Liberty .(LBTYK) - 2024 Q2 - Quarterly Report

Customer Metrics - As of June 30, 2024, the company served 4,017,500 fixed-line customers and 5,906,000 mobile subscribers, with networks passing 8,573,400 homes[207]. - The company’s ability to maintain or increase subscriptions and average revenue per household is critical for future performance[203]. - The average number of fixed-line customers for Sunrise decreased, contributing to a revenue decline of $6.2 million in Q2 2024[220]. - The company experienced competition across all markets, adversely affecting revenue and average monthly subscription revenue per customer[208]. Revenue Performance - Total revenue for Q2 2024 increased to $1,873.7 million, up 1.4% from $1,848.0 million in Q2 2023[219]. - Sunrise's total revenue for Q2 2024 was $815.8 million, a slight decrease of 0.4% compared to $816.2 million in Q2 2023[220]. - Telenet's revenue for Q2 2024 decreased by $11.9 million, or 1.6%, to $755.1 million from $767.0 million in Q2 2023[219]. - The total revenue for the six months ended June 30, 2024, was $3,818.8 million, reflecting a 2.8% increase from $3,716.4 million in the same period of 2023[219]. - The organic revenue increase for Central and Other segments was $51.9 million, representing a 25.2% growth in Q2 2024[219]. Adjusted EBITDA - Adjusted EBITDA for the six months ended June 30, 2024, was $1,186.1 million, compared to $1,225.9 million for the same period in 2023, reflecting a decrease of 3.2%[216]. - Adjusted EBITDA for the three months ended June 30, 2024, was $604.7 million, slightly up from $601.4 million in the same period of 2023[216]. - Telenet's Adjusted EBITDA decreased by $34.1 million (9.9%) to $311.9 million in the three-month period ended June 30, 2024[227]. - VM Ireland's Adjusted EBITDA for the three months ended June 30, 2024, was $45.7 million, a decrease of $1.6 million (3.4%) from $47.3 million in 2023[227]. Operating Expenses - Programming and other direct costs of services increased by $107.2 million or 9.3% during the six months ended June 30, 2024, compared to the same period in 2023, with an organic increase of $95.3 million or 8.2%[246]. - Other operating expenses (excluding share-based compensation) decreased by $7.2 million or 2.4% for the three months ended June 30, 2024, and by $3.3 million or 0.6% for the six months ended June 30, 2024, compared to the same periods in 2023[249]. - SG&A expenses (excluding share-based compensation) increased by $23.8 million or 6.5% for the three months ended June 30, 2024, and by $38.3 million or 5.2% for the six months ended June 30, 2024, compared to the corresponding periods in 2023[254]. - Share-based compensation expense for the three months ended June 30, 2024, was $49.5 million, a decrease of $26.3 million or 34.7% compared to $75.8 million in the same period of 2023[255]. Net Earnings and Losses - Net earnings for Q2 2024 were $275.2 million, a significant improvement from a loss of $511.3 million in Q2 2023[216]. - The company reported a net loss of $15.4 million for Q2 2024, an improvement from a net loss of $127.5 million in Q2 2023[273]. - For the six months ended June 30, 2024, net earnings were $802.2 million, a significant improvement from a net loss of $1,224.8 million in the same period of 2023[287]. Foreign Currency Impact - Changes in foreign currency exchange rates significantly impact reported operating results, with primary exposure to euro and Swiss franc fluctuations[211]. - Foreign currency transaction gains amounted to $228.9 million for the three months and $298.0 million for the six months ended June 30, 2024, compared to losses in the same periods of 2023[268]. Capital Expenditures and Cash Flow - Capital expenditures, net for the six months ended June 30, 2024, were $640.1 million, compared to $688.4 million in 2023, reflecting a decrease in property and equipment additions[315]. - Net cash provided by operating activities for the six months ended June 30, 2024, was $791.8 million, a decrease of $207.8 million compared to $999.6 million in 2023[313]. - Adjusted free cash flow for the six months ended June 30, 2024, was $73.1 million, down from $150.3 million in 2023[320]. Acquisitions and Joint Ventures - The company completed the Telenet Takeover Bid in October 2023, increasing its ownership interest in Telenet to 100%[206]. - The VodafoneZiggo JV reported revenue of $1,091.6 million for Q2 2024, a slight increase from $1,088.4 million in Q2 2023, and Adjusted EBITDA of $518.7 million, up from $484.9 million in the same period[273]. - The VMO2 joint venture reported revenue of $3,375.4 million for Q2 2024, a decrease of $16.1 million or 0.5% from the previous year[219]. Future Outlook - The company anticipates continued increases in programming and copyright costs due to higher expenses associated with digital video content expansion and live sporting events[244]. - The company aims to maintain a consolidated debt balance between four and five times its consolidated Adjusted EBITDA, which is a non-GAAP measure[308]. - The company anticipates significant liquidity requirements over the next 12 to 24 months due to various commitments, including programming and operating costs[305].