[Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) [Assets](index=3&type=section&id=Assets) Total assets decreased to **$48.2 billion** from **$53.2 billion** at December 31, 2018, driven by a significant reduction in discontinued operations' long-term assets Assets | Asset Category | Sep 30, 2019 (in millions) | Dec 31, 2018 (in millions) | |:---------------|:---------------------------|:---------------------------| | Cash and cash equivalents | $7,382.0 | $1,480.5 | | Total current assets | $9,792.7 | $4,141.4 | | Investments and related note receivables | $4,728.0 | $5,121.8 | | Property and equipment, net | $13,047.8 | $13,878.9 | | Goodwill | $13,283.2 | $13,715.8 | | Deferred tax assets | $2,601.3 | $2,488.2 | | Long-term assets of discontinued operations | — | $10,174.6 | | Other assets, net | $4,725.6 | $3,632.9 | | **Total assets** | **$48,178.6** | **$53,153.6** | [Liabilities and Equity](index=3&type=section&id=Liabilities%20and%20Equity) Total liabilities decreased to **$34.8 billion** from **$49.0 billion** at December 31, 2018, due to discontinued operations, while total equity increased to **$13.4 billion** from **$4.1 billion** Liabilities and Equity | Liability & Equity Category | Sep 30, 2019 (in millions) | Dec 31, 2018 (in millions) | |:----------------------------|:---------------------------|:---------------------------| | Total current liabilities | $7,747.8 | $10,306.1 | | Long-term debt and finance lease obligations | $24,096.2 | $26,190.0 | | Long-term liabilities of discontinued operations | — | $10,072.4 | | Other long-term liabilities | $2,973.0 | $2,436.8 | | **Total liabilities** | **$34,817.0** | **$49,005.3** | | Total Liberty Global shareholders' equity | $13,787.3 | $4,681.4 | | Noncontrolling interests | $(425.7) | $(533.1) | | **Total equity** | **$13,361.6** | **$4,148.3** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) [Operating Results](index=5&type=section&id=Operating%20Results) Net earnings significantly increased to **$12.9 billion** for the three months and **$13.0 billion** for the nine months, primarily due to a large gain on discontinued operations disposal Operating Results | Metric | 3 Months Ended Sep 30, 2019 (in millions) | 3 Months Ended Sep 30, 2018 (in millions) | 9 Months Ended Sep 30, 2019 (in millions) | 9 Months Ended Sep 30, 2018 (in millions) | |:-------|:------------------------------------------|:------------------------------------------|:------------------------------------------|:------------------------------------------| | Revenue | $2,840.9 | $2,929.7 | $8,559.3 | $9,008.8 | | Operating income | $208.8 | $205.2 | $463.0 | $586.9 | | Earnings (loss) from continuing operations before income taxes | $516.4 | $(118.1) | $(75.5) | $(199.1) | | Income tax benefit (expense) | $70.8 | $(281.3) | $16.2 | $(898.5) | | Earnings (loss) from continuing operations | $587.2 | $(399.4) | $(59.3) | $(1,097.6) | | Earnings from discontinued operations, net of taxes | $92.2 | $327.2 | $730.3 | $797.3 | | Gain on disposal of discontinued operations, net of taxes | $12,205.7 | $1,098.1 | $12,312.3 | $1,098.1 | | Net earnings | $12,885.1 | $1,025.9 | $12,983.3 | $797.8 | | Net earnings attributable to Liberty Global shareholders | $12,847.9 | $974.1 | $12,907.9 | $700.2 | | Basic and diluted EPS from continuing operations attributable to Liberty Global shareholders | $0.77 | $(0.57) | $(0.18) | $(1.51) | [Condensed Consolidated Statements of Comprehensive Earnings](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Earnings) [Comprehensive Earnings](index=6&type=section&id=Comprehensive%20Earnings) Comprehensive earnings significantly increased to **$12.3 billion** for both three and nine months, driven by net earnings despite foreign currency translation losses Comprehensive Earnings | Metric | 3 Months Ended Sep 30, 2019 (in millions) | 3 Months Ended Sep 30, 2018 (in millions) | 9 Months Ended Sep 30, 2019 (in millions) | 9 Months Ended Sep 30, 2018 (in millions) | |:-------|:------------------------------------------|:------------------------------------------|:------------------------------------------|:------------------------------------------| | Net earnings | $12,885.1 | $1,025.9 | $12,983.3 | $797.8 | | Foreign currency translation adjustments (continuing operations) | $(599.7) | $(244.0) | $(741.2) | $(672.1) | | Other comprehensive earnings (loss) from discontinued operations | $60.0 | $29.6 | $61.0 | $(7.0) | | Other comprehensive loss | $(540.0) | $(211.2) | $(681.3) | $(683.0) | | Comprehensive earnings | $12,345.1 | $814.7 | $12,302.0 | $114.8 | | Comprehensive earnings attributable to Liberty Global shareholders | $12,307.9 | $760.8 | $12,226.2 | $17.3 | [Condensed Consolidated Statements of Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) [Equity Changes](index=6&type=section&id=Equity%20Changes) Total equity significantly increased to **$13.4 billion** at September 30, 2019, from **$4.1 billion** at January 1, 2019, primarily due to net earnings and share repurchases Equity Changes | Metric | Balance at Jan 1, 2019 (in millions) | Net Earnings (in millions) | Other Comprehensive Loss (in millions) | Share Repurchases (in millions) | Balance at Sep 30, 2019 (in millions) | |:-------|:-------------------------------------|:---------------------------|:---------------------------------------|:--------------------------------|:--------------------------------------| | Total Liberty Global shareholders | $4,681.4 | $12,847.9 | $(540.0) | $(2,715.8) | $13,787.3 | | Noncontrolling interests | $(533.1) | $37.2 | — | — | $(425.7) | | **Total equity** | **$4,148.3** | **$12,885.1** | **$(540.0)** | **$(2,715.8)** | **$13,361.6** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) [Cash Flow Summary](index=9&type=section&id=Cash%20Flow%20Summary) Net cash from operating activities decreased for the nine months, while investing activities significantly increased to **$9.5 billion** due to asset dispositions Cash Flow Summary | Cash Flow Category | 9 Months Ended Sep 30, 2019 (in millions) | 9 Months Ended Sep 30, 2018 (in millions) | |:-------------------|:------------------------------------------|:------------------------------------------| | Net cash provided by operating activities | $3,091.5 | $4,200.4 | | Net cash provided by investing activities | $9,542.9 | $407.6 | | Net cash used by financing activities | $(6,689.1) | $(5,296.4) | | Effect of exchange rate changes on cash and cash equivalents | $(33.8) | $(33.7) | | Net increase (decrease) in cash and cash equivalents | $5,911.5 | $(722.1) | | Cash and cash equivalents, beginning of period | $1,498.3 | $1,682.9 | | Cash and cash equivalents, end of period | $7,409.8 | $960.8 | - Proceeds received upon disposition of discontinued operations, net, significantly increased to **$11,219.9 million** in 2019 from **$2,061.2 million** in 2018, driving the increase in investing activities[16](index=16&type=chunk) - Repurchase of Liberty Global ordinary shares increased to **$3,212.5 million** in 2019 from **$1,671.8 million** in 2018, contributing to higher cash used in financing activities[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1: Basis of Presentation](index=11&type=section&id=Note%201%20Basis%20of%20Presentation) Liberty Global is an international provider of video, broadband internet, fixed-line telephony, and mobile communications services in Europe, with continuing operations in key European markets and several discontinued operations - Liberty Global is an international provider of video, broadband internet, fixed-line telephony, and mobile communications services to residential and business customers in Europe[19](index=19&type=chunk) - Continuing operations include Virgin Media (U.K./Ireland), Telenet (Belgium), UPC Holding (Switzerland, Poland, Slovakia), and a **50% noncontrolling interest** in VodafoneZiggo JV (Netherlands)[20](index=20&type=chunk) - Operations in Austria, Germany, Romania, Hungary, the Czech Republic, and UPC DTH are presented as discontinued operations[21](index=21&type=chunk) [Note 2: Accounting Changes and Recent Accounting Pronouncements](index=12&type=section&id=Note%202%20Accounting%20Changes%20and%20Recent%20Accounting%20Pronouncements) Liberty Global adopted ASU 2016-02 (Leases) on January 1, 2019, recognizing **$545.1 million** in ROU assets and **$558.1 million** in lease liabilities, with minimal impact on operations or cash flows - Adopted ASU 2016-02 (Leases) on January 1, 2019, recognizing **$545.1 million** in ROU assets and **$558.1 million** in lease liabilities for operating leases[27](index=27&type=chunk)[29](index=29&type=chunk) - The adoption of ASU 2016-02 resulted in a **$1.2 million decrease** to accumulated deficit and did not significantly impact consolidated statements of operations or cash flows[29](index=29&type=chunk) - Currently evaluating the effect of ASU 2018-15 (Cloud Computing Arrangements) and ASU 2019-02 (Costs of Films and License Agreements for Program Materials) on consolidated financial statements[30](index=30&type=chunk)[31](index=31&type=chunk) [Note 3: Revenue Recognition and Related Costs](index=13&type=section&id=Note%203%20Revenue%20Recognition%20and%20Related%20Costs) Contract balances show **$1,221.1 million** in trade receivables and **$742.2 million** in deferred revenue as of September 30, 2019, with deferred revenue decreasing due to recognition Contract Balances and Costs | Metric | Sep 30, 2019 (in millions) | Dec 31, 2018 (in millions) | |:-------|:---------------------------|:---------------------------| | Trade receivables, net | $1,221.1 | $1,342.1 | | Allowance for doubtful accounts | $44.3 | $45.8 | | Contract assets | $34.4 | $44.3 | | Deferred revenue | $742.2 | $877.9 | | Aggregate assets associated with incremental costs to obtain and fulfill contracts | $78.4 | $73.0 | - Deferred revenue decreased primarily due to **$730.4 million** of revenue recognized from the December 31, 2018 balance[35](index=35&type=chunk) - Amortized **$73.4 million** of contract costs during the nine months ended September 30, 2019[36](index=36&type=chunk) [Note 4: Acquisitions and Dispositions](index=13&type=section&id=Note%204%20Acquisitions%20and%20Dispositions) Liberty Global completed significant dispositions, including the Vodafone Disposal Group for **€10.0 billion ($11.1 billion)** and UPC DTH for **€130.5 million ($145.8 million)**, resulting in substantial gains - Acquired remaining **50%** of De Vijver Media for **€52.5 million ($58.9 million)**, recognizing a **$25.7 million gain**[38](index=38&type=chunk) - Sold Vodafone Disposal Group (Germany, Romania, Hungary, Czech Republic) for **€10.0 billion ($11.1 billion)** net cash, resulting in a **$12.2 billion gain**[40](index=40&type=chunk)[41](index=41&type=chunk) - Sold UPC DTH for **€130.5 million ($145.8 million)** net cash, recognizing a **$106.6 million gain**[43](index=43&type=chunk)[44](index=44&type=chunk) Discontinued Operations Performance | Discontinued Operations (9 Months Ended Sep 30) | 2019 (in millions) | 2018 (in millions) | |:------------------------------------------------|:-------------------|:-------------------| | Revenue | $2,054.6 | $3,058.8 | | Operating income | $1,176.3 | $1,408.8 | | Net earnings attributable to Liberty Global shareholders | $730.3 | $793.1 | | Basic and diluted EPS from discontinued operations | $1.00 | $1.01 | - The sale of UPC Switzerland to Sunrise Communications Group AG is pending shareholder approval, with a potential **CHF 50.0 million ($50.1 million) termination fee** if certain conditions are met[58](index=58&type=chunk) [Note 5: Investments](index=17&type=section&id=Note%205%20Investments) Total investments decreased to **$4.7 billion** at September 30, 2019, with equity method investments, primarily VodafoneZiggo JV, totaling **$3.6 billion**, and fair value investments at **$1.1 billion** Investment Portfolio | Investment Category | Sep 30, 2019 (in millions) | Dec 31, 2018 (in millions) | |:--------------------|:---------------------------|:---------------------------| | Equity Method Investments: | | | | VodafoneZiggo JV | $3,356.6 | $3,761.5 | | All3Media Group | $136.7 | $72.2 | | Formula E Holdings Ltd | $76.4 | $45.4 | | Other | $37.9 | $67.9 | | **Total – equity** | **$3,607.6** | **$3,947.0** | | Fair Value Investments: | | | | ITV plc | $616.6 | $634.2 | | ITI Neovision S.A. | $116.9 | $125.4 | | Lions Gate Entertainment Corp | $59.3 | $77.5 | | Casa Systems, Inc. | $19.5 | $39.5 | | Other | $308.1 | $298.2 | | **Total – fair value** | **$1,120.4** | **$1,174.8** | | **Total Investments** | **$4,728.0** | **$5,121.8** | Realized & Unrealized Gains (Losses) on Investments | Realized & Unrealized Gains (Losses) on Investments | 3 Months Ended Sep 30, 2019 (in millions) | 3 Months Ended Sep 30, 2018 (in millions) | 9 Months Ended Sep 30, 2019 (in millions) | 9 Months Ended Sep 30, 2018 (in millions) | |:----------------------------------------------------|:------------------------------------------|:------------------------------------------|:------------------------------------------|:------------------------------------------| | Lionsgate | $(15.9) | $(1.5) | $(33.7) | $(44.7) | | ITV | $70.2 | $(94.5) | $(17.6) | $(71.6) | | Casa | $4.6 | $(6.6) | $(13.8) | $(5.4) | | ITI Neovision | $0.2 | $4.9 | $0.7 | $11.6 | | Other | $(0.1) | $13.5 | $(0.8) | $1.1 | | **Total** | **$59.0** | **$(84.2)** | **$(65.2)** | **$(109.0)** | Share of Results of Affiliates, Net | Share of Results of Affiliates, Net | 3 Months Ended Sep 30, 2019 (in millions) | 3 Months Ended Sep 30, 2018 (in millions) | 9 Months Ended Sep 30, 2019 (in millions) | 9 Months Ended Sep 30, 2019 (in millions) | |:------------------------------------|:------------------------------------------|:------------------------------------------|:------------------------------------------|:------------------------------------------| | VodafoneZiggo JV | $(21.8) | $(8.5) | $(124.1) | $(98.5) | | All3Media | $(11.5) | $(0.5) | $(34.2) | $(20.1) | | Formula E | $1.2 | $(0.9) | $(8.7) | $(8.1) | | Other | $(0.7) | $(1.2) | $(6.0) | $(3.2) | | **Total** | **$(32.8)** | **$(11.1)** | **$(173.0)** | **$(129.9)** | - VodafoneZiggo JV is experiencing significant competition, particularly in mobile operations, which could lead to future impairment charges on the investment[68](index=68&type=chunk) [Note 6: Derivative Instruments](index=22&type=section&id=Note%206%20Derivative%20Instruments) Liberty Global uses derivative instruments to manage interest rate, foreign currency, and equity market risks, recognizing **$582.1 million** in net realized and unrealized gains for the three months ended September 30, 2019 - Derivative instruments are used to protect against increases in interest rates on variable-rate debt, foreign currency movements, and decreases in market prices of certain publicly traded securities[71](index=71&type=chunk) Derivative Instrument Fair Values | Derivative Instrument Fair Values | Sep 30, 2019 (in millions) | Dec 31, 2018 (in millions) | |:----------------------------------|:---------------------------|:---------------------------| | Total Assets | $3,273.0 | $2,496.7 | | Total Liabilities | $1,583.6 | $1,370.7 | | Net Assets (Liabilities) | $1,689.4 | $1,126.0 | Realized & Unrealized Gains on Derivative Instruments, Net | Realized & Unrealized Gains on Derivative Instruments, Net | 3 Months Ended Sep 30, 2019 (in millions) | 3 Months Ended Sep 30, 2018 (in millions) | 9 Months Ended Sep 30, 2019 (in millions) | 9 Months Ended Sep 30, 2018 (in millions) | |:-----------------------------------------------------------|:------------------------------------------|:------------------------------------------|:------------------------------------------|:------------------------------------------| | Cross-currency and interest rate derivative contracts | $567.3 | $(18.4) | $549.1 | $489.8 | | Equity-related derivative instruments | $(100.8) | $76.9 | $9.0 | $19.7 | | Foreign currency forward and option contracts | $116.3 | $6.7 | $94.1 | $20.6 | | Other | $(0.7) | $0.3 | — | $(0.4) | | **Total** | **$582.1** | **$65.5** | **$652.2** | **$529.7** | - The company is exposed to counterparty credit risk, which is managed through evaluation and monitoring of creditworthiness and concentration of risk[77](index=77&type=chunk) [Note 7: Fair Value Measurements](index=27&type=section&id=Note%207%20Fair%20Value%20Measurements) Liberty Global uses fair value measurements for investments and derivatives, categorizing inputs into Level 1, 2, and 3, with total assets measured at fair value reaching **$4.4 billion** at September 30, 2019 - Fair value measurements are categorized into Level 1 (quoted market prices), Level 2 (observable inputs), and Level 3 (unobservable inputs)[93](index=93&type=chunk) Fair Value Measurements (Assets) | Fair Value Measurements (Assets) | Sep 30, 2019 (in millions) | Level 1 (in millions) | Level 2 (in millions) | Level 3 (in millions) | |:---------------------------------|:---------------------------|:----------------------|:----------------------|:----------------------| | Derivative instruments | $3,273.0 | — | $2,536.7 | $736.3 | | Investments | $1,120.4 | $695.4 | — | $425.0 | | **Total Assets** | **$4,393.4** | **$695.4** | **$2,536.7** | **$1,161.3** | Fair Value Measurements (Liabilities) | Fair Value Measurements (Liabilities) | Sep 30, 2019 (in millions) | Level 1 (in millions) | Level 2 (in millions) | Level 3 (in millions) | |:--------------------------------------|:---------------------------|:----------------------|:----------------------|:----------------------| | Derivative instruments | $1,583.6 | — | $1,564.2 | $19.4 | | Debt | $218.0 | — | $218.0 | — | | **Total Liabilities** | **$1,801.6** | **—** | **$1,782.2** | **$19.4** | - A Monte Carlo based approach is used to incorporate credit risk valuation adjustments in fair value measurements for cross-currency and interest rate swaps[94](index=94&type=chunk) [Note 8: Long-lived Assets](index=30&type=section&id=Note%208%20Long-lived%20Assets) Net property and equipment decreased to **$13.0 billion** at September 30, 2019, while goodwill decreased to **$13.3 billion**, primarily due to foreign currency translation adjustments Property and Equipment, Net | Property and Equipment, Net | Sep 30, 2019 (in millions) | Dec 31, 2018 (in millions) | |:----------------------------|:---------------------------|:---------------------------| | Distribution systems | $17,944.8 | $17,845.4 | | Customer premises equipment | $4,445.6 | $4,191.2 | | Support equipment, buildings and land | $5,148.2 | $4,933.7 | | Total property and equipment, gross | $27,538.6 | $26,970.3 | | Accumulated depreciation | $(14,490.8) | $(13,091.4) | | **Total property and equipment, net** | **$13,047.8** | **$13,878.9** | Goodwill | Goodwill (in millions) | Jan 1, 2019 | Acquisitions related adjustments | Foreign currency translation adjustments | Sep 30, 2019 | |:-----------------------|:------------|:---------------------------------|:-----------------------------------------|:-------------|\ | U.K./Ireland | $7,671.0 | — | $(277.9) | $7,393.1 | | Belgium | $2,576.3 | $48.8 | $(123.7) | $2,501.4 | | Switzerland | $2,903.9 | — | $(43.9) | $2,860.0 | | Central and Eastern Europe | $564.6 | — | $(35.9) | $528.7 | | **Total** | **$13,715.8** | **$48.8** | **$(481.4)** | **$13,283.2** | Intangible Assets Subject to Amortization, Net | Intangible Assets Subject to Amortization, Net | Sep 30, 2019 (in millions) | Dec 31, 2018 (in millions) | |:-----------------------------------------------|:---------------------------|:---------------------------| | Customer relationships, net | $386.9 | $758.9 | | Other, net | $269.5 | $272.3 | | **Total, net** | **$656.4** | **$1,031.2** | - Non-cash increases to property and equipment related to vendor financing arrangements were **$1,303.2 million** during the nine months ended September 30, 2019[107](index=107&type=chunk) [Note 9: Debt](index=33&type=section&id=Note%209%20Debt) Total debt before deferred financing costs, discounts, and premiums decreased to **$27.0 billion** at September 30, 2019, with a weighted average interest rate of **4.53%**, following significant refinancing activities Debt Principal Amounts | Debt Category | Sep 30, 2019 Principal Amount (in millions) | Dec 31, 2018 Principal Amount (in millions) | Weighted Average Interest Rate (Sep 30, 2019) | |:-----------------------------------------------------------|:--------------------------------------------|:--------------------------------------------|:----------------------------------------------| | VM Senior Secured Notes | $6,519.5 | $6,268.3 | 5.40% | | VM Credit Facilities | $4,677.7 | $4,600.5 | 4.65% | | Telenet Credit Facility | $3,094.4 | $3,145.7 | 3.94% | | UPC Holding Bank Facility | — | $1,645.0 | — | | Vendor financing | $3,375.7 | $3,620.3 | 4.13% | | **Total debt before deferred financing costs, discounts and premiums** | **$26,977.3** | **$29,315.3** | **4.53%** | Debt and Finance Lease Obligations | Debt and Finance Lease Obligations | Sep 30, 2019 (in millions) | Dec 31, 2018 (in millions) | |:-----------------------------------|:---------------------------|:---------------------------| | Total carrying amount of debt | $26,890.1 | $29,183.9 | | Finance lease obligations | $586.6 | $621.3 | | **Total debt and finance lease obligations** | **$27,476.7** | **$29,805.2** | | Current maturities | $(3,380.5) | $(3,615.2) | | Long-term debt and finance lease obligations | $24,096.2 | $26,190.0 | - Virgin Media issued **$825.0 million** and **£300.0 million** in senior secured notes, using proceeds to redeem existing notes, resulting in a **$77.2 million net loss** on debt modification and extinguishment[125](index=125&type=chunk) - UPC Holding prepaid **$1,645.0 million** of debt using proceeds from the Vodafone Disposal Group sale, incurring a **$15.4 million loss** on debt modification and extinguishment[127](index=127&type=chunk) [Note 10: Leases](index=36&type=section&id=Note%2010%20Leases) Liberty Global recognizes ROU assets and lease liabilities for leases over 12 months, with total lease liabilities at **$1.1 billion** and total lease expense of **$203.7 million** for the nine months ended September 30, 2019 Lease Balances | Lease Balances (Sep 30, 2019, in millions) | ROU Assets | Lease Liabilities | |:-------------------------------------------|:-----------|:------------------| | Finance leases | $510.3 | $586.6 | | Operating leases | $502.6 | $529.6 | | **Total** | **$1,012.9** | **$1,116.2** | - Weighted average remaining lease term for finance leases was **23.7 years** with a **6.1% discount rate**; for operating leases, it was **7.9 years** with a **4.0% discount rate**[138](index=138&type=chunk)[139](index=139&type=chunk) Lease Expense | Lease Expense (9 Months Ended Sep 30, 2019, in millions) | Amount | |:---------------------------------------------------------|:-------| | Total finance lease expense | $90.4 | | Operating lease expense | $103.8 | | Short-term lease expense | $6.0 | | Variable lease expense | $3.5 | | **Total lease expense** | **$203.7** | Cash Outflows from Leases | Cash Outflows from Leases (9 Months Ended Sep 30, 2019, in millions) | Amount | |:---------------------------------------------------------------------|:-------| | Operating cash outflows from operating leases | $103.8 | | Operating cash outflows from finance leases | $25.4 | | Financing cash outflows from finance leases | $57.0 | | **Total cash outflows** | **$186.2** | [Note 11: Income Taxes](index=40&type=section&id=Note%2011%20Income%20Taxes) Liberty Global reported an income tax benefit of **$70.8 million** for the three months and **$16.2 million** for the nine months ended September 30, 2019, primarily due to decreases in valuation allowances Income Tax Benefit (Expense) | Income Tax Benefit (Expense) (in millions) | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | |:-------------------------------------------|:----------------------------|:----------------------------|:----------------------------|:----------------------------| | Computed "expected" tax benefit (expense) | $(98.2) | $22.4 | $14.3 | $37.8 | | Change in valuation allowances | $132.8 | $41.2 | $199.2 | $446.5 | | Mandatory Repatriation Tax | — | $(172.7) | — | $(1,141.2) | | **Total income tax benefit (expense)** | **$70.8** | **$(281.3)** | **$16.2** | **$(898.5)** | - Unrecognized tax benefits totaled **$856.6 million** at September 30, 2019, with **$681.3 million** having a favorable impact on the effective income tax rate if recognized[151](index=151&type=chunk) - Potential reductions to unrecognized tax benefits of up to **$260.0 million** are reasonably possible within the next 12 months, with approximately **$95.0 million** positively impacting the effective tax rate[152](index=152&type=chunk) [Note 12: Equity](index=42&type=section&id=Note%2012%20Equity) During the nine months ended September 30, 2019, Liberty Global repurchased **119.7 million** ordinary shares for an aggregate of **$3.2 billion**, including significant repurchases through modified Dutch auction tender offers Share Repurchases | Share Class | Shares Repurchased (9 Months Ended Sep 30, 2019) | Average Price Per Share | Aggregate Purchase Price (in millions) | |:------------|:-------------------------------------------------|:------------------------|:---------------------------------------| | Class A ordinary shares | 346,300 | $25.10 | (Included in $502.5) | | Class C ordinary shares | 19,975,282 | $24.72 | (Included in $502.5) | | Class A ordinary shares (Dutch auction) | 24,002,262 | $27.50 | (Included in $2,700.0) | | Class C ordinary shares (Dutch auction) | 75,420,009 | $27.00 | (Included in $2,700.0) | | **Total Repurchases** | **119,743,853** | **—** | **$3,202.5** | - The remaining amount authorized for share repurchases was **$66.4 million** at September 30, 2019[155](index=155&type=chunk) [Note 13: Share-based Compensation](index=42&type=section&id=Note%2013%20Share-based%20Compensation) Aggregate share-based compensation expense increased to **$228.3 million** for the nine months ended September 30, 2019, including **$96.8 million** for performance-based awards and **$82.6 million** for non-performance-based awards Share-based Compensation Expense | Share-based Compensation Expense (in millions) | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | |:-----------------------------------------------|:----------------------------|:----------------------------|:----------------------------|:----------------------------| | Performance-based incentive awards | $28.9 | $9.3 | $96.8 | $26.0 | | Non-performance based incentive awards | $31.6 | $18.3 | $82.6 | $64.6 | | Other | $8.0 | $8.9 | $30.5 | $29.4 | | **Total Liberty Global** | **$68.5** | **$36.5** | **$209.9** | **$120.0** | | Other | $5.5 | $6.3 | $18.4 | $11.0 | | **Total** | **$74.0** | **$42.8** | **$228.3** | **$131.0** | - The 2019 CEO Performance Award included **670,000 RSAs** and **1,330,000 PSUs**, with vesting contingent on performance conditions[163](index=163&type=chunk) - 2019 PSUs for executive officers and key employees are based on achieving a specified compound annual growth rate (CAGR) with respect to Adjusted OIBDA[164](index=164&type=chunk) [Note 14: Restructuring Liability](index=45&type=section&id=Note%2014%20Restructuring%20Liability) Restructuring liability increased to **$47.0 million** at September 30, 2019, due to **$80.8 million** in charges, primarily for employee severance and termination costs related to reorganization activities Restructuring Liability | Restructuring Liability (in millions) | Jan 1, 2019 (as adjusted) | Restructuring Charges | Cash Paid | Sep 30, 2019 | |:--------------------------------------|:--------------------------|:----------------------|:----------|:-------------| | Employee severance and termination | $14.7 | $76.8 | $(60.6) | $31.0 | | Office closures | $6.1 | $1.1 | $(2.0) | $4.3 | | Lease termination and other | $17.9 | $2.9 | $(8.3) | $11.7 | | **Total** | **$38.7** | **$80.8** | **$(70.9)** | **$47.0** | - Restructuring charges for the nine months ended September 30, 2019, included **$33.5 million** in U.K./Ireland, **$29.9 million** in Central and Corporate, and **$12.6 million** in Switzerland for employee severance and termination costs[167](index=167&type=chunk) [Note 15: Earnings or Loss per Share](index=46&type=section&id=Note%2015%20Earnings%20or%20Loss%20per%20Share) Basic and diluted EPS from continuing operations attributable to Liberty Global shareholders improved to **$0.77** for the three months and a loss of **$0.18** for the nine months ended September 30, 2019 EPS Metrics | EPS Metric | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | |:-----------|:----------------------------|:----------------------------|:----------------------------|:----------------------------| | Net earnings (loss) from continuing operations attributable to Liberty Global shareholders | $550.0 million | $(450.6) million | $(134.7) million | $(1,191.0) million | | Weighted average ordinary shares outstanding (basic) | 714,234,500 | 793,544,759 | 730,476,710 | 787,649,342 | | Basic and diluted EPS from continuing operations | $0.77 | $(0.57) | $(0.18) | $(1.51) | - **61.1 million options, SARs, RSUs, and RSAs**, and **25.2 million PSARs and PSUs** were excluded from diluted EPS calculation for the three months ended September 30, 2019, due to their anti-dilutive effect or unfulfilled performance criteria[170](index=170&type=chunk) [Note 16: Commitments and Contingencies](index=47&type=section&id=Note%2016%20Commitments%20and%20Contingencies) Total contractual commitments reached **$5.4 billion** as of September 30, 2019, with significant programming and network commitments, alongside ongoing legal and regulatory proceedings Contractual Commitments | Commitment Category | Total (in millions) | |:--------------------|:--------------------| | Programming commitments | $2,552.5 | | Network and connectivity commitments | $1,875.4 | | Purchase commitments | $892.6 | | Other commitments | $34.8 | | **Total Commitments** | **$5,355.3** | - Telenet is involved in the Interkabel Acquisition litigation, with Proximus claiming **€1.4 billion ($1.5 billion)** in damages, though the company does not expect a material impact[181](index=181&type=chunk)[182](index=182&type=chunk) - Belgium Regulatory Authorities upheld a decision imposing wholesale broadband access obligations on Telenet, with proposed tariffs representing an estimated additional **25% reduction** compared to interim prices[184](index=184&type=chunk)[185](index=185&type=chunk) - Virgin Media faces VAT matters in the U.K. with an estimated maximum exposure of **£47 million ($58 million)**, with no accrual as loss is not considered probable[186](index=186&type=chunk) [Note 17: Segment Reporting](index=50&type=section&id=Note%2017%20Segment%20Reporting) Liberty Global's total revenue was **$8.6 billion** (down **5.0%** YoY) and Adjusted OIBDA was **$3.6 billion** (down **6.9%** YoY) for the nine months ended September 30, 2019, with U.K./Ireland as the largest segment - Reportable segments include U.K./Ireland, Belgium, Switzerland, Central and Eastern Europe (Poland and Slovakia), and the non-consolidated VodafoneZiggo JV[194](index=194&type=chunk) - Adjusted OIBDA is the primary measure for evaluating segment operating performance, defined as operating income before depreciation and amortization, share-based compensation, provisions related to significant litigation, and impairment, restructuring, and other operating items[193](index=193&type=chunk) Segment Performance | Segment Performance (9 Months Ended Sep 30) | 2019 Revenue (in millions) | 2018 Revenue (in millions) | 2019 Adjusted OIBDA (in millions) | 2018 Adjusted OIBDA (in millions) | |:--------------------------------------------|:---------------------------|:---------------------------|:----------------------------------|:----------------------------------| | U.K./Ireland | $4,885.2 | $5,180.8 | $2,085.5 | $2,268.3 | | Belgium | $2,147.0 | $2,260.3 | $1,047.0 | $1,124.7 | | Switzerland | $942.7 | $1,000.4 | $500.8 | $566.5 | | Central and Eastern Europe | $355.4 | $373.1 | $173.3 | $185.2 | | Central and Corporate | $231.4 | $197.4 | $(222.0) | $(283.3) | | Intersegment eliminations | $(2.4) | $(3.2) | $1.1 | $(11.5) | | **Total Consolidated** | **$8,559.3** | **$9,008.8** | **$3,585.7** | **$3,849.9** | | VodafoneZiggo JV | $3,275.3 | $3,468.5 | $1,481.5 | $1,534.7 | Property and Equipment Additions by Segment | Property and Equipment Additions (9 Months Ended Sep 30, in millions) | 2019 | 2018 | |:------------------------------------------------------|:-----|:-----| | U.K./Ireland | $1,128.5 | $1,495.8 | | Belgium | $397.8 | $564.6 | | Switzerland | $207.2 | $164.9 | | Central and Eastern Europe | $66.2 | $99.1 | | Central and Corporate | $240.4 | $409.9 | | **Total property and equipment additions** | **$2,040.1** | **$2,734.3** | [Note 18: Subsequent Events](index=56&type=section&id=Note%2018%20Subsequent%20Events) Subsequent to September 30, 2019, Virgin Media and Telenet completed significant financing transactions, including new term loan facilities and senior secured notes, to prepay existing debt - Virgin Media entered into new term loan facilities (**$3,300.0 million USD**, **€750.0 million EUR**) and issued **£400.0 million GBP** senior secured notes in October 2019[211](index=211&type=chunk) - Proceeds from Virgin Media's financing were used to prepay **$3,400.0 million** in term loans and redeem **$1,000.0 million USD** and **£300.0 million GBP** senior secured notes[211](index=211&type=chunk) - Telenet increased term loan commitments by **$220.0 million USD** and **€175.0 million EUR** to prepay **€371.0 million** in term loans and redeem notes[212](index=212&type=chunk) [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=57&type=section&id=MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) [Forward-looking Statements](index=57&type=section&id=Forward-looking%20Statements) This section highlights that the report contains forward-looking statements, which involve inherent risks and uncertainties that could cause actual results to differ materially from expectations - Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations[216](index=216&type=chunk) - Key risk factors include economic conditions, competitive environment, currency and interest rate fluctuations, global financial market instability, consumer behavior, technological changes, regulatory compliance, and the impact of acquisitions and dispositions[216](index=216&type=chunk)[218](index=218&type=chunk) - The company disclaims any obligation to update or revise forward-looking statements due to the rapidly changing broadband distribution and mobile service industries[219](index=219&type=chunk) [Overview](index=59&type=section&id=Overview) Liberty Global is an international provider of communications services in Europe, serving **25.5 million** homes passed and **25.1 million** revenue generating units as of September 30, 2019, amidst significant competition and macroeconomic challenges - Liberty Global is an international provider of video, broadband internet, fixed-line telephony, and mobile communications services to residential and businesses in Europe[221](index=221&type=chunk) Key Operational Metrics | Metric (as of Sep 30, 2019) | Count | |:----------------------------|:----------| | Homes passed | 25,576,300 | | Revenue generating units (RGUs) | 25,175,800 | | Video subscribers | 8,372,500 | | Broadband internet subscribers | 9,329,500 | | Fixed-line telephony subscribers | 7,473,800 | | Mobile subscribers | 6,207,700 | - Connected approximately **458,000** additional residential and commercial premises through Network Extensions during the first nine months of 2019[224](index=224&type=chunk) - Significant competition and macroeconomic factors, including Brexit uncertainty, are adversely impacting revenue, RGUs, and ARPU[225](index=225&type=chunk)[226](index=226&type=chunk) [Material Changes in Results of Operations](index=60&type=section&id=Material%20Changes%20in%20Results%20of%20Operations) Consolidated revenue decreased by **3.0%** for the three months and **5.0%** for the nine months ended September 30, 2019, while net earnings significantly increased due to substantial gains from discontinued operations disposal Consolidated Operating Results | Metric | 3 Months Ended Sep 30, 2019 (in millions) | 3 Months Ended Sep 30, 2018 (in millions) | 9 Months Ended Sep 30, 2019 (in millions) | 9 Months Ended Sep 30, 2018 (in millions) | |:-------|:------------------------------------------|:------------------------------------------|:------------------------------------------|:------------------------------------------| | Total Revenue | $2,840.9 | $2,929.7 | $8,559.3 | $9,008.8 | | Organic Revenue Change | $(9.5) (-0.3%) | — | $(56.3) (-0.6%) | — | | Total Adjusted OIBDA | $1,211.7 | $1,284.7 | $3,585.7 | $3,849.9 | | Organic Adjusted OIBDA Change | $(46.4) (-3.5%) | — | $(102.0) (-2.6%) | — | | Net Earnings | $12,885.1 | $1,025.9 | $12,983.3 | $797.8 | | Programming and other direct costs of services | $801.8 | $787.7 | $2,388.5 | $2,438.3 | | Other operating expenses (excl. share-based comp) | $398.6 | $425.6 | $1,233.9 | $1,311.9 | | SG&A expenses (excl. share-based comp) | $428.8 | $431.7 | $1,351.2 | $1,408.7 | | Share-based compensation expense | $74.0 | $42.8 | $228.3 | $131.0 | | Depreciation and amortization | $892.9 | $929.4 | $2,754.3 | $2,934.1 | | Impairment, restructuring and other operating items, net | $36.0 | $107.3 | $140.1 | $197.9 | | Interest expense | $(340.1) | $(363.0) | $(1,071.0) | $(1,118.7) | | Realized and unrealized gains on derivative instruments, net | $582.1 | $65.5 | $652.2 | $529.7 | | Foreign currency transaction gains, net | $54.2 | $96.6 | $165.8 | $46.4 | | Losses on debt modification and extinguishment, net | $(48.5) | $(27.7) | $(97.3) | $(50.4) | | Share of results of affiliates, net | $(32.8) | $(11.1) | $(173.0) | $(129.9) | | Other income, net | $36.3 | $16.0 | $75.3 | $32.2 | | Income tax benefit (expense) | $70.8 | $(281.3) | $16.2 | $(898.5) | | Earnings (loss) from continuing operations | $587.2 | $(399.4) | $(59.3) | $(1,097.6) | | Earnings from discontinued operations, net of taxes | $92.2 | $327.2 | $730.3 | $797.3 | | Gain on disposal of discontinued operations, net of taxes | $12,205.7 | $1,098.1 | $12,312.3 | $1,098.1 | | Net earnings attributable to Liberty Global shareholders | $12,847.9 | $974.1 | $12,907.9 | $700.2 | - Consolidated revenue decreased organically by **0.3%** for the three months and **0.6%** for the nine months, primarily due to declines in residential cable and mobile subscription revenue[272](index=272&type=chunk)[273](index=273&type=chunk)[275](index=275&type=chunk) - Adjusted OIBDA margins for U.K./Ireland, Belgium, Switzerland, and Central and Eastern Europe ranged from **42.7% to 53.9%** for the three months ended September 30, 2019[265](index=265&type=chunk) - Share-based compensation expense increased significantly to **$228.3 million** for the nine months ended September 30, 2019, from **$131.0 million** in the prior year[301](index=301&type=chunk) - Net earnings were substantially boosted by a **$12.2 billion gain** on disposal of the Vodafone Disposal Group and a **$106.6 million gain** on disposal of UPC DTH[345](index=345&type=chunk) [Material Changes in Financial Condition](index=81&type=section&id=Material%20Changes%20in%20Financial%20Condition) Liberty Global's corporate liquidity is primarily derived from cash held by Liberty Global and its unrestricted subsidiaries, with consolidated cash and cash equivalents at **$7.4 billion** as of September 30, 2019 Cash and Cash Equivalents Breakdown | Cash and Cash Equivalents (Sep 30, 2019, in millions) | Amount | |:------------------------------------------------------|:-------| | Liberty Global and unrestricted subsidiaries | $7,144.3 | | Borrowing groups | $237.7 | | **Total cash and cash equivalents** | **$7,382.0** | - The ratio of consolidated debt to annualized consolidated Adjusted OIBDA was **5.1x** at September 30, 2019, with net debt to Adjusted OIBDA at **3.6x**[361](index=361&type=chunk) - Total outstanding principal amount of consolidated debt and finance lease obligations aggregated **$27.6 billion** at September 30, 2019, with **$20.4 billion** not due until 2025 or thereafter[363](index=363&type=chunk) Cash Flow Summary | Cash Flow Summary (9 Months Ended Sep 30, in millions) | 2019 | 2018 | |:-------------------------------------------------------|:-----|:-----| | Net cash provided by operating activities | $2,220.2 | $2,707.5 | | Net cash provided by investing activities | $9,809.3 | $795.2 | | Net cash used by financing activities | $(6,434.8) | $(5,415.6) | | **Net increase (decrease) in cash and cash equivalents** | **$5,562.1** | **$(1,944.7)** | Adjusted Free Cash Flow | Adjusted Free Cash Flow (9 Months Ended Sep 30, in millions) | 2019 | 2018 | |:-------------------------------------------------------------|:-----|:-----| | Net cash provided by operating activities of continuing operations | $2,220.2 | $2,707.5 | | Capital expenditures, net | $(900.1) | $(1,138.5) | | Principal payments on amounts financed by vendors and intermediaries | $(3,069.2) | $(3,918.0) | | **Adjusted free cash flow** | **$(143.4)** | **$(970.2)** | Contractual Commitments | Contractual Commitments (Sep 30, 2019, in millions) | Total | |:------------------------------------|:------| | Debt (excluding interest) | $26,977.3 | | Finance leases (excluding interest) | $586.6 | | Operating leases | $628.4 | | Programming commitments | $2,552.5 | | Network and connectivity commitments | $1,875.4 | | Purchase commitments | $892.6 | | Other commitments | $34.8 | | **Total** | **$33,547.6** | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=89&type=section&id=QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) [General](index=89&type=section&id=General) Liberty Global is exposed to market risk from foreign currency exchange rates, interest rates, and stock prices, which it manages through established policies and derivative instruments - The company is exposed to market risk from foreign currency exchange rates, interest rates, and stock prices[384](index=384&type=chunk) - Market risks are managed through established policies, procedures, and the use of derivative instruments[384](index=384&type=chunk) [Cash](index=89&type=section&id=Cash) Liberty Global invests its cash in highly liquid, high-credit-quality instruments, with **91.7%** of consolidated cash denominated in U.S. dollars and **6.5%** in euros as of September 30, 2019 - Cash is invested in highly liquid instruments meeting high credit quality standards[387](index=387&type=chunk) - Exchange rate risk on cash balances is mitigated by actively managing denominations based on forecasted liquidity requirements[387](index=387&type=chunk) - At September 30, 2019, **91.7%** of consolidated cash was in U.S. dollars and **6.5%** in euros[387](index=387&type=chunk) [Foreign Currency Risk](index=89&type=section&id=Foreign%20Currency%20Risk) Liberty Global manages foreign currency exchange rate risk, which arises when debt is denominated in a currency other than the functional currency of supporting operations, primarily through derivative instruments - Foreign currency exchange rate risk arises when debt is denominated in a currency different from the functional currency of supporting operations[388](index=388&type=chunk) - Derivative instruments are used to manage foreign currency exchange rate risk, with most debt directly or synthetically matched to functional currencies[388](index=388&type=chunk)[78](index=78&type=chunk) Key Exchange Rates | Currency | Spot Rate (Sep 30, 2019) | Spot Rate (Dec 31, 2018) | Average Rate (9 Months Ended Sep 30, 2019) | Average Rate (9 Months Ended Sep 30, 2018) | |:---------|:-------------------------|:-------------------------|:-------------------------------------------|:-------------------------------------------| | Euro | 0.9172 | 0.8732 | 0.8900 | 0.8374 | | British pound sterling | 0.8137 | 0.7846 | 0.7858 | 0.7405 | | Swiss franc | 0.9979 | 0.9828 | 0.9951 | 0.9722 | | Hungarian forint | 306.99 | 280.21 | 287.54 | 265.96 | | Polish zloty | 4.0089 | 3.7454 | 3.8284 | 3.5588 | [Interest Rate Risks](index=90&type=section&id=Interest%20Rate%20Risks) Liberty Global is exposed to interest rate changes from its fixed-rate and variable-rate debt, primarily EURIBOR-indexed and LIBOR-indexed, which it manages using derivative instruments - Exposure to interest rate changes primarily stems from EURIBOR-indexed and LIBOR-indexed variable-rate debt[392](index=392&type=chunk) - Derivative instruments (swaps, caps, collars, swaptions) are used to mitigate interest rate risk, typically for **five years**[393](index=393&type=chunk) - The potential cessation of LIBOR and reform of EURIBOR after 2021 introduce uncertainty, but loan documents contemplate alternative base rate calculations[394](index=394&type=chunk) - A hypothetical **50 basis point increase** in the weighted average variable interest rate would increase annual consolidated interest expense by **$50.0 million**, largely offset by derivative contracts[395](index=395&type=chunk)[397](index=397&type=chunk) [Sensitivity Information](index=91&type=section&id=Sensitivity%20Information) A **10%** change in key foreign currency exchange rates or a **50 basis point** change in base rates would significantly impact the fair value of Liberty Global's derivative contracts - A **10% change** in GBP/USD would impact Virgin Media's cross-currency and interest rate derivative contracts by approximately **£595 million ($731 million)**[399](index=399&type=chunk) - A **10% change** in CHF, PLN, and HUF relative to EUR would impact UPC Holding's cross-currency and interest rate derivative contracts by approximately **€386 million ($421 million)**[399](index=399&type=chunk) - A **10% change** in EUR/USD would impact Telenet's cross-currency derivative contracts by approximately **€338 million ($369 million)**[400](index=400&type=chunk) - A **50 basis point change** in the relevant base rate would impact Telenet's cross-currency, interest rate cap, and swap contracts by approximately **€99 million ($108 million)**[400](index=400&type=chunk) [Projected Cash Flows Associated with Derivative Instruments](index=92&type=section&id=Projected%20Cash%20Flows%20Associated%20with%20Derivative%20Instruments) Projected net cash payments for derivative instruments total **$(2.6 billion)**, based on September 30, 2019, interest rate projections and exchange rates, covering interest, principal, and equity-related derivatives Projected Derivative Cash Flows, Net | Projected Derivative Cash Flows, Net (in millions) | Remainder of 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | |:---------------------------------------------------|:------------------|:-----|:-----|:-----|:-----|:-----|:-----------|:------| | Interest-related | $(285.4) | $9.9 | $(27.5) | $54.4 | $(3.2) | $(63.5) | $(14.0) | $(329.3) | | Principal-related | $5.5 | $43.6 | $(122.1) | $(181.8) | $(196.3) | $(102.3) | $(1,023.1) | $(1,576.5) | | Other | $23.0 | $(67.7) | $(469.0) | $(182.0) | — | — | — | $(695.7) | | **Total** | **$(256.9)** | **$(14.2)** | **$(618.6)** | **$(309.4)** | **$(199.5)** | **$(165.8)** | **$(1,037.1)** | **$(2,601.5)** | - Projected cash flows are based on September 30, 2019, interest rate projections and exchange rates and are illustrative[402](index=402&type=chunk) [CONTROLS AND PROCEDURES](index=93&type=section&id=CONTROLS%20AND%20PROCEDURES) [Evaluation of Disclosure Controls and Procedures](index=93&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Liberty Global's management concluded that the company's disclosure controls and procedures were effective as of September 30, 2019, providing reasonable assurance for timely and accurate SEC filings - Disclosure controls and procedures were evaluated and deemed effective as of September 30, 2019[406](index=406&type=chunk) - Controls provide reasonable assurance that information for SEC filings is recorded, processed, summarized, and reported within specified time periods[406](index=406&type=chunk) [Changes in Internal Controls over Financial Reporting](index=93&type=section&id=Changes%20in%20Internal%20Controls%20over%20Financial%20Reporting) No material changes in internal controls over financial reporting were identified during the fiscal quarter ended September 30, 2019 - No material changes in internal controls over financial reporting occurred during the quarter ended September 30, 2019[407](index=407&type=chunk) [PART II — OTHER INFORMATION](index=94&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Unregistered Sales of Equity Securities and Use of Proceeds](index=94&type=section&id=UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) During September 2019, Liberty Global repurchased **99.4 million** Class A and Class C ordinary shares through modified Dutch auction tender offers, with **$66.4 million** remaining authorized for repurchases Share Repurchase Activity | Period | Share Class | Total Number of Shares Purchased | Average Price Paid Per Share | |:-------|:------------|:---------------------------------|:-----------------------------| | Sep 1, 2019 - Sep 30, 2019 | Class A | 24,002,262 | $27.50 | | Sep 1, 2019 - Sep 30, 2019 | Class C | 75,420,009 | $27.00 | | Jul 1, 2019 - Sep 30, 2019 | Class A | 24,002,262 | $27.50 | | Jul 1, 2019 - Sep 30, 2019 | Class C | 75,420,009 | $27.00 | - These repurchases were part of modified Dutch auction tender offers announced on August 7, 2019, which expired on September 10, 2019[410](index=410&type=chunk) - The remaining amount authorized for share repurchases was **$66.4 million** as of September 30, 2019[410](index=410&type=chunk) [Exhibits](index=94&type=section&id=EXHIBITS) This section lists the exhibits filed as part of the Quarterly Report, including plans of acquisition, instruments defining rights of securities holders, and material contracts - Exhibits include plans of acquisition (e.g., Amended Sale and Purchase Agreement with Vodafone Group plc)[411](index=411&type=chunk) - Instruments defining rights of securities holders include supplemental indentures for Virgin Media Senior Secured Notes and accession agreements for Telenet and Virgin Media credit facilities[412](index=412&type=chunk)[413](index=413&type=chunk)[414](index=414&type=chunk)[415](index=415&type=chunk)[417](index=417&type=chunk) - Material contracts include various forms of share appreciation rights, restricted share units, and performance grant award agreements under the Liberty Global 2014 Incentive Plan[418](index=418&type=chunk) [Signatures](index=96&type=section&id=SIGNATURES) The report is signed by Michael T. Fries, President and Chief Executive Officer, and Charles H.R. Bracken, Executive Vice President and Chief Financial Officer, certifying compliance with SEC requirements - The report is signed by Michael T. Fries, President and Chief Executive Officer, and Charles H.R. Bracken, Executive Vice President and Chief Financial Officer[419](index=419&type=chunk) - Signatures certify compliance with the requirements of the Securities Exchange Act of 1934[419](index=419&type=chunk)

Liberty Global Plc (NASDAQ:LBTYA) Q2 2019 Results Conference Call August 8, 2019 9:00 AM ET Company Participants Mike Fries - CEO Charlie Bracken - EVP and CFO Lutz Schüler - CEO of Virgin Media Conference Call Participants Maurice Patrick - Barclays Ben Swinburne - Morgan Stanley Christian Fangmann - HSBC James Ratzer - New Street Research James Ratcliffe - Evercore Matthew Harrigan - Benchmark Jeff Wlodarczak - Pivotal Research Operator Good morning, ladies and gentlemen, and thank you for standing by. We ...

[PART I — FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section presents Liberty Global's unaudited condensed consolidated financial information [ITEM 1. FINANCIAL STATEMENTS](index=2&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents Liberty Global's unaudited condensed consolidated financial statements and detailed notes for 2019 and 2018 periods [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202019%20and%20December%2031%2C%202018%20%28unaudited%29) Total assets and liabilities increased from December 2018 to June 2019, while total equity decreased Balance Sheet Summary | Metric | June 30, 2019 (in millions) | December 31, 2018 (in millions) | |:------------------------|:----------------------------|:--------------------------------| | Total Assets | $53,987.0 | $53,153.6 | | Total Liabilities | $50,316.3 | $49,005.3 | | Total Equity | $3,670.7 | $4,148.3 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202019%20and%202018%20%28unaudited%29) Net earnings significantly decreased for the three months but improved for the six months ended June 30, 2019 Statements of Operations Summary | Metric | 3 Months Ended June 30, 2019 (in millions) | 3 Months Ended June 30, 2018 (in millions) | 6 Months Ended June 30, 2019 (in millions) | 6 Months Ended June 30, 2018 (in millions) | |:------------------------------------------------|:-------------------------------------------|:-------------------------------------------|:-------------------------------------------|:-------------------------------------------| | Revenue | $2,850.4 | $3,015.6 | $5,718.4 | $6,079.1 | | Operating income | $148.7 | $264.1 | $254.2 | $381.7 | | Earnings (loss) from continuing operations | ($339.6) | $669.0 | ($646.5) | ($698.2) | | Earnings from discontinued operations, net of taxes | $315.5 | $281.5 | $638.1 | $470.1 | | Gain on disposal of discontinued operations, net of taxes | $106.6 | — | $106.6 | — | | Net earnings (loss) | $82.5 | $950.5 | $98.2 | ($228.1) | | Net earnings (loss) attributable to Liberty Global shareholders | $53.0 | $912.6 | $60.0 | ($273.9) | | Basic and diluted EPS from continuing operations | ($0.50) | $0.80 | ($0.93) | ($0.93) | [Condensed Consolidated Statements of Comprehensive Earnings (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Earnings%20%28Loss%29%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202019%20and%202018%20%28unaudited%29) Comprehensive earnings improved for the three months and comprehensive loss narrowed for the six months ended June 30, 2019 Statements of Comprehensive Earnings (Loss) Summary | Metric | 3 Months Ended June 30, 2019 (in millions) | 3 Months Ended June 30, 2018 (in millions) | 6 Months Ended June 30, 2019 (in millions) | 6 Months Ended June 30, 2018 (in millions) | |:------------------------------------------------|:-------------------------------------------|:-------------------------------------------|:-------------------------------------------|:-------------------------------------------| | Net earnings (loss) | $82.5 | $950.5 | $98.2 | ($228.1) | | Other comprehensive loss, net of taxes | ($6.3) | ($1,064.0) | ($141.3) | ($471.8) | | Comprehensive earnings (loss) | $76.2 | ($113.5) | ($43.1) | ($699.9) | | Comprehensive earnings (loss) attributable to Liberty Global shareholders | $46.5 | ($149.2) | ($81.7) | ($743.5) | [Condensed Consolidated Statements of Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202019%20and%202018%20%28unaudited%29) Total equity attributable to shareholders decreased due to share repurchases and comprehensive losses Statements of Equity Summary | Metric | January 1, 2019 (as adjusted) (in millions) | March 31, 2019 (in millions) | June 30, 2019 (in millions) | |:------------------------------------------------|:--------------------------------------------|:-----------------------------|:----------------------------| | Total Liberty Global shareholders | $4,682.6 | $4,360.1 | $4,133.5 | | Net earnings | $7.0 | $53.0 | | | Other comprehensive loss, net of taxes | ($135.2) | ($6.5) | | | Repurchase and cancellation of ordinary shares | ($214.1) | ($288.4) | | | Share-based compensation | $55.6 | $70.0 | | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202019%20and%202018%20%28unaudited%29) Operating cash flow decreased, while cash used in investing and financing activities significantly decreased Statements of Cash Flows Summary | Metric | 6 Months Ended June 30, 2019 (in millions) | 6 Months Ended June 30, 2018 (in millions) | |:------------------------------------------------|:-------------------------------------------|:-------------------------------------------| | Net cash provided by operating activities | $1,628.5 | $2,128.1 | | Net cash used by investing activities | ($682.7) | ($893.3) | | Net cash used by financing activities | ($1,595.4) | ($3,029.8) | | Net decrease in cash and cash equivalents and restricted cash | ($204.5) | ($803.7) | | Cash and cash equivalents and restricted cash, end of period | $1,293.8 | $879.3 | - Repayments and repurchases of debt and finance lease obligations were **($3,838.8) million in 2019**, compared to **($3,828.8) million in 2018**[18](index=18&type=chunk) - Borrowings of debt increased to **$2,800.7 million in 2019** from **$2,146.5 million in 2018**[18](index=18&type=chunk) - Repurchase of Liberty Global ordinary shares decreased significantly to **($502.5) million in 2019** from **($1,276.2) million in 2018**[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%28unaudited%29) Detailed notes provide explanations and disclosures for accounting policies, acquisitions, debt, equity, and segment reporting [(1) Basis of Presentation](index=12&type=section&id=%281%29%20Basis%20of%20Presentation) Liberty Global provides communication services in Europe, with continuing operations in key regions and several discontinued operations - Liberty Global is an international provider of video, broadband internet, fixed-line telephony, and mobile communications services to residential and business customers in Europe[19](index=19&type=chunk) - Continuing operations include Virgin Media (U.K./Ireland), Telenet (Belgium), UPC Holding (Switzerland/Poland/Slovakia), and a **50% noncontrolling interest in VodafoneZiggo JV (Netherlands)**[20](index=20&type=chunk) - Operations in Austria, Germany, Romania, Hungary, Czech Republic, and UPC DTH are presented as discontinued operations[21](index=21&type=chunk) [(2) Accounting Changes and Recent Accounting Pronouncements](index=13&type=section&id=%282%29%20Accounting%20Changes%20and%20Recent%20Accounting%20Pronouncements) The company adopted ASU 2016-02 (Leases) in 2019, recognizing ROU assets and lease liabilities, and is evaluating other pronouncements - Adopted ASU 2016-02 (Leases) on January 1, 2019[27](index=27&type=chunk) Impact of ASU 2016-02 Adoption (January 1, 2019) | Impact of ASU 2016-02 Adoption (January 1, 2019) | Amount (in millions) | |:-------------------------------------------------|:---------------------| | ROU assets (operating leases) | $545.1 | | Lease liabilities (operating leases) | $558.1 | | Decrease to accumulated deficit | $1.2 | - Evaluating the effect of ASU 2018-15 (Cloud Computing Arrangements) and ASU 2019-02 (Costs of Films and License Agreements) on consolidated financial statements[30](index=30&type=chunk)[31](index=31&type=chunk) [(3) Revenue Recognition and Related Costs](index=14&type=section&id=%283%29%20Revenue%20Recognition%20and%20Related%20Costs) Revenue recognition involves managing contract balances, with deferred revenue decreasing and contract costs amortized Contract Balance Metrics | Contract Balance Metric | June 30, 2019 (in millions) | December 31, 2018 (in millions) | |:------------------------|:----------------------------|:--------------------------------| | Trade receivables, net | $1,298.4 | $1,342.1 | | Contract assets | $42.6 | $44.3 | | Deferred revenue | $822.6 | $877.9 | - Deferred revenue decreased by **$55.3 million** for the six months ended June 30, 2019, primarily due to **$791.7 million** of revenue recognized from the December 31, 2018 balance[35](index=35&type=chunk) Contract Costs Metrics | Contract Costs Metric | June 30, 2019 (in millions) | December 31, 2018 (in millions) | |:----------------------|:----------------------------|:--------------------------------| | Aggregate assets | $72.7 | $73.0 | | Amortization (6 months ended June 30, 2019) | $48.7 | $51.3 | [(4) Acquisitions and Dispositions](index=14&type=section&id=%284%29%20Acquisitions%20and%20Dispositions) The company completed several acquisitions and dispositions, including De Vijver Media and UPC DTH, with the Vodafone Disposal Group sale finalized - Acquired remaining **50% of De Vijver Media** for **€52.5 million ($58.9 million)** on June 3, 2019, recognizing a **$25.7 million gain**[38](index=38&type=chunk) - Completed sale of UPC DTH on May 2, 2019, for **€130.5 million ($145.8 million)**, recognizing a **$106.6 million gain**[46](index=46&type=chunk)[47](index=47&type=chunk) - Completed sale of Vodafone Disposal Group (Germany, Romania, Hungary, Czech Republic) to Vodafone on July 31, 2019, for net cash proceeds of **€10.1 billion ($11.3 billion)**[44](index=44&type=chunk) - Pending sale of UPC Switzerland to Sunrise for a total enterprise value of **$6.3 billion**, subject to regulatory and shareholder approval[40](index=40&type=chunk)[42](index=42&type=chunk) [(5) Investments](index=19&type=section&id=%285%29%20Investments) Total investments decreased, with equity method investments, primarily VodafoneZiggo JV, contributing to net losses from affiliates Investment Summary | Investment Type | June 30, 2019 (in millions) | December 31, 2018 (in millions) | |:----------------|:----------------------------|:--------------------------------| | Equity (a) | $3,875.0 | $3,947.0 | | Fair value | $1,070.0 | $1,174.8 | | Total | $4,945.0 | $5,121.8 | Share of Results of Affiliates, Net | Share of Results of Affiliates, Net | 3 Months Ended June 30, 2019 (in millions) | 3 Months Ended June 30, 2018 (in millions) | 6 Months Ended June 30, 2019 (in millions) | 6 Months Ended June 30, 2018 (in millions) | |:------------------------------------|:-------------------------------------------|:-------------------------------------------|:-------------------------------------------|:-------------------------------------------| | VodafoneZiggo JV | ($40.0) | ($63.2) | ($102.3) | ($90.0) | | Other | ($29.3) | ($19.1) | ($37.9) | ($28.8) | | Total | ($69.3) | ($82.3) | ($140.2) | ($118.8) | - The VodafoneZiggo JV is experiencing significant competition, particularly in mobile operations, which could lead to future impairment charges[70](index=70&type=chunk) [(6) Derivative Instruments](index=21&type=section&id=%286%29%20Derivative%20Instruments) Derivative instruments manage interest rate and foreign currency risks, with total assets and liabilities increasing and net gains reported Derivative Instrument Balances | Derivative Instrument Type | June 30, 2019 (in millions) | December 31, 2018 (in millions) | |:---------------------------|:----------------------------|:--------------------------------| | Total Derivative Assets | $2,780.5 | $2,496.7 | | Total Derivative Liabilities | $1,842.8 | $1,370.7 | Realized & Unrealized Gains on Derivative Instruments, Net | Realized & Unrealized Gains on Derivative Instruments, Net | 3 Months Ended June 30, 2019 (in millions) | 3 Months Ended June 30, 2018 (in millions) | 6 Months Ended June 30, 2019 (in millions) | 6 Months Ended June 30, 2018 (in millions) | |:-----------------------------------------------------------|:-------------------------------------------|:-------------------------------------------|:-------------------------------------------|:-------------------------------------------| | Cross-currency and interest rate derivative contracts | $69.1 | $870.1 | ($18.2) | $508.2 | | Equity-related derivative instruments | $95.0 | ($202.4) | $109.8 | ($57.2) | | Foreign currency forward and option contracts | ($11.6) | $8.3 | ($22.2) | $13.9 | | Total | $152.9 | $675.5 | $70.1 | $464.2 | - Net cash received related to derivative instruments was **$258.6 million** for the six months ended June 30, 2019, compared to **$256.3 million** in the prior-year period[78](index=78&type=chunk) [(7) Fair Value Measurements](index=26&type=section&id=%287%29%20Fair%20Value%20Measurements) Fair value measurements for assets and liabilities are categorized by input levels, incorporating credit risk adjustments - Fair value measurements are categorized into Level 1 (quoted market prices), Level 2 (observable inputs), and Level 3 (unobservable inputs)[95](index=95&type=chunk) Fair Value Measurement (June 30, 2019) | Fair Value Measurement (June 30, 2019) | Total (in millions) | Level 1 (in millions) | Level 2 (in millions) | Level 3 (in millions) | |:---------------------------------------|:--------------------|:----------------------|:----------------------|:----------------------| | Total Assets | $3,850.5 | $624.1 | $1,924.5 | $1,301.9 | | Total Liabilities | $2,068.4 | — | $2,015.2 | $53.2 | - A Monte Carlo based approach is used to incorporate credit risk valuation adjustments in fair value measurements[96](index=96&type=chunk) [(8) Long-lived Assets](index=30&type=section&id=%288%29%20Long-lived%20Assets) Net property and equipment decreased, goodwill increased due to an acquisition, and intangible assets decreased from amortization Long-lived Asset Metrics | Long-lived Asset Metric | June 30, 2019 (in millions) | December 31, 2018 (in millions) | |:------------------------|:----------------------------|:--------------------------------| | Property and equipment, net | $13,622.9 | $13,878.9 | | Goodwill | $13,731.8 | $13,715.8 | | Intangible assets subject to amortization, net | $819.3 | $1,031.2 | - Goodwill increased by **$48.8 million** due to the De Vijver Media acquisition and decreased by **$32.8 million** due to foreign currency translation adjustments[106](index=106&type=chunk) - Amortization of intangible assets was **$48.7 million** for the six months ended June 30, 2019[36](index=36&type=chunk) [(9) Debt](index=31&type=section&id=%289%29%20Debt) Total debt and finance lease obligations were $29.9 billion with a 4.54% weighted average interest rate, following recent financing activities Debt Metrics | Debt Metric | June 30, 2019 (in millions) | December 31, 2018 (in millions) | |:------------------------------------------------|:----------------------------|:--------------------------------| | Total debt before deferred financing costs, discounts and premiums | $29,402.0 | $29,315.3 | | Weighted average interest rate (a) | 4.54% | | | Total debt and finance lease obligations | $29,916.1 | $29,805.2 | | Current maturities of debt and finance lease obligations | $3,680.5 | $3,615.2 | - Virgin Media issued **$825.0 million** and **£300.0 million** in senior secured notes in May 2019, using proceeds to redeem existing notes and recognizing a **$48.0 million loss** on debt modification and extinguishment[120](index=120&type=chunk) - Telenet prepaid **€106.0 million ($120.4 million)** of its term loan in July 2019, funded by existing cash and a revolving credit facility draw-down[122](index=122&type=chunk) [(10) Leases](index=35&type=section&id=%2810%29%20Leases) Following ASU 2016-02 adoption, ROU assets and lease liabilities were recognized, with total lease expense of $135.9 million Lease Metrics (June 30, 2019) | Lease Metric (June 30, 2019) | Amount (in millions) | |:-----------------------------|:---------------------| | Total ROU assets | $1,068.0 | | Total lease liabilities | $1,173.8 | | Weighted average remaining lease term (operating) | 7.9 years | | Weighted average remaining lease term (finance) | 23.4 years | | Weighted average discount rate (operating) | 4.0% | | Weighted average discount rate (finance) | 6.1% | Lease Expense (6 Months Ended June 30, 2019) | Lease Expense (6 Months Ended June 30, 2019) | Amount (in millions) | |:---------------------------------------------|:---------------------| | Total finance lease expense | $62.3 | | Operating lease expense | $67.3 | | Short-term lease expense | $4.0 | | Variable lease expense | $2.3 | | Total lease expense | $135.9 | - Cash outflows from operating and finance leases totaled **$121.0 million** for the six months ended June 30, 2019[136](index=136&type=chunk) [(11) Income Taxes](index=39&type=section&id=%2811%29%20Income%20Taxes) Income tax expense significantly decreased, influenced by permanent differences and valuation allowances, with substantial unrecognized tax benefits Income Tax Metrics | Income Tax Metric | 3 Months Ended June 30, 2019 (in millions) | 3 Months Ended June 30, 2018 (in millions) | 6 Months Ended June 30, 2019 (in millions) | 6 Months Ended June 30, 2018 (in millions) | |:------------------|:-------------------------------------------|:-------------------------------------------|:-------------------------------------------|:-------------------------------------------| | Total income tax benefit (expense) | ($26.8) | $92.8 | ($54.6) | ($617.2) | | Computed "expected" tax benefit (expense) (a) | $59.5 | ($109.5) | $112.5 | $15.4 | - Unrecognized tax benefits totaled **$873.1 million** at June 30, 2019, with **$701.0 million** having a favorable impact on the effective income tax rate if recognized[143](index=143&type=chunk) - Potential reductions to unrecognized tax benefits of up to **$280.0 million** are reasonably possible within the next 12 months, with approximately **$110.0 million** positively impacting the effective tax rate[144](index=144&type=chunk) [(12) Equity](index=41&type=section&id=%2812%29%20Equity) The company repurchased $502.5 million in shares and plans new tender offers for up to $2.5 billion Share Repurchase (6 Months Ended June 30, 2019) | Share Repurchase (6 Months Ended June 30, 2019) | Class A Shares | Class C Shares | Aggregate (in millions) | |:------------------------------------------------|:---------------|:---------------|:------------------------| | Number of shares repurchased | 346,300 | 19,975,282 | | | Aggregate purchase price | | | $502.5 | - Remaining authorized amount for share repurchases was **$66.4 million** at June 30, 2019[147](index=147&type=chunk) - Intention to commence modified Dutch auction cash tender offers for up to **$2.5 billion** of Class A and Class C ordinary shares, expected around August 12, 2019[148](index=148&type=chunk) [(13) Share-based Compensation](index=41&type=section&id=%2813%29%20Share-based%20Compensation) Share-based compensation expense significantly increased due to performance-based incentive awards, including new CEO and PSU awards Share-based Compensation Expense | Share-based Compensation Expense | 3 Months Ended June 30, 2019 (in millions) | 3 Months Ended June 30, 2018 (in millions) | 6 Months Ended June 30, 2019 (in millions) | 6 Months Ended June 30, 2018 (in millions) | |:---------------------------------|:-------------------------------------------|:-------------------------------------------|:-------------------------------------------|:-------------------------------------------| | Performance-based incentive awards | $38.0 | $8.0 | $67.9 | $16.7 | | Non-performance based incentive awards | $29.0 | $24.3 | $51.0 | $46.3 | | Other | $12.6 | $13.4 | $22.5 | $20.5 | | Total Liberty Global | $79.6 | $45.7 | $141.4 | $83.5 | | Total | $87.0 | $45.5 | $154.3 | $88.2 | - The 2019 CEO Performance Award includes **670,000 RSAs** and **1,330,000 PSUs** (Class B ordinary shares), vesting on December 31, 2019, and May 15, 2020/2021, respectively, based on performance conditions[154](index=154&type=chunk) - The 2019 PSUs are based on achieving a specified compound annual growth rate (CAGR) for Adjusted OIBDA over a two-year period ending December 31, 2020, with vesting in April and October 2021[155](index=155&type=chunk) [(14) Restructuring Liability](index=44&type=section&id=%2814%29%20Restructuring%20Liability) Restructuring liability increased to $46.9 million, with charges primarily for employee severance and termination costs Restructuring Liability Metrics | Restructuring Liability Metric | January 1, 2019 (as adjusted) (in millions) | June 30, 2019 (in millions) | |:-------------------------------|:--------------------------------------------|:----------------------------| | Total restructuring liability | $38.7 | $46.9 | | Current portion | | $35.9 | | Noncurrent portion | | $11.0 | - Restructuring charges for the six months ended June 30, 2019, were **$55.5 million**, including **$52.1 million** for employee severance and termination costs[157](index=157&type=chunk)[158](index=158&type=chunk) - Cash paid for restructuring activities was **$46.3 million** during the six months ended June 30, 2019[157](index=157&type=chunk) [(15) Earnings or Loss per Share](index=45&type=section&id=%2815%29%20Earnings%20or%20Loss%20per%20Share) The company reported basic and diluted losses from continuing operations, with potentially dilutive instruments excluded due to anti-dilutive effect EPS Metrics | EPS Metric | 3 Months Ended June 30, 2019 | 3 Months Ended June 30, 2018 | 6 Months Ended June 30, 2019 | 6 Months Ended June 30, 2018 | |:------------------------------------------------|:-----------------------------|:-----------------------------|:-----------------------------|:-----------------------------| | Net earnings (loss) from continuing operations attributable to Liberty Global shareholders | ($369.1) (in millions) | $632.9 (in millions) | ($684.7) (in millions) | ($740.4) (in millions) | | Basic and diluted EPS from continuing operations attributable to Liberty Global shareholders | ($0.50) | $0.80 | ($0.93) | ($0.93) | - Weighted average ordinary shares outstanding for basic and diluted EPS were **735.4 million** and **738.7 million** for the three and six months ended June 30, 2019, respectively[161](index=161&type=chunk) - Potentially dilutive instruments (options, SARs, RSUs, RSAs, PSUs) totaling **82.7 million shares** for the three months and **10.8 million PSUs** for the six months ended June 30, 2019, were excluded from diluted EPS due to anti-dilutive effect[161](index=161&type=chunk) [(16) Commitments and Contingencies](index=46&type=section&id=%2816%29%20Commitments%20and%20Contingencies) Significant off-balance sheet commitments total $5.9 billion, with ongoing legal and regulatory proceedings whose outcomes are uncertain Commitment Types (June 30, 2019) | Commitment Type (June 30, 2019) | Total (in millions) | |:--------------------------------|:--------------------| | Programming commitments | $2,828.9 | | Network and connectivity commitments | $2,053.1 | | Purchase commitments | $1,042.1 | | Other commitments | $38.9 | | Total | $5,963.0 | - Programming and copyright costs aggregated **$847.0 million** for the six months ended June 30, 2019, and are expected to rise due to content expansion and rate increases[164](index=164&type=chunk) - The Interkabel Acquisition litigation in Belgium, where Proximus is seeking **€1.4 billion ($1.6 billion)** in damages, is currently under appeal to the Belgian Supreme Court[171](index=171&type=chunk)[172](index=172&type=chunk) - Virgin Media's VAT application is challenged by U.K. tax authorities, with a maximum exposure of **£47 million ($60 million)** and an appeal pending for a **£63.7 million ($83.1 million)** provision recorded in 2018[176](index=176&type=chunk)[177](index=177&type=chunk) [(17) Segment Reporting](index=49&type=section&id=%2817%29%20Segment%20Reporting) Reportable segments include U.K./Ireland, Belgium, Switzerland, CEE, and VodafoneZiggo JV, with Adjusted OIBDA as key performance measure - Reportable segments: U.K./Ireland, Belgium, Switzerland, Central and Eastern Europe (Poland and Slovakia), and nonconsolidated VodafoneZiggo JV[185](index=185&type=chunk)[186](index=186&type=chunk) Segment Performance (6 Months Ended June 30, 2019) | Segment (6 Months Ended June 30, 2019) | Revenue (in millions) | Adjusted OIBDA (in millions) | |:---------------------------------------|:----------------------|:-----------------------------| | U.K./Ireland | $3,305.3 | $1,411.5 | | Belgium | $1,425.1 | $688.4 | | Switzerland | $631.0 | $332.8 | | Central and Eastern Europe | $238.2 | $115.1 | | Central and Corporate | $120.9 | ($175.2) | | Intersegment eliminations | ($2.1) | $1.4 | | Total Consolidated | $5,718.4 | $2,374.0 | | VodafoneZiggo JV | $2,178.4 | $981.4 | - Adjusted OIBDA is defined as operating income before depreciation and amortization, share-based compensation, significant litigation provisions, and impairment, restructuring, and other operating items[183](index=183&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=55&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section analyzes Liberty Global's financial condition and operating results, covering forward-looking statements, segment performance, and liquidity [Forward-looking Statements](index=55&type=section&id=Forward-looking%20Statements) The report contains forward-looking statements subject to various risks and uncertainties, cautioning against undue reliance - Statements in this report are forward-looking and involve risks and uncertainties that could cause actual results to differ materially[203](index=203&type=chunk) - Key risk factors include economic conditions, competitive environment, currency and interest rate fluctuations, regulatory changes, and the ability to manage technological changes and close transactions[203](index=203&type=chunk)[205](index=205&type=chunk) - The broadband distribution and mobile service industries are rapidly changing, adding significant risk to forward-looking statements[206](index=206&type=chunk) [Overview](index=57&type=section&id=Overview) Liberty Global provides communication services in Europe, expanding its network amidst significant competition and regulatory challenges - Continuing operations serve **25,414,100 homes passed** and **25,259,500 revenue generating units (RGUs)** at June 30, 2019[210](index=210&type=chunk) - Network extension programs connected approximately **296,000 additional residential and commercial premises** in the first six months of 2019[211](index=211&type=chunk) - Significant competition, macroeconomic factors, and regulatory developments (including Brexit uncertainty) are adversely impacting revenue, RGUs, and ARPU[212](index=212&type=chunk)[213](index=213&type=chunk) [Material Changes in Results of Operations](index=58&type=section&id=Material%20Changes%20in%20Results%20of%20Operations) Consolidated revenue and Adjusted OIBDA declined due to foreign currency and organic factors, with volatile non-operating items impacting net earnings - Consolidated revenue decreased **$165.2 million (5.5%)** and **$360.7 million (5.9%)** for the three and six months ended June 30, 2019, respectively, compared to 2018[259](index=259&type=chunk) - Organic consolidated revenue decreased **$38.3 million (1.3%)** and **$53.6 million (0.9%)** for the three and six months ended June 30, 2019, respectively[259](index=259&type=chunk) - Net earnings (loss) from continuing operations were **($339.6) million** and **($646.5) million** for the three and six months ended June 30, 2019, respectively[323](index=323&type=chunk)[325](index=325&type=chunk) [Discussion and Analysis of our Reportable Segments](index=58&type=section&id=Discussion%20and%20Analysis%20of%20our%20Reportable%20Segments) Reportable segments experienced revenue and Adjusted OIBDA declines due to foreign exchange and competitive pressures - Significant competition in all markets adversely impacts the ability to increase or maintain RGUs and ARPU[222](index=222&type=chunk) Segment Performance (3 Months Ended June 30, 2019) | Segment (3 Months Ended June 30, 2019) | Revenue (in millions) | Organic Change (%) | Adjusted OIBDA (in millions) | Organic Change (%) | |:---------------------------------------|:----------------------|:-------------------|:-----------------------------|:-------------------| | U.K./Ireland | $1,644.0 | 0.4% | $703.2 | (2.5)% | | Belgium | $713.2 | (2.1)% | $349.4 | (2.6)% | | Switzerland | $315.0 | (3.6)% | $169.7 | (8.9)% | | Central and Eastern Europe | $119.1 | 2.9% | $57.9 | (0.5)% | | Total Consolidated | $2,850.4 | (1.3)% | $1,190.7 | (4.0)% | Segment Performance (6 Months Ended June 30, 2019) | Segment (6 Months Ended June 30, 2019) | Revenue (in millions) | Organic Change (%) | Adjusted OIBDA (in millions) | Organic Change (%) | |:---------------------------------------|:----------------------|:-------------------|:-----------------------------|:-------------------| | U.K./Ireland | $3,305.3 | 0.1% | $1,411.5 | (1.6)% | | Belgium | $1,425.1 | (1.4)% | $688.4 | (0.1)% | | Switzerland | $631.0 | (3.7)% | $332.8 | (8.2)% | | Central and Eastern Europe | $238.2 | 2.6% | $115.1 | 0.7% | | Total Consolidated | $5,718.4 | (0.9)% | $2,374.0 | (2.1)% | [Revenue of our Consolidated Reportable Segments](index=59&type=section&id=Revenue%20of%20our%20Consolidated%20Reportable%20Segments) Consolidated segment revenue declined due to foreign exchange, with mixed organic performance across regions Revenue Change (3 Months Ended June 30, 2019) | Segment (3 Months Ended June 30, 2019) | Reported Change ($M) | Reported Change (%) | Organic Change ($M) | Organic Change (%) | |:---------------------------------------|:---------------------|:--------------------|:--------------------|:-------------------| | U.K./Ireland | ($90.9) | (5.2)% | $6.4 | 0.4% | | Belgium | ($40.7) | (5.4)% | ($16.6) | (2.1)% | | Switzerland | ($17.2) | (5.2)% | ($12.0) | (3.6)% | | Central and Eastern Europe | ($4.2) | (3.4)% | $3.6 | 2.9% | | Total | ($165.2) | (5.5)% | ($38.3) | (1.3)% | Revenue Change (6 Months Ended June 30, 2019) | Segment (6 Months Ended June 30, 2019) | Reported Change ($M) | Reported Change (%) | Organic Change ($M) | Organic Change (%) | |:---------------------------------------|:---------------------|:--------------------|:--------------------|:-------------------| | U.K./Ireland | ($207.8) | (5.9)% | $5.0 | 0.1% | | Belgium | ($88.4) | (5.8)% | ($21.2) | (1.4)% | | Switzerland | ($46.1) | (6.8)% | ($25.1) | (3.7)% | | Central and Eastern Europe | ($14.6) | (5.8)% | $6.5 | 2.6% | | Total | ($360.7) | (5.9)% | ($53.6) | (0.9)% | - U.K./Ireland's organic revenue increase was driven by residential cable subscription revenue (due to RGU increases) and residential mobile subscription revenue (due to mobile subscriber increases), partially offset by decreases in residential mobile non-subscription revenue (mobile handset sales) and B2B non-subscription revenue (data services)[228](index=228&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk) [Programming and Other Direct Costs of Services, Other Operating Expenses and SG&A Expenses of our Consolidated Reportable Segments](index=64&type=section&id=Programming%20and%20Other%20Direct%20Costs%20of%20Services%2C%20Other%20Operating%20Expenses%20and%20SG%26A%20Expenses%20of%20our%20Consolidated%20Reportable%20Segments) Refer to the consolidated operating results section for detailed analysis of programming, other operating, and SG&A expenses - For detailed information on changes in programming and other direct costs of services, other operating expenses, and SG&A expenses, refer to the consolidated operating results section[247](index=247&type=chunk) [Adjusted OIBDA of our Consolidated Reportable Segments](index=64&type=section&id=Adjusted%20OIBDA%20of%20our%20Consolidated%20Reportable%20Segments) Consolidated Adjusted OIBDA decreased both reported and organically, with most segments experiencing declines Adjusted OIBDA Change (3 Months Ended June 30, 2019) | Segment (3 Months Ended June 30, 2019) | Reported Change ($M) | Reported Change (%) | Organic Change ($M) | Organic Change (%) | |:---------------------------------------|:---------------------|:--------------------|:--------------------|:-------------------| | U.K./Ireland | ($60.4) | (7.9)% | ($18.9) | (2.5)% | | Belgium | ($34.3) | (8.9)% | ($9.7) | (2.6)% | | Switzerland | ($19.3) | (10.2)% | ($16.8) | (8.9)% | | Central and Eastern Europe | ($4.1) | (6.6)% | ($0.3) | (0.5)% | | Total | ($112.8) | (8.7)% | ($52.1) | (4.0)% | Adjusted OIBDA Change (6 Months Ended June 30, 2019) | Segment (6 Months Ended June 30, 2019) | Reported Change ($M) | Reported Change (%) | Organic Change ($M) | Organic Change (%) | |:---------------------------------------|:---------------------|:--------------------|:--------------------|:-------------------| | U.K./Ireland | ($114.7) | (7.5)% | ($24.2) | (1.6)% | | Belgium | ($52.9) | (7.1)% | ($0.8) | (0.1)% | | Switzerland | ($42.7) | (11.4)% | ($30.8) | (8.2)% | | Central and Eastern Europe | ($9.2) | (7.4)% | $0.9 | 0.7% | | Total | ($191.2) | (7.5)% | ($54.1) | (2.1)% | [Adjusted OIBDA Margin](index=65&type=section&id=Adjusted%20OIBDA%20Margin) Adjusted OIBDA margins decreased across all consolidated reportable segments for both three and six-month periods Adjusted OIBDA Margin by Segment | Segment | 3 Months Ended June 30, 2019 | 3 Months Ended June 30, 2018 | 6 Months Ended June 30, 2019 | 6 Months Ended June 30, 2018 | |:-----------------|:-----------------------------|:-----------------------------|:-----------------------------|:-----------------------------| | U.K./Ireland | 42.8% | 44.0% | 42.7% | 43.5% | | Belgium | 49.0% | 50.9% | 48.3% | 49.0% | | Switzerland | 53.9% | 56.9% | 52.7% | 55.5% | | Central and Eastern Europe | 48.6% | 50.3% | 48.3% | 49.2% | [Discussion and Analysis of our Consolidated Operating Results](index=65&type=section&id=Discussion%20and%20Analysis%20of%20our%20Consolidated%20Operating%20Results) Consolidated revenue declined, programming costs increased, other operating and SG&A expenses decreased, and share-based compensation rose significantly Consolidated Revenue Change (3 Months Ended June 30, 2019) | Consolidated Revenue (3 Months Ended June 30, 2019) | Reported Change ($M) | Reported Change (%) | Organic Change ($M) | Organic Change (%) | |:----------------------------------------------------|:---------------------|:--------------------|:--------------------|:-------------------| | Total residential revenue | ($147.0) | (6.0)% | ($22.9) | (0.9)% | | Total B2B revenue | ($29.4) | (5.8)% | ($12.1) | (2.4)% | | Other revenue | $11.2 | 14.1% | ($3.3) | (3.3)% | | Total | ($165.2) | (5.5)% | ($38.3) | (1.3)% | Consolidated Revenue Change (6 Months Ended June 30, 2019) | Consolidated Revenue (6 Months Ended June 30, 2019) | Reported Change ($M) | Reported Change (%) | Organic Change ($M) | Organic Change (%) | |:----------------------------------------------------|:---------------------|:--------------------|:--------------------|:-------------------| | Total residential revenue | ($359.3) | (7.3)% | ($68.7) | (1.4)% | | Total B2B revenue | ($31.2) | (3.1)% | $5.3 | 0.5% | | Other revenue | $29.8 | 21.2% | $9.8 | 5.7% | | Total | ($360.7) | (5.9)% | ($53.6) | (0.9)% | - Share-based compensation expense increased significantly by **$40.5 million (89.0%)** for the three months and **$65.2 million (74.8%)** for the six months ended June 30, 2019[281](index=281&type=chunk)[282](index=282&type=chunk) [Revenue](index=65&type=section&id=Revenue) Consolidated revenue decreased organically, with residential cable and mobile subscription declines offset by B2B subscription growth Residential Cable Subscription Revenue (Organic Change) | Residential Cable Subscription Revenue (Organic Change) | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:--------------------------------------------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Video | ($5.7) | ($0.8) | ($10.1) | ($0.7) | | Broadband internet | $27.5 | 3.4% | $47.1 | 2.8% | | Fixed-line telephony | ($26.5) | (6.5)% | ($53.7) | (6.5)% | | Total | ($4.7) | (0.2)% | ($16.7) | (0.4)% | - Residential mobile subscription revenue decreased organically by **$5.5 million (2.2%)** and **$4.6 million (0.9%)** for the three and six months ended June 30, 2019, respectively[262](index=262&type=chunk) - B2B subscription revenue increased organically by **$13.1 million (11.8%)** and **$27.8 million (12.7%)** for the three and six months ended June 30, 2019, respectively, driven by SOHO revenue growth[264](index=264&type=chunk) [Programming and other direct costs of services](index=68&type=section&id=Programming%20and%20other%20direct%20costs%20of%20services) Programming and other direct costs increased organically due to higher content costs, partially offset by lower mobile handset costs Programming and Other Direct Costs of Services | Programming and Other Direct Costs of Services | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:-----------------------------------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Total Reported | $786.3 | $803.5 | $1,586.7 | $1,650.6 | | Organic Change ($M) | $12.7 | 1.6% | $17.7 | 1.1% | - Programming and copyright costs increased by **$17.5 million (4.3%)** and **$35.0 million (4.1%)** for the three and six months, respectively, due to higher costs for premium/basic content[273](index=273&type=chunk) - Mobile handset and other device costs increased by **$5.3 million (6.1%)** for the three months but decreased by **($11.7) million (6.1%)** for the six months, influenced by sales volumes and average cost per handset[273](index=273&type=chunk) [Other operating expenses](index=69&type=section&id=Other%20operating%20expenses) Other operating expenses showed mixed organic changes, driven by network infrastructure charges and personnel cost adjustments Other Operating Expenses (Excl. Share-based Comp.) | Other Operating Expenses (Excl. Share-based Comp.) | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:---------------------------------------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Total Reported | $416.8 | $425.3 | $835.3 | $886.3 | | Organic Change ($M) | $10.4 | 2.4% | ($8.5) | (0.9)% | - Network infrastructure charges in U.K./Ireland increased by **$11.7 million** and **$18.2 million** for the three and six months, respectively[278](index=278&type=chunk) - Personnel costs decreased by **$4.0 million (3.0%)** and **$15.0 million (5.4%)** for the three and six months, respectively, due to lower staffing levels[278](index=278&type=chunk) [SG&A expenses](index=71&type=section&id=SG%26A%20expenses) SG&A expenses decreased organically due to lower sales and marketing costs, partially offset by increased personnel costs SG&A Expenses (Excl. Share-based Comp.) | SG&A Expenses (Excl. Share-based Comp.) | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:----------------------------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Total Reported | $456.6 | $483.3 | $922.4 | $977.0 | | Organic Change ($M) | ($9.3) | (1.9)% | ($8.7) | (0.9)% | - Personnel costs increased by **$19.2 million (9.5%)** and **$24.4 million (5.8%)** for the three and six months, respectively, due to higher average cost per employee[286](index=286&type=chunk) - External sales and marketing costs decreased by **$11.3 million (11.2%)** and **$21.1 million (10.2%)** for the three and six months, respectively, due to lower advertising campaigns[286](index=286&type=chunk) [Share-based compensation expense](index=73&type=section&id=Share-based%20compensation%20expense%20%28included%20in%20other%20operating%20and%20SG%26A%20expenses%29) Share-based compensation expense significantly increased, primarily driven by performance-based incentive awards Share-based Compensation Expense | Share-based Compensation Expense | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:---------------------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Total Liberty Global | $79.6 | $45.7 | $141.4 | $83.5 | | Total | $87.0 | $45.5 | $154.3 | $88.2 | - Performance-based incentive awards contributed **$38.0 million** and **$67.9 million** to the expense for the three and six months ended June 30, 2019, respectively[288](index=288&type=chunk) [Depreciation and amortization expense](index=73&type=section&id=Depreciation%20and%20amortization%20expense) Depreciation and amortization expense decreased, influenced by FX, property additions, and fully depreciated assets Depreciation and Amortization Expense | Depreciation and Amortization Expense | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:--------------------------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Total | $921.8 | $964.0 | $1,861.4 | $2,004.7 | - Excluding FX, depreciation and amortization expense increased **$10.4 million (1.1%)** for the three months and decreased **($22.1) million (1.1%)** for the six months[292](index=292&type=chunk) - Changes are primarily due to increases from property and equipment additions and decreases from fully depreciated assets[292](index=292&type=chunk) [Impairment, restructuring and other operating items, net](index=73&type=section&id=Impairment%2C%20restructuring%20and%20other%20operating%20items%2C%20net) Net impairment, restructuring, and other operating items included severance, network asset impairment, and acquisition/disposition costs Impairment, Restructuring and Other Operating Items, Net | Impairment, Restructuring and Other Operating Items, Net | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:---------------------------------------------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Total | $33.2 | $29.9 | $104.1 | $90.6 | - 2019 periods include restructuring charges of **$18.0 million (3-month)** and **$55.5 million (6-month)**, mainly for employee severance[294](index=294&type=chunk) - Six-month 2019 period includes **$22.6 million impairment charges** for network assets and **$18.1 million** in direct acquisition/disposition costs[294](index=294&type=chunk) [Interest expense](index=74&type=section&id=Interest%20expense) Interest expense decreased, but organically increased due to higher weighted average interest rates, partially offset by lower debt balances Interest Expense | Interest Expense | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:-----------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Total | ($363.6) | ($380.4) | ($730.9) | ($755.7) | - Excluding FX, interest expense increased **$2.4 million (0.6%)** for the three months and **$20.0 million (2.6%)** for the six months[297](index=297&type=chunk) - Increases are attributable to higher weighted average interest rates, partially offset by lower average outstanding debt balances[297](index=297&type=chunk) [Realized and unrealized gains on derivative instruments, net](index=75&type=section&id=Realized%20and%20unrealized%20gains%20on%20derivative%20instruments%2C%20net) Net realized and unrealized gains on derivative instruments significantly decreased, primarily due to lower gains on cross-currency and interest rate contracts Realized and Unrealized Gains on Derivative Instruments, Net | Realized and Unrealized Gains on Derivative Instruments, Net | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:-----------------------------------------------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Total | $152.9 | $675.5 | $70.1 | $464.2 | - 2019 results for cross-currency and interest rate derivative contracts were primarily a net gain of **$69.1 million (3-month)** and a net loss of **($18.2) million (6-month)**, including net losses from credit risk valuation adjustments[301](index=301&type=chunk) - Equity-related derivative instruments generated gains of **$95.0 million (3-month)** and **$109.8 million (6-month)** in 2019[301](index=301&type=chunk) [Foreign currency transaction gains (losses), net](index=76&type=section&id=Foreign%20currency%20transaction%20gains%20%28losses%29%2C%20net) Net foreign currency transaction results shifted from gains to losses for three months, and from losses to gains for six months Foreign Currency Transaction Gains (Losses), Net | Foreign Currency Transaction Gains (Losses), Net | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:-------------------------------------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Total | ($27.0) | $51.5 | $111.6 | ($50.2) | - Primary drivers include intercompany payables/receivables and U.S. dollar-denominated debt issued by euro and British pound sterling functional currency entities[305](index=305&type=chunk) [Realized and unrealized gains (losses) due to changes in fair values of certain investments and debt, net](index=76&type=section&id=Realized%20and%20unrealized%20gains%20%28losses%29%20due%20to%20changes%20in%20fair%20values%20of%20certain%20investments%20and%20debt%2C%20net) Net realized and unrealized losses on investments and debt were reported, contrasting with prior-year gains, driven by specific investment losses Realized and Unrealized Gains (Losses) on Investments and Debt, Net | Realized and Unrealized Gains (Losses) on Investments and Debt, Net | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:--------------------------------------------------------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Investments | ($128.3) | $54.2 | ($124.2) | ($24.8) | | Debt | ($10.4) | $7.3 | ($22.7) | $29.1 | | Total | ($138.7) | $61.5 | ($146.9) | $4.3 | - Significant losses were recorded on ITV (**$111.8 million** for 3-month, **$87.8 million** for 6-month), Casa (**$5.5 million** for 3-month, **$18.4 million** for 6-month), and Lionsgate (**$17.2 million** for 3-month, **$17.8 million** for 6-month) investments in 2019[307](index=307&type=chunk) [Losses on debt modification and extinguishment, net](index=77&type=section&id=Losses%20on%20debt%20modification%20and%20extinguishment%2C%20net) Net losses on debt modification and extinguishment were incurred due to redemption premiums and write-offs from financing transactions Losses on Debt Modification and Extinguishment, Net | Losses on Debt Modification and Extinguishment, Net | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:----------------------------------------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Total | ($48.3) | ($20.1) | ($48.8) | ($22.7) | - The 2019 six-month loss includes **$43.7 million** in redemption premiums and **$4.3 million** write-off of unamortized deferred financing costs and discounts[310](index=310&type=chunk) [Share of results of affiliates, net](index=77&type=section&id=Share%20of%20results%20of%20af%20iliates%2C%20net) Net losses from affiliates were primarily driven by the VodafoneZiggo JV's performance, impacted by significant mobile competition Share of Results of Affiliates, Net | Share of Results of Affiliates, Net | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:------------------------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | VodafoneZiggo JV | ($40.0) | ($63.2) | ($102.3) | ($90.0) | | Other | ($29.3) | ($19.1) | ($37.9) | ($28.8) | | Total | ($69.3) | ($82.3) | ($140.2) | ($118.8) | VodafoneZiggo JV Summarized Results | VodafoneZiggo JV Summarized Results | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:------------------------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Revenue | $1,084.5 | $1,133.3 | $2,178.4 | $2,329.9 | | Net loss | ($104.0) | ($137.1) | ($254.3) | ($213.3) | - VodafoneZiggo JV faces significant competition, particularly in mobile operations, which could lead to future impairment charges[314](index=314&type=chunk) [Other income, net](index=78&type=section&id=Other%20income%2C%20net) Other income, net, increased, primarily due to a gain from the De Vijver Media Acquisition Other Income, Net | Other Income, Net | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Total | $32.5 | $6.4 | $39.0 | $16.2 | - The 2019 amounts include a **$25.7 million gain** associated with the De Vijver Media Acquisition[316](index=316&type=chunk) [Income tax expense](index=78&type=section&id=Income%20tax%20expense) Income tax expense significantly decreased, influenced by permanent differences, valuation allowances, and foreign currency exchange results Income Tax Expense | Income Tax Expense | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:-------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Total | ($26.8) | $92.8 | ($54.6) | ($617.2) | - The 2019 six-month expense differs from the expected benefit of **$112.5 million** (U.K. statutory rate of **19.0%**) due to permanent differences in investment treatment and interest, offset by valuation allowance decreases and foreign currency exchange results[321](index=321&type=chunk) [Earnings (loss) from continuing operations](index=78&type=section&id=Earnings%20%28loss%29%20from%20continuing%20operations) Losses from continuing operations were reported, influenced by operating income, non-operating items, and income tax expense Earnings (Loss) from Continuing Operations | Earnings (Loss) from Continuing Operations | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:-------------------------------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Total | ($339.6) | $669.0 | ($646.5) | ($698.2) | - Gains or losses from derivative instruments, foreign currency exchange rates, and asset dispositions are highly volatile and not a reliable source of income[326](index=326&type=chunk) - The company expects to report significant interest expense and relies on increasing Adjusted OIBDA to offset expenses and achieve earnings[327](index=327&type=chunk) [Earnings from discontinued operations, net of taxes](index=79&type=section&id=Earnings%20from%20discontinued%20operations%2C%20net%20of%20taxes) Earnings from discontinued operations were reported, including a significant gain from the sale of UPC DTH Earnings from Discontinued Operations, Net of Taxes | Earnings from Discontinued Operations, Net of Taxes | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:----------------------------------------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Total | $315.5 | $281.5 | $638.1 | $470.1 | - Includes a **$106.6 million gain** on the sale of UPC DTH during the second quarter of 2019[328](index=328&type=chunk) [Net earnings attributable to noncontrolling interests](index=79&type=section&id=Net%20earnings%20attributable%20to%20noncontrolling%20interests) Net earnings attributable to noncontrolling interests decreased due to lower operating results from Telenet and the UPC Austria sale Net Earnings Attributable to Noncontrolling Interests | Net Earnings Attributable to Noncontrolling Interests | 3 Months Ended June 30, 2019 ($M) | 3 Months Ended June 30, 2018 ($M) | 6 Months Ended June 30, 2019 ($M) | 6 Months Ended June 30, 2018 ($M) | |:------------------------------------------------------|:----------------------------------|:----------------------------------|:----------------------------------|:----------------------------------| | Total | ($29.5) | ($37.9) | ($38.2) | ($45.8) | - Decreases are primarily attributable to declines in Telenet's results and the impact of the UPC Austria sale[329](index=329&type=chunk) [Material Changes in Financial Condition](index=79&type=section&id=Material%20Changes%20in%20Financial%20Condition) Financial condition is dependent on subsidiary capital, with a debt-to-Adjusted OIBDA ratio of 5.4x and decreased cash flows - Liberty Global is a holding company dependent on subsidiary capital resources, with significant operating subsidiaries separately financed within borrowing groups (Virgin Media, UPC Holding, Telenet)[330](index=330&type=chunk) - Consolidated debt to annualized Adjusted OIBDA ratio was **5.4x** at June 30, 2019, with a target range of four to five times[344](index=344&type=chunk) - Total debt and finance lease obligations aggregated **$30.0 billion** at June 30, 2019, with **$21.8 billion** not due until 2025 or thereafter[346](index=346&type=chunk) [Sources and Uses of Cash](index=79&type=section&id=Sources%20and%20Uses%20of%20Cash) Consolidated cash totaled $1.27 billion, with corporate liquidity for G&A and debt, and borrowing group liquidity for capex and debt service Cash and Cash Equivalents (June 30, 2019) | Cash and Cash Equivalents (June 30, 2019) | Amount (in millions) | |:------------------------------------------|:---------------------| | Liberty Global and unrestricted subsidiaries | $1,018.5 | | Borrowing groups | $250.5 | | Total consolidated | $1,269.0 | - Corporate liquidity sources include cash, interest/dividend income, VodafoneZiggo JV Receivable payments, and cash from transitional services[335](index=335&type=chunk) - Corporate liquidity requirements include G&A expenses, interest/principal payments on ITV Collar Loan and Lionsgate Loan, and potential share repurchases[339](index=339&type=chunk) [Cash and cash equivalents](index=79&type=section&id=Cash%20and%20cash%20equivalents) Consolidated cash and cash equivalents totaled $1.27 billion, primarily held by Liberty Global and its unrestricted subsidiaries Cash Holder (June 30, 2019) | Cash Holder (June 30, 2019) | Amount (in millions) | |:----------------------------|:---------------------| | Liberty Global | $6.4 | | Unrestricted subsidiaries | $1,012.1 | | Telenet | $158.4 | | UPC Holding | $50.4 | | Virgin Media | $41.7 | | Total | $1,269.0 | [Liquidity of Liberty Global and its unrestricted subsidiaries](index=81&type=section&id=Liquidity%20of%20Liberty%20Global%20and%20its%20unrestricted%20subsidiaries) Corporate liquidity of $1.02 billion is used for G&A, debt payments, and share repurchases, with no anticipated adverse tax impact - Available corporate liquidity was **$1,018.5 million** at June 30, 2019[334](index=334&type=chunk) - Corporate liquidity requirements include G&A expenses, interest/principal payments on ITV Collar Loan and Lionsgate Loan, and potential share repurchases[339](index=339&type=chunk) - Tax considerations are not anticipated to adversely impact corporate liquidity over the next 12 months[337](index=337&type=chunk) [Liquidity of borrowing groups](index=82&type=section&id=Liquidity%20of%20borrowing%20groups) Borrowing groups held $250.5 million in cash, using operational cash and debt availability for capital expenditures and debt service - Borrowing groups held **$250.5 million** in cash and cash equivalents at June 30, 2019[331](index=331&type=chunk)[342](index=342&type=chunk) - Primary liquidity sources are cash from operations and borrowing availability under debt instruments[342](index=342&type=chunk) - All borrowing groups were in compliance with debt covenants at June 30, 2019, and no material adverse impact on liquidity is anticipated from non-compliance in the next 12 months[345](index=345&type=chunk) [Capitalization](index=82&type=section&id=Capitalization) The company's debt-to-Adjusted OIBDA ratio was 5.4x, with $30.0 billion in debt, and plans to refinance maturing obligations - Target consolidated debt to Adjusted OIBDA ratio is between four and five times[344](index=344&type=chunk) Leverage Ratios (June 30, 2019) | Leverage Ratio (June 30, 2019) | Value | |:-------------------------------|:------| | Consolidated debt to annualized Adjusted OIBDA | 5.4x | | Consolidated net debt to annualized Adjusted OIBDA | 5.2x | - Total outstanding consolidated debt and finance lease obligations were **$30.0 billion** at June 30, 2019, with **$21.8 billion** due in 2025 or thereafter[346](index=346&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=83&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased, while cash used in investing and financing activities also decreased due to lower capex and share repurchases Cash Flow Activity (6 Months Ended June 30) | Cash Flow Activity (6 Months Ended June 30) | 2019 ($M) | 2018 ($M) | Change ($M) | |:--------------------------------------------|:----------|:----------|:------------| | Net cash provided by operating activities | $1,628.5 | $2,128.1 | ($499.6) | | Net cash used by investing activities | ($682.7) | ($893.3) | $210.6 | | Net cash used by financing activities | ($1,595.4) | ($3,029.8) | $1,434.4 | | Net decrease in cash and cash equivalents | ($654.6) | ($1,804.3) | $1,149.7 | - Decrease in operating cash flow due to lower cash dividends, higher tax/interest payments, and lower derivative cash receipts[350](index=350&type=chunk) - Investing cash flow decrease driven by **$161.9 million** lower capital expenditures and **$145.8 million** net cash proceeds from UPC DTH sale[351](index=351&type=chunk) [Summary](index=83&type=section&id=Summary) Net cash provided by operating activities was $1.63 billion, with net cash used in investing and financing activities Cash Flow Activity Summary (6 Months Ended June 30) | Cash Flow Activity (6 Months Ended June 30) | 2019 ($M) | 2018 ($M) | Change ($M) | |:--------------------------------------------|:----------|:----------|:------------| | Net cash provided by operating activities | $1,628.5 | $2,128.1 | ($499.6) | | Net cash used by investing activities | ($682.7) | ($893.3) | $210.6 | | Net cash used by financing activities | ($1,595.4) | ($3,029.8) | $1,434.4 | | Net decrease in cash and cash equivalents | ($654.6) | ($1,804.3) | $1,149.7 | [Operating Activities](index=83&type=section&id=Operating%20Activities) Net cash from operating activities decreased due to lower dividends, higher tax/interest payments, and reduced derivative cash receipts - Net cash provided by operating activities decreased by **$499.6 million** to **$1,628.5 million** for the six months ended June 30, 2019[350](index=350&type=chunk) - Decrease attributed to lower cash dividends, higher tax and interest payments, and lower cash receipts from derivative instruments[350](index=350&type=chunk) [Investing Activities](index=83&type=section&id=Investing%20Activities) Net cash used in investing activities decreased due to lower capital expenditures and proceeds from the UPC DTH sale - Net cash used by investing activities decreased by **$210.6 million** to **($682.7) million** for the six months ended June 30, 2019[351](index=351&type=chunk) - Capital expenditures decreased by **$161.9 million** to **$632.9 million**, and net cash proceeds from UPC DTH sale were **$145.8 million**[351](index=351&type=chunk) Capital Expenditures, Net (6 Months Ended June 30) | Capital Expenditures, Net (6 Months Ended June 30) | 2019 ($M) | 2018 ($M) | |:---------------------------------------------------|:----------|:----------| | Property and equipment additions | $1,381.3 | $1,846.4 | | Assets acquired under vendor financing | ($926.3) | ($1,186.7) | | Assets acquired under finance leases | ($32.6) | ($46.5) | | Capital expenditures, net | $632.9 | $794.8 | [Financing Activities](index=84&type=section&id=Financing%20Activities) Net cash used in financing activities significantly decreased due to lower share repurchases and higher net debt borrowings - Net cash used by financing activities decreased by **$1,434.4 million** to **($1,595.4) million** for the six months ended June 30, 2019[350](index=350&type=chunk)[356](index=356&type=chunk) - Decrease driven by **$773.7 million** lower share repurchases and **$644.2 million** higher net debt borrowings[356](index=356&type=chunk) [Adjusted Free Cash Flow](index=84&type=section&id=Adjusted%20Free%20Cash%20Flow) Adjusted free cash flow significantly improved to ($72.5) million, reflecting adjustments for various cash flow items Adjusted Free Cash Flow (6 Months Ended June 30) | Adjusted Free Cash Flow (6 Months Ended June 30) | 2019 ($M) | 2018 ($M) | |:-------------------------------------------------|:----------|:----------| | Net cash provided by operating activities | $1,628.5 | $2,128.1 | | Cash payments for direct acquisition/disposition costs | $18.0 | $4.8 | | Expenses financed by an intermediary | $1,08

Liberty Global Plc (NASDAQ:LBTYA) Q1 2019 Results Earnings Conference Call May 7, 2019 9:00 AM ET Company Participants Mike Fries - CEO Charlie Bracken - EVP and CFO Thomas Mockridge - CEO, Virgin Media Manuel Kohnstamm - SVP and Chief Corporate Affairs Officer Lutz Schüler - Conference Call Participants Robert Grindle - Deutsche Bank Ben Swinburne - Morgan Stanley Goldman Sachs - Michael Bishop Vijay Jayant - Evercore Ulrich Rathe - Jefferies Jeff Wlodarczak - Pivotal Research Nick Lyall - SocGen Christia ...

[Financial Statements](index=3&type=section&id=FINANCIAL%20STATEMENTS) [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2019, Liberty Global reported total assets of $53.44 billion, a slight increase from $53.15 billion at year-end 2018, with total liabilities also increasing to $49.59 billion from $49.01 billion over the same period, leading to a decrease in total equity from $4.15 billion to $3.85 billion Condensed Consolidated Balance Sheet Summary (in millions) | Balance Sheet Item | March 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Total current assets** | $3,677.2 | $4,141.4 | | **Total assets** | **$53,437.6** | **$53,153.6** | | **Total current liabilities** | $10,175.2 | $10,306.1 | | **Total liabilities** | **$49,588.0** | **$49,005.3** | | **Total equity** | **$3,849.6** | **$4,148.3** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2019, the company's revenue decreased to $2.87 billion from $3.06 billion year-over-year, while the loss from continuing operations significantly narrowed to $(306.9) million from $(1,367.2) million, resulting in net earnings of $15.7 million, a substantial improvement from a net loss of $(1,178.6) million in Q1 2018 Q1 2019 Statement of Operations Summary (in millions, except per share data) | Metric | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Revenue | $2,868.0 | $3,063.5 | | Operating income | $105.5 | $117.6 | | Loss from continuing operations | $(306.9) | $(1,367.2) | | Earnings from discontinued operations | $322.6 | $188.6 | | **Net earnings (loss)** | **$15.7** | **$(1,178.6)** | | Diluted loss per share from continuing operations | $(0.43) | $(1.70) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In the first three months of 2019, net cash provided by operating activities decreased to $765.4 million from $1,279.3 million, with net cash used in investing activities at $477.3 million and financing activities at $815.8 million, leading to a net decrease in cash and cash equivalents of $535.3 million and an ending balance of $963.0 million Q1 2019 Cash Flow Summary (in millions) | Cash Flow Category | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Net cash from operating activities | $765.4 | $1,279.3 | | Net cash used by investing activities | $(477.3) | $(671.1) | | Net cash used by financing activities | $(815.8) | $(1,732.4) | | **Net decrease in cash** | **$(535.3)** | **$(1,110.1)** | | Cash at end of period | $963.0 | $572.8 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures supporting the financial statements, covering basis of presentation, accounting changes, significant acquisitions and dispositions, investments, debt structure, derivative instruments, leases, income taxes, share-based compensation, and segment reporting, with key events including pending sales of the Vodafone Disposal Group and UPC Switzerland, and the adoption of the new lease accounting standard (ASU 2016-02) [Note 4: Acquisitions and Dispositions](index=13&type=section&id=%284%29%20Acquisitions%20and%20Dispositions) This note details significant pending and completed dispositions, including agreements to sell operations in Germany, Romania, Hungary, and the Czech Republic to Vodafone for approximately €10.6 billion ($11.9 billion) and UPC Switzerland to Sunrise for a total enterprise value of $6.3 billion, with these operations presented as discontinued - Pending sale of the "Vodafone Disposal Group" (Germany, Romania, Hungary, Czech Republic) to Vodafone, with expected cash proceeds of approximately **€10.6 billion ($11.9 billion)**[39](index=39&type=chunk) - Pending sale of UPC Switzerland to Sunrise Communications Group AG for a total enterprise value of **$6.3 billion**, with expected net cash proceeds of **$2.6 billion**[41](index=41&type=chunk) Assets and Liabilities of Discontinued Operations (March 31, 2019, in millions) | Category | Vodafone Disposal Group | UPC DTH | Total | | :--- | :--- | :--- | :--- | | **Total assets** | **$10,875.7** | **$95.9** | **$10,971.6** | | **Total liabilities** | **$12,321.5** | **$79.2** | **$12,400.7** | [Note 9: Debt](index=29&type=section&id=%289%29%20Debt) As of March 31, 2019, total debt before deferred financing costs was $29.5 billion, with a weighted average interest rate of 4.58%, and including finance lease obligations, total debt and finance lease obligations amounted to $30.0 billion, with $2.49 billion in unused borrowing capacity Debt Summary (March 31, 2019) | Metric | Amount (in millions) | | :--- | :--- | | Total debt before deferred financing costs | $29,534.2 | | Total debt and finance lease obligations | $30,039.7 | | Weighted average interest rate | 4.58% | | Unused borrowing capacity | $2,487.4 | [Note 12: Equity](index=36&type=section&id=%2812%29%20Equity) During the first quarter of 2019, Liberty Global repurchased 9,049,882 shares of its Class C ordinary shares for an aggregate price of $214.1 million, with $353.2 million remaining authorized for future share repurchases as of March 31, 2019 - In Q1 2019, the company repurchased **9.05 million Class C shares** for **$214.1 million** at an average price of **$23.66 per share**[142](index=142&type=chunk) - The remaining amount authorized for share repurchases was **$353.2 million** as of March 31, 2019[142](index=142&type=chunk) [Note 17: Segment Reporting](index=43&type=section&id=%2817%29%20Segment%20Reporting) The company's performance is evaluated based on reportable segments, including U.K./Ireland, Belgium, Switzerland, and Central and Eastern Europe, as well as the nonconsolidated VodafoneZiggo JV, with Q1 2019 total revenue from continuing operations at $2.87 billion and Adjusted OIBDA at $1.18 billion, and the U.K./Ireland segment being the largest contributor to revenue Revenue by Reportable Segment (in millions) | Segment | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | U.K./Ireland | $1,661.3 | $1,778.2 | | Belgium | $711.9 | $759.6 | | Switzerland | $316.0 | $344.9 | | Central and Eastern Europe | $119.1 | $129.5 | | **Total** | **$2,868.0** | **$3,063.5** | Adjusted OIBDA by Reportable Segment (in millions) | Segment | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | U.K./Ireland | $708.3 | $762.6 | | Belgium | $339.0 | $357.6 | | Switzerland | $163.1 | $186.5 | | Central and Eastern Europe | $57.2 | $62.3 | | **Total** | **$1,183.3** | **$1,261.7** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=50&type=section&id=Item%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) [Overview](index=52&type=section&id=Overview) Liberty Global provides communication services across Europe, with the MD&A focusing on continuing operations in the U.K., Ireland, Belgium, Switzerland, Poland, and Slovakia, and a 50% interest in the VodafoneZiggo JV, while operations in Germany, Austria, and other CEE countries are treated as discontinued due to sales agreements, and the company faces significant competition and macroeconomic risks, such as Brexit - The company's continuing operations passed **25.2 million homes** and served **25.3 million revenue generating units (RGUs)** and **6.0 million mobile subscribers** as of March 31, 2019[204](index=204&type=chunk) - Network extension programs connected approximately **131,000 new premises** in Q1 2019, with the majority (**102,000**) in the U.K. and Ireland[205](index=205&type=chunk) - The company highlights significant competition and external risks, including the uncertainty surrounding "Brexit" and its potential adverse effects on business, economic conditions, and currency exchange rates[206](index=206&type=chunk)[207](index=207&type=chunk) [Material Changes in Results of Operations](index=53&type=section&id=Material%20Changes%20in%20Results%20of%20Operations) For Q1 2019, consolidated revenue decreased 6.4% to $2.87 billion, with an organic decline of only 0.6% primarily due to foreign exchange headwinds, while residential revenue saw an organic decline of 1.8% and B2B revenue grew 2.9% organically, and Adjusted OIBDA decreased 6.2% as reported and 0.2% organically to $1.18 billion, with the loss from continuing operations narrowing significantly due to smaller derivative losses and favorable foreign currency transaction gains Consolidated Revenue Performance (Q1 2019 vs Q1 2018) | Metric | Amount (in millions) | % Change | | :--- | :--- | :--- | | Reported Revenue Change | $(195.5) | (6.4)% | | Organic Revenue Change | $(17.5) | (0.6)% | Consolidated Adjusted OIBDA Performance (Q1 2019 vs Q1 2018) | Metric | Amount (in millions) | % Change | | :--- | :--- | :--- | | Reported Adjusted OIBDA Change | $(78.4) | (6.2)% | | Organic Adjusted OIBDA Change | $(2.5) | (0.2)% | - Programming and other direct costs of services increased **0.5% organically**, driven by higher programming and copyright costs, partially offset by lower mobile handset costs[255](index=255&type=chunk) - Share of results of affiliates was a loss of **$(70.9) million**, primarily reflecting the company's **50% share** of the VodafoneZiggo JV's net loss of **$(150.3) million**[287](index=287&type=chunk)[288](index=288&type=chunk) [Material Changes in Financial Condition](index=71&type=section&id=Material%20Changes%20in%20Financial%20Condition) The company's liquidity is managed through separate borrowing groups and a corporate-level cash pool, with total cash at $939.4 million as of March 31, 2019, and a consolidated debt-to-Adjusted OIBDA ratio of 5.4x, exceeding the target of 4-5x, while Adjusted free cash flow for the quarter was an outflow of $(624.5) million, an improvement from $(998.9) million in Q1 2018 due to lower capital expenditures - The company targets a consolidated debt to Adjusted OIBDA ratio of **four to five times**. As of March 31, 2019, this ratio was **5.4x**[311](index=311&type=chunk) - Total consolidated debt and finance lease obligations aggregated **$30.2 billion**, with **$21.5 billion** not due until 2025 or later[313](index=313&type=chunk) Adjusted Free Cash Flow (in millions) | Period | Adjusted Free Cash Flow | | :--- | :--- | | Q1 2019 | $(624.5) | | Q1 2018 | $(998.9) | [Quantitative and Qualitative Disclosures About Market Risk](index=77&type=section&id=Item%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is exposed to market risks from foreign currency exchange rates, interest rates, and stock prices, with primary currency exposures to the Euro and British pound sterling, and interest rate risk arising from $11.9 billion in variable-rate debt managed through derivative instruments, while the upcoming transition away from LIBOR after 2021 is not anticipated to have a material impact [Foreign Currency Risk](index=78&type=section&id=Foreign%20Currency%20Risk) The company faces significant foreign currency risk due to debt denominated in currencies different from the functional currency of supporting operations, with the report detailing spot and average exchange rates for key currencies like the Euro, British pound sterling, and Swiss franc against the U.S. dollar, highlighting volatility Key Exchange Rates (per one U.S. dollar) | Currency | Spot Rate (Mar 31, 2019) | Avg. Rate (Q1 2019) | Avg. Rate (Q1 2018) | | :--- | :--- | :--- | :--- | | Euro | 0.8912 | 0.8807 | 0.8135 | | British pound sterling | 0.7696 | 0.7679 | 0.7187 | | Swiss franc | 0.9957 | 0.9972 | 0.9480 | [Interest Rate Risks](index=79&type=section&id=Interest%20Rate%20Risks) Exposure to interest rate changes primarily stems from $11.9 billion in variable-rate debt indexed to EURIBOR and LIBOR, which the company actively hedges with derivative instruments, and a hypothetical 50 basis point increase in variable rates would increase annual interest expense by $59.5 million before considering derivatives, with sensitivity analyses provided for major derivative portfolios - The company has **$11.9 billion** in outstanding variable-rate debt with a weighted average interest rate of approximately **4.3%** at March 31, 2019[345](index=345&type=chunk) - A hypothetical **50 basis point (0.50%) increase** in the weighted average variable interest rate would increase annual consolidated interest expense by **$59.5 million**, excluding the impact of derivative contracts[345](index=345&type=chunk) [Controls and Procedures](index=81&type=section&id=Item%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2019, confirming that information required for SEC filings is recorded, processed, and reported in a timely manner, with no material changes to internal controls over financial reporting identified during the quarter [Evaluation of Disclosure Controls and Procedures](index=81&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Based on an evaluation as of March 31, 2019, the CEO and CFO concluded that the company's disclosure controls and procedures are effective at providing reasonable assurance that required information is properly recorded and reported within specified timeframes - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2019[355](index=355&type=chunk) [Part II — Other Information](index=82&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Unregistered Sales of Equity Securities and Use of Proceeds](index=82&type=section&id=Item%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section details the company's repurchases of its own equity securities during the first quarter of 2019, where it bought back over 9 million Class C shares for a total cost of approximately $214 million Issuer Purchases of Equity Securities (Q1 2019) | Period | Class | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | :--- | | Jan 2019 | C | 3,422,200 | $21.55 | | Feb 2019 | C | 2,704,282 | $24.64 | | Mar 2019 | C | 2,923,400 | $25.23 | | **Total** | **C** | **9,049,882** | **$23.66** | - As of March 31, 2019, the approximate dollar value of shares that may yet be purchased under the plans or programs was **$353.2 million**[359](index=359&type=chunk) [Exhibits](index=83&type=section&id=Item%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including the Share Purchase Agreement for the sale of UPC Switzerland, various material contracts related to executive compensation plans, and required certifications by the CEO and CFO - Key exhibits filed include the Share Purchase Agreement with Sunrise Communications Group AG for the sale of UPC Switzerland, and details of various 2019 executive performance award programs[361](index=361&type=chunk)

Liberty Global, Inc. (NASDAQ:LBTYA) Q4 2018 Results Earnings Conference Call February 27, 2019 5:00 PM ET Company Participants Mike Fries - CEO Charlie Bracken - EVP and CFO Thomas Mockridge - CEO, Virgin Media Andrea Salvato - Conference Call Participants Nick Lyall - Societe Generale Vijay Jayant - Evercore James Ratzer - New Street Research David Wright - Bank of America Polo Tang - UBS Jeff Wlodarczak - Pivotal Research Group Carl Murdock-Smith - Berenberg Steve Malcolm - Redburn Ulrich Rathe - Jefferi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-K þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-35961 Liberty Global plc (Exact name of Registrant as specified in its charter) Liberty Global Class C Ordinary Shares, nominal value $0.01 per ...