UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 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) England and Wales (State or other jurisdiction of incorporat ...

Liberty Global plc (NASDAQ:LBTYA) Q1 2020 Earnings Conference Call May 7, 2020 9:00 AM ET Company Participants Mike Fries - Chief Executive Officer Charlie Bracken - Chief Financial Officer Lutz Schüler - Chief Executive Officer, Virgin Media Baptiest Coopmans - Chief Executive Officer, UPC Switzerland Conference Call Participants Robert Grindle - Deutsche Bank Jeff Wlodarczak - Pivotal Research David Wright - Bank of America Merrill Lynch Michael Bishop - Goldman Sachs Benjamin Swinburne - Morgan Stanley V ...

Financial Performance - Total revenue for the three months ended March 31, 2020, was $2,875.8 million, a slight increase from $2,868.0 million in the same period of 2019, representing a growth of 0.3%[13] - Operating income for the first quarter of 2020 was $280.6 million, significantly up from $105.5 million in Q1 2019, indicating a year-over-year increase of 165.5%[13] - Net earnings attributable to Liberty Global shareholders for Q1 2020 were $949.8 million, a substantial rise from $7.0 million in Q1 2019[13] - The company reported basic earnings per share of $1.51 for Q1 2020, compared to a loss of $0.43 per share in the same quarter of 2019[13] - Net earnings for the three months ended March 31, 2020, were $1,017.7 million, a significant increase from $15.7 million in the same period of 2019[18] - Revenue for the three months ended March 31, 2020, was $886.4 million, with operating income of $504.1 million and net earnings attributable to Liberty Global shareholders of $322.6 million[47] - Adjusted OIBDA for the same period was $1,150.3 million, down from $1,183.3 million in 2019, reflecting a decrease of approximately 2.8%[186] - U.K./Ireland segment revenue was $1,620.6 million, a decrease from $1,661.3 million in 2019, representing a decline of about 2.4%[184] - The Belgium segment reported revenue of $718.1 million, slightly up from $711.9 million in 2019, indicating a growth of approximately 0.3%[184] - The VodafoneZiggo JV generated revenue of $1,097.1 million, compared to $1,093.9 million in the previous year, showing a marginal increase[184] Cash Flow and Liquidity - Cash and cash equivalents decreased to $5,440.5 million as of March 31, 2020, down from $8,142.4 million at the end of 2019, reflecting a decline of 33.2%[7] - Cash flows from operating activities of continuing operations provided $449.8 million, compared to $306.3 million in the prior year[18] - The company reported a net cash used by investing activities of continuing operations of $(2,349.2) million, a substantial increase from $(367.7) million in the previous year[18] - The net decrease in cash and cash equivalents and restricted cash for continuing operations was $(2,698.8) million, compared to $(806.3) million for the same period in 2019, reflecting a significant increase in cash outflow[21] - The company reported cash paid for interest of $389.7 million for continuing operations, down from $516.1 million in the same period last year, representing a 24.5% decrease[21] Assets and Liabilities - Total assets as of March 31, 2020, were $47,256.0 million, down from $49,046.3 million at the end of 2019, a decrease of 3.6%[9] - Total liabilities decreased to $34,343.8 million as of March 31, 2020, compared to $35,847.7 million at the end of 2019, a reduction of 4.2%[9] - The total equity attributable to Liberty Global shareholders was $13,244.1 million as of March 31, 2020, down from $13,606.2 million at the end of 2019[10] - The total carrying amount of debt as of March 31, 2020, was $26,817.8 million, compared to $27,565.4 million as of December 31, 2019, a decrease of about 2.7%[106] - Long-term debt and finance lease obligations decreased to $23,455.7 million from $24,305.3 million, a decrease of 3.5%[9] Investments and Capital Expenditures - Capital expenditures for the three months ended March 31, 2020, totaled $347.8 million, compared to $331.3 million in 2019, reflecting an increase of about 5.6%[189] - The total investments as of March 31, 2020, amounted to $6,207.8 million, with long-term investments at $4,567.6 million[50] Shareholder Information - The company repurchased 13,452,600 Class C ordinary shares at an average price of $16.71, totaling $224.4 million during the three months ended March 31, 2020[139] - The company has authorized an additional $1.0 billion for share repurchases, with $842.7 million remaining as of March 31, 2020[139] - As of March 31, 2020, Liberty Global had 20,474,598 Class A options outstanding with a weighted average exercise price of $30.13 and 46,274,632 Class C options outstanding with a weighted average exercise price of $28.71[143] Legal and Regulatory Matters - Telenet is involved in ongoing legal proceedings with Proximus, which claims damages of €1.4 billion ($1.5 billion) related to the annulment of the 2008 PICs Agreement[160] - The Belgian Council of State annulled decisions related to the 2008 PICs Agreement, but Telenet does not expect a material impact on its financial position from these proceedings[161] - Unitymedia is pursuing a lawsuit against Telekom Deutschland for excessive duct lease prices, seeking a reduction of annual fees by approximately five-sixths[162] - The Belgium Regulatory Authorities imposed a 17% interim price reduction on Telenet's wholesale cable access prices, with a potential additional 25% reduction proposed[164] Miscellaneous - The company incurred a foreign currency translation adjustment loss of $1,070.9 million in Q1 2020, compared to a loss of $116.0 million in Q1 2019[14] - The company adopted ASU 2018-15 on January 1, 2020, which requires deferring implementation costs related to cloud computing arrangements, although it did not have a significant impact on the consolidated financial statements[30] - A database breach affected approximately 900,000 individuals, representing less than 15% of the total customer base, but is not expected to materially impact financial results[173]

Liberty Global Plc. (NASDAQ:LBTYA) Q4 2019 Results Earnings Conference Call February 14, 2020 9:00 AM ET Company Participants Mike Fries - CEO Charlie Bracken - EVP and CFO Lutz Schüler - CEO of Virgin Media Conference Call Participants James Ratcliffe - Evercore ISI Polo Tang - UBS David Wright - Bank of America Nick Lyall - SocGen Benjamin Swinburne - Morgan Stanley Matthew Harrigan - Benchmark Sam McHugh - Exane Andrew Beale - Arete Research James Ratzer - New Street Research Robert Grindle - Deutsche Ba ...

Financial Performance - Total revenue for the consolidated reportable segments decreased by $416.4 million, or 3.5%, from $11,957.9 million in 2018 to $11,541.5 million in 2019[334]. - The overall revenue for the company in 2019 was $4,859.5 million, a decrease of 5.7% compared to 2018[357]. - Consolidated revenue decreased by $416.4 million or 3.5% in 2019 compared to 2018, with an organic decrease of $87.2 million or 0.7%[371]. - Total residential revenue declined by $512.1 million or 5.3%, with a significant impact from fixed-line telephony services decreasing by $129.8 million or 8.1%[371]. - The company reported that 53.0% of its revenue during the three months ended December 31, 2019, was derived from subsidiaries with functional currencies in British pounds, highlighting exposure to foreign currency risks[324]. Assets and Liabilities - Total assets decreased from $53,153.6 million in 2018 to $49,046.3 million in 2019, a decline of approximately 7.9%[299]. - Debt and finance lease obligations decreased from $29,805.2 million in 2018 to $28,182.5 million in 2019, a reduction of about 5.4%[299]. - The consolidated debt at December 31, 2019, was $28.3 billion, with $3.9 billion classified as current and $20.7 billion not due until 2025 or thereafter[442]. - The ratio of consolidated debt to Adjusted OIBDA was 5.4x as of December 31, 2019, while the ratio of consolidated net debt to Adjusted OIBDA was 3.7x[440]. - The aggregate carrying value of property and equipment and intangible assets comprised 58.0% of total assets as of December 31, 2019[467]. Cash Flow and Investments - Net cash provided by operating activities decreased from $3,985.0 million in 2018 to $3,714.1 million in 2019, a change of $(270.9) million[445]. - Net cash provided by investing activities increased significantly by $8,939.5 million, from $601.5 million in 2018 to $9,541.0 million in 2019, primarily due to higher net cash proceeds from the sale of discontinued operations[446]. - Adjusted free cash flow increased from $107.8 million in 2018 to $631.3 million in 2019, reflecting a significant improvement[455]. - The company reported a net increase in cash and cash equivalents of $6,333.2 million in 2019, compared to a decrease of $(1,743.3) million in 2018, marking a significant turnaround[445]. - The company anticipates maintaining significant levels of interest expense due to its capital structure and debt levels[423]. Revenue Segments - In the U.K./Ireland segment, revenue decreased by $274.8 million, or 4.0%, primarily due to a decline in RGUs and ARPU[334][336]. - Belgium's revenue decreased by $100.6 million, or 3.4%, with a notable impact from foreign exchange fluctuations of $117.5 million[334][341]. - The average number of RGUs in the U.K./Ireland increased, contributing to a $42.4 million increase in residential cable subscription revenue[336]. - The B2B revenue in Belgium increased by $31.7 million, despite a decrease in non-subscription revenue[341][344]. - The increase in residential mobile revenue was $28.8 million, driven by a rise in the average number of mobile subscribers[350]. Operating Costs and Expenses - Adjusted OIBDA margins for the consolidated reportable segments showed a decline due to increased operating costs and revenue-based taxes[329]. - Other operating expenses (excluding share-based compensation) decreased by $75.4 million or 4.4% in 2019 compared to 2018, with an organic decrease of $11.6 million or 0.7%[383]. - SG&A expenses (excluding share-based compensation) decreased by $41.6 million or 2.3% in 2019 compared to 2018, with an organic increase of $5.4 million or 0.3%[388]. - Personnel costs increased by $29.8 million or 3.7% in SG&A expenses, primarily due to higher incentive compensation costs and higher average costs per employee[389]. - Programming and other direct costs of services decreased by $7.4 million or 0.2%, but increased by $81.2 million or 2.5% on an organic basis[379]. Market and Competitive Environment - The company is facing competition across all markets, adversely affecting the ability to maintain RGUs and ARPU[332]. - The impact of regulatory changes on interconnection fees could affect future revenue and costs, influencing Adjusted OIBDA[330]. - The company is focusing on expanding its B2B services, particularly in broadband internet for SOHO subscribers in the U.K.[339]. - The company experienced inflationary pressures and foreign currency exchange risks that could impact operating margins[331]. - The company connected approximately 649,000 additional residential and commercial premises to its networks in 2019, with expectations to continue this expansion in 2020[315]. Acquisitions and Investments - The company completed the De Vijver Media Acquisition on June 3, 2019, impacting the comparability of its 2019 and 2018 results of operations[322]. - The company continues to invest in new technologies to enhance internet speeds, offering broadband services with download speeds of up to 1.1 Gbps depending on location[308]. - The capital costs associated with network extensions are expected to decline in 2020 compared to 2019, although they will still represent a significant portion of capital costs[316]. - The company capitalizes costs associated with the construction and installation of new cable and mobile transmission facilities[474]. - Significant management judgment is required to estimate the fair value of reporting units and long-lived assets, with a focus on subscriber growth and retention rates[470]. Tax and Legal Matters - Income tax expense significantly decreased to $253.0 million in 2019 from $1,573.3 million in 2018[418]. - The company recognized a net provision for litigation of £41.3 million ($54.0 million) related to a VAT matter in the U.K. during Q4 2019[396]. - The amount of unrecognized tax benefits was $664.3 million as of December 31, 2019, with $546.5 million potentially favorable to the effective income tax rate if recognized[484]. - The valuation allowance against deferred tax assets was $4,235.5 million as of December 31, 2019[483]. - The company did not record any significant impairment charges for property and equipment and intangible assets during the three years ended December 31, 2019[472].

Liberty Global PLC (NASDAQ:LBTYA) Q3 2019 Earnings Conference Call November 7, 2019 9:00 AM ET Company Participants Mike Fries - CEO Charlie Bracken - EVP and CFO Lutz Schüler - CEO of Virgin Media Conference Call Participants Michael Bishop - Goldman Sachs Jeff Wlodarczak - Pivotal Research Group James Ratcliffe - Evercore Nick Lyall - SocGen Ulrich Rathe - Jefferies Carl Murdock-Smith - Berenberg Robert Grindle - Deutsche Bank David Wright - Bank of America James Ratzer - New Street Research Maurice Patri ...

[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 ...