Improved fixed revenue performance following price rises;
return to positive U.K. broadband net adds and continued postpaid
momentum
Successfully completed the acquisition of 100% of Telenet;
shares fully delisted mid-October
Redomiciliation to Bermuda on track for completion in late
November
Repurchased ~$1.3 billion of stock YTD1 representing 15% of
shares outstanding; buyback plan increased by $300 million to a
target of 18-19% by end of January
Updating full-year revenue guidance at VMO2 to 'stable' vs
'growth'; on track for all remaining 2023 OpCo and Group guidance2
targets
Liberty Global plc today announced its Q3 2023 financial
results.
CEO Mike Fries stated, “Strategically, we achieved a number of
recent milestones to drive future value creation. On our next
results call we anticipate providing a longer update on these and
other core initiatives that will reduce the significant value gap
we perceive in our stock price.
- Earlier today we announced the sale of a minority stake in
VMO2's tower joint venture (Cornerstone Telecommunications
Infrastructure Limited) for 18.7x Adjusted EBITDA which, upon
closing, will deliver ~$435 million of cash proceeds to VMO2.
- In October, we successfully completed the Telenet tender offer
and fully delisted the shares. Under full ownership, Telenet will
be on a stronger footing by leveraging Liberty Global's scale and
expertise as well as our substantial balance sheet.
- We continue executing well on our U.K. fiber strategies and
during the quarter we announced the acquisition of Upp, which will
ultimately increase the nexfibre JV's 500,000 home footprint by
175,000 premises following integration work by VMO2. Total fiber
homes in the U.K., including VMO2's upgrade plans, will approach
~1.5 million by year-end.
- In Ireland, the recent wholesale network access deal with Sky
will enhance returns on our upgrade project to deliver over 1
million FTTH homes by the end of 2025.
- In Q3 we also expanded our strategic partnership with Infosys
whereby they will assume responsibility for the operational
delivery of Liberty Global's entertainment and connectivity
platforms, leading to over $100 million of annual run-rate savings
in our technology spend.
- Following strong shareholder support for our redomiciliation to
Bermuda, we remain on track to complete the move in late November
which will enhance agile capital allocation and strategic value
creation initiatives going forward.
- And finally, as of October 30 we had repurchased ~$1.3 billion
worth of stock, completing our buyback target of 15%. We are
announcing today an increase to our buyback program in an amount of
~$300 million to an aggregate of $1.6 billion. When completed, we
anticipate that we will have retired 18-19% of our shares
outstanding from the beginning of 2023 to the end of January
2024.
Operationally in Q3 we delivered an improved fixed revenue
performance across all of our core FMC operations, supported by
recent price rises and a return to broadband net adds at VMO2.
Postpaid mobile momentum continued with positive or broadly stable
net adds across the group and over 100,000 aggregate3 net additions
in the quarter. We are confirming today all 2023 OpCo guidance
metrics with the exception of VMO2 revenue which moves from
'growth' to 'stable'. We are also confirming the $1.6 billion of
Distributable Cash Flow(i) at Liberty Global. Our balance sheet
remains robust, with over $5.0 billion of total liquidity4,
including $3.5 billion in cash(ii), and no material debt
maturities5 until 2028. During Q3, we proactively completed over
$1.2 billion of refinancing at VMO2 which will extend the tenor of
its long-term debt previously maturing in 2027 out to 2031."
(i)
Quantitative reconciliations to cash flow from operating
activities for our Distributable Cash Flow guidance cannot be
provided without unreasonable efforts as we do not forecast
specific changes in working capital that impact cash flows from
operating activities. The items we do not forecast may vary
significantly from period to period. 2023 Distributable Cash Flow
guidance reflects FX rates of EUR/USD 1.07, GBP/USD 1.21 and
CHF/USD 1.08.
(ii)
Including amounts held under separately managed accounts
(SMAs).
Q3 Operating Company Highlights
Sunrise (Consolidated)
Sunrise continues to drive momentum in mobile despite
continued headwinds in fixed as a result of the competitive
landscape and UPC migration
Operating highlights: In Q3,
Sunrise continued to drive commercial momentum in mobile,
delivering 29,200 postpaid net adds. On the fixed side, the
broadband base contracted by 7,400 net adds in Q3, due to reduced
promotions and marketing activity following the price adjustment in
July and broader lower market liquidity. FMC penetration remains
high at 58% across the Sunrise broadband base.
Financial highlights: Revenue of
$859.3 million in Q3 2023 increased 8.8% YoY on a reported basis
and decreased 0.8% on a rebased6 basis. The rebased decrease was
largely driven by lower handset and roaming revenue that was only
partially offset by the July price rise benefit and strong trading
momentum in flanker brands. Adjusted EBITDA increased 6.2% YoY on a
reported basis and decreased 3.4% on a rebased basis to $311.0
million in Q3 2023, including $2 million of costs to capture7. The
rebased decrease was mainly due to (i) the aforementioned decline
in revenue and (ii) an increase in hardware costs, partially offset
by lower costs to capture. Adjusted EBITDA less P&E Additions
of $175.6 million in Q3 increased 19.6% YoY on a reported basis and
9.4% on a rebased basis, including $14 million of opex and capex
costs to capture.
Telenet (Consolidated)
Telenet tender offer successfully completed and shares
delisted October 13, intend to align capital structure with Liberty
Global at ~4-5x Adjusted EBITDAaL going forward
Operating highlights: Telenet's
base contracted by 13,500 broadband net adds and 4,000 postpaid
mobile net adds in Q3, largely driven by the implementation of the
June price increase and a temporary halt to marketing campaigns
following IT platform migration issues. FMC penetration remains
high at 48% of the broadband base.
Financial highlights: Revenue of
$775.2 million in Q3 2023 increased 16.6% YoY on a reported basis
and decreased 0.3% on a rebased basis. The rebased decrease was
primarily driven by lower production and advertising revenue due to
the macro-economic backdrop, partially offset by (i) higher
subscription revenue following the June price increase and (ii) an
increase in B2B revenue. Adjusted EBITDA increased 7.3% on a
reported basis and decreased 2.6% on a rebased basis to $339.8
million in Q3. The rebased decrease was primarily driven by (a)
higher staff-related expenses following the mandatory 11% wage
indexation and (b) higher costs for outsourced call centers linked
to IT platform migration issues. Reported and rebased Adjusted
EBITDA less P&E Additions decreased 3.0% and 12.3%,
respectively, to $162.7 million in Q3.
VMO2 (Non-consolidated Joint Venture)
VMO2 delivers customer growth, advances network rollout and
improves Adjusted EBITDA growth
Operating highlights: VMO2's fixed
customer base returned to positive growth, with 32,500 net adds in
Q3, while continued demand for fast, high-quality connectivity
drove 40,800 broadband net adds. Postpaid mobile also returned to
growth, delivering 50,000 net adds in Q3. The average download
speed across the company's broadband base increased 34% YoY to
349Mbps, approximately 5x higher than the national average. During
Q3, VMO2 built 250,800 premises, the majority of which were FTTH
homes built for the nexfibre JV. Integration is underway following
the acquisition of fiber altnet, Upp, in September and its ~175,000
premises will be transferred to the nexfibre JV within the next
year. In mobile, VMO2's 5G connectivity expanded to more than 3,200
towns and cities and remains on track to deliver 5G services to
more than 50% of the entire U.K. population this year.
Financial highlights (in U.S.
GAAP)8: Revenue13 of $3,503.8 million in Q3 2023 increased
15.2% YoY on a reported basis and 1.2% YoY on a rebased basis,
primarily due to the net effect of (i) an overall increase in
mobile revenue driven by higher service revenue that was partially
offset by lower handset revenue, (ii) a decrease in consumer fixed
revenue and (iii) a one-time increase of $48 million due to a
change in the contract terms with a related-party supplier, with
each revenue category as defined and reported by the VMO2 JV.
Adjusted EBITDA13 increased 10.4% YoY on a reported basis and 2.4%
YoY on a rebased basis to $1,170.9 million, including $27 million
of opex costs to capture. The YoY increase in Adjusted EBITDA was
primarily due to (a) the realization of synergies, (b) the
implementation of price rises and (c) the aforementioned one-time
revenue increase, partially offset by higher energy costs and the
impact of a Q3 2022 benefit of $35 million related to the
resolution of a legal matter. Adjusted EBITDA less P&E
Additions13 increased 36.0% YoY on a reported basis and decreased
14.6% YoY on a rebased basis to $483.2 million, including $61
million of opex and capex costs to capture.
Financial highlights (in IFRS):
Revenue of £2,769.1 million ($3,503.8 million) on a reported basis
in Q3 2023 increased 7.2% YoY on an FX neutral basis and 1.2% YoY
on a rebased basis. Q3 Adjusted EBITDA of £1,023.3 million
($1,294.4 million) on a reported basis, including costs to capture,
increased 4.4% YoY on an FX neutral basis and 4.5% YoY on a rebased
basis. Q3 Adjusted EBITDA less P&E Additions of £423.9 million
($536.4 million) on a reported basis increased 21.6% YoY on an FX
neutral basis and decreased 11.7% YoY on a rebased basis. The
drivers of these IFRS changes are largely consistent with those
under U.S. GAAP detailed above.
For more information regarding the VMO2 JV, including full IFRS
disclosures, please visit its investor relations page to access the
Q3 earnings release.
VodafoneZiggo (Non-consolidated Joint Venture)
VodafoneZiggo drives financial improvement in Q3 supported by
commercial actions and reiterates 2023 guidance
Operating highlights: VodafoneZiggo
continues to drive momentum in mobile and convergence, as FMC
households9 remained stable at 1.5 million and FMC net adds
increased by 13,000 in Q3 to more than 2.6 million, delivering
significant Net Promoter Scores along with customer loyalty
benefits. Mobile postpaid net adds grew 28,600 to 5.3 million,
while mobile postpaid ARPU declined 3.1% YoY, primarily driven by
ARPU decline in B2B. The broadband base contracted by 33,900 net
adds in the quarter, as a 39,200 decline in Consumer was only
partially offset by a 5,300 increase in B2B. Consumer fixed ARPU
increased 4.4% YoY as a result of the price increase implemented in
July. VodafoneZiggo announced a mobile price indexation of 10% from
October to support from Q4.
Financial highlights: Revenue
increased 8.0% YoY on a reported basis and 0.1% YoY on a rebased
basis to $1,125.2 million in Q3. The stable rebased result was
primarily driven by the July price increase in consumer fixed and
customer growth in mobile postpaid and B2B fixed, fully offsetting
the decline in the consumer fixed base. Adjusted EBITDA increased
3.4% YoY on a reported basis and decreased 4.1% on a rebased basis
to $518.3 million in Q3. The rebased decrease was primarily driven
by higher energy and wage costs related to inflation. Reported and
rebased Adjusted EBITDA less P&E Additions decreased 0.9% and
7.8%, respectively, to $287.5 million in Q3.
Q3 ESG Highlights
In Q3 we continued to advance the priorities underpinning our
People Planet Progress strategy.
One such priority is to bring better transparency across our
value chain, to mitigate indirect carbon emissions, as well as to
ensure responsible business practices that align with those of our
own. In September, we joined the Joint Alliance for Corporate
Social Responsibility (JAC), the international association of
telecom operators dedicated to developing and assessing Corporate
Social Responsibility (CSR) standards across the industry's supply
chain. As part of JAC, we will collaborate alongside the world's
largest telecom providers, conducting and sharing CSR audit reports
of our major suppliers. This membership will focus on driving
improvements in the different layers of the supply chain through
risk mitigation, issue identification, and promoting universal
sustainability standards across the sector.
Our focus remains to champion diversity, equity, inclusion and a
culture of Belonging. We are committed to enhancing digital equity
and engaging with our communities to create positive change for the
generations to come. In Q3 we have continued to work with our
Employee Resource Groups, providing educational moments for our
people to take meaningful action to create a world where everyone
belongs. We have also launched our Youth Council, a new body
harnessing youth insight and diversifying the perspectives of the
business.
Our group companies have also been active throughout the quarter
across various social and environmental initiatives contributing to
our People Planet Progress agenda:
- VodafoneZiggo demonstrated commitment to inclusivity and our
People priorities with its new trial program to tackle the digital
divide alongside a number of local NGOs and municipalities in the
Netherlands. The offer provides a Digital Participation Package,
which will supply financially vulnerable households with internet,
a device, and digital guidance
- VMO2 stepped up its support to communities by providing free
connectivity to those in need. In partnership with technology
charity Jangala, 5,000 WiFi-enabled boxes will be distributed to
households, community centers, refuges and homeless shelters across
the U.K. This is in addition to their existing commitment to donate
61 million gigabytes of O2 mobile data to the National Databank by
the end of 2025
- Telenet and Virgin Media Ireland have progressed their Planet
agenda, enhancing renewable energy and efficiency solutions. Both
are increasing their number of installed solar panels, with Telenet
set to increase fivefold to nearly 700 solar panels at its office
headquarters. Virgin Media Ireland is also installing battery
storage and moving all large-scale cooling to ‘free-cooling’ for
its data centers
- Also on Planet, Sunrise launched a Flex Upgrade Option that
promotes the circular economy. With clear benefits for customers,
including affordable prices for new devices, the program will help
extend the life cycle of a smartphone or tablet through its
innovative repair, refurbishment and recycling approach
Liberty Global Consolidated Q3 Highlights
- Q3 revenue(i) increased 6.2% YoY on a reported basis and
decreased 4.3% on a rebased basis to $1,854.5 million
- Q3 earnings (loss) from continuing operations decreased 66.2%
YoY on a reported basis to $822.7 million
- Q3 Adjusted EBITDA(i) decreased 10.0% YoY on a reported basis
and 16.9% on a rebased basis to $597.7 million
- Q3 property & equipment additions(i) were 19.7% of revenue,
as compared to 21.3% in Q3 2022
- Balance sheet with over $5.0 billion of total liquidity
- Comprised of $1.7 billion of cash, $1.8 billion of investments
held under SMAs and $1.5 billion of unused borrowing
capacity10
- Blended, fully-swapped borrowing cost of 3.5% on a debt balance
of $15.3 billion
Liberty Global
Q3 2023
Q3 2022
YoY Change (reported)
YoY Change (rebased)
YTD 2023
YoY Change (reported)
YoY Change (rebased)
Customers
Organic customer net losses
(39,100
)
(14,000
)
(179.3
%)
(84,900
)
(124.6
%)
Financial
(in millions, except percentages)
Revenue(i)
$
1,854.5
$
1,746.3
6.2
%
(4.3
%)
$
5,570.9
4.1
%
(1.3
%)
Earnings (loss) from continuing
operations(i)
$
822.7
$
2,431.7
(66.2
%)
$
(402.1
)
(106.9
%)
Adjusted EBITDA(i)
$
597.7
$
664.0
(10.0
%)
(16.9
%)
$
1,823.6
(8.7
%)
(10.4
%)
P&E additions(i)
$
365.1
$
371.7
(1.8
%)
$
1,107.7
1.7
%
Adjusted EBITDA less P&E
Additions(i)
$
232.6
$
292.3
(20.4
%)
(25.3
%)
$
715.9
(21.2
%)
(20.5
%)
Cash provided by operating activities
$
327.1
$
540.5
(39.5
%)
$
1,326.7
(30.3
%)
Cash provided (used) by investing
activities
$
519.9
$
(633.5
)
182.1
%
$
(966.4
)
(149.6
%)
Cash used by financing activities
$
(638.1
)
$
(628.0
)
(1.6
%)
$
(343.1
)
88.8
%
Full Company11 Adjusted FCF
$
(102.3
)
$
147.5
(169.4
%)
$
48.0
(93.3
%)
Full Company Distributable Cash Flow
$
309.4
$
414.4
(25.3
%)
$
863.2
(11.8
%)
______________________
(i)
As further described in footnote (ii) to
the revenue table in our in our P&L Discussion below, 2023
amounts are impacted by the strategic and operational changes to
our T&I Function as a result of our determination to outsource
a component of our T&I Function and market certain of our
internally-developed software to third parties. Accordingly, during
the three and nine months ended September 30, 2023, revenue,
Adjusted EBITDA and Adjusted EBITDA less P&E Additions exclude
the benefit of $61.5 million and $92.2 million, respectively, that
otherwise would have been reported in such metrics impacting both
our consolidated and Central and Other results. As a result,
Adjusted EBITDA and Adjusted EBITDA less P&E Additions are
comparatively lower in the current periods, however, Adjusted FCF
is unaffected.
Customer Growth
Three months ended
Nine months ended
September 30,
September 30,
2023
2022
2023
2022
Organic customer net additions (losses)
by market
Switzerland
(11,100
)
(3,200
)
(16,900
)
(6,800
)
Belgium
(20,700
)
(7,700
)
(46,800
)
(17,600
)
Ireland
(5,100
)
(1,900
)
(14,400
)
(7,800
)
Slovakia
(1,800
)
(1,200
)
(4,300
)
(5,600
)
Luxembourg(i)
(400
)
—
(2,500
)
—
Total
(39,100
)
(14,000
)
(84,900
)
(37,800
)
VMO2 JV(ii)
32,500
12,300
28,700
11,700
VodafoneZiggo JV(iii)
(38,600
)
(19,500
)
(76,000
)
(57,300
)
________________________ (i)
The 2023 amounts relate to our business in
Luxembourg as a result of Telenet's January 2023 acquisition of
Eltrona.
(ii)
Fixed-line customer counts for the VMO2 JV
exclude Upp customers.
(iii)
Fixed-line customer counts for the
VodafoneZiggo JV include certain B2B customers.
Earnings (Loss) from Continuing Operations
Earnings (loss) from continuing operations was $822.7 million
and $2,431.7 million for the three months ended September 30, 2023
and 2022, respectively, and ($402.1 million) and $5,789.6 million
for the nine months ended September 30, 2023 and 2022,
respectively.
Financial Highlights
The following tables present (i) Revenue, Adjusted EBITDA and
Adjusted EBITDA less P&E Additions for each of our reportable
segments, including the non-consolidated VMO2 JV and VodafoneZiggo
JV, for the comparative periods and (ii) the percentage change from
period to period on both a reported and rebased basis. During the
first quarter of 2023, we changed the terms related to, and
approach to how we reflect the allocation of, charges for certain
products and services that our centrally-managed technology and
innovation function provides to our consolidated reportable
segments (the Tech Framework). For additional information, see the
Appendix. Consolidated Adjusted EBITDA and Consolidated Adjusted
EBITDA less P&E Additions are non-GAAP measures. For additional
information on how these measures are defined and why we believe
they are meaningful, see the Glossary.
Three months ended
Increase/(decrease)
Nine months ended
Increase/(decrease)
September 30,
September 30,
Revenue
2023
2022(i)
Reported %
Rebased %
2023
2022(i)
Reported %
Rebased %
in millions, except %
amounts
Switzerland
$
859.3
$
789.8
8.8
(0.8
)
$
2,482.9
$
2,377.3
4.4
(1.2
)
Belgium
775.2
665.1
16.6
(0.3
)
2,296.7
2,078.6
10.5
1.1
Ireland
125.5
116.1
8.1
—
372.4
365.4
1.9
0.1
Central and Other(ii)
164.3
238.3
(31.1
)
(30.4
)
615.0
720.2
(14.6
)
(10.0
)
Intersegment eliminations(iii)
(69.8
)
(63.0
)
10.8
N.M.
(196.1
)
(187.7
)
4.5
N.M.
Total
$
1,854.5
$
1,746.3
6.2
(4.3
)
$
5,570.9
$
5,353.8
4.1
(1.3
)
VMO2 JV(iv)
$
3,503.8
$
3,042.1
15.2
1.2
$
10,058.0
$
9,642.7
4.3
0.7
VodafoneZiggo JV(iv)
$
1,125.2
$
1,041.7
8.0
0.1
$
3,297.0
$
3,237.3
1.8
0.1
______________________
N.M. - Not Meaningful
(i)
Amounts have been revised, as applicable,
to reflect the retrospective impact of the Tech Framework, as
described above and in the Appendix.
(ii)
As further described in note 16 to our
10-Q, as a result of our determination to market and sell certain
of our internally-developed software to third parties, from May
2023, we recorded proceeds from the licensing and related sale of
products from this internally-developed software (including
proceeds generated from our arrangements with the VMO2 JV and the
VodafoneZiggo JV) against the net book value of our existing
internally-developed capitalized software and will continue to do
so until that balance is reduced to zero. Accordingly, during the
three and nine months ended September 30, 2023, revenue, Adjusted
EBITDA and Adjusted EBITDA less P&E Additions exclude the
benefit of $61.5 million and $92.2 million, respectively, that
otherwise would have been reported in such metrics impacting both
our consolidated and Central and Other revenue, Adjusted EBITDA and
Adjusted EBITDA less P&E Additions. As a result, Adjusted
EBITDA and Adjusted EBITDA less P&E Additions are comparatively
lower in the current periods, however, Adjusted FCF is unaffected.
We will resume recognizing revenue for such licensing and related
sale of products once the balance of our internally-developed
capitalized software has been reduced to zero. Further, we now
expense the costs of development of such software due to the fact
that it is now externally marketed to third parties.
(iii)
Amounts primarily relate to (i) the
revenue recognized within our T&I Function related to the Tech
Framework and (ii) for the 2022 YTD period, transactions between
our continuing and discontinued operations.
(iv)
Amounts reflect 100% of the 50:50
non-consolidated VMO2 JV and VodafoneZiggo JV's revenue.
Three months ended
Increase/(decrease)
Nine months ended
Increase/(decrease)
September 30,
September 30,
Adjusted EBITDA
2023
2022(i)
Reported %
Rebased %
2023
2022(i)
Reported %
Rebased %
in millions, except %
amounts
Switzerland
$
311.0
$
292.8
6.2
(3.4
)
$
861.1
$
850.3
1.3
(4.3
)
Belgium
339.8
316.6
7.3
(2.6
)
988.7
982.9
0.6
(0.5
)
Ireland
45.9
46.3
(0.9
)
(7.8
)
134.7
141.9
(5.1
)
(6.7
)
Central and Other(ii)
(83.6
)
22.4
(473.2
)
N.M.
(115.3
)
68.5
(268.3
)
N.M.
Intersegment eliminations(iii)
(15.4
)
(14.1
)
9.2
N.M.
(45.6
)
(45.5
)
0.2
N.M.
Total
$
597.7
$
664.0
(10.0
)
(16.9
)
$
1,823.6
$
1,998.1
(8.7
)
(10.4
)
VMO2 JV(iv)
$
1,170.9
$
1,060.5
10.4
2.4
$
3,335.6
$
3,515.2
(5.1
)
2.3
VodafoneZiggo JV(iv)
$
518.3
$
501.4
3.4
(4.1
)
$
1,474.7
$
1,530.1
(3.6
)
(5.3
)
______________________
N.M. - Not Meaningful
(i)
Amounts have been revised, as applicable,
to reflect the retrospective impact of the Tech Framework, as
described above and in the Appendix.
(ii)
2023 amounts are impacted by the strategic
and operational changes to our Central T&I function as
discussed in footnote (ii) to the revenue table above.
(iii)
Amounts relate to (i) the Adjusted EBITDA
impact to Central and Other of the value attributed to
centrally-held internally developed technology that is embedded
within our various CPE, as well as any applicable markup, and (ii)
for the YTD 2022 period, transactions between our continuing and
discontinued operations.
(iv)
Amounts reflect 100% of the 50:50
non-consolidated VMO2 JV and VodafoneZiggo JV's Adjusted
EBITDA.
Three months ended
Increase/(decrease)
Nine months ended
Increase/(decrease)
Adjusted EBITDA less
P&E Additions
September 30,
September 30,
2023
2022(i)
Reported %
Rebased %
2023
2022(i)
Reported %
Rebased %
in millions, except %
amounts
Switzerland
$
175.6
$
146.8
19.6
9.4
$
454.3
$
437.8
3.8
(1.4
)
Belgium
162.7
167.8
(3.0
)
(12.3
)
476.6
528.6
(9.8
)
(9.4
)
Ireland
2.5
10.7
(76.6
)
(78.0
)
6.7
50.9
(86.8
)
(86.8
)
Central and Other(ii)
(108.2
)
(33.0
)
(227.9
)
N.M.
(221.7
)
(108.0
)
(105.3
)
N.M.
Intersegment eliminations
—
—
—
N.M.
—
(0.8
)
100.0
N.M.
Total
$
232.6
$
292.3
(20.4
)
(25.3
)
$
715.9
$
908.5
(21.2
)
(20.5
)
VMO2 JV(iii)
$
483.2
$
355.4
36.0
(14.6
)
$
1,386.5
$
1,461.5
(5.1
)
(16.1
)
VodafoneZiggo JV(iii)
$
287.5
$
290.2
(0.9
)
(7.8
)
$
736.9
$
846.4
(12.9
)
(14.4
)
______________________
N.M. - Not Meaningful
(i)
Amounts have been revised, as applicable,
to reflect the retrospective impact of the Tech Framework, as
described above and in the Appendix.
(ii)
2023 amounts are impacted by the strategic
and operational changes to our Central T&I function as
discussed in footnote (ii) to the revenue table above.
(iii)
Amounts reflect 100% of the 50:50
non-consolidated VMO2 JV and VodafoneZiggo JV's Adjusted EBITDA
less P&E Additions.
Leverage and Liquidity
- Total principal amount of debt and
finance leases: $15.3 billion
- Average debt tenor12: 5.0 years,
with ~48% not due until 2029 or thereafter
- Borrowing costs: Blended,
fully-swapped cost of debt was 3.5%
- Liquidity: $5.0 billion, including
(i) $1.7 billion of cash at September 30, 2023, (ii) $1.8 billion
of investments held under SMAs and (iii) $1.5 billion of aggregate
unused borrowing capacity under our credit facilities
Forward-Looking Statements and Disclaimer
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements with respect to our strategies, future
growth prospects and opportunities; expectations regarding our and
our businesses' financial performance, including Revenue and
Rebased Revenue, Adjusted EBITDA, Adjusted EBITDA less P&E
Additions, Adjusted Free Cash Flow and Distributable Cash Flow, as
well as the 2023 financial guidance provided by us and our
operating companies and joint ventures; expectations of any
macroeconomic dynamics that may be beneficial or detrimental to the
company; expectations with respect to the integration and synergy
plans at Virgin Media O2, including the timing, costs and
anticipated benefits thereof; our and our affiliates' and joint
ventures' plans with respect to network products and services,
including with respect to 5G expansion; our proposed
redomiciliation from the U.K. to Bermuda, including the timing and
anticipated benefits resulting from such a move; our anticipated
pricing adjustments in our various markets and the effect that such
adjustments will have on our operational and financial results;
our, and our operating companies'; the benefits to be realized from
the acquisition of Upp by our nexfibre joint venture, including the
amount and timing thereof; the benefits to be realized by Virgin
Media Ireland following its wholesale network access deal with Sky,
including the amount and timing thereof; the savings to be realized
from the Company's partnership with Infosys; the aligning of
Telenet's capital structure with that of the Company group going
forward; commitments and aspirations with respect to ESG, including
work to be completed through charities with whom we partner; our
share buyback program, including the amount we anticipate spending
on such program, as well as the anticipated number of shares to be
repurchased, expressed as either a percentage of outstanding shares
or in whole numbers; our anticipated investments in our
infrastructure and networks; the strength of our and our
affiliates' respective balance sheets (including cash and liquidity
position); the tenor and cost of our third-party debt and
anticipated borrowing capacity; anticipated distributions to be
received from our subsidiaries and joint ventures; and other
information and statements that are not historical fact. These
forward-looking statements involve certain risks and uncertainties
that could cause actual results to differ materially from those
expressed or implied by these statements. These risks and
uncertainties include events that are outside of our control, such
as the continued use by subscribers and potential subscribers of
our and our affiliates’ and joint ventures' services and their
willingness to upgrade to our more advanced offerings; our and our
affiliates’ ability to meet challenges from competition, to manage
rapid technological change or to maintain or increase rates to
subscribers or to pass through increased costs to subscribers; the
potential impact of pandemics and epidemics on us and our
businesses as well as our customers; the effects of changes in laws
or regulations; the effects of the U.K.'s exit from the E.U.;
general economic factors; our, our affiliates’ and our joint
ventures' ability to obtain regulatory approval and satisfy
regulatory conditions associated with acquisitions and
dispositions; our, our affiliates’ and our joint ventures' ability
to successfully acquire and integrate new businesses and realize
anticipated efficiencies from acquired businesses; the availability
of attractive programming for our, our affiliates’ and our joint
ventures' video services and the costs associated with such
programming; our, our affiliates’ and our joint ventures' ability
to achieve forecasted financial and operating targets; the outcome
of any pending or threatened litigation; the ability of our
operating companies and affiliates and joint ventures to access the
cash of their respective subsidiaries; the impact of our operating
companies', affiliates’ and joint ventures' future financial
performance, or market conditions generally, on the availability,
terms and deployment of capital; fluctuations in currency exchange
and interest rates; the ability of suppliers, vendors and
contractors to timely deliver quality products, equipment,
software, services and access; our, our affiliates’ and our joint
ventures' ability to adequately forecast and plan future network
requirements including the costs and benefits associated with
network expansions; and other factors detailed from time to time in
our filings with the Securities and Exchange Commission (the
"SEC"), including our most recently filed Form 10-K, Form 10-K/A
and Form 10-Qs. These forward-looking statements speak only as of
the date of this release. We expressly disclaim any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in
our expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is
based.
Share Repurchase Program
Our original share buyback plan for 2023 authorized the
repurchase of 10% of our outstanding shares as of December 31,
2022, and this was increased to a minimum of 15% in July 2023. As
of October 30, 2023, we completed our 15% buyback target and today
announced we are now targeting a further repurchase of shares
through the end of January 2024 in the amount of approximately
$300.0 million. Under the program, Liberty Global may acquire from
time to time its Class A ordinary shares, Class C ordinary shares,
or any combination of Class A and Class C ordinary shares. The
program may be effected through open market transactions and/or
privately negotiated transactions, which may include derivative
transactions. The timing of the repurchase of shares pursuant to
the program will depend on a variety of factors, including market
conditions and applicable law. The program may be implemented in
conjunction with brokers for the Company and other financial
institutions with whom the Company has relationships within certain
pre-set parameters, and purchases may continue during closed
periods in accordance with applicable restrictions. The program may
be suspended or discontinued at any time and will terminate upon
repurchasing the authorized limits unless further repurchase
authorization is provided for.
About Liberty Global
Liberty Global (NASDAQ: LBTYA, LBTYB and LBTYK) is a world
leader in converged broadband, video and mobile communications
services. We deliver next-generation products through advanced
fiber and 5G networks, and currently provide over 85 million
connections* across Europe and the United Kingdom. Our businesses
operate under some of the best-known consumer brands, including
Virgin Media-O2 in the U.K., VodafoneZiggo in The Netherlands,
Telenet in Belgium, Sunrise in Switzerland, Virgin Media in Ireland
and UPC in Slovakia. Through our substantial scale and commitment
to innovation, we are building Tomorrow’s Connections Today,
investing in the infrastructure and platforms that empower our
customers to make the most of the digital revolution, while
deploying the advanced technologies that nations and economies need
to thrive.
Our consolidated businesses generate annual revenue of more than
$7 billion, while the VMO2 JV and VodafoneZiggo JV generate
combined annual revenue of more than $17 billion.**
Liberty Global Ventures, our global investment arm, has a
portfolio of more than 75 companies across content, technology and
infrastructure, including strategic stakes in companies like ITV,
Televisa Univision, Plume, AtlasEdge and the Formula E racing
series.
* Represents aggregate consolidated and 50% owned
non-consolidated fixed and mobile subscribers. Includes wholesale
mobile connections of the VMO2 JV and B2B fixed subscribers of the
VodafoneZiggo JV.
** Revenue figures above are provided based on full year 2022
Liberty Global consolidated results (excluding revenue from Poland)
and the combined as reported full year 2022 results for the
VodafoneZiggo JV and full year 2022 U.S. GAAP results for the VMO2
JV. For more information, please visit www.libertyglobal.com.
Balance Sheets, Statements of Operations and Statements of
Cash Flows
The condensed consolidated balance sheets, statements of
operations and statements of cash flows of Liberty Global are in
our 10-Q.
Rebase Information
Rebase growth percentages, which are non-GAAP measures, are
presented as a basis for assessing growth rates on a comparable
basis. For purposes of calculating rebase growth rates on a
comparable basis for all businesses that we owned during 2023, we
have adjusted our historical revenue, Adjusted EBITDA and Adjusted
EBITDA less P&E Additions for the three and nine months ended
September 30, 2022 to (i) include the pre-acquisition revenue,
Adjusted EBITDA and P&E additions to the same extent these
entities are included in our results for the three and nine months
ended September 30, 2023, (ii) exclude from our rebased amounts the
revenue, Adjusted EBITDA and P&E additions of entities disposed
of to the same extent these entities are excluded in our results
for the three and nine months ended September 30, 2023, (iii)
include in our rebased amounts the revenue and costs for the
temporary elements of transitional and other services provided to
iliad, Vodafone, Deutsche Telekom and M7 Group, to reflect amounts
related to these services equal to those included in our results
for the three and nine months ended September 30, 2023 and (iv)
reflect the translation of our rebased amounts at the applicable
average foreign currency exchange rates that were used to translate
our results for the three and nine months ended September 30, 2023.
We have reflected the revenue, Adjusted EBITDA and P&E
additions of these acquired entities in our 2022 rebased amounts
based on what we believe to be the most reliable information that
is currently available to us (generally pre-acquisition financial
statements), as adjusted for the estimated effects of (a) any
significant differences between U.S. GAAP and local generally
accepted accounting principles, (b) any significant effects of
acquisition accounting adjustments, (c) any significant differences
between our accounting policies and those of the acquired entities
and (d) other items we deem appropriate. We do not adjust
pre-acquisition periods to eliminate nonrecurring items or to give
retroactive effect to any changes in estimates that might be
implemented during post-acquisition periods. As we did not own or
operate the acquired businesses during the pre-acquisition periods,
no assurance can be given that we have identified all adjustments
necessary to present the revenue, Adjusted EBITDA and Adjusted
EBITDA less P&E Additions of these entities on a basis that is
comparable to the corresponding post-acquisition amounts that are
included in our results or that the pre-acquisition financial
statements we have relied upon do not contain undetected errors. In
addition, the rebase growth percentages are not necessarily
indicative of the revenue, Adjusted EBITDA and Adjusted EBITDA less
P&E Additions that would have occurred if these transactions
had occurred on the dates assumed for purposes of calculating our
rebased amounts or the revenue, Adjusted EBITDA and Adjusted EBITDA
less P&E Additions that will occur in the future. Investors
should view rebase growth as a supplement to, and not a substitute
for, U.S. GAAP measures of performance included in our condensed
consolidated statements of operations.
The following table provides adjustments made to the 2022
amounts (i) in aggregate for our consolidated reportable segments
and (ii) for the non-consolidated VMO2 JV and VodafoneZiggo JV to
derive our rebased growth rates:
Three months ended September
30, 2022
Nine months ended September
30, 2022
Revenue
Adjusted EBITDA
Adjusted EBITDA less P&E
Additions
Revenue
Adjusted EBITDA
Adjusted EBITDA less P&E
Additions
in millions
Consolidated Liberty Global:
Acquisitions and dispositions(i)
$
40.6
$
(4.9
)
$
(9.4
)
$
111.8
$
(37.0
)
$
(46.6
)
Foreign currency
151.7
60.3
28.5
181.5
73.7
38.7
Total
$
192.3
$
55.4
$
19.1
$
293.3
$
36.7
$
(7.9
)
VMO2 JV(ii):
Acquisitions and dispositions(iii)
$
5.9
$
(5.9
)
$
(5.9
)
$
(20.8
)
$
(265.7
)
$
(265.7
)
nexfibre construction revenue(iv)
189.8
7.2
7.2
478.0
38.0
38.0
nexfibre construction P&E
additions(iv)
—
—
167.3
—
—
424.6
Foreign currency
226.2
82.2
41.6
(106.9
)
(28.5
)
(6.1
)
Total
$
421.9
$
83.5
$
210.2
$
350.3
$
(256.2
)
$
190.8
VodafoneZiggo JV(ii):
Foreign currency
$
81.9
$
38.8
$
21.5
$
54.8
$
26.4
$
14.0
_______________
(i)
In addition to our acquisitions and
dispositions, these rebase adjustments include amounts related to
agreements to provide transitional and other services to iliad,
Vodafone, Deutsche Telekom and M7 Group. These adjustments result
in an equal amount of fees in both the 2023 and 2022 periods for
those services that are deemed to be temporary in nature.
(ii)
Amounts reflect 100% of the adjustments
made related to the VMO2 JV's and the VodafoneZiggo JV's revenue,
Adjusted EBITDA and Adjusted EBITDA less P&E Additions, which
we do not consolidate, as we hold a 50% noncontrolling interest in
the VMO2 JV and the VodafoneZiggo JV.
(iii)
Amounts for the YTD period relate to the
exclusion of certain handset securitization transactions in Q1
2022, including approximately £32 million ($44 million at the
applicable rate) of revenue and £174 million ($233 million at the
applicable rate) of Adjusted EBITDA related to restructuring of the
legacy O2 securitization structure.
(iv)
Amounts relate to the VMO2 JV's
construction agreement with the nexfibre JV. Amounts exclude
adjustments for other service-related benefits attributable to the
overall agreement between the VMO2 JV and the nexfibre JV.
Liquidity
The following table(i) details the U.S. dollar equivalents of
our liquidity position at September 30, 2023, which includes our
(i) cash and cash equivalents, (ii) investments held under SMAs and
(iii) unused borrowing capacity:
Cash
Unused
and Cash
Borrowing
Total
Equivalents
SMAs(ii)
Capacity(iii)
Liquidity
in millions
Liberty Global and unrestricted
subsidiaries
$
595.7
$
1,797.7
$
—
$
2,393.4
Telenet
1,136.7
—
682.2
1,818.9
UPC Holding
7.7
—
754.6
762.3
VM Ireland
1.5
—
105.8
107.3
Total
$
1,741.6
$
1,797.7
$
1,542.6
$
5,081.9
_______________
(i)
Except as otherwise indicated, the amounts
reported in the table include the named entity and its
subsidiaries.
(ii)
Represents investments held under SMAs
which are maintained by investment managers acting as agents on our
behalf.
(iii)
Our aggregate unused borrowing capacity of
$1.5 billion represents maximum undrawn commitments under the
applicable facilities without regard to covenant compliance
calculations or other conditions precedent to borrowing.
Summary of Debt & Finance Lease Obligations
The following table(i) details the September 30, 2023 U.S.
dollar equivalents of the (i) outstanding principal amounts of our
debt and finance lease obligations, (ii) expected principal-related
derivative cash payments or receipts and (iii) swapped principal
amounts of our debt and finance lease obligations:
Finance
Total Debt
Principal Related
Swapped Debt
Lease
& Finance Lease
Derivative
& Finance Lease
Debt(ii)
Obligations
Obligations
Cash Payments
Obligations
in millions
UPC Holding
$
6,263.9
$
30.7
$
6,294.6
$
298.0
$
6,592.6
Telenet
5,856.0
4.2
5,860.2
(201.8
)
5,658.4
VM Ireland
952.0
—
952.0
—
952.0
Other(iii)
2,218.0
21.2
2,239.2
—
2,239.2
Total
$
15,289.9
$
56.1
$
15,346.0
$
96.2
$
15,442.2
_______________
(i)
Except as otherwise indicated, the amounts
reported in the table include the named entity and its
subsidiaries.
(ii)
Debt amounts for UPC Holding include notes
issued by special purpose entities that are consolidated by UPC
Holding.
(iii)
Debt amount includes a loan of $1,330.7
million backed by the shares we hold in Vodafone Group plc and
$859.4 million under LGBH Facility B.
Property and Equipment Additions and Capital
Expenditures
The table below highlights the categories of property and
equipment additions of our continuing operations for the indicated
periods and reconciles those additions to the capital expenditures
of our continuing operations that are presented in the condensed
consolidated statements of cash flows in our 10-Q.
Three months ended
Nine months ended
September 30,
September 30,
2023
2022
2023
2022
in millions, except %
amounts
Customer premises equipment (CPE)
$
61.9
$
63.9
$
201.9
$
199.8
New build & upgrade
62.8
32.0
144.6
82.4
Capacity
51.3
56.3
145.8
147.0
Baseline
100.5
107.0
334.3
333.6
Product & enablers
88.6
112.5
281.1
326.8
Total P&E additions
365.1
371.7
1,107.7
1,089.6
Reconciliation of P&E additions to
capital expenditures:
Assets acquired under capital-related
vendor financing arrangements(i)
(31.6
)
(40.7
)
(129.9
)
(142.9
)
Assets acquired under finance leases
(3.9
)
(7.8
)
(20.8
)
(25.8
)
Changes in current liabilities related to
capital expenditures
(1.8
)
(28.1
)
59.2
8.4
Total capital expenditures, net(ii)
$
327.8
$
295.1
$
1,016.2
$
929.3
P&E additions as % of revenue
19.7
%
21.3
%
19.9
%
20.4
%
______________________
(i)
Amounts exclude related VAT of $4.9
million and $7.2 million for the three months ended September 30,
2023 and 2022, respectively, and $14.8 million and $17.0 million
for the nine months ended September 30, 2023 and 2022,
respectively, that were also financed under these arrangements.
(ii)
The capital expenditures that we report in
our condensed consolidated statements of cash flows do not include
amounts that are financed under vendor financing or finance lease
arrangements. Instead, these expenditures are reflected as non-cash
additions to our property and equipment when the underlying assets
are delivered, and as repayments of debt when the related principal
is repaid.
ARPU per Fixed Customer Relationship
The following table provides ARPU per fixed customer
relationship and percentage change from period to period on both a
reported and rebased basis for the indicated periods:
ARPU per Fixed Customer
Relationship
Three months ended September
30,
Increase/(decrease)
2023
2022
Reported %
Rebased %
Liberty Global
$
67.56
$
61.62
9.6
%
1.7
%
Ireland
€
63.03
€
62.28
1.2
%
1.2
%
Belgium (Telenet)
€
62.46
€
60.31
3.6
%
4.6
%
UPC Holding
€
61.39
€
62.03
(1.0
%)
(1.6
%)
Mobile ARPU
The following tables provide ARPU per mobile subscriber and
percentage change from period to period on both a reported and
rebased basis for the indicated periods:
ARPU per Mobile
Subscriber
Three months ended September
30,
Increase/(decrease)
2023
2022
Reported %
Rebased %
Liberty Global:
Including interconnect revenue
$
26.81
$
26.02
3.0
%
(5.5
%)
Excluding interconnect revenue
$
25.03
$
23.80
5.2
%
(3.5
%)
Operating Data — September 30,
2023
Homes
Passed
Fixed-Line Customer
Relationships
Internet
Subscribers(i)
Video Subscribers
(ii)
Telephony
Subscribers(iii)
Total RGUs
Postpaid Mobile
Subscribers
Total Mobile
Subscribers(iv)
Consolidated Liberty Global:
Switzerland(v)
2,700,700
1,480,200
1,180,400
1,216,600
952,000
3,349,000
2,442,000
2,839,400
Belgium
3,454,600
1,970,900
1,718,600
1,638,000
948,200
4,304,800
2,673,000
2,915,900
Ireland
971,000
406,700
371,500
233,900
221,300
826,700
136,600
136,600
Slovakia
640,400
178,100
145,200
162,400
87,900
395,500
—
—
Luxembourg(vi)
149,300
49,200
17,000
42,800
9,100
68,900
2,400
2,400
Total Liberty Global
7,916,000
4,085,100
3,432,700
3,293,700
2,218,500
8,944,900
5,254,000
5,894,300
VMO2 JV(vii)
16,197,100
5,824,200
5,708,100
12,799,000
16,103,300
35,065,600
VodafoneZiggo JV(viii)
7,467,100
3,600,200
3,233,600
3,573,500
1,593,000
8,400,100
5,261,500
5,598,100
Subscriber Variance Table —
September 30, 2023 vs. June 30, 2023
Homes Passed
Fixed-Line Customer
Relationships
Internet
Subscribers(ii)
Video
Subscribers(i)
Telephony
Subscribers(iii)
Total RGUs
Postpaid Mobile
Subscribers
Total Mobile
Subscribers(iv)
Organic Change
Summary
Consolidated Liberty Global:
Switzerland(v)
13,800
(11,100)
(7,400)
(13,300)
(20,800)
(41,500)
29,200
36,000
Belgium
4,700
(20,700)
(13,600)
(26,700)
(23,900)
(64,200)
(4,000)
(13,300)
Ireland
800
(5,100)
(4,100)
(8,500)
(15,300)
(27,900)
(3,200)
(3,200)
Slovakia
900
(1,800)
(400)
(800)
(500)
(1,700)
—
—
Luxembourg(vi)
600
(400)
100
(600)
300
(200)
—
—
Total Liberty Global
20,800
(39,100)
(25,400)
(49,900)
(60,200)
(135,500)
22,000
19,500
Q3 2023 Liberty
Global Adjustments:
Switzerland
—
—
—
—
—
—
27,400
—
Total adjustments
—
—
—
—
—
—
27,400
—
VMO2 JV(vii)
12,600
32,500
40,800
(38,900)
50,000
539,700
VodafoneZiggo JV(viii)
28,800
(38,600)
(33,900)
(38,000)
(65,900)
(137,800)
28,600
27,700
Q3 2023 Joint
Ventures Adjustments:
VodafoneZiggo JV
63,000
—
—
—
—
—
—
—
Total adjustments
63,000
—
—
—
—
—
—
—
Footnotes for Operating Data and Subscriber Variance
Tables
(i)
In Switzerland, we offer a 10 Mbps
internet service to our Video Subscribers without an incremental
recurring fee. Our Internet Subscribers in Switzerland include
approximately 44,100 subscribers who have requested and received
this service.
(ii)
We have approximately 30,900 “lifeline”
customers that are counted on a per connection basis, representing
the least expensive regulated tier of video service, with only a
few channels.
(iii)
In Switzerland, we offer a basic phone
service to our Video Subscribers without an incremental recurring
fee. Our Telephony Subscribers in Switzerland include approximately
154,100 subscribers who have requested and received this
service.
(iv)
In a number of countries, our mobile
subscribers receive mobile services pursuant to prepaid contracts.
As of September 30, 2023, our mobile subscriber count included
approximately 397,400, 242,900, 7,966,200 and 336,600 prepaid
mobile subscribers in Switzerland, Belgium, the VMO2 JV and the
VodafoneZiggo JV, respectively. Prepaid mobile customers are
excluded from the VMO2 JV's and the VodafoneZiggo JV's mobile
subscriber counts after a period of inactivity of three months and
nine months, respectively. The mobile subscriber count for the VMO2
JV includes IoT connections, which are Machine-to-Machine contract
mobile connections, including Smart Metering contract connections.
The mobile subscriber count presented above for the VMO2 JV
excludes wholesale mobile connections of approximately 9,539,600
that are included in the total mobile subscriber count as defined
and presented by the VMO2 JV.
(v)
Pursuant to service agreements,
Switzerland offers broadband internet, video and telephony services
over networks owned by third-party operators (“partner networks”),
and following the acquisition of Sunrise, also services homes
through Sunrise's existing agreements with Swisscom, Swiss Fibre
Net and local utilities. Under these agreements, RGUs are only
recognized if there is a direct billing relationship with the
customer. Homes passed or serviceable through the above service
agreements are not included in Switzerland's homes passed count as
we do not own these networks. Including these arrangements, our
operations in Switzerland have the ability to offer fixed services
to the national footprint.
(vi)
Relates to our business in Luxembourg as a
result of Telenet's January 2023 acquisition of Eltrona.
(vii)
Fixed-line customer counts for the VMO2 JV
exclude Upp customers.
(viii)
Fixed-line counts for the VodafoneZiggo JV
include certain B2B customers and subscribers.
Additional General Notes to
Tables:
Most of our broadband communications subsidiaries provide
broadband internet, telephony, data, video or other B2B services.
Certain of our B2B revenue is derived from SOHO subscribers that
pay a premium price to receive enhanced service levels along with
internet, video or telephony services that are the same or similar
to the mass marketed products offered to our residential
subscribers. All mass marketed products provided to SOHOs, whether
or not accompanied by enhanced service levels and/or premium
prices, are included in the respective RGU and customer counts of
our broadband communications operations, with only those services
provided at premium prices considered to be “SOHO RGUs” or “SOHO
customers”. To the extent our existing customers upgrade from a
residential product offering to a SOHO product offering, the number
of SOHO RGUs or SOHO customers will increase, but there is no
impact to our total RGU or customer counts. With the exception of
our B2B SOHO subscribers and mobile subscribers at medium and large
enterprises, we generally do not count customers of B2B services as
customers or RGUs for external reporting purposes.
In Belgium, Telenet leases a portion of its network under a
long-term finance lease arrangement. These tables include operating
statistics for Telenet's owned and leased networks.
While we take appropriate steps to ensure that subscriber
statistics are presented on a consistent and accurate basis at any
given balance sheet date, the variability from country to country
in (i) the nature and pricing of products and services, (ii) the
distribution platform, (iii) billing systems, (iv) bad debt
collection experience and (v) other factors add complexity to the
subscriber counting process. We periodically review our subscriber
counting policies and underlying systems to improve the accuracy
and consistency of the data reported on a prospective basis.
Accordingly, we may from time to time make appropriate adjustments
to our subscriber statistics based on those reviews.
Subscriber information for acquired entities is preliminary and
subject to adjustment until we have completed our review of such
information and determined that it is presented in accordance with
our policies.
Footnotes
- YTD represents stock repurchases through October 30, 2023.
- 2023 Distributable Cash Flow guidance reflects FX rates of
EUR/USD 1.07, GBP/USD 1.21, CHF/USD 1.08.
- Represents aggregate consolidated and 50% owned
non-consolidated VMO2 JV and VodafoneZiggo JV homes passed,
broadband subscribers and postpaid mobile subscribers, as
applicable. Aggregate subscribers also includes certain B2B fixed
subscribers of the VodafoneZiggo JV.
- Liquidity refers to cash and cash equivalents and investments
held under separately managed accounts plus the maximum undrawn
commitments under subsidiary borrowing facilities, without regard
to covenant compliance calculations or other conditions precedent
to borrowing.
- Represents consolidated debt and non-consolidated VMO2 JV and
VodafoneZiggo JV debt maturities.
- The indicated growth rates are rebased for acquisitions,
dispositions, FX and other items that impact the comparability of
our year-over-year results. See the Rebase Information section for
more information on rebased growth.
- Costs to capture generally include incremental, third-party
operating and capital related costs that are directly associated
with integration activities, restructuring activities and certain
other costs associated with aligning an acquiree to our business
processes to derive synergies. These costs are necessary to combine
the operations of a business being acquired (or joint venture being
formed) with ours or are incidental to the acquisition. As a
result, costs to capture may include certain (i) operating costs
that are included in Adjusted EBITDA, (ii) capital-related costs
that are included in property and equipment additions and Adjusted
EBITDA less P&E Additions and (iii) certain integration-related
restructuring expenses that are not included within Adjusted EBITDA
or Adjusted EBITDA less P&E Additions. Given the achievement of
synergies occurs over time, certain of our costs to capture are
recurring by nature, and generally incurred within a few years of
completing the transaction.
- This release includes the actual U.S. GAAP results for the VMO2
JV for the three and nine months ended September 30, 2023 and 2022.
The commentary and YoY growth rates presented in this release are
shown on a rebased basis. For more information regarding the VMO2
JV, including full IFRS disclosures, please visit their investor
relations page to access the VMO2 JV's Q3 earnings release.
- Converged households or converged SIMs represent customers in
either our Consumer or SOHO segment that subscribe to both a
fixed-line digital TV and an internet service and Vodafone and/or
hollandsnieuwe postpaid mobile telephony service.
- Our aggregate unused borrowing capacity of $1.5 billion
represents the maximum undrawn commitments under the applicable
facilities without regard to covenant compliance calculations or
other conditions precedent to borrowing. Upon completion of the
relevant September 30, 2023 compliance reporting requirements for
our credit facilities, and assuming no further changes from
quarter-end borrowing levels, we anticipate that the full unused
borrowing capacity will continue to be available under each of the
respective subsidiary facilities. Our above expectations do not
consider any actual or potential changes to our borrowing levels or
any amounts loaned or distributed subsequent to September 30,
2023.
- The term "Full Company" includes certain amounts that were
classified as discontinued operations prior to disposal. We also
present Full Company Adjusted Free Cash Flow and Full Company
Distributable Cash Flow, consistent with the basis for our full
year 2023 Distributable Cash Flow guidance.
- For purposes of calculating our average tenor, total
third-party debt excludes vendor financing, certain debt
obligations that we assumed in connection with various
acquisitions, and liabilities related to Telenet's acquisition of
mobile spectrum licenses. The percentage of debt not due until 2029
or thereafter includes all of these amounts.
- The U.S. GAAP YoY growth rates for the VMO2 JV are impacted by
rebase adjustments and recurring U.S. GAAP to IFRS accounting
differences, as further described and reconciled below.
Three months ended September
30,
Nine months ended September
30,
2023
2022
2023
2022
in millions
Revenue:
U.S. GAAP revenue
$
3,503.8
$
3,042.1
$
10,058.0
$
9,642.7
Rebase adjustments(i)
3.0
195.7
10.4
457.2
U.S. GAAP rebased revenue
3,506.8
3,237.8
10,068.4
10,099.9
U.S. GAAP/IFRS adjustments
—
—
—
—
IFRS rebased revenue
3,506.8
3,237.8
10,068.4
10,099.9
Rebase adjustments(i)
(3.0
)
(195.7
)
(10.4
)
(457.2
)
IFRS revenue
$
3,503.8
$
3,042.1
$
10,058.0
$
9,642.7
Adjusted EBITDA:
U.S. GAAP Adjusted EBITDA
$
1,170.9
$
1,060.5
$
3,335.6
$
3,515.2
Rebase adjustments(ii)
1.9
1.3
5.8
(227.7
)
U.S. GAAP rebased Adjusted EBITDA
1,172.8
1,061.8
3,341.4
3,287.5
U.S. GAAP/IFRS adjustments(iv)
123.5
98.2
334.0
342.1
IFRS rebased Adjusted EBITDA (including
costs to capture)
1,296.3
1,160.0
3,675.4
3,629.6
Rebase adjustments(ii)
(1.9
)
(1.3
)
(5.8
)
227.7
IFRS Adjusted EBITDA
$
1,294.4
$
1,158.7
$
3,669.6
$
3,857.3
Property & equipment
additions:
U.S. GAAP P&E additions
$
687.7
$
705.1
$
1,949.1
$
2,053.7
Rebase adjustments(iii)
—
(167.3
)
—
(424.6
)
U.S. GAAP rebased P&E additions
687.7
537.8
1,949.1
1,629.1
U.S. GAAP/IFRS adjustments(iv)
70.3
44.9
182.7
153.9
IFRS rebased P&E additions (including
costs to capture)
758.0
582.7
2,131.8
1,783.0
Rebase adjustments(iii)
—
167.3
—
424.6
IFRS P&E additions
$
758.0
$
750.0
$
2,131.8
$
2,207.6
Adjusted EBITDA less P&E
additions:
U.S. GAAP Adjusted EBITDA less P&E
additions
$
483.2
$
355.4
$
1,386.5
$
1,461.5
Rebase adjustments(ii)(iii)
1.9
168.6
5.8
196.9
U.S. GAAP rebased Adjusted EBITDA less
P&E additions
485.1
524.0
1,392.3
1,658.4
U.S. GAAP/IFRS adjustments(iv)
53.2
53.3
151.3
188.2
IFRS rebased Adjusted EBITDA less P&E
additions (including costs to capture)
538.3
577.3
1,543.6
1,846.6
Rebase adjustments(ii)(iii)
(1.9
)
(168.6
)
(5.8
)
(196.9
)
IFRS Adjusted EBITDA less P&E
additions
$
536.4
$
408.7
$
1,537.8
$
1,649.7
______________________
(i)
Revenue rebase adjustments relate to (i)
for 2022, the VMO2 JV's construction agreement with the nexfibre JV
of approximately $190 million and $478 million, respectively, (ii)
for the 2022 YTD period, the exclusion of certain handset
securitization transactions in Q1 2022 of approximately $44 million
related to restructuring of the legacy O2 securitization structure
and (iii) certain transaction adjustments made to reflect the JV's
new basis of accounting, which reverse the effect of the write-off
of deferred revenue.
(ii)
Adjusted EBITDA rebase adjustments relate
to (i) for the 2022 YTD period, the exclusion of certain handset
securitization transactions in Q1 2022 of approximately $233
million related to restructuring of the legacy O2 securitization
structure, (ii) for 2022, the VMO2 JV's construction agreement with
the nexfibre JV of approximately $7 million and $38 million,
respectively, and (iii) certain transaction adjustments made to
reflect the JV's new basis of accounting, which reverse the effect
of the write-off of deferred commissions, install costs and
deferred revenue.
(iii)
P&E rebase adjustments for 2022 relate
to the VMO2 JV's construction agreement with the nexfibre JV of
approximately $168 million and $425 million, respectively.
(iv)
U.S. GAAP/IFRS differences primarily
relate to (i) the VMO2 JV's investment in CTIL and (ii) lease
accounting.
Glossary
10-Q or 10-K: As used herein, the
terms 10-Q and 10-K refer to our most recent quarterly or annual
report as filed with the Securities and Exchange Commission on Form
10-Q or Form 10-K, as applicable.
Adjusted EBITDA, Adjusted EBITDA less
P&E Additions and Property and Equipment Additions (P&E
Additions):
- Adjusted EBITDA: Adjusted EBITDA
is the primary measure used by our chief operating decision maker
to evaluate segment operating performance and is also a key factor
that is used by our internal decision makers to (i) determine how
to allocate resources to segments and (ii) evaluate the
effectiveness of our management for purposes of annual and other
incentive compensation plans. As we use the term, Adjusted EBITDA
is defined as earnings (loss) from continuing operations before net
income tax benefit (expense), other non-operating income or
expenses, net share of results of affiliates, net gains (losses) on
debt extinguishment, net realized and unrealized gains (losses) due
to changes in fair values of certain investments, net foreign
currency transaction gains (losses), net gains (losses) on
derivative instruments, net interest expense, depreciation and
amortization, share-based compensation, provisions and provision
releases related to significant litigation and impairment,
restructuring and other operating items. Other operating items
include (a) gains and losses on the disposition of long-lived
assets, (b) third-party costs directly associated with successful
and unsuccessful acquisitions and dispositions, including legal,
advisory and due diligence fees, as applicable, and (c) other
acquisition-related items, such as gains and losses on the
settlement of contingent consideration. Our internal decision
makers believe Adjusted EBITDA is a meaningful measure because it
represents a transparent view of our recurring operating
performance that is unaffected by our capital structure and allows
management to (1) readily view operating trends, (2) perform
analytical comparisons and benchmarking between segments and (3)
identify strategies to improve operating performance in the
different countries in which we operate. We believe our
consolidated Adjusted EBITDA measure, which is a non-GAAP measure,
is useful to investors because it is one of the bases for comparing
our performance with the performance of other companies in the same
or similar industries, although our measure may not be directly
comparable to similar measures used by other public companies.
Consolidated Adjusted EBITDA should be viewed as a measure of
operating performance that is a supplement to, and not a substitute
for, U.S. GAAP measures of income included in our condensed
consolidated statements of operations.
- Adjusted EBITDA less P&E
Additions: We define Adjusted EBITDA less P&E Additions,
which is a non-GAAP measure, as Adjusted EBITDA less property and
equipment additions on an accrual basis. Adjusted EBITDA less
P&E Additions is a meaningful measure because it provides (i) a
transparent view of Adjusted EBITDA that remains after our capital
spend, which we believe is important to take into account when
evaluating our overall performance and (ii) a comparable view of
our performance relative to other telecommunications companies. Our
Adjusted EBITDA less P&E Additions measure may differ from how
other companies define and apply their definition of similar
measures. Adjusted EBITDA less P&E Additions should be viewed
as a measure of operating performance that is a supplement to, and
not a substitute for, U.S. GAAP measures of income included in our
condensed consolidated statements of operations.
- P&E Additions: Includes
capital expenditures on an accrual basis, amounts financed under
vendor financing or finance lease arrangements and other non-cash
additions. A reconciliation of earnings (loss) from continuing
operations to Adjusted EBITDA and Adjusted EBITDA less P&E
Additions is presented in the following table:
Three months ended
Nine months ended
September 30,
September 30,
2023
2022
2023
2022
in millions
Earnings (loss) from continuing
operations
$
822.7
$
2,431.7
$
(402.1
)
$
5,789.6
Income tax expense (benefit)
(1.7
)
64.8
170.0
209.6
Other income, net
(39.8
)
(21.7
)
(159.5
)
(63.0
)
Gain associated with the Telenet Wyre
Transaction
(377.8
)
—
(377.8
)
—
Gain on Telenet Tower Sale
—
(7.1
)
—
(700.4
)
Share of results of affiliates, net
240.8
(501.0
)
341.1
(812.6
)
Realized and unrealized losses (gains) due
to changes in fair values of certain investments, net
(71.5
)
2.1
344.8
207.4
Foreign currency transaction gains,
net
(664.4
)
(1,462.7
)
(417.9
)
(3,186.4
)
Realized and unrealized gains on
derivative instruments, net
(177.1
)
(546.9
)
(193.8
)
(1,668.8
)
Interest expense
241.4
149.7
656.0
416.8
Operating income (loss)
(27.4
)
108.9
(39.2
)
192.2
Impairment, restructuring and other
operating items, net
(13.7
)
6.4
6.6
74.1
Depreciation and amortization
584.0
506.0
1,681.8
1,588.4
Share-based compensation expense
54.8
42.7
174.4
143.4
Adjusted EBITDA
597.7
664.0
1,823.6
1,998.1
Property and equipment additions
(365.1
)
(371.7
)
(1,107.7
)
(1,089.6
)
Adjusted EBITDA less P&E Additions
$
232.6
$
292.3
$
715.9
$
908.5
Adjusted EBITDA after leases (Adjusted
EBITDAaL): We define Adjusted EBITDAaL as Adjusted EBITDA as
further adjusted to include finance lease related depreciation and
interest expense. Our internal decision makers believe Adjusted
EBITDAaL is a meaningful measure because it represents a
transparent view of our recurring operating performance that
includes recurring lease expenses necessary to operate our
business. We believe Adjusted EBITDAaL, which is a non-GAAP
measure, is useful to investors because it is one of the bases for
comparing our performance with the performance of other companies
in the same or similar industries, although our measure may not be
directly comparable to similar measures used by other public
companies. Adjusted EBITDAaL should be viewed as a measure of
operating performance that is a supplement to, and not a substitute
for, U.S. GAAP measures of income included in our condensed
consolidated statements of operations.
Adjusted Free Cash Flow (Adjusted FCF)
& Distributable Cash Flow:
- Adjusted FCF: We define Adjusted
FCF as net cash provided by the operating activities of our
continuing operations, plus operating-related vendor financed
expenses (which represents an increase in the period to our actual
cash available as a result of extending vendor payment terms beyond
normal payment terms, which are typically 90 days or less, through
non-cash financing activities), less (i) cash payments in the
period for capital expenditures, (ii) principal payments on
operating- and capital-related amounts financed by vendors and
intermediaries (which represents a decrease in the period to our
actual cash available as a result of paying amounts to vendors and
intermediaries where we previously had extended vendor payments
beyond the normal payment terms), and (iii) principal payments on
finance leases (which represents a decrease in the period to our
actual cash available), each as reported in our condensed
consolidated statements of cash flows with each item excluding any
cash provided or used by our discontinued operations. Net cash
provided by operating activities includes cash paid for third-party
costs directly associated with successful and unsuccessful
acquisition and dispositions of $7.7 million and $9.8 million
during the three months ended September 30, 2023 and 2022,
respectively, and $23.8 million and $32.0 million during the nine
months ended September 30, 2023 and 2022, respectively.
- Distributable Cash Flow: We define
Distributable Cash Flow as Adjusted FCF plus any dividends received
from our equity affiliates that are funded by activities outside of
their normal course of operations, including, for example, those
funded by recapitalizations (referred to as “Other Affiliate
Dividends”).
We believe our presentation of Adjusted FCF and Distributable
Cash Flow, each of which is a non-GAAP measure, provides useful
information to our investors because these measures can be used to
gauge our ability to (i) service debt and (ii) fund new investment
opportunities after consideration of all actual cash payments
related to our working capital activities and expenses that are
capital in nature, whether paid inside normal vendor payment terms
or paid later outside normal vendor payment terms (in which case we
typically pay in less than 365 days). Adjusted FCF and
Distributable Cash Flow should not be understood to represent our
ability to fund discretionary amounts, as we have various mandatory
and contractual obligations, including debt repayments, that are
not deducted to arrive at these amounts. Investors should view
Adjusted FCF and Distributable Cash Flow as supplements to, and not
substitutes for, U.S. GAAP measures of liquidity included in our
condensed consolidated statements of cash flows. Further, our
Adjusted FCF and Distributable Cash Flow may differ from how other
companies define and apply their definition of Adjusted FCF or
other similar measures. Consistent with the basis for our full year
2023 Distributable Cash Flow guidance, the following table provides
a reconciliation of our Full Company net cash provided by operating
activities to Full Company Adjusted FCF and Full Company
Distributable Cash Flow for the indicated periods.
Three months ended
Nine months ended
September 30,
September 30,
2023
2022
2023
2022
in millions
Net cash provided by operating
activities
$
327.1
$
540.5
$
1,326.7
$
1,954.6
Operating-related vendor financing
additions(i)
167.8
165.8
444.5
403.6
Cash capital expenditures, net
(327.8
)
(295.1
)
(1,016.2
)
(945.1
)
Principal payments on operating-related
vendor financing
(202.0
)
(206.8
)
(470.9
)
(529.2
)
Principal payments on capital-related
vendor financing
(48.6
)
(41.5
)
(210.8
)
(125.5
)
Principal payments on finance leases
(18.8
)
(15.4
)
(25.3
)
(46.7
)
Full Company Adjusted FCF
(102.3
)
147.5
48.0
711.7
Other affiliate dividends
411.7
266.9
815.2
266.9
Full Company Distributable Cash Flow
$
309.4
$
414.4
$
863.2
$
978.6
(i)
For purposes of our condensed consolidated
statements of cash flows, operating-related vendor financing
additions represent operating-related expenses financed by an
intermediary that are treated as constructive operating cash
outflows and constructive financing cash inflows when the
intermediary settles the liability with the vendor. When we pay the
financing intermediary, we record financing cash outflows in our
condensed consolidated statements of cash flows. For purposes of
our Adjusted FCF definition, we (i) add in the constructive
financing cash inflow when the intermediary settles the liability
with the vendor as our actual net cash available at that time is
not affected and (ii) subsequently deduct the related financing
cash outflow when we actually pay the financing intermediary,
reflecting the actual reduction to our cash available to service
debt or fund new investment opportunities.
ARPU: Average Revenue Per Unit is
the average monthly subscription revenue per average fixed customer
relationship or mobile subscriber, as applicable. ARPU per average
fixed-line customer relationship is calculated by dividing the
average monthly subscription revenue from residential fixed and
SOHO services by the average number of fixed-line customer
relationships for the period. ARPU per average mobile subscriber is
calculated by dividing mobile subscription revenue for the
indicated period by the average number of mobile subscribers for
the period. Unless otherwise indicated, ARPU per fixed customer
relationship or mobile subscriber is not adjusted for currency
impacts. ARPU per RGU refers to average monthly revenue per average
RGU, which is calculated by dividing the average monthly
subscription revenue from residential and SOHO services for the
indicated period, by the average number of the applicable RGUs for
the period. Unless otherwise noted, ARPU in this release is
considered to be ARPU per average fixed customer relationship or
mobile subscriber, as applicable. Fixed-line customer
relationships, mobile subscribers and RGUs of entities acquired
during the period are normalized. In addition, for purposes of
calculating the percentage change in ARPU on a rebased basis, which
is a non-GAAP measure, we adjust the prior-year subscription
revenue, fixed-line customer relationships, mobile subscribers and
RGUs, as applicable, to reflect acquisitions, dispositions and FX
on a comparable basis with the current year, consistent with how we
calculate our rebased growth for revenue and Adjusted EBITDA, as
further described in the body of this release.
ARPU per Mobile Subscriber: Our
ARPU per mobile subscriber calculation that excludes interconnect
revenue refers to the average monthly mobile subscription revenue
per average mobile subscriber and is calculated by dividing the
average monthly mobile subscription revenue (excluding handset
sales and late fees) for the indicated period, by the monthly
average of the opening and closing balances of mobile subscribers
in service for the period. Our ARPU per mobile subscriber
calculation that includes interconnect revenue increases the
numerator in the above-described calculation by the amount of
mobile interconnect revenue during the period.
Blended, fully-swapped debt borrowing
cost: The weighted average interest rate on our aggregate
variable- and fixed-rate indebtedness (excluding finance leases and
including vendor financing obligations), including the effects of
derivative instruments, original issue premiums or discounts and
commitment fees, but excluding the impact of financing costs. The
weighted average interest rate calculation includes principal
amounts outstanding associated with all of our secured and
unsecured borrowings.
B2B: Business-to-Business.
Customer Churn: The rate at which
customers relinquish their subscriptions. The annual rolling
average basis is calculated by dividing the number of disconnects
during the preceding 12 months by the average number of customer
relationships. For the purpose of computing churn, a disconnect is
deemed to have occurred if the customer no longer receives any
level of service from us and is required to return our equipment. A
partial product downgrade, typically used to encourage customers to
pay an outstanding bill and avoid complete service disconnection,
is not considered to be disconnected for purposes of our churn
calculations. Customers who move within our footprint and upgrades
and downgrades between services are also excluded from the
disconnect figures used in the churn calculation.
Debt and Net Debt Ratios: Our debt
and net debt ratios, which are non-GAAP metrics, are defined as
total debt and net debt, respectively, divided by reported net loss
for the last twelve months (reported LTM net loss) and Adjusted
EBITDA for the last twelve months (LTM Adjusted EBITDA). Net debt
is defined as total debt less cash and cash equivalents and
investments held under SMAs. For purposes of these calculations,
debt is measured using swapped foreign currency rates, consistent
with the covenant calculation requirements of our subsidiary debt
agreements. The following table details the calculation of our debt
and net debt to reported LTM net loss and LTM Adjusted EBITDA
ratios as of and for the twelve months ended September 30, 2023 (in
millions, except ratios):
Reconciliation of reported LTM net loss
to LTM Adjusted EBITDA:
Reported LTM net loss
$
(5,086.4
)
Income tax expense
279.3
Other income, net
(233.7
)
Gain associated with the Telenet Wyre
Transaction
(377.8
)
Gain on Telenet Tower Sale
(0.1
)
Share of results of affiliates, net
2,421.5
Realized and unrealized loss due to
changes in fair values of certain investments, net
439.2
Foreign currency transaction loss, net
1,361.3
Realized and unrealized loss on derivative
instruments, net
283.6
Interest expense
828.5
Operating loss
(84.6
)
Impairment, restructuring and other
operating items, net
17.6
Depreciation and amortization
2,264.8
Share-based compensation expense
223.1
LTM Adjusted EBITDA
$
2,420.9
Debt to reported LTM net loss and LTM
Adjusted EBITDA:
Debt and finance lease obligations before
deferred financing costs, discounts and premiums
$
15,346.0
Principal related projected derivative
cash payments
96.2
Vodafone Collar Loan
(1,330.7
)
Adjusted debt and finance lease
obligations before deferred financing costs, discounts and
premiums
$
14,111.5
Reported LTM net loss
$
(5,086.4
)
Debt to reported LTM net loss ratio
(2.8
)
LTM Adjusted EBITDA
$
2,420.9
Debt to LTM Adjusted EBITDA ratio
5.8
Net Debt to reported LTM net loss and
LTM Adjusted EBITDA:
Adjusted debt and finance lease
obligations before deferred financing costs, discounts and
premiums
$
14,111.5
Cash and cash equivalents and investments
held under SMAs
(3,539.3
)
Adjusted net debt and finance lease
obligations before deferred financing costs, discounts and
premiums
$
10,572.2
Reported LTM net loss
$
(5,086.4
)
Net debt to reported LTM net loss
ratio
(2.1
)
LTM Adjusted EBITDA
$
2,420.9
Net debt to LTM Adjusted EBITDA ratio
4.4
Fixed-Line Customer Relationships:
The number of customers who receive at least one of our internet,
video or telephony services that we count as RGUs, without regard
to which or to how many services they subscribe. Fixed-Line
Customer Relationships generally are counted on a unique premises
basis. Accordingly, if an individual receives our services in two
premises (e.g., a primary home and a vacation home), that
individual generally will count as two Fixed-Line Customer
Relationships. We exclude mobile-only customers from Fixed-Line
Customer Relationships.
Fixed-Mobile Convergence (FMC):
Fixed-mobile convergence penetration represents the number of
customers who subscribe to both a fixed broadband internet service
and postpaid mobile telephony service, divided by the total number
of customers who subscribe to our fixed broadband internet
service.
Homes Passed: Homes, residential
multiple dwelling units or commercial units that can be connected
to our networks without materially extending the distribution
plant. Certain of our Homes Passed counts are based on census data
that can change based on either revisions to the data or from new
census results.
Internet Subscriber: A home,
residential multiple dwelling unit or commercial unit that receives
internet services over our networks, or that we service through a
partner network.
Lightning Premises: Includes homes,
residential multiple dwelling units and commercial premises that
potentially could subscribe to our residential or SOHO services,
which have been connected to the VMO2 JV's networks in the U.K. and
Ireland as a part of the Project Lightning network extension
program. Project Lightning infill build relates to construction in
areas adjacent to our existing network.
Mobile Subscriber Count: For
residential and business subscribers, the number of active SIM
cards in service rather than services provided. For example, if a
mobile subscriber has both a data and voice plan on a smartphone
this would equate to one mobile subscriber. Alternatively, a
subscriber who has a voice and data plan for a mobile handset and a
data plan for a laptop would be counted as two mobile subscribers.
Customers who do not pay a recurring monthly fee are excluded from
our mobile telephony subscriber counts after periods of inactivity
ranging from 30 to 90 days, based on industry standards within the
respective country. In a number of countries, our mobile
subscribers receive mobile services pursuant to prepaid
contracts.
MVNO: Mobile Virtual Network
Operator.
RGU: A Revenue Generating Unit is
separately an Internet Subscriber, Video Subscriber or Telephony
Subscriber. A home, residential multiple dwelling unit, or
commercial unit may contain one or more RGUs. For example, if a
residential customer subscribed to our broadband internet service,
video service and fixed-line telephony service, the customer would
constitute three RGUs. Total RGUs is the sum of Internet, Video and
Telephony Subscribers. RGUs generally are counted on a unique
premises basis such that a given premise does not count as more
than one RGU for any given service. On the other hand, if an
individual receives one of our services in two premises (e.g., a
primary home and a vacation home), that individual will count as
two RGUs for that service. Each bundled internet, video or
telephony service is counted as a separate RGU regardless of the
nature of any bundling discount or promotion. Non-paying
subscribers are counted as subscribers during their free
promotional service period. Some of these subscribers may choose to
disconnect after their free service period. Services offered
without charge on a long-term basis (e.g., VIP subscribers or free
service to employees) generally are not counted as RGUs. We do not
include subscriptions to mobile services in our externally reported
RGU counts. In this regard, our RGU counts exclude our separately
reported postpaid and prepaid mobile subscribers.
SIM: Subscriber Identification
Module.
SOHO: Small or Home Office
Subscribers.
Telephony Subscriber: A home,
residential multiple dwelling unit or commercial unit that receives
voice services over our networks, or that we service through a
partner network. Telephony Subscribers exclude mobile telephony
subscribers.
U.S. GAAP: Accounting principles
generally accepted in the United States.
Video Subscriber: A home,
residential multiple dwelling unit or commercial unit that receives
our video service over our broadband network or through a partner
network.
YoY: Year-over-year.
Appendix - Supplemental Tech Framework Information
During the first quarter of 2023, we changed the terms related
to, and approach to how we reflect the allocation of, charges for
certain products and services that our centrally-managed technology
and innovation function (our T&I Function) provides to
our consolidated reportable segments (the Tech Framework).
These products and services include CPE hardware and related
essential software, maintenance, hosting and other services. As a
result, our consolidated reportable segments now capitalize the
combined cost of the CPE hardware and essential software as
property and equipment additions. The other services, including
maintenance and hosting, continue to be reported as operating costs
in the period incurred (included in our Adjusted EBITDA). The
corresponding amounts charged by our T&I Function are reflected
as revenue when earned. The new Tech Framework is a result of
internal changes with respect to the way in which our chief
operating decision maker evaluates the revenue, Adjusted EBITDA and
property and equipment additions of our consolidated reportable
segments. Segment information has been revised, as applicable, to
reflect these changes. The following table provides a summary of
the impact on the revenue, Adjusted EBITDA and property and
equipment additions of our consolidated reportable segments and
Central and Other.
Three months ended
September 30,
Nine months ended
September 30,
2023
2022
2023
2022
in millions
Increase (decrease) to
revenue(i):
Central and Other
$
65.4
$
60.9
$
184.0
$
180.8
Intersegment eliminations
(65.4
)
(60.9
)
(184.0
)
(180.8
)
Total
$
—
$
—
$
—
$
—
Increase (decrease) to Adjusted
EBITDA(ii):
Switzerland
$
(16.4
)
$
(9.7
)
$
(48.3
)
$
(29.9
)
Belgium
(2.2
)
(2.1
)
(6.6
)
(6.5
)
Ireland
(6.0
)
(3.3
)
(18.0
)
(10.6
)
Central and Other
40.0
29.2
118.5
91.7
Intersegment eliminations
(15.4
)
(14.1
)
(45.6
)
(44.7
)
Total
$
—
$
—
$
—
$
—
Increase (decrease) to property and
equipment additions(iii):
Switzerland
$
5.8
$
5.3
$
17.0
$
16.7
Belgium
7.0
6.4
20.8
20.4
Ireland
2.6
2.4
7.8
7.6
Central and Other
—
—
—
—
Intersegment eliminations
(15.4
)
(14.1
)
(45.6
)
(44.7
)
Total
$
—
$
—
$
—
$
—
_______________
(i)
Amounts reflect the revenue recognized
within our T&I Function, as well as any applicable markup
related to the Tech Framework.
(ii)
Amounts reflect the charge to each
respective consolidated reportable segment related to the service
and maintenance component of the Tech Framework and, additionally
for Central and Other, the Adjusted EBITDA impact of the value
attributed to centrally-held internally developed technology that
is embedded within our various CPE, as well as any applicable
markup.
(iii)
Amounts reflect the charge to each
respective consolidated reportable segment related to the value
attributed to centrally-held internally developed technology that
is embedded within our various CPE, as well as any applicable
markup.
Appendix - Supplemental Adjusted EBITDAaL Information
The following table presents (i) Adjusted EBITDA, (ii) finance
lease-related depreciation and interest expense adjustments, (iii)
Adjusted EBITDAaL and (iv) the percentage change from period to
period for Adjusted EBITDA and Adjusted EBITDAaL on both a reported
and rebased basis for each of our reportable segments.
Three months ended
September 30,
Increase/(decrease)
Nine months ended
September 30,
Increase/(decrease)
2023
2022
Reported %
Rebased %
2023
2022(i)
Reported %
Rebased %
in millions, except %
amounts
Adjusted EBITDA:
Switzerland
$
311.0
$
292.8
6.2
(3.4
)
$
861.1
$
850.3
1.3
(4.3
)
Belgium
339.8
316.6
7.3
(2.6
)
988.7
982.9
0.6
(0.5
)
Ireland
45.9
46.3
(0.9
)
(7.8
)
134.7
141.9
(5.1
)
(6.7
)
Central and Other
(83.6
)
22.4
(437.2
)
N.M.
(115.3
)
68.5
(268.3
)
N.M.
Intersegment eliminations(ii)
(15.4
)
(14.1
)
N.M.
N.M.
(45.6
)
(45.5
)
N.M.
N.M.
Total Adjusted EBITDA
$
597.7
$
664.0
(10.0
)
(16.9
)
$
1,823.6
$
1,998.1
(8.7
)
(10.4
)
VMO2 JV(iii)
$
1,170.9
$
1,060.5
10.4
2.4
$
3,335.6
$
3,515.2
(5.1
)
2.3
VodafoneZiggo JV(iii)
$
518.3
$
501.4
3.4
(4.1
)
$
1,474.7
$
1,530.1
(3.6
)
(5.3
)
Finance lease adjustments:
Switzerland
$
(1.3
)
$
(1.2
)
$
(4.2
)
$
(5.4
)
Belgium
(0.5
)
(17.9
)
(23.7
)
(58.4
)
Central and Other
(1.9
)
(2.0
)
(6.0
)
(6.0
)
Total finance lease adjustments
$
(3.7
)
$
(21.1
)
$
(33.9
)
$
(69.8
)
VMO2 JV(iii)
$
(1.9
)
$
(2.1
)
$
(6.0
)
$
(6.8
)
VodafoneZiggo JV(iii)
$
(2.9
)
$
(1.8
)
$
(7.4
)
$
(6.6
)
Adjusted EBITDAaL:
Switzerland
$
309.7
$
291.6
6.2
(3.3
)
$
856.9
$
844.9
1.4
(4.3
)
Belgium
339.3
298.7
13.6
(2.5
)
965.0
924.5
4.4
1.3
Ireland
45.9
46.3
(0.9
)
(7.8
)
134.7
141.9
(5.1
)
(6.7
)
Central and Other
(85.5
)
20.4
N.M.
N.M.
(121.3
)
62.5
N.M.
N.M.
Intersegment eliminations(ii)
(15.4
)
(14.1
)
N.M.
N.M.
(45.6
)
(45.5
)
N.M.
N.M.
Total Adjusted EBITDAaL
$
594.0
$
642.9
(7.6
)
(16.9
)
$
1,789.7
$
1,928.3
(7.2
)
(9.7
)
VMO2 JV(iii)
$
1,169.0
$
1,058.4
10.4
10.3
$
3,329.6
$
3,508.4
(5.1
)
1.5
VodafoneZiggo JV(iii)
$
515.4
$
499.6
3.2
(4.2
)
$
1,467.3
$
1,523.5
(3.7
)
(5.3
)
______________________
N.M. - Not Meaningful
(i)
Amounts have been revised, as applicable,
to reflect the retrospective impact of the Tech Framework, as
described above.
(ii)
Amounts relate to (i) the Adjusted EBITDA
impact to Central and Other of the value attributed to
centrally-held internally developed technology that is embedded
within our various CPE, as well as any applicable markup, and (b)
for 2022, transactions between our continuing and discontinued
operations.
(iii)
Amounts reflect 100% of the 50:50
non-consolidated VMO2 JV and VodafoneZiggo JV.
Appendix - Foreign Currency Information
The following table presents the relationships between the
primary currencies of the countries in which we operate and the
U.S. dollar, which is our reporting currency, per one U.S.
dollar:
September 30, 2023
December 31, 2022
Spot rates:
Euro
0.9454
0.9337
Swiss franc
0.9146
0.9219
British pound sterling
0.8193
0.8265
Polish zloty
4.3689
4.3686
Three months ended
September 30,
Nine months ended
September 30,
2023
2022
2023
2022
Average rates:
Euro
0.9192
0.9935
0.9232
0.9412
Swiss franc
0.8835
0.9669
0.9025
0.9518
British pound sterling
0.7900
0.8508
0.8039
0.7974
Polish zloty
4.1389
4.7124
4.2337
4.3972
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231031889580/en/
Investor Relations Michael Bishop +44 20 8483 6246
Michael Khehra +44 78 9005 0979
Corporate Communications Bill Myers +1 303 220 6686 Matt
Beake +44 20 8483 6428
Liberty Global (NASDAQ:LBTYA)
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