Liberty .(LBTYK) - 2025 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION This section encompasses the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations ITEM 1. FINANCIAL STATEMENTS This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive earnings (loss), equity, and cash flows, along with detailed notes. It provides a financial overview of Liberty Global's performance and position for the periods ended June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets This statement provides a snapshot of the company's assets, liabilities, and equity at specific points in time | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | Total Assets | $27,167.1 | $25,439.7 | | Total Liabilities | $13,962.1 | $12,895.4 | | Total Equity | $13,205.0 | $12,544.3 | | Current Assets | $4,428.9 | $3,300.3 | | Current Liabilities | $4,343.7 | $3,133.9 | - Total assets increased by $1,727.4 million, and total liabilities increased by $1,066.7 million from December 31, 2024, to June 30, 2025. Current assets saw a notable increase, primarily driven by short-term investments, while current liabilities also rose significantly, mainly due to the current portion of debt[7][10] Condensed Consolidated Statements of Operations This statement details the company's revenues, expenses, and net earnings or losses over specific reporting periods | Metric | Three months ended June 30, 2025 (in millions) | Three months ended June 30, 2024 (in millions) | Six months ended June 30, 2025 (in millions) | Six months ended June 30, 2024 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,269.1 | $1,057.9 | $2,440.3 | $2,149.2 | | Operating income (loss) | $29.6 | $(33.0) | $90.3 | $(45.3) | | Net earnings (loss) attributable to Liberty Global shareholders | $(2,792.9) | $268.1 | $(4,130.2) | $778.1 | | Basic EPS attributable to Liberty Global shareholders | $(8.09) | $0.72 | $(11.91) | $2.08 | | Diluted EPS attributable to Liberty Global shareholders | $(8.09) | $0.71 | $(11.91) | $2.04 | - The company reported a significant net loss for both the three and six months ended June 30, 2025, primarily driven by substantial foreign currency transaction losses and realized and unrealized losses on derivative instruments. Revenue increased year-over-year for both periods[13] Key Non-Operating Income (Expense) Changes (Six months ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Realized and unrealized gains (losses) on derivative instruments, net | $(570.7) | $224.5 | | Foreign currency transaction gains (losses), net | $(3,170.9) | $732.8 | | Share of results of affiliates, net | $(412.6) | $(31.6) | Condensed Consolidated Statements of Comprehensive Earnings (Loss) This statement presents net earnings alongside other comprehensive income or loss items, such as foreign currency translation adjustments | Metric | Three months ended June 30, 2025 (in millions) | Three months ended June 30, 2024 (in millions) | Six months ended June 30, 2025 (in millions) | Six months ended June 30, 2024 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Net earnings (loss) | $(2,773.8) | $275.2 | $(4,097.1) | $802.2 | | Foreign currency translation adjustments | $3,174.4 | $(416.4) | $4,801.4 | $(1,455.7) | | Other comprehensive earnings (loss) | $3,179.0 | $(198.5) | $4,800.9 | $(1,224.9) | | Comprehensive earnings (loss) attributable to Liberty Global shareholders | $386.1 | $69.7 | $670.7 | $(447.3) | - Despite a net loss, comprehensive earnings attributable to Liberty Global shareholders turned positive for both the three and six months ended June 30, 2025, primarily due to significant positive foreign currency translation adjustments[16] Condensed Consolidated Statements of Equity This statement tracks changes in shareholders' equity, including net earnings, share repurchases, and other comprehensive income | Metric | January 1, 2025 (in millions) | June 30, 2025 (in millions) | | :--- | :--- | :--- | | Total Liberty Global shareholders' equity | $12,365.9 | $12,994.0 | | Accumulated earnings | $12,242.6 | $8,112.4 | | Accumulated other comprehensive earnings (loss), net of taxes | $(657.0) | $4,143.9 | | Class C common shares outstanding | 162,710,787 | 155,157,101 | - Total Liberty Global shareholders' equity increased, driven by a substantial increase in accumulated other comprehensive earnings, net of taxes, which offset the decrease in accumulated earnings due to net losses. The number of Class C common shares outstanding decreased due to repurchases[10][23] Condensed Consolidated Statements of Cash Flows This statement categorizes cash inflows and outflows from operating, investing, and financing activities over a period | Cash Flow Activity (Six months ended June 30) | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $278.4 | $791.8 | | Net cash provided (used) by investing activities | $(246.9) | $310.7 | | Net cash used by financing activities | $(191.0) | $(473.3) | | Net increase in cash and cash equivalents and restricted cash | $0.2 | $596.2 | - Net cash provided by operating activities decreased significantly in 2025 compared to 2024. Investing activities shifted from providing cash to using cash, while financing activities used less cash in 2025[26][30][32] Capital Expenditures and Cash Paid for Interest/Taxes (Six months ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Capital expenditures, net | $(562.6) | $(391.1) | | Cash paid for interest | $236.0 | $468.1 | | Net cash paid for taxes | $182.7 | $190.7 | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and additional information supporting the condensed consolidated financial statements Note 1: Basis of Presentation This note outlines the company's business, its continuing operations, and significant changes in consolidated entities - Liberty Global is an international provider of broadband internet, video, fixed-line telephony, and mobile communications services in Europe, and an active investor across infrastructure, content, and technology industries[34] - Continuing operations include Telenet (Belgium, Luxembourg) and VM Ireland (Ireland), and 50% noncontrolling interests in VMO2 JV (UK) and VodafoneZiggo JV (Netherlands)[35] - Sunrise Entities (Switzerland) were spun off on November 8, 2024, and are presented as discontinued operations. Liberty Global acquired a controlling interest in Formula E on October 2, 2024, and began consolidating its results[36][37] Note 2: Accounting Changes and Recent Accounting Pronouncements This note details the adoption of new accounting standards and their impact on financial reporting - Adopted ASU 2023-09 (Improvements to Income Tax Disclosures) on January 1, 2025, retrospectively, to enhance transparency of income tax matters[42] - Adopted ASU 2023-07 (Improvements to Reportable Segment Disclosures) on January 1, 2024, retrospectively, requiring enhanced disclosures regarding significant segment expenses[43] - Adopted ASU 2023-05 (Business Combinations — Joint Venture Formations) on January 1, 2025, requiring joint ventures to measure assets and liabilities at fair value upon formation[44] Note 3: Revenue Recognition and Related Costs This note provides details on the company's revenue recognition policies and related contract balances | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | Trade receivables, net | $570.3 | $449.8 | | Contract assets | $11.7 | $9.4 | | Deferred revenue | $257.9 | $289.5 | - The decrease in deferred revenue for the six months ended June 30, 2025, is primarily due to the recognition of $262.7 million of revenue that was included in the December 31, 2024, balance[50] Note 4: Acquisitions and Dispositions This note details significant business combinations and divestitures, including the Formula E acquisition and Sunrise spin-off - On October 2, 2024, Liberty Global acquired a controlling interest in Formula E, increasing its ownership from 38.2% to 65.6% for €150.0 million ($165.7 million), and began consolidating 100% of Formula E's results[52] - On November 8, 2024, the Spin-off of Sunrise Entities was completed, resulting in Sunrise Communications AG becoming an independent, publicly-traded Swiss company. Sunrise operations are now presented as discontinued[57] Sunrise Entities Operating Results (Discontinued Operations) (Six months ended June 30, 2024) | Metric | Amount (in millions) | | :--- | :--- | | Revenue | $1,669.6 | | Operating income | $87.0 | | Net loss attributable to Liberty Global shareholders | $(156.4) | Note 5: Investments This note provides information on the company's equity method and fair value investments, including joint ventures | Investment Type | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | Total investments | $12,554.6 | $12,023.6 | | Equity method investments (Total) | $9,296.5 | $8,780.3 | | Fair value investments (Total) | $3,258.1 | $3,243.3 | Key Equity Method Investments (June 30, 2025) | Investment | Carrying Value (in millions) | Ownership % | | :--- | :--- | :--- | | VMO2 JV | $6,844.9 | 50.0% | | VodafoneZiggo JV | $1,873.1 | 50.0% | | AtlasEdge JV | $395.8 | 48.7% | | Nexfibre JV | $92.5 | 24.9% | Share of Results of Affiliates, net (Six months ended June 30) | Affiliate | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | VMO2 JV | $(247.7) | $3.7 | | VodafoneZiggo JV | $(70.7) | $11.4 | | Nexfibre JV | $(42.2) | $11.7 | | AtlasEdge JV | $(34.5) | $(13.8) | | Total | $(412.6) | $(31.6) | - During Q2 2025, Liberty Global partially unwound its Vodafone Collar and fully settled the associated Vodafone Collar Loan in July 2025, effectively reducing its economic interest in Vodafone to nil[67] - The VodafoneZiggo JV is facing significant competition, which could lead to future impairment charges on Liberty Global's investment[75] Note 6: Derivative Instruments This note describes the company's use of derivative instruments to manage interest rate and foreign currency exposures | Derivative Type | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | Total Derivative Assets | $322.0 | $843.9 | | Total Derivative Liabilities | $333.2 | $186.4 | Realized and Unrealized Gains (Losses) on Derivative Instruments, net (Six months ended June 30) | Derivative Type | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Cross-currency and interest rate derivative contracts | $(433.9) | $280.3 | | Equity-related derivative instruments | $(123.1) | $(48.1) | | Foreign currency forward and option contracts | $(13.7) | $(7.7) | | Total | $(570.7) | $224.5 | - The company uses cross-currency swaps, interest rate swaps, swaptions, and basis swaps to manage interest rate and foreign currency exposure. These derivatives resulted in a net loss of $570.7 million for the six months ended June 30, 2025, compared to a net gain in the prior year[88][92][95][96][97][100] Impact of Derivative Instruments on Borrowing Costs (June 30, 2025) | Entity | Decrease to borrowing costs | | :--- | :--- | | Telenet | (1.69)% | | VM Ireland | (1.59)% | | Total decrease | (1.67)% | Note 7: Fair Value Measurements This note explains the categorization and valuation techniques used for assets and liabilities measured at fair value - Fair value measurements are categorized into Level 1 (quoted prices), Level 2 (observable inputs), and Level 3 (unobservable inputs). The Vodafone Collar transferred from Level 3 to Level 2 during Q2 2025[107] Assets and Liabilities Measured at Fair Value (June 30, 2025) | Category | Total (in millions) | Level 1 (in millions) | Level 2 (in millions) | Level 3 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Total Assets | $3,580.1 | $1,807.5 | $404.9 | $1,367.7 | | Total Liabilities | $333.2 | $0 | $333.2 | $0 | Reconciliation of Level 3 Net Assets (January 1, 2025 to June 30, 2025) | Metric | Amount (in millions) | | :--- | :--- | | Balance at January 1, 2025 | $1,477.2 | | Losses included in loss from continuing operations | $(137.8) | | Additions | $60.5 | | Transfers out of Level 3 | $(173.8) | | Foreign currency translation adjustments and other, net | $141.6 | | Balance at June 30, 2025 | $1,367.7 | Note 8: Long-lived Assets This note provides details on property and equipment, goodwill, and intangible assets, including changes and impairment risks | Asset Category | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | Total property and equipment, net | $5,091.6 | $4,326.0 | | Goodwill | $3,601.0 | $3,152.6 | | Intangible assets subject to amortization, net | $1,423.2 | $1,290.4 | - Goodwill increased by $448.4 million during the six months ended June 30, 2025, primarily due to foreign currency translation adjustments ($431.7 million) and acquisitions ($16.7 million)[119] - The company warns that adverse economic, competitive, or regulatory factors could lead to significant impairment charges on goodwill and other long-lived assets in future periods[119] Note 9: Debt This note details the company's debt structure, interest rates, and significant debt-related transactions and maturities | Debt Category | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | Total debt before deferred financing costs, discounts and premiums | $9,816.7 | $9,145.0 | | Total debt and finance lease obligations | $9,795.5 | $9,101.0 | | Current portion of debt and finance lease obligations | $1,990.5 | $898.5 | | Long-term debt and finance lease obligations | $7,805.0 | $8,202.5 | - The weighted average interest rate on aggregate variable- and fixed-rate indebtedness (including derivative effects) was 3.74% at June 30, 2025[124] - In February 2025, Telenet entered into a €500.0 million sustainability-linked term loan facility, used to refinance existing debt, resulting in an $8.0 million loss on debt extinguishment[131] Debt Maturities (June 30, 2025) | Year Ending December 31 | Total Debt Maturities (in millions) | | :--- | :--- | | 2025 (remainder of year) | $1,876.8 | | 2026 | $166.0 | | 2027 | $24.6 | | 2028 | $4,447.4 | | 2029 | $2,389.2 | | 2030 | $25.8 | | Thereafter | $886.9 | | Total | $9,816.7 | Note 10: Leases This note provides information on the company's right-of-use assets, lease liabilities, and lease expenses | Lease Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | Total ROU assets | $816.0 | $748.7 | | Total lease liabilities | $863.6 | $787.2 | Total Lease Expense (Six months ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Total finance lease expense | $4.8 | $2.1 | | Operating lease expense | $56.3 | $52.1 | | Short-term lease expense | $0.2 | $0.2 | | Variable lease expense | $0.8 | $0.7 | | Total lease expense | $62.1 | $55.1 | Cash Outflows from Operating and Finance Leases (Six months ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Total cash outflows from operating and finance leases | $43.5 | $36.7 | Note 11: Income Taxes This note discusses income tax provisions, effective tax rates, unrecognized tax benefits, and ongoing tax litigation - Bermuda enacted the Corporate Income Tax Act 2023, effective January 1, 2025, imposing a 15.0% statutory rate. This rate is now used to compute expected income tax benefit/expense[151] Effective Tax Rate vs. Statutory Rate (Six months ended June 30, 2025) | Metric | Amount (in millions) | Rate | | :--- | :--- | :--- | | Income tax benefit (expense) | $69.1 | 1.7% | | Expected income tax benefit (Bermuda statutory rate of 15.0%) | $624.9 | 15.0% | - The difference between the effective and statutory tax rates is primarily due to non-deductible net foreign exchange losses and non-deductible net losses from investments in certain subsidiaries and affiliates, partially offset by statutory rate differences in other jurisdictions and the release of valuation allowances in Luxembourg[153] - Unrecognized tax benefits totaled $308.6 million as of June 30, 2025, with $269.5 million having a favorable impact if recognized[158] - The company is involved in ongoing tax litigation with the U.S. Department of Justice for the 2018 tax year ($284 million) and appealed an unfavorable decision from the U.S. Tax Court for the 2010 tax year ($315 million paid in December 2023)[161][162] Note 12: Equity This note details share repurchase activities and remaining authorization under the company's repurchase program - During the six months ended June 30, 2025, Liberty Global repurchased 9,421,772 Class C common shares at an average price of $10.93 per share, for an aggregate of $103.0 million[165] - As of June 30, 2025, the company was authorized to repurchase an additional 25.5 million Class A and/or Class C common shares during 2025, equating to approximately $259.1 million based on current share prices[166] Note 13: Share-based Compensation This note outlines the types of share-based awards granted, associated expenses, and performance conditions Total Share-based Compensation Expense (Six months ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Non-performance based incentive awards | $43.1 | $56.1 | | Performance-based incentive awards | $20.9 | $7.0 | | Other | $14.9 | $14.8 | | Total Liberty Global | $78.9 | $77.9 | | Other | $3.9 | $4.5 | | Total | $82.8 | $82.4 | - In March 2025, the company granted 2025 PSUs to executive officers and employees, with performance tied to Liberty Global's average share price appreciation from March 2025 to December 2027, and payouts ranging from 0% to 200% of target[174] Note 14: Earnings (Loss) per Share This note presents the basic and diluted earnings or loss per share from continuing operations Basic and Diluted EPS from Continuing Operations (Six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Basic EPS attributable to Liberty Global shareholders | $(11.91) | $2.50 | | Diluted EPS attributable to Liberty Global shareholders | $(11.91) | $2.45 | - The company reported a significant basic and diluted loss per share from continuing operations for the six months ended June 30, 2025, a substantial decline from earnings per share in the prior year[13] Note 15: Commitments and Contingencies This note details the company's contractual commitments and outlines significant legal proceedings and their potential financial impact Total Commitments (June 30, 2025) | Commitment Type | Total (in millions) | | :--- | :--- | | Purchase commitments | $2,234.4 | | Programming commitments | $154.0 | | Network and connectivity commitments | $93.4 | | Other commitments | $486.2 | | Total | $2,968.0 | - Programming commitments are expected to be significantly higher than reported amounts due to contractual inflation and other price adjustments not yet fixed[182] - The company is involved in ongoing legal proceedings, including the Interkabel Acquisition litigation (seeking annulment of a 2008 agreement and €1.4 billion damages) and the Telekom Deutschland Litigation (seeking reduction in cable duct lease fees). No amounts have been accrued for Interkabel as loss is not probable[188][189][190] Note 16: Segment Reporting This note provides financial information by operating segment, including revenue, Adjusted EBITDA, and capital expenditures - Liberty Global operates through three strategic platforms: Liberty Telecom (converged communications), Liberty Growth (global investments in technology, media, sports, digital infrastructure), and Liberty Services (technology and finance services)[196] - Reportable segments include Telenet, VM Ireland, VMO2 JV (nonconsolidated), and VodafoneZiggo JV (nonconsolidated). Adjusted EBITDA is the primary measure for evaluating segment performance[196][200] Total Consolidated Revenue (Six months ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Reported Change | Organic Change | | :--- | :--- | :--- | :--- | :--- | | Total consolidated revenue | $2,440.3 | $2,149.2 | +13.5% | -1.2% | Total Consolidated Adjusted EBITDA (Six months ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Reported Change | Organic Change | | :--- | :--- | :--- | :--- | :--- | | Total consolidated Adjusted EBITDA | $659.9 | $580.6 | +13.7% | +2.3% | Property and Equipment Additions (Six months ended June 30) | Segment | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Telenet | $516.0 | $384.9 | | VM Ireland | $98.3 | $81.0 | | VMO2 JV | $1,267.1 | $1,271.8 | | VodafoneZiggo JV | $435.1 | $499.6 | | Total consolidated property and equipment additions | $610.8 | $461.4 | ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides a detailed analysis of Liberty Global's financial performance and condition for the three and six months ended June 30, 2025, compared to 2024. It covers the impact of acquisitions and dispositions, foreign currency fluctuations, revenue and expense trends, and changes in liquidity and capitalization, including adjusted free cash flow Forward-Looking Statements This section highlights the inherent risks and uncertainties associated with forward-looking information presented in the report - The report contains forward-looking statements that involve risks and uncertainties, which could cause actual results to differ materially from expectations[236] - Key risk factors include economic and business conditions, competitive environment, technological changes, regulatory impacts, capital availability, consumer behavior, programming costs, supply chain, data security, foreign currency and interest rate fluctuations, global financial instability, tax laws, employee relations, government intervention, M&A integration, litigation, and external events[238][239][243] Overview This section provides a general description of Liberty Global's business, market presence, and operational challenges - Liberty Global is an international provider of broadband internet, video, fixed-line telephony, and mobile communications services in Europe, and an active investor across infrastructure, content, and technology industries[241] - As of June 30, 2025, the company's reportable segments (including nonconsolidated JVs) passed 29,062,700 homes and served 11,412,000 fixed-line customers and 44,577,800 mobile subscribers[245] - The company faces significant competition and inflationary pressures across all markets, which have adversely impacted revenue, customer numbers, and average monthly subscription revenue per user (ARPU)[246][247] Material Changes in Results of Operations This section analyzes the key factors driving changes in the company's consolidated and segment-level operating results - The Formula E Acquisition (October 2, 2024) and the Spin-off of Sunrise (November 8, 2024) significantly impact the comparability of 2025 and 2024 operating results[248] - Changes in foreign currency exchange rates, particularly the euro, have a significant impact on reported operating results[250] Total Consolidated Adjusted EBITDA (Six months ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Reported Change | Organic Change | | :--- | :--- | :--- | :--- | :--- | | Total consolidated Adjusted EBITDA | $659.9 | $580.6 | +13.7% | +2.3% | Discussion and Analysis of our Reportable Segments This section provides a detailed review of revenue and Adjusted EBITDA performance for each reportable operating segment Revenue of Reportable Segments (Six months ended June 30) | Segment | 2025 (in millions) | 2024 (in millions) | Reported Change | Organic Change | | :--- | :--- | :--- | :--- | :--- | | Telenet | $1,560.7 | $1,517.7 | +2.8% | +1.7% | | VM Ireland | $238.6 | $243.0 | -1.8% | -2.9% | | VMO2 JV (nonconsolidated) | $6,499.8 | $6,658.2 | -2.4% | N/A | | VodafoneZiggo JV (nonconsolidated) | $2,175.3 | $2,205.6 | -1.4% | N/A | Adjusted EBITDA of Reportable Segments (Six months ended June 30) | Segment | 2025 (in millions) | 2024 (in millions) | Reported Change | Organic Change | | :--- | :--- | :--- | :--- | :--- | | Telenet | $639.5 | $620.3 | +3.1% | +1.8% | | VM Ireland | $78.6 | $85.7 | -8.3% | -9.5% | | VMO2 JV (nonconsolidated) | $2,245.7 | $2,206.0 | +1.8% | N/A | | VodafoneZiggo JV (nonconsolidated) | $959.8 | $1,037.7 | -7.5% | N/A | Adjusted EBITDA Margins (June 30) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Telenet | 42.2% | 41.3% | | VM Ireland | 33.7% | 38.1% | | VMO2 JV | 34.8% | 33.5% | | VodafoneZiggo JV | 44.2% | 47.5% | Discussion and Analysis of our Consolidated Operating Results This section analyzes consolidated revenue by category and key expense trends impacting overall financial performance Consolidated Revenue by Major Category (Six months ended June 30) | Revenue Category | 2025 (in millions) | 2024 (in millions) | Reported Change | Organic Change | | :--- | :--- | :--- | :--- | :--- | | Total residential revenue | $1,170.2 | $1,174.5 | -0.4% | -1.5% | | Total B2B revenue | $432.9 | $418.9 | +3.3% | +2.2% | | Other revenue | $837.2 | $555.8 | +50.6% | -2.7% | | Total consolidated revenue | $2,440.3 | $2,149.2 | +13.5% | -1.2% | - The significant increase in 'Other revenue' is primarily attributable to the Formula E Acquisition and the Sunrise Services provided post-spin-off[273] Key Consolidated Expenses (Six months ended June 30) | Expense Category | 2025 (in millions) | 2024 (in millions) | Reported Change | Organic Change | | :--- | :--- | :--- | :--- | :--- | | Programming and other direct costs of services | $868.7 | $730.9 | +18.9% | -5.3% | | Other operating expenses (excl. share-based comp) | $402.2 | $362.5 | +11.0% | +4.4% | | SG&A expenses (excl. share-based comp) | $509.5 | $475.2 | +7.2% | -2.2% | | Depreciation and amortization | $483.0 | $505.4 | -4.4% | -5.6% | | Interest expense | $257.0 | $289.9 | -11.4% | -12.3% | - Net foreign currency transaction losses were $(3,170.9) million for the six months ended June 30, 2025, a significant negative swing from a $732.8 million gain in the prior year, primarily due to intercompany balances and U.S. dollar-denominated debt[302] - Share of results of affiliates, net, was a loss of $(412.6) million for the six months ended June 30, 2025, compared to a loss of $(31.6) million in the prior year, largely driven by VMO2 JV and VodafoneZiggo JV losses[307] Material Changes in Financial Condition This section discusses changes in corporate liquidity, debt levels, and cash flow activities, including adjusted free cash flow Corporate Liquidity (June 30, 2025) | Metric | Amount (in millions) | | :--- | :--- | | Cash and cash equivalents (Liberty Global and unrestricted subsidiaries) | $598.7 | | Investments held under SMAs | $82.8 | | Total available corporate liquidity | $681.5 | - The company aims to maintain consolidated debt between four and five times its consolidated Adjusted EBITDA[344] - As of June 30, 2025, the outstanding principal amount of consolidated debt and finance lease obligations aggregated $9.9 billion, with $2.0 billion classified as current[346] Condensed Consolidated Statements of Cash Flows Summary (Six months ended June 30) | Cash Flow Activity | 2025 (in millions) | 2024 (in millions) | Change (in millions) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $278.4 | $345.0 | $(66.6) | | Net cash provided (used) by investing activities | $(246.9) | $567.8 | $(814.7) | | Net cash used by financing activities | $(191.0) | $(439.7) | $248.7 | Adjusted Free Cash Flow (Six months ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | | Adjusted free cash flow | $(342.4) | $(91.2) | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK This section details Liberty Global's exposure to market risks, including foreign currency exchange rates, interest rates, and inflation. It outlines the company's strategies for managing these risks, primarily through derivative instruments, and provides sensitivity analysis for key financial exposures General This section outlines the company's exposure to market risks and its approach to managing them using derivative instruments - Liberty Global is exposed to market risk from foreign investments and ongoing investing and financing activities, covering foreign currency exchange rates, interest rates, and stock prices[358] - The company has established policies, procedures, and processes for managing market risks and using derivative instruments[358] Cash This section describes the company's cash management strategy, focusing on liquidity and mitigating exchange rate risk - Cash is invested in highly liquid instruments meeting high credit quality standards. The company actively manages cash denominations to mitigate exchange rate risk[361] - As of June 30, 2025, 72.1% of consolidated cash was denominated in euros and 26.4% in U.S. dollars. 88.2% of investments held under SMAs were denominated in U.S. dollars[361] Foreign Currency Risk This section addresses the risks arising from debt denominated in foreign currencies and the use of derivatives to manage them - Foreign currency exchange rate risk arises from debt denominated in currencies other than the functional currency of supporting operations. Derivative instruments are used to manage this risk[362] Key Foreign Currency Exchange Rates (June 30, 2025) | Currency | Spot Rate (per USD) | Average Rate (Six months ended June 30, 2025) | | :--- | :--- | :--- | | Euro | 0.8502 | 0.9159 | | British pound sterling | 0.7292 | 0.7712 | Inflation and Foreign Investment Risk This section discusses the impact of inflationary pressures on costs and the potential effects on operating results and liquidity - The company is subject to inflationary pressures on labor, programming, and other costs. While efforts are made to offset these with revenue increases, there is no assurance this will be successful, potentially impacting operating results, cash flows, and liquidity[364] Interest Rate Risks This section details the company's exposure to interest rate fluctuations on borrowings and its use of derivative instruments - Exposure to interest rate changes primarily stems from fixed-rate and variable-rate borrowings, with primary exposure to EURIBOR-indexed and Term SOFR-indexed debt[365] - Derivative instruments, such as interest rate swaps, caps, floors, and swaptions, are used to manage exposure to increases in variable interest rates[366] - As of June 30, 2025, variable-rate indebtedness aggregated $6.8 billion, with a weighted average interest rate of approximately 5.4%. A hypothetical 50 basis point increase/decrease would change annual consolidated interest expense by $34.0 million[368] Sensitivity Information This section provides quantitative analysis of the potential impact of market risk changes on derivative fair values and cash flows - For Telenet's cross-currency and interest rate derivative contracts at June 30, 2025: a 10% increase/decrease in the euro's value relative to the U.S. dollar would change the aggregate fair value by approximately €308 million ($361 million)[373] - A 50 basis point increase in the relevant base rate would increase the aggregate fair value of Telenet's derivatives by approximately €71 million ($83 million), while a decrease would decrease it by approximately €73 million ($85 million)[373] Projected Derivative Cash Payments (Receipts), net (Total) | Period | Amount (in millions) | | :--- | :--- | | Remainder of 2025 | $(52.8) | | 2026 | $4.9 | | 2027 | $(101.1) | | 2028 | $70.6 | | 2029 | $(19.9) | | 2030 | $1.5 | | Thereafter | $0.2 | | Total | $(96.6) | ITEM 4. CONTROLS AND PROCEDURES This section confirms that management, including the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures as of June 30, 2025, concluding they provide reasonable assurance. No material changes to internal controls over financial reporting were identified during the quarter - Disclosure controls and procedures were evaluated by management, including the CEO and CFO, and concluded to be effective as of June 30, 2025, providing reasonable assurance of achieving desired control objectives[374] - No changes in internal controls over financial reporting were identified during the fiscal quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, these controls[375] PART II — OTHER INFORMATION This section covers legal proceedings, equity security sales, other disclosures, and a list of exhibits filed with the report ITEM 1. LEGAL PROCEEDINGS This section refers to Note 15 of the condensed consolidated financial statements for details on legal proceedings arising in the normal course of business - Information regarding legal proceedings is provided in Note 15 to the condensed consolidated financial statements[377] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS This section details the company's repurchases of Class C common shares during the second quarter of 2025 and outlines the remaining authorization under its current share repurchase program Issuer Purchases of Equity Securities (April 1, 2025 – June 30, 2025) | Period | Class | Total number of shares purchased | Average price paid per share | | :--- | :--- | :--- | :--- | | April 1, 2025 through April 30, 2025 | Class C | 1,881,276 | $11.09 | | May 1, 2025 through May 31, 2025 | Class C | 2,288,393 | $9.91 | | June 1, 2025 through June 30, 2025 | Class C | 2,054,106 | $10.07 | | Total | Class C | 6,223,775 | $10.32 | - The total aggregate purchase price for Class C shares repurchased during Q2 2025 was approximately $64.2 million[378] - As of June 30, 2025, the company was authorized to repurchase an additional 25.5 million Class A and/or Class C common shares during 2025, equating to approximately $259.1 million[378] ITEM 5. OTHER INFORMATION This section states that no directors or executive officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025 - No directors or executive officers adopted or terminated any Rule 10b5-1(c) trading arrangements for company securities during the quarter ended June 30, 2025[379] ITEM 6. EXHIBITS This section lists all exhibits filed as part of the Quarterly Report, including various agreements, certifications, and XBRL taxonomy documents - Exhibits filed include supplemental agreements, forms of non-executive director restricted share units agreements, certifications (Rule 13a-14(a)/15d-14(a) and Section 1350), and Inline XBRL Taxonomy Extension documents[381][382]