UPC Holding B.V. Provides Selected Financial Information for the Period Ended September 30, 2009
More News related to LBTYA
- J.P. Morgan Initiates Coverage on Liberty Global (LBTYA) with a Neutral
- Notable Mergers and Acquisitions of the Day for 11/13: LBTYA, BAIRY, GMCR, SSTI
- Liberty Global (LBTYA) Scoops Up Major German Cable Operator
- Liberty Global (LBTYA) to Acquire Unitymedia in $5.2B Transaction
- Liberty Global Schedules Investor Call To Discuss the Acquisition of Unitymedia
More News related to LBTYB
- Liberty Global Schedules Investor Call To Discuss the Acquisition of Unitymedia
- Liberty Global to Acquire Unitymedia
- UPC Holding B.V. Provides Selected Financial Information for the Period Ended September 30, 2009
- Liberty Global Reports Third Quarter 2009 Results
- Liberty Global Schedules Investor Call for Third Quarter 2009 Results
More News related to LBTYK
- Liberty Global Schedules Investor Call To Discuss the Acquisition of Unitymedia
- Liberty Global to Acquire Unitymedia
- UPC Holding B.V. Provides Selected Financial Information for the Period Ended September 30, 2009
- Liberty Global Reports Third Quarter 2009 Results
- Liberty Global Schedules Investor Call for Third Quarter 2009 Results
AMSTERDAM--(BUSINESS WIRE)-- UPC Holding B.V. ("UPC Holding") is today providing selected, preliminary unaudited financial and operating information for the three and nine months ended September 30, 2009. UPC Holding is an indirect wholly-owned subsidiary of Liberty Global, Inc. ("Liberty Global") (NASDAQ: LBTYA) (NASDAQ: LBTYB) and (NASDAQ: LBTYK). A copy of this press release will be posted to the Liberty Global website (www.lgi.com). In addition, UPC Holding's unaudited condensed consolidated financial statements with the accompanying notes are expected to be posted prior to the end of November 2009.
Highlights for the third quarter ("Q") ended September 30, 2009 as compared to the results for the same period last year (unless noted) include:1
- Organic RGU2 additions of 59,000 during the quarter, an increase of 84% over Q2 2009
- Reported revenue of EUR862 million and operating cash flow ("OCF")3 of EUR421 million
- Rebased4 growth of 1% on revenue and 4% on OCF
- OCF margin5 of 48.8%, representing a 140 basis point improvement
- Operating income of EUR149 million, a 7% increase
Financial Results
On a reported basis, we generated revenue of EUR862 million and EUR2.57 billion for the three and nine months ended September 30, 2009, respectively, reflecting a 1% decrease for both periods as compared to the respective 2008 periods. For both the three and nine month 2009 periods, our revenue was adversely impacted by the effects of foreign currency ("FX") movements, depressing our reported growth rates by approximately three percentage points. Adjusting for both the effects of FX and acquisitions, we delivered 1% and 2% rebased revenue growth for the three and nine months ended September 30, 2009, as compared to the respective prior year periods.
With respect to quarterly rebased revenue growth, our UPC Broadband Division ("UPC") achieved rebased growth in the third quarter that exceeded the comparable growth rate in the second quarter. Our results continue to be impacted by our Austrian and Hungarian operations. However, our Romanian operation reported positive revenue growth for the first time in two years. Similar to recent quarters, we are generating revenue growth from our advanced services,6 which is being partially offset by the effects associated with continued ARPU7 compression, analog churn, and declines in our business-to-business and interconnect revenues. We continue to upsell high-ARPU advanced services to our customer base, enabling us to generate year-over-year ARPU per customer increases of 4% for UPC and 3% for VTR in local currency terms.
For the three and nine months ended September 30, 2009, our OCF increased to EUR421 million and EUR1.22 billion, respectively, each reflecting 2% growth over the respective prior year periods. For the same comparative periods, we realized rebased OCF growth of 4% and 5% for the three and nine months ended September 30, 2009, respectively. In the third quarter, our rebased results were supported by continued double-digit growth from our Polish operation and the strongest rebased growth quarters of the year from our Chilean and Romanian operations. Based upon our year-to-date performance and outlook for Q4, we would expect that our rebased OCF growth in the fourth quarter would be lower than the previous three quarters, reflecting in part more difficult year-over-year Q4 comparisons in some markets.
Our consolidated OCF margins were 48.8% and 47.4% for the three and nine months ended September 30, 2009, respectively, reflecting 140 basis point improvements over the corresponding prior year periods. Our operating expenses and selling, general and administrative costs have contributed to our margin improvement, as they are lower as a percentage of revenue in both 2009 periods versus the three and nine months ended September 30, 2008. With respect to our third quarter results, UPC and VTR attained their highest OCF margins of 2009 at 50.1% and 41.5%, respectively, representing 150 and 140 basis point increases, respectively, over the comparable OCF margins in Q3 2008. Our improvement at UPC was driven largely by our Western European markets, particularly Switzerland and the Netherlands.
Subscriber Statistics
Our base of 15.8 million RGUs consists of 9.4 million video, 3.8 million broadband internet and 2.6 million telephony subscribers at September 30, 2009. We have increased our RGUs by 313,000 or 2% since September 30, 2008, driven primarily by organic growth. Over this same timeframe, we have added more than 330,000 multi-play customers, growing our bundled customer base by 10% as compared to the third quarter ended September 30, 2008. As a result, 37% of our 10.2 million customers now subscribe to two or more products.
In the third quarter, we added 59,000 organic RGUs, consisting of 35,000 Chilean and 24,000 European organic additions. Our total organic additions reflect an increase of 84% above our second quarter 2009 organic additions, entirely as a result of our European performance. Our European markets, which are typically adversely impacted by the summer holiday season, had a strong third quarter, improving from an organic loss in Q2 2009 of 11,000 RGUs to an organic gain of 24,000 RGUs in Q3 2009.
Our third quarter organic additions included broadband internet and telephony additions of 75,000 and 53,000 RGUs, respectively, and video losses of 69,000 RGUs. Organic broadband internet additions were 17% higher than Q2 2009, and in-line with the 75,000 organic additions gained in Q3 2008. In the third quarter, the Netherlands and Ireland added 15,000 and 13,000 broadband internet subscribers, respectively, representing improvements both sequentially and year-over-year. Furthermore, the Netherlands reported its best broadband internet quarter since 2007, reflecting early success with its "Fiber Power" products. We currently have next-generation broadband internet services in seven of nine UPC markets, four of which launched in September (Switzerland, Czech Republic, Slovakia, and Poland). Over 60% of UPC's two-way footprint is now capable of supporting speeds of 100+ Mbps and we estimate that we are marketing to approximately 80% of this footprint.
Our third quarter organic video loss compares favorably to Q1 2009 and Q2 2009, as it was better by 13,000 and 29,000 subscribers, respectively. This result was aided by VTR's highest organic gain in 2009 and improved quarterly churn in the Netherlands, as evidenced by their lowest video loss of the year. At September 30, 2009, our 9.4 million video subscribers consisted of 5.9 million analog (including MMDS), 3.0 million digital cable, and 483,000 DTH RGUs. In the last twelve months, digital cable subscribers have grown by 47% or 970,000, resulting in consolidated digital cable penetration8 of 34%.
For the three and nine months ended September 30, 2009, we added 180,000 and 679,000 digital cable RGUs, respectively, on an organic basis. The latter represented an increase of 16% over the nine months ended September 30, 2008. As compared to the corresponding prior year period, our digital cable growth improvement on a year-to-date basis was led by our Central and Eastern European ("CEE") operations, which grew by 37%, and VTR, which grew by 34%. Within our digital subscriber base, the digital video recorder ("DVR") continues to appeal to our customers. At UPC, we have added over 400,000 DVR cable RGUs in the last twelve months, an increase of approximately 88% since September 30, 2008. We believe our digital video growth opportunity remains substantial, particularly at UPC, given its digital penetration of 31% and analog video base of 5.5 million subscribers.
Summary of Third-Party Debt and Cash and Cash Equivalents
The following table details UPC Holding's consolidated third-party debt and cash and cash equivalents as of the indicated periods:
September 30, June 30,
2009 2009
in millions
UPC Broadband Holding Bank Facility EUR 6,182.9 EUR 6,209.0
UPC Holding 7.75% Senior Notes due 2014 384.6 384.6
UPC Holding 8.63% Senior Notes due 2014 230.9 230.9
UPC Holding 8.00% Senior Notes due 2016 300.0 300.0
UPC Holding 9.75% Senior Notes due 2018 373.5 373.2
UPC Holding 9.875% Senior Notes due 2018 253.0 263.4
VTR Bank Facility9 314.7 331.3
Other debt, including capital lease obligations 30.0 29.5
Total third-party debt EUR 8,069.6 EUR 8,121.9
Cash and cash equivalents EUR 79.4 EUR 124.7
Restricted cash10 316.7 333.4
Total cash and cash equivalents including EUR 396.1 EUR 458.1
restricted cash
At September 30, 2009, we reported EUR8.1 billion of third-party debt and EUR396 million of cash and cash equivalents, including restricted cash of EUR317 million. As compared to June 30, 2009, our third-party debt decreased by EUR52 million, due largely to the translation impact associated with our U.S. dollar-denominated debt, as a result of the euro strengthening relative to the U.S. dollar during the third quarter. This was partially offset by incremental borrowings under the bank facility during the quarter. As of September 30, 2009, we had minimal near-term amortizations, with over 99% of our consolidated debt maturing in 2013 and beyond.
Subsequent to the second quarter, we completed several transactions involving our bank facility. In September, we rolled EUR70 million of our redrawable Facility L commitments due 2012 into EUR35 million of Facility Q due 2014 and EUR35 million of Facility T due 2016. During September and October, we also increased the committed amounts under Facility T by EUR222 million ($325 million) through the addition of a $25 million (EUR17 million) tranche issued at par and a $300 million (EUR205 million) tranche issued at a discount. We received net proceeds after discounts of EUR157 million ($229 million) as of September 30, 2009 and will receive the remaining EUR57 million ($84 million) in the fourth quarter. After completion of the foregoing transactions, total third-party commitments under Facility T were $876 million (EUR598 million).
Borrowing Capacity & Covenant Calculations
As of September 30, 2009, UPC Holding had maximum undrawn commitments under Facilities I, L, Q and T of the UPC Broadband Holding Bank Facility of EUR456 million, of which we estimate EUR318 million will be available to borrow upon completion of our third quarter bank reporting requirements. Based on the results for September 30, 2009 and subject to the completion of third quarter bank reporting requirements, (i) the ratio of Senior Debt to Annualized EBITDA (last two quarters annualized), as defined and calculated in accordance with the UPC Broadband Holding Bank Facility, was 3.81x,11 and (ii) the ratio of Total Debt to Annualized EBITDA (last two quarters annualized), as defined and calculated in accordance with the UPC Broadband Holding Bank Facility was 4.78x.11
UPC Broadband Holding Bank Facility
The following table details the key terms of the UPC Broadband Holding Bank Facility at September 30, 2009:
As of September 30, 2009
Final Interest Facility Unused Carrying
Facility maturity rate amount12 borrowing value13
capacity
in millions
Facility I April 1, E + 2.50% EUR 48 EUR 48 EUR --
2010
Facility L July 3, E + 2.25% EUR 160 160 --
2012
Facility M Dec. 31, E + 2.00% EUR 954 -- 954
201414
Facility N Dec. 31, L + 1.75% $ 1,400 -- 956
201414
Facility O July 31, SR + 2.75%15 HUF 5,963 / -- 50
2013 PLN 115
Facility P Sept. 2, L + 2.75% $ 512 -- 349
2013
Facility Q July 31, E + 2.75% EUR 372 230 142
201416
Facility R Dec. 31, E + 3.25% EUR 263 -- 263
201516
Facility S Dec. 31, E + 3.75% EUR 1,700 -- 1,700
201617
Facility T Dec. 31, L + 3.50% $ 816 18 533
201617
Facility U Dec. 31, E + 4.00% EUR 1,236 -- 1,236
201718
Total EUR 456 EUR 6,183
Disposition of UPC Slovenia
On July 15, 2009, one of our subsidiaries sold 100% of its interest in UPC Slovenia to Mid Europa Partners for a cash purchase price of EUR119.5 million, before working capital adjustments.
About UPC Holding
UPC Holding connects its customers to the world of entertainment, communications and information, by offering advanced video, voice and broadband internet services. As of September 30, 2009, UPC Holding operated state-of-the-art networks in Europe and Chile, serving 10 million customers in 10 countries.
Disclaimer
This press release contains forward-looking statements, including our expectations with respect to our 2009 outlook, including our rebased operating cash flow growth in the fourth quarter, our future growth prospects, and our liquidity and access to capital markets, including our borrowing availability; the timing and impact of our roll-out of advanced products and services, including the success of our EuroDOCSIS 3.0 deployment and our digital cable growth opportunity; our insight and expectations regarding competitive and economic factors in our markets; the impact of our M&A activity on our operations and financial performance; and other information and statements that are not historical fact. 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 UPC Holding's services and their willingness to upgrade to our more advanced offerings, our ability to meet challenges from competition and economic factors, the continued growth in services for digital television at a reasonable cost, the effects of changes in technology and regulation, our ability to achieve expected operational efficiencies and economies of scale, our ability to generate expected revenue and operating cash flow, control capital expenditures as measured by a percentage of revenue and achieve assumed margins, the impact of our future financial performance, or market conditions generally, on the availability, terms and deployment of capital, as well as other factors detailed from time to time in Liberty Global's filings with the Securities and Exchange Commission including Liberty Global's most recently filed Forms 10-K and 10-Q. These forward-looking statements speak only as of the date of this release. UPC Holding expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in UPC Holding's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
UPC Holding is required under the terms of the indentures for its Senior Notes to provide certain financial information regarding UPC Holding to bondholders on a quarterly basis. UPC Broadband Holding B.V. ("UPC Broadband Holding"), a wholly-owned subsidiary of UPC Holding, is a borrower and UPC Holding is a guarantor of outstanding indebtedness under a senior secured credit facility (the "UPC Broadband Holding Bank Facility") which also requires the provision of certain financial and related information to the lenders. This press release is being issued at this time, in connection with those obligations, due to the contemporaneous release by Liberty Global of its September 30, 2009 results. The financial information contained herein is preliminary and subject to change. UPC Holding presently expects to issue its unaudited condensed consolidated financial statements prior to the end of November 2009, at which time they will be posted to the investor relations section of the Liberty Global website (www.lgi.com) under the fixed income heading. Copies will also be available from the Trustee for the Senior Notes.
UPC Slovenia was sold on July 15, 2009 and we have treated UPC Slovenia as a
discontinued operation in our condensed consolidated financial statements.
1 Thus, the results of operations and cash flows of UPC Slovenia have been
reclassified to discontinued operations for all periods presented.
Additionally, we are reporting subscriber metrics excluding the impact of
this discontinued operation.
Please see footnotes to the operating data table for the definition of
revenue generating units ("RGUs"). Organic figures exclude RGUs of acquired
2 entities at the date of acquisition but include the impact of changes in
RGUs from the date of acquisition. Organic figures represent additions on a
net basis.
3 Please see page 10 for our definition of operating cash flow and a
reconciliation to operating income.
For purposes of calculating rebased growth rates on a comparable basis for
all businesses that we owned during the respective period in 2009, we have
adjusted our historical 2008 revenue and OCF to (i) include the
pre-acquisition revenue and OCF of certain entities acquired during 2008 and
4 2009 in the respective 2008 rebased amounts to the same extent that the
revenue and OCF of such entities are included in our 2009 results and (ii)
reflect the translation of our 2008 rebased amounts at the applicable
average exchange rates that were used to translate our 2009 results. Please
see page 7 for supplemental information.
5 OCF margin is calculated by dividing OCF by total revenue for the applicable
period.
6 Advanced services represent our services related to digital video, including
digital cable and direct-to-home ("DTH"), broadband internet and telephony.
ARPU per customer relationship refers to the average monthly subscription
revenue per average customer relationship. ARPU or ARPU per RGU refers to
the average monthly subscription revenue per average RGU. In both cases, the
amounts are calculated by dividing the average monthly subscription revenue
7 (excluding installation, late fees and mobile telephony revenue) for the
indicated period, by the average of the opening and closing balances for
customer relationships or RGUs, as the case may be, for the period. The
growth rate for ARPU per customer relationship for UPC is not adjusted for
currency impacts unless otherwise noted.
8 Digital penetration is calculated by dividing digital cable RGUs by the
total of digital and analog cable RGUs.
An amount equal to the outstanding principal and interest balance due under
9 the VTR Bank Facility is held in a cash collateral account that is reflected
as restricted cash in our consolidated balance sheet.
Of this amount, EUR315 million and EUR331 million of restricted cash as of
10 September 30, 2009 and June 30, 2009, respectively, relates to our VTR Bank
Facility.
Our covenant calculations are based on debt figures which take into account
11 currency swaps. Thus, the debt used in the calculations may differ from the
debt balances reported within the financial statements.
Amounts represent total third-party commitments at September 30, 2009
12 without giving effect to discounts. Certain of the originally committed
amounts under Facilities I, L, M and N have been novated to Liberty Global
Europe B.V. and accordingly, such amounts are not included in the table.
13 The Facility T amount includes the impact of discounts.
The final maturity date for Facilities M and N is the earlier of (i)
December 31, 2014 and (ii) October 17, 2013, the date falling 90 days prior
14 to the date on which the UPC Holding Senior Notes due 2014 fall due, if such
Senior Notes have not been repaid, refinanced or redeemed prior to such
date.
SR refers to the specified percentage rate per annum determined by the
15 Polish Association of Banking Dealers - Forex Poland or the National Bank of
Hungary, as appropriate for the relevant period.
The final maturity dates for Facilities Q and R are the earlier of (i) July
31, 2014 and December 31, 2015, respectively, and (ii) October 17, 2013, the
16 date falling 90 days prior to the date on which the UPC Holding Senior Notes
due 2014 fall due, if such Senior Notes have not been repaid, refinanced or
redeemed prior to such date.
The final maturity date for Facilities S and T will be the earlier of (i)
December 31, 2016 and (ii) October 17, 2013, the date falling 90 days prior
17 to the date on which the UPC Holding Senior Notes due 2014 fall due, if, on
such date, such notes are outstanding in an aggregate principal amount of
EUR250 million or more.
The final maturity date for Facility U is the earlier of (i) December 31,
2017 and (ii) October 17, 2013, the date falling 90 days prior to the date
18 on which the UPC Holding Senior Notes due 2014 fall due, if, on such date,
such notes are outstanding in an aggregate principal amount of EUR250
million or more.
Revenue and Operating Cash Flow
The following tables present preliminary revenue and operating cash flow by reportable segment for the three and nine months ended September 30, 2009, as compared to the corresponding prior year period. All of the reportable segments derive their revenue primarily from broadband communications services, including video, voice and broadband internet services. Certain segments also provide competitive local exchange carrier and other business-to-business communications services. At September 30, 2009, our operating segments in UPC Holding provided services in ten countries, consisting of our UPC Broadband Division in Europe and VTR in Chile. Other Central and Eastern Europe segment includes our operating segments in the Czech Republic, Poland, Romania and Slovakia.
During the first quarter of 2009, we changed our reporting such that we no longer include video-on-demand costs within the central and corporate operations category of UPC. Instead, we present these costs within the individual operating segments of UPC. Segment information for all periods presented has been recast to reflect the reclassification of these costs. Additionally, our reportable segments have been reclassified for all periods to present UPC Slovenia as a discontinued operation. Previously, UPC Slovenia was included in our Other Central and Eastern Europe segment. We present only the reportable segments of our continuing operations in the following tables.
For purposes of calculating rebased growth rates on a comparable basis for all businesses that we owned during 2009, we have adjusted our historical revenue and OCF for the three and nine months ended September 30, 2008 to (i) include the pre-acquisition revenue and OCF of certain entities acquired during 2008 and 2009 in our rebased amounts for the three and nine months ended September 30, 2008 to the same extent that the revenue and OCF of such entities are included in our results for the three and nine months ended September 30, 2009 and (ii) reflect the translation of our rebased amounts for the three and nine months ended September 30, 2008 at the applicable average exchange rates that were used to translate our results for the three and nine months ended September 30, 2009. The acquired entities that have been included in whole or in part in the determination of our rebased revenue and OCF for the three months ended September 30, 2008 include one small acquisition in Europe. The acquired entities that have been included in whole or in part in the determination of our rebased revenue and OCF for the nine months ended September 30, 2008 include four small acquisitions in Europe. We have reflected the revenue and OCF of these acquired entities in our 2008 rebased amounts based on what we believe to be the most reliable information that is currently available to us (generally pre-acquisition financial statements), as adjusted for the estimated effects of (i) any significant differences between generally accepted accounting principles in the U.S. ("GAAP") and local generally accepted accounting principles, (ii) any significant effects of post-acquisition purchase accounting adjustments, (iii) any significant differences between our accounting policies and those of the acquired entities and (iv) other items we deem appropriate. As we did not own or operate the acquired businesses during the pre-acquisition periods, no assurance can be given that we have identified all adjustments necessary to present the revenue and OCF of these entities on a basis that is comparable to the corresponding post-acquisition amounts that are included in our historical 2008 results or that the pre-acquisition financial statements we have relied upon do not contain undetected errors. The adjustments reflected in our 2008 rebased amounts have not been prepared with a view towards complying with Article 11 of the Securities and Exchange Commission's Regulation S-X. In addition, the rebased growth percentages are not necessarily indicative of the revenue and OCF that would have occurred if these transactions had occurred on the dates assumed for purposes of calculating our rebased 2008 amounts or the revenue and OCF that will occur in the future. The rebased growth percentages have been presented as a basis for assessing 2009 growth rates on a comparable basis, and are not presented as a measure of our pro forma financial performance for 2008. Therefore, we believe our rebased data is not a non-GAAP financial measure as contemplated by Regulation G or Item 10 of Regulation S-K.
The selected financial data contained herein is preliminary and unaudited and subject to possible adjustments in connection with the publication of UPC Holding's September 30, 2009 unaudited condensed consolidated financial statements. In each case, the following tables present (i) the amounts reported by each of our reportable segments for the comparative periods, (ii) the Euro change and percentage change from period to period, (iii) the percentage change from period to period, after removing foreign currency translation effects (FX), and (iv) the percentage change from period to period on a rebased basis. The comparisons that exclude FX assume that exchange rates remained constant during the periods that are included in each table.
Revenue
Increase
Three months ended Increase Increase
(decrease)
September 30, (decrease) (decrease)
excluding
FX
2009 2008 EUR % % Rebased %
in millions
UPC
Broadband
Division:
The EUR 201.6 EUR 197.9 EUR 3.7 1.9 % 1.9 % --
Netherlands
Switzerland 181.0 170.3 10.7 6.3 % 0.3 % --
Austria 86.2 90.5 (4.3 ) (4.8 %) (4.8 %) --
Ireland 61.6 60.6 1.0 1.7 % 1.7 % --
Total
Western 530.4 519.3 11.1 2.1 % 0.2 % 0.2 %
Europe
Hungary 59.2 73.2 (14.0 ) (19.1 %) (7.2 %) --
Other
Central and 144.8 156.7 (11.9 ) (7.6 %) 6.8 % --
Eastern
Europe
Total
Central and 204.0 229.9 (25.9 ) (11.3 %) 2.4 % 1.9 %
Eastern
Europe
Central and
corporate 1.4 1.7 (0.3 ) (17.6 %) (17.6 %) --
operations
Total UPC
Broadband 735.8 750.9 (15.1 ) (2.0 %) 0.8 % 0.6 %
Division
VTR (Chile) 125.7 119.8 5.9 4.9 % 5.5 % 5.5 %
Total UPC EUR 861.5 EUR 870.7 EUR (9.2) (1.1 %) 1.4 % 1.3 %
Holding
Increase
Nine months ended Increase Increase
(decrease)
September 30, (decrease) (decrease)
excluding
FX
2009 2008 EUR % % Rebased %
in millions
UPC
Broadband
Division:
The EUR 609.7 EUR 597.4 EUR 12.3 2.1 % 2.1 % --
Netherlands
Switzerland 545.9 510.3 35.6 7.0 % 0.5 % --
Austria 260.8 275.8 (15.0 ) (5.4 %) (5.4 %) --
Ireland 184.6 180.7 3.9 2.2 % 2.2 % --
Total
Western 1,601.0 1,564.2 36.8 2.4 % 0.2 % 0.2 %
Europe
Hungary 176.0 209.3 (33.3 ) (15.9 %) (3.7 %) --
Other
Central and 418.2 454.7 (36.5 ) (8.0 %) 6.0 % --
Eastern
Europe
Total
Central and 594.2 664.0 (69.8 ) (10.5 %) 2.9 % 2.3 %
Eastern
Europe
Central and
corporate 3.9 4.7 (0.8 ) (17.0 %) (17.0 %) --
operations
Total UPC
Broadband 2,199.1 2,232.9 (33.8 ) (1.5 %) 1.0 % 0.7 %
Division
VTR (Chile) 371.9 368.8 3.1 0.8 % 7.2 % 7.2 %
Total UPC EUR 2,571.0 EUR 2,601.7 EUR (30.7) (1.2 %) 1.9 % 1.6 %
Holding
Operating Cash Flow
Increase
Three months ended Increase Increase
(decrease)
September 30, (decrease) (decrease)
excluding
FX
2009 2008 EUR % % Rebased %
in millions
UPC
Broadband
Division:
The EUR 122.2 EUR 115.4 EUR 6.8 5.9 % 5.9 % --
Netherlands
Switzerland 103.2 91.6 11.6 12.7 % 6.4 % --
Austria 44.9 47.0 (2.1 ) (4.5 %) (4.5 %) --
Ireland 24.4 23.6 0.8 3.4 % 3.4 % --
Total
Western 294.7 277.6 17.1 6.2 % 4.1 % 4.1 %
Europe
Hungary 29.2 38.4 (9.2 ) (24.0 %) (12.5 %) --
Other
Central and 78.4 84.4 (6.0 ) (7.1 %) 7.3 % --
Eastern
Europe
Total
Central and 107.6 122.8 (15.2 ) (12.4 %) 1.1 % 0.6 %
Eastern
Europe
Central and
corporate (33.9 ) (35.3 ) 1.4 4.0 % 3.0 % --
operations
Total UPC
Broadband 368.4 365.1 3.3 0.9 % 3.8 % 3.8 %
Division
VTR (Chile) 52.2 48.0 4.2 8.8 % 8.9 % 8.9 %
Total EUR 420.6 EUR 413.1 EUR 7.5 1.8 % 4.4 % 4.4 %
Increase
Nine months ended Increase Increase
(decrease)
September 30, (decrease) (decrease)
excluding
FX
2009 2008 EUR % % Rebased %
in millions
UPC
Broadband
Division:
The EUR 356.1 EUR 334.0 EUR 22.1 6.6 % 6.6 % --
Netherlands
Switzerland 305.1 267.7 37.4 14.0 % 7.1 % --
Austria 132.7 141.3 (8.6 ) (6.1 %) (6.1 %) --
Ireland 73.8 69.0 4.8 7.0 % 7.0 % --
Total
Western 867.7 812.0 55.7 6.9 % 4.6 % 4.6 %
Europe
Hungary 87.9 107.7 (19.8 ) (18.4 %) (6.4 %) --
Other
Central and 216.0 236.8 (20.8 ) (8.8 %) 5.0 % --
Eastern
Europe
Total
Central and 303.9 344.5 (40.6 ) (11.8 %) 1.4 % 0.7 %
Eastern
Europe
Central and
corporate (104.9 ) (110.6 ) 5.7 5.2 % 3.8 % --
operations
Total UPC
Broadband 1,066.7 1,045.9 20.8 2.0 % 4.4 % 4.4 %
Division
VTR (Chile) 150.7 150.9 (0.2 ) (0.1 %) 6.1 % 6.1 %
Total EUR 1,217.4 EUR 1,196.8 EUR 20.6 1.7 % 4.6 % 4.6 %
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. Operating cash flow is also a key factor that is used by our internal decision makers to (i) determine how to allocate resources to segments and (ii) evaluate the effectiveness of our management for purposes of annual and other incentive compensation plans. As we use the term, operating cash flow is defined as revenue less operating and SG&A expenses (excluding stock-based compensation, related-party fees and allocations, depreciation and amortization, and impairment, restructuring and other operating charges or credits). Other operating charges or credits include gains and losses on the disposition of long-lived assets and due diligence, legal, advisory and other third-party costs directly related to our efforts to acquire controlling interests in entities. 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 that is unaffected by our capital structure and allows management to (i) readily view operating trends, (ii) perform analytical comparisons and benchmarking between segments and (iii) identify strategies to improve operating performance in the different countries in which we operate. We believe our operating cash flow measure is useful to investors because it is one of the bases for comparing our performance with the performance of other companies in the same or similar industries, although our measure may not be directly comparable to similar measures used by other companies. Operating cash flow should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income, net earnings, cash flow from operating activities and other GAAP measures of income or cash flows. A reconciliation of UPC Holding's total segment operating cash flow to operating income is presented below.
Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
in millions
Total segment EUR 420.6 EUR 413.1 EUR 1,217.4 EUR 1,196.8
operating cash flow
Stock-based
compensation (10.9 ) (10.4 ) (23.4 ) (28.6 )
expense
Related-party fees
and allocations, 4.5 7.4 15.1 15.5
net
Depreciation and (265.6 ) (269.2 ) (790.9 ) (810.7 )
amortization
Impairment,
restructuring and
other operating 0.4 (1.0 ) (89.1 ) (5.9 )
charges (credits),
net*
Operating income EUR 149.0 EUR 139.9 EUR 329.1 EUR 367.1
Capital Expenditure Summary
The following table provides UPC Holding capital expenditures for the indicated
periods:
Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
in millions
UPC Broadband
Division:
The Netherlands EUR 32.9 EUR 36.0 EUR 75.0 EUR 102.3
Switzerland 44.6 48.0 147.5 122.5
Austria 16.4 19.2 55.9 49.9
Ireland 23.1 18.2 73.4 52.9
Total Western 117.0 121.4 351.8 327.6
Europe
Hungary 7.3 13.6 35.1 51.1
Other Central and 45.0 56.9 123.5 153.3
Eastern Europe
Total Central and 52.3 70.5 158.6 204.4
Eastern Europe
Corporate and other 16.5 19.0 47.5 55.3
operations
Total UPC Broadband 185.8 210.9 557.9 587.3
Division
VTR (Chile) 24.8 36.0 91.2 96.1
Total UPC Holding EUR 210.6 EUR 246.9 EUR 649.1 EUR 683.4
* During the second quarter of 2009, we recorded an EUR85 million charge to
impair a portion of the goodwill associated with our Romanian operating segment.
Operating Data Table
Operating Data - September 30, 2009 - UPC Holding B.V. Consolidated
Video Internet Telephony
Two-way Customer
Homes Analog Digital DTH MMDS Homes Homes
Homes Relationships Total Cable Cable Total Subscribers Subscribers
Passed(1) (3) Subscribers Subscribers Serviceable (10) Serviceable (12)
Passed(2) RGUs(4) Subscribers Subscribers (7) (8) Video (9) (11)
(5) (6)
UPC
Broadband
Division:
The
Netherlands 2,756,600 2,649,800 1,968,600 3,272,300 1,255,300 710,700 -- -- 1,966,000 2,649,800 707,900 2,603,100 598,400
(13)
Switzerland 1,983,300 1,629,000 1,590,300 2,344,600 1,192,100 362,300 -- -- 1,554,400 1,979,500 485,100 1,977,000 305,100
(13)
Austria 1,157,500 1,157,500 721,000 1,238,600 323,600 217,600 -- -- 541,200 1,157,500 424,300 1,157,500 273,100
Ireland 876,400 572,000 537,000 697,800 169,600 263,500 -- 76,800 509,900 572,000 134,900 473,100 53,000
Total
Western 6,773,800 6,008,300 4,816,900 7,553,300 2,940,600 1,554,100 -- 76,800 4,571,500 6,358,800 1,752,200 6,210,700 1,229,600
Europe
Hungary 1,229,400 1,209,500 905,300 1,369,700 476,600 140,600 182,900 -- 800,100 1,209,500 325,100 1,211,900 244,500
Romania 2,070,500 1,732,000 1,237,300 1,638,200 872,800 202,900 161,600 -- 1,237,300 1,606,600 256,400 1,544,800 144,500
Poland 2,013,100 1,859,100 1,081,500 1,619,800 819,500 193,900 -- -- 1,013,400 1,859,100 437,800 1,858,200 168,600
Czech 1,313,200 1,203,400 771,700 1,137,800 171,500 361,600 107,600 -- 640,700 1,203,400 344,900 1,199,300 152,200
Republic
Slovakia 489,400 430,900 286,700 365,200 189,700 53,800 31,100 4,300 278,900 393,000 59,800 393,000 26,500
Total
Central and 7,115,600 6,434,900 4,282,500 6,130,700 2,530,100 952,800 483,200 4,300 3,970,400 6,271,600 1,424,000 6,207,200 736,300
Eastern
Europe
Total UPC
Broadband 13,889,400 12,443,200 9,099,400 13,684,000 5,470,700 2,506,900 483,200 81,100 8,541,900 12,630,400 3,176,200 12,417,900 1,965,900
Division
VTR (Chile) 2,597,000 1,933,400 1,051,000 2,164,500 389,700 509,000 -- -- 898,700 1,933,400 645,900 1,920,500 619,900
Total UPC
Holding 16,486,400 14,376,600 10,150,400 15,848,500 5,860,400 3,015,900 483,200 81,100 9,440,600 14,563,800 3,822,100 14,338,400 2,585,800
B.V.
Footnotes to Operating Data Table:
Homes Passed are homes or residential multiple dwelling units that can be
connected to our networks without further extending the distribution
plant, except for direct-to-home (DTH) and Multi-channel Multipoint
(microwave) Distribution System (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. We do not count homes passed for DTH. With
(1) respect to MMDS, one MMDS customer is equal to one Home Passed. Due to the
fact that we do not own the partner networks (defined below) used by
Cablecom in Switzerland (see note 13) or the unbundled loop and shared
access network used by one of our Austrian subsidiaries, UPC Austria GmbH
(Austria GmbH), we do not report homes passed for Cablecom's partner
networks or the unbundled loop and shared access network used by Austria
GmbH.
Two-way Homes Passed are Homes Passed by those sections of our networks
that are technologically capable of providing two-way services, including
video and internet services and, in some cases, telephony services. Due to
(2) the fact that we do not own the partner networks used by Cablecom in
Switzerland or the unbundled loop and shared access network used by
Austria GmbH, we do not report two-way homes passed for Cablecom's partner
networks or the unbundled loop and shared access network used by Austria
GmbH.
Customer Relationships are the number of customers who receive at least
one of our video, internet or voice services that we count as Revenue
Generating Units (RGUs), without regard to which, or to how many services
they subscribe. To the extent that RGU counts include equivalent billing
(3) unit (EBU) adjustments, we reflect corresponding adjustments to our
Customer Relationship counts. Customer Relationships generally are counted
on a unique premise basis. Accordingly, if an individual receives our
services in two premises (e.g. primary home and vacation home), that
individual will count as two Customer Relationships. We exclude mobile
customers from Customer Relationships.
Revenue Generating Unit is separately an Analog Cable Subscriber, Digital
Cable Subscriber, DTH Subscriber, MMDS Subscriber, Internet Subscriber or
Telephony Subscriber. A home, residential multiple dwelling unit, or
commercial unit may contain one or more RGUs. For example, if a
residential customer in our Austrian system subscribed to our digital
cable service, telephony service and broadband internet service, the
customer would constitute three RGUs. Total RGUs is the sum of Analog
Cable, Digital Cable, DTH, MMDS, Internet and Telephony Subscribers. RGUs
generally are counted on a unique premise basis such that a given premise
(4) does not count as more than one RGU for any given service. On the other
hand, if an individual receives our service in two premises (e.g. a
primary home and a vacation home), that individual will count as two RGUs.
Each bundled cable, internet or telephony service is counted as a separate
RGU regardless of the nature of any bundling discount or promotion.
Non-paying subscribers are counted as subscribers during their free
promotional service period. Some of these subscribers may choose to
disconnect after their free service period. Services offered without
charge on a permanent basis (e.g. VIP subscribers, free service to
employees) are not counted as RGUs.
Analog Cable Subscriber is a home, residential multiple dwelling unit or
commercial unit that receives our analog cable service over our broadband
(5) network. In Europe, we have approximately 464,800 "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.
Digital Cable Subscriber is a home, residential multiple dwelling unit or
commercial unit that receives our digital cable service over our broadband
network or through a partner network. We count a subscriber with one or
more digital converter boxes that receives our digital cable service as
just one subscriber. A Digital Cable Subscriber is not counted as an
Analog Cable Subscriber. As we migrate customers from analog to digital
cable services, we report a decrease in our Analog Cable Subscribers equal
(6) to the increase in our Digital Cable Subscribers. Individuals who receive
digital cable service through a purchased digital set-top box but do not
pay a monthly digital service fee are only counted as Digital Cable
Subscribers to the extent we can verify that such individuals are
subscribing to our analog cable service. We include 41,400 of these
subscribers in the Digital Cable Subscribers reported for Cablecom.
Subscribers to digital cable services provided by Cablecom over partner
networks receive analog cable services from the partner networks as
opposed to Cablecom.
DTH Subscriber is a home, residential multiple dwelling unit or commercial
(7) unit that receives our video programming broadcast directly via a
geosynchronous satellite.
MMDS Subscriber is a home, residential multiple dwelling unit or
(8) commercial unit that receives our video programming via a multi-channel
multipoint (microwave) distribution system.
Internet Homes Serviceable are Two-way Homes Passed that can be connected
to our network, or a partner network with which we have a service
(9) agreement, for the provision of broadband internet services if requested
by the customer or building owner. With respect to Austria GmbH, we do not
report as Internet Homes Serviceable those homes served either over an
unbundled loop or over a shared access network.
Internet Subscriber is a home, residential multiple dwelling unit or
commercial unit that receives internet services over our networks, or that
we service through a partner network. Our Internet Subscribers in Austria
(10) include 78,800 residential digital subscriber line (DSL) subscribers of
Austria GmbH that are not serviced over our networks. Our Internet
Subscribers do not include customers that receive services from dial-up
connections.
Telephony Homes Serviceable are Two-way Homes Passed that can be connected
to our network, or a partner network with which we have a service
(11) agreement, for the provision of telephony services if requested by the
customer or building owner. With respect to Austria GmbH, we do not report
as Telephony Homes Serviceable those homes served over an unbundled loop
rather than our network.
Telephony Subscriber is a home, residential multiple dwelling unit or
commercial unit that receives voice services over our networks, or that we
(12) service through a partner network. Telephony Subscribers exclude mobile
telephony subscribers. Our Telephony Subscribers in Austria include 46,000
residential subscribers of Austria GmbH that are not serviced over our
networks.
Pursuant to service agreements, Cablecom and, to a much lesser extent, the
Netherlands offer digital cable, broadband internet and telephony services
over networks owned by third-party cable operators (partner networks). A
partner network RGU is only recognized if there is a direct billing
relationship with the customer. Homes Serviceable for partner networks
represent the estimated number of homes that are technologically capable
of receiving the applicable service within the geographic regions covered
by the applicable service agreements. Internet and Telephony Homes
(13) Serviceable with respect to partner networks have been estimated by
Cablecom. These estimates may change in future periods as more accurate
information becomes available. At September 30, 2009, Cablecom's partner
networks account for 83,600 Customer Relationships, 120,100 RGUs, 47,600
Digital Cable Subscribers, 350,600 Internet Homes Serviceable, 348,100
Telephony Homes Serviceable, 44,100 Internet Subscribers, and 28,400
Telephony Subscribers. In addition, partner networks account for 460,200
digital cable homes serviceable that are not included in Homes Passed or
Two-way Homes Passed in our September 30, 2009 subscriber table.
Additional General Notes to Tables:
With respect to Chile, residential multiple dwelling units with a
discounted pricing structure for video, broadband internet or telephony
services are counted on an EBU basis. With respect to commercial
establishments, such as bars, hotels and hospitals, to which we provide
video and other services primarily for the patrons of such establishments,
the subscriber count is generally calculated on an EBU basis by our
subsidiaries. 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.
On a business-to-business basis, certain of our subsidiaries provide data,
telephony and other services to businesses, primarily in the Netherlands,
Switzerland, Austria, Ireland, and Romania. We generally do not count
customers of these services as subscribers, customers or RGUs.
While we take appropriate steps to ensure that subscriber statistics are
presented on a consistent and accurate basis at any given balance sheet
date, the variability from country to country in (i) the nature and
pricing of products and services, (ii) the distribution platform, (iii)
billing systems, (iv) bad debt collection experience and (v) other factors
add complexity to the subscriber counting process. We periodically review
our subscriber counting policies and underlying systems to improve the
accuracy and consistency of the data reported. Accordingly, we may from
time to time make appropriate adjustments to our subscriber statistics
based on those reviews.
Subscriber information for 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.
Source: UPC Holding B.V.
Related Categories
Press ReleasesStocks Mentioned
+0.00Related Entities
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
