|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the quarterly period ended June 30, 2014
|
¨
|
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 2.
|
||
ITEM 6.
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
|
in millions
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,110.2
|
|
|
$
|
2,701.9
|
|
Trade receivables, net
|
1,511.9
|
|
|
1,588.7
|
|
||
Derivative instruments (note 5)
|
499.2
|
|
|
252.1
|
|
||
Deferred income taxes
|
319.8
|
|
|
226.1
|
|
||
Prepaid expenses
|
252.1
|
|
|
238.2
|
|
||
Current assets of discontinued operation (note 3)
|
—
|
|
|
238.7
|
|
||
Other current assets
|
263.8
|
|
|
236.9
|
|
||
Total current assets
|
3,957.0
|
|
|
5,482.6
|
|
||
Investments (including $3,573.3 million and $3,481.8 million, respectively, measured at fair value) (note 4)
|
3,593.1
|
|
|
3,491.2
|
|
||
Property and equipment, net (note 7)
|
23,820.6
|
|
|
23,974.9
|
|
||
Goodwill (note 7)
|
23,950.5
|
|
|
23,748.8
|
|
||
Intangible assets subject to amortization, net (note 7)
|
5,382.2
|
|
|
5,795.4
|
|
||
Long-term assets of discontinued operation (note 3)
|
—
|
|
|
513.6
|
|
||
Other assets, net (note 5)
|
4,826.0
|
|
|
4,707.8
|
|
||
Total assets
|
$
|
65,529.4
|
|
|
$
|
67,714.3
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
|
in millions
|
||||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
1,207.5
|
|
|
$
|
1,072.9
|
|
Deferred revenue and advance payments from subscribers and others
|
1,443.7
|
|
|
1,406.2
|
|
||
Current portion of debt and capital lease obligations (note 8)
|
1,850.9
|
|
|
1,023.4
|
|
||
Derivative instruments (note 5)
|
1,271.4
|
|
|
751.2
|
|
||
Accrued interest
|
666.6
|
|
|
598.7
|
|
||
Accrued programming and copyright fees
|
387.6
|
|
|
359.1
|
|
||
Current liabilities of discontinued operation (note 3)
|
—
|
|
|
127.5
|
|
||
Other accrued and current liabilities (note 12)
|
2,431.9
|
|
|
2,344.0
|
|
||
Total current liabilities
|
9,259.6
|
|
|
7,683.0
|
|
||
Long-term debt and capital lease obligations (note 8)
|
40,709.3
|
|
|
43,680.9
|
|
||
Long-term liabilities of discontinued operation (note 3)
|
—
|
|
|
19.8
|
|
||
Other long-term liabilities (notes 5 and 12)
|
4,772.9
|
|
|
4,789.1
|
|
||
Total liabilities
|
54,741.8
|
|
|
56,172.8
|
|
||
Commitments and contingencies (notes 3, 5, 8, 9 and 14)
|
|
|
|
||||
Equity (note 10):
|
|
|
|
||||
Liberty Global shareholders:
|
|
|
|
||||
Class A ordinary shares, $0.01 nominal value. Issued and outstanding 214,812,401 and 222,081,117 shares, respectively
|
2.1
|
|
|
2.2
|
|
||
Class B ordinary shares, $0.01 nominal value. Issued and outstanding 10,139,184 and 10,147,184 shares, respectively
|
0.1
|
|
|
0.1
|
|
||
Class C ordinary shares, $0.01 nominal value. Issued and outstanding 555,391,246 and 556,221,669 shares, respectively
|
5.6
|
|
|
5.6
|
|
||
Additional paid-in capital
|
12,011.1
|
|
|
12,809.4
|
|
||
Accumulated deficit
|
(3,641.3
|
)
|
|
(3,312.6
|
)
|
||
Accumulated other comprehensive earnings, net of taxes
|
3,067.8
|
|
|
2,528.8
|
|
||
Treasury shares, at cost
|
(5.2
|
)
|
|
(7.7
|
)
|
||
Total Liberty Global shareholders
|
11,440.2
|
|
|
12,025.8
|
|
||
Noncontrolling interests (note 10)
|
(652.6
|
)
|
|
(484.3
|
)
|
||
Total equity
|
10,787.6
|
|
|
11,541.5
|
|
||
Total liabilities and equity
|
$
|
65,529.4
|
|
|
$
|
67,714.3
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
in millions, except share and per share amounts
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
4,602.2
|
|
|
$
|
3,057.8
|
|
|
$
|
9,135.9
|
|
|
$
|
5,729.7
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Operating (other than depreciation and amortization) (including share-based compensation) (note 11)
|
1,719.2
|
|
|
1,098.1
|
|
|
3,418.0
|
|
|
2,064.9
|
|
||||
Selling, general and administrative (SG&A) (including share-based compensation) (note 11)
|
792.5
|
|
|
613.0
|
|
|
1,555.0
|
|
|
1,084.4
|
|
||||
Depreciation and amortization
|
1,393.4
|
|
|
855.8
|
|
|
2,770.5
|
|
|
1,540.4
|
|
||||
Impairment, restructuring and other operating items, net (notes 3 and 12)
|
27.6
|
|
|
45.8
|
|
|
141.2
|
|
|
66.7
|
|
||||
|
3,932.7
|
|
|
2,612.7
|
|
|
7,884.7
|
|
|
4,756.4
|
|
||||
Operating income
|
669.5
|
|
|
445.1
|
|
|
1,251.2
|
|
|
973.3
|
|
||||
Non-operating income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(641.8
|
)
|
|
(542.4
|
)
|
|
(1,295.3
|
)
|
|
(1,013.9
|
)
|
||||
Interest and dividend income
|
2.2
|
|
|
35.0
|
|
|
16.0
|
|
|
48.7
|
|
||||
Realized and unrealized
gains (losses)
on derivative instruments, net (note 5)
|
(328.6
|
)
|
|
(3.4
|
)
|
|
(705.2
|
)
|
|
192.1
|
|
||||
Foreign currency transaction gains (
losses)
, net
|
(36.4
|
)
|
|
91.3
|
|
|
(57.2
|
)
|
|
(45.0
|
)
|
||||
Realized and unrealized
gains
due to changes in fair values of certain investments, net (notes 4 and 6)
|
157.4
|
|
|
193.8
|
|
|
97.2
|
|
|
264.6
|
|
||||
Losses on debt modification and extinguishment, net (note 8)
|
(53.0
|
)
|
|
(11.7
|
)
|
|
(73.9
|
)
|
|
(170.0
|
)
|
||||
Other expense, net
|
(3.9
|
)
|
|
(1.5
|
)
|
|
(4.4
|
)
|
|
(3.2
|
)
|
||||
|
(904.1
|
)
|
|
(238.9
|
)
|
|
(2,022.8
|
)
|
|
(726.7
|
)
|
||||
Earnings (loss)
from continuing operations before income taxes
|
(234.6
|
)
|
|
206.2
|
|
|
(771.6
|
)
|
|
246.6
|
|
||||
Income tax benefit (
expense)
(note 9)
|
0.6
|
|
|
(193.3
|
)
|
|
117.6
|
|
|
(213.6
|
)
|
||||
Earnings (loss)
from continuing operations
|
(234.0
|
)
|
|
12.9
|
|
|
(654.0
|
)
|
|
33.0
|
|
||||
Discontinued operation (note 3):
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) from discontinued operation, net of taxes
|
—
|
|
|
(4.2
|
)
|
|
0.8
|
|
|
(2.4
|
)
|
||||
Gain (adjustment to gain) on disposal of discontinued operation, net of taxes
|
(7.2
|
)
|
|
—
|
|
|
332.7
|
|
|
—
|
|
||||
|
(7.2
|
)
|
|
(4.2
|
)
|
|
333.5
|
|
|
(2.4
|
)
|
||||
Net
earnings (loss)
|
(241.2
|
)
|
|
8.7
|
|
|
(320.5
|
)
|
|
30.6
|
|
||||
Net earnings
attributable to noncontrolling interests
|
(8.7
|
)
|
|
(20.3
|
)
|
|
(8.2
|
)
|
|
(43.2
|
)
|
||||
Net loss attributable to Liberty Global shareholders
|
$
|
(249.9
|
)
|
|
$
|
(11.6
|
)
|
|
$
|
(328.7
|
)
|
|
$
|
(12.6
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted earnings (loss)
attributable to Liberty Global shareholders per share (note 13):
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.31
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.84
|
)
|
|
$
|
(0.02
|
)
|
Discontinued operation
|
(0.01
|
)
|
|
(0.01
|
)
|
|
0.42
|
|
|
—
|
|
||||
|
$
|
(0.32
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average ordinary shares outstanding — basic and diluted
|
784,980,724
|
|
|
585,034,888
|
|
|
786,351,696
|
|
|
549,617,116
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Net earnings (loss)
|
$
|
(241.2
|
)
|
|
$
|
8.7
|
|
|
$
|
(320.5
|
)
|
|
$
|
30.6
|
|
Other comprehensive earnings (loss), net of taxes:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
416.9
|
|
|
(500.7
|
)
|
|
475.0
|
|
|
(479.3
|
)
|
||||
Reclassification adjustments included in net
earnings (loss) (note 3)
|
0.1
|
|
|
0.1
|
|
|
64.2
|
|
|
0.2
|
|
||||
Other
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||
Other comprehensive earnings (loss)
|
417.0
|
|
|
(500.4
|
)
|
|
539.2
|
|
|
(478.9
|
)
|
||||
Comprehensive earnings (loss)
|
175.8
|
|
|
(491.7
|
)
|
|
218.7
|
|
|
(448.3
|
)
|
||||
Comprehensive earnings attributable to noncontrolling interests
|
(8.9
|
)
|
|
(8.0
|
)
|
|
(8.4
|
)
|
|
(37.5
|
)
|
||||
Comprehensive earnings (
loss)
attributable to Liberty Global shareholders
|
$
|
166.9
|
|
|
$
|
(499.7
|
)
|
|
$
|
210.3
|
|
|
$
|
(485.8
|
)
|
|
Liberty Global shareholders
|
|
Non-controlling
interests
|
|
Total
equity
|
||||||||||||||||||||||||||||||||||
|
Ordinary shares
|
|
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
|
|
|||||||||||||||||||||||||||||||||
|
in millions
|
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Balance at January 1, 2014
|
$
|
2.2
|
|
|
$
|
0.1
|
|
|
$
|
5.6
|
|
|
$
|
12,809.4
|
|
|
$
|
(3,312.6
|
)
|
|
$
|
2,528.8
|
|
|
$
|
(7.7
|
)
|
|
$
|
12,025.8
|
|
|
$
|
(484.3
|
)
|
|
$
|
11,541.5
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(328.7
|
)
|
|
—
|
|
|
—
|
|
|
(328.7
|
)
|
|
8.2
|
|
|
(320.5
|
)
|
||||||||||
Other comprehensive earnings, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
539.0
|
|
|
—
|
|
|
539.0
|
|
|
0.2
|
|
|
539.2
|
|
||||||||||
Repurchase and cancellation of Liberty Global ordinary shares (note 10)
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(885.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(885.5
|
)
|
|
—
|
|
|
(885.5
|
)
|
||||||||||
Call option contracts on Liberty Global shares
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(126.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(126.5
|
)
|
|
—
|
|
|
(126.5
|
)
|
||||||||||
VTR NCI Acquisition (note 10)
|
—
|
|
|
—
|
|
|
0.1
|
|
|
185.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
185.4
|
|
|
(185.4
|
)
|
|
—
|
|
||||||||||
Share-based compensation (note 11)
|
—
|
|
|
—
|
|
|
—
|
|
|
89.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
89.0
|
|
|
—
|
|
|
89.0
|
|
||||||||||
Adjustments due to changes in subsidiaries’ equity and other, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(60.8
|
)
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|
(58.3
|
)
|
|
8.7
|
|
|
(49.6
|
)
|
||||||||||
Balance at June 30, 2014
|
$
|
2.1
|
|
|
$
|
0.1
|
|
|
$
|
5.6
|
|
|
$
|
12,011.1
|
|
|
$
|
(3,641.3
|
)
|
|
$
|
3,067.8
|
|
|
$
|
(5.2
|
)
|
|
$
|
11,440.2
|
|
|
$
|
(652.6
|
)
|
|
$
|
10,787.6
|
|
|
Six months ended
|
||||||
|
June 30,
|
||||||
|
2014
|
|
2013
|
||||
|
in millions
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net
earnings (loss)
|
$
|
(320.5
|
)
|
|
$
|
30.6
|
|
Loss (earnings)
from discontinued operation
|
(333.5
|
)
|
|
2.4
|
|
||
Earnings (loss)
from continuing operations
|
(654.0
|
)
|
|
33.0
|
|
||
Adjustments to reconcile
earnings (loss)
from continuing operations to net cash provided by operating activities:
|
|
|
|
||||
Share-based compensation expense
|
109.5
|
|
|
119.7
|
|
||
Depreciation and amortization
|
2,770.5
|
|
|
1,540.4
|
|
||
Impairment, restructuring and other operating items, net
|
141.2
|
|
|
66.7
|
|
||
Amortization of deferred financing costs and non-cash interest accretion
|
41.8
|
|
|
33.2
|
|
||
Realized and unrealized losses (gains) on derivative instruments, net
|
705.2
|
|
|
(192.1
|
)
|
||
Foreign currency transaction
losses
, net
|
57.2
|
|
|
45.0
|
|
||
Realized and unrealized gains
due to changes in fair values of certain investments, net
|
(97.2
|
)
|
|
(264.6
|
)
|
||
Losses on debt modification and extinguishment, net
|
73.9
|
|
|
170.0
|
|
||
Deferred income tax expense (benefit)
|
(248.4
|
)
|
|
49.7
|
|
||
Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions
|
17.0
|
|
|
(252.4
|
)
|
||
Net cash used by operating activities of discontinued operation
|
(9.6
|
)
|
|
(2.4
|
)
|
||
Net cash provided by operating activities
|
2,907.1
|
|
|
1,346.2
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(1,402.0
|
)
|
|
(987.0
|
)
|
||
Proceeds received upon disposition of discontinued operation, net of disposal costs
|
985.2
|
|
|
—
|
|
||
Cash paid in connection with acquisitions, net of cash acquired
|
(32.3
|
)
|
|
(4,064.2
|
)
|
||
Investments in and loans to affiliates and others
|
(18.6
|
)
|
|
(1,202.7
|
)
|
||
Other investing activities, net
|
11.1
|
|
|
(17.2
|
)
|
||
Net cash used by investing activities of discontinued operation
|
(3.8
|
)
|
|
(7.1
|
)
|
||
Net cash used by investing activities
|
$
|
(460.4
|
)
|
|
$
|
(6,278.2
|
)
|
|
Six months ended
|
||||||
|
June 30,
|
||||||
|
2014
|
|
2013
|
||||
|
in millions
|
||||||
Cash flows from financing activities:
|
|
|
|
||||
Repayments and repurchases of debt and capital lease obligations
|
$
|
(6,328.9
|
)
|
|
$
|
(7,339.1
|
)
|
Borrowings of debt
|
3,605.8
|
|
|
8,845.2
|
|
||
Repurchase of Liberty Global and LGI shares
|
(895.9
|
)
|
|
(346.4
|
)
|
||
Net cash paid related to derivative instruments
|
(177.6
|
)
|
|
(4.4
|
)
|
||
Payment of financing costs and debt premiums
|
(172.2
|
)
|
|
(341.0
|
)
|
||
Net cash received (paid) associated with call option contracts on Liberty Global and LGI shares
|
(98.8
|
)
|
|
45.2
|
|
||
Distributions by subsidiaries to noncontrolling interests
|
(2.2
|
)
|
|
(524.4
|
)
|
||
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
|
|
||
Purchase of additional Telenet shares
|
—
|
|
|
(454.5
|
)
|
||
Other financing activities, net
|
9.9
|
|
|
6.4
|
|
||
Net cash used by financing activities of discontinued operation
|
(1.2
|
)
|
|
(5.4
|
)
|
||
Net cash
provided (used)
by financing activities
|
(4,061.1
|
)
|
|
5,015.7
|
|
||
Effect of exchange rate changes on cash:
|
|
|
|
||||
Continuing operations
|
22.7
|
|
|
3.3
|
|
||
Discontinued operation
|
—
|
|
|
(0.9
|
)
|
||
Total
|
22.7
|
|
|
2.4
|
|
||
Net
increase (decrease)
in cash and cash equivalents:
|
|
|
|
||||
Continuing operations
|
(1,577.1
|
)
|
|
101.9
|
|
||
Discontinued operation
|
(14.6
|
)
|
|
(15.8
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
(1,591.7
|
)
|
|
86.1
|
|
||
Cash and cash equivalents:
|
|
|
|
||||
Beginning of period
|
2,701.9
|
|
|
2,038.9
|
|
||
End of period
|
$
|
1,110.2
|
|
|
$
|
2,125.0
|
|
|
|
|
|
||||
Cash paid for interest - continuing operations
|
$
|
1,199.1
|
|
|
$
|
886.2
|
|
Net cash
paid
for taxes:
|
|
|
|
||||
Continuing operations
|
$
|
54.5
|
|
|
$
|
54.6
|
|
Discontinued operation
|
2.2
|
|
|
6.2
|
|
||
Total
|
$
|
56.7
|
|
|
$
|
60.8
|
|
|
Three months ended
|
|
Six months ended
|
||||
|
June 30, 2013
|
|
June 30, 2013
|
||||
|
in millions, except per share amounts
|
||||||
Revenue:
|
|
|
|
||||
Continuing operations
|
$
|
4,224.7
|
|
|
$
|
8,494.6
|
|
Discontinued operation
|
104.1
|
|
|
199.9
|
|
||
Total
|
$
|
4,328.8
|
|
|
$
|
8,694.5
|
|
|
|
|
|
||||
Net
loss
attributable to Liberty Global shareholders
|
$
|
(72.0
|
)
|
|
$
|
(348.4
|
)
|
Basic and diluted loss attributable to Liberty Global shareholders per share
|
$
|
(0.09
|
)
|
|
$
|
(0.43
|
)
|
|
Three months ended
June 30, 2013
|
|
Six months ended
June 30,
|
||||||||
|
|
2014 (a)
|
|
2013
|
|||||||
|
in millions
|
||||||||||
|
|
|
|
|
|
||||||
Revenue
|
$
|
104.1
|
|
|
$
|
26.6
|
|
|
$
|
199.9
|
|
Operating income (loss)
|
$
|
0.1
|
|
|
$
|
0.6
|
|
|
$
|
(2.7
|
)
|
Earnings (loss) before income taxes and noncontrolling interests
|
$
|
(1.5
|
)
|
|
$
|
0.9
|
|
|
$
|
0.4
|
|
Income tax expense
|
$
|
(2.7
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
(2.8
|
)
|
Earnings (loss) from discontinued operation attributable to Liberty Global shareholders, net of taxes
|
$
|
(4.6
|
)
|
|
$
|
0.8
|
|
|
$
|
(2.7
|
)
|
(a)
|
Includes the operating results of the
Chellomedia Disposal Group
through January 31, 2014, the date the
Chellomedia Disposal Group
was sold.
|
Accounting Method
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
|
in millions
|
|||||||
Fair value:
|
|
|
|
|||||
Ziggo (a):
|
|
|
|
|||||
Not subject to re-use rights (38.7 million
and 34.1 million shares, respectively)
|
$
|
1,791.2
|
|
|
$
|
1,560.1
|
|
|
Subject to re-use rights (18.3 million and 22.9 million shares, respectively)
|
844.1
|
|
|
1,049.4
|
|
|||
Total — Ziggo
|
2,635.3
|
|
|
2,609.5
|
|
|||
Sumitomo (b)
|
616.6
|
|
|
572.9
|
|
|||
Other (c)
|
321.4
|
|
|
299.4
|
|
|||
Total — fair value
|
3,573.3
|
|
|
3,481.8
|
|
|||
Equity
|
19.3
|
|
|
8.9
|
|
|||
Cost
|
0.5
|
|
|
0.5
|
|
|||
Total
|
$
|
3,593.1
|
|
|
$
|
3,491.2
|
|
(a)
|
At
June 30, 2014
, we owned
57,000,738
shares of
Ziggo
. Our
Ziggo
shares represented
28.5%
of the outstanding shares of
Ziggo
at
June 30, 2014
. At
June 30, 2014
,
19,965,600
of the
Ziggo
shares that we owned were (i) subject to a share collar (the
Ziggo Collar
) and (ii) pledged as collateral under a secured borrowing arrangement (the
Ziggo Collar Loan
) and are held in a custody account. Under the terms of the
Ziggo Collar
, the counterparty has the right to re-use most of the
Ziggo
shares held in the custody account (up to an estimated
18.3 million
shares at
June 30, 2014
), but we have the right to recall the shares that are re-used by the counterparty subject to certain costs. In addition, the counterparty retains dividends on the
Ziggo
shares that the counterparty would need to borrow from the custody account to hedge its exposure under the
Ziggo Collar
(an estimated
14.3 million
shares at
June 30, 2014
). The decline in the number of shares subject to re-use rights is primarily attributable to a partial settlement in January 2014 of the
Ziggo Collar
and
Ziggo Collar Loan
.
|
(b)
|
At
June 30, 2014
, 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, 2014
. 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 ITI Neovision S.A. (formerly Canal+ Cyfrowy S.A.), a privately-held direct-to-home (
DTH
) operator in Poland.
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||||||||||||
|
Current
|
|
Long-term (a)
|
|
Total
|
|
Current
|
|
Long-term (a)
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cross-currency and interest rate derivative contracts (b)
|
$
|
497.3
|
|
|
$
|
483.3
|
|
|
$
|
980.6
|
|
|
$
|
248.4
|
|
|
$
|
520.8
|
|
|
$
|
769.2
|
|
Equity-related derivative instruments (c)
|
—
|
|
|
425.1
|
|
|
425.1
|
|
|
—
|
|
|
430.4
|
|
|
430.4
|
|
||||||
Foreign currency forward contracts
|
1.3
|
|
|
—
|
|
|
1.3
|
|
|
2.6
|
|
|
—
|
|
|
2.6
|
|
||||||
Other
|
0.6
|
|
|
1.5
|
|
|
2.1
|
|
|
1.1
|
|
|
0.9
|
|
|
2.0
|
|
||||||
Total
|
$
|
499.2
|
|
|
$
|
909.9
|
|
|
$
|
1,409.1
|
|
|
$
|
252.1
|
|
|
$
|
952.1
|
|
|
$
|
1,204.2
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cross-currency and interest rate derivative contracts (b)
|
$
|
1,163.5
|
|
|
$
|
2,271.2
|
|
|
$
|
3,434.7
|
|
|
$
|
727.2
|
|
|
$
|
2,191.4
|
|
|
$
|
2,918.6
|
|
Equity-related derivative instruments (c)
|
105.1
|
|
|
—
|
|
|
105.1
|
|
|
15.6
|
|
|
101.3
|
|
|
116.9
|
|
||||||
Foreign currency forward contracts
|
2.6
|
|
|
—
|
|
|
2.6
|
|
|
8.2
|
|
|
12.0
|
|
|
20.2
|
|
||||||
Other
|
0.2
|
|
|
0.1
|
|
|
0.3
|
|
|
0.2
|
|
|
0.6
|
|
|
0.8
|
|
||||||
Total
|
$
|
1,271.4
|
|
|
$
|
2,271.3
|
|
|
$
|
3,542.7
|
|
|
$
|
751.2
|
|
|
$
|
2,305.3
|
|
|
$
|
3,056.5
|
|
(a)
|
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, 2014
and
December 31, 2013
, (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
$7.7 million
and
$9.8 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
$122.6 million
and
$173.0 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
$19.4 million
and
$13.0 million
during the
three months ended June 30, 2014
and
2013
, respectively, and net losses of
$48.9 million
and
$45.5 million
during the
six months ended June 30, 2014
and
2013
, 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
6
.
|
(c)
|
Our equity-related derivative instruments include the fair value of (i) the
Ziggo Collar
with respect to the
Ziggo
shares held by our company, (ii) the share collar (the
Sumitomo Collar
) with respect to the
Sumitomo
shares held by our company and (iii)
Virgin Media
’s conversion hedges (the
Virgin Media Capped Calls
) with respect to the
VM Convertible Notes
, as defined and described in note
8
. The fair values of the
Ziggo Collar
and the
Sumitomo Collar
do not include credit risk valuation adjustments as we have assumed that any losses incurred by our company in the event of nonperformance by the respective counterparty would be, subject to relevant insolvency laws, fully offset against amounts we owe to such counterparty pursuant to the secured borrowing arrangements of the
Ziggo Collar
and
Sumitomo Collar
. For additional information regarding the
Ziggo Collar
, see note
4
.
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Cross-currency and interest rate derivative contracts
|
$
|
(285.7
|
)
|
|
$
|
162.4
|
|
|
$
|
(705.9
|
)
|
|
$
|
343.0
|
|
Equity-related derivative instruments:
|
|
|
|
|
|
|
|
|
|
||||||
Sumitomo Collar
|
(23.8
|
)
|
|
(52.4
|
)
|
|
(15.3
|
)
|
|
(140.1
|
)
|
||||
Ziggo Collar
|
(21.3
|
)
|
|
—
|
|
|
(5.9
|
)
|
|
—
|
|
||||
Virgin Media Capped Calls
|
0.7
|
|
|
(9.4
|
)
|
|
0.9
|
|
|
(9.4
|
)
|
||||
Total equity-related derivative instruments
|
(44.4
|
)
|
|
(61.8
|
)
|
|
(20.3
|
)
|
|
(149.5
|
)
|
||||
Foreign currency forward contracts
|
0.4
|
|
|
(103.5
|
)
|
|
20.4
|
|
|
(1.1
|
)
|
||||
Other
|
1.1
|
|
|
(0.5
|
)
|
|
0.6
|
|
|
(0.3
|
)
|
||||
Total
|
$
|
(328.6
|
)
|
|
$
|
(3.4
|
)
|
|
$
|
(705.2
|
)
|
|
$
|
192.1
|
|
Subsidiary /
F
inal maturity date
|
|
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%
|
|
5.49%
|
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%
|
January 2021
|
|
$
|
500.0
|
|
|
£
|
308.9
|
|
|
5.25%
|
|
6 mo. GBP LIBOR + 2.06%
|
October 2019
|
|
$
|
500.0
|
|
|
£
|
302.3
|
|
|
8.38%
|
|
9.07%
|
January 2022
|
|
$
|
425.0
|
|
|
£
|
255.8
|
|
|
5.50%
|
|
5.82%
|
April 2019
|
|
$
|
291.5
|
|
|
£
|
186.2
|
|
|
5.38%
|
|
5.49%
|
November 2016 (a)
|
|
$
|
55.0
|
|
|
£
|
27.7
|
|
|
6.50%
|
|
7.03%
|
UPC Broadband Holding BV (UPC Broadband Holding), a subsidiary of UPC Holding:
|
|
|
|
|
|
|
|
|
|
|||
July 2018
|
|
$
|
525.0
|
|
|
€
|
396.3
|
|
|
6 mo. LIBOR + 1.99%
|
|
6.25%
|
September 2014
|
|
$
|
440.0
|
|
|
€
|
316.3
|
|
|
6 mo. LIBOR
|
|
6 mo. EURIBOR - 0.04%
|
December 2014
|
|
$
|
340.0
|
|
|
€
|
244.6
|
|
|
6 mo. LIBOR
|
|
6 mo. EURIBOR
|
September 2014 - January 2020
|
|
$
|
327.5
|
|
|
€
|
249.5
|
|
|
6 mo. LIBOR + 4.92%
|
|
7.52%
|
January 2015 - July 2021
|
|
$
|
312.0
|
|
|
€
|
240.0
|
|
|
6 mo. LIBOR + 2.50%
|
|
6 mo. EURIBOR + 2.87%
|
January 2015
|
|
$
|
300.0
|
|
|
€
|
226.5
|
|
|
6 mo. LIBOR + 1.75%
|
|
5.78%
|
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%
|
November 2019
|
|
$
|
250.0
|
|
|
€
|
181.5
|
|
|
7.25%
|
|
7.74%
|
November 2021
|
|
$
|
250.0
|
|
|
€
|
181.4
|
|
|
7.25%
|
|
7.50%
|
December 2014 - July 2018
|
|
$
|
200.0
|
|
|
€
|
151.0
|
|
|
6 mo. LIBOR + 3.00%
|
|
7.31%
|
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%
|
January 2015 - July 2018
|
|
$
|
100.0
|
|
|
€
|
75.4
|
|
|
6 mo. LIBOR + 1.75%
|
|
5.77%
|
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%
|
November 2019
|
|
$
|
250.0
|
|
|
CHF
|
226.8
|
|
|
7.25%
|
|
6 mo. CHF LIBOR + 5.01%
|
Subsidiary /
F
inal maturity date
|
|
Notional
amount
due from
counterparty
|
|
Notional
amount
due to
counterparty
|
|
Interest rate
due from
counterparty
|
|
Interest rate
due to
counterparty
|
||||
|
|
in millions
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
January 2020
|
|
$
|
225.0
|
|
|
CHF
|
206.3
|
|
|
6 mo. LIBOR + 4.81%
|
|
5.44%
|
January 2015 - July 2021
|
|
$
|
200.0
|
|
|
CHF
|
186.0
|
|
|
6 mo. LIBOR + 2.50%
|
|
6 mo. CHF LIBOR + 2.55%
|
January 2015
|
|
$
|
171.5
|
|
|
CHF
|
187.1
|
|
|
6 mo. LIBOR + 2.75%
|
|
6 mo. CHF LIBOR + 2.95%
|
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%
|
January 2015
|
|
€
|
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%
|
January 2015 - January 2017
|
|
€
|
360.4
|
|
|
CHF
|
589.0
|
|
|
6 mo. EURIBOR + 3.75%
|
|
6 mo. CHF LIBOR + 3.94%
|
April 2018
|
|
€
|
285.1
|
|
|
CHF
|
346.7
|
|
|
10.51%
|
|
9.87%
|
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%
|
December 2014
|
|
€
|
134.2
|
|
|
CLP
|
107,800.0
|
|
|
6 mo. EURIBOR + 2.00%
|
|
10.00%
|
December 2015
|
|
€
|
69.1
|
|
|
CLP
|
53,000.0
|
|
|
3.50%
|
|
5.75%
|
January 2015
|
|
€
|
365.8
|
|
|
CZK
|
10,521.8
|
|
|
5.48%
|
|
5.99%
|
January 2015 - January 2017
|
|
€
|
60.0
|
|
|
CZK
|
1,703.1
|
|
|
5.50%
|
|
6.99%
|
July 2017
|
|
€
|
39.6
|
|
|
CZK
|
1,000.0
|
|
|
3.00%
|
|
3.75%
|
January 2015
|
|
€
|
260.0
|
|
|
HUF
|
75,570.0
|
|
|
5.50%
|
|
9.40%
|
January 2015 - January 2017
|
|
€
|
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%
|
January 2015
|
|
€
|
400.5
|
|
|
PLN
|
1,605.6
|
|
|
5.50%
|
|
7.50%
|
January 2015 - January 2017
|
|
€
|
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%
|
December 2014
|
|
CLP 181,322.0
|
|
|
$
|
340.0
|
|
|
8.76%
|
|
6 mo. LIBOR + 1.75%
|
|
December 2014
|
|
CLP 107,800.0
|
|
|
EUR
|
134.2
|
|
|
10.00%
|
|
6 mo. EURIBOR + 2.00%
|
|
December 2015
|
|
CLP 53,000.0
|
|
|
EUR
|
69.1
|
|
|
5.75%
|
|
3.50%
|
|
Unitymedia Hessen GmbH & Co. KG, 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%
|
|
|
|
|
|
|
|
|
|
|
|||
VTR GlobalCom:
|
|
|
|
|
|
|
|
|
|
|||
January 2022
|
|
$
|
1,400.0
|
|
|
CLP
|
760,340.0
|
|
|
6.88%
|
|
10.94%
|
Subsidiary /
F
inal maturity date
|
|
Notional
amount
due from
counterparty
|
|
Notional
amount
due to
counterparty
|
|
Interest rate
due from
counterparty
|
|
Interest rate
due to
counterparty
|
||||
|
|
in millions
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
September 2014
|
|
$
|
134.9
|
|
|
CLP
|
74,639.5
|
|
|
6 mo. LIBOR + 3.00%
|
|
11.34%
|
September 2014
|
|
CLP 74,639.5
|
|
|
$
|
134.9
|
|
|
11.34%
|
|
6 mo. LIBOR + 3.00%
|
(a)
|
Unlike the other cross-currency swaps presented in this table, the identified cross-currency swap does not involve the exchange of notional amounts at the inception and maturity of the instrument. Accordingly, the only cash flows associated with this instrument are interest payments and receipts.
|
Subsidiary / Final maturity date
|
|
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%
|
January 2021
|
|
£
|
650.0
|
|
|
6 mo. GBP LIBOR + 1.84%
|
|
3.87%
|
December 2015
|
|
£
|
600.0
|
|
|
6 mo. GBP LIBOR
|
|
2.90%
|
April 2018
|
|
£
|
300.0
|
|
|
6 mo. GBP LIBOR
|
|
1.37%
|
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 2015
|
|
€
|
1,554.0
|
|
|
1 mo. EURIBOR + 3.75%
|
|
6 mo. EURIBOR + 3.56%
|
January 2015
|
|
€
|
1,364.8
|
|
|
6 mo. EURIBOR
|
|
3.44%
|
July 2020
|
|
€
|
750.0
|
|
|
6.38%
|
|
6 mo. EURIBOR + 3.16%
|
January 2015 - January 2021
|
|
€
|
750.0
|
|
|
6 mo. EURIBOR
|
|
2.57%
|
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 2015 - January 2018
|
|
€
|
175.0
|
|
|
6 mo. EURIBOR
|
|
3.74%
|
January 2015 - July 2020
|
|
€
|
171.3
|
|
|
6 mo. EURIBOR
|
|
3.95%
|
July 2020
|
|
€
|
171.3
|
|
|
6 mo. EURIBOR
|
|
4.32%
|
December 2014
|
|
€
|
107.0
|
|
|
6 mo. EURIBOR
|
|
4.73%
|
January 2015 - November 2021
|
|
€
|
107.0
|
|
|
6 mo. EURIBOR
|
|
2.89%
|
January 2015
|
|
CHF
|
2,380.0
|
|
|
6 mo. CHF LIBOR
|
|
2.81%
|
January 2015 - January 2022
|
|
CHF
|
711.5
|
|
|
6 mo. CHF LIBOR
|
|
1.89%
|
Subsidiary / Final maturity date
|
|
Notional amount
|
|
Interest rate due from
counterparty
|
|
Interest rate due to
counterparty
|
||
|
|
in millions
|
|
|
|
|
||
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%
|
Telenet International Finance S.a.r.l (Telenet International), a subsidiary of Telenet:
|
|
|
|
|
|
|
|
|
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%
|
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%
|
Subsidiary / Final maturity date
|
|
Notional amount
|
|
EURIBOR cap rate
|
||
|
|
in millions
|
|
|
||
Interest rate caps purchased (a):
|
|
|
|
|
||
Liberty Global Europe Financing BV (LGE Financing), the immediate parent of UPC Holding:
|
|
|
|
|||
January 2015 - January 2020
|
€
|
735.0
|
|
|
7.00%
|
|
Telenet International:
|
|
|
|
|||
June 2015 - June 2017
|
€
|
50.0
|
|
|
4.50%
|
|
Telenet NV, a subsidiary of Telenet:
|
|
|
|
|||
December 2017
|
€
|
1.1
|
|
|
6.50%
|
|
December 2017
|
€
|
1.1
|
|
|
5.50%
|
|
|
|
|
|
|
||
Interest rate cap sold (b):
|
|
|
|
|
||
UPC Broadband Holding:
|
|
|
|
|||
January 2015 - January 2020
|
€
|
735.0
|
|
|
7.00%
|
(a)
|
Our purchased interest rate caps entitle us to receive payments from the counterparty when
EURIBOR
exceeds the
EURIBOR
cap rate.
|
(b)
|
Our sold interest rate cap requires that we make payments to the counterparty when
EURIBOR
exceeds the
EURIBOR
cap rate.
|
Subsidiary / Final maturity date
|
|
Notional
amount
|
|
EURIBOR floor rate (a)
|
|
EURIBOR cap rate (b)
|
||
|
|
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)
|
We make payments to the counterparty when
EURIBOR
is less than the
EURIBOR
floor rate.
|
(b)
|
We receive payments from the counterparty when
EURIBOR
is greater than the
EURIBOR
cap rate.
|
Subsidiary
|
|
Currency
purchased
forward
|
|
Currency
sold
forward
|
|
Maturity dates
|
||||
|
|
in millions
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||
LGE Financing
|
$
|
1.5
|
|
|
€
|
1.1
|
|
|
July 2014 - October 2014
|
|
UPC Broadband Holding
|
$
|
2.3
|
|
|
CZK
|
44.5
|
|
|
July 2014 - March 2015
|
|
UPC Broadband Holding
|
€
|
45.3
|
|
|
CHF
|
55.4
|
|
|
July 2014 - June 2015
|
|
UPC Broadband Holding
|
€
|
13.5
|
|
|
CZK
|
361.2
|
|
|
July 2014 - March 2015
|
|
UPC Broadband Holding
|
€
|
12.4
|
|
|
HUF
|
3,825.0
|
|
|
July 2014 - March 2015
|
|
UPC Broadband Holding
|
€
|
36.0
|
|
|
PLN
|
155.2
|
|
|
July 2014 - March 2015
|
|
UPC Broadband Holding
|
£
|
2.7
|
|
|
€
|
3.3
|
|
|
July 2014 - March 2015
|
|
Telenet NV
|
$
|
24.5
|
|
|
€
|
18.0
|
|
|
July 2014 - December 2014
|
|
VTR GlobalCom
|
$
|
27.6
|
|
|
CLP
|
15,336.1
|
|
|
July 2014 - June 2015
|
|
|
|
Fair value measurements at June 30, 2014 using:
|
||||||||||||
Description
|
June 30,
2014 |
|
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
|
$
|
980.6
|
|
|
$
|
—
|
|
|
$
|
980.6
|
|
|
$
|
—
|
|
Equity-related derivative instruments
|
425.1
|
|
|
—
|
|
|
—
|
|
|
425.1
|
|
||||
Foreign currency forward contracts
|
1.3
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
||||
Other
|
2.1
|
|
|
—
|
|
|
2.1
|
|
|
—
|
|
||||
Total derivative instruments
|
1,409.1
|
|
|
—
|
|
|
984.0
|
|
|
425.1
|
|
||||
Investments
|
3,573.3
|
|
|
3,251.9
|
|
|
—
|
|
|
321.4
|
|
||||
Total assets
|
$
|
4,982.4
|
|
|
$
|
3,251.9
|
|
|
$
|
984.0
|
|
|
$
|
746.5
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities - derivative instruments:
|
|
|
|
|
|
|
|
||||||||
Cross-currency and interest rate derivative contracts
|
$
|
3,434.7
|
|
|
$
|
—
|
|
|
$
|
3,434.7
|
|
|
$
|
—
|
|
Equity-related derivative instruments
|
105.1
|
|
|
—
|
|
|
—
|
|
|
105.1
|
|
||||
Foreign currency forward contracts
|
2.6
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
||||
Other
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
||||
Total liabilities
|
$
|
3,542.7
|
|
|
$
|
—
|
|
|
$
|
3,437.6
|
|
|
$
|
105.1
|
|
|
|
|
Fair value measurements at
December 31, 2013 using:
|
||||||||||||
Description
|
December 31, 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
|
$
|
769.2
|
|
|
$
|
—
|
|
|
$
|
769.2
|
|
|
$
|
—
|
|
Equity-related derivative instruments
|
430.4
|
|
|
—
|
|
|
—
|
|
|
430.4
|
|
||||
Foreign currency forward contracts
|
2.6
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
||||
Other
|
2.0
|
|
|
—
|
|
|
2.0
|
|
|
—
|
|
||||
Total derivative instruments
|
1,204.2
|
|
|
—
|
|
|
773.8
|
|
|
430.4
|
|
||||
Investments
|
3,481.8
|
|
|
3,182.4
|
|
|
—
|
|
|
299.4
|
|
||||
Total assets
|
$
|
4,686.0
|
|
|
$
|
3,182.4
|
|
|
$
|
773.8
|
|
|
$
|
729.8
|
|
Liabilities - derivative instruments:
|
|
|
|
|
|
|
|
||||||||
Cross-currency and interest rate derivative contracts
|
$
|
2,918.6
|
|
|
$
|
—
|
|
|
$
|
2,918.6
|
|
|
$
|
—
|
|
Equity-related derivative instruments
|
116.9
|
|
|
—
|
|
|
—
|
|
|
116.9
|
|
||||
Foreign currency forward contracts
|
20.2
|
|
|
—
|
|
|
20.2
|
|
|
—
|
|
||||
Other
|
0.8
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
||||
Total liabilities
|
$
|
3,056.5
|
|
|
$
|
—
|
|
|
$
|
2,939.6
|
|
|
$
|
116.9
|
|
|
Investments
|
|
Equity-related
derivative
instruments
|
|
Total
|
||||||
|
in millions
|
||||||||||
|
|
|
|
|
|
||||||
Balance of net assets at January 1, 2014
|
$
|
299.4
|
|
|
$
|
313.5
|
|
|
$
|
612.9
|
|
Partial settlement of the Ziggo Collar (a)
|
—
|
|
|
17.9
|
|
|
17.9
|
|
|||
Gains (losses) included in net loss (b):
|
|
|
|
|
|
|
|||||
Realized and unrealized losses on derivative instruments, net
|
—
|
|
|
(20.3
|
)
|
|
(20.3
|
)
|
|||
Realized and unrealized gains due to changes in fair values of certain investments, net
|
19.1
|
|
|
—
|
|
|
19.1
|
|
|||
Foreign currency translation adjustments and other, net
|
2.9
|
|
|
8.9
|
|
|
11.8
|
|
|||
Balance of net assets at June 30, 2014
|
$
|
321.4
|
|
|
$
|
320.0
|
|
|
$
|
641.4
|
|
(a)
|
For additional information regarding the
Ziggo Collar
, see note
4
.
|
(b)
|
Most of these net gains (losses) relate to assets and liabilities that we continue to carry on our condensed consolidated balance sheet as of
June 30, 2014
.
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
|
in millions
|
||||||
|
|
|
|
||||
Distribution systems
|
$
|
26,241.1
|
|
|
$
|
25,193.2
|
|
Customer premises equipment
|
6,563.2
|
|
|
6,126.0
|
|
||
Support equipment, buildings and land
|
3,835.9
|
|
|
3,581.9
|
|
||
|
36,640.2
|
|
|
34,901.1
|
|
||
Accumulated depreciation
|
(12,819.6
|
)
|
|
(10,926.2
|
)
|
||
Total property and equipment, net
|
$
|
23,820.6
|
|
|
$
|
23,974.9
|
|
|
January 1, 2014
|
|
Acquisitions
and related
adjustments
|
|
Foreign
currency
translation
adjustments and other
|
|
June 30,
2014 |
||||||||
|
in millions
|
||||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
9,598.2
|
|
|
$
|
—
|
|
|
$
|
310.5
|
|
|
$
|
9,908.7
|
|
Germany (Unitymedia KabelBW)
|
3,939.4
|
|
|
—
|
|
|
(28.1
|
)
|
|
3,911.3
|
|
||||
Belgium (Telenet)
|
2,255.1
|
|
|
—
|
|
|
(16.1
|
)
|
|
2,239.0
|
|
||||
The Netherlands
|
1,260.4
|
|
|
—
|
|
|
(9.0
|
)
|
|
1,251.4
|
|
||||
Switzerland
|
3,197.4
|
|
|
—
|
|
|
5.4
|
|
|
3,202.8
|
|
||||
Other Western Europe
|
1,079.7
|
|
|
—
|
|
|
(7.7
|
)
|
|
1,072.0
|
|
||||
Total Western Europe
|
21,330.2
|
|
|
—
|
|
|
255.0
|
|
|
21,585.2
|
|
||||
Central and Eastern Europe
|
1,520.1
|
|
|
5.5
|
|
|
(25.1
|
)
|
|
1,500.5
|
|
||||
Total European Operations Division
|
22,850.3
|
|
|
5.5
|
|
|
229.9
|
|
|
23,085.7
|
|
||||
Chile (VTR)
|
508.5
|
|
|
—
|
|
|
(25.3
|
)
|
|
483.2
|
|
||||
Corporate and other
|
390.0
|
|
|
—
|
|
|
(8.4
|
)
|
|
381.6
|
|
||||
Total
|
$
|
23,748.8
|
|
|
$
|
5.5
|
|
|
$
|
196.2
|
|
|
$
|
23,950.5
|
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||||||||||||
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
||||||||||||
|
|
in millions
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
|
$
|
8,095.9
|
|
|
$
|
(2,840.3
|
)
|
|
$
|
5,255.6
|
|
|
$
|
8,116.7
|
|
|
$
|
(2,458.4
|
)
|
|
$
|
5,658.3
|
|
Other
|
|
264.8
|
|
|
(138.2
|
)
|
|
126.6
|
|
|
288.1
|
|
|
(151.0
|
)
|
|
137.1
|
|
||||||
Total
|
|
$
|
8,360.7
|
|
|
$
|
(2,978.5
|
)
|
|
$
|
5,382.2
|
|
|
$
|
8,404.8
|
|
|
$
|
(2,609.4
|
)
|
|
$
|
5,795.4
|
|
|
June 30, 2014
|
|
|
|
Carrying value (d)
|
|||||||||||||||||||||
Weighted
average
interest
rate (a)
|
|
Unused borrowing capacity (b)
|
|
Estimated fair value (c)
|
||||||||||||||||||||||
Borrowing currency
|
|
U.S. $
equivalent
|
|
June 30, 2014
|
|
December 31, 2013
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||||||||
|
|
|
in millions
|
|||||||||||||||||||||||
Debt:
|
|
|
|
|||||||||||||||||||||||
VM Notes
|
6.11
|
%
|
|
—
|
|
|
$
|
—
|
|
|
$
|
8,881.5
|
|
|
$
|
9,188.7
|
|
|
$
|
8,555.1
|
|
|
$
|
9,150.1
|
|
|
VM Credit Facility
|
3.78
|
%
|
|
£
|
660.0
|
|
|
1,128.8
|
|
|
5,018.9
|
|
|
4,388.9
|
|
|
5,004.1
|
|
|
4,352.8
|
|
|||||
VM Convertible Notes (e)
|
6.50
|
%
|
|
—
|
|
|
—
|
|
|
164.1
|
|
|
164.1
|
|
|
57.2
|
|
|
57.5
|
|
||||||
UPCB SPE Notes
|
6.88
|
%
|
|
—
|
|
|
—
|
|
|
4,541.0
|
|
|
4,536.5
|
|
|
4,207.5
|
|
|
4,219.5
|
|
||||||
UPC Broadband Holding Bank Facility
|
3.72
|
%
|
|
€
|
976.2
|
|
|
1,336.6
|
|
|
3,536.2
|
|
|
5,717.8
|
|
|
3,521.3
|
|
|
5,671.4
|
|
|||||
UPC Holding Senior Notes (f)
|
7.16
|
%
|
|
—
|
|
|
—
|
|
|
2,982.0
|
|
|
3,297.4
|
|
|
2,701.8
|
|
|
3,099.2
|
|
||||||
Unitymedia KabelBW Notes
|
6.88
|
%
|
|
—
|
|
|
—
|
|
|
8,277.0
|
|
|
8,058.2
|
|
|
7,607.5
|
|
|
7,651.9
|
|
||||||
Unitymedia KabelBW Revolving Credit Facilities
|
2.66
|
%
|
|
€
|
337.5
|
|
|
462.1
|
|
|
108.7
|
|
|
—
|
|
|
109.5
|
|
|
—
|
|
|||||
Telenet SPE Notes
|
5.96
|
%
|
|
—
|
|
|
—
|
|
|
2,797.6
|
|
|
2,916.5
|
|
|
2,601.2
|
|
|
2,759.2
|
|
||||||
Telenet Credit Facility
|
3.52
|
%
|
|
€
|
322.9
|
|
|
442.1
|
|
|
1,858.8
|
|
|
1,956.9
|
|
|
1,853.7
|
|
|
1,936.9
|
|
|||||
VTR Finance Senior Secured Notes
|
6.88
|
%
|
|
—
|
|
|
—
|
|
|
1,497.1
|
|
|
—
|
|
|
1,400.0
|
|
|
—
|
|
||||||
Sumitomo Collar Loan
|
1.88
|
%
|
|
—
|
|
|
—
|
|
|
973.3
|
|
|
939.3
|
|
|
930.8
|
|
|
894.3
|
|
||||||
Ziggo Collar Loan
|
0.45
|
%
|
|
—
|
|
|
—
|
|
|
683.1
|
|
|
852.9
|
|
|
678.8
|
|
|
852.6
|
|
||||||
Liberty Puerto Rico Bank Facility
|
6.89
|
%
|
|
$
|
25.0
|
|
|
25.0
|
|
|
652.5
|
|
|
666.2
|
|
|
652.3
|
|
|
665.0
|
|
|||||
Ziggo Margin Loan (g)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
634.3
|
|
|
—
|
|
|
634.3
|
|
||||||
Vendor financing (h)
|
3.59
|
%
|
|
—
|
|
|
—
|
|
|
659.7
|
|
|
603.1
|
|
|
659.7
|
|
|
603.1
|
|
||||||
Other (i)
|
8.95
|
%
|
|
(j)
|
|
200.0
|
|
|
198.1
|
|
|
308.2
|
|
|
198.1
|
|
|
308.2
|
|
|||||||
Total debt
|
5.59
|
%
|
|
|
|
$
|
3,594.6
|
|
|
$
|
42,829.6
|
|
|
$
|
44,229.0
|
|
|
40,738.6
|
|
|
42,856.0
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Capital lease obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Unitymedia KabelBW
|
|
931.0
|
|
|
952.0
|
|
||||||||||||||||||||
Telenet
|
|
466.2
|
|
|
451.2
|
|
||||||||||||||||||||
Virgin Media
|
|
350.7
|
|
|
373.5
|
|
||||||||||||||||||||
Other subsidiaries
|
|
73.7
|
|
|
71.6
|
|
||||||||||||||||||||
Total capital lease obligations
|
|
1,821.6
|
|
|
1,848.3
|
|
||||||||||||||||||||
Total debt and capital lease obligations
|
|
42,560.2
|
|
|
44,704.3
|
|
||||||||||||||||||||
Current maturities
|
|
(1,850.9
|
)
|
|
(1,023.4
|
)
|
||||||||||||||||||||
Long-term debt and capital lease obligations
|
|
$
|
40,709.3
|
|
|
$
|
43,680.9
|
|
(a)
|
Represents the weighted average interest rate in effect at
June 30, 2014
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 of our interest rate derivative contracts, deferred financing costs, original issue premiums or discounts or commitment fees, all of which affect our overall cost of borrowing. Including the effects of derivative instruments, original issue premiums and discounts and commitment fees, but excluding the impact of financing costs, our weighted average interest rate on our aggregate variable- and fixed-rate indebtedness was
6.6%
at
June 30, 2014
. For information concerning our derivative instruments, see note
5
.
|
(b)
|
Unused borrowing capacity represents the maximum availability under the applicable facility at
June 30, 2014
without regard to covenant compliance calculations or other conditions precedent to borrowing. At
June 30, 2014
, 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, 2014
, our availability under the
UPC Broadband Holding Bank Facility
(as defined and described below) was limited to
€884.1 million
(
$1,210.4 million
). When the relevant
June 30, 2014
compliance reporting requirements have been completed and assuming no changes from
June 30, 2014
borrowing levels, we anticipate that our availability under the
UPC Broadband Holding Bank Facility
will be limited to
€951.6 million
(
$1,302.8 million
). 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, 2014
, these restrictions did not impact our ability to access the liquidity of our subsidiaries to satisfy our corporate liquidity needs beyond what is described above, except that
the availability to be loaned or distributed by
Virgin Media
was limited to
£259.1 million
(
$443.1 million
) and none of the liquidity of
Liberty Puerto Rico
was available to be loaned or distributed. When the relevant
June 30, 2014
compliance reporting requirements have been completed and assuming no changes from
June 30, 2014
borrowing levels, we anticipate that the availability to be loaned or distributed by
Virgin Media
will be limited to
£443.0 million
(
$757.7 million
) and that all of the liquidity of
Liberty Puerto Rico
will continue to be unavailable to be loaned or distributed. For information concerning transactions completed subsequent to
June 30, 2014
that could have an impact on unused borrowing capacity, see note
16
.
|
(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
6
.
|
(d)
|
Amounts include the impact of premiums and discounts, where applicable.
|
(e)
|
The
6.50%
convertible senior notes issued by
Virgin Media
(the
VM Convertible Notes
) are exchangeable under certain conditions for (subject to further adjustment as provided in the underlying indenture and subject to
Virgin Media
’s right to settle in cash or a combination of
Liberty Global
ordinary shares and cash)
13.4339
of our Class A ordinary shares,
33.4963
of our Class C ordinary shares and
$910.51
in cash (without interest) for each
$1,000
in principal amount of
VM Convertible Notes
exchanged. 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, 2014
, including both the debt and equity components.
|
(f)
|
During April 2014, we used existing cash to fully redeem
UPC Holding
’s
$400.0 million
principal amount of
9.875%
senior notes due 2018 (the
UPC Holding 9.875% Senior Notes
). In connection with this transaction, we recognized a loss on debt modification and extinguishment of
$41.5 million
, which includes (i)
$19.7 million
of redemption premiums, (ii) the write-off of
$17.4 million
of unamortized discount and (iii) the write-off of
$4.4 million
of deferred financing costs.
|
(g)
|
During the first quarter of 2014, we used existing cash to repay the full amount of the limited recourse margin loan (the
Ziggo Margin Loan
) that was secured by a portion of our investment in
Ziggo
. In connection with this transaction, we recognized a loss on debt modification and extinguishment of
$2.3 million
related to the write-off of deferred financing costs. For information regarding our investment in
Ziggo
, see note
4
.
|
(h)
|
Represents amounts owed pursuant to interest-bearing vendor financing arrangements that are generally due within
one year
. At
June 30, 2014
and
December 31, 2013
, the amounts owed pursuant to these arrangements include
$59.2 million
and
$47.3 million
, respectively, of
VAT
that was 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 statements of cash flows.
|
(i)
|
The
December 31, 2013
amounts include outstanding borrowings of
$113.1 million
under
VTR Wireless
’s then-existing CLP
60.0 billion
(
$108.5 million
) term loan bank facility (the
VTR Wireless Bank Facility
). In January 2014, all outstanding amounts under the
VTR Wireless Bank Facility
were repaid and the
VTR Wireless Bank Facility
was cancelled. In connection with this transaction, we recognized a loss on debt modification and extinguishment of
$2.0 million
related to the write-off of deferred financing costs.
|
(j)
|
Unused borrowing capacity relates to the senior secured revolving credit facility of entities within
VTR
, which includes a
$160.0 million
U.S. dollar facility (the
VTR Dollar Senior Credit Facility
) and a CLP
22.0 billion
(
$39.8 million
) Chilean peso facility (the
VTR CLP Senior Credit Facility
), each of which were undrawn at
June 30, 2014
. The
VTR Dollar Senior Credit Facility
and the
VTR CLP Senior Credit Facility
have fees on unused commitments of
1.1%
and
1.34%
per year, respectively.
|
|
|
Redemption price
|
||
Year
|
|
2025 VM Senior Secured Notes
|
|
2029 VM Senior Secured Notes
|
|
|
|
|
|
2019
|
102.750%
|
|
N.A.
|
|
2020
|
101.833%
|
|
N.A.
|
|
2021
|
100.000%
|
|
103.125%
|
|
2022
|
100.000%
|
|
102.083%
|
|
2023
|
100.000%
|
|
101.042%
|
|
2024 and thereafter
|
100.000%
|
|
100.000%
|
Facility
|
|
Final maturity date
|
|
Interest rate
|
|
Facility amount
(in borrowing
currency)
|
|
Unused
borrowing
capacity
|
|
Carrying
value (a)
|
||||||
|
|
|
|
|
|
in millions
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
A
|
June 7, 2019
|
|
LIBOR + 3.25%
|
|
£
|
375.0
|
|
|
$
|
—
|
|
|
$
|
641.3
|
|
|
B
|
June 7, 2020
|
|
LIBOR + 2.75% (b)
|
|
$
|
2,755.0
|
|
|
—
|
|
|
2,743.1
|
|
|||
D
|
June 30, 2022
|
|
LIBOR + 3.25% (b)
|
|
£
|
100.0
|
|
|
—
|
|
|
170.6
|
|
|||
E
|
June 30, 2023
|
|
LIBOR + 3.50% (b)
|
|
£
|
849.4
|
|
|
—
|
|
|
1,449.1
|
|
|||
Revolving facility (c)
|
June 7, 2019
|
|
LIBOR + 3.25%
|
|
£
|
660.0
|
|
|
1,128.8
|
|
|
—
|
|
|||
Total
|
|
$
|
1,128.8
|
|
|
$
|
5,004.1
|
|
(a)
|
The carrying values of VM Facilities B, D and E include the impact of discounts.
|
(b)
|
VM Facilities B, D and E each have a LIBOR floor of
0.75%
.
|
(c)
|
The revolving facility has a fee on unused commitments of
1.3%
per year.
|
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
|
|
|
$
|
41.1
|
|
|
$
|
—
|
|
|
V (d)
|
January 15, 2020
|
|
7.625%
|
|
€
|
500.0
|
|
|
—
|
|
|
684.5
|
|
|||
Y (d)
|
July 1, 2020
|
|
6.375%
|
|
€
|
750.0
|
|
|
—
|
|
|
1,026.8
|
|
|||
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
|
|
|||
AG
|
March 31, 2021
|
|
EURIBOR + 3.75%
|
|
€
|
1,554.4
|
|
|
—
|
|
|
2,123.7
|
|
|||
AH
|
June 30, 2021
|
|
LIBOR + 2.50% (e)
|
|
$
|
1,305.0
|
|
|
—
|
|
|
1,301.8
|
|
|||
AI
|
April 30, 2019
|
|
EURIBOR + 3.25%
|
|
€
|
1,016.2
|
|
|
1,295.5
|
|
|
95.8
|
|
|||
Elimination of Facilities V, Y, Z, AC and AD in consolidation (d)
|
|
—
|
|
|
(4,211.3
|
)
|
||||||||||
Total
|
|
$
|
1,336.6
|
|
|
$
|
3,521.3
|
|
(a)
|
Except as described in (d) below, amounts represent total third-party facility amounts at
June 30, 2014
without giving effect to the impact of discounts.
|
(b)
|
At
June 30, 2014
, our availability under the
UPC Broadband Holding Bank Facility
was limited to
€884.1 million
(
$1,210.4 million
). When the relevant
June 30, 2014
compliance reporting requirements have been completed, we anticipate that our availability under the
UPC Broadband Holding Bank Facility
will be limited to
€951.6 million
(
$1,302.8 million
). Facilities Q and AI have fees on unused commitments of
0.75%
and
1.3%
per year, respectively.
|
(c)
|
The carrying values of Facilities AG and AH include the impact of discounts.
|
(d)
|
Amounts related to certain senior secured notes (the
UPCB SPE Notes
) issued by special purpose financing entities (the
UPCB SPE
s) that are consolidated by UPC Holding and
Liberty Global
. The proceeds from the
UPCB SPE Notes
were used to fund additional Facilities V, Y, Z, AC and AD, with our wholly-owned subsidiary UPC Financing Partnership as the borrower. Accordingly, the amounts outstanding under Facilities V, Y, Z, AC and AD are eliminated in our condensed consolidated financial statements.
|
(e)
|
Facility AH has a
LIBOR
floor of
0.75%
.
|
Facility
|
|
Final maturity date
|
|
Interest rate
|
|
Facility amount
(in borrowing
currency) (a)
|
|
Unused
borrowing
capacity (b)
|
|
Carrying
value
|
||||||
|
|
|
|
|
|
in millions
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
M (c)
|
November 15, 2020
|
|
6.375%
|
|
€
|
500.0
|
|
|
$
|
—
|
|
|
$
|
684.5
|
|
|
O (c)
|
February 15, 2021
|
|
6.625%
|
|
€
|
300.0
|
|
|
—
|
|
|
410.7
|
|
|||
P (c)
|
June 15, 2021
|
|
EURIBOR + 3.875%
|
|
€
|
400.0
|
|
|
—
|
|
|
547.6
|
|
|||
S
|
December 31, 2016
|
|
EURIBOR + 2.75%
|
|
€
|
36.9
|
|
|
50.5
|
|
|
—
|
|
|||
U (c)
|
August 15, 2022
|
|
6.250%
|
|
€
|
450.0
|
|
|
—
|
|
|
616.1
|
|
|||
V (c)
|
August 15, 2024
|
|
6.750%
|
|
€
|
250.0
|
|
|
—
|
|
|
342.3
|
|
|||
W (d)
|
June 30, 2022
|
|
EURIBOR + 3.25%
|
|
€
|
474.1
|
|
|
—
|
|
|
647.6
|
|
|||
X
|
September 30, 2020
|
|
EURIBOR + 2.75%
|
|
€
|
286.0
|
|
|
391.6
|
|
|
—
|
|
|||
Y (d)
|
June 30, 2023
|
|
EURIBOR + 3.50%
|
|
€
|
882.9
|
|
|
—
|
|
|
1,206.1
|
|
|||
Elimination of Telenet Facilities M, O, P, U and V in consolidation (c)
|
|
—
|
|
|
(2,601.2
|
)
|
||||||||||
Total
|
|
$
|
442.1
|
|
|
$
|
1,853.7
|
|
(a)
|
Except as described in (c) below, amounts represent total third-party facility amounts at
June 30, 2014
.
|
(b)
|
Telenet Facilities S and X have a fee on unused commitments of
1.10%
per year.
|
(c)
|
As described below, the amounts outstanding under Telenet Facilities M, O, P, U and V are eliminated in
Liberty Global
’s consolidated financial statements.
|
(d)
|
The carrying values of Telenet Facilities W and Y include the impact of discounts.
|
|
Virgin Media
|
|
UPC
Holding (a)
|
|
Unitymedia KabelBW
|
|
Telenet (b)
|
|
Other (c)
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Year ending December 31:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2014 (remainder of year)
|
$
|
70.3
|
|
|
$
|
317.3
|
|
|
$
|
137.4
|
|
|
$
|
10.1
|
|
|
$
|
726.0
|
|
|
$
|
1,261.1
|
|
2015
|
78.7
|
|
|
212.7
|
|
|
64.9
|
|
|
10.1
|
|
|
7.5
|
|
|
373.9
|
|
||||||
2016
|
—
|
|
|
—
|
|
|
—
|
|
|
10.1
|
|
|
378.6
|
|
|
388.7
|
|
||||||
2017
|
—
|
|
|
—
|
|
|
—
|
|
|
10.1
|
|
|
867.3
|
|
|
877.4
|
|
||||||
2018
|
—
|
|
|
—
|
|
|
—
|
|
|
10.1
|
|
|
342.8
|
|
|
352.9
|
|
||||||
2019
|
1,582.0
|
|
|
—
|
|
|
2,376.1
|
|
|
23.2
|
|
|
—
|
|
|
3,981.3
|
|
||||||
Thereafter
|
11,873.7
|
|
|
10,352.6
|
|
|
5,234.4
|
|
|
4,566.7
|
|
|
1,400.0
|
|
|
33,427.4
|
|
||||||
Total debt maturities
|
13,604.7
|
|
|
10,882.6
|
|
|
7,812.8
|
|
|
4,640.4
|
|
|
3,722.2
|
|
|
40,662.7
|
|
||||||
Unamortized premium (discount)
|
106.0
|
|
|
(17.9
|
)
|
|
(3.0
|
)
|
|
(4.1
|
)
|
|
(5.1
|
)
|
|
75.9
|
|
||||||
Total debt
|
$
|
13,710.7
|
|
|
$
|
10,864.7
|
|
|
$
|
7,809.8
|
|
|
$
|
4,636.3
|
|
|
$
|
3,717.1
|
|
|
$
|
40,738.6
|
|
Current portion (d)
|
$
|
151.4
|
|
|
$
|
530.0
|
|
|
$
|
202.3
|
|
|
$
|
10.1
|
|
|
$
|
723.5
|
|
|
$
|
1,617.3
|
|
Noncurrent portion
|
$
|
13,559.3
|
|
|
$
|
10,334.7
|
|
|
$
|
7,607.5
|
|
|
$
|
4,626.2
|
|
|
$
|
2,993.6
|
|
|
$
|
39,121.3
|
|
(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 certain senior secured notes issued by special purpose financing entities that are consolidated by
Telenet
.
|
(c)
|
The debt maturity during the remainder of
2014
includes the
$685.0 million
(equivalent) principal amount outstanding under the
Ziggo Collar Loan
, which we expect to settle on or before the closing of the acquisition of
Ziggo
. The
Ziggo Collar Loan
may be settled with cash, shares or a combination thereof. For information regarding our pending acquisition of
Ziggo
, see note
3
.
|
(d)
|
Includes the
$205.3 million
aggregate principal amount outstanding under the revolving credit facilities of our subsidiaries.
|
|
Unitymedia KabelBW
|
|
Telenet
|
|
Virgin Media
|
|
Other
|
|
Total
|
||||||||||
|
in millions
|
||||||||||||||||||
Year ending December 31:
|
|
|
|
|
|
|
|
|
|
||||||||||
2014 (remainder of year)
|
$
|
50.0
|
|
|
$
|
44.7
|
|
|
$
|
84.6
|
|
|
$
|
10.0
|
|
|
$
|
189.3
|
|
2015
|
100.4
|
|
|
71.0
|
|
|
129.6
|
|
|
21.9
|
|
|
322.9
|
|
|||||
2016
|
100.4
|
|
|
70.3
|
|
|
75.8
|
|
|
18.7
|
|
|
265.2
|
|
|||||
2017
|
100.4
|
|
|
68.4
|
|
|
32.0
|
|
|
11.4
|
|
|
212.2
|
|
|||||
2018
|
100.4
|
|
|
64.7
|
|
|
7.2
|
|
|
5.0
|
|
|
177.3
|
|
|||||
2019
|
100.4
|
|
|
52.9
|
|
|
4.8
|
|
|
3.0
|
|
|
161.1
|
|
|||||
Thereafter
|
1,092.7
|
|
|
259.9
|
|
|
244.1
|
|
|
24.5
|
|
|
1,621.2
|
|
|||||
Total principal and interest payments
|
1,644.7
|
|
|
631.9
|
|
|
578.1
|
|
|
94.5
|
|
|
2,949.2
|
|
|||||
Amounts representing interest
|
(713.7
|
)
|
|
(165.7
|
)
|
|
(227.4
|
)
|
|
(20.8
|
)
|
|
(1,127.6
|
)
|
|||||
Present value of net minimum lease payments
|
$
|
931.0
|
|
|
$
|
466.2
|
|
|
$
|
350.7
|
|
|
$
|
73.7
|
|
|
$
|
1,821.6
|
|
Current portion
|
$
|
29.5
|
|
|
$
|
45.1
|
|
|
$
|
142.8
|
|
|
$
|
16.2
|
|
|
$
|
233.6
|
|
Noncurrent portion
|
$
|
901.5
|
|
|
$
|
421.1
|
|
|
$
|
207.9
|
|
|
$
|
57.5
|
|
|
$
|
1,588.0
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Computed “expected” tax benefit (expense) (a)
|
$
|
49.3
|
|
|
$
|
(47.4
|
)
|
|
$
|
162.0
|
|
|
$
|
(56.7
|
)
|
Change in valuation allowances
|
(92.2
|
)
|
|
1.9
|
|
|
(142.5
|
)
|
|
1.1
|
|
||||
International rate differences (b)
|
48.7
|
|
|
28.5
|
|
|
102.7
|
|
|
42.4
|
|
||||
Non-deductible or non-taxable interest and other expenses
|
(51.8
|
)
|
|
(48.6
|
)
|
|
(82.8
|
)
|
|
(82.8
|
)
|
||||
Tax effect of intercompany financing
|
41.0
|
|
|
7.4
|
|
|
81.5
|
|
|
7.4
|
|
||||
Recognition of previously unrecognized tax benefits
|
—
|
|
|
—
|
|
|
28.8
|
|
|
—
|
|
||||
Non-deductible or non-taxable foreign currency exchange results
|
(17.9
|
)
|
|
12.7
|
|
|
(23.3
|
)
|
|
10.2
|
|
||||
Basis and other differences in the treatment of items associated with investments in subsidiaries and affiliates
|
22.2
|
|
|
(43.9
|
)
|
|
(11.9
|
)
|
|
(30.7
|
)
|
||||
Enacted tax law and rate changes
|
1.1
|
|
|
(8.0
|
)
|
|
5.7
|
|
|
(8.4
|
)
|
||||
Loss of subsidiary tax attributes due to a deemed change in control
|
—
|
|
|
(91.4
|
)
|
|
—
|
|
|
(91.4
|
)
|
||||
Other, net
|
0.2
|
|
|
(4.5
|
)
|
|
(2.6
|
)
|
|
(4.7
|
)
|
||||
Total income tax benefit (expense)
|
$
|
0.6
|
|
|
$
|
(193.3
|
)
|
|
$
|
117.6
|
|
|
$
|
(213.6
|
)
|
(a)
|
In July 2013, a law was enacted that decreased the
U.K.
corporate income tax rate from
23.0%
to
21.0%
in April 2014, with a further decline to
20.0%
scheduled for April 2015. Accordingly, the statutory or “expected” tax rates used in this table are
21.0%
for the 2014 periods and
23%
for the 2013 periods. Substantially all of the impact of these rate changes on our deferred tax balances was recorded in the third quarter of 2013.
|
(b)
|
Amounts reflect statutory rates in jurisdictions in which we operate outside of the
U.K.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
in millions
|
||||||||||||||
Liberty Global shares:
|
|
|
|
|
|
|
|
||||||||
Performance-based incentive awards (a)
|
$
|
23.2
|
|
|
$
|
7.8
|
|
|
$
|
43.8
|
|
|
$
|
11.9
|
|
Other share-based incentive awards
|
22.2
|
|
|
49.8
|
|
|
52.4
|
|
|
61.0
|
|
||||
Total Liberty Global shares (b)
|
45.4
|
|
|
57.6
|
|
|
96.2
|
|
|
72.9
|
|
||||
Telenet share-based incentive awards (c)
|
7.8
|
|
|
36.5
|
|
|
10.7
|
|
|
47.5
|
|
||||
Other
|
1.2
|
|
|
(0.2
|
)
|
|
2.6
|
|
|
0.3
|
|
||||
Total
|
$
|
54.4
|
|
|
$
|
93.9
|
|
|
$
|
109.5
|
|
|
$
|
120.7
|
|
Included in:
|
|
|
|
|
|
|
|
||||||||
Continuing operations:
|
|
|
|
|
|
|
|
||||||||
Operating expense
|
$
|
3.6
|
|
|
$
|
6.0
|
|
|
$
|
4.9
|
|
|
$
|
9.9
|
|
SG&A expense
|
50.8
|
|
|
87.4
|
|
|
104.6
|
|
|
109.8
|
|
||||
Total - continuing operations
|
54.4
|
|
|
93.4
|
|
|
109.5
|
|
|
119.7
|
|
||||
Discontinued operation
|
—
|
|
|
0.5
|
|
|
—
|
|
|
1.0
|
|
||||
Total
|
$
|
54.4
|
|
|
$
|
93.9
|
|
|
$
|
109.5
|
|
|
$
|
120.7
|
|
(a)
|
Includes share-based compensation expense related to (i)
Liberty Global
performance-based restricted share units (
PSU
s), (ii) the challenge performance award plan (the
Challenge Performance Awards
), which awards were issued on June 24, 2013, and (iii) for the 2014 periods, the
PGUs
, as defined and described below.
|
(b)
|
In connection with the
Virgin Media Acquisition
, 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.
Virgin Media
recorded share-based compensation expense of
$12.1 million
and
$31.4 million
during the
three and six months ended June 30, 2014
, respectively, including compensation expense related to the
Virgin Media Replacement Awards
and new awards that were granted after the
Virgin Media Replacement Awards
were issued. During the post-acquisition period ended
June 30, 2013
,
Virgin Media
recorded share-based compensation expense of
$35.9 million
, primarily related to the
Virgin Media Replacement Awards
, including
$25.9 million
that 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.
|
(c)
|
During the second quarter of
2013
,
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 continues to recognize additional share-based compensation expense as the underlying options vest. In addition, during the first quarter of
2013
,
Telenet
recognized expense of
$6.2 million
related to the accelerated vesting of options granted under the Telenet 2010 specific stock option plan (
Telenet 2010 SSOP
).
|
|
Liberty Global
ordinary shares (a)
|
|
Liberty Global performance-based awards (b)
|
|
Telenet ordinary shares (c)
|
||||||
|
|
|
|
|
|
||||||
Total compensation expense not yet recognized (in millions)
|
$
|
166.6
|
|
|
$
|
234.0
|
|
|
$
|
7.3
|
|
Weighted average period remaining for expense recognition (in years)
|
2.8
|
|
|
1.8
|
|
|
2.4
|
|
(a)
|
Amounts relate to awards granted or assumed by
Liberty Global
under (i) the Liberty Global 2014 Incentive Plan, (ii) the Liberty Global 2014 Nonemployee Director Incentive Plan, (iii) the Liberty Global, Inc. 2005 Incentive Plan (as amended and restated effective
June 7, 2013
) (the
Liberty Global 2005 Incentive Plan
), (iv) the Liberty Global, Inc. 2005 Nonemployee Director Incentive Plan (as amended and restated effective
June 7, 2013
) (the
Liberty Global 2005 Director Incentive Plan
), (v) the Virgin Media Inc. 2010 Stock Incentive Plan (as amended and restated effective
June 7, 2013
) (the
VM Incentive Plan
) and (vi) certain other incentive plans of Virgin Media pursuant to which awards may no longer be granted. On January 30, 2014, our shareholders approved the Liberty Global 2014 Incentive Plan and the Liberty Global 2014 Nonemployee Director Incentive Plan and, accordingly, no further awards will be granted under the
Liberty Global 2005 Incentive Plan
, the
Liberty Global 2005 Director Incentive Plan
or the
VM Incentive Plan
.
|
(b)
|
Amounts relate to (i) the
Challenge Performance Awards
, which include performance-based share appreciation rights (
PSAR
s) and
PSU
s that were granted in June 2013, (ii)
PSU
s and (iii) the
PGUs
, as defined and described below.
|
(c)
|
Amounts relate to various equity incentive awards granted to employees of
Telenet
.
|
|
Six months ended
|
||||||
|
June 30,
|
||||||
|
2014
|
|
2013
|
||||
Assumptions used to estimate fair value of options, share appreciation rights (SARs) and PSARs granted:
|
|
|
|
||||
Risk-free interest rate
|
0.81 - 1.77%
|
|
0.36 - 1.27%
|
||||
Expected life (a)
|
3.1 - 5.1 years
|
|
3.2 - 7.1 years
|
||||
Expected volatility (a)
|
25.5 -28.7%
|
|
26.9 - 35.8%
|
||||
Expected dividend yield
|
none
|
|
none
|
||||
Weighted average grant-date fair value per share of awards granted:
|
|
|
|
||||
Options
|
$
|
11.40
|
|
|
$
|
11.09
|
|
SARs
|
$
|
8.95
|
|
|
$
|
8.35
|
|
PSARs
|
$
|
8.15
|
|
|
$
|
8.32
|
|
Restricted share units (RSUs)
|
$
|
39.72
|
|
|
$
|
35.60
|
|
PSUs and PGUs
|
$
|
42.48
|
|
|
$
|
34.89
|
|
Total intrinsic value of awards exercised (in millions):
|
|
|
|
||||
Options
|
$
|
43.7
|
|
|
$
|
35.3
|
|
SARs
|
$
|
17.7
|
|
|
$
|
30.6
|
|
PSARs
|
$
|
0.2
|
|
|
$
|
—
|
|
Cash received from exercise of options (in millions)
|
$
|
23.9
|
|
|
$
|
14.3
|
|
Income tax benefit related to share-based compensation (in millions)
|
$
|
20.1
|
|
|
$
|
15.7
|
|
(a)
|
The
2013
ranges shown for these assumptions exclude the awards for certain former employees of
Virgin Media
who were expected to exercise their awards immediately or soon after the
Virgin Media Acquisition
. For these awards, the assumptions used for expected life and volatility were essentially nil.
|
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, 2014
|
2,708,445
|
|
|
$
|
16.12
|
|
|
|
|
|
||
Granted
|
78,677
|
|
|
$
|
42.54
|
|
|
|
|
|
||
Cancelled
|
(34,856
|
)
|
|
$
|
21.51
|
|
|
|
|
|
||
Exercised
|
(423,750
|
)
|
|
$
|
16.38
|
|
|
|
|
|
||
Outstanding at June 30, 2014
|
2,328,516
|
|
|
$
|
16.89
|
|
|
5.7
|
|
$
|
63.6
|
|
Exercisable at June 30, 2014
|
1,393,587
|
|
|
$
|
13.50
|
|
|
4.5
|
|
$
|
42.8
|
|
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, 2014
|
7,031,369
|
|
|
$
|
14.95
|
|
|
|
|
|
||
Granted
|
157,346
|
|
|
$
|
40.86
|
|
|
|
|
|
||
Cancelled
|
(86,164
|
)
|
|
$
|
20.16
|
|
|
|
|
|
||
Exercised
|
(1,147,771
|
)
|
|
$
|
14.30
|
|
|
|
|
|
||
Outstanding at June 30, 2014
|
5,954,780
|
|
|
$
|
15.68
|
|
|
5.6
|
|
$
|
158.6
|
|
Exercisable at June 30, 2014
|
3,628,006
|
|
|
$
|
12.66
|
|
|
4.4
|
|
$
|
107.6
|
|
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, 2014
|
4,168,758
|
|
|
$
|
24.78
|
|
|
|
|
|
||
Granted
|
2,117,808
|
|
|
$
|
40.91
|
|
|
|
|
|
||
Forfeited
|
(120,843
|
)
|
|
$
|
29.49
|
|
|
|
|
|
||
Exercised
|
(217,826
|
)
|
|
$
|
20.46
|
|
|
|
|
|
||
Outstanding at June 30, 2014
|
5,947,897
|
|
|
$
|
30.57
|
|
|
5.2
|
|
$
|
81.2
|
|
Exercisable at June 30, 2014
|
2,197,247
|
|
|
$
|
19.99
|
|
|
3.6
|
|
$
|
53.2
|
|
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, 2014
|
12,437,530
|
|
|
$
|
23.87
|
|
|
|
|
|
||
Granted
|
4,235,616
|
|
|
$
|
39.09
|
|
|
|
|
|
||
Forfeited
|
(359,164
|
)
|
|
$
|
28.86
|
|
|
|
|
|
||
Exercised
|
(598,149
|
)
|
|
$
|
20.51
|
|
|
|
|
|
||
Outstanding at June 30, 2014
|
15,715,833
|
|
|
$
|
27.99
|
|
|
5.0
|
|
$
|
225.2
|
|
Exercisable at June 30, 2014
|
6,578,331
|
|
|
$
|
19.36
|
|
|
3.6
|
|
$
|
151.0
|
|
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, 2014
|
2,817,498
|
|
|
$
|
35.07
|
|
|
|
|
|
||
Granted
|
10,000
|
|
|
$
|
43.59
|
|
|
|
|
|
||
Exercised
|
(6,248
|
)
|
|
$
|
35.03
|
|
|
|
|
|
||
Outstanding at June 30, 2014
|
2,821,250
|
|
|
$
|
35.10
|
|
|
6.0
|
|
$
|
25.7
|
|
Exercisable at June 30, 2014
|
—
|
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
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, 2014
|
8,452,494
|
|
|
$
|
33.44
|
|
|
|
|
|
||
Granted
|
30,000
|
|
|
$
|
43.03
|
|
|
|
|
|
||
Exercised
|
(18,744
|
)
|
|
$
|
33.41
|
|
|
|
|
|
||
Outstanding at June 30, 2014
|
8,463,750
|
|
|
$
|
33.48
|
|
|
6.0
|
|
$
|
76.1
|
|
Exercisable at June 30, 2014
|
—
|
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
RSUs — 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, 2014
|
725,676
|
|
|
$
|
35.48
|
|
|
|
Granted
|
197,968
|
|
|
$
|
40.93
|
|
|
|
Forfeited
|
(32,834
|
)
|
|
$
|
31.65
|
|
|
|
Released from restrictions
|
(222,782
|
)
|
|
$
|
34.80
|
|
|
|
Outstanding at June 30, 2014
|
668,028
|
|
|
$
|
37.39
|
|
|
5.1
|
RSUs — 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, 2014
|
1,944,468
|
|
|
$
|
32.79
|
|
|
|
Granted
|
395,936
|
|
|
$
|
39.11
|
|
|
|
Forfeited
|
(94,513
|
)
|
|
$
|
29.61
|
|
|
|
Released from restrictions
|
(596,121
|
)
|
|
$
|
32.11
|
|
|
|
Outstanding at June 30, 2014
|
1,649,770
|
|
|
$
|
34.63
|
|
|
5.0
|
PSUs and PGUs — 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, 2014
|
924,648
|
|
|
$
|
32.05
|
|
|
|
Granted
|
1,503,128
|
|
|
$
|
42.78
|
|
|
|
Performance adjustment (a)
|
(138,668
|
)
|
|
$
|
26.17
|
|
|
|
Forfeited
|
(14,085
|
)
|
|
$
|
30.54
|
|
|
|
Released from restrictions
|
(141,499
|
)
|
|
$
|
26.50
|
|
|
|
Outstanding at June 30, 2014
|
2,133,524
|
|
|
$
|
39.14
|
|
|
2.1
|
PGUs — Class B ordinary shares
|
Number of
shares
|
|
Weighted
average
grant-date
fair value
per share
|
|
Weighted
average
remaining
contractual
term
|
|||
|
|
|
|
|
in years
|
|||
Outstanding at January 1, 2014
|
—
|
|
|
$
|
—
|
|
|
|
Granted
|
1,000,000
|
|
|
$
|
44.55
|
|
|
|
Outstanding at June 30, 2014
|
1,000,000
|
|
|
$
|
44.55
|
|
|
2.7
|
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, 2014
|
2,744,452
|
|
|
$
|
29.99
|
|
|
|
Granted
|
1,007,344
|
|
|
$
|
39.97
|
|
|
|
Performance adjustment (a)
|
(416,004
|
)
|
|
$
|
24.73
|
|
|
|
Forfeited
|
(42,255
|
)
|
|
$
|
28.65
|
|
|
|
Released from restrictions
|
(424,497
|
)
|
|
$
|
25.02
|
|
|
|
Outstanding at June 30, 2014
|
2,869,040
|
|
|
$
|
35.01
|
|
|
1.5
|
(a)
|
Represents the reduction in
PSU
s associated with the first quarter
2014
determination that
66.3%
of the
PSU
s that were granted in
2012
(the
2012 PSU
s) had been earned. Half of the earned
2012 PSU
s were released from restrictions on March 31, 2014 and, subject to forfeitures, the remainder will be released from restrictions on September 30, 2014.
|
|
|
Employee
severance
and
termination
|
|
Office
closures
|
|
Contract termination and other
|
|
Total
|
||||||||
|
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Restructuring liability as of January 1, 2014
|
|
$
|
26.6
|
|
|
$
|
14.9
|
|
|
$
|
72.0
|
|
|
$
|
113.5
|
|
Restructuring charges
|
|
24.9
|
|
|
8.5
|
|
|
90.3
|
|
|
123.7
|
|
||||
Cash paid
|
|
(33.3
|
)
|
|
(8.4
|
)
|
|
(19.6
|
)
|
|
(61.3
|
)
|
||||
Foreign currency translation adjustments and other
|
|
1.4
|
|
|
0.2
|
|
|
(4.2
|
)
|
|
(2.6
|
)
|
||||
Restructuring liability as of June 30, 2014
|
|
$
|
19.6
|
|
|
$
|
15.2
|
|
|
$
|
138.5
|
|
|
$
|
173.3
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current portion
|
|
$
|
19.5
|
|
|
$
|
13.7
|
|
|
$
|
25.6
|
|
|
$
|
58.8
|
|
Noncurrent portion
|
|
0.1
|
|
|
1.5
|
|
|
112.9
|
|
|
114.5
|
|
||||
Total
|
|
$
|
19.6
|
|
|
$
|
15.2
|
|
|
$
|
138.5
|
|
|
$
|
173.3
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
in millions
|
||||||||||||||
Amounts attributable to Liberty Global shareholders:
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations
|
$
|
(242.7
|
)
|
|
$
|
(7.0
|
)
|
|
$
|
(662.2
|
)
|
|
$
|
(9.9
|
)
|
Earnings (loss) from discontinued operation
|
(7.2
|
)
|
|
(4.6
|
)
|
|
333.5
|
|
|
(2.7
|
)
|
||||
Net loss attributable to Liberty Global shareholders
|
$
|
(249.9
|
)
|
|
$
|
(11.6
|
)
|
|
$
|
(328.7
|
)
|
|
$
|
(12.6
|
)
|
|
Payments due during:
|
|
|
||||||||||||||||||||||||||||
|
Remainder
of
2014
|
|
Year ending December 31,
|
|
|
|
|
||||||||||||||||||||||||
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
||||||||||||||||||
|
in millions
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Programming commitments
|
$
|
543.1
|
|
|
$
|
839.0
|
|
|
$
|
755.7
|
|
|
$
|
594.0
|
|
|
$
|
515.5
|
|
|
$
|
245.1
|
|
|
$
|
1.8
|
|
|
$
|
3,494.2
|
|
Network and connectivity commitments
|
206.6
|
|
|
347.3
|
|
|
286.1
|
|
|
266.1
|
|
|
141.2
|
|
|
102.1
|
|
|
1,208.8
|
|
|
2,558.2
|
|
||||||||
Purchase commitments
|
742.5
|
|
|
132.1
|
|
|
46.0
|
|
|
11.6
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
933.4
|
|
||||||||
Operating leases
|
90.3
|
|
|
158.3
|
|
|
131.9
|
|
|
107.5
|
|
|
72.1
|
|
|
58.7
|
|
|
276.1
|
|
|
894.9
|
|
||||||||
Other commitments
|
237.9
|
|
|
271.4
|
|
|
193.2
|
|
|
140.2
|
|
|
83.5
|
|
|
32.1
|
|
|
38.2
|
|
|
996.5
|
|
||||||||
Total (a)
|
$
|
1,820.4
|
|
|
$
|
1,748.1
|
|
|
$
|
1,412.9
|
|
|
$
|
1,119.4
|
|
|
$
|
813.5
|
|
|
$
|
438.0
|
|
|
$
|
1,524.9
|
|
|
$
|
8,877.2
|
|
(a)
|
The commitments reflected in this table do not reflect any liabilities that are included in our
June 30, 2014
condensed consolidated balance sheet.
|
•
|
European Operations Division
:
|
•
|
U.K.
(
Virgin Media
)
|
•
|
Germany (
Unitymedia KabelBW
)
|
•
|
Belgium (
Telenet
)
|
•
|
The Netherlands
|
•
|
Switzerland
|
•
|
Other Western Europe
|
•
|
Central and Eastern Europe
|
•
|
Chile (
VTR
)
|
|
Revenue
|
||||||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
in millions
|
||||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
1,774.6
|
|
|
$
|
401.3
|
|
|
$
|
3,502.5
|
|
|
$
|
401.3
|
|
Germany (Unitymedia KabelBW)
|
688.8
|
|
|
624.6
|
|
|
1,384.7
|
|
|
1,242.8
|
|
||||
Belgium (Telenet)
|
582.4
|
|
|
534.4
|
|
|
1,156.6
|
|
|
1,070.6
|
|
||||
The Netherlands
|
316.3
|
|
|
303.2
|
|
|
634.4
|
|
|
618.0
|
|
||||
Switzerland
|
365.3
|
|
|
323.9
|
|
|
718.1
|
|
|
649.9
|
|
||||
Other Western Europe
|
233.5
|
|
|
219.6
|
|
|
464.1
|
|
|
442.2
|
|
||||
Total Western Europe
|
3,960.9
|
|
|
2,407.0
|
|
|
7,860.4
|
|
|
4,424.8
|
|
||||
Central and Eastern Europe
|
290.7
|
|
|
281.5
|
|
|
579.9
|
|
|
569.3
|
|
||||
Central and other
|
32.6
|
|
|
31.5
|
|
|
66.5
|
|
|
63.3
|
|
||||
Total European Operations Division
|
4,284.2
|
|
|
2,720.0
|
|
|
8,506.8
|
|
|
5,057.4
|
|
||||
Chile (VTR)
|
229.8
|
|
|
252.7
|
|
|
455.1
|
|
|
503.1
|
|
||||
Corporate and other
|
94.2
|
|
|
94.5
|
|
|
187.3
|
|
|
187.5
|
|
||||
Intersegment eliminations (a)
|
(6.0
|
)
|
|
(9.4
|
)
|
|
(13.3
|
)
|
|
(18.3
|
)
|
||||
Total
|
$
|
4,602.2
|
|
|
$
|
3,057.8
|
|
|
$
|
9,135.9
|
|
|
$
|
5,729.7
|
|
(a)
|
Amounts are primarily related to transactions between our
European Operations Division
and our continuing programming operations.
|
|
Operating cash flow
|
||||||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
in millions
|
||||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
772.4
|
|
|
$
|
175.3
|
|
|
$
|
1,508.9
|
|
|
$
|
175.3
|
|
Germany (Unitymedia KabelBW)
|
431.0
|
|
|
369.4
|
|
|
860.0
|
|
|
729.4
|
|
||||
Belgium (Telenet)
|
287.9
|
|
|
269.2
|
|
|
590.0
|
|
|
516.7
|
|
||||
The Netherlands
|
185.1
|
|
|
171.1
|
|
|
368.4
|
|
|
355.9
|
|
||||
Switzerland
|
219.6
|
|
|
189.2
|
|
|
426.0
|
|
|
371.4
|
|
||||
Other Western Europe
|
114.9
|
|
|
105.6
|
|
|
228.0
|
|
|
210.4
|
|
||||
Total Western Europe
|
2,010.9
|
|
|
1,279.8
|
|
|
3,981.3
|
|
|
2,359.1
|
|
||||
Central and Eastern Europe
|
136.9
|
|
|
135.1
|
|
|
283.9
|
|
|
275.7
|
|
||||
Central and other
|
(61.6
|
)
|
|
(54.2
|
)
|
|
(121.3
|
)
|
|
(100.0
|
)
|
||||
Total European Operations Division
|
2,086.2
|
|
|
1,360.7
|
|
|
4,143.9
|
|
|
2,534.8
|
|
||||
Chile (VTR)
|
85.8
|
|
|
86.8
|
|
|
168.5
|
|
|
172.0
|
|
||||
Corporate and other
|
(27.1
|
)
|
|
(18.8
|
)
|
|
(44.0
|
)
|
|
(29.4
|
)
|
||||
Intersegment eliminations (a)
|
—
|
|
|
11.4
|
|
|
4.0
|
|
|
22.7
|
|
||||
Total
|
$
|
2,144.9
|
|
|
$
|
1,440.1
|
|
|
$
|
4,272.4
|
|
|
$
|
2,700.1
|
|
(a)
|
Amounts are related to transactions between our
European Operations Division
and the
Chellomedia Disposal Group
, which eliminations are no longer recorded following the completion of the
Chellomedia Transaction
on January 31, 2014.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Total segment operating cash flow from continuing operations
|
$
|
2,144.9
|
|
|
$
|
1,440.1
|
|
|
$
|
4,272.4
|
|
|
$
|
2,700.1
|
|
Share-based compensation expense
|
(54.4
|
)
|
|
(93.4
|
)
|
|
(109.5
|
)
|
|
(119.7
|
)
|
||||
Depreciation and amortization
|
(1,393.4
|
)
|
|
(855.8
|
)
|
|
(2,770.5
|
)
|
|
(1,540.4
|
)
|
||||
Impairment, restructuring and other operating items, net
|
(27.6
|
)
|
|
(45.8
|
)
|
|
(141.2
|
)
|
|
(66.7
|
)
|
||||
Operating income
|
669.5
|
|
|
445.1
|
|
|
1,251.2
|
|
|
973.3
|
|
||||
Interest expense
|
(641.8
|
)
|
|
(542.4
|
)
|
|
(1,295.3
|
)
|
|
(1,013.9
|
)
|
||||
Interest and dividend income
|
2.2
|
|
|
35.0
|
|
|
16.0
|
|
|
48.7
|
|
||||
Realized and unrealized gains (losses) on derivative instruments, net
|
(328.6
|
)
|
|
(3.4
|
)
|
|
(705.2
|
)
|
|
192.1
|
|
||||
Foreign currency transaction gains (losses), net
|
(36.4
|
)
|
|
91.3
|
|
|
(57.2
|
)
|
|
(45.0
|
)
|
||||
Realized and unrealized gains due to changes in fair values of certain investments, net
|
157.4
|
|
|
193.8
|
|
|
97.2
|
|
|
264.6
|
|
||||
Losses on debt modification and extinguishment, net
|
(53.0
|
)
|
|
(11.7
|
)
|
|
(73.9
|
)
|
|
(170.0
|
)
|
||||
Other expense, net
|
(3.9
|
)
|
|
(1.5
|
)
|
|
(4.4
|
)
|
|
(3.2
|
)
|
||||
Earnings (loss) from continuing operations before income taxes
|
$
|
(234.6
|
)
|
|
$
|
206.2
|
|
|
$
|
(771.6
|
)
|
|
$
|
246.6
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
in millions
|
||||||||||||||
Subscription revenue (a):
|
|
|
|
|
|
|
|
||||||||
Video
|
$
|
1,662.2
|
|
|
$
|
1,274.8
|
|
|
$
|
3,302.7
|
|
|
$
|
2,487.5
|
|
Broadband internet
|
1,188.4
|
|
|
765.2
|
|
|
2,330.1
|
|
|
1,424.5
|
|
||||
Fixed-line telephony
|
829.7
|
|
|
518.7
|
|
|
1,652.8
|
|
|
928.1
|
|
||||
Cable subscription revenue
|
3,680.3
|
|
|
2,558.7
|
|
|
7,285.6
|
|
|
4,840.1
|
|
||||
Mobile subscription revenue (b)
|
273.1
|
|
|
110.4
|
|
|
530.4
|
|
|
172.5
|
|
||||
Total subscription revenue
|
3,953.4
|
|
|
2,669.1
|
|
|
7,816.0
|
|
|
5,012.6
|
|
||||
B2B revenue (c)
|
377.5
|
|
|
168.9
|
|
|
750.0
|
|
|
286.2
|
|
||||
Other revenue (b) (d)
|
271.3
|
|
|
219.8
|
|
|
569.9
|
|
|
430.9
|
|
||||
Total revenue
|
$
|
4,602.2
|
|
|
$
|
3,057.8
|
|
|
$
|
9,135.9
|
|
|
$
|
5,729.7
|
|
(a)
|
Subscription revenue includes amounts received from subscribers for ongoing services, excluding installation fees and late fees. 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. As a result, changes in the standalone pricing of our cable and mobile products or the composition of bundles can contribute to changes in our product revenue categories from period to period.
|
(b)
|
Mobile subscription revenue excludes mobile interconnect revenue of
$63.0 million
and
$33.5 million
during the
three months ended June 30, 2014
and
2013
, respectively, and
$123.8 million
and
$56.7 million
during the
six months ended June 30, 2014
and
2013
, respectively. Mobile interconnect revenue and revenue from mobile handset sales are included in other revenue.
|
(c)
|
B2B
revenue includes revenue from business broadband internet, video, voice, wireless and data services offered to medium to large enterprises and, on a wholesale basis, to other operators. We also provide services to certain small office and home office (
SOHO
) subscribers.
SOHO
subscribers pay a premium price to receive enhanced service levels along with video, broadband internet or fixed-line telephony services that are the same or similar to the mass marketed products offered to our residential subscribers. Revenue from
SOHO
subscribers, which aggregated
$49.7 million
and
$35.3 million
during the
three months ended June 30, 2014
and
2013
, respectively, and
$96.2 million
and
$68.1 million
during the
six months ended June 30, 2014
and
2013
, respectively, is included in cable subscription revenue.
|
(d)
|
Other revenue includes, among other items, interconnect, carriage fee and installation revenue.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
in millions
|
||||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
||||||||
U.K.
|
$
|
1,774.6
|
|
|
$
|
401.3
|
|
|
$
|
3,502.5
|
|
|
$
|
401.3
|
|
Germany
|
688.8
|
|
|
624.6
|
|
|
1,384.7
|
|
|
1,242.8
|
|
||||
Belgium
|
582.4
|
|
|
534.4
|
|
|
1,156.6
|
|
|
1,070.6
|
|
||||
Switzerland
|
365.3
|
|
|
323.9
|
|
|
718.1
|
|
|
649.9
|
|
||||
The Netherlands
|
316.3
|
|
|
303.2
|
|
|
634.4
|
|
|
618.0
|
|
||||
Poland
|
121.2
|
|
|
113.2
|
|
|
241.7
|
|
|
229.7
|
|
||||
Ireland
|
122.1
|
|
|
112.3
|
|
|
241.7
|
|
|
226.7
|
|
||||
Austria
|
111.4
|
|
|
107.3
|
|
|
222.4
|
|
|
215.5
|
|
||||
Hungary
|
65.4
|
|
|
63.8
|
|
|
129.4
|
|
|
127.2
|
|
||||
The Czech Republic
|
50.5
|
|
|
54.6
|
|
|
102.0
|
|
|
112.1
|
|
||||
Romania
|
37.3
|
|
|
34.3
|
|
|
74.2
|
|
|
68.9
|
|
||||
Slovakia
|
16.3
|
|
|
15.6
|
|
|
32.6
|
|
|
31.4
|
|
||||
Other (a)
|
32.6
|
|
|
31.5
|
|
|
66.5
|
|
|
63.3
|
|
||||
Total European Operations Division
|
4,284.2
|
|
|
2,720.0
|
|
|
8,506.8
|
|
|
5,057.4
|
|
||||
Chile
|
229.8
|
|
|
252.7
|
|
|
455.1
|
|
|
503.1
|
|
||||
Puerto Rico
|
76.6
|
|
|
74.2
|
|
|
151.3
|
|
|
147.2
|
|
||||
Other, including intersegment eliminations
|
11.6
|
|
|
10.9
|
|
|
22.7
|
|
|
22.0
|
|
||||
Total
|
$
|
4,602.2
|
|
|
$
|
3,057.8
|
|
|
$
|
9,135.9
|
|
|
$
|
5,729.7
|
|
(a)
|
Primarily represents revenue of
UPC DTH
from customers located in the Czech Republic, Hungary, Romania and Slovakia.
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Forward-Looking Statements.
This section provides a description of certain 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, 2014
and
2013
.
|
•
|
Material Changes in Financial Condition.
This section provides an analysis of our corporate and subsidiary liquidity, condensed consolidated statements of cash flows 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 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 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 business 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;
|
•
|
our ability to obtain regulatory approval and satisfy other conditions necessary to close acquisitions, including the pending acquisition of
Ziggo
, and dispositions, and the impact of conditions imposed by competition and other regulatory authorities in connection with acquisitions, including the impact of the present and any future conditions imposed in connection with the acquisition of
KBW
on our operations in Germany;
|
•
|
our ability to successfully acquire new businesses and, if acquired, to integrate, realize anticipated efficiencies from, and implement our business plan with respect to, the businesses we have or may acquire, such as the
Virgin Media Acquisition
and the pending acquisition of
Ziggo
;
|
•
|
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 and the costs associated with such programming, including retransmission and copyright fees payable to public and private broadcasters;
|
•
|
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;
|
•
|
problems we may discover post-closing with the operations, including the internal controls and financial reporting process, of businesses we acquire;
|
•
|
leakage of sensitive customer data;
|
•
|
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 overall revenue and subscription revenue from broadband internet services in the Netherlands during the
second
quarter of
2014
, as compared to the first quarter of
2014
;
|
(ii)
|
organic declines in subscription revenue from (a) broadband internet services in the Netherlands and (b) fixed-line telephony services in Belgium and Chile during the
second
quarter of
2014
, as compared to the
second
quarter of
2013
;
|
(iii)
|
organic declines in video
RGU
s in most of our markets during the
second
quarter of
2014
, as net declines in our analog cable
RGU
s generally 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 the Netherlands and (b) fixed-line telephony services in most of our markets during the
second
quarter of
2014
, as compared to the
second
quarter of
2013
; and
|
(v)
|
organic declines in overall
ARPU
in the Netherlands and many of our other markets during the
second
quarter of
2014
, as compared to the
second
quarter of
2013
.
|
|
Three months ended June 30,
|
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|
%
|
||||||||
|
in millions
|
|
|
|
|
||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
1,774.6
|
|
|
$
|
401.3
|
|
|
$
|
1,373.3
|
|
|
N.M.
|
|
|
N.M.
|
|
Germany (Unitymedia KabelBW)
|
688.8
|
|
|
624.6
|
|
|
64.2
|
|
|
10.3
|
|
|
5.1
|
|
|||
Belgium (Telenet)
|
582.4
|
|
|
534.4
|
|
|
48.0
|
|
|
9.0
|
|
|
3.9
|
|
|||
The Netherlands
|
316.3
|
|
|
303.2
|
|
|
13.1
|
|
|
4.3
|
|
|
(0.6
|
)
|
|||
Switzerland
|
365.3
|
|
|
323.9
|
|
|
41.4
|
|
|
12.8
|
|
|
6.3
|
|
|||
Other Western Europe
|
233.5
|
|
|
219.6
|
|
|
13.9
|
|
|
6.3
|
|
|
1.1
|
|
|||
Total Western Europe
|
3,960.9
|
|
|
2,407.0
|
|
|
1,553.9
|
|
|
64.6
|
|
|
5.0
|
|
|||
Central and Eastern Europe
|
290.7
|
|
|
281.5
|
|
|
9.2
|
|
|
3.3
|
|
|
0.1
|
|
|||
Central and other
|
32.6
|
|
|
31.5
|
|
|
1.1
|
|
|
3.5
|
|
|
(1.0
|
)
|
|||
Total European Operations Division
|
4,284.2
|
|
|
2,720.0
|
|
|
1,564.2
|
|
|
57.5
|
|
|
4.4
|
|
|||
Chile (VTR)
|
229.8
|
|
|
252.7
|
|
|
(22.9
|
)
|
|
(9.1
|
)
|
|
4.0
|
|
|||
Corporate and other
|
94.2
|
|
|
94.5
|
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(1.5
|
)
|
|||
Intersegment eliminations
|
(6.0
|
)
|
|
(9.4
|
)
|
|
3.4
|
|
|
N.M.
|
|
|
N.M.
|
|
|||
Total (a)
|
$
|
4,602.2
|
|
|
$
|
3,057.8
|
|
|
$
|
1,544.4
|
|
|
50.5
|
|
|
4.3
|
|
|
Six months ended June 30,
|
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|
%
|
||||||||
|
in millions
|
|
|
|
|
||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
3,502.5
|
|
|
$
|
401.3
|
|
|
$
|
3,101.2
|
|
|
N.M.
|
|
|
N.M.
|
|
Germany (Unitymedia KabelBW)
|
1,384.7
|
|
|
1,242.8
|
|
|
141.9
|
|
|
11.4
|
|
|
6.7
|
|
|||
Belgium (Telenet)
|
1,156.6
|
|
|
1,070.6
|
|
|
86.0
|
|
|
8.0
|
|
|
3.5
|
|
|||
The Netherlands
|
634.4
|
|
|
618.0
|
|
|
16.4
|
|
|
2.7
|
|
|
(1.6
|
)
|
|||
Switzerland
|
718.1
|
|
|
649.9
|
|
|
68.2
|
|
|
10.5
|
|
|
4.9
|
|
|||
Other Western Europe
|
464.1
|
|
|
442.2
|
|
|
21.9
|
|
|
5.0
|
|
|
0.3
|
|
|||
Total Western Europe
|
7,860.4
|
|
|
4,424.8
|
|
|
3,435.6
|
|
|
77.6
|
|
|
5.0
|
|
|||
Central and Eastern Europe
|
579.9
|
|
|
569.3
|
|
|
10.6
|
|
|
1.9
|
|
|
(0.2
|
)
|
|||
Central and other
|
66.5
|
|
|
63.3
|
|
|
3.2
|
|
|
5.1
|
|
|
1.3
|
|
|||
Total European Operations Division
|
8,506.8
|
|
|
5,057.4
|
|
|
3,449.4
|
|
|
68.2
|
|
|
4.4
|
|
|||
Chile (VTR)
|
455.1
|
|
|
503.1
|
|
|
(48.0
|
)
|
|
(9.5
|
)
|
|
4.6
|
|
|||
Corporate and other
|
187.3
|
|
|
187.5
|
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(1.0
|
)
|
|||
Intersegment eliminations
|
(13.3
|
)
|
|
(18.3
|
)
|
|
5.0
|
|
|
N.M.
|
|
|
N.M.
|
|
|||
Total (a)
|
$
|
9,135.9
|
|
|
$
|
5,729.7
|
|
|
$
|
3,406.2
|
|
|
59.4
|
|
|
4.4
|
|
(a)
|
As further described under
Material Changes in Results of Operations
above, our organic revenue growth rates are impacted by the organic growth of
Virgin Media
. Excluding the impact of
Virgin Media
, the organic increase in our revenue would have been 3.2% during each of the
three and six months ended June 30, 2014
, as compared to the corresponding prior year periods. For additional information, see
Discussion and Analysis of our Consolidated Results - Revenue
.
|
|
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 cable subscription revenue due to change in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (c)
|
$
|
25.8
|
|
|
$
|
—
|
|
|
$
|
25.8
|
|
|
$
|
53.1
|
|
|
$
|
—
|
|
|
$
|
53.1
|
|
ARPU (d)
|
7.6
|
|
|
—
|
|
|
7.6
|
|
|
16.4
|
|
|
—
|
|
|
16.4
|
|
||||||
Total increase in cable subscription revenue
|
33.4
|
|
|
—
|
|
|
33.4
|
|
|
69.5
|
|
|
—
|
|
|
69.5
|
|
||||||
Increase in mobile subscription revenue (e)
|
1.3
|
|
|
—
|
|
|
1.3
|
|
|
2.8
|
|
|
—
|
|
|
2.8
|
|
||||||
Total increase in subscription revenue
|
34.7
|
|
|
—
|
|
|
34.7
|
|
|
72.3
|
|
|
—
|
|
|
72.3
|
|
||||||
Decrease in B2B revenue
|
—
|
|
|
(0.9
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
(0.4
|
)
|
||||||
Increase (decrease) in other non-subscription revenue (f)
|
—
|
|
|
(2.1
|
)
|
|
(2.1
|
)
|
|
—
|
|
|
11.8
|
|
|
11.8
|
|
||||||
Total organic increase (decrease)
|
34.7
|
|
|
(3.0
|
)
|
|
31.7
|
|
|
72.3
|
|
|
11.4
|
|
|
83.7
|
|
||||||
Impact of FX
|
29.3
|
|
|
3.2
|
|
|
32.5
|
|
|
52.1
|
|
|
6.1
|
|
|
58.2
|
|
||||||
Total
|
$
|
64.0
|
|
|
$
|
0.2
|
|
|
$
|
64.2
|
|
|
$
|
124.4
|
|
|
$
|
17.5
|
|
|
$
|
141.9
|
|
(a)
|
Unitymedia KabelBW
’s subscription revenue includes revenue from multi-year bulk agreements with landlords or 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
Unitymedia KabelBW
’s video subscribers.
Unitymedia KabelBW
’s bulk agreements are, to a significant extent, medium- and long-term contracts. As of
June 30, 2014
, bulk agreements covering approximately 37% of the video subscribers that
Unitymedia KabelBW
serves through these agreements expire by the end of 2015 or are terminable on 30-days notice. During the three months ended
June 30, 2014
,
Unitymedia KabelBW
’s 20 largest bulk agreement accounts generated approximately 7%
of its total revenue (including estimated amounts billed directly to the building occupants for premium cable, broadband internet and fixed-line telephony services). No assurance can be given that
Unitymedia KabelBW
’s bulk agreements will be renewed or extended on financially equivalent terms or at all, particularly in light of the commitments we made to the
FCO
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
Unitymedia KabelBW
’s existing access agreements (the
Remedy HA Agreements
). The total number of dwelling units covered by the
Remedy HA Agreements
was approximately
340,000
as of December 15, 2011. At
June 30, 2014
, approximately 14% 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) as of
June 30, 2014
accounted for less than 1% of
Unitymedia KabelBW
’s total revenue during the three months ended
June 30, 2014
. During the third quarter of 2013, the Düsseldorf Court of Appeal decided to overturn the
FCO
’s decision to clear our acquisition of
KBW
. For additional information, see note
14
to our condensed consolidated financial statements.
|
(b)
|
Unitymedia KabelBW
’s other non-subscription revenue includes fees received for the carriage of certain channels included in
Unitymedia KabelBW
’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 2014 through 2018. The aggregate amount of revenue related to these carriage contracts represented approximately 5%
of
Unitymedia KabelBW
’s total revenue during the three months ended
June 30, 2014
. No assurance can be given that these contracts will be renewed or extended on financially equivalent terms, or at all. In 2012, public broadcasters sent us notices purporting to terminate their carriage fee arrangements effective December 31, 2012. We have rejected these termination notices and we are seeking to negotiate
|
(c)
|
The increases in
Unitymedia KabelBW
’s cable subscription revenue related to changes in the average numbers of
RGU
s are attributable to increases in the average numbers of broadband internet, fixed-line telephony and digital cable
RGU
s that were only partially offset by declines in the average numbers of analog cable
RGU
s.
|
(d)
|
The increases in
Unitymedia KabelBW
’s cable subscription revenue related to changes in
ARPU
are due to (i) improvements in
RGU
mix attributable to higher proportions of broadband internet and fixed-line telephony
RGU
s and
(ii) net increases resulting primarily from the following factors: (a) higher
ARPU
from broadband internet and digital cable services, (b) lower
ARPU
from fixed-line telephony services due to the net impact of (1) decreases in
ARPU
associated with lower fixed-line telephony call volumes for customers on usage-based calling plans and (2) increases in
ARPU
associated with the migration of customers to fixed-rate calling plans and related value-added services and (c) lower
ARPU
from analog cable services primarily due to lower negotiated rates for certain bulk agreements and higher proportions of customers receiving discounted analog cable services through these agreements.
|
(e)
|
The increases in
Unitymedia KabelBW
’s mobile subscription revenue are primarily due to the net effect of (i) increases in the average numbers of mobile subscribers and (ii) lower
ARPU
due to the impact of increases in the proportions of subscribers receiving lower-priced tiers of mobile services.
|
(f)
|
The changes in
Unitymedia KabelBW
’s other non-subscription revenue are primarily attributable to the net effect of (i) during the six-month period, an $11.4 million increase in network usage revenue related to the settlement of prior year amounts during the first quarter of 2014, (ii) decreases in interconnect revenue of $4.3 million and $8.7 million, respectively, substantially all of which is attributable to lower fixed-line termination rates, (iii) increases in carriage fee revenue of $3.4 million and $6.1 million, respectively, and (iv) an increase (decrease) in installation revenue of ($0.6 million) and $2.1 million, respectively.
|
|
Three-month period
|
|
Six-month period
|
||||||||||||||||||||
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Increase in cable subscription revenue due to change in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (a)
|
$
|
13.6
|
|
|
$
|
—
|
|
|
$
|
13.6
|
|
|
$
|
26.9
|
|
|
$
|
—
|
|
|
$
|
26.9
|
|
ARPU (b)
|
6.4
|
|
|
—
|
|
|
6.4
|
|
|
9.2
|
|
|
—
|
|
|
9.2
|
|
||||||
Total increase in cable subscription revenue
|
20.0
|
|
|
—
|
|
|
20.0
|
|
|
36.1
|
|
|
—
|
|
|
36.1
|
|
||||||
Increase (decrease) in mobile subscription revenue (c)
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
3.4
|
|
|
—
|
|
|
3.4
|
|
||||||
Total increase in subscription revenue
|
19.7
|
|
|
—
|
|
|
19.7
|
|
|
39.5
|
|
|
—
|
|
|
39.5
|
|
||||||
Increase in B2B revenue (d)
|
—
|
|
|
2.7
|
|
|
2.7
|
|
|
—
|
|
|
3.9
|
|
|
3.9
|
|
||||||
Decrease in other non-subscription revenue (e)
|
—
|
|
|
(1.6
|
)
|
|
(1.6
|
)
|
|
—
|
|
|
(5.6
|
)
|
|
(5.6
|
)
|
||||||
Total organic increase (decrease)
|
19.7
|
|
|
1.1
|
|
|
20.8
|
|
|
39.5
|
|
|
(1.7
|
)
|
|
37.8
|
|
||||||
Impact of FX
|
23.2
|
|
|
4.0
|
|
|
27.2
|
|
|
41.3
|
|
|
6.9
|
|
|
48.2
|
|
||||||
Total
|
$
|
42.9
|
|
|
$
|
5.1
|
|
|
$
|
48.0
|
|
|
$
|
80.8
|
|
|
$
|
5.2
|
|
|
$
|
86.0
|
|
(a)
|
The increases in
Telenet
’s cable subscription revenue related to changes in the average numbers of
RGU
s are attributable to increases in the average numbers of fixed-line telephony, digital cable and broadband internet
RGU
s that were only partially offset by declines in the average numbers of analog cable
RGU
s.
|
(b)
|
The increases in
Telenet
’s cable subscription revenue related to changes in
ARPU
are due to (i) improvements in
RGU
mix, attributable to higher proportions of broadband internet, digital cable and fixed-line telephony
RGU
s, and (ii) net increases resulting primarily from the following factors:
(a) higher
ARPU
due to (1) higher-priced tiers of services in our bundles and (2) February 2014 price increases for certain existing analog and digital cable, broadband internet and fixed-line telephony services, (b) lower
ARPU
due to the impacts of higher bundling and promotional discounts, (c) lower
ARPU
from fixed-line telephony services due to (I) lower fixed-line telephony call volumes for customers on usage-based plans and (II) higher proportions of customers migrating to fixed-rate calling plans and (d) lower
ARPU
due to the impact of increases in the proportions of subscribers receiving lower-priced tiers of broadband internet services.
|
(c)
|
The changes in
Telenet
’s mobile subscription revenue are due primarily to the net effect of (i) increases in the average numbers of mobile subscribers and (ii) lower
ARPU
due to (a) the impact of increases in the proportion of subscribers receiving lower-priced tiers of mobile services and (b) reductions in billable usage.
|
(d)
|
The increases in
Telenet
’s
B2B
revenue are due primarily to higher revenue from (i) mobile services on a wholesale basis and (ii) data services.
|
(e)
|
The decreases in
Telenet
’s other non-subscription revenue are primarily due to the net effect of (i) decreases in mobile handset sales of $5.3 million and $12.2 million, respectively, and (ii) increases in interconnect revenue of $2.9 million and $6.7 million, respectively, primarily due to the net effect of (a) growth in mobile customers and (b) lower data usage. The decreases in
Telenet
’s mobile handset sales, which typically generate relatively low margins, are primarily due to decreases 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 cable subscription revenue due to change in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (a)
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
1.3
|
|
ARPU (b)
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
(7.3
|
)
|
|
—
|
|
|
(7.3
|
)
|
||||||
Total increase (decrease) in cable subscription revenue
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|
(6.0
|
)
|
|
—
|
|
|
(6.0
|
)
|
||||||
Decrease in B2B revenue
|
—
|
|
|
(0.8
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
(1.3
|
)
|
|
(1.3
|
)
|
||||||
Decrease in other non-subscription revenue (c)
|
—
|
|
|
(1.9
|
)
|
|
(1.9
|
)
|
|
—
|
|
|
(2.8
|
)
|
|
(2.8
|
)
|
||||||
Total organic increase (decrease)
|
0.9
|
|
|
(2.7
|
)
|
|
(1.8
|
)
|
|
(6.0
|
)
|
|
(4.1
|
)
|
|
(10.1
|
)
|
||||||
Impact of FX
|
13.6
|
|
|
1.3
|
|
|
14.9
|
|
|
24.2
|
|
|
2.3
|
|
|
26.5
|
|
||||||
Total
|
$
|
14.5
|
|
|
$
|
(1.4
|
)
|
|
$
|
13.1
|
|
|
$
|
18.2
|
|
|
$
|
(1.8
|
)
|
|
$
|
16.4
|
|
(a)
|
The increases in the Netherlands’ cable subscription revenue related to changes in the average numbers of
RGU
s are attributable to increases in the average numbers of broadband internet, fixed-line telephony and digital cable
RGU
s that were largely offset by declines in the average numbers of analog cable
RGU
s.
|
(b)
|
The decreases in the Netherlands’ cable subscription revenue related to changes in
ARPU
are due to the net effect of (i) decreases resulting primarily from the following factors: (a) lower
ARPU
due to the impact of increases in the proportions of subscribers receiving lower-priced tiers of broadband internet and fixed-line telephony services, (b) higher
ARPU
from digital cable services, (c) lower
ARPU
due to decreases in fixed-line telephony call volumes and (d) higher
ARPU
due to the impacts of lower bundling discounts and
(ii) improvements in
RGU
mix, primarily attributable to higher proportions of digital cable
RGU
s.
|
(c)
|
The decreases in the Netherlands’ other non-subscription revenue are primarily due to decreases in installation revenue.
|
|
Three-month period
|
|
Six-month period
|
||||||||||||||||||||
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Increase in cable subscription revenue due to change in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (a)
|
$
|
7.5
|
|
|
$
|
—
|
|
|
$
|
7.5
|
|
|
$
|
15.0
|
|
|
$
|
—
|
|
|
$
|
15.0
|
|
ARPU (b)
|
9.4
|
|
|
—
|
|
|
9.4
|
|
|
15.5
|
|
|
—
|
|
|
15.5
|
|
||||||
Total increase in cable subscription revenue
|
16.9
|
|
|
—
|
|
|
16.9
|
|
|
30.5
|
|
|
—
|
|
|
30.5
|
|
||||||
Increase in B2B revenue (c)
|
—
|
|
|
2.5
|
|
|
2.5
|
|
|
—
|
|
|
3.9
|
|
|
3.9
|
|
||||||
Increase (decrease) in other non-subscription revenue (d)
|
—
|
|
|
0.9
|
|
|
0.9
|
|
|
—
|
|
|
(2.3
|
)
|
|
(2.3
|
)
|
||||||
Total organic increase
|
16.9
|
|
|
3.4
|
|
|
20.3
|
|
|
30.5
|
|
|
1.6
|
|
|
32.1
|
|
||||||
Impact of acquisitions
|
1.3
|
|
|
(0.7
|
)
|
|
0.6
|
|
|
2.5
|
|
|
(1.3
|
)
|
|
1.2
|
|
||||||
Impact of FX
|
17.8
|
|
|
2.7
|
|
|
20.5
|
|
|
30.1
|
|
|
4.8
|
|
|
34.9
|
|
||||||
Total
|
$
|
36.0
|
|
|
$
|
5.4
|
|
|
$
|
41.4
|
|
|
$
|
63.1
|
|
|
$
|
5.1
|
|
|
$
|
68.2
|
|
(a)
|
The increases in Switzerland’s cable subscription revenue related to changes in the average numbers of
RGU
s are attributable to increases in the average numbers of broadband internet, digital cable and fixed-line telephony
RGU
s that were only partially offset by declines in the average numbers of analog cable
RGU
s.
|
(b)
|
The increases in Switzerland’s cable subscription revenue related to changes in
ARPU
are due to (i) improvements in
RGU
mix, primarily attributable to higher proportions of broadband internet and digital cable
RGU
s, and
(ii) net increases resulting primarily from the following factors: (a) higher
ARPU
due to the inclusion of higher-priced tiers of broadband internet, video and telephony services in our promotional bundles, including the impacts of price increases in January 2014 and April 2014, (b) lower
ARPU
due to the impacts of bundling discounts, (c) lower
ARPU
due to decreases in fixed-line telephony call volumes and (d) higher
ARPU
from incremental digital cable services.
|
(c)
|
The increases in Switzerland’s
B2B
revenue are due primarily to higher revenue from broadband internet services, voice services and data services.
|
(d)
|
The decrease in Switzerland’s other non-subscription revenue during the six-month period is largely attributable to a decrease in installation revenue. The remaining net decrease during the six-month period and the net increase during the three-month period are attributable to individually insignificant changes in other 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 (decrease) in cable subscription revenue due to change in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (a)
|
$
|
9.6
|
|
|
$
|
—
|
|
|
$
|
9.6
|
|
|
$
|
19.4
|
|
|
$
|
—
|
|
|
$
|
19.4
|
|
ARPU (b)
|
(2.9
|
)
|
|
—
|
|
|
(2.9
|
)
|
|
(8.8
|
)
|
|
—
|
|
|
(8.8
|
)
|
||||||
Total increase in cable subscription revenue
|
6.7
|
|
|
—
|
|
|
6.7
|
|
|
10.6
|
|
|
—
|
|
|
10.6
|
|
||||||
Decrease in B2B revenue (c)
|
—
|
|
|
(1.8
|
)
|
|
(1.8
|
)
|
|
—
|
|
|
(4.1
|
)
|
|
(4.1
|
)
|
||||||
Decrease in other non-subscription revenue (d)
|
—
|
|
|
(2.6
|
)
|
|
(2.6
|
)
|
|
—
|
|
|
(5.2
|
)
|
|
(5.2
|
)
|
||||||
Organic increase (decrease)
|
6.7
|
|
|
(4.4
|
)
|
|
2.3
|
|
|
10.6
|
|
|
(9.3
|
)
|
|
1.3
|
|
||||||
Impact of an acquisition
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
||||||
Impact of FX
|
8.8
|
|
|
2.3
|
|
|
11.1
|
|
|
16.6
|
|
|
3.1
|
|
|
19.7
|
|
||||||
Total
|
$
|
16.0
|
|
|
$
|
(2.1
|
)
|
|
$
|
13.9
|
|
|
$
|
28.1
|
|
|
$
|
(6.2
|
)
|
|
$
|
21.9
|
|
(a)
|
The increases in Other Western Europe’s cable subscription revenue related to changes in the average numbers of
RGU
s are attributable to increases in the average numbers of fixed-line telephony, broadband internet and, to a lesser extent, 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
MMDS
video
RGU
s in Ireland.
|
(b)
|
The decreases in Other Western Europe’s cable subscription revenue related to changes in
ARPU
are attributable to decreases in
ARPU
in each of Ireland and Austria.
Other Western Europe’s overall
ARPU
was impacted by adverse changes in
RGU
mix, primarily attributable to lower proportions of fixed-line telephony
RGU
s in each of Ireland and Austria and digital cable
RGU
s in Ireland.
In addition to the adverse impact of
RGU
mix, Ireland's
ARPU
was positively impacted during the three-month period and negatively impacted during the six-month period by the net effect of (i) higher
ARPU
due to the inclusion of higher-priced tiers of broadband internet, video and fixed-line telephony services in our promotional bundles, including the impact of a price increase in March 2014, (ii) lower
ARPU
due to the impacts of bundling discounts and (iii) lower
ARPU
due to decreases in fixed-line telephony call volumes. In addition to the adverse impact of
RGU
mix, Austria’s
ARPU
was negatively impacted by the net effect of (a) a January 2014 price increase for video services, (b) lower
ARPU
due to the impacts of bundling discounts and (c) lower
ARPU
due to decreases in fixed-line telephony call volumes.
|
(c)
|
The decreases in Other Western Europe’s
B2B
revenue are due primarily to lower revenue from voice services in each of Ireland and Austria.
|
(d)
|
The decreases in Other Western Europe’s other non-subscription revenue are due largely to (i) decreases in installation revenue in Ireland and (ii) decreases in interconnect revenue attributable to lower fixed-line termination rates in Austria.
|
|
Three-month period
|
|
Six-month period
|
||||||||||||||||||||
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Increase (decrease) in cable subscription revenue due to change in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (a)
|
$
|
6.0
|
|
|
$
|
—
|
|
|
$
|
6.0
|
|
|
$
|
11.6
|
|
|
$
|
—
|
|
|
$
|
11.6
|
|
ARPU (b)
|
(4.5
|
)
|
|
—
|
|
|
(4.5
|
)
|
|
(11.4
|
)
|
|
—
|
|
|
(11.4
|
)
|
||||||
Total increase in cable subscription revenue
|
1.5
|
|
|
—
|
|
|
1.5
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||||
Increase in B2B revenue
|
—
|
|
|
1.2
|
|
|
1.2
|
|
|
—
|
|
|
2.0
|
|
|
2.0
|
|
||||||
Decrease in other non-subscription revenue (c)
|
—
|
|
|
(2.5
|
)
|
|
(2.5
|
)
|
|
—
|
|
|
(3.4
|
)
|
|
(3.4
|
)
|
||||||
Total organic increase (decrease)
|
1.5
|
|
|
(1.3
|
)
|
|
0.2
|
|
|
0.2
|
|
|
(1.4
|
)
|
|
(1.2
|
)
|
||||||
Impact of FX
|
9.1
|
|
|
(0.1
|
)
|
|
9.0
|
|
|
11.6
|
|
|
0.2
|
|
|
11.8
|
|
||||||
Total
|
$
|
10.6
|
|
|
$
|
(1.4
|
)
|
|
$
|
9.2
|
|
|
$
|
11.8
|
|
|
$
|
(1.2
|
)
|
|
$
|
10.6
|
|
(a)
|
The increases in Central and Eastern Europe’s cable subscription revenue related to changes in the average numbers of
RGU
s are primarily attributable to increases in the average numbers of digital cable, broadband internet and fixed-line telephony
RGU
s in Poland, Romania, Hungary and Slovakia that were only partially offset by (i) declines in the average numbers of analog cable
RGU
s in Poland, Romania, Hungary and Slovakia and (ii) declines in the average numbers of digital cable and fixed-line telephony
RGU
s in the Czech Republic.
|
(b)
|
The decreases in Central and Eastern Europe’s cable subscription revenue related to changes in
ARPU
are due to the net effect of (i) decreases resulting primarily from the following factors: (a) lower
ARPU
due to the impacts of higher bundling discounts, (b) lower
ARPU
from fixed-line telephony services, primarily due to (1) increases in the proportions of subscribers receiving lower-priced calling plans and (2) decreases in call volumes for customers on usage-based calling plans, and (c) higher
ARPU
due to the inclusion of higher-priced tiers of broadband internet and digital cable services in our promotional bundles and (ii) improvements in
RGU
mix, primarily attributable to higher proportions of digital cable and broadband internet
RGU
s.
|
(c)
|
The decreases in Central and Eastern Europe’s non-subscription revenue are due to (i) decreases in interconnect revenue, largely in Poland as a result of lower fixed-line telephony termination rates, and (ii) net decreases resulting from individually insignificant changes in other 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 cable subscription revenue due to change in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (a)
|
$
|
10.0
|
|
|
$
|
—
|
|
|
$
|
10.0
|
|
|
$
|
21.5
|
|
|
$
|
—
|
|
|
$
|
21.5
|
|
ARPU (b)
|
1.4
|
|
|
—
|
|
|
1.4
|
|
|
6.6
|
|
|
—
|
|
|
6.6
|
|
||||||
Total increase in cable subscription revenue
|
11.4
|
|
|
—
|
|
|
11.4
|
|
|
28.1
|
|
|
—
|
|
|
28.1
|
|
||||||
Increase in mobile subscription revenue
|
1.3
|
|
|
—
|
|
|
1.3
|
|
|
1.0
|
|
|
—
|
|
|
1.0
|
|
||||||
Total increase in subscription revenue
|
12.7
|
|
|
—
|
|
|
12.7
|
|
|
29.1
|
|
|
—
|
|
|
29.1
|
|
||||||
Decrease in non-subscription revenue (c)
|
—
|
|
|
(2.6
|
)
|
|
(2.6
|
)
|
|
—
|
|
|
(6.2
|
)
|
|
(6.2
|
)
|
||||||
Total organic increase (decrease)
|
12.7
|
|
|
(2.6
|
)
|
|
10.1
|
|
|
29.1
|
|
|
(6.2
|
)
|
|
22.9
|
|
||||||
Impact of FX
|
(30.9
|
)
|
|
(2.1
|
)
|
|
(33.0
|
)
|
|
(66.6
|
)
|
|
(4.3
|
)
|
|
(70.9
|
)
|
||||||
Total
|
$
|
(18.2
|
)
|
|
$
|
(4.7
|
)
|
|
$
|
(22.9
|
)
|
|
$
|
(37.5
|
)
|
|
$
|
(10.5
|
)
|
|
$
|
(48.0
|
)
|
(a)
|
The increases in
VTR
’s cable subscription revenue related to changes in the average numbers of
RGU
s are attributable to increases in the average numbers of digital cable, broadband internet and fixed-line telephony
RGU
s that were only partially offset by declines in the average numbers of analog cable
RGU
s.
|
(b)
|
The increases in
VTR
’s cable subscription revenue related to a change in
ARPU
are due to (i) net increases resulting from the following factors: (a) lower
ARPU
due to the impacts of higher bundling and promotional discounts, (b) higher
ARPU
due to the inclusion of higher-priced tiers of broadband internet and fixed-line telephony services in our promotional bundles, (c) higher
ARPU
due to semi-annual inflation and other price adjustments for video, broadband internet and fixed-line telephony services, (d) higher
ARPU
from incremental digital cable services and (e) lower
ARPU
due to decreases in fixed-line telephony call volumes for customers on usage-based plans and (ii) improvements in
RGU
mix, primarily
attributable to higher proportions of digital cable, fixed-line telephony and broadband internet
RGU
s.
|
(c)
|
The decreases in
VTR
’s non-subscription revenue are attributable to (i) decreases in interconnect revenue, primarily associated with a January 2014 decline in mobile terminations rates, and (ii) net decreases resulting from individually insignificant changes in other non-subscription revenue categories.
|
|
Three months ended June 30,
|
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|
%
|
||||||||
|
in millions
|
|
|
|
|
||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
763.1
|
|
|
$
|
174.4
|
|
|
$
|
588.7
|
|
|
N.M.
|
|
|
N.M.
|
|
Germany (Unitymedia KabelBW)
|
158.3
|
|
|
157.7
|
|
|
0.6
|
|
|
0.4
|
|
|
(4.4
|
)
|
|||
Belgium (Telenet)
|
228.6
|
|
|
201.6
|
|
|
27.0
|
|
|
13.4
|
|
|
8.0
|
|
|||
The Netherlands
|
90.5
|
|
|
94.0
|
|
|
(3.5
|
)
|
|
(3.7
|
)
|
|
(8.3
|
)
|
|||
Switzerland
|
98.4
|
|
|
89.5
|
|
|
8.9
|
|
|
9.9
|
|
|
3.8
|
|
|||
Other Western Europe
|
87.2
|
|
|
83.5
|
|
|
3.7
|
|
|
4.4
|
|
|
(0.6
|
)
|
|||
Total Western Europe
|
1,426.1
|
|
|
800.7
|
|
|
625.4
|
|
|
78.1
|
|
|
(1.6
|
)
|
|||
Central and Eastern Europe
|
112.4
|
|
|
107.4
|
|
|
5.0
|
|
|
4.7
|
|
|
1.5
|
|
|||
Central and other
|
33.3
|
|
|
34.4
|
|
|
(1.1
|
)
|
|
(3.2
|
)
|
|
(9.0
|
)
|
|||
Total European Operations Division
|
1,571.8
|
|
|
942.5
|
|
|
629.3
|
|
|
66.8
|
|
|
(1.5
|
)
|
|||
Chile (VTR)
|
102.0
|
|
|
121.1
|
|
|
(19.1
|
)
|
|
(15.8
|
)
|
|
(3.6
|
)
|
|||
Corporate and other
|
49.3
|
|
|
50.4
|
|
|
(1.1
|
)
|
|
(2.2
|
)
|
|
(4.4
|
)
|
|||
Intersegment eliminations
|
(7.5
|
)
|
|
(21.9
|
)
|
|
14.4
|
|
|
N.M.
|
|
|
N.M.
|
|
|||
Total operating expenses excluding share-based compensation expense (a)
|
1,715.6
|
|
|
1,092.1
|
|
|
623.5
|
|
|
57.1
|
|
|
(0.6
|
)
|
|||
Share-based compensation expense
|
3.6
|
|
|
6.0
|
|
|
(2.4
|
)
|
|
(40.0
|
)
|
|
|
||||
Total
|
$
|
1,719.2
|
|
|
$
|
1,098.1
|
|
|
$
|
621.1
|
|
|
56.6
|
|
|
|
|
Six months ended June 30,
|
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|
%
|
||||||||
|
in millions
|
|
|
|
|
||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
1,531.8
|
|
|
$
|
174.4
|
|
|
$
|
1,357.4
|
|
|
N.M.
|
|
|
N.M.
|
|
Germany (Unitymedia KabelBW)
|
320.3
|
|
|
319.4
|
|
|
0.9
|
|
|
0.3
|
|
|
(3.9
|
)
|
|||
Belgium (Telenet)
|
435.1
|
|
|
432.5
|
|
|
2.6
|
|
|
0.6
|
|
|
(3.5
|
)
|
|||
The Netherlands
|
186.6
|
|
|
189.3
|
|
|
(2.7
|
)
|
|
(1.4
|
)
|
|
(5.6
|
)
|
|||
Switzerland
|
196.8
|
|
|
181.7
|
|
|
15.1
|
|
|
8.3
|
|
|
3.0
|
|
|||
Other Western Europe
|
172.7
|
|
|
170.4
|
|
|
2.3
|
|
|
1.3
|
|
|
(3.2
|
)
|
|||
Total Western Europe
|
2,843.3
|
|
|
1,467.7
|
|
|
1,375.6
|
|
|
93.7
|
|
|
(3.8
|
)
|
|||
Central and Eastern Europe
|
216.3
|
|
|
216.9
|
|
|
(0.6
|
)
|
|
(0.3
|
)
|
|
(2.3
|
)
|
|||
Central and other
|
68.8
|
|
|
65.7
|
|
|
3.1
|
|
|
4.7
|
|
|
0.1
|
|
|||
Total European Operations Division
|
3,128.4
|
|
|
1,750.3
|
|
|
1,378.1
|
|
|
78.7
|
|
|
(3.4
|
)
|
|||
Chile (VTR)
|
203.4
|
|
|
241.6
|
|
|
(38.2
|
)
|
|
(15.8
|
)
|
|
(2.7
|
)
|
|||
Corporate and other
|
99.5
|
|
|
104.5
|
|
|
(5.0
|
)
|
|
(4.8
|
)
|
|
(6.2
|
)
|
|||
Intersegment eliminations
|
(18.2
|
)
|
|
(41.4
|
)
|
|
23.2
|
|
|
N.M.
|
|
|
N.M.
|
|
|||
Total operating expenses excluding share-based compensation expense (a)
|
3,413.1
|
|
|
2,055.0
|
|
|
1,358.1
|
|
|
66.1
|
|
|
(2.4
|
)
|
|||
Share-based compensation expense
|
4.9
|
|
|
9.9
|
|
|
(5.0
|
)
|
|
(50.5
|
)
|
|
|
||||
Total
|
$
|
3,418.0
|
|
|
$
|
2,064.9
|
|
|
$
|
1,353.1
|
|
|
65.5
|
|
|
|
(a)
|
As further described under
Material Changes in Results of Operations
above, the organic decreases in our operating expenses are impacted by the organic decreases in
Virgin Media
’s operating expenses. Excluding the impact of
Virgin Media
, the organic increase (decrease) in our operating expenses would have been 1.2% and (1.7%) during the
three and six months ended June 30, 2014
, respectively, as compared to the corresponding prior year periods.
|
•
|
Decreases in personnel costs of
$6.8 million or 4.4% and $22.5 million or 7.7%, respectively,
due primarily to the net effect of
(i) decreased staffing levels, primarily as a result of integration and reorganization activities in the
U.K.
following the
Virgin Media Acquisition
,
(ii) annual wage increases, primarily in the
U.K.
, Germany, Belgium and the Netherlands, and (iii) decreased costs related to higher proportions of capitalizable activities, primarily in Germany, that were only partially offset by increased costs related to lower proportions of capitalizable activities in the
U.K.
and the Netherlands;
|
•
|
Increases in programming and copyright costs of $13.3 million or 4.8% and $20.9 million or 4.0%, respectively,
due
primarily to (i) growth in digital video services in Belgium, the
U.K.
, Poland, Switzerland and Germany and (ii) increased costs for sports rights, primarily in the
U.K.
In addition, certain non-recurring adjustments related to the settlement or reassessment of operational contingencies resulted in net decreases in programming and copyright costs of $7.7 million and $29.3 million, respectively, as the favorable impacts (a) during the first quarter of 2014 in Belgium of $16.9 million and in Poland of $7.0 million and (b) during the second quarter of 2014 in the
U.K.
of $10.6 million, more than offset the aggregate impacts of similar reassessments and settlements in Belgium and the Netherlands that reduced costs by $2.9 million and $5.2 million during the three- and six-month periods of 2013, respectively;
|
•
|
An increase (decrease) in mobile handset costs in Belgium of $1.0 million and ($18.5 million), respectively, due primarily to (i) decreased mobile handset sales to third-party retailers and (ii) an increase during the three-month period and a decrease during the six-month period in costs associated with subscriber promotions involving free or heavily-discounted handsets;
|
•
|
Decreases in outsourced labor and professional fees of $8.1 million
or 11.2% and $14.8 million or 11.5%, respectively,
due primarily to (i) lower call center costs, predominantly in Belgium, the
U.K.
and the Netherlands, and
(ii) lower consulting costs in the
European Operations Division
’s central operations, Belgium, the
U.K.
and Germany;
|
•
|
Decreases in interconnect costs of $1.0 million or 0.7% and $14.3 million or 5.6%, respectively,
due primarily to the net effect of
(i) increased costs in Belgium and the
U.K.
attributable to mobile subscriber growth, (ii) decreased costs resulting from lower rates, primarily in Belgium, Germany, the Netherlands and the
U.K.
, (iii) lower call volumes, predominantly in the
U.K.
and Germany, and (iv) during the six-month period, a decrease of $2.6 million in Belgium due to the impact of an accrual release in the first quarter of 2014 associated with the reassessment of an operational contingency;
|
•
|
Decreases in network-related expenses of $8.2 million or 5.6% and $8.8 million or 3.1%, respectively, due primarily to the net effect of (i) decreased network and customer premises equipment maintenance costs, predominantly in the
U.K.
and Switzerland, (ii) lower outsourced labor costs associated with customer-facing activities, primarily in the Netherlands, and (iii) higher power costs mostly in the
U.K.
; and
|
•
|
Decreases in bad debt and collection expenses of $6.7 million or 24.7% and $6.6 million or 13.5%, respectively, primarily in Germany, Belgium and the Netherlands.
|
•
|
Increases in programming and copyright costs of $4.4 million or 11.1% and $11.1 million or 14.3%, respectively, primarily associated with (i) growth in digital cable services and (ii) increases arising from foreign currency exchange rate fluctuations with respect to
VTR GlobalCom
’s
U.S.
dollar denominated programming contracts. A significant portion of
VTR GlobalCom
’s programming costs are denominated in
U.S.
dollars;
|
•
|
Decreases in facilities expenses of $4.9 million or 87.4% and $9.8 million or 87.2%, respectively, due primarily to lower tower and real estate rental costs, as the discounted fair value of all remaining payments due under these leases was included in the restructuring charges recorded by
VTR Wireless
during the third and fourth quarters of 2013 in connection with certain strategic changes that were implemented with regard to its mobile operations;
|
•
|
Decreases in outsourced labor and professional fees of $4.1 million or 30.6% and $5.2 million or 22.1%, respectively, primarily attributable to (i) lower costs associated with
VTR Wireless
’ network operating center and (ii) a $3.1 million nonrecurring charge recorded during the second quarter of 2013 to provide for
VTR GlobalCom
’s mandated share of severance and other labor-related obligations that were incurred by a
VTR GlobalCom
contractor in connection with such contractor’s bankruptcy;
|
•
|
Decreases in bad debt and collection expenses of $1.0 million or 8.8% and $2.3 million or 10.2%, respectively, primarily at
VTR Wireless
. These decreases are primarily due to more selective credit acceptance policies;
|
•
|
Increases in personnel costs of $2.0 million or 16.2% and $2.3 million or 8.6%, respectively, due primarily to the net effect of (i) higher bonus costs at
VTR GlobalCom
, (ii) increased costs related to lower proportions of capitalizable activities, primarily at
VTR Wireless
, and (iii) decreased staffing levels at
VTR Wireless
; and
|
•
|
Decreases in mobile access and interconnect costs of $1.2 million or 6.0% and $1.4 million or 3.5%, respectively, primarily attributable to the net effect of (i) lower mobile access charges due to the impacts of lower rates and (ii) higher interconnect costs at
VTR GlobalCom
, as the impacts of higher call volumes were only partially offset by lower rates.
|
|
Three months ended June 30,
|
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|
%
|
||||||||
|
in millions
|
|
|
|
|
||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
239.1
|
|
|
$
|
51.6
|
|
|
$
|
187.5
|
|
|
N.M.
|
|
|
N.M.
|
|
Germany (Unitymedia KabelBW)
|
99.5
|
|
|
97.5
|
|
|
2.0
|
|
|
2.1
|
|
|
(2.8
|
)
|
|||
Belgium (Telenet)
|
65.9
|
|
|
63.6
|
|
|
2.3
|
|
|
3.6
|
|
|
(1.2
|
)
|
|||
The Netherlands
|
40.7
|
|
|
38.1
|
|
|
2.6
|
|
|
6.8
|
|
|
1.7
|
|
|||
Switzerland
|
47.3
|
|
|
45.2
|
|
|
2.1
|
|
|
4.6
|
|
|
(1.2
|
)
|
|||
Other Western Europe
|
31.4
|
|
|
30.5
|
|
|
0.9
|
|
|
3.0
|
|
|
(2.6
|
)
|
|||
Total Western Europe
|
523.9
|
|
|
326.5
|
|
|
197.4
|
|
|
60.5
|
|
|
(0.5
|
)
|
|||
Central and Eastern Europe
|
41.4
|
|
|
39.0
|
|
|
2.4
|
|
|
6.2
|
|
|
2.8
|
|
|||
Central and other
|
60.9
|
|
|
51.3
|
|
|
9.6
|
|
|
18.7
|
|
|
13.5
|
|
|||
Total European Operations Division
|
626.2
|
|
|
416.8
|
|
|
209.4
|
|
|
50.2
|
|
|
1.5
|
|
|||
Chile (VTR)
|
42.0
|
|
|
44.8
|
|
|
(2.8
|
)
|
|
(6.3
|
)
|
|
7.1
|
|
|||
Corporate and other
|
72.0
|
|
|
62.9
|
|
|
9.1
|
|
|
14.5
|
|
|
11.8
|
|
|||
Intersegment eliminations
|
1.5
|
|
|
1.1
|
|
|
0.4
|
|
|
N.M.
|
|
|
N.M.
|
|
|||
Total SG&A expenses excluding share-based compensation expense (a)
|
741.7
|
|
|
525.6
|
|
|
216.1
|
|
|
41.1
|
|
|
4.2
|
|
|||
Share-based compensation expense
|
50.8
|
|
|
87.4
|
|
|
(36.6
|
)
|
|
(41.9
|
)
|
|
|
||||
Total
|
$
|
792.5
|
|
|
$
|
613.0
|
|
|
$
|
179.5
|
|
|
29.3
|
|
|
|
|
Six months ended
June 30, |
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|
%
|
||||||||
|
in millions
|
|
|
|
|
||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
461.8
|
|
|
$
|
51.6
|
|
|
$
|
410.2
|
|
|
N.M.
|
|
|
N.M.
|
|
Germany (Unitymedia KabelBW)
|
204.4
|
|
|
194.0
|
|
|
10.4
|
|
|
5.4
|
|
|
0.9
|
|
|||
Belgium (Telenet)
|
131.5
|
|
|
121.4
|
|
|
10.1
|
|
|
8.3
|
|
|
3.8
|
|
|||
The Netherlands
|
79.4
|
|
|
72.8
|
|
|
6.6
|
|
|
9.1
|
|
|
4.5
|
|
|||
Switzerland
|
95.3
|
|
|
96.8
|
|
|
(1.5
|
)
|
|
(1.5
|
)
|
|
(6.3
|
)
|
|||
Other Western Europe
|
63.4
|
|
|
61.4
|
|
|
2.0
|
|
|
3.3
|
|
|
(1.7
|
)
|
|||
Total Western Europe
|
1,035.8
|
|
|
598.0
|
|
|
437.8
|
|
|
73.2
|
|
|
(0.7
|
)
|
|||
Central and Eastern Europe
|
79.7
|
|
|
76.7
|
|
|
3.0
|
|
|
3.9
|
|
|
1.6
|
|
|||
Central and other
|
119.0
|
|
|
97.6
|
|
|
21.4
|
|
|
21.9
|
|
|
17.1
|
|
|||
Total European Operations Division
|
1,234.5
|
|
|
772.3
|
|
|
462.2
|
|
|
59.8
|
|
|
1.8
|
|
|||
Chile (VTR)
|
83.2
|
|
|
89.5
|
|
|
(6.3
|
)
|
|
(7.0
|
)
|
|
7.3
|
|
|||
Corporate and other
|
131.8
|
|
|
112.4
|
|
|
19.4
|
|
|
17.3
|
|
|
14.6
|
|
|||
Intersegment eliminations
|
0.9
|
|
|
0.4
|
|
|
0.5
|
|
|
N.M.
|
|
|
N.M.
|
|
|||
Total SG&A expenses excluding share-based compensation expense (a)
|
1,450.4
|
|
|
974.6
|
|
|
475.8
|
|
|
48.8
|
|
|
4.2
|
|
|||
Share-based compensation expense
|
104.6
|
|
|
109.8
|
|
|
(5.2
|
)
|
|
(4.7
|
)
|
|
|
||||
Total
|
$
|
1,555.0
|
|
|
$
|
1,084.4
|
|
|
$
|
470.6
|
|
|
43.4
|
|
|
|
(a)
|
As further described under
Material Changes in Results of Operations
above, the organic increases in our SG&A expenses are impacted by the organic changes in
Virgin Media
’s SG&A expenses. Excluding the impact of
Virgin Media
, the organic increases in our SG&A expenses would have been 4.1% and 5.2% during the
three and six months ended June 30, 2014
, respectively, as compared to the corresponding prior year periods.
|
•
|
Increases in information technology-related expenses of $11.1 million
and $21.3 million, respectively, due primarily to higher software and other information technology-related maintenance costs, primarily in the
U.K.
, the
European Operations Division
’s central operations and Belgium;
|
•
|
Decreases in sales and marketing costs of $5.7 million or 4.0%
and $10.4 million or 3.9%, respectively, due primarily to (i) lower costs associated with rebranding and other advertising campaigns in Switzerland and the
U.K.
, (ii) lower third-party sales commissions, predominantly in the
U.K.
and Switzerland, and (iii) higher third-party sales commissions, primarily in Germany and the Netherlands;
|
•
|
Increases in personnel costs of $4.2 million or 2.5% and $6.6 million or 2.1%, respectively,
due to the net effect of (i) higher incentive compensation costs in the
U.K.
and the
European Operations Division
’s central operations, (ii) decreased staffing levels in the
U.K.
as a result of integration and reorganization activities following the
Virgin Media Acquisition
, (iii) annual wage increases, mostly in the
U.K.
,
the Netherlands and Belgium, and (iv) increased staffing levels in the
European Operations Division
’s central operations and Germany;
|
•
|
An increase in outsourced labor and professional fees during the six-month period of $6.1 million or 10.7%, due primarily to (i) increases in consulting costs related to strategic initiatives, primarily in the
European Operations Division
’s central operations, Germany, and Belgium and (ii) increased legal costs, primarily in the
U.K.
; and
|
•
|
Net decreases resulting from individually insignificant changes in other SG&A categories.
|
•
|
Increases in sales and marketing costs of $3.5 million or 25.0% and $7.5 million or 27.0%, respectively, primarily due to the net effect of (i) higher third-party sales commissions and advertising costs at
VTR GlobalCom
and (ii) lower third-party sales commissions at
VTR Wireless
; and
|
•
|
Decreases in
VTR GlobalCom
’s personnel costs of $1.1 million or 6.7% and $0.9 million or 2.9%, respectively, primarily due to the net effect of (i) decreases due to lower staffing levels, (ii) during the six-month period, an increase due to higher severance costs and (iii) increases due to higher bonus costs.
|
|
Three months ended June 30,
|
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|
%
|
||||||||
|
in millions
|
|
|
|
|
||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
772.4
|
|
|
$
|
175.3
|
|
|
$
|
597.1
|
|
|
N.M.
|
|
|
N.M.
|
|
Germany (Unitymedia KabelBW)
|
431.0
|
|
|
369.4
|
|
|
61.6
|
|
|
16.7
|
|
|
11.2
|
|
|||
Belgium (Telenet)
|
287.9
|
|
|
269.2
|
|
|
18.7
|
|
|
6.9
|
|
|
2.0
|
|
|||
The Netherlands
|
185.1
|
|
|
171.1
|
|
|
14.0
|
|
|
8.2
|
|
|
3.1
|
|
|||
Switzerland
|
219.6
|
|
|
189.2
|
|
|
30.4
|
|
|
16.1
|
|
|
9.2
|
|
|||
Other Western Europe
|
114.9
|
|
|
105.6
|
|
|
9.3
|
|
|
8.8
|
|
|
3.4
|
|
|||
Total Western Europe
|
2,010.9
|
|
|
1,279.8
|
|
|
731.1
|
|
|
57.1
|
|
|
10.6
|
|
|||
Central and Eastern Europe
|
136.9
|
|
|
135.1
|
|
|
1.8
|
|
|
1.3
|
|
|
(1.8
|
)
|
|||
Central and other
|
(61.6
|
)
|
|
(54.2
|
)
|
|
(7.4
|
)
|
|
(13.7
|
)
|
|
(8.0
|
)
|
|||
Total European Operations Division
|
2,086.2
|
|
|
1,360.7
|
|
|
725.5
|
|
|
53.3
|
|
|
9.4
|
|
|||
Chile (VTR)
|
85.8
|
|
|
86.8
|
|
|
(1.0
|
)
|
|
(1.2
|
)
|
|
12.7
|
|
|||
Corporate and other
|
(27.1
|
)
|
|
(18.8
|
)
|
|
(8.3
|
)
|
|
(44.1
|
)
|
|
N.M.
|
|
|||
Intersegment eliminations
|
—
|
|
|
11.4
|
|
|
(11.4
|
)
|
|
N.M.
|
|
|
N.M.
|
|
|||
Total (a)
|
$
|
2,144.9
|
|
|
$
|
1,440.1
|
|
|
$
|
704.8
|
|
|
48.9
|
|
|
8.1
|
|
|
Six months ended June 30,
|
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|
%
|
||||||||
|
in millions
|
|
|
|
|
||||||||||||
European Operations Division:
|
|
|
|
|
|
|
|
|
|
||||||||
U.K. (Virgin Media)
|
$
|
1,508.9
|
|
|
$
|
175.3
|
|
|
$
|
1,333.6
|
|
|
N.M.
|
|
|
N.M.
|
|
Germany (Unitymedia KabelBW)
|
860.0
|
|
|
729.4
|
|
|
130.6
|
|
|
17.9
|
|
|
12.9
|
|
|||
Belgium (Telenet)
|
590.0
|
|
|
516.7
|
|
|
73.3
|
|
|
14.2
|
|
|
9.4
|
|
|||
The Netherlands
|
368.4
|
|
|
355.9
|
|
|
12.5
|
|
|
3.5
|
|
|
(0.8
|
)
|
|||
Switzerland
|
426.0
|
|
|
371.4
|
|
|
54.6
|
|
|
14.7
|
|
|
8.8
|
|
|||
Other Western Europe
|
228.0
|
|
|
210.4
|
|
|
17.6
|
|
|
8.4
|
|
|
3.7
|
|
|||
Total Western Europe
|
3,981.3
|
|
|
2,359.1
|
|
|
1,622.2
|
|
|
68.8
|
|
|
12.0
|
|
|||
Central and Eastern Europe
|
283.9
|
|
|
275.7
|
|
|
8.2
|
|
|
3.0
|
|
|
0.9
|
|
|||
Central and other
|
(121.3
|
)
|
|
(100.0
|
)
|
|
(21.3
|
)
|
|
(21.3
|
)
|
|
(16.3
|
)
|
|||
Total European Operations Division
|
4,143.9
|
|
|
2,534.8
|
|
|
1,609.1
|
|
|
63.5
|
|
|
10.6
|
|
|||
Chile (VTR)
|
168.5
|
|
|
172.0
|
|
|
(3.5
|
)
|
|
(2.0
|
)
|
|
13.1
|
|
|||
Corporate and other
|
(44.0
|
)
|
|
(29.4
|
)
|
|
(14.6
|
)
|
|
(49.7
|
)
|
|
N.M.
|
|
|||
Intersegment eliminations
|
4.0
|
|
|
22.7
|
|
|
(18.7
|
)
|
|
N.M.
|
|
|
N.M.
|
|
|||
Total (a)
|
$
|
4,272.4
|
|
|
$
|
2,700.1
|
|
|
$
|
1,572.3
|
|
|
58.2
|
|
|
9.5
|
|
(a)
|
As further described under
Material Changes in Results of Operations
above, the organic increases in our operating cash flow are impacted by the organic increases in
Virgin Media
’s operating cash flow. Excluding the impact of
Virgin Media
, the organic increases in our operating cash flow would have been 4.4% and 6.1% during the
three and six months ended June 30, 2014
, respectively, as compared to the corresponding prior year periods.
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
%
|
||||||
European Operations Division:
|
|
|
|
|
|
|
|
U.K. (Virgin Media)
|
43.5
|
|
43.7
|
|
43.1
|
|
43.7
|
Germany (Unitymedia KabelBW)
|
62.6
|
|
59.1
|
|
62.1
|
|
58.7
|
Belgium (Telenet)
|
49.4
|
|
50.4
|
|
51.0
|
|
48.3
|
The Netherlands
|
58.5
|
|
56.4
|
|
58.1
|
|
57.6
|
Switzerland
|
60.1
|
|
58.4
|
|
59.3
|
|
57.1
|
Other Western Europe
|
49.2
|
|
48.1
|
|
49.1
|
|
47.6
|
Total Western Europe
|
50.8
|
|
53.2
|
|
50.7
|
|
53.3
|
Central and Eastern Europe
|
47.1
|
|
48.0
|
|
49.0
|
|
48.4
|
Total European Operations Division, including central and other
|
48.7
|
|
50.0
|
|
48.7
|
|
50.1
|
Chile (VTR)
|
37.3
|
|
34.3
|
|
37.0
|
|
34.2
|
|
Three months ended June 30,
|
|
Increase
|
|
Organic increase (decrease) (e)
|
|||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|
%
|
|||||||
|
in millions
|
|
|
|
|
|||||||||||
Subscription revenue (a):
|
|
|
|
|
|
|
|
|
|
|||||||
Video
|
$
|
1,662.2
|
|
|
$
|
1,274.8
|
|
|
$
|
387.4
|
|
|
30.4
|
|
2.7
|
|
Broadband internet
|
1,188.4
|
|
|
765.2
|
|
|
423.2
|
|
|
55.3
|
|
15.4
|
|
|||
Fixed-line telephony
|
829.7
|
|
|
518.7
|
|
|
311.0
|
|
|
60.0
|
|
(2.9
|
)
|
|||
Cable subscription revenue
|
3,680.3
|
|
|
2,558.7
|
|
|
1,121.6
|
|
|
43.8
|
|
5.4
|
|
|||
Mobile subscription revenue (b)
|
273.1
|
|
|
110.4
|
|
|
162.7
|
|
|
147.4
|
|
12.1
|
|
|||
Total subscription revenue
|
3,953.4
|
|
|
2,669.1
|
|
|
1,284.3
|
|
|
48.1
|
|
5.7
|
|
|||
B2B revenue (c)
|
377.5
|
|
|
168.9
|
|
|
208.6
|
|
|
123.5
|
|
7.2
|
|
|||
Other revenue (b) (d)
|
271.3
|
|
|
219.8
|
|
|
51.5
|
|
|
23.4
|
|
(13.9
|
)
|
|||
Total
|
$
|
4,602.2
|
|
|
$
|
3,057.8
|
|
|
$
|
1,544.4
|
|
|
50.5
|
|
4.3
|
|
|
Six months ended June 30,
|
|
Increase
|
|
Organic increase (decrease) (e)
|
|||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|
%
|
|||||||
|
in millions
|
|
|
|
|
|||||||||||
Subscription revenue (a):
|
|
|
|
|
|
|
|
|
|
|||||||
Video
|
$
|
3,302.7
|
|
|
$
|
2,487.5
|
|
|
$
|
815.2
|
|
|
32.8
|
|
1.5
|
|
Broadband internet
|
2,330.1
|
|
|
1,424.5
|
|
|
905.6
|
|
|
63.6
|
|
16.1
|
|
|||
Fixed-line telephony
|
1,652.8
|
|
|
928.1
|
|
|
724.7
|
|
|
78.1
|
|
(1.3
|
)
|
|||
Cable subscription revenue
|
7,285.6
|
|
|
4,840.1
|
|
|
2,445.5
|
|
|
50.5
|
|
5.3
|
|
|||
Mobile subscription revenue (b)
|
530.4
|
|
|
172.5
|
|
|
357.9
|
|
|
207.5
|
|
12.5
|
|
|||
Total subscription revenue
|
7,816.0
|
|
|
5,012.6
|
|
|
2,803.4
|
|
|
55.9
|
|
5.5
|
|
|||
B2B revenue (c)
|
750.0
|
|
|
286.2
|
|
|
463.8
|
|
|
162.1
|
|
7.3
|
|
|||
Other revenue (b) (d)
|
569.9
|
|
|
430.9
|
|
|
139.0
|
|
|
32.3
|
|
(11.0
|
)
|
|||
Total revenue
|
$
|
9,135.9
|
|
|
$
|
5,729.7
|
|
|
$
|
3,406.2
|
|
|
59.4
|
|
4.4
|
|
(a)
|
Subscription revenue includes amounts received from subscribers for ongoing services, excluding installation fees and late fees. 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. As a result, changes in the standalone pricing of our cable and mobile products or the composition of bundles can contribute to changes in our product revenue categories from period to period.
|
(b)
|
Mobile subscription revenue excludes mobile interconnect revenue of
$63.0 million
and
$33.5 million
during the three months ended
June 30, 2014
and
2013
, respectively, and
$123.8 million
and
$56.7 million
during the
six
months ended
|
(c)
|
B2B
revenue includes revenue from business broadband internet, video, voice, wireless and data services offered to medium to large enterprises and, on a wholesale basis, to other operators. We also provide services to certain
SOHO
subscribers.
SOHO
subscribers pay a premium price to receive enhanced service levels along with video, broadband internet or fixed-line telephony services that are the same or similar to the mass marketed products offered to our residential subscribers. Revenue from
SOHO
subscribers, which aggregated
$49.7 million
and
$35.3 million
during the three months ended
June 30, 2014
and
2013
, respectively, and
$96.2 million
and
$68.1 million
during the
six
months ended
June 30, 2014
and
2013
, respectively, is included in cable subscription revenue.
|
(d)
|
Other revenue includes, among other items, interconnect, carriage fee and installation revenue.
|
(e)
|
As further described under
Material Changes in Results of Operations
above, our organic revenue growth rates are impacted by the organic growth of
Virgin Media
. Excluding the impacts of the organic growth of
Virgin Media
, our organic growth rates would have been as follows:
|
|
Three-month period
|
|
Six-month period
|
||
|
%
|
||||
|
|
|
|
||
Subscription revenue:
|
|
|
|
||
Video
|
1.4
|
|
|
0.9
|
|
Broadband internet
|
10.1
|
|
|
10.6
|
|
Fixed-line telephony
|
1.6
|
|
|
1.1
|
|
Cable subscription revenue
|
4.0
|
|
|
3.8
|
|
Mobile
|
3.4
|
|
|
5.4
|
|
Total subscription revenue
|
4.0
|
|
|
3.8
|
|
B2B revenue
|
3.6
|
|
|
2.0
|
|
Other revenue
|
(6.1
|
)
|
|
(3.2
|
)
|
Total revenue
|
3.2
|
|
|
3.2
|
|
|
Three-month period
|
|
Six-month period
|
||||
|
(in millions)
|
||||||
Increase in cable subscription revenue due to change in:
|
|
|
|
||||
Average number of RGUs
|
$
|
86.2
|
|
|
$
|
171.9
|
|
ARPU
|
51.6
|
|
|
82.9
|
|
||
Total increase in cable subscription revenue
|
137.8
|
|
|
254.8
|
|
||
Increase in mobile subscription revenue
|
13.3
|
|
|
21.6
|
|
||
Total organic increase in subscription revenue
|
151.1
|
|
|
276.4
|
|
||
Impact of acquisitions
|
936.1
|
|
|
2,200.8
|
|
||
Impact of FX
|
197.1
|
|
|
326.2
|
|
||
Total
|
$
|
1,284.3
|
|
|
$
|
2,803.4
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
in millions
|
||||||||||||||
Liberty Global shares:
|
|
|
|
|
|
|
|
||||||||
Performance-based incentive awards (a)
|
$
|
23.2
|
|
|
$
|
7.8
|
|
|
$
|
43.8
|
|
|
$
|
11.9
|
|
Other share-based incentive awards
|
22.2
|
|
|
49.8
|
|
|
52.4
|
|
|
61.0
|
|
||||
Total Liberty Global shares (b)
|
45.4
|
|
|
57.6
|
|
|
96.2
|
|
|
72.9
|
|
||||
Telenet share-based incentive awards (c)
|
7.8
|
|
|
36.5
|
|
|
10.7
|
|
|
47.5
|
|
||||
Other
|
1.2
|
|
|
(0.2
|
)
|
|
2.6
|
|
|
0.3
|
|
||||
Total
|
$
|
54.4
|
|
|
$
|
93.9
|
|
|
$
|
109.5
|
|
|
$
|
120.7
|
|
Included in:
|
|
|
|
|
|
|
|
||||||||
Operating expense
|
$
|
3.6
|
|
|
$
|
6.0
|
|
|
$
|
4.9
|
|
|
$
|
9.9
|
|
SG&A expense
|
50.8
|
|
|
87.4
|
|
|
104.6
|
|
|
109.8
|
|
||||
Total
|
$
|
54.4
|
|
|
$
|
93.4
|
|
|
$
|
109.5
|
|
|
$
|
119.7
|
|
(a)
|
Includes share-based compensation expense related to (i)
Liberty Global
PSU
s, (ii) the
Challenge Performance Awards
, which awards were issued on June 24, 2013, and (iii) for the 2014 periods, the
PGUs
.
|
(b)
|
In connection with the
Virgin Media Acquisition
, we issued
Virgin Media Replacement Awards
to employees and former directors of
Virgin Media
in exchange for corresponding
Virgin Media
awards.
Virgin Media
recorded share-based compensation expense of
$12.1 million
and
$31.4 million
during the
three and six months ended June 30, 2014
, respectively, including compensation expense related to the
Virgin Media Replacement Awards
and new awards that were granted after the
Virgin Media Replacement Awards
were issued. During the post-acquisition period ended
June 30, 2013
,
Virgin Media
recorded share-based compensation expense of
$35.9 million
, primarily related to the
Virgin Media Replacement Awards
, including $25.9 million that 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.
|
(c)
|
During the second quarter of
2013
,
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 continues to recognize additional share-based compensation expense as the underlying options vest. In addition, during the first quarter of
2013
,
Telenet
recognized expense of
$6.2 million
related to the accelerated vesting of options granted under the
Telenet 2010 SSOP
.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Cross-currency and interest rate derivative contracts (a)
|
$
|
(285.7
|
)
|
|
$
|
162.4
|
|
|
$
|
(705.9
|
)
|
|
$
|
343.0
|
|
Equity-related derivative instruments (b):
|
|
|
|
|
|
|
|
||||||||
Sumitomo Collar
|
(23.8
|
)
|
|
(52.4
|
)
|
|
(15.3
|
)
|
|
(140.1
|
)
|
||||
Ziggo Collar
|
(21.3
|
)
|
|
—
|
|
|
(5.9
|
)
|
|
—
|
|
||||
Other
|
0.7
|
|
|
(9.4
|
)
|
|
0.9
|
|
|
(9.4
|
)
|
||||
Total equity-related derivative instruments
|
(44.4
|
)
|
|
(61.8
|
)
|
|
(20.3
|
)
|
|
(149.5
|
)
|
||||
Foreign currency forward contracts (c)
|
0.4
|
|
|
(103.5
|
)
|
|
20.4
|
|
|
(1.1
|
)
|
||||
Other
|
1.1
|
|
|
(0.5
|
)
|
|
0.6
|
|
|
(0.3
|
)
|
||||
Total
|
$
|
(328.6
|
)
|
|
$
|
(3.4
|
)
|
|
$
|
(705.2
|
)
|
|
$
|
192.1
|
|
(a)
|
The loss during the
2014
three-month period
is primarily attributable to the net effect of (i) losses associated with decreases in market interest rates in the euro, Chilean peso, Swiss franc, Hungarian forint and Polish zloty markets, (ii) losses associated with an increase in the value of the British pound sterling relative to the
U.S.
dollar, (iii) gains associated with decreases in market interest rates in the
U.S.
dollar market, (iv) gains associated with increases in market interest rates in the British pound sterling market and (v) gains associated with decreases in the values of the euro and Chilean peso relative to the
U.S.
dollar. The loss during the
2014
six-month period
is primarily attributable to (i) losses associated with decreases in market interest rates in the euro, Swiss franc, Chilean peso, Hungarian forint and Polish zloty markets and (ii) losses associated with an increase in the value of the British pound sterling relative to the
U.S.
dollar. In addition, the losses during the
2014
periods include net losses of
$19.4 million
and
$48.9 million
, respectively, resulting from changes in our credit risk valuation adjustments. 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.
|
(b)
|
For information concerning the factors that impact the valuations of our equity-related derivative instruments, see note
6
to our condensed consolidated financial statements.
|
(c)
|
Primarily includes activity with respect to the foreign currency forward contracts of LGE Financing for all periods presented and activity related to deal contingent forward contracts related to the
Virgin Media Acquisition
during the
2013
periods.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
U.S. dollar denominated debt issued by a British pound sterling functional currency entity
|
$
|
91.4
|
|
|
$
|
(84.3
|
)
|
|
$
|
119.3
|
|
|
$
|
(84.3
|
)
|
Intercompany payables and receivables denominated in a currency other than the entity’s functional currency (a)
|
(85.9
|
)
|
|
94.3
|
|
|
(103.2
|
)
|
|
(87.9
|
)
|
||||
Yen denominated debt issued by a U.S. dollar functional currency entity
|
(16.0
|
)
|
|
53.0
|
|
|
(35.0
|
)
|
|
139.0
|
|
||||
U.S. dollar denominated debt issued by euro functional currency entities
|
(17.6
|
)
|
|
56.4
|
|
|
(24.0
|
)
|
|
(50.3
|
)
|
||||
Cash and restricted cash denominated in a currency other than the entity’s functional currency
|
(0.8
|
)
|
|
23.1
|
|
|
(10.3
|
)
|
|
81.5
|
|
||||
U.S. dollar denominated debt issued by a Chilean peso functional currency entity
|
(8.7
|
)
|
|
—
|
|
|
(6.7
|
)
|
|
—
|
|
||||
British pound sterling denominated debt issued by a U.S. dollar functional currency entity
|
—
|
|
|
(46.6
|
)
|
|
—
|
|
|
(37.3
|
)
|
||||
Other
|
1.2
|
|
|
(4.6
|
)
|
|
2.7
|
|
|
(5.7
|
)
|
||||
Total
|
$
|
(36.4
|
)
|
|
$
|
91.3
|
|
|
$
|
(57.2
|
)
|
|
$
|
(45.0
|
)
|
(a)
|
Amounts primarily relate to (i) loans between certain of our non-operating and operating subsidiaries in Europe, which generally are denominated in the currency of the applicable operating subsidiary, and (ii) loans between certain of our non-operating subsidiaries in the
U.S.
, Europe and Chile.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
in millions
|
||||||||||||||
Ziggo
|
$
|
112.2
|
|
|
$
|
178.8
|
|
|
$
|
34.5
|
|
|
$
|
258.5
|
|
Sumitomo
|
35.0
|
|
|
(5.6
|
)
|
|
43.6
|
|
|
(11.2
|
)
|
||||
Other, net
|
10.2
|
|
|
20.6
|
|
|
19.1
|
|
|
17.3
|
|
||||
Total
|
$
|
157.4
|
|
|
$
|
193.8
|
|
|
$
|
97.2
|
|
|
$
|
264.6
|
|
•
|
a
$41.5 million
loss during the second quarter related to the repayment of the
UPC Holding 9.875% Senior Notes
, including (i)
$19.7 million
of redemption premiums, (ii) the write-off of
$17.4 million
of unamortized discount and (iii) the write-off of
$4.4 million
of deferred financing costs;
|
•
|
a
$16.5 million
loss during the first quarter related to the repayment of Facilities R, S, AE and AF under the
UPC Broadband Holding Bank Facility
, including (i) a
$11.6 million
write-off of deferred financing costs and (ii) a
$4.9 million
write-off of an unamortized discount;
|
•
|
an
$11.9 million
loss during the second quarter related to the completion of certain refinancing transactions with respect to the
Telenet Credit Facility
, including (i) the write-off of
$7.1 million
of deferred financing costs, (ii)
$3.6 million
of redemption premium and (iii) the write-off of
$1.2 million
of unamortized discount;
|
•
|
a
$5.4 million
loss during the second quarter related to the redemption of the
2018 VM Dollar Senior Secured Notes
, including (i) the write-off of
$33.9 million
of unamortized premium, (ii)
$32.4 million
of redemption premiums and (iii) the write-off of
$6.9 million
of deferred financing costs;
|
•
|
a
$5.2 million
gain during the second quarter related to the redemption of the
2018 VM Sterling Senior Secured Notes
, including (i) the write-off of
$61.8 million
of unamortized premium, (ii)
$51.3 million
of redemption premiums and (iii) the write-off of
$5.3 million
of deferred financing costs; and
|
•
|
an aggregate loss of
$4.3 million
during the first quarter related to the write-off of deferred financing costs, including (i) a
$2.3 million
loss associated with the repayment of the
Ziggo Margin Loan
and (ii) a
$2.0 million
loss associated with the repayment of the
VTR Wireless Bank Facility
.
|
•
|
an
$85.5 million
loss during the first quarter, including (i)
$35.6 million
of aggregate redemption premiums related to
UPC Holding
’s then existing euro-denominated 8.0% senior notes (the
UPC Holding 8.0% Senior Notes
) and euro-denominated 9.75% senior notes (the
UPC Holding 9.75% Senior Notes
), (ii) the write-off of
$24.5 million
of an unamortized discount related to the
UPC Holding 9.75% Senior Notes
, (iii) the write-off of
$19.0 million
of aggregate deferred financing costs associated with the
UPC Holding 8.0% Senior Notes
and the
UPC Holding 9.75% Senior Notes
and (iv)
$6.4 million
of aggregate interest incurred on the
UPC Holding 8.0% Senior Notes
and the
UPC Holding 9.75% Senior Notes
between the respective dates that we and the trustee were legally discharged;
|
•
|
a $71.1 million loss during the first quarter related to the redemption of a portion of
Unitymedia KabelBW
’s then existing euro-denominated 8.125% senior secured notes, including (i) $50.5 million of redemption premiums and (ii) $20.6 million associated with the write-off of deferred financing costs and an unamortized discount; and
|
•
|
an $11.9 million loss during the second quarter related to the prepayment of amounts outstanding under Facilities R, S, T, U and X of the
UPC Broadband Holding Bank Facility
, including (i) $7.7 million of third-party costs and (ii) $4.2 million associated with the write-off of deferred financing costs and unamortized discount.
|
Cash and cash equivalents held by:
|
|
||
Liberty Global and unrestricted subsidiaries:
|
|
||
Liberty Global (a)
|
$
|
79.0
|
|
Unrestricted subsidiaries (b) (c)
|
498.2
|
|
|
Total Liberty Global and unrestricted subsidiaries
|
577.2
|
|
|
Borrowing groups (d):
|
|
||
Telenet
|
249.0
|
|
|
VTR Finance
|
110.5
|
|
|
Virgin Media (c)
|
72.6
|
|
|
UPC Holding
|
72.0
|
|
|
Unitymedia KabelBW
|
27.4
|
|
|
Liberty Puerto Rico
|
1.5
|
|
|
Total borrowing groups
|
533.0
|
|
|
Total cash and cash equivalents
|
$
|
1,110.2
|
|
(a)
|
Represents the amount held by
Liberty Global
on a standalone basis.
|
(b)
|
Represents the aggregate amount held by subsidiaries of
Liberty Global
that are outside of our borrowing groups.
|
(c)
|
The Virgin Media borrowing group includes certain subsidiaries of
Virgin Media
, but excludes
Virgin Media
. The
$128.1 million
of cash and cash equivalents held by
Virgin Media
is included in the amount shown for
Liberty Global
’s unrestricted subsidiaries.
|
(d)
|
Except as otherwise noted, represents the aggregate amounts held by the parent entity and restricted subsidiaries of our borrowing groups.
|
|
Six months ended
|
|
|
||||||||
|
June 30,
|
|
|
||||||||
|
2014
|
|
2013
|
|
Change
|
||||||
|
in millions
|
||||||||||
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
2,916.7
|
|
|
$
|
1,348.6
|
|
|
$
|
1,568.1
|
|
Net cash used by investing activities
|
(456.6
|
)
|
|
(6,271.1
|
)
|
|
5,814.5
|
|
|||
Net cash provided (used) by financing activities
|
(4,059.9
|
)
|
|
5,021.1
|
|
|
(9,081.0
|
)
|
|||
Effect of exchange rate changes on cash
|
22.7
|
|
|
3.3
|
|
|
19.4
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
(1,577.1
|
)
|
|
$
|
101.9
|
|
|
$
|
(1,679.0
|
)
|
|
Six months ended
|
||||||
|
June 30,
|
||||||
|
2014
|
|
2013
|
||||
|
in millions
|
||||||
|
|
|
|
||||
Property and equipment additions
|
$
|
1,881.0
|
|
|
$
|
1,266.3
|
|
Assets acquired under capital-related vendor financing arrangements
|
(401.8
|
)
|
|
(221.6
|
)
|
||
Assets acquired under capital leases
|
(89.8
|
)
|
|
(44.9
|
)
|
||
Changes in current liabilities related to capital expenditures
|
12.6
|
|
|
(12.8
|
)
|
||
Capital expenditures
|
$
|
1,402.0
|
|
|
$
|
987.0
|
|
|
Six months ended
|
||||||
|
June 30,
|
||||||
|
2014
|
|
2013
|
||||
|
in millions
|
||||||
|
|
|
|
||||
Net cash provided by operating activities of our continuing operations
|
$
|
2,916.7
|
|
|
$
|
1,348.6
|
|
Excess tax benefits from share-based compensation
|
—
|
|
|
0.5
|
|
||
Cash payments for direct acquisition and disposition costs
|
20.4
|
|
|
38.4
|
|
||
Capital expenditures
|
(1,402.0
|
)
|
|
(987.0
|
)
|
||
Principal payments on vendor financing obligations
|
(397.9
|
)
|
|
(167.4
|
)
|
||
Principal payments on certain capital leases
|
(97.2
|
)
|
|
(8.2
|
)
|
||
Free cash flow
|
$
|
1,040.0
|
|
|
$
|
224.9
|
|
|
Payments due during:
|
|
Total
|
||||||||||||||||||||||||||||
|
Remainder
of
2014
|
|
Year ending December 31,
|
|
|||||||||||||||||||||||||||
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
||||||||||||||||||||
|
in millions
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt (excluding interest)
|
$
|
1,261.1
|
|
|
$
|
373.9
|
|
|
$
|
388.7
|
|
|
$
|
877.4
|
|
|
$
|
352.9
|
|
|
$
|
3,981.3
|
|
|
$
|
33,427.4
|
|
|
$
|
40,662.7
|
|
Capital leases (excluding interest)
|
126.1
|
|
|
210.7
|
|
|
163.2
|
|
|
119.2
|
|
|
91.5
|
|
|
82.1
|
|
|
1,028.8
|
|
|
1,821.6
|
|
||||||||
Programming commitments
|
543.1
|
|
|
839.0
|
|
|
755.7
|
|
|
594.0
|
|
|
515.5
|
|
|
245.1
|
|
|
1.8
|
|
|
3,494.2
|
|
||||||||
Network and connectivity commitments
|
206.6
|
|
|
347.3
|
|
|
286.1
|
|
|
266.1
|
|
|
141.2
|
|
|
102.1
|
|
|
1,208.8
|
|
|
2,558.2
|
|
||||||||
Purchase commitments
|
742.5
|
|
|
132.1
|
|
|
46.0
|
|
|
11.6
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
933.4
|
|
||||||||
Operating leases
|
90.3
|
|
|
158.3
|
|
|
131.9
|
|
|
107.5
|
|
|
72.1
|
|
|
58.7
|
|
|
276.1
|
|
|
894.9
|
|
||||||||
Other commitments
|
237.9
|
|
|
271.4
|
|
|
193.2
|
|
|
140.2
|
|
|
83.5
|
|
|
32.1
|
|
|
38.2
|
|
|
996.5
|
|
||||||||
Total (a)
|
$
|
3,207.6
|
|
|
$
|
2,332.7
|
|
|
$
|
1,964.8
|
|
|
$
|
2,116.0
|
|
|
$
|
1,257.9
|
|
|
$
|
4,501.4
|
|
|
$
|
35,981.1
|
|
|
$
|
51,361.5
|
|
Projected cash interest payments on debt and capital lease obligations (b)
|
$
|
1,116.8
|
|
|
$
|
2,321.0
|
|
|
$
|
2,271.5
|
|
|
$
|
2,231.8
|
|
|
$
|
2,191.5
|
|
|
$
|
2,087.5
|
|
|
$
|
4,803.7
|
|
|
$
|
17,023.8
|
|
(a)
|
The commitments reflected in this table do not reflect any liabilities that are included in our
June 30, 2014
condensed consolidated balance sheet other than debt and capital lease obligations. Our liability for uncertain tax positions in the various jurisdictions in which we operate ($355.2 million
at
June 30, 2014
) has been excluded from the table as the amount and timing of any related payments are not subject to reasonable estimation.
|
(b)
|
Amounts are based on interest rates, interest payment dates and contractual maturities in effect as of
June 30, 2014
. 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, 2014
|
|
December 31, 2013
|
||
Spot rates:
|
|
|
|
||
Euro
|
0.7304
|
|
|
0.7252
|
|
British pound sterling
|
0.5847
|
|
|
0.6036
|
|
Swiss franc
|
0.8871
|
|
|
0.8886
|
|
Hungarian forint
|
226.19
|
|
|
215.62
|
|
Polish zloty
|
3.0369
|
|
|
3.0135
|
|
Czech koruna
|
20.048
|
|
|
19.828
|
|
Romanian lei
|
3.2029
|
|
|
3.2434
|
|
Chilean peso
|
552.90
|
|
|
525.45
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
June 30,
|
|
June 30,
|
||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||
Average rates:
|
|
|
|
|
|
|
|
||||
Euro
|
0.7293
|
|
|
0.7653
|
|
|
0.7295
|
|
|
0.7614
|
|
British pound sterling
|
0.5942
|
|
|
0.6509
|
|
|
0.5992
|
|
|
0.6481
|
|
Swiss franc
|
0.8891
|
|
|
0.9420
|
|
|
0.8908
|
|
|
0.9362
|
|
Hungarian forint
|
223.13
|
|
|
226.39
|
|
|
223.88
|
|
|
225.47
|
|
Polish zloty
|
3.0382
|
|
|
3.2154
|
|
|
3.0452
|
|
|
3.1808
|
|
Czech koruna
|
20.018
|
|
|
19.764
|
|
|
20.019
|
|
|
19.559
|
|
Romanian lei
|
3.2269
|
|
|
3.3666
|
|
|
3.2557
|
|
|
3.3441
|
|
Chilean peso
|
554.69
|
|
|
485.46
|
|
|
553.41
|
|
|
478.96
|
|
(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
£452 million
(
$773 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
£56 million
(
$96 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
€432 million
(
$591 million
);
|
(ii)
|
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
€253 million
(
$346 million
);
|
(iii)
|
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
€144 million
(
$197 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
€107 million
(
$146 million
) and, conversely, a decrease of 50 basis points would have decreased the aggregate fair value by approximately
€114 million
(
$156 million
); and
|
(v)
|
an instantaneous increase (decrease) in
UPC Broadband Holding
’s credit spread of 50 basis points (0.50%) would have increased (decreased) the aggregate fair value of the
UPC Broadband Holding
cross-currency and interest rate derivative contracts by approximately
€18 million
(
$25 million
).
|
|
Payments (receipts) due during:
|
|
Total
|
||||||||||||||||||||||||||||
|
Remainder
of
2014
|
|
Year ending December 31,
|
|
|||||||||||||||||||||||||||
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
|||||||||||||||||||
|
in millions
|
||||||||||||||||||||||||||||||
Projected derivative cash payments (receipts), net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest-related (a)
|
$
|
178.5
|
|
|
$
|
414.2
|
|
|
$
|
365.7
|
|
|
$
|
238.6
|
|
|
$
|
208.6
|
|
|
$
|
108.8
|
|
|
$
|
160.9
|
|
|
$
|
1,675.3
|
|
Principal-related (b)
|
(38.1
|
)
|
|
267.3
|
|
|
36.0
|
|
|
138.7
|
|
|
7.6
|
|
|
35.7
|
|
|
486.3
|
|
|
933.5
|
|
||||||||
Other (c)
|
29.9
|
|
|
62.9
|
|
|
(119.7
|
)
|
|
(110.7
|
)
|
|
(59.3
|
)
|
|
—
|
|
|
—
|
|
|
(196.9
|
)
|
||||||||
Total
|
$
|
170.3
|
|
|
$
|
744.4
|
|
|
$
|
282.0
|
|
|
$
|
266.6
|
|
|
$
|
156.9
|
|
|
$
|
144.5
|
|
|
$
|
647.2
|
|
|
$
|
2,411.9
|
|
(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 interest rate swap contracts.
|
(b)
|
Includes the principal-related cash flows of our cross-currency contracts.
|
(c)
|
Includes amounts related to our equity-related derivative instruments and, to a lesser extent, our foreign currency forward contracts. We may elect to use cash or the collective value of the related shares and equity-related derivative instrument to settle the
Sumitomo Collar Loan
and
Ziggo Collar Loan
.
|
Item 4.
|
CONTROLS AND PROCEDURES
|
Item 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
(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
|
||||
|
|
|
|
|
|
|
|
|
||||
April 1, 2014 through April 30, 2014:
|
|
|
|
|
|
|
|
|||||
Class A
|
5,183,512
|
|
|
$
|
41.93
|
|
|
5,183,512
|
|
|
(b)
|
|
Class C
|
6,001
|
|
|
$
|
40.97
|
|
|
6,001
|
|
|
(b)
|
|
May 1, 2014 through May 31, 2014:
|
|
|
|
|
|
|
|
|||||
Class A
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
(b)
|
|
Class C
|
3,180,432
|
|
|
$
|
42.05
|
|
|
3,180,432
|
|
|
(b)
|
|
June 1, 2014 through June 30, 2014:
|
|
|
|
|
|
|
|
|||||
Class A
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
(b)
|
|
Class C
|
3,389,661
|
|
|
$
|
42.41
|
|
|
3,389,661
|
|
|
(b)
|
|
Total — April 1, 2014 through June 30, 2014:
|
|
|
|
|
|
|
|
|||||
Class A
|
5,183,512
|
|
|
$
|
41.93
|
|
|
5,183,512
|
|
|
(b)
|
|
Class C
|
6,576,094
|
|
|
$
|
42.24
|
|
|
6,576,094
|
|
|
(b)
|
(a)
|
Average price paid per share includes direct acquisition costs and the effects of derivative instruments, where applicable.
|
(b)
|
At
June 30, 2014
, the remaining amount authorized for share repurchases was
$2,641.3 million
.
|
Item 6.
|
EXHIBITS
|
4 — Instruments Defining the Rights of Securities Holders, including Indentures:
|
|||
|
|
||
4.1
|
|
|
Telenet Additional Facility W Accession Agreement, dated April 9, 2014, among, inter alia, Telenet International Finance S.à.r.l. as Borrower, Telenet NV and Telenet International Finance S.à.r.l. as Guarantors, The Bank of Nova Scotia as Facility Agent, KBC Bank NV as Security Agent and the financial institutions listed therein as Additional Facility W Lenders, under the €2,300,000,000 Credit Agreement, originally dated August 1, 2007, as amended and restated from time to time, among Telenet Bidco NV (now known as Telenet NV) as borrower, Toronto Dominion (Texas) LLC as facility agent, the parties listed therein as original guarantors, ABN AMRO Bank N.V., BNP Paribas S.A. and J.P. Morgan PLC as mandated lead arrangers, KBC Bank NV as security agent, and the financial institutions listed therein as initial original lenders (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed April 15, 2014 (File No. 001-35961) (the April 15, 2014 8-K)).
|
|
|
|
|
4.2
|
|
|
Telenet Additional Facility Y Accession Agreement, dated April 9, 2014, among, inter alia, Telenet International Finance S.à.r.l. as Borrower, Telenet NV and Telenet International Finance S.à.r.l. as Guarantors, The Bank of Nova Scotia as Facility Agent, KBC Bank NV as Security Agent and the financial institutions listed therein as Additional Facility Y Lenders, under the €2,300,000,000 Credit Agreement, originally dated August 1, 2007, as amended and restated from time to time, among Telenet Bidco NV (now known as Telenet NV) as borrower, Toronto Dominion (Texas) LLC as facility agent, the parties listed therein as original guarantors, ABN AMRO Bank N.V., BNP Paribas S.A. and J.P. Morgan PLC as mandated lead arrangers, KBC Bank NV as security agent, and the financial institutions listed therein as initial original lenders (incorporated by reference to Exhibit 4.2 to the April 15, 2014 8-K).
|
|
|
||
4.3
|
|
|
Telenet Additional Facility X Accession Agreement, dated April 11, 2014, among, inter alia, Telenet International Finance S.à.r.l. as Borrower, Telenet NV and Telenet International Finance S.à.r.l. as Guarantors, The Bank of Nova Scotia as Facility Agent, KBC Bank NV as Security Agent and the financial institutions listed therein as Additional Facility X Lenders, under the €2,300,000,000 Credit Agreement, originally dated August 1, 2007, as amended and restated from time to time, among Telenet Bidco NV (now known as Telenet NV) as borrower, Toronto Dominion (Texas) LLC as facility agent, the parties listed therein as original guarantors, ABN AMRO Bank N.V., BNP Paribas S.A. and J.P. Morgan PLC as mandated lead arrangers, KBC Bank NV as security agent, and the financial institutions listed therein as initial original lenders (incorporated by reference to Exhibit 4.3 to the April 15, 2014 8-K).
|
|
|
|
|
4.4
|
|
|
Virgin Additional Facility D Accession Agreement, dated April 17, 2014, among, inter alia, Virgin Media SFA Finance Limited as Borrower, certain other subsidiaries of Virgin Media Inc., The Bank of Nova Scotia as Facility Agent and the financial institutions listed therein as Additional Facility D Lenders, under the Senior Facilities Agreement, originally dated as of June 7, 2013, as amended, among, among others, Virgin Media Finance PLC, certain other subsidiaries of Virgin Media Inc. and the lenders thereto (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed April 23, 2014 (File No. 001-35961) (the April 23, 2014 8-K)).
|
|
|
|
|
4.5
|
|
|
Virgin Additional Facility E Accession Agreement, dated April 17, 2014, among, inter alia, Virgin Media SFA Finance Limited as Borrower, certain other subsidiaries of Virgin Media Inc., The Bank of Nova Scotia as Facility Agent and the financial institutions listed therein as Additional Facility E Lenders, under the Senior Facilities Agreement, originally dated as of June 7, 2013, as amended, among, among others, Virgin Media Finance PLC, certain other subsidiaries of Virgin Media Inc. and the lenders thereto (incorporated by reference to Exhibit 4.2 to the April 23, 2014 8-K).
|
|
|
|
|
10 — Material Contracts:
|
|||
|
|
|
|
10.1
|
|
|
Employment Agreement, dated as of April 30, 2014, by and among the Registrant, Liberty Global, Inc. and Michael T. Fries (incorporated by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q filed May 6, 2014 (File No. 001-35961 (the May 6, 2014 10-Q)).
|
|
|
|
|
10.2
|
|
|
Form of Performance Grant Award Agreement under the 2014 Incentive Plan (Effective March 1, 2014)(the Incentive Plan) dated as of April 30, 2014, between the Registrant and Michael T. Fries (incorporated by reference to Exhibit 10.8 to the May 6, 2014 10-Q).
|
|
|
|
|
10.3
|
|
|
Form of Non-Qualified Share Option Agreement under the 2014 Nonemployee Director Incentive Plan effective March 1, 2014 (the Director Plan).*
|
|
|
|
|
10.4
|
|
|
Form of Restricted Share Units Agreement under the Director Plan. *
|
|
|
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
|
|
|
LIBERTY GLOBAL PLC
|
|
|
|
|
Dated:
|
August 5, 2014
|
|
/s/ M
ICHAEL
T. F
RIES
|
|
|
|
Michael T. Fries
President and Chief Executive Officer
|
|
|
|
|
Dated:
|
August 5, 2014
|
|
/s/ C
HARLES
H.R. B
RACKEN
|
|
|
|
Charles H.R. Bracken
Executive Vice President and Co-Chief
Financial Officer (Principal Financial Officer)
|
|
|
|
|
Dated:
|
August 5, 2014
|
|
/s/ B
ERNARD
G. D
VORAK
|
|
|
|
Bernard G. Dvorak
Executive Vice President and Co-Chief
Financial Officer (Principal Accounting Officer)
|
4 — Instruments Defining the Rights of Securities Holders, including Indentures:
|
|||
|
|
||
4.1
|
|
|
Telenet Additional Facility W Accession Agreement, dated April 9, 2014, among, inter alia, Telenet International Finance S.à.r.l. as Borrower, Telenet NV and Telenet International Finance S.à.r.l. as Guarantors, The Bank of Nova Scotia as Facility Agent, KBC Bank NV as Security Agent and the financial institutions listed therein as Additional Facility W Lenders, under the €2,300,000,000 Credit Agreement, originally dated August 1, 2007, as amended and restated from time to time, among Telenet Bidco NV (now known as Telenet NV) as borrower, Toronto Dominion (Texas) LLC as facility agent, the parties listed therein as original guarantors, ABN AMRO Bank N.V., BNP Paribas S.A. and J.P. Morgan PLC as mandated lead arrangers, KBC Bank NV as security agent, and the financial institutions listed therein as initial original lenders (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed April 15, 2014 (File No. 001-35961) (the April 15, 2014 8-K)).
|
|
|
|
|
4.2
|
|
|
Telenet Additional Facility Y Accession Agreement, dated April 9, 2014, among, inter alia, Telenet International Finance S.à.r.l. as Borrower, Telenet NV and Telenet International Finance S.à.r.l. as Guarantors, The Bank of Nova Scotia as Facility Agent, KBC Bank NV as Security Agent and the financial institutions listed therein as Additional Facility Y Lenders, under the €2,300,000,000 Credit Agreement, originally dated August 1, 2007, as amended and restated from time to time, among Telenet Bidco NV (now known as Telenet NV) as borrower, Toronto Dominion (Texas) LLC as facility agent, the parties listed therein as original guarantors, ABN AMRO Bank N.V., BNP Paribas S.A. and J.P. Morgan PLC as mandated lead arrangers, KBC Bank NV as security agent, and the financial institutions listed therein as initial original lenders (incorporated by reference to Exhibit 4.2 to the April 15, 2014 8-K).
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||
4.3
|
|
|
Telenet Additional Facility X Accession Agreement, dated April 11, 2014, among, inter alia, Telenet International Finance S.à.r.l. as Borrower, Telenet NV and Telenet International Finance S.à.r.l. as Guarantors, The Bank of Nova Scotia as Facility Agent, KBC Bank NV as Security Agent and the financial institutions listed therein as Additional Facility X Lenders, under the €2,300,000,000 Credit Agreement, originally dated August 1, 2007, as amended and restated from time to time, among Telenet Bidco NV (now known as Telenet NV) as borrower, Toronto Dominion (Texas) LLC as facility agent, the parties listed therein as original guarantors, ABN AMRO Bank N.V., BNP Paribas S.A. and J.P. Morgan PLC as mandated lead arrangers, KBC Bank NV as security agent, and the financial institutions listed therein as initial original lenders (incorporated by reference to Exhibit 4.3 to the April 15, 2014 8-K).
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|
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4.4
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|
|
Virgin Additional Facility D Accession Agreement, dated April 17, 2014, among, inter alia, Virgin Media SFA Finance Limited as Borrower, certain other subsidiaries of Virgin Media Inc., The Bank of Nova Scotia as Facility Agent and the financial institutions listed therein as Additional Facility D Lenders, under the Senior Facilities Agreement, originally dated as of June 7, 2013, as amended, among, among others, Virgin Media Finance PLC, certain other subsidiaries of Virgin Media Inc. and the lenders thereto (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed April 23, 2014 (File No. 001-35961) (the April 23, 2014 8-K)).
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4.5
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|
|
Virgin Additional Facility E Accession Agreement, dated April 17, 2014, among, inter alia, Virgin Media SFA Finance Limited as Borrower, certain other subsidiaries of Virgin Media Inc., The Bank of Nova Scotia as Facility Agent and the financial institutions listed therein as Additional Facility E Lenders, under the Senior Facilities Agreement, originally dated as of June 7, 2013, as amended, among, among others, Virgin Media Finance PLC, certain other subsidiaries of Virgin Media Inc. and the lenders thereto (incorporated by reference to Exhibit 4.2 to the April 23, 2014 8-K).
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|
||
10 — Material Contracts:
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|||
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10.1
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|
|
Employment Agreement, dated as of April 30, 2014, by and among the Registrant, Liberty Global, Inc. and Michael T. Fries (incorporated by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q filed May 6, 2014 (File No. 001-35961 (the May 6, 2014 10-Q)).
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10.2
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|
Form of Performance Grant Award Agreement under the 2014 Incentive Plan (Effective March 1, 2014)(the Incentive Plan) dated as of April 30, 2014, between the Registrant and Michael T. Fries (incorporated by reference to Exhibit 10.8 to the May 6, 2014 10-Q).
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10.3
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|
Form of Non-Qualified Share Option Agreement under the 2014 Nonemployee Director Incentive Plan effective March 1, 2014 (the Director Plan).*
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10.4
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|
|
Form of Restricted Share Units Agreement under the Director Plan. *
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|
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*
|
Filed herewith
|
**
|
Furnished herewith
|
(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
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(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.
|
(i)
|
If the Grantee’s service as a Nonemployee Director terminates by reason of Grantee’s death or Disability, the Restricted Share Units, to the extent not theretofore vested, and any related Unpaid RSU Dividend Equivalents, will immediately become fully vested.
|
(ii)
|
If Grantee’s service as a Nonemployee Director terminates prior to the Vesting Date for any reason other than as specified in Section 6(a)(i) above, then the Restricted Share Units, to the extent not theretofore vested, together with any related Unpaid RSU Dividend Equivalents, will be forfeited immediately.
|
(iii)
|
If the Grantee breaches any restrictions, terms or conditions provided in or established by the Board pursuant to the Plan or this Agreement with respect to the Restricted Share Units prior to the vesting thereof (including any attempted or completed transfer of
|
(A)
|
On the Corresponding Day in the sixth month following the Grant Date, 12.5% of the SARs will be exercisable;
|
(B)
|
On the Corresponding Day in the ninth month following the Grant Date and on the Corresponding Day in each third month thereafter, an additional 6.25% of the SARs will become exercisable; and
|
(C)
|
On and after the Corresponding Day in the forty-eighth (48) month following the Grant Date, 100% of the SARs will be exercisable.
|
Address:
|
|
Address:
|
|
(i)
|
On the Corresponding Day in the sixth month following the Grant Date, 12.5% of the Restricted Share Units shall become vested; and
|
(ii)
|
On the Corresponding Day in the ninth month following the Grant Date and on the Corresponding Day on each third month thereafter, an additional 6.25% of the Restricted Share Units shall become vested, until the Restricted Share Units are vested in full on the Corresponding Day in the forty-eighth (48) month following the Grant Date.
|
(i)
|
If Termination of Service occurs by reason of the Grantee’s death or Disability, the Restricted Share Units, to the extent not theretofore vested, and any related Unpaid RSU Dividend Equivalents, will immediately become fully vested.
|
(ii)
|
If the Termination of Service is due to the Grantee’s Retirement, then any unvested Restricted Share Units and Unpaid Dividend Equivalents shall immediately vest to the extent that such Restricted Share Units (including any related Unpaid RSU Dividend Equivalents) would have become vested had the Grantee remained in continuous employment with the Company through the date that is one year after the date of the Grantee’s Retirement. Such Restricted Share Units and any related Unpaid RSU Dividend Equivalents will be settled in accordance with Section 3.
|
(iii)
|
If Termination of Service is by the Company or a Subsidiary without Cause (as determined in the sole discretion of the Committee) and occurs more than six months after the Grant Date and prior to vesting in full of the Restricted Share Units, then an additional percentage of the Restricted Share Units, together with
|
(iv)
|
If Termination of Service occurs for any reason other than as specified in Section 6(a)(i), 6(a)(ii) or 6(a)(iii) above or 6(d) below, then the Restricted Share Units, to the extent not theretofore vested, together with any related Unpaid RSU Dividend Equivalents, will be forfeited immediately.
|
(v)
|
If the Grantee breaches any restrictions, terms or conditions provided in or established by the Committee pursuant to the Plan or this Agreement with respect to the Restricted Share Units prior to the vesting thereof (including any attempted or completed transfer of any such unvested Restricted Share Units contrary to the terms of the Plan or this Agreement), the unvested Restricted Share Units, together with any related Unpaid RSU Dividend Equivalents, will be forfeited immediately.
|
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 5, 2014
|
|
/s/ Michael T. Fries
|
|
|
|
Michael T. Fries
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
Dated:
|
August 5, 2014
|
|
/s/ Charles H.R. Bracken
|
|
|
|
Charles H.R. Bracken
|
|
|
|
Executive Vice President and Co-Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
Dated:
|
August 5, 2014
|
|
/s/ Bernard G. Dvorak
|
|
|
|
Bernard G. Dvorak
|
|
|
|
Executive Vice President and Co-Chief Financial Officer
|
|
|
|
(Principal Accounting Officer)
|