Exhibit 99.1
LIBERTY GLOBAL REPORTS SECOND QUARTER RESULTS
Record Broadband Internet Subscriber Growth in Q2,
Digital Phone Subscriber Growth Accelerating
Denver, Colorado— August 11, 2005: Liberty Global, Inc. (“Liberty Global”) (NASDAQ: LBTYA, LBTYB), today announces financial and operating results for the three months ended June 30, 2005. Highlights for the quarter compared to the results of Liberty Global’s predecessor Liberty Media International, Inc. (“LMI”) for the same period last year include:
| | • | | Pro forma1 revenue growth of 35% to $1.28 billion2 |
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| | • | | Pro forma1 Operating Cash Flow (OCF) growth of 25% to $428 million3 |
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| | • | | Net loss of $123 million compared to net income of $29 million |
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| | • | | RGU additions4 of 596,500 including acquisitions, a pro forma1 increase of 265% |
Mike Fries, President and Chief Executive Officer of Liberty Global, said, “We are pleased to report excellent second quarter results for Liberty Global’s first earnings release. Following the completion of our recent merger, we are demonstrating strong operating momentum through aggressive marketing and new product launches across all three of our core broadband businesses — UPC in Europe, J:COM in Japan, and VTR in Chile.”
“Including subscribers gained through acquisitions, Liberty Global added nearly 600,000 RGUs during the second quarter. Excluding acquisitions, we added 262,500 RGUs on an organic basis including robust gains from our digital phone and broadband Internet products. Following the launch of our digital phone (VoIP) services in France this quarter, and together with our existing deployments in the Netherlands and Hungary, we are now selling 7,000-8,000 units per week. And, with a record 137,000 broadband Internet RGUs added on an organic basis in Q2, we have exceeded 100,000 Internet additions on a global basis for three consecutive quarters due to the success of our speed increases and tiering strategy. In Japan, J:COM is now testing a 100Mbps service which demonstrates the potential of our broadband cable networks.”
“Our financial results were equally strong. On a pro forma basis as if J:COM’s results were consolidated last year, our revenue increased 35% to $1.28 billion for the second quarter and OCF increased 25% to $428 million. Adjusting for foreign currency movements, acquisitions and the May 1, 2005 consolidation of NTL Ireland, our pro forma, year-over-year organic revenue and OCF growth rates for the first six months of 2005 were 11.3% and 11.0%, respectively.”
“We have made excellent progress on a number of strategic objectives. Most importantly, in June the business combination of Liberty Media International and UnitedGlobalCom (“UGC”) was completed. This transaction positions Liberty Global as the premier international broadband cable operator with unparalleled scale and a strong balance sheet with ample liquidity to pursue organic growth opportunities in our existing operations and strategic growth through acquisitions.”
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| 1 | | Proforma data assumes J:COM was consolidated for the comparable period in the preceding year. |
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| 2 | | Financial results include two months of results from NTL Ireland. Operating statistics exclude NTL Ireland. |
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| 3 | | Please see page 11 for an explanation of Operating Cash Flow and required reconciliations. |
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| 4 | | Revenue Generating Units (RGUs) using a “single count” methodology. Please see footnote 4 on page 16 for more detail. |
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“We also had a successful quarter on the M&A front. In April, VTR completed the acquisition of Santiago-based cable operator Metropolis-Intercom in Chile, and we are successfully completing the integration process. In May, we announced an agreement to acquire the largest cable operator in the Republic of Ireland and last month we agreed to acquire the largest cable operator in Romania. These transactions, which represent a total of more than 1.5 million RGUs, were reached on attractive terms and have the potential to generate meaningful synergies with our existing businesses in those markets. In June, we received regulatory approval to acquire the Dutch content business of Canal Plus. Upon completion of the transaction, expected by October 2005, we will secure key movie and sports rights to support our digital television initiatives in the Netherlands.”
“In July our 100% owned subsidiary UPC Holding B.V. raised Euro 500 million of 7.75% Senior Notes due 2014. This financing demonstrates our continued access to capital and the terms compare favorably with other issuers in the broadband cable industry.”
Second Quarter 2005 Financial and Operating Results
Our consolidated operating subsidiaries in Europe include UPC — our broadband cable division with operations in 13 countries, and chellomedia — our media and programming division. In Asia, our consolidated subsidiary is J:COM, the largest broadband cable operator in Japan. In the Americas, our primary consolidated operation is VTR, the largest broadband cable operator in Chile. Although we consolidate 100% of their revenue and OCF, at June 30, 2005, we owned an indirect 80% interest in VTR and, through our interest in Super Media, an indirect 36.8% interest in J:COM. Please refer to the appropriate sections herein for additional segment financial information. Additionally, the pro forma data contained herein assumes J:COM was consolidated for the comparable period in the preceding year.
Revenue
Total consolidated revenue for the three months ended June 30, 2005 increased 120% on a reported basis to $1.28 billion as compared to the same period last year. The increase was principally due to acquisitions and the consolidation of J:COM as of January 1, 2005 (due to a change in governance) and the consolidation of NTL Ireland as of May 1, 2005. On a pro forma basis, as if J:COM’s results had been consolidated in last year’s second quarter, revenue increased approximately 35% year over year.
Excluding the effects of acquisitions, the consolidation of NTL Ireland and FX movements, revenue on a pro forma organic basis increased 10.8% for the three months ended June 30, 2005 as compared to last year’s second quarter. This increase was driven almost entirely by increases in RGUs between the periods. For the six month period ending June 30, 2005, organic revenue growth was 11.3% as compared to the prior year period.
Average monthly revenue (ARPU5) per RGU for the three months ended June 30, 2005, was $27.33, an increase of 7% as compared to the same period in 2004. The increase was principally due to the consolidation of J:COM as of January 1, 2005. ARPU per customer relationship for the three months ended June 30, 2005 was $35.33.
Operating Cash Flow
Operating Cash Flow for the three months ended June 30, 2005 increased 118% on a reported basis to $428 million as compared to the prior year period. The increase was principally due to acquisitions and the consolidation of J:COM as of January 1, 2005 and the consolidation of NTL Ireland as of May 1, 2005. On a pro forma basis as if J:COM’s results had been consolidated in last year’s second quarter, OCF increased 25% year over year.
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| 5 | | Average monthly revenue (ARPU) is calculated as follows: average total monthly broadband revenue for the period as indicated, divided by the average of the opening and closing RGUs or customer relationships, as applicable, for the period. |
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Excluding the effects of acquisitions, the consolidation of NTL Ireland and FX movements, OCF on a pro forma, organic basis increased 7.7% for the three months ended June 30, 2005 as compared to last year’s second quarter. This increase was driven almost entirely by increases in RGUs between the periods. For the six month period ending June 30, 2005, organic OCF growth was 11.0% as compared to the prior year period.
The reported OCF margin for the three months ended June 30, 2005 was 33.6%. The margin declined as compared to the pro forma OCF margin of 36.2% for last year’s second quarter and as compared to the reported OCF margin of 36.3% for the three months ended March 31, 2005. The decline in margin was due primarily to the negative impact of increases in marketing, advertising and commissions expenses, and increases in labor and other direct costs. The increases in our marketing, advertising and commissions expenses primarily are attributable to our successful efforts to increase our RGUs. Most of the remaining increases in our costs and expenses are a function of increased volumes or levels of activity associated with the increase in our customer base.
Net Earnings (Loss)
Our net earnings (loss) for the three months ended June 30, 2005 was ($123) million or ($0.67) per share. The second quarter 2005 loss compares to net earnings of $29 million or $0.19 per share for the same period last year. The decline in earnings was in large part due to increased foreign currency transaction losses as well as higher losses on the disposition of assets.
Free Cash Flow and Capital Expenditures
Our Free Cash Flow6 (FCF) deficit for the three months ended June 30, 2005 was $62 million, a decrease of $124 million compared to the same period last year. The decrease was primarily attributable to the fact that capital expenditures (including capital lease additions) increased 222% compared to last year’s second quarter (which did not include J:COM), offset by a 67% improvement in net cash provided by operating activities to $281 million for the three months ended June 30, 2005.
Our Free Cash Flow deficit for the six months ended June 30, 2005 was $37 million, including payments of approximately $75 million relating to the settlement and termination of a Dutch programming contract (MovieCo). Excluding those payments, FCF for the six months ended June 30, 2005 would have been $38 million.
Capital expenditures and capital lease additions for the three months ended June 30, 2005 were $343 million, an increase of 222% compared to last year’s second quarter. The primary reason for the increase was the consolidation of J:COM’s results in 2005, as well as an increase in spending on customer premise equipment to support our faster unit growth in the current period. In addition, we continue to invest in the upgrade of our networks, particularly in Central and Eastern Europe, to support the deployment of our broadband products including significant investment in digital television initiatives.
Balance Sheet, Leverage, and Liquidity
At June 30, 2005, total debt (including capital lease obligations) was $6.49 billion and cash and cash equivalents (including short-term liquid investments) were $1.91 billion. Our consolidated leverage ratio, defined as net debt to Q2 annualized Operating Cash Flow, was 2.7x compared to 2.0x at March 31, 2005. The primary reason for the increase was a $1.18 billion reduction in our consolidated cash balance from $3.09 billion at March 31, 2005. Uses of cash in the quarter included approximately $704 million of cash paid in connection with the combination of LMI and UGC, and $564 million of net cash used for acquisitions, principally relating to NTL Ireland and the remaining minority interest in UPC France.
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| 6 | | Free Cash Flow is defined as net cash provided by operating activities less capital expenditures and capital lease additions. Please see page 11 for more information. |
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In addition to our cash balances, we had approximately€533 million of availability under our European revolvers totaling€1.0 billion, and $180 million of availability under our ¥20 billion Japanese revolver, each of which revolvers is currently undrawn. Subject to the terms of those revolvers, the undrawn amounts under those revolvers may be borrowed to finance acquisitions. At June 30, 2005, our investments in the publicly traded securities of SBS Broadcasting, Austar United, and News Corporation, as well as the estimated fair value of our ABC Family preferred stock, totaled $1.08 billion, excluding any potential tax effects.
Based on results for the six months ended June 30, 2005, the ratio of senior debt to EBITDA for UPC Broadband Holding B.V., as defined in and calculated in accordance with the UPC Broadband Holding credit facility was 3.99:1.
Operating Statistics
At June 30, 2005, we had 14,929,000 total RGUs (excluding NTL Ireland), which represented an increase of 596,500 RGUs from March 31, 2005, including 334,000 from acquisitions and 262,500 from organic RGU additions. The organic RGU additions represent a 61% improvement from last year’s second quarter net gain (pro forma to include the consolidation of J:COM). Our RGU figures use a “single count” method whereby we do not “double count” a digital video subscriber as an analog video subscriber.
In terms of net RGU additions by product, the breakdown of our 262,500 organic additions for second quarter 2005 includes 137,000 broadband Internet subscribers, 112,400 telephony subscribers and 13,100 video subscribers. Our broadband Internet subscriber additions increase was driven by continued strong demand for the multiple tiers of high-speed access services that we offer across most of our markets. Our telephony additions were driven primarily by the early success of our digital phone offerings in the Netherlands, France and Hungary.
The increase in our video subscribers consisted of an increase of 132,800 digital video and DTH subscribers, offset by a reduction of 119,700 analog video subscribers. The digital video RGU increase was driven primarily by upgrades from our analog video subscriber base. J:COM achieved particular success in this regard, generating a second quarter increase of more than 100,000 digital RGUs. With respect to our analog video business, the second quarter is seasonally soft in Europe as we typically experience an increase in disconnects leading into and during the summer months.
2005 Guidance
For full year 2005, we are providing consolidated guidance for Liberty Global. In terms of RGU additions, we expect to add 1.1 — 1.2 million in 2005 on an organic basis (excluding the impact of acquisitions at closing). As a result, and including approximately 1.7 million RGUs either already acquired or expected to be acquired during 2005, we expect to end the year with 16.7 — 16.8 million total RGUs. The RGU addition forecast assumes continued demand for our broadband Internet, telephony, and digital video products. The year-end 2005 RGU forecast assumes the completion of our previously announced Romanian and Irish acquisitions.
For fiscal 2005, we expect to report consolidated revenue of $5.1 — $5.2 billion, which assumes full year 2005 average exchange rates of approximately 1.25 dollars per Euro, 109 yen per dollar and 580 Chilean pesos per dollar, as well as the completion of the NTL Ireland transaction. On the same basis, we expect total segment Operating Cash Flow of $1.8 — $1.9 billion in fiscal 2005. To the extent that our organic RGU growth exceeds our guidance range above, we would expect to report lower OCF due to the associated increase in marketing and subscriber acquisition costs.
We expect capital expenditures and capital lease additions for the year to equate to approximately 25% of revenue. Our capital spending is primarily to support such new product launches as digital phone and the resultant higher RGU growth anticipated this year, as well as to support the upgrade of new two-way homes, primarily in Central and Eastern Europe and to support the trend of migrating our analog TV customer base to our digital video services.
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About Liberty Global, Inc.
Liberty Global owns interests in broadband distribution and content companies operating outside the continental United States, principally in Europe, Asia, and the Americas. Through its subsidiaries and affiliates, Liberty Global is the largest broadband cable operator outside the U.S. in terms of subscribers. Based on the Company’s consolidated operating statistics at June 30, 2005 (other than NTL Ireland which we consolidate but do not control), Liberty Global’s networks passed approximately 23.5 million homes and served approximately 14.9 million revenue generating units, including approximately 10.7 million video subscribers, 2.5 million broadband Internet subscribers and 1.7 million telephone subscribers.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including guidance given for 2005. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. These risks and uncertainties include the continued use by subscribers and potential subscribers of the Company’s services, changes in technology and competition, our ability to achieve expected operational efficiencies and economies of scale, our ability to generate expected revenue and Operating Cash Flow and achieve assumed margins including, to the extent annualized figures imply forward-looking projections, continued performance comparable with the period annualized, as well as other factors detailed from time to time in the Company’s filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this release. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any guidance and other forward-looking statement contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
For more information, please visitwww.lgi.comor contact:
| | | |
| Richard S.L. Abbott | | Bert Holtkamp |
| Investor Relations — Denver | | Corporate Communications — Europe |
| (303) 220-6664 | | +31 20 778 9447 |
| | | |
| Christopher Noyes | | Dennis Okhuijsen |
| Investor Relations — Denver | | Investor Relations — Europe |
| (303) 220-6693 | | +31 20 778 9966 |
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Liberty Global, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
| | | | | | | | | |
| | | June 30, | | | December 31, | |
| | | 2005 | | | 2004 | |
| | | amounts in thousands | |
ASSETS | | | | | | | | |
| Current assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 1,884,001 | | | $ | 2,531,486 | |
| Trade receivables, net | | | 254,798 | | | | 201,519 | |
| Other receivables, net | | | 77,791 | | | | 165,631 | |
| Other current assets | | | 389,494 | | | | 293,947 | |
| | | | | | | |
| Total current assets | | | 2,606,084 | | | | 3,192,583 | |
| | | | | | | |
| | | | | | | | | |
| Investments in affiliates, accounted for using the equity method, and related receivables | | | 832,820 | | | | 1,865,642 | |
| | | | | | | | | |
| Other investments | | | 873,824 | | | | 838,608 | |
| | | | | | | | | |
| Property and equipment, net | | | 6,961,458 | | | | 4,303,099 | |
| | | | | | | | | |
| Goodwill | | | 6,513,083 | | | | 2,667,279 | |
| | | | | | | | | |
| Franchise rights and other intangible assets not subject to amortization | | | 231,887 | | | | 230,674 | |
| | | | | | | | | |
| Intangible assets subject to amortization, net | | | 669,622 | | | | 382,599 | |
| | | | | | | | | |
| Deferred tax assets | | | 100,748 | | | | 77,313 | |
| | | | | | | | | |
| Other assets, net | | | 362,848 | | | | 144,566 | |
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| | | | | | | | | |
| Total assets | | $ | 19,152,374 | | | $ | 13,702,363 | |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 453,101 | | | $ | 363,549 | |
| Accrued liabilities and other | | | 650,355 | | | | 645,627 | |
| Subscriber advance payments and deposits | | | 321,531 | | | | 353,069 | |
| Current portion of debt and capital lease obligations | | | 215,988 | | | | 36,827 | |
| | | | | | | |
| Total current liabilities | | | 1,640,975 | | | | 1,399,072 | |
| | | | | | | | | |
| Long-term debt and capital lease obligations | | | 6,276,415 | | | | 4,955,919 | |
| Deferred tax liabilities | | | 678,631 | | | | 458,138 | |
| Other long-term liabilities | | | 881,451 | | | | 432,018 | |
| | | | | | | |
| Total liabilities | | | 9,477,472 | | | | 7,245,147 | |
| | | | | | | |
| | | | | | | | | |
| Commitments and contingencies | | | | | | | | |
| | | | | | | | | |
| Minority interests in subsidiaries | | | 1,752,057 | | | | 1,216,710 | |
| | | | | | | | | |
| Stockholders’ Equity: | | | | | | | | |
| Series A common stock, $.01 par value. Authorized 500,000,000 shares; issued 231,736,629 and 168,514,962 shares at June 30, 2005 and December 31, 2004, respectively | | | 2,317 | | | | 1,685 | |
| Series B common stock, $.01 par value. Authorized 50,000,000 shares; issued and outstanding 7,264,300 shares | | | 73 | | | | 73 | |
| Series C common stock, $.01 par value. Authorized 500,000,000 shares; no shares issued | | | — | | | | — | |
| Additional paid-in capital | | | 9,899,215 | | | | 7,001,635 | |
| Accumulated deficit | | | (1,746,021 | ) | | | (1,649,007 | ) |
| Accumulated other comprehensive earnings (loss), net of taxes | | | (130,862 | ) | | | 14,010 | |
| Deferred compensation | | | (11,283 | ) | | | — | |
| Shares held by subsidiaries | | | (90,594 | ) | | | — | |
| Treasury stock, at cost | | | — | | | | (127,890 | ) |
| | | | | | | |
| Total stockholders’ equity | | | 7,922,845 | | | | 5,240,506 | |
| | | | | | | |
| | | | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 19,152,374 | | | $ | 13,702,363 | |
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6
Liberty Global, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three months ended | | | Six months ended | |
| | | June 30, | | | June 30, | |
| | | 2005 | | | 2004 | | | 2005 | | | 2004 | |
| | | amounts in thousands, except per share amounts | |
| |
| Revenue | | $ | 1,276,272 | | | $ | 580,409 | | | $ | 2,511,522 | | | $ | 1,156,609 | |
| | | | | | | | | | | | | | | | | |
| Operating costs and expenses: | | | | | | | | | | | | | | | | |
| Operating (other than depreciation) | | | 535,308 | | | | 229,561 | | | | 1,037,583 | | | | 457,176 | |
| Selling, general and administrative (SG&A) | | | 312,512 | | | | 154,065 | | | | 596,612 | | | | 297,222 | |
| Stock-based compensation charges (credits) — primarily SG&A | | | 42,871 | | | | (11,002 | ) | | | 61,526 | | | | 52,743 | |
| Depreciation and amortization | | | 345,824 | | | | 221,497 | | | | 673,415 | | | | 443,009 | |
| Impairment of long-lived assets | | | 167 | | | | 16,623 | | | | 167 | | | | 16,623 | |
| Restructuring and other charges (credits) | | | (2,255 | ) | | | 4,962 | | | | 2,608 | | | | 8,784 | |
| | | | | | | | | | | | | |
| | | | 1,234,427 | | | | 615,706 | | | | 2,371,911 | | | | 1,275,557 | |
| | | | | | | | | | | | | |
| Operating income (loss) | | | 41,845 | | | | (35,297 | ) | | | 139,611 | | | | (118,948 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Other income (expense): | | | | | | | | | | | | | | | | |
| Interest expense | | | (86,728 | ) | | | (81,501 | ) | | | (177,756 | ) | | | (153,986 | ) |
| Interest and dividend income | | | 22,317 | | | | 16,228 | | | | 42,853 | | | | 25,194 | |
| Share of earnings (losses) of affiliates, net | | | 4,517 | | | | 22,755 | | | | (16,807 | ) | | | 38,845 | |
| Realized and unrealized gains on derivative instruments, net | | | 69,301 | | | | 88,416 | | | | 155,169 | | | | 75,385 | |
| Foreign currency transaction losses, net | | | (136,885 | ) | | | (6,272 | ) | | | (201,647 | ) | | | (27,130 | ) |
| Gain (loss) on extinguishment of debt | | | (651 | ) | | | 3,871 | | | | (12,631 | ) | | | 35,787 | |
| Gains (losses) on disposition of assets, net | | | (43,994 | ) | | | 26,566 | | | | 25,578 | | | | 24,724 | |
| Other income (expense), net | | | 589 | | | | (103 | ) | | | 1,273 | | | | (8,360 | ) |
| | | | | | | | | | | | | |
| | | | (171,534 | ) | | | 69,960 | | | | (183,968 | ) | | | 10,459 | |
| | | | | | | | | | | | | |
| Earnings (loss) before income taxes and minority interests | | | (129,689 | ) | | | 34,663 | | | | (44,357 | ) | | | (108,489 | ) |
| Income tax benefit (expense) | | | 43,905 | | | | (24,650 | ) | | | (1,792 | ) | | | (34,393 | ) |
| Minority interests in losses (earnings) of subsidiaries, net | | | (37,564 | ) | | | 19,013 | | | | (50,865 | ) | | | 87,957 | |
| | | | | | | | | | | | | |
| Net earnings (loss) | | $ | (123,348 | ) | | $ | 29,026 | | | $ | (97,014 | ) | | $ | (54,925 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Historical and pro forma earnings (loss) per common share — basic and diluted | | $ | (0.67 | ) | | $ | 0.19 | | | $ | (0.54 | ) | | $ | (0.36 | ) |
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Liberty Global, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| | | | | | | | | |
| | | Six months ended | |
| | | June 30, | |
| | | 2005 | | | 2004 | |
| | | amounts in thousands | |
Cash flows from operating activities: | | | | | | | | |
| Net loss | | $ | (97,014 | ) | | $ | (54,925 | ) |
| Adjustments to reconcile net loss to net cash provided by operating activities: | | | | | | | | |
| Stock-based compensation expense | | | 61,526 | | | | 52,743 | |
| Depreciation and amortization | | | 673,415 | | | | 443,009 | |
| Impairment of long-lived assets | | | 167 | | | | 16,623 | |
| Restructuring charges | | | 2,608 | | | | 8,784 | |
| Amortization of deferred financing costs and noncash interest | | | 29,173 | | | | 16,069 | |
| Share of losses (earnings) of affiliates, net | | | 16,807 | | | | (38,845 | ) |
| Realized and unrealized gains on derivative instruments, net | | | (155,169 | ) | | | (75,385 | ) |
| Foreign currency transaction losses, net | | | 201,647 | | | | 27,130 | |
| Loss (gain) on extinguishment of debt | | | 12,631 | | | | (35,787 | ) |
| Gains on disposition of assets, net | | | (25,578 | ) | | | (24,724 | ) |
| Deferred income tax expense (benefit) | | | (30,627 | ) | | | 21,837 | |
| Minority interests in earnings (losses) of subsidiaries | | | 50,865 | | | | (87,957 | ) |
| Non-cash recognition of deferred revenue | | | (15,493 | ) | | | — | |
| Non-cash charges from Liberty Media Corporation | | | — | | | | 15,490 | |
| Other non-cash items | | | — | | | | 2,986 | |
| Changes in operating assets and liabilities, net of the effects of acquisitions: | | | | | | | | |
| Receivables and other | | | 121,205 | | | | (44,542 | ) |
| Payables and accruals | | | (261,792 | ) | | | 61,022 | |
| | | | | | | |
| Net cash provided by operating activities | | | 584,371 | | | | 303,528 | |
| | | | | | | |
| | | | | | | | | |
Cash flows from investing activities: | | | | | | | | |
| Capital expended for property and equipment | | | (550,424 | ) | | | (195,935 | ) |
| Proceeds received upon disposition of assets | | | 150,756 | | | | 30,303 | |
| Cash received (paid) in connection with acquisitions, net of cash acquired | | | (639,988 | ) | | | 216,742 | |
| Cash paid in connection with LGI Combination | | | (703,868 | ) | | | — | |
| Return of cash previously paid into escrow in connection with 2004 acquisition | | | 56,883 | | | | — | |
| Net cash received (paid) to purchase or settle derivative instruments | | | 77,976 | | | | (69,035 | ) |
| Purchases of short-term liquid investments | | | (35,520 | ) | | | (213,044 | ) |
| Proceeds from sale of short-term liquid investments | | | 55,163 | | | | 7,984 | |
| Change in restricted cash | | | 26,693 | | | | 4,815 | |
| Investments in and loans to affiliates and others | | | — | | | | (88,370 | ) |
| Other investing activities, net | | | 10,400 | | | | 3,983 | |
| | | | | | | |
| Net cash used by investing activities | | | (1,551,929 | ) | | | (302,557 | ) |
| | | | | | | |
| | | | | | | | | |
Cash flows from financing activities: | | | | | | | | |
| Borrowings of debt | | | 3,401,795 | | | | 743,375 | |
| Repayments of debt and capital lease obligations | | | (3,812,903 | ) | | | (487,792 | ) |
| Proceeds from issuance of stock by subsidiaries | | | 855,466 | | | | 486,161 | |
| Deferred financing costs | | | (63,204 | ) | | | (50,126 | ) |
| Contributions from Liberty Media Corporation | | | — | | | | 704,250 | |
| Other financing activities, net | | | 1,671 | | | | (3,000 | ) |
| | | | | | | |
| Net cash provided by financing activities | | | 382,825 | | | | 1,392,868 | |
| | | | | | | |
| Effect of exchange rates on cash | | | (62,752 | ) | | | (9,632 | ) |
| | | | | | | |
| Net increase (decrease) in cash and cash equivalents | | | (647,485 | ) | | | 1,384,207 | |
| Cash and cash equivalents: | | | | | | | | |
| Beginning of period | | | 2,531,486 | | | | 12,753 | |
| | | | | | | |
| End of period | | $ | 1,884,001 | | | $ | 1,396,960 | |
| | | | | | | |
| | | | | | | | | |
Supplemental Cash Flow Disclosures | | | | | | | | |
| Cash paid for interest | | $ | 161,993 | | | $ | 132,484 | |
| | | | | | | |
| Net cash paid for taxes | | $ | 20,509 | | | $ | 8,140 | |
| | | | | | | |
8
Revenue
The tables presented below provide revenue by reportable segment for the three and six months ended June 30, 2005, as compared to corresponding prior year periods. In each case, the tables present (i) the amounts reported by each of our reportable segments for the comparative interim periods, (ii) the U.S. dollar change and percentage change from period to period, and (iii) the U.S. dollar equivalent of the change and the percentage change from period to period, after removing foreign currency effects (FX). The comparisons that exclude FX assume that exchange rates remained constant during the periods that are included in each table. Other Western Europe includes our operating segments in Ireland, Norway, Sweden and Belgium. Other Central and Eastern Europe includes our operating segments in Poland, Czech Republic, Slovak Republic, Romania and Slovenia.
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended | | | Increase | | | Increase (decrease) | |
| | | June 30, | | | (decrease) | | | excluding FX | |
| | | 2005 | | | 2004 | | | $ | | | % | | | $ | | | % | |
| | | amounts in thousands, except % amounts | |
| Europe (UPC Broadband) | | | | | | | | | | | | | | | | | | | | | | | | |
| The Netherlands | | $ | 195,535 | | | $ | 172,568 | | | $ | 22,967 | | | | 13.3 | | | $ | 14,151 | | | | 8.2 | |
| France | | | 128,285 | | | | 30,982 | | | | 97,303 | | | | 314.1 | | | | 95,695 | | | | 308.9 | |
| Austria | | | 81,744 | | | | 75,929 | | | | 5,815 | | | | 7.7 | | | | 2,126 | | | | 2.8 | |
| Other Western Europe | | | 114,216 | | | | 65,373 | | | | 48,843 | | | | 74.7 | | | | 45,123 | | | | 69.0 | |
| | | | | | | | | | | | | | | | | | | |
| Total Western Europe | | | 519,780 | | | | 344,852 | | | | 174,928 | | | | 50.7 | | | | 157,095 | | | | 45.6 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Hungary | | | 71,086 | | | | 51,726 | | | | 19,360 | | | | 37.4 | | | | 15,518 | | | | 30.0 | |
| Other Central and Eastern Europe | | | 84,723 | | | | 59,621 | | | | 25,102 | | | | 42.1 | | | | 15,032 | | | | 25.2 | |
| | | | | | | | | | | | | | | | | | | |
| Total Central and Eastern Europe | | | 155,809 | | | | 111,347 | | | | 44,462 | | | | 39.9 | | | | 30,550 | | | | 27.4 | |
| | | | | | | | | | | | | | | | | | | |
| Total Europe (UPC Broadband) | | | 675,589 | | | | 456,199 | | | | 219,390 | | | | 48.1 | | | | 187,645 | | | | 41.1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Japan (J:COM) | | | 412,898 | | | | 364,047 | | | | 48,851 | | | | 13.4 | | | | 42,550 | | | | 11.7 | |
| Chile (VTR) | | | 109,213 | | | | 69,758 | | | | 39,455 | | | | 56.6 | | | | 31,252 | | | | 44.8 | |
| Corporate and other (1) | | | 96,708 | | | | 65,094 | | | | 31,614 | | | | 48.6 | | | | 28,887 | | | | 44.4 | |
| Intersegment eliminations | | | (18,136 | ) | | | (10,642 | ) | | | (7,494 | ) | | | (70.4 | ) | | | (6,683 | ) | | | (62.8 | ) |
| Elimination of equity affiliate (J:COM) | | | — | | | | (364,047 | ) | | | 364,047 | | | NM | | | NM | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total consolidated LGI | | $ | 1,276,272 | | | $ | 580,409 | | | $ | 695,863 | | | NM | | | NM | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | |
| |
| | | Six months ended | | | Increase | | | Increase (decrease) | |
| | | June 30, | | | (decrease) | | | excluding FX | |
| | | 2005 | | | 2004 | | | $ | | | % | | | $ | | | % | |
| | | amounts in thousands, except % amounts | |
| Europe (UPC Broadband) | | | | | | | | | | | | | | | | | | | | | | | | |
| The Netherlands | | $ | 399,997 | | | $ | 348,239 | | | $ | 51,758 | | | | 14.9 | | | $ | 33,431 | | | | 9.6 | |
| France | | | 260,188 | | | | 62,202 | | | | 197,986 | | | | 318.3 | | | | 194,648 | | | | 312.9 | |
| Austria | | | 166,761 | | | | 152,218 | | | | 14,543 | | | | 9.6 | | | | 6,850 | | | | 4.5 | |
| Other Western Europe | | | 204,211 | | | | 122,172 | | | | 82,039 | | | | 67.2 | | | | 73,544 | | | | 60.2 | |
| | | | | | | | | | | | | | | | | | | |
| Total Western Europe | | | 1,031,157 | | | | 684,831 | | | | 346,326 | | | | 50.6 | | | | 308,473 | | | | 45.0 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Hungary | | | 143,330 | | | | 102,384 | | | | 40,946 | | | | 40.0 | | | | 29,691 | | | | 29.0 | |
| Other Central and Eastern Europe | | | 168,592 | | | | 117,130 | | | | 51,462 | | | | 43.9 | | | | 29,070 | | | | 24.8 | |
| | | | | | | | | | | | | | | | | | | |
| Total Central and Eastern Europe | | | 311,922 | | | | 219,514 | | | | 92,408 | | | | 42.1 | | | | 58,761 | | | | 26.8 | |
| | | | | | | | | | | | | | | | | | | |
| Total Europe (UPC Broadband) | | | 1,343,079 | | | | 904,345 | | | | 438,734 | | | | 48.5 | | | | 367,234 | | | | 40.6 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Japan (J:COM) | | | 819,035 | | | | 723,414 | | | | 95,621 | | | | 13.2 | | | | 81,468 | | | | 11.3 | |
| Chile (VTR) | | | 194,102 | | | | 141,441 | | | | 52,661 | | | | 37.2 | | | | 43,847 | | | | 31.0 | |
| Corporate and other (1) | | | 191,323 | | | | 133,121 | | | | 58,202 | | | | 43.7 | | | | 52,637 | | | | 39.5 | |
| Intersegment eliminations | | | (36,017 | ) | | | (22,298 | ) | | | (13,719 | ) | | | (61.5 | ) | | | (12,108 | ) | | | (54.3 | ) |
| Elimination of equity affiliate (J:COM) | | | — | | | | (723,414 | ) | | | 723,414 | | | NM | | | NM | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total consolidated LGI | | $ | 2,511,522 | | | $ | 1,156,609 | | | $ | 1,354,913 | | | NM | | | NM | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | |
| (1) | | Includes (i) certain less significant operating segments that provide video programming and other services in Europe and Argentina and broadband services in Puerto Rico, Brazil and Peru, and (ii) our corporate segment.
NM — Not Meaningful |
9
Operating Cash Flow
The tables presented below provide Operating Cash Flow by reportable segment for the three and six months ended June 30, 2005, as compared to corresponding prior year periods. In each case, the tables present (i) the amounts reported by each of our reportable segments for the comparative interim periods, (ii) the U.S. dollar change and percentage change from period to period, and (iii) the U.S. dollar equivalent of the change and the percentage change from period to period, after removing foreign currency effects (FX). The comparisons that exclude FX assume that exchange rates remained constant during the periods that are included in each table. Other Western Europe includes our operating segments in Ireland, Norway, Sweden and Belgium. Other Central and Eastern Europe includes our operating segments in Poland, Czech Republic, Slovak Republic, Romania and Slovenia.
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended | | | Increase | | | Increase (decrease) | |
| | | June 30, | | | (decrease) | | | excluding FX | |
| | | 2005 | | | 2004 | | | $ | | | % | | | $ | | | % | |
| | | amounts in thousands, except % amounts | |
| Europe (UPC Broadband) | | | | | | | | | | | | | | | | | | | | | | | | |
| The Netherlands | | $ | 85,344 | | | $ | 86,129 | | | $ | (785 | ) | | | (0.9 | ) | | $ | (4,384 | ) | | | (5.1 | ) |
| France | | | 21,265 | | | | 1,470 | | | | 19,795 | | | | 1346.6 | | | | 19,711 | | | | 1340.9 | |
| Austria | | | 34,899 | | | | 30,493 | | | | 4,406 | | | | 14.4 | | | | 2,836 | | | | 9.3 | |
| Other Western Europe | | | 41,832 | | | | 23,364 | | | | 18,468 | | | | 79.0 | | | | 16,899 | | | | 72.3 | |
| | | | | | | | | | | | | | | | | | | |
| Total Western Europe | | | 183,340 | | | | 141,456 | | | | 41,884 | | | | 29.6 | | | | 35,062 | | | | 24.8 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Hungary | | | 27,251 | | | | 19,956 | | | | 7,295 | | | | 36.6 | | | | 5,827 | | | | 29.2 | |
| Other Central and Eastern Europe | | | 34,547 | | | | 23,224 | | | | 11,323 | | | | 48.8 | | | | 7,360 | | | | 31.7 | |
| | | | | | | | | | | | | | | | | | | |
| Total Central and Eastern Europe | | | 61,798 | | | | 43,180 | | | | 18,618 | | | | 43.1 | | | | 13,187 | | | | 30.5 | |
| | | | | | | | | | | | | | | | | | | |
| Total Europe (UPC Broadband) | | | 245,138 | | | | 184,636 | | | | 60,502 | | | | 32.8 | | | | 48,249 | | | | 26.1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Japan (J:COM) | | | 147,175 | | | | 145,144 | | | | 2,031 | | | | 1.4 | | | | 193 | | | | 0.1 | |
| Chile (VTR) | | | 35,283 | | | | 23,987 | | | | 11,296 | | | | 47.1 | | | | 8,659 | | | | 36.1 | |
| Corporate and other (1) | | | 856 | | | | (11,840 | ) | | | 12,696 | | | | 107.2 | | | | 12,482 | | | | 105.4 | |
| Elimination of equity affiliate (J:COM) | | | — | | | | (145,144 | ) | | | 145,144 | | | NM | | | NM | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total | | $ | 428,452 | | | $ | 196,783 | | | $ | 231,669 | | | NM | | | NM | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six months ended | | | Increase | | | Increase (decrease) | |
| | | June 30, | | | (decrease) | | | excluding FX | |
| | | 2005 | | | 2004 | | | $ | | | % | | | $ | | | % | |
| | | amounts in thousands, except % amounts | |
| Europe (UPC Broadband) | | | | | | | | | | | | | | | | | | | | | | | | |
| The Netherlands | | $ | 190,674 | | | $ | 177,181 | | | $ | 13,493 | | | | 7.6 | | | $ | 4,752 | | | | 2.7 | |
| France | | | 46,407 | | | | 4,084 | | | | 42,323 | | | | 1036.3 | | | | 42,003 | | | | 1028.5 | |
| Austria | | | 71,104 | | | | 62,051 | | | | 9,053 | | | | 14.6 | | | | 5,771 | | | | 9.3 | |
| Other Western Europe | | | 74,261 | | | | 44,897 | | | | 29,364 | | | | 65.4 | | | | 26,018 | | | | 58.0 | |
| | | | | | | | | | | | | | | | | | | |
| Total Western Europe | | | 382,446 | | | | 288,213 | | | | 94,233 | | | | 32.7 | | | | 78,544 | | | | 27.3 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Hungary | | | 55,782 | | | | 40,133 | | | | 15,649 | | | | 39.0 | | | | 11,237 | | | | 28.0 | |
| Other Central and Eastern Europe | | | 70,062 | | | | 46,006 | | | | 24,056 | | | | 52.3 | | | | 15,070 | | | | 32.8 | |
| | | | | | | | | | | | | | | | | | | |
| Total Central and Eastern Europe | | | 125,844 | | | | 86,139 | | | | 39,705 | | | | 46.1 | | | | 26,307 | | | | 30.5 | |
| | | | | | | | | | | | | | | | | | | |
| Total Europe (UPC Broadband) | | | 508,290 | | | | 374,352 | | | | 133,938 | | | | 35.8 | | | | 104,851 | | | | 28.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Japan (J:COM) | | | 315,587 | | | | 286,672 | | | | 28,915 | | | | 10.1 | | | | 23,220 | | | | 8.1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Chile (VTR) | | | 65,958 | | | | 49,017 | | | | 16,941 | | | | 34.6 | | | | 13,970 | | | | 28.5 | |
| Corporate and other (1) | | | (12,508 | ) | | | (21,158 | ) | | | 8,650 | | | | 40.9 | | | | 8,670 | | | | 41.0 | |
| Elimination of equity affiliate (J:COM) | | | — | | | | (286,672 | ) | | | 286,672 | | | NM | | | NM | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total | | $ | 877,327 | | | $ | 402,211 | | | $ | 475,116 | | | NM | | | NM | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | |
| (1) | | Includes (i) certain less significant operating segments that provide video programming and other services in Europe and Argentina and broadband services in Puerto Rico, Brazil and Peru, and (ii) our corporate segment.
NM — Not Meaningful |
10
Operating Cash Flow Definition and Reconciliation
Operating cash flow is not a GAAP measure. Operating cash flow is the primary measure used by our chief operating decision maker to evaluate segment operating performance and to decide how to allocate resources to segments. As we use the term, operating cash flow is defined as revenue less operating and SG&A expenses (excluding depreciation and amortization, stock-based compensation, impairment of long-lived assets and restructuring and other charges). We believe operating cash flow is meaningful because it provides investors a means to evaluate the operating performance of our segments and our company on an ongoing basis using criteria that is used by our internal decision makers. Our internal decision makers believe operating cash flow is a meaningful measure and is superior to other available GAAP measures because it represents a transparent view of our recurring operating performance and allows management to readily view operating trends, perform analytical comparisons and benchmarking between segments in the different countries in which we operate and identify strategies to improve operating performance. For example, our internal decision makers believe that the inclusion of impairment and restructuring charges within operating cash flow would distort the ability to efficiently assess and view the core operating trends in our segments. In addition, our internal decision makers believe our measure of operating cash flow is important because analysts and investors use it to compare our performance to other companies in our industry. A reconciliation of total segment operating cash flow to our consolidated earnings (loss) before income taxes and minority interests is presented below. Investors should view operating cash flow as a supplement to, and not a substitute for, operating income, net earnings, cash flow from operating activities and other GAAP measures of income as a measure of operating performance.
We are unable to provide a reconciliation of forecasted Operating Cash Flow, to the most directly comparable GAAP measure, net income (loss), as applicable, because certain items are out of our control and/or cannot be reasonably predicted. For example, it is impractical to: (1) estimate future fluctuations in interest rates on our variable-rate debt facilities; (2) estimate the fluctuations in exchange rates relative to the U.S. dollar and its impact on our results of operations; (3) estimate the financial results of our non-consolidated affiliates; and (4) estimate changes in circumstances that lead to gains and/or losses such as sales of investments in affiliates and other assets. Any and/or all of these items could be significant to our financial results.
The table below highlights the reconciliation of operating cash flow to earnings (loss) before income taxes and minority interests:
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended | | | | Six months ended | |
| | | June 30, | | | March 31, | | | June 30, | | | | June 30, | | | June 30, | |
| (amounts in thousands) | | 2005 | | | 2005 | | | 2004 | | | | 2005 | | | 2004 | |
| | | | |
| Total segment operating cash flow | | $ | 428,452 | | | $ | 448,875 | | | $ | 196,783 | | | | $ | 877,327 | | | $ | 402,211 | |
| Stock-based compensation credits (charges) | | | (42,871 | ) | | | (18,655 | ) | | | 11,002 | | | | | (61,526 | ) | | | (52,743 | ) |
| Depreciation and amortization | | | (345,824 | ) | | | (327,591 | ) | | | (221,497 | ) | | | | (673,415 | ) | | | (443,009 | ) |
| Impairment of long-lived assets | | | (167 | ) | | | 0 | | | | (16,623 | ) | | | | (167 | ) | | | (16,623 | ) |
| Restructuring and other credits (charges) | | | 2,255 | | | | (4,863 | ) | | | (4,962 | ) | | | | (2,608 | ) | | | (8,784 | ) |
| | | | | | |
| Operating income (loss) | | | 41,845 | | | | 97,766 | | | | (35,297 | ) | | | | 139,611 | | | | (118,948 | ) |
| Interest expense | | | (86,728 | ) | | | (91,028 | ) | | | (81,501 | ) | | | | (177,756 | ) | | | (153,986 | ) |
| Interest and dividend income | | | 22,317 | | | | 20,536 | | | | 16,228 | | | | | 42,853 | | | | 25,194 | |
| Share of earnings (losses) of affiliates, net | | | 4,517 | | | | (21,324 | ) | | | 22,755 | | | | | (16,807 | ) | | | 38,845 | |
| Realized and unrealized gains on derivative instruments, net | | | 69,301 | | | | 85,868 | | | | 88,416 | | | | | 155,169 | | | | 75,385 | |
| Foreign currency transaction losses, net | | | (136,885 | ) | | | (64,762 | ) | | | (6,272 | ) | | | | (201,647 | ) | | | (27,130 | ) |
| Gain (loss) on extinguishment of debt | | | (651 | ) | | | (11,980 | ) | | | 3,871 | | | | | (12,631 | ) | | | 35,787 | |
| Gains (losses) on disposition of assets, net | | | (43,994 | ) | | | 69,572 | | | | 26,566 | | | | | 25,578 | | | | 24,724 | |
| Other income (expense), net | | | 589 | | | | 684 | | | | (103 | ) | | | | 1,273 | | | | (8,360 | ) |
| | | | | | |
| Earnings (loss) before income taxes and minority interests | | $ | (129,689 | ) | | $ | 85,332 | | | $ | 34,663 | | | | $ | (44,357 | ) | | $ | (108,489 | ) |
| | | | | | |
Free Cash Flow Definition and Reconciliation
Free Cash Flow is not a GAAP measure of liquidity. We define Free Cash Flow as net cash provided by operating activities less capital expenditures and capital lease additions. Our definition of free cash flow includes capital lease additions which are used to finance capital expenditures. From an accounting perspective, capital expenditures that are financed by capital lease arrangements are treated as non-cash activities and accordingly are not included in the capital expenditure amounts presented in our condensed consolidated statements of cash flows. We believe our presentation of free cash flow provides useful information to our investors because it can be used to gauge our ability to service debt and fund new investment opportunities. Investors should view free cash flow as a supplement to, and not a substitute for, GAAP cash flows from operating, investing and financing activities as a measure of liquidity. The table below highlights the reconciliation of net cash flows from operating activities to Free Cash Flow:
11
| | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended | | Six months ended |
| (amounts in thousands) | | June 30, 2005 | | March 31, 2005 | | June 30, 2004 | | June 30, 2005 | | June 30, 2004 |
| | | |
| Net cash provided by operating activities | | $ | 281,354 | | | $ | 303,017 | | | $ | 168,809 | | | $ | 584,371 | | | $ | 303,528 | |
| Capital expenditures | | | (301,734 | ) | | | (248,690 | ) | | | (106,389 | ) | | | (550,424 | ) | | | (195,935 | ) |
| Capital lease additions | | | (41,231 | ) | | | (30,183 | ) | | | 0 | | | | (71,414 | ) | | | 0 | |
| | | | | |
| Free cash flow (deficit) | | $ | (61,611 | ) | | $ | 24,144 | | | $ | 62,420 | | | $ | (37,467 | ) | | $ | 107,593 | |
| | | | | |
Capital Expenditures and Capital Lease Additions
The table below highlights our capital expenditures per NCTA cable industry guidelines, as well as capital lease additions:
| | | | | | | | | | | | | | | | | | |
| | | Three months ended | | Percent | | | Six months ended |
| (amounts in thousands) | | June 30, 2005 | | March 31, 2005 | | Change | | | June 30, 2005 |
| | | | |
| Customer Premises Equipment | | $ | 106,929 | | | $ | 102,237 | | | | 5 | % | | | $ | 209,166 | |
| Commercial | | | 33 | | | | 37 | | | | n.m. | | | | | 70 | |
| Scaleable Infrastructure | | | 57,598 | | | | 36,117 | | | | 59 | % | | | | 93,715 | |
| Line Extensions | | | 21,597 | | | | 26,625 | | | | -19 | % | | | | 48,222 | |
| Upgrade/Rebuild | | | 39,192 | | | | 22,544 | | | | 74 | % | | | | 61,736 | |
| Support Capital | | | 58,591 | | | | 49,591 | | | | 18 | % | | | | 108,182 | |
| NTL Ireland | | | 4,505 | | | | — | | | | n.m. | | | | | 4,505 | |
| Intangibles & chellomedia | | | 13,289 | | | | 11,539 | | | | 15 | % | | | | 24,828 | |
| | | | | | | | | | | | | | | | | | |
Total Capital Expenditures (Capex) | | $ | 301,734 | | | $ | 248,690 | | | | 21 | % | | | $ | 550,424 | |
| | | | | | | | | | | | | | | | | | |
Percent of Revenue | | | 23.6 | % | | | 20.1 | % | | | 17.4 | % | | | | 21.9 | % |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Add: Capital Lease Additions(1) | | | 41,231 | | | | 30,183 | | | | 37 | % | | | | 71,414 | |
| | | | | | | | | | | | | | | | | | |
Total Capex and Capital Leases | | $ | 342,965 | | | $ | 278,873 | | | | 23 | % | | | $ | 621,838 | |
| | | | | | | | | | | | | | | | | | |
Percent of Revenue | | | 26.9 | % | | | 22.6 | % | | | 19.0 | % | | | | 24.8 | % |
| | | | | | | | | | | | | | | | | | |
| | |
| (1) | | Relates primarily to customer premise equipment for J:COM. |
Summary of Debt, Capital Lease Obligations and Cash and Cash Equivalents
The following table details the U.S. dollar equivalent balances of our consolidated debt, capital lease obligations and cash and cash equivalents (including short-term liquid investments) by entity at June 30, 2005:
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Total Debt and | | |
| (amounts in thousands) | | | | | | Capital Lease | | Capital Lease | | Cash and Cash |
| Entity | | Debt | | Obligations | | Obligations | | Equivalents |
| LGI Corporate and Other | | $ | 802,686 | | | $ | 487 | | | $ | 803,173 | | | $ | 1,199,288 | |
| UPC Broadband | | | 3,824,271 | | | | 41,099 | | | | 3,865,370 | | | | 230,976 | |
| J:COM | | | 1,334,641 | | | | 306,853 | | | | 1,641,494 | | | | 455,968 | |
| VTR | | | 181,800 | | | | 566 | | | | 182,366 | | | | 27,126 | |
| | | | | | | | | | | | | | | | | |
| LGI Total | | $ | 6,143,398 | | | $ | 349,005 | | | $ | 6,492,403 | | | $ | 1,913,358 | |
| | | | | | | | | | | | | | | | | |
ARPU1 Table
| | | | | | | | | | | | | | | | | | | | | |
| | | As of | | As of | | Percent | | As of | | Percent |
| | | June 30, 2005 | | March 31, 2005 | | Change | | June 30, 2004 | | Change |
| | | |
| Europe | | | | | | | | | | | | | | | | | | | | |
| ARPU per RGU | | € | 16.90 | | | € | 16.99 | | | | -0.5 | % | | € | 15.50 | | | | 9.0 | % |
| ARPU per Customer Relationship | | € | 20.05 | | | € | 19.94 | | | | 0.6 | % | | € | 18.04 | | | | 11.1 | % |
| J:COM | | | | | | | | | | | | | | | | | | | | |
| ARPU per RGU | | ¥ | 4,822 | | | ¥ | 4,771 | | | | 1.1 | % | | ¥ | 4,966 | | | | -2.9 | % |
| ARPU per Customer Relationship | | ¥ | 8,169 | | | ¥ | 7,997 | | | | 2.2 | % | | ¥ | 7,955 | | | | 2.7 | % |
| VTR | | | | | | | | | | | | | | | | | | | | |
| ARPU per RGU | | CLP17,871 | | CLP16,027 | | | 11.5 | % | | CLP15,734 | | | 13.6 | % |
| ARPU per Customer Relationship | | CLP27,699 | | CLP25,452 | | | 8.8 | % | | CLP24,157 | | | 14.7 | % |
| Liberty Global Consolidated | | | | | | | | | | | | | | | | | | | | |
| ARPU per RGU | | $ | 27.33 | | | $ | 27.85 | | | | -1.9 | % | | $ | 25.52 | | | | 7.1 | % |
| ARPU per Customer Relationship | | $ | 35.33 | | | $ | 35.61 | | | | -0.8 | % | | $ | 32.26 | | | | 9.5 | % |
| | |
| 1 | | Average monthly revenue (ARPU) is calculated as follows: average total monthly broadband revenue for the period as indicated, divided by the average of the opening and closing RGUs or customer relationships, as applicable, for the period. |
12
Consolidated Operating Data
June 30, 2005
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Video Subscribers | | Internet | | Telephone |
| | | | | | | Two-way | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Homes | | Homes | | Customer | | Total | | Analog | | Digital | | | | | | | | | | Homes | | | | | | Homes | | |
| | | Passed(1) | | Passed(2) | | Relationships(3) | | RGUs(4) | | Cable(5) | | Cable(6) | | DTH(7) | | MMDS(8) | | Serviceable(9) | | Subscribers(10) | | Serviceable(11) | | Subscribers(12) |
| | | |
| Europe | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| The Netherlands | | | 2,631,200 | | | | 2,508,800 | | | | 2,261,200 | | | | 2,944,500 | | | | 2,202,800 | | | | 54,800 | | | | — | | | | — | | | | 2,508,800 | | | | 438,800 | | | | 2,386,500 | | | | 248,100 | |
| France | | | 4,592,700 | | | | 3,341,900 | | | | 1,619,500 | | | | 1,858,000 | | | | 956,100 | | | | 546,200 | | | | — | | | | — | | | | 3,341,900 | | | | 271,600 | | | | 1,578,500 | | | | 84,100 | |
| Austria | | | 951,600 | | | | 948,300 | | | | 574,800 | | | | 905,800 | | | | 461,200 | | | | 39,000 | | | | — | | | | — | | | | 948,300 | | | | 254,200 | | | | 914,900 | | | | 151,400 | |
| Ireland | | | 326,400 | | | | 39,500 | | | | 199,900 | | | | 201,200 | | | | 92,000 | | | | 18,500 | | | | — | | | | 88,800 | | | | 39,500 | | | | 1,500 | | | | 24,200 | | | | 400 | |
| Norway | | | 521,700 | | | | 258,200 | | | | 372,300 | | | | 452,900 | | | | 333,000 | | | | 29,600 | | | | — | | | | — | | | | 258,200 | | | | 59,500 | | | | 172,100 | | | | 30,800 | |
| Sweden | | | 421,600 | | | | 284,800 | | | | 296,000 | | | | 378,400 | | | | 252,200 | | | | 43,800 | | | | — | | | | — | | | | 284,800 | | | | 82,400 | | | | — | | | | — | |
| Belgium | | | 156,200 | | | | 156,200 | | | | 146,700 | | | | 166,300 | | | | 130,700 | | | | 3,200 | | | | — | | | | — | | | | 156,200 | | | | 32,400 | | | | — | | | | — | |
| | | |
| Total Western Europe | | | 9,601,400 | | | | 7,537,700 | | | | 5,470,400 | | | | 6,907,100 | | | | 4,428,000 | | | | 735,100 | | | | — | | | | 88,800 | | | | 7,537,700 | | | | 1,140,400 | | | | 5,076,200 | | | | 514,800 | |
| | | |
| Poland | | | 1,890,100 | | | | 680,500 | | | | 999,700 | | | | 1,063,000 | | | | 987,500 | | | | — | | | | — | | | | — | | | | 680,500 | | | | 75,500 | | | | — | | | | — | |
| Hungary | | | 1,018,100 | | | | 746,800 | | | | 948,100 | | | | 1,045,200 | | | | 718,400 | | | | — | | | | 150,100 | | | | — | | | | 746,800 | | | | 97,200 | | | | 741,400 | | | | 79,500 | |
| Czech Republic | | | 734,800 | | | | 339,800 | | | | 404,200 | | | | 441,200 | | | | 292,700 | | | | — | | | | 89,700 | | | | — | | | | 339,800 | | | | 58,800 | | | | — | | | | — | |
| Romania | | | 556,900 | | | | 46,900 | | | | 391,900 | | | | 393,000 | | | | 391,600 | | | | — | | | | — | | | | — | | | | 46,900 | | | | 1,400 | | | | — | | | | — | |
| Slovak Republic | | | 425,500 | | | | 214,000 | | | | 298,400 | | | | 310,400 | | | | 249,000 | | | | — | | | | 14,700 | | | | 32,200 | | | | 201,100 | | | | 14,500 | | | | — | | | | — | |
| Slovenia | | | 124,200 | | | | 88,700 | | | | 106,600 | | | | 120,800 | | | | 106,700 | | | | — | | | | — | | | | — | | | | 88,700 | | | | 14,100 | | | | — | | | | — | |
| | | |
Total Central and
Eastern Europe | | | 4,749,600 | | | | 2,116,700 | | | | 3,148,900 | | | | 3,373,600 | | | | 2,745,900 | | | | — | | | | 254,500 | | | | 32,200 | | | | 2,103,800 | | | | 261,500 | | | | 741,400 | | | | 79,500 | |
| | | |
| Total Europe | | | 14,351,000 | | | | 9,654,400 | | | | 8,619,300 | | | | 10,280,700 | | | | 7,173,900 | | | | 735,100 | | | | 254,500 | | | | 121,000 | | | | 9,641,500 | | | | 1,401,900 | | | | 5,817,600 | | | | 594,300 | |
| | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Japan: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| J:Com | | | 6,616,300 | | | | 6,607,700 | | | | 1,826,200 | | | | 3,117,400 | | | | 1,140,300 | | | | 406,400 | | | | — | | | | — | | | | 6,607,700 | | | | 763,600 | | | | 6,229,600 | | | | 807,100 | |
| | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| The Americas: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Chile | | | 2,102,100 | | | | 1,362,900 | | | | 880,700 | | | | 1,339,500 | | | | 734,500 | | | | — | | | | — | | | | 12,300 | | | | 1,362,900 | | | | 255,100 | | | | 1,365,900 | | | | 337,600 | |
| Puerto Rico | | | 329,200 | | | | 329,200 | | | | 122,600 | | | | 159,700 | | | | 65,900 | | | | 52,500 | | | | — | | | | — | | | | 329,200 | | | | 26,900 | | | | 329,200 | | | | 14,400 | |
| Brazil | | | 14,900 | | | | 14,900 | | | | 14,900 | | | | 16,100 | | | | — | | | | — | | | | — | | | | 14,900 | | | | 14,900 | | | | 1,200 | | | | — | | | | — | |
| Peru | | | 66,800 | | | | 30,300 | | | | 13,700 | | | | 15,600 | | | | 12,300 | | | | — | | | | — | | | | — | | | | 30,300 | | | | 3,300 | | | | — | | | | — | |
| | | |
| Total Latin America. | | | 2,513,000 | | | | 1,737,300 | | | | 1,031,900 | | | | 1,530,900 | | | | 812,700 | | | | 52,500 | | | | — | | | | 27,200 | | | | 1,737,300 | | | | 286,500 | | | | 1,695,100 | | | | 352,000 | |
| | | |
| Grand Total | | | 23,480,300 | | | | 17,999,400 | | | | 11,477,400 | | | | 14,929,000 | | | | 9,126,900 | | | | 1,194,000 | | | | 254,500 | | | | 148,200 | | | | 17,986,500 | | | | 2,452,000 | | | | 13,742,300 | | | | 1,753,400 | |
| | | |
13
Subscriber Variance Table
June 30, 2005 — March 31, 2005
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Video Subscribers | | Internet | | Telephone |
| | | | | | | Two-way | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Homes | | Homes | | Customer | | Total | | Analog | | Digital | | | | | | | | | | Homes | | | | | | Homes | | |
| | | Passed(1) | | Passed(2) | | Relationships(3) | | RGUs(4) | | Cable(5) | | Cable(6) | | DTH(7) | | MMDS(8) | | Serviceable(9) | | Subscribers(10) | | Serviceable(11) | | Subscribers(12) |
| | | |
| Europe: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| The Netherlands | | | 1,700 | | | | 3,200 | | | | (11,000 | ) | | | 42,200 | | | | (10,600 | ) | | | (400 | ) | | | — | | | | — | | | | 3,200 | | | | 17,900 | | | | 5,600 | | | | 35,300 | |
| France | | | 4,000 | | | | (16,900 | ) | | | 2,800 | | | | 26,800 | | | | (7,100 | ) | | | 8,700 | | | | — | | | | — | | | | (16,900 | ) | | | 11,200 | | | | 870,700 | | | | 14,000 | |
| Austria | | | 2,900 | | | | 2,800 | | | | (800 | ) | | | 3,300 | | | | (2,500 | ) | | | 1,800 | | | | — | | | | — | | | | 2,900 | | | | 4,700 | | | | 2,700 | | | | (700 | ) |
| Ireland | | | 8,500 | | | | 10,100 | | | | (1,400 | ) | | | (1,000 | ) | | | (3,300 | ) | | | 1,900 | | | | — | | | | (200 | ) | | | 19,800 | | | | 600 | | | | — | | | | — | |
| Norway | | | 33,900 | | | | 8,000 | | | | 27,500 | | | | 35,500 | | | | 21,800 | | | | (1,400 | ) | | | — | | | | — | | | | 8,000 | | | | 6,700 | | | | 18,900 | | | | 8,400 | |
| Sweden | | | — | | | | 2,500 | | | | 2,200 | | | | 4,600 | | | | 100 | | | | 2,100 | | | | — | | | | — | | | | 2,500 | | | | 2,400 | | | | — | | | | — | |
| Belgium | | | 300 | | | | 300 | | | | (400 | ) | | | — | | | | (4,200 | ) | | | 3,200 | | | | — | | | | — | | | | 300 | | | | 1,000 | | | | — | | | | — | |
| | | |
| Total Western Europe | | | 51,300 | | | | 10,000 | | | | 18,900 | | | | 111,400 | | | | (5,800 | ) | | | 15,900 | | | | — | | | | (200 | ) | | | 19,800 | | | | 44,500 | | | | 897,900 | | | | 57,000 | |
| | | |
| Poland | | | 3,300 | | | | 98,000 | | | | 2,200 | | | | 9,800 | | | | (3,000 | ) | | | — | | | | — | | | | — | | | | 98,000 | | | | 12,800 | | | | — | | | | — | |
| Hungary | | | 6,600 | | | | 40,200 | | | | 7,400 | | | | 21,300 | | | | (1,300 | ) | | | — | | | | 4,100 | | | | — | | | | 40,200 | | | | 11,900 | | | | 315,300 | | | | 6,600 | |
| Czech Republic | | | 4,500 | | | | 11,600 | | | | 700 | | | | 5,400 | | | | (1,800 | ) | | | — | | | | (200 | ) | | | — | | | | 11,600 | | | | 7,400 | | | | — | | | | — | |
| Romania | | | 38,200 | | | | 42,500 | | | | 29,900 | | | | 30,700 | | | | 29,800 | | | | — | | | | — | | | | — | | | | 42,500 | | | | 900 | | | | — | | | | — | |
| Slovak Republic | | | 4,800 | | | | 20,300 | | | | 1,600 | | | | 3,600 | | | | 800 | | | | — | | | | 200 | | | | 100 | | | | 18,900 | | | | 2,500 | | | | — | | | | — | |
| Slovenia | | | 500 | | | | 1,200 | | | | 600 | | | | 3,400 | | | | 700 | | | | — | | | | — | | | | — | | | | 1,200 | | | | 2,700 | | | | — | | | | — | |
| | | |
| Total Central and Eastern Europe | | | 57,900 | | | | 213,800 | | | | 42,400 | | | | 74,200 | | | | 25,200 | | | | — | | | | 4,100 | | | | 100 | | | | 212,400 | | | | 38,200 | | | | 315,300 | | | | 6,600 | |
| | | |
| Total Europe | | | 109,200 | | | | 223,800 | | | | 61,300 | | | | 185,600 | | | | 19,400 | | | | 15,900 | | | | 4,100 | | | | (100 | ) | | | 232,200 | | | | 82,700 | | | | 1,213,200 | | | | 63,600 | |
| | | |
| Japan: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| J:Com | | | 87,500 | | | | 90,500 | | | | 31,200 | | | | 101,200 | | | | (80,300 | ) | | | 107,100 | | | | — | | | | — | | | | 90,500 | | | | 29,600 | | | | 394,900 | | | | 44,800 | |
| | | |
| The Americas: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Chile | | | 296,300 | | | | 280,900 | | | | 231,700 | | | | 308,100 | | | | 224,100 | | | | — | | | | — | | | | (1,100 | ) | | | 280,900 | | | | 64,300 | | | | 295,200 | | | | 20,800 | |
| Puerto Rico | | | 1,100 | | | | 1,100 | | | | (2,700 | ) | | | 1,700 | | | | (8,600 | ) | | | 5,700 | | | | — | | | | — | | | | 1,100 | | | | 2,500 | | | | 1,100 | | | | 2,100 | |
| Brazil | | | (500 | ) | | | (200 | ) | | | (200 | ) | | | (100 | ) | | | — | | | | — | | | | — | | | | (200 | ) | | | (200 | ) | | | 100 | | | | — | | | | — | |
| Peru | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | |
| Total Latin America | | | 296,900 | | | | 281,800 | | | | 228,800 | | | | 309,700 | | | | 215,500 | | | | 5,700 | | | | — | | | | (1,300 | ) | | | 281,800 | | | | 66,900 | | | | 296,300 | | | | 22,900 | |
| | | |
| Grand Total | | | 493,600 | | | | 596,100 | | | | 321,300 | | | | 596,500 | | | | 154,600 | | | | 128,700 | | | | 4,100 | | | | (1,400 | ) | | | 604,500 | | | | 179,200 | | | | 1,904,400 | | | | 131,300 | |
| | | |
| Acquisitions and Dispositions | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Metropolis (Chile) | | | 271,200 | | | | 222,300 | | | | — | | | | — | | | | — | | | | 231,900 | | | | 38,400 | | | | 231,900 | | | | 10,500 | |
| SmartCall (Norway) | | | 34,000 | | | | 21,800 | | | | — | | | | — | | | | — | | | | — | | | | 3,800 | | | | — | | | | 8,400 | |
| Conex Sat (Romania) | | | 28,800 | | | | 28,800 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | |
| Subtotal | | | 334,000 | | | | 272,900 | | | | — | | | | — | | | | — | | | | 231,900 | | | | 42,200 | | | | 231,900 | | | | 18,900 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Organic Growth | | | 262,500 | | | | (118,300 | ) | | | 128,700 | | | | 4,100 | | | | (1,400 | ) | | | 372,600 | | | | 137,000 | | | | 1,672,500 | | | | 112,400 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Organic growth by region | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Latin America | | | 38,500 | | | | (6,800 | ) | | | 5,700 | | | | — | | | | (1,300 | ) | | | 49,900 | | | | 28,500 | | | | 64,400 | | | | 12,400 | |
| Japan | | | 101,200 | | | | (80,300 | ) | | | 107,100 | | | | — | | | | — | | | | 90,500 | | | | 29,600 | | | | 394,900 | | | | 44,800 | |
| Europe | | | 122,800 | | | | (31,200 | ) | | | 15,900 | | | | 4,100 | | | | (100 | ) | | | 232,200 | | | | 78,900 | | | | 1,213,200 | | | | 55,200 | |
| | | | | | | | | | | | | | | |
| Total | | | 262,500 | | | | (118,300 | ) | | | 128,700 | | | | 4,100 | | | | (1,400 | ) | | | 372,600 | | | | 137,000 | | | | 1,672,500 | | | | 112,400 | |
| | | | | | | | | | | | | | | |
14
Subscriber Variance Table
June 30, 2005 — January 1, 2005
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Video Subscribers | | Internet | | Telephone |
| | | | | | | Two-way | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Homes | | Homes | | Customer | | Total | | Analog | | Digital | | | | | | | | | | Homes | | | | | | Homes | | |
| | | Passed(1) | | Passed(2) | | Relationships(3) | | RGUs(4) | | Cable(5) | | Cable(6) | | DTH(7) | | MMDS(8) | | Serviceable(9) | | Subscribers(10) | | Serviceable(11) | | Subscribers(12) |
| | | |
| Europe: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| The Netherlands | | | 11,200 | | | | 11,000 | | | | (27,800 | ) | | | 79,500 | | | | (26,000 | ) | | | (1,900 | ) | | | — | | | | — | | | | 11,000 | | | | 41,400 | | | | 136,000 | | | | 66,000 | |
| France | | | 12,000 | | | | 25,400 | | | | 7,500 | | | | 46,700 | | | | (21,300 | ) | | | 26,000 | | | | — | | | | — | | | | 25,400 | | | | 24,500 | | | | 870,700 | | | | 17,500 | |
| Austria | | | 4,700 | | | | 4,600 | | | | (3,200 | ) | | | 9,400 | | | | (5,200 | ) | | | 4,000 | | | | — | | | | — | | | | 4,600 | | | | 11,700 | | | | 4,500 | | | | (1,100 | ) |
| Ireland | | | 9,100 | | | | 15,300 | | | | (2,800 | ) | | | (1,800 | ) | | | (6,400 | ) | | | 4,000 | | | | — | | | | (200 | ) | | | 25,000 | | | | 900 | | | | — | | | | (100 | ) |
| Norway | | | 35,100 | | | | 13,800 | | | | 31,300 | | | | 40,500 | | | | 24,100 | | | | (2,500 | ) | | | — | | | | — | | | | 13,800 | | | | 11,000 | | | | 20,900 | | | | 7,900 | |
| Sweden | | | — | | | | 3,600 | | | | 3,700 | | | | 10,100 | | | | (2,400 | ) | | | 6,100 | | | | — | | | | — | | | | 3,600 | | | | 6,400 | | | | — | | | | — | |
| Belgium | | | 700 | | | | 700 | | | | (1,400 | ) | | | 1,500 | | | | (4,200 | ) | | | 3,200 | | | | — | | | | — | | | | 700 | | | | 2,500 | | | | — | | | | — | |
| | | |
| Total Western Europe | | | 72,800 | | | | 74,400 | | | | 7,300 | | | | 185,900 | | | | (41,400 | ) | | | 38,900 | | | | — | | | | (200 | ) | | | 84,100 | | | | 98,400 | | | | 1,032,100 | | | | 90,200 | |
| | | |
| Poland | | | 5,300 | | | | 111,400 | | | | (1,000 | ) | | | 15,400 | | | | (6,700 | ) | | | — | | | | — | | | | — | | | | 111,400 | | | | 22,100 | | | | — | | | | — | |
| Hungary | | | 11,600 | | | | 71,000 | | | | 25,900 | | | | 41,800 | | | | (2,500 | ) | | | — | | | | 9,700 | | | | — | | | | 71,000 | | | | 24,000 | | | | 325,800 | | | | 10,600 | |
| Czech Republic | | | 5,800 | | | | 17,600 | | | | 3,000 | | | | 13,000 | | | | (3,000 | ) | | | — | | | | (400 | ) | | | — | | | | 17,600 | | | | 16,400 | | | | — | | | | — | |
| Romania | | | 38,200 | | | | 43,000 | | | | 34,800 | | | | 35,700 | | | | 34,600 | | | | — | | | | — | | | | — | | | | 43,000 | | | | 1,100 | | | | — | | | | — | |
| Slovak Republic | | | 12,300 | | | | 45,200 | | | | — | | | | 4,100 | | | | (1,300 | ) | | | — | | | | 100 | | | | — | | | | 39,000 | | | | 5,300 | | | | — | | | | — | |
| Slovenia | | | 124,200 | | | | 88,700 | | | | 106,600 | | | | 120,800 | | | | 106,700 | | | | — | | | | — | | | | — | | | | 88,700 | | | | 14,100 | | | | — | | | | — | |
| | | |
| Total Central and Eastern Europe | | | 197,400 | | | | 376,900 | | | | 169,300 | | | | 230,800 | | | | 127,800 | | | | — | | | | 9,400 | | | | — | | | | 370,700 | | | | 83,000 | | | | 325,800 | | | | 10,600 | |
| | | |
| Total Europe | | | 270,200 | | | | 451,300 | | | | 176,600 | | | | 416,700 | | | | 86,400 | | | | 38,900 | | | | 9,400 | | | | (200 | ) | | | 454,800 | | | | 181,400 | | | | 1,357,900 | | | | 100,800 | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Japan: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| J:Com | | | 328,500 | | | | 331,500 | | | | 81,400 | | | | 199,700 | | | | (110,300 | ) | | | 174,400 | | | | — | | | | — | | | | 331,500 | | | | 55,000 | | | | 430,400 | | | | 80,600 | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| The Americas: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Chile | | | 308,200 | | | | 292,200 | | | | 244,700 | | | | 330,200 | | | | 229,900 | | | | — | | | | (4,500 | ) | | | (1,600 | ) | | | 292,200 | | | | 78,800 | | | | 313,200 | | | | 27,600 | |
| Puerto Rico | | | 4,600 | | | | 26,400 | | | | (2,300 | ) | | | 9,400 | | | | (11,200 | ) | | | 8,800 | | | | — | | | | — | | | | 26,400 | | | | 6,400 | | | | 26,400 | | | | 5,400 | |
| Brazil | | | (500 | ) | | | (500 | ) | | | (500 | ) | | | (300 | ) | | | — | | | | — | | | | — | | | | (400 | ) | | | (500 | ) | | | 100 | | | | — | | | | — | |
| Peru | | | — | | | | — | | | | (200 | ) | | | — | | | | (100 | ) | | | — | | | | — | | | | — | | | | — | | | | 100 | | | | — | | | | — | |
| | | |
| Total Latin America | | | 312,300 | | | | 318,100 | | | | 241,700 | | | | 339,300 | | | | 218,600 | | | | 8,800 | | | | (4,500 | ) | | | (2,000 | ) | | | 318,100 | | | | 85,400 | | | | 339,600 | | | | 33,000 | |
| | | |
| Grand Total | | | 911,000 | | | | 1,100,900 | | | | 499,700 | | | | 955,700 | | | | 194,700 | | | | 222,100 | | | | 4,900 | | | | (2,200 | ) | | | 1,104,400 | | | | 321,800 | | | | 2,127,900 | | | | 214,400 | |
| | | |
| Acquisitions and Dispositions | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Metropolis (Chile) | | | 271,200 | | | | 222,300 | | | | — | | | | — | | | | — | | | | 231,900 | | | | 38,400 | | | | 231,900 | | | | 10,500 | |
| SmartCall (Norway) | | | 34,000 | | | | 21,800 | | | | — | | | | — | | | | — | | | | — | | | | 3,800 | | | | — | | | | 8,400 | |
| Conex Sat (Romania) | | | 28,800 | | | | 28,800 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Telemach (Slovenia) | | | 116,200 | | | | 105,800 | | | | — | | | | — | | | | — | | | | 87,500 | | | | 10,400 | | | | — | | | | — | |
| Chile DTH | | | (4,500 | ) | | | — | | | | — | | | | (4,500 | ) | | | — | | | | — | | | | — | | | | — | | | | — | |
| Gratkorn (Austria) | | | 1,200 | | | | 1,200 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Chofu Cable (Japan) | | | 40,300 | | | | 22,900 | | | | 7,300 | | | | — | | | | — | | | | — | | | | 10,100 | | | | — | | | | — | |
| | | | | | | | | | | | | | | |
| Subtotal | | | 487,200 | | | | 402,800 | | | | 7,300 | | | | (4,500 | ) | | | — | | | | 319,400 | | | | 62,700 | | | | 231,900 | | | | 18,900 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Organic Growth | | | 468,500 | | | | (208,100 | ) | | | 214,800 | | | | 9,400 | | | | (2,200 | ) | | | 785,000 | | | | 259,100 | | | | 1,896,000 | | | | 195,500 | |
| | | | | | | | | | | | | | | |
| Organic growth by region | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Latin America | | | 72,600 | | | | (3,700 | ) | | | 8,800 | | | | — | | | | (2,000 | ) | | | 86,200 | | | | 47,000 | | | | 107,700 | | | | 22,500 | |
| Japan | | | 159,400 | | | | (133,200 | ) | | | 167,100 | | | | — | | | | — | | | | 331,500 | | | | 44,900 | | | | 430,400 | | | | 80,600 | |
| Europe | | | 236,500 | | | | (71,200 | ) | | | 38,900 | | | | 9,400 | | | | (200 | ) | | | 367,300 | | | | 167,200 | | | | 1,357,900 | | | | 92,400 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Total | | | 468,500 | | | | (208,100 | ) | | | 214,800 | | | | 9,400 | | | | (2,200 | ) | | | 785,000 | | | | 259,100 | | | | 1,896,000 | | | | 195,500 | |
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15
Footnotes for pages 13 — 15
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| (1) | | “Homes Passed” are homes that can be connected to our networks without further extending the distribution plant, except for DTH and MMDS homes. Our Homes Passed counts are based on census data that can change based on either revisions to the data or from new census results. With respect to DTH, we do not count homes passed. With respect to MMDS, one home passed is equal to one MMDS subscriber. |
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| (2) | | “Two-way Homes Passed” are homes passed by our networks where customers can request and receive the installation of a two-way addressable set-top converter, cable modem, transceiver and/or voice port which, in most cases, allows for the provision of video and Internet services and, in some cases, telephony services. |
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| (3) | | “Customer Relationships” are the number of customers who receive at least one level of service without regard to which service(s) they subscribe. |
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| (4) | | “Revenue Generating Unit” is separately an Analog Cable Subscriber, Digital Cable Subscriber, DTH Subscriber, MMDS Subscriber, Internet Subscriber or Telephone Subscriber. A home may contain one or more RGUs. For example, if a residential customer in our Austrian system subscribed to our digital cable service, telephone service and high-speed broadband Internet access service, the customer would constitute three RGUs. “Total RGUs” is the sum of Analog, Digital Cable, DTH, MMDS, Internet and Telephone Subscribers. In some cases, non-paying subscribers are counted as subscribers during their free promotional service period. Some of these subscribers choose to disconnect after their free service period. This table excludes all RGU data relating to NTL Ireland, which had approximately 360,000 RGUs as of March 31, 2005. |
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| (5) | | “Analog Cable Subscriber” is comprised of basic cable video customers that are counted on a per connection basis. We have approximately 1.37 million “lifeline” customers that are counted on a per connection basis, representing the least expensive regulated tier of basic cable service, with only a few channels. With respect to Japan and Puerto Rico, residential multiple dwelling units with a discounted pricing structure are counted on an equivalent bulk unit (EBU) basis. Commercial contracts such as hotels and hospitals are counted by all our subsidiaries on an EBU basis. EBU is calculated by dividing the bulk price charged to accounts in an area by the prevalent price charged to non-bulk residential customers in that market for the comparable tier of service. An analog cable subscriber is not counted as a digital cable subscriber. |
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| (6) | | “Digital Cable Subscriber” is a customer with one or more digital converter boxes that receives our digital video service. We count a subscriber with one or more digital converter boxes that receives our digital video service as just one subscriber. A digital subscriber is not counted as analog subscriber. |
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| (7) | | “DTH Subscriber” is a home or commercial unit that receives our video programming broadcast directly to the home via a geosynchronous satellite. |
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| (8) | | “MMDS Subscriber” is a home or commercial unit that receives our video programming via a multipoint microwave (wireless) distribution system. |
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| (9) | | “Internet Homes Serviceable” are homes that can be connected to our broadband networks, where customers can request and receive Internet access services. |
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| (10) | | “Internet Subscriber” is a home or commercial unit with one or more cable modems connected to our broadband networks, where a customer has requested and is receiving high-speed Internet access services. |
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| (11) | | “Telephone Homes Serviceable” are homes that can be connected to our networks, where customers can request and receive voice services. |
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| (12) | | “Telephone Subscriber” is a home or commercial unit connected to our networks, where a customer has requested and is receiving voice services. |
16
