Liberty .(LBTYK) - 2022 Q3 - Quarterly Report

Customer Base and Market Presence - As of September 30, 2022, the company served 4,089,900 fixed-line customers and 5,830,200 mobile subscribers, with networks passing 7,527,000 homes[232]. - The company holds a 50% noncontrolling interest in the VMO2 JV and VodafoneZiggo JV, which provide residential and B2B communications services in the U.K. and the Netherlands, respectively[229]. Financial Performance - Earnings from continuing operations for Q3 2022 were $2,431.7 million, a significant increase from $315.6 million in Q3 2021[245]. - Total revenue for Q3 2022 was $1,901.4 million, a decrease of $155.1 million (8.2%) compared to Q3 2021[249]. - Total revenue for the nine months ended September 30, 2022, was $5,353.8 million, a decrease of 36.2% compared to $8,390.5 million in 2021[249]. - Adjusted EBITDA for the nine months ended September 30, 2022, was $1,998.1 million, down from $3,273.2 million in the same period of 2021[245]. - The company experienced a $3,036.7 million (36.2%) decrease in total revenue for the nine months ended September 30, 2022, compared to the same period in 2021[249]. Revenue Breakdown - For the three months ended September 30, 2022, 53.6% of reported revenue was derived from subsidiaries with euro as the functional currency, and 45.2% from those with Swiss franc[239]. - Total residential revenue for the three months ended September 30, 2022, was $1,193.7 million, down $138.2 million, or 10.4%, from $1,331.9 million in the prior year[265]. - Residential fixed revenue decreased by $95.5 million or 11.9% for the three months and $2,186.4 million or 49.6% for the nine months ended September 30, 2022[265]. - B2B revenue showed a slight decrease of $5.1 million or 1.5% for the three months but a decrease of $461.1 million or 30.9% for the nine months ended September 30, 2022[266]. Cost and Expense Management - The total other operating expenses for the nine months ended September 30, 2022, were $816.1 million, down from $1,225.6 million in 2021, a decrease of $409.5 million or 33.4%[282]. - Share-based compensation expense decreased by $14.7 million or 26.1% for the three months and by $70.2 million or 33.4% for the nine months compared to the same periods in 2021[285]. - Other operating expenses excluding share-based compensation decreased by $3.3 million or 1.2% for the three months ended September 30, 2022, and by $402.5 million or 33.1% for the nine months ended September 30, 2022, compared to the same periods in 2021[282]. Market Challenges - The competitive environment has adversely affected the company's revenue, customer numbers, and average revenue per user (ARPU) across all markets[233]. - The company noted competition in all markets, adversely impacting customer growth and average revenue per user (ARPU)[247]. - The company experienced significant inflationary pressures, particularly in labor, programming, and energy costs, impacting operating results and cash flows[235][236]. Joint Ventures and Affiliates - The VMO2 joint venture generated revenue of $3,042.1 million for the three months ended September 30, 2022, down from $3,614.0 million in 2021, with adjusted EBITDA of $1,060.5 million compared to $1,180.3 million[311]. - The VodafoneZiggo joint venture reported revenue of $1,041.7 million for the three months ended September 30, 2022, a decrease from $1,206.1 million in 2021, with adjusted EBITDA of $501.4 million compared to $578.1 million[312]. Cash Flow and Liquidity - Total cash and cash equivalents as of September 30, 2022, amounted to $1,594.1 million, with $656.9 million held by Liberty Global and unrestricted subsidiaries[333]. - The company reported net cash provided by operating activities of $1,903.5 million for the nine months ended September 30, 2022, a decrease of $510.5 million compared to the same period in 2021[351]. - Liberty Global aims to maintain a consolidated debt balance between four and five times its consolidated Adjusted EBITDA to ensure attractive equity returns[345]. Foreign Exchange Impact - Changes in foreign currency exchange rates significantly impact reported operating results, particularly with exposure to euro and Swiss franc[239]. - The cash flow from subsidiaries is affected by exchange rate fluctuations, particularly between euros and Swiss francs against the U.S. dollar[338]. Strategic Outlook - Future strategies may include addressing competitive pressures and optimizing pricing and service bundling to improve ARPU[248]. - The company anticipates no adverse impact on corporate liquidity from tax considerations over the next 12 months[337].