Liberty .(LBTYA) - 2025 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This section presents Liberty Global Ltd.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive earnings (loss), equity, and cash flows for the periods ended June 30, 2025 and 2024 Condensed Consolidated Balance Sheets The condensed consolidated balance sheets show an increase in total assets and total liabilities from December 31, 2024, to June 30, 2025, with a corresponding increase in total equity | 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 | | Cash and cash equivalents | $1,816.5 | $1,816.3 | | Short-term investments | $1,328.1 | $335.6 | | Current portion of debt | $1,990.5 | $898.5 | Condensed Consolidated Statements of Operations Liberty Global reported a net loss for the three and six months ended June 30, 2025, a significant decline compared to net earnings in the prior year periods | Metric (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | | Revenue | $1,269.1 | $1,057.9 | | Operating income (loss) | $29.6 | $(33.0) | | Net earnings (loss) | $(2,773.8) | $275.2 | | Net earnings (loss) attributable to Liberty Global shareholders | $(2,792.9) | $268.1 | | Basic EPS attributable to Liberty Global shareholders | $(8.09) | $0.72 | | Diluted EPS attributable to Liberty Global shareholders | $(8.09) | $0.71 | | Metric (in millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $2,440.3 | $2,149.2 | | Operating income (loss) | $90.3 | $(45.3) | | Net earnings (loss) | $(4,097.1) | $802.2 | | Net earnings (loss) attributable to Liberty Global shareholders | $(4,130.2) | $778.1 | | Basic EPS attributable to Liberty Global shareholders | $(11.91) | $2.08 | | Diluted EPS attributable to Liberty Global shareholders | $(11.91) | $2.04 | - Significant non-operating losses for the three and six months ended June 30, 2025, were primarily due to foreign currency transaction losses (net) of $(2,089.9) million and $(3,170.9) million, respectively, and realized/unrealized losses on derivative instruments (net) of $(406.0) million and $(570.7) million, respectively[13] Condensed Consolidated Statements of Comprehensive Earnings (Loss) The company reported comprehensive earnings for the three and six months ended June 30, 2025, despite net losses, primarily due to substantial foreign currency translation adjustments in other comprehensive earnings | Metric (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | | Net earnings (loss) | $(2,773.8) | $275.2 | | Foreign currency translation adjustments | $3,174.4 | $(416.4) | | Other comprehensive earnings (loss) | $3,179.0 | $(198.5) | | Comprehensive earnings (loss) | $405.2 | $76.7 | | Metric (in millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net earnings (loss) | $(4,097.1) | $802.2 | | Foreign currency translation adjustments | $4,801.4 | $(1,455.7) | | Other comprehensive earnings (loss) | $4,800.9 | $(1,224.9) | | Comprehensive earnings (loss) | $703.8 | $(422.7) | Condensed Consolidated Statements of Equity Liberty Global's total equity increased from January 1, 2025, to June 30, 2025, despite net losses, primarily due to significant accumulated other comprehensive earnings, net of taxes | Metric (in millions) | January 1, 2025 | June 30, 2025 | | :--------------------------------------- | :-------------- | :------------ | | Total Liberty Global shareholders | $12,365.9 | $12,994.0 | | Noncontrolling interests | $178.4 | $211.0 | | Total equity | $12,544.3 | $13,205.0 | | Accumulated earnings | $12,242.6 | $8,112.4 | | Accumulated other comprehensive earnings (loss), net of taxes | $(657.0) | $4,143.9 | - The increase in accumulated other comprehensive earnings (loss), net of taxes, from $(657.0) million at January 1, 2025, to $4,143.9 million at June 30, 2025, was largely due to other comprehensive earnings of $3,179.0 million during the second quarter of 2025[23] Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash provided by operating activities decreased, while net cash used by investing activities increased significantly, and net cash used by financing activities decreased compared to the prior year | Metric (in millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | 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) | | Effect of exchange rate changes on cash | $159.7 | $(33.0) | | Net increase in cash and cash equivalents | $0.2 | $596.2 | | Cash and cash equivalents, end of period | $1,822.5 | $2,019.1 | - Cash paid for interest from continuing operations decreased from $254.8 million in 2024 to $236.0 million in 2025 for the six-month period[32] Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations and disclosures for the condensed consolidated financial statements, covering accounting policies, significant transactions, financial instruments, and segment performance (1) Basis of Presentation Liberty Global Ltd. is a Bermuda-exempted company providing broadband internet, video, fixed-line telephony, and mobile communications services in Europe, alongside investments in infrastructure, content, and technology - Liberty Global's continuing operations include Telenet (Belgium/Luxembourg) and VM Ireland, and 50% noncontrolling interests in VMO2 JV (U.K.) and VodafoneZiggo JV (Netherlands)[35] - The Spin-off of Sunrise (Switzerland) was completed on November 8, 2024, with Sunrise operations reflected as discontinued[36] - A controlling interest in Formula E Holdings Ltd. was acquired on October 2, 2024, leading to 100% consolidation of its results from that date[37] (2) Accounting Changes and Recent Accounting Pronouncements Liberty Global adopted several new accounting standards in 2024 and 2025, including ASU 2023-09, ASU 2023-07, and ASU 2023-05, and is evaluating ASU 2024-03 - Adopted ASU 2023-09 (Improvements to Income Tax Disclosures) on January 1, 2025, retrospectively[42] - Adopted ASU 2023-07 (Improvements to Reportable Segment Disclosures) on January 1, 2024, retrospectively, enhancing disclosures in note 16[43] - Adopted ASU 2023-05 (Business Combinations — Joint Venture Formations) on January 1, 2025, requiring fair value measurement of assets and liabilities upon joint venture formation[44] - Currently evaluating the impact of ASU 2024-03 (Disaggregation of Income Statement Expenses), effective for annual periods beginning after December 15, 2026[46] (3) Revenue Recognition and Related Costs The company recognizes revenue when goods or services are transferred to customers, recording trade receivables, contract assets, or deferred revenue based on payment timing | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | Trade receivables, net | $570.3 | $449.8 | | Allowance for doubtful accounts | $33.2 | $20.5 | | 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] (4) Acquisitions and Dispositions Liberty Global completed the Formula E Acquisition on October 2, 2024, gaining a controlling interest and consolidating its results, and completed the Spin-off of Sunrise on November 8, 2024 - Acquired a controlling interest in Formula E on October 2, 2024, increasing ownership from 38.2% to 65.6% for €150.0 million ($165.7 million)[52] - Completed the Spin-off of Sunrise on November 8, 2024, distributing Sunrise common shares to Liberty Global shareholders[57][58] | Metric (in millions) | Six months ended June 30, 2024 (Sunrise Discontinued Operations) | | :------------------- | :------------------------------------------------------------- | | Revenue | $1,669.6 | | Operating income | $87.0 | | Net loss attributable to Liberty Global shareholders | $(156.4) | - Recorded $101.3 million in revenue from Sunrise Services for the six months ended June 30, 2025, following the Spin-off[59] (5) Investments Liberty Global holds significant equity method investments in VMO2 JV and VodafoneZiggo JV, and fair value investments in various companies, subject to macroeconomic pressures and volatility | Investment (in millions) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Equity Method: | | | | VMO2 JV | $6,844.9 | $6,501.4 | | VodafoneZiggo JV | $1,873.1 | $1,738.4 | | Fair Value: | | | | Vodafone (short-term) | $1,328.1 | — | | EdgeConneX | $516.3 | $414.5 | | ITV | $431.2 | $351.4 | | Televisa Univision | $313.9 | $314.8 | | Vodafone (long-term) | — | $1,141.5 | | Total investments | $12,554.6 | $12,023.6 | | Share of Results of Affiliates, net (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | | VMO2 JV | $(161.1) | $3.0 | | VodafoneZiggo JV | $(48.1) | $4.8 | | nexfibre JV | $(29.6) | $(0.7) | | AtlasEdge JV | $(18.5) | $(4.7) | | Total | $(264.6) | $(24.6) | | Realized and Unrealized Gains (Losses) on Investments, net (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :----------------------------------------------------------------------- | :------------------------------- | :------------------------------- | | Vodafone | $57.9 | $(1.7) | | ITV | $43.1 | $33.1 | | Televisa Univision | $(27.6) | $1.2 | | Plume | $(9.7) | $(26.7) | | EdgeConneX | $14.9 | $17.3 | | Total | $55.3 | $(29.8) | - During Q2 2025, Liberty Global disposed of 90 million Vodafone shares and unwound the associated Vodafone Collar and Loan, receiving €70.9 million ($81.7 million) net cash[67] (6) Derivative Instruments Liberty Global uses derivative instruments to manage interest rate and foreign currency exposures, reporting significant realized and unrealized losses for the three and six months ended June 30, 2025 | Derivative Instrument Fair Values (in millions) | June 30, 2025 (Assets) | June 30, 2025 (Liabilities) | December 31, 2024 (Assets) | December 31, 2024 (Liabilities) | | :---------------------------------------------- | :--------------------- | :-------------------------- | :------------------------- | :------------------------------ | | Cross-currency and interest rate derivative contracts | $270.1 | $304.5 | $623.2 | $183.1 | | Equity-related derivative instruments | $29.3 | — | $213.4 | — | | Foreign currency forward and option contracts | $15.6 | $21.8 | $6.5 | $3.3 | | Total | $322.0 | $333.2 | $843.9 | $186.4 | | Realized and Unrealized Gains (Losses) on Derivative Instruments, net (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :-------------------------------------------------------------------------------- | :------------------------------- | :------------------------------- | | Cross-currency and interest rate derivative contracts | $(323.2) | $103.2 | | Equity-related derivative instruments | $(73.9) | $(4.6) | | Total | $(406.0) | $91.2 | | Realized and Unrealized Gains (Losses) on Derivative Instruments, net (in millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------------------------------------------------------- | :----------------------------- | :----------------------------- | | Cross-currency and interest rate derivative contracts | $(433.9) | $280.3 | | Equity-related derivative instruments | $(123.1) | $(48.1) | | Total | $(570.7) | $224.5 | - Derivative instruments reduced borrowing costs by 1.67% at June 30, 2025[102] (7) Fair Value Measurements Liberty Global uses fair value measurements for certain investments and derivative instruments, categorizing inputs into Level 1, 2, or 3, with the Vodafone Collar transferring from Level 3 to Level 2 during Q2 2025 - The Vodafone Collar transferred from Level 3 to Level 2 during the second quarter of 2025[107] | Fair Value Assets (in millions) | Level 1 (June 30, 2025) | Level 2 (June 30, 2025) | Level 3 (June 30, 2025) | | :------------------------------ | :---------------------- | :---------------------- | :---------------------- | | Total derivative instruments | $0 | $322.0 | $0 | | Total investments | $1,807.5 | $82.9 | $1,367.7 | | Total assets | $1,807.5 | $404.9 | $1,367.7 | | Fair Value Liabilities (in millions) | Level 1 (June 30, 2025) | Level 2 (June 30, 2025) | Level 3 (June 30, 2025) | | :----------------------------------- | :---------------------- | :---------------------- | :---------------------- | | Total derivative instruments | $0 | $333.2 | $0 | | Total liabilities | $0 | $333.2 | $0 | - As of June 30, 2025, $366.6 million of Level 3 investments were accounted for under the measurement alternative at cost less impairment, adjusted for observable price changes[117] (8) Long-lived Assets Liberty Global's property and equipment, net, increased to $5,091.6 million at June 30, 2025, from $4,326.0 million at December 31, 2024, with goodwill also increasing to $3,601.0 million | Property and Equipment, Net (in millions) | June 30, 2025 | December 31, 2024 | | :---------------------------------------- | :------------ | :---------------- | | Distribution systems | $6,913.4 | $5,702.7 | | Support equipment, buildings and land | $2,972.3 | $2,518.0 | | CPE | $1,024.8 | $843.1 | | Total property and equipment, net | $5,091.6 | $4,326.0 | | Goodwill (in millions) | January 1, 2025 | Acquisitions and related adjustments | Foreign currency translation adjustments and other | June 30, 2025 | | :--------------------- | :-------------- | :----------------------------------- | :----------------------------------------------- | :------------ | | Telenet | $2,656.4 | $0.6 | $363.1 | $3,020.1 | | VM Ireland | $250.8 | — | $34.2 | $285.0 | | Other | $245.4 | $16.1 | $34.4 | $295.9 | | Total | $3,152.6 | $16.7 | $431.7 | $3,601.0 | | Intangible Assets Subject to Amortization, Net (in millions) | June 30, 2025 | December 31, 2024 | | :----------------------------------------------------------- | :------------ | :---------------- | | Licenses | $1,178.3 | $1,061.2 | | Customer relationships | $99.8 | $94.4 | | Other | $145.1 | $134.8 | | Total | $1,423.2 | $1,290.4 | (9) Debt Liberty Global's total debt before deferred financing costs, discounts, and premiums increased to $9,816.7 million at June 30, 2025, with a weighted average interest rate of 4.91% | Debt Component (in millions) | June 30, 2025 (Principal) | December 31, 2024 (Principal) | | :--------------------------- | :------------------------ | :---------------------------- | | Telenet Credit Facility | $4,647.5 | $4,364.8 | | Telenet Senior Secured Notes | $1,635.2 | $1,558.8 | | VM Ireland Credit Facility | $1,058.6 | $931.4 | | Vodafone Collar Loan | $1,379.9 | $1,301.9 | | Vendor financing | $385.2 | $355.9 | | Other | $710.3 | $632.2 | | Total debt before deferred financing costs, discounts and premiums | $9,816.7 | $9,145.0 | - The weighted average interest rate on total debt was 4.91% at June 30, 2025, excluding derivative impacts[124] - Telenet entered into a €500.0 million sustainability-linked term loan facility in February 2025, maturing March 31, 2033, with interest at EURIBOR + 3.0%[131] - The Vodafone Collar Loan was partially settled by €84.8 million ($99.7 million) in Q2 2025, resulting in a $0.9 million loss on debt extinguishment, and fully settled in July 2025[127][133] (10) Leases Liberty Global's ROU assets and lease liabilities increased from December 31, 2024, to June 30, 2025, with total lease expense for the six months ended June 30, 2025, at $62.1 million | Lease Balances (in millions) | June 30, 2025 | December 31, 2024 | | :--------------------------- | :------------ | :---------------- | | Operating ROU assets | $776.6 | $710.5 | | Finance ROU assets | $39.4 | $38.2 | | Total ROU assets | $816.0 | $748.7 | | Operating lease liabilities | $828.7 | $753.1 | | Finance lease liabilities | $34.9 | $34.1 | | Total lease liabilities | $863.6 | $787.2 | | Lease Expense (in millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------- | :----------------------------- | :----------------------------- | | 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 | | Lease Liabilities Maturities (in millions) | Operating leases (June 30, 2025) | Finance leases (June 30, 2025) | | :----------------------------------------- | :------------------------------- | :----------------------------- | | Total payments | $1,109.1 | $44.4 | | Present value of lease payments | $828.7 | $34.9 | | Current portion | $88.4 | $7.3 | | Long-term portion | $740.3 | $27.6 | (11) Income Taxes Liberty Global will use a 15.0% Bermuda statutory rate for income tax calculations starting January 1, 2025, with effective tax rates for Q2 and YTD 2025 significantly impacted by non-deductible foreign exchange and investment losses - Bermuda enacted the Corporate Income Tax Act 2023, imposing a 15.0% statutory rate starting January 1, 2025[151] - Effective tax rate for Q2 2025 was 0.0% (expense of $0.9 million) compared to the 15.0% Bermuda statutory rate, primarily due to non-deductible net foreign exchange losses ($594.9 million) and investment losses ($69.5 million)[152] - Effective tax rate for YTD Q2 2025 was 1.7% (benefit of $69.1 million) compared to the 15.0% Bermuda statutory rate, influenced by similar factors and a $86.0 million 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] - Ongoing litigation includes a U.S. Department of Justice suit for $284 million in unpaid federal income taxes for 2018 and an appeal regarding a $315 million payment for the 2010 tax year[161][162] (12) Equity During the first six months of 2025, Liberty Global repurchased 9,421,772 Class C common shares for $103.0 million, with 25.5 million shares remaining under authorization - Repurchased 9,421,772 Class C common shares for an aggregate of $103.0 million during the six months ended June 30, 2025[165] - Authorized to repurchase up to 10% of total outstanding shares in 2025, with 25.5 million Class A and/or Class C common shares remaining under authorization as of June 30, 2025[166] (13) Share-based Compensation Liberty Global's share-based compensation expense for the six months ended June 30, 2025, was $82.8 million, consistent with the prior year, with new 2025 PSUs granted in March 2025 | Share-based Compensation Expense (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | | Non-performance based incentive awards | $21.3 | $27.8 | | Performance-based incentive awards | $15.4 | $4.9 | | Other | $8.8 | $7.4 | | Total Liberty Global | $45.5 | $40.1 | | Total | $49.4 | $43.4 | | Share-based Compensation Expense (in millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------------- | :----------------------------- | :----------------------------- | | 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 | | Total | $82.8 | $82.4 | - As of June 30, 2025, 38.6 million Class A and 86.7 million Class C options, SARs, and PSARs were outstanding for Liberty Global employees[171][172] - Additionally, 3.4 million Class A and 4.5 million Class C RSUs, and 4.9 million Class A and 6.7 million Class C PSUs were outstanding[171][172] - New 2025 PSUs were granted in March 2025, with payouts based on Liberty Global's average share price appreciation during a performance period ending December 31, 2027[174] (14) Earnings (Loss) per Share Liberty Global reported basic and diluted losses per share from continuing operations of $(8.09) for Q2 2025 and $(11.91) for YTD Q2 2025, a significant decline from positive EPS in the prior year | EPS Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | | Basic EPS from continuing operations | $(8.09) | $0.85 | | Diluted EPS from continuing operations | $(8.09) | $0.84 | | EPS Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS from continuing operations | $(11.91) | $2.50 | | Diluted EPS from continuing operations | $(11.91) | $2.45 | - Weighted average common shares outstanding (basic) were 345.0 million for Q2 2025 and 346.7 million for YTD Q2 2025[176] - Potentially dilutive employee share-based incentive awards of 155.5 million were excluded from diluted EPS computation for Q2 and YTD Q2 2025 due to their anti-dilutive effect[176][179] (15) Commitments and Contingencies Liberty Global has significant off-balance sheet commitments totaling $2,968.0 million as of June 30, 2025, and is involved in various legal and regulatory proceedings | Commitment Type (in millions) | Remainder of 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Total | | :---------------------------- | :---------------- | :----- | :----- | :----- | :---- | :--- | :--------- | :------ | | Purchase commitments | $397.0 | $628.8 | $543.0 | $508.3 | $102.1 | $36.3 | $18.9 | $2,234.4 | | Programming commitments | $72.9 | $44.8 | $33.3 | $2.2 | $0.8 | — | — | $154.0 | | Network and connectivity commitments | $41.7 | $45.4 | $4.6 | $1.0 | $0.5 | $0.1 | $0.1 | $93.4 | | Other commitments | $270.5 | $181.2 | $13.8 | $9.8 | $5.7 | $2.5 | $2.7 | $486.2 | | Total | $521.3 | $782.1 | $900.2 | $594.7 | $109.1 | $38.9 | $21.7 | $2,968.0 | - Programming commitments are expected to rise in future periods due to contractual inflation and content expansion, despite the fixed amounts shown[182] - Ongoing legal proceedings include the Interkabel Acquisition dispute in Belgium (claiming €1.4 billion in damages) and the Telekom Deutschland Litigation in Germany, with no material impact expected on financial position[188][189][190][192] (16) Segment Reporting Liberty Global operates through three strategic platforms: Liberty Telecom, Liberty Growth, and Liberty Services, with Adjusted EBITDA as the primary measure for evaluating segment performance - Reportable segments include Telenet, VM Ireland, VMO2 JV, and VodafoneZiggo JV, all part of the 'Liberty Telecom' strategic platform[200][206] - 'Liberty Growth' and 'Liberty Services' strategic platforms, along with corporate activities, are included in the 'all other category' due to not meeting reportable segment thresholds[202][203][205] | Segment Revenue (in millions) | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :---------------------------- | :------------------------------- | :----------------------------- | | Telenet | $801.0 | $1,560.7 | | VM Ireland | $122.8 | $238.6 | | VMO2 JV | $3,373.5 | $6,499.8 | | VodafoneZiggo JV | $1,123.3 | $2,175.3 | | Total reportable segment revenue | $5,420.6 | $10,474.4 | | Segment Adjusted EBITDA (in millions) | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :------------------------------------ | :------------------------------- | :----------------------------- | | Telenet | $337.9 | $639.5 | | VM Ireland | $41.4 | $78.6 | | VMO2 JV | $1,172.3 | $2,245.7 | | VodafoneZiggo JV | $496.7 | $959.8 | | Total reportable segment Adjusted EBITDA | $2,048.3 | $3,923.6 | | Revenue by Major Category (in millions) | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :-------------------------------------- | :------------------------------- | :----------------------------- | | Residential fixed subscription revenue | $439.2 | $846.0 | | Residential mobile subscription revenue | $125.0 | $240.7 | | B2B subscription revenue | $112.5 | $216.3 | | Other revenue | $436.8 | $837.2 | | Total consolidated revenue | $1,269.1 | $2,440.3 | ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides a comprehensive analysis of Liberty Global's financial condition and results of operations for the three and six months ended June 30, 2025, compared to 2024 Forward-Looking Statements This section outlines various risks and uncertainties that could cause actual results to differ materially from forward-looking statements - Key risks include economic and business conditions, competitive environment, technological changes, regulatory impacts, and fluctuations in currency exchange rates and interest rates[238][239] - The company disclaims any obligation to update or revise forward-looking statements[240] Overview Liberty Global is an international provider of broadband, video, fixed-line telephony, and mobile services in Europe, with active investments in infrastructure, content, and technology - At June 30, 2025, reportable segments passed 29.1 million homes, served 11.4 million fixed-line customers, and 44.6 million mobile subscribers[245] - Competition, macroeconomic, and regulatory factors are adversely impacting revenue, customer numbers, and ARPU[246] - The company is subject to inflationary pressures on labor, programming, and other costs, which may outpace revenue increases[247] Material Changes in Results of Operations Liberty Global's consolidated revenue increased by 20.0% for Q2 2025 and 13.5% for YTD Q2 2025, primarily due to acquisitions, but organic revenue decreased, leading to significant net losses Discussion and Analysis of our Reportable Segments Telenet's revenue increased organically, while VM Ireland's revenue decreased, and VMO2 JV and VodafoneZiggo JV experienced mixed results | Segment Revenue (in millions) | Three months ended June 30, 2025 | Organic % Change (QoQ) | | :---------------------------- | :------------------------------- | :--------------------- | | Telenet | $801.0 | 0.6% | | VM Ireland | $122.8 | (3.0)% | | Total consolidated reportable segments | $923.8 | | | Segment Revenue (in millions) | Six months ended June 30, 2025 | Organic % Change (YoY) | | :---------------------------- | :----------------------------- | :--------------------- | | Telenet | $1,560.7 | 1.7% | | VM Ireland | $238.6 | (2.9)% | | Total consolidated reportable segments | $1,799.3 | | | Segment Adjusted EBITDA (in millions) | Three months ended June 30, 2025 | Organic % Change (QoQ) | | :------------------------------------ | :------------------------------- | :--------------------- | | Telenet | $337.9 | 2.8% | | VM Ireland | $41.4 | (14.1)% | | Total consolidated reportable segments | $379.3 | | | Segment Adjusted EBITDA (in millions) | Six months ended June 30, 2025 | Organic % Change (YoY) | | :------------------------------------ | :----------------------------- | :--------------------- | | Telenet | $639.5 | 1.8% | | VM Ireland | $78.6 | (9.5)% | | Total consolidated reportable segments | $718.1 | | | Adjusted EBITDA Margin | June 30, 2025 (QoQ) | June 30, 2024 (QoQ) | June 30, 2025 (YoY) | June 30, 2024 (YoY) | | :--------------------- | :------------------ | :------------------ | :------------------ | :------------------ | | Telenet | 42.2% | 41.3% | 41.0% | 40.9% | | VM Ireland | 33.7% | 38.1% | 32.9% | 35.3% | | VMO2 JV | 34.8% | 33.5% | 34.6% | 33.1% | | VodafoneZiggo JV | 44.2% | 47.5% | 44.1% | 47.0% | Discussion and Analysis of our Consolidated Operating Results Consolidated revenue increased due to acquisitions but organic revenue declined, with net losses driven by foreign currency and derivative losses, and significant losses from affiliates | Consolidated Revenue (in millions) | Three months ended June 30, 2025 | Organic % Change (QoQ) | | :------------------------------- | :------------------------------- | :--------------------- | | Total consolidated revenue | $1,269.1 | (1.2)% | | Residential fixed revenue | $443.8 | 0.4% | | Residential mobile revenue | $162.6 | (5.7)% | | B2B revenue | $225.9 | 1.4% | | Other revenue | $436.8 | (2.3)% | | Consolidated Revenue (in millions) | Six months ended June 30, 2025 | Organic % Change (YoY) | | :------------------------------- | :----------------------------- | :--------------------- | | Total consolidated revenue | $2,440.3 | (1.2)% | | Residential fixed revenue | $855.7 | 0.4% | | Residential mobile revenue | $314.5 | (6.3)% | | B2B revenue | $432.9 | 2.2% | | Other revenue | $837.2 | (2.7)% | - Consolidated revenue increased $211.2 million (20.0%) for Q2 2025 and $291.1 million (13.5%) for YTD Q2 2025, including $114.4 million and $198.9 million from Formula E Acquisition and $51.7 million and $101.3 million from Sunrise Services, respectively[273] | Expense Category (in millions) | Six months ended June 30, 2025 | Organic % Change (YoY) | | :----------------------------- | :----------------------------- | :--------------------- | | Programming and other direct costs of services | $868.7 | (5.3)% | | Other operating expenses (excl. share-based comp) | $402.2 | 4.4% | | SG&A expenses (excl. share-based comp) | $509.5 | (2.2)% | - Interest expense decreased by $35.6 million (12.3%) for YTD Q2 2025, primarily due to lower weighted average interest rates[297] - Share of results of affiliates, net, showed a loss of $(412.6) million for YTD Q2 2025, compared to a loss of $(31.6) million in the prior year, largely due to VMO2 JV and VodafoneZiggo JV losses[307] Material Changes in Financial Condition Liberty Global's liquidity is dependent on its subsidiaries' capital resources, with $1,899.3 million in cash, cash equivalents, and SMAs at June 30, 2025, and adjusted free cash flow was negative $(342.4) million for YTD Q2 2025 Sources and Uses of Cash Liberty Global's corporate liquidity relies on cash from unrestricted subsidiaries and investments held under SMAs, with borrowing groups holding additional cash that may have restricted access | Cash and Cash Equivalents and SMAs (in millions) | June 30, 2025 | | :----------------------------------------------- | :------------ | | Liberty Global and unrestricted subsidiaries | $598.7 | | Borrowing groups | $1,217.8 | | Total cash and cash equivalents | $1,816.5 | | Investments held under SMAs | $82.8 | | Total | $1,899.3 | - 72.1% ($1,309.6 million) of consolidated cash and cash equivalents is denominated in euros, and 26.4% ($478.9 million) in U.S. dollars[333] - The company repurchased $103.0 million of shares during the six months ended June 30, 2025[339] Capitalization Liberty Global aims to maintain consolidated debt between four and five times its consolidated Adjusted EBITDA, with total consolidated debt and finance lease obligations at $9.9 billion as of June 30, 2025 - Target consolidated debt balance is between four and five times consolidated Adjusted EBITDA[344] - Total consolidated debt and finance lease obligations aggregated $9.9 billion at June 30, 2025, with $2.0 billion classified as current[346] - All borrowing groups were in compliance with debt covenants at June 30, 2025, and no material adverse impact on liquidity is anticipated for the next 12 months[345] Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash provided by operating activities decreased, net cash used by investing activities increased, and net cash used by financing activities decreased compared to the prior year | Cash Flow Summary (in millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Change | | :------------------------------ | :----------------------------- | :----------------------------- | :----- | | 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 | | Net increase in cash | $0.2 | $441.4 | $(441.2) | - The decrease in operating cash flow was due to lower interest receipts and derivative cash receipts, partially offset by lower interest payments and FX impact[349] - The change in investing cash flow was primarily due to a $411.7 million decrease from the All3Media sale, $258.7 million lower net cash from investment sales, and $171.5 million higher capital expenditures[350] - The decrease in financing cash used was mainly due to $244.5 million lower share repurchases, partially offset by $92.0 million higher net debt repayments and $84.1 million higher net cash receipts from derivatives[352] Adjusted Free Cash Flow Adjusted free cash flow for the six months ended June 30, 2025, was negative $(342.4) million, a significant decrease from $(91.2) million in the prior year | Adjusted Free Cash Flow (in millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by operating activities of continuing operations | $278.4 | $345.0 | | Operating-related vendor financing additions | $151.6 | $170.6 | | Cash capital expenditures, net | $(562.6) | $(391.1) | | Principal payments on operating-related vendor financing | $(176.6) | $(162.6) | | Principal payments on capital-related vendor financing | $(30.4) | $(51.5) | | Principal payments on finance leases | $(2.8) | $(1.6) | | Adjusted free cash flow | $(342.4) | $(91.2) | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Liberty Global is exposed to market risks from foreign currency exchange rates, interest rates, and stock prices, which are managed using derivative instruments General Liberty Global is exposed to market risks from foreign currency exchange rates, interest rates, and stock prices due to its international investments and financing activities - Market risk includes foreign currency exchange rates, interest rates, and stock prices[358] - Derivative instruments are used to manage exposure to market risks[358] Cash The company invests cash in highly liquid, high-credit-quality instruments and manages currency denominations to mitigate exchange rate risk - At June 30, 2025, 72.1% ($1,309.6 million) of consolidated cash was in euros, and 26.4% ($478.9 million) in U.S. dollars[361] - 88.2% ($73.0 million) of investments held under SMAs were denominated in U.S. dollars[361] Foreign Currency Risk Liberty Global faces foreign currency exchange rate risk when debt is denominated in a currency different from the functional currency of the supporting operations, primarily for the euro and British pound sterling against the U.S. dollar - Primary foreign exchange risk exposure is to the euro and British pound sterling against the U.S. dollar[362][363] | Currency | Spot Rate (June 30, 2025) | Spot Rate (December 31, 2024) | | :------- | :------------------------ | :---------------------------- | | Euro | 0.8502 | 0.9663 | | GBP | 0.7292 | 0.7988 | Inflation and Foreign Investment Risk The company is exposed to inflationary pressures on labor, programming, and other costs, which may negatively impact operating results, cash flows, and liquidity - Subject to inflationary pressures on labor, programming, and other costs[364] - Costs could rise faster than revenue, negatively impacting operating results, cash flows, and liquidity[364] Interest Rate Risks Liberty Global is exposed to interest rate changes from its fixed-rate and variable-rate borrowings, primarily EURIBOR-indexed and Term SOFR-indexed debt, managed with derivative instruments - Primary exposure to variable-rate debt is through EURIBOR-indexed and Term SOFR-indexed debt[365] - Uses interest rate derivative contracts (swaps, caps, floors, collars, swaptions) to mitigate interest rate risk[366] - At June 30, 2025, outstanding variable-rate indebtedness aggregated $6.8 billion, with a weighted average interest rate of approximately 5.4%[368] - A hypothetical 50 basis point increase in the weighted average variable interest rate would increase annual consolidated interest expense and cash outflows by $34.0 million[368] Sensitivity Information The fair value of Telenet's cross-currency and interest rate derivative contracts is sensitive to changes in exchange rates and interest rates - A 10% increase in the euro's value relative to the U.S. dollar would decrease Telenet's cross-currency and interest rate derivative contracts' fair value by approximately €308 million ($361 million)[373] - A 50 basis point increase in the relevant base rate would increase Telenet's cross-currency and interest rate derivative contracts' fair value by approximately €71 million ($83 million)[373] Projected Cash Flows Associated with Derivative Instruments Projected net cash payments associated with derivative instruments total $(96.6) million, with interest-related payments of $(247.0) million and principal-related receipts of $144.8 million | Projected Derivative Cash Flows, net (in millions) | Remainder of 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Total | | :----------------------------------------------- | :---------------- | :---- | :----- | :---- | :----- | :--- | :--------- | :------ | | Interest-related | $(56.8) | $3.4 | $(101.0) | $(74.4) | $(19.9) | $1.5 | $0.2 | $(247.0) | | Principal-related | — | — | — | $144.8 | — | — | — | $144.8 | | Other | $4.0 | $1.5 | $(0.1) | $0.2 | — | — | — | $5.6 | | Total | $(52.8) | $4.9 | $(101.1) | $70.6 | $(19.9) | $1.5 | $0.2 | $(96.6) | ITEM 4. CONTROLS AND PROCEDURES Liberty Global's management evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, concluding they provide reasonable assurance, with no material changes in internal controls over financial reporting Evaluation of Disclosure Controls and Procedures The CEO and CFO concluded that Liberty Global's disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[374] - Controls provide reasonable assurance of achieving desired control objectives[374] Changes in Internal Controls over Financial Reporting No material changes in internal controls over financial reporting were identified during the fiscal quarter ended June 30, 2025 - No material changes in internal controls over financial reporting occurred during the quarter[375] PART II — OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS This section refers to Note 15 of the condensed consolidated financial statements for details on legal proceedings, which arise in the normal course of business - Legal proceedings are detailed in Note 15 to the condensed consolidated financial statements[377] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS During the quarter ended June 30, 2025, Liberty Global repurchased 6,223,775 Class C common shares for an average price of $10.32 per share, totaling approximately $64.2 million | 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 — April 1, 2025 through June 30, 2025 | Class C | 6,223,775 | $10.32 | - As of June 30, 2025, the company is 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 closing share prices[378] ITEM 5. OTHER INFORMATION No directors or executive officers adopted or terminated any Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025 - No directors or executive officers adopted or terminated Rule 10b5-1 trading arrangements during Q2 2025[379] ITEM 6. EXHIBITS This section lists the exhibits filed as part of the Quarterly Report, including supplemental agreements, incentive plans, and certifications - Exhibits include a Supplemental Agreement for Telenet's Credit Agreement, a Form of Non-Executive Director Restricted Share Units Agreement, and various certifications (Rule 13a-14(a)/15d-14(a) and Section 1350)[381]