|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the quarterly period ended June 30, 2013
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from to
|
England and Wales
|
|
98-1112770
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
38 Hans Crescent, London, England
|
|
SW1X 0LZ
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
|
Page
Number
|
|
PART I — FINANCIAL INFORMATION
|
|
ITEM 1.
|
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
||
|
||
|
||
|
||
|
||
|
||
ITEM 2.
|
||
ITEM 3.
|
||
ITEM 4.
|
||
|
PART II — OTHER INFORMATION
|
|
ITEM 1.
|
||
ITEM 1A.
|
||
ITEM 2.
|
||
ITEM 6.
|
|
June 30,
2013 |
|
December 31,
2012 |
||||
|
in millions
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,125.0
|
|
|
$
|
2,038.9
|
|
Trade receivables, net
|
1,533.8
|
|
|
1,031.0
|
|
||
Other current assets (note 4)
|
1,355.6
|
|
|
655.9
|
|
||
Total current assets
|
5,014.4
|
|
|
3,725.8
|
|
||
Restricted cash (notes 2 and
9
)
|
7.0
|
|
|
1,516.7
|
|
||
Investments (including $2,521.1 million and $947.9 million, respectively, measured at fair value) (note 3)
|
2,522.4
|
|
|
950.1
|
|
||
Property and equipment, net (note 6)
|
22,779.0
|
|
|
13,437.6
|
|
||
Goodwill (note 6)
|
22,382.3
|
|
|
13,877.6
|
|
||
Intangible assets subject to amortization, net (note 6)
|
6,074.8
|
|
|
2,581.3
|
|
||
Other assets, net (note 4)
|
4,925.7
|
|
|
2,218.6
|
|
||
Total assets
|
$
|
63,705.6
|
|
|
$
|
38,307.7
|
|
|
June 30,
2013 |
|
December 31,
2012 |
||||
|
in millions
|
||||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
1,203.0
|
|
|
$
|
774.0
|
|
Deferred revenue and advance payments from subscribers and others
|
1,272.2
|
|
|
849.7
|
|
||
Current portion of debt and capital lease obligations (note 7)
|
845.0
|
|
|
363.5
|
|
||
Derivative instruments (note 4)
|
610.1
|
|
|
569.9
|
|
||
Accrued interest
|
595.5
|
|
|
351.8
|
|
||
Accrued programming
|
357.3
|
|
|
251.0
|
|
||
Other accrued and current liabilities
|
2,268.2
|
|
|
1,460.4
|
|
||
Total current liabilities
|
7,151.3
|
|
|
4,620.3
|
|
||
Long-term debt and capital lease obligations (note 7)
|
41,059.2
|
|
|
27,161.0
|
|
||
Other long-term liabilities (note 4)
|
3,947.7
|
|
|
4,441.3
|
|
||
Total liabilities
|
52,158.2
|
|
|
36,222.6
|
|
||
Commitments and contingencies (notes 2, 4, 7 and 12)
|
|
|
|
||||
Equity (note 9):
|
|
|
|
||||
Liberty Global shareholders:
|
|
|
|
||||
Class A ordinary shares, $0.01 nominal value. Issued and outstanding 222,297,273 and nil shares, respectively
|
2.2
|
|
|
—
|
|
||
Class B ordinary shares, $0.01 nominal value. Issued and outstanding 10,176,295 and nil shares, respectively
|
0.1
|
|
|
—
|
|
||
Class C ordinary shares, $0.01 nominal value. Issued and outstanding 166,443,526 and nil shares, respectively
|
1.7
|
|
|
—
|
|
||
Series A common stock, $0.01 par value. Authorized 500,000,000 shares at December 31, 2012; issued and outstanding nil and 142,284,430 shares, respectively
|
—
|
|
|
1.4
|
|
||
Series B common stock, $0.01 par value. Authorized 50,000,000 shares at December 31, 2012; issued and outstanding nil and 10,206,145 shares, respectively
|
—
|
|
|
0.1
|
|
||
Series C common stock, $0.01 par value. Authorized 500,000,000 shares at December 31, 2012; issued and outstanding nil and 106,402,667 shares, respectively
|
—
|
|
|
1.1
|
|
||
Additional paid-in capital
|
13,294.2
|
|
|
2,955.6
|
|
||
Accumulated deficit
|
(2,361.3
|
)
|
|
(2,348.7
|
)
|
||
Accumulated other comprehensive earnings, net of taxes
|
1,127.3
|
|
|
1,600.5
|
|
||
Treasury shares, at cost
|
(20.2
|
)
|
|
—
|
|
||
Total Liberty Global shareholders
|
12,044.0
|
|
|
2,210.0
|
|
||
Noncontrolling interests
|
(496.6
|
)
|
|
(124.9
|
)
|
||
Total equity
|
11,547.4
|
|
|
2,085.1
|
|
||
Total liabilities and equity
|
$
|
63,705.6
|
|
|
$
|
38,307.7
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
in millions, except share and per share amounts
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
3,161.9
|
|
|
$
|
2,524.5
|
|
|
$
|
5,929.6
|
|
|
$
|
5,061.5
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Operating (other than depreciation and amortization) (including share-based compensation)
(note 10)
|
1,171.1
|
|
|
887.3
|
|
|
2,198.1
|
|
|
1,785.0
|
|
||||
Selling, general and administrative (SG&A) (including share-based compensation)
(note 10)
|
635.0
|
|
|
477.9
|
|
|
1,132.9
|
|
|
949.3
|
|
||||
Depreciation and amortization
|
864.3
|
|
|
668.7
|
|
|
1,557.4
|
|
|
1,339.4
|
|
||||
Impairment, restructuring and other operating items, net
(note 2)
|
46.3
|
|
|
11.6
|
|
|
70.6
|
|
|
14.5
|
|
||||
|
2,716.7
|
|
|
2,045.5
|
|
|
4,959.0
|
|
|
4,088.2
|
|
||||
Operating income
|
445.2
|
|
|
479.0
|
|
|
970.6
|
|
|
973.3
|
|
||||
Non-operating income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest
expense
|
(542.4
|
)
|
|
(402.1
|
)
|
|
(1,012.5
|
)
|
|
(820.2
|
)
|
||||
Interest and divide
nd income (note 3)
|
35.3
|
|
|
1.9
|
|
|
49.2
|
|
|
20.9
|
|
||||
Realized and unrealized
gains (losses)
on derivative instruments, net
(note 4)
|
(4.7
|
)
|
|
237.4
|
|
|
191.1
|
|
|
(376.7
|
)
|
||||
Foreign currency transaction
gains (losses)
, net
|
91.5
|
|
|
(474.4
|
)
|
|
(43.4
|
)
|
|
4.6
|
|
||||
Realized and unrealized gains (losses) due to changes in fair values of certain investments, net
(notes 3 and 5)
|
193.0
|
|
|
(34.1
|
)
|
|
265.2
|
|
|
16.8
|
|
||||
Losses on debt modification and extinguishment, net (note 7)
|
(11.7
|
)
|
|
(6.9
|
)
|
|
(170.0
|
)
|
|
(13.7
|
)
|
||||
Other expense, net
|
(1.6
|
)
|
|
(3.7
|
)
|
|
(3.2
|
)
|
|
(4.0
|
)
|
||||
|
(240.6
|
)
|
|
(681.9
|
)
|
|
(723.6
|
)
|
|
(1,172.3
|
)
|
||||
Earnings (loss) from continuing operations before income taxes
|
204.6
|
|
|
(202.9
|
)
|
|
247.0
|
|
|
(199.0
|
)
|
||||
Income tax expense (note 8)
|
(195.9
|
)
|
|
(11.8
|
)
|
|
(216.4
|
)
|
|
(44.9
|
)
|
||||
Earnings (loss)
from continuing operations
|
8.7
|
|
|
(214.7
|
)
|
|
30.6
|
|
|
(243.9
|
)
|
||||
Discontinued operation (note 2):
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) from discontinued operation, net of taxes
|
—
|
|
|
(2.6
|
)
|
|
—
|
|
|
35.5
|
|
||||
Gain on disposal of discontinued operation, net of taxes
|
—
|
|
|
924.1
|
|
|
—
|
|
|
924.1
|
|
||||
|
—
|
|
|
921.5
|
|
|
—
|
|
|
959.6
|
|
||||
Net earnings
|
8.7
|
|
|
706.8
|
|
|
30.6
|
|
|
715.7
|
|
||||
Net
earnings
attributable to noncontrolling interests
|
(20.3
|
)
|
|
(5.2
|
)
|
|
(43.2
|
)
|
|
(39.2
|
)
|
||||
Net earnings (loss) attributable to Liberty Global shareholders
|
$
|
(11.6
|
)
|
|
$
|
701.6
|
|
|
$
|
(12.6
|
)
|
|
$
|
676.5
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted earnings (loss) attributable to Liberty Global shareholders per share (note 11):
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.04
|
)
|
|
$
|
(0.81
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.97
|
)
|
Discontinued operation
|
—
|
|
|
3.41
|
|
|
—
|
|
|
3.46
|
|
||||
|
$
|
(0.04
|
)
|
|
$
|
2.60
|
|
|
$
|
(0.05
|
)
|
|
$
|
2.49
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average ordinary shares outstanding — basic and diluted
|
292,517,444
|
|
|
269,398,368
|
|
|
274,808,558
|
|
|
271,186,138
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
$
|
8.7
|
|
|
$
|
706.8
|
|
|
$
|
30.6
|
|
|
$
|
715.7
|
|
Other comprehensive earnings (loss), net of taxes:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(500.7
|
)
|
|
32.5
|
|
|
(479.3
|
)
|
|
92.6
|
|
||||
Reclassification adjustments included in net earnings (note 2)
|
—
|
|
|
(12.0
|
)
|
|
—
|
|
|
(12.0
|
)
|
||||
Other
|
0.3
|
|
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
||||
Other comprehensive earnings (loss)
|
(500.4
|
)
|
|
20.9
|
|
|
(478.9
|
)
|
|
81.0
|
|
||||
Comprehensive earnings (loss)
|
(491.7
|
)
|
|
727.7
|
|
|
(448.3
|
)
|
|
796.7
|
|
||||
Comprehensive earnings attributable to noncontrolling interests
|
(8.0
|
)
|
|
(3.0
|
)
|
|
(37.5
|
)
|
|
(40.9
|
)
|
||||
Comprehensive earnings (loss) attributable to Liberty Global shareholders
|
$
|
(499.7
|
)
|
|
$
|
724.7
|
|
|
$
|
(485.8
|
)
|
|
$
|
755.8
|
|
|
Liberty Global shareholders
|
|
Non-controlling
interests
|
|
Total
equity
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Ordinary shares
|
|
Common stock
|
|
Additional
paid-in
capital
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
earnings,
net of taxes
|
|
Treasury shares,
at cost
|
|
Total Liberty Global shareholders
|
|
|||||||||||||||||||||||||||||||||||||
|
Class A
|
|
Class B
|
|
Class C
|
|
Series A
|
|
Series B
|
|
Series C
|
|
|||||||||||||||||||||||||||||||||||||||
|
in millions
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Balance at January 1, 2013
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
|
$
|
0.1
|
|
|
$
|
1.1
|
|
|
$
|
2,955.6
|
|
|
$
|
(2,348.7
|
)
|
|
$
|
1,600.5
|
|
|
$
|
—
|
|
|
$
|
2,210.0
|
|
|
$
|
(124.9
|
)
|
|
$
|
2,085.1
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.6
|
)
|
|
—
|
|
|
—
|
|
|
(12.6
|
)
|
|
43.2
|
|
|
30.6
|
|
|||||||||||||
Other comprehensive loss, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(473.2
|
)
|
|
—
|
|
|
(473.2
|
)
|
|
(5.7
|
)
|
|
(478.9
|
)
|
|||||||||||||
Shares issued in connection with the Virgin Media Acquisition and impacts of related change in parent entity (notes 1 and 2)
|
2.1
|
|
|
0.1
|
|
|
1.6
|
|
|
(1.4
|
)
|
|
(0.1
|
)
|
|
(1.1
|
)
|
|
9,374.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,375.3
|
|
|
—
|
|
|
9,375.3
|
|
|||||||||||||
Revaluation of VM Convertible Notes in connection with the Virgin Media Acquisition (note 2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,660.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,660.0
|
|
|
—
|
|
|
1,660.0
|
|
|||||||||||||
Distributions by subsidiaries to noncontrolling interest owners (note 9)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(523.8
|
)
|
|
(523.8
|
)
|
|||||||||||||
Purchase of additional Telenet shares (note 9)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(525.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(525.4
|
)
|
|
63.6
|
|
|
(461.8
|
)
|
|||||||||||||
Repurchase and cancellation of Liberty Global and LGI shares (note 9)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(374.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(374.4
|
)
|
|
—
|
|
|
(374.4
|
)
|
|||||||||||||
Exchange of VM Convertible Notes (note 7)
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102.9
|
|
|
—
|
|
|
102.9
|
|
|||||||||||||
Share-based compensation (note 10)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63.9
|
|
|
—
|
|
|
63.9
|
|
|||||||||||||
Shares issued to subsidiary (note 9)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20.2
|
|
|
—
|
|
|
—
|
|
|
(20.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||||
Adjustments due to changes in subsidiaries’ equity and other, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17.5
|
|
|
51.0
|
|
|
68.5
|
|
|||||||||||||
Balance at June 30, 2013
|
$
|
2.2
|
|
|
$
|
0.1
|
|
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,294.2
|
|
|
$
|
(2,361.3
|
)
|
|
$
|
1,127.3
|
|
|
$
|
(20.2
|
)
|
|
$
|
12,044.0
|
|
|
$
|
(496.6
|
)
|
|
$
|
11,547.4
|
|
|
Six months ended
|
||||||
|
June 30,
|
||||||
|
2013
|
|
2012
|
||||
|
in millions
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net earnings
|
$
|
30.6
|
|
|
$
|
715.7
|
|
Earnings from discontinued operation
|
—
|
|
|
(959.6
|
)
|
||
Earnings (loss) from continuing operations
|
30.6
|
|
|
(243.9
|
)
|
||
Adjustments to reconcile earnings (loss) from continuing operations to net cash provided by operating activities:
|
|
|
|
||||
Share-based compensation expense
|
120.7
|
|
|
63.3
|
|
||
Depreciation and amortization
|
1,557.4
|
|
|
1,339.4
|
|
||
Impairment, restructuring and other operating items, net
|
70.6
|
|
|
14.5
|
|
||
Amortization of deferred financing costs and non-cash interest accretion
|
33.2
|
|
|
32.1
|
|
||
Realized and unrealized losses (gains) on derivative instruments, net
|
(191.1
|
)
|
|
376.7
|
|
||
Foreign currency transaction losses (gains), net
|
43.4
|
|
|
(4.6
|
)
|
||
Realized and unrealized gains due to changes in fair values of certain investments, net
|
(265.2
|
)
|
|
(11.2
|
)
|
||
Losses on debt modification and extinguishment, net
|
170.0
|
|
|
13.7
|
|
||
Deferred income tax expense
|
47.1
|
|
|
122.4
|
|
||
Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions
|
(270.5
|
)
|
|
(308.7
|
)
|
||
Net cash provided by operating activities of discontinued operation
|
—
|
|
|
61.2
|
|
||
Net cash provided by operating activities
|
1,346.2
|
|
|
1,454.9
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Cash paid in connection with acquisitions, net of cash acquired
|
(4,065.2
|
)
|
|
(48.7
|
)
|
||
Investments in and loans to affiliates and others
|
(1,202.7
|
)
|
|
(18.4
|
)
|
||
Capital expenditures
|
(994.6
|
)
|
|
(994.1
|
)
|
||
Proceeds received upon disposition of discontinued operation
|
—
|
|
|
1,055.6
|
|
||
Other investing activities, net
|
(15.7
|
)
|
|
25.8
|
|
||
Net cash used by investing activities of discontinued operation
|
—
|
|
|
(51.7
|
)
|
||
Net cash used by investing activities
|
$
|
(6,278.2
|
)
|
|
$
|
(31.5
|
)
|
|
Six months ended
|
||||||
|
June 30,
|
||||||
|
2013
|
|
2012
|
||||
|
in millions
|
||||||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings of debt
|
$
|
8,845.2
|
|
|
$
|
1,311.9
|
|
Repayments and repurchases of debt and capital lease obligations
|
(7,339.3
|
)
|
|
(1,858.5
|
)
|
||
Decrease in restricted cash related to the Virgin Media Acquisition
|
3,594.4
|
|
|
—
|
|
||
Decrease in restricted cash related to the Telenet Tender
|
1,539.7
|
|
|
—
|
|
||
Distributions by subsidiaries to noncontrolling interests
|
(524.4
|
)
|
|
(84.9
|
)
|
||
Purchase of additional Telenet shares
|
(454.5
|
)
|
|
—
|
|
||
Repurchase of Liberty Global and LGI shares
|
(346.4
|
)
|
|
(428.1
|
)
|
||
Payment of financing costs and debt premiums
|
(341.0
|
)
|
|
(29.2
|
)
|
||
Payment of net settled employee withholding taxes on share-based incentive awards
|
(34.6
|
)
|
|
(28.4
|
)
|
||
Other financing activities, net
|
76.6
|
|
|
(27.2
|
)
|
||
Net cash provided (used) by financing activities
|
5,015.7
|
|
|
(1,144.4
|
)
|
||
Effect of exchange rate changes on cash:
|
|
|
|
||||
Continuing operations
|
2.4
|
|
|
(11.9
|
)
|
||
Discontinued operation
|
—
|
|
|
(9.5
|
)
|
||
Total
|
2.4
|
|
|
(21.4
|
)
|
||
Net increase in cash and cash equivalents:
|
|
|
|
||||
Continuing operations
|
86.1
|
|
|
257.6
|
|
||
Discontinued operation
|
—
|
|
|
—
|
|
||
Net increase in cash and cash equivalents
|
86.1
|
|
|
257.6
|
|
||
Cash and cash equivalents:
|
|
|
|
||||
Beginning of period
|
2,038.9
|
|
|
1,651.2
|
|
||
End of period
|
$
|
2,125.0
|
|
|
$
|
1,908.8
|
|
Cash paid for interest:
|
|
|
|
||||
Continuing operations
|
$
|
886.2
|
|
|
$
|
771.3
|
|
Discontinued operation
|
—
|
|
|
29.0
|
|
||
Total
|
$
|
886.2
|
|
|
$
|
800.3
|
|
Net cash paid (refunded) for taxes — continuing operations
|
$
|
60.8
|
|
|
$
|
(12.4
|
)
|
•
|
Each share of common stock, par value
$0.01
per share, of
Virgin Media
was converted into the right to receive (i)
0.2582
Class A ordinary shares of
Liberty Global
, (ii)
0.1928
Class C ordinary shares of
Liberty Global
and (iii)
$17.50
in cash (collectively, the
Virgin Media Merger Consideration
); and
|
•
|
Each share of Series A common stock, par value
$0.01
per share, of
LGI
was converted into the right to receive
one
Class A ordinary share of
Liberty Global
; each share of Series B common stock, par value
$0.01
per share, of
LGI
was converted into the right to receive
one
Class B ordinary share of
Liberty Global
; and each share of Series C common stock, par value
$0.01
per share, of
LGI
was converted into the right to receive
one
Class C ordinary share of
Liberty Global
.
|
Class A ordinary shares (a)
|
$
|
5,354.6
|
|
Class C ordinary shares (a)
|
3,750.3
|
|
|
Cash (b)
|
4,760.2
|
|
|
Fair value of the vested portion of Virgin Media stock incentive awards (c)
|
270.4
|
|
|
Total equity and cash consideration
|
$
|
14,135.5
|
|
(a)
|
Represents the value assigned to the
70,233,842
and
52,444,170
Class A and Class C ordinary shares issued to
Virgin Media
shareholders in connection with the
Virgin Media Acquisition
. These amounts are based on (i) the exchange ratios specified by the
Virgin Media Merger Agreement
, (ii) the closing per share price on June 7, 2013 of Series A and Series C
LGI
common stock of
$76.24
and
$71.51
, respectively, and (iii) the
272,013,333
outstanding shares of
Virgin Media
common stock at June 7, 2013.
|
(b)
|
Represents the cash consideration paid in connection with the
Virgin Media Acquisition
. This amount is based on (i) the
$17.50
per share cash consideration specified by the
Virgin Media Merger Agreement
and (ii) the
272,013,333
outstanding shares of
Virgin Media
common stock at June 7, 2013.
|
(c)
|
Represents the portion of the estimated fair value of the
Virgin Media
stock incentive awards that are attributable to services provided prior to the June 7, 2013 acquisition date. The estimated fair value is based on the attributes of the
13.03 million
outstanding
Virgin Media
stock incentive awards at June 7, 2013, including the market price of the underlying
Virgin Media
common stock. The outstanding
Virgin Media
stock incentive awards at June 7, 2013 include
9.86 million
stock options that have been valued using Black Scholes option valuations. In addition,
Virgin Media
’s stock incentive awards at June 7, 2013 included
3.17 million
restricted stock units that included performance conditions and, in certain cases, market conditions. Those restricted stock units with market conditions have been valued using Monte Carlo simulation models.
|
Cash and cash equivalents
|
$
|
694.6
|
|
Other current assets
|
935.9
|
|
|
Property and equipment, net
|
9,869.9
|
|
|
Goodwill (a)
|
8,982.0
|
|
|
Intangible assets subject to amortization (b)
|
3,925.8
|
|
|
Other assets, net
|
4,268.0
|
|
|
Current portion of debt and capital lease obligations
|
(1,184.5
|
)
|
|
Other accrued and current liabilities (c) (d)
|
(1,892.5
|
)
|
|
Long-term debt and capital lease obligations
|
(8,477.4
|
)
|
|
Other long-term liabilities (c)
|
(1,326.3
|
)
|
|
Additional paid-in capital (e)
|
(1,660.0
|
)
|
|
Total purchase price (f)
|
$
|
14,135.5
|
|
(a)
|
The goodwill recognized in connection with the
Virgin Media Acquisition
is primarily attributable to (i) the ability to take advantage of
Virgin Media
’s existing advanced broadband communications network to gain immediate access to potential customers and (ii) substantial synergies that are expected to be achieved through the integration of
Virgin Media
with our other broadband communications operations in Europe.
|
(b)
|
Amount primarily includes intangible assets related to customer relationships. At June 7, 2013, the weighted average useful life of
Virgin Media
’s intangible assets was approximately
seven
years.
|
(c)
|
No amounts have been allocated to deferred revenue associated with the ongoing performance obligations associated with
Virgin Media
's commercial service contracts, as our preliminary view is that the remaining fees to be received under these contracts approximate fair value given our preliminary estimates of the costs associated with these ongoing obligations.
|
(d)
|
Amount includes a
$35.6 million
liability that was recorded to adjust an unfavorable capacity arrangement contract to its estimated fair value. This amount, which is subject to adjustment upon the finalization of our acquisition accounting, will be amortized
through the March 31, 2014 expiration date of the contract as a reduction of
Virgin Media
's operating expenses so that the net effect of this amortization and the payments required under the contract approximate market rates. During the period from June 8, 2013 through June 30, 2013,
$6.7 million
of this liability was amortized.
|
(e)
|
Represents the equity component of the
VM Convertible Notes
(as defined and described in note
7
). During the period from June 7, 2013 through July 9, 2013,
94.4%
of the
VM Convertible Notes
were exchanged for Class A and Class C ordinary shares and cash pursuant to the terms of the
VM Convertible Notes Indenture
. For additional information, see note
7
.
|
(f)
|
Excludes direct acquisition costs that we incurred of
$50.1 million
, of which
$35.6 million
were paid through June 30, 2013.
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
in millions, except per share amounts
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
4,333.4
|
|
|
$
|
4,064.4
|
|
|
$
|
8,699.4
|
|
|
$
|
8,021.1
|
|
Discontinued operation
|
—
|
|
|
106.5
|
|
|
—
|
|
|
293.7
|
|
||||
Total
|
$
|
4,333.4
|
|
|
$
|
4,170.9
|
|
|
$
|
8,699.4
|
|
|
$
|
8,314.8
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net earnings (
loss)
attributable to Liberty Global shareholders
|
$
|
(64.2
|
)
|
|
$
|
535.9
|
|
|
$
|
(334.5
|
)
|
|
$
|
320.2
|
|
Basic and diluted earnings (loss) attributable to Liberty Global shareholders per share
|
$
|
(0.16
|
)
|
|
$
|
1.29
|
|
|
$
|
(0.83
|
)
|
|
$
|
0.77
|
|
|
Three months ended
June 30, 2012 (a)
|
|
Six months ended
June 30, 2012 (a)
|
||||
|
in millions
|
||||||
|
|
|
|
||||
Revenue
|
$
|
106.5
|
|
|
$
|
293.7
|
|
Operating income
|
$
|
13.7
|
|
|
$
|
78.7
|
|
Earnings (loss) before income taxes and noncontrolling interests
|
$
|
(4.4
|
)
|
|
$
|
49.6
|
|
Income tax benefit (expense)
|
$
|
1.8
|
|
|
$
|
(14.1
|
)
|
Earnings (loss) from discontinued operation attributable to Liberty Global shareholders, net of taxes
|
$
|
(5.0
|
)
|
|
$
|
15.6
|
|
(a)
|
Represents the operating results of
Austar
through May 23, 2012, the date the sale of
Austar
was completed.
|
Accounting Method
|
|
June 30,
2013 |
|
December 31,
2012 |
||||
|
in millions
|
|||||||
Fair value:
|
|
|
|
|||||
Ziggo (a)
|
$
|
1,580.9
|
|
|
$
|
—
|
|
|
Sumitomo (b)
|
568.5
|
|
|
579.7
|
|
|||
Other (c)
|
371.7
|
|
|
368.2
|
|
|||
Total — fair value
|
2,521.1
|
|
|
947.9
|
|
|||
Equity
|
0.9
|
|
|
1.7
|
|
|||
Cost
|
0.4
|
|
|
0.5
|
|
|||
Total
|
$
|
2,522.4
|
|
|
$
|
950.1
|
|
(a)
|
During the first six months of 2013, we acquired an aggregate of
39.5 million
shares of Ziggo N.V. (
Ziggo
), a publicly-traded company in the Netherlands, at an average price of
€25.77
(
$33.51
) per share, for a total investment of
€1,018.6 million
(
$1,324.7 million
).
Ziggo
is the largest cable operator in the Netherlands in terms of customers. As a result of these investments, we owned
19.77%
of the outstanding shares of
Ziggo
at
June 30, 2013
. In April 2013, we entered into a limited recourse margin loan agreement with respect to a portion of our investment in
Ziggo
, and on July 25, 2013, we acquired additional
Ziggo
shares pursuant to the
Ziggo Transaction Agreement
(as defined and described in note
14
). Most of the
Ziggo
shares that we owned at July 25, 2013 were pledged as collateral under one or the other of these
two
arrangements. For additional information concerning these arrangements, see notes
7
and
14
. During the second quarter of 2013, we received a cash dividend from
Ziggo
of
$29.7 million
.
|
(b)
|
At
June 30, 2013
, we owned
45,652,043
shares of Sumitomo Corporation (
Sumitomo
) common stock. Our
Sumitomo
shares represented less than
5%
of
Sumitomo
’s outstanding common stock at
June 30, 2013
. These shares secure a loan (the
Sumitomo Collar Loan
) to Liberty Programming Japan LLC, our wholly-owned subsidiary.
|
(c)
|
Includes various fair value investments, the most significant of which is our
17.0%
interest in Canal+ Cyfrowy S.A., a privately-held
DTH
operator in Poland.
|
|
June 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||||
|
Current (a)
|
|
Long-term (a)
|
|
Total
|
|
Current (a)
|
|
Long-term (a)
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cross-currency and interest rate derivative contracts (b)
|
$
|
180.9
|
|
|
$
|
736.6
|
|
|
$
|
917.5
|
|
|
$
|
191.3
|
|
|
$
|
467.1
|
|
|
$
|
658.4
|
|
Equity-related derivative instruments (c)
|
433.1
|
|
|
584.8
|
|
|
1,017.9
|
|
|
—
|
|
|
594.6
|
|
|
594.6
|
|
||||||
Foreign currency forward contracts
|
6.4
|
|
|
11.9
|
|
|
18.3
|
|
|
0.7
|
|
|
0.4
|
|
|
1.1
|
|
||||||
Other
|
1.3
|
|
|
2.7
|
|
|
4.0
|
|
|
1.3
|
|
|
3.0
|
|
|
4.3
|
|
||||||
Total
|
$
|
621.7
|
|
|
$
|
1,336.0
|
|
|
$
|
1,957.7
|
|
|
$
|
193.3
|
|
|
$
|
1,065.1
|
|
|
$
|
1,258.4
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cross-currency and interest rate derivative contracts (b)
|
$
|
591.6
|
|
|
$
|
1,606.2
|
|
|
$
|
2,197.8
|
|
|
$
|
543.2
|
|
|
$
|
2,156.3
|
|
|
$
|
2,699.5
|
|
Equity-related derivative instruments (c)
|
15.8
|
|
|
—
|
|
|
15.8
|
|
|
21.6
|
|
|
—
|
|
|
21.6
|
|
||||||
Foreign currency forward contracts
|
1.0
|
|
|
0.1
|
|
|
1.1
|
|
|
4.5
|
|
|
3.6
|
|
|
8.1
|
|
||||||
Other
|
1.7
|
|
|
0.8
|
|
|
2.5
|
|
|
0.6
|
|
|
0.7
|
|
|
1.3
|
|
||||||
Total
|
$
|
610.1
|
|
|
$
|
1,607.1
|
|
|
$
|
2,217.2
|
|
|
$
|
569.9
|
|
|
$
|
2,160.6
|
|
|
$
|
2,730.5
|
|
(a)
|
Our current derivative assets are included in other current assets and our long-term derivative assets and liabilities are included in other assets, net, and other long-term liabilities, respectively, in our condensed consolidated balance sheets.
|
(b)
|
We consider credit risk in our fair value assessments. As of
June 30, 2013
and
December 31, 2012
, (i) the fair values of our cross-currency and interest rate derivative contracts that represented assets have been reduced by credit risk valuation adjustments aggregating
$36.8 million
and
$17.2 million
, respectively, and (ii) the fair values of our cross-currency and interest rate derivative contracts that represented liabilities have been reduced by credit risk valuation adjustments aggregating
$129.2 million
and
$156.5 million
, respectively. The adjustments to our derivative assets relate to the credit risk associated with counterparty nonperformance and the adjustments to our derivative liabilities relate to credit risk associated with our own nonperformance. In all cases, the adjustments take into account offsetting liability or asset positions within a given contract. Our determination of credit risk valuation adjustments generally is based on our and our counterparties’ credit risks, as observed in the credit default swap market and market quotations for certain of our subsidiaries’ debt instruments, as applicable. The changes in the credit risk valuation adjustments associated with our cross-currency and interest rate derivative contracts resulted in net losses of
$13.0 million
and
$45.5 million
during the
three and six months ended June 30, 2013
, respectively, and net losses of
$70.6 million
and
$48.3 million
during the
three and six months ended June 30, 2012
, respectively. These amounts are included in realized and unrealized gains (losses) on derivative instruments, net, in our condensed consolidated statements of operations. For further information concerning our fair value measurements, see note
5
.
|
(c)
|
The fair value of our equity-related derivative instruments relates to (i) the
Virgin Media Capped Call
, as defined and described below, and (ii) the share collar (the
Sumitomo Collar
) with respect to the
Sumitomo
shares held by our company. The fair value of the
Sumitomo Collar
does not include a credit risk valuation adjustment as we have assumed that any losses incurred by our company in the event of nonperformance by the counterparty would be, subject to relevant insolvency laws, fully offset against amounts we owe to the counterparty pursuant to the secured borrowing arrangements of the
Sumitomo Collar
.
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Continuing operations:
|
|
|
|
|
|
|
|
||||||||
Cross-currency and interest rate derivative contracts
|
$
|
162.4
|
|
|
$
|
169.5
|
|
|
$
|
343.0
|
|
|
$
|
(309.6
|
)
|
Equity-related derivative instruments (a)
|
(61.8
|
)
|
|
66.9
|
|
|
(149.5
|
)
|
|
(59.6
|
)
|
||||
Foreign currency forward contracts
|
(103.5
|
)
|
|
0.7
|
|
|
(1.1
|
)
|
|
(9.7
|
)
|
||||
Other
|
(1.8
|
)
|
|
0.3
|
|
|
(1.3
|
)
|
|
2.2
|
|
||||
Total — continuing operations
|
$
|
(4.7
|
)
|
|
$
|
237.4
|
|
|
$
|
191.1
|
|
|
$
|
(376.7
|
)
|
Discontinued operation
|
$
|
—
|
|
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
4.6
|
|
(a)
|
Represents activity related to the
Sumitomo Collar
and the
Virgin Media Capped Call
, as defined and described below.
|
|
Six months ended
|
||||||
|
June 30,
|
||||||
|
2013
|
|
2012
|
||||
|
in millions
|
||||||
Continuing operations:
|
|
|
|
||||
Operating activities
|
$
|
(211.8
|
)
|
|
$
|
(245.5
|
)
|
Investing activities
|
(15.4
|
)
|
|
24.1
|
|
||
Financing activities
|
(4.4
|
)
|
|
(64.9
|
)
|
||
Total — continuing operations
|
$
|
(231.6
|
)
|
|
$
|
(286.3
|
)
|
Discontinued operation
|
$
|
—
|
|
|
$
|
(6.6
|
)
|
Subsidiary /
F
inal maturity date (a)
|
|
Notional
amount
due from
counterparty
|
|
Notional
amount
due to
counterparty
|
|
Interest rate due from
counterparty
|
|
Interest rate due to
counterparty
|
||||
|
|
in millions
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
Virgin Media Investment Holdings Limited (VMIH), a subsidiary of Virgin Media:
|
|
|
|
|
|
|
|
|
|
|||
February 2022
|
|
$
|
1,400.0
|
|
|
£
|
873.6
|
|
|
5.01%
|
|
5.35%
|
June 2020
|
|
$
|
1,384.6
|
|
|
£
|
901.4
|
|
|
6 mo. LIBOR + 2.75%
|
|
6 mo. GBP LIBOR + 3.18%
|
October 2020
|
|
$
|
1,370.4
|
|
|
£
|
881.6
|
|
|
6 mo. LIBOR + 2.75%
|
|
6 mo. GBP LIBOR + 3.10%
|
November 2016 (b)
|
|
$
|
1,000.0
|
|
|
£
|
516.9
|
|
|
6.50%
|
|
6.91%
|
January 2018
|
|
$
|
1,000.0
|
|
|
£
|
615.7
|
|
|
6.50%
|
|
7.02%
|
October 2019
|
|
$
|
500.0
|
|
|
£
|
302.3
|
|
|
8.38%
|
|
9.02%
|
April 2019
|
|
$
|
291.5
|
|
|
£
|
186.2
|
|
|
5.38%
|
|
5.49%
|
UPC Holding:
|
|
|
|
|
|
|
|
|
|
|||
April 2016 (b)
|
|
$
|
400.0
|
|
|
CHF
|
441.8
|
|
|
9.88%
|
|
9.87%
|
UPC Broadband Holding BV (UPC Broadband Holding), a subsidiary of UPC Holding:
|
|
|
|
|
|
|
|
|
|
|||
November 2019
|
|
$
|
500.0
|
|
|
€
|
362.9
|
|
|
7.25%
|
|
7.74%
|
January 2015 - July 2021
|
|
$
|
312.0
|
|
|
€
|
240.0
|
|
|
6 mo. LIBOR + 2.50%
|
|
6 mo. EURIBOR + 2.87%
|
October 2020
|
|
$
|
300.0
|
|
|
€
|
219.1
|
|
|
6 mo. LIBOR + 3.00%
|
|
6 mo. EURIBOR + 3.04%
|
January 2017 - July 2021
|
|
$
|
262.1
|
|
|
€
|
194.1
|
|
|
6 mo. LIBOR + 2.50%
|
|
6 mo. EURIBOR + 2.51%
|
October 2017
|
|
$
|
200.0
|
|
|
€
|
145.7
|
|
|
6 mo. LIBOR + 3.50%
|
|
6 mo. EURIBOR + 3.33%
|
January 2020
|
|
$
|
197.5
|
|
|
€
|
150.5
|
|
|
6 mo. LIBOR + 4.92%
|
|
6 mo. EURIBOR + 4.91%
|
September 2014 - July 2021
|
|
$
|
128.0
|
|
|
€
|
97.2
|
|
|
6 mo. LIBOR + 2.50%
|
|
6 mo. EURIBOR + 2.90%
|
December 2016
|
|
$
|
340.0
|
|
|
CHF
|
370.9
|
|
|
6 mo. LIBOR + 3.50%
|
|
6 mo. CHF LIBOR + 4.01%
|
January 2017 - July 2021
|
|
$
|
300.0
|
|
|
CHF
|
278.3
|
|
|
6 mo. LIBOR + 2.50%
|
|
6 mo. CHF LIBOR + 2.46%
|
January 2015 - July 2021
|
|
$
|
200.0
|
|
|
CHF
|
186.0
|
|
|
6 mo. LIBOR + 2.50%
|
|
6 mo. CHF LIBOR + 2.55%
|
December 2014
|
|
$
|
171.5
|
|
|
CHF
|
187.1
|
|
|
6 mo. LIBOR + 2.75%
|
|
6 mo. CHF LIBOR + 2.95%
|
December 2014
|
|
€
|
898.4
|
|
|
CHF
|
1,466.0
|
|
|
6 mo. EURIBOR + 1.68%
|
|
6 mo. CHF LIBOR + 1.94%
|
January 2015 - September 2022
|
|
€
|
383.8
|
|
|
CHF
|
477.0
|
|
|
6 mo. EURIBOR + 2.00%
|
|
6 mo. CHF LIBOR + 2.22%
|
December 2014 - December 2016
|
|
€
|
360.4
|
|
|
CHF
|
589.0
|
|
|
6 mo. EURIBOR + 3.75%
|
|
6 mo. CHF LIBOR + 3.94%
|
January 2020
|
|
€
|
175.0
|
|
|
CHF
|
258.6
|
|
|
7.63%
|
|
6.76%
|
July 2020
|
|
€
|
107.4
|
|
|
CHF
|
129.0
|
|
|
6 mo. EURIBOR + 3.00%
|
|
6 mo. CHF LIBOR + 3.28%
|
January 2017
|
|
€
|
75.0
|
|
|
CHF
|
110.9
|
|
|
7.63%
|
|
6.98%
|
July 2015
|
|
€
|
123.8
|
|
|
CLP
|
86,500.0
|
|
|
2.50%
|
|
5.84%
|
Subsidiary /
F
inal maturity date (a)
|
|
Notional
amount
due from
counterparty
|
|
Notional
amount
due to
counterparty
|
|
Interest rate due from
counterparty
|
|
Interest rate due to
counterparty
|
||||
|
|
in millions
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
December 2015
|
|
€
|
69.1
|
|
|
CLP
|
53,000.0
|
|
|
3.50%
|
|
5.75%
|
December 2014
|
|
€
|
365.8
|
|
|
CZK
|
10,521.8
|
|
|
5.48%
|
|
5.56%
|
December 2014 - December 2016
|
|
€
|
60.0
|
|
|
CZK
|
1,703.1
|
|
|
5.50%
|
|
6.99%
|
July 2017
|
|
€
|
39.6
|
|
|
CZK
|
1,000.0
|
|
|
3.00%
|
|
3.75%
|
December 2014
|
|
€
|
260.0
|
|
|
HUF
|
75,570.0
|
|
|
5.50%
|
|
9.40%
|
December 2014 - December 2016
|
|
€
|
260.0
|
|
|
HUF
|
75,570.0
|
|
|
5.50%
|
|
10.56%
|
December 2016
|
|
€
|
150.0
|
|
|
HUF
|
43,367.5
|
|
|
5.50%
|
|
9.20%
|
July 2018
|
|
€
|
78.0
|
|
|
HUF
|
19,500.0
|
|
|
5.50%
|
|
9.15%
|
December 2014
|
|
€
|
400.5
|
|
|
PLN
|
1,605.6
|
|
|
5.50%
|
|
7.50%
|
December 2014 - December 2016
|
|
€
|
245.0
|
|
|
PLN
|
1,000.6
|
|
|
5.50%
|
|
9.03%
|
September 2016
|
|
€
|
200.0
|
|
|
PLN
|
892.7
|
|
|
6.00%
|
|
8.19%
|
July 2017
|
|
€
|
82.0
|
|
|
PLN
|
318.0
|
|
|
3.00%
|
|
5.60%
|
Unitymedia Hessen GmbH & Co. KG (Unitymedia Hessen), a subsidiary of Unitymedia KabelBW:
|
|
|
|
|
|
|
|
|
|
|||
January 2021
|
|
$
|
1,000.0
|
|
|
€
|
688.2
|
|
|
5.50%
|
|
5.58%
|
March 2019
|
|
$
|
459.3
|
|
|
€
|
326.5
|
|
|
7.50%
|
|
7.98%
|
(a)
|
For each subsidiary, the notional amount of multiple derivative instruments that mature within the same calendar month are shown in the aggregate and interest rates are presented on a weighted average basis. For derivative instruments that were in effect as of
June 30, 2013
, we present a single date that represents the applicable final maturity date. For derivative instruments that become effective subsequent to
June 30, 2013
, we present a range of dates that represents the period covered by the applicable derivative instrument.
|
(b)
|
Unlike the other cross-currency swaps presented in this table, the identified cross-currency swaps do not involve the exchange of notional amounts at the inception and maturity of the instruments. Accordingly, the only cash flows associated with these instruments are interest payments and receipts.
|
Subsidiary / Final maturity date (a)
|
|
Notional amount
due from
counterparty
|
|
Notional amount
due to
counterparty
|
|
Interest rate due from
counterparty
|
|
Interest rate due to
counterparty
|
||||
|
|
in millions
|
|
|
|
|
||||||
VMIH:
|
|
|
|
|
|
|
|
|
|
|||
January 2021
|
|
$
|
500.0
|
|
|
£
|
308.9
|
|
|
5.25%
|
|
6 mo. GBP LIBOR + 1.94%
|
UPC Broadband Holding:
|
|
|
|
|
|
|
|
|
|
|||
July 2018
|
|
$
|
425.0
|
|
|
€
|
320.9
|
|
|
6 mo. LIBOR + 1.75%
|
|
6.08%
|
September 2014 - January 2020
|
|
$
|
327.5
|
|
|
€
|
249.5
|
|
|
6 mo. LIBOR + 4.92%
|
|
7.52%
|
December 2014
|
|
$
|
300.0
|
|
|
€
|
226.5
|
|
|
6 mo. LIBOR + 1.75%
|
|
5.78%
|
December 2014 - July 2018
|
|
$
|
300.0
|
|
|
€
|
226.5
|
|
|
6 mo. LIBOR + 2.58%
|
|
6.80%
|
December 2016
|
|
$
|
296.6
|
|
|
€
|
219.8
|
|
|
6 mo. LIBOR + 3.50%
|
|
6.75%
|
July 2018
|
|
$
|
100.0
|
|
|
€
|
75.4
|
|
|
6 mo. LIBOR + 3.00%
|
|
6.97%
|
November 2019
|
|
$
|
250.0
|
|
|
CHF
|
226.8
|
|
|
7.25%
|
|
6 mo. CHF LIBOR + 5.01%
|
January 2020
|
|
$
|
225.0
|
|
|
CHF
|
206.3
|
|
|
6 mo. LIBOR + 4.81%
|
|
5.44%
|
December 2014
|
|
$
|
340.0
|
|
|
CLP
|
181,322.0
|
|
|
6 mo. LIBOR + 1.75%
|
|
8.76%
|
December 2016
|
|
$
|
201.5
|
|
|
RON
|
489.3
|
|
|
6 mo. LIBOR + 3.50%
|
|
14.01%
|
December 2014
|
|
€
|
134.2
|
|
|
CLP
|
107,800.0
|
|
|
6 mo. EURIBOR + 2.00%
|
|
10.00%
|
VTR:
|
|
|
|
|
|
|
|
|
|
|||
September 2014
|
|
$
|
446.5
|
|
|
CLP
|
247,137.8
|
|
|
6 mo. LIBOR + 3.00%
|
|
11.16%
|
(a)
|
For each subsidiary, the notional amount of multiple derivative instruments that mature within the same calendar month are shown in the aggregate and interest rates are presented on a weighted average basis. For derivative instruments that were in effect as of
June 30, 2013
, we present a single date that represents the applicable final maturity date. For derivative instruments that become effective subsequent to
June 30, 2013
, we present a range of dates that represents the period covered by the applicable derivative instrument.
|
Subsidiary / Final maturity date (a)
|
|
Notional amount
|
|
Interest rate due from
counterparty
|
|
Interest rate due to
counterparty
|
||
|
|
in millions
|
|
|
|
|
||
VMIH:
|
|
|
|
|
|
|
|
|
October 2018
|
|
£
|
2,155.0
|
|
|
6 mo. GBP LIBOR
|
|
1.52%
|
January 2021
|
|
£
|
650.0
|
|
|
5.50%
|
|
6 mo. GBP LIBOR + 1.84%
|
December 2015
|
|
£
|
600.0
|
|
|
6 mo. GBP LIBOR
|
|
2.86%
|
April 2018
|
|
£
|
300.0
|
|
|
6 mo. GBP LIBOR
|
|
1.37%
|
January 2021
|
|
£
|
300.0
|
|
|
6 mo. GBP LIBOR + 1.83%
|
|
3.89%
|
UPC Broadband Holding:
|
|
|
|
|
|
|
|
|
July 2020
|
|
$
|
1,000.0
|
|
|
6.63%
|
|
6 mo. LIBOR + 3.03%
|
January 2022
|
|
$
|
750.0
|
|
|
6.88%
|
|
6 mo. LIBOR + 4.89%
|
January 2014
|
|
€
|
2,750.0
|
|
|
1 mo. EURIBOR + 3.76%
|
|
6 mo. EURIBOR + 3.52%
|
December 2014
|
|
€
|
971.8
|
|
|
6 mo. EURIBOR
|
|
2.97%
|
July 2020
|
|
€
|
750.0
|
|
|
6.38%
|
|
6 mo. EURIBOR + 3.16%
|
January 2015 - January 2021
|
|
€
|
750.0
|
|
|
6 mo. EURIBOR
|
|
2.57%
|
July 2013 - December 2014
|
|
€
|
500.0
|
|
|
6 mo. EURIBOR
|
|
4.67%
|
January 2015 - December 2016
|
|
€
|
500.0
|
|
|
6 mo. EURIBOR
|
|
4.32%
|
July 2014
|
|
€
|
337.0
|
|
|
6 mo. EURIBOR
|
|
3.94%
|
January 2015 - January 2023
|
|
€
|
290.0
|
|
|
6 mo. EURIBOR
|
|
2.79%
|
December 2015
|
|
€
|
263.3
|
|
|
6 mo. EURIBOR
|
|
3.97%
|
January 2023
|
|
€
|
210.0
|
|
|
6 mo. EURIBOR
|
|
2.88%
|
January 2014
|
|
€
|
185.0
|
|
|
6 mo. EURIBOR
|
|
4.04%
|
January 2015 - January 2018
|
|
€
|
175.0
|
|
|
6 mo. EURIBOR
|
|
3.74%
|
July 2020
|
|
€
|
171.3
|
|
|
6 mo. EURIBOR
|
|
4.32%
|
January 2015 - July 2020
|
|
€
|
171.3
|
|
|
6 mo. EURIBOR
|
|
3.95%
|
January 2015 - November 2021
|
|
€
|
107.0
|
|
|
6 mo. EURIBOR
|
|
2.89%
|
December 2013
|
|
€
|
90.5
|
|
|
6 mo. EURIBOR
|
|
0.90%
|
December 2014
|
|
CHF
|
2,380.0
|
|
|
6 mo. CHF LIBOR
|
|
2.81%
|
January 2015 - January 2022
|
|
CHF
|
711.5
|
|
|
6 mo. CHF LIBOR
|
|
1.89%
|
January 2015 - January 2021
|
|
CHF
|
500.0
|
|
|
6 mo. CHF LIBOR
|
|
1.65%
|
January 2015 - January 2018
|
|
CHF
|
400.0
|
|
|
6 mo. CHF LIBOR
|
|
2.51%
|
January 2015 - December 2016
|
|
CHF
|
370.9
|
|
|
6 mo. CHF LIBOR
|
|
3.82%
|
January 2015 - November 2019
|
|
CHF
|
226.8
|
|
|
6 mo. CHF LIBOR + 5.01%
|
|
6.88%
|
July 2013
|
|
CLP
|
61,500.0
|
|
|
6.77%
|
|
6 mo. TAB
|
Telenet International Finance S.a.r.l (Telenet International):
|
|
|
|
|
|
|
|
|
July 2017 - July 2019
|
|
€
|
600.0
|
|
|
3 mo. EURIBOR
|
|
3.29%
|
August 2015
|
|
€
|
350.0
|
|
|
3 mo. EURIBOR
|
|
3.54%
|
August 2015 - December 2018
|
|
€
|
305.0
|
|
|
3 mo. EURIBOR
|
|
2.46%
|
Subsidiary / Final maturity date (a)
|
|
Notional amount
|
|
Interest rate due from
counterparty
|
|
Interest rate due to
counterparty
|
||
|
|
in millions
|
|
|
|
|
||
December 2015 - June 2021
|
|
€
|
250.0
|
|
|
3 mo. EURIBOR
|
|
3.49%
|
July 2019
|
|
€
|
200.0
|
|
|
3 mo. EURIBOR
|
|
3.55%
|
July 2017
|
|
€
|
150.0
|
|
|
3 mo. EURIBOR
|
|
3.55%
|
July 2017 - December 2018
|
|
€
|
70.0
|
|
|
3 mo. EURIBOR
|
|
3.00%
|
June 2021
|
|
€
|
55.0
|
|
|
3 mo. EURIBOR
|
|
2.29%
|
June 2015
|
|
€
|
50.0
|
|
|
3 mo. EURIBOR
|
|
3.55%
|
December 2017
|
|
€
|
50.0
|
|
|
3 mo. EURIBOR
|
|
3.52%
|
December 2015 - July 2019
|
|
€
|
50.0
|
|
|
3 mo. EURIBOR
|
|
3.40%
|
December 2017 - July 2019
|
|
€
|
50.0
|
|
|
3 mo. EURIBOR
|
|
2.99%
|
July 2017 - June 2021
|
|
€
|
50.0
|
|
|
3 mo. EURIBOR
|
|
3.00%
|
August 2015 - June 2021
|
|
€
|
45.0
|
|
|
3 mo. EURIBOR
|
|
3.20%
|
VTR:
|
|
|
|
|
|
|
|
|
July 2013
|
|
CLP
|
61,500.0
|
|
|
6 mo. TAB
|
|
7.78%
|
(a)
|
For each subsidiary, the notional amount of multiple derivative instruments that mature within the same calendar month are shown in the aggregate and interest rates are presented on a weighted average basis. For derivative instruments that were in effect as of
June 30, 2013
, we present a single date that represents the applicable final maturity date. For derivative instruments that become effective subsequent to
June 30, 2013
, we present a range of dates that represents the period covered by the applicable derivative instrument.
|
(a)
|
For each subsidiary, the notional amount of multiple derivative instruments that mature within the same calendar month are shown in the aggregate. For derivative instruments that were in effect as of
June 30, 2013
, we present a single date that represents the applicable final maturity date. For derivative instruments that become effective subsequent to
June 30, 2013
, we present a range of dates that represents the period covered by the applicable derivative instrument.
|
(b)
|
Our purchased interest rate caps entitle us to receive payments from the counterparty when
EURIBOR
exceeds the
EURIBOR
cap rate.
|
(c)
|
Our sold interest rate cap requires that we make payments to the counterparty when
EURIBOR
exceeds the
EURIBOR
cap rate.
|
|
|
June 30, 2013
|
||||||
Subsidiary / Final maturity date (a)
|
|
Notional
amount
|
|
EURIBOR floor rate (b)
|
|
EURIBOR cap rate (c)
|
||
|
|
in millions
|
|
|
|
|
||
UPC Broadband Holding:
|
|
|
|
|
|
|
||
January 2015 - January 2020
|
€
|
1,135.0
|
|
|
1.00%
|
|
3.54%
|
|
Telenet International:
|
|
|
|
|
|
|
||
July 2017
|
€
|
950.0
|
|
|
2.00%
|
|
4.00%
|
(a)
|
For each subsidiary, the notional amount of multiple derivative instruments that mature within the same calendar month are shown in the aggregate. For derivative instruments that were in effect as of
June 30, 2013
, we present a single date that represents the applicable final maturity date. For derivative instruments that become effective subsequent to
June 30, 2013
, we present a range of dates that represents the period covered by the applicable derivative instrument.
|
(b)
|
We make payments to the counterparty when
EURIBOR
is less than the
EURIBOR
floor rate.
|
(c)
|
We receive payments from the counterparty when
EURIBOR
is greater than the
EURIBOR
cap rate.
|
|
|
Notional amount at
|
||
Contract expiration date
|
|
June 30, 2013
|
||
|
|
in millions
|
||
|
|
|
||
April 2018
|
$
|
419.8
|
|
|
October 2016
|
$
|
19.8
|
|
|
April 2017
|
$
|
19.8
|
|
|
October 2017
|
$
|
19.8
|
|
Subsidiary
|
|
Currency
purchased
forward
|
|
Currency
sold
forward
|
|
Maturity dates
|
||||
|
|
in millions
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||
LGE Financing
|
$
|
854.9
|
|
|
€
|
654.8
|
|
|
July 2013 - July 2014
|
|
UPC Holding
|
$
|
479.0
|
|
|
CHF
|
415.1
|
|
|
October 2016 - April 2018
|
|
UPC Broadband Holding
|
$
|
3.3
|
|
|
CZK
|
64.1
|
|
|
July 2013 - July 2014
|
|
UPC Broadband Holding
|
€
|
57.8
|
|
|
CHF
|
70.9
|
|
|
July 2013 - July 2014
|
|
UPC Broadband Holding
|
€
|
18.8
|
|
|
CZK
|
484.2
|
|
|
July 2013 - July 2014
|
|
UPC Broadband Holding
|
€
|
18.3
|
|
|
HUF
|
5,525.0
|
|
|
July 2013 - July 2014
|
|
UPC Broadband Holding
|
€
|
52.1
|
|
|
PLN
|
228.6
|
|
|
July 2013 - July 2014
|
|
UPC Broadband Holding
|
£
|
3.9
|
|
|
€
|
4.7
|
|
|
July 2013 - July 2014
|
|
UPC Broadband Holding
|
CZK
|
246.0
|
|
|
€
|
9.5
|
|
|
July 2013
|
|
UPC Broadband Holding
|
HUF
|
6,500.0
|
|
|
€
|
22.0
|
|
|
July 2013
|
|
UPC Broadband Holding
|
PLN
|
105.0
|
|
|
€
|
24.1
|
|
|
July 2013
|
|
UPC Broadband Holding
|
RON
|
30.0
|
|
|
€
|
6.7
|
|
|
July 2013
|
|
Telenet NV
|
$
|
53.0
|
|
|
€
|
40.7
|
|
|
July 2013 - September 2014
|
|
VTR
|
$
|
28.6
|
|
|
CLP
|
14,286.5
|
|
|
July 2013 - May 2014
|
|
|
|
Fair value measurements at June 30, 2013 using:
|
||||||||||||
Description
|
June 30,
2013 |
|
Quoted prices
in active
markets for
identical assets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
|
in millions
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivative instruments:
|
|
|
|
|
|
|
|
||||||||
Cross-currency and interest rate derivative contracts
|
$
|
917.5
|
|
|
$
|
—
|
|
|
$
|
917.5
|
|
|
$
|
—
|
|
Equity-related derivative instruments
|
1,017.9
|
|
|
—
|
|
|
—
|
|
|
1,017.9
|
|
||||
Foreign currency forward contracts
|
18.3
|
|
|
—
|
|
|
18.3
|
|
|
—
|
|
||||
Other
|
4.0
|
|
|
—
|
|
|
4.0
|
|
|
—
|
|
||||
Total derivative instruments
|
1,957.7
|
|
|
—
|
|
|
939.8
|
|
|
1,017.9
|
|
||||
Investments
|
2,521.1
|
|
|
2,149.4
|
|
|
—
|
|
|
371.7
|
|
||||
Total assets
|
$
|
4,478.8
|
|
|
$
|
2,149.4
|
|
|
$
|
939.8
|
|
|
$
|
1,389.6
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities - derivative instruments:
|
|
|
|
|
|
|
|
||||||||
Cross-currency and interest rate derivative contracts
|
$
|
2,197.8
|
|
|
$
|
—
|
|
|
$
|
2,197.8
|
|
|
$
|
—
|
|
Equity-related derivative instruments
|
15.8
|
|
|
—
|
|
|
—
|
|
|
15.8
|
|
||||
Foreign currency forward contracts
|
1.1
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
||||
Other
|
2.5
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
||||
Total liabilities
|
$
|
2,217.2
|
|
|
$
|
—
|
|
|
$
|
2,201.4
|
|
|
$
|
15.8
|
|
|
|
|
Fair value measurements
at December 31, 2012 using:
|
||||||||||||
Description
|
December 31, 2012
|
|
Quoted prices
in active
markets for
identical assets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
|
in millions
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivative instruments:
|
|
|
|
|
|
|
|
||||||||
Cross-currency and interest rate derivative contracts
|
$
|
658.4
|
|
|
$
|
—
|
|
|
$
|
658.4
|
|
|
$
|
—
|
|
Equity-related derivative instrument
|
594.6
|
|
|
—
|
|
|
—
|
|
|
594.6
|
|
||||
Foreign currency forward contracts
|
1.1
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
||||
Other
|
4.3
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
||||
Total derivative instruments
|
1,258.4
|
|
|
—
|
|
|
663.8
|
|
|
594.6
|
|
||||
Investments
|
947.9
|
|
|
579.7
|
|
|
—
|
|
|
368.2
|
|
||||
Total assets
|
$
|
2,206.3
|
|
|
$
|
579.7
|
|
|
$
|
663.8
|
|
|
$
|
962.8
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities - derivative instruments:
|
|
|
|
|
|
|
|
||||||||
Cross-currency and interest rate derivative contracts
|
$
|
2,699.5
|
|
|
$
|
—
|
|
|
$
|
2,699.5
|
|
|
$
|
—
|
|
Equity-related derivative instrument
|
21.6
|
|
|
—
|
|
|
—
|
|
|
21.6
|
|
||||
Foreign currency forward contracts
|
8.1
|
|
|
—
|
|
|
8.1
|
|
|
—
|
|
||||
Other
|
1.3
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
||||
Total liabilities
|
$
|
2,730.5
|
|
|
$
|
—
|
|
|
$
|
2,708.9
|
|
|
$
|
21.6
|
|
|
Investments
|
|
Equity-related
derivative
instruments
|
|
Total
|
||||||
|
in millions
|
||||||||||
|
|
|
|
|
|
||||||
Balance of net asset at January 1, 2013
|
$
|
368.2
|
|
|
$
|
573.0
|
|
|
$
|
941.2
|
|
Addition (a)
|
—
|
|
|
566.8
|
|
|
566.8
|
|
|||
Gains (losses) included in net loss (b):
|
|
|
|
|
|
||||||
Realized and unrealized losses on derivative instruments, net
|
—
|
|
|
(149.5
|
)
|
|
(149.5
|
)
|
|||
Realized and unrealized gains due to changes in fair values of certain investments, net
|
17.9
|
|
|
—
|
|
|
17.9
|
|
|||
Foreign currency translation adjustments and other
|
(14.4
|
)
|
|
11.8
|
|
|
(2.6
|
)
|
|||
Balance of net asset at June 30, 2013
|
$
|
371.7
|
|
|
$
|
1,002.1
|
|
|
$
|
1,373.8
|
|
(a)
|
Represents estimated fair value of the
Virgin Media Capped Call
on June 7, 2013.
|
(b)
|
Substantially all of the net gains (losses) recognized during the first
six
months of
2013
relate to assets and liabilities that we continue to carry on our condensed consolidated balance sheet as of
June 30, 2013
.
|
|
June 30,
2013 |
|
December 31,
2012 |
||||
|
in millions
|
||||||
|
|
|
|
||||
Distribution systems
|
$
|
23,111.7
|
|
|
$
|
15,372.3
|
|
Customer premises equipment
|
5,569.2
|
|
|
4,162.6
|
|
||
Support equipment, buildings and land
|
3,212.0
|
|
|
2,282.1
|
|
||
|
31,892.9
|
|
|
21,817.0
|
|
||
Accumulated depreciation
|
(9,113.9
|
)
|
|
(8,379.4
|
)
|
||
Total property and equipment, net
|
$
|
22,779.0
|
|
|
$
|
13,437.6
|
|
|
January 1, 2013
|
|
Acquisitions
and related
adjustments
|
|
Foreign
currency
translation
adjustments and other
|
|
June 30,
2013 |
||||||||
|
|
|
in millions
|
|
|
||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
—
|
|
|
$
|
8,982.0
|
|
|
$
|
(202.9
|
)
|
|
$
|
8,779.1
|
|
Germany (Unitymedia KabelBW)
|
3,770.3
|
|
|
—
|
|
|
(54.9
|
)
|
|
3,715.4
|
|
||||
Belgium (Telenet)
|
2,158.3
|
|
|
—
|
|
|
(31.4
|
)
|
|
2,126.9
|
|
||||
The Netherlands
|
1,206.2
|
|
|
—
|
|
|
(17.5
|
)
|
|
1,188.7
|
|
||||
Switzerland
|
3,107.9
|
|
|
—
|
|
|
(105.4
|
)
|
|
3,002.5
|
|
||||
Other Western Europe
|
1,031.5
|
|
|
—
|
|
|
(13.1
|
)
|
|
1,018.4
|
|
||||
Total Western Europe
|
11,274.2
|
|
|
8,982.0
|
|
|
(425.2
|
)
|
|
19,831.0
|
|
||||
Central and Eastern Europe
|
1,509.5
|
|
|
—
|
|
|
(74.8
|
)
|
|
1,434.7
|
|
||||
Total European Operations Division
|
12,783.7
|
|
|
8,982.0
|
|
|
(500.0
|
)
|
|
21,265.7
|
|
||||
Chile (VTR Group)
|
558.0
|
|
|
—
|
|
|
(32.2
|
)
|
|
525.8
|
|
||||
Corporate and other
|
535.9
|
|
|
60.8
|
|
|
(5.9
|
)
|
|
590.8
|
|
||||
Total
|
$
|
13,877.6
|
|
|
$
|
9,042.8
|
|
|
$
|
(538.1
|
)
|
|
$
|
22,382.3
|
|
|
|
June 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||||
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
||||||||||||
|
|
in millions
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
|
$
|
7,845.5
|
|
|
$
|
(1,989.7
|
)
|
|
$
|
5,855.8
|
|
|
$
|
4,117.5
|
|
|
$
|
(1,780.0
|
)
|
|
$
|
2,337.5
|
|
Other
|
|
374.0
|
|
|
(155.0
|
)
|
|
219.0
|
|
|
379.3
|
|
|
(135.5
|
)
|
|
243.8
|
|
||||||
Total
|
|
$
|
8,219.5
|
|
|
$
|
(2,144.7
|
)
|
|
$
|
6,074.8
|
|
|
$
|
4,496.8
|
|
|
$
|
(1,915.5
|
)
|
|
$
|
2,581.3
|
|
|
June 30, 2013
|
|
|
|
Carrying value (d)
|
|||||||||||||||||||||
Weighted
average
interest
rate (a)
|
|
Unused borrowing
capacity (b)
|
|
Estimated fair value (c)
|
||||||||||||||||||||||
Borrowing
currency
|
|
U.S. $
equivalent
|
|
June 30, 2013
|
|
December 31, 2012
|
|
June 30, 2013
|
|
December 31, 2012
|
||||||||||||||||
|
|
|
in millions
|
|||||||||||||||||||||||
Debt:
|
|
|
|
|
||||||||||||||||||||||
VM Credit Facility
|
3.77
|
%
|
|
£
|
660.0
|
|
|
$
|
1,002.1
|
|
|
$
|
4,211.0
|
|
|
$
|
—
|
|
|
$
|
4,217.3
|
|
|
$
|
—
|
|
VM Notes
|
6.36
|
%
|
|
|
—
|
|
|
—
|
|
|
8,619.5
|
|
|
—
|
|
|
8,727.9
|
|
|
—
|
|
|||||
VM Convertible Notes (e)
|
6.50
|
%
|
|
|
—
|
|
|
—
|
|
|
385.0
|
|
|
—
|
|
|
153.5
|
|
|
—
|
|
|||||
UPC Broadband Holding Bank Facility
|
3.72
|
%
|
|
€
|
1,046.2
|
|
|
1,360.6
|
|
|
5,441.0
|
|
|
5,494.4
|
|
|
5,450.4
|
|
|
5,466.8
|
|
|||||
UPC Holding Senior Notes
|
7.53
|
%
|
|
|
—
|
|
|
—
|
|
|
3,005.9
|
|
|
3,190.0
|
|
|
2,941.2
|
|
|
2,905.9
|
|
|||||
UPCB SPE Notes
|
6.88
|
%
|
|
|
—
|
|
|
—
|
|
|
4,298.6
|
|
|
4,502.3
|
|
|
4,121.5
|
|
|
4,145.2
|
|
|||||
Unitymedia KabelBW Notes
|
7.03
|
%
|
|
|
—
|
|
|
—
|
|
|
7,436.2
|
|
|
7,416.5
|
|
|
7,254.2
|
|
|
6,815.5
|
|
|||||
Unitymedia KabelBW Revolving Credit Facilities
|
3.22
|
%
|
|
€
|
417.5
|
|
|
543.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Telenet Credit Facility
|
3.61
|
%
|
|
€
|
158.0
|
|
|
205.5
|
|
|
1,830.1
|
|
|
1,860.0
|
|
|
1,826.8
|
|
|
1,853.7
|
|
|||||
Telenet SPE Notes
|
5.92
|
%
|
|
|
—
|
|
|
—
|
|
|
2,642.9
|
|
|
2,777.6
|
|
|
2,602.4
|
|
|
2,641.0
|
|
|||||
Sumitomo Collar Loan
|
1.88
|
%
|
|
|
—
|
|
|
—
|
|
|
996.4
|
|
|
1,175.1
|
|
|
946.5
|
|
|
1,083.6
|
|
|||||
Liberty Puerto Rico Bank Facility (f)
|
6.88
|
%
|
|
$
|
25.0
|
|
|
25.0
|
|
|
654.2
|
|
|
667.0
|
|
|
657.8
|
|
|
663.9
|
|
|||||
LGE Margin Loan
|
3.05
|
%
|
|
|
—
|
|
|
—
|
|
|
598.2
|
|
|
—
|
|
|
598.2
|
|
|
—
|
|
|||||
Vendor financing (g)
|
3.72
|
%
|
|
|
—
|
|
|
—
|
|
|
344.8
|
|
|
276.8
|
|
|
344.8
|
|
|
276.8
|
|
|||||
Other
|
8.60
|
%
|
|
CLP
|
4,410.0
|
|
|
8.7
|
|
|
300.8
|
|
|
282.5
|
|
|
300.8
|
|
|
282.5
|
|
|||||
Total debt
|
5.68
|
%
|
|
|
|
|
$
|
3,144.9
|
|
|
$
|
40,764.6
|
|
|
$
|
27,642.2
|
|
|
40,143.3
|
|
|
26,134.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital lease obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Unitymedia KabelBW
|
|
910.7
|
|
|
937.1
|
|
||||||||||||||||||||
Telenet
|
|
422.2
|
|
|
405.1
|
|
||||||||||||||||||||
Virgin Media
|
|
370.2
|
|
|
—
|
|
||||||||||||||||||||
Other subsidiaries
|
|
57.8
|
|
|
47.4
|
|
||||||||||||||||||||
Total capital lease obligations
|
|
1,760.9
|
|
|
1,389.6
|
|
||||||||||||||||||||
Total debt and capital lease obligations
|
|
41,904.2
|
|
|
27,524.5
|
|
||||||||||||||||||||
Current maturities
|
|
(845.0
|
)
|
|
(363.5
|
)
|
||||||||||||||||||||
Long-term debt and capital lease obligations
|
|
$
|
41,059.2
|
|
|
$
|
27,161.0
|
|
(a)
|
Represents the weighted average interest rate in effect at
June 30, 2013
for all borrowings outstanding pursuant to each debt instrument including any applicable margin. The interest rates presented represent stated rates and do not include the impact
|
(b)
|
Unused borrowing capacity represents the maximum availability under the applicable facility at
June 30, 2013
without regard to covenant compliance calculations or other conditions precedent to borrowing. At
June 30, 2013
, the full amount of unused borrowing capacity was available to be borrowed under each of the respective subsidiary facilities based on the applicable leverage and other financial covenants, except as noted below. At
June 30, 2013
, our availability under the
UPC Broadband Holding Bank Facility
(as defined and described below) and the CLP
60.0 billion
(
$118.1 million
) term loan bank facility of
VTR Wireless
(the
VTR Wireless Bank Facility
) was limited to
€508.7 million
(
$661.6 million
) and CLP
1.9 billion
(
$3.7 million
), respectively, and our availability under the bank credit facility of
Liberty Puerto Rico
(the
Liberty Puerto Rico Bank Facility
) was effectively limited to the amounts drawn at June 30, 2013. When the relevant
June 30, 2013
compliance reporting requirements have been completed and assuming no changes from
June 30, 2013
borrowing levels, we anticipate that our availability under the
UPC Broadband Holding Bank Facility
, the
VM Credit Facility
(as defined and described below),
Unitymedia KabelBW
’s revolving credit facilities and the
Liberty Puerto Rico Bank Facility
will be limited to
€365.2 million
(
$475.0 million
),
£501.4 million
(
$761.3 million
),
€80.0 million
(
$104.0 million
) and
$14.7 million
, respectively. In addition to the limitations noted above, the debt instruments of our subsidiaries contain restricted payment tests that limit the amount that can be loaned or distributed to other
Liberty Global
subsidiaries and ultimately to
Liberty Global
. At
June 30, 2013
, these restrictions did not impact our ability to access the borrowing availability of our subsidiaries to satisfy our corporate liquidity needs beyond what is described above, except that none of the availability under the
VM Credit Facility
,
Unitymedia KabelBW
’s revolving credit facilities or the
Liberty Puerto Rico Bank Facility
was available on such date to be loaned or distributed to other
Liberty Global
subsidiaries and ultimately to
Liberty Global
.
|
(c)
|
The estimated fair values of our debt instruments were determined using the average of applicable bid and ask prices
(mostly Level 1 of the fair value hierarchy) or, when quoted market prices are unavailable or not considered indicative of fair value, discounted cash flow models (mostly Level 2 of the fair value hierarchy). The discount rates used in the cash flow models are based on the market interest rates and estimated credit spreads of the applicable entity, to the extent available, and other relevant factors. For additional information concerning fair value hierarchies, see note
5
.
|
(d)
|
Amounts include the impact of premiums and discounts, where applicable.
|
(e)
|
The
$2,716.8 million
fair value of the
VM Convertible Notes
(as defined and described below) on the date of the Virgin Media Acquisition includes
$1,056.8 million
that we allocated to a debt component and
$1,660.0 million
that we allocated to an equity component. See the related discussion below for additional information. The amount reported in the estimated fair value column for the
VM Convertible Notes
represents the estimated fair value of the remaining
VM Convertible Notes
outstanding as of June 30, 2013, including both the debt and equity components.
|
(f)
|
In May 2013, we obtained a waiver for a technical default under the
Liberty Puerto Rico Bank Facility
. The default was identified in connection with our review of the financial statements of
OneLink
for periods prior to our November 8, 2012 acquisition of
OneLink
. As a result of this review and a review of the related compliance certificates furnished to lenders, we concluded during the second quarter of 2013 that materially misstated financial information had been provided to lenders for the 2012 reporting periods prior to and including September 30, 2012. The furnishing of this materially misstated financial information to lenders constituted a technical default under the
Liberty Puerto Rico Bank Facility
, but did not create a cross default in any of our other debt agreements.
|
(g)
|
Represents amounts owed pursuant to interest-bearing vendor financing arrangements that are generally due within
one year
. At
June 30, 2013
and
December 31, 2012
, the amounts owed pursuant to these arrangements include
$29.5 million
and
$29.1 million
, respectively, of value-added taxes that were paid on our behalf by the vendor. Repayments of vendor financing obligations are included in repayments and repurchases of debt and capital lease obligations in our condensed consolidated cash flow statements.
|
|
|
|
|
June 30, 2013
|
||||||||||||
Facility
|
|
Final maturity date
|
|
Interest rate
|
|
Facility amount
(in borrowing
currency)
|
|
Unused
borrowing
capacity (a)
|
|
Carrying
value (b)
|
||||||
|
|
|
|
|
|
in millions
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
A
|
June 7, 2019
|
|
LIBOR + 3.25%
|
|
£
|
375.0
|
|
|
$
|
—
|
|
|
$
|
569.4
|
|
|
B
|
June 7, 2020
|
|
LIBOR + 2.75% (c)
|
|
$
|
2,755.0
|
|
|
—
|
|
|
2,741.3
|
|
|||
C
|
June 7, 2020
|
|
LIBOR + 3.75% (c)
|
|
£
|
600.0
|
|
|
—
|
|
|
906.6
|
|
|||
Revolving Facility
|
June 7, 2019
|
|
LIBOR + 3.25%
|
|
£
|
660.0
|
|
|
1,002.1
|
|
|
—
|
|
|||
Total
|
|
$
|
1,002.1
|
|
|
$
|
4,217.3
|
|
(a)
|
When the relevant
June 30, 2013
compliance reporting requirements have been completed and assuming no changes from
June 30, 2013
borrowing levels, we anticipate that our availability will be limited to
£501.4 million
(
$761.3 million
). The
VM Revolving Facility
has a commitment fee on unused and uncanceled balances of
1.3%
per year.
|
(b)
|
The carrying values of VM Facilities B and C include the impact of discounts.
|
(c)
|
VM Facilities B and C have a LIBOR floor of
0.75%
.
|
•
|
$507.1 million
principal amount of
8.375%
senior notes (the
2019 VM Dollar Senior Notes
) and
£253.5 million
(
$384.9 million
) principal amount of
8.875%
senior notes (the
2019 VM Sterling Senior Notes
and, together with the
2019 VM Dollar Senior Notes
, the
2019 VM Senior Notes
). The
2019 VM Senior Notes
were issued by
Virgin Media Finance
;
|
•
|
$1.0 billion
principal amount of
6.50%
senior secured notes (the
2018 VM Dollar Senior Secured Notes
) and
£875.0 million
(
$1,328.6 million
) principal amount of
7.0%
senior secured notes (the
2018 VM Sterling Senior Secured Notes
and, together with the
2018 VM Dollar Senior Secured Notes
, the
2018 VM Senior Secured Notes
). The
2018 VM Senior Secured Notes
were issued by Virgin Media Secured Finance PLC (
Virgin Media Secured Finance
), a wholly-owned subsidiary of
Virgin Media
;
|
•
|
$447.9 million
principal amount of
5.25%
senior secured notes (the
January 2021 VM Dollar Senior Secured Notes
) and
£628.4 million
(
$954.1 million
) principal amount of
5.50%
senior secured notes (the
January 2021 VM Sterling Senior Secured Notes
and, together with the
January 2021 VM Dollar Senior Secured Notes
, the
January 2021 VM Senior Secured Notes
). The
January 2021 VM Senior Secured Notes
were issued by
Virgin Media Secured Finance
;
|
•
|
$95.0 million
principal amount of
5.25%
senior notes (the
2022 VM 5.25% Dollar Senior Notes
);
|
•
|
$118.7 million
principal amount of
4.875%
senior notes (the
2022 VM 4.875% Dollar Senior Notes
) and
£44.1 million
(
$67.0 million
) principal amount of
5.125%
senior notes (the
2022 VM Sterling Senior Notes
and, together with the
2022 VM 4.875% Dollar Senior Notes
and the
2022 VM 5.25% Dollar Senior Notes
, the
2022 VM Senior Notes
). The
2022 VM Senior Notes
were issued by
Virgin Media Finance
;
|
•
|
$1.0 billion
principal amount of
5.375%
senior secured notes (the
April 2021 VM Dollar Senior Secured Notes
) and
£1.1 billion
(
$1.7 billion
) principal amount of
6.0%
senior secured notes (the
April 2021 VM Sterling Senior Secured Notes
and, together with the
April 2021 VM Dollar Senior Secured Notes
, the
April 2021 VM Senior Secured Notes
); and
|
•
|
$530.0 million
principal amount of
6.375%
senior notes (the
2023 VM Dollar Senior Notes
) and
£250.0 million
(
$379.6 million
) principal amount of
7.0%
senior notes (the
2023 VM Sterling Senior Notes
and, together with the
2023 VM Dollar Senior Notes
, the
2023 VM Senior Notes
).
|
|
|
|
|
|
|
June 30, 2013
|
||||||||||||||
|
|
|
|
|
|
Outstanding principal
amount |
|
|
|
|
||||||||||
VM Notes
|
|
Maturity
|
|
Interest
rate |
|
Borrowing
currency |
|
U.S. $
equivalent |
|
Estimated
fair value |
|
Carrying
value (a) |
||||||||
|
|
|
|
|
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2018 VM Dollar Senior Secured Notes
|
January 15, 2018
|
|
6.500%
|
|
$
|
1,000.0
|
|
|
$
|
1,000.0
|
|
|
$
|
1,030.6
|
|
|
$
|
1,048.0
|
|
|
2018 VM Sterling Senior Secured Notes
|
January 15, 2018
|
|
7.000%
|
|
£
|
875.0
|
|
|
1,328.6
|
|
|
1,378.5
|
|
|
1,396.8
|
|
||||
2019 VM Dollar Senior Notes
|
October 15, 2019
|
|
8.375%
|
|
$
|
507.1
|
|
|
507.1
|
|
|
551.2
|
|
|
561.7
|
|
||||
2019 VM Sterling Senior Notes
|
October 15, 2019
|
|
8.875%
|
|
£
|
253.5
|
|
|
384.9
|
|
|
418.6
|
|
|
424.7
|
|
||||
January 2021 VM Dollar Senior Secured Notes
|
January 15, 2021
|
|
5.250%
|
|
$
|
447.9
|
|
|
447.9
|
|
|
448.1
|
|
|
463.2
|
|
||||
January 2021 VM Sterling Senior Secured Notes
|
January 15, 2021
|
|
5.500%
|
|
£
|
628.4
|
|
|
954.1
|
|
|
936.3
|
|
|
970.2
|
|
||||
April 2021 VM Dollar Senior Secured Notes
|
April 15, 2021
|
|
5.375%
|
|
$
|
1,000.0
|
|
|
1,000.0
|
|
|
1,009.4
|
|
|
1,000.0
|
|
||||
April 2021 VM Sterling Senior Secured Notes
|
April 15, 2021
|
|
6.000%
|
|
£
|
1,100.0
|
|
|
1,670.2
|
|
|
1,666.1
|
|
|
1,670.3
|
|
||||
2022 VM 5.25% Dollar Senior Notes
|
February 15, 2022
|
|
5.250%
|
|
$
|
95.0
|
|
|
95.0
|
|
|
87.6
|
|
|
96.0
|
|
||||
2022 VM 4.875% Dollar Senior Notes
|
February 15, 2022
|
|
4.875%
|
|
$
|
118.7
|
|
|
118.7
|
|
|
115.0
|
|
|
119.8
|
|
||||
2022 VM Sterling Senior Notes
|
February 15, 2022
|
|
5.125%
|
|
£
|
44.1
|
|
|
67.0
|
|
|
63.4
|
|
|
67.6
|
|
||||
2023 VM Dollar Senior Notes
|
April 15, 2023
|
|
6.375%
|
|
$
|
530.0
|
|
|
530.0
|
|
|
536.0
|
|
|
530.0
|
|
||||
2023 VM Sterling Senior Notes
|
April 15, 2023
|
|
7.000%
|
|
£
|
250.0
|
|
|
379.6
|
|
|
378.7
|
|
|
379.6
|
|
||||
|
|
|
|
|
|
|
|
$
|
8,483.1
|
|
|
$
|
8,619.5
|
|
|
$
|
8,727.9
|
|
(a)
|
Amounts include the impact of premiums and discounts, where applicable, including amounts recorded in connection with the acquisition accounting for the
Virgin Media Acquisition
.
|
|
|
Redemption price
|
||||||||||||||
Year
|
|
2018 VM Dollar Senior Secured Notes
|
|
2018 VM Sterling Senior Secured Notes
|
|
2019 VM Dollar Senior Notes
|
|
2019 VM Sterling Senior Notes
|
|
April 2021 VM Dollar Senior Secured Notes
|
|
April 2021 VM Sterling Senior Secured Notes
|
|
2023 VM Dollar Senior Notes
|
|
2023 VM Sterling Senior Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
103.250%
|
|
103.500%
|
|
104.188%
|
|
104.438%
|
|
N.A.
|
|
N.A.
|
|
N.A.
|
|
N.A.
|
|
2015
|
101.625%
|
|
101.750%
|
|
102.792%
|
|
102.958%
|
|
N.A.
|
|
N.A.
|
|
N.A.
|
|
N.A.
|
|
2016
|
100.000%
|
|
100.000%
|
|
101.396%
|
|
101.479%
|
|
N.A.
|
|
N.A.
|
|
N.A.
|
|
N.A.
|
|
2017
|
100.000%
|
|
100.000%
|
|
100.000%
|
|
100.000%
|
|
102.688%
|
|
103.000%
|
|
N.A.
|
|
N.A.
|
|
2018
|
N.A.
|
|
N.A.
|
|
100.000%
|
|
100.000%
|
|
101.344%
|
|
101.500%
|
|
103.188%
|
|
103.500%
|
|
2019
|
N.A.
|
|
N.A.
|
|
N.A.
|
|
N.A.
|
|
100.000%
|
|
100.000%
|
|
102.125%
|
|
102.333%
|
|
2020
|
N.A.
|
|
N.A.
|
|
N.A.
|
|
N.A.
|
|
100.000%
|
|
100.000%
|
|
101.063%
|
|
101.667%
|
|
2021 and thereafter
|
N.A.
|
|
N.A.
|
|
N.A.
|
|
N.A.
|
|
N.A.
|
|
N.A.
|
|
100.000%
|
|
100.000%
|
|
|
|
|
June 30, 2013
|
||||||||||||
Facility
|
|
Final maturity date
|
|
Interest rate
|
|
Facility amount
(in borrowing
currency) (a)
|
|
Unused
borrowing
capacity (b)
|
|
Carrying
value (c)
|
||||||
|
|
|
|
|
|
in millions
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Q
|
July 31, 2014
|
|
EURIBOR + 2.75%
|
|
€
|
30.0
|
|
|
$
|
39.0
|
|
|
$
|
—
|
|
|
R
|
December 31, 2015
|
|
EURIBOR + 3.25%
|
|
€
|
111.0
|
|
|
—
|
|
|
144.4
|
|
|||
S
|
December 31, 2016
|
|
EURIBOR + 3.75%
|
|
€
|
545.5
|
|
|
—
|
|
|
709.5
|
|
|||
V (d)
|
January 15, 2020
|
|
7.625%
|
|
€
|
500.0
|
|
|
—
|
|
|
650.2
|
|
|||
Y (d)
|
July 1, 2020
|
|
6.375%
|
|
€
|
750.0
|
|
|
—
|
|
|
975.4
|
|
|||
Z (d)
|
July 1, 2020
|
|
6.625%
|
|
$
|
1,000.0
|
|
|
—
|
|
|
1,000.0
|
|
|||
AC (d)
|
November 15, 2021
|
|
7.250%
|
|
$
|
750.0
|
|
|
—
|
|
|
750.0
|
|
|||
AD (d)
|
January 15, 2022
|
|
6.875%
|
|
$
|
750.0
|
|
|
—
|
|
|
750.0
|
|
|||
AE
|
December 31, 2019
|
|
EURIBOR + 3.75%
|
|
€
|
602.5
|
|
|
—
|
|
|
783.5
|
|
|||
AF
|
January 31, 2021
|
|
LIBOR + 3.00% (e)
|
|
$
|
500.0
|
|
|
—
|
|
|
494.8
|
|
|||
AG
|
March 31, 2021
|
|
EURIBOR + 3.75%
|
|
€
|
1,554.4
|
|
|
—
|
|
|
2,016.8
|
|
|||
AH
|
June 30, 2021
|
|
LIBOR + 2.50% (e)
|
|
$
|
1,305.0
|
|
|
—
|
|
|
1,301.4
|
|
|||
AI
|
April 30, 2019
|
|
EURIBOR + 3.25%
|
|
€
|
1,016.2
|
|
|
1,321.6
|
|
|
—
|
|
|||
Elimination of Facilities V, Y, Z, AC and AD in consolidation (d)
|
|
—
|
|
|
(4,125.6
|
)
|
||||||||||
Total
|
|
$
|
1,360.6
|
|
|
$
|
5,450.4
|
|
(a)
|
Except as described in (d) below, amounts represent total third-party facility amounts at
June 30, 2013
without giving effect to the impact of discounts.
|
(b)
|
At
June 30, 2013
, our availability was limited to
€508.7 million
(
$661.6 million
). When the relevant
June 30, 2013
compliance reporting requirements have been completed and assuming no changes from
June 30, 2013
borrowing levels, we anticipate that our availability will be limited to
€365.2 million
(
$475.0 million
). Facility Q and Facility AI have commitment fees on unused and uncancelled balances of
0.75%
and
1.3%
per year, respectively.
|
(c)
|
The carrying values of Facilities AF, AG, and AH include the impact of discounts.
|
(d)
|
The
UPCB SPE Notes
were issued by certain special purpose entities (the
UPCB SPE
s) that were created for the primary purpose of facilitating the offering of certain senior secured notes (the
UPCB SPE Notes
). The proceeds from the
UPCB SPE Notes
were used to fund additional Facilities V, Y, Z, AC and AD (each a
UPCB Funded Facility
), with
UPC Financing
as the borrower. Each
UPCB SPE
is dependent on payments from
UPC Financing
under the applicable
UPCB Funded Facility
in order to service its payment obligations under its
UPCB SPE Notes
. Although
UPC Financing
has no equity or voting interest in any of the
UPCB SPE
s, each of the
UPCB Funded Facility
loans creates a variable interest in the respective
UPCB SPE
for which
UPC Financing
is the primary beneficiary, as contemplated by
GAAP
. As such,
UPC Financing
and
|
(e)
|
Facilities AF and AH have LIBOR floors of
1.00%
and
0.75%
, respectively.
|
Year
|
|
Redemption price
|
|
|
|
2018
|
103.375%
|
|
2019
|
102.250%
|
|
2020
|
101.125%
|
|
2021 and thereafter
|
100.000%
|
Year
|
|
Redemption
price
|
|
|
|
2018
|
102.813%
|
|
2019
|
101.875%
|
|
2020
|
100.938%
|
|
2021 and thereafter
|
100.000%
|
|
Virgin Media
|
|
UPC
Holding (a)
|
|
Unitymedia KabelBW
|
|
Telenet (b)
|
|
Other (c)
|
|
Total
|
||||||||||||
|
|
|
in millions
|
||||||||||||||||||||
Year ending December 31:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2013 (remainder of year)
|
$
|
145.1
|
|
|
$
|
65.7
|
|
|
$
|
20.1
|
|
|
$
|
9.6
|
|
|
$
|
179.6
|
|
|
$
|
420.1
|
|
2014
|
—
|
|
|
152.0
|
|
|
6.7
|
|
|
9.6
|
|
|
41.1
|
|
|
209.4
|
|
||||||
2015
|
—
|
|
|
144.4
|
|
|
—
|
|
|
9.6
|
|
|
6.6
|
|
|
160.6
|
|
||||||
2016
|
—
|
|
|
709.5
|
|
|
—
|
|
|
139.7
|
|
|
982.8
|
|
|
1,832.0
|
|
||||||
2017
|
—
|
|
|
—
|
|
|
580.0
|
|
|
570.2
|
|
|
871.8
|
|
|
2,022.0
|
|
||||||
2018
|
2,328.6
|
|
|
400.0
|
|
|
—
|
|
|
237.2
|
|
|
347.1
|
|
|
3,312.9
|
|
||||||
Thereafter
|
10,390.0
|
|
|
11,303.6
|
|
|
6,684.8
|
|
|
3,625.0
|
|
|
—
|
|
|
32,003.4
|
|
||||||
Total debt maturities
|
12,863.7
|
|
|
12,775.2
|
|
|
7,291.6
|
|
|
4,600.9
|
|
|
2,429.0
|
|
|
39,960.4
|
|
||||||
Unamortized premium (discount)
|
235.0
|
|
|
(44.3
|
)
|
|
(10.6
|
)
|
|
1.4
|
|
|
1.4
|
|
|
182.9
|
|
||||||
Total debt
|
$
|
13,098.7
|
|
|
$
|
12,730.9
|
|
|
$
|
7,281.0
|
|
|
$
|
4,602.3
|
|
|
$
|
2,430.4
|
|
|
$
|
40,143.3
|
|
Current portion
|
$
|
153.5
|
|
|
$
|
217.8
|
|
|
$
|
26.8
|
|
|
$
|
9.6
|
|
|
$
|
216.1
|
|
|
$
|
623.8
|
|
Noncurrent portion
|
$
|
12,945.2
|
|
|
$
|
12,513.1
|
|
|
$
|
7,254.2
|
|
|
$
|
4,592.7
|
|
|
$
|
2,214.3
|
|
|
$
|
39,519.5
|
|
(a)
|
Amounts include the
UPCB SPE Notes
issued by the
UPCB SPE
s. As described above, the
UPCB SPE
s are consolidated by
UPC Holding
.
|
(b)
|
Amounts include the
Telenet SPE Notes
that were issued by certain special purpose entities (the
Telenet SPE
s) that were created for the primary purposes of facilitating the offering of certain senior secured notes (the
Telenet SPE Notes
). The proceeds from the
Telenet SPE Notes
were used to fund additional Telenet Facilities M, N, O, P, U and V (each a
SPE Funded Facility
), with
Telenet International
as the borrower. Each
Telenet SPE
is dependent on payments from
Telenet International
under the applicable
SPE Funded Facility
in order to service its payment obligations under its
Telenet SPE Notes
. Although
Telenet International
has no equity or voting interest in any of the
Telenet SPE
s, each of the
SPE Funded Facility
loans creates a variable interest in the respective
Telenet SPE
for which
Telenet International
is the primary beneficiary, as contemplated by
GAAP
. As such,
Telenet International
and its parent entities, including
Telenet
and
Liberty Global
, are required by the provisions of
GAAP
to consolidate the
Telenet SPE
s.
|
(c)
|
As further described in note
6
, we are exploring strategic alternatives with respect to
VTR Wireless
' mobile operations in Chile, with a likely outcome being all amounts outstanding under the
VTR Wireless Bank Facility
becoming due within the next twelve months. Accordingly, we have reflected the CLP
55.6 billion
(
$109.4 million
) principal amount due under the
VTR Wireless Bank Facility
in the current portion of debt and capital lease obligations in our condensed consolidated balance sheet as of
June 30, 2013
.
|
|
Unitymedia KabelBW
|
|
Telenet
|
|
Virgin Media
|
|
Other
|
|
Total
|
||||||||||
|
in millions
|
||||||||||||||||||
Year ending December 31:
|
|
|
|
|
|
|
|
|
|
||||||||||
2013 (remainder of year)
|
$
|
47.8
|
|
|
$
|
49.6
|
|
|
$
|
90.6
|
|
|
$
|
7.4
|
|
|
$
|
195.4
|
|
2014
|
95.6
|
|
|
65.0
|
|
|
130.0
|
|
|
12.9
|
|
|
303.5
|
|
|||||
2015
|
95.4
|
|
|
60.3
|
|
|
89.8
|
|
|
12.9
|
|
|
258.4
|
|
|||||
2016
|
95.4
|
|
|
58.8
|
|
|
43.1
|
|
|
10.2
|
|
|
207.5
|
|
|||||
2017
|
95.4
|
|
|
57.2
|
|
|
7.2
|
|
|
5.7
|
|
|
165.5
|
|
|||||
2018
|
95.4
|
|
|
53.9
|
|
|
4.3
|
|
|
3.2
|
|
|
156.8
|
|
|||||
Thereafter
|
1,133.2
|
|
|
234.1
|
|
|
220.9
|
|
|
26.0
|
|
|
1,614.2
|
|
|||||
Total principal and interest payments
|
1,658.2
|
|
|
578.9
|
|
|
585.9
|
|
|
78.3
|
|
|
2,901.3
|
|
|||||
Amounts representing interest
|
(747.5
|
)
|
|
(156.7
|
)
|
|
(215.7
|
)
|
|
(20.5
|
)
|
|
(1,140.4
|
)
|
|||||
Present value of net minimum lease payments
|
$
|
910.7
|
|
|
$
|
422.2
|
|
|
$
|
370.2
|
|
|
$
|
57.8
|
|
|
$
|
1,760.9
|
|
Current portion
|
$
|
26.4
|
|
|
$
|
45.5
|
|
|
$
|
139.1
|
|
|
$
|
10.2
|
|
|
$
|
221.2
|
|
Noncurrent portion
|
$
|
884.3
|
|
|
$
|
376.7
|
|
|
$
|
231.1
|
|
|
$
|
47.6
|
|
|
$
|
1,539.7
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Computed “expected” tax benefit (expense)
(a)
|
$
|
(47.1
|
)
|
|
$
|
71.1
|
|
|
$
|
(56.8
|
)
|
|
$
|
69.7
|
|
Loss of subsidiary tax attributes due to a deemed change in control
|
(91.4
|
)
|
|
—
|
|
|
(91.4
|
)
|
|
—
|
|
||||
Non-deductible or non-taxable interest and other expenses
|
(48.5
|
)
|
|
(24.6
|
)
|
|
(82.7
|
)
|
|
(36.9
|
)
|
||||
International rate differences (b)
|
28.9
|
|
|
(21.0
|
)
|
|
42.4
|
|
|
(19.1
|
)
|
||||
Basis and other differences in the treatment of items associated with investments in subsidiaries and affiliates
|
(44.2
|
)
|
|
7.9
|
|
|
(29.2
|
)
|
|
(6.0
|
)
|
||||
Non-deductible or non-taxable foreign currency exchange results
|
12.7
|
|
|
(1.6
|
)
|
|
10.2
|
|
|
(1.6
|
)
|
||||
Enacted tax law and rate changes
|
(8.0
|
)
|
|
0.4
|
|
|
(8.7
|
)
|
|
(0.2
|
)
|
||||
Tax effect of intercompany financing
|
7.4
|
|
|
—
|
|
|
7.4
|
|
|
—
|
|
||||
Change in valuation allowances
|
1.4
|
|
|
(40.6
|
)
|
|
(0.5
|
)
|
|
(43.3
|
)
|
||||
Other, net
|
(7.1
|
)
|
|
(3.4
|
)
|
|
(7.1
|
)
|
|
(7.5
|
)
|
||||
Total
|
$
|
(195.9
|
)
|
|
$
|
(11.8
|
)
|
|
$
|
(216.4
|
)
|
|
$
|
(44.9
|
)
|
(a)
|
As a result of the
Virgin Media Acquisition
, pursuant to which
Liberty Global
became the publicly-held parent company of the successors by merger of
LGI
and
Virgin Media
, our statutory tax rate changed from the
U.S.
federal income tax rate of
35%
to the
U.K.
statutory income tax rate of
23%
. Accordingly, the statutory or “expected” tax rates used in this table are
23%
for the 2013 periods and
35%
for the 2012 periods.
|
(b)
|
Amounts reflect statutory rates in jurisdictions in which we operate outside of the
U.K.
for the 2013 periods and outside of the
U.S.
for the 2012 periods.
|
Country
|
|
Tax loss
carryforward
|
|
Related
tax asset
|
|
Expiration
date
|
||||
|
in millions
|
|
|
|||||||
|
|
|
|
|
|
|||||
U.K.
|
$
|
20,725.8
|
|
|
$
|
4,767.0
|
|
|
Indefinite
|
|
Germany
|
2,972.8
|
|
|
468.9
|
|
|
Indefinite
|
|||
The Netherlands
|
2,685.4
|
|
|
671.4
|
|
|
2013-2022
|
|||
U.S.
|
1,796.5
|
|
|
629.8
|
|
|
2014-2033
|
|||
Luxembourg
|
988.4
|
|
|
288.8
|
|
|
Indefinite
|
|||
France
|
633.1
|
|
|
218.0
|
|
|
Indefinite
|
|||
Ireland
|
516.1
|
|
|
64.5
|
|
|
Indefinite
|
|||
Belgium
|
314.8
|
|
|
107.0
|
|
|
Indefinite
|
|||
Hungary
|
296.5
|
|
|
56.3
|
|
|
Indefinite
|
|||
Chile
|
227.3
|
|
|
45.5
|
|
|
Indefinite
|
|||
Romania
|
73.9
|
|
|
11.8
|
|
|
2016-2020
|
|||
Poland
|
56.3
|
|
|
10.7
|
|
|
2014-2018
|
|||
Puerto Rico
|
32.3
|
|
|
12.6
|
|
|
2016-2025
|
|||
Spain
|
25.0
|
|
|
7.5
|
|
|
2023-2028
|
|||
Other
|
24.1
|
|
|
5.9
|
|
|
Various
|
|||
Total
|
$
|
31,368.3
|
|
|
$
|
7,365.7
|
|
|
|
|
Six months ended
|
||||||
|
June 30,
|
||||||
|
2013
|
|
2012
|
||||
|
in millions
|
||||||
|
|
|
|
||||
Balance at January 1
|
$
|
359.7
|
|
|
$
|
400.6
|
|
Additions based on tax positions related to the current year
|
86.4
|
|
|
6.0
|
|
||
Additions for tax positions of prior years
|
25.2
|
|
|
3.8
|
|
||
Reductions for tax positions of prior years
|
(5.8
|
)
|
|
(108.8
|
)
|
||
Foreign currency translation
|
(3.0
|
)
|
|
(1.3
|
)
|
||
Lapse of statue of limitations
|
(0.9
|
)
|
|
(0.6
|
)
|
||
Balance at June 30
|
$
|
461.6
|
|
|
$
|
299.7
|
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
in millions
|
||||||||||||||
Liberty Global shares:
|
|
|
|
|
|
|
|
||||||||
Performance-based incentive awards (a)
|
$
|
7.8
|
|
|
$
|
8.9
|
|
|
$
|
11.9
|
|
|
$
|
18.4
|
|
Other share-based incentive awards
|
49.8
|
|
|
10.1
|
|
|
61.0
|
|
|
22.8
|
|
||||
Total Liberty Global shares (b)
|
57.6
|
|
|
19.0
|
|
|
72.9
|
|
|
41.2
|
|
||||
Telenet share-based incentive awards (c)
|
36.5
|
|
|
16.2
|
|
|
47.5
|
|
|
20.8
|
|
||||
Other
|
(0.2
|
)
|
|
0.4
|
|
|
0.3
|
|
|
1.3
|
|
||||
Total
|
$
|
93.9
|
|
|
$
|
35.6
|
|
|
$
|
120.7
|
|
|
$
|
63.3
|
|
Included in:
|
|
|
|
|
|
|
|
||||||||
Operating expense
|
$
|
6.0
|
|
|
$
|
3.5
|
|
|
$
|
9.9
|
|
|
$
|
5.2
|
|
SG&A expense
|
87.9
|
|
|
32.1
|
|
|
110.8
|
|
|
58.1
|
|
||||
Total
|
$
|
93.9
|
|
|
$
|
35.6
|
|
|
$
|
120.7
|
|
|
$
|
63.3
|
|
(a)
|
Primarily includes share-based compensation expense related to
Liberty Global
performance-based restricted share units (
PSU
s).
|
(b)
|
In accordance with the terms of the
Virgin Media Merger Agreement
, we issued
Liberty Global
share-based incentive awards (
Virgin Media Replacement Awards
) to employees and former directors of
Virgin Media
in exchange for corresponding
Virgin Media
awards. In connection with the
Virgin Media Acquisition
, the
Virgin Media Replacement Awards
were remeasured as of
June 7, 2013
, resulting in an aggregate estimated fair value attributable to the post-acquisition period of
$188.5 million
. During the second quarter of 2013,
$25.9 million
of the
June 7, 2013
estimated fair value of the
Virgin Media Replacement Awards
was charged to expense in recognition of the
Virgin Media Replacement Awards
that were fully vested on
June 7, 2013
or for which vesting was accelerated pursuant to the terms of the
Virgin Media Merger Agreement
on or prior to
June 30, 2013
. The remaining
June 7, 2013
estimated fair value will be amortized over the remaining service periods of the unvested
Virgin Media Replacement Awards
, subject to forfeitures and the satisfaction of performance conditions. Including this amortization, which aggregated
$6.4 million
during the post-acquisition period ended
June 30, 2013
, the aforementioned amount charged to expense and
$3.6 million
of national insurance taxes, the
Virgin Media Replacement Awards
have accounted for
$35.9 million
of the share-based compensation expense related to
Liberty Global
shares during the
three and six months ended June 30, 2013
.
|
(c)
|
During the second quarters of
2013
and
2012
,
Telenet
modified the terms of certain of its share-based incentive plans to provide for anti-dilution adjustments in connection with its shareholder returns. In connection with these anti-dilution adjustments,
Telenet
recognized share-based compensation expense of
$32.7 million
and
$12.6 million
, respectively. In
|
|
Liberty Global ordinary shares (a)
|
|
Liberty Global
performance-based awards
|
|
Telenet ordinary shares (b)
|
||||||
|
|
|
|
|
|
||||||
Total compensation expense not yet recognized (in millions)
|
$
|
262.1
|
|
|
$
|
158.8
|
|
|
$
|
10.8
|
|
Weighted average period remaining for expense recognition (in years)
|
2.3
|
|
|
2.6
|
|
|
1.2
|
|
(a)
|
Amounts relate to awards granted or assumed by
Liberty Global
under (i) the Liberty Global, Inc. 2005 Incentive Plan (as amended and restated effective
June 7, 2013
) (the
Liberty Global Incentive Plan
), (ii) the Liberty Global, Inc. 2005 Nonemployee Director Incentive Plan (as amended and restated effective
June 7, 2013
) (the
Liberty Global Director Incentive Plan
), (iii) the Virgin Media Inc. 2010 Stock Incentive Plan (as amended and restated effective
June 7, 2013
) (the
VMI Incentive Plan
) and (iv) certain other incentive plans of Virgin Media pursuant to which awards may no longer be granted. The
Liberty Global Incentive Plan
had
278,665
shares
available for grant as of
June 30, 2013
and the
VMI Incentive Plan
had
11,561,330
shares available for grant as of
June 30, 2013
. These shares may be awarded in any class of our ordinary shares. The
Liberty Global Director Incentive Plan
had
8,817,675
shares available for grant as of
June 30, 2013
. These shares may be awarded in any class of our ordinary shares, except that no more than five million shares may be awarded in Class B ordinary shares.
|
(b)
|
Amounts relate to various equity incentive awards granted to employees of
Telenet
.
|
|
Six months ended
|
||||||
|
June 30,
|
||||||
|
2013
|
|
2012
|
||||
Assumptions used to estimate fair value of options, share appreciation rights (SARs) and performance-based share appreciation rights (PSARs) granted:
|
|
|
|
||||
Risk-free interest rate
|
0.36 - 1.27%
|
|
0.51 - 1.68%
|
||||
Expected life
|
3.2 - 7.1 years
|
|
3.3 - 7.9 years
|
||||
Expected volatility
|
26.9 - 35.8%
|
|
34.6 - 40.4%
|
||||
Expected dividend yield
|
none
|
|
none
|
||||
|
|
|
|
||||
Weighted average grant-date fair value per share awards granted:
|
|
|
|
||||
Options
|
$
|
22.19
|
|
|
$
|
20.00
|
|
SARs
|
$
|
16.70
|
|
|
$
|
14.43
|
|
PSARs
|
$
|
16.64
|
|
|
$
|
—
|
|
Restricted shares and restricted share units
|
$
|
71.19
|
|
|
$
|
49.03
|
|
PSUs
|
$
|
70.22
|
|
|
$
|
50.17
|
|
Total intrinsic value of awards exercised (in millions):
|
|
|
|
||||
Options
|
$
|
35.3
|
|
|
$
|
26.4
|
|
SARs
|
$
|
30.6
|
|
|
$
|
22.2
|
|
Cash received from exercise of options (in millions)
|
$
|
14.3
|
|
|
$
|
17.4
|
|
Income tax benefit related to share-based compensation (in millions)
|
$
|
15.8
|
|
|
$
|
8.9
|
|
Options — Class A ordinary shares
|
Number of
shares
|
|
Weighted
average
exercise price
|
|
Weighted
average
remaining
contractual
term
|
|
Aggregate
intrinsic value
|
|||||
|
|
|
|
|
in years
|
|
in millions
|
|||||
Outstanding at January 1, 2013
|
804,617
|
|
|
$
|
25.90
|
|
|
|
|
|
||
Virgin Media Replacement Awards
|
3,934,574
|
|
|
$
|
31.16
|
|
|
|
|
|
||
Granted
|
62,314
|
|
|
$
|
73.66
|
|
|
|
|
|
||
Cancelled
|
(25,541
|
)
|
|
$
|
76.24
|
|
|
|
|
|
||
Exercised
|
(417,212
|
)
|
|
$
|
24.01
|
|
|
|
|
|
||
Outstanding at June 30, 2013
|
4,358,752
|
|
|
$
|
31.33
|
|
|
6.3
|
|
$
|
184.0
|
|
Exercisable at June 30, 2013
|
2,564,458
|
|
|
$
|
26.98
|
|
|
4.9
|
|
$
|
119.3
|
|
Options — Class C ordinary shares
|
Number of
shares
|
|
Weighted
average
exercise price
|
|
Weighted
average
remaining
contractual
term
|
|
Aggregate
intrinsic value
|
|||||
|
|
|
|
|
in years
|
|
in millions
|
|||||
Outstanding at January 1, 2013
|
842,771
|
|
|
$
|
24.59
|
|
|
|
|
|
||
Virgin Media Replacement Awards
|
2,935,250
|
|
|
$
|
27.16
|
|
|
|
|
|
||
Granted
|
67,334
|
|
|
$
|
68.16
|
|
|
|
|
|
||
Cancelled
|
(19,061
|
)
|
|
$
|
71.51
|
|
|
|
|
|
||
Exercised
|
(322,482
|
)
|
|
$
|
21.23
|
|
|
|
|
|
||
Outstanding at June 30, 2013
|
3,503,812
|
|
|
$
|
27.74
|
|
|
6.1
|
|
$
|
140.7
|
|
Exercisable at June 30, 2013
|
2,131,055
|
|
|
$
|
23.58
|
|
|
4.7
|
|
$
|
94.4
|
|
SARs — Class A ordinary shares
|
Number of
shares
|
|
Weighted
average
base price
|
|
Weighted
average
remaining
contractual
term
|
|
Aggregate
intrinsic value
|
|||||
|
|
|
|
|
in years
|
|
in millions
|
|||||
Outstanding at January 1, 2013
|
3,761,337
|
|
|
$
|
36.94
|
|
|
|
|
|
||
Granted
|
1,181,120
|
|
|
$
|
74.08
|
|
|
|
|
|
||
Forfeited
|
(13,882
|
)
|
|
$
|
45.17
|
|
|
|
|
|
||
Exercised
|
(337,799
|
)
|
|
$
|
27.61
|
|
|
|
|
|
||
Outstanding at June 30, 2013
|
4,590,776
|
|
|
$
|
46.48
|
|
|
5.0
|
|
$
|
120.8
|
|
Exercisable at June 30, 2013
|
1,732,805
|
|
|
$
|
30.96
|
|
|
3.7
|
|
$
|
72.9
|
|
SARs — Class C ordinary shares
|
Number of
shares
|
|
Weighted
average
base price
|
|
Weighted
average
remaining
contractual
term
|
|
Aggregate
intrinsic value
|
|||||
|
|
|
|
|
in years
|
|
in millions
|
|||||
Outstanding at January 1, 2013
|
3,786,754
|
|
|
$
|
35.58
|
|
|
|
|
|
||
Granted
|
1,181,120
|
|
|
$
|
68.82
|
|
|
|
|
|
||
Forfeited
|
(13,882
|
)
|
|
$
|
43.40
|
|
|
|
|
|
||
Exercised
|
(377,575
|
)
|
|
$
|
25.99
|
|
|
|
|
|
||
Outstanding at June 30, 2013
|
4,576,417
|
|
|
$
|
44.93
|
|
|
5.1
|
|
$
|
105.5
|
|
Exercisable at June 30, 2013
|
1,718,446
|
|
|
$
|
30.11
|
|
|
3.7
|
|
$
|
64.2
|
|
PSARs — Class A ordinary shares
|
Number of
shares
|
|
Weighted
average
base price
|
|
Weighted
average
remaining
contractual
term
|
|
Aggregate
intrinsic value
|
|||||
|
|
|
|
|
in years
|
|
in millions
|
|||||
Outstanding at January 1, 2013
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Granted
|
2,873,750
|
|
|
$
|
69.70
|
|
|
|
|
|
||
Outstanding at June 30, 2013
|
2,873,750
|
|
|
$
|
69.70
|
|
|
7.0
|
|
$
|
10.9
|
|
Exercisable at June 30, 2013
|
—
|
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
PSARs — Class C ordinary shares
|
Number of
shares
|
|
Weighted
average
base price
|
|
Weighted
average
remaining
contractual
term
|
|
Aggregate
intrinsic value
|
|||||
|
|
|
|
|
in years
|
|
in millions
|
|||||
Outstanding at January 1, 2013
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Granted
|
2,873,750
|
|
|
$
|
65.56
|
|
|
|
|
|
||
Outstanding at June 30, 2013
|
2,873,750
|
|
|
$
|
65.56
|
|
|
7.0
|
|
$
|
6.7
|
|
Exercisable at June 30, 2013
|
—
|
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
Restricted shares and share units — Class A ordinary shares
|
Number of
shares
|
|
Weighted
average
grant-date
fair value
per share
|
|
Weighted
average
remaining
contractual
term
|
|||
|
|
|
|
|
in years
|
|||
Outstanding at January 1, 2013
|
332,008
|
|
|
$
|
40.53
|
|
|
|
Virgin Media Replacement Awards (a)
|
900,408
|
|
|
$
|
76.24
|
|
|
|
Granted
|
124,254
|
|
|
$
|
73.79
|
|
|
|
Forfeited
|
(5,343
|
)
|
|
$
|
49.27
|
|
|
|
Released from restrictions
|
(169,118
|
)
|
|
$
|
46.07
|
|
|
|
Outstanding at June 30, 2013
|
1,182,209
|
|
|
$
|
70.06
|
|
|
6.7
|
Restricted shares and share units — Class C ordinary shares
|
Number of
shares
|
|
Weighted
average
grant-date
fair value
per share
|
|
Weighted
average
remaining
contractual
term
|
|||
|
|
|
|
|
in years
|
|||
Outstanding at January 1, 2013
|
332,301
|
|
|
$
|
39.13
|
|
|
|
Virgin Media Replacement Awards (a)
|
671,923
|
|
|
$
|
71.51
|
|
|
|
Granted
|
124,254
|
|
|
$
|
68.60
|
|
|
|
Forfeited
|
(5,154
|
)
|
|
$
|
46.23
|
|
|
|
Released from restrictions
|
(154,059
|
)
|
|
$
|
41.51
|
|
|
|
Outstanding at June 30, 2013
|
969,265
|
|
|
$
|
64.70
|
|
|
6.3
|
(a)
|
The amounts shown as the grant-date fair values per share for these awards represent the June 7, 2013 market prices of the applicable
LGI
Series A or Series C common stock that were assigned to these awards when they were remeasured in connection with the
Virgin Media Acquisition
.
|
PSUs — Class A ordinary shares
|
Number of
shares
|
|
Weighted
average
grant-date
fair value
per share
|
|
Weighted
average
remaining
contractual
term
|
|||
|
|
|
|
|
in years
|
|||
Outstanding at January 1, 2013
|
759,585
|
|
|
$
|
46.54
|
|
|
|
Granted
|
572,038
|
|
|
$
|
71.87
|
|
|
|
Forfeited
|
(11,720
|
)
|
|
$
|
40.75
|
|
|
|
Released from restrictions
|
(118,405
|
)
|
|
$
|
40.75
|
|
|
|
Outstanding at June 30, 2013
|
1,201,498
|
|
|
$
|
59.23
|
|
|
1.7
|
PSUs — Class C ordinary shares
|
Number of
shares
|
|
Weighted
average
grant-date
fair value
per share
|
|
Weighted
average
remaining
contractual
term
|
|||
|
|
|
|
|
in years
|
|||
Outstanding at January 1, 2013
|
759,585
|
|
|
$
|
44.68
|
|
|
|
Granted
|
540,626
|
|
|
$
|
67.56
|
|
|
|
Forfeited
|
(11,720
|
)
|
|
$
|
39.21
|
|
|
|
Released from restrictions
|
(118,405
|
)
|
|
$
|
39.21
|
|
|
|
Outstanding at June 30, 2013
|
1,170,086
|
|
|
$
|
55.84
|
|
|
1.7
|
Options — Telenet ordinary shares
|
Number of
shares
|
|
Weighted
average
exercise price
|
|
Weighted
average
remaining
contractual
term
|
|
Aggregate
intrinsic value
|
|||||
|
|
|
|
|
in years
|
|
in millions
|
|||||
Outstanding at January 1, 2013
|
833,594
|
|
|
€
|
18.66
|
|
|
|
|
|
||
Granted (a)
|
256,490
|
|
|
€
|
20.27
|
|
|
|
|
|
||
Net impact of anti-dilution adjustments
|
252,540
|
|
|
€
|
(3.58
|
)
|
|
|
|
|
||
Outstanding at June 30, 2013
|
1,342,624
|
|
|
€
|
15.46
|
|
|
4.2
|
|
€
|
26.6
|
|
Exercisable at June 30, 2013
|
—
|
|
|
€
|
—
|
|
|
—
|
|
€
|
—
|
|
(a)
|
Represents the number of options granted during the three months ended March, 31, 2013. The vesting of these options was accelerated to March 31, 2013 in connection with the resignation of
Telenet
’s Chief Executive Officer. As a result of this accelerated vesting, Telenet recorded additional share-based compensation of
$6.2 million
during the first quarter of 2013. All of the vested options pursuant to the
Telenet Specific Stock Option Plan
become exercisable during defined exercise periods following January 1, 2014. The fair value of these options was calculated on the date that the performance criteria was set using an expected volatility of
23.3%
, an expected life of
3.3
years, and a risk-free return of
0.33%
. The grant date fair value of these options was
€18.24
(
$23.72
).
|
Warrants — Telenet ordinary shares
|
Number of
shares
|
|
Weighted
average
exercise price
|
|
Weighted
average
remaining
contractual
term
|
|
Aggregate
intrinsic value
|
|||||
|
|
|
|
|
in years
|
|
in millions
|
|||||
Outstanding at January 1, 2013
|
3,185,709
|
|
|
€
|
13.95
|
|
|
|
|
|
||
Forfeited
|
(7,725
|
)
|
|
€
|
18.27
|
|
|
|
|
|
||
Exercised
|
(1,423,846
|
)
|
|
€
|
12.37
|
|
|
|
|
|
||
Net impact of anti-dilution adjustments
|
406,378
|
|
|
€
|
(2.86
|
)
|
|
|
|
|
||
Outstanding at June 30, 2013
|
2,160,516
|
|
|
€
|
12.35
|
|
|
1.7
|
|
€
|
49.5
|
|
Exercisable at June 30, 2013
|
1,479,666
|
|
|
€
|
10.84
|
|
|
1.5
|
|
€
|
36.1
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
in millions
|
||||||||||||||
Amounts attributable to Liberty Global shareholders:
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations
|
$
|
(11.6
|
)
|
|
$
|
(217.5
|
)
|
|
$
|
(12.6
|
)
|
|
$
|
(263.2
|
)
|
Earnings from discontinued operation
|
—
|
|
|
919.1
|
|
|
—
|
|
|
939.7
|
|
||||
Net earnings (loss) attributable to Liberty Global shareholders
|
$
|
(11.6
|
)
|
|
$
|
701.6
|
|
|
$
|
(12.6
|
)
|
|
$
|
676.5
|
|
(a)
|
Includes amounts with respect to tower and related real estate operating lease agreements associated with our wireless network in Chile in accordance with the applicable contractual payment terms. As further described in note
6
, we are considering strategic alternatives that could impact when and to what extent we make payments under these leases.
|
•
|
European Operations Division
:
|
•
|
U.K.
(
Virgin Media
)
|
•
|
Germany (
Unitymedia KabelBW
)
|
•
|
Belgium (
Telenet
)
|
•
|
The Netherlands
|
•
|
Switzerland
|
•
|
Other Western Europe
|
•
|
Central and Eastern Europe
|
•
|
Chile (
VTR Group
)
|
|
Revenue
|
||||||||||||||
|
Three months ended June 30,
|
|
Six months ended
June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
in millions
|
||||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
401.3
|
|
|
$
|
—
|
|
|
$
|
401.3
|
|
|
$
|
—
|
|
Germany (Unitymedia KabelBW)
|
624.6
|
|
|
566.2
|
|
|
1,242.8
|
|
|
1,126.9
|
|
||||
Belgium (Telenet)
|
534.4
|
|
|
466.2
|
|
|
1,070.6
|
|
|
943.7
|
|
||||
The Netherlands
|
303.2
|
|
|
303.7
|
|
|
618.0
|
|
|
614.4
|
|
||||
Switzerland
|
323.9
|
|
|
313.0
|
|
|
649.9
|
|
|
626.3
|
|
||||
Other Western Europe
|
219.6
|
|
|
208.5
|
|
|
442.2
|
|
|
420.4
|
|
||||
Total Western Europe
|
2,407.0
|
|
|
1,857.6
|
|
|
4,424.8
|
|
|
3,731.7
|
|
||||
Central and Eastern Europe
|
281.5
|
|
|
275.0
|
|
|
569.3
|
|
|
555.9
|
|
||||
Central and other
|
31.3
|
|
|
28.9
|
|
|
63.3
|
|
|
57.1
|
|
||||
Total European Operations Division
|
2,719.8
|
|
|
2,161.5
|
|
|
5,057.4
|
|
|
4,344.7
|
|
||||
Chile (VTR Group)
|
252.7
|
|
|
226.8
|
|
|
503.1
|
|
|
451.3
|
|
||||
Corporate and other
|
210.5
|
|
|
149.0
|
|
|
410.7
|
|
|
301.0
|
|
||||
Intersegment eliminations
|
(21.1
|
)
|
|
(12.8
|
)
|
|
(41.6
|
)
|
|
(35.5
|
)
|
||||
Total
|
$
|
3,161.9
|
|
|
$
|
2,524.5
|
|
|
$
|
5,929.6
|
|
|
$
|
5,061.5
|
|
|
Operating cash flow
|
||||||||||||||
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
in millions
|
||||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
175.3
|
|
|
$
|
—
|
|
|
$
|
175.3
|
|
|
$
|
—
|
|
Germany (Unitymedia KabelBW)
|
369.4
|
|
|
334.2
|
|
|
729.4
|
|
|
657.2
|
|
||||
Belgium (Telenet)
|
269.2
|
|
|
236.9
|
|
|
516.7
|
|
|
472.7
|
|
||||
The Netherlands
|
171.1
|
|
|
178.8
|
|
|
355.9
|
|
|
361.5
|
|
||||
Switzerland
|
189.2
|
|
|
179.2
|
|
|
371.4
|
|
|
356.2
|
|
||||
Other Western Europe
|
105.6
|
|
|
95.9
|
|
|
210.4
|
|
|
194.5
|
|
||||
Total Western Europe
|
1,279.8
|
|
|
1,025.0
|
|
|
2,359.1
|
|
|
2,042.1
|
|
||||
Central and Eastern Europe
|
135.1
|
|
|
134.9
|
|
|
275.7
|
|
|
272.5
|
|
||||
Central and other
|
(54.4
|
)
|
|
(43.0
|
)
|
|
(100.0
|
)
|
|
(80.0
|
)
|
||||
Total European Operations Division
|
1,360.5
|
|
|
1,116.9
|
|
|
2,534.8
|
|
|
2,234.6
|
|
||||
Chile (VTR Group)
|
86.8
|
|
|
75.3
|
|
|
172.0
|
|
|
150.5
|
|
||||
Corporate and other
|
2.4
|
|
|
2.7
|
|
|
12.5
|
|
|
5.4
|
|
||||
Total
|
$
|
1,449.7
|
|
|
$
|
1,194.9
|
|
|
$
|
2,719.3
|
|
|
$
|
2,390.5
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Total segment operating cash flow from continuing operations
|
$
|
1,449.7
|
|
|
$
|
1,194.9
|
|
|
$
|
2,719.3
|
|
|
$
|
2,390.5
|
|
Share-based compensation expense
|
(93.9
|
)
|
|
(35.6
|
)
|
|
(120.7
|
)
|
|
(63.3
|
)
|
||||
Depreciation and amortization
|
(864.3
|
)
|
|
(668.7
|
)
|
|
(1,557.4
|
)
|
|
(1,339.4
|
)
|
||||
Impairment, restructuring and other operating items, net
|
(46.3
|
)
|
|
(11.6
|
)
|
|
(70.6
|
)
|
|
(14.5
|
)
|
||||
Operating income
|
445.2
|
|
|
479.0
|
|
|
970.6
|
|
|
973.3
|
|
||||
Interest expense
|
(542.4
|
)
|
|
(402.1
|
)
|
|
(1,012.5
|
)
|
|
(820.2
|
)
|
||||
Interest and dividend income
|
35.3
|
|
|
1.9
|
|
|
49.2
|
|
|
20.9
|
|
||||
Realized and unrealized gains (losses) on derivative instruments, net
|
(4.7
|
)
|
|
237.4
|
|
|
191.1
|
|
|
(376.7
|
)
|
||||
Foreign currency transaction gains (losses), net
|
91.5
|
|
|
(474.4
|
)
|
|
(43.4
|
)
|
|
4.6
|
|
||||
Realized and unrealized gains (losses) due to changes in fair values of certain investments, net
|
193.0
|
|
|
(34.1
|
)
|
|
265.2
|
|
|
16.8
|
|
||||
Losses on debt modifications and extinguishment, net
|
(11.7
|
)
|
|
(6.9
|
)
|
|
(170.0
|
)
|
|
(13.7
|
)
|
||||
Other expense, net
|
(1.6
|
)
|
|
(3.7
|
)
|
|
(3.2
|
)
|
|
(4.0
|
)
|
||||
Earnings (loss) from continuing operations before income taxes
|
$
|
204.6
|
|
|
$
|
(202.9
|
)
|
|
$
|
247.0
|
|
|
$
|
(199.0
|
)
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
in millions
|
||||||||||||||
Subscription revenue (a):
|
|
|
|
|
|
|
|
||||||||
Video
|
$
|
1,274.8
|
|
|
$
|
1,143.1
|
|
|
$
|
2,487.5
|
|
|
$
|
2,307.5
|
|
Broadband internet (b)
|
765.2
|
|
|
590.1
|
|
|
1,424.5
|
|
|
1,181.3
|
|
||||
Telephony (b)
|
518.7
|
|
|
375.8
|
|
|
928.1
|
|
|
750.8
|
|
||||
Total subscription revenue
|
2,558.7
|
|
|
2,109.0
|
|
|
4,840.1
|
|
|
4,239.6
|
|
||||
Other revenue (b) (c)
|
603.2
|
|
|
415.5
|
|
|
1,089.5
|
|
|
821.9
|
|
||||
Total
|
$
|
3,161.9
|
|
|
$
|
2,524.5
|
|
|
$
|
5,929.6
|
|
|
$
|
5,061.5
|
|
(a)
|
Subscription revenue includes amounts received from subscribers for ongoing services, excluding installation fees, late fees and mobile services revenue. Subscription revenue from subscribers who purchase bundled services at a discounted rate is generally allocated proportionally to each service based on the standalone price for each individual service.
|
(b)
|
In connection with the
Virgin Media Acquisition
, we determined that we would no longer externally report digital subscriber line (
DSL
) subscribers as
RGU
s. Accordingly, we have reclassified the revenue from our
DSL
subscribers in Austria from broadband internet and telephony subscription revenue to other revenue for all periods presented.
|
(c)
|
Other revenue includes non-subscription revenue (including
B2B
, mobile services, interconnect, carriage fee and installation revenue) and programming revenue.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
in millions
|
||||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
||||||||
United Kingdom
|
$
|
401.3
|
|
|
$
|
—
|
|
|
$
|
401.3
|
|
|
$
|
—
|
|
Germany
|
624.6
|
|
|
566.2
|
|
|
1,242.8
|
|
|
1,126.9
|
|
||||
Belgium
|
534.4
|
|
|
466.2
|
|
|
1,070.6
|
|
|
943.7
|
|
||||
The Netherlands
|
303.2
|
|
|
303.7
|
|
|
618.0
|
|
|
614.4
|
|
||||
Switzerland
|
323.9
|
|
|
313.0
|
|
|
649.9
|
|
|
626.3
|
|
||||
Austria
|
107.3
|
|
|
105.2
|
|
|
215.5
|
|
|
212.4
|
|
||||
Ireland
|
112.3
|
|
|
103.3
|
|
|
226.7
|
|
|
208.0
|
|
||||
Poland
|
113.2
|
|
|
109.7
|
|
|
229.7
|
|
|
224.2
|
|
||||
Hungary
|
63.8
|
|
|
60.9
|
|
|
127.2
|
|
|
120.8
|
|
||||
The Czech Republic
|
54.6
|
|
|
56.7
|
|
|
112.1
|
|
|
114.2
|
|
||||
Romania
|
34.3
|
|
|
32.6
|
|
|
68.9
|
|
|
66.0
|
|
||||
Slovakia
|
15.6
|
|
|
15.1
|
|
|
31.4
|
|
|
30.7
|
|
||||
Other (a)
|
31.3
|
|
|
28.9
|
|
|
63.3
|
|
|
57.1
|
|
||||
Total European Operations Division
|
2,719.8
|
|
|
2,161.5
|
|
|
5,057.4
|
|
|
4,344.7
|
|
||||
Chellomedia:
|
|
|
|
|
|
|
|
||||||||
Poland
|
23.6
|
|
|
30.6
|
|
|
44.5
|
|
|
56.6
|
|
||||
The Netherlands
|
24.8
|
|
|
17.3
|
|
|
49.1
|
|
|
45.6
|
|
||||
Spain
|
16.0
|
|
|
16.6
|
|
|
31.8
|
|
|
33.7
|
|
||||
Hungary
|
17.5
|
|
|
15.6
|
|
|
32.7
|
|
|
29.4
|
|
||||
Other (b)
|
54.4
|
|
|
38.3
|
|
|
105.4
|
|
|
76.0
|
|
||||
Total Chellomedia
|
136.3
|
|
|
118.4
|
|
|
263.5
|
|
|
241.3
|
|
||||
Chile
|
252.7
|
|
|
226.8
|
|
|
503.1
|
|
|
451.3
|
|
||||
Puerto Rico
|
74.2
|
|
|
30.6
|
|
|
147.2
|
|
|
59.7
|
|
||||
Intersegment eliminations and other
|
(21.1
|
)
|
|
(12.8
|
)
|
|
(41.6
|
)
|
|
(35.5
|
)
|
||||
Total
|
$
|
3,161.9
|
|
|
$
|
2,524.5
|
|
|
$
|
5,929.6
|
|
|
$
|
5,061.5
|
|
(a)
|
Primarily represents revenue of
UPC DTH
from customers located in Hungary, the Czech Republic, Romania and Slovakia.
|
(b)
|
Chellomedia
’s other geographic segments are located primarily in the U.K., Latin America, the Czech Republic, Portugal,
Romania, Slovakia and Italy.
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Forward-Looking Statements.
This section provides a description of certain of the factors that could cause actual results or events to differ materially from anticipated results or events.
|
•
|
Overview.
This section provides a general description of our business and recent events.
|
•
|
Material Changes in Results of Operations.
This section provides an analysis of our results of operations for the
three and six months ended June 30, 2013
and
2012
.
|
•
|
Material Changes in Financial Condition.
This section provides an analysis of our corporate and subsidiary liquidity, condensed consolidated cash flow statements and contractual commitments.
|
•
|
Quantitative and Qualitative Disclosures about Market Risk.
This section provides discussion and analysis of the foreign currency, interest rate and other market risk that our company faces.
|
•
|
economic and business conditions and industry trends in the countries in which we operate;
|
•
|
the competitive environment in the broadband communications and programming industries in the countries in which we operate, including competitor responses to our products and services;
|
•
|
fluctuations in currency exchange rates and interest rates;
|
•
|
instability in global financial markets, including sovereign debt issues in the
EU
and related fiscal reforms;
|
•
|
consumer disposable income and spending levels, including the availability and amount of individual consumer debt;
|
•
|
changes in consumer television viewing preferences and habits;
|
•
|
consumer acceptance of our existing service offerings, including our digital video, broadband internet, fixed-line telephony, mobile and
B2B
service offerings, and of new technology, programming alternatives and other products and services that we may offer in the future;
|
•
|
our ability to manage rapid technological changes;
|
•
|
our ability to maintain or increase the number of subscriptions to our digital video, broadband internet, fixed-line telephony and mobile service offerings and our average revenue per household;
|
•
|
our ability to provide satisfactory customer service, including support for new and evolving products and services;
|
•
|
our ability to maintain or increase rates to our subscribers or to pass through increased costs to our subscribers;
|
•
|
our ability to maintain our revenue from channel carriage arrangements, particularly in Germany;
|
•
|
the impact of our future financial performance, or market conditions generally, on the availability, terms and deployment of capital;
|
•
|
changes in, or failure or inability to comply with, government regulations in the countries in which we operate and adverse outcomes from regulatory proceedings;
|
•
|
government intervention that opens our broadband distribution networks to competitors, such as the obligations imposed in Belgium and the Netherlands;
|
•
|
our ability to obtain regulatory approval and satisfy other conditions necessary to close acquisitions and dispositions and the impact of conditions imposed by competition and other regulatory authorities in connection with acquisitions, including the impact of the conditions imposed in connection with the acquisition of Kabel BW GmbH (
KBW
) on our operations in Germany;
|
•
|
changes in laws or treaties relating to taxation, or the interpretation thereof, in the
U.S.
or in countries in which we operate;
|
•
|
changes in laws and government regulations that may impact the availability and cost of credit and the derivative instruments that hedge certain of our financial risks;
|
•
|
the ability of suppliers and vendors to timely deliver quality products, equipment, software and services;
|
•
|
the availability of attractive programming for our digital video services at reasonable costs;
|
•
|
uncertainties inherent in the development and integration of new business lines and business strategies;
|
•
|
our ability to adequately forecast and plan future network requirements;
|
•
|
the availability of capital for the acquisition and/or development of telecommunications networks and services;
|
•
|
our ability to successfully integrate and realize anticipated efficiencies from the businesses we acquire;
|
•
|
problems we may discover post-closing with the operations, including the internal controls and financial reporting process, of businesses we acquire;
|
•
|
the outcome of any pending or threatened litigation;
|
•
|
the loss of key employees and the availability of qualified personnel;
|
•
|
changes in the nature of key strategic relationships with partners and joint venturers; and
|
•
|
events that are outside of our control, such as political unrest in international markets, terrorist attacks, malicious human acts, natural disasters, pandemics and other similar events.
|
(i)
|
organic declines in total subscription revenue and overall revenue in the Netherlands during the
second
quarter of
2013
, as compared to (a) the first quarter of
2013
and (b) the
second
quarter of
2012
;
|
(ii)
|
organic declines in subscription revenue from video and fixed-line telephony services in the Netherlands during the
second
quarter of
2013
, as compared to (a) the first quarter of
2013
and (b) the
second
quarter of
2012
;
|
(iii)
|
organic declines in video
RGU
s in the Netherlands, Germany, Belgium, Switzerland and most of our other markets during the
second
quarter of
2013
, as net declines in our analog cable
RGU
s exceeded net additions to our digital cable
RGU
s (including migrations from analog cable) in these markets;
|
(iv)
|
organic declines in
ARPU
from (a) broadband internet in Belgium and several of our other markets and (b) telephony services in all of our markets during the
second
quarter of
2013
, as compared to the
second
quarter of
2012
; and
|
(v)
|
organic declines in overall
ARPU
in
the Netherlands, Belgium and many of our other markets
during the
second
quarter of
2013
, as compared to the
second
quarter of
2012
.
|
|
Three months ended June 30,
|
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|
%
|
||||||||
|
in millions
|
|
|
|
|
||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
401.3
|
|
|
$
|
—
|
|
|
$
|
401.3
|
|
|
N.M.
|
|
|
N.M.
|
|
Germany (Unitymedia KabelBW)
|
624.6
|
|
|
566.2
|
|
|
58.4
|
|
|
10.3
|
|
|
8.3
|
|
|||
Belgium (Telenet)
|
534.4
|
|
|
466.2
|
|
|
68.2
|
|
|
14.6
|
|
|
12.5
|
|
|||
The Netherlands
|
303.2
|
|
|
303.7
|
|
|
(0.5
|
)
|
|
(0.2
|
)
|
|
(2.0
|
)
|
|||
Switzerland
|
323.9
|
|
|
313.0
|
|
|
10.9
|
|
|
3.5
|
|
|
4.1
|
|
|||
Other Western Europe
|
219.6
|
|
|
208.5
|
|
|
11.1
|
|
|
5.3
|
|
|
3.4
|
|
|||
Total Western Europe
|
2,407.0
|
|
|
1,857.6
|
|
|
549.4
|
|
|
29.6
|
|
|
6.4
|
|
|||
Central and Eastern Europe
|
281.5
|
|
|
275.0
|
|
|
6.5
|
|
|
2.4
|
|
|
0.2
|
|
|||
Central and other
|
31.3
|
|
|
28.9
|
|
|
2.4
|
|
|
8.3
|
|
|
6.9
|
|
|||
Total European Operations Division
|
2,719.8
|
|
|
2,161.5
|
|
|
558.3
|
|
|
25.8
|
|
|
5.6
|
|
|||
Chile (VTR Group)
|
252.7
|
|
|
226.8
|
|
|
25.9
|
|
|
11.4
|
|
|
9.0
|
|
|||
Corporate and other
|
210.5
|
|
|
149.0
|
|
|
61.5
|
|
|
41.3
|
|
|
2.5
|
|
|||
Intersegment eliminations
|
(21.1
|
)
|
|
(12.8
|
)
|
|
(8.3
|
)
|
|
N.M.
|
|
|
N.M.
|
|
|||
Total
|
$
|
3,161.9
|
|
|
$
|
2,524.5
|
|
|
$
|
637.4
|
|
|
25.2
|
|
|
5.5
|
|
|
Six months ended
June 30, |
|
Increase (decrease)
|
|
Organic increase (decrease)
|
|||||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|
%
|
|||||||
|
in millions
|
|
|
|
|
|||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
|
|
|||||||
U.K. (Virgin Media)
|
$
|
401.3
|
|
|
$
|
—
|
|
|
$
|
401.3
|
|
|
N.M.
|
|
N.M.
|
|
Germany (Unitymedia KabelBW)
|
1,242.8
|
|
|
1,126.9
|
|
|
115.9
|
|
|
10.3
|
|
8.9
|
|
|||
Belgium (Telenet)
|
1,070.6
|
|
|
943.7
|
|
|
126.9
|
|
|
13.4
|
|
12.0
|
|
|||
The Netherlands
|
618.0
|
|
|
614.4
|
|
|
3.6
|
|
|
0.6
|
|
(0.7
|
)
|
|||
Switzerland
|
649.9
|
|
|
626.3
|
|
|
23.6
|
|
|
3.8
|
|
4.6
|
|
|||
Other Western Europe
|
442.2
|
|
|
420.4
|
|
|
21.8
|
|
|
5.2
|
|
3.9
|
|
|||
Total Western Europe
|
4,424.8
|
|
|
3,731.7
|
|
|
693.1
|
|
|
18.6
|
|
6.8
|
|
|||
Central and Eastern Europe
|
569.3
|
|
|
555.9
|
|
|
13.4
|
|
|
2.4
|
|
0.5
|
|
|||
Central and other
|
63.3
|
|
|
57.1
|
|
|
6.2
|
|
|
10.9
|
|
9.3
|
|
|||
Total European Operations Division
|
5,057.4
|
|
|
4,344.7
|
|
|
712.7
|
|
|
16.4
|
|
6.0
|
|
|||
Chile (VTR Group)
|
503.1
|
|
|
451.3
|
|
|
51.8
|
|
|
11.5
|
|
8.4
|
|
|||
Corporate and other
|
410.7
|
|
|
301.0
|
|
|
109.7
|
|
|
36.4
|
|
(1.9
|
)
|
|||
Intersegment eliminations
|
(41.6
|
)
|
|
(35.5
|
)
|
|
(6.1
|
)
|
|
N.M.
|
|
N.M.
|
|
|||
Total
|
$
|
5,929.6
|
|
|
$
|
5,061.5
|
|
|
$
|
868.1
|
|
|
17.2
|
|
5.7
|
|
|
Three-month period
|
|
Six-month period
|
||||||||||||||||||||
|
Subscription
revenue (a)
|
|
Non-subscription
revenue (b)
|
|
Total
|
|
Subscription
revenue (a)
|
|
Non-subscription
revenue (b)
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Increase in subscription revenue due to change in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (c)
|
$
|
32.3
|
|
|
$
|
—
|
|
|
$
|
32.3
|
|
|
$
|
67.6
|
|
|
$
|
—
|
|
|
$
|
67.6
|
|
ARPU (d)
|
20.1
|
|
|
—
|
|
|
20.1
|
|
|
40.7
|
|
|
—
|
|
|
40.7
|
|
||||||
Decrease in non-subscription revenue (e)
|
—
|
|
|
(5.3
|
)
|
|
(5.3
|
)
|
|
—
|
|
|
(7.8
|
)
|
|
(7.8
|
)
|
||||||
Organic increase (decrease)
|
52.4
|
|
|
(5.3
|
)
|
|
47.1
|
|
|
108.3
|
|
|
(7.8
|
)
|
|
100.5
|
|
||||||
Impact of FX
|
10.1
|
|
|
1.2
|
|
|
11.3
|
|
|
13.8
|
|
|
1.6
|
|
|
15.4
|
|
||||||
Total
|
$
|
62.5
|
|
|
$
|
(4.1
|
)
|
|
$
|
58.4
|
|
|
$
|
122.1
|
|
|
$
|
(6.2
|
)
|
|
$
|
115.9
|
|
(a)
|
Germany’s subscription revenue includes revenue from multi-year bulk agreements with landlords, housing associations or with third parties that operate and administer the in-building networks on behalf of housing associations. These bulk agreements, which generally allow for the procurement of the basic video signals at volume-based discounts, provide access to
nearly two-thirds of Germany’s video cable subscribers. Germany’s bulk agreements are, to a significant extent, medium- and long-term contracts, although bulk agreements related to approximately 20% of the video cable subscribers that Germany serves through these agreements expire by the end of 2014. During the three months ended
June 30, 2013
, Germany’s 20 largest bulk agreement accounts generated approximately 7% of its revenue (including estimated amounts billed directly to the building occupants for premium cable, broadband internet and telephony services). No assurance can be given that Germany’s bulk agreements will be renewed or extended on financially equivalent terms or at all, particularly in light of the commitments we made to regulators in connection with the December 15, 2011 acquisition of
KBW
. In this regard, we have, among other items, agreed to grant a special termination right with respect to certain of Germany’s existing access agreements (the
Remedy HA Agreements
). The total number of dwelling units covered by the affected agreements was approximately 340,000 as of December 15, 2011. At
June 30, 2013
, approximately 35% of the dwelling units covered by the
Remedy HA Agreements
remain subject to special termination rights. These dwelling units (which include agreements that are not among the 20 largest bulk agreements) accounted for approximately 1% of Germany’s total revenue during the three months ended
June 30, 2013
.
|
(b)
|
Germany’s non-subscription revenue includes fees received for the carriage of certain channels included in Germany’s analog and digital cable offerings. This carriage fee revenue is subject to contracts that expire or are otherwise terminable by either party on various dates ranging from 2013 through 2018. The aggregate amount of revenue related to these carriage contracts represented approximately 5% of Germany’s total revenue during the three months ended
June 30, 2013
. Public broadcasters have sent us notices purporting to terminate their carriage fee arrangements effective December 31, 2012. While we are seeking to negotiate with the public broadcasters to reach acceptable agreements, we have rejected the termination notices and filed lawsuits for payment of carriage fees against the public broadcasters. Until such time as we resolve these disputes or obtain favorable outcomes in our lawsuits, we don’t believe we meet the criteria to recognize the impacted revenue for 2013 and future periods. The aggregate amount of revenue related to these public broadcasters
|
(c)
|
The increases in Germany’s subscription revenue related to changes in the average numbers of
RGU
s are attributable to increases in the average numbers of broadband internet, telephony and digital cable
RGU
s that were only partially offset by declines in the average numbers of analog cable
RGU
s. The declines in Germany’s average numbers of analog cable
RGU
s led to declines in the average numbers of Germany’s total video
RGU
s during the
three and six months ended June 30, 2013
, as compared to the corresponding periods in
2012
.
|
(d)
|
The increases in Germany’s subscription revenue related to changes in
ARPU
are due to (i) net increases resulting primarily from the following factors: (a) higher
ARPU
from digital cable services, (b) higher
ARPU
from broadband internet services, (c) higher
ARPU
from analog cable services, as price increases more than offset lower
ARPU
due to higher proportions of subscribers receiving discounted analog cable services through bulk agreements, (d) lower
ARPU
from telephony services due to the net impact of (1) decreases in
ARPU
associated with lower telephony call volumes for customers on usage-based calling plans and (2) increases in
ARPU
associated with the migration of customers to fixed-rate plans and related value-added services and (e) higher
ARPU
due to lower negative impacts from free bundled services provided to new subscribers during promotional periods and (ii) improvements in
RGU
mix attributable to higher proportions of telephony and broadband internet
RGU
s.
|
(e)
|
The decreases in Germany’s non-subscription revenue are primarily attributable to the net effect of (i) decreases in carriage fee revenue as described above, (ii) increases in mobile services revenue and (iii) increases in installation revenue, due to higher numbers of installations and increases in the average installation fee.
|
|
Three-month period
|
|
Six-month period
|
||||||||||||||||||||
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Increase (decrease) in subscription revenue due to change in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (a)
|
$
|
9.1
|
|
|
$
|
—
|
|
|
$
|
9.1
|
|
|
$
|
18.0
|
|
|
$
|
—
|
|
|
$
|
18.0
|
|
ARPU (b)
|
(5.1
|
)
|
|
—
|
|
|
(5.1
|
)
|
|
(11.8
|
)
|
|
—
|
|
|
(11.8
|
)
|
||||||
Increase in non-subscription revenue (c)
|
—
|
|
|
54.4
|
|
|
54.4
|
|
|
—
|
|
|
107.3
|
|
|
107.3
|
|
||||||
Organic increase
|
4.0
|
|
|
54.4
|
|
|
58.4
|
|
|
6.2
|
|
|
107.3
|
|
|
113.5
|
|
||||||
Impact of FX
|
7.2
|
|
|
2.6
|
|
|
9.8
|
|
|
9.6
|
|
|
3.8
|
|
|
13.4
|
|
||||||
Total
|
$
|
11.2
|
|
|
$
|
57.0
|
|
|
$
|
68.2
|
|
|
$
|
15.8
|
|
|
$
|
111.1
|
|
|
$
|
126.9
|
|
(a)
|
The increases in
Telenet
’s subscription revenue related to changes in the average numbers of
RGU
s are attributable to increases in the average numbers of telephony, broadband internet and digital cable
RGU
s that were only partially offset by declines in the average numbers of analog cable
RGU
s. The declines in the average numbers of analog cable
RGU
s led to declines in the average numbers of Telenet’s total video
RGU
s during the
three and six months ended June 30, 2013
, as compared to the corresponding periods in
2012
.
|
(b)
|
The decreases in
Telenet
’s subscription revenue related to changes in
ARPU
are due to the net effect of (i) net decreases resulting primarily from the following factors: (a) lower
ARPU
due to increases in the proportion of subscribers selecting
|
(c)
|
The increases in
Telenet
’s non-subscription revenue are due primarily to (i) increases in mobile services revenue of $33.6 million and $63.2 million, respectively, (ii) increases in interconnect revenue of $17.7 million and $34.2 million, respectively, primarily associated with growth in mobile services, and (iii) increases in mobile handset sales of $4.9 million and $10.9 million, respectively. These increases were partially offset by decreases of $3.9 million and $5.0 million, respectively, associated with changes in how Telenet recognizes certain up-front fees. The increases in
Telenet
’s mobile handset sales, which typically generate relatively low margins, are mostly due to increases in sales to third-party retailers.
|
|
Three-month period
|
|
Six-month period
|
||||||||||||||||||||
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Increase (decrease) in subscription revenue due to change in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (a)
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
2.8
|
|
|
$
|
—
|
|
|
$
|
2.8
|
|
ARPU (b)
|
(3.9
|
)
|
|
—
|
|
|
(3.9
|
)
|
|
(7.1
|
)
|
|
—
|
|
|
(7.1
|
)
|
||||||
Decrease in non-subscription revenue (c)
|
—
|
|
|
(2.0
|
)
|
|
(2.0
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||||
Organic decrease
|
(4.0
|
)
|
|
(2.0
|
)
|
|
(6.0
|
)
|
|
(4.3
|
)
|
|
(0.2
|
)
|
|
(4.5
|
)
|
||||||
Impact of an acquisition
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
||||||
Impact of FX
|
4.6
|
|
|
0.7
|
|
|
5.3
|
|
|
6.6
|
|
|
0.9
|
|
|
7.5
|
|
||||||
Total
|
$
|
0.8
|
|
|
$
|
(1.3
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
2.9
|
|
|
$
|
0.7
|
|
|
$
|
3.6
|
|
(a)
|
The changes in the Netherlands’ subscription revenue related to changes in the average numbers of
RGU
s are attributable to the net effect of (i) increases in the average numbers of telephony, broadband internet and digital cable
RGU
s and (ii) declines in the average numbers of analog cable
RGU
s. The declines in the average numbers of analog cable
RGU
s led to (a) declines in the average numbers of the Netherlands’ total video
RGU
s during the
three and six months ended June 30, 2013
, as compared to the corresponding periods in
2012
, and (b) a decline in the average number of total
RGU
s during the three months ended
June 30, 2013
, as compared to the corresponding period in
2012
.
|
(b)
|
The decreases in the Netherlands’ subscription revenue related to changes in
ARPU
are due to the net effect of (i) net decreases resulting primarily from the following factors: (a) lower
ARPU
due to decreases in telephony call volumes and (b) lower
ARPU
due to the impacts of higher bundling and promotional discounts that more than offset the positive impacts of (1) the inclusion of higher-priced tiers of digital cable, broadband internet and telephony services in our promotional bundles and (2) July 2012 price increases for bundled services and a January 2013 price increase for certain analog cable services and (ii) improvements in
RGU
mix, attributable to higher proportions of digital cable, broadband internet and telephony
RGU
s.
|
(c)
|
The decreases in the Netherlands’ non-subscription revenue are primarily attributable to the net effect of (i) increases in installation revenue, largely related to
Horizon TV
, (ii) decreases in interconnect revenue, due primarily to the impact of an August 1, 2012 reduction in fixed termination rates, and (iii) decreases in
B2B
revenue.
|
|
Three-month period
|
|
Six-month period
|
||||||||||||||||||||
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Increase in subscription revenue due to change in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (a)
|
$
|
7.6
|
|
|
$
|
—
|
|
|
$
|
7.6
|
|
|
$
|
16.1
|
|
|
$
|
—
|
|
|
$
|
16.1
|
|
ARPU (b)
|
5.6
|
|
|
—
|
|
|
5.6
|
|
|
9.3
|
|
|
—
|
|
|
9.3
|
|
||||||
Increase (decrease) in non-subscription revenue (c)
|
—
|
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
3.1
|
|
|
3.1
|
|
||||||
Organic increase (decrease)
|
13.2
|
|
|
(0.3
|
)
|
|
12.9
|
|
|
25.4
|
|
|
3.1
|
|
|
28.5
|
|
||||||
Impact of an acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
||||||
Impact of FX
|
(1.9
|
)
|
|
(0.1
|
)
|
|
(2.0
|
)
|
|
(4.7
|
)
|
|
(0.6
|
)
|
|
(5.3
|
)
|
||||||
Total
|
$
|
11.3
|
|
|
$
|
(0.4
|
)
|
|
$
|
10.9
|
|
|
$
|
21.1
|
|
|
$
|
2.5
|
|
|
$
|
23.6
|
|
(a)
|
The increases in Switzerland’s subscription revenue related to changes in the average numbers of
RGU
s are attributable to increases in the average numbers of digital cable, telephony and broadband internet
RGU
s that were only partially offset by declines in the average numbers of analog cable
RGU
s. The declines in the average numbers of analog cable
RGU
s led to declines in the average numbers of Switzerland’s total video
RGU
s during the
three and six months ended June 30, 2013
, as compared to the corresponding periods in
2012
.
|
(b)
|
The increases in Switzerland’s subscription revenue related to changes in
ARPU
are due to the net effect of (i) improvements in
RGU
mix, attributable to higher proportions of digital cable, broadband internet and telephony
RGU
s, and (ii) a slight net increase during the three-month period and a net decrease during the six-month period resulting primarily from the following factors: (a) higher
ARPU
due to the inclusion of higher-priced tiers of broadband internet services and, to a lesser extent, digital cable services in our promotional bundles, (b) lower
ARPU
due to the impacts of bundling discounts, (c) lower
ARPU
due to decreases in telephony call volumes for customers on usage-based calling plans and (d) higher ARPU due to a January 2013 price increase for a basic cable connection, as discussed below, and, to a lesser extent, a June 2013 price increase for broadband internet services.
|
(c)
|
The changes in Switzerland’s non-subscription revenue are primarily attributable to the net effect of (i) increases in installation revenue of $2.1 million and $5.4 million, respectively, (ii) decreases in sales of customer premises equipment, primarily due to the unencryption described below, and (iii) declines in revenue from usage-based wholesale residential telephony services. The increases in installation revenue include increases of $1.8 million and $3.6 million, respectively, associated with a change in how we recognize installation revenue in Switzerland as a result of a change in how we market and deliver services upon the unencryption of the basic tier of digital television channels in November 2012, as further described below.
|
|
Three-month period
|
|
Six-month period
|
||||||||||||||||||||
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Increase (decrease) in subscription revenue due to change in (a):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (b)
|
$
|
10.9
|
|
|
$
|
—
|
|
|
$
|
10.9
|
|
|
$
|
23.3
|
|
|
$
|
—
|
|
|
$
|
23.3
|
|
ARPU (c)
|
(3.9
|
)
|
|
—
|
|
|
(3.9
|
)
|
|
(9.5
|
)
|
|
—
|
|
|
(9.5
|
)
|
||||||
Increase in non-subscription
revenue (a) (d)
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
2.7
|
|
|
2.7
|
|
||||||
Organic increase
|
7.0
|
|
|
0.1
|
|
|
7.1
|
|
|
13.8
|
|
|
2.7
|
|
|
16.5
|
|
||||||
Impact of FX
|
3.8
|
|
|
0.2
|
|
|
4.0
|
|
|
5.0
|
|
|
0.3
|
|
|
5.3
|
|
||||||
Total
|
$
|
10.8
|
|
|
$
|
0.3
|
|
|
$
|
11.1
|
|
|
$
|
18.8
|
|
|
$
|
3.0
|
|
|
$
|
21.8
|
|
(a)
|
In connection with the
Virgin Media Acquisition
, we determined that we would no longer externally report
DSL
subscribers as
RGU
s. Accordingly, we have reclassified the revenue from our
DSL
subscribers in Austria from broadband internet and telephony subscription revenue to non-subscription revenue for all periods presented.
|
(b)
|
The increases in Other Western Europe’s subscription revenue related to changes in the average numbers of
RGU
s are attributable to increases in the average numbers of telephony, broadband internet and digital cable
RGU
s in each of Ireland and Austria that were only partially offset by declines in the average numbers of analog cable
RGU
s in each of Austria and Ireland and, to a lesser extent,
MMDS
video
RGU
s in Ireland. The declines in the average numbers of analog cable and
MMDS
video
RGU
s led to declines in the average numbers of total video
RGU
s in each of Ireland and Austria during the
three and six months ended June 30, 2013
, as compared to the corresponding periods in
2012
.
|
(c)
|
The decreases in Other Western Europe’s subscription revenue related to changes in
ARPU
are attributable to decreases in
ARPU
in each of Ireland and Austria. The decreases in Ireland’s
ARPU
are primarily due to the net effect of (i) lower
ARPU
due to the impact of bundling discounts and (ii) higher
ARPU
due to the inclusion of higher-priced tiers of broadband internet and digital cable services in our promotional bundles. The decreases in Austria’s
ARPU
are primarily due to the net effect of (a) lower
ARPU
due to the impact of bundling discounts, (b) higher
ARPU
due to January 2013 price increases for digital and analog cable and broadband internet services and (c) lower
ARPU
due to higher proportions of subscribers selecting lower-priced tiers of broadband internet services. In addition, Other Western Europe’s overall
ARPU
was impacted by adverse changes in
RGU
mix, primarily attributable to lower proportions of digital cable
RGU
s in Ireland.
|
(d)
|
The increases in Other Western Europe’s non-subscription revenue are due primarily to increases in installation revenue and
B2B
telephony services in Ireland.
|
|
Three-month period
|
|
Six-month period
|
||||||||||||||||||||
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Increase (decrease) in subscription revenue due to change in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (a)
|
$
|
6.5
|
|
|
$
|
—
|
|
|
$
|
6.5
|
|
|
$
|
14.5
|
|
|
$
|
—
|
|
|
$
|
14.5
|
|
ARPU (b)
|
(5.6
|
)
|
|
—
|
|
|
(5.6
|
)
|
|
(12.5
|
)
|
|
—
|
|
|
(12.5
|
)
|
||||||
Increase (decrease) in non-subscription revenue (c)
|
—
|
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
0.5
|
|
|
0.5
|
|
||||||
Organic increase (decrease)
|
0.9
|
|
|
(0.4
|
)
|
|
0.5
|
|
|
2.0
|
|
|
0.5
|
|
|
2.5
|
|
||||||
Impact of an acquisition
|
0.8
|
|
|
—
|
|
|
0.8
|
|
|
3.1
|
|
|
0.1
|
|
|
3.2
|
|
||||||
Impact of FX
|
4.1
|
|
|
1.1
|
|
|
5.2
|
|
|
6.9
|
|
|
0.8
|
|
|
7.7
|
|
||||||
Total
|
$
|
5.8
|
|
|
$
|
0.7
|
|
|
$
|
6.5
|
|
|
$
|
12.0
|
|
|
$
|
1.4
|
|
|
$
|
13.4
|
|
(a)
|
The increases in Central and Eastern Europe’s subscription revenue related to changes in the average numbers of
RGU
s are attributable to increases in the average numbers of digital cable, telephony and broadband internet
RGU
s in Poland, Romania, Hungary and Slovakia that were only partially offset by declines in the average numbers of (i) analog cable
RGU
s in each country within our Central and Eastern Europe segment and (ii) digital cable, telephony and broadband internet
RGU
s in the Czech Republic. As a result, each country within our Central and Eastern Europe segment experienced declines in the average numbers of total video
RGU
s during the
three and six months ended June 30, 2013
, as compared to the corresponding periods in
2012
.
|
(b)
|
The decreases in Central and Eastern Europe’s subscription revenue related to changes in
ARPU
are primarily due to the net effect of (i) lower
ARPU
due to the impacts of higher bundling discounts, (ii) higher
ARPU
due to the inclusion of higher-priced tiers of broadband internet and digital cable services in our promotional bundles, (iii) lower
ARPU
from digital cable services and (iv) lower
ARPU
due to decreases in telephony call volume for customers on usage-based calling plans. In addition, Central and Eastern Europe’s overall
ARPU
was positively impacted by improvements in
RGU
mix, primarily attributable to higher proportions of digital cable and, to a lesser extent, broadband internet
RGU
s.
|
(c)
|
The changes in Central and Eastern Europe’s non-subscription revenue are due to individually insignificant changes in various non-subscription revenue categories.
|
|
Three-month period
|
|
Six-month period
|
||||||||||||||||||||
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Increase in subscription revenue due to change in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (a)
|
$
|
11.2
|
|
|
$
|
—
|
|
|
$
|
11.2
|
|
|
$
|
21.0
|
|
|
$
|
—
|
|
|
$
|
21.0
|
|
ARPU (b)
|
4.2
|
|
|
|
|
4.2
|
|
|
4.7
|
|
|
—
|
|
|
4.7
|
|
|||||||
Increase in non-subscription revenue (c)
|
—
|
|
|
5.0
|
|
|
5.0
|
|
|
—
|
|
|
12.1
|
|
|
12.1
|
|
||||||
Organic increase
|
15.4
|
|
|
5.0
|
|
|
20.4
|
|
|
25.7
|
|
|
12.1
|
|
|
37.8
|
|
||||||
Impact of FX
|
5.2
|
|
|
0.3
|
|
|
5.5
|
|
|
12.7
|
|
|
1.3
|
|
|
14.0
|
|
||||||
Total
|
$
|
20.6
|
|
|
$
|
5.3
|
|
|
$
|
25.9
|
|
|
$
|
38.4
|
|
|
$
|
13.4
|
|
|
$
|
51.8
|
|
(a)
|
The increases in the
VTR Group
’s subscription revenue related to changes in the average numbers of
RGU
s are due to increases in the average numbers of digital cable, broadband internet and telephony
RGU
s that were only partially offset by declines in the average numbers of analog cable
RGU
s.
|
(b)
|
The increases in the
VTR Group
’s subscription revenue related to changes in
ARPU
are due to (i) improvements in
RGU
mix, primarily attributable to higher proportions of digital cable
RGU
s, and (ii) net increases resulting from the following factors: (a) higher
ARPU
due to the impacts of lower bundling and promotional discounts, (b) lower
ARPU
from analog and digital cable services, largely due to higher proportions of subscribers selecting lower-priced tiers of services, (c) higher
ARPU
due to semi-annual inflation and other price adjustments for video, broadband internet and telephony services and (d) lower
ARPU
due to decreases in telephony call volume for customers on usage-based plans.
|
(c)
|
The increases in the
VTR Group
’s non-subscription revenue are primarily attributable to increases of $5.4 million and $13.9 million, respectively, in mobile revenue (including subscription, handset sales and interconnect revenue) due to the May 2012 launch of mobile services at
VTR Wireless
.
|
|
Three months ended June 30,
|
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|
%
|
||||||||
|
in millions
|
|
|
|
|
||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
174.4
|
|
|
$
|
—
|
|
|
$
|
174.4
|
|
|
N.M.
|
|
|
N.M.
|
|
Germany (Unitymedia KabelBW)
|
156.0
|
|
|
136.3
|
|
|
19.7
|
|
|
14.5
|
|
|
12.3
|
|
|||
Belgium (Telenet)
|
201.6
|
|
|
169.2
|
|
|
32.4
|
|
|
19.1
|
|
|
17.1
|
|
|||
The Netherlands
|
94.0
|
|
|
90.5
|
|
|
3.5
|
|
|
3.9
|
|
|
1.9
|
|
|||
Switzerland
|
89.5
|
|
|
91.5
|
|
|
(2.0
|
)
|
|
(2.2
|
)
|
|
(1.5
|
)
|
|||
Other Western Europe
|
83.5
|
|
|
82.8
|
|
|
0.7
|
|
|
0.8
|
|
|
(1.4
|
)
|
|||
Total Western Europe
|
799.0
|
|
|
570.3
|
|
|
228.7
|
|
|
40.1
|
|
|
7.9
|
|
|||
Central and Eastern Europe
|
107.4
|
|
|
103.8
|
|
|
3.6
|
|
|
3.5
|
|
|
1.1
|
|
|||
Central and other
|
34.3
|
|
|
25.8
|
|
|
8.5
|
|
|
33.0
|
|
|
33.5
|
|
|||
Total European Operations Division
|
940.7
|
|
|
699.9
|
|
|
240.8
|
|
|
34.4
|
|
|
7.8
|
|
|||
Chile (VTR Group)
|
121.1
|
|
|
106.0
|
|
|
15.1
|
|
|
14.2
|
|
|
11.7
|
|
|||
Corporate and other
|
125.5
|
|
|
90.1
|
|
|
35.4
|
|
|
39.3
|
|
|
1.7
|
|
|||
Intersegment eliminations
|
(22.2
|
)
|
|
(12.2
|
)
|
|
(10.0
|
)
|
|
N.M.
|
|
|
N.M.
|
|
|||
Total operating expenses excluding share-based compensation expense
|
1,165.1
|
|
|
883.8
|
|
|
281.3
|
|
|
31.8
|
|
|
6.7
|
|
|||
Share-based compensation expense
|
6.0
|
|
|
3.5
|
|
|
2.5
|
|
|
71.4
|
|
|
|
||||
Total
|
$
|
1,171.1
|
|
|
$
|
887.3
|
|
|
$
|
283.8
|
|
|
32.0
|
|
|
|
|
Six months ended
June 30, |
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|
%
|
||||||||
|
in millions
|
|
|
|
|
||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
174.4
|
|
|
$
|
—
|
|
|
$
|
174.4
|
|
|
N.M.
|
|
|
N.M.
|
|
Germany (Unitymedia KabelBW)
|
310.0
|
|
|
275.5
|
|
|
34.5
|
|
|
12.5
|
|
|
11.1
|
|
|||
Belgium (Telenet)
|
432.5
|
|
|
352.6
|
|
|
79.9
|
|
|
22.7
|
|
|
21.1
|
|
|||
The Netherlands
|
189.3
|
|
|
183.8
|
|
|
5.5
|
|
|
3.0
|
|
|
1.7
|
|
|||
Switzerland
|
181.7
|
|
|
181.9
|
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
0.7
|
|
|||
Other Western Europe
|
170.4
|
|
|
167.2
|
|
|
3.2
|
|
|
1.9
|
|
|
0.6
|
|
|||
Total Western Europe
|
1,458.3
|
|
|
1,161.0
|
|
|
297.3
|
|
|
25.6
|
|
|
9.5
|
|
|||
Central and Eastern Europe
|
216.9
|
|
|
212.4
|
|
|
4.5
|
|
|
2.1
|
|
|
—
|
|
|||
Central and other
|
65.7
|
|
|
50.9
|
|
|
14.8
|
|
|
29.1
|
|
|
27.3
|
|
|||
Total European Operations Division
|
1,740.9
|
|
|
1,424.3
|
|
|
316.6
|
|
|
22.2
|
|
|
8.7
|
|
|||
Chile (VTR Group)
|
241.6
|
|
|
207.9
|
|
|
33.7
|
|
|
16.2
|
|
|
12.9
|
|
|||
Corporate and other
|
247.9
|
|
|
182.3
|
|
|
65.6
|
|
|
36.0
|
|
|
(1.1
|
)
|
|||
Intersegment eliminations
|
(42.2
|
)
|
|
(34.7
|
)
|
|
(7.5
|
)
|
|
N.M.
|
|
|
N.M.
|
|
|||
Total operating expenses excluding share-based compensation expense
|
2,188.2
|
|
|
1,779.8
|
|
|
408.4
|
|
|
22.9
|
|
|
8.0
|
|
|||
Share-based compensation expense
|
9.9
|
|
|
5.2
|
|
|
4.7
|
|
|
90.4
|
|
|
|
||||
Total
|
$
|
2,198.1
|
|
|
$
|
1,785.0
|
|
|
$
|
413.1
|
|
|
23.1
|
|
|
|
•
|
Increases in interconnect costs of $20.8 million or 27.1% and $39.6 million or 25.1%, respectively, due primarily to the net effect of (i) increased costs in Belgium attributable to (a) mobile subscriber growth and (b) increased mobile voice and data volumes and (ii) decreased costs due to lower rates in Germany and the Netherlands;
|
•
|
Increases in programming and related costs of $13.5 million or 6.3% and $32.3 million or 7.4%, respectively, due predominantly to growth in digital video services in Germany, Belgium, the Netherlands and Ireland;
|
•
|
Increases in mobile handset costs in Belgium of $2.8 million and $21.3 million, respectively, due primarily to (i) higher costs associated with subscriber promotions involving free or heavily-discounted handsets and (ii) increased mobile handset sales to third-party retailers. The increase in costs during the second quarter of 2013 is lower than the increase during the first quarter of 2013 due primarily to the curtailment of subscriber promotions featuring handset subsidies;
|
•
|
Increases in outsourced labor and professional fees of $9.9 million or 14.3% and $14.6 million or 10.2%, respectively, due primarily to (i) higher call center costs in Germany, the Netherlands and Switzerland, (ii) higher consulting costs related to (a) a customer retention project in Germany and (b) development costs associated with the
Horizon TV
platform incurred in the
European Operations Division
's central operations and (iii) higher outsourced labor costs associated with customer-facing activities in Germany and Poland. These increases were partially offset by lower call center costs in Hungary due primarily to reduced proportions of calls handled by third parties; and
|
•
|
Increases in bad debt and collection expenses of $5.1 million and $6.6 million, respectively, due primarily to (i) increases in bad debt expenses in Germany, partially offset by decreases in the Netherlands and Switzerland due to improved collection experience, and (ii) the negative impact of a $3.2 million favorable nonrecurring adjustment recorded in the second quarter of 2012 related to the settlement of an operational contingency in Belgium.
|
•
|
Increases in mobile access and interconnect costs of $2.5 million or 14.0% and $5.7 million or 16.9%, respectively, due primarily to the impact of
VTR Wireless
’ May 2012 launch of mobile services;
|
•
|
Increases in outsourced labor and professional fees of $4.0 million or 44.7% and $5.1 million or 29.0%, respectively, primarily attributable to a $3.0 million non-recurring charge recorded during the second quarter of 2013 to provide for
VTR
's mandated share of severance and other labor-related obligations that were incurred by a
VTR
contractor in connection with such contractor’s bankruptcy. In addition, increased costs associated with
VTR Wireless
’ network operating center also contributed to the increase;
|
•
|
Increases in programming and related costs of $3.3 million or 9.2% and $4.9 million or 7.0%, respectively, primarily associated with growth in digital cable services;
|
•
|
Increases in
VTR Wireless
’ mobile handset costs of $1.3 million and $4.7 million, respectively;
|
•
|
Increases in bad debt and collection expenses of $1.6 million or 17.6% and $4.0 million or 21.6%, respectively, at
VTR Wireless
and, to a lesser extent,
VTR
. The increases at
VTR Wireless
are largely a function of the May 2012 launch of mobile services; and
|
•
|
Increases in personnel costs of $1.0 million or 9.0% and $2.2 million or 9.1%, respectively, due primarily to higher bonus accruals at
VTR
.
|
|
Three months ended June 30,
|
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|
%
|
||||||||
|
in millions
|
|
|
|
|
||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
51.6
|
|
|
$
|
—
|
|
|
$
|
51.6
|
|
|
N.M.
|
|
|
N.M.
|
|
Germany (Unitymedia KabelBW)
|
99.2
|
|
|
95.7
|
|
|
3.5
|
|
|
3.7
|
|
|
1.7
|
|
|||
Belgium (Telenet)
|
63.6
|
|
|
60.1
|
|
|
3.5
|
|
|
5.8
|
|
|
3.8
|
|
|||
The Netherlands
|
38.1
|
|
|
34.4
|
|
|
3.7
|
|
|
10.8
|
|
|
8.3
|
|
|||
Switzerland
|
45.2
|
|
|
42.3
|
|
|
2.9
|
|
|
6.9
|
|
|
7.8
|
|
|||
Other Western Europe
|
30.5
|
|
|
29.8
|
|
|
0.7
|
|
|
2.3
|
|
|
0.4
|
|
|||
Total Western Europe
|
328.2
|
|
|
262.3
|
|
|
65.9
|
|
|
25.1
|
|
|
3.9
|
|
|||
Central and Eastern Europe
|
39.0
|
|
|
36.3
|
|
|
2.7
|
|
|
7.4
|
|
|
4.8
|
|
|||
Central and other
|
51.4
|
|
|
46.1
|
|
|
5.3
|
|
|
11.5
|
|
|
9.6
|
|
|||
Total Europe Operations Division
|
418.6
|
|
|
344.7
|
|
|
73.9
|
|
|
21.4
|
|
|
4.8
|
|
|||
Chile (VTR Group)
|
44.8
|
|
|
45.5
|
|
|
(0.7
|
)
|
|
(1.5
|
)
|
|
(3.6
|
)
|
|||
Corporate and other
|
82.6
|
|
|
56.2
|
|
|
26.4
|
|
|
47.0
|
|
|
27.8
|
|
|||
Intersegment eliminations
|
1.1
|
|
|
(0.6
|
)
|
|
1.7
|
|
|
N.M.
|
|
|
N.M.
|
|
|||
Total SG&A expenses excluding share-based compensation expense
|
547.1
|
|
|
445.8
|
|
|
101.3
|
|
|
22.7
|
|
|
7.3
|
|
|||
Share-based compensation expense
|
87.9
|
|
|
32.1
|
|
|
55.8
|
|
|
173.8
|
|
|
|
||||
Total
|
$
|
635.0
|
|
|
$
|
477.9
|
|
|
$
|
157.1
|
|
|
32.9
|
|
|
|
|
Six months ended
June 30, |
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|
%
|
||||||||
|
in millions
|
|
|
|
|
||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
51.6
|
|
|
$
|
—
|
|
|
$
|
51.6
|
|
|
N.M.
|
|
|
N.M.
|
|
Germany (Unitymedia KabelBW)
|
203.4
|
|
|
194.2
|
|
|
9.2
|
|
|
4.7
|
|
|
3.4
|
|
|||
Belgium (Telenet)
|
121.4
|
|
|
118.4
|
|
|
3.0
|
|
|
2.5
|
|
|
1.3
|
|
|||
The Netherlands
|
72.8
|
|
|
69.1
|
|
|
3.7
|
|
|
5.4
|
|
|
3.5
|
|
|||
Switzerland
|
96.8
|
|
|
88.2
|
|
|
8.6
|
|
|
9.8
|
|
|
10.7
|
|
|||
Other Western Europe
|
61.4
|
|
|
58.7
|
|
|
2.7
|
|
|
4.6
|
|
|
3.3
|
|
|||
Total Western Europe
|
607.4
|
|
|
528.6
|
|
|
78.8
|
|
|
14.9
|
|
|
4.2
|
|
|||
Central and Eastern Europe
|
76.7
|
|
|
71.0
|
|
|
5.7
|
|
|
8.0
|
|
|
6.0
|
|
|||
Central and other
|
97.6
|
|
|
86.2
|
|
|
11.4
|
|
|
13.2
|
|
|
11.8
|
|
|||
Total European Operations Division
|
781.7
|
|
|
685.8
|
|
|
95.9
|
|
|
14.0
|
|
|
5.3
|
|
|||
Chile (VTR Group)
|
89.5
|
|
|
92.9
|
|
|
(3.4
|
)
|
|
(3.7
|
)
|
|
(6.4
|
)
|
|||
Corporate and other
|
150.3
|
|
|
113.3
|
|
|
37.0
|
|
|
32.7
|
|
|
14.0
|
|
|||
Intersegment eliminations
|
0.6
|
|
|
(0.8
|
)
|
|
1.4
|
|
|
N.M.
|
|
|
N.M.
|
|
|||
Total SG&A expenses excluding share-based compensation expense
|
1,022.1
|
|
|
891.2
|
|
|
130.9
|
|
|
14.7
|
|
|
5.3
|
|
|||
Share-based compensation expense
|
110.8
|
|
|
58.1
|
|
|
52.7
|
|
|
90.7
|
|
|
|
||||
Total
|
$
|
1,132.9
|
|
|
$
|
949.3
|
|
|
$
|
183.6
|
|
|
19.3
|
|
|
|
•
|
Increases in personnel costs of $12.3 million or 9.3% and $22.4 million or 8.6%, respectively, due largely to (i) increased staffing levels, primarily in the
European Operations Division
's central operations, Switzerland, Hungary, Belgium and the Czech Republic, and (ii) annual wage increases, primarily in Belgium, the Netherlands, the
European Operations Division
's central operations, Germany and Switzerland. The increases in personnel costs also include the impact of a new employee wage tax in the Netherlands, which was authorized in the third quarter of 2012;
|
•
|
Increases in information technology-related expenses of $4.1 million or 25.7% and $6.4 million or 19.2%, respectively, due largely to (i) costs incurred in connection with the migration of operating systems in Germany and (ii) higher software maintenance costs, primarily in Belgium, Germany, the Netherlands, Hungary and Poland; and
|
•
|
Increases in outsourced labor and professional fees of $4.0 million or 16.2% and $2.5 million or 5.1%, respectively, due largely to the net effect of (i) higher consulting costs in the
European Operations Division
's central operations, Belgium and the Netherlands and (ii) decreases in consulting costs in Germany, primarily associated with integration activities during the 2012 periods related to the acquisition of
KBW
.
|
|
Three months ended June 30,
|
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|
%
|
||||||||
|
in millions
|
|
|
|
|
||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
175.3
|
|
|
$
|
—
|
|
|
$
|
175.3
|
|
|
N.M.
|
|
|
N.M.
|
|
Germany (Unitymedia KabelBW)
|
369.4
|
|
|
334.2
|
|
|
35.2
|
|
|
10.5
|
|
|
8.6
|
|
|||
Belgium (Telenet)
|
269.2
|
|
|
236.9
|
|
|
32.3
|
|
|
13.6
|
|
|
11.5
|
|
|||
The Netherlands
|
171.1
|
|
|
178.8
|
|
|
(7.7
|
)
|
|
(4.3
|
)
|
|
(5.9
|
)
|
|||
Switzerland
|
189.2
|
|
|
179.2
|
|
|
10.0
|
|
|
5.6
|
|
|
6.1
|
|
|||
Other Western Europe
|
105.6
|
|
|
95.9
|
|
|
9.7
|
|
|
10.1
|
|
|
8.5
|
|
|||
Total Western Europe
|
1,279.8
|
|
|
1,025.0
|
|
|
254.8
|
|
|
24.9
|
|
|
6.3
|
|
|||
Central and Eastern Europe
|
135.1
|
|
|
134.9
|
|
|
0.2
|
|
|
0.1
|
|
|
(1.8
|
)
|
|||
Central and other
|
(54.4
|
)
|
|
(43.0
|
)
|
|
(11.4
|
)
|
|
(26.5
|
)
|
|
(25.8
|
)
|
|||
Total European Operations Division
|
1,360.5
|
|
|
1,116.9
|
|
|
243.6
|
|
|
21.8
|
|
|
4.6
|
|
|||
Chile (VTR Group)
|
86.8
|
|
|
75.3
|
|
|
11.5
|
|
|
15.3
|
|
|
12.8
|
|
|||
Corporate and other
|
2.4
|
|
|
2.7
|
|
|
(0.3
|
)
|
|
N.M.
|
|
|
N.M.
|
|
|||
Total
|
$
|
1,449.7
|
|
|
$
|
1,194.9
|
|
|
$
|
254.8
|
|
|
21.3
|
|
|
3.9
|
|
|
Six months ended
June 30, |
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|
%
|
||||||||
|
in millions
|
|
|
|
|
||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
175.3
|
|
|
$
|
—
|
|
|
$
|
175.3
|
|
|
N.M.
|
|
|
N.M.
|
|
Germany (Unitymedia KabelBW)
|
729.4
|
|
|
657.2
|
|
|
72.2
|
|
|
11.0
|
|
|
9.6
|
|
|||
Belgium (Telenet)
|
516.7
|
|
|
472.7
|
|
|
44.0
|
|
|
9.3
|
|
|
8.0
|
|
|||
The Netherlands
|
355.9
|
|
|
361.5
|
|
|
(5.6
|
)
|
|
(1.5
|
)
|
|
(2.8
|
)
|
|||
Switzerland
|
371.4
|
|
|
356.2
|
|
|
15.2
|
|
|
4.3
|
|
|
5.0
|
|
|||
Other Western Europe
|
210.4
|
|
|
194.5
|
|
|
15.9
|
|
|
8.2
|
|
|
6.9
|
|
|||
Total Western Europe
|
2,359.1
|
|
|
2,042.1
|
|
|
317.0
|
|
|
15.5
|
|
|
6.0
|
|
|||
Central and Eastern Europe
|
275.7
|
|
|
272.5
|
|
|
3.2
|
|
|
1.2
|
|
|
(0.6
|
)
|
|||
Central and other
|
(100.0
|
)
|
|
(80.0
|
)
|
|
(20.0
|
)
|
|
(25.0
|
)
|
|
(23.5
|
)
|
|||
Total European Operations Division
|
2,534.8
|
|
|
2,234.6
|
|
|
300.2
|
|
|
13.4
|
|
|
4.6
|
|
|||
Chile (VTR Group)
|
172.0
|
|
|
150.5
|
|
|
21.5
|
|
|
14.3
|
|
|
11.2
|
|
|||
Corporate and other
|
12.5
|
|
|
5.4
|
|
|
7.1
|
|
|
N.M.
|
|
|
N.M.
|
|
|||
Total
|
$
|
2,719.3
|
|
|
$
|
2,390.5
|
|
|
$
|
328.8
|
|
|
13.8
|
|
|
4.1
|
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
%
|
||||||
European Operations Division:
|
|
|
|
|
|
|
|
U.K. (Virgin Media)
|
43.7
|
|
—
|
|
43.7
|
|
—
|
Germany (Unitymedia KabelBW)
|
59.1
|
|
59.0
|
|
58.7
|
|
58.3
|
Belgium (Telenet)
|
50.4
|
|
50.8
|
|
48.3
|
|
50.1
|
The Netherlands
|
56.4
|
|
58.9
|
|
57.6
|
|
58.8
|
Switzerland
|
58.4
|
|
57.3
|
|
57.1
|
|
56.9
|
Other Western Europe
|
48.1
|
|
46.0
|
|
47.6
|
|
46.3
|
Total Western Europe
|
53.2
|
|
55.2
|
|
53.3
|
|
54.7
|
Central and Eastern Europe
|
48.0
|
|
49.1
|
|
48.4
|
|
49.0
|
Total European Operations Division, including central and other
|
50.0
|
|
51.7
|
|
50.1
|
|
51.4
|
Chile (VTR Group)
|
34.3
|
|
33.2
|
|
34.2
|
|
33.3
|
|
Three months ended June 30,
|
|
Increase
|
|
Organic increase
|
||||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|
%
|
||||||
|
in millions
|
|
|
|
|
||||||||||
Subscription revenue (a):
|
|
|
|
|
|
|
|
|
|
||||||
Video
|
$
|
1,274.8
|
|
|
$
|
1,143.1
|
|
|
$
|
131.7
|
|
|
11.5
|
|
1.2
|
Broadband internet (b)
|
765.2
|
|
|
590.1
|
|
|
175.1
|
|
|
29.7
|
|
10.0
|
|||
Telephony (b)
|
518.7
|
|
|
375.8
|
|
|
142.9
|
|
|
38.0
|
|
5.4
|
|||
Total subscription revenue
|
2,558.7
|
|
|
2,109.0
|
|
|
449.7
|
|
|
21.3
|
|
4.4
|
|||
Other revenue (b) (c)
|
603.2
|
|
|
415.5
|
|
|
187.7
|
|
|
45.2
|
|
10.7
|
|||
Total
|
$
|
3,161.9
|
|
|
$
|
2,524.5
|
|
|
$
|
637.4
|
|
|
25.2
|
|
5.5
|
|
Six months ended
June 30,
|
|
Increase
|
|
Organic increase
|
||||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|
%
|
||||||
|
in millions
|
|
|
|
|
||||||||||
Subscription revenue (a):
|
|
|
|
|
|
|
|
|
|
||||||
Video
|
$
|
2,487.5
|
|
|
$
|
2,307.5
|
|
|
$
|
180.0
|
|
|
7.8
|
|
1.2
|
Broadband internet (b)
|
1,424.5
|
|
|
1,181.3
|
|
|
243.2
|
|
|
20.6
|
|
9.3
|
|||
Telephony (b)
|
928.1
|
|
|
750.8
|
|
|
177.3
|
|
|
23.6
|
|
6.3
|
|||
Total subscription revenue
|
4,840.1
|
|
|
4,239.6
|
|
|
600.5
|
|
|
14.2
|
|
4.4
|
|||
Other revenue (b) (c)
|
1,089.5
|
|
|
821.9
|
|
|
267.6
|
|
|
32.6
|
|
12.6
|
|||
Total
|
$
|
5,929.6
|
|
|
$
|
5,061.5
|
|
|
$
|
868.1
|
|
|
17.2
|
|
5.7
|
(a)
|
Subscription revenue includes amounts received from subscribers for ongoing services, excluding installation fees, late fees and mobile services revenue. Subscription revenue from subscribers who purchase bundled services at a discounted rate is generally allocated proportionally to each service based on the standalone price for each individual service.
|
(b)
|
In connection with the
Virgin Media Acquisition
, we determined that we would no longer externally report
DSL
subscribers as
RGU
s. Accordingly, we have reclassified the revenue from our
DSL
subscribers in Austria from broadband internet and telephony subscription revenue to other revenue for all periods presented.
|
(c)
|
Other revenue includes non-subscription revenue (including
B2B
, mobile services, interconnect, carriage fee and installation revenue) and programming revenue.
|
|
Three-month period
|
|
Six-month period
|
||||
|
in millions
|
||||||
Increase due to change in:
|
|
|
|
||||
Average number of RGUs
|
$
|
84.5
|
|
|
$
|
176.1
|
|
ARPU
|
8.8
|
|
|
9.5
|
|
||
Organic increase
|
93.3
|
|
|
185.6
|
|
||
Impact of acquisitions
|
322.6
|
|
|
364.4
|
|
||
Impact of FX
|
33.8
|
|
|
50.5
|
|
||
Total increase in subscription revenue
|
$
|
449.7
|
|
|
$
|
600.5
|
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
in millions
|
||||||||||||||
Liberty Global shares:
|
|
|
|
|
|
|
|
||||||||
Performance-based incentive awards (a)
|
$
|
7.8
|
|
|
$
|
8.9
|
|
|
$
|
11.9
|
|
|
$
|
18.4
|
|
Other share-based incentive awards
|
49.8
|
|
|
10.1
|
|
|
61.0
|
|
|
22.8
|
|
||||
Total Liberty Global shares (b)
|
57.6
|
|
|
19.0
|
|
|
72.9
|
|
|
41.2
|
|
||||
Telenet share-based incentive awards (c)
|
36.5
|
|
|
16.2
|
|
|
47.5
|
|
|
20.8
|
|
||||
Other
|
(0.2
|
)
|
|
0.4
|
|
|
0.3
|
|
|
1.3
|
|
||||
Total
|
$
|
93.9
|
|
|
$
|
35.6
|
|
|
$
|
120.7
|
|
|
$
|
63.3
|
|
Included in:
|
|
|
|
|
|
|
|
||||||||
Operating expense
|
$
|
6.0
|
|
|
$
|
3.5
|
|
|
$
|
9.9
|
|
|
$
|
5.2
|
|
SG&A expense
|
87.9
|
|
|
32.1
|
|
|
110.8
|
|
|
58.1
|
|
||||
Total
|
$
|
93.9
|
|
|
$
|
35.6
|
|
|
$
|
120.7
|
|
|
$
|
63.3
|
|
(a)
|
Primarily includes share-based compensation expense related to
Liberty Global
PSU
s.
|
(b)
|
In accordance with the terms of the
Virgin Media Merger Agreement
, we issued
Virgin Media Replacement Awards
to employees and former directors of
Virgin Media
in exchange for corresponding
Virgin Media
awards. In connection with the
Virgin Media Acquisition
, the
Virgin Media Replacement Awards
were remeasured as of
June 7, 2013
, resulting in an aggregate estimated fair value attributable to the post-acquisition period of
$188.5 million
. During the second quarter of 2013,
$25.9 million
of the
June 7, 2013
estimated fair value of the
Virgin Media Replacement Awards
was charged to expense in recognition of the
Virgin Media Replacement Awards
that were fully vested on
June 7, 2013
or for which vesting was accelerated pursuant to the terms of the
Virgin Media Merger Agreement
on or prior to
June 30, 2013
. The remaining
June 7, 2013
estimated fair value will be amortized over the remaining service periods of the unvested
Virgin Media Replacement Awards
, subject to forfeitures and the satisfaction of performance conditions. Including this amortization, which aggregated
$6.4 million
during the post-acquisition period ended
June 30, 2013
, the aforementioned amount charged to expense and
$3.6 million
of national insurance taxes, the
Virgin Media Replacement Awards
have accounted for
$35.9 million
of the share-based compensation expense related to
Liberty Global
shares during the
three and six months ended June 30, 2013
.
|
(c)
|
During the second quarters of
2013
and
2012
,
Telenet
modified the terms of certain of its share-based incentive plans to provide for anti-dilution adjustments in connection with its shareholder returns. In connection with these anti-dilution adjustments,
Telenet
recognized share-based compensation expense of
$32.7 million
and
$12.6 million
, respectively. In addition, the amount for the six months ended
June 30, 2013
includes expense of
$6.2 million
related to the accelerated vesting of options granted under the
Telenet Specific Stock Option Plan
.
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Cross-currency and interest rate derivative contracts (a)
|
$
|
162.4
|
|
|
$
|
169.5
|
|
|
$
|
343.0
|
|
|
$
|
(309.6
|
)
|
Equity-related derivative instruments (b)
|
(61.8
|
)
|
|
66.9
|
|
|
(149.5
|
)
|
|
(59.6
|
)
|
||||
Foreign currency forward contracts (c)
|
(103.5
|
)
|
|
0.7
|
|
|
(1.1
|
)
|
|
(9.7
|
)
|
||||
Other
|
(1.8
|
)
|
|
0.3
|
|
|
(1.3
|
)
|
|
2.2
|
|
||||
Total
|
$
|
(4.7
|
)
|
|
$
|
237.4
|
|
|
$
|
191.1
|
|
|
$
|
(376.7
|
)
|
(a)
|
The
gain
during the
2013
three
-month period is primarily attributable to the net effect of (i) gains associated with increases in market interest rates in the British pound sterling, euro, Swiss franc and Polish zloty markets, (ii) losses associated with increases in market interest rates in the
U.S.
dollar market, (iii) gains associated with decreases in the values of the Chilean peso, Polish zloty and Swiss franc relative to the euro, (iv) gains associated with a decrease in the value of the Chilean peso relative to the
U.S.
dollar and (v) losses associated with an increase in the value of the euro relative to the
U.S.
dollar. The
gain
during the
2013
six
-month period is primarily attributable to the net effect of (i) gains associated with increases in market interest rates in the British pound sterling, euro, Swiss franc and Polish zloty markets, (ii) losses associated with increases in market interest rates in the
U.S.
dollar market, (iii) gains associated with decreases in the values of the euro, Swiss franc and Chilean peso relative to the
U.S.
dollar and (iv) gains associated with decreases in the values of the Polish zloty, Swiss franc, Chilean peso and Czech koruna relative to the euro. In addition, the gains during the
2013
periods include net losses of
$13.0 million
and
$45.5 million
, respectively, resulting from changes in our credit risk valuation adjustments. The gain during the
2012
three
-month period is primarily attributable to the net effect of (i) gains associated with decreases in the values of the euro, Swiss franc and Chilean peso relative to the
U.S.
dollar, (ii) losses associated with decreases in market interest rates in the euro, Chilean peso, Hungarian forint and Swiss franc markets, (iii) gains associated with decreases in market interest rates in the
U.S.
dollar market, (iv) losses associated with increases in the values of the Hungarian forint and Chilean peso relative to the euro and (v) gains associated with decreases in the values of the Polish zloty and Czech koruna relative to the euro. The loss during the
2012
six
-month period is primarily attributable to the net effect of (i) losses associated with decreases in market interest rates in the euro, Hungarian forint and Swiss franc markets, (ii) losses associated with increases in the values of the Hungarian forint, Polish zloty, Chilean peso and Swiss franc relative to the euro, (iii) gains associated with decreases in the values of the euro and Swiss franc relative to the
U.S.
dollar, (iv) gains associated with decreases in market interest rates in the
U.S.
dollar market and (v) losses associated with an increase in the value of the Chilean peso relative to the
U.S.
dollar. In addition, the gain (loss)
during the
2012
periods include net losses
of
$70.6 million
and
$48.3 million
, respectively, resulting from changes in our credit risk valuation adjustments.
|
(b)
|
Primarily includes gains (losses) related to the
Sumitomo Collar
with respect to the
Sumitomo
shares held by our company. The
2013
losses are primarily attributable to (i) decreases in the value of the Japanese yen relative to the
U.S.
dollar and (ii) increases in the market price of
Sumitomo
common stock. The
2012
gain (loss) is primarily attributable to (i) a decrease (increase) in the market price of
Sumitomo
common stock and (ii) an increase (decrease) in the value of the Japanese yen relative to the
U.S.
dollar.
|
(c)
|
Primarily includes activity related to deal contingent foreign currency forward contracts that were settled in connection with the
Virgin Media Acquisition
and the foreign currency forward contracts of LGE Financing.
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Yen denominated debt issued by a U.S. dollar functional currency entity
|
$
|
53.0
|
|
|
$
|
(40.0
|
)
|
|
$
|
139.0
|
|
|
$
|
43.5
|
|
Intercompany payables and receivables denominated in a currency other than the entity’s functional currency (a)
|
94.9
|
|
|
(259.9
|
)
|
|
(85.2
|
)
|
|
18.7
|
|
||||
U.S. dollar denominated debt issued by a British pound sterling functional currency entity
|
(84.3
|
)
|
|
—
|
|
|
(84.3
|
)
|
|
—
|
|
||||
Cash and restricted cash denominated in a currency other than the entity’s functional currency
|
23.1
|
|
|
18.4
|
|
|
81.7
|
|
|
29.7
|
|
||||
U.S. dollar denominated debt issued by euro functional currency entities
|
55.8
|
|
|
(183.0
|
)
|
|
(50.9
|
)
|
|
(80.0
|
)
|
||||
British pound sterling denominated debt issued by a U.S. dollar functional currency entity
|
(46.6
|
)
|
|
—
|
|
|
(37.3
|
)
|
|
—
|
|
||||
Other
|
(4.4
|
)
|
|
(9.9
|
)
|
|
(6.4
|
)
|
|
(7.3
|
)
|
||||
Total
|
$
|
91.5
|
|
|
$
|
(474.4
|
)
|
|
$
|
(43.4
|
)
|
|
$
|
4.6
|
|
(a)
|
Amounts primarily relate to (i) loans between our non-operating and operating subsidiaries in Europe, which generally are denominated in the currency of the applicable operating subsidiary, (ii)
U.S.
dollar denominated loans between certain of our non-operating subsidiaries in the
U.S.
and Europe, (iii) a British pound sterling denominated loan between a
U.S.
non-operating subsidiary and a European non-operating subsidiary and (iv) a
U.S.
dollar denominated loan between a Chilean subsidiary and a non-operating subsidiary in Europe. Accordingly, these amounts are a function of movements of (i) the euro against (a) the
U.S.
dollar and (b) other local currencies in Europe and (ii) the
U.S.
dollar against the (1) British pound sterling and (2) Chilean peso.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
in millions
|
||||||||||||||
Ziggo
|
$
|
178.8
|
|
|
$
|
—
|
|
|
$
|
258.5
|
|
|
$
|
—
|
|
Sumitomo
|
(5.6
|
)
|
|
(26.8
|
)
|
|
(11.2
|
)
|
|
16.0
|
|
||||
Other, net
|
19.8
|
|
|
(7.3
|
)
|
|
17.9
|
|
|
0.8
|
|
||||
Total
|
$
|
193.0
|
|
|
$
|
(34.1
|
)
|
|
$
|
265.2
|
|
|
$
|
16.8
|
|
(a)
|
Includes $10.5 million of cash and cash equivalents held by
VTR Wireless
.
|
|
Six months ended
|
|
|
||||||||
|
June 30,
|
|
|
||||||||
|
2013
|
|
2012
|
|
Change
|
||||||
|
in millions
|
||||||||||
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
1,346.2
|
|
|
$
|
1,393.7
|
|
|
$
|
(47.5
|
)
|
Net cash provided (used) by investing activities
|
(6,278.2
|
)
|
|
20.2
|
|
|
(6,298.4
|
)
|
|||
Net cash
provided (used)
by financing activities
|
5,015.7
|
|
|
(1,144.4
|
)
|
|
6,160.1
|
|
|||
Effect of exchange rate changes on cash
|
2.4
|
|
|
(11.9
|
)
|
|
14.3
|
|
|||
Net inc
rease
in cash and cash equivalents
|
$
|
86.1
|
|
|
$
|
257.6
|
|
|
$
|
(171.5
|
)
|
|
Six months ended
|
||||||
|
June 30,
|
||||||
|
2013
|
|
2012
|
||||
|
in millions
|
||||||
|
|
|
|
||||
Net cash provided by operating activities of our continuing operations
|
$
|
1,346.2
|
|
|
$
|
1,393.7
|
|
Excess tax benefits from share-based compensation
|
0.5
|
|
|
10.0
|
|
||
Cash payments for direct acquisition costs
|
39.2
|
|
|
14.4
|
|
||
Capital expenditures
|
(994.6
|
)
|
|
(994.1
|
)
|
||
Principal payments on vendor financing obligations
|
(167.4
|
)
|
|
(26.7
|
)
|
||
Principal payments on certain capital leases
|
(8.2
|
)
|
|
(6.1
|
)
|
||
Free cash flow
|
$
|
215.7
|
|
|
$
|
391.2
|
|
|
Payments due during:
|
|
Total
|
||||||||||||||||||||||||||||
|
Remainder
of
2013
|
|
Year ending December 31,
|
|
|||||||||||||||||||||||||||
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
||||||||||||||||||||
|
in millions
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt (excluding interest)
|
$
|
420.1
|
|
|
$
|
209.4
|
|
|
$
|
160.6
|
|
|
$
|
1,832.0
|
|
|
$
|
2,022.0
|
|
|
$
|
3,312.9
|
|
|
$
|
32,003.4
|
|
|
$
|
39,960.4
|
|
Capital leases (excluding interest)
|
125.1
|
|
|
194.6
|
|
|
159.4
|
|
|
117.1
|
|
|
81.7
|
|
|
78.8
|
|
|
1,004.2
|
|
|
1,760.9
|
|
||||||||
Operating leases (a)
|
134.7
|
|
|
207.0
|
|
|
182.5
|
|
|
148.4
|
|
|
124.2
|
|
|
89.7
|
|
|
409.7
|
|
|
1,296.2
|
|
||||||||
Programming obligations
|
254.5
|
|
|
330.3
|
|
|
200.6
|
|
|
123.4
|
|
|
81.0
|
|
|
1.2
|
|
|
0.2
|
|
|
991.2
|
|
||||||||
Other commitments
|
1,084.4
|
|
|
668.2
|
|
|
438.9
|
|
|
285.6
|
|
|
190.8
|
|
|
104.0
|
|
|
1,232.9
|
|
|
4,004.8
|
|
||||||||
Total (b)
|
$
|
2,018.8
|
|
|
$
|
1,609.5
|
|
|
$
|
1,142.0
|
|
|
$
|
2,506.5
|
|
|
$
|
2,499.7
|
|
|
$
|
3,586.6
|
|
|
$
|
34,650.4
|
|
|
$
|
48,013.5
|
|
Projected cash interest payments on debt and capital lease obligations (c)
|
$
|
1,224.2
|
|
|
$
|
2,336.4
|
|
|
$
|
2,348.3
|
|
|
$
|
2,342.4
|
|
|
$
|
2,246.6
|
|
|
$
|
2,050.8
|
|
|
$
|
5,521.3
|
|
|
$
|
18,070.0
|
|
(a)
|
Includes amounts with respect to tower and related real estate operating lease agreements associated with our wireless network in Chile in accordance with the applicable contractual payment terms. As further described in note
6
to our condensed consolidated financial statements, we are considering strategic alternatives that could impact when and to what extent we make payments under these leases.
|
(b)
|
The commitments reflected in this table do not reflect any liabilities that are included in our
June 30, 2013
balance sheet other than debt and capital lease obligations. Our liability for uncertain tax positions in the various jurisdictions in which we operate ($345.8 million at
June 30, 2013
) has been excluded from the table as the amount and timing of any related payments are not subject to reasonable estimation.
|
(c)
|
Amounts are based on interest rates, interest payment dates and contractual maturities in effect as of
June 30, 2013
. These amounts are presented for illustrative purposes only and will likely differ from the actual cash payments required in future periods. In addition, the amounts presented do not include the impact of our interest rate derivative contracts, deferred financing costs, discounts or premiums, all of which affect our overall cost of borrowing.
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
June 30, 2013
|
|
December 31, 2012
|
||
Spot rates:
|
|
|
|
||
Euro
|
0.7689
|
|
|
0.7577
|
|
British pound sterling
|
0.6586
|
|
|
0.6157
|
|
Swiss franc
|
0.9461
|
|
|
0.9146
|
|
Hungarian forint
|
226.70
|
|
|
220.83
|
|
Polish zloty
|
3.3310
|
|
|
3.0939
|
|
Czech koruna
|
19.980
|
|
|
19.009
|
|
Romanian lei
|
3.4326
|
|
|
3.3675
|
|
Chilean peso
|
508.10
|
|
|
478.79
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
June 30,
|
|
June 30,
|
||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Average rates:
|
|
|
|
|
|
|
|
||||
Euro
|
0.7653
|
|
|
0.7795
|
|
|
0.7614
|
|
|
0.7710
|
|
British pound sterling
|
0.6509
|
|
|
0.6321
|
|
|
0.6481
|
|
|
0.6343
|
|
Swiss franc
|
0.9420
|
|
|
0.9367
|
|
|
0.9362
|
|
|
0.9289
|
|
Hungarian forint
|
226.39
|
|
|
229.19
|
|
|
225.47
|
|
|
227.73
|
|
Polish zloty
|
3.2154
|
|
|
3.3195
|
|
|
3.1808
|
|
|
3.2723
|
|
Czech koruna
|
19.764
|
|
|
19.691
|
|
|
19.559
|
|
|
19.405
|
|
Romanian lei
|
3.3666
|
|
|
3.4525
|
|
|
3.3441
|
|
|
3.3861
|
|
Chilean peso
|
485.46
|
|
|
496.22
|
|
|
478.96
|
|
|
492.56
|
|
(i)
|
an instantaneous increase (decrease) of 10% in the value of the British pound sterling relative to the
U.S.
dollar would have decreased (increased) the aggregate fair value of the
Virgin Media
cross-currency and interest rate derivative contracts by approximately
£524 million
(
$796 million
); and
|
(ii)
|
an instantaneous increase (decrease) in the relevant base rate of 50 basis points (0.50%) would have increased (decreased) the aggregate fair value of the
Virgin Media
cross-currency and interest rate derivative contracts by approximately
£45 million
(
$68 million
).
|
(i)
|
an instantaneous increase (decrease) of 10% in the value of the Swiss franc, Polish zloty, Hungarian forint, Czech koruna and Chilean peso relative to the euro would have decreased (increased) the aggregate fair value of the
UPC Broadband Holding
cross-currency and interest rate derivative contracts by approximately
€418 million
(
$544 million
);
|
(ii)
|
an instantaneous increase (decrease) of 10% in the value of the Swiss franc, Chilean peso, and Romanian lei relative to the
U.S.
dollar would have decreased (increased) the aggregate fair value of the
UPC Broadband Holding
cross-currency and interest rate derivative contracts by approximately
€152 million
(
$198 million
);
|
(iii)
|
an instantaneous increase (decrease) of 10% in the value of the euro relative to the
U.S.
dollar would have decreased (increased) the aggregate fair value of the
UPC Broadband Holding
cross-currency and interest rate derivative contracts by approximately
€243 million
(
$316 million
);
|
(iv)
|
an instantaneous increase in the relevant base rate of 50 basis points (0.50%) would have increased the aggregate fair value of the
UPC Broadband Holding
cross-currency and interest rate derivative contracts by approximately
€114 million
(
$148 million
) and conversely, a decrease of 50 basis points (0.50%) would have decreased the aggregate fair value by approximately
€117 million
(
$152 million
); and
|
(v)
|
an instantaneous increase in
UPC Broadband Holding
’s credit spread of 50 basis points (0.50%) would have increased the aggregate fair value of the
UPC Broadband Holding
cross-currency and interest rate derivative contracts by approximately
€13 million
(
$17 million
) and conversely, a decrease of 50 basis points (0.50%) would have decreased the aggregate fair value by approximately
€14 million
(
$18 million
).
|
(i)
|
an instantaneous increase (decrease) of 10% in the value of the euro relative to the
U.S.
dollar would have decreased (increased) the aggregate value of the
Unitymedia KabelBW
cross-currency and interest rate derivative contracts by approximately
€139 million
(
$181 million
); and
|
(ii)
|
an instantaneous increase (decrease) in the relevant base rate of 50 basis points (0.50%) would have decreased (increased) the aggregate fair value of the
Unitymedia KabelBW
cross-currency and interest rate derivative contracts by approximately
€4 million
(
$5 million
).
|
(i)
|
an instantaneous increase in the Japanese yen risk-free rate of 50 basis points (0.50%) would have decreased the fair value of the
Sumitomo Collar
by
¥2.7 billion
(
$27 million
) and conversely, a decrease of 50 basis points (0.50%) would have increased the value by
¥919 million
(
$9 million
); and
|
(ii)
|
an instantaneous increase of 10% in the per share market price of
Sumitomo
’s common stock would have decreased the fair value of the
Sumitomo Collar
by approximately
¥5.9 billion
(
$59 million
) and conversely, a decrease of 10% would have increased the fair value by
¥4.2 billion
(
$42 million
).
|
|
Payments (receipts) due during:
|
|
Total
|
||||||||||||||||||||||||||||
|
Remainder
of
2013
|
|
Year ending December 31,
|
|
|||||||||||||||||||||||||||
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
|||||||||||||||||||
|
in millions
|
||||||||||||||||||||||||||||||
Projected derivative cash payments (receipts), net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest-related (a)
|
$
|
173.0
|
|
|
$
|
569.3
|
|
|
$
|
156.2
|
|
|
$
|
259.3
|
|
|
$
|
95.5
|
|
|
$
|
84.1
|
|
|
$
|
(26.4
|
)
|
|
$
|
1,311.0
|
|
Principal-related (b)
|
—
|
|
|
375.5
|
|
|
21.9
|
|
|
124.5
|
|
|
12.1
|
|
|
(95.6
|
)
|
|
(352.3
|
)
|
|
86.1
|
|
||||||||
Other (c)
|
(528.9
|
)
|
|
20.4
|
|
|
19.6
|
|
|
(171.4
|
)
|
|
(145.8
|
)
|
|
(106.5
|
)
|
|
—
|
|
|
(912.6
|
)
|
||||||||
Total
|
$
|
(355.9
|
)
|
|
$
|
965.2
|
|
|
$
|
197.7
|
|
|
$
|
212.4
|
|
|
$
|
(38.2
|
)
|
|
$
|
(118.0
|
)
|
|
$
|
(378.7
|
)
|
|
$
|
484.5
|
|
(a)
|
Includes (i) the cash flows of our interest rate cap, collar and swap contracts and (ii) the interest-related cash flows of our cross-currency and cross-currency interest rate swap contracts.
|
(b)
|
Includes the principal-related cash flows of our cross-currency and cross-currency interest rate swap contracts.
|
(c)
|
Includes amounts related to the
Virgin Media Capped Call
, the
Sumitomo Collar
and, to a lesser extent, our foreign currency forward contracts. The amount shown in the remainder-of-2013 column includes cash proceeds of
$534.8 million
that
Virgin Media
received in July 2013 in connection with the settlement of
93.8%
of the notional amount of the
Virgin Media Capped Call
. For further information regarding the
Virgin Media Capped Call
, see note
4
to our condensed consolidated financial statements. We expect to use the collective value of the
Sumitomo Collar
and the underlying
Sumitomo
shares held by our company to settle the
Sumitomo Collar Loan
maturities in 2016 through 2018.
|
Item 4.
|
CONTROLS AND PROCEDURES
|
(c)
|
Issuer Purchases of Equity Securities
|
Period
|
|
Total number of shares purchased
|
|
Average price
paid per share (a)
|
|
Total number of
shares purchased as part of publicly
announced plans
or programs
|
|
Approximate
dollar value of
shares that may
yet be purchased
under the plans or programs
|
||||
|
|
|
|
|
|
|
|
|
||||
June 1, 2013 through June 30, 2013:
|
|
|
|
|
|
|
|
|||||
Class A
|
2,000,100
|
|
|
$
|
71.90
|
|
|
2,000,100
|
|
|
(b)
|
|
Class C
|
910,000
|
|
|
$
|
67.69
|
|
|
910,000
|
|
|
(b)
|
|
Total — April 1, 2013 through June 30, 2013:
|
|
|
|
|
|
|
|
|||||
Class A
|
2,000,100
|
|
|
$
|
71.90
|
|
|
2,000,100
|
|
|
(b)
|
|
Class C
|
910,000
|
|
|
$
|
67.69
|
|
|
910,000
|
|
|
(b)
|
(a)
|
Average price paid per share includes direct acquisition costs where applicable.
|
(b)
|
On June 11, 2013, we announced that our board of directors authorized a new
$3.5 billion
stock repurchase program, which effectively replaces our previous repurchase program. At
June 30, 2013
, we were authorized to purchase
$3,295.1 million
of our Class A and Class C ordinary shares under our most recent stock repurchase program.
|
Item 6.
|
EXHIBITS
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
|
|
|
LIBERTY GLOBAL PLC
|
|
|
|
|
Dated:
|
August 1, 2013
|
|
/s/ M
ICHAEL
T. F
RIES
|
|
|
|
Michael T. Fries
President and Chief Executive Officer
|
|
|
|
|
Dated:
|
August 1, 2013
|
|
/s/ C
HARLES
H.R. B
RACKEN
|
|
|
|
Charles H.R. Bracken
Executive Vice President and Co-Chief
Financial Officer (Principal Financial Officer)
|
|
|
|
|
Dated:
|
August 1, 2013
|
|
/s/ B
ERNARD
G. D
VORAK
|
|
|
|
Bernard G. Dvorak
Executive Vice President and Co-Chief
Financial Officer (Principal Accounting Officer)
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
Address:
|
|
(i)
|
On and after the Initial Vesting Date, the Option shall be exercisable as to 33.34% of the Option Shares;
|
(ii)
|
On and after the second Annual Meeting Date following the Effective Date, the Option shall be exercisable as to 66.67% of the Option Shares; and
|
(iii)
|
On and after the third Annual Meeting Date following the Effective Date, the Option shall be exercisable as to 100% of the Option Shares.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Liberty Global plc;
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this quarterly report based on such evaluation; and
|
d)
|
Disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Michael T. Fries
|
|
Michael T. Fries
|
|
President and Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Liberty Global plc;
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this quarterly report based on such evaluation; and
|
d)
|
Disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Charles H.R. Bracken
|
|
Charles H.R. Bracken
|
|
Executive Vice President and Co-Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Liberty Global plc;
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this quarterly report based on such evaluation; and
|
d)
|
Disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Bernard G. Dvorak
|
|
Bernard G. Dvorak
|
|
Executive Vice President and Co-Chief Financial Officer
|
|
(Principal Accounting Officer)
|
|
Dated:
|
August 1, 2013
|
|
/s/ Michael T. Fries
|
|
|
|
Michael T. Fries
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
Dated:
|
August 1, 2013
|
|
/s/ Charles H.R. Bracken
|
|
|
|
Charles H.R. Bracken
|
|
|
|
Executive Vice President and Co-Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
Dated:
|
August 1, 2013
|
|
/s/ Bernard G. Dvorak
|
|
|
|
Bernard G. Dvorak
|
|
|
|
Executive Vice President and Co-Chief Financial Officer
|
|
|
|
(Principal Accounting Officer)
|