Liberty .(US:LBTYK)2023-02-21 16:00Customer and Market Overview - As of December 31, 2022, the company served 4,083,200 fixed-line customers and 5,850,300 mobile subscribers, with networks passing 7,553,400 homes[272]. - The company reported significant competition affecting revenue, customer numbers, and average revenue per user (ARPU) across all markets[282]. - The impact of the COVID-19 pandemic on the company remained minimal in 2022, with strong demand for products and services[281]. - The company aims to achieve organic revenue growth by enhancing bundled services and increasing customer penetration in broadband internet, video, and mobile services[280]. - The company is focused on building national fixed-mobile converged communications businesses for future growth[279]. Financial Performance - Total revenue for 2022 was $7,195.7 million, representing a decrease of 30.2% compared to $10,311.3 million in 2021[297]. - Earnings from continuing operations for 2022 were $1,105.3 million, a significant decrease from $13,527.5 million in 2021[294]. - Adjusted EBITDA for 2022 was $2,595.4 million, down 34.5% from $3,963.1 million in 2021[307]. - The company experienced significant foreign currency transaction losses of $1,407.2 million in 2022, impacting overall financial results[294]. - The share of results from affiliates increased to $1,267.8 million in 2022, up from $175.4 million in 2021[294]. Revenue Breakdown - Total consolidated revenue decreased by $3,115.6 million or 30.2% in 2022, with an organic increase of $126.3 million or 1.7%[316]. - Residential fixed revenue dropped by $2,274.3 million or 43.7%, while residential mobile revenue decreased by $446.4 million or 18.7% in 2022 compared to 2021[313]. - B2B subscription revenue increased by $18.6 million or 3.4% in 2022, primarily due to growth in Belgium[318]. - The VMO2 joint venture saw a revenue increase of 50.9%, reaching $12,857.2 million in 2022 from $8,522.9 million in 2021[297]. - The VodafoneZiggo joint venture reported revenue of $4,284.6 million in 2022, down from $4,824.2 million in 2021, reflecting a decline of 11.2%[360]. Expenses and Costs - Other operating expenses (excluding share-based compensation) decreased by $387.6 million or 26.4% in 2022 compared to 2021, with a significant impact from the U.K. JV Transaction[327]. - SG&A expenses (excluding share-based compensation) decreased by $428.4 million or 23.0% in 2022 compared to 2021, also influenced by the U.K. JV Transaction[332]. - Programming and other direct costs of services decreased by $931.9 million or 30.9% in 2022, with an organic increase of $60.0 million or 2.7%[322]. - Share-based compensation expense decreased to $192.1 million in 2022 from $308.1 million in 2021, reflecting a reduction in both non-performance and performance-based incentive awards[335]. - The company recognized a $39.6 million provision in Central and Other related to a legal contingency in 2022[340]. Cash Flow and Liquidity - The company reported a net cash provided by operating activities of $2,786.7 million in 2022, a decrease of $577.3 million compared to 2021[396]. - The total outstanding principal amount of consolidated debt and finance lease obligations was $13.8 billion as of December 31, 2022[391]. - The company plans to repurchase up to 10% of its total outstanding shares in 2023, following aggregate share repurchases of $1,702.6 million in 2022[384]. - The liquidity of borrowing groups is primarily sourced from cash provided by operations and borrowing availability under their respective debt instruments[385]. - The company experienced a significant increase in cash used by financing activities, totaling $(3,273.4) million in 2022, compared to $(1,512.6) million in 2021[396]. Investments and Acquisitions - The company has significant investments in various media and technology companies, including ITV and Lionsgate[277]. - The company completed the sale of its operations in Poland on April 1, 2022, which is reflected as discontinued operations[270]. - The company recognized a pre-tax gain of $700.5 million from the Telenet Tower Sale in 2022[362]. - The company anticipates potential impairment charges in future periods if equity values decline or if adverse economic conditions impact operations[342]. - The company did not record any significant impairment charges related to goodwill during the three years ended December 31, 2022[410]. Tax and Deferred Tax Assets - The income tax expense decreased to $318.9 million in 2022 from $473.3 million in 2021, a reduction of 32.7%[366]. - As of December 31, 2022, the aggregate valuation allowance against deferred tax assets was $1,586.5 million, indicating a significant assessment of future taxable income and tax planning strategies[421]. - The amount of unrecognized tax benefits as of December 31, 2022, was $435.2 million, with $337.9 million potentially favorably impacting the effective income tax rate if recognized[422].