|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the quarterly period ended
|
June 30, 2018
|
¨
|
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.)
|
|
|
|
Griffin House, 161 Hammersmith Rd, London, United Kingdom
|
|
W6 8BS
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
|
Page
Number
|
|
PART I — FINANCIAL INFORMATION
|
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
|
||
|
||
|
||
|
||
|
||
|
||
ITEM 2.
|
||
ITEM 3.
|
||
ITEM 4.
|
||
|
PART II — OTHER INFORMATION
|
|
ITEM 2.
|
||
ITEM 6.
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
in millions
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
862.4
|
|
|
$
|
1,672.4
|
|
Trade receivables, net
|
1,323.6
|
|
|
1,411.0
|
|
||
Derivative instruments (note 6)
|
385.3
|
|
|
494.4
|
|
||
Prepaid expenses
|
197.0
|
|
|
133.8
|
|
||
Current assets of discontinued operations (note 4)
|
425.2
|
|
|
268.1
|
|
||
Other current assets (notes 3 and 5)
|
378.0
|
|
|
351.9
|
|
||
Total current assets
|
3,571.5
|
|
|
4,331.6
|
|
||
Investments and related note receivables (including $2,164.1 million and $2,315.3 million, respectively, measured at fair value on a recurring basis) (note 5)
|
6,317.8
|
|
|
6,671.4
|
|
||
Property and equipment, net (note 8)
|
14,053.0
|
|
|
14,245.3
|
|
||
Goodwill (note 8)
|
13,999.2
|
|
|
14,354.1
|
|
||
Deferred tax assets (note 10)
|
3,135.6
|
|
|
3,133.1
|
|
||
Long-term assets of discontinued operations (note 4)
|
10,933.8
|
|
|
11,141.1
|
|
||
Other assets, net (notes 3, 6 and 8)
|
3,700.0
|
|
|
3,720.2
|
|
||
Total assets
|
$
|
55,710.9
|
|
|
$
|
57,596.8
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
in millions
|
||||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
831.0
|
|
|
$
|
934.1
|
|
Deferred revenue
|
846.2
|
|
|
942.2
|
|
||
Current portion of debt and capital lease obligations (note 9)
|
3,392.6
|
|
|
3,680.1
|
|
||
Accrued capital expenditures
|
458.6
|
|
|
581.7
|
|
||
Current liabilities of discontinued operations (note 4)
|
1,873.1
|
|
|
1,587.7
|
|
||
Other accrued and current liabilities (notes 6 and 13)
|
2,583.4
|
|
|
2,240.0
|
|
||
Total current liabilities
|
9,984.9
|
|
|
9,965.8
|
|
||
Long-term debt and capital lease obligations (note 9)
|
28,425.9
|
|
|
29,023.4
|
|
||
Long-term liabilities of discontinued operations (note 4)
|
10,125.4
|
|
|
9,967.6
|
|
||
Other long-term liabilities (notes 6, 10, and 13)
|
2,422.8
|
|
|
2,247.0
|
|
||
Total liabilities
|
50,959.0
|
|
|
51,203.8
|
|
||
Commitments and contingencies (notes 6, 9, 10 and 15)
|
|
|
|
||||
Equity (note 11):
|
|
|
|
||||
Liberty Global shareholders:
|
|
|
|
||||
Class A ordinary shares, $0.01 nominal value. Issued and outstanding 207,403,209 and 219,668,579 shares, respectively
|
2.1
|
|
|
2.2
|
|
||
Class B ordinary shares, $0.01 nominal value. Issued and outstanding 11,102,619 shares at each date
|
0.1
|
|
|
0.1
|
|
||
Class C ordinary shares, $0.01 nominal value. Issued and outstanding 555,820,059 and 584,332,055 shares, respectively
|
5.6
|
|
|
5.8
|
|
||
Additional paid-in capital
|
10,095.5
|
|
|
11,358.6
|
|
||
Accumulated deficit
|
(6,171.4
|
)
|
|
(6,217.6
|
)
|
||
Accumulated other comprehensive earnings, net of taxes
|
1,186.4
|
|
|
1,656.0
|
|
||
Treasury shares, at cost
|
(0.1
|
)
|
|
(0.1
|
)
|
||
Total Liberty Global shareholders
|
5,118.2
|
|
|
6,805.0
|
|
||
Noncontrolling interests
|
(366.3
|
)
|
|
(412.0
|
)
|
||
Total equity
|
4,751.9
|
|
|
6,393.0
|
|
||
Total liabilities and equity
|
$
|
55,710.9
|
|
|
$
|
57,596.8
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions, except per share amounts
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue (notes 3, 5 and 16)
|
$
|
3,045.1
|
|
|
$
|
2,774.9
|
|
|
$
|
6,139.6
|
|
|
$
|
5,444.7
|
|
Operating costs and expenses (exclusive of depreciation and amortization, shown separately below):
|
|
|
|
|
|
|
|
||||||||
Programming and other direct costs of services
|
818.0
|
|
|
704.6
|
|
|
1,677.4
|
|
|
1,418.1
|
|
||||
Other operating (note 12)
|
431.2
|
|
|
409.0
|
|
|
899.2
|
|
|
804.9
|
|
||||
Selling, general and administrative (SG&A) (note 12)
|
531.6
|
|
|
517.3
|
|
|
1,069.6
|
|
|
1,000.2
|
|
||||
Depreciation and amortization
|
970.2
|
|
|
922.0
|
|
|
2,017.5
|
|
|
1,789.7
|
|
||||
Impairment, restructuring and other operating items, net (note 13)
|
30.2
|
|
|
13.1
|
|
|
91.6
|
|
|
6.4
|
|
||||
|
2,781.2
|
|
|
2,566.0
|
|
|
5,755.3
|
|
|
5,019.3
|
|
||||
Operating income
|
263.9
|
|
|
208.9
|
|
|
384.3
|
|
|
425.4
|
|
||||
Non-operating income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(381.1
|
)
|
|
(348.8
|
)
|
|
(757.0
|
)
|
|
(688.3
|
)
|
||||
Realized and unrealized gains (losses) on derivative instruments, net (note 6)
|
675.5
|
|
|
(351.7
|
)
|
|
464.2
|
|
|
(596.1
|
)
|
||||
Foreign currency transaction gains (losses), net
|
52.1
|
|
|
(18.2
|
)
|
|
(49.6
|
)
|
|
11.0
|
|
||||
Realized and unrealized gains (losses) due to changes in fair values of certain investments and debt, net (notes 5, 7 and 9)
|
61.5
|
|
|
(141.4
|
)
|
|
4.3
|
|
|
(42.6
|
)
|
||||
Losses on debt modification and extinguishment, net (note 9)
|
(20.1
|
)
|
|
(53.6
|
)
|
|
(22.7
|
)
|
|
(98.9
|
)
|
||||
Share of losses of affiliates, net (note 5)
|
(82.3
|
)
|
|
(3.6
|
)
|
|
(118.8
|
)
|
|
(19.3
|
)
|
||||
Other income, net
|
6.4
|
|
|
15.8
|
|
|
16.2
|
|
|
32.4
|
|
||||
|
312.0
|
|
|
(901.5
|
)
|
|
(463.4
|
)
|
|
(1,401.8
|
)
|
||||
Earnings (loss) from continuing operations before income taxes
|
575.9
|
|
|
(692.6
|
)
|
|
(79.1
|
)
|
|
(976.4
|
)
|
||||
Income tax benefit (expense) (note 10)
|
92.8
|
|
|
(68.7
|
)
|
|
(617.2
|
)
|
|
(150.4
|
)
|
||||
Earnings (loss) from continuing operations
|
668.7
|
|
|
(761.3
|
)
|
|
(696.3
|
)
|
|
(1,126.8
|
)
|
||||
Earnings from discontinued operations, net of taxes (note 4)
|
281.8
|
|
|
108.9
|
|
|
468.2
|
|
|
207.2
|
|
||||
Net earnings (loss)
|
950.5
|
|
|
(652.4
|
)
|
|
(228.1
|
)
|
|
(919.6
|
)
|
||||
Net earnings attributable to noncontrolling interests
|
(37.9
|
)
|
|
(21.9
|
)
|
|
(45.8
|
)
|
|
(74.9
|
)
|
||||
Net earnings (loss) attributable to Liberty Global shareholders
|
$
|
912.6
|
|
|
$
|
(674.3
|
)
|
|
$
|
(273.9
|
)
|
|
$
|
(994.5
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) from continuing operations attributable to Liberty Global shareholders per share (note 14)
|
$
|
0.80
|
|
|
$
|
(0.90
|
)
|
|
$
|
(0.93
|
)
|
|
$
|
(1.34
|
)
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) from continuing operations attributable to Liberty Global shareholders per share (note 14)
|
$
|
0.80
|
|
|
$
|
(0.90
|
)
|
|
$
|
(0.93
|
)
|
|
$
|
(1.34
|
)
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Net earnings (loss)
|
$
|
950.5
|
|
|
$
|
(652.4
|
)
|
|
$
|
(228.1
|
)
|
|
$
|
(919.6
|
)
|
Other comprehensive earnings (loss), net of taxes:
|
|
|
|
|
|
|
|
||||||||
Continuing operations:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(1,012.6
|
)
|
|
875.8
|
|
|
(431.7
|
)
|
|
1,122.2
|
|
||||
Pension-related adjustments and other
|
(6.2
|
)
|
|
(1.1
|
)
|
|
(7.1
|
)
|
|
(2.6
|
)
|
||||
Other comprehensive earnings (loss) from continuing operations
|
(1,018.8
|
)
|
|
874.7
|
|
|
(438.8
|
)
|
|
1,119.6
|
|
||||
Other comprehensive loss from discontinued operations
|
(45.2
|
)
|
|
(4.2
|
)
|
|
(33.0
|
)
|
|
(9.2
|
)
|
||||
Other comprehensive earnings (loss)
|
(1,064.0
|
)
|
|
870.5
|
|
|
(471.8
|
)
|
|
1,110.4
|
|
||||
Comprehensive earnings (loss)
|
(113.5
|
)
|
|
218.1
|
|
|
(699.9
|
)
|
|
190.8
|
|
||||
Comprehensive earnings attributable to noncontrolling interests
|
(35.7
|
)
|
|
(22.0
|
)
|
|
(43.6
|
)
|
|
(74.5
|
)
|
||||
Comprehensive earnings (loss) attributable to Liberty Global shareholders
|
$
|
(149.2
|
)
|
|
$
|
196.1
|
|
|
$
|
(743.5
|
)
|
|
$
|
116.3
|
|
|
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, 2018, before effect of accounting change
|
$
|
2.2
|
|
|
$
|
0.1
|
|
|
$
|
5.8
|
|
|
$
|
11,358.6
|
|
|
$
|
(6,217.6
|
)
|
|
$
|
1,656.0
|
|
|
$
|
(0.1
|
)
|
|
$
|
6,805.0
|
|
|
$
|
(412.0
|
)
|
|
$
|
6,393.0
|
|
Accounting change (note 2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
320.1
|
|
|
—
|
|
|
—
|
|
|
320.1
|
|
|
4.4
|
|
|
324.5
|
|
||||||||||
Balance at January 1, 2018, as adjusted for accounting change
|
2.2
|
|
|
0.1
|
|
|
5.8
|
|
|
11,358.6
|
|
|
(5,897.5
|
)
|
|
1,656.0
|
|
|
(0.1
|
)
|
|
7,125.1
|
|
|
(407.6
|
)
|
|
6,717.5
|
|
||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(273.9
|
)
|
|
—
|
|
|
—
|
|
|
(273.9
|
)
|
|
45.8
|
|
|
(228.1
|
)
|
||||||||||
Other comprehensive loss, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(469.6
|
)
|
|
—
|
|
|
(469.6
|
)
|
|
(2.2
|
)
|
|
(471.8
|
)
|
||||||||||
Repurchase and cancellation of Liberty Global ordinary shares (note 11)
|
(0.1
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
(1,288.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,288.3
|
)
|
|
—
|
|
|
(1,288.3
|
)
|
||||||||||
Share-based compensation (note 12)
|
—
|
|
|
—
|
|
|
—
|
|
|
84.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
84.4
|
|
|
—
|
|
|
84.4
|
|
||||||||||
Adjustments due to changes in subsidiaries’ equity and other, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(59.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59.5
|
)
|
|
(2.3
|
)
|
|
(61.8
|
)
|
||||||||||
Balance at June 30, 2018
|
$
|
2.1
|
|
|
$
|
0.1
|
|
|
$
|
5.6
|
|
|
$
|
10,095.5
|
|
|
$
|
(6,171.4
|
)
|
|
$
|
1,186.4
|
|
|
$
|
(0.1
|
)
|
|
$
|
5,118.2
|
|
|
$
|
(366.3
|
)
|
|
$
|
4,751.9
|
|
|
Six months ended
|
||||||
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
in millions
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(228.1
|
)
|
|
$
|
(919.6
|
)
|
Earnings from discontinued operations
|
468.2
|
|
|
207.2
|
|
||
Loss from continuing operations
|
(696.3
|
)
|
|
(1,126.8
|
)
|
||
Adjustments to reconcile loss from continuing operations to net cash provided by operating activities from continuing operations:
|
|
|
|
||||
Share-based compensation expense
|
88.2
|
|
|
80.3
|
|
||
Depreciation and amortization
|
2,017.5
|
|
|
1,789.7
|
|
||
Impairment, restructuring and other operating items, net
|
91.6
|
|
|
6.4
|
|
||
Amortization of deferred financing costs and non-cash interest
|
29.1
|
|
|
31.6
|
|
||
Realized and unrealized losses (gains) on derivative instruments, net
|
(464.2
|
)
|
|
596.1
|
|
||
Foreign currency transaction losses (gains), net
|
49.6
|
|
|
(11.0
|
)
|
||
Realized and unrealized losses (gains) due to changes in fair values of certain investments and debt, net
|
(4.3
|
)
|
|
42.6
|
|
||
Losses on debt modification and extinguishment, net
|
22.7
|
|
|
98.9
|
|
||
Share of losses of affiliates, net
|
118.8
|
|
|
19.3
|
|
||
Deferred income tax benefit
|
(125.3
|
)
|
|
(25.4
|
)
|
||
Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions
|
885.4
|
|
|
(48.1
|
)
|
||
Dividends from affiliates and others
|
130.1
|
|
|
104.8
|
|
||
Net cash provided by operating activities of continuing operations
|
2,142.9
|
|
|
1,558.4
|
|
||
Net cash provided by operating activities of discontinued operations
|
1,122.2
|
|
|
1,153.2
|
|
||
Net cash provided by operating activities
|
3,265.1
|
|
|
2,711.6
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures, net
|
(797.8
|
)
|
|
(588.0
|
)
|
||
Cash paid in connection with acquisitions, net of cash acquired
|
(71.7
|
)
|
|
(438.6
|
)
|
||
Investments in and loans to affiliates and others
|
(56.8
|
)
|
|
(64.7
|
)
|
||
Distributions received from affiliates
|
—
|
|
|
1,569.4
|
|
||
Equalization payment related to the VodafoneZiggo JV Transaction
|
—
|
|
|
845.3
|
|
||
Other investing activities, net
|
30.0
|
|
|
(4.3
|
)
|
||
Net cash provided (used) by investing activities of continuing operations
|
(896.3
|
)
|
|
1,319.1
|
|
||
Net cash used by investing activities of discontinued operations
|
(281.0
|
)
|
|
(607.0
|
)
|
||
Net cash provided (used) by investing activities
|
$
|
(1,177.3
|
)
|
|
$
|
712.1
|
|
|
Six months ended
|
||||||
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
in millions
|
||||||
Cash flows from financing activities:
|
|
|
|
||||
Repayments and repurchases of debt and capital lease obligations
|
$
|
(3,836.4
|
)
|
|
$
|
(4,698.3
|
)
|
Borrowings of debt
|
2,146.5
|
|
|
4,597.9
|
|
||
Repurchase of Liberty Global ordinary shares
|
(1,276.2
|
)
|
|
(2,108.7
|
)
|
||
Payment of financing costs and debt premiums
|
(39.5
|
)
|
|
(122.0
|
)
|
||
Net cash received (paid) related to derivative instruments
|
10.2
|
|
|
(139.0
|
)
|
||
Value-added taxes (VAT) paid on behalf of the VodafoneZiggo JV
|
—
|
|
|
(162.6
|
)
|
||
Other financing activities, net
|
(42.1
|
)
|
|
(44.3
|
)
|
||
Net cash used by financing activities of continuing operations
|
(3,037.5
|
)
|
|
(2,677.0
|
)
|
||
Net cash provided (used) by financing activities of discontinued operations
|
155.3
|
|
|
(80.0
|
)
|
||
Net cash used by financing activities
|
(2,882.2
|
)
|
|
(2,757.0
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash:
|
|
|
|
||||
Continuing operations
|
(9.3
|
)
|
|
93.7
|
|
||
Discontinued operations
|
—
|
|
|
(2.7
|
)
|
||
Total
|
(9.3
|
)
|
|
91.0
|
|
||
|
|
|
|
|
|
||
Net increase (decrease) in cash and cash equivalents and restricted cash:
|
|
|
|
||||
Continuing operations
|
(1,800.2
|
)
|
|
294.2
|
|
||
Discontinued operations - Vodafone Disposal Group and UPC Austria
|
996.5
|
|
|
405.5
|
|
||
Discontinued operations - LiLAC Group
|
—
|
|
|
58.0
|
|
||
Total
|
$
|
(803.7
|
)
|
|
$
|
757.7
|
|
|
|
|
|
||||
Cash and cash equivalents and restricted cash:
|
|
|
|
||||
Beginning of period
|
$
|
1,683.0
|
|
|
$
|
1,087.4
|
|
Net increase (decrease) (excluding, during the 2017 period, LiLAC Group activity related to cash balances included in discontinued operations)
|
(803.7
|
)
|
|
699.7
|
|
||
End of period
|
$
|
879.3
|
|
|
$
|
1,787.1
|
|
|
|
|
|
||||
Cash paid for interest:
|
|
|
|
||||
Continuing operations
|
$
|
714.8
|
|
|
$
|
717.8
|
|
Discontinued operations
|
222.3
|
|
|
432.6
|
|
||
Total
|
$
|
937.1
|
|
|
$
|
1,150.4
|
|
|
|
|
|
||||
Net cash paid for taxes:
|
|
|
|
||||
Continuing operations
|
$
|
174.4
|
|
|
$
|
216.0
|
|
Discontinued operations
|
12.8
|
|
|
70.4
|
|
||
Total
|
$
|
187.2
|
|
|
$
|
286.4
|
|
|
|
|
|
||||
Details of end of period cash and cash equivalents and restricted cash:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
862.4
|
|
|
$
|
1,090.7
|
|
Restricted cash included in other current assets and other assets, net
|
14.9
|
|
|
694.4
|
|
||
Restricted cash included in current and long-term assets of discontinued operations
|
2.0
|
|
|
2.0
|
|
||
Total cash and cash equivalents and restricted cash
|
$
|
879.3
|
|
|
$
|
1,787.1
|
|
•
|
When we enter into contracts to provide services to our customers, we often provide time-limited discounts or free service periods. Under previous accounting rules, we recognized revenue, net of discounts, during the promotional periods and did not recognize any revenue during free service periods. Under ASU 2014-09, revenue recognition for those contracts that contain substantive termination penalties is accelerated, as the impact of the discounts or free service periods is recognized uniformly over the contractual period. For contracts that do not have substantive termination penalties, we continue to record the impacts of partial or full discounts during the applicable promotional periods.
|
•
|
When we enter into contracts to provide services to our customers, we often charge installation or other upfront fees. Under previous accounting rules, installation fees related to services provided over our cable networks were recognized as revenue during the period in which the installation occurred to the extent these fees were equal to or less than direct selling costs. Under ASU 2014-09, these fees are generally deferred and recognized as revenue over the contractual period, or longer if the upfront fee results in a material renewal right.
|
|
Balance at December 31, 2017
|
|
ASU 2014-09 Adjustments
|
|
Balance at January 1, 2018
|
|||||
|
in millions
|
|||||||||
Assets:
|
|
|
|
|
|
|||||
Trade receivables, net
|
$
|
1,411.0
|
|
|
(0.7
|
)
|
|
$
|
1,410.3
|
|
Current assets of discontinued operations
|
$
|
268.1
|
|
|
98.2
|
|
|
$
|
366.3
|
|
Other current assets
|
$
|
351.9
|
|
|
76.6
|
|
|
$
|
428.5
|
|
Investments and related note receivables (a)
|
$
|
6,671.4
|
|
|
191.2
|
|
|
$
|
6,862.6
|
|
Deferred tax assets
|
$
|
3,133.1
|
|
|
(16.0
|
)
|
|
$
|
3,117.1
|
|
Long-term assets of discontinued operations
|
$
|
11,141.1
|
|
|
29.1
|
|
|
$
|
11,170.2
|
|
Other assets, net
|
$
|
3,720.2
|
|
|
21.4
|
|
|
$
|
3,741.6
|
|
|
|
|
|
|
|
|||||
Liabilities:
|
|
|
|
|
|
|||||
Deferred revenue
|
$
|
942.2
|
|
|
5.6
|
|
|
$
|
947.8
|
|
Current liabilities of discontinued operations
|
$
|
1,587.7
|
|
|
26.7
|
|
|
$
|
1,614.4
|
|
Other accrued and current liabilities
|
$
|
2,240.0
|
|
|
1.2
|
|
|
$
|
2,241.2
|
|
Long-term liabilities of discontinued operations
|
$
|
9,967.6
|
|
|
39.1
|
|
|
$
|
10,006.7
|
|
Other long-term liabilities
|
$
|
2,247.0
|
|
|
2.7
|
|
|
$
|
2,249.7
|
|
|
|
|
|
|
|
|||||
Equity:
|
|
|
|
|
|
|||||
Accumulated deficit (a)
|
$
|
(6,217.6
|
)
|
|
320.1
|
|
|
$
|
(5,897.5
|
)
|
Noncontrolling interests
|
$
|
(412.0
|
)
|
|
4.4
|
|
|
$
|
(407.6
|
)
|
(a)
|
The ASU 2014-09 adjustment amounts include the impact of our share of the VodafoneZiggo JV’s adjustment to its owners’ equity.
|
|
UPC Austria
|
|
Vodafone Disposal Group
|
|
Total
|
||||||
|
in millions
|
||||||||||
Assets:
|
|
|
|
|
|
||||||
Current assets other than cash
|
$
|
40.9
|
|
|
$
|
384.3
|
|
|
$
|
425.2
|
|
Property and equipment, net
|
479.6
|
|
|
5,245.8
|
|
|
5,725.4
|
|
|||
Goodwill
|
706.0
|
|
|
4,041.0
|
|
|
4,747.0
|
|
|||
Other assets, net
|
3.2
|
|
|
458.2
|
|
|
461.4
|
|
|||
Total assets
|
$
|
1,229.7
|
|
|
$
|
10,129.3
|
|
|
$
|
11,359.0
|
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
||||||
Current portion of debt and capital lease obligations
|
$
|
0.8
|
|
|
$
|
602.3
|
|
|
$
|
603.1
|
|
Other accrued and current liabilities
|
82.8
|
|
|
1,187.2
|
|
|
1,270.0
|
|
|||
Long-term debt and capital lease obligations
|
1.3
|
|
|
9,155.7
|
|
|
9,157.0
|
|
|||
Other long-term liabilities
|
85.1
|
|
|
883.3
|
|
|
968.4
|
|
|||
Total liabilities
|
$
|
170.0
|
|
|
$
|
11,828.5
|
|
|
$
|
11,998.5
|
|
|
UPC Austria
|
|
Vodafone Disposal Group
|
|
Total
|
||||||
|
in millions
|
||||||||||
Assets:
|
|
|
|
|
|
||||||
Current assets other than cash
|
$
|
29.2
|
|
|
$
|
238.9
|
|
|
$
|
268.1
|
|
Property and equipment, net
|
451.9
|
|
|
5,290.1
|
|
|
5,742.0
|
|
|||
Goodwill
|
732.2
|
|
|
4,181.0
|
|
|
4,913.2
|
|
|||
Other assets, net
|
3.2
|
|
|
482.7
|
|
|
485.9
|
|
|||
Total assets
|
$
|
1,216.5
|
|
|
$
|
10,192.7
|
|
|
$
|
11,409.2
|
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
||||||
Current portion of debt and capital lease obligations
|
$
|
0.8
|
|
|
$
|
486.9
|
|
|
$
|
487.7
|
|
Other accrued and current liabilities
|
77.7
|
|
|
1,022.3
|
|
|
1,100.0
|
|
|||
Long-term debt and capital lease obligations
|
1.5
|
|
|
9,026.1
|
|
|
9,027.6
|
|
|||
Other long-term liabilities
|
76.3
|
|
|
863.7
|
|
|
940.0
|
|
|||
Total liabilities
|
$
|
156.3
|
|
|
$
|
11,399.0
|
|
|
$
|
11,555.3
|
|
|
UPC Austria
|
|
Vodafone Disposal Group
|
|
Total
|
||||||
|
in millions
|
||||||||||
Three months ended June 30, 2018
|
|
|
|
|
|
||||||
Revenue
|
$
|
107.4
|
|
|
$
|
892.9
|
|
|
$
|
1,000.3
|
|
Operating income
|
$
|
61.7
|
|
|
$
|
419.9
|
|
|
$
|
481.6
|
|
|
|
|
|
|
|
||||||
Earnings before income taxes and noncontrolling interests
|
$
|
61.5
|
|
|
$
|
310.1
|
|
|
$
|
371.6
|
|
Income tax expense
|
(9.7
|
)
|
|
(80.1
|
)
|
|
(89.8
|
)
|
|||
Net earnings
|
51.8
|
|
|
230.0
|
|
|
281.8
|
|
|||
Net earnings attributable to noncontrolling interests
|
(1.8
|
)
|
|
—
|
|
|
(1.8
|
)
|
|||
Net earnings attributable to Liberty Global shareholders
|
$
|
50.0
|
|
|
$
|
230.0
|
|
|
$
|
280.0
|
|
|
UPC Austria
|
|
Vodafone Disposal Group
|
|
Total
|
||||||
|
in millions
|
||||||||||
Six months ended June 30, 2018
|
|
|
|
|
|
||||||
Revenue
|
$
|
216.7
|
|
|
$
|
1,845.2
|
|
|
$
|
2,061.9
|
|
Operating income
|
$
|
122.9
|
|
|
$
|
731.5
|
|
|
$
|
854.4
|
|
|
|
|
|
|
|
||||||
Earnings before income taxes and noncontrolling interests
|
$
|
122.7
|
|
|
$
|
491.5
|
|
|
$
|
614.2
|
|
Income tax expense
|
(19.2
|
)
|
|
(126.8
|
)
|
|
(146.0
|
)
|
|||
Net earnings
|
103.5
|
|
|
364.7
|
|
|
468.2
|
|
|||
Net earnings attributable to noncontrolling interests
|
(3.6
|
)
|
|
—
|
|
|
(3.6
|
)
|
|||
Net earnings attributable to Liberty Global shareholders
|
$
|
99.9
|
|
|
$
|
364.7
|
|
|
$
|
464.6
|
|
|
UPC Austria
|
|
Vodafone Disposal Group
|
|
LiLAC Group
|
|
Total
|
||||||||
|
in millions
|
||||||||||||||
Three months ended June 30, 2017
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
95.9
|
|
|
$
|
792.9
|
|
|
$
|
920.9
|
|
|
$
|
1,809.7
|
|
Operating income
|
$
|
35.6
|
|
|
$
|
234.5
|
|
|
$
|
155.4
|
|
|
$
|
425.5
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings before income taxes and noncontrolling
interests
|
$
|
35.6
|
|
|
$
|
125.9
|
|
|
$
|
8.4
|
|
|
$
|
169.9
|
|
Income tax expense
|
(3.0
|
)
|
|
(27.4
|
)
|
|
(30.6
|
)
|
|
(61.0
|
)
|
||||
Net earnings (loss)
|
32.6
|
|
|
98.5
|
|
|
(22.2
|
)
|
|
108.9
|
|
||||
Net earnings attributable to noncontrolling
interests
|
(1.6
|
)
|
|
—
|
|
|
(15.5
|
)
|
|
(17.1
|
)
|
||||
Net earnings (loss) attributable to Liberty Global shareholders
|
$
|
31.0
|
|
|
$
|
98.5
|
|
|
$
|
(37.7
|
)
|
|
$
|
91.8
|
|
|
UPC Austria
|
|
Vodafone Disposal Group
|
|
LiLAC Group
|
|
Total
|
||||||||
|
in millions
|
||||||||||||||
Six months ended June 30 2017
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
188.1
|
|
|
$
|
1,549.9
|
|
|
$
|
1,831.8
|
|
|
$
|
3,569.8
|
|
Operating income
|
$
|
70.1
|
|
|
$
|
410.0
|
|
|
$
|
290.2
|
|
|
$
|
770.3
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings before income taxes and noncontrolling interests
|
$
|
70.1
|
|
|
$
|
221.1
|
|
|
$
|
42.1
|
|
|
$
|
333.3
|
|
Income tax expense
|
(5.8
|
)
|
|
(45.1
|
)
|
|
(75.2
|
)
|
|
(126.1
|
)
|
||||
Net earnings (loss)
|
64.3
|
|
|
176.0
|
|
|
(33.1
|
)
|
|
207.2
|
|
||||
Net earnings attributable to noncontrolling
interests
|
(3.2
|
)
|
|
—
|
|
|
(31.9
|
)
|
|
(35.1
|
)
|
||||
Net earnings (loss) attributable to Liberty Global shareholders
|
$
|
61.1
|
|
|
$
|
176.0
|
|
|
$
|
(65.0
|
)
|
|
$
|
172.1
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings from discontinued operations attributable to Liberty Global shareholders per Liberty Global Share
|
$
|
0.35
|
|
|
$
|
0.15
|
|
|
$
|
0.58
|
|
|
$
|
0.27
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings from discontinued operations attributable to Liberty Global shareholders per Liberty Global Share
|
$
|
0.35
|
|
|
$
|
0.15
|
|
|
$
|
0.58
|
|
|
$
|
0.27
|
|
|
Three months ended
June 30, 2017
|
|
Six months ended
June 30, 2017
|
||||
|
|
|
|
||||
Basic and diluted loss from discontinued operations attributable to Liberty Global shareholders per LiLAC Share
|
$
|
(0.22
|
)
|
|
$
|
(0.38
|
)
|
|
|
|
|
||||
Weighted average ordinary shares outstanding (LiLAC Shares) - basic and diluted
|
172,074,934
|
|
|
172,410,613
|
|
Accounting Method
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
in millions
|
|||||||
Equity (a):
|
|
|
|
|||||
VodafoneZiggo JV (b)
|
$
|
3,993.0
|
|
|
$
|
4,162.8
|
|
|
Other
|
160.7
|
|
|
161.8
|
|
|||
Total — equity
|
4,153.7
|
|
|
4,324.6
|
|
|||
Fair value:
|
|
|
|
|||||
ITV plc (ITV) — subject to re-use rights
|
914.9
|
|
|
892.0
|
|
|||
Sumitomo Corporation (Sumitomo)
|
600.0
|
|
|
776.5
|
|
|||
ITI Neovision S.A.
|
163.8
|
|
|
161.9
|
|
|||
Lions Gate Entertainment Corp (Lionsgate)
|
120.7
|
|
|
163.9
|
|
|||
Casa Systems, Inc. (Casa)
|
72.4
|
|
|
76.3
|
|
|||
Other
|
292.3
|
|
|
244.7
|
|
|||
Total — fair value
|
2,164.1
|
|
|
2,315.3
|
|
|||
Cost (c)
|
—
|
|
|
31.5
|
|
|||
Total
|
$
|
6,317.8
|
|
|
$
|
6,671.4
|
|
(a)
|
At June 30, 2018 and December 31, 2017, the carrying amounts of each of our equity method investments did not materially exceed our proportionate share of the respective investee’s net assets.
|
(b)
|
Amounts include a related-party euro-denominated note receivable (the VodafoneZiggo JV Receivable) with a principal amount of $1,050.9 million and $1,081.9 million, respectively, due from a subsidiary of the VodafoneZiggo JV (as defined below) to a subsidiary of Liberty Global. The VodafoneZiggo JV Receivable bears interest at 5.55% and requires €100.0 million ($116.8 million) of principal to be paid annually through December 31, 2019, with the remaining principal due on January 16, 2027. The accrued interest on the VodafoneZiggo JV Receivable will be payable in a manner mutually agreed upon by Liberty Global and the VodafoneZiggo JV. During the six months ended June 30, 2018, interest accrued on the VodafoneZiggo JV Receivable was $30.2 million, all of which has been cash settled.
|
(c)
|
As a result of the January 1, 2018 adoption of ASU 2016-01, all of our cost investments have been reclassified to fair value investments.
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
VodafoneZiggo JV (a)
|
$
|
(63.2
|
)
|
|
$
|
6.5
|
|
|
$
|
(90.0
|
)
|
|
$
|
5.2
|
|
Other
|
(19.1
|
)
|
|
(10.1
|
)
|
|
(28.8
|
)
|
|
(24.5
|
)
|
||||
Total
|
$
|
(82.3
|
)
|
|
$
|
(3.6
|
)
|
|
$
|
(118.8
|
)
|
|
$
|
(19.3
|
)
|
(a)
|
Amounts include the net effect of (i) 100% of the interest income earned on the VodafoneZiggo JV Receivable, (ii) 100% of the share-based compensation expense associated with Liberty Global awards held by VodafoneZiggo JV employees who were formerly employees of Liberty Global, as these awards remain our responsibility, and (iii) our 50% share of the remaining results of operations of the VodafoneZiggo JV.
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
1,114.5
|
|
|
$
|
1,081.3
|
|
|
$
|
2,296.1
|
|
|
$
|
2,165.2
|
|
Loss before income taxes
|
$
|
(201.2
|
)
|
|
$
|
(25.8
|
)
|
|
$
|
(319.8
|
)
|
|
$
|
(69.1
|
)
|
Net loss
|
$
|
(150.8
|
)
|
|
$
|
(18.3
|
)
|
|
$
|
(238.1
|
)
|
|
$
|
(48.6
|
)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Current (a)
|
|
Long-term (a)
|
|
Total
|
|
Current (a)
|
|
Long-term (a)
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cross-currency and interest rate derivative contracts (b)
|
$
|
371.6
|
|
|
$
|
1,344.1
|
|
|
$
|
1,715.7
|
|
|
$
|
477.0
|
|
|
$
|
1,071.9
|
|
|
$
|
1,548.9
|
|
Equity-related derivative instruments (c)
|
—
|
|
|
491.9
|
|
|
491.9
|
|
|
—
|
|
|
560.9
|
|
|
560.9
|
|
||||||
Foreign currency forward and option contracts
|
13.6
|
|
|
—
|
|
|
13.6
|
|
|
17.0
|
|
|
0.1
|
|
|
17.1
|
|
||||||
Other
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
0.4
|
|
|
0.4
|
|
|
0.8
|
|
||||||
Total
|
$
|
385.3
|
|
|
$
|
1,836.0
|
|
|
$
|
2,221.3
|
|
|
$
|
494.4
|
|
|
$
|
1,633.3
|
|
|
$
|
2,127.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cross-currency and interest rate derivative contracts (b)
|
$
|
386.5
|
|
|
$
|
1,254.1
|
|
|
$
|
1,640.6
|
|
|
$
|
210.2
|
|
|
$
|
1,557.7
|
|
|
$
|
1,767.9
|
|
Equity-related derivative instruments (c)
|
1.7
|
|
|
—
|
|
|
1.7
|
|
|
5.4
|
|
|
—
|
|
|
5.4
|
|
||||||
Foreign currency forward and option contracts
|
4.5
|
|
|
—
|
|
|
4.5
|
|
|
7.7
|
|
|
0.2
|
|
|
7.9
|
|
||||||
Other
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
392.7
|
|
|
$
|
1,254.2
|
|
|
$
|
1,646.9
|
|
|
$
|
223.3
|
|
|
$
|
1,557.9
|
|
|
$
|
1,781.2
|
|
(a)
|
Our current derivative liabilities, long-term derivative assets and long-term derivative liabilities are included in other current and accrued liabilities, other assets, net, and other long-term liabilities, respectively, in our condensed consolidated balance sheets.
|
(b)
|
We consider credit risk relating to our and our counterparties’ nonperformance in the fair value assessment of our derivative instruments. In all cases, the adjustments take into account offsetting liability or asset positions within each of our subsidiary borrowing groups (as defined and described in note 9). The changes in the credit risk valuation adjustments associated with our cross-currency and interest rate derivative contracts resulted in a net gain (loss) of ($65.6 million) and $59.6 million during the three months ended June 30, 2018 and 2017, respectively, and a net gain (loss) of ($27.9 million) and $109.0 million during the six months ended June 30, 2018 and 2017, 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 regarding our fair value measurements, see note 7.
|
(c)
|
Our equity-related derivative instruments primarily include the fair value of (i) the share collar (the ITV Collar) with respect to ITV shares held by our company, (ii) the prepaid forward transaction (the Lionsgate Forward) with respect to 1.25 million of our voting and 1.25 million of our non-voting Lionsgate shares and (iii) at December 31, 2017, the share collar (the Sumitomo Collar) with respect to a portion of the shares of Sumitomo held by our company. On May 22, 2018, we settled the final tranche of the Sumitomo Collar and related borrowings with a portion of the existing Sumitomo shares held by our company. The aggregate market value of these shares on the transaction date was $159.3 million.The fair values of the ITV Collar and the Lionsgate Forward do not include credit risk valuation adjustments as we assume 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 related secured borrowing arrangements.
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions
|
||||||||||||||
Cross-currency and interest rate derivative contracts
|
$
|
870.1
|
|
|
$
|
(502.3
|
)
|
|
$
|
508.2
|
|
|
$
|
(659.1
|
)
|
Equity-related derivative instruments:
|
|
|
|
|
|
|
|
||||||||
ITV Collar
|
(183.6
|
)
|
|
163.4
|
|
|
(60.0
|
)
|
|
110.2
|
|
||||
Lionsgate Forward
|
3.4
|
|
|
(2.5
|
)
|
|
12.4
|
|
|
(2.0
|
)
|
||||
Sumitomo Collar
|
(23.2
|
)
|
|
2.2
|
|
|
(11.8
|
)
|
|
(21.3
|
)
|
||||
Other
|
1.0
|
|
|
0.4
|
|
|
2.2
|
|
|
(5.4
|
)
|
||||
Total equity-related derivative instruments
|
(202.4
|
)
|
|
163.5
|
|
|
(57.2
|
)
|
|
81.5
|
|
||||
Foreign currency forward and option contracts
|
8.3
|
|
|
(12.9
|
)
|
|
13.9
|
|
|
(19.0
|
)
|
||||
Other
|
(0.5
|
)
|
|
—
|
|
|
(0.7
|
)
|
|
0.5
|
|
||||
Total
|
$
|
675.5
|
|
|
$
|
(351.7
|
)
|
|
$
|
464.2
|
|
|
$
|
(596.1
|
)
|
|
Six months ended
|
||||||
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
in millions
|
||||||
Operating activities
|
$
|
246.1
|
|
|
$
|
89.5
|
|
Investing activities
|
—
|
|
|
(0.5
|
)
|
||
Financing activities
|
10.2
|
|
|
(139.0
|
)
|
||
Total
|
$
|
256.3
|
|
|
$
|
(50.0
|
)
|
Borrowing group
|
|
Notional amount due from counterparty
|
|
Notional amount due to counterparty
|
|
|
Weighted average remaining life
|
||||
|
|
in millions
|
|
|
in years
|
||||||
|
|
|
|
|
|
|
|
|
|
||
Virgin Media
|
$
|
400.0
|
|
|
€
|
339.6
|
|
|
|
4.6
|
|
|
|
$
|
8,933.0
|
|
|
£
|
5,844.3
|
|
|
(a) (b)
|
5.2
|
|
|
£
|
2,396.1
|
|
|
$
|
3,450.0
|
|
|
(a)
|
6.5
|
|
|
|
|
|
|
|
|
|
|
||
UPC Holding
|
$
|
2,765.0
|
|
|
€
|
2,276.7
|
|
|
|
6.3
|
|
|
|
$
|
1,200.0
|
|
|
CHF
|
1,107.5
|
|
|
(b)
|
6.7
|
|
|
€
|
2,521.2
|
|
|
CHF
|
2,901.0
|
|
|
(b)
|
5.5
|
|
|
€
|
418.5
|
|
|
CZK
|
11,521.8
|
|
|
|
2.0
|
|
|
€
|
488.0
|
|
|
HUF
|
138,437.5
|
|
|
|
3.5
|
|
|
€
|
851.6
|
|
|
PLN
|
3,604.5
|
|
|
|
3.2
|
|
|
€
|
225.9
|
|
|
RON
|
650.0
|
|
|
|
3.6
|
|
|
|
|
|
|
|
|
|
|
||
Telenet
|
$
|
3,195.0
|
|
|
€
|
2,834.1
|
|
|
(b)
|
6.9
|
|
|
|
€
|
1,431.2
|
|
|
$
|
1,600.0
|
|
|
(a)
|
7.0
|
(a)
|
Includes certain derivative instruments that do not involve the exchange of notional amounts at the inception and maturity of the instruments. Accordingly, the only cash flows associated with these derivative instruments are coupon-related payments and receipts. At June 30, 2018, the total U.S. dollar equivalents of the notional amount of these derivative instruments was $5.3 billion.
|
(b)
|
Includes certain derivative instruments that are “forward-starting,” such that the initial exchange occurs at a date subsequent to June 30, 2018. These instruments are typically entered into in order to extend existing hedges without the need to amend existing contracts.
|
|
|
Borrowing group pays fixed rate (a)
|
|
Borrowing group receives fixed rate
|
||||||||
Borrowing group
|
|
Notional amount
|
|
Weighted average remaining life
|
|
Notional amount
|
|
Weighted average remaining life
|
||||
|
|
in millions
|
|
in years
|
|
in millions
|
|
in years
|
||||
|
|
|
|
|
|
|
|
|
||||
Virgin Media
|
$
|
18,625.7
|
|
|
3.6
|
|
$
|
11,789.1
|
|
|
5.7
|
|
|
|
|
|
|
|
|
|
|
||||
UPC Holding
|
$
|
5,766.6
|
|
|
5.1
|
|
$
|
3,408.3
|
|
|
7.3
|
|
|
|
|
|
|
|
|
|
|
||||
Telenet
|
$
|
3,686.4
|
|
|
5.5
|
|
$
|
1,666.3
|
|
|
5.2
|
(a)
|
Includes forward-starting derivative instruments.
|
Borrowing group
|
|
Notional amount
|
|
Underlying swap currency
|
|
Weighted average option expiration period (a)
|
|
Weighted average strike rate (b)
|
||
|
|
in millions
|
|
|
|
in years
|
|
|
||
|
|
|
|
|
|
|
|
|
||
Virgin Media
|
$
|
6,275.6
|
|
|
£
|
|
1.4
|
|
2.47%
|
|
|
|
$
|
601.1
|
|
|
€
|
|
1.4
|
|
2.08%
|
|
|
|
|
|
|
|
|
|
||
UPC Holding
|
$
|
1,328.3
|
|
|
CHF
|
|
0.6
|
|
1.22%
|
(a)
|
Represents the weighted average period until the date on which we have the option to enter into the interest rate swap contracts.
|
(b)
|
Represents the weighted average interest rate that we would pay if we exercised our option to enter into the interest rate swap contracts.
|
Borrowing group
|
|
Notional amount due from counterparty
|
|
Weighted average remaining life
|
||
|
|
in millions
|
|
in years
|
||
|
|
|
|
|
||
Virgin Media
|
$
|
4,587.5
|
|
|
0.5
|
|
|
|
|
|
|
||
UPC Holding
|
$
|
1,975.0
|
|
|
0.5
|
|
|
|
|
|
|
||
Telenet
|
$
|
1,600.0
|
|
|
0.5
|
Borrowing group
|
|
Decrease to borrowing costs at June 30, 2018 (a)
|
|
|
|
|
|
Virgin Media
|
(0.32
|
)%
|
|
UPC Holding
|
(0.02
|
)%
|
|
Telenet
|
(0.44
|
)%
|
|
Total decrease to borrowing costs
|
(0.27
|
)%
|
(a)
|
Represents the effect of derivative instruments in effect at June 30, 2018 and does not include forward-starting derivative instruments or swaptions.
|
|
|
|
Fair value measurements at
June 30, 2018 using:
|
||||||||||||
Description
|
June 30,
2018 |
|
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
|
$
|
1,715.7
|
|
|
$
|
—
|
|
|
$
|
1,715.0
|
|
|
$
|
0.7
|
|
Equity-related derivative instruments
|
491.9
|
|
|
—
|
|
|
—
|
|
|
491.9
|
|
||||
Foreign currency forward and option contracts
|
13.6
|
|
|
—
|
|
|
13.6
|
|
|
—
|
|
||||
Other
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
||||
Total derivative instruments
|
2,221.3
|
|
|
—
|
|
|
1,728.7
|
|
|
492.6
|
|
||||
Investments
|
2,164.1
|
|
|
1,717.1
|
|
|
—
|
|
|
447.0
|
|
||||
Total assets
|
$
|
4,385.4
|
|
|
$
|
1,717.1
|
|
|
$
|
1,728.7
|
|
|
$
|
939.6
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative instruments:
|
|
|
|
|
|
|
|
||||||||
Cross-currency and interest rate derivative contracts
|
$
|
1,640.6
|
|
|
$
|
—
|
|
|
$
|
1,632.6
|
|
|
$
|
8.0
|
|
Equity-related derivative instruments
|
1.7
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
||||
Foreign currency forward and option contracts
|
4.5
|
|
|
—
|
|
|
4.5
|
|
|
—
|
|
||||
Other
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
||||
Total derivative instruments
|
1,646.9
|
|
|
—
|
|
|
1,637.2
|
|
|
9.7
|
|
||||
Debt
|
881.7
|
|
|
600.6
|
|
|
281.1
|
|
|
—
|
|
||||
Total liabilities
|
$
|
2,528.6
|
|
|
$
|
600.6
|
|
|
$
|
1,918.3
|
|
|
$
|
9.7
|
|
|
|
|
Fair value measurements at
December 31, 2017 using:
|
||||||||||||
Description
|
December 31, 2017
|
|
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
|
$
|
1,548.9
|
|
|
$
|
—
|
|
|
$
|
1,548.7
|
|
|
$
|
0.2
|
|
Equity-related derivative instruments
|
560.9
|
|
|
—
|
|
|
—
|
|
|
560.9
|
|
||||
Foreign currency forward and option contracts
|
17.1
|
|
|
—
|
|
|
17.1
|
|
|
—
|
|
||||
Other
|
0.8
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
||||
Total derivative instruments
|
2,127.7
|
|
|
—
|
|
|
1,566.6
|
|
|
561.1
|
|
||||
Investments
|
2,315.3
|
|
|
1,908.7
|
|
|
—
|
|
|
406.6
|
|
||||
Total assets
|
$
|
4,443.0
|
|
|
$
|
1,908.7
|
|
|
$
|
1,566.6
|
|
|
$
|
967.7
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative instruments:
|
|
|
|
|
|
|
|
||||||||
Cross-currency and interest rate derivative contracts
|
$
|
1,767.9
|
|
|
$
|
—
|
|
|
$
|
1,764.5
|
|
|
$
|
3.4
|
|
Equity-related derivative instruments
|
5.4
|
|
|
—
|
|
|
—
|
|
|
5.4
|
|
||||
Foreign currency forward and option contracts
|
7.9
|
|
|
—
|
|
|
7.9
|
|
|
—
|
|
||||
Total derivative instruments
|
1,781.2
|
|
|
—
|
|
|
1,772.4
|
|
|
8.8
|
|
||||
Debt
|
926.6
|
|
|
621.7
|
|
|
304.9
|
|
|
—
|
|
||||
Total liabilities
|
$
|
2,707.8
|
|
|
$
|
621.7
|
|
|
$
|
2,077.3
|
|
|
$
|
8.8
|
|
|
Investments
|
|
Cross-currency and interest rate derivative contracts
|
|
Equity-related
derivative
instruments
|
|
Total
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Balance of net assets (liabilities) at January 1, 2018
|
$
|
406.6
|
|
|
$
|
(3.2
|
)
|
|
$
|
555.5
|
|
|
$
|
958.9
|
|
Gains (losses) included in earnings (loss) from continuing operations (a):
|
|
|
|
|
|
|
|
|
|||||||
Realized and unrealized losses on derivative instruments, net
|
—
|
|
|
(4.5
|
)
|
|
(57.2
|
)
|
|
(61.7
|
)
|
||||
Realized and unrealized gains due to changes in fair values of certain investments and debt, net
|
4.4
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
||||
Impact of ASU 2016-01
|
31.9
|
|
|
—
|
|
|
—
|
|
|
31.9
|
|
||||
Additions
|
25.1
|
|
|
0.2
|
|
|
—
|
|
|
25.3
|
|
||||
Dispositions
|
(12.1
|
)
|
|
—
|
|
|
—
|
|
|
(12.1
|
)
|
||||
Final settlement of Sumitomo Collar (b)
|
—
|
|
|
—
|
|
|
(7.4
|
)
|
|
(7.4
|
)
|
||||
Transfers out of Level 3
|
(2.0
|
)
|
|
—
|
|
|
—
|
|
|
(2.0
|
)
|
||||
Foreign currency translation adjustments, dividends and other, net
|
(6.9
|
)
|
|
0.2
|
|
|
(0.7
|
)
|
|
(7.4
|
)
|
||||
Balance of net assets (liabilities) at June 30, 2018
|
$
|
447.0
|
|
|
$
|
(7.3
|
)
|
|
$
|
490.2
|
|
|
$
|
929.9
|
|
(a)
|
Most of these net gains and losses relate to assets and liabilities that we continue to carry on our condensed consolidated balance sheet as of June 30, 2018.
|
(b)
|
For information regarding the settlement of the final tranche of the Sumitomo Collar, see note 6.
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
in millions
|
||||||
|
|
|
|
||||
Distribution systems
|
$
|
17,714.5
|
|
|
$
|
17,522.9
|
|
Customer premises equipment
|
4,633.9
|
|
|
4,434.3
|
|
||
Support equipment, buildings and land
|
5,044.8
|
|
|
4,790.2
|
|
||
Total property and equipment, gross
|
27,393.2
|
|
|
26,747.4
|
|
||
Accumulated depreciation
|
(13,340.2
|
)
|
|
(12,502.1
|
)
|
||
Total property and equipment, net
|
$
|
14,053.0
|
|
|
$
|
14,245.3
|
|
|
January 1, 2018
|
|
Acquisitions
and related
adjustments
|
|
Foreign
currency
translation
adjustments
|
|
June 30, 2018
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
U.K./Ireland
|
$
|
8,134.1
|
|
|
$
|
—
|
|
|
$
|
(199.7
|
)
|
|
$
|
7,934.4
|
|
Belgium
|
2,681.7
|
|
|
20.1
|
|
|
(79.6
|
)
|
|
2,622.2
|
|
||||
Switzerland
|
2,931.3
|
|
|
—
|
|
|
(54.2
|
)
|
|
2,877.1
|
|
||||
Central and Eastern Europe
|
607.0
|
|
|
—
|
|
|
(41.5
|
)
|
|
565.5
|
|
||||
Total
|
$
|
14,354.1
|
|
|
$
|
20.1
|
|
|
$
|
(375.0
|
)
|
|
$
|
13,999.2
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
4,013.3
|
|
|
$
|
(2,958.7
|
)
|
|
$
|
1,054.6
|
|
|
$
|
4,041.0
|
|
|
$
|
(2,745.8
|
)
|
|
$
|
1,295.2
|
|
Other
|
516.9
|
|
|
(241.0
|
)
|
|
275.9
|
|
|
531.9
|
|
|
(218.6
|
)
|
|
313.3
|
|
||||||
Total
|
$
|
4,530.2
|
|
|
$
|
(3,199.7
|
)
|
|
$
|
1,330.5
|
|
|
$
|
4,572.9
|
|
|
$
|
(2,964.4
|
)
|
|
$
|
1,608.5
|
|
|
June 30, 2018
|
|
|
|
Principal amount
|
||||||||||||||||||||
Weighted
average
interest
rate (a)
|
|
Unused borrowing capacity (b)
|
|
Estimated fair value (c)
|
|||||||||||||||||||||
Borrowing currency
|
|
U.S. $
equivalent
|
|
June 30, 2018
|
|
December 31, 2017
|
|
June 30, 2018
|
|
December 31, 2017
|
|||||||||||||||
|
|
|
in millions
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
VM Notes (d)
|
5.54
|
%
|
|
—
|
|
|
$
|
—
|
|
|
$
|
9,406.6
|
|
|
$
|
9,987.4
|
|
|
$
|
9,434.0
|
|
|
$
|
9,565.7
|
|
VM Credit Facilities
|
4.57
|
%
|
|
(e)
|
|
890.6
|
|
|
5,482.2
|
|
|
4,681.5
|
|
|
5,511.0
|
|
|
4,676.2
|
|
||||||
UPC Holding Bank Facility (d)
|
4.16
|
%
|
|
990.1
|
|
|
1,156.1
|
|
|
2,535.9
|
|
|
2,576.4
|
|
|
2,558.9
|
|
|
2,576.1
|
|
|||||
UPCB SPE Notes
|
4.51
|
%
|
|
—
|
|
|
—
|
|
|
2,474.3
|
|
|
2,638.8
|
|
|
2,541.2
|
|
|
2,582.6
|
|
|||||
UPC Holding Senior Notes (d)
|
4.57
|
%
|
|
—
|
|
|
—
|
|
|
1,183.5
|
|
|
1,272.5
|
|
|
1,291.5
|
|
|
1,313.4
|
|
|||||
Telenet Credit Facility
|
3.97
|
%
|
|
(f)
|
|
519.7
|
|
|
2,436.7
|
|
|
2,188.9
|
|
|
2,452.4
|
|
|
2,177.6
|
|
||||||
Telenet Senior Secured Notes
|
4.68
|
%
|
|
—
|
|
|
—
|
|
|
1,586.1
|
|
|
1,724.4
|
|
|
1,700.6
|
|
|
1,721.3
|
|
|||||
Telenet SPE Notes
|
4.88
|
%
|
|
—
|
|
|
—
|
|
|
591.4
|
|
|
1,014.4
|
|
|
557.0
|
|
|
937.7
|
|
|||||
Vendor financing (g)
|
3.69
|
%
|
|
—
|
|
|
—
|
|
|
2,495.5
|
|
|
3,599.0
|
|
|
2,495.5
|
|
|
3,599.0
|
|
|||||
ITV Collar Loan
|
0.71
|
%
|
|
—
|
|
|
—
|
|
|
1,404.8
|
|
|
1,445.8
|
|
|
1,428.1
|
|
|
1,463.8
|
|
|||||
Sumitomo Share Loan (h)
|
0.95
|
%
|
|
—
|
|
|
—
|
|
|
600.6
|
|
|
621.7
|
|
|
600.6
|
|
|
621.7
|
|
|||||
Derivative-related debt instruments (i)
|
3.41
|
%
|
|
—
|
|
|
—
|
|
|
334.7
|
|
|
359.8
|
|
|
336.4
|
|
|
361.5
|
|
|||||
Sumitomo Collar Loan
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
170.3
|
|
|
—
|
|
|
169.1
|
|
|||||
Other (j)
|
5.92
|
%
|
|
—
|
|
|
—
|
|
|
384.3
|
|
|
413.4
|
|
|
389.1
|
|
|
418.2
|
|
|||||
Total debt before deferred financing costs, discounts and premiums
|
4.48
|
%
|
|
|
|
$
|
2,566.4
|
|
|
$
|
30,916.6
|
|
|
$
|
32,694.3
|
|
|
$
|
31,296.3
|
|
|
$
|
32,183.9
|
|
|
June 30, 2018
|
|
December 31, 2017
|
|||||||||||||
|
in millions
|
|||||||||||||||
|
|
|
|
|||||||||||||
Total debt before deferred financing costs, discounts and premiums
|
$
|
31,296.3
|
|
|
$
|
32,183.9
|
|
|||||||||
Deferred financing costs, discounts and premiums, net
|
(150.6
|
)
|
|
(171.8
|
)
|
|||||||||||
Total carrying amount of debt
|
31,145.7
|
|
|
32,012.1
|
|
|||||||||||
Capital lease obligations (k)
|
672.8
|
|
|
691.4
|
|
|||||||||||
Total debt and capital lease obligations
|
31,818.5
|
|
|
32,703.5
|
|
|||||||||||
Current maturities of debt and capital lease obligations
|
(3,392.6
|
)
|
|
(3,680.1
|
)
|
|||||||||||
Long-term debt and capital lease obligations
|
$
|
28,425.9
|
|
|
$
|
29,023.4
|
|
(a)
|
Represents the weighted average interest rate in effect at June 30, 2018 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 derivative instruments, deferred financing costs, original issue premiums or discounts and commitment fees, all of which affect our overall cost of borrowing. Including the effects of derivative instruments, original issue premiums or discounts and commitment fees, but excluding the impact of deferred financing costs, our weighted average interest rate on our aggregate
|
(b)
|
Unused borrowing capacity represents the maximum availability under the applicable facility at June 30, 2018 without regard to covenant compliance calculations or other conditions precedent to borrowing. At June 30, 2018, based on the most restrictive applicable leverage covenants, the full amount of unused borrowing capacity was available to be borrowed under each of the respective subsidiary facilities, and based on the most restrictive applicable leverage-based restricted payment tests, there were no restrictions on the respective subsidiary's ability to make loans or distributions from this availability to Liberty Global or its subsidiaries or other equity holders, except as shown in the table below. In the following table we present, based on the most restrictive applicable leverage covenants, leverage-based restricted payment tests and other limitations in effect for each borrowing group, (i) for each subsidiary where the ability to borrow is limited, the actual borrowing availability under the respective facility and (ii) for each subsidiary where the ability to make loans or distributions from this availability is limited, the amount that can be loaned or distributed to Liberty Global or its subsidiaries or other equity holders. The amounts presented below do not consider any actual or potential changes to our borrowing levels subsequent to June 30, 2018 and are based on the most restrictive applicable leverage-based restricted payment tests and covenant and other limitations in effect for each borrowing group at June 30, 2018, both before and after considering the impact of the completion of the June 30, 2018 compliance requirements.
|
|
|
Limitation on availability
|
||||||||||||||
|
|
June 30, 2018
|
|
Upon completion of relevant
June 30, 2018 compliance reporting requirements
|
||||||||||||
|
|
Borrowing currency
|
|
U.S. $ equivalent
|
|
Borrowing currency
|
|
U.S. $ equivalent
|
||||||||
|
|
in millions
|
||||||||||||||
Limitation on availability to be borrowed under:
|
|
|
|
|
|
|
|
|
|
|
||||||
VM Credit Facilities (e)
|
|
£
|
675.0
|
|
|
$
|
890.6
|
|
|
£
|
455.4
|
|
|
$
|
600.9
|
|
(c)
|
The estimated fair values of our debt instruments are generally 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 regarding fair value hierarchies, see note 7.
|
(d)
|
As further described in note 4, subsequent to June 30, 2018, we used a portion of the net proceeds from the sale of UPC Austria to repay or redeem certain debt of the UPC Holding and Virgin Media borrowing groups.
|
(e)
|
Unused borrowing capacity under the VM Credit Facilities relates to multi-currency revolving facilities with an aggregate maximum borrowing capacity equivalent to £675.0 million ($890.6 million). In February 2018, the VM Revolving Facility was amended and split into two revolving facilities. VM Revolving Facility A is a multi-currency revolving facility maturing on December 31, 2021 with a maximum borrowing capacity equivalent to £75.0 million ($98.9 million), and VM Revolving Facility B is a multi-currency revolving facility maturing on January 15, 2024 with a maximum borrowing capacity equivalent to £600.0 million ($791.7 million). All other terms from the previously existing VM Revolving Facility continue to apply to the new revolving facilities
|
(f)
|
Unused borrowing capacity under the Telenet Credit Facility comprises (i) €400.0 million ($467.1 million) under Telenet Facility AG, (ii) €25.0 million ($29.2 million) under the Telenet Overdraft Facility and (iii) €20.0 million ($23.4 million) under the Telenet Revolving Facility, each of which were undrawn at June 30, 2018.
|
(g)
|
Represents amounts owed pursuant to interest-bearing vendor financing arrangements that are used to finance certain of our property and equipment additions and, to a lesser extent, certain of our operating expenses. These obligations are generally due within one year and include 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.
|
(h)
|
The Sumitomo Share Loan is carried at fair value. For information regarding fair value hierarchies, see note 7.
|
(i)
|
Represents amounts associated with certain derivative-related borrowing instruments, including $281.1 million and $304.9 million at June 30, 2018 and December 31, 2017, respectively, carried at fair value. These instruments mature at various dates through January 2025. For information regarding fair value hierarchies, see note 7.
|
(j)
|
Amounts include $131.0 million and $160.9 million at June 30, 2018 and December 31, 2017, respectively, of debt collateralized by certain trade receivables of Virgin Media.
|
(k)
|
The U.S. dollar equivalents of our consolidated capital lease obligations are as follows:
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
|
in millions
|
||||||
|
|
|
|
|
||||
Telenet
|
|
$
|
461.6
|
|
|
$
|
456.1
|
|
UPC Holding
|
|
80.6
|
|
|
89.0
|
|
||
Virgin Media
|
|
73.5
|
|
|
79.1
|
|
||
Other subsidiaries
|
|
57.1
|
|
|
67.2
|
|
||
Total
|
|
$
|
672.8
|
|
|
$
|
691.4
|
|
|
Virgin Media
|
|
UPC
Holding (a) |
|
Telenet (b)
|
|
Other
|
|
Total
|
||||||||||
|
in millions
|
||||||||||||||||||
Year ending December 31:
|
|
|
|
|
|
|
|
|
|
||||||||||
2018 (remainder of year)
|
$
|
1,255.2
|
|
|
$
|
281.9
|
|
|
$
|
330.2
|
|
|
$
|
13.5
|
|
|
$
|
1,880.8
|
|
2019
|
1,140.2
|
|
|
230.3
|
|
|
142.0
|
|
|
44.3
|
|
|
1,556.8
|
|
|||||
2020
|
80.8
|
|
|
21.5
|
|
|
14.5
|
|
|
207.6
|
|
|
324.4
|
|
|||||
2021
|
1,350.0
|
|
|
22.0
|
|
|
12.5
|
|
|
1,584.3
|
|
|
2,968.8
|
|
|||||
2022
|
396.0
|
|
|
19.0
|
|
|
12.3
|
|
|
321.2
|
|
|
748.5
|
|
|||||
2023
|
957.1
|
|
|
13.8
|
|
|
12.5
|
|
|
—
|
|
|
983.4
|
|
|||||
Thereafter
|
11,645.5
|
|
|
6,391.6
|
|
|
4,796.5
|
|
|
—
|
|
|
22,833.6
|
|
|||||
Total debt maturities
|
16,824.8
|
|
|
6,980.1
|
|
|
5,320.5
|
|
|
2,170.9
|
|
|
31,296.3
|
|
|||||
Deferred financing costs, discounts and premiums, net
|
(54.8
|
)
|
|
(50.2
|
)
|
|
(21.3
|
)
|
|
(24.3
|
)
|
|
(150.6
|
)
|
|||||
Total debt
|
$
|
16,770.0
|
|
|
$
|
6,929.9
|
|
|
$
|
5,299.2
|
|
|
$
|
2,146.6
|
|
|
$
|
31,145.7
|
|
Current portion
|
$
|
2,325.5
|
|
|
$
|
508.2
|
|
|
$
|
447.4
|
|
|
$
|
23.3
|
|
|
$
|
3,304.4
|
|
Noncurrent portion
|
$
|
14,444.5
|
|
|
$
|
6,421.7
|
|
|
$
|
4,851.8
|
|
|
$
|
2,123.3
|
|
|
$
|
27,841.3
|
|
(a)
|
Amounts include certain senior secured notes issued by special purpose financing entities that are consolidated by UPC Holding and Liberty Global.
|
(b)
|
Amounts include certain senior secured notes issued by special purpose financing entities that are consolidated by Telenet and Liberty Global.
|
|
Telenet
|
|
UPC
Holding |
|
Virgin Media
|
|
Other
|
|
Total
|
||||||||||
|
in millions
|
||||||||||||||||||
Year ending December 31:
|
|
|
|
|
|
|
|
|
|
||||||||||
2018 (remainder of year)
|
$
|
43.1
|
|
|
$
|
7.8
|
|
|
$
|
8.4
|
|
|
$
|
11.2
|
|
|
$
|
70.5
|
|
2019
|
76.8
|
|
|
14.9
|
|
|
11.5
|
|
|
16.5
|
|
|
119.7
|
|
|||||
2020
|
72.6
|
|
|
15.2
|
|
|
8.5
|
|
|
10.4
|
|
|
106.7
|
|
|||||
2021
|
68.4
|
|
|
15.6
|
|
|
8.8
|
|
|
5.1
|
|
|
97.9
|
|
|||||
2022
|
68.6
|
|
|
12.7
|
|
|
10.6
|
|
|
3.0
|
|
|
94.9
|
|
|||||
2023
|
57.2
|
|
|
11.6
|
|
|
6.3
|
|
|
18.1
|
|
|
93.2
|
|
|||||
Thereafter
|
224.9
|
|
|
20.2
|
|
|
192.4
|
|
|
—
|
|
|
437.5
|
|
|||||
Total principal and interest payments
|
611.6
|
|
|
98.0
|
|
|
246.5
|
|
|
64.3
|
|
|
1,020.4
|
|
|||||
Amounts representing interest
|
(150.0
|
)
|
|
(17.4
|
)
|
|
(173.0
|
)
|
|
(7.2
|
)
|
|
(347.6
|
)
|
|||||
Present value of net minimum lease payments
|
$
|
461.6
|
|
|
$
|
80.6
|
|
|
$
|
73.5
|
|
|
$
|
57.1
|
|
|
$
|
672.8
|
|
Current portion
|
$
|
51.4
|
|
|
$
|
10.4
|
|
|
$
|
9.7
|
|
|
$
|
16.7
|
|
|
$
|
88.2
|
|
Noncurrent portion
|
$
|
410.2
|
|
|
$
|
70.2
|
|
|
$
|
63.8
|
|
|
$
|
40.4
|
|
|
$
|
584.6
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Computed “expected” tax benefit (expense) (a)
|
$
|
(109.4
|
)
|
|
$
|
133.3
|
|
|
$
|
15.0
|
|
|
$
|
188.0
|
|
Mandatory Repatriation Tax (b)
|
242.0
|
|
|
—
|
|
|
(968.5
|
)
|
|
—
|
|
||||
Change in valuation allowances (b) (c):
|
|
|
|
|
|
|
|
||||||||
Expense
|
18.9
|
|
|
(102.2
|
)
|
|
(16.1
|
)
|
|
(169.6
|
)
|
||||
Benefit
|
(131.2
|
)
|
|
(2.0
|
)
|
|
422.1
|
|
|
10.0
|
|
||||
Basis and other differences in the treatment of items associated with investments in subsidiaries and affiliates (c):
|
|
|
|
|
|
|
|
||||||||
Expense
|
(91.4
|
)
|
|
(41.3
|
)
|
|
(146.6
|
)
|
|
(80.8
|
)
|
||||
Benefit
|
(0.4
|
)
|
|
(0.1
|
)
|
|
3.3
|
|
|
0.3
|
|
||||
Non-deductible or non-taxable foreign currency exchange results (c):
|
|
|
|
|
|
|
|
||||||||
Expense
|
78.0
|
|
|
(103.4
|
)
|
|
(4.9
|
)
|
|
(132.5
|
)
|
||||
Benefit
|
71.3
|
|
|
3.0
|
|
|
73.6
|
|
|
4.3
|
|
||||
Non-deductible or non-taxable interest and other items (c):
|
|
|
|
|
|
|
|
||||||||
Expense
|
(15.0
|
)
|
|
(5.7
|
)
|
|
(41.8
|
)
|
|
(52.6
|
)
|
||||
Benefit
|
9.3
|
|
|
10.0
|
|
|
22.4
|
|
|
18.8
|
|
||||
International rate differences (c) (d):
|
|
|
|
|
|
|
|
||||||||
Expense
|
(13.5
|
)
|
|
(3.5
|
)
|
|
(22.6
|
)
|
|
(19.1
|
)
|
||||
Benefit
|
15.5
|
|
|
41.4
|
|
|
31.2
|
|
|
75.3
|
|
||||
Other, net
|
18.7
|
|
|
1.8
|
|
|
15.7
|
|
|
7.5
|
|
||||
Total income tax benefit (expense)
|
$
|
92.8
|
|
|
$
|
(68.7
|
)
|
|
$
|
(617.2
|
)
|
|
$
|
(150.4
|
)
|
(a)
|
The statutory or “expected” tax rates are U.K. rates of 19.0% for the 2018 periods and 19.25% for the 2017 periods. The statutory rate for the 2017 periods represents the blended rate in effect for the year ended December 31, 2017 based on the 20.0% statutory rate that was in effect for the first quarter of 2017 and the 19.0% statutory rate that was in effect for the remainder of 2017.
|
(b)
|
As further discussed below, the liability we have recorded for the Mandatory Repatriation Tax (as defined and described below) is significantly lower than the amount included in our income tax expense due primarily to the expected use of carryforward tax attributes in the U.S., all of which were subject to valuation allowances prior to the initial recognition of the Mandatory Repatriation Tax during the first quarter of 2018.
|
(c)
|
Country jurisdictions giving rise to income tax benefits are grouped together and shown separately from country jurisdictions giving rise to income tax expenses.
|
(d)
|
Amounts reflect adjustments (either a benefit or an expense) to the “expected” tax benefit for statutory rates in jurisdictions in which we operate outside of the U.K.
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions
|
||||||||||||||
Liberty Global:
|
|
|
|
|
|
|
|
||||||||
Performance-based incentive awards (a)
|
$
|
8.0
|
|
|
$
|
19.1
|
|
|
$
|
16.7
|
|
|
$
|
19.8
|
|
Non-performance based share-based incentive awards
|
24.3
|
|
|
24.6
|
|
|
46.3
|
|
|
46.3
|
|
||||
Other (b)
|
13.4
|
|
|
—
|
|
|
20.5
|
|
|
—
|
|
||||
Total Liberty Global
|
45.7
|
|
|
43.7
|
|
|
83.5
|
|
|
66.1
|
|
||||
Other
|
(0.2
|
)
|
|
7.7
|
|
|
4.7
|
|
|
14.2
|
|
||||
Total
|
$
|
45.5
|
|
|
$
|
51.4
|
|
|
$
|
88.2
|
|
|
$
|
80.3
|
|
Included in:
|
|
|
|
|
|
|
|
||||||||
Other operating expense
|
$
|
—
|
|
|
$
|
0.9
|
|
|
$
|
1.0
|
|
|
$
|
1.9
|
|
SG&A expense
|
45.5
|
|
|
50.5
|
|
|
87.2
|
|
|
78.4
|
|
||||
Total
|
$
|
45.5
|
|
|
$
|
51.4
|
|
|
$
|
88.2
|
|
|
$
|
80.3
|
|
(a)
|
Includes share-based compensation expense related to (i) performance-based restricted share units (PSUs) and (ii) through March 31, 2017, performance grant units (PGUs) held by our Chief Executive Officer.
|
(b)
|
Represents annual incentive compensation and defined contribution plan liabilities that have been or are expected to be settled with Liberty Global ordinary shares. In the case of the annual incentive compensation, shares will be issued to senior management and key employees pursuant to a shareholding incentive program that was implemented in 2018. The shareholding incentive program allows these employees to elect to receive up to 100% of their annual incentive compensation in ordinary shares of Liberty Global in lieu of cash.
|
|
Class A
|
|
Class C
|
||||||||||
|
Number of shares underlying awards
|
|
Weighted Average exercise or base price
|
|
Number of shares underlying awards
|
|
Weighted Average exercise or base price
|
||||||
Held by Liberty Global employees:
|
|
|
|
|
|
|
|
||||||
Outstanding
|
16,106,261
|
|
|
$
|
32.28
|
|
|
37,449,896
|
|
|
$
|
30.38
|
|
Exercisable
|
9,311,226
|
|
|
$
|
31.85
|
|
|
22,890,732
|
|
|
$
|
29.65
|
|
|
|
|
|
|
|
|
|
||||||
Held by former Liberty Global employees:
|
|
|
|
|
|
|
|
||||||
Outstanding
|
1,202,625
|
|
|
$
|
32.72
|
|
|
2,825,949
|
|
|
$
|
30.54
|
|
Exercisable
|
952,952
|
|
|
$
|
31.91
|
|
|
2,325,227
|
|
|
$
|
29.64
|
|
|
Class A
|
|
Class C
|
||
Held by Liberty Global employees:
|
|
|
|
||
RSUs
|
640,075
|
|
|
1,265,060
|
|
PSUs
|
1,771,830
|
|
|
3,548,966
|
|
Held by former Liberty Global employees:
|
|
|
|
||
RSUs
|
13,719
|
|
|
27,501
|
|
PSUs
|
172,971
|
|
|
346,299
|
|
|
Employee
severance
and
termination
|
|
Office
closures
|
|
Contract termination and other
|
|
Total
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Restructuring liability as of January 1, 2018
|
$
|
11.7
|
|
|
$
|
9.5
|
|
|
$
|
16.5
|
|
|
$
|
37.7
|
|
Restructuring charges
|
22.2
|
|
|
4.5
|
|
|
41.8
|
|
|
68.5
|
|
||||
Cash paid
|
(16.8
|
)
|
|
(3.2
|
)
|
|
(19.7
|
)
|
|
(39.7
|
)
|
||||
Foreign currency translation adjustments
|
(0.4
|
)
|
|
(0.3
|
)
|
|
(2.2
|
)
|
|
(2.9
|
)
|
||||
Restructuring liability as of June 30, 2018
|
$
|
16.7
|
|
|
$
|
10.5
|
|
|
$
|
36.4
|
|
|
$
|
63.6
|
|
|
|
|
|
|
|
|
|
||||||||
Current portion
|
$
|
15.2
|
|
|
$
|
6.3
|
|
|
$
|
25.8
|
|
|
$
|
47.3
|
|
Noncurrent portion
|
1.5
|
|
|
4.2
|
|
|
10.6
|
|
|
16.3
|
|
||||
Total
|
$
|
16.7
|
|
|
$
|
10.5
|
|
|
$
|
36.4
|
|
|
$
|
63.6
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) from continuing operations
|
$
|
668.7
|
|
|
$
|
(761.3
|
)
|
|
$
|
(696.3
|
)
|
|
$
|
(1,126.8
|
)
|
Net earnings from continuing operations attributable to noncontrolling interests
|
(36.1
|
)
|
|
(4.8
|
)
|
|
(42.2
|
)
|
|
(39.8
|
)
|
||||
Net earnings (loss) from continuing operations attributable to Liberty Global shareholders
|
$
|
632.6
|
|
|
$
|
(766.1
|
)
|
|
$
|
(738.5
|
)
|
|
$
|
(1,166.6
|
)
|
Numerator:
|
|
||
Net earnings from continuing operations attributable to Liberty Global shareholders (basic and diluted EPS computation) (in millions)
|
$
|
632.6
|
|
|
|
||
Denominator (Liberty Global Shares):
|
|
||
Weighted average ordinary shares (basic EPS computation)
|
788,815,021
|
|
|
Incremental shares attributable to the assumed exercise of outstanding options, SARs and the release of restricted shares and share units upon vesting (treasury stock method)
|
3,105,000
|
|
|
Weighted average ordinary shares outstanding (diluted EPS computation)
|
791,920,021
|
|
|
Payments due during:
|
|
|
||||||||||||||||||||||||||||
|
Remainder
of 2018 |
|
|
|
|
|
|
||||||||||||||||||||||||
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||||||
|
in millions
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Network and connectivity commitments
|
$
|
402.8
|
|
|
$
|
345.4
|
|
|
$
|
283.4
|
|
|
$
|
250.2
|
|
|
$
|
67.5
|
|
|
$
|
49.6
|
|
|
$
|
787.8
|
|
|
$
|
2,186.7
|
|
Programming commitments
|
544.1
|
|
|
792.9
|
|
|
470.3
|
|
|
227.7
|
|
|
40.3
|
|
|
14.7
|
|
|
46.6
|
|
|
2,136.6
|
|
||||||||
Purchase commitments
|
506.7
|
|
|
306.9
|
|
|
136.2
|
|
|
47.7
|
|
|
20.8
|
|
|
17.5
|
|
|
38.6
|
|
|
1,074.4
|
|
||||||||
Operating leases
|
70.4
|
|
|
99.6
|
|
|
79.0
|
|
|
60.0
|
|
|
47.8
|
|
|
40.1
|
|
|
151.0
|
|
|
547.9
|
|
||||||||
Other commitments
|
9.8
|
|
|
15.2
|
|
|
2.8
|
|
|
0.4
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
28.4
|
|
||||||||
Total
|
$
|
1,533.8
|
|
|
$
|
1,560.0
|
|
|
$
|
971.7
|
|
|
$
|
586.0
|
|
|
$
|
176.6
|
|
|
$
|
121.9
|
|
|
$
|
1,024.0
|
|
|
$
|
5,974.0
|
|
|
Revenue
|
||||||||||||||
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
U.K./Ireland
|
$
|
1,734.9
|
|
|
$
|
1,566.1
|
|
|
$
|
3,513.1
|
|
|
$
|
3,070.5
|
|
Belgium
|
753.9
|
|
|
686.0
|
|
|
1,513.5
|
|
|
1,347.4
|
|
||||
Switzerland
|
332.2
|
|
|
339.0
|
|
|
677.1
|
|
|
670.2
|
|
||||
Central and Eastern Europe
|
152.9
|
|
|
142.0
|
|
|
313.4
|
|
|
277.1
|
|
||||
Central and Corporate
|
72.0
|
|
|
42.7
|
|
|
123.8
|
|
|
83.5
|
|
||||
Intersegment eliminations
|
(0.8
|
)
|
|
(0.9
|
)
|
|
(1.3
|
)
|
|
(4.0
|
)
|
||||
Total
|
$
|
3,045.1
|
|
|
$
|
2,774.9
|
|
|
$
|
6,139.6
|
|
|
$
|
5,444.7
|
|
|
|
|
|
|
|
|
|
||||||||
VodafoneZiggo JV
|
$
|
1,114.5
|
|
|
$
|
1,081.3
|
|
|
$
|
2,296.1
|
|
|
$
|
2,165.2
|
|
|
Adjusted OIBDA
|
||||||||||||||
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
U.K./Ireland
|
$
|
763.6
|
|
|
$
|
707.1
|
|
|
$
|
1,526.2
|
|
|
$
|
1,353.1
|
|
Belgium
|
383.7
|
|
|
317.9
|
|
|
741.3
|
|
|
615.8
|
|
||||
Switzerland
|
189.0
|
|
|
212.9
|
|
|
375.5
|
|
|
417.7
|
|
||||
Central and Eastern Europe
|
67.9
|
|
|
64.6
|
|
|
139.8
|
|
|
123.1
|
|
||||
Central and Corporate
|
(83.6
|
)
|
|
(98.7
|
)
|
|
(182.7
|
)
|
|
(191.7
|
)
|
||||
Intersegment eliminations (a)
|
(10.8
|
)
|
|
(8.4
|
)
|
|
(18.5
|
)
|
|
(16.2
|
)
|
||||
Total
|
$
|
1,309.8
|
|
|
$
|
1,195.4
|
|
|
$
|
2,581.6
|
|
|
$
|
2,301.8
|
|
|
|
|
|
|
|
|
|
||||||||
VodafoneZiggo JV
|
$
|
483.6
|
|
|
$
|
471.1
|
|
|
$
|
985.5
|
|
|
$
|
930.6
|
|
(a)
|
Amounts are related to transactions between our continuing and discontinued operations, which eliminations will no longer be recorded subsequent to the respective disposals of UPC Austria and the Vodafone Disposal Group.
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Adjusted OIBDA from continuing operations
|
$
|
1,309.8
|
|
|
$
|
1,195.4
|
|
|
$
|
2,581.6
|
|
|
$
|
2,301.8
|
|
Share-based compensation expense
|
(45.5
|
)
|
|
(51.4
|
)
|
|
(88.2
|
)
|
|
(80.3
|
)
|
||||
Depreciation and amortization
|
(970.2
|
)
|
|
(922.0
|
)
|
|
(2,017.5
|
)
|
|
(1,789.7
|
)
|
||||
Impairment, restructuring and other operating items, net
|
(30.2
|
)
|
|
(13.1
|
)
|
|
(91.6
|
)
|
|
(6.4
|
)
|
||||
Operating income
|
263.9
|
|
|
208.9
|
|
|
384.3
|
|
|
425.4
|
|
||||
Interest expense
|
(381.1
|
)
|
|
(348.8
|
)
|
|
(757.0
|
)
|
|
(688.3
|
)
|
||||
Realized and unrealized gains (losses) on derivative instruments, net
|
675.5
|
|
|
(351.7
|
)
|
|
464.2
|
|
|
(596.1
|
)
|
||||
Foreign currency transaction gains (losses), net
|
52.1
|
|
|
(18.2
|
)
|
|
(49.6
|
)
|
|
11.0
|
|
||||
Realized and unrealized gains (losses) due to changes in fair values of certain investments and debt, net
|
61.5
|
|
|
(141.4
|
)
|
|
4.3
|
|
|
(42.6
|
)
|
||||
Losses on debt modification and extinguishment, net
|
(20.1
|
)
|
|
(53.6
|
)
|
|
(22.7
|
)
|
|
(98.9
|
)
|
||||
Share of losses of affiliates, net
|
(82.3
|
)
|
|
(3.6
|
)
|
|
(118.8
|
)
|
|
(19.3
|
)
|
||||
Other income, net
|
6.4
|
|
|
15.8
|
|
|
16.2
|
|
|
32.4
|
|
||||
Earnings (loss) from continuing operations before income taxes
|
$
|
575.9
|
|
|
$
|
(692.6
|
)
|
|
$
|
(79.1
|
)
|
|
$
|
(976.4
|
)
|
|
Six months ended
June 30, |
||||||
|
2018
|
|
2017
|
||||
|
in millions
|
||||||
|
|
|
|
||||
U.K./Ireland
|
$
|
1,040.1
|
|
|
$
|
970.7
|
|
Belgium
|
355.2
|
|
|
288.4
|
|
||
Switzerland
|
105.2
|
|
|
96.5
|
|
||
Central and Eastern Europe
|
71.9
|
|
|
117.0
|
|
||
Central and Corporate (a)
|
278.0
|
|
|
159.1
|
|
||
Total property and equipment additions
|
1,850.4
|
|
|
1,631.7
|
|
||
Assets acquired under capital-related vendor financing arrangements
|
(1,187.9
|
)
|
|
(1,164.1
|
)
|
||
Assets acquired under capital leases
|
(46.5
|
)
|
|
(97.9
|
)
|
||
Changes in current liabilities related to capital expenditures
|
181.8
|
|
|
218.3
|
|
||
Total capital expenditures, net
|
$
|
797.8
|
|
|
$
|
588.0
|
|
|
|
|
|
||||
Capital expenditures, net:
|
|
|
|
||||
Third-party payments
|
$
|
855.1
|
|
|
$
|
782.9
|
|
Proceeds received for transfers to related parties (b)
|
(57.3
|
)
|
|
(194.9
|
)
|
||
Total capital expenditures, net
|
$
|
797.8
|
|
|
$
|
588.0
|
|
|
|
|
|
||||
Property and equipment additions - VodafoneZiggo JV
|
$
|
476.6
|
|
|
$
|
444.5
|
|
(a)
|
Includes amounts that represent the net impact of changes in inventory levels associated with certain centrally-procured network equipment. This equipment is ultimately transferred to our operating subsidiaries.
|
(b)
|
Primarily relates to transfers of centrally-procured property and equipment to our discontinued operations and the VodafoneZiggo JV.
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions
|
||||||||||||||
Residential revenue:
|
|
|
|
|
|
|
|
||||||||
Residential cable revenue (a):
|
|
|
|
|
|
|
|
||||||||
Subscription revenue (b):
|
|
|
|
|
|
|
|
||||||||
Video
|
$
|
743.5
|
|
|
$
|
717.3
|
|
|
$
|
1,518.1
|
|
|
$
|
1,406.2
|
|
Broadband internet
|
816.7
|
|
|
724.8
|
|
|
1,657.9
|
|
|
1,430.7
|
|
||||
Fixed-line telephony
|
407.7
|
|
|
395.9
|
|
|
829.7
|
|
|
787.6
|
|
||||
Total subscription revenue
|
1,967.9
|
|
|
1,838.0
|
|
|
4,005.7
|
|
|
3,624.5
|
|
||||
Non-subscription revenue
|
72.4
|
|
|
76.9
|
|
|
154.1
|
|
|
157.8
|
|
||||
Total residential cable revenue
|
2,040.3
|
|
|
1,914.9
|
|
|
4,159.8
|
|
|
3,782.3
|
|
||||
Residential mobile revenue (c):
|
|
|
|
|
|
|
|
||||||||
Subscription revenue (b)
|
249.6
|
|
|
245.8
|
|
|
493.4
|
|
|
482.1
|
|
||||
Non-subscription revenue
|
175.2
|
|
|
134.3
|
|
|
354.7
|
|
|
260.9
|
|
||||
Total residential mobile revenue
|
424.8
|
|
|
380.1
|
|
|
848.1
|
|
|
743.0
|
|
||||
Total residential revenue
|
2,465.1
|
|
|
2,295.0
|
|
|
5,007.9
|
|
|
4,525.3
|
|
||||
B2B revenue (d):
|
|
|
|
|
|
|
|
||||||||
Subscription revenue
|
102.9
|
|
|
91.2
|
|
|
219.6
|
|
|
168.5
|
|
||||
Non-subscription revenue
|
400.2
|
|
|
337.9
|
|
|
771.4
|
|
|
652.7
|
|
||||
Total B2B revenue
|
503.1
|
|
|
429.1
|
|
|
991.0
|
|
|
821.2
|
|
||||
Other revenue (e)
|
76.9
|
|
|
50.8
|
|
|
140.7
|
|
|
98.2
|
|
||||
Total
|
$
|
3,045.1
|
|
|
$
|
2,774.9
|
|
|
$
|
6,139.6
|
|
|
$
|
5,444.7
|
|
(a)
|
Residential cable subscription revenue includes amounts received from subscribers for ongoing services. Residential cable non-subscription revenue includes, among other items, channel carriage fees, late fees and revenue from the sale of equipment. As described in note 2, we adopted ASU 2014-09 on January 1, 2018 using the cumulative effect transition method. For periods subsequent to our adoption of ASU 2014-09, installation revenue is generally deferred and recognized over the contractual period as residential cable subscription revenue. For periods prior to the adoption of ASU 2014-09, installation revenue is included in residential cable non-subscription revenue.
|
(b)
|
Residential 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.
|
(c)
|
Residential mobile subscription revenue includes amounts received from subscribers for ongoing services. Residential mobile non-subscription revenue includes, among other items, interconnect revenue and revenue from sales of mobile handsets and other devices.
|
(d)
|
B2B subscription revenue represents revenue from services to certain small or home office (SOHO) subscribers. SOHO subscribers pay a premium price to receive expanded service levels along with video, broadband internet, fixed-line telephony or mobile services that are the same or similar to the mass marketed products offered to our residential subscribers. B2B non-subscription revenue includes business broadband internet, video, fixed-line telephony, mobile and data services offered to medium to large enterprises and, on a wholesale basis, to other operators.
|
(e)
|
Other revenue includes, among other items, revenue earned from the JV Services, broadcasting revenue in Ireland and revenue from Central and Corporate’s wholesale handset program. In addition, the 2018 periods include revenue earned from (i) sales of customer premises equipment to the VodafoneZiggo JV and (ii) services provided to Liberty Latin America.
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
U.K.
|
$
|
1,605.6
|
|
|
$
|
1,454.8
|
|
|
$
|
3,250.0
|
|
|
$
|
2,855.2
|
|
Belgium
|
753.9
|
|
|
686.0
|
|
|
1,513.5
|
|
|
1,347.4
|
|
||||
Switzerland
|
332.2
|
|
|
339.0
|
|
|
677.1
|
|
|
670.2
|
|
||||
Ireland
|
129.3
|
|
|
111.3
|
|
|
263.1
|
|
|
215.3
|
|
||||
Poland
|
110.4
|
|
|
101.8
|
|
|
226.4
|
|
|
197.7
|
|
||||
Slovakia
|
15.8
|
|
|
14.6
|
|
|
32.3
|
|
|
28.9
|
|
||||
Other, including intersegment eliminations (a)
|
97.9
|
|
|
67.4
|
|
|
177.2
|
|
|
130.0
|
|
||||
Total
|
$
|
3,045.1
|
|
|
$
|
2,774.9
|
|
|
$
|
6,139.6
|
|
|
$
|
5,444.7
|
|
|
|
|
|
|
|
|
|
||||||||
VodafoneZiggo JV (the Netherlands)
|
$
|
1,114.5
|
|
|
$
|
1,081.3
|
|
|
$
|
2,296.1
|
|
|
$
|
2,165.2
|
|
(a)
|
Includes revenue from DTH services provided to customers in the Czech Republic, Hungary and Romania.
|
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, 2018 and 2017.
|
•
|
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.
|
•
|
economic and business conditions and industry trends in the countries in which we or our affiliates operate;
|
•
|
the competitive environment in the industries in the countries in which we or our affiliates 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 cable television, 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 cable television, 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;
|
•
|
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 or our affiliates operate and adverse outcomes from regulatory proceedings;
|
•
|
government intervention that requires opening 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 and dispositions (including the disposition of the Vodafone Disposal Group) and the impact of conditions imposed by competition and other regulatory authorities in connection with acquisitions;
|
•
|
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 acquired or that we expect to acquire;
|
•
|
changes in laws or treaties relating to taxation, or the interpretation thereof, in the U.K., the U.S. or in other countries in which we or our affiliates operate;
|
•
|
changes in laws and government regulations that may impact the availability and cost of capital and the derivative instruments that hedge certain of our financial risks;
|
•
|
the ability of suppliers and vendors (including our third-party wireless network providers under our MVNO arrangements) to timely deliver quality products, equipment, software, services and access;
|
•
|
the availability of attractive programming for our 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, including the costs and benefits associated with the Network Extensions;
|
•
|
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;
|
•
|
the 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;
|
•
|
our equity capital structure; 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.
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017 (a)
|
|
2018
|
|
2017 (a)
|
||||||||
|
in millions
|
||||||||||||||
Increase (decrease) to revenue:
|
|
|
|
|
|
|
|
||||||||
U.K./Ireland
|
$
|
11.2
|
|
|
$
|
(2.3
|
)
|
|
$
|
16.8
|
|
|
$
|
(4.2
|
)
|
Belgium
|
(2.8
|
)
|
|
(1.2
|
)
|
|
(4.3
|
)
|
|
(2.6
|
)
|
||||
Switzerland
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(0.8
|
)
|
|
(1.2
|
)
|
||||
Central and Eastern Europe
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(0.8
|
)
|
||||
Total increase (decrease) to revenue
|
$
|
8.0
|
|
|
$
|
(4.0
|
)
|
|
$
|
11.5
|
|
|
$
|
(8.8
|
)
|
|
|
|
|
|
|
|
|
||||||||
Increase (decrease) to Adjusted OIBDA:
|
|
|
|
|
|
|
|
||||||||
U.K./Ireland
|
$
|
8.6
|
|
|
$
|
(6.1
|
)
|
|
$
|
8.6
|
|
|
$
|
(9.2
|
)
|
Belgium
|
(2.8
|
)
|
|
(1.2
|
)
|
|
(4.3
|
)
|
|
(2.6
|
)
|
||||
Switzerland
|
(1.1
|
)
|
|
(0.5
|
)
|
|
(1.7
|
)
|
|
(1.6
|
)
|
||||
Central and Eastern Europe
|
(0.4
|
)
|
|
0.2
|
|
|
(0.4
|
)
|
|
—
|
|
||||
Total increase (decrease) to Adjusted OIBDA
|
$
|
4.3
|
|
|
$
|
(7.6
|
)
|
|
$
|
2.2
|
|
|
$
|
(13.4
|
)
|
(a)
|
Amounts are presented on a pro forma basis that gives effect to the adoption of ASU 2014-09 as if such adoption had occurred on January 1, 2017.
|
|
Three months ended June 30,
|
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
|
|
|
pro forma
|
|
|
|
|
|
|
|
|
||||||||||
|
in millions, except percentages
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.K./Ireland
|
$
|
1,734.9
|
|
|
$
|
1,563.8
|
|
|
$
|
171.1
|
|
|
10.9
|
|
|
$
|
64.3
|
|
|
4.1
|
|
Belgium
|
753.9
|
|
|
684.8
|
|
|
69.1
|
|
|
10.1
|
|
|
(5.2
|
)
|
|
(0.7
|
)
|
||||
Switzerland
|
332.2
|
|
|
338.7
|
|
|
(6.5
|
)
|
|
(1.9
|
)
|
|
(6.5
|
)
|
|
(1.9
|
)
|
||||
Central and Eastern Europe
|
152.9
|
|
|
141.8
|
|
|
11.1
|
|
|
7.8
|
|
|
0.4
|
|
|
0.3
|
|
||||
Central and Corporate (a)
|
72.0
|
|
|
42.7
|
|
|
29.3
|
|
|
68.6
|
|
|
25.0
|
|
|
58.0
|
|
||||
Intersegment eliminations
|
(0.8
|
)
|
|
(0.9
|
)
|
|
0.1
|
|
|
N.M.
|
|
|
0.1
|
|
|
N.M.
|
|
||||
Total
|
$
|
3,045.1
|
|
|
$
|
2,770.9
|
|
|
$
|
274.2
|
|
|
9.9
|
|
|
$
|
78.1
|
|
|
2.8
|
|
|
Six months ended
June 30, |
|
Increase
|
|
Organic increase (decrease)
|
|||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
|||||||||
|
|
|
pro forma
|
|
|
|
|
|
|
|
|
|||||||||
|
in millions, except percentages
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.K./Ireland
|
$
|
3,513.1
|
|
|
$
|
3,066.3
|
|
|
$
|
446.8
|
|
|
14.6
|
|
$
|
142.4
|
|
|
4.7
|
|
Belgium
|
1,513.5
|
|
|
1,344.8
|
|
|
168.7
|
|
|
12.5
|
|
(15.3
|
)
|
|
(1.1
|
)
|
||||
Switzerland
|
677.1
|
|
|
669.0
|
|
|
8.1
|
|
|
1.2
|
|
(11.3
|
)
|
|
(1.6
|
)
|
||||
Central and Eastern Europe
|
313.4
|
|
|
276.3
|
|
|
37.1
|
|
|
13.4
|
|
1.9
|
|
|
0.7
|
|
||||
Central and Corporate (a)
|
123.8
|
|
|
83.5
|
|
|
40.3
|
|
|
48.3
|
|
28.5
|
|
|
33.8
|
|
||||
Intersegment eliminations
|
(1.3
|
)
|
|
(4.0
|
)
|
|
2.7
|
|
|
N.M.
|
|
2.7
|
|
|
N.M.
|
|
||||
Total
|
$
|
6,139.6
|
|
|
$
|
5,435.9
|
|
|
$
|
703.7
|
|
|
12.9
|
|
$
|
148.9
|
|
|
2.7
|
|
(a)
|
Amounts primarily include the revenue earned from services provided to the VodafoneZiggo JV and, during the 2018 periods, Liberty Latin America. For additional information, see note 5 to our condensed consolidated financial statements.
|
|
Three-month period
|
|
Six-month period
|
||||||||||||||||||||
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Increase in residential cable subscription revenue due to change in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (a)
|
$
|
14.6
|
|
|
$
|
—
|
|
|
$
|
14.6
|
|
|
$
|
30.8
|
|
|
$
|
—
|
|
|
$
|
30.8
|
|
ARPU (b)
|
13.2
|
|
|
—
|
|
|
13.2
|
|
|
29.6
|
|
|
—
|
|
|
29.6
|
|
||||||
Decrease in residential cable non-subscription revenue
|
—
|
|
|
(1.1
|
)
|
|
(1.1
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||||
Total increase (decrease) in residential cable revenue
|
27.8
|
|
|
(1.1
|
)
|
|
26.7
|
|
|
60.4
|
|
|
(0.2
|
)
|
|
60.2
|
|
||||||
Increase (decrease) in residential mobile revenue (c)
|
(1.4
|
)
|
|
30.2
|
|
|
28.8
|
|
|
(4.3
|
)
|
|
63.1
|
|
|
58.8
|
|
||||||
Increase (decrease) in B2B revenue (d)
|
6.6
|
|
|
(0.1
|
)
|
|
6.5
|
|
|
13.7
|
|
|
2.2
|
|
|
15.9
|
|
||||||
Increase in other revenue (e)
|
—
|
|
|
2.3
|
|
|
2.3
|
|
|
—
|
|
|
7.5
|
|
|
7.5
|
|
||||||
Total organic increase
|
33.0
|
|
|
31.3
|
|
|
64.3
|
|
|
69.8
|
|
|
72.6
|
|
|
142.4
|
|
||||||
Impact of FX
|
83.4
|
|
|
23.4
|
|
|
106.8
|
|
|
237.3
|
|
|
67.1
|
|
|
304.4
|
|
||||||
Total
|
$
|
116.4
|
|
|
$
|
54.7
|
|
|
$
|
171.1
|
|
|
$
|
307.1
|
|
|
$
|
139.7
|
|
|
$
|
446.8
|
|
(a)
|
The increases in residential cable subscription revenue related to changes in the average number of RGUs are attributable to increases in the average number of broadband internet, video and fixed-line telephony RGUs.
|
(b)
|
The increases in cable subscription revenue related to changes in ARPU are primarily attributable to (i) net increases due to (a) higher ARPU from broadband internet services and (b) lower ARPU from fixed-line telephony and video services and (ii) improvements in RGU mix.
|
(c)
|
The decreases in residential mobile subscription revenue relate to the net effect of (i) decreases in the U.K., due primarily to lower ARPU, and (ii) increases in Ireland, mainly due to increases in the average number of mobile subscribers. The increases in residential mobile non-subscription revenue are primarily due to increases in revenue from mobile handset sales in the U.K., which typically generate relatively low margins.
|
(d)
|
The increases in B2B subscription revenue are primarily due to increases in the average number of broadband internet SOHO subscribers in the U.K. The changes in B2B non-subscription revenue are primarily driven by changes in the U.K., including the net effect of (i) higher revenue related to business network services, (ii) decreases in interconnect revenue, (iii) decreases in installation revenue and (iv) decreases in early termination fees.
|
(e)
|
The increases in other revenue are largely due to increases in broadcasting revenue in Ireland.
|
|
Three-month period
|
|
Six-month period
|
||||||||||||||||||||
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Increase (decrease) in residential cable subscription revenue due to change in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (a)
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
0.9
|
|
|
$
|
(23.3
|
)
|
|
$
|
—
|
|
|
$
|
(23.3
|
)
|
ARPU (b)
|
(12.2
|
)
|
|
—
|
|
|
(12.2
|
)
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
||||||
Decrease in residential cable non-subscription revenue (c)
|
—
|
|
|
(1.7
|
)
|
|
(1.7
|
)
|
|
—
|
|
|
(6.3
|
)
|
|
(6.3
|
)
|
||||||
Total decrease in residential cable revenue
|
(11.3
|
)
|
|
(1.7
|
)
|
|
(13.0
|
)
|
|
(22.7
|
)
|
|
(6.3
|
)
|
|
(29.0
|
)
|
||||||
Decrease in residential mobile
revenue (d)
|
(5.3
|
)
|
|
(1.0
|
)
|
|
(6.3
|
)
|
|
(14.0
|
)
|
|
(2.6
|
)
|
|
(16.6
|
)
|
||||||
Increase (decrease) in B2B revenue (e)
|
(4.3
|
)
|
|
18.4
|
|
|
14.1
|
|
|
11.7
|
|
|
18.6
|
|
|
30.3
|
|
||||||
Total organic increase (decrease)
|
(20.9
|
)
|
|
15.7
|
|
|
(5.2
|
)
|
|
(25.0
|
)
|
|
9.7
|
|
|
(15.3
|
)
|
||||||
Impact of acquisitions
|
12.1
|
|
|
9.6
|
|
|
21.7
|
|
|
26.6
|
|
|
11.5
|
|
|
38.1
|
|
||||||
Impact of disposals
|
(4.0
|
)
|
|
(1.4
|
)
|
|
(5.4
|
)
|
|
(11.4
|
)
|
|
(2.0
|
)
|
|
(13.4
|
)
|
||||||
Impact of FX
|
43.5
|
|
|
14.5
|
|
|
58.0
|
|
|
121.3
|
|
|
38.0
|
|
|
159.3
|
|
||||||
Total
|
$
|
30.7
|
|
|
$
|
38.4
|
|
|
$
|
69.1
|
|
|
$
|
111.5
|
|
|
$
|
57.2
|
|
|
$
|
168.7
|
|
(a)
|
The changes in residential cable subscription revenue related to changes in the average number of RGUs are primarily attributable to the net effect of (i) decreases in the average number of video RGUs, (ii) for the six-month comparison, decreases in the average number of broadband internet and fixed-line telephony RGUs and (iii) for the three-month comparison, an increase in the average number of broadband internet RGUs.
|
(b)
|
The decrease in residential cable subscription revenue related to changes in ARPU for the three-month comparison is primarily attributable to lower ARPU from broadband internet, video and fixed-line telephony services. The increase for the six-month comparison is primarily attributable to the net effect of lower ARPU from fixed-line telephony services and higher ARPU from broadband internet and, to a lesser extent, video services. In addition, the change in ARPU during both periods was positively impacted by improvements in RGU mix.
|
(c)
|
The decreases in residential cable non-subscription revenue are primarily attributable to the net effect of (i) for the six-month comparison, a decrease of $5.6 million related to adjustments recorded during the 2017 period to reflect the expected recovery of certain prior-period VAT payments and (ii) increases in distribution revenue.
|
(d)
|
The decreases in residential mobile subscription revenue are primarily due to the net effect of (i) lower ARPU and (ii) increases in the average number of mobile subscribers. The decreases in residential mobile non-subscription revenue are
|
(e)
|
The changes in B2B subscription revenue are primarily attributable to the net effect of (i) increases in broadband internet and video SOHO subscribers and (ii) lower ARPU from mobile SOHO services. The increases in B2B non-subscription revenue are primarily due to (i) higher revenue from wholesale services and (ii) increases in interconnect revenue.
|
|
Three-month period
|
|
Six-month period
|
||||||||||||||||||||
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Decrease in residential cable subscription revenue due to change in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (a)
|
$
|
(9.2
|
)
|
|
$
|
—
|
|
|
$
|
(9.2
|
)
|
|
$
|
(13.1
|
)
|
|
$
|
—
|
|
|
$
|
(13.1
|
)
|
ARPU (b)
|
(14.3
|
)
|
|
—
|
|
|
(14.3
|
)
|
|
(32.3
|
)
|
|
—
|
|
|
(32.3
|
)
|
||||||
Increase in residential cable non-subscription revenue (c)
|
—
|
|
|
4.0
|
|
|
4.0
|
|
|
—
|
|
|
12.6
|
|
|
12.6
|
|
||||||
Total increase (decrease) in residential cable revenue
|
(23.5
|
)
|
|
4.0
|
|
|
(19.5
|
)
|
|
(45.4
|
)
|
|
12.6
|
|
|
(32.8
|
)
|
||||||
Increase in residential mobile revenue (d)
|
4.0
|
|
|
0.8
|
|
|
4.8
|
|
|
7.2
|
|
|
1.3
|
|
|
8.5
|
|
||||||
Increase in B2B revenue (e)
|
0.4
|
|
|
7.1
|
|
|
7.5
|
|
|
0.8
|
|
|
11.3
|
|
|
12.1
|
|
||||||
Increase in other revenue
|
—
|
|
|
0.7
|
|
|
0.7
|
|
|
—
|
|
|
0.9
|
|
|
0.9
|
|
||||||
Total organic increase (decrease)
|
(19.1
|
)
|
|
12.6
|
|
|
(6.5
|
)
|
|
(37.4
|
)
|
|
26.1
|
|
|
(11.3
|
)
|
||||||
Impact of FX
|
(0.2
|
)
|
|
0.2
|
|
|
—
|
|
|
15.4
|
|
|
4.0
|
|
|
19.4
|
|
||||||
Total
|
$
|
(19.3
|
)
|
|
$
|
12.8
|
|
|
$
|
(6.5
|
)
|
|
$
|
(22.0
|
)
|
|
$
|
30.1
|
|
|
$
|
8.1
|
|
(a)
|
The decreases in residential cable subscription revenue related to changes in the average number of RGUs are attributable to the net effect of (i) declines in the average number of video and broadband internet RGUs and (ii) increases in the average number of fixed-line telephony RGUs.
|
(b)
|
The decreases in residential cable subscription revenue related to changes in ARPU are primarily attributable to decreases due to lower ARPU from video, fixed-line telephony and broadband internet services, including, for the six-month comparison, the reversal during the first quarter of 2018 of $3.9 million of revenue in Switzerland that was recognized during prior-year periods.
|
(c)
|
The increases in residential cable non-subscription revenue are primarily attributable to the net effect of (i) increases in distribution revenue of $5.3 million and $17.2 million, respectively, associated with the September 2017 launch of our Swiss sports channels and (ii) decreases of $2.7 million and $6.4 million, respectively, due to the impact of unclaimed customer credit accruals that were released during the 2017 periods.
|
(d)
|
The increases in residential mobile subscription revenue are primarily due to increases in the average number of mobile subscribers.
|
(e)
|
The increases in B2B non-subscription revenue are primarily due to (i) increases in interconnect revenue and (ii) higher revenue from fixed-line telephony and data services.
|
|
Three-month period
|
|
Six-month period
|
||||||||||||||||||||
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
|
Subscription
revenue
|
|
Non-subscription
revenue
|
|
Total
|
||||||||||||
|
in millions
|
||||||||||||||||||||||
Decrease in residential cable subscription revenue due to change in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average number of RGUs (a)
|
$
|
(0.5
|
)
|
|
$
|
—
|
|
|
$
|
(0.5
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
—
|
|
|
$
|
(1.8
|
)
|
ARPU (b)
|
(1.1
|
)
|
|
—
|
|
|
(1.1
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
(0.6
|
)
|
||||||
Increase (decrease) in residential cable non-subscription revenue
|
—
|
|
|
0.4
|
|
|
0.4
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||||
Total increase (decrease) in residential cable revenue
|
(1.6
|
)
|
|
0.4
|
|
|
(1.2
|
)
|
|
(2.4
|
)
|
|
(0.1
|
)
|
|
(2.5
|
)
|
||||||
Increase in B2B revenue (c)
|
1.2
|
|
|
0.4
|
|
|
1.6
|
|
|
2.7
|
|
|
1.7
|
|
|
4.4
|
|
||||||
Total organic increase (decrease)
|
(0.4
|
)
|
|
0.8
|
|
|
0.4
|
|
|
0.3
|
|
|
1.6
|
|
|
1.9
|
|
||||||
Impact of FX
|
10.3
|
|
|
0.4
|
|
|
10.7
|
|
|
33.1
|
|
|
2.1
|
|
|
35.2
|
|
||||||
Total
|
$
|
9.9
|
|
|
$
|
1.2
|
|
|
$
|
11.1
|
|
|
$
|
33.4
|
|
|
$
|
3.7
|
|
|
$
|
37.1
|
|
(a)
|
The decreases in residential cable subscription revenue related to changes in the average number of RGUs are primarily attributable to the net effect of (i) decreases in the average number of video RGUs, primarily in UPC DTH and Poland, and (ii) increases in the average number of broadband internet RGUs.
|
(b)
|
The decreases in residential cable subscription revenue related to changes in ARPU are primarily attributable to the net effect of (i) lower ARPU from fixed-line telephony services, primarily in Poland, and (ii) for the six-month comparison, (a) higher ARPU from video services, primarily in Poland and UPC DTH, and (b) lower ARPU from broadband internet services, primarily in Poland.
|
(c)
|
The increases in B2B subscription revenue are attributable to increases in the average number of broadband internet SOHO subscribers.
|
|
Three months ended June 30,
|
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
|
|
|
pro forma
|
|
|
|
|
|
|
|
|
||||||||||
|
in millions, except percentages
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.K./Ireland
|
$
|
763.6
|
|
|
$
|
701.0
|
|
|
$
|
62.6
|
|
|
8.9
|
|
|
$
|
15.8
|
|
|
2.4
|
|
Belgium
|
383.7
|
|
|
316.7
|
|
|
67.0
|
|
|
21.2
|
|
|
29.4
|
|
|
9.1
|
|
||||
Switzerland
|
189.0
|
|
|
212.4
|
|
|
(23.4
|
)
|
|
(11.0
|
)
|
|
(23.4
|
)
|
|
(11.0
|
)
|
||||
Central and Eastern Europe
|
67.9
|
|
|
64.8
|
|
|
3.1
|
|
|
4.8
|
|
|
(2.1
|
)
|
|
(2.5
|
)
|
||||
Central and Corporate
|
(83.6
|
)
|
|
(98.7
|
)
|
|
15.1
|
|
|
15.3
|
|
|
20.7
|
|
|
20.9
|
|
||||
Intersegment eliminations
|
(10.8
|
)
|
|
(8.4
|
)
|
|
(2.4
|
)
|
|
N.M.
|
|
|
(2.4
|
)
|
|
N.M.
|
|
||||
Total
|
$
|
1,309.8
|
|
|
$
|
1,187.8
|
|
|
$
|
122.0
|
|
|
10.3
|
|
|
$
|
38.0
|
|
|
3.2
|
|
|
Six months ended
June 30, |
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
|
|
|
pro forma
|
|
|
|
|
|
|
|
|
||||||||||
|
in millions, except percentages
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.K./Ireland
|
$
|
1,526.2
|
|
|
$
|
1,343.9
|
|
|
$
|
182.3
|
|
|
13.6
|
|
|
$
|
51.3
|
|
|
3.9
|
|
Belgium
|
741.3
|
|
|
613.2
|
|
|
128.1
|
|
|
20.9
|
|
|
36.7
|
|
|
5.9
|
|
||||
Switzerland
|
375.5
|
|
|
416.1
|
|
|
(40.6
|
)
|
|
(9.8
|
)
|
|
(51.0
|
)
|
|
(12.3
|
)
|
||||
Central and Eastern Europe
|
139.8
|
|
|
123.1
|
|
|
16.7
|
|
|
13.6
|
|
|
0.6
|
|
|
0.8
|
|
||||
Central and Corporate
|
(182.7
|
)
|
|
(191.7
|
)
|
|
9.0
|
|
|
4.7
|
|
|
23.1
|
|
|
12.0
|
|
||||
Intersegment eliminations
|
(18.5
|
)
|
|
(16.2
|
)
|
|
(2.3
|
)
|
|
N.M.
|
|
|
(2.3
|
)
|
|
N.M.
|
|
||||
Total
|
$
|
2,581.6
|
|
|
$
|
2,288.4
|
|
|
$
|
293.2
|
|
|
12.8
|
|
|
$
|
58.4
|
|
|
2.5
|
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
|
|
|
pro forma
|
|
|
|
pro forma
|
||||
|
|
|
|
|
|
|
|
||||
U.K./Ireland
|
44.0
|
%
|
|
44.8
|
%
|
|
43.5
|
%
|
|
43.8
|
%
|
Belgium
|
50.9
|
%
|
|
46.2
|
%
|
|
49.0
|
%
|
|
45.6
|
%
|
Switzerland
|
56.9
|
%
|
|
62.7
|
%
|
|
55.5
|
%
|
|
62.2
|
%
|
Central and Eastern Europe
|
44.4
|
%
|
|
45.6
|
%
|
|
44.6
|
%
|
|
44.6
|
%
|
|
Three months ended June 30,
|
|
Increase
|
|
Organic increase (decrease)
|
|||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
|||||||||
|
|
|
pro forma
|
|
|
|
|
|
|
|
|
|||||||||
|
in millions, except percentages
|
|||||||||||||||||||
Residential revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential cable revenue (a):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Subscription revenue (b):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Video
|
$
|
743.5
|
|
|
$
|
721.9
|
|
|
$
|
21.6
|
|
|
3.0
|
|
$
|
(26.5
|
)
|
|
(3.6
|
)
|
Broadband internet
|
816.7
|
|
|
729.3
|
|
|
87.4
|
|
|
12.0
|
|
36.2
|
|
|
4.9
|
|
||||
Fixed-line telephony
|
407.7
|
|
|
399.6
|
|
|
8.1
|
|
|
2.0
|
|
(18.3
|
)
|
|
(4.6
|
)
|
||||
Total subscription revenue
|
1,967.9
|
|
|
1,850.8
|
|
|
117.1
|
|
|
6.3
|
|
(8.6
|
)
|
|
(0.5
|
)
|
||||
Non-subscription revenue
|
72.4
|
|
|
62.5
|
|
|
9.9
|
|
|
15.8
|
|
7.5
|
|
|
11.9
|
|
||||
Total residential cable revenue
|
2,040.3
|
|
|
1,913.3
|
|
|
127.0
|
|
|
6.6
|
|
(1.1
|
)
|
|
(0.1
|
)
|
||||
Residential mobile revenue (c):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Subscription revenue (b)
|
249.6
|
|
|
240.3
|
|
|
9.3
|
|
|
3.9
|
|
(2.7
|
)
|
|
(1.1
|
)
|
||||
Non-subscription revenue
|
175.2
|
|
|
137.6
|
|
|
37.6
|
|
|
27.3
|
|
29.8
|
|
|
22.2
|
|
||||
Total residential mobile revenue
|
424.8
|
|
|
377.9
|
|
|
46.9
|
|
|
12.4
|
|
27.1
|
|
|
7.3
|
|
||||
Total residential revenue
|
2,465.1
|
|
|
2,291.2
|
|
|
173.9
|
|
|
7.6
|
|
26.0
|
|
|
1.1
|
|
||||
B2B revenue (d):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Subscription revenue
|
102.9
|
|
|
91.4
|
|
|
11.5
|
|
|
12.6
|
|
3.9
|
|
|
4.3
|
|
||||
Non-subscription revenue
|
400.2
|
|
|
337.5
|
|
|
62.7
|
|
|
18.6
|
|
25.5
|
|
|
7.3
|
|
||||
Total B2B revenue
|
503.1
|
|
|
428.9
|
|
|
74.2
|
|
|
17.3
|
|
29.4
|
|
|
6.7
|
|
||||
Other revenue (e)
|
76.9
|
|
|
50.8
|
|
|
26.1
|
|
|
51.4
|
|
22.7
|
|
|
44.7
|
|
||||
Total
|
$
|
3,045.1
|
|
|
$
|
2,770.9
|
|
|
$
|
274.2
|
|
|
9.9
|
|
$
|
78.1
|
|
|
2.8
|
|
|
Six months ended
June 30, |
|
Increase
|
|
Organic increase (decrease)
|
||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
|
|
|
pro forma
|
|
|
|
|
|
|
|
|
||||||||||
|
in millions, except percentages
|
||||||||||||||||||||
Residential revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential cable revenue (a):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Subscription revenue (b):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Video
|
$
|
1,518.1
|
|
|
$
|
1,415.4
|
|
|
$
|
102.7
|
|
|
7.3
|
|
|
$
|
(39.2
|
)
|
|
(2.7
|
)
|
Broadband internet
|
1,657.9
|
|
|
1,439.9
|
|
|
218.0
|
|
|
15.1
|
|
|
69.5
|
|
|
4.8
|
|
||||
Fixed-line telephony
|
829.7
|
|
|
794.7
|
|
|
35.0
|
|
|
4.4
|
|
|
(40.4
|
)
|
|
(5.1
|
)
|
||||
Total subscription revenue
|
4,005.7
|
|
|
3,650.0
|
|
|
355.7
|
|
|
9.7
|
|
|
(10.1
|
)
|
|
(0.3
|
)
|
||||
Non-subscription revenue
|
154.1
|
|
|
129.5
|
|
|
24.6
|
|
|
19.0
|
|
|
16.8
|
|
|
13.1
|
|
||||
Total residential cable revenue
|
4,159.8
|
|
|
3,779.5
|
|
|
380.3
|
|
|
10.1
|
|
|
6.7
|
|
|
0.2
|
|
||||
Residential mobile revenue (c):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Subscription revenue (b)
|
493.4
|
|
|
469.9
|
|
|
23.5
|
|
|
5.0
|
|
|
(11.1
|
)
|
|
(2.4
|
)
|
||||
Non-subscription revenue
|
354.7
|
|
|
267.5
|
|
|
87.2
|
|
|
32.6
|
|
|
61.6
|
|
|
23.6
|
|
||||
Total residential mobile revenue
|
848.1
|
|
|
737.4
|
|
|
110.7
|
|
|
15.0
|
|
|
50.5
|
|
|
7.0
|
|
||||
Total residential revenue
|
5,007.9
|
|
|
4,516.9
|
|
|
491.0
|
|
|
10.9
|
|
|
57.2
|
|
|
1.3
|
|
||||
B2B revenue (d):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Subscription revenue
|
219.6
|
|
|
168.8
|
|
|
50.8
|
|
|
30.1
|
|
|
28.9
|
|
|
17.1
|
|
||||
Non-subscription revenue
|
771.4
|
|
|
652.0
|
|
|
119.4
|
|
|
18.3
|
|
|
35.4
|
|
|
5.3
|
|
||||
Total B2B revenue
|
991.0
|
|
|
820.8
|
|
|
170.2
|
|
|
20.7
|
|
|
64.3
|
|
|
7.7
|
|
||||
Other revenue (e)
|
140.7
|
|
|
98.2
|
|
|
42.5
|
|
|
43.3
|
|
|
27.4
|
|
|
27.7
|
|
||||
Total
|
$
|
6,139.6
|
|
|
$
|
5,435.9
|
|
|
$
|
703.7
|
|
|
12.9
|
|
|
$
|
148.9
|
|
|
2.7
|
|
(a)
|
Residential cable subscription revenue includes amounts received from subscribers for ongoing services and the recognition of deferred installation revenue over the associated contract period. Residential cable non-subscription revenue includes, among other items, channel carriage fees, late fees and revenue from the sale of equipment.
|
(b)
|
Residential 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.
|
(c)
|
Residential mobile subscription revenue includes amounts received from subscribers for ongoing services. Residential mobile non-subscription revenue includes, among other items, interconnect revenue and revenue from sales of mobile handsets and other devices. Residential mobile interconnect revenue was $67.4 million and $66.4 million during the three months ended June 30, 2018 and 2017, respectively, and $137.3 million and $129.9 million during the six months ended June 30, 2018 and 2017, respectively.
|
(d)
|
B2B subscription revenue represents revenue from SOHO subscribers. SOHO subscribers pay a premium price to receive expanded service levels along with video, broadband internet, fixed-line telephony or mobile services that are the same or similar to the mass marketed products offered to our residential subscribers. A portion of the increases in our B2B subscription revenue is attributable to the conversion of certain residential subscribers to SOHO subscribers. B2B non-subscription revenue includes revenue from business broadband internet, video, fixed-line telephony, mobile and data services offered to medium to large enterprises and, on a wholesale basis, to other operators.
|
(e)
|
Other revenue includes, among other items, revenue earned from the JV Services, broadcasting revenue in Ireland and revenue from Central and Corporate’s wholesale handset program. In addition, the 2018 periods include revenue earned from (i) sales of customer premises equipment to the VodafoneZiggo JV and (ii) services provided to Liberty Latin America.
|
|
Three-month period
|
|
Six-month period
|
||||
|
in millions
|
||||||
Increase (decrease) in residential cable subscription revenue due to change in:
|
|
|
|
||||
Average number of RGUs
|
$
|
6.7
|
|
|
$
|
(7.6
|
)
|
ARPU
|
(15.3
|
)
|
|
(2.5
|
)
|
||
Increase in residential cable non-subscription revenue
|
7.5
|
|
|
16.8
|
|
||
Total increase (decrease) in residential cable revenue
|
(1.1
|
)
|
|
6.7
|
|
||
Decrease in residential mobile subscription revenue
|
(2.7
|
)
|
|
(11.1
|
)
|
||
Increase in residential mobile non-subscription revenue
|
29.8
|
|
|
61.6
|
|
||
Total organic increase in residential revenue
|
26.0
|
|
|
57.2
|
|
||
Net impact of acquisitions and disposals
|
5.4
|
|
|
7.3
|
|
||
Impact of FX
|
142.5
|
|
|
426.5
|
|
||
Total increase in residential revenue
|
$
|
173.9
|
|
|
$
|
491.0
|
|
|
Three months ended June 30,
|
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
|
|
|
pro forma
|
|
|
|
|
|
|
|
|
||||||||||
|
in millions, except percentages
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.K./Ireland
|
$
|
513.5
|
|
|
$
|
437.4
|
|
|
$
|
76.1
|
|
|
17.4
|
|
|
$
|
44.7
|
|
|
10.2
|
|
Belgium
|
168.1
|
|
|
177.3
|
|
|
(9.2
|
)
|
|
(5.2
|
)
|
|
(23.8
|
)
|
|
(13.3
|
)
|
||||
Switzerland
|
61.9
|
|
|
43.6
|
|
|
18.3
|
|
|
42.0
|
|
|
18.3
|
|
|
42.0
|
|
||||
Central and Eastern Europe
|
42.6
|
|
|
36.9
|
|
|
5.7
|
|
|
15.4
|
|
|
2.6
|
|
|
7.0
|
|
||||
Central and Corporate
|
32.2
|
|
|
9.4
|
|
|
22.8
|
|
|
242.6
|
|
|
21.4
|
|
|
227.7
|
|
||||
Intersegment eliminations
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
N.M.
|
|
|
(0.3
|
)
|
|
N.M.
|
|
||||
Total
|
$
|
818.0
|
|
|
$
|
704.6
|
|
|
$
|
113.4
|
|
|
16.1
|
|
|
$
|
62.9
|
|
|
8.9
|
|
|
Six months ended
June 30, |
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
|
|
|
pro forma
|
|
|
|
|
|
|
|
|
||||||||||
|
in millions, except percentages
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.K./Ireland
|
$
|
1,066.7
|
|
|
$
|
885.8
|
|
|
$
|
180.9
|
|
|
20.4
|
|
|
$
|
87.6
|
|
|
9.9
|
|
Belgium
|
348.7
|
|
|
355.8
|
|
|
(7.1
|
)
|
|
(2.0
|
)
|
|
(44.1
|
)
|
|
(12.4
|
)
|
||||
Switzerland
|
132.1
|
|
|
85.2
|
|
|
46.9
|
|
|
55.0
|
|
|
43.1
|
|
|
50.6
|
|
||||
Central and Eastern Europe
|
84.9
|
|
|
72.4
|
|
|
12.5
|
|
|
17.3
|
|
|
3.2
|
|
|
4.4
|
|
||||
Central and Corporate
|
44.8
|
|
|
18.2
|
|
|
26.6
|
|
|
146.2
|
|
|
23.1
|
|
|
126.9
|
|
||||
Intersegment eliminations
|
0.2
|
|
|
0.7
|
|
|
(0.5
|
)
|
|
N.M.
|
|
|
(0.5
|
)
|
|
N.M.
|
|
||||
Total
|
$
|
1,677.4
|
|
|
$
|
1,418.1
|
|
|
$
|
259.3
|
|
|
18.3
|
|
|
$
|
112.4
|
|
|
7.9
|
|
•
|
Increases in mobile handset and other device costs of $16.8 million or 21.7% and $50.0 million or 34.2%, respectively, primarily due to (i) higher average cost per handset sold in U.K./Ireland and (ii) higher mobile handset and other device sales volumes, primarily due to increases in Central and Corporate and U.K./Ireland, that were only partially offset by decreases in Belgium. Substantially all of the increases in Central and Corporate are attributable to its wholesale handset program;
|
•
|
Increases in programming and copyright costs of $11.2 million or 3.0% and $42.4 million or 5.7%, respectively, primarily due to increases in Switzerland and U.K./Ireland. These increases are primarily due to (i) higher costs for certain premium and/or basic content, including higher costs associated with (a) sports rights in Switzerland and (b) for the six-month comparison, broadcasting rights in Ireland, (ii) growth in the number of enhanced video subscribers, primarily due to increases in U.K./Ireland, and (iii) higher costs in Central and Eastern Europe due to a $2.6 million accrual during the second quarter of 2018 following the reassessment of an operational contingency. The cost for sports rights in Switzerland increased by $9.4 million and $28.6 million, respectively, due to the acquisition of the rights to carry live sporting events in connection with the September 2017 launch of our Swiss sports channels. Approximately half of the annual programming costs and the operating and capital costs associated with the production of the related Swiss sports channels are recovered from the revenue earned from the distribution of these sports channels to other cable operators;
|
•
|
Higher costs of sales of $17.2 million during each period in Central and Corporate related to customer premises equipment sold to the VodafoneZiggo JV;
|
•
|
Decreases of $3.2 million and $6.8 million, respectively, in the U.K. associated with the fourth quarter 2017 modification of a software agreement that resulted in the acquisition of a perpetual license and related conversion of the operating costs to capitalized costs; and
|
•
|
Increases in interconnect and access costs of $20.8 million or 10.4% and $5.7 million or 1.4%, respectively, primarily due to the net effect of (i) lower MVNO costs, as decreases in Belgium of $15.6 million and $29.2 million, respectively, were only partially offset by increases in Switzerland, (ii) higher costs of $23.8 million in U.K./Ireland during each period resulting from the net impact of credits recorded during the second quarter of 2017 ($28.8 million) and the second quarter of 2018 ($5.0 million) in connection with a telecommunications operator’s agreement to compensate communications providers, including Virgin Media, for certain contractual breaches related to network charges and (iii) higher interconnect and roaming costs, primarily due to the net effect of (a) increases in U.K./Ireland and Switzerland and (b) for the six-month comparison, a decrease in Belgium. The lower MVNO costs in Belgium are primarily attributable to the impact of the migration of mobile subscribers from Telenet’s MVNO arrangement to Telenet’s mobile network, which was completed during the first quarter of 2018. For additional information, see note 13 to our condensed consolidated financial statements.
|
|
Three months ended June 30,
|
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
|
|
|
pro forma
|
|
|
|
|
|
|
|
|
||||||||||
|
in millions, except percentages
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.K./Ireland
|
$
|
227.9
|
|
|
$
|
206.5
|
|
|
$
|
21.4
|
|
|
10.4
|
|
|
$
|
10.1
|
|
|
4.9
|
|
Belgium
|
98.2
|
|
|
91.3
|
|
|
6.9
|
|
|
7.6
|
|
|
(2.9
|
)
|
|
(3.1
|
)
|
||||
Switzerland
|
37.4
|
|
|
41.8
|
|
|
(4.4
|
)
|
|
(10.5
|
)
|
|
(4.3
|
)
|
|
(10.3
|
)
|
||||
Central and Eastern Europe
|
21.8
|
|
|
20.0
|
|
|
1.8
|
|
|
9.0
|
|
|
1.2
|
|
|
6.0
|
|
||||
Central and Corporate
|
40.1
|
|
|
40.7
|
|
|
(0.6
|
)
|
|
(1.5
|
)
|
|
(4.7
|
)
|
|
(11.5
|
)
|
||||
Intersegment eliminations
|
5.8
|
|
|
7.6
|
|
|
(1.8
|
)
|
|
N.M.
|
|
|
(1.8
|
)
|
|
N.M.
|
|
||||
Total other operating expenses excluding share-based compensation expense
|
431.2
|
|
|
407.9
|
|
|
23.3
|
|
|
5.7
|
|
|
$
|
(2.4
|
)
|
|
(0.6
|
)
|
|||
Share-based compensation expense
|
—
|
|
|
0.9
|
|
|
(0.9
|
)
|
|
(100.0
|
)
|
|
|
|
|
||||||
Total
|
$
|
431.2
|
|
|
$
|
408.8
|
|
|
$
|
22.4
|
|
|
5.5
|
|
|
|
|
|
|
Six months ended
June 30, |
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
|
|
|
pro forma
|
|
|
|
|
|
|
|
|
||||||||||
|
in millions, except percentages
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.K./Ireland
|
$
|
459.9
|
|
|
$
|
402.4
|
|
|
$
|
57.5
|
|
|
14.3
|
|
|
$
|
17.5
|
|
|
4.3
|
|
Belgium
|
211.5
|
|
|
183.8
|
|
|
27.7
|
|
|
15.1
|
|
|
0.4
|
|
|
0.2
|
|
||||
Switzerland
|
81.2
|
|
|
83.3
|
|
|
(2.1
|
)
|
|
(2.5
|
)
|
|
(4.7
|
)
|
|
(5.6
|
)
|
||||
Central and Eastern Europe
|
46.5
|
|
|
42.0
|
|
|
4.5
|
|
|
10.7
|
|
|
(0.5
|
)
|
|
(1.2
|
)
|
||||
Central and Corporate
|
84.1
|
|
|
79.7
|
|
|
4.4
|
|
|
5.5
|
|
|
(3.8
|
)
|
|
(4.8
|
)
|
||||
Intersegment eliminations
|
15.0
|
|
|
13.1
|
|
|
1.9
|
|
|
N.M.
|
|
|
1.9
|
|
|
N.M.
|
|
||||
Total other operating expenses excluding share-based compensation expense
|
898.2
|
|
|
804.3
|
|
|
93.9
|
|
|
11.7
|
|
|
$
|
10.8
|
|
|
1.3
|
|
|||
Share-based compensation expense
|
1.0
|
|
|
1.9
|
|
|
(0.9
|
)
|
|
(47.4
|
)
|
|
|
|
|
||||||
Total
|
$
|
899.2
|
|
|
$
|
806.2
|
|
|
$
|
93.0
|
|
|
11.5
|
|
|
|
|
|
•
|
Increases in network infrastructure charges in U.K./Ireland of $4.6 million and $13.0 million, respectively, following an increase in the rateable value of existing assets. For additional information, including our estimate of the full year
|
•
|
Decreases in business service costs of $2.7 million or 5.1% and $6.3 million or 6.4%, respectively, primarily due to (i) decreased vehicle expenses due to the impact of the conversion of certain operating leases on company vehicles to capital leases in Belgium and U.K./Ireland, (ii) for the six-month comparison, lower energy costs and (iii) decreases in travel and entertainment expenses; and
|
•
|
Decreases in personnel costs of $9.2 million or 7.8% and $2.2 million or 0.9%, respectively, primarily due to the net effect of (i) lower staffing levels, as decreases in U.K./Ireland, Belgium and Switzerland were only partially offset by increases in Central and Corporate, and (ii) higher incentive compensation costs in U.K./Ireland.
|
|
Three months ended June 30,
|
|
Increase (decrease)
|
|
Organic increase (decrease)
|
||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
|
|
|
pro forma
|
|
|
|
|
|
|
|
|
||||||||||
|
in millions, except percentages
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.K./Ireland
|
$
|
229.9
|
|
|
$
|
218.9
|
|
|
$
|
11.0
|
|
|
5.0
|
|
|
$
|
(6.3
|
)
|
|
(2.9
|
)
|
Belgium
|
103.9
|
|
|
99.5
|
|
|
4.4
|
|
|
4.4
|
|
|
(7.9
|
)
|
|
(7.6
|
)
|
||||
Switzerland
|
43.9
|
|
|
40.9
|
|
|
3.0
|
|
|
7.3
|
|
|
2.9
|
|
|
7.1
|
|
||||
Central and Eastern Europe
|
20.6
|
|
|
20.1
|
|
|
0.5
|
|
|
2.5
|
|
|
(1.3
|
)
|
|
(6.5
|
)
|
||||
Central and Corporate
|
83.3
|
|
|
91.3
|
|
|
(8.0
|
)
|
|
(8.8
|
)
|
|
(12.4
|
)
|
|
(13.6
|
)
|
||||
Intersegment eliminations
|
4.5
|
|
|
(0.1
|
)
|
|
4.6
|
|
|
N.M.
|
|
|
4.6
|
|
|
N.M.
|
|
||||
Total SG&A expenses excluding share-based compensation expense
|
486.1
|
|
|
470.6
|
|
|
15.5
|
|
|
3.3
|
|
|
$
|
(20.4
|
)
|
|
(4.3
|
)
|
|||
Share-based compensation expense
|
45.5
|
|
|
50.5
|
|
|
(5.0
|
)
|
|
(9.9
|
)
|
|
|
|
|
||||||
Total
|
$
|
531.6
|
|
|
$
|
521.1
|
|
|
$
|
10.5
|
|
|
2.0
|
|
|
|
|
|
|
Six months ended
June 30, |
|
Increase
|
|
Organic increase (decrease)
|
|||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
|||||||||
|
|
|
pro forma
|
|
|
|
|
|
|
|
|
|||||||||
|
in millions, except percentages
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.K./Ireland
|
$
|
460.3
|
|
|
$
|
434.2
|
|
|
$
|
26.1
|
|
|
6.0
|
|
$
|
(14.0
|
)
|
|
(3.2
|
)
|
Belgium
|
212.0
|
|
|
192.0
|
|
|
20.0
|
|
|
10.4
|
|
(8.3
|
)
|
|
(4.2
|
)
|
||||
Switzerland
|
88.3
|
|
|
84.4
|
|
|
3.9
|
|
|
4.6
|
|
1.3
|
|
|
1.5
|
|
||||
Central and Eastern Europe
|
42.2
|
|
|
38.8
|
|
|
3.4
|
|
|
8.8
|
|
(1.4
|
)
|
|
(3.6
|
)
|
||||
Central and Corporate
|
177.6
|
|
|
177.3
|
|
|
0.3
|
|
|
0.2
|
|
(13.9
|
)
|
|
(7.8
|
)
|
||||
Intersegment eliminations
|
2.0
|
|
|
(1.6
|
)
|
|
3.6
|
|
|
N.M.
|
|
3.6
|
|
|
N.M.
|
|
||||
Total SG&A expenses excluding share-based compensation expense
|
982.4
|
|
|
925.1
|
|
|
57.3
|
|
|
6.2
|
|
$
|
(32.7
|
)
|
|
(3.5
|
)
|
|||
Share-based compensation expense
|
87.2
|
|
|
78.4
|
|
|
8.8
|
|
|
11.2
|
|
|
|
|
||||||
Total
|
$
|
1,069.6
|
|
|
$
|
1,003.5
|
|
|
$
|
66.1
|
|
|
6.6
|
|
|
|
|
|
Three months ended June 30,
|
|
Increase (decrease)
|
|
Organic decrease
|
||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
|
|
|
pro forma
|
|
|
|
|
|
|
|
|
||||||||||
|
in millions, except percentages
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
General and administrative (a)
|
$
|
386.7
|
|
|
$
|
367.6
|
|
|
$
|
19.1
|
|
|
5.2
|
|
|
$
|
(9.6
|
)
|
|
(2.6
|
)
|
External sales and marketing
|
99.4
|
|
|
103.0
|
|
|
(3.6
|
)
|
|
(3.5
|
)
|
|
(10.8
|
)
|
|
(10.4
|
)
|
||||
Total
|
$
|
486.1
|
|
|
$
|
470.6
|
|
|
$
|
15.5
|
|
|
3.3
|
|
|
$
|
(20.4
|
)
|
|
(4.3
|
)
|
|
Six months ended
June 30, |
|
Increase (decrease)
|
|
Organic decrease
|
||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
|
|
|
pro forma
|
|
|
|
|
|
|
|
|
||||||||||
|
in millions, except percentages
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
General and administrative (a)
|
$
|
779.3
|
|
|
$
|
718.2
|
|
|
$
|
61.1
|
|
|
8.5
|
|
|
$
|
(8.0
|
)
|
|
(1.1
|
)
|
External sales and marketing
|
203.1
|
|
|
206.9
|
|
|
(3.8
|
)
|
|
(1.8
|
)
|
|
(24.7
|
)
|
|
(11.9
|
)
|
||||
Total
|
$
|
982.4
|
|
|
$
|
925.1
|
|
|
$
|
57.3
|
|
|
6.2
|
|
|
$
|
(32.7
|
)
|
|
(3.5
|
)
|
(a)
|
General and administrative expenses include all personnel-related costs within our SG&A expenses, including personnel-related costs associated with our sales and marketing function.
|
•
|
Decreases in external sales and marketing costs of $9.3 million or 7.8% and $21.6 million or 9.0%, respectively, primarily due to lower costs associated with advertising campaigns in U.K./Ireland and, for the three-month comparison, Belgium;
|
•
|
Decreases in personnel costs of $8.8 million or 4.4% and $18.0 million or 4.5%, respectively, primarily due to the net effect of (i) lower incentive compensation costs, primarily in Central and Corporate, (ii) a higher average cost per employee, primarily due to increases in U.K./Ireland that were only partially offset by decreases in Central and Corporate, (iii) lower staffing levels, as decreases in U.K./Ireland were only partially offset by increases in Central and Corporate, and (iv) decreases in temporary personnel costs, primarily in Central and Corporate and U.K./Ireland. The lower incentive compensation costs include decreases of $12.7 million and $19.4 million, respectively, primarily in Central and Corporate, attributable to the expected settlement of a portion of our 2018 annual incentive compensation with Liberty Global ordinary shares through a shareholding incentive program that was implemented in 2018. For additional information, see note 12 to our condensed consolidated financial statements;
|
•
|
Increases in core network and information technology-related costs of $5.2 million or 11.8% and $11.4 million or 13.8%, respectively, primarily due to increases in information technology-related expenses in Central and Corporate and, for the six-month comparison, U.K./Ireland; and
|
•
|
Decreases in business service and certain other costs of $1.6 million or 3.0% and $5.3 million or 5.4%, respectively, primarily due to the net effect of (i) an increase of $6.4 million during each period due to the reassessment of an accrual
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions
|
||||||||||||||
Liberty Global:
|
|
|
|
|
|
|
|
||||||||
Performance-based incentive awards (a)
|
$
|
8.0
|
|
|
$
|
19.1
|
|
|
$
|
16.7
|
|
|
$
|
19.8
|
|
Non-performance based share-based incentive awards
|
24.3
|
|
|
24.6
|
|
|
46.3
|
|
|
46.3
|
|
||||
Other (b)
|
13.4
|
|
|
—
|
|
|
20.5
|
|
|
—
|
|
||||
Total Liberty Global
|
45.7
|
|
|
43.7
|
|
|
83.5
|
|
|
66.1
|
|
||||
Other
|
(0.2
|
)
|
|
7.7
|
|
|
4.7
|
|
|
14.2
|
|
||||
Total
|
$
|
45.5
|
|
|
$
|
51.4
|
|
|
$
|
88.2
|
|
|
$
|
80.3
|
|
Included in:
|
|
|
|
|
|
|
|
||||||||
Other operating expense
|
$
|
—
|
|
|
$
|
0.9
|
|
|
$
|
1.0
|
|
|
$
|
1.9
|
|
SG&A expense
|
45.5
|
|
|
50.5
|
|
|
87.2
|
|
|
78.4
|
|
||||
Total
|
$
|
45.5
|
|
|
$
|
51.4
|
|
|
$
|
88.2
|
|
|
$
|
80.3
|
|
(a)
|
Includes share-based compensation expense related to (i) PSUs and (ii) through March 31, 2017, PGUs held by our Chief Executive Officer.
|
(b)
|
Represents annual incentive compensation and defined contribution plan liabilities that have been or are expected to be settled with Liberty Global ordinary shares. In the case of the annual incentive compensation, shares will be issued to senior management and key employees pursuant to a shareholding incentive program that was implemented in 2018. The shareholding incentive program allows these employees to elect to receive up to 100% of their annual incentive compensation in ordinary shares of Liberty Global in lieu of cash.
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Cross-currency and interest rate derivative contracts (a)
|
$
|
870.1
|
|
|
$
|
(502.3
|
)
|
|
$
|
508.2
|
|
|
$
|
(659.1
|
)
|
Equity-related derivative instruments:
|
|
|
|
|
|
|
|
||||||||
ITV Collar
|
(183.6
|
)
|
|
163.4
|
|
|
(60.0
|
)
|
|
110.2
|
|
||||
Lionsgate Forward
|
3.4
|
|
|
(2.5
|
)
|
|
12.4
|
|
|
(2.0
|
)
|
||||
Sumitomo Collar
|
(23.2
|
)
|
|
2.2
|
|
|
(11.8
|
)
|
|
(21.3
|
)
|
||||
Other
|
1.0
|
|
|
0.4
|
|
|
2.2
|
|
|
(5.4
|
)
|
||||
Total equity-related derivative instruments (b)
|
(202.4
|
)
|
|
163.5
|
|
|
(57.2
|
)
|
|
81.5
|
|
||||
Foreign currency forward and option contracts
|
8.3
|
|
|
(12.9
|
)
|
|
13.9
|
|
|
(19.0
|
)
|
||||
Other
|
(0.5
|
)
|
|
—
|
|
|
(0.7
|
)
|
|
0.5
|
|
||||
Total
|
$
|
675.5
|
|
|
$
|
(351.7
|
)
|
|
$
|
464.2
|
|
|
$
|
(596.1
|
)
|
(a)
|
The gains during the 2018 periods are primarily attributable to the net effect of (i) net gains associated with changes in the relative value of certain currencies and (ii) net losses associated with changes in certain market interest rates. In addition, the gains during the 2018 periods include net losses of $65.6 million and $27.9 million, respectively, resulting from changes in our credit risk valuation adjustments. The losses during the 2017 periods are primarily attributable to the net effect of (a) net losses associated with changes in the relative value of certain currencies and (b) net gains associated with changes in certain market interest rates. In addition, the losses during the 2017 periods include net gains of $59.6 million and $109.0 million, respectively, resulting from changes in our credit risk valuation adjustments.
|
(b)
|
The recurring fair value measurements of our equity-related derivative instruments are based on Black-Scholes pricing models.
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Intercompany payables and receivables denominated in a currency other than the entity’s functional currency (a)
|
$
|
450.5
|
|
|
$
|
(348.1
|
)
|
|
$
|
158.8
|
|
|
$
|
(349.8
|
)
|
U.S. dollar-denominated debt issued by euro functional currency entities
|
(228.9
|
)
|
|
267.0
|
|
|
(133.9
|
)
|
|
313.0
|
|
||||
U.S. dollar-denominated debt issued by British pound sterling functional currency entities
|
(271.4
|
)
|
|
126.8
|
|
|
(99.3
|
)
|
|
196.4
|
|
||||
British pound sterling-denominated debt issued by a U.S. dollar functional currency entity
|
87.9
|
|
|
(49.6
|
)
|
|
35.3
|
|
|
(70.5
|
)
|
||||
Cash and restricted cash denominated in a currency other than the entity’s functional currency
|
13.4
|
|
|
(42.4
|
)
|
|
(5.4
|
)
|
|
(82.5
|
)
|
||||
Other
|
0.6
|
|
|
28.1
|
|
|
(5.1
|
)
|
|
4.4
|
|
||||
Total
|
$
|
52.1
|
|
|
$
|
(18.2
|
)
|
|
$
|
(49.6
|
)
|
|
$
|
11.0
|
|
(a)
|
Amounts primarily relate to (i) loans between certain of our non-operating subsidiaries in the U.S. and Europe and (ii) loans between certain of our non-operating and operating subsidiaries in Europe, which generally are denominated in the currency of the applicable operating subsidiary.
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions
|
||||||||||||||
Investments:
|
|
|
|
|
|
|
|
||||||||
Lionsgate
|
$
|
(4.1
|
)
|
|
$
|
8.9
|
|
|
$
|
(43.2
|
)
|
|
$
|
7.6
|
|
Sumitomo
|
(8.9
|
)
|
|
(20.1
|
)
|
|
(17.2
|
)
|
|
55.7
|
|
||||
ITV
|
109.7
|
|
|
(153.7
|
)
|
|
22.9
|
|
|
(75.0
|
)
|
||||
Casa
|
(51.0
|
)
|
|
4.2
|
|
|
1.2
|
|
|
5.9
|
|
||||
Other, net
|
8.5
|
|
|
7.3
|
|
|
11.5
|
|
|
15.4
|
|
||||
Total investments
|
54.2
|
|
|
(153.4
|
)
|
|
(24.8
|
)
|
|
9.6
|
|
||||
Debt
|
7.3
|
|
|
12.0
|
|
|
29.1
|
|
|
(52.2
|
)
|
||||
Total
|
$
|
61.5
|
|
|
$
|
(141.4
|
)
|
|
$
|
4.3
|
|
|
$
|
(42.6
|
)
|
|
Three months ended June 30,
|
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
VodafoneZiggo JV (a)
|
$
|
(63.2
|
)
|
|
$
|
6.5
|
|
|
$
|
(90.0
|
)
|
|
$
|
5.2
|
|
Other
|
(19.1
|
)
|
|
(10.1
|
)
|
|
(28.8
|
)
|
|
(24.5
|
)
|
||||
Total
|
$
|
(82.3
|
)
|
|
$
|
(3.6
|
)
|
|
$
|
(118.8
|
)
|
|
$
|
(19.3
|
)
|
(a)
|
Amounts include the net effect of (i) interest income of $15.0 million, $15.8 million, $30.2 million and $30.6 million, respectively, representing 100% of the interest earned on the VodafoneZiggo JV Receivable, (ii) 100% of the share-based compensation expense associated with Liberty Global awards held by VodafoneZiggo JV employees who were formerly employees of Liberty Global, as these awards remain our responsibility, and (iii) our 50% share of the remaining results of operations of the VodafoneZiggo JV. The summarized results of operations of the VodafoneZiggo JV are set forth below:
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2018
|
|
2017 (1)
|
|
2018
|
|
2017 (1)
|
||||||||
|
in millions
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
1,114.5
|
|
|
$
|
1,077.9
|
|
|
$
|
2,296.1
|
|
|
$
|
2,150.0
|
|
Adjusted OIBDA
|
$
|
483.6
|
|
|
$
|
471.0
|
|
|
$
|
985.5
|
|
|
$
|
932.7
|
|
Operating income (loss)
|
$
|
(6.1
|
)
|
|
$
|
50.8
|
|
|
$
|
17.6
|
|
|
$
|
109.7
|
|
Non-operating expense (2)
|
$
|
195.1
|
|
|
$
|
76.7
|
|
|
$
|
337.5
|
|
|
$
|
176.7
|
|
Net loss
|
$
|
(150.8
|
)
|
|
$
|
(18.4
|
)
|
|
$
|
(238.1
|
)
|
|
$
|
(46.5
|
)
|
(1)
|
Amounts have been presented on a pro forma basis that gives effect to the adoption of ASU 2014-09 as if such adoption had occurred on January 1, 2017.
|
(2)
|
Includes interest expense of $168.6 million, $158.0 million, $338.2 million and $311.4 million, respectively.
|
Cash and cash equivalents held by:
|
|
||
Liberty Global and unrestricted subsidiaries:
|
|
||
Liberty Global (a)
|
$
|
31.8
|
|
Unrestricted subsidiaries (b)
|
638.8
|
|
|
Total Liberty Global and unrestricted subsidiaries
|
670.6
|
|
|
Borrowing groups (c):
|
|
||
Telenet
|
147.7
|
|
|
Virgin Media (d)
|
38.2
|
|
|
UPC Holding
|
5.9
|
|
|
Total borrowing groups
|
191.8
|
|
|
Total cash and cash equivalents
|
$
|
862.4
|
|
(a)
|
Represents the amount held by Liberty Global on a standalone basis.
|
(b)
|
Represents the aggregate amount held by subsidiaries that are outside of our borrowing groups.
|
(c)
|
Except as otherwise noted, represents the aggregate amounts held by the parent entity and restricted subsidiaries of our borrowing groups.
|
(d)
|
The Virgin Media borrowing group includes certain subsidiaries of Virgin Media, but excludes the parent entity, Virgin Media Inc.
|
|
Six months ended
|
|
|
||||||||
|
June 30,
|
|
|
||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
|
in millions
|
||||||||||
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
2,142.9
|
|
|
$
|
1,558.4
|
|
|
$
|
584.5
|
|
Net cash provided (used) by investing activities
|
(896.3
|
)
|
|
1,319.1
|
|
|
(2,215.4
|
)
|
|||
Net cash used by financing activities
|
(3,037.5
|
)
|
|
(2,677.0
|
)
|
|
(360.5
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents and restricted cash
|
(9.3
|
)
|
|
93.7
|
|
|
(103.0
|
)
|
|||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
$
|
(1,800.2
|
)
|
|
$
|
294.2
|
|
|
$
|
(2,094.4
|
)
|
|
Six months ended
June 30, |
||||||
|
2018
|
|
2017
|
||||
|
in millions
|
||||||
|
|
|
|
||||
Property and equipment additions
|
$
|
1,850.4
|
|
|
$
|
1,631.7
|
|
Assets acquired under capital-related vendor financing arrangements
|
(1,187.9
|
)
|
|
(1,164.1
|
)
|
||
Assets acquired under capital leases
|
(46.5
|
)
|
|
(97.9
|
)
|
||
Changes in current liabilities related to capital expenditures
|
181.8
|
|
|
218.3
|
|
||
Capital expenditures, net
|
$
|
797.8
|
|
|
$
|
588.0
|
|
|
|
|
|
||||
Capital expenditures, net:
|
|
|
|
||||
Third-party payments
|
$
|
855.1
|
|
|
$
|
782.9
|
|
Proceeds received for transfers to related parties (a)
|
(57.3
|
)
|
|
(194.9
|
)
|
||
Total capital expenditures, net
|
$
|
797.8
|
|
|
$
|
588.0
|
|
(a)
|
Primarily relates to transfers of centrally-procured property and equipment to our discontinued operations and the VodafoneZiggo JV.
|
|
Six months ended
June 30, |
||||||
|
2018
|
|
2017 (a)
|
||||
|
in millions
|
||||||
|
|
|
|
||||
Net cash provided by operating activities of our continuing operations (b)
|
$
|
2,142.9
|
|
|
$
|
1,558.4
|
|
Cash payments for direct acquisition and disposition costs
|
4.8
|
|
|
6.0
|
|
||
Expenses financed by an intermediary (c)
|
916.4
|
|
|
577.2
|
|
||
Capital expenditures, net
|
(797.8
|
)
|
|
(588.0
|
)
|
||
Principal payments on amounts financed by vendors and intermediaries
|
(3,353.3
|
)
|
|
(1,944.4
|
)
|
||
Principal payments on certain capital leases
|
(40.9
|
)
|
|
(41.8
|
)
|
||
Adjusted free cash flow
|
$
|
(1,127.9
|
)
|
|
$
|
(432.6
|
)
|
(a)
|
Adjusted free cash flow for the six months ended June 30, 2018 has been restated to reflect our January 1, 2018 adoption of ASU 2016-18.
|
(b)
|
Amounts include interest payments related to debt that may be repaid in connection with the completion of the dispositions of UPC Austria and the Vodafone Disposal Group. These interest payments have not been allocated to discontinued operations.
|
(c)
|
For purposes of our condensed consolidated statements of cash flows, expenses financed by an intermediary are treated as hypothetical operating cash outflows and hypothetical financing cash inflows when the expenses are incurred. When we pay the financing intermediary, we record financing cash outflows in our condensed consolidated statements of cash flows. For purposes of our adjusted free cash flow definition, we add back the hypothetical operating cash outflow when these financed expenses are incurred and deduct the financing cash outflows when we pay the financing intermediary.
|
|
Payments due during:
|
|
Total
|
||||||||||||||||||||||||||||
|
Remainder
of 2018 |
|
|
|
|
|
|||||||||||||||||||||||||
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
||||||||||||||||||||
|
in millions
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt (excluding interest)
|
$
|
1,880.8
|
|
|
$
|
1,556.8
|
|
|
$
|
324.4
|
|
|
$
|
2,968.8
|
|
|
$
|
748.5
|
|
|
$
|
983.4
|
|
|
$
|
22,833.6
|
|
|
$
|
31,296.3
|
|
Capital leases (excluding interest)
|
50.3
|
|
|
84.6
|
|
|
75.7
|
|
|
70.9
|
|
|
72.0
|
|
|
74.3
|
|
|
245.0
|
|
|
672.8
|
|
||||||||
Network and connectivity commitments
|
402.8
|
|
|
345.4
|
|
|
283.4
|
|
|
250.2
|
|
|
67.5
|
|
|
49.6
|
|
|
787.8
|
|
|
2,186.7
|
|
||||||||
Programming commitments
|
544.1
|
|
|
792.9
|
|
|
470.3
|
|
|
227.7
|
|
|
40.3
|
|
|
14.7
|
|
|
46.6
|
|
|
2,136.6
|
|
||||||||
Purchase commitments
|
506.7
|
|
|
306.9
|
|
|
136.2
|
|
|
47.7
|
|
|
20.8
|
|
|
17.5
|
|
|
38.6
|
|
|
1,074.4
|
|
||||||||
Operating leases
|
70.4
|
|
|
99.6
|
|
|
79.0
|
|
|
60.0
|
|
|
47.8
|
|
|
40.1
|
|
|
151.0
|
|
|
547.9
|
|
||||||||
Other commitments
|
9.8
|
|
|
15.2
|
|
|
2.8
|
|
|
0.4
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
28.4
|
|
||||||||
Total (a)
|
$
|
3,464.9
|
|
|
$
|
3,201.4
|
|
|
$
|
1,371.8
|
|
|
$
|
3,625.7
|
|
|
$
|
997.1
|
|
|
$
|
1,179.6
|
|
|
$
|
24,102.6
|
|
|
$
|
37,943.1
|
|
Projected cash interest payments on debt and capital lease obligations (b)
|
$
|
673.1
|
|
|
$
|
1,284.6
|
|
|
$
|
1,380.3
|
|
|
$
|
1,332.2
|
|
|
$
|
1,262.8
|
|
|
$
|
1,212.0
|
|
|
$
|
3,511.2
|
|
|
$
|
10,656.2
|
|
(a)
|
The commitments included in this table do not reflect any liabilities that are included in our June 30, 2018 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 ($375.5 million at June 30, 2018) 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, commitment fees and contractual maturities in effect as of June 30, 2018. 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, original issue premiums or discounts.
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
June 30, 2018
|
|
December 31, 2017
|
||
Spot rates:
|
|
|
|
||
Euro
|
0.8564
|
|
|
0.8318
|
|
British pound sterling
|
0.7579
|
|
|
0.7394
|
|
Swiss franc
|
0.9920
|
|
|
0.9736
|
|
Hungarian forint
|
282.46
|
|
|
258.41
|
|
Polish zloty
|
3.7479
|
|
|
3.4730
|
|
Czech koruna
|
22.258
|
|
|
21.243
|
|
Romanian lei
|
3.9949
|
|
|
3.8830
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
June 30,
|
|
June 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Average rates:
|
|
|
|
|
|
|
|
||||
Euro
|
0.8389
|
|
|
0.9094
|
|
|
0.8262
|
|
|
0.9233
|
|
British sterling
|
0.7353
|
|
|
0.7821
|
|
|
0.7270
|
|
|
0.7944
|
|
Swiss franc
|
0.9851
|
|
|
0.9852
|
|
|
0.9666
|
|
|
0.9944
|
|
Hungarian forint
|
266.15
|
|
|
281.97
|
|
|
259.60
|
|
|
285.92
|
|
Polish zloty
|
3.5762
|
|
|
3.8371
|
|
|
3.4880
|
|
|
3.9440
|
|
Czech koruna
|
21.484
|
|
|
24.152
|
|
|
21.074
|
|
|
24.747
|
|
Romanian lei
|
3.9048
|
|
|
4.1396
|
|
|
3.8464
|
|
|
4.1911
|
|
(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 £587 million ($774 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 £63 million ($83 million).
|
(i)
|
an instantaneous increase (decrease) of 10% in the value of the Swiss franc, Polish zloty, Hungarian forint, Czech koruna and Romanian lei relative to the euro would have decreased (increased) the aggregate fair value of the UPC Holding cross-currency and interest rate derivative contracts by approximately €500 million ($584 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 Holding cross-currency and interest rate derivative contracts by approximately €279 million ($326 million); and
|
(iii)
|
an instantaneous increase (decrease) of 10% in the value of the Swiss franc relative to the U.S. dollar would have decreased (increased) the aggregate fair value of the UPC Holding cross-currency and interest rate derivative contracts by approximately €90 million ($105 million).
|
(i)
|
an instantaneous increase (decrease) of 10% in the value of the euro relative to the U.S. dollar would have decreased (increased) the aggregate fair value of the Telenet cross-currency derivative contracts by approximately €282 million ($329 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 Telenet cross-currency, interest rate cap and swap contracts by approximately €87 million ($102 million).
|
(a)
|
Includes (i) the cash flows of our interest rate cap, swaption, 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 swap contracts.
|
(c)
|
Includes amounts related to our equity-related derivative instruments and 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 ITV Collar Loan and the Lionsgate 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, 2018 through April 30, 2018:
|
|
|
|
|
|
|
|
|||||
Class A
|
609,400
|
|
|
$
|
31.71
|
|
|
609,400
|
|
|
(b)
|
|
Class C
|
2,001,300
|
|
|
$
|
30.90
|
|
|
2,001,300
|
|
|
(b)
|
|
May 1, 2018 through May 31, 2018:
|
|
|
|
|
|
|
|
|
||||
Class A
|
8,699,200
|
|
|
$
|
29.53
|
|
|
8,699,200
|
|
|
(b)
|
|
Class C
|
11,387,500
|
|
|
$
|
28.77
|
|
|
11,387,500
|
|
|
(b)
|
|
June 1, 2018 through June 30, 2018:
|
|
|
|
|
|
|
|
|||||
Class A
|
1,021,400
|
|
|
$
|
29.49
|
|
|
1,021,400
|
|
|
(b)
|
|
Class C
|
3,402,500
|
|
|
$
|
28.27
|
|
|
3,402,500
|
|
|
(b)
|
|
Total — April 1, 2018 through June 30, 2018:
|
|
|
|
|
|
|
|
|||||
Class A
|
10,330,000
|
|
|
$
|
29.65
|
|
|
10,330,000
|
|
|
(b)
|
|
Class C
|
16,791,300
|
|
|
$
|
28.93
|
|
|
16,791,300
|
|
|
(b)
|
(a)
|
Average price paid per share includes direct acquisition costs and the effects of derivative instruments, where applicable.
|
(b)
|
At June 30, 2018, the remaining amount authorized for share repurchases was $783.9 million. On July 31, 2018, our board of directors authorized an additional $500.0 million for share repurchases.
|
Item 6.
|
EXHIBITS
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
|
|
|
LIBERTY GLOBAL PLC
|
|
|
|
|
Dated:
|
August 8, 2018
|
|
/s/ MICHAEL T. FRIES
|
|
|
|
Michael T. Fries
President and Chief Executive Officer
|
|
|
|
|
Dated:
|
August 8, 2018
|
|
/s/ CHARLES H.R. BRACKEN
|
|
|
|
Charles H.R. Bracken
Executive Vice President and Chief
Financial Officer
|
1.
|
I, individually and on behalf of my successors, heirs and assigns, release, waive and discharge Employer, and any of its parents, subsidiaries, or otherwise affiliated corporations, partnerships or business enterprises, and their respective present and former directors, officers, shareholders, employees, and assigns (hereinafter, “Released Parties”), from any and all causes of action, claims, charges, demands, losses, damages, costs, attorneys’ fees and liabilities of any kind that I may have or claim to have relating to my employment relationship with the Employer, including my service as a director of the Company, or the termination thereof, relating to or arising out of any act of commission or omission from the beginning of time through the date of my execution of this Agreement; provided, however, nothing contained herein shall release any claim I may have: (i) for indemnification under Employer’s constituent documents or any other agreement that I have with any of the Released Parties; (ii) for unemployment compensation benefits; (iii) to enforce the obligations of Employer set forth in the Employment Agreement; (iv) to vested amounts held in my name in accordance with the conditions and terms of any plan, program or arrangement sponsored or maintained by any of the Released Parties, including, without limitation the Plan and any nonqualified deferred compensation plan; (v) to outstanding equity awards granted to me (collectively, the “Grants”), which shall be subject to the terms and conditions of the applicable incentive plan and the agreement evidencing the respective Grant, as modified by the Employment Agreement; (vi) to benefits under any employee benefit plan maintained or sponsored by any of the Released Parties, including health care continuation under COBRA; or (vii) to rights as a shareholder of the Company.
|
2.
|
This release includes, but is not limited to, the following claims, and shall apply to claims made in the United States, the United Kingdom, and/or any country or territory where such a claim can be made:
|
a.
|
Claims under federal, state, local or foreign laws prohibiting age, sex, race, national origin, disability, religion, sexual orientation, marital status, retaliation, or any other form of discrimination, or mistreatment, such as, but not limited to, the Age Discrimination in Employment Act, (29 U.S.C. §621 et seq), Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, 42 U.S.C. §1981, §1985, §1986, the Americans with Disabilities Act, and the National Labor Relations Act, as amended, 29 U.S.C. §151, et seq;
|
b.
|
Intentional or negligent infliction of emotional distress, defamation, invasion of privacy, and other tort claims;
|
c.
|
Breach of express or implied contract claims;
|
d.
|
Promissory estoppel claims;
|
e.
|
Retaliatory discharge claims;
|
f.
|
Wrongful discharge claims;
|
g.
|
Breach of any express or implied covenant of good faith and fair dealing;
|
h.
|
Constructive discharge;
|
i.
|
Claims arising out of or related to any applicable federal, state or foreign constitutions;
|
j.
|
Claims for compensation, including without limitation, any wages, bonus payments, on call pay, overtime pay, commissions, and any other claim pertaining to local, state, federal or foreign wage and hour or other compensation laws, such as, but not limited to, the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §2101, et seq, and the Fair Labor Standards Act, as amended, 29 U.S.C. §201, et seq.;
|
k.
|
Fraud, misrepresentation, and/or fraudulent inducement;
|
l.
|
Claims made under or pursuant to any severance plan or program maintained by any of the Released Parties;
|
m.
|
Claims of breach of any data privacy or similar laws in connection with the handling or investigation of any whistleblower complaints or any other investigation by Employer or its representatives; and
|
n.
|
Other legal and equitable claims regarding my employment or the termination of my employment, other than as set forth herein.
|
3.
|
I hereby warrant and represent that I have not filed or caused to be filed any charge or claim against any Released Party with any administrative agency, court of law or other tribunal. I agree that I am not entitled to any remedy or relief if I were to pursue any such claim, complaint or charge.
|
4.
|
I hereby acknowledge that I am age forty (40) or older.
|
5.
|
BY SIGNING THIS AGREEMENT, I ACKNOWLEDGE THAT EMPLOYER HAS ADVISED ME TO DISCUSS THIS WAIVER AND RELEASE AGREEMENT WITH AN ATTORNEY BEFORE SIGNING THIS AGREEMENT. I acknowledge and agree that the Released Parties are not responsible for any of my costs, expenses, and attorney’s fees, if any, incurred in connection with any claim or the review and signing of this Agreement.
|
6.
|
I acknowledge and state that I have been given a period of at least twenty‑one (21) days in which to consider the terms of this Agreement.
|
7.
|
I understand that I have the right to revoke this Agreement at any time within seven (7) days after signing it, by providing written notice to the Company, Attn. General Counsel at 1550 Wewatta Street, Denver, CO 80202, and this Agreement is not effective or enforceable until the seven (7) day revocation period has expired. In the event I revoke this Agreement, the Company shall have no obligation to provide me the Benefits. I understand that failure to revoke my acceptance of this Agreement will result in this Agreement being permanent and irrevocable.
|
8.
|
I agree that this Agreement is a compromise of claims and charges and/or potential claims and charges which are or may be in dispute, and that this Agreement does not constitute an admission of liability or an admission against interest of any Released Party.
|
9.
|
Nothing herein prohibits or prevents me from filing a charge with or participating, testifying or assisting in any investigation, hearing, whistleblower action or other proceeding before any federal, state or local government agency, nor does anything herein preclude, prohibit or otherwise limit, in any way, my rights and abilities to contact, communicate with, report matters to or otherwise participate in any whistleblower program administered by any such agencies. Pursuant to the Defend Trade Secrets Act of 2016, I understand that I shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any confidential information of the Company that (i) is made (A) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
|
10.
|
This Agreement is made and is effective as of the date first written below.
|
11.
|
This Agreement becomes null and void and has no further force or effect if Employer does not receive the executed Agreement by 5:00 p.m., Mountain Time, __________, 20___.
|
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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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/s/ Charles H.R. Bracken
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Charles H.R. Bracken
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Executive Vice President and Chief Financial Officer
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Dated:
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August 8, 2018
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/s/ Michael T. Fries
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Michael T. Fries
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President and Chief Executive Officer
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Dated:
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August 8, 2018
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/s/ Charles H.R. Bracken
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Charles H.R. Bracken
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Executive Vice President and Chief Financial Officer
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