Q1 2015 Fixed Income Release - Liberty ...
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Q1 2015 Fixed Income Release
Denver, Colorado May 7, 2015: Liberty Global plc ("Liberty Global") (NASDAQ: LBTYA, LBTYB and
LBTYK) is today providing selected, preliminary unaudited financial and operating information for certain of
its fixed-income borrowing groups for the three months ended March 31, 2015 ("Q1") as compared to the
results for the same period last year (unless otherwise noted). The financial and operating information
contained herein is preliminary and subject to change. We presently expect to issue the March 31, 2015
unaudited condensed consolidated financial statements for each of our fixed-income borrowing groups prior
to the end of May 2015, at which time they will be posted to the investor relations section of our website
(www.libertyglobal.com) under the "Fixed Income" heading. Convenience translations provided herein are
calculated as of March 31, 2015.
.........................................................................................................Page 2
Delivered Strong Segment OCF Growth and Record Low Customer
Churn
......................................................................................................Page 10
Continued Focus on Superior Value and Bundles Driving Customer
ARPU up 8% Year-Over-Year
......................................................................................................Page 16
Steady Progress Made On Integrating Ziggo And UPC Nederland
......................................................................................................Page 22
Revenue Growth Driven by Solid Swiss/Austrian Performance
...............................................................................................Page 29
Quarterly RGU Gains Fueled by Strength in Broadband
Virgin Media Reports Preliminary Q1 2015 Results
Delivered Strong Segment OCF Growth and Record Low Customer Churn
Virgin Media Inc. ("Virgin Media") is the leading cable operator in the U.K. and Ireland, delivering ultrafast
broadband, entertainment and market-leading connectivity to 5.5 million customers. The results presented
herein have been retrospectively revised to give effect to the UPC Ireland Transfer, as described below.
Operating and financial highlights*:
• Q1 operating performance driven by record low churn1 and subscriber growth in the U.K.
Q1 combined U.K./Ireland customer churn of 14.5% driven by a third successive quarter of
record low U.K. churn of 14.3%, compared to 15.4% in the comparative period of 2014
Q1 combined RGU2 additions of 14,000 driven by 23,000 RGU additions in the U.K.
Delivered 115,000 next-generation (TiVo and Horizon) video subscriber additions in Q1
Added 19,000 postpaid mobile subscribers in Q1 driven by Freestyle mobile subscriptions
• Encouraging early consumer and business interest following the announcement of our U.K. network
extension program ("Project Lightning"), in advance of full sales and build programme commencing
in the second half of 2015
36,000 two-way homes added during Q1 with the majority added in the last six weeks
• Focus on under-penetrated small office/home office and small and medium enterprise market
Launched nationwide campaign supported by first TV advertisement targeting all U.K. start-
up, small and medium businesses
Offering faster dedicated connections for businesses in Tech City located in East London
• Rebased3 revenue increased 3% to £1,130 million in Q1
Q1 rebased total subscription revenue growth of 2% to £926 million, impacted by £20 million
lower revenue due to VAT changes as compared to Q1 2014
Rebased business revenue4 growth of 3% in Q1 with growth in data and amortisation of upfront
fees, partially offset by lower voice and local area network equipment revenue
Rebased other revenue growth of 5% in Q1 includes £13 million due to higher Freestyle mobile
handset sales5
• U.K. performance driving strong rebased Segment OCF6 growth of 7% to £504 million in Q1
Segment OCF margin7 improved to 45% in Q1 from 43% in Q1 2014
Segment OCF growth driven by strong cost control and continued benefit of substantial
synergies in the U.K.; Ireland integration started
• Operating income increased to £97 million, up from £29 million in Q1 2014
• Property and equipment additions8 as a percentage of revenue were 20% in Q1
• Raised £1.8 billion equivalent amount of debt during Q1 to fund the UPC Ireland Transfer and to
refinance existing debt to improve our maturity profile
* The financial figures contained in this release are prepared in accordance with U.S. GAAP37. During the first quarter of 2015, Liberty Global undertook various financing
transactions in connection with certain internal reorganisations of its broadband and wireless communications businesses in Europe, including the intragroup transfer
of a controlling interest in UPC Broadband Ireland Ltd. ("UPC Ireland") from UPC Holding B.V. (the "UPC Ireland Transfer") to our company. We have accounted for
this common control transfer at carryover basis and the financial information and operating statistics presented herein have been retrospectively revised to give effect
to this transaction for all periods presented.
2Operating Statistics Summary
As of and for the three months
(Combining Virgin Media and UPC Ireland for both periods) ended March 31,
2015 2014
CABLE
Footprint
Homes Passed9 ....................................................................................................... 13,513,900 13,429,900
Two-way Homes Passed10 ....................................................................................... 13,389,600 13,322,600
Subscribers (RGUs)
Basic Video11 ........................................................................................................... 37,500 47,800
Enhanced Video12 .................................................................................................... 4,070,500 4,087,600
MMDS13 ................................................................................................................... 27,500 35,900
Total Video ........................................................................................................ 4,135,500 4,171,300
Internet14 .................................................................................................................. 4,929,500 4,764,100
Telephony15 .............................................................................................................. 4,573,400 4,459,900
Total RGUs ........................................................................................................ 13,638,400 13,395,300
Q1 Organic RGU Net Additions (Losses)
Basic Video .............................................................................................................. (2,600) (3,300)
Enhanced Video ...................................................................................................... (23,000) (4,000)
MMDS ...................................................................................................................... (2,700) (2,600)
Total Video ........................................................................................................ (28,300) (9,900)
Internet .................................................................................................................... 29,500 44,800
Telephony ................................................................................................................ 12,500 24,300
Total RGU net additions .................................................................................... 13,700 59,200
Customer Relationships
Customer Relationships16 ........................................................................................ 5,538,100 5,460,300
Q1 Customer Relationship net additions ................................................................. 2,600 12,800
RGUs per Customer Relationship ........................................................................... 2.46 2.45
Q1 Monthly ARPU per Customer Relationship17 ...................................................... £ 48.73 £ 48.58
Customer Bundling
Single-Play .............................................................................................................. 17.6% 18.0%
Double-Play ............................................................................................................. 18.5% 18.7%
Triple-Play ............................................................................................................... 63.9% 63.3%
Quad-Play18 ............................................................................................................. 15.6% 14.7%
MOBILE
Mobile Subscribers19
Postpaid ................................................................................................................... 2,128,200 1,957,700
Prepaid .................................................................................................................... 879,100 1,040,800
Total Mobile subscribers .................................................................................... 3,007,300 2,998,500
Q1 Postpaid net additions ........................................................................................ 18,800 78,600
Q1 Prepaid net losses ............................................................................................. (64,500) (70,300)
Total Mobile net additions (losses) .................................................................... (45,700) 8,300
Q1 Monthly ARPU per Mobile Subscriber20
Excluding interconnect revenue ........................................................................ £ 12.80 £ 12.70
Including interconnect revenue ......................................................................... £ 14.77 £ 14.93
3Financial Results, Segment OCF Reconciliation & Property and Equipment
Additions
The following tables reflect preliminary unaudited selected financial results for the three months ended
March 31, 2015 and 2014.
Three months ended
March 31, Change
2015 2014 Rebased %
in millions, except % amounts
Revenue:
Subscription revenue:
Cable .......................................................................................... £ 809.3 £ 797.8 2.3
Mobile ........................................................................................ 116.3 114.1 1.9
Total subscription revenue ...................................................... 925.6 911.9 2.3
Business revenue ........................................................................... 156.2 151.4 3.2
Other revenue ................................................................................. 48.0 52.3 5.0
Total revenue ............................................................................... £ 1,129.8 £ 1,115.6 2.5
Segment OCF ................................................................................. £ 504.0 £ 478.2 6.5
Share-based compensation expense .............................................. (10.7) (11.7)
Related-party fees and allocations, net21 ........................................ (19.1) (11.6)
Depreciation and amortisation ........................................................ (381.9) (421.9)
Impairment, restructuring and other operating items, net................ 5.1 (4.2)
Operating income ............................................................................ £ 97.4 £ 28.8
Segment OCF as a percentage of revenue .................................... 44.6% 42.9%
The table below highlights the categories of our property and equipment additions for the indicated periods
and reconciles those additions to the capital expenditures that we present in our condensed consolidated
statements of cash flows:
Three months ended
March 31,
2015 2014
in millions, except % amounts
Customer premises equipment ................................................................................. £ 78.5 £ 92.1
Scalable infrastructure .............................................................................................. 45.3 42.7
Line extensions ......................................................................................................... 28.0 23.9
Upgrade/rebuild ........................................................................................................ 19.6 24.5
Support capital .......................................................................................................... 58.2 39.9
Property and equipment additions ......................................................................... 229.6 223.1
Assets acquired under capital-related vendor financing arrangements..................... (61.8) (11.5)
Assets acquired under capital leases ........................................................................ (12.1) (14.6)
Changes in liabilities related to capital expenditures ................................................. (2.6) (15.2)
Total capital expenditures22 ............................................................................. £ 153.1 £ 181.8
Property and equipment additions as a percentage of revenue ................................ 20.3% 20.0%
4Combined Virgin Media and UPC Ireland Historical Information
OPERATING STATISTICS Q4 2014 Q3 2014 Q2 2014 Q1 2014 Q4 2013
Footprint
Homes Passed ........................................ 13,482,200 13,439,400 13,395,900 13,429,900 13,379,700
Two-way Homes Passed ......................... 13,353,300 13,275,800 13,291,400 13,322,600 13,268,700
Subscribers (RGUs)
Basic Video ............................................. 40,100 42,100 44,500 47,800 51,100
Enhanced Video ...................................... 4,093,500 4,074,600 4,070,400 4,087,600 4,087,900
MMDS ..................................................... 30,200 31,900 33,600 35,900 38,500
Total Video ........................................... 4,163,800 4,148,600 4,148,500 4,171,300 4,177,500
Internet .................................................... 4,900,000 4,823,200 4,767,800 4,764,100 4,714,000
Telephony ................................................ 4,560,900 4,497,500 4,469,600 4,459,900 4,429,900
Total RGUs ....................................... 13,624,700 13,469,300 13,385,900 13,395,300 13,321,400
RGU net additions (losses)
Basic Video ............................................. (2,000) (2,400) (3,300) (3,300) (2,900)
Enhanced Video ...................................... 18,900 4,200 (17,200) (4,000) 2,600
MMDS ..................................................... (1,700) (1,700) (2,300) (2,600) (1,700)
Total Video ........................................... 15,200 100 (22,800) (9,900) (2,000)
Internet .................................................... 63,000 55,400 3,700 44,800 47,400
Telephony ................................................ 41,100 27,900 9,700 24,300 10,100
Total RGU net additions (losses).......... 119,300 83,400 (9,400) 59,200 55,500
Customer Relationships
Customer Relationships .......................... 5,535,500 5,469,600 5,436,800 5,460,300 5,441,500
Net additions (losses) .............................. 41,100 32,800 (23,500) 12,800 18,600
RGUs per Customer ................................ 2.46 2.46 2.46 2.45 2.45
Customer churn ....................................... 14.7% 15.0% 15.3% 15.3% 15.2%
Monthly ARPU per Customer................... £ 48.76 £ 48.26 £ 49.27 £ 48.58 £ 47.69
Customer bundling
Single-Play .............................................. 17.8% 17.7% 17.6% 18.0% 18.1%
Double-Play ............................................. 18.3% 18.4% 18.6% 18.7% 19.1%
Triple-Play ............................................... 63.9% 63.9% 63.8% 63.3% 62.8%
Quad-Play ............................................... 15.5% 15.4% 15.1% 14.7% 14.7%
FINANCIAL STATISTICS Q4 2014 Q3 2014 Q2 2014 Q1 2014 Q4 2013
Revenue
Subscription revenue:
Cable ................................................ £ 808.2 £ 793.0 £ 808.7 £ 797.8 £ 780.8
Mobile .............................................. 124.3 122.5 119.1 114.1 113.7
Total subscription revenue ............ 932.5 915.5 927.8 911.9 894.5
Business ................................................. 156.7 154.9 151.2 151.4 147.7
Other ....................................................... 49.5 45.7 47.5 52.3 60.5
Total revenue .................................... £ 1,138.7 £ 1,116.1 £ 1,126.5 £ 1,115.6 £ 1,102.7
Segment OCF ......................................... £ 507.2 £ 487.0 £ 492.9 £ 478.2 £ 463.0
Share-based compensation expense ...... (6.3) (8.6) (7.2) (11.7) (22.8)
Related-party fees and allocations, net.... (12.4) (4.4) (8.2) (11.6) (7.9)
Depreciation and amortisation ................. (386.4) (381.2) (418.6) (421.9) (416.6)
Impairment, restructuring and other
operating items, net .......................... (0.6) (1.1) (6.8) (4.2) (10.2)
Operating income .................................... £ 101.5 £ 91.7 £ 52.1 £ 28.8 £ 5.5
Property and equipment additions ........... £ 238.3 £ 233.9 £ 220.0 £ 223.1 £ 218.4
% of revenue
Segment OCF ......................................... 44.5% 43.6% 43.8% 42.9% 42.0%
Property and equipment additions ........... 20.9% 21.0% 19.5% 20.0% 19.8%
5Subscriber Statistics
Customer loyalty has remained strong in the U.K where we have delivered another quarter of record low
churn. We continue to invest in our superior products and service quality in both Ireland and the U.K. with
additional TV content and higher broadband speeds. These investments have supported 5.9% average
price increases implemented in the U.K. and Irish markets in Q1 2015. Our 14,000 RGU additions in Q1,
comprised 23,000 RGU additions in the U.K. and 9,000 RGU losses in Ireland. Our RGU performance in
Ireland was due in part to increased competition. Recent product enhancements in Ireland, including our
new top internet speed of 240 Mbps and our SVoD MyPrime service, are expected to support future RGU
growth.
We continue to see strong take-up of our top-tier internet and connected TV services. As of Q1, 36% of our
4.9 million internet subscribers were taking speeds of 100 Mbps or higher, up from 12% at the end of Q1
2014. Subscriptions to our next-generation connected TV services, TiVo in the U.K. and Horizon in Ireland,
increased by 115,000 during Q1 to 2.8 million at quarter-end, representing 67% of our video base.
Our Q1 ARPU of £48.73 was up 1% after adjusting for currency movements. The benefits from improvements
in our tier mix and price increases were partially offset by the impact of VAT changes, which accounted for
a £1.11 decrease from our Q1 2014 ARPU, as well as ongoing declines in telephony usage. In terms of
mobile, the 19,000 increase in postpaid subscriptions in Q1 was more than offset by a decline in our prepaid
base, resulting in a 46,000 decline in our total mobile base. Mobile additions are lower than in Q1 2014 due
to lower postpaid subscriber additions, which partly reflect less aggressive pricing for our SIM-only plans.
During Q1, we added a total of 36,000 two-way homes passed and, following the announcement of Project
Lightning in February, we have seen an encouraging level of early interest from potential customers and
businesses in areas not covered by our cable network. We expect to focus on demand driven new build in
the second half of the year, supported by marketing initiatives in select areas.
Financial Summary
Total revenue increased 3% on a rebased basis to £1,130 million. This increase was primarily attributable
to (i) higher cable subscription revenue, driven mainly by growth in subscribers, and (ii) a £13 million increase
in other revenue due to higher mobile handset sales following the November 2014 launch of our Freestyle
proposition, which enables customers to purchase a mobile handset independent of a mobile airtime contract.
Previously, handset revenue that was contingent upon delivering future airtime services was recognised
over the life of the customer contract as part of the monthly fee and included in mobile subscription revenue.
Total subscription revenue growth was also affected by declines due to (a) an £11 million impact from a VAT
legislation change that took place on May 1, 2014 and (b) a £9 million change in how VAT is applied to
certain components of our operations that took effect on January 1, 2015.
Segment OCF increased by 7% on a rebased basis to £504 million in Q1 due to the aforementioned revenue
growth, cost controls and the delivery of substantially all of the expected OCF synergies as a result of
reorganization and integration activities following the acquisition by Liberty Global. Q1 Segment OCF growth
was also positively impacted by reductions in network infrastructure charges from local authorities, including
a nonrecurring £5 million reduction in Q1 2015 and a recurring benefit of £4 million arising from other
successful appeals of network infrastructure charges in the second half of 2014. Meanwhile, Segment OCF
margin improved from 42.9% in Q1 2014 to 44.6% in Q1 2015.
Property and equipment additions increased 3% in Q1 to £230 million, compared to the prior year period.
A decrease in customer premises equipment was more than offset by investment in our mobile billing system
and new build activities. As a result, property and equipment additions as a percentage of revenue increased
slightly from 20.0% in Q1 2014 to 20.3% in Q1 2015.
6Summary of Third-Party Debt and Cash and Cash Equivalents
The following table details the nominal value and sterling equivalent of the carrying value of Virgin Media's
consolidated third-party debt and cash and cash equivalents as of the dates indicated:
March 31, December 31,
2015 2014
Nominal Carrying Carrying
value value value
in millions
Senior Credit Facility
Term Loan A (LIBOR + 3.25%) due 2019 .................................. £ — £ — £ 375.0
Term Loan B (LIBOR + 2.75%) due 2020 .................................. $ 2,355.0 1,580.5 1,761.1
Term Loan D (LIBOR + 3.25%) due 2022.................................. £ 100.0 99.8 99.8
Term Loan E (LIBOR + 3.50%) due 2023 .................................. £ 849.4 847.4 847.4
Revolving Credit Facility ............................................................ £ 660.0 — —
Total Senior Credit Facility ................................................................................ 2,527.7 3,083.3
Senior Secured Notes
6.00% GBP Senior Secured Notes due 2021 ............................ £ 990.0 990.0 1,100.0
5.375% USD Senior Secured Notes due 2021 .......................... $ 900.0 606.3 641.8
5.50% GBP Senior Secured Notes due 2021 ............................ £ 628.4 636.5 636.8
5.25% USD Senior Secured Notes due 2021 ............................ $ 447.9 309.6 295.3
5.50% USD Senior Secured Notes due 2025 ............................ $ 425.0 286.3 272.8
5.50% GBP Senior Secured Notes due 2025 ............................ £ 387.0 387.0 430.0
5.125% GBP Senior Secured Notes due 2025 .......................... £ 300.0 300.0 —
5.25% USD Senior Secured Notes due 2026 ............................ $ 500.0 336.8 —
4.875% GBP Senior Secured Notes due 2027 .......................... £ 525.0 525.0 —
6.25% GBP Senior Secured Notes due 2029 ............................ £ 400.0 402.9 403.0
Total Senior Secured Notes .............................................................................. 4,780.4 3,779.7
Senior Notes
7.00% GBP Senior Notes due 2023 .......................................... £ 250.0 250.0 250.0
6.375% USD Senior Notes due 2023 ........................................ $ 530.0 357.1 340.1
5.25% USD Senior Notes due 2022 .......................................... $ 95.0 64.5 61.5
4.875% USD Senior Notes due 2022 ........................................ $ 118.7 80.5 76.7
5.125% GBP Senior Notes due 2022 ........................................ £ 44.1 44.5 44.5
6.00% USD Senior Notes due 2024 .......................................... $ 500.0 336.8 320.9
6.375% GBP Senior Notes due 2024 ........................................ £ 300.0 300.0 300.0
4.50% EUR Senior Notes due 2025 .......................................... € 460.0 332.5 —
5.75% USD Senior Notes due 2025 .......................................... $ 400.0 269.5 —
Total Senior Notes ............................................................................................ 2,035.4 1,393.7
6.50% USD Convertible Senior Notes due 2016 ....................... $ 54.8 38.2 36.5
Capital Lease Obligations ...................................................................................... 155.8 163.8
Vendor Financing .................................................................................................. 151.6 227.0
Total third-party debt and capital lease obligations .................................... 9,689.1 8,684.0
Less: cash and cash equivalents ........................................................................... 37.3 36.6
Net third-party debt and capital lease obligations23 .................................... £ 9,651.8 £ 8,647.4
Exchange rate (€ to £) ........................................................................................... 1.3836 1.2877
Exchange rate ($ to £) ........................................................................................... 1.4843 1.5581
7Total third-party debt increased by £1.0 billion during Q1 primarily due to the financing associated with the
UPC Ireland Transfer. In January, we issued £300 million principal amount of 5.125% senior secured notes
due 2025, $400 million (£269.5 million) principal amount of 5.75% senior notes due 2025 and €460 million
(£332.5 million) principal amount of 4.5% senior notes due 2025 to fund the UPC Ireland Transfer, which
subsequently was completed on February 12, 2015.
In March, we issued an additional $500 million (£336.8 million) principal amount of 5.25% senior secured
notes due 2026 and £525 million principal amount of 4.875% senior secured notes due 2027. The net
proceeds were used to (i) prepay in full the £375 million outstanding principal amount of Term Loan A and
$400 million (£269.5 million) of the outstanding principal amount of Term Loan B and (ii) redeem 10% of the
principal amount of certain series of outstanding senior secured notes. In April, we executed a $500 million
(£336.8 million) tap on the 5.25% senior secured notes due 2026 issued at 101% of par. The proceeds were
used to further reduce the amount outstanding on our Term Loan B on May 1, 2015.
Following these financing activities, our fully-swapped third-party debt borrowing cost24 improved to 5.6%,
as compared to 6.0% at Q1 2014, and the average tenor of our third-party debt is now over eight years.
Based on the results for Q1 2015, and subject to the completion of our Q1 2015 compliance reporting
requirements, the ratio of Senior Net Debt to Annualised EBITDA (last two quarters annualised) was 3.65x
and the ratio of Total Net Debt to Annualised EBITDA (last two quarters annualised) was 4.63x, in each
case, calculated in accordance with the Senior Credit Facility. As of March 31, 2015, we had maximum
undrawn commitments of £660 million. When the March 31, 2015 compliance reporting requirements are
completed, we anticipate the full amount of unused commitments will continue to be available.
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9Unitymedia Reports Preliminary Q1 2015 Results
Continued Focus on Superior Value and Bundles Driving Customer
ARPU up 8% Year-Over-Year
Unified-Brand Strategy Across German Footprint Kicked Off in April
Unitymedia GmbH ("Unitymedia") is the leading cable operator in Germany and the federal states of North
Rhine-Westphalia, Hesse and Baden-Württemberg. We provide cable television services, as well as internet
and telephony services under our "Unitymedia" brand to 7.1 million customers who reside in our fiber-rich
footprint.
Operating and financial highlights*:
• Implemented a 10% price increase to 1.3 million legacy broadband subscribers in February
Monthly ARPU17 per customer grew 8% to €22.80 in Q1, best growth in seven quarters
• Q1 net additions of 29,000 RGUs2, primarily impacted by anticipated churn as a result of the
aforementioned broadband price increase
Added 35,000 broadband internet and 27,000 telephony RGUs in Q1
Record quarter of Horizon TV additions in Q1 with 80,000 new subscribers, increasing our
total next-generation video base to 326,000
• Entered into a distribution agreement with Maxdome, Germany's leading subscription-based video-
on-demand ("SVoD") platform
• Launched a new high-value product portfolio in March with Horizon TV, SVoD from Maxdome and
superfast broadband to offer the best "plug&play" solution in our footprint
Enhanced Horizon Go, which now offers over 100 channels in combination with Maxdome
SVoD, and nearly all linear live TV channels are available out-of-home
In March 2015, started offering all new customer acquisition bundles at higher price points
• Initiated unified-brand strategy across German footprint in April following full KabelBW integration
New TV campaign highlights Unitymedia's endless opportunities in the digital world
• Revenue increased 6% to €538 million and Adjusted Segment EBITDA29 up 7% to €334 million in Q1
Both growth rates were negatively impacted by a favorable non-recurring item in Q1 2014
• Net loss in Q1 was €40 million
• Property, equipment and intangible asset additions8 were 27.5% of revenue in Q1
• Refinanced €1.0 billion of debt in Q1, improving cost of debt by 210 basis points and extending tenor
* The financial figures contained in this release are prepared in accordance with EU-IFRS32. Unitymedia’s financial condition and results of operations will be included
in Liberty Global’s consolidated financial statements under U.S. GAAP37. There are significant differences between the U.S. GAAP and EU-IFRS presentations of our
consolidated financial statements.
10Operating Statistics Summary
As of and for the three months
ended March 31,
2015 2014
Footprint
Homes Passed9 ................................................................................................... 12,722,400 12,639,900
Two-way Homes Passed10 ................................................................................... 12,415,800 12,311,200
Subscribers (RGUs)
Basic Video11 ........................................................................................................ 5,131,500 5,344,000
Enhanced Video12 ................................................................................................ 1,393,400 1,240,800
Total Video ..................................................................................................... 6,524,900 6,584,800
Internet14 .............................................................................................................. 2,931,000 2,661,200
Telephony15 .......................................................................................................... 2,775,100 2,579,300
Total RGUs .................................................................................................... 12,231,000 11,825,300
Q1 Organic RGU Net Additions (Losses)
Basic Video .......................................................................................................... (65,500) (44,400)
Enhanced Video ................................................................................................... 32,500 27,800
Total Video ..................................................................................................... (33,000) (16,600)
Internet ................................................................................................................. 34,600 81,600
Telephony ............................................................................................................. 27,100 61,800
Total RGU net additions ................................................................................. 28,700 126,800
Penetration
Enhanced Video Subscribers as % of Total Video Subscribers27 ......................... 21.4% 18.8%
Internet as % of Two-way Homes Passed28 ......................................................... 23.6% 21.6%
Telephony as % of Two-way Homes Passed28 ..................................................... 22.4% 21.0%
Customer Relationships
Customer Relationships16 .................................................................................... 7,111,600 7,080,800
RGUs per Customer Relationship ........................................................................ 1.72 1.67
Q1 Monthly ARPU per Customer Relationship..................................................... € 22.80 € 21.07
Customer Bundling
Single-Play ........................................................................................................... 59.4% 62.4%
Double-Play ......................................................................................................... 9.3% 8.1%
Triple-Play ............................................................................................................ 31.3% 29.5%
Mobile statistics
Mobile subscribers19 ............................................................................................. 322,700 255,300
11Financial Results, Adjusted Segment EBITDA Reconciliation & Property,
Equipment and Intangible Asset Additions
The following table reflects preliminary unaudited selected financial results for the three months ended
March 31, 2015 and 2014.
Three months ended
March 31,
2015 2014 Change
in millions, except % amounts
Revenue ........................................................................................................... € 538.3 € 508.7 6%
Adjusted Segment EBITDA .............................................................................. € 334.3 € 312.6 7%
Depreciation and amortization ......................................................................... (189.5) (176.8)
Impairment, restructuring and other operating items, net ................................. (0.3) (1.6)
Share-based compensation expense ............................................................... (1.0) (0.6)
Related-party fees and allocations21 ................................................................ (33.4) (26.5)
Earnings before interest and taxes ("EBIT") .............................................. 110.1 107.1
Net financial and other expense ....................................................................... (144.7) (133.3)
Income tax benefit (expense) ........................................................................... (5.3) 5.5
Net loss ..................................................................................................... € (39.9) € (20.7)
Adjusted Segment EBITDA as % of Revenue .................................................. 62.1% 61.5%
The table below highlights the categories of our property, equipment and intangible asset additions for the
indicated periods and reconciles those additions to the capital expenditures that we present in our condensed
consolidated statements of cash flows:
Three months ended
March 31,
2015 2014
in millions,
except % amounts
Customer premises equipment ............................................................................................. € 34.7 € 25.0
Scalable infrastructure .......................................................................................................... 17.9 14.1
Line extensions / new build .................................................................................................. 11.5 12.0
Upgrade / rebuild / network improvement ............................................................................. 40.0 36.8
Support capital ..................................................................................................................... 10.2 7.6
Capitalized subscriber acquisition costs ............................................................................... 21.4 16.7
Software and licenses .......................................................................................................... 12.3 12.3
Property, equipment and intangible asset additions.......................................................... 148.0 124.5
Assets acquired under capital-related vendor financing arrangements ................................ (39.5) (19.6)
Changes in liabilities related to capital expenditures ............................................................ 7.5 2.1
Total capital expenditures22 .............................................................................................. € 116.0 € 107.0
Property, equipment and intangible asset additions as a % of Revenue ......................... 27.5% 24.5%
12Subscriber Statistics
Entering 2015, we continued our strategy of focusing on customer value and providing the best entertainment
and broadband experience in our market. In order to harvest the investments we have made in our superior
products and network, we implemented a price increase for 1.3 million of our broadband subscribers in
February, driving monthly ARPU per customer up 8% in Q1 on a year-over-year basis, the highest increase
in seven quarters. This price increase follows the video price increases we initiated in the second half of
2014 and underpins our strategy of balancing price and volume growth. On the volume side, our RGU net
additions of 29,000 were tempered as compared to 127,000 in Q1 2014, partly due to our price increases
and approximately 20,000 incremental RGU losses related to housing association contract disconnections.
Our video attrition was 16,000 higher as compared to the first quarter of 2014, mainly due to the
aforementioned disconnection of housing associations with 12,000 video RGUs and the aforementioned
price increases. However, Horizon TV, our next-generation video platform, had its best quarterly performance
ever. We added over 80,000 new Horizon TV subscribers during Q1 2015, as compared to 44,000 during
Q1 2014, partly driven by the successful Horizon TV launch in the Baden-Württemberg region and successful
Horizon TV marketing efforts. As of March 31, 2015, we had 326,000 Horizon TV subscribers, representing
23% of our enhanced video base and 5% penetration of our total video base, which provides a substantial
opportunity for continued upsell.
Our broadband RGU growth of 35,000 in Q1 was 47,000 lower than in Q1 2014 due largely to the
aforementioned price increase. As a result of continued demand for superfast broadband, over 60% of our
new subscribers chose products with speeds of 120 Mbps or higher in Q1. With broadband penetration of
only 24%, the ability to offer superior speeds across our entire footprint and the upcoming deployment of
EuroDocsis 3.1 technology, we are well positioned for continued growth. Our telephony RGUs were similarly
impacted by the broadband price increase, as we typically bundle our telephony products with our broadband
internet offerings.
During Q1, we signed a new distribution agreement with Maxdome, Germany's leading SVoD service, and
launched a new product portfolio containing more value for our customers in early March. These new offers
feature Horizon TV with DVR functionality, Maxdome's rich SVoD offering and further enhancement of our
multi-screen "Horizon Go" video service. In conjunction with these improvements, we increased the price
points of our customer acquisition portfolio by approximately €5 to €13 per month, depending on the bundle
and tier, and reduced the promotional period from 12 to 9 months. This will enable us to continue investing
in our value leadership by offering the best broadband connection along with outstanding content and
functionalities to our customers.
Financial Summary
Total revenue increased 6% to €538 million in Q1 2015. This growth was primarily attributable to higher
cable subscription revenue, driven by growth in subscribers and an increase in ARPU, partially offset by the
€9 million negative impact of a favorable revenue settlement during Q1 2014, of which €8 million positively
impacted our Adjusted Segment EBITDA in the prior-year period. We delivered 7% Adjusted Segment
EBITDA growth as compared to Q1 2014, primarily due to the aforementioned revenue growth drivers.
Our property, equipment and intangible asset additions were 27.5% of revenue in Q1 2015, compared to
24.5% in the prior year period. The increase was largely attributable to higher customer premises equipment
due to record Horizon TV subscriber additions, as well as an increase in capitalized subscriber acquisition
costs due largely to higher commissions paid on our higher-priced product portfolio.
13Summary of Third-Party Debt and Cash and Cash Equivalents
The following table details the nominal value and euro equivalent of the carrying value of Unitymedia's third-
party debt and cash and cash equivalents as of the dates indicated:
March 31, 2015 Dec. 31, 2014
Nominal Carrying Carrying
value value value
in millions
Senior Credit Facilities
Super Senior Revolving Credit Facility (Euribor+2.25%) due 2020 ... € 80.0 € — € 80.0
Senior Revolving Credit Facility (Euribor+2.75%) due 2020.............. € 420.0 — 200.0
Total Senior Credit Facilities ............................................................................... — 280.0
Senior Secured Notes
5.500% EUR Senior Secured Notes due 2022 .................................. € 585.0 585.0 650.0
5.125% EUR Senior Secured Notes due 2023 .................................. € 450.0 450.0 500.0
5.500% USD Senior Secured Notes due 2023 .................................. $ 1,000.0 932.1 826.4
5.625% EUR Senior Secured Notes due 2023 .................................. € 315.0 315.0 350.0
5.750% EUR Senior Secured Notes due 2023 .................................. € 450.0 450.0 500.0
4.000% EUR Senior Secured Notes due 2025 .................................. € 1,000.0 1,000.0 1,000.0
5.000% USD Senior Secured Notes due 2025 .................................. $ 550.0 512.7 454.5
3.500% EUR Senior Secured Notes due 2027 .................................. € 500.0 500.0 —
6.250% EUR Senior Secured Notes due 2029 .................................. € 475.0 475.0 475.0
Total Senior Secured Notes ................................................................................ 5,219.8 4,755.9
Senior Notes
3.750% EUR Senior Notes due 2027 ................................................ € 700.0 700.0 —
6.125% USD Senior Notes due 2025 ................................................ $ 900.0 838.9 743.8
9.500% EUR Senior Exchange Notes due 2021 ............................... € — — 616.6
Total Senior Notes .............................................................................................. 1,538.9 1,360.4
Finance lease obligations ........................................................................................ 5.2 5.2
Vendor financing ..................................................................................................... 115.9 96.5
Transaction costs and accrued third-party interest .................................................. 36.2 52.3
Total third-party debt and finance lease obligations..................................... 6,916.0 6,550.3
Less: cash and cash equivalents ............................................................................ 8.7 14.4
Net third-party debt and finance lease obligations23 ..................................... € 6,907.3 € 6,535.9
Exchange rate ($ to €) ............................................................................................. 1.0728 1.2100
At March 31, 2015, our fully-swapped third-party debt borrowing cost24 improved to 4.9%, as compared to
5.4% at December 31, 2014, and the average tenor of our third-party debt is now nearly 10 years. During
Q1, we issued €500 million principal amount of 3.5% senior secured notes due 2027, which were used to
redeem 10% of the principal amount of certain senior secured notes, repay the outstanding drawings under
our senior revolving credit facility and pay the related call premium and transaction costs where applicable.
In addition, we issued €700 million of 3.75% senior notes due 2027. The net proceeds were used to redeem
the 9.50% EUR Senior Exchange Notes and to pay the related call premium and transaction costs. Based
on the results for Q1 2015, and subject to the completion of our Q1 2015 compliance reporting requirements,
(i) the ratio of Senior Secured Debt to Annualized EBITDA (last two quarters annualized) was 3.84x and (ii)
the ratio of Total Debt to Annualized EBITDA (last two quarters annualized) was 4.95x, each as defined and
calculated in accordance with our Senior Revolving Credit Facilities. As of March 31, 2015, we had maximum
undrawn commitments of €500 million. When the March 31, 2015 compliance reporting requirements are
completed, we anticipate €482 million will be available.
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15Ziggo Reports Preliminary Q1 2015 Results
Steady Progress Made On Integrating Ziggo And UPC Nederland
Launched Unified Portfolio Under Ziggo Brand In April
Offering More Value with Horizon TV & Broadband Speeds
Ziggo Group Holding B.V. ("Ziggo") is the leading Dutch provider of entertainment, information and
communication through television, internet and telephony services, providing 9.9 million services to its 4.2
million customers.
Operating and financial highlights*:
• Continued competitive pressure and our network and product harmonization efforts were among the
factors that impacted our first quarter RGU2 performance, resulting in a net loss of 47,000 RGUs
Delivered 10,000 broadband internet RGUs in Q1 or 93,000 in the last twelve months
Added 44,000 Horizon TV subscribers in Q1, growing next-generation TV base to 375,000
Postpaid mobile subscriber additions of 29,000 in Q1 or 105,000 in the last twelve months
• Steady progress made on integration since mid-November 2014; starting to drive scale benefits across
the organization
Completed network and product harmonization in former Ziggo footprint, which enabled the
launch of our new high-value product portfolio under the unified Ziggo brand in April
Targeting reduction of approximately 450 permanent positions through 2018 and closure of
three offices to result in a more streamlined and efficient organization34
• Unified portfolio as of mid-April including Horizon TV, Horizon Go, MyPrime, Replay TV and mobile
Additional content and functionality in core bundle "Complete" offered at an incremental €5
Created national challenger in business market with launch of new Ziggo Business portfolio
• Rebased3 revenue growth of 1% to €628 million in Q1
Monthly ARPU17 per customer grew 4.2% to €44.39 in Q1
• Rebased Segment OCF6 decline of 4% to €326 million in Q1 impacted by €14 million of expenses
associated with rebranding and network and product harmonization efforts
• Operating income was €9 million in Q1 2015 as compared to €71 million in the prior year period
• Property and equipment additions8 were 17% of revenue in Q1, as compared to 22% in Q1 2014,
driven by rationalization of non-CPE projects following the integration
• Issued €1.6 billion equivalent of bonds in Q1 and effectively rolled €689 million of loans from UPC
Holding credit pool as part of the Netherlands Reorganization that resulted in the creation of a unified
Dutch credit pool
* The financial figures contained in this release are prepared in accordance with U.S. GAAP37. The financial and operating information included herein as of and for
the three months ended March 31, 2014, and for other periods that precede the November 11, 2014 common control date, is presented on a pro forma basis that
gives effect to the transfers of Ziggo Holding B.V. (“Ziggo Holding”) and UPC Nederland B.V. (“UPC Nederland”) (collectively, “the Netherlands Reorganization”) into
Ziggo as if they had occurred on January 1, 2014. Financial and operating information included in this release for all other periods is presented on a historical basis
unless otherwise noted. For additional information, see footnote 31 on page 37.
16Operating Statistics Summary
As of and for the three months
ended March 31,
2015 2014
Historical Pro forma31
Footprint
Homes Passed9 ................................................................................................... 6,993,600 6,949,700
10
Two-way Homes Passed ................................................................................... 6,979,200 6,936,300
Subscribers (RGUs)26
Basic Video11 ........................................................................................................ 871,800 1,022,000
Enhanced Video12 ................................................................................................ 3,368,100 3,363,600
Total Video ..................................................................................................... 4,239,900 4,385,600
Internet14 .............................................................................................................. 3,076,300 2,983,000
Telephony15 .......................................................................................................... 2,568,600 2,580,500
Total RGUs .................................................................................................... 9,884,800 9,949,100
Q1 Organic RGU Net Additions (Losses)
Basic Video .......................................................................................................... (30,300) (48,000)
Enhanced Video ................................................................................................... (19,200) 18,400
Total Video ..................................................................................................... (49,500) (29,600)
Internet ................................................................................................................. 10,300 53,000
Telephony ............................................................................................................. (7,400) 25,400
Total RGU net additions (losses) ................................................................... (46,600) 48,800
Penetration
Enhanced Video Subscribers as a % of Total Video Subscribers27 ...................... 79.4% 76.7%
Internet as a % of Two-way Homes Passed28 ...................................................... 44.1% 43.0%
Telephony as a % of Two-way Homes Passed28 .................................................. 36.8% 37.2%
Customer Relationships
Customer Relationships16 .................................................................................... 4,241,900 4,387,800
RGUs per Customer Relationship ........................................................................ 2.33 2.27
Q1 Monthly ARPU per Customer Relationship..................................................... € 44.39 € 42.62
Customer Bundling
Single-Play ........................................................................................................... 25.5% 30.0%
Double-Play ......................................................................................................... 15.9% 13.1%
Triple-Play ............................................................................................................ 58.6% 56.9%
Mobile Statistics
Mobile subscribers19 ............................................................................................. 158,400 53,800
17Financial Results, Segment OCF Reconciliation & Property and Equipment
Additions
The following tables reflect preliminary unaudited selected financial results for the three months ended
March 31, 2015 and 2014.
Three months ended
March 31, Change
2015 2014 Pro forma Rebased
Historical Pro forma31 % %
in millions, except % amounts
Revenue .................................................................................. € 627.8 € 627.5 — 0.6
Segment OCF ......................................................................... € 325.8 € 341.1 (4.5) (3.5)
Share-based compensation expense ...................................... (1.1) (0.3)
Related-party fees and allocations21 ........................................ (40.1) (36.0)
Depreciation and amortization ................................................. (269.5) (232.5)
Impairment, restructuring and other operating items, net (5.9) (1.7)
Operating income .................................................................. € 9.2 € 70.6
Segment OCF as a percentage of revenue ............................. 51.9% 54.4%
The table below highlights the categories of our property and equipment additions for the indicated periods
and reconciles those additions to the capital expenditures that we present in our condensed consolidated
statements of cash flows:
Three months ended
March 31,
2015 2014
Historical Pro forma31
in millions, except % amounts
Customer premises equipment .................................................................................. € 38.6 € 39.0
Scalable infrastructure ............................................................................................... 26.8 20.4
Line extensions .......................................................................................................... 14.5 10.9
Upgrade/rebuild ......................................................................................................... 11.6 21.1
Support capital ........................................................................................................... 16.4 44.4
Property and equipment additions .......................................................................... 107.9 135.8
Assets acquired under capital-related vendor financing arrangements ..................... (3.9) (3.0)
Assets acquired under capital leases ........................................................................ (2.8) (8.6)
Changes in liabilities related to capital expenditures ................................................. 3.4 1.1
Total capital expenditures22 .............................................................................. € 104.6 € 125.3
Property and equipment additions as a percentage of revenue ................................. 17.2% 21.6%
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