Record Q3 Organic RGU Additions of 309,500
Strong Growth in Revenue and OCF
DENVER, Colo., Nov. 10 - Liberty Global, Inc. ("Liberty Global") (Nasdaq: LBTYA, LBTYB, LBTYK), today announces financial and operating results for the three months ended September 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 forma(1) revenue growth of 20% to $1.30 billion(2)
* Pro forma(1) Operating Cash Flow (OCF) growth of 16% to $463 million(3)
* Net loss of $153 million compared to net income of $79 million
* Organic increase of 309,500 RGUs(4), a 74% pro forma(1) increase in net
additions
Mike Fries, President and Chief Executive Officer of Liberty Global, said, "The Company has continued the strong operating momentum exhibited in the second quarter during what historically has been a slow, summer period for many of our operations. During the third quarter, we posted record organic RGU additions and strong sequential growth in revenue and OCF over our second quarter 2005 results. Our core broadband businesses, including UPC in Europe, J:COM in Japan, and VTR in Chile, have benefited from aggressive marketing and new product launches during the summer season."
"We added 309,500 RGUs during the third quarter on an organic basis, driven primarily by the success of our digital phone (VoIP) and broadband Internet products. With VoIP services launched in France, the Netherlands and Hungary, we are currently adding over 6,000 RGUs per week in Europe, an acceleration from our second quarter. Additionally, we added 155,500 organic broadband Internet RGUs in the third quarter, our fourth consecutive quarter of over 100,000 subscribers and our best quarter ever in terms of additions."
"Our financial results for the third quarter were also very strong. On a pro forma basis as if J:COM's results were consolidated last year, our revenue for the three months increased 20% to $1.30 billion and OCF increased 16% to $463 million. Adjusting for foreign currency movements, acquisitions and the May 1, 2005 consolidation of NTL Ireland, our pro forma, year-over-year revenue and OCF growth rates for the third quarter were 11% and 10%, respectively. If we exclude the Netherlands from our organic calculation, which experienced an increase in operating costs associated with our recently launched "digital for all" (D4A) initiative, our organic OCF growth rate for the third quarter would have been 17% over the prior year quarter."
"With respect to our core operating objectives, we have made substantial progress. In terms of our digital video products, J:COM continues to deliver strong growth with nearly 90,000 subscribers added this quarter, achieving a digital penetration of 31% of total video subscribers. Also of note, our D4A launch in the Netherlands began last month and has received a positive reception from both regulators and customers. We also launched branded mobile services in the Netherlands in August, which has started off strong with over 23,000 customers added by September 30, 2005. We also recently announced the launch, scheduled for March 2006, of J:COM branded mobile services. This new "Quad-Play" opportunity is expected to reduce customer churn and generate incremental profitability in our core markets. In addition, we are well positioned with respect to wireless opportunities, and have been opportunistically acquiring low-cost spectrum licenses in selected markets."
"We also continue to pursue a disciplined and opportunistic acquisition strategy. In Europe, we have closed three acquisitions since completion of the second quarter including the previously announced acquisitions of Canal Plus, the Dutch premium content business, and Astral, the largest cable operator in Romania. The content business of Canal Plus is highly complementary to our digital rollout in the Netherlands, and the combination of Astral with our existing Romanian cable business creates the leading broadband cable operator in that market."
"In October, we completed the acquisition of Cablecom, the largest cable operator in Switzerland. Cablecom expands our European footprint into the highly attractive Swiss market, which is characterized by high analog TV penetrations and an affluent customer base. We recently received approval from the Irish Competition Authority, subject to certain conditions, with respect to our announced acquisition of NTL Ireland and are optimistic that we will close this acquisition in 2005. In addition to our acquisition activity in Europe, we also made significant progress in Japan, completing the acquisition of Odakyu Cable Vision and increasing our stake to a majority interest in Cable Television Kobe, that together will add over 500,000 homes passed to J:COM's consolidated footprint."
"From a balance sheet and liquidity perspective, we successfully accessed the capital markets on several occasions. In particular, we financed our acquisition of Cablecom with a combination of cash and approximately $1.0 billion of new debt, which we raised on attractive terms. At VTR, through strong cash flow generation and a new credit facility, we have been able to upstream approximately $196 million in cash within the last year. Additionally, we continue to be focused on rationalizing non-core assets, as evidenced by our third quarter monetization of our News Corporation stake and our recent sale of our SBS Broadcasting interest, which combined, generated gross proceeds exceeding $400 million."
Third Quarter 2005 Financial and Operating Results
Our consolidated operating subsidiaries in Europe include UPC -- our broadband cable division with operations in 14 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 September 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.
Operating Statistics
At September 30, 2005, we had 15,203,300 total RGUs(5) which represented an organic(6) increase of 309,500 RGUs from June 30, 2005. The organic RGU additions represent a 74% improvement from last year's third 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 and we do not currently count mobile telephony customers as subscribers.
In terms of net RGU additions by product, the breakdown of our 309,500 organic additions for third quarter 2005 includes 155,500 broadband Internet subscribers, 117,500 telephony subscribers and 36,500 video subscribers. Our broadband Internet subscriber addition increase was driven by continued strong demand for the multiple tiers of high-speed access services that we offer across most of our markets, with Central and Eastern Europe demonstrating accelerating growth over the second quarter. Our telephony additions were driven primarily by the continued success of our digital phone offerings in the Netherlands, France and Hungary, as well as strong organic telephone adds in Japan and Chile.
The increase in our video subscribers consisted of an increase of 107,900 digital video and DTH subscribers, offset by a reduction of 71,400 analog video and MMDS 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 third quarter organic increase of 87,900 digital RGUs. With respect to our analog video business, the third quarter is seasonally soft in Europe as we typically experience an increase in disconnects during the summer months.
Revenue
Total consolidated revenue for the three months ended September 30, 2005 increased 83% on a reported basis to $1.30 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 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 third quarter, revenue increased 20% year over year.
Excluding the effects of FX movements, revenue on a pro forma basis increased 19% and 25% for the three months and nine months ended September 30, 2005, respectively, as compared to the same periods last year. This increase was driven primarily by acquisitions and internal RGU growth. Additionally, on a pro forma organic basis(7), revenue grew 11% for the quarter, as compared to the same period last year.
In terms of average monthly revenue (ARPU(8)) per RGU and ARPU per customer relationship, UPC Broadband and J:COM experienced sequential growth over the second quarter in both ratios. For the three months ended September 30, 2005, ARPU per RGU and ARPU per customer relationship for UPC Broadband was EUR 16.95 and EUR 20.35, reflecting increases of 0.3% and 1.5% sequentially over the second quarter, respectively. Similarly, J:COM generated ARPU per RGU and ARPU per customer relationship of YEN 4,900 and YEN 8,413 for the three months ended September 30, 2005, which were increases of 1.6% and 3.0% over the second quarter, respectively.
Operating Cash Flow
Operating Cash Flow for the three months ended September 30, 2005 increased 84% on a reported basis to $463 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 third quarter, OCF increased 16% year over year.
Excluding the effects of FX movements, OCF on a pro forma basis increased 15% and 20% for the three months and nine months ended September 30, 2005, respectively, as compared to the comparable periods last year. This increase was driven primarily by acquisitions and increases in RGUs between the periods. On a pro forma organic basis(7), OCF increased 10% for the quarter, as compared to the same period last year. Excluding the Netherlands' results from both periods, our pro forma organic OCF growth rate for the three month period improves to 17%. We are incurring higher operating, marketing and customer care costs in that market related to new product launches, in particular our D4A initiative.
Our reported OCF margin(9) for the three months ended September 30, 2005 was 35.8%. The margin declined as compared to the pro forma OCF margin of 37.0% for last year's third quarter, but improved sequentially as compared to our reported OCF margin of 33.6% for the second quarter. The decline in margin was due primarily to new service launches around digital video and VoIP, the impact of acquisitions and increases in marketing, advertising and commissions expenses and direct costs and labor. The increases in marketing, advertising and commissions expenses primarily are attributable to our efforts to increase RGUs.
Net Earnings (Loss)
Our net earnings (loss) for the three months ended September 30, 2005 was ($153) million or ($0.32) per share. The third quarter 2005 loss compares to net earnings of $79 million or $0.23 per share for the same period last year. The loss in earnings was in large part due to increased interest expense, increased realized and unrealized losses on derivative instruments and higher minority interests in earnings of subsidiaries, partially offset by higher operating income.
Free Cash Flow and Capital Expenditures
Our Free Cash Flow(10) (FCF) for the three months ended September 30, 2005 was $51 million, a decrease of $33 million compared to the same period last year. The decrease was primarily attributable to an increase in capital expenditures (including capital lease additions) of 145% compared to last year's third quarter (which did not include J:COM), offset by a 72% improvement in net cash provided by operating activities to $368 million for the three months ended September 30, 2005.
Our Free Cash Flow for the nine months ended September 30, 2005 was $78 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 nine months ended September 30, 2005 would have been approximately $153 million.
Capital expenditures and capital lease additions for the three months ended September 30, 2005 were $317 million, an increase of 145% compared to last year's third 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.
Balance Sheet, Leverage, and Liquidity
At September 30, 2005, total debt (including capital lease obligations) was $7.38 billion, cash and cash equivalents were $2.415 billion, and short- term liquid investments were $31.5 million. Our consolidated leverage ratio, defined as gross debt to Q3 annualized Operating Cash Flow, was 4.0x compared to 3.8x at June 30, 2005. Our leverage ratio during the period increased in part because of financings at UPC Holdings B.V. and VTR, offset by sequential OCF improvement.
Subsequent to September 30, 2005, we raised approximately $1.0 billion of debt financing in connection with the acquisition of Cablecom, excluding Cablecom debt with a balance of $1.3 billion at June 30, 2005 (the most recent date that Cablecom's debt balances were publicly reported) and purchased 100% of Cablecom's and Astral's equity for approximately $2.6 billion. Adjusting for the purchases of Cablecom and Astral including the related financings, as well as our additional investment in Telenet and the sale of our SBS stake, our consolidated debt would be approximately $9.9 billion and our cash and cash equivalents would be approximately $1.0 billion.
In addition to our cash balances and short-term liquid investments at September 30, 2005, we had approximately EUR 295 million of availability under our 1.0 billion Euros in European revolvers, and $176 million of availability under our 20 billion Yen Japanese revolver. Subject to their terms, the undrawn amounts under those revolvers may be borrowed to finance acquisitions. In terms of monetization activity, we entered into a prepaid forward sale transaction with respect to 5.5 million shares of News Corporation Class A Common Stock, deriving $75 million in proceeds during the third quarter. We also disposed of our interest in SBS Broadcasting in November, receiving 276 million Euros ($326 million) of gross proceeds.
Based on our September 30, 2005 results, the ratio of Senior Debt to Annualised EBITDA (last two quarters annualized) for UPC Broadband Holding B.V., as defined in and calculated in accordance with the UPC Broadband Holding credit facility was 4.01x.
2005 Guidance Update
We provided full year 2005 consolidated guidance for Liberty Global in our second quarter results press release based on certain exchange rate (FX) assumptions. We reconfirmed that guidance at our Investor Day on September 28, 2005. Based upon our third quarter results and early performance in the fourth quarter, and adjusting for our FX assumptions, we believe that we are on track to achieve our guidance on revenue, OCF, capex, and RGUs. Our guidance targets do not include the results of Cablecom, which we will begin consolidating during the fourth quarter.
Excluding the impact of Cablecom, our guidance targets for 2005 consist of 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, our consolidated Operating Cash Flow target is $1.8 - $1.9 billion. In terms of capital expenditures and capital lease additions for 2005, our guidance target is to end the year at approximately 25% of revenue. Additionally, we expect to end the year with 16.7 - 16.8 million total RGUs, based on organic RGU additions of 1.1 - 1.2 million in 2005 (excluding the impact of acquisitions at closing) and including approximately 1.7 million RGUs either already acquired or expected to be acquired during 2005 (excluding Cablecom but including the completion of our previously announced Romanian and Irish acquisitions). To the extent that our organic RGU growth exceeds our target range, we would expect to report lower OCF due to the associated increase in marketing and subscriber acquisition costs.
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 September 30, 2005 (other than those of NTL Ireland which we consolidate but do not control), Liberty Global's networks passed approximately 23.6 million homes and served approximately 15.2 million revenue generating units, including approximately 10.7 million video subscribers, 2.6 million broadband Internet subscribers and 1.9 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.
(1) Pro forma data assumes J:COM was consolidated for the comparable
period in the preceding year.
(2) Financial results for the second and third quarter include the
results from NTL Ireland, which we began consolidating May 1, 2005.
As we do not control NTL Ireland, our operating statistics exclude
NTL Ireland.
(3) Please see below for an explanation of Operating Cash Flow and the
required reconciliation.
(4) Please see footnote 4 at the end of the release for more detail on
the definition of Revenue Generating Units (RGUs).
(5) Excluding NTL Ireland.
(6) Organic figures exclude RGUs at the date of acquisition but include
the impact of changes in RGUs from the date of acquisition.
(7) Pro forma organic growth rate is calculated by excluding the effects
of FX movements, acquisitions and the consolidation of NTL Ireland.
(8) Average monthly revenue (ARPU) is calculated as follows: average
total monthly revenue from all sources for the period as indicated,
divided by the average of the opening and closing RGUs or customer
relationships, as applicable, for the period.
(9) OCF margin is calculated by dividing OCF for the respective period by
total revenue.
(10) Free Cash Flow is defined as net cash provided by operating
activities less capital expenditures and capital lease additions.
Please see below for more information and the required GAAP
reconciliation.
For more information, please visit http://www.lgi.com or contact:
Christopher Noyes Bert Holtkamp
Investor Relations - Denver Corporate Communications - Europe
(303) 220-6693 +31 20 778 9447
Liberty Global, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
September 30, December 31,
2005 2004
amounts in thousands
ASSETS
Current assets:
Cash and cash equivalents $2,414,504 $2,529,115
Trade receivables, net 254,063 203,890
Other receivables, net 101,043 165,631
Available-for-sale investment 326,160 --
Other current assets 505,800 261,509
Total current assets 3,601,570 3,160,145
Investments in affiliates, accounted for
using the equity method, and related
receivables 844,842 1,865,642
Other investments 581,616 838,608
Property and equipment, net 6,863,142 4,335,537
Goodwill 6,729,051 2,667,279
Franchise rights and other intangible
assets not subject to amortization 225,724 230,674
Intangible assets subject to amortization,
net 654,903 382,599
Deferred tax assets 131,065 77,313
Other assets, net 394,495 144,566
Total assets $20,026,408 $13,702,363
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $478,596 $363,549
Accrued liabilities and other 754,517 645,627
Deferred and advance payments from
subscribers and others 324,346 353,069
Current portion of debt and capital
lease obligations 322,855 36,827
Total current liabilities 1,880,314 1,399,072
Long-term debt and capital lease obligations 7,055,638 4,955,919
Deferred tax liabilities 580,424 458,138
Other long-term liabilities 875,811 432,018
Total liabilities 10,392,187 7,245,147
Commitments and contingencies
Minority interests in subsidiaries 1,757,575 1,216,710
Stockholders' Equity:
Series A common stock, $.01 par value.
Authorized 500,000,000 shares; issued
232,024,666 and 168,514,962 shares at
September 30, 2005 and December 31,
2004, respectively 2,320 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;
239,296,905 and 175,779,262 shares
issued and outstanding at September 30,
2005 and December 31, 2004,
respectively 2,393 1,758
Additional paid-in capital 9,970,009 6,999,877
Accumulated deficit (1,898,829) (1,649,007)
Accumulated other comprehensive earnings
(loss), net of taxes (95,124) 14,010
Deferred compensation (13,560) --
Shares held by subsidiaries (90,594) --
Treasury stock, at cost (42) (127,890)
Total stockholders' equity 7,876,646 5,240,506
Total liabilities and stockholders'
equity $20,026,408 $13,702,363
Liberty Global, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
Three months ended Nine months ended
September 30, September 30,
2005 2004 2005 2004
amounts in thousands, except per share amounts
Revenue $1,295,795 $708,807 $3,807,317 $1,865,416
Operating costs and
expenses:
Operating (other than
depreciation) 553,265 286,814 1,590,848 743,990
Selling, general and
administrative (SG&A) 279,206 170,679 875,818 467,901
Stock-based
compensation expense
- primarily SG&A 60,784 13,377 122,310 66,120
Depreciation and
amortization 365,187 253,615 1,038,602 696,624
Impairment,
restructuring and
other operating
charges 930 27,807 3,705 53,214
1,259,372 752,292 3,631,283 2,027,849
Operating income
(loss) 36,423 (43,485) 176,034 (162,433)
Other income (expense):
Interest expense (134,405) (67,653) (312,161) (221,639)
Interest and dividend
income 18,851 18,849 61,704 44,043
Share of earnings
(losses) of affiliates,
net 2,055 15,673 (14,752) 54,518
Realized and unrealized
gains (losses) on
derivative instruments,
net (29,178) 11,255 125,991 86,640
Foreign currency
transaction gains
(losses), net 7,349 25,890 (194,298) (1,240)
Gain on exchanges of
investment securities -- 168,301 -- 168,301
Other-than-temporary
declines in fair value
of investments -- (12,429) -- (15,115)
Gain (loss) on
extinguishment of debt -- -- (12,631) 35,787
Gains (losses) on
disposition of assets,
net 277 (12,092) 25,855 12,632
Other income (expense),
net 6 (1,861) 1,279 (7,535)
(135,045) 145,933 (319,013) 156,392
Earnings (loss)
before income taxes
and minority
interests (98,622) 102,448 (142,979) (6,041)
Income tax expense (28,449) (56,634) (30,241) (91,027)
Minority interests in
losses (earnings) of
subsidiaries, net (25,737) 32,735 (76,602) 120,692
Net earnings (loss) $(152,808) $78,549 $(249,822) $23,624
Historical and pro forma
earnings (loss) per
common share - basic
and diluted $(0.32) $0.23 $(0.63) $0.07
Liberty Global, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
Nine months ended
September 30,
2005 2004
amounts in thousands
Cash flows from operating activities:
Net earnings (loss) $(249,822) $23,624
Adjustments to reconcile net earnings (loss)
to net cash provided by operating activities:
Stock-based compensation expense 122,310 66,120
Depreciation and amortization 1,038,602 696,624
Impairment, restructuring and other operating
charges, net 3,705 53,214
Amortization of deferred financing costs and
non-cash interest 78,887 25,475
Share of losses (earnings) of affiliates, net 14,752 (54,518)
Realized and unrealized gains on derivative
instruments, net (125,991) (86,640)
Foreign currency transaction losses, net 194,298 1,240
Gain on exchange of investment securities -- (168,301)
Other-than-temporary declines in fair value
of investments -- 15,115
Loss (gain) on extinguishment of debt 12,631 (35,787)
Gains on disposition of assets, net (25,855) (12,632)
Deferred income tax expense (benefit) (12,008) 59,007
Minority interests in earnings (losses) of
subsidiaries 76,602 (120,692)
Non-cash recognition of deferred revenue (22,982) --
Non-cash charges from Liberty Media Corporation -- 15,490
Changes in operating assets and liabilities,
net of the effects of acquisitions:
Receivables and other 131,661 (55,832)
Payables and accruals (220,095) 95,635
Net cash provided by operating
activities 1,016,695 517,142
Cash flows from investing activities:
Capital expended for property and equipment (832,959) (325,262)
Proceeds received upon disposition of assets 151,733 163,950
Cash paid in connection with acquisitions,
net of cash acquired (755,540) (428,156)
Cash paid in connection with LGI Combination (703,868) --
Payment of deposit for pending acquisition (131,142) --
Return of cash previously paid into escrow
in connection with 2004 acquisition 56,883 --
Net cash received (paid) to purchase or settle
derivative instruments 77,545 (69,672)
Purchases of short-term liquid investments (51,809) (244,859)
Proceeds from sale of short-term liquid
investments 69,312 135,371
Change in restricted cash 28,724 1,685
Investments in and loans to affiliates and
others (20,231) (241,183)
Repayment of amounts loaned to affiliate -- 129,237
Other investing activities, net 2,454 3,638
Net cash used by investing activities (2,108,898) (875,251)
Cash flows from financing activities:
Borrowings of debt 4,250,798 1,214,534
Repayments of debt and capital lease
obligations (3,924,329) (981,601)
Net proceeds from rights offering -- 735,661
Proceeds from issuance of stock by
subsidiaries 857,969 486,457
Payment of deferred financing costs (62,180) (50,410)
Contributions from Liberty Media Corporation -- 704,250
Other financing activities, net 5,669 (13,287)
Net cash provided by financing activities 1,127,927 2,095,604
Effect of exchange rates on cash (150,335) (11,518)
Net increase (decrease) in cash and
cash equivalents (114,611) 1,725,977
Cash and cash equivalents:
Beginning of period 2,529,115 12,753
End of period $2,414,504 $1,738,730
Supplemental Cash Flow Disclosures
Cash paid for interest $231,471 $231,139
Net cash paid for taxes $29,708 $2,504
Revenue
The tables presented below provide revenue by reportable segment for the three and nine months ended September 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. Our corporate and other category 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.
Increase
Three months ended Increase (decrease)
September 30, (decrease) excluding FX
2005 2004 $ % $ %
amounts in thousands, except % amounts
Europe (UPC
Broadband)
The Netherlands $192,916 $181,845 $11,071 6.1 $12,002 6.6
France 127,355 120,974 6,381 5.3 6,946 5.7
Austria 78,566 73,993 4,573 6.2 4,958 6.7
Other Western
Europe 124,419 77,605 46,814 60.3 45,732 58.9
Total Western
Europe 523,256 454,417 68,839 15.1 69,638 15.3
Hungary 70,337 53,137 17,200 32.4 16,526 31.1
Other Central and
Eastern Europe 83,963 63,550 20,413 32.1 14,601 23.0
Total Central
and Eastern
Europe 154,300 116,687 37,613 32.2 31,127 26.7
Total Europe
(UPC
Broadband) 677,556 571,104 106,452 18.6 100,765 17.6
Japan (J:COM) 418,757 367,062 51,695 14.1 56,799 15.5
Chile (VTR) 119,158 75,096 44,062 58.7 29,963 39.9
Corporate and
other 99,368 75,272 24,096 32.0 24,397 32.4
Intersegment
eliminations (19,044) (12,665) (6,379) (50.4) (6,459) (51.0)
Total LGI before
elimination of
equity
affiliates 1,295,795 1,075,869 219,926 20.4 205,465 19.1
Elimination of
equity
affiliate
(J:COM) -- (367,062) 367,062 -- -- --
Total
consolidated
LGI $1,295,795 $708,807 $586,988 82.8 $205,465 29.0
Increase
Nine months ended Increase (decrease)
September 30, (decrease) excluding FX
2005 2004 $ % $ %
amounts in thousands, except % amounts
Europe (UPC Broadband)
The Netherlands $592,913 $530,084 $62,829 11.9 $45,587 8.6
France 387,543 183,176 204,367 111.6 201,546 110.0
Austria 245,327 226,211 19,116 8.5 11,763 5.2
Other Western
Europe 328,630 199,777 128,853 64.5 119,227 59.7
Total Western
Europe 1,554,413 1,139,248 415,165 36.4 378,123 33.2
Hungary 213,667 155,521 58,146 37.4 46,190 29.7
Other Central
and Eastern
Europe 252,555 180,680 71,875 39.8 43,717 24.2
Total
Central and
Eastern
Europe 466,222 336,201 130,021 38.7 89,907 26.7
Total
Europe
(UPC
Broadband) 2,020,635 1,475,449 545,186 37.0 468,030 31.7
Japan (J:COM) 1,237,792 1,090,476 147,316 13.5 138,458 12.7
Chile (VTR) 313,260 216,537 96,723 44.7 73,839 34.1
Corporate and
other 290,691 208,393 82,298 39.5 77,000 36.9
Intersegment
eliminations (55,061) (34,963) (20,098) (57.5) (18,565)(53.1)
Total LGI before
elimination of
equity
affiliates 3,807,317 2,955,892 851,425 28.8 738,762 25.0
Elimination of
equity
affiliate
(J:COM) -- (1,090,476) 1,090,476 -- -- --
Total
consolidated
LGI $3,807,317 $1,865,416 $1,941,901 104.1 $738,762 39.6
Operating Cash Flow
The tables presented below provide Operating Cash Flow by reportable segment for the three and nine months ended September 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. Our corporate and other category 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.
Increase
Three months ended Increase (decrease)
September 30, (decrease) excluding FX
2005 2004 $ % $ %
amounts in thousands, except % amounts
Europe (UPC
Broadband)
The
Netherlands $88,314 $100,307 $(11,993) (12.0) $(11,494) (11.5)
France 31,543 19,534 12,009 61.5 12,165 62.3
Austria 35,179 31,289 3,890 12.4 4,106 13.1
Other
Western
Europe 41,855 28,585 13,270 46.4 13,004 45.5
Total
Western
Europe 196,891 179,715 17,176 9.6 17,781 9.9
Hungary 26,956 19,996 6,960 34.8 6,710 33.6
Other
Central
and
Eastern
Europe 31,755 26,071 5,684 21.8 3,570 13.7
Total
Central
and
Eastern
Europe 58,711 46,067 12,644 27.4 10,280 22.3
Total
Europe
(UPC
Broadband) 255,602 225,782 29,820 13.2 28,061 12.4
Japan (J:COM) 165,592 146,439 19,153 13.1 21,182 14.5
Chile (VTR) 38,269 25,925 12,344 47.6 7,779 30.0
Corporate
and other 3,861 (393) 4,254 1,082.4 4,288 1,091.1
Total LGI
before
elimination
of equity
affiliates 463,324 397,753 65,571 16.5 61,310 15.4
Elimination
of equity
affiliate
(J:COM) -- (146,439) 146,439 -- -- --
Total $463,324 $ 251,314 $212,010 84.4 $61,310 24.4
Increase
Nine months ended Increase (decrease)
September 30, (decrease) excluding FX
2005 2004 $ % $ %
amounts in thousands, except % amounts
Europe (UPC
Broadband)
The
Netherlands $278,988 $277,488 $1,500 0.5 $(6,620) (2.4)
France 77,950 23,618 54,332 230.0 54,150 229.3
Austria 106,283 93,340 12,943 13.9 9,844 10.5
Other
Western
Europe 116,116 73,482 42,634 58.0 38,997 53.1
Total
Western
Europe 579,337 467,928 111,409 23.8 96,371 20.6
Hungary 82,738 60,129 22,609 37.6 17,945 29.8
Other
Central
and
Eastern
Europe 101,817 72,077 29,740 41.3 18,753 26.0
Total
Central
and
Eastern
Europe 184,555 132,206 52,349 39.6 36,698 27.8
Total
Europe
(UPC
Broadband) 763,892 600,134 163,758 27.3 133,069 22.2
Japan
(J:COM) 481,179 433,112 48,067 11.1 44,527 10.3
Chile (VTR) 104,227 74,942 29,285 39.1 21,657 28.9
Corporate
and other (8,647) (21,551) 12,904 59.9 12,876 59.7
Total LGI
before
elimination
of equity
affiliates 1,340,651 1,086,637 254,014 23.4 212,129 19.5
Elimination
of equity
affiliate
(J:COM) -- (433,112) 433,112 -- -- --
Total $1,340,651 $653,525 $687,126 105.1 $212,129 32.5
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 and impairment, restructuring and other operating
charges or credits). 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 Nine months ended
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
2005 2005 2004 2005 2004
amounts in thousands
Total segment
operating
cash flow $463,324 $428,452 $251,314 $1,340,651 $653,525
Stock-based
compensation
expense (60,784) (42,871) (13,377) (122,310) (66,120)
Depreciation
and
amortization (365,187) (345,824) (253,615) (1,038,602) (696,624)
Impairment,
restructuring
and other
operating
credits
(charges), net (930) 2,088 (27,807) (3,705) (53,214)
Operating
income
(loss) 36,423 41,845 (43,485) 176,034 (162,433)
Interest
expense (134,405) (86,728) (67,653) (312,161) (221,639)
Interest and
dividend
income 18,851 22,317 18,849 61,704 44,043
Share of
earnings
(losses) of
affiliates,
net 2,055 4,517 15,673 (14,752) 54,518
Realized and
unrealized
gains (losses)
on derivative
instruments,
net (29,178) 69,301 11,255 125,991 86,640
Foreign currency
transaction
gains (losses),
net 7,349 (136,885) 25,890 (194,298) (1,240)
Gain on exchange
of investment
securities -- -- 168,301 -- 168,301
Other-than-
temporary
declines in
fair value of
investments -- -- (12,429) -- (15,115)
Gain (loss) on
extinguishment
of debt -- (651) -- (12,631) 35,787
Gains (losses)
on disposition
of assets, net 277 (43,994) (12,092) 25,855 12,632
Other income
(expense), net 6 589 (1,861) 1,279 (7,535)
Earnings (loss)
before income
taxes and
minority
interests $(98,622) $(129,689) $102,448 $(142,979) $(6,041)
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:
Three months ended Nine months ended
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
2005 2005(1) 2004 2005 2004
amounts in thousands
Net cash
provided by
operating
activities $368,266 $345,412 $213,614 $1,016,695 $517,142
Capital
expenditures (282,535) (301,734) (129,327) (832,959) (325,262)
Capital lease
additions (34,790) (41,231) 0 (106,204) 0
Free cash
flow $50,941 $2,447 $84,287 $77,532 $191,880
(1) Net cash provided by operating activities for the three months ended
June 30, 2005 has been revised as a result of a reclassification
within our condensed consolidated statements of cash flows.
Capital Expenditures and Capital Lease Additions
The table below highlights our capital expenditures per NCTA cable
industry guidelines, as well as capital lease additions:
Nine months
Three months ended ended
Sept. 30, June 30, Percent Sept. 30,
2005 2005 Change 2005
amounts in thousands
Customer Premises
Equipment $89,337 $106,962 (16.5%) $298,573
Scaleable Infrastructure 47,566 57,598 (17.4%) 141,281
Line Extensions 28,700 21,597 32.9% 76,922
Upgrade/Rebuild 43,928 39,192 12.1% 105,664
Support Capital 52,495 58,591 (10.4%) 160,677
NTL Ireland 9,663 4,505 114.5% 14,168
chellomedia and other 10,846 13,289 (18.4%) 35,674
Total Capital
Expenditures (Capex) $282,535 $301,734 (6.4%) $832,959
Percent of Revenue 21.8% 23.6% (7.8%) 21.9%
Add: Capital Lease
Additions(1) 34,790 41,231 (15.6%) 106,204
Total Capex and
Capital Leases $317,325 $342,965 (7.5%) $939,163
Percent of Revenue 24.5% 26.9% (8.9%) 24.7%
(1) Relates primarily to customer premise equipment for J:COM.
Summary of Debt, Capital Lease Obligations and Cash and Short-Term Liquid
Investments
The following table details the U.S. dollar equivalent balances of our
consolidated debt, capital lease obligations and cash and short-term (ST)
liquid investments by segment at September 30, 2005:
Total Debt and
Capital Lease Capital Lease Cash and ST
Debt Obligations Obligations Investments
Segment amounts in thousands
LGI Corporate
and Other $968,593 $435 $969,028 $1,325,835
UPC Broadband 4,414,610 40,571 4,455,181 753,106
J:COM 1,305,413 317,104 1,622,517 334,254
VTR 331,261 506 331,767 32,805
LGI Total $7,019,877 $358,616 $7,378,493 $2,446,000
ARPU(1) Table
As of As of Percent
UPC Broadband Sept. 30, 2005 June 30, 2005 Change
ARPU per RGU EUR16.95 EUR16.90 0.3%
ARPU per Customer
Relationship EUR20.35 EUR20.05 1.5%
J:COM
ARPU per RGU YEN4,900 YEN4,822 1.6%
ARPU per Customer
Relationship YEN8,413 YEN8,169 3.0%
VTR(2)
ARPU per RGU CLP16,261 CLP17,871 (9.0%)
ARPU per Customer
Relationship CLP24,720 CLP27,699 (10.8%)
Liberty Global Consolidated
ARPU per RGU $26.65 $27.33 (2.5%)
ARPU per Customer
Relationship $34.89 $35.33 (1.2%)
(1) Average monthly revenue (ARPU) is calculated as follows: average total
monthly revenue from all sources for the period as indicated, divided
by the average of the opening and closing RGUs or customer
relationships, as applicable, for the period.
(2) VTR's ARPU per RGU and per customer relationship declined sequentially
as calculated primarily because of the impact of the Metropolis
acquisition.
RGUs per Customer Relationship
As of As of As of
Sept. 30, June 30, Percent Sept. 30, Percent
2005 2005 Change 2004 Change
Europe 1.21 1.19 1.7% 1.17 3.4%
J:Com 1.73 1.71 1.2% 1.64 5.5%
VTR 1.52 1.52 0.0% 1.56 (2.6%)
Liberty Global
Consolidated 1.32 1.30 1.5% 1.27 3.9%
Jupiter Programming Co., Ltd ("JPC") Supplemental Financial Information
Liberty Global owned 50% of JPC at September 30, 2005. JPC is the largest
multi-channel pay television programming and content provider in Japan
based upon the number of subscribers receiving the channels. JPC
currently owns or has investments in 16 channels. Summary financial
information is presented below, as well as a reconciliation of operating
cash flow to operating income calculated in accordance with GAAP for the
periods presented therein:
Nine Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2004 2005 2004
amount in millions
Revenue $566 $389 YEN61,041 YEN42,179
Operating Cash Flow $111 $57 YEN12,007 YEN6,220
Depreciation and
Amortization (12) (8) (1,330) (896)
Operating Income $99 $49 YEN10,677 YEN5,324
Outstanding Net
Debt (Cash) (1) $(52) $12 YEN(5,884) YEN1,274
Cumulative
Subscribers (2)
(in thousands) 50,190 45,163
(1) Includes shareholder debt of $9 million at September 30, 2005 and
2004, respectively.
(2) Includes subscribers at all consolidated and equity owned JPC
channels. Shop Channel subscribers are stated on a full-time
equivalent basis. Shop Channel prior year full-time equivalent
subscriber numbers have been restated for comparability with the
current year presentation.
Consolidated Operating Data
September 30, 2005
Two-way Customer
Homes Homes Relation- Total
Passed(1) Passed(2) ships(3) RGUs(4)
Europe
The Netherlands 2,636,900 2,514,300 2,252,000 2,979,100
France 4,603,900 3,353,900 1,613,000 1,876,000
Austria 954,400 951,100 575,800 909,200
Ireland 327,900 44,900 199,400 201,100
Norway 521,800 265,700 375,300 460,400
Sweden 421,600 285,900 297,100 383,300
Belgium 156,400 156,400 146,000 167,300
Total Western Europe 9,622,900 7,572,200 5,458,600 6,976,400
Poland 1,895,800 813,400 1,007,500 1,085,600
Hungary 1,024,500 862,400 962,300 1,080,900
Czech Republic 739,300 382,200 407,900 453,400
Romania 569,100 133,700 389,600 395,400
Slovak Republic 426,400 228,900 299,100 314,000
Slovenia 124,900 78,300 107,400 123,300
Total Central and
Eastern Europe 4,780,000 2,498,900 3,173,800 3,452,600
Total Europe 14,402,900 10,071,100 8,632,400 10,429,000
Japan:
J-Com 6,717,100 6,708,500 1,865,000 3,220,500
The Americas:
Chile(14) 2,021,700 1,238,800 899,200 1,366,200
Puerto Rico(14) 329,700 329,700 114,100 157,100
Brazil 14,900 14,900 14,900 16,300
Peru 66,800 30,300 12,300 14,200
Total Latin America 2,433,100 1,613,700 1,040,500 1,553,800
Grand Total 23,553,100 18,393,300 11,537,900 15,203,300
September 30, 2005
Video
Analog Digital
Cable Cable DTH MMDS
Subscri- Subscri- Subscri- Subscri-
bers(5) bers(6) bers(7) bers(8)
Europe
The Netherlands 2,195,500 52,500 -- --
France 947,700 548,000 -- --
Austria 456,400 41,600 -- --
Ireland 88,800 21,100 -- 88,800
Norway 335,600 29,800 -- --
Sweden 245,800 51,300 -- --
Belgium 129,400 3,500 -- --
Total Western Europe 4,399,200 747,800 -- 88,800
Poland 987,900 -- -- --
Hungary 722,800 -- 151,700 --
Czech Republic 291,200 -- 96,000 --
Romania 389,500 -- -- --
Slovak Republic 249,900 -- 15,200 32,100
Slovenia 107,400 -- -- --
Total Central and
Eastern Europe 2,748,700 -- 262,900 32,100
Total Europe 7,147,900 747,800 262,900 120,900
Japan:
J-Com 1,080,100 494,300 -- --
The Americas:
Chile(14) 739,500 4,400 -- --
Puerto Rico(14) 61,200 51,400 -- --
Brazil -- -- -- 14,900
Peru 10,900 -- -- --
Total Latin America 811,600 55,800 -- 14,900
Grand Total 9,039,600 1,297,900 262,900 135,800
September 30, 2005
Internet Telephone
Homes Homes
Service- Subscri- Service- Subscri-
able(9) bers(10) able(11) bers(12)
Europe
The Netherlands 2,514,300 457,700 2,390,000 273,400
France 3,353,900 278,400 1,941,900 101,900
Austria 951,100 260,900 917,700 150,300
Ireland 44,900 2,000 24,200 400
Norway 265,700 65,100 173,700 29,900
Sweden 285,900 86,200 -- --
Belgium 156,400 34,400 -- --
Total Western Europe 7,572,200 1,184,700 5,447,500 555,900
Poland 813,400 97,700 -- --
Hungary 862,400 114,800 858,900 91,600
Czech Republic 382,200 66,200 -- --
Romania 133,700 5,900 -- --
Slovak Republic 214,000 16,800 -- --
Slovenia 78,300 15,900 -- --
Total Central and
Eastern Europe 2,484,000 317,300 858,900 91,600
Total Europe 10,056,200 1,502,000 6,306,400 647,500
Japan:
J-Com 6,708,500 791,700 6,285,100 854,400
The Americas:
Chile(14) 1,238,800 279,300 1,238,800 343,000
Puerto Rico(14) 329,700 29,100 329,700 15,400
Brazil 14,900 1,400 -- --
Peru 30,300 3,300 -- --
Total Latin America 1,613,700 313,100 1,568,500 358,400
Grand Total 18,378,400 2,606,800 14,160,000 1,860,300
Subscriber Variance Table September 30, 2005 vs. June 30, 2005
Two-way Customer
Homes Homes Relation- Total
Passed(1) Passed(2) ships(3) RGUs(4)
Europe:
The Netherlands 5,700 5,500 (9,200) 34,600
France 11,200 12,000 (6,500) 18,000
Austria 2,800 2,800 1,000 3,400
Ireland 1,500 5,400 (500) (100)
Norway 100 7,500 3,000 7,500
Sweden -- 1,100 1,100 4,900
Belgium 200 200 (700) 1,000
Total Western Europe 21,500 34,500 (11,800) 69,300
Poland 5,700 132,900 7,800 22,600
Hungary 6,400 115,600 14,200 35,700
Czech Republic 4,500 42,400 3,700 12,200
Romania 12,200 86,800 (2,300) 2,400
Slovak Republic 900 14,900 700 3,600
Slovenia 700 (10,400) 800 2,500
Total Central and
Eastern Europe 30,400 382,200 24,900 79,000
Total Europe 51,900 416,700 13,100 148,300
Japan:
J-Com 100,800 100,800 38,800 103,100
The Americas:
Chile (80,400) (124,100) 18,500 26,700
Puerto Rico 500 500 (8,500) (2,600)
Brazil -- -- -- 200
Peru -- -- (1,400) (1,400)
Total Latin America (79,900) (123,600) 8,600 22,900
Grand Total 72,800 393,900 60,500 274,300
Organic growth by region
Latin America 58,100
Japan 103,100
Europe 148,300
Total 309,500
Dispositions and Other(13)
Puerto Rico adj(14) (5,500)
Chile MMDS (11,800)
Metropolis adj(14) (17,900)
Subtotal (35,200)
Total Net Adds 274,300
Subscriber Variance Table September 30, 2005 vs. June 30, 2005
Video
Analog Digital
Cable Cable DTH MMDS
Subscri- Subscri- Subscri- Subscri-
bers(5) bers(6) bers(7) bers(8)
Europe:
The Netherlands (7,300) (2,300) -- --
France (8,400) 1,800 -- --
Austria (4,800) 2,600 -- --
Ireland (3,200) 2,600 -- --
Norway 2,600 200 -- --
Sweden (6,400) 7,500 -- --
Belgium (1,300) 300 -- --
Total Western Europe (28,800) 12,700 -- --
Poland 400 -- -- --
Hungary 4,400 -- 1,600 --
Czech Republic (1,500) -- 6,300 --
Romania (2,100) -- -- --
Slovak Republic 900 -- 500 (100)
Slovenia 700 -- -- --
Total Central and
Eastern Europe 2,800 -- 8,400 (100)
Total Europe (26,000) 12,700 8,400 (100)
Japan:
J-Com (60,200) 87,900 -- --
The Americas:
Chile 5,000 4,400 -- (12,300)
Puerto Rico (4,700) (1,100) -- --
Brazil -- -- -- --
Peru (1,400) -- -- --
Total Latin America (1,100) 3,300 -- (12,300)
Grand Total (87,300) 103,900 8,400 (12,400)
Organic growth by region
Latin America 15,400 (1,100) -- (500)
Japan (60,200) 87,900 -- --
Europe (26,000) 12,700 8,400 (100)
Total (70,800) 99,500 8,400 (600)
Dispositions and Other(13)
Puerto Rico adj(14) (4,700) -- -- --
Chile MMDS -- -- -- (11,800)
Metropolis adj(14) (11,800) 4,400 -- --
Subtotal (16,500) 4,400 -- (11,800)
Total Net Adds (87,300) 103,900 8,400 (12,400)
Subscriber Variance Table September 30, 2005 vs. June 30, 2005
Internet Telephone
Homes Homes
Service- Subscri- Service- Subscri-
able(9) bers(10) able(11) bers(12)
Europe:
The Netherlands 5,500 18,900 3,500 25,300
France 12,000 6,800 363,400 17,800
Austria 2,800 6,700 2,800 (1,100)
Ireland 5,400 500 -- --
Norway 7,500 5,600 1,600 (900)
Sweden 1,100 3,800 -- --
Belgium 200 2,000 -- --
Total Western Europe 34,500 44,300 371,300 41,100
Poland 132,900 22,200 -- --
Hungary 115,600 17,600 117,500 12,100
Czech Republic 42,400 7,400 -- --
Romania 86,800 4,500 -- --
Slovak Republic 12,900 2,300 -- --
Slovenia (10,400) 1,800 -- --
Total Central and
Eastern Europe 380,200 55,800 117,500 12,100
Total Europe 414,700 100,100 488,800 53,200
Japan:
J-Com 100,800 28,100 55,500 47,300
The Americas:
Chile (124,100) 24,200 (127,100) 5,400
Puerto Rico 500 2,200 500 1,000
Brazil -- 200 -- --
Peru -- -- -- --
Total Latin America (123,600) 26,600 (126,600) 6,400
Grand Total 391,900 154,800 417,700 106,900
Organic growth by region
Latin America (123,600) 27,300 (126,600) 17,000
Japan 100,800 28,100 55,500 47,300
Europe 414,700 100,100 488,800 53,200
Total 391,900 155,500 417,700 117,500
Dispositions and Other(13)
Puerto Rico adj(14) -- (700) -- (100)
Chile MMDS -- -- -- --
Metropolis adj(14) -- -- -- (10,500)
Subtotal -- (700) -- (10,600)
Total Net Adds 391,900 154,800 417,700 106,900
Footnotes for pages the last two tables
(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.
(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, telephone services.
(3) "Customer Relationships" are the number of customers who receive at
least one level of service without regard to which service(s) they
subscribe. We exclude mobile customers from customer relationships.
(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.
(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 most
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.
(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 an analog subscriber.
(7) "DTH Subscriber" is a home or commercial unit that receives our video
programming broadcast directly to the home via a geosynchronous
satellite.
(8) "MMDS Subscriber" is a home or commercial unit that receives our
video programming via a multipoint microwave (wireless) distribution
system.
(9) "Internet Homes Serviceable" are homes that can be connected to our
broadband networks, where customers can request and receive Internet
access services.
(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.
(11) "Telephone Homes Serviceable" are homes that can be connected to our
networks, where customers can request and receive voice services.
(12) "Telephone Subscriber" is a home or commercial unit connected to our
networks, where a customer has requested and is receiving voice
services. Telephone subscribers as of September 30, 2005 exclude
23,300 mobile telephone subscribers. Mobile telephone services
generate a significantly lower ARPU than broadband or VoIP telephone
services.
(13) Subscriber information for recently acquired entities is preliminary
and subject to adjustment until we have completed our review of such
information and determined that it is presented in accordance with
our policies.
(14) The subscriber statistics of VTR and Puerto Rico were adjusted during
the third quarter of 2005 to conform subscriber counting
methodologies to our consolidated policies and to correct certain
errors.
