Significant progress against strategy to create and deliver
value to shareholders, with Sunrise spin-off anticipated
Q4'24
Strong balance sheet, including $3.9 billion(i) of cash and
liquid securities; proactively refinanced >$2bn of 2027
maturities at VMO2
Investment in fixed and mobile networks continues, with FTTH
programs on track in the U.K., Belgium and Ireland
Q1 financial performance in line with expectations and fully
on track to achieve all full-year guidance targets
Liberty Global Ltd. today announced its Q1 2024 financial
results.
CEO Mike Fries stated, “On our extended fourth quarter results
call we presented a clear pivot in our strategy which will see us
not only focus on maximizing the long-term value of our core FMC
assets, but also delivering that value directly to shareholders
over time. During Q1 we made significant progress on the
initiatives we announced, including our plan to spin-off Sunrise,
which is on track for Q4 this year.
Our balance sheet remains in great shape, with $3.9 billion(i)
of cash and liquid securities, supported by strong Adjusted FCF
generation and the ability to replenish liquidity through asset
sales. We recently completed a proactive $2.4 billion VMO2
refinancing where we successfully extended the average life of our
total U.K. debt stack with a negligible impact to VMO2's WACD. We
remain committed to shareholder remuneration, having already
repurchased ~3% of our shares through April 26th against our target
of up to 10% of shares by year-end. Meanwhile our Ventures
portfolio, valued at $3.4 billion, represents an attractive
platform to support our FMC operations, drive returns, and create
significant value over time.
We continue to invest in our fiber-rich, fixed and 5G mobile
networks and, while this is driving elevated capital intensity
today, it remains critical to underpinning the long-term asset
values of our OpCos. Our fiber upgrade projects in the U.K.,
Belgium and Ireland remain on track, and nexfibre recently
announced it had reached the milestone of one million premises1
built in the U.K., as VMO2 fiber build capacity continues to ramp
up. Meanwhile, we're continuing to invest in digital and AI
initiatives to support commercial momentum and efficiencies.
Our overall financial performance in Q1 was in line with
expectations, highlighted by the return to strong Adjusted EBITDA
growth in the Netherlands and the return to positive broadband net
adds in Switzerland. Fixed ARPU trends in the U.K. and Switzerland
improved while our businesses in Belgium and the Netherlands each
delivered continued fixed ARPU growth. We are on track to meet our
full-year 2024 guidance metrics across all OpCos, with price
adjustments recently announced in the U.K., the Netherlands and
Belgium to support our financial targets."
(i)
Including amounts held under separately
managed accounts (SMAs) and our investments in ITV, Lionsgate,
Vodafone and All3Media.
Q1 Operating Company Highlights
Sunrise (Consolidated)
Sunrise delivered a return to positive broadband net adds and
a solid financial performance in Q1
Operating highlights: During Q1,
Sunrise delivered 6,200 broadband net adds, primarily driven by an
improved main brand performance from customer loyalty initiatives,
as well as continued trading momentum in flanker brands. In mobile,
Sunrise continued to drive commercial momentum, delivering 26,000
postpaid net adds. FMC penetration remains high at 59% across the
Sunrise broadband base. The spin-off is on track for Q4'24.
Financial highlights: Revenue of
$854.0 million in Q1 2024 increased 5.8% YoY on a reported basis
and was flat on a rebased2 basis. The flat rebased result was
mainly due to (i) the positive impact of last year's July price
rise and (ii) continued momentum in mobile subscription and B2B,
offset by lower handset revenues. Adjusted EBITDA increased 6.2%
YoY on a reported basis and 0.4% on a rebased basis to $279.3
million in Q1 2024, including $2 million of costs to capture3. The
rebased increase was mainly due to lower costs to capture. Adjusted
EBITDA less P&E Additions of $129.4 million in Q1 increased
13.5% YoY on a reported basis and 7.6% on a rebased basis,
including $6 million of opex and capex costs to capture.
Telenet (Consolidated)
Telenet has a solid start to 2024, on track to deliver on
full-year guidance
Operating highlights: During Q1,
Telenet's postpaid mobile base declined by 800 while its broadband
base declined by 6,000. The net subscriber trend in the first
quarter continued to be impacted by higher annualized churn from
the intensely competitive market environment, which more than
offset the improved sales performance from Telenet's latest
marketing campaigns. Wyre, Telenet's NetCo partnership with
Fluvius, in which it holds a majority 66.8% stake, is well on track
to achieve its FTTH rollout plan, whilst continuing to explore ways
in which it can maximize efficiency of such rollout. FMC
penetration remains high at 49% of the broadband base. In April,
Telenet extended its digital ecosystem through Blossom, an
"all-in-one" digital solution for the installation of charging
stations and smart charging for electric cars.
Financial highlights: Revenue of
$762.6 million in Q1 2024 increased 1.1% YoY on a reported basis
and decreased 0.5% on a rebased basis. The rebased decrease was
primarily driven by the net effect of (i) a decrease in B2B
wholesale revenue following the expected loss of the VOO MVNO
contract, (ii) a decline in the fixed customer base and (iii) lower
interconnect revenue, partially offset by the benefit of the June
2023 price rise. Adjusted EBITDA increased 1.8% YoY on a reported
basis and 0.2% on a rebased basis to $308.4 million in Q1,
primarily due to the net effect of (a) lower programming and
interconnect costs and (b) lower energy costs, partially offset by
higher staff-related expenses following the mandatory 1.5% wage
indexation as of January 2024 and growth in the overall FTE base.
Reported and rebased Adjusted EBITDA less P&E Additions
decreased 4.0% and 5.9%, respectively, to $124.7 million in Q1.
VMO2 (Non-consolidated Joint Venture)
VMO2 sets up for 2024 execution with focused investments in
Q1
Operating highlights: VMO2's fixed
customer base declined by 2,000 in Q1, primarily driven by a
reduction in gross adds, as a slowdown in customer activity in the
fixed market offset growth in nexfibre areas. VMO2's premium fixed
ARPU was broadly stable for the second consecutive quarter ahead of
price rises being implemented in Q2. The broadband base grew by
5,300 in Q1, while growth in broadband speeds continued, as average
download speed increased 17% YoY to 368Mbps. In line with its
continued broadband innovation, VMO2 became the first major UK
provider to publicly launch a residential 2Gbps service in
February, with the new services initially available across the
nexfibre network. In mobile, the postpaid base declined by 74,500
in Q1, driven by a reduction in handset sales and disconnections
related to the decommissioning of a legacy billing system. During
Q1, VMO2 built 194,000 premises, the majority of which were FTTH
homes built for the nexfibre JV, representing an increase in build
pace of 80% YoY. The milestone of one million nexfibre premises
built was achieved in April, highlighting the ramp up of the VMO2
fiber build capacity.
Financial highlights (in U.S.
GAAP)4: Revenue9 of $3,282.8 million in Q1 2024 increased
3.8% YoY on a reported basis and decreased 0.5% YoY on a rebased
basis. The rebased decrease was primarily due to the net effect of
(i) an increase in other revenue due to low-margin construction
revenue from the nexfibre JV, (ii) a decrease in mobile revenue due
to lower handset sales and (iii) a decrease in B2B fixed revenue,
with each revenue category as defined and reported by the VMO2 JV.
Q1 Adjusted EBITDA9 increased 4.6% YoY on a reported basis and 0.3%
YoY on a rebased basis to $1,073.6 million, including $14 million
of opex costs to capture. The YoY increase in Adjusted EBITDA was
primarily due to the net effect of (a) a benefit of approximately
$15 million during 2024 related to higher capitalized costs by the
VMO2 JV due to a change in the terms of a related-party contract
and (b) investment in IT and digital efficiency programs. Q1
Adjusted EBITDA less P&E Additions9 decreased 10.9% YoY on a
reported basis and 14.7% YoY on a rebased basis to $387.8 million,
including $39 million of opex and capex costs to capture.
Financial highlights (in IFRS):
Revenue of £2,588.8 million ($3,282.8 million) in Q1 2024 decreased
0.5% YoY on a rebased basis. Q1 Adjusted EBITDA of £925.7 million
($1,173.9 million), including costs to capture, decreased 0.2% YoY
on a rebased basis. Q1 Adjusted EBITDA less P&E Additions of
£278.2 million ($352.8 million), including costs to capture,
decreased 29.3% 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
Q1 earnings release.
VodafoneZiggo (Non-consolidated Joint Venture)
VodafoneZiggo delivers a solid financial performance in Q1,
confirming 2024 guidance
Operating highlights: During Q1,
FMC5 net adds increased by 22,700 to almost 2.7 million, delivering
significant Net Promoter Scores along with customer loyalty
benefits. FMC penetration remained stable at 48%. Mobile postpaid
net adds grew 22,300 alongside growth in mobile postpaid ARPU of
3.4% YoY, supported by the price indexation implemented in October.
The broadband base contracted by 23,500 in the quarter, a 3,000
improvement compared to Q4, as a 26,600 decline in Consumer was
only partially offset by a 3,100 increase in B2B.
Financial highlights: Revenue
increased 2.8% YoY on a reported basis and 1.6% YoY on a rebased
basis to $1,114.0 million in Q1. The rebased increase was primarily
due to continued growth in mobile and B2B fixed revenue, partially
offset by a decline in the B2C fixed customer base. Adjusted EBITDA
increased 10.1% YoY on a reported basis and 8.8% on a rebased basis
to $519.0 million in Q1. The rebased increase was primarily driven
by lower energy costs and the phasing of wage increases. Adjusted
EBITDA less P&E Additions increased 24.1% YoY on a reported
basis and 22.6% on a rebased basis to $274.3 million in Q1.
Q1 ESG Highlights
Since the launch of our ESG strategy "People Planet Progress" in
2023, we have remained steadfast in our commitment to fostering
inclusivity, sustainability and responsibility across the
business.
With our People agenda we are working towards a high
performing, inclusive company for our employees, where everyone is
valued and respected, and where we have a positive impact on each
other and our communities. We have utilized results from our annual
Diversity Equity & Inclusivity survey to focus our work on what
matters most for our people. We continue to hold ourselves
accountable through our ambitions to progress gender diversity in
all areas of the business and empower our people to feel that they
can be themselves at work.
Our Planet agenda reflects our commitment to the
environment and efforts to be a sustainable company. Recognizing
the significant impact of our supply chain emissions, we have taken
proactive steps to accelerate our supplier engagement. In Q1, our
Liberty Procurement Services introduced a new Responsible Supplier
Code of Conduct and supplier assessment procedure, which includes
our latest ESG requirements and criteria to advance alignment
across carbon emissions reductions and human rights priorities.
On Progress, we have been making further strides to
demonstrate our commitment to transparency and responsibility. In
Q1 we received the scores of the CDP benchmark (formerly the Carbon
Disclosure Project), where we have been upgraded to B grade,
reflecting our enhanced focus on our Planet strategy, and upgrade
to B- for our work in supplier engagement. CDP is a not-for-profit
charity that runs the global disclosure system for investors,
companies, cities, states, and regions to manage their
environmental impacts.
In April, VodafoneZiggo published its Integrated Annual Report,
including company performance across ESG matters. In 2023,
VodafoneZiggo conducted its first double materiality analysis to
identify the most relevant themes for the company and its
stakeholders. They also made progress against their 2025 ambitions,
reaching 194,000 people through their social programs, as well as
reducing their environmental footprint. VodafoneZiggo aims to
reduce its emissions by 50% by 2025 compared to 2018, and as of
last year, had achieved a total reduction of 44% compared to 2018.
To reduce its environmental impact, the company improved the energy
efficiency of its network and products, increased focus on
digitization and cloud-based solutions, continued to deploy
electric vehicles for use by technicians, and supported sustainable
commuting for employees.
We will publish our annual Liberty Global Corporate
Responsibility Report, highlighting the successes and progress of
our entire business and operations, this summer.
Liberty Global Consolidated Q1 Highlights
- Q1 revenue increased 4.1% YoY on a reported basis and 1.9% on a
rebased basis to $1,945.1 million
- Q1 net earnings (loss) increased 173.9% YoY on a reported basis
to $527.0 million
- Q1 Adjusted EBITDA decreased 6.9% YoY on a reported basis and
6.8% on a rebased basis to $581.4 million
- Q1 property & equipment additions were 18.8% of revenue, as
compared to 20.9% in Q1 2023
- Balance sheet with $4.7 billion of total liquidity6
- Comprised of nearly $1.2 billion of cash, $2.0 billion of
investments held under SMAs and $1.5 billion of unused borrowing
capacity7
- Blended, fully-swapped borrowing cost of 3.4% on a debt balance
of $15.7 billion
Liberty Global
Q1 2024
Q1 2023
YoY Change (reported)
YoY Change (rebased)
Customers
Organic customer net losses
(18,800
)
(16,500
)
Financial
(in millions, except percentages)
Revenue
$
1,945.1
$
1,868.4
4.1
%
1.9
%
Net earnings (loss)
$
527.0
$
(713.5
)
173.9
%
Adjusted EBITDA
$
581.4
$
624.5
(6.9
%)
(6.8
%)
P&E additions
$
365.1
$
389.9
(6.4
%)
Adjusted EBITDA less P&E Additions
$
216.3
$
234.6
(7.8
%)
(2.5
%)
Cash provided by operating activities
$
245.7
$
307.8
(20.2
%)
Cash used by investing activities
$
(211.7
)
$
(1,423.2
)
85.1
%
Cash provided (used) by financing
activities
$
(284.0
)
$
813.8
(134.9
%)
Adjusted FCF
$
(185.4
)
$
(178.4
)
3.9
%
Distributable Cash Flow
$
(185.4
)
$
19.9
(1,031.7
%)
Customer Growth
Three months ended
March 31,
2024
2023
Organic customer net additions (losses)
by market
Sunrise
(800
)
2,300
Telenet
(14,900
)
(15,100
)
VM Ireland
(1,300
)
(2,500
)
UPC Slovakia
(1,800
)
(1,200
)
Total
(18,800
)
(16,500
)
VMO2 JV(i)
(2,000
)
20,900
VodafoneZiggo JV(ii)
(35,200
)
(3,500
)
______________________
(i)
Fixed-line customer counts for the VMO2 JV
exclude Upp customers.
(ii)
Fixed-line customer counts for the
VodafoneZiggo JV include certain B2B customers.
Net earnings (loss)
Net earnings (loss) was $527.0 million and ($713.5 million) for
the three months ended March 31, 2024 and 2023, 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. 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)
March 31,
Revenue
2024
2023
Reported %
Rebased %
in millions, except %
amounts
Sunrise
$
854.0
$
807.4
5.8
—
Telenet
762.6
754.5
1.1
(0.5
)
VM Ireland
123.0
123.0
—
(1.2
)
Central and Other
269.6
244.5
10.3
20.3
Intersegment eliminations(i)
(64.1
)
(61.0
)
N.M.
N.M.
Total
$
1,945.1
$
1,868.4
4.1
1.9
VMO2 JV(ii)
$
3,282.8
$
3,162.7
3.8
(0.5
)
VodafoneZiggo JV(ii)
$
1,114.0
$
1,083.4
2.8
1.6
______________________ N.M. - Not Meaningful (i)
Amounts primarily relate to the revenue
recognized within our T&I Function related to the Tech
Framework. For additional information on the Tech Framework, see
the Glossary.
(ii)
Amounts reflect 100% of the 50:50
non-consolidated VMO2 JV and VodafoneZiggo JV's revenue.
Three months ended
Increase/(decrease)
March 31,
Adjusted EBITDA
2024
2023
Reported %
Rebased %
in millions, except %
amounts
Sunrise
$
279.3
$
263.0
6.2
0.4
Telenet
308.4
302.9
1.8
0.2
VM Ireland
40.0
41.5
(3.6
)
(4.9
)
Central and Other(i)
(31.0
)
32.1
N.M.
N.M.
Intersegment eliminations(ii)
(15.3
)
(15.0
)
N.M.
N.M.
Total
$
581.4
$
624.5
(6.9
)
(6.8
)
VMO2 JV(iii)(iv)
$
1,073.6
$
1,025.9
4.6
0.3
VodafoneZiggo JV(iii)
$
519.0
$
471.5
10.1
8.8
______________________
N.M. - Not Meaningful (i)
2024 amount includes development costs
related to our internally-developed software subsequent to our
decision to externally market such software during the second
quarter of 2023.
(ii)
Amounts relate to the Adjusted EBITDA
impact within our T&I Function related to the Tech Framework.
For additional information on the Tech Framework, see the
Glossary.
(iii)
Amounts reflect 100% of the 50:50
non-consolidated VMO2 JV and VodafoneZiggo JV's Adjusted
EBITDA.
(iv)
2024 amount for the VMO2 JV includes a
benefit of approximately $15 million related to higher capitalized
costs by the VMO2 JV due to a change in the terms of a
related-party contract.
Three months ended
Increase/(decrease)
Adjusted EBITDA less P&E
Additions
March 31,
2024
2023
Reported %
Rebased %
in millions, except %
amounts
Sunrise
$
129.4
$
114.0
13.5
7.6
Telenet
124.7
129.9
(4.0
)
(5.9
)
VM Ireland
0.6
8.4
(92.9
)
(93.6
)
Central and Other
(38.4
)
(17.7
)
(116.9
)
9.4
Total
$
216.3
$
234.6
(7.8
)
(2.5
)
VMO2 JV(i)
$
387.8
$
435.3
(10.9
)
(14.7
)
VodafoneZiggo JV(i)
$
274.3
$
221.1
24.1
22.6
______________________
N.M. - Not Meaningful (i)
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: $15.7 billion
- Average debt tenor8: 4.6 years,
with ~10% not due until 2030 or thereafter
- Borrowing costs: Blended,
fully-swapped cost of debt was 3.4%
- Liquidity: $4.7 billion, including
(i) nearly $1.2 billion of cash at March 31, 2024, (ii) $2.0
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, operating and capital expenses, property and equipment
additions, Adjusted Free Cash Flow and Distributable Cash Flow, as
well as the 2024 financial guidance provided by us and our
operating companies and joint ventures, which includes expected
capital intensity; our future strategies for maximizing and
creating value for our shareholders; the anticipated spin-off of
our Swiss operating company, Sunrise, including the timing of the
anticipated closing and the hosting of a capital markets day; the
pricing strategies at our operating companies and our joint
ventures; the expected drivers of future financial performance at
our operating companies and our joint ventures; expectations with
respect to a fiber rollout plan by our joint venture, Wyre, in
Belgium, along with future efforts to maximize efficiencies of such
rollout; our, our affiliates' and our joint ventures' plans with
respect to networks, products and services and the investments in
such networks, products and services; our strategic plans for our
ventures portfolio, including expected capital rotation; our, our
affiliates' and our joint ventures' commitments and aspirations
with respect to ESG through our People Planet Progress strategy;
our share repurchase program, including the percentage amount of
shares we intend to repurchase during the year; 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; 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, our affiliates’ and our joint
ventures' 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 and Form 10-Q.
These forward-looking statements speak only as of the date of this
release. We expressly disclaim any obligation or undertaking to
disseminate any updates or revisions to any forward-looking
statement contained herein to reflect any change in our
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is
based.
Share Repurchase Program
Our share buyback plan for 2024 authorized the repurchase of up
to 10% of our outstanding shares as of December 31, 2023. Under the
program, Liberty Global may acquire from time to time its Class A
common shares, Class C common 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
Liberty Global and other financial institutions with whom Liberty
Global 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. Our businesses operate under some of the
best-known consumer brands, including Sunrise in Switzerland,
Telenet in Belgium, Virgin Media in Ireland, UPC in Slovakia,
Virgin Media-O2 in the U.K. and VodafoneZiggo in The Netherlands.
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.
Liberty Global's consolidated businesses generate annual revenue
of more than $7 billion, while the VMO2 JV and the VodafoneZiggo JV
generate combined annual revenue of more than $18 billion.**
Liberty Global Ventures, our global investment arm, has a
portfolio of more than 75 companies and funds across the content,
technology and infrastructure industries, including 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 2023
Liberty Global consolidated results and the combined as reported
full year 2023 results for the VodafoneZiggo JV and full year 2023
U.S. GAAP results for the VMO2 JV.
Sunrise, Telenet, the VMO2 JV and the VodafoneZiggo JV deliver
mobile services as mobile network operators. Virgin Media Ireland
delivers mobile services as a mobile virtual network operator
through third-party networks. UPC Slovakia delivers mobile services
as a reseller of SIM cards.
Liberty Global Ltd. is listed on the Nasdaq Global Select Market
under the symbols "LBTYA", "LBTYB" and "LBTYK".
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 2024, we
have adjusted our historical revenue, Adjusted EBITDA and Adjusted
EBITDA less P&E Additions for the three months ended March 31,
2023 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 months ended March 31, 2024,
(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 months
ended March 31, 2024, (iii) include in our rebased amounts the
revenue and costs for the temporary elements of transitional and
other services provided to iliad, Vodafone and Deutsche Telekom, to
reflect amounts related to these services equal to those included
in our results for the three months ended March 31, 2024 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 months ended March 31, 2024. We have
reflected the revenue, Adjusted EBITDA and P&E additions of
these acquired entities in our 2023 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 2023
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 March 31,
2023
Revenue
Adjusted EBITDA
Adjusted EBITDA less P&E
Additions
in millions
Consolidated Liberty Global:
Acquisitions and dispositions(i)
$
(19.7
)
$
(20.5
)
$
(20.5
)
Foreign currency
60.1
19.8
7.7
Total
$
40.4
$
(0.7
)
$
(12.8
)
VMO2 JV(ii):
Foreign currency
$
137.4
$
44.6
$
19.1
VodafoneZiggo JV(ii):
Foreign currency
$
12.6
$
5.4
$
2.6
______________________
(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 and Deutsche Telekom. These adjustments result in an equal
amount of fees in both the 2024 and 2023 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.
Liquidity
The following table(i) details the U.S. dollar equivalents of
our liquidity position at March 31, 2024, 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
$
227.8
$
2,029.5
$
—
$
2,257.3
Telenet
894.5
—
664.0
1,558.5
Sunrise Holding
15.9
—
763.4
779.3
VM Ireland
1.4
—
108.0
109.4
Total
$
1,139.6
$
2,029.5
$
1,535.4
$
4,704.5
______________________
(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 March 31, 2024 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
Sunrise Holding
$
6,393.8
$
27.7
$
6,421.5
$
351.7
$
6,773.2
Telenet
6,867.0
3.7
6,870.7
(137.7
)
6,733.0
VM Ireland
971.7
—
971.7
—
971.7
Other(iii)
1,370.0
20.9
1,390.9
—
1,390.9
Total
$
15,602.5
$
52.3
$
15,654.8
$
214.0
$
15,868.8
______________________
(i)
Except as otherwise indicated, the amounts
reported in the table include the named entity and its
subsidiaries.
(ii)
Debt amounts for Sunrise Holding include
notes issued by special purpose entities that are consolidated by
Sunrise Holding.
(iii)
Debt amount includes a loan of $1,358.2
million backed by the shares we hold in Vodafone Group plc.
Property and Equipment Additions and Capital
Expenditures
The table below highlights the categories of property and
equipment additions for the indicated periods and reconciles those
additions to the capital expenditures that are presented in the
condensed consolidated statements of cash flows in our 10-Q.
Three months ended
March 31,
2024
2023
in millions, except %
amounts
Customer premises equipment (CPE)
$
52.1
$
69.3
New build & upgrade
71.4
28.1
Capacity
36.1
56.0
Baseline
140.3
137.0
Product & enablers
65.2
99.5
Total P&E additions
365.1
389.9
Reconciliation of P&E additions to
capital expenditures:
Assets acquired under capital-related
vendor financing arrangements(i)
(39.8
)
(42.3
)
Assets acquired under finance leases
(0.5
)
(7.3
)
Changes in current liabilities related to
capital expenditures
26.0
36.9
Total capital expenditures, net(ii)
$
350.8
$
377.2
P&E additions as % of revenue
18.8
%
20.9
%
______________________
(i)
Amounts exclude related VAT of $5.1
million and $6.7 million for the three months ended March 31, 2024
and 2023, 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 March
31,
Increase/(decrease)
2024
2023
Reported %
Rebased %
Liberty Global
$
66.69
$
63.80
4.5
%
1.8
%
VM Ireland
€
61.99
€
61.70
0.5
%
0.5
%
Telenet
€
61.59
€
59.40
3.7
%
3.7
%
Sunrise Holding
€
61.09
€
59.13
3.3
%
(0.8
%)
Mobile ARPU
The following tables provide ARPU per mobile subscriber and
percentage change from period to period on both a reported and
rebased basis for the indicated periods:
ARPU per Mobile
Subscriber
Three months ended March
31,
Increase/(decrease)
2024
2023
Reported %
Rebased %
Liberty Global:
Including interconnect revenue
$
27.04
$
25.91
4.4
%
(0.3
%)
Excluding interconnect revenue
$
25.02
$
23.68
5.7
%
1.0
%
Operating Data — March 31,
2024
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:
Sunrise(v)
2,722,400
1,467,200
1,186,600
1,193,900
921,700
3,302,200
2,493,100
2,854,200
Telenet(vi)
4,200,600
1,992,600
1,724,400
1,637,100
912,900
4,274,400
2,676,500
2,899,100
VM Ireland
987,100
401,500
368,200
222,800
191,000
782,000
134,200
134,200
UPC Slovakia
642,800
175,400
143,800
158,900
87,000
389,700
—
—
Total Liberty Global
8,552,900
4,036,700
3,423,000
3,212,700
2,112,600
8,748,300
5,303,800
5,887,500
VMO2 JV(vii)
16,205,600
5,824,800
5,722,900
12,629,000
15,988,600
35,373,500
VodafoneZiggo JV(viii)
7,533,200
3,517,800
3,183,600
3,491,700
1,434,700
8,110,000
5,324,100
5,651,600
Subscriber Variance Table —
March 31, 2024 vs. December 31, 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:
Sunrise(v)
8,700
(800
)
6,200
(5,800
)
(12,500
)
(12,100
)
26,000
17,900
Telenet(vi)
7,200
(14,900
)
(6,000
)
(20,600
)
(21,300
)
(47,900
)
(800
)
(11,400
)
VM Ireland
4,200
(1,300
)
(300
)
(5,100
)
(14,800
)
(20,200
)
(200
)
(200
)
UPC Slovakia
400
(1,800
)
(1,000
)
(2,800
)
(500
)
(4,300
)
—
—
Total Liberty Global
20,500
(18,800
)
(1,100
)
(34,300
)
(49,100
)
(84,500
)
25,000
6,300
Q1 2024 Liberty
Global Adjustments:
Sunrise
6,000
—
—
—
—
—
—
—
Telenet(ix)
580,000
—
—
—
—
—
—
—
Total adjustments
586,000
—
—
—
—
—
—
—
VMO2 JV(vii)
7,200
(2,000
)
5,300
(77,400
)
(74,500
)
157,200
VodafoneZiggo JV(viii)
16,600
(35,200
)
(23,500
)
(33,000
)
(86,400
)
(142,900
)
22,300
9,600
Q1 2024 Joint
Ventures Adjustments:
VMO2 JV
—
—
—
—
—
—
(59,200
)
—
Total adjustments
—
—
—
—
—
—
(59,200
)
—
Footnotes for Operating Data and Subscriber Variance
Tables
______________________
(i)
At Sunrise, we offer a 10 Mbps internet
service to our Video Subscribers without an incremental recurring
fee. Our Internet Subscribers at Sunrise include approximately
39,100 subscribers who have requested and received this
service.
(ii)
We have approximately 30,000 “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)
At Sunrise, we offer a basic phone service
to our Video Subscribers without an incremental recurring fee. Our
Telephony Subscribers at Sunrise include approximately 115,200
subscribers who have requested and received this service.
(iv)
In a number of countries, our mobile
subscribers receive mobile services pursuant to prepaid contracts.
As of March 31, 2024, our mobile subscriber count included
approximately 361,100, 222,600, 7,495,600 and 327,500 prepaid
mobile subscribers at Sunrise, Telenet, 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 9,709,800
that are included in the total mobile subscriber count as defined
and presented by the VMO2 JV.
(v)
Pursuant to service agreements, Sunrise
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 Sunrise's homes passed count as we do not own these
networks. Including these arrangements, our operations at Sunrise
have the ability to offer fixed services to the national
footprint.
(vi)
Includes 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.
(ix)
Represents the aggregate effect of
adjustments to correct the understatement of our and Telenet's
December 31, 2023 reported Homes Passed.
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
1
VMO2 JV has access to and acts as the
anchor tenant to homes passed on the nexfibre partner network.
2
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.
3
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.
4
This release includes the actual U.S. GAAP
results for the VMO2 JV for the three months ended March 31, 2024
and 2023. 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 Q1
earnings release.
5
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.
6
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.
7
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 March 31, 2024 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
March 31, 2024.
8
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 2030
or thereafter includes all of these amounts.
9
The U.S. GAAP YoY growth rates for the
VMO2 JV are impacted by recurring U.S. GAAP to IFRS accounting
differences, as further described and reconciled below.
Three months ended
March 31,
2024
2023
in millions
Revenue:
U.S. GAAP revenue
$
3,282.8
$
3,162.7
U.S. GAAP/IFRS adjustments
—
—
IFRS revenue
$
3,282.8
$
3,162.7
Adjusted EBITDA:
U.S. GAAP Adjusted EBITDA
$
1,073.6
$
1,025.9
U.S. GAAP/IFRS adjustments(i)
100.3
101.8
IFRS Adjusted EBITDA (including costs to
capture)
$
1,173.9
$
1,127.7
Property & equipment
additions:
U.S. GAAP P&E additions
$
685.8
$
590.6
U.S. GAAP/IFRS adjustments(i)
135.3
59.1
IFRS P&E additions (including costs to
capture)
$
821.1
$
649.7
Adjusted EBITDA less P&E
additions:
U.S. GAAP Adjusted EBITDA less P&E
additions
$
387.8
$
435.3
U.S. GAAP/IFRS adjustments(i)
(35.0
)
42.7
IFRS Adjusted EBITDA less P&E
additions (including costs to capture)
$
352.8
$
478.0
______________________
(i)
U.S. GAAP/IFRS differences primarily
relate to (a) the VMO2 JV's investment in CTIL and (b) 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 net earnings (loss) before net income tax benefit
(expense), other non-operating income or expenses, net share of
results of affiliates, net gains (losses) on debt extinguishment,
net realized and unrealized gains (losses) due to changes in fair
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 net earnings (loss) to Adjusted
EBITDA and Adjusted EBITDA less P&E Additions is presented in
the following table:
Three months ended
March 31,
2024
2023
in millions
Net earnings (loss)
$
527.0
$
(713.5
)
Income tax expense
26.9
12.5
Other income, net
(43.5
)
(43.9
)
Share of results of affiliates, net
8.0
238.6
Realized and unrealized losses (gains) due
to changes in fair values of certain investments, net
(114.9
)
5.5
Foreign currency transaction losses
(gains), net
(69.1
)
302.9
Realized and unrealized losses (gains) on
derivative instruments, net
(565.3
)
34.4
Interest expense
253.5
200.9
Operating income
22.6
37.4
Impairment, restructuring and other
operating items, net
33.5
16.4
Depreciation and amortization
480.7
526.9
Share-based compensation expense
44.6
43.8
Adjusted EBITDA
581.4
624.5
Property and equipment additions
(365.1
)
(389.9
)
Adjusted EBITDA less P&E Additions
$
216.3
$
234.6
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 operating activities, 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 $5.2 million and $11.6 million
during the three months ended March 31, 2024 and 2023,
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. The following table provides a
reconciliation of our net cash provided by operating activities to
Adjusted FCF and Distributable Cash Flow for the indicated
periods.
Three months ended
March 31,
2024
2023
in millions
Net cash provided by operating
activities
$
245.7
$
307.8
Operating-related vendor financing
additions(i)
159.8
141.4
Cash capital expenditures, net
(350.8
)
(377.2
)
Principal payments on operating-related
vendor financing
(191.0
)
(143.5
)
Principal payments on capital-related
vendor financing
(45.1
)
(104.5
)
Principal payments on finance leases
(4.0
)
(2.4
)
Adjusted FCF
(185.4
)
(178.4
)
Other affiliate dividends
—
198.3
Distributable Cash Flow
$
(185.4
)
$
19.9
_______________
(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
(or WACD): 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 March 31, 2024 (in
millions, except ratios):
Reconciliation of reported LTM net loss
to LTM Adjusted EBITDA:
Reported LTM net loss
$
(2,633.3
)
Income tax expense
164.0
Other income, net
(225.1
)
Gain associated with the Telenet Wyre
Transaction
(377.8
)
Share of results of affiliates, net
1,788.7
Loss on debt extinguishment, net
1.4
Realized and unrealized loss due to
changes in fair values of certain investments, net
436.9
Foreign currency transaction gain, net
(301.2
)
Realized and unrealized gain on derivative
instruments, net
(73.4
)
Interest expense
960.5
Operating loss
(259.3
)
Impairment, restructuring and other
operating items, net
85.0
Depreciation and amortization
2,269.0
Share-based compensation expense
231.8
LTM Adjusted EBITDA
$
2,326.5
Debt to reported LTM net loss and LTM
Adjusted EBITDA:
Debt and finance lease obligations before
deferred financing costs, discounts and premiums
$
15,654.8
Principal related projected derivative
cash payments
214.0
Vodafone Collar Loan
(1,358.2
)
Adjusted debt and finance lease
obligations before deferred financing costs, discounts and
premiums
$
14,510.6
Reported LTM net loss
$
(2,633.3
)
Debt to reported LTM net loss ratio
(5.5
)
LTM Adjusted EBITDA
$
2,326.5
Debt to LTM Adjusted EBITDA ratio
6.2
Net Debt to reported LTM net loss and
LTM Adjusted EBITDA:
Adjusted debt and finance lease
obligations before deferred financing costs, discounts and
premiums
$
14,510.6
Cash and cash equivalents and investments
held under SMAs
(3,169.1
)
Adjusted net debt and finance lease
obligations before deferred financing costs, discounts and
premiums
$
11,341.5
Reported LTM net loss
$
(2,633.3
)
Net debt to reported LTM net loss
ratio
(4.3
)
LTM Adjusted EBITDA
$
2,326.5
Net debt to LTM Adjusted EBITDA ratio
4.9
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.
Tech Framework: Our
centrally-managed technology and innovation function (our T&I
Function) provides, and allocates charges for, certain products and
services to our consolidated reportable segments (the Tech
Framework). These products and services include CPE hardware and
related essential software, maintenance, hosting and other
services. Our consolidated reportable segments capitalize the
combined cost of the CPE hardware and essential software as
property and equipment additions and the corresponding amounts
charged by our T&I Function are reflected as revenue when
earned.
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 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
March 31,
Increase/(decrease)
2024
2023(i)
Reported %
Rebased %
in millions, except %
amounts
Adjusted EBITDA:
Sunrise
$
279.3
$
263.0
6.2
0.4
Telenet
308.4
302.9
1.8
0.2
VM Ireland
40.0
41.5
(3.6
)
(4.9
)
Central and Other
(31.0
)
32.1
N.M.
N.M.
Intersegment eliminations(i)
(15.3
)
(15.0
)
N.M.
N.M.
Total Adjusted EBITDA
$
581.4
$
624.5
(6.9
)
(6.8
)
VMO2 JV(ii)
$
1,073.6
$
1,025.9
4.6
0.3
VodafoneZiggo JV(ii)
$
519.0
$
471.5
10.1
8.8
Finance lease adjustments:
Sunrise
$
(1.7
)
$
(1.2
)
Telenet
(0.3
)
(20.3
)
Central and Other
(0.7
)
(2.0
)
Total finance lease adjustments
$
(2.7
)
$
(23.5
)
VMO2 JV(ii)
$
(2.2
)
$
(2.1
)
VodafoneZiggo JV(ii)
$
(2.9
)
$
(2.4
)
Adjusted EBITDAaL:
Sunrise
$
277.6
$
261.8
6.0
0.3
Telenet
308.1
282.6
9.0
0.3
VM Ireland
40.0
41.5
(3.6
)
(4.9
)
Central and Other
(31.7
)
30.1
N.M.
N.M.
Intersegment eliminations(i)
(15.3
)
(15.0
)
N.M.
N.M.
Total Adjusted EBITDAaL
$
578.7
$
601.0
(3.7
)
(6.6
)
VMO2 JV(ii)
$
1,071.4
$
1,023.8
4.6
0.3
VodafoneZiggo JV(ii)
$
516.1
$
469.1
10.0
8.7
______________________
N.M. - Not Meaningful
(i)
Amounts relate to the Adjusted EBITDA
impact within our T&I Function related to the Tech
Framework.
(ii)
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:
March 31, 2024
December 31, 2023
Spot rates:
Euro
0.9262
0.9038
Swiss franc
0.9014
0.8392
British pound sterling
0.7920
0.7835
Polish zloty
3.9891
3.9272
Three months ended
March 31,
2024
2023
Average rates:
Euro
0.9211
0.9320
Swiss franc
0.8747
0.9253
British pound sterling
0.7886
0.8229
Polish zloty
3.9897
4.3895
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240501179316/en/
For more information, please visit www.libertyglobal.com or
contact:
Investor Relations Michael Bishop +44 20 8483 6246
Corporate Communications Bill Myers +1 303 220 6686 Matt
Beake +44 20 8483 6428
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