Exhibit 99.1
ATTRIBUTED FINANCIAL INFORMATION
Unless otherwise defined herein, the capitalized terms used herein are defined in our consolidated financial statements, which are included in Part II of our 2016 Annual Report on Form 10-K (our 2016 Annual Report). The financial information presented herein should be read in conjunction with the financial information and related discussion and analysis included in our 2016 Annual Report. In the following text, the terms “we,” “our,” “our company” and “us” may refer, as the context requires, to Liberty Global or collectively to Liberty Global and its subsidiaries.
The following tables present our assets, liabilities, revenue, expenses and cash flows that are intended to track and reflect the separate economic performance of the businesses and assets attributed to (i) the Liberty Global Group and (ii) the LiLAC Group. For additional information regarding our tracking shares, see note 1 to our consolidated financial statements included in our 2016 Annual Report.
The attributed financial information presented herein has been prepared assuming this attribution had been completed as of January 1, 2014. However, this attribution of historical financial information does not necessarily represent the actual results and balances that would have occurred if such attribution had actually been in place during the periods presented.
F-1
LIBERTY GLOBAL PLC
ATTRIBUTED BALANCE SHEET INFORMATION
December 31, 2016
(unaudited)
| Attributed to: | |||||||||||||||
| Liberty Global Group | LiLAC Group | Inter-group eliminations | Consolidated Liberty Global | ||||||||||||
| in millions | |||||||||||||||
| ASSETS | |||||||||||||||
| Current assets: | |||||||||||||||
| Cash and cash equivalents | $ | 1,076.6 | $ | 552.6 | $ | — | $ | 1,629.2 | |||||||
| Receivable from the Dutch JV | 2,346.6 | — | — | 2,346.6 | |||||||||||
| Trade receivables, net | 1,374.9 | 531.6 | — | 1,906.5 | |||||||||||
| Derivative instruments | 405.5 | 7.2 | — | 412.7 | |||||||||||
| Prepaid expenses | 122.8 | 86.6 | — | 209.4 | |||||||||||
| Other current assets | 237.6 | 335.7 | (25.9 | ) | 547.4 | ||||||||||
| Total current assets | 5,564.0 | 1,513.7 | (25.9 | ) | 7,051.8 | ||||||||||
| Investments | 6,388.7 | 95.0 | — | 6,483.7 | |||||||||||
| Property and equipment, net | 17,249.3 | 3,860.9 | — | 21,110.2 | |||||||||||
| Goodwill | 17,063.7 | 6,302.6 | — | 23,366.3 | |||||||||||
| Intangible assets subject to amortization, net | 2,423.2 | 1,234.5 | — | 3,657.7 | |||||||||||
| Other assets, net (notes 2 and 4) | 5,829.0 | 1,185.4 | — | 7,014.4 | |||||||||||
| Total assets | $ | 54,517.9 | $ | 14,192.1 | $ | (25.9 | ) | $ | 68,684.1 | ||||||
F-2
LIBERTY GLOBAL PLC
ATTRIBUTED BALANCE SHEET INFORMATION — (Continued)
December 31, 2016
(unaudited)
| Attributed to: | |||||||||||||||
| Liberty Global Group | LiLAC Group | Inter-group eliminations | Consolidated Liberty Global | ||||||||||||
| in millions | |||||||||||||||
| LIABILITIES AND EQUITY | |||||||||||||||
| Current liabilities: | |||||||||||||||
| Accounts payable | $ | 954.5 | $ | 219.4 | $ | (5.7 | ) | $ | 1,168.2 | ||||||
| Deferred revenue and advance payments from subscribers and others | 1,059.0 | 181.1 | — | 1,240.1 | |||||||||||
| Current portion of debt and capital lease obligations | 2,624.3 | 150.8 | — | 2,775.1 | |||||||||||
| Accrued capital expenditures | 677.8 | 87.6 | — | 765.4 | |||||||||||
| Accrued interest | 555.8 | 115.6 | — | 671.4 | |||||||||||
| Accrued income taxes | 431.8 | 26.1 | — | 457.9 | |||||||||||
| Other accrued and current liabilities | 2,094.1 | 570.8 | (20.2 | ) | 2,644.7 | ||||||||||
| Total current liabilities | 8,397.3 | 1,351.4 | (25.9 | ) | 9,722.8 | ||||||||||
| Long-term debt and capital lease obligations (note 4) | 34,886.5 | 5,897.1 | — | 40,783.6 | |||||||||||
| Other long-term liabilities (note 2) | 2,235.5 | 1,210.2 | — | 3,445.7 | |||||||||||
| Total liabilities | 45,519.3 | 8,458.7 | (25.9 | ) | 53,952.1 | ||||||||||
| Equity attributable to Liberty Global shareholders | 9,508.7 | 4,252.6 | — | 13,761.3 | |||||||||||
| Noncontrolling interests | (510.1 | ) | 1,480.8 | — | 970.7 | ||||||||||
| Total equity | 8,998.6 | 5,733.4 | — | 14,732.0 | |||||||||||
| Total liabilities and equity | $ | 54,517.9 | $ | 14,192.1 | $ | (25.9 | ) | $ | 68,684.1 | ||||||
F-3
LIBERTY GLOBAL PLC
ATTRIBUTED BALANCE SHEET INFORMATION
December 31, 2015
(unaudited)
| Attributed to: | |||||||||||||||
| Liberty Global Group | LiLAC Group | Inter-group eliminations | Consolidated Liberty Global | ||||||||||||
| in millions | |||||||||||||||
| ASSETS | |||||||||||||||
| Current assets: | |||||||||||||||
| Cash and cash equivalents | $ | 707.6 | $ | 274.5 | $ | — | $ | 982.1 | |||||||
| Trade receivables, net | 1,376.2 | 91.5 | — | 1,467.7 | |||||||||||
| Derivative instruments | 405.9 | 16.0 | — | 421.9 | |||||||||||
| Prepaid expenses | 132.0 | 12.2 | — | 144.2 | |||||||||||
| Other current assets | 305.7 | 44.8 | (9.0 | ) | 341.5 | ||||||||||
| Total current assets | 2,927.4 | 439.0 | (9.0 | ) | 3,357.4 | ||||||||||
| Investments | 2,839.6 | — | — | 2,839.6 | |||||||||||
| Property and equipment, net | 20,840.5 | 843.5 | — | 21,684.0 | |||||||||||
| Goodwill | 26,244.8 | 775.6 | — | 27,020.4 | |||||||||||
| Intangible assets subject to amortization, net | 6,975.1 | 117.4 | — | 7,092.5 | |||||||||||
| Other assets, net (notes 2 and 4) | 4,504.1 | 1,062.6 | (1.6 | ) | 5,565.1 | ||||||||||
| Total assets | $ | 64,331.5 | $ | 3,238.1 | $ | (10.6 | ) | $ | 67,559.0 | ||||||
F-4
LIBERTY GLOBAL PLC
ATTRIBUTED BALANCE SHEET INFORMATION — (Continued)
December 31, 2015
(unaudited)
| Attributed to: | |||||||||||||||
| Liberty Global Group | LiLAC Group | Inter-group eliminations | Consolidated Liberty Global | ||||||||||||
| in millions | |||||||||||||||
| LIABILITIES AND EQUITY | |||||||||||||||
| Current liabilities: | |||||||||||||||
| Accounts payable | $ | 995.9 | $ | 54.2 | $ | — | $ | 1,050.1 | |||||||
| Deferred revenue and advance payments from subscribers and others | 1,347.7 | 45.8 | — | 1,393.5 | |||||||||||
| Current portion of debt and capital lease obligations | 2,537.1 | 0.8 | — | 2,537.9 | |||||||||||
| Accrued capital expenditures | 418.5 | 23.3 | — | 441.8 | |||||||||||
| Accrued interest | 776.5 | 56.3 | — | 832.8 | |||||||||||
| Accrued income taxes | 445.6 | 37.9 | — | 483.5 | |||||||||||
| Other accrued and current liabilities | 2,246.0 | 181.3 | (9.0 | ) | 2,418.3 | ||||||||||
| Total current liabilities | 8,767.3 | 399.6 | (9.0 | ) | 9,157.9 | ||||||||||
| Long-term debt and capital lease obligations (note 4) | 41,907.7 | 2,304.6 | (1.1 | ) | 44,211.2 | ||||||||||
| Other long-term liabilities (note 2) | 3,751.9 | 264.2 | (0.5 | ) | 4,015.6 | ||||||||||
| Total liabilities | 54,426.9 | 2,968.4 | (10.6 | ) | 57,384.7 | ||||||||||
| Equity attributable to Liberty Global shareholders | 10,446.0 | 206.4 | — | 10,652.4 | |||||||||||
| Noncontrolling interests | (541.4 | ) | 63.3 | — | (478.1 | ) | |||||||||
| Total equity | 9,904.6 | 269.7 | — | 10,174.3 | |||||||||||
| Total liabilities and equity | $ | 64,331.5 | $ | 3,238.1 | $ | (10.6 | ) | $ | 67,559.0 | ||||||
F-5
LIBERTY GLOBAL PLC
ATTRIBUTED STATEMENT OF OPERATIONS AND COMPREHENSIVE EARNINGS (LOSS) INFORMATION
Year ended December 31, 2016
(unaudited)
| Attributed to: | |||||||||||||||
| Liberty Global Group | LiLAC Group | Inter-group eliminations | Consolidated Liberty Global | ||||||||||||
| in millions | |||||||||||||||
| Revenue | $ | 17,285.0 | $ | 2,723.8 | $ | — | $ | 20,008.8 | |||||||
| Operating costs and expenses (exclusive of depreciation and amortization, shown separately below) (note 3): | |||||||||||||||
| Programming and other direct costs of services | 3,929.0 | 677.2 | — | 4,606.2 | |||||||||||
| Other operating | 2,446.1 | 438.7 | — | 2,884.8 | |||||||||||
| SG&A | 3,027.7 | 539.2 | — | 3,566.9 | |||||||||||
| Inter-group fees and allocations | (8.5 | ) | 8.5 | — | — | ||||||||||
| Depreciation and amortization | 5,213.8 | 587.3 | — | 5,801.1 | |||||||||||
| Impairment, restructuring and other operating items, net | 194.7 | 153.8 | — | 348.5 | |||||||||||
| 14,802.8 | 2,404.7 | — | 17,207.5 | ||||||||||||
| Operating income | 2,482.2 | 319.1 | — | 2,801.3 | |||||||||||
| Non-operating income (expense): | |||||||||||||||
| Interest expense (note 4) | (2,324.4 | ) | (314.4 | ) | 0.4 | (2,638.4 | ) | ||||||||
| Realized and unrealized gains (losses) on derivative instruments, net | 1,071.0 | (225.9 | ) | — | 845.1 | ||||||||||
| Foreign currency transaction gains (losses), net | (400.1 | ) | 110.1 | — | (290.0 | ) | |||||||||
| Realized and unrealized losses due to changes in fair values of certain investments and debt, net | (461.5 | ) | — | — | (461.5 | ) | |||||||||
| Gains (losses) on debt modification and extinguishment, net | (238.1 | ) | 0.9 | — | (237.2 | ) | |||||||||
| Gain on Dutch JV Transaction | 520.8 | — | — | 520.8 | |||||||||||
| Other income (expense), net (note 4) | (2.4 | ) | 12.1 | (0.4 | ) | 9.3 | |||||||||
| (1,834.7 | ) | (417.2 | ) | — | (2,251.9 | ) | |||||||||
| Earnings (loss) before income taxes | 647.5 | (98.1 | ) | — | 549.4 | ||||||||||
| Income tax benefit (expense) (note 2) | 1,347.0 | (129.1 | ) | — | 1,217.9 | ||||||||||
| Net earnings (loss) | 1,994.5 | (227.2 | ) | — | 1,767.3 | ||||||||||
| Net earnings attributable to noncontrolling interests | (33.7 | ) | (28.3 | ) | — | (62.0 | ) | ||||||||
| Allocation of inter-group loss (note 4) | (19.7 | ) | 19.7 | — | — | ||||||||||
| Net earnings (loss) attributable to Liberty Global shareholders | $ | 1,941.1 | $ | (235.8 | ) | $ | — | $ | 1,705.3 | ||||||
| Net earnings (loss) | $ | 1,994.5 | $ | (227.2 | ) | $ | — | $ | 1,767.3 | ||||||
| Other comprehensive earnings (loss), net of taxes: | |||||||||||||||
| Foreign currency translation adjustments | (1,908.8 | ) | (58.1 | ) | — | (1,966.9 | ) | ||||||||
| Reclassification adjustments included in net earnings (loss) | 714.6 | 1.1 | — | 715.7 | |||||||||||
| Pension-related adjustments and other | (6.0 | ) | (14.2 | ) | — | (20.2 | ) | ||||||||
| Other comprehensive loss | (1,200.2 | ) | (71.2 | ) | — | (1,271.4 | ) | ||||||||
| Comprehensive earnings (loss) | 794.3 | (298.4 | ) | — | 495.9 | ||||||||||
| Comprehensive earnings attributable to noncontrolling interests | (29.7 | ) | (29.2 | ) | — | (58.9 | ) | ||||||||
| Allocation of inter-group loss (note 4) | (19.7 | ) | 19.7 | — | — | ||||||||||
| Comprehensive earnings (loss) attributable to Liberty Global shareholders | $ | 744.9 | $ | (307.9 | ) | $ | — | $ | 437.0 | ||||||
F-6
LIBERTY GLOBAL PLC
ATTRIBUTED STATEMENT OF OPERATIONS AND COMPREHENSIVE EARNINGS (LOSS) INFORMATION
Year ended December 31, 2015
(unaudited)
| Attributed to: | |||||||||||||||
| Liberty Global Group | LiLAC Group | Inter-group eliminations | Consolidated Liberty Global | ||||||||||||
| in millions | |||||||||||||||
| Revenue | $ | 17,062.7 | $ | 1,217.3 | $ | — | $ | 18,280.0 | |||||||
| Operating costs and expenses (exclusive of depreciation and amortization, shown separately below) (note 3): | |||||||||||||||
| Programming and other direct costs of services | 3,766.3 | 337.7 | — | 4,104.0 | |||||||||||
| Other operating | 2,470.7 | 184.5 | — | 2,655.2 | |||||||||||
| SG&A | 2,965.2 | 206.5 | — | 3,171.7 | |||||||||||
| Inter-group fees and allocations | (4.3 | ) | 4.3 | — | — | ||||||||||
| Depreciation and amortization | 5,609.4 | 216.4 | — | 5,825.8 | |||||||||||
| Impairment, restructuring and other operating items, net | 154.3 | 19.8 | — | 174.1 | |||||||||||
| 14,961.6 | 969.2 | — | 15,930.8 | ||||||||||||
| Operating income | 2,101.1 | 248.1 | — | 2,349.2 | |||||||||||
| Non-operating income (expense): | |||||||||||||||
| Interest expense (note 4) | (2,284.1 | ) | (157.9 | ) | 0.6 | (2,441.4 | ) | ||||||||
| Realized and unrealized gains on derivative instruments, net | 619.9 | 227.3 | — | 847.2 | |||||||||||
| Foreign currency transaction losses, net | (925.8 | ) | (223.4 | ) | — | (1,149.2 | ) | ||||||||
| Realized and unrealized gains due to changes in fair values of certain investments, net | 124.5 | — | — | 124.5 | |||||||||||
| Losses on debt modification and extinguishment, net | (388.0 | ) | — | — | (388.0 | ) | |||||||||
| Other expense, net (note 4) | (24.5 | ) | (1.8 | ) | (0.6 | ) | (26.9 | ) | |||||||
| (2,878.0 | ) | (155.8 | ) | — | (3,033.8 | ) | |||||||||
| Earnings (loss) before income taxes | (776.9 | ) | 92.3 | — | (684.6 | ) | |||||||||
| Income tax expense (note 2) | (324.3 | ) | (40.6 | ) | — | (364.9 | ) | ||||||||
| Net earnings (loss) | (1,101.2 | ) | 51.7 | — | (1,049.5 | ) | |||||||||
| Net earnings attributable to noncontrolling interests | (95.2 | ) | (7.8 | ) | — | (103.0 | ) | ||||||||
| Net earnings (loss) attributable to Liberty Global shareholders | $ | (1,196.4 | ) | $ | 43.9 | $ | — | $ | (1,152.5 | ) | |||||
| Net earnings (loss) | $ | (1,101.2 | ) | $ | 51.7 | $ | — | $ | (1,049.5 | ) | |||||
| Other comprehensive earnings (loss), net of taxes: | |||||||||||||||
| Foreign currency translation adjustments | (762.4 | ) | 29.5 | — | (732.9 | ) | |||||||||
| Reclassification adjustments included in net earnings (loss) | 1.5 | — | — | 1.5 | |||||||||||
| Pension-related adjustments and other | (20.3 | ) | 1.5 | — | (18.8 | ) | |||||||||
| Other comprehensive earnings (loss) | (781.2 | ) | 31.0 | — | (750.2 | ) | |||||||||
| Comprehensive earnings (loss) | (1,882.4 | ) | 82.7 | — | (1,799.7 | ) | |||||||||
| Comprehensive earnings attributable to noncontrolling interests | (95.7 | ) | (7.8 | ) | — | (103.5 | ) | ||||||||
| Comprehensive earnings (loss) attributable to Liberty Global shareholders | $ | (1,978.1 | ) | $ | 74.9 | $ | — | $ | (1,903.2 | ) | |||||
F-7
LIBERTY GLOBAL PLC
ATTRIBUTED STATEMENT OF OPERATIONS AND COMPREHENSIVE EARNINGS (LOSS) INFORMATION
Year ended December 31, 2014
(unaudited)
| Attributed to: | |||||||||||||||
| Liberty Global Group | LiLAC Group | Inter-group eliminations | Consolidated Liberty Global | ||||||||||||
| in millions | |||||||||||||||
| Revenue | $ | 17,043.7 | $ | 1,204.6 | $ | — | $ | 18,248.3 | |||||||
| Operating costs and expenses (exclusive of depreciation and amortization, shown separately below) (note 3): | |||||||||||||||
| Programming and other direct costs of services | 3,718.8 | 324.3 | — | 4,043.1 | |||||||||||
| Other operating | 2,584.7 | 191.1 | — | 2,775.8 | |||||||||||
| SG&A | 2,940.3 | 224.0 | — | 3,164.3 | |||||||||||
| Depreciation and amortization | 5,283.4 | 216.7 | — | 5,500.1 | |||||||||||
| Impairment, restructuring and other operating items, net | 516.7 | 20.1 | — | 536.8 | |||||||||||
| 15,043.9 | 976.2 | — | 16,020.1 | ||||||||||||
| Operating income | 1,999.8 | 228.4 | — | 2,228.2 | |||||||||||
| Non-operating income (expense): | |||||||||||||||
| Interest expense (note 4) | (2,405.1 | ) | (140.4 | ) | 0.8 | (2,544.7 | ) | ||||||||
| Realized and unrealized gains on derivative instruments, net | 45.1 | 43.7 | — | 88.8 | |||||||||||
| Foreign currency transaction losses, net | (738.6 | ) | (97.9 | ) | — | (836.5 | ) | ||||||||
| Realized and unrealized gains due to changes in fair values of certain investments, net | 205.2 | — | — | 205.2 | |||||||||||
| Losses on debt modification and extinguishment, net | (174.4 | ) | (11.8 | ) | — | (186.2 | ) | ||||||||
| Other income (expense), net (note 4) | (12.0 | ) | 2.1 | (0.8 | ) | (10.7 | ) | ||||||||
| (3,079.8 | ) | (204.3 | ) | — | (3,284.1 | ) | |||||||||
| Earnings (loss) from continuing operations before income taxes | (1,080.0 | ) | 24.1 | — | (1,055.9 | ) | |||||||||
| Income tax benefit (expense) (note 2) | 89.4 | (14.4 | ) | — | 75.0 | ||||||||||
Earnings (loss) from continuing operations | (990.6 | ) | 9.7 | — | (980.9 | ) | |||||||||
| Discontinued operation: | |||||||||||||||
| Earnings from discontinued operation, net of taxes | 0.8 | — | — | 0.8 | |||||||||||
| Gain on disposal of discontinued operation, net of taxes | 332.7 | — | — | 332.7 | |||||||||||
| 333.5 | — | — | 333.5 | ||||||||||||
| Net earnings (loss) | (657.1 | ) | 9.7 | — | (647.4 | ) | |||||||||
| Net loss (earnings) attributable to noncontrolling interests | (49.9 | ) | 2.3 | — | (47.6 | ) | |||||||||
| Net earnings (loss) attributable to Liberty Global shareholders | $ | (707.0 | ) | $ | 12.0 | $ | — | $ | (695.0 | ) | |||||
| Net earnings (loss) | $ | (657.1 | ) | $ | 9.7 | $ | — | $ | (647.4 | ) | |||||
| Other comprehensive earnings (loss), net of taxes: | |||||||||||||||
| Foreign currency translation adjustments | (869.9 | ) | (66.0 | ) | — | (935.9 | ) | ||||||||
| Reclassification adjustments included in net earnings (loss) | 124.4 | — | — | 124.4 | |||||||||||
| Pension-related adjustments and other | (71.2 | ) | — | — | (71.2 | ) | |||||||||
| Other comprehensive loss | (816.7 | ) | (66.0 | ) | — | (882.7 | ) | ||||||||
| Comprehensive loss | (1,473.8 | ) | (56.3 | ) | — | (1,530.1 | ) | ||||||||
| Comprehensive loss (earnings) attributable to noncontrolling interests | (49.4 | ) | 2.3 | — | (47.1 | ) | |||||||||
| Comprehensive loss attributable to Liberty Global shareholders | $ | (1,523.2 | ) | $ | (54.0 | ) | $ | — | $ | (1,577.2 | ) | ||||
F-8
LIBERTY GLOBAL PLC
ATTRIBUTED STATEMENT OF CASH FLOWS INFORMATION
Year ended December 31, 2016
(unaudited)
| Attributed to: | |||||||||||||||
| Liberty Global Group | LiLAC Group | Inter-group eliminations | Consolidated Liberty Global | ||||||||||||
| in millions | |||||||||||||||
| Cash flows from operating activities: | |||||||||||||||
| Net earnings (loss) | $ | 1,994.5 | $ | (227.2 | ) | $ | — | $ | 1,767.3 | ||||||
| Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | |||||||||||||||
| Share-based compensation expense | 281.5 | 15.4 | — | 296.9 | |||||||||||
| Inter-group fees and allocations | (8.5 | ) | 8.5 | — | — | ||||||||||
| Depreciation and amortization | 5,213.8 | 587.3 | — | 5,801.1 | |||||||||||
| Impairment, restructuring and other operating items, net | 194.7 | 153.8 | — | 348.5 | |||||||||||
| Amortization of deferred financing costs and non-cash interest | 76.2 | (8.3 | ) | — | 67.9 | ||||||||||
| Realized and unrealized losses (gains) on derivative instruments, net | (1,071.0 | ) | 225.9 | — | (845.1 | ) | |||||||||
| Foreign currency transaction losses (gains), net | 400.1 | (110.1 | ) | — | 290.0 | ||||||||||
| Realized and unrealized losses due to changes in fair values of certain investments and debt, including impact of dividends | 477.0 | — | — | 477.0 | |||||||||||
| Losses (gains) on debt modification and extinguishment, net | 238.1 | (0.9 | ) | — | 237.2 | ||||||||||
| Gain on Dutch JV Transaction | (520.8 | ) | — | — | (520.8 | ) | |||||||||
| Deferred income tax benefit | (1,465.0 | ) | (55.0 | ) | — | (1,520.0 | ) | ||||||||
| Excess tax benefits from share-based compensation | (4.4 | ) | — | — | (4.4 | ) | |||||||||
| Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions: | |||||||||||||||
| Receivables and other operating assets | 530.7 | (83.7 | ) | 10.9 | 457.9 | ||||||||||
| Payables and accruals | (869.6 | ) | (37.5 | ) | (10.9 | ) | (918.0 | ) | |||||||
Net cash provided by operating activities | 5,467.3 | 468.2 | — | 5,935.5 | |||||||||||
| Cash flows from investing activities: | |||||||||||||||
| Capital expenditures | (2,153.9 | ) | (490.4 | ) | — | (2,644.3 | ) | ||||||||
| Cash received (paid) in connection with acquisitions, net | (1,401.5 | ) | 17.0 | — | (1,384.5 | ) | |||||||||
| Sale of investments | 147.3 | — | — | 147.3 | |||||||||||
| Investments in and loans to affiliates and others | (140.2 | ) | (0.7 | ) | — | (140.9 | ) | ||||||||
| Inter-group receipts, net | 2.1 | 0.3 | (2.4 | ) | — | ||||||||||
| Other investing activities, net | 71.0 | 32.7 | 1.0 | 104.7 | |||||||||||
| Net cash used by investing activities | $ | (3,475.2 | ) | $ | (441.1 | ) | $ | (1.4 | ) | $ | (3,917.7 | ) | |||
F-9
LIBERTY GLOBAL PLC
ATTRIBUTED STATEMENT OF CASH FLOWS INFORMATION — (Continued)
Year ended December 31, 2016
(unaudited)
| Attributed to: | |||||||||||||||
| Liberty Global Group | LiLAC Group | Inter-group eliminations | Consolidated Liberty Global | ||||||||||||
| in millions | |||||||||||||||
| Cash flows from financing activities: | |||||||||||||||
| Borrowings of debt | $ | 12,160.2 | $ | 1,520.6 | $ | — | $ | 13,680.8 | |||||||
| Repayments and repurchases of debt and capital lease obligations | (11,387.9 | ) | (1,156.5 | ) | — | (12,544.4 | ) | ||||||||
| Repurchase of Liberty Global ordinary shares | (1,948.3 | ) | (20.0 | ) | — | (1,968.3 | ) | ||||||||
| Payment of financing costs and debt premiums | (222.4 | ) | (31.5 | ) | — | (253.9 | ) | ||||||||
| Net cash paid related to derivative instruments | (251.5 | ) | — | — | (251.5 | ) | |||||||||
| Change in cash collateral | 117.6 | (11.3 | ) | — | 106.3 | ||||||||||
| Distributions by subsidiaries to noncontrolling interest owners | (13.2 | ) | (61.9 | ) | — | (75.1 | ) | ||||||||
Inter-group payments, net | (0.3 | ) | (2.1 | ) | 2.4 | — | |||||||||
| Other financing activities, net | (88.6 | ) | 10.0 | (1.0 | ) | (79.6 | ) | ||||||||
| Net cash provided (used) by financing activities | (1,634.4 | ) | 247.3 | 1.4 | (1,385.7 | ) | |||||||||
| Effect of exchange rate changes on cash | 11.3 | 3.7 | — | 15.0 | |||||||||||
| Net increase in cash and cash equivalents | 369.0 | 278.1 | — | 647.1 | |||||||||||
| Cash and cash equivalents: | |||||||||||||||
| Beginning of year | 707.6 | 274.5 | — | 982.1 | |||||||||||
| End of year | $ | 1,076.6 | $ | 552.6 | $ | — | $ | 1,629.2 | |||||||
| Cash paid for interest | $ | 2,303.4 | $ | 304.6 | $ | — | $ | 2,608.0 | |||||||
| Net cash paid for taxes | $ | 309.7 | $ | 131.0 | $ | — | $ | 440.7 | |||||||
F-10
LIBERTY GLOBAL PLC
ATTRIBUTED STATEMENT OF CASH FLOWS INFORMATION
Year ended December 31, 2015
(unaudited)
| Attributed to: | |||||||||||||||
| Liberty Global Group | LiLAC Group | Inter-group eliminations | Consolidated Liberty Global | ||||||||||||
| in millions | |||||||||||||||
| Cash flows from operating activities: | |||||||||||||||
| Net earnings (loss) | $ | (1,101.2 | ) | $ | 51.7 | $ | — | $ | (1,049.5 | ) | |||||
| Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | |||||||||||||||
| Share-based compensation expense | 315.8 | 2.4 | — | 318.2 | |||||||||||
| Inter-group fees and allocations | (4.3 | ) | 4.3 | — | — | ||||||||||
| Depreciation and amortization | 5,609.4 | 216.4 | — | 5,825.8 | |||||||||||
| Impairment, restructuring and other operating items, net | 154.3 | 19.8 | — | 174.1 | |||||||||||
| Amortization of deferred financing costs and non-cash interest | 76.5 | 4.3 | — | 80.8 | |||||||||||
| Realized and unrealized gains on derivative instruments, net | (619.9 | ) | (227.3 | ) | — | (847.2 | ) | ||||||||
| Foreign currency transaction losses, net | 925.8 | 223.4 | — | 1,149.2 | |||||||||||
| Realized and unrealized gains due to changes in fair values of certain investments, including impact of dividends | (121.4 | ) | — | — | (121.4 | ) | |||||||||
| Losses on debt modification and extinguishment, net | 388.0 | — | — | 388.0 | |||||||||||
| Deferred income tax benefit | (31.5 | ) | (18.6 | ) | — | (50.1 | ) | ||||||||
| Excess tax benefits from share-based compensation | (23.0 | ) | (3.7 | ) | — | (26.7 | ) | ||||||||
| Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions: | |||||||||||||||
| Receivables and other operating assets | 532.7 | 46.6 | (12.8 | ) | 566.5 | ||||||||||
| Payables and accruals | (701.9 | ) | (12.8 | ) | 12.8 | (701.9 | ) | ||||||||
| Net cash provided by operating activities | 5,399.3 | 306.5 | — | 5,705.8 | |||||||||||
| Cash flows from investing activities: | |||||||||||||||
| Capital expenditures | (2,272.3 | ) | (227.2 | ) | — | (2,499.5 | ) | ||||||||
| Cash paid in connection with acquisitions, net of cash acquired | (113.3 | ) | (272.5 | ) | — | (385.8 | ) | ||||||||
| Investments in and loans to affiliates and others | (998.6 | ) | (1.0 | ) | — | (999.6 | ) | ||||||||
| Inter-group receipts (payments), net | (98.8 | ) | 8.6 | 90.2 | — | ||||||||||
| Other investing activities, net | 54.0 | 1.5 | — | 55.5 | |||||||||||
| Net cash used by investing activities | $ | (3,429.0 | ) | $ | (490.6 | ) | $ | 90.2 | $ | (3,829.4 | ) | ||||
F-11
LIBERTY GLOBAL PLC
ATTRIBUTED STATEMENT OF CASH FLOWS INFORMATION — (Continued)
Year ended December 31, 2015
(unaudited)
| Attributed to: | |||||||||||||||
| Liberty Global Group | LiLAC Group | Inter-group eliminations | Consolidated Liberty Global | ||||||||||||
| in millions | |||||||||||||||
| Cash flows from financing activities: | |||||||||||||||
| Borrowings of debt | $ | 14,969.3 | $ | 261.1 | $ | — | $ | 15,230.4 | |||||||
| Repayments and repurchases of debt and capital lease obligations | (13,880.6 | ) | (0.8 | ) | — | (13,881.4 | ) | ||||||||
| Repurchase of Liberty Global ordinary shares | (2,320.5 | ) | — | — | (2,320.5 | ) | |||||||||
| Payment of financing costs and debt premiums | (418.1 | ) | (5.2 | ) | — | (423.3 | ) | ||||||||
| Net cash paid related to derivative instruments | (301.2 | ) | — | — | (301.2 | ) | |||||||||
| Change in cash collateral | (56.1 | ) | — | — | (56.1 | ) | |||||||||
| Purchase of additional shares of subsidiaries | (142.4 | ) | — | — | (142.4 | ) | |||||||||
| Distributions by subsidiaries to noncontrolling interest owners | (11.3 | ) | — | — | (11.3 | ) | |||||||||
| Inter-group receipts (payments), net | (8.5 | ) | 98.7 | (90.2 | ) | — | |||||||||
| Other financing activities, net | (141.9 | ) | 9.9 | — | (132.0 | ) | |||||||||
| Net cash provided (used) by financing activities | (2,311.3 | ) | 363.7 | (90.2 | ) | (2,037.8 | ) | ||||||||
| Effect of exchange rate changes on cash | (2.8 | ) | (12.2 | ) | — | (15.0 | ) | ||||||||
| Net increase (decrease) in cash and cash equivalents | (343.8 | ) | 167.4 | — | (176.4 | ) | |||||||||
| Cash and cash equivalents: | |||||||||||||||
| Beginning of year | 1,051.4 | 107.1 | — | 1,158.5 | |||||||||||
| End of year | $ | 707.6 | $ | 274.5 | $ | — | $ | 982.1 | |||||||
| Cash paid for interest | $ | 2,024.0 | $ | 146.4 | $ | — | $ | 2,170.4 | |||||||
| Net cash paid for taxes | $ | 213.8 | $ | 22.5 | $ | — | $ | 236.3 | |||||||
F-12
LIBERTY GLOBAL PLC
ATTRIBUTED STATEMENT OF CASH FLOWS INFORMATION
Year ended December 31, 2014
(unaudited)
| Attributed to: | |||||||||||||||
| Liberty Global Group | LiLAC Group | Inter-group eliminations | Consolidated Liberty Global | ||||||||||||
| in millions | |||||||||||||||
| Cash flows from operating activities: | |||||||||||||||
| Net earnings (loss) | $ | (657.1 | ) | $ | 9.7 | $ | — | $ | (647.4 | ) | |||||
| Earnings from discontinued operation | (333.5 | ) | — | — | (333.5 | ) | |||||||||
| Earnings (loss) from continuing operations | (990.6 | ) | 9.7 | — | (980.9 | ) | |||||||||
| Adjustments to reconcile earnings (loss) from continuing operations to net cash provided by operating activities: | |||||||||||||||
| Share-based compensation expense | 245.6 | 11.6 | — | 257.2 | |||||||||||
| Depreciation and amortization | 5,283.4 | 216.7 | — | 5,500.1 | |||||||||||
| Impairment, restructuring and other operating items, net | 516.7 | 20.1 | — | 536.8 | |||||||||||
| Amortization of deferred financing costs and non-cash interest | 80.9 | 3.4 | — | 84.3 | |||||||||||
| Realized and unrealized gains on derivative instruments, net | (45.1 | ) | (43.7 | ) | — | (88.8 | ) | ||||||||
| Foreign currency transaction losses, net | 738.6 | 97.9 | — | 836.5 | |||||||||||
| Realized and unrealized gains due to changes in fair values of certain investments, including impact of dividends | (203.7 | ) | — | — | (203.7 | ) | |||||||||
| Losses on debt modification and extinguishment, net | 174.4 | 11.8 | — | 186.2 | |||||||||||
| Deferred income tax expense (benefit) | (378.8 | ) | 28.2 | — | (350.6 | ) | |||||||||
| Excess tax benefits from share-based compensation | (6.9 | ) | (0.1 | ) | — | (7.0 | ) | ||||||||
| Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions: | |||||||||||||||
| Receivables and other operating assets | 907.9 | (45.2 | ) | (2.2 | ) | 860.5 | |||||||||
| Payables and accruals | (998.6 | ) | (21.4 | ) | 2.2 | (1,017.8 | ) | ||||||||
| Net cash used by operating activities of discontinued operation | (9.6 | ) | — | — | (9.6 | ) | |||||||||
| Net cash provided by operating activities | 5,314.2 | 289.0 | — | 5,603.2 | |||||||||||
| Cash flows from investing activities: | |||||||||||||||
| Capital expenditures | (2,461.3 | ) | (223.1 | ) | — | (2,684.4 | ) | ||||||||
| Cash paid in connection with acquisitions, net of cash acquired | (73.3 | ) | — | — | (73.3 | ) | |||||||||
| Investments in and loans to affiliates and others | (1,015.6 | ) | (1.0 | ) | — | (1,016.6 | ) | ||||||||
| Proceeds received upon disposition of discontinued operation, net of disposal costs | 988.5 | — | — | 988.5 | |||||||||||
| Inter-group receipts, net | 441.8 | — | (441.8 | ) | — | ||||||||||
| Other investing activities, net | (14.8 | ) | (8.1 | ) | 9.1 | (13.8 | ) | ||||||||
| Net cash used by investing activities of discontinued operation, including deconsolidated cash | (3.8 | ) | — | — | (3.8 | ) | |||||||||
| Net cash used by investing activities | $ | (2,138.5 | ) | $ | (232.2 | ) | $ | (432.7 | ) | $ | (2,803.4 | ) | |||
F-13
LIBERTY GLOBAL PLC
ATTRIBUTED STATEMENT OF CASH FLOWS INFORMATION — (Continued)
Year ended December 31, 2014
(unaudited)
| Attributed to: | |||||||||||||||
| Liberty Global Group | LiLAC Group | Inter-group eliminations | Consolidated Liberty Global | ||||||||||||
| in millions | |||||||||||||||
| Cash flows from financing activities: | |||||||||||||||
| Borrowings of debt | $ | 9,527.4 | $ | 45.0 | $ | — | $ | 9,572.4 | |||||||
| Repayments and repurchases of debt and capital lease obligations | (11,190.5 | ) | (125.6 | ) | — | (11,316.1 | ) | ||||||||
| Repurchase of Liberty Global ordinary shares | (1,584.9 | ) | — | — | (1,584.9 | ) | |||||||||
| Payment of financing costs and debt premiums | (336.1 | ) | (43.7 | ) | — | (379.8 | ) | ||||||||
| Net cash paid related to derivative instruments | (183.6 | ) | (37.4 | ) | — | (221.0 | ) | ||||||||
| Change in cash collateral | (63.1 | ) | 4.4 | — | (58.7 | ) | |||||||||
| Purchase of additional shares of subsidiaries | (260.7 | ) | — | — | (260.7 | ) | |||||||||
| Distributions by subsidiaries to noncontrolling interest owners | (12.1 | ) | — | — | (12.1 | ) | |||||||||
| Inter-group receipts (payments), net | (472.1 | ) | 39.4 | 432.7 | — | ||||||||||
| Other financing activities, net | 0.9 | (0.1 | ) | — | 0.8 | ||||||||||
| Net cash used by financing activities of discontinued operation | (1.2 | ) | — | — | (1.2 | ) | |||||||||
| Net cash used by financing activities | (4,576.0 | ) | (118.0 | ) | 432.7 | (4,261.3 | ) | ||||||||
| Effect of exchange rate changes on cash | (75.2 | ) | (6.7 | ) | — | (81.9 | ) | ||||||||
| Net decrease in cash and cash equivalents: | |||||||||||||||
| Continuing operations | (1,460.9 | ) | (67.9 | ) | — | (1,528.8 | ) | ||||||||
| Discontinued operation | (14.6 | ) | — | — | (14.6 | ) | |||||||||
| Net decrease in cash and cash equivalents | (1,475.5 | ) | (67.9 | ) | — | (1,543.4 | ) | ||||||||
| Cash and cash equivalents: | |||||||||||||||
| Beginning of year | 2,526.9 | 175.0 | — | 2,701.9 | |||||||||||
| End of year | $ | 1,051.4 | $ | 107.1 | $ | — | $ | 1,158.5 | |||||||
| Cash paid for interest – continuing operations | $ | 2,289.8 | $ | 90.1 | $ | (3.2 | ) | $ | 2,376.7 | ||||||
| Net cash paid for taxes: | |||||||||||||||
| Continuing operations | $ | 59.9 | $ | 37.4 | $ | — | $ | 97.3 | |||||||
| Discontinued operation | 2.2 | — | — | 2.2 | |||||||||||
| Total | $ | 62.1 | $ | 37.4 | $ | — | $ | 99.5 | |||||||
F-14
LIBERTY GLOBAL PLC
Notes to Attributed Financial Information
December 31, 2016, 2015 and 2014
(unaudited)
| (1) | Attributed Financial Information |
The terms “LiLAC Group” and “Liberty Global Group” do not represent separate legal entities, rather they represent those businesses, assets and liabilities that have been attributed to each group. The LiLAC Group comprises our businesses, assets and liabilities in Latin America and the Caribbean and has attributed to it (i) LGE Coral and its subsidiaries, which include CWC, (ii) VTR Finance and its subsidiaries, which include VTR, (iii) Lila Chile Holding, which is the parent entity of VTR Finance, (iv) LiLAC Communications and its subsidiaries, which include Liberty Puerto Rico and (v) prior to July 1, 2015, the LiLAC Corporate Costs. Effective July 1, 2015, LiLAC Corporate Costs were transferred to LiLAC Communications. The Liberty Global Group comprises our businesses, assets and liabilities not attributed to the LiLAC Group, including Virgin Media, Ziggo Group Holding (through December 31, 2016), Unitymedia, Telenet, UPC Holding, our corporate entities (excluding LiLAC Communications) and certain other less significant entities. Accordingly, the accompanying attributed financial information for the Liberty Global Group and the LiLAC Group includes the assets, liabilities, revenue, expenses and cash flows of the respective entities within each group. Any business that we may acquire in the future that we do not attribute to the LiLAC Group will be attributed to the Liberty Global Group.
Our board of directors is vested with discretion to reattribute businesses, assets and liabilities that are attributed to either the Liberty Global Group or the LiLAC Group to the other group, without the approval of any of our shareholders, and may use the liquidity of one group to fund the liquidity and capital resource requirements of the other group. Accordingly, shareholders may have difficulty evaluating the future prospects and liquidity and capital resources of each group.
| (2) | Income Taxes |
We generally have accounted for income taxes for the Liberty Global Group and the LiLAC Group in the accompanying attributed financial information on a separate return basis, as adjusted to reflect the consolidated view of the tax asset, liability, benefit or expense (tax attribute) of each group. Accordingly, except as otherwise noted below, any tax attribute associated with an entity attributed to the Liberty Global Group has been allocated to the Liberty Global Group and any tax attribute associated with an entity attributed to the LiLAC Group has been allocated to the LiLAC Group.
Liberty Global owns consolidated interests in a number of entities that are included in combined or consolidated tax returns, including tax returns in the Netherlands (the Dutch Fiscal Unity), the U.K. (the U.K. Tax Group) and the U.S. (the U.S. Tax Group). Different members of the Liberty Global Group file combined tax returns for the Dutch Fiscal Unity and U.K. tax returns, where sharing of certain tax attributes is permitted, and consolidated tax returns for the U.S. Tax Group. Certain entities included in the Dutch Fiscal Unity, the U.K. Tax Group and the U.S. Tax Group are attributed to the LiLAC Group. As a result, we record inter-group tax allocations to recognize changes in the tax attributes of certain members of the LiLAC Group that are included in the Dutch Fiscal Unity, the U.K. Tax Group or the U.S. Tax Group. Prior to July 1, 2015, the inter-group tax allocations reflected in the attributed financial information were not cash settled and were not the subject of tax sharing agreements. Accordingly, inter-group tax allocations prior to July 1, 2015 are reflected in the attributed financial information as adjustments of equity. Following the adoption of the tax sharing policy described below, certain inter-group tax allocations are expected to be cash settled.
Effective July 1, 2015 (the date we distributed the LiLAC Shares), the allocation of tax attributes between the Liberty Global Group and the LiLAC Group is based on a tax sharing policy. This tax sharing policy, which may be changed in future periods at the discretion of the board of directors of Liberty Global, generally results in the allocation of Liberty Global’s tax attributes to the Liberty Global Group and the LiLAC Group based on the tax attributes of the legal entities attributed to each of the groups. Nevertheless, to the extent that Liberty Global management concludes the actions or results of one group give rise to changes in the tax attributes of the other group, the change in those tax attributes are generally allocated to the group whose actions or results gave rise to such changes. Similarly, in cases where legal entities in one group join in a common tax filing with members of the other group, changes in the tax attributes of the group that includes the filing entity that are the result of the actions or financial results of one or more members of the other group are allocated to the group that does not include the filing entity. In addition, the allocation of any taxes and losses resulting from the ultimate tax treatment of Liberty Global tax attributes related to the distribution of the LiLAC Shares are allocated in proportion to each group’s respective number of “liquidation units.” Pursuant to the terms of our articles of association, the liquidation units for each Liberty Global Share and each LiLAC Share are 1 and 0.94893, respectively. For periods beginning on and after July 1, 2015, we will record non-interest bearing inter-group payables and receivables in connection with the allocation of tax attributes to the extent that tax assets are utilized or taxable income is included in the return for the applicable tax year. These inter-group payables and receivables are expected to be cash settled annually within 90 days following the filing of the relevant tax return.
F-15
LIBERTY GLOBAL PLC
Notes to Attributed Financial Information — (Continued)
December 31, 2016, 2015 and 2014
(unaudited)
Liberty Global Group
Income tax benefit (expense) consists of:
| Liberty Global Group | |||||||||||
| Current | Deferred | Total | |||||||||
| in millions | |||||||||||
| Year ended December 31, 2016: | |||||||||||
| The Netherlands | $ | (0.3 | ) | $ | 1,259.6 | $ | 1,259.3 | ||||
| U.S. (a) (b) | 146.8 | 90.2 | 237.0 | ||||||||
| Belgium | (105.0 | ) | 57.0 | (48.0 | ) | ||||||
| Switzerland | (48.4 | ) | 5.3 | (43.1 | ) | ||||||
| Germany | (77.9 | ) | 41.0 | (36.9 | ) | ||||||
| U.K. | (12.3 | ) | 1.2 | (11.1 | ) | ||||||
| Other | (20.9 | ) | 10.7 | (10.2 | ) | ||||||
| Total | $ | (118.0 | ) | $ | 1,465.0 | $ | 1,347.0 | ||||
| Year ended December 31, 2015: | |||||||||||
| U.K. | $ | (0.9 | ) | $ | (209.0 | ) | $ | (209.9 | ) | ||
| The Netherlands | 2.5 | 159.0 | 161.5 | ||||||||
| Belgium | (125.4 | ) | 11.1 | (114.3 | ) | ||||||
| Switzerland | (63.2 | ) | (14.7 | ) | (77.9 | ) | |||||
| Germany | (66.7 | ) | 24.3 | (42.4 | ) | ||||||
| U.S. (a) (b) | (79.4 | ) | 54.1 | (25.3 | ) | ||||||
| Other | (22.7 | ) | 6.7 | (16.0 | ) | ||||||
| Total | $ | (355.8 | ) | $ | 31.5 | $ | (324.3 | ) | |||
| Year ended December 31, 2014: | |||||||||||
| Continuing operations: | |||||||||||
| U.S. (a) (b) | $ | (19.2 | ) | $ | 133.7 | $ | 114.5 | ||||
| U.K | (2.1 | ) | 113.4 | 111.3 | |||||||
| Belgium | (138.7 | ) | 31.7 | (107.0 | ) | ||||||
| Switzerland | (76.8 | ) | 3.1 | (73.7 | ) | ||||||
| The Netherlands | 11.1 | 42.5 | 53.6 | ||||||||
| Germany | (22.6 | ) | 37.0 | 14.4 | |||||||
| Other | (41.1 | ) | 17.4 | (23.7 | ) | ||||||
| Total — continuing operations | $ | (289.4 | ) | $ | 378.8 | $ | 89.4 | ||||
| Discontinued operations | $ | — | $ | (0.1 | ) | $ | (0.1 | ) | |||
_______________
| (a) | Includes federal and state income taxes. The Liberty Global Group’s U.S. state income taxes were not material during any of the years presented. |
| (b) | The amounts include (i) inter-group current tax expense of the U.S. Tax Group of $12.0 million during 2016 and inter-group current tax expense of the U.S. Tax Group of $2.1 million during the six months ended December 31, 2015 and (ii) inter-group deferred tax expense of the U.S. Tax Group of $1.5 million during the six months ended June 30, 2015 and $6.1 million during 2014. The U.S. Tax Group expenses were recorded as an adjustment of equity through June 30, 2015 and as a current payable at subsequent balance sheet dates. |
F-16
LIBERTY GLOBAL PLC
Notes to Attributed Financial Information — (Continued)
December 31, 2016, 2015 and 2014
(unaudited)
Income tax benefit (expense) attributable to the Liberty Global Group’s earnings (loss) from continuing operations before income taxes differs from the amounts computed using the applicable income tax rate as a result of the following factors:
| Liberty Global Group | |||||||||||
| Year ended December 31, | |||||||||||
| 2016 | 2015 | 2014 | |||||||||
| in millions | |||||||||||
| Computed “expected” tax benefit (expense) (a) | $ | (129.5 | ) | $ | 155.4 | $ | 226.8 | ||||
| Change in valuation allowances | 828.7 | (486.7 | ) | (330.2 | ) | ||||||
| Recognition of previously unrecognized tax benefits | 210.9 | 44.4 | 28.7 | ||||||||
| Non-deductible or non-taxable foreign currency exchange results | 194.2 | 49.2 | 55.6 | ||||||||
| Tax effect of intercompany financing | 161.6 | 154.9 | 166.9 | ||||||||
| Enacted tax law and rate changes (b) | (157.7 | ) | (282.0 | ) | 2.1 | ||||||
| International rate differences (c) | 112.2 | 148.9 | 237.9 | ||||||||
| Basis and other differences in the treatment of items associated with investments in subsidiaries and affiliates | 93.5 | (89.9 | ) | (132.0 | ) | ||||||
| Tax benefit associated with technology innovation | 72.6 | 21.0 | — | ||||||||
| Non-deductible or non-taxable interest and other expenses | (43.6 | ) | (52.6 | ) | (178.4 | ) | |||||
| Other, net | 4.1 | 13.1 | 12.0 | ||||||||
| Total income tax benefit (expense) | $ | 1,347.0 | $ | (324.3 | ) | $ | 89.4 | ||||
_______________
| (a) | The statutory or “expected” tax rates are the U.K. rates of 20.0% for 2016 and 2015 and 21.0% for 2014. |
| (b) | During 2015, the U.K. enacted legislation that will change the corporate income tax rate from the current rate of 20.0% to 19.0% in April 2017 and 18.0% in April 2020. Substantially all of the impact of these rate changes on the Liberty Global Group’s deferred tax balances was recorded in the fourth quarter of 2015 when the change in law was enacted. During the third quarter of 2016, the U.K. enacted legislation that will further reduce the corporate income tax rate in April 2020 from 18.0% to 17.0%. Substantially all of the rate impact of this rate change on the Liberty Global Group’s deferred tax balances was recorded during the third quarter of 2016. |
| (c) | Amounts reflect adjustments to the “expected” tax benefit (expense) for statutory rates in jurisdictions in which we operate outside of the U.K. |
The components of the Liberty Global Group’s deferred tax assets are as follows:
| Liberty Global Group | |||||||
| December 31, | |||||||
| 2016 | 2015 | ||||||
| in millions | |||||||
| Deferred tax assets (a) | $ | 2,826.4 | $ | 2,262.5 | |||
| Deferred tax liabilities (a) | (669.9 | ) | (1,569.6 | ) | |||
| Net deferred tax asset | $ | 2,156.5 | $ | 692.9 | |||
_______________
| (a) | The Liberty Global Group’s deferred tax assets and liabilities are included in other assets, net, and other long-term liabilities, respectively, in our attributed balance sheet information. |
F-17
LIBERTY GLOBAL PLC
Notes to Attributed Financial Information — (Continued)
December 31, 2016, 2015 and 2014
(unaudited)
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:
| Liberty Global Group | |||||||
| December 31, | |||||||
| 2016 | 2015 | ||||||
| in millions | |||||||
| Deferred tax assets: | |||||||
| Net operating loss and other carryforwards | $ | 5,176.6 | $ | 5,823.4 | |||
| Property and equipment, net | 1,960.7 | 2,550.9 | |||||
| Debt | 1,557.3 | 1,580.0 | |||||
| Share-based compensation | 118.7 | 111.1 | |||||
| Intangible assets | 86.1 | 108.9 | |||||
| Derivative instruments | 55.2 | 173.1 | |||||
| Other future deductible amounts | 184.4 | 117.6 | |||||
| Deferred tax assets | 9,139.0 | 10,465.0 | |||||
| Valuation allowance | (4,664.5 | ) | (6,325.5 | ) | |||
| Deferred tax assets, net of valuation allowance | 4,474.5 | 4,139.5 | |||||
| Deferred tax liabilities: | |||||||
| Property and equipment, net | (902.4 | ) | (1,053.4 | ) | |||
| Intangible assets | (664.0 | ) | (1,826.5 | ) | |||
| Deferred revenue | (254.8 | ) | (7.8 | ) | |||
| Derivative instruments | (175.5 | ) | (279.9 | ) | |||
| Investments | (144.7 | ) | (149.7 | ) | |||
| Other future taxable amounts | (176.6 | ) | (129.3 | ) | |||
| Deferred tax liabilities | (2,318.0 | ) | (3,446.6 | ) | |||
| Net deferred tax asset | $ | 2,156.5 | $ | 692.9 | |||
The significant components of the Liberty Global Group’s tax loss carryforwards and related tax assets at December 31, 2016 are as follows:
| Country | Tax loss carryforward | Related tax asset | Expiration date | |||||||
| in millions | ||||||||||
| U.K.: | ||||||||||
| Amount attributable to capital losses | $ | 14,941.0 | $ | 2,540.0 | Indefinite | |||||
| Amount attributable to net operating losses | 1,202.7 | 204.5 | Indefinite | |||||||
| The Netherlands | 4,042.0 | 1,010.5 | 2017-2025 | |||||||
| Germany | 1,608.1 | 259.5 | Indefinite | |||||||
| U.S. | 1,248.8 | 313.4 | 2019-2036 | |||||||
| Luxembourg | 1,124.1 | 292.4 | Indefinite | |||||||
| Belgium | 894.2 | 303.9 | Indefinite | |||||||
| Ireland | 601.9 | 75.2 | Indefinite | |||||||
| France | 505.4 | 146.2 | Indefinite | |||||||
| Hungary | 166.8 | 15.0 | 2020-2025 | |||||||
| Other | 96.1 | 16.0 | Various | |||||||
| Total | $ | 26,431.1 | $ | 5,176.6 | ||||||
F-18
LIBERTY GLOBAL PLC
Notes to Attributed Financial Information — (Continued)
December 31, 2016, 2015 and 2014
(unaudited)
LiLAC Group
Income tax expense consists of:
| LiLAC Group | |||||||||||
| Current | Deferred | Total | |||||||||
| in millions | |||||||||||
| Year ended December 31, 2016: | |||||||||||
| Chile | $ | (134.3 | ) | $ | (11.2 | ) | $ | (145.5 | ) | ||
| Netherlands | (0.1 | ) | 55.7 | 55.6 | |||||||
| U.K. | (3.0 | ) | 15.8 | 12.8 | |||||||
| Barbados | (13.9 | ) | 5.8 | (8.1 | ) | ||||||
| Other (a) | (32.8 | ) | (11.1 | ) | (43.9 | ) | |||||
| Total | $ | (184.1 | ) | $ | 55.0 | $ | (129.1 | ) | |||
| Year ended December 31, 2015: | |||||||||||
| Chile | $ | (57.4 | ) | $ | 13.5 | $ | (43.9 | ) | |||
| U.S. (a) | (1.8 | ) | 4.6 | 2.8 | |||||||
| U.K. | — | 0.5 | 0.5 | ||||||||
| Total | $ | (59.2 | ) | $ | 18.6 | $ | (40.6 | ) | |||
| Year ended December 31, 2014: | |||||||||||
| U.S. (a) | $ | (3.3 | ) | $ | (4.1 | ) | $ | (7.4 | ) | ||
| Chile | 17.1 | (24.1 | ) | (7.0 | ) | ||||||
| Total | $ | 13.8 | $ | (28.2 | ) | $ | (14.4 | ) | |||
_______________
| (a) | The amounts include (i) inter-group current tax benefit of the U.S. Tax Group of $12.0 million during 2016, (ii) inter-group current tax benefit of the U.S. Tax Group of $2.1 million during the six months ended December 31, 2015 and (iii) inter-group deferred tax benefit of the U.S. Tax Group of $1.5 million during the six months ended June 30, 2015 and $6.1 million during 2014. The U.S. Tax Group benefits were recorded as an adjustment of equity through June 30, 2015 and as a current receivable at subsequent balance sheet dates. |
F-19
LIBERTY GLOBAL PLC
Notes to Attributed Financial Information — (Continued)
December 31, 2016, 2015 and 2014
(unaudited)
Income tax expense attributable to the LiLAC Group’s earnings (loss) from continuing operations before income taxes differs from the amounts computed using the applicable income tax rate as a result of the following:
| LiLAC Group | |||||||||||
| Year ended December 31, | |||||||||||
| 2016 | 2015 | 2014 | |||||||||
| in millions | |||||||||||
| Computed “expected” tax benefit (expense) (a) | $ | 19.6 | $ | (18.5 | ) | $ | (5.1 | ) | |||
| Non-deductible or non-taxable interest and other expenses | (127.5 | ) | (5.9 | ) | (0.1 | ) | |||||
| Change in valuation allowances | 60.0 | (14.8 | ) | (31.0 | ) | ||||||
| Basis and other differences in the treatment of items associated with investments in subsidiaries and affiliates | (30.7 | ) | (3.7 | ) | (3.4 | ) | |||||
| Foreign taxes | (19.6 | ) | 2.0 | 1.6 | |||||||
| International rate differences (b) | (17.1 | ) | (0.8 | ) | 0.9 | ||||||
| Tax effect of intercompany financing | 12.1 | — | — | ||||||||
| Impact of price level adjustments for tax purposes | 5.7 | 0.3 | 1.5 | ||||||||
| Impact of merger on tax attributes | (5.3 | ) | — | — | |||||||
| Enacted tax law and rate changes (c) | (4.5 | ) | 1.5 | 21.8 | |||||||
| Other, net | (21.8 | ) | (0.7 | ) | (0.6 | ) | |||||
| Total income tax expense | $ | (129.1 | ) | $ | (40.6 | ) | $ | (14.4 | ) | ||
| (a) | The statutory or “expected” tax rates are the U.K. rates of 20.0% for 2016 and 2015 and 21.0% for 2014. |
| (b) | Amounts reflect adjustments to the “expected” tax benefit (expense) for statutory rates in jurisdictions in which we operate outside of the U.K. |
| (c) | During 2015, the U.K. enacted legislation that will change the corporate income tax rate from the current rate of 20.0% to 19.0% in April 2017 and 18.0% in April 2020. Substantially all of the impact of these rate changes on the LiLAC Group’s deferred tax balances was recorded in the fourth quarter of 2015 when the change in law was enacted. During the third quarter of 2016, the U.K. enacted legislation that will further reduce the corporate income tax rate in April 2020 from 18.0% to 17.0%. Substantially all of the rate impact of this rate change on the LiLAC Group’s deferred tax balances was recorded during the third quarter of 2016. |
The components of the LiLAC Group’s deferred tax liabilities are as follows:
| LiLAC Group | |||||||
| December 31, | |||||||
| 2016 | 2015 | ||||||
| in millions | |||||||
| Deferred tax assets (a) | $ | 198.3 | $ | 80.4 | |||
| Deferred tax liabilities (a) | (637.9 | ) | (216.1 | ) | |||
| Net deferred tax liability | $ | (439.6 | ) | $ | (135.7 | ) | |
_______________
| (a) | The LiLAC Group’s deferred tax assets and liabilities are included in other assets, net, and other long-term liabilities, respectively, in our attributed balance sheet information. |
F-20
LIBERTY GLOBAL PLC
Notes to Attributed Financial Information — (Continued)
December 31, 2016, 2015 and 2014
(unaudited)
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:
| LiLAC Group | |||||||
| December 31, | |||||||
| 2016 | 2015 | ||||||
| in millions | |||||||
| Deferred tax assets: | |||||||
| Net operating loss and other carryforwards | $ | 1,421.4 | $ | 49.8 | |||
| Debt | 69.0 | 31.7 | |||||
| Property and equipment, net | 68.2 | 32.2 | |||||
| Pension obligation, net | 25.4 | — | |||||
| Intangible assets | 13.4 | 3.5 | |||||
| Derivative instruments | 13.1 | — | |||||
| Other future deductible amounts | 71.1 | 43.8 | |||||
| Deferred tax assets | 1,681.6 | 161.0 | |||||
| Valuation allowance | (1,350.9 | ) | (70.1 | ) | |||
| Deferred tax assets, net of valuation allowance | 330.7 | 90.9 | |||||
| Deferred tax liabilities: | |||||||
| Investments (including consolidated partnerships) | (341.2 | ) | (224.8 | ) | |||
| Intangible assets | (237.6 | ) | — | ||||
| Property and equipment, net | (174.5 | ) | — | ||||
| Other future taxable amounts | (17.0 | ) | (1.8 | ) | |||
| Deferred tax liabilities | (770.3 | ) | (226.6 | ) | |||
| Net deferred tax liability | $ | (439.6 | ) | $ | (135.7 | ) | |
The significant components of the LiLAC Group’s tax loss carryforwards and related tax assets at December 31, 2016 are as follows:
| Country | Tax loss carryforward | Related tax asset | Expiration date | |||||||
| in millions | ||||||||||
| U.K.: | ||||||||||
| Amount attributable to capital losses | $ | 5,394.9 | $ | 917.1 | Indefinite | |||||
| Amount attributable to net operating losses | 1,360.7 | 231.3 | Indefinite | |||||||
| Barbados | 817.9 | 52.4 | 2017-2023 | |||||||
| Jamaica | 449.7 | 149.9 | Indefinite | |||||||
| The Netherlands | 66.7 | 16.7 | 2021-2025 | |||||||
| Chile | 47.6 | 12.4 | Indefinite | |||||||
| Other | 140.4 | 41.6 | Various | |||||||
| Total | $ | 8,277.9 | $ | 1,421.4 | ||||||
F-21
LIBERTY GLOBAL PLC
Notes to Attributed Financial Information — (Continued)
December 31, 2016, 2015 and 2014
(unaudited)
Chilean Tax Law Changes
In September 2014, the Chilean President signed into law an extensive tax reform bill, including changes to the corporate tax rate, changes to the thin capitalization rules, taxation of certain Chilean investments abroad and changes to the stamp tax rate, among other relevant changes. The impacts of the tax law changes that are currently in effect are reflected in the attributed financial information. Accordingly, the corporate tax rate during 2015 of 22.5% increased to 24% during 2016. Beginning in 2017, there are two income tax regimes: the “attributed system” and the “partially integrated system.” Under the “partially integrated system,” which the LiLAC Group’s Chilean operations are required to use based on legislation that was enacted on February 1, 2016, the corporate tax rate will be 25.5% in 2017 and 27% in 2018 and future years, and the 35% withholding tax will be paid only upon actual distributions to shareholders. However, under this partially integrated system, only 65% of the corporate tax paid by a Chilean company can be used as a credit against the withholding tax imposed on non-Chilean resident shareholders, which implies a final tax burden of 44.45%. In the case of shareholders resident in countries that have tax treaties in force with Chile, there will be a full credit for the corporate tax paid, which implies a final tax burden of 35% for such shareholders. Currently, there are no tax treaties between Chile and the U.S.
| (3) | Allocated Expenses |
Prior to July 1, 2015, we did not allocate any of the costs of the Liberty Global Group’s corporate functions to the LiLAC Group. Following the July 1, 2015 distribution of the LiLAC Shares, we began to allocate a portion of these costs, excluding share-based compensation expense, to the LiLAC Group based primarily on the estimated percentage of time spent by corporate personnel providing services for each group. The allocated costs, which are cash settled and are periodically re-evaluated, are presented as inter-group fees and allocations in the attributed statements of operations information. The portion of the Liberty Global Group’s corporate costs that were allocated to the LiLAC Group was $4.3 million and $8.5 million during the six months ended December 31, 2015 and the year ended December 31, 2016, respectively. Effective January 1, 2017, the costs to be allocated to the LiLAC Group increased to $12.0 million annually.
The share-based compensation expense reflected in the accompanying attributed statements of operations information is based on the share incentive awards held by the employees of the respective entities comprising the Liberty Global Group and the LiLAC Group.
The income tax benefit and expense of the Liberty Global Group and the LiLAC Group includes inter-group tax allocations. For additional information concerning our inter-group tax allocations, see note 2 to this attributed financial information.
While we believe that our allocation methodologies are reasonable, we may elect to change these allocation methodologies or the percentages used to allocate operating and SG&A expenses in the future.
| (4) | Inter-group Transactions |
Inter-group Interests
On May 16, 2016, we competed the CWC Acquisition. Under the terms of the transaction, CWC shareholders received in the aggregate: 31,607,008 Class A Liberty Global Shares, 77,379,774 Class C Liberty Global Shares, 3,648,513 Class A LiLAC Shares and 8,939,316 Class C LiLAC Shares. Further, in accordance with the scheme of arrangement and immediately prior to the acquisition, CWC declared the Special Dividend to its shareholders in the amount of £0.03 ($0.04 at the transaction date) per CWC share. The Special Dividend was paid to CWC shareholders promptly following the closing and the payment, together with fees and expenses related to the acquisition, was funded with CWC liquidity, including incremental debt borrowings, and LiLAC Group corporate liquidity.
Following completion of the CWC Acquisition, we attributed CWC to the LiLAC Group, with the Liberty Global Group being granted an inter-group interest in the LiLAC Group representing the fair value (as determined by our board of directors) of the Liberty Global Shares issued as part of the purchase consideration. During the period from May 16, 2016 through June 30, 2016, we recorded the Liberty Global Group’s 67.5% share of the LiLAC Group’s loss during this period in Liberty Global Group’s attributed statement of operations information with a corresponding offsetting amount recorded in the LiLAC Group’s attributed statement of operations information. Liberty Global Group's inter-group interest in the LiLAC Group was $3.9 billion as of June 30, 2016. On July 1, 2016, we completed the LiLAC Distribution, thereby eliminating the Liberty Global Group's inter-group interest in the LiLAC Group. The LiLAC Distribution was accounted for prospectively effective July 1, 2016.
F-22
LIBERTY GLOBAL PLC
Notes to Attributed Financial Information — (Continued)
December 31, 2016, 2015 and 2014
(unaudited)
Capital Contributions
On June 3, 2015, in connection with the Choice Acquisition, an entity attributed to the Liberty Global Group made a $10.2 million cash capital contribution to an entity attributed to the LiLAC Group to partially fund the purchase price for Choice.
On June 30, 2015, an entity attributed to the Liberty Global Group made a $100.0 million cash capital contribution to LiLAC Communications in order to provide liquidity to fund, among other things, the LiLAC Group’s ongoing operating costs and acquisitions.
Lila Chile Note
On July 11, 2014, Lila Chile Holding and Liberty Global Holding B.V. (Liberty Global Holding), an entity attributed to the Liberty Global Group, entered into a loan agreement (the Lila Chile Note). During the fourth quarter of 2016, the outstanding principal and interest on the Lila Chile Note was cash settled. At December 31, 2015, Liberty Global Holding owed Lila Chile Holding $1.1 million in principal pursuant to the Lila Chile Note. The Lila Chile Note bore interest at 5.9% per annum. The December 31, 2015 principal and accrued interest on the Lila Chile Note are included in the LiLAC Group’s other assets, net, and the Liberty Global Group’s long-term debt and capital lease obligations in the attributed balance sheet information. The net decrease in the Lila Chile Note during 2016 includes (i) cash repayments of $8.3 million, (ii) cash loans of $6.8 million and (iii) the transfer of $0.4 million in non-cash accrued interest to the principal balance. The net decrease in the Lila Chile Note during 2015 includes (a) cash repayments of $10.0 million, (b) cash loans of $1.4 million and (c) the transfer of $0.3 million in non-cash accrued interest to the principal balance.
VTR Finance Senior Secured Notes
On January 24, 2014, VTR Finance issued the VTR Finance Senior Secured Notes. The use of proceeds from the VTR Finance Senior Secured Notes to repay debt of UPC Holding has been reflected as a non-cash transaction in this attributed financial information.
Related-party Advance
During 2013, VTR Chile Holdings SpA (VTR Chile Holdings), an entity attributed to the LiLAC Group, made a $600.0 million non-interest bearing advance to UPC Holding, which was repaid in full during 2014. This advance is reflected in inter-group receipts (payments), net, in the attributed statement of cash flows information. The proceeds received from the repayment of this advance were used to fund (i) the $435.1 million consideration paid by VTR Chile Holdings to acquire the VTR NCI Owner’s 20.0% ownership interests in VTR and VTR Wireless, (ii) a $128.5 million distribution to an entity attributed to the Liberty Global Group, which represented a return of capital, and (iii) the settlement of certain derivative instruments of VTR.
UPC Broadband France Loan
The UPC Broadband France Loan, as amended, represented amounts owed by VTR to UPC Broadband France SAS (UPC Broadband France), an entity attributed to the Liberty Global Group. The UPC Broadband France Loan bore interest at the Eurodollar Rate (as defined in the UPC Broadband France Loan agreement) plus 2.0%. In January 2014, a parent of UPC Broadband France made a capital contribution in the amount of $444.9 million to the parent of VTR, which was used to acquire the corresponding loan receivable from UPC Broadband France and pay related accrued interest. Accordingly, the UPC Broadband France Loan was effectively settled within the LiLAC Group. The cash outflow related to Liberty Global Group’s capital contribution has been reflected in inter-group receipts (payments), net, in financing activities in the attributed statement of cash flows information and the cash inflow to the Liberty Global Group related to the sale of the loan receivable has been reflected in inter-group receipts, net in investing activities in the attributed statement of cash flows information. The cash effects of these transactions for the LiLAC Group are reflected in inter-group receipts (payments), net, in financing activities in the attributed statement of cash flows information. During 2014, VTR incurred related-party interest expense on the UPC Broadband France Loan of $0.3 million.
UPC Chile Mobile Shareholder Loan
Prior to December 31, 2011, Liberty Global Europe Holding BV, an entity attributed to the Liberty Global Group, had loaned an aggregate of $99.4 million (the UPC Chile Mobile Shareholder Loan) to an entity attributed to the LiLAC Group. The interest rate on the UPC Chile Mobile Shareholder Loan was 9.39% in 2014. In January 2014, the UPC Chile Mobile Shareholder Loan was settled through a non-cash capital contribution by Liberty Global Europe to an entity attributed to the LiLAC Group. During 2014, VTR incurred related-party interest expense on the UPC Chile Mobile Shareholder Loan of $0.3 million.
F-23
LIBERTY GLOBAL PLC
Notes to Attributed Financial Information — (Continued)
December 31, 2016, 2015 and 2014
(unaudited)
| (5) | Commitments |
In the normal course of business, we have entered into agreements that commit our company to make cash payments in future periods with respect to network and connectivity commitments, programming contracts, non-cancellable operating leases, purchases of customer premises and other equipment and other items. The following table sets forth the U.S. dollar equivalents of such commitments as of December 31, 2016:
| Payments due during: | |||||||||||||||||||||||||||
| 2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | Total | |||||||||||||||||||||
| in millions | |||||||||||||||||||||||||||
| Liberty Global Group: | |||||||||||||||||||||||||||
| Network and connectivity commitments | $ | 676.1 | $ | 339.9 | $ | 278.0 | $ | 249.8 | $ | 234.4 | $ | 854.6 | $ | 2,632.8 | |||||||||||||
| Programming commitments | 909.6 | 799.8 | 431.4 | 176.1 | 58.7 | 88.4 | 2,464.0 | ||||||||||||||||||||
| Purchase commitments | 1,135.8 | 193.6 | 133.5 | 99.8 | 18.3 | 62.0 | 1,643.0 | ||||||||||||||||||||
| Operating leases | 104.4 | 88.0 | 76.5 | 60.7 | 50.5 | 227.0 | 607.1 | ||||||||||||||||||||
| Other commitments | 31.0 | 13.5 | 11.6 | 8.5 | 7.4 | 14.4 | 86.4 | ||||||||||||||||||||
| Total (a) | $ | 2,856.9 | $ | 1,434.8 | $ | 931.0 | $ | 594.9 | $ | 369.3 | $ | 1,246.4 | $ | 7,433.3 | |||||||||||||
| LiLAC Group: | |||||||||||||||||||||||||||
| Network and connectivity commitments | $ | 62.7 | $ | 47.0 | $ | 30.9 | $ | 7.6 | $ | 6.2 | $ | 13.6 | $ | 168.0 | |||||||||||||
| Programming commitments | 131.6 | 100.7 | 25.8 | 7.4 | 3.4 | 4.7 | 273.6 | ||||||||||||||||||||
| Purchase commitments | 101.1 | 19.0 | 12.4 | 2.8 | 2.7 | 8.3 | 146.3 | ||||||||||||||||||||
| Operating leases | 29.1 | 25.2 | 17.5 | 13.1 | 10.2 | 22.0 | 117.1 | ||||||||||||||||||||
| Other commitments | 15.7 | 1.5 | 0.6 | — | — | — | 17.8 | ||||||||||||||||||||
| Total (a) | $ | 340.2 | $ | 193.4 | $ | 87.2 | $ | 30.9 | $ | 22.5 | $ | 48.6 | $ | 722.8 | |||||||||||||
_______________
| (a) | The commitments included in this table do not reflect any liabilities that are included in our December 31, 2016 attributed balance sheet information. |
F-24