
718.1
7.6
(1.3
)
Switzerland
841.8
316.8
165.7
(0.3
)
CEE
128.6
119.1
8.0
3.2
Central and Corporate
102.7
101.2
1.5
(1.9
)
Intersegment eliminations
(1.2
)
—
N.M.
N.M.
Total
$
3,615.3
$
2,875.8
25.7
0.2
VodafoneZiggo JV(i)
$
1,217.0
$
1,097.1
10.9
1.8
______________________
(i) Amounts reflect 100% of the 50:50 non-consolidated
VodafoneZiggo JV's revenue.
N.M. - Not Meaningful
- Reported revenue for the three months ended March 31, 2021
increased 25.7% YoY
- The increase was primarily driven by the impact of (i) the
acquisition of Sunrise, (ii) positive foreign exchange ("FX")
movements, mainly related to the strengthening of the British
Pound, Euro and Swiss Franc against the U.S. dollar and (iii)
organic revenue contraction
- Rebased revenue increased 0.2% YoY in Q1, including:
- Adverse COVID impacts of around 0.6%, primarily stemming from
lower mobile roaming and usage revenue
- Lower revenue related to regulated contract notifications in
the U.K.
- Unfavorable decrease of $1.8 million in Switzerland due to the
Q1 2020 acceleration of revenue from our distribution partner for
the broadcast of ice hockey. Switzerland's ice hockey league was
cancelled in 2020 as a result of the COVID-19 pandemic, which
resulted in the prepaid amounts for the associated sports rights
that were previously scheduled to be expensed during the second
quarter of 2020 to be recognized during the first quarter of 2020.
Accordingly, $1.8 million of associated revenue that would have
been recorded in April 2020 was recognized during the first quarter
of 2020
Q1 2021 Rebased Revenue Growth - Segment
Highlights
- U.K./Ireland: Rebased revenue
increased 1.4% YoY in Q1, primarily due to higher B2B and mobile
revenue, including the effect of (i) an increase in handset sales,
(ii) higher wholesale revenue and continued growth in SOHO
customers and (iii) an increase in fixed-line customers offset by a
decrease in fixed-line customer ARPU
- Belgium: Rebased revenue declined
1.3% YoY in Q1, driven by the net effect of (i) lower interconnect
and roaming revenue and (ii) higher B2B subscription revenue due to
an increase in SOHO customers
- Switzerland: Rebased revenue
declined 0.3% YoY in Q1, primarily due to the net effect of (i)
lower B2B wholesale and mobile roaming revenue related to COVID-19,
(ii) higher mobile subscription revenue driven by a larger
subscriber base and (iii) an increase in handset sales
- CEE (Poland and Slovakia): Rebased
revenue grew 3.2% YoY in Q1, primarily due to an increase in
residential cable subscription revenue driven by higher customer
volume
- Central and Corporate: Rebased
revenue decreased 1.9% YoY in Q1, primarily due to lower CPE sales
to the VodafoneZiggo JV
Net earnings
- Net earnings was $1,440.3 million and $1,017.7 million for the
three months ended March 31, 2021 and 2020, respectively
- The increase in our net earnings is primarily due to the net
effect of (i) a change in realized and unrealized gains (losses)
due to changes in fair values of certain investments and debt, net,
(ii) a decrease in realized and unrealized gains on derivative
instruments, net, (iii) an increase in Adjusted EBITDA, as further
described below, and (iv) a decrease in depreciation and
amortization
Adjusted EBITDA Highlights
The following table presents (i) Adjusted EBITDA(*) of each of
our reportable segments, including the non-consolidated
VodafoneZiggo JV, 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)
March 31,
Adjusted EBITDA
2021
2020
Reported %
Rebased %
in millions, except %
amounts
U.K./Ireland
$
692.6
$
655.4
5.7
(1.9
)
Belgium
371.8
331.6
12.1
3.2
Switzerland
281.6
134.1
110.0
(7.3
)
CEE
57.0
54.3
5.0
0.3
Central and Corporate
(35.7
)
(25.1
)
(42.2
)
1.2
Total
$
1,367.3
$
1,150.3
18.9
(1.7
)
VodafoneZiggo JV(i)
$
565.2
$
502.8
12.4
2.8
______________________
(i) Amounts reflect 100% of the 50:50 non-consolidated
VodafoneZiggo JV's Adjusted EBITDA.
(*)
Consolidated Adjusted EBITDA is a non-GAAP
measure, which we believe 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 readily view operating trends from a consolidated
view. Investors should view consolidated Adjusted EBITDA as a
supplement to, and not a substitute for, net earnings or loss and
other U.S. GAAP measures of performance. For additional information
on our Adjusted EBITDA measure, including a reconciliation to net
earnings, see the Glossary.
- Reported Adjusted EBITDA for the three months ended March 31,
2021 increased 18.9% YoY
- Rebased Adjusted EBITDA declined 1.7% for the three months
ended March 31, 2021, including:
- The aforementioned impacts of certain revenue items, as
discussed in the "Revenue Highlights" section above
- The following current year impacts:
- An unfavorable impact associated with costs to capture3 of $19
million
- The following 2020 impacts:
- A $12.9 million net favorable impact of the Q1 2020
acceleration of certain revenue and costs for sports rights as a
result of the COVID-19 pandemic. In this respect, certain sports
leagues in Belgium and Switzerland were cancelled during 2020.
Accordingly, in Belgium and Switzerland prepaid costs of $10.6
million and $4.1 million, respectively, for the associated sports
rights that were previously scheduled to be expensed during the
second quarter of 2020 were recognized during the first quarter of
2020. In Switzerland, the lower costs were only partially offset by
the aforementioned related $1.8 million decrease in revenue. This
acceleration in sports rights revenue and costs will have no full
year impact on our 2021 Adjusted EBITDA, as compared to the prior
year
Q1 2021 Rebased Adjusted EBITDA - Segment
Highlights
- U.K./Ireland: Rebased Adjusted
EBITDA declined 1.9% YoY in Q1 due to the aforementioned revenue
increase that was more than offset by (i) a short-term increase in
expenditures related to insourcing field engineers and on-shoring
customer care, (ii) pre-merger opex costs to capture of $6.2
million and (iii) ongoing investments in digital
transformation
- Belgium: Rebased Adjusted EBITDA
increased 3.2% YoY in Q1, primarily due to the aforementioned
revenue decline, which was more than offset by (i) lower
programming and copyright costs and (ii) lower costs related to
outsourced labor and professional services
- Switzerland: Rebased Adjusted
EBITDA declined 7.3% YoY in Q1, primarily due to the net effect of
(i) $11.1 million of costs to capture, (ii) the aforementioned loss
of revenue, (iii) lower programming and interconnect costs and (iv)
higher growth related opex, primarily due to an increase in
marketing spend and investments in B2B
- CEE (Poland and Slovakia): Rebased
Adjusted EBITDA increased 0.3% YoY in Q1, largely driven by the
aforementioned revenue increase partially offset by an increase in
programming spend and other indirect expenses
OFCF Highlights
The following table presents (i) OFCF of each of our reportable
segments, including the non-consolidated VodafoneZiggo JV, 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)
March 31,
OFCF
2021
2020
Reported %
Rebased %
in millions, except %
amounts
U.K./Ireland
$
341.2
$
308.8
10.5
2.4
Belgium
218.4
190.0
14.9
5.3
Switzerland
127.4
64.9
96.3
(6.8
)
CEE
39.4
35.4
11.3
6.0
Central and Corporate
(105.7
)
(103.2
)
(2.4
)
12.8
Total
$
620.7
$
495.9
25.2
5.0
VodafoneZiggo JV(i)
$
330.7
$
257.4
28.5
17.5
______________________
- Amounts reflect 100% of the 50:50 non-consolidated
VodafoneZiggo JV's OFCF.
Net Earnings Attributable to Liberty Global
Shareholders
- Net earnings attributable to Liberty Global shareholders was
$1,385.4 million and $949.8 million for the three months ended
March 31, 2021 and 2020, respectively
Leverage and Liquidity
- Total principal amount of debt and
finance leases: $30.9 billion for the Full Company
- Leverage ratios9: At March 31,
2021, our adjusted gross and net leverage ratios were 5.6x and
5.1x, respectively, on a Full Company basis
- Average debt tenor10: Over 7
years, with ~82% not due until 2027 or thereafter on a Full Company
basis
- Borrowing costs: Blended,
fully-swapped cost of debt was 4.2% for the Full Company
- Liquidity6: $5.8 billion on a Full
Company basis, including (i) $0.9 billion of cash at March 31,
2021, (ii) $2.0 billion of investments held under SMAs and (iii)
$2.9 billion of aggregate unused borrowing capacity8 under our
credit facilities
Forward-Looking Statements and Disclaimer
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements with respect to our strategies, future
growth prospects and opportunities; expectations with respect to
the joint venture transaction in the U.K., including related
regulatory approval, intended executive appointments for the joint
venture entity and anticipated timing of completion, as well as
anticipated benefits thereof including synergies; expectations
regarding costs to capture; expectations regarding our financial
performance, including Rebased Revenue, Rebased Adjusted EBITDA,
Rebased OFCF and Adjusted FCF; expectations with respect to
customer growth, price increases and B2B services; our commitments
with respect to the European Green Digital Coalition; the strength
of our balance sheet (including cash and liquidity position), tenor
of our third-party debt, anticipated borrowing capacity; 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 potential continued
impact of the COVID-19 pandemic on our company; the effects of
changes in laws or regulation; the effects of the U.K.'s exit from
the E.U.; 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, vendors and contractors
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/A
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.
About Liberty Global
Liberty Global (NASDAQ: LBTYA, LBTYB and LBTYK) is one of the
world’s leading converged video, broadband and communications
companies, with operations in seven European countries under the
consumer brands Virgin Media, Telenet, UPC, the combined Sunrise
UPC, as well as VodafoneZiggo, which is owned through a 50/50 joint
venture. Our substantial scale and commitment to innovation enable
us to invest in the infrastructure and digital platforms that
empower our customers to make the most of the digital
revolution.
Liberty Global delivers market-leading products through
next-generation networks that connect customers subscribing to 49
million broadband, video, fixed and mobile telephony services
across our brands. We also have significant investments in ITV,
All3Media, CANAL+ Polska, LionsGate, the Formula E racing series
and several regional sports networks.
Balance Sheets, Statements of Operations and Statements of
Cash Flows
The condensed consolidated balance sheets, statements of
operations and statements of cash flows of Liberty Global are in
our 10-Q.
Rebase Information
Rebase growth percentages, which are non-GAAP measures, are
presented as a basis for assessing growth rates on a comparable
basis. For purposes of calculating rebased growth rates on a
comparable basis for all businesses that we owned during 2021, we
have adjusted our historical revenue, Adjusted EBITDA and OFCF for
the three months ended March 31, 2020 to (i) include the
pre-acquisition revenue, Adjusted EBITDA and P&E additions of
entities acquired during 2020 in our rebased amounts for the three
months ended March 31, 2020 to the same extent that the revenue,
Adjusted EBITDA and P&E additions of these entities are
included in our results for the three months ended March 31, 2021,
(ii) exclude the revenue, Adjusted EBITDA and P&E additions in
our rebased amounts for the three months ended March 31, 2020 for
entities disposed of during 2020, (iii) include revenue and costs
for the temporary elements of transitional and other services
provided to the VodafoneZiggo JV, Vodafone, Deutsche Telekom (the
buyer of UPC Austria), Liberty Latin America and M7 Group (the
buyer of UPC DTH), to reflect amounts related to these services
equal to those included in our results for the three months ended
March 31, 2021 and (iv) reflect the translation of our rebased
amounts for the three months ended March 31, 2020 at the applicable
average foreign currency exchange rates that were used to translate
our results for the three months ended March 31, 2021. We have
reflected the revenue, Adjusted EBITDA and P&E additions of
these acquired entities in our 2020 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, Adjusted EBITDA and OFCF 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. In addition, the rebased growth
percentages are not necessarily indicative of the revenue, Adjusted
EBITDA and OFCF that would have occurred if these transactions had
occurred on the dates assumed for purposes of calculating our
rebased amounts or the revenue, Adjusted EBITDA and OFCF that will
occur in the future. Investors should view rebased growth as a
supplement to, and not a substitute for, U.S. GAAP measures of
performance included in our condensed consolidated statements of
operations.
The following table provides adjustments made to the 2020
amounts (i) in aggregate for our consolidated reportable segments
and (ii) for the non-consolidated VodafoneZiggo JV to derive our
rebased growth rates:
Three months ended March 31,
2020
Revenue
Adjusted EBITDA
OFCF
in millions
Consolidated Liberty Global:
Acquisitions
$
473.5
$
151.6
$
65.2
Dispositions(i)
(7.3
)
(14.2
)
(12.1
)
Foreign Currency
265.1
103.9
42.4
Total increase
$
731.3
$
241.3
$
95.5
VodafoneZiggo JV(ii)
Foreign Currency
$
98.5
$
47.0
$
24.1
_____________________________
(i)
Relates primarily to rebase adjustments
for agreements to provide transitional and other services to the
VodafoneZiggo JV, Vodafone, Liberty Latin America, Deutsche Telekom
and M7 Group. These adjustments result in an equal amount of fees
in both the 2021 and 2020 periods for those services that are
deemed to be temporary in nature.
(ii)
Amounts reflect 100% of the adjustments
made related to the VodafoneZiggo JV's revenue, Adjusted EBITDA and
OFCF, respectively, which we do not consolidate as we hold a 50%
noncontrolling interest
Liquidity
The following table details the U.S. dollar equivalent balances
of our liquidity position(i) at March 31, 2021, which includes our
(i) cash and cash equivalents, (ii) investments held under SMAs and
(iii) unused borrowing capacity at March 31, 2021:
Cash
Unused
and Cash
Borrowing
Total
Equivalents(ii)
SMAs (iii)
Capacity (iv)
Liquidity
in millions
Liberty Global and unrestricted
subsidiaries
$
650.4
$
1,961.2
$
—
$
2,611.6
Virgin Media(v)
11.3
—
1,380.1
1,391.4
UPC Holding
32.0
—
842.0
874.0
Telenet
235.0
—
652.1
887.1
Total
$
928.7
$
1,961.2
$
2,874.2
$
5,764.1
______________________
(i)
Except as otherwise indicated, the amounts
reported in the table include the named entity and its
subsidiaries.
(ii)
Excludes certain amounts held in
restricted cash associated with the financing transactions
completed by the U.K. JV Entities during 2020.
(iii)
Represents investments held under SMAs
which are maintained by investment managers acting as agents on our
behalf.
(iv)
Our aggregate unused borrowing capacity of
$2.9 billion for the Full Company represents the maximum undrawn
commitments under the applicable facilities without regard to
covenant compliance calculations or other conditions precedent to
borrowing. Unused borrowing capacity excludes certain undrawn
facilities entered into by the U.K. JV Entities as these facilities
are deal contingent and cannot be used prior to the formation of
the U.K. JV.
(iv)
Cash and cash equivalents of Virgin Media
includes (i) certain subsidiaries of Virgin Media, but excludes the
parent entity, Virgin Media Inc., and (ii) the cash and cash
equivalents of the U.K. JV Entities, (with the exception of those
amounts held in restricted cash, as described above) as such cash
and cash equivalents will be retained by Liberty Global upon the
formation of the U.K. JV and is therefore not classified as held
for sale at March 31, 2021. Unused borrowing capacity of Virgin
Media represents unused capacity under a multi-currency revolving
credit facility of the U.K. JV Entities. The outstanding
third-party debt of the U.K. JV Entities is classified as held for
sale on our March 31, 2021 condensed consolidated balance
sheet.
Summary of Debt & Finance Lease Obligations
The following table(i) details the March 31, 2021 U.S. dollar
equivalent balances of the (i) outstanding principal amount of our
debt and finance lease obligations, (ii) expected principal related
derivative cash payments or receipts and (iii) swapped principal
amount of our debt and finance lease obligations:
Finance
Debt & Finance
Principal Related
Swapped Debt
Lease
Lease
Derivative
& Finance Lease
Debt(ii)
Obligations
Obligations
Cash Payments
Obligations
in millions
Virgin Media(iii)
$
16,270.4
$
65.5
$
16,335.9
$
112.3
$
16,448.2
UPC Holding
7,658.3
21.8
7,680.1
(163.6
)
7,516.5
Telenet
5,805.9
461.1
6,267.0
141.1
6,408.1
Other(iv)
531.2
43.6
574.8
—
574.8
Total
$
30,265.8
$
592.0
$
30,857.8
$
89.8
$
30,947.6
______________________
(i)
Except as otherwise indicated, the amounts
reported in the table include the named entity and its
subsidiaries.
(ii)
Debt amounts (i) for UPC Holding include
notes issued by special purpose entities that are consolidated by
UPC Holding, (ii) for Virgin Media exclude notes issued by certain
of the U.K. JV Entities outside of the Virgin Media borrowing group
and certain undrawn facilities entered into by the U.K. JV Entities
as these are deal contingent and cannot be used prior to the
formation of the U.K. JV.
(iii)
Virgin Media represents the debt and
finance lease obligations of the U.K. JV Entities that are within
the Virgin Media borrowing group, which are classified as held for
sale on our March 31, 2021 condensed consolidated balance
sheet.
(iv)
Debt amount includes (i) a loan backed by
the shares we hold in ITV Plc of $138.4 million and (ii) certain
debt held outside of the U.K. JV Entities that is classified as
held for sale on our March 31, 2021 condensed consolidated balance
sheet.
Property and Equipment Additions and Capital
Expenditures
The table below highlights the categories of our property and
equipment additions for the indicated periods and reconciles those
additions to our capital expenditures that are presented in the
condensed consolidated statements of cash flows in our 10-Q.
Three months ended
March 31,
2021
2020
in millions, except %
amounts
Customer premises equipment
$
154.2
$
147.5
New build & upgrade
139.9
159.5
Capacity
56.6
69.7
Baseline
225.2
137.6
Product & enablers
170.7
140.1
Total P&E additions
746.6
654.4
Reconciliation of P&E additions to
capital expenditures:
Assets acquired under capital-related
vendor financing arrangements(i)
(328.2
)
(370.9
)
Assets acquired under capital leases
(9.7
)
(11.1
)
Changes in current liabilities related to
capital expenditures
67.1
75.4
Total capital expenditures, net(ii)
$
475.8
$
347.8
P&E additions as % of revenue
20.7
%
22.8
%
______________________
(i)
Amounts exclude related VAT of $41.4
million and $63.6 million for the three months ended March 31, 2021
and 2020, respectively, that were also financed under these
arrangements.
(ii)
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 finance 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 and percentage change from period to period on both a
reported and rebased basis for the indicated periods:
ARPU per Cable Customer
Relationship
Three months ended March
31,
Increase/(decrease)
2021
2020
Reported %
Rebased %
Liberty Global
$
63.16
$
59.59
6.0
%
(2.7
%)
U.K. & Ireland (Virgin Media)
£
49.86
£
51.97
(4.1
%)
(4.1
%)
Belgium (Telenet)
€
58.90
€
58.34
1.0
%
1.0
%
UPC Holding
€
39.41
€
37.01
6.5
%
(2.2
%)
Mobile ARPU
The following tables provide ARPU per mobile subscriber and
percentage change from period to period on both a reported and
rebased basis for the indicated periods:
ARPU per Mobile
Subscriber
Three months ended March
31,
Increase/(decrease)
2021
2020
Reported %
Rebased %
Liberty Global:
Including interconnect revenue
$
22.89
$
16.74
36.7
%
(5.4
%)
Excluding interconnect revenue
$
19.87
$
13.74
44.6
%
(4.8
%)
Operating Data — March 31,
2021
Video
Homes Passed
Fixed-Line Customer
Relationships
Internet
Subscribers(i)
Basic Video
Subscribers(ii)
Enhanced Video
Subscribers
Total Video
Telephony
Subscribers(iii)
Total RGUs
Total Mobile
Subscribers(iv)
U.K.
15,386,600
5,655,100
5,458,600
—
3,446,600
3,446,600
4,419,300
13,324,500
3,407,700
Belgium
3,381,300
2,043,600
1,706,100
110,500
1,688,500
1,799,000
1,161,000
4,666,100
2,798,200
Switzerland(v)
2,464,500
1,482,500
1,146,900
336,200
906,500
1,242,700
1,007,000
3,396,600
2,205,800
Ireland
948,000
437,800
387,600
—
318,700
318,700
294,900
1,001,200
122,400
Poland
3,652,800
1,530,600
1,300,100
265,600
1,081,000
1,346,600
630,000
3,276,700
87,900
Slovakia
627,800
192,100
146,700
31,700
138,900
170,600
89,300
406,600
—
Total Liberty Global
26,461,000
11,341,700
10,146,000
744,000
7,580,200
8,324,200
7,601,500
26,071,700
8,622,000
VodafoneZiggo JV(vi)
7,298,100
3,816,100
3,354,300
511,300
3,299,800
3,811,100
2,222,900
9,388,300
5,232,900
Subscriber Variance Table —
March 31, 2021 vs. December 31, 2020
Video
Homes Passed
Fixed-Line Customer
Relationships
Internet
Subscribers(ii)
Basic Video
Subscribers(i)
Enhanced Video
Subscribers
Total Video
Telephony
Subscribers(iii)
Total RGUs
Total Mobile
Subscribers(iv)
Organic Change Summary:
U.K.
75,800
28,400
38,500
—
(51,400
)
(51,400
)
(43,900
)
(56,800
)
49,400
Belgium
8,300
(4,500
)
9,000
(13,200
)
500
(12,700
)
(10,800
)
(14,500
)
(9,900
)
Switzerland(v)
5,100
4,400
14,400
(9,900
)
16,500
6,600
12,300
33,300
26,700
Ireland
1,500
2,600
4,600
—
9,200
9,200
(5,100
)
8,700
2,800
Poland
17,600
5,600
10,400
10,600
1,200
11,800
(13,000
)
9,200
25,200
Slovakia
3,500
1,500
2,700
500
(800
)
(300
)
400
2,800
—
Total Liberty Global organic
change
111,800
38,000
79,600
(12,000
)
(24,800
)
(36,800
)
(60,100
)
(17,300
)
94,200
Q1 2021 Liberty Global
Adjustments:
Switzerland
53,100
700
(3,300
)
4,100
(3,500
)
600
(1,900
)
(4,600
)
(2,200
)
Belgium
—
—
—
—
—
—
—
—
(7,600
)
Total adjustments
53,100
700
(3,300
)
4,100
(3,500
)
600
(1,900
)
(4,600
)
(9,800
)
VodafoneZiggo JV(vi)
(600
)
(20,200
)
(9,200
)
6,400
(26,600
)
(20,200
)
(49,900
)
(79,300
)
43,000
Footnotes for Operating Data and Subscriber Variance
Tables
(i)
In Switzerland, we offer a 10 Mbps
internet service to our Basic and Enhanced Video Subscribers
without an incremental recurring fee. Our Internet Subscribers in
Switzerland include 49,900 subscribers who have requested and
received this service
(ii)
We have approximately 31,300 “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.
(iii)
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 208,100 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 March 31, 2021, our mobile subscriber count included 460,600,
356,600 and 123,500 prepaid mobile subscribers in Switzerland,
Belgium and the U.K., respectively.
(v)
Pursuant to service agreements,
Switzerland offers broadband internet, video 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 March 31, 2021,
Switzerland’s partner networks accounted for 114,000 Fixed-Line
Customer Relationships, 292,500 RGUs, which include 106,700
Internet Subscribers, 102,500 Video Subscribers and 83,300
Telephony Subscribers. Subscribers to our enhanced video services
provided over partner networks largely 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 include
the 475,800 homes passed by Switzerland’s partner networks at March
31, 2021. In addition, with the completion of the acquisition of
Sunrise, we now service homes through Sunrise's existing agreements
with Swisscom, Swiss Fibre Net and local utilities, which are not
included in Switzerland's homes passed count. Including these
arrangements, our operations in Switzerland have the ability to
offer fixed services to a national footprint.
(vi)
Amounts related to the VodafoneZiggo JV's
fixed-line and mobile products include small business and multiple
dwelling unit subscribers. In addition, the mobile amount shown for
the VodafoneZiggo JV's includes medium and large enterprise
subscribers. Prepaid mobile customers are excluded from the
VodafoneZiggo JV's mobile telephony subscriber counts after a
period of inactivity of nine months.
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 Belgium, Telenet leases a portion of its network under a
long-term finance 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
- The indicated growth rates are rebased for acquisitions,
dispositions, FX and other items that impact the comparability of
our year-over-year results. Please see Rebase Information for
information on rebased growth.
- Excludes customer impacts, including postponed U.K. price
increases and related churn effects.
- Costs to capture generally include incremental, third-party
operating and capital related costs that are directly associated
with integration activities, restructuring activities, and certain
other costs associated with aligning an acquiree to our business
processes to derive synergies. These costs are necessary to combine
the operations of a business being acquired (or joint venture being
formed) with ours or are incidental to the acquisition. As a
result, costs to capture may include certain (i) operating costs
that are included in Adjusted EBITDA, (ii) capital related costs
that are included in property and equipment additions and OFCF and
(iii) certain integration related restructuring expenses that are
not included within Adjusted EBITDA or OFCF. Given the achievement
of synergies occurs over time, certain of our costs to capture are
recurring by nature, and generally incurred within a few years of
completing the transaction.
- On May 7, 2020, we entered into an agreement with, among
others, Telefonica SA (Telefonica). Pursuant to which, Liberty
Global and Telefonica agreed to form a 50:50 joint venture (the
U.K. JV), which will combine Virgin Media’s operations in the U.K.
along with certain other Liberty Global subsidiaries created as a
result of the pending U.K. JV (together, the U.K. JV Entities) with
Telefonica’s mobile business in the U.K. to create a nationwide
integrated communications provider.
- Represents the simple aggregation of Virgin Media's and O2's
combined operating statistics, as reported at December 31,
2020.
- Liquidity refers to cash and cash equivalents and investments
held under separately managed accounts plus the maximum undrawn
commitments under subsidiary borrowing facilities for the Full
Company, without regard to covenant compliance calculations or
other conditions precedent to borrowing.
- The term "Full Company" includes amounts related to the U.K. JV
Entities, and certain amounts held outside of the U.K. JV Entities,
which are presented as held for sale on our March 31, 2021
condensed consolidated balance sheet. For purposes of presenting
certain debt and liquidity metrics consistent with how we calculate
our leverage ratios under our debt agreements, we have included
these debt and finance lease obligations in our Full Company
metrics.
- Our aggregate unused borrowing capacity of $2.9 billion for the
Full Company represents the maximum undrawn commitments under the
applicable facilities without regard to covenant compliance
calculations or other conditions precedent to borrowing. Upon
completion of the relevant March 31, 2021 compliance reporting
requirements for our credit facilities, and assuming no further
changes from quarter-end borrowing levels, we anticipate that the
full unused borrowing capacity will continue to be available, with
the exception of the VM Credit Facilities, which will have
borrowing capacity limited to £402.6 million ($555.6 million), with
no additional restriction to loan or distribute. Our above
expectations do not consider any actual or potential changes to our
borrowing levels or any amounts loaned or distributed subsequent to
March 31, 2021.
- Our debt and net debt ratios, which are non-GAAP metrics, are
defined as total debt and net debt, respectively, divided by
Adjusted EBITDA for the last twelve months (LTM Adjusted EBITDA),
which includes the pro forma pre-acquisition Adjusted EBITDA of
Sunrise. Net debt is defined as total debt less cash and cash
equivalents and investments under separately managed accounts.
Consistent with how we calculate our leverage ratios under our debt
agreements, these ratios are presented on a Full Company basis that
includes the debt of the U.K. JV Entities and certain amounts
outside of the U.K. JV Entities that are classified as held for
sale on our March 31, 2021 condensed consolidated balance sheet.
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
loan backed by the shares we hold in ITV plc. For additional
information on our investments, see note 5 to the condensed
consolidated financial statements included in our 10-Q. The
following table details the calculation of our debt and net debt to
LTM Adjusted EBITDA ratios as of and for the twelve months ended
March 31, 2021 (in millions, except ratios):
Reconciliation of LTM loss to LTM
Adjusted EBITDA:
LTM loss
$
(1,179.6
)
Income tax benefit
(190.7
)
Other income, net
(35.9
)
Share of results of affiliates, net
277.0
Losses on debt extinguishment, net
171.2
Realized and unrealized gains due to
changes in fair values of certain investments and debt, net
(769.6
)
Foreign currency transaction losses,
net
1,505.4
Realized and unrealized losses on
derivative instruments, net
1,305.5
Interest expense
1,287.0
Operating income
2,370.3
Impairment, restructuring and other
operating items, net
4.0
Depreciation and amortization
2,746.9
Share-based compensation expense
362.6
LTM Adjusted EBITDA
$
5,483.8
Debt to LTM Adjusted EBITDA:
Debt and finance lease obligations before
deferred financing costs, discounts and premiums
30,857.8
Principal related projected derivative
cash receipts
89.8
ITV Collar Loan
(138.4
)
Adjusted debt and finance lease
obligations before deferred financing costs, discounts and
premiums
$
30,809.2
LTM Adjusted EBITDA
$
5,483.8
Debt to LTM Adjusted EBITDA ratio
5.6
Net Debt to LTM Adjusted
EBITDA:
Adjusted debt and finance lease
obligations before deferred financing costs, discounts and
premiums
$
30,809.2
Cash and cash equivalents and investments
held under separately managed accounts
(2,889.9
)
Adjusted net debt and finance lease
obligations before deferred financing costs, discounts and
premiums
$
27,919.3
LTM Adjusted EBITDA
$
5,483.8
Net debt to LTM Adjusted EBITDA ratio
5.1
10. For purposes of calculating our average tenor, total
third-party debt excludes vendor financing.
Glossary
10-Q or 10-K: As used herein, the
terms 10-Q and 10-K refer to our most recent quarterly or annual
report as filed with the Securities and Exchange Commission on Form
10-Q or Form 10-K, as applicable.
Adjusted EBITDA: Adjusted EBITDA is
the primary measure used by our chief operating decision maker to
evaluate segment operating performance and 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, Adjusted EBITDA
is defined as net earnings (loss) before net income tax benefit
(expense), other non-operating income or expenses, net share of
results of affiliates, net gains (losses) on debt extinguishment,
net realized and unrealized gains (losses) due to changes in fair
value of certain investments and debt, net foreign currency
transaction gains (losses), net gains (losses) on derivative
instruments, net interest expense, 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 Adjusted EBITDA 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
consolidated Adjusted EBITDA measure, which is a non-GAAP 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.
Consolidated Adjusted EBITDA should be viewed as a measure of
operating performance that is a supplement to, and not a substitute
for U.S. GAAP measures of income included in our condensed
consolidated statements of operations.
A reconciliation of net earnings to Adjusted EBITDA is presented
in the following table:
Three months ended
March 31,
2021
2020
in millions
Net earnings
$
1,440.3
$
1,017.7
Income tax expense
170.5
80.1
Other income, net
(10.1
)
(52.4
)
Share of results of affiliates, net
(1.7
)
(33.4
)
Losses on debt extinguishment, net
—
54.5
Realized and unrealized losses (gains) due
to changes in fair values of certain investments and debt, net
(194.6
)
529.8
Foreign currency transaction gains,
net
(303.1
)
(391.7
)
Realized and unrealized gains on
derivative instruments, net
(811.1
)
(1,237.3
)
Interest expense
335.1
313.3
Operating income
625.3
280.6
Impairment, restructuring and other
operating items, net
44.4
31.0
Depreciation and amortization
634.2
783.5
Share-based compensation expense
63.4
55.2
Adjusted EBITDA
$
1,367.3
$
1,150.3
Adjusted Free Cash Flow (FCF): Net
cash provided by our operating activities, plus (i) cash payments
or receipts 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 condensed consolidated statements
of cash flows, (b) principal payments on amounts financed by
vendors and intermediaries and (c) principal payments on finance
leases (exclusive of the portions of the network lease in Belgium
that we assumed in connection with certain acquisitions). We
believe that our presentation of Adjusted Free Cash Flow, which is
a non-GAAP measure, 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 condensed consolidated
statements of cash flows.
The following table provides a reconciliation of our net cash
provided by operating activities to Adjusted Free Cash Flow for the
indicated periods.
Three months ended
March 31,
2021
2020
in millions
Net cash provided by operating
activities
$
821.2
$
449.8
Cash payments for direct acquisition and
disposition costs
13.2
0.5
Expenses financed by an
intermediary(i)
852.3
722.8
Capital expenditures, net
(475.8
)
(347.8
)
Principal payments on amounts financed by
vendors and intermediaries
(1,101.9
)
(1,121.0
)
Principal payments on certain finance
leases
(15.9
)
(21.3
)
Adjusted FCF
$
93.1
$
(317.0
)
_______________
(i)
For purposes of our condensed consolidated statements of cash
flows, expenses financed by an intermediary are treated as
hypothetical operating cash outflows and hypothetical financing
cash inflows when the expenses are incurred. When we pay the
financing intermediary, we record financing cash outflows in our
condensed consolidated statements of cash flows. For purposes of
our 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 per average cable customer
relationship or mobile subscriber, as applicable. ARPU per average
fixed-line customer relationship is calculated by dividing the
average monthly subscription revenue from residential cable and
SOHO services by the average number of fixed-line 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 cable 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 cable customer relationship or
mobile subscriber, as applicable. Fixed-line 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, which
is a non-GAAP measure, we adjust the prior-year subscription
revenue, fixed-line 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 Adjusted EBITDA, 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 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 or through a partner
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. 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 finance 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.
B2B: Business-to-Business.
Customer Churn: The rate at which
customers relinquish their subscriptions. The annual rolling
average basis is calculated by dividing the number of disconnects
during the preceding 12 months by the average number of customer
relationships. For the purpose of computing churn, a disconnect is
deemed to have occurred if the customer no longer receives any
level of service from us and is required to return our equipment. A
partial product downgrade, typically used to encourage customers to
pay an outstanding bill and avoid complete service disconnection,
is not considered to be disconnected for purposes of our churn
calculations. Customers who move within our cable footprint and
upgrades and downgrades between services are also excluded from the
disconnect figures used in the churn calculation.
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 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.
Fixed-Line Customer Relationships:
The number of customers who receive at least one of our internet,
video or telephony services that we count as RGUs, without regard
to which or to how many services they subscribe. Fixed-Line
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 Fixed-Line Customer
Relationships. We exclude mobile-only customers from Fixed-Line
Customer Relationships.
Fixed-Mobile Convergence (FMC):
Fixed-mobile convergence penetration represents the number of
customers who subscribe to both a fixed broadband internet service
and postpaid mobile telephony service, divided by the total number
of customers who subscribe to our fixed broadband internet
service.
Homes Passed: Homes, residential
multiple dwelling units or commercial units that can be connected
to our networks without materially extending the distribution
plant. 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.
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.
Lightning premises: Includes homes,
residential multiple dwelling units and commercial premises that
potentially could subscribe to our residential or SOHO services,
which have been connected to our networks as a part of our Project
Lightning network extension program in the U.K. and Ireland.
Project Lightning infill build relates to construction in areas
adjacent to our existing network.
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.
OFCF: As used herein, Operating
Free Cash Flow or "OFCF", which is a non-GAAP measure, represents
Adjusted EBITDA less property and equipment additions. OFCF is an
additional metric that we use to measure the performance of our
operations after considering the level of property and equipment
additions incurred during the period.
A reconciliation of Adjusted EBITDA to OFCF is presented in the
following table:
Three months ended
March 31,
2021
2020
in millions
Adjusted EBITDA
$
1,367.3
$
1,150.3
Property and equipment additions
(746.6
)
(654.4
)
OFCF
$
620.7
$
495.9
Property and equipment additions (P&E
additions): Includes capital expenditures on an accrual
basis, amounts financed under vendor financing or finance lease
arrangements and other non-cash additions.
RGU: A Revenue Generating Unit is
separately a Basic Video Subscriber, Enhanced Video 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, 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 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.
U.S. GAAP: Accounting principles
generally accepted in the United States.
YoY: Year-over-year.
Appendix - Supplemental Adjusted EBITDA, P&E and OFCF
information
The following table presents (i) Adjusted EBITDA, (ii) property
and equipment additions, (iii) OFCF and (iv) percentage change from
period to period for Adjusted EBITDA and OFCF on both a reported
and rebased basis for each of our consolidated reportable
segments:
Three months ended March
31,
Increase/(decrease)
2021
2020
Reported %
Rebased %
in millions, except %
amounts
Adjusted EBITDA:
U.K./Ireland
$
692.6
$
655.4
5.7
(1.9
)
Belgium
371.8
331.6
12.1
3.2
Switzerland
281.6
134.1
110.0
(7.3
)
CEE
57.0
54.3
5.0
0.3
Central and Corporate
(35.7
)
(25.1
)
(42.2
)
1.2
Adjusted EBITDA
$
1,367.3
$
1,150.3
18.9
(1.7
)
Property and equipment additions(i):
U.K./Ireland
$
351.4
$
346.6
Belgium
153.4
141.6
Switzerland
154.2
69.2
CEE
17.6
18.9
Central and Corporate
70.0
78.1
Total property and equipment additions
$
746.6
$
654.4
OFCF:
U.K./Ireland
$
341.2
$
308.8
10.5
2.4
Belgium
218.4
190.0
14.9
5.3
Switzerland
127.4
64.9
96.3
(6.8
)
CEE
39.4
35.4
11.3
6.0
Central and Corporate
(105.7
)
(103.2
)
(2.4
)
12.8
Total OFCF
$
620.7
$
495.9
25.2
5.0
_______________
(i) Excludes the Centrally-held P&E
Attributions, as defined and described below.
Centrally-held Property & Equipment
Attributions
Property and equipment additions presented for Central and
Corporate include certain capital costs incurred for the benefit of
our operating segments. Generally, for purposes of the consolidated
financial statements of our borrowing groups, the expense
associated with these capital costs is allocated and/or charged to
our operating segments as related-party fees and allocations in
their respective statements of operations over the period in which
the operating segment benefits from the use of the Central and
Corporate asset. Related-party fees and allocations are excluded
from the reported Adjusted EBITDA metric of these borrowing groups.
These amounts are based on (i) our estimate of its share of
underlying costs, (ii) our estimate of its share of the underlying
costs plus a mark-up or (iii) commercially-negotiated rates. These
charges and allocations differ from the attributed OFCF approach,
as further described below.
For internal management reporting and capital allocation
purposes, we evaluate the OFCF of our operating segments on an
"attributed" basis, whereby we estimate and attribute certain
capital costs incurred by Central and Corporate to our operating
segments as if that operating segment directly incurred its
estimated share of the capital costs in the same period the costs
were incurred by Central and Corporate. These capital costs
represent assets that are jointly used by our operating segments.
In the context of evaluating our operating segments, we believe
this non-GAAP approach, which we refer to as the "Centrally-held
Property and Equipment Attributions", is a meaningful measure as it
represents a transparent view of what the estimated capital spend
for our operating segments might be if they were to operate as a
stand-alone business (excluding, among other considerations, any
impact from lost economies of scale) and allows us to more
accurately (i) review capital trends by operating segment, (ii)
perform benchmarking between operating segments and (iii) drive
alignment and accountability between Central and Corporate and our
operating segments with respect to our consolidated capital spend.
The amounts attributed to each operating segment are estimated
based on (a) actual costs incurred by Central and Corporate,
without any mark-up, and (b) each respective operating segment's
estimated use of the associated assets.
The below table summarizes the Centrally-held Property and
Equipment Attributions, consistent with our internal management
reporting approach. This presentation is for illustrative purposes
only and is intended as a supplement to, and not a substitute for,
our U.S. GAAP presentation of the property and equipment additions
of our reportable segments.
Three months ended March
31,
2021
2020
in millions
Increase (decrease) to property and
equipment additions:
U.K./Ireland
$
32.9
$
34.9
Belgium
4.1
3.1
Switzerland
11.6
10.1
CEE
5.2
6.9
Central and Corporate
(53.8
)
(55.0
)
Total Liberty Global
$
—
$
—
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210505006026/en/
Investor Relations Max Adkins +44 78 1795 9705 Steve
Carroll +1 303 784 4505 Stefan Halters +44 20 8483 6211
Corporate Communications Molly Bruce +1 303 220 4202 Matt
Beake +44 20 8483 6428
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