Liberty .(US:LBTYB)2023-10-30 16:00PART I — FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This section presents Liberty Global plc's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, cash flows, and detailed notes for Q3 and 9M 2023 Condensed Consolidated Balance Sheets Total assets slightly decreased to $42.7 billion while total liabilities increased to $21.8 billion, leading to a decrease in total equity Condensed Consolidated Balance Sheet Highlights (in millions) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Assets | $42,696.4 | $42,895.0 | | Total Current Assets | $5,428.0 | $6,297.4 | | Property and equipment, net | $7,002.2 | $6,504.5 | | Goodwill | $9,766.9 | $9,316.1 | | Total Liabilities | $21,848.8 | $20,321.6 | | Total Current Liabilities | $3,730.8 | $3,921.0 | | Long-term debt and finance lease obligations | $14,558.3 | $12,963.5 | | Total Equity | $20,847.6 | $22,573.4 | Condensed Consolidated Statements of Operations Q3 2023 revenue increased to $1.85 billion, but operating loss was $27.4 million, with net earnings significantly down due to lower derivative gains Q3 2023 vs Q3 2022 Performance (in millions, except per share) | Metric | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | Revenue | $1,854.5 | $1,746.3 | | Operating Income (Loss) | $(27.4) | $108.9 | | Net Earnings (Loss) to Shareholders | $659.2 | $2,348.0 | | Diluted EPS | $1.57 | $4.87 | Nine Months 2023 vs 2022 Performance (in millions, except per share) | Metric | 9M 2023 | 9M 2022 | | :--- | :--- | :--- | | Revenue | $5,570.9 | $5,353.8 | | Operating Income (Loss) | $(39.2) | $192.2 | | Net Earnings (Loss) to Shareholders | $(561.8) | $6,172.9 | | Diluted EPS | $(1.28) | $12.15 | Condensed Consolidated Statements of Cash Flows Net cash from operating activities decreased to $1.33 billion for 9M 2023, while investing activities shifted to a net use of $966.4 million Cash Flow Summary for Nine Months Ended Sep 30 (in millions) | Cash Flow Category | 2023 | 2022 | | :--- | :--- | :--- | | Net cash from operating activities | $1,326.7 | $1,954.6 | | Net cash from investing activities | $(966.4) | $1,932.2 | | Net cash from financing activities | $(343.1) | $(3,062.6) | | Net increase in cash | $16.1 | $682.9 | Notes to Condensed Consolidated Financial Statements Notes detail the Telenet Wyre transaction, Vodafone stake acquisition, share repurchases, and segment performance, including a new cost allocation framework - On July 1, 2023, Telenet and Fluvius created Wyre, an infrastructure company, resulting in a net gain of $377.8 million for Liberty Global5255 - In Q1 2023, the company acquired a 4.9% stake in Vodafone for an aggregate price of $1.49 billion, funded through cash and a collar transaction68 - During the nine months ended September 30, 2023, the company repurchased $1.15 billion of its Class A and Class C ordinary shares153 - The company launched a takeover bid for Telenet, increasing its ownership to 96.26% as of the reporting period end, with a plan to reach 100% ownership155156 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management discusses competitive and inflationary pressures, segment performance, non-operating items, liquidity, and debt structure, confirming covenant compliance Results of Operations Consolidated revenue increased 6.2% but declined organically, with Adjusted EBITDA down 10.0% due to higher costs and affiliate losses Consolidated Revenue by Segment - Q3 2023 (in millions) | Segment | Revenue | Reported Change % | Organic Change % | | :--- | :--- | :--- | :--- | | Switzerland | $859.3 | 8.8% | (0.9)% | | Belgium | $775.2 | 16.6% | 1.3% | | Ireland | $125.5 | 8.1% | 0.0% | | Central and Other | $164.3 | (31.1)% | (28.5)% | | Total | $1,854.5 | 6.2% | (4.1)% | Consolidated Adjusted EBITDA by Segment - Q3 2023 (in millions) | Segment | Adjusted EBITDA | Reported Change % | Organic Change % | | :--- | :--- | :--- | :--- | | Switzerland | $311.0 | 6.2% | (4.0)% | | Belgium | $339.8 | 7.3% | (1.8)% | | Ireland | $45.9 | (0.9)% | (7.8)% | | Central and Other | $(83.6) | N.M. | N.M. | | Total | $597.7 | (10.0)% | (16.8)% | - The VMO2 JV reported a net loss of $386.6 million in Q3 2023, contributing to Liberty Global's share of affiliate losses, compared to net earnings of $832.2 million in Q3 2022295296 - The VodafoneZiggo JV's net loss was $63.6 million in Q3 2023, a decline from net earnings of $171.7 million in Q3 2022, primarily due to inflation-related cost increases297298 Financial Condition and Liquidity Total liquidity was $3.54 billion as of September 30, 2023, with $15.3 billion in consolidated debt and ongoing share repurchase programs Liquidity Position as of Sep 30, 2023 (in millions) | Component | Amount | | :--- | :--- | | Total cash and cash equivalents | $1,741.6 | | Investments held under SMAs | $1,797.7 | | Total Liquidity | $3,539.3 | - The company's share repurchase program for 2023 was increased to a minimum of 15% of outstanding shares, with a further $300 million target through January 2024327370 - Adjusted Free Cash Flow for the first nine months of 2023 was $48.0 million, a significant decrease from $678.9 million in the prior-year period345 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The company faces market risks from foreign currency, interest rates, and stock prices, with sensitivity analyses for its derivative contracts - The company's primary currency exposures are to the Euro and Swiss franc, with 70.1% of consolidated cash denominated in euros at September 30, 2023230350 - At September 30, 2023, the company had $11.3 billion in variable-rate debt, where a hypothetical 0.50% increase in rates would raise annual interest expense by $56.5 million before hedges360 - The company has fully transitioned its U.S. dollar-denominated loans from LIBOR to the Term Secured Overnight Financing Rate (Term SOFR)125357 CONTROLS AND PROCEDURES Management concluded disclosure controls were effective as of September 30, 2023, with no material changes to internal controls during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2023366 - No material changes to the company's internal controls over financial reporting were identified during the third quarter of 2023367 PART II — OTHER INFORMATION LEGAL PROCEEDINGS The company is involved in various litigation arising in the normal course of business, with details in Note 15 of the financial statements - The company is involved in litigation from normal business operations, with further details provided in Note 15 to the financial statements369 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS This section details the repurchase of 27,012,709 Class C shares in Q3 2023 at an average price of $19.38 per share, confirming repurchase targets Issuer Purchases of Equity Securities (Q3 2023) | Period | Class | Total Shares Purchased | Average Price Paid | | :--- | :--- | :--- | :--- | | Jul-23 | C | 9,120,000 | $19.31 | | Aug-23 | C | 9,672,284 | $19.50 | | Sep-23 | C | 8,220,425 | $19.32 | | Total Q3 | C | 27,012,709 | $19.38 | OTHER INFORMATION No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 arrangements during Q3 2023 - No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the quarter ended September 30, 2023371 EXHIBITS This section lists the exhibits filed with the Quarterly Report, including CEO and CFO certifications and Inline XBRL documents - Key exhibits filed include CEO/CFO certifications and Inline XBRL data files372