UPC Holding Reports 2012 Results
UPC Holding Reports 2012 Results
Business Wire
AMSTERDAM -- February 14, 2013
UPC Holding B.V. (“UPC Holding”) is today providing selected, preliminary
unaudited financial and operating information for the three months (“Q4”) and
year ended December 31, 2012. UPC Holding is a wholly-owned subsidiary of
Liberty Global, Inc. (“Liberty Global”) (NASDAQ: LBTYA, LBTYB and LBTYK). A
copy of this press release will be posted to Liberty Global’s website
(www.lgi.com). In addition, UPC Holding’s consolidated financial statements
with the accompanying notes are expected to be posted prior to the end of
March 2013.
Financial and operating highlights for the year ended December 31, 2012, as
compared to the results for the same period last year (unless noted), include:
* Organic RGU^1 additions increased 7% to 711,000, including 222,000 in Q4
* Highest annual RGU additions since 2007
* Revenue increased 6% to €4.27 billion, representing rebased^2 growth of 3%
* Operating cash flow (“OCF”)^3 improved 7% to €2.07 billion, reflecting
rebased growth of 4%
* Achieved Q4 rebased OCF growth of 6%
* Operating income increased by 11% year-over-year to €1.0 billion
* Capital expenditures as a percentage of revenue declined to 17%
* Over 75% of consolidated third-party debt is due in 2017 and beyond
Financial Results
For the three months and year ended December 31, 2012, our consolidated
revenue increased by 7% to €1.09 billion and 6% to €4.27 billion respectively,
as compared to the corresponding prior year periods. Besides acquisitions,
including Aster in Poland, and favorable foreign currency (“FX”) movements,
our revenue growth for both periods primarily resulted from continued volume
growth in RGUs. Neutralizing the impact of acquisitions and FX, we achieved
year-over-year rebased revenue growth of 3% for both the three-month and
full-year 2012 periods. For the last three years, our annual rebased revenue
growth has consistently averaged 3%.
Geographically, our European operations (“UPC Europe”) achieved rebased growth
of 3% in 2012, with our Western European and our Central and Eastern European
(“CEE”) regions posting rebased revenue growth of 4% and a modest decline of
1%, respectively. Our top-performing European markets for 2012 in terms of
rebased revenue growth were our Irish and our Dutch businesses. One particular
highlight in 2012 was the performance of UPC Cablecom in Switzerland. Gaining
momentum throughout the year, our Swiss business delivered rebased revenue
growth of 4% in 2012, up from 2% in 2011. Turning to South America, our
Chilean operations (“VTR”) realized rebased revenue growth of 4%, matching the
result of our Western European region.
We increased our OCF by 10% to €537 million and 7% to €2.07 billion for the
three months and year ended December 31, 2012, respectively, as compared to
the corresponding prior year periods. This OCF growth reflects the positive
impact of our organic growth, acquisitions and, to a lesser extent, favorable
FX movements. On a rebased basis, we delivered year-over-year growth of 6% for
Q4 and 4% for the full year. For 2012, we delivered year-over-year rebased OCF
growth of 5% in our Western European region with particularly strong
contributions from our Irish and Dutch businesses, which grew 11% and 6%,
respectively. In addition, our Swiss operation improved its rebased OCF growth
to 5% in 2012, its strongest result in the last four years. Rounding out our
other operations, CEE’s rebased OCF was flat for the second year in a row, and
in Chile, we posted rebased OCF growth of 8% for 2012, its strongest showing
since 2008.
Our consolidated OCF margins^4 increased by 130 basis points to 49.2% in Q4
and 50 basis points to 48.6% for full-year 2012, as compared to the
corresponding prior year periods. Specifically, for full-year 2012, our
Western European and CEE businesses attained OCF margins of 55.8% and 49.8%,
respectively, with each experiencing year-over-year OCF margin improvement of
approximately 100 basis points. With respect to Western Europe, each of our
operations delivered improved OCF margins. Moving to Chile, we achieved a
44.0% OCF margin in 2012, which reflected a 160 basis point improvement over
Chile’s OCF margin of 42.4% in 2011. The overall OCF margin improvements for
UPC Holding were partially offset by increased costs in our European central
and other operations during the 2012 periods as compared to the corresponding
periods in 2011.
For the year ended December 31, 2012, we reported capital expenditures of €724
million, reflecting a decline of approximately €58 million from 2011. As a
percentage of revenue, our capital expenditures decreased from 19% of revenue
in 2011 to 17% of revenue in 2012. This was in the middle of our target range
of 16% to 18% on a consolidated basis. The annual decline was attributable in
large part to our working capital efforts, as our non-cash vendor financing
arrangements were €87 million higher year-over-year. Additionally, our total
property and equipment additions, which include our capital expenditures on an
accrual basis and our vendor financing, capital lease and other non-cash
additions, declined year-over-year from 22% of revenue in 2011 to 21% of
revenue in 2012, despite our stronger subscriber growth in 2012 compared to
the prior year.
Subscriber Statistics
At December 31, 2012, we provided our 10.3 million unique customers with 18.7
million services, consisting of 9.3 million video, 5.5 million broadband
internet and 4.0 million telephony subscriptions. As compared to year-end
2011, we increased our RGU base by 5% or over 900,000 RGUs. This growth was
driven by over 700,000 organic RGU additions, as well as RGUs from the
inclusion of our historical small office home office (“SOHO”) business^5 and
from multiple small in-market acquisitions. During 2012, we increased our
combined double- and triple-play customers by 388,000 or 8% (inclusive of
acquisitions) to over 5 million bundled customers, or 50% of our customer
base. As a result, our bundling ratio increased from 1.73x RGUs per customer
at the end of 2011 to 1.81x RGUs per customer at the end of 2012.
Our subscriber additions increased by 7% year-over-year to 711,000 RGUs in
2012, with 222,000 RGUs added in the fourth quarter. Our 2012 result
represents our strongest performance since 2007 and our Q4 2012 result
reflects our second highest quarterly total since Q4 2007. Our subscriber
additions for the three months and year ended 2012 include 23,000 and 71,000
RGUs, respectively, relating to SOHO RGUs.
Geographically, our European operations accounted for over 85% of our total
RGU additions in 2012. Our Western European businesses added 278,000 RGUs
during the year, which was largely flat as compared to 2011. We had strong
performances in both Switzerland and Austria, which added 123,000 RGUs on a
combined basis in 2012 versus 46,000 RGUs in 2011. In particular, our Swiss
operation reported its best subscriber performance since 2006 with 80,000 RGU
additions. Offsetting our Swiss and Austrian improved performances, our Dutch
business faced a more competitive environment in the second half of 2012 and,
as a result, added 55,000 RGUs in 2012 as compared to 137,000 in 2011.
Rounding out our European footprint, our CEE operations grew their RGU
additions by 24% in 2012, gaining 329,000 RGUs. This was our highest annual
total since 2007 in that region, with both our Romanian and Hungarian
operations showing dramatic year-over-year improvement. Finally, our Chilean
operation realized a 7% decline in RGU additions to 105,000 in 2012.
In terms of our TV business, we lost 169,000 video subscribers (including just
12,000 in Q4) in 2012, which is slightly better than our 2011 result, and
represented our lowest annual RGU attrition since 2006. We finished 2012 with
a digital video base of 5.2 million RGUs, as we added 497,000 digital cable
RGUs (including 141,000 in Q4) during the year. As a result of our growth in
digital subscribers, we achieved a digital penetration^6 of 61%, as compared
to 54% at year-end 2011. We expect that our opportunity to continue driving
digital upgrades will be enhanced by our recently launched Horizon TV product
and with over 3 million analog video subscribers, we remain confident in the
video growth opportunity. The take-up of Horizon TV in the Dutch market
remained robust during the fourth quarter and within five short months we have
sold over 100,000 Horizon TV subscriptions and have over 200,000 unique users
enjoying our on-line and multiscreen services. In January 2013, we introduced
Horizon TV in Switzerland and the early results so far have been very positive
and we look forward to launching Horizon TV in Ireland later this year.
Overall subscriber growth was powered by our market-leading double- and
triple-play bundles, with our superior broadband internet products serving as
the key competitive differentiator. As a result of continued strong demand
from within our customer base, we added 403,000 broadband internet subscribers
(including 113,000 in Q4) and 477,000 telephony subscribers (including 122,000
in Q4), reflecting a year-over-year decline of 4% for broadband internet, but
an increase of 16% for telephony, which represents a record level for annual
telephony additions.
Summary of Third-Party Debt and Cash and Cash Equivalents
At December 31, 2012, we reported €9.6 billion of third-party debt and €58
million of cash and cash equivalents. As compared to September 30, 2012, our
third-party debt remained relatively constant, decreasing €62 million. At
December 31, 2012, over 75% of our third-party debt was due in 2017 and
beyond, while our fully-swapped borrowing cost^7 declined to approximately
7.8% at Q4 2012 from 8.8% at Q4 2011, due to a combination of attractive
pricing on our new debt issuances and lower costs associated with our
derivative instruments.
During 2012, we completed several opportunistic financing transactions, which
enabled us to extend our maturity profile, lower our borrowing cost, and raise
new capital. In the fourth quarter, we rolled our existing $500 million of
commitments under Facility AB due 2017 into a new Facility AF, which matures
in 2021.
The following table details our consolidated third-party debt and cash and
cash equivalents as of the dates indicated:^8
December 31, September 30,
2012 2012
in millions
UPC Broadband Holding Bank Facility € 4,142.5 € 4,170.6
UPCB Finance Limited 7.625% Senior Secured 496.6 496.5
Notes due 2020
UPCB Finance II Limited 6.375% Senior Secured 750.0 750.0
Notes due 2020
UPCB Finance III Limited 6.625% Senior Secured 757.7 776.7
Notes due 2020
UPCB Finance V Limited 7.25% Senior Secured 568.3 582.5
Notes due 2021
UPCB Finance VI Limited 6.875% Senior Secured 568.3 582.5
Notes due 2022
UPC Holding 8.00% Senior Notes due 2016 300.0 300.0
UPC Holding 9.75% Senior Notes due 2018 380.5 379.8
UPC Holding 9.875% Senior Notes due 2018 286.8 293.4
UPC Holding 8.375% Senior Notes due 2020 640.0 640.0
UPC Holding 6.375% Senior Notes due 2022 594.7 594.6
Other debt, including vendor financing and 108.3 89.2
capital lease obligations
Total third-party debt € 9,593.7 € 9,655.8
Cash and cash equivalents € 58.3 € 71.0
UPC Broadband Holding Bank Facility
The following table details the key terms of the UPC Broadband Holding Bank
Facility at December 31, 2012:
As of December 31, 2012
Final Interest Facility Unused Carrying
Facility maturity rate amount^9 borrowing value^10
capacity
in millions
Facility Q July 31, E + 2.75% € 30.0 € 30.0 € —
2014
Facility R Dec. 31, E + 3.25% € 290.7 — 290.7
2015
Facility S Dec. 31, E + 3.75% € 1,204.5 — 1,204.5
2016
Facility T Dec. 31, L + 3.50% $ 260.2 — 196.1
2016
Facility U Dec. 31, E + 4.00% € 750.8 — 750.8
2017
Facility V Jan. 15, 7.625% € 500.0 — 500.0
2020
Facility W Mar. 31, E + 3.00% € 144.1 144.1 —
2015
Facility X Dec. 31, L + 3.50% $ 1,042.8 — 790.2
2017
Facility Y July 1, 6.375% € 750.0 — 750.0
2020
Facility Z July 1, 6.625% $ 1,000.0 — 757.7
2020
Facility July 31, E + 3.25% € 904.0 904.0 —
AA 2016
Facility Nov. 15, 7.250% $ 750.0 — 568.3
AC 2021
Facility Jan. 15, 6.875% $ 750.0 — 568.3
AD 2022
Facility Dec. 31, E + 3.75% € 535.5 — 535.5
AE 2019
Facility Jan. 31, L + $ 500.0 — 374.7
AF 2021 3.00%^11
Elimination of Facilities V, Y, Z, AC and AD in — (3,144.3 )
consolidation
Total € 1,078.1 € 4,142.5
Borrowing Capacity & Covenant Calculations
UPC Broadband Holding B.V. (“UPC Broadband Holding”), our wholly-owned
subsidiary, is a borrower of outstanding indebtedness under the UPC Broadband
Holding Bank Facility, which we guarantee. As of December 31, 2012, UPC
Broadband Holding had maximum undrawn commitments under Facilities Q, W and AA
of the UPC Broadband Holding Bank Facility of €1.1 billion. We estimate that
approximately €789 million of this amount will be available upon completion of
our fourth quarter compliance reporting requirements.
Based on the results ended December 31, 2012 and subject to the completion of
our fourth 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 3.64x 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 4.66x.^12
About UPC Holding
UPC Holding connects people to the digital world and enables them to discover
and experience its endless possibilities. Our market-leading television,
broadband internet and telephony services are provided through next-generation
networks and innovative technology platforms in 10 countries that connect 10
million customers who subscribe to 19 million services as of December 31,
2012.
Disclaimer
This press release contains forward-looking statements, including our
expectations with respect to our strategy and future growth prospects,
including our continued ability to increase our organic RGU additions and
further grow the penetration of our advanced services and our assessment of
our liquidity and access to capital markets, including our borrowing
availability; our expectations with respect to the timing and impact of our
expanded roll-out of advanced products and services, including Horizon TV; 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 our 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 property and equipment additions 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 Form 10-K.
These forward-looking statements speak only as of the date of this release. We
expressly disclaim any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statement contained herein to reflect any
change in our expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.
We are required under the terms of the indentures for the UPC Holding senior
notes and the UPCB Finance Limited, UPCB Finance II Limited, UPCB Finance III
Limited, UPCB Finance V Limited and UPCB Finance VI Limited senior secured
notes to provide certain financial information regarding UPC Holding to
bondholders on a quarterly basis. UPC Broadband Holding, our wholly-owned
subsidiary, is a borrower and we are a guarantor of outstanding indebtedness
under 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
December 31, 2012 results. The financial information contained herein is
preliminary and subject to change. We presently expect to issue our December
31, 2012 audited consolidated financial statements prior to the end of March
2013, 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 and the
senior secured notes.
Please see footnotes to the operating data table for the definition of
revenue generating units (“RGUs”). Organic figures exclude RGUs of
^1 acquired entities at the date of acquisition, but include the impact of
changes in RGUs from the date of acquisition. All subscriber/RGU
additions or losses refer to net organic changes, unless otherwise
noted.
For purposes of calculating rebased growth rates on a comparable basis
for all businesses that we owned during 2011 and 2012, we have adjusted
our historical revenue and OCF for the three months and year ended
December 31, 2011 to (i) include the pre-acquisition revenue and OCF of
certain entities acquired during 2011 and 2012 in the respective 2011
^2 rebased amounts to the same extent that the revenue and OCF of such
entities are included in our 2012 results and (ii) reflect the
translation of our rebased amounts for the 2011 periods at the
applicable average exchange rates that were used to translate our 2012
results. Please see page 7 for supplemental information on rebased
growth.
^3 Please see page 10 for our definition of operating cash flow and a
reconciliation to operating income.
^4 OCF margin is calculated by dividing OCF by total revenue for the
applicable period.
Certain of our business-to-business (“B2B”) revenue is derived from SOHO
subscribers that pay a premium price to receive enhanced service levels
along with video, internet or telephony services that are the same or
similar to the mass marketed products offered to our residential
subscribers. Effective January 1, 2012, we recorded non-organic
adjustments to begin including the SOHO subscribers of UPC Europe in our
RGU and customer counts. As a result, all mass marketed products
^5 provided to SOHOs, whether or not accompanied by enhanced service levels
and/or premium prices, are now included in the respective RGU and
customer counts of our broadband communications operations, with only
those services provided at premium prices considered to be “SOHO RGUs”
or “SOHO customers.” With the exception of our B2B SOHO subscribers, we
generally do not count customers of B2B services as customers or RGUs
for external reporting purposes. RGU, customer, bundling and ARPU
amounts presented for periods prior to January 1, 2012 have not been
restated to reflect this change.
^6 Digital penetration is calculated by dividing the number of digital
cable RGUs by the total number of digital and analog cable RGUs.
Our fully swapped debt borrowing cost represents the weighted average
^7 interest rate on our aggregate variable and fixed rate indebtedness,
including the effects of derivative instruments, discounts and
commitment fees, but excluding the impact of financing costs.
UPCB Finance Limited, UPCB Finance II Limited, UPCB Finance III Limited,
UPCB Finance V Limited and UPCB Finance VI Limited are special purpose
financing companies created for the primary purpose of issuing senior
secured notes and are owned 100% by charitable trusts. We used the
proceeds from the senior secured notes to fund Facilities V, Y, Z, AC
and AD under the UPC Broadband Holding Bank Facility, with UPC
Financing, our direct subsidiary, as the borrower. These special purpose
^8 financing companies are dependent on payments from UPC Financing under
Facilities V, Y, Z, AC and AD in order to service their payment
obligations under the senior secured notes. As such, these companies are
variable interest entities and UPC Financing and its parent entities,
including UPC Holding, are required by accounting principles generally
accepted in the U.S. (“GAAP”) to consolidate these companies.
Accordingly, the amounts outstanding under Facilities V, Y, Z, AC and AD
eliminate within our condensed consolidated financial statements.
Except as described in note 8 above, amounts represent total third-party
^9 commitments at December 31, 2012 without giving effect to the impact of
discounts.
^10 Facilities T and AF carrying values include the impact of discounts.
^11 The Facility AF interest rate includes a LIBOR floor of 1.00%.
Our covenant calculations are based on debt amounts which take into
^12 account currency swaps calculated at weighted average FX rates across
the period. Thus, the debt used in the calculations may differ from the
debt balances reported within the financial statements.
Revenue and Operating Cash Flow
In the following tables, we present revenue and operating cash flow by
reportable segment for the three months and year ended December 31, 2012, as
compared to the corresponding prior year periods. All of the reportable
segments derive their revenue primarily from broadband communications
services, including video, broadband internet and telephony services. Most
reportable segments also provide B2B services. At December 31, 2012, our
operating segments in UPC Europe provided broadband communications services in
nine European countries and direct-to-home (“DTH”) services to customers in
the Czech Republic, Hungary, Romania and Slovakia through a Luxembourg-based
organization that we refer to as "UPC DTH." Our Other Western Europe segment
includes our broadband communications operating segments in Austria and
Ireland. Our Central and Eastern Europe segment includes our broadband
communications operating segments in the Czech Republic, Hungary, Poland,
Romania and Slovakia. UPC Europe’s central and other category includes (i) the
UPC DTH operating segment, (ii) costs associated with certain centralized
functions, including billing systems, network operations, technology,
marketing, facilities, finance and other administrative functions and (iii)
intersegment eliminations within UPC Europe. VTR provides video, broadband
internet and telephony services in Chile.
Beginning in the fourth quarter of 2012, the management responsibility for
certain of our operations in Switzerland was transferred to our Austrian
operations and, accordingly, such operations are now reported within our Other
Western Europe segment. Segment information for all periods presented has been
retrospectively revised to reflect this change. We present only the reportable
segments of our continuing operations in the tables below.
For purposes of calculating rebased growth rates on a comparable basis for all
businesses that we owned during 2012, we have adjusted our historical revenue
and OCF for the three months and year ended December 31, 2011 to (i) include
the pre-acquisition revenue and OCF of certain entities acquired during 2011
and 2012 in our rebased amounts for the three months and year ended December
31, 2011 to the same extent that the revenue and OCF of such entities are
included in our results for the three months and year ended December 31, 2012
and (ii) reflect the translation of our rebased amounts for the three months
and year ended December 31, 2011 at the applicable average foreign currency
exchange rates that were used to translate our results for the three months
and year ended December 31, 2012. 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 December 31, 2011 include four small entities
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 year ended
December 31, 2011 include Aster and six small entities in Europe.
We have reflected the revenue and OCF of the acquired entities in our 2011
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 GAAP and local generally accepted accounting principles,
(ii) any significant effects of acquisition accounting adjustments, (iii) any
significant differences between our accounting policies and those of the
acquired entities and (iv) other items we deem appropriate. We do not adjust
pre-acquisition periods to eliminate non-recurring items or to give
retroactive effect to any changes in estimates that might be implemented
during post-acquisition periods. 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 results or that
the pre-acquisition financial statements we have relied upon do not contain
undetected errors. The adjustments reflected in our rebased amounts have not
been prepared with a view towards complying with Article 11 of 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 amounts
or the revenue and OCF that will occur in the future. The rebased growth
percentages have been presented as a basis for assessing growth rates on a
comparable basis, and are not presented as a measure of our pro forma
financial performance. 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 December 31, 2012 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 and (iii) the percentage change from
period to period on a rebased basis:
Three months ended Increase Increase
Revenue
December 31, (Decrease) (Decrease)
2012 2011 € % Rebased %
in millions, except % amounts
UPC Europe:
The Netherlands € 242.2 € 232.8 € 9.4 4.0 3.9
Switzerland 250.9 236.7 14.2 6.0 3.8
Other Western Europe 169.3 162.2 7.1 4.4 4.4
Total Western Europe 662.4 631.7 30.7 4.9 4.0
Central and Eastern 220.4 211.6 8.8 4.2 (0.9 )
Europe
Central and other 24.1 21.2 2.9 13.7 —
Total UPC Europe 906.9 864.5 42.4 4.9 3.0
VTR (Chile) 184.7 159.9 24.8 15.5 3.8
Total € 1,091.6 € 1,024.4 € 67.2 6.6 3.1
Year ended Increase Increase
December 31, (Decrease) (Decrease)
2012 2011 € % Rebased %
in millions, except % amounts
UPC Europe:
The Netherlands € 955.6 € 914.9 € 40.7 4.4 4.4
Switzerland 979.6 921.3 58.3 6.3 3.8
Other Western Europe 659.5 641.8 17.7 2.8 2.7
Total Western Europe 2,594.7 2,478.0 116.7 4.7 3.7
Central and Eastern 867.5 806.6 60.9 7.6 (0.6 )
Europe
Central and other 91.2 89.3 1.9 2.1 —
Total UPC Europe 3,553.4 3,373.9 179.5 5.3 2.6
VTR (Chile) 718.2 639.4 78.8 12.3 4.3
Total € 4,271.6 € 4,013.3 € 258.3 6.4 2.9
Three months ended Increase Increase
Operating Cash Flow
December 31, (Decrease) (Decrease)
2012 2011 € % Rebased %
in millions, except % amounts
UPC Europe:
The Netherlands € 147.7 € 137.4 € 10.3 7.5 7.5
Switzerland 142.9 132.7 10.2 7.7 5.5
Other Western Europe 84.4 74.6 9.8 13.1 13.1
Total Western Europe 375.0 344.7 30.3 8.8 7.9
Central and Eastern 111.6 99.9 11.7 11.7 6.2
Europe
Central and other (34.1 ) (25.0 ) (9.1 ) (36.4 ) —
Total UPC Europe 452.5 419.6 32.9 7.8 5.8
VTR (Chile) 84.4 70.8 13.6 19.2 7.0
Total € 536.9 € 490.4 € 46.5 9.5 6.0
Year ended Increase Increase
December 31, (Decrease) (Decrease)
2012 2011 € % Rebased %
in millions, except % amounts
UPC Europe:
The Netherlands € 573.1 € 542.5 € 30.6 5.6 5.6
Switzerland 558.4 518.5 39.9 7.7 5.2
Other Western 316.9 300.6 16.3 5.4 5.4
Europe
Total Western 1,448.4 1,361.6 86.8 6.4 5.4
Europe
Central and 431.7 393.5 38.2 9.7 0.0
Eastern Europe
Central and (122.2 ) (95.3 ) (26.9 ) (28.2 ) —
other
Total UPC 1,757.9 1,659.8 98.1 5.9 2.8
Europe
VTR (Chile) 316.0 271.0 45.0 16.6 8.2
Total € 2,073.9 € 1,930.8 € 143.1 7.4 3.6
Operating Cash Flow Definition and Reconciliation
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 selling, general and administrative expenses
(excluding stock-based compensation, related party fees and allocations,
depreciation and amortization, and impairment, restructuring and other
operating items). Other operating items include (i) gains and losses on the
disposition of long-lived assets, (ii) direct acquisition costs, such as
third-party due diligence, legal and advisory costs, and (iii) other
acquisition-related items, such as gains and losses on the settlement of
contingent consideration. Our internal decision makers believe operating cash
flow is a meaningful measure and is superior to 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 public
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 (loss), cash flow from operating activities and other
GAAP measures of income or cash flows. A reconciliation of total segment
operating cash flow to our operating income is presented below.
Three months ended Year ended
December 31, December 31,
2012 2011 2012 2011
in millions
Total segment operating € 536.9 € 490.4 € 2,073.9 € 1,930.8
cash flow
Stock-based (3.7 ) (3.6 ) (17.8 ) (13.5 )
compensation expense
Depreciation and (246.5 ) (247.3 ) (1,037.3 ) (970.2 )
amortization
Related party fees and (13.8 ) (6.8 ) 2.4 (5.9 )
allocations, net
Impairment,
restructuring and other (5.9 ) (12.5 ) (8.2 ) (26.8 )
operating items, net
Operating income € 267.0 € 220.2 € 1,013.0 € 914.4
Capital Expenditures
The following table provides property and equipment additions for UPC Holding
for the indicated periods:
Three months ended Year ended
December 31, December 31,
2012 2011 2012 2011
in millions, except % amounts
UPC Europe:
The Netherlands € 51.7 € 45.8 € 172.3 € 166.6
Switzerland 44.1 55.7 173.2 169.5
Other Western Europe 29.7 43.5 112.7 139.4
Total Western Europe 125.5 145.0 458.2 475.5
Central and Eastern Europe 54.0 42.0 176.7 144.9
Central and other 35.2 37.8 120.2 120.7
Total UPC Europe 214.7 224.8 755.1 741.1
VTR (Chile) 33.9 32.4 160.6 132.1
Total UPC Holding € 248.6 € 257.2 € 915.7 € 873.2
Total property and equipment 22.8 % 25.1 % 21.4 % 21.8 %
additions as % of revenue
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 consolidated statements of cash
flows:
Three months ended Year ended
December 31, December 31,
2012 2011 2012 2011
in millions, except % amounts
Customer premises equipment € 91.9 € 71.6 € 400.5 € 326.5
Scalable infrastructure 49.7 64.2 165.0 196.1
Line extensions 28.9 29.4 102.2 98.0
Upgrade/rebuild 25.5 31.7 82.0 93.7
Support capital 52.6 60.3 166.0 158.9
Property and equipment 248.6 257.2 915.7 873.2
additions
Assets acquired under
capital-related vendor
financing (48.8 ) (31.8 ) (160.6 ) (73.2 )
arrangements (including
related-party amounts)^1
Assets acquired under capital (0.5 ) (0.3 ) (1.9 ) (1.4 )
leases^1
Assets contributed by parent (3.7 ) — (10.2 ) —
company^2
Changes in current
liabilities related to
capital expenditures (29.5 ) (39.1 ) (19.2 ) (17.0 )
(including related-party
amounts)
Total capital expenditures € 166.1 € 186.0 € 723.8 € 781.6
Total Capital Expenditures:
UPC Europe € 137.0 € 170.4 € 571.6 € 663.6
VTR (Chile) 29.1 15.6 152.2 118.0
Total UPC Holding € 166.1 € 186.0 € 723.8 € 781.6
Total Capital Expenditures as
% of Revenue:
UPC Europe 15.1 % 19.7 % 16.1 % 19.7 %
VTR (Chile) 15.8 % 9.8 % 21.2 % 18.5 %
Total UPC Holding 15.2 % 18.2 % 16.9 % 19.5 %
RGUs, Customers and Bundling^3
The following table provides information on the breakdown of our RGUs and
customer base and highlights our customer bundling metrics at December 31,
2012, September 30, 2012 and December 31, 2011:
September December 31, Q4’12 / Q4’12 /
December 31, 30, Q3’12 Q4’11
2012 2012 2011 (% (%
Change) Change)
Total RGUs
Video 9,290,400 9,294,500 9,375,500 — (0.9 %)
Broadband 5,458,400 5,343,800 4,968,000 2.1 % 9.9 %
Internet
Telephony 3,986,700 3,865,000 3,464,100 3.1 % 15.1 %
UPC Holding 18,735,500 18,503,300 17,807,600 1.3 % 5.2 %
RGUs
Total
Customers
Total
Single-Play 5,188,700 5,269,700 5,517,000 (1.5 %) (6.0 %)
Customers
Total
Double-Play 1,923,900 1,953,300 2,015,700 (1.5 %) (4.6 %)
Customers
Total
Triple-Play 3,233,000 3,109,000 2,753,100 4.0 % 17.4 %
Customers
UPC Holding 10,345,600 10,332,000 10,285,800 0.1 % 0.6 %
Customers
% Double-Play
Customers
UPC Europe 18.3 % 18.7 % 19.4 % (2.1 %) (5.7 %)
VTR (Chile) 20.7 % 20.5 % 21.2 % 1.0 % (2.4 %)
UPC Holding 18.6 % 18.9 % 19.6 % (1.6 %) (5.1 %)
% Triple-Play
Customers
UPC Europe 29.4 % 28.0 % 24.6 % 5.0 % 19.5 %
VTR (Chile) 46.1 % 46.7 % 45.2 % (1.3 %) 2.0 %
UPC Holding 31.3 % 30.1 % 26.8 % 4.0 % 16.8 %
RGUs per
Customer
Relationship
UPC Europe 1.77 1.75 1.69 1.1 % 4.7 %
VTR (Chile) 2.13 2.14 2.12 (0.5 %) 0.5 %
UPC Holding 1.81 1.79 1.73 1.1 % 4.6 %
ARPU per Customer Relationship^4
The following table provides ARPU per customer relationship for the indicated
periods:
Three months ended Dec. 31, FX Neutral
2012 2011 % Change % Change^5
UPC Europe € 28.91 € 27.43 5.4 % 3.8 %
VTR (Chile) CLP 30,830 CLP 30,572 0.8 % 0.8 %
UPC Holding € 31.20 € 29.23 6.7 % 3.5 %
The capital expenditures that we report in our consolidated cash flow
statements do not include amounts that are financed under vendor
^1 financing or capital lease arrangements. Instead, these expenditures are
reflected as non-cash additions to our property and equipment when the
underlying assets are delivered and as repayments of debt when the
principal is repaid.
Represents non-cash contributions of property and equipment that we
^2 received from our parent company. These amounts are excluded from the
capital expenditures that we report in our consolidated cash flow
statements.
The RGU, customer and bundling statistics reported for periods prior to
^3 January 1, 2012 have not been restated to reflect the January 1, 2012
change in our reporting of SOHO RGUs.
ARPU per customer relationship refers to the average monthly subscription
revenue per average customer relationship and is calculated by dividing
the average monthly subscription revenue (excluding installation, late
fees and mobile service revenue) for the indicated period, by the average
of the opening and closing balances for customer relationships for the
^4 period. Customer relationships of entities acquired during the period are
normalized. Unless otherwise indicated, ARPU per customer relationship
for UPC Europe and UPC Holding are not adjusted for currency impacts.
ARPU per customer relationship amounts reported for periods prior to
January 1, 2012 have not been restated to reflect the January 1, 2012
change in our reporting of SOHO RGUs.
The FX-neutral change represents the percentage change on a
^5 year-over-year basis adjusted for FX impacts and is calculated by
adjusting the prior year figures to reflect translation at the foreign
currency rates used to translate the current year amounts.
Consolidated Operating Data – December 31, 2012
Video Internet Telephony
Homes Two-way Customer Total Analog Cable Digital Cable DTH MMDS Total Homes Homes
Homes Subscribers^(10) Subscribers^(12)
Passed^(1) Relationships^(3) RGUs^(4) Subscribers^(5) Subscribers^(6) Subscribers^(7) Subscribers^(8) Video Serviceable^(9) Serviceable^(11)
Passed^(2)
UPC Europe:
The 2,825,200 2,810,800 1,731,800 3,685,500 651,600 1,078,000 — — 1,729,600 2,823,500 1,025,400 2,820,700 930,500
Netherlands^(13)
Switzerland^(13) 2,074,700 1,825,400 1,485,600 2,464,400 842,500 606,000 — — 1,448,500 2,292,000 594,500 2,323,900 421,400
Austria 1,313,400 1,297,400 733,000 1,408,000 199,400 335,900 — — 535,300 1,297,300 490,700 1,265,400 382,000
Ireland 862,900 737,200 538,800 988,800 63,000 337,800 — 45,600 446,400 737,200 304,300 715,000 238,100
Total Western 7,076,200 6,670,800 4,489,200 8,546,700 1,756,500 2,357,700 — 45,600 4,159,800 7,150,000 2,414,900 7,125,000 1,972,000
Europe
Poland 2,667,900 2,537,600 1,472,000 2,616,000 546,000 756,300 — — 1,302,300 2,537,600 854,700 2,527,600 459,000
Hungary 1,525,700 1,508,300 1,029,600 1,760,300 306,900 327,100 242,900 — 876,900 1,508,300 486,600 1,510,700 396,800
Romania 2,082,800 1,708,000 1,177,600 1,733,900 428,700 423,600 319,700 — 1,172,000 1,708,000 333,000 1,646,200 228,900
Czech Republic 1,345,200 1,236,900 745,300 1,217,300 76,100 406,000 102,200 — 584,300 1,236,900 439,900 1,234,200 193,100
Slovakia 495,500 464,800 287,500 425,600 84,100 123,100 54,300 1,100 262,600 433,600 103,800 431,800 59,200
Total CEE 8,117,100 7,455,600 4,712,000 7,753,100 1,441,800 2,036,100 719,100 1,100 4,198,100 7,424,400 2,218,000 7,350,500 1,337,000
Total UPC Europe 15,193,300 14,126,400 9,201,200 16,299,800 3,198,300 4,393,800 719,100 46,700 8,357,900 14,574,400 4,632,900 14,475,500 3,309,000
VTR (Chile) 2,861,100 2,330,400 1,144,400 2,435,700 163,200 769,300 — — 932,500 2,330,400 825,500 2,322,100 677,700
Grand Total 18,054,400 16,456,800 10,345,600 18,735,500 3,361,500 5,163,100 719,100 46,700 9,290,400 16,904,800 5,458,400 16,797,600 3,986,700
Subscriber Variance Table – December 31, 2012 vs. September 30, 2012
Video Internet Telephony
Homes Two-way Customer Total Analog Cable Digital Cable DTH MMDS Total Homes Homes
Homes Subscribers^(10) Subscribers^(12)
Passed^(1) Relationships^(3) RGUs^(4) Subscribers^(5) Subscribers^(6) Subscribers^(7) Subscribers^(8) Video Serviceable^(9) Serviceable^(11)
Passed^(2)
UPC Europe:
The 5,800 6,600 (30,200 ) 2,000 (42,600 ) 12,200 — — (30,400 ) 6,500 12,100 6,700 20,300
Netherlands^(13)
Switzerland^(13) (46,200 ) (15,200 ) (58,500 ) (30,300 ) (79,500 ) 21,200 — — (58,300 ) (16,100 ) 8,800 15,800 19,200
Austria 51,100 35,100 31,900 50,100 22,000 8,500 — — 30,500 35,000 11,600 3,100 8,000
Ireland (900 ) 3,800 600 19,600 (4,500 ) 1,700 — (2,300 ) (5,100 ) 3,800 10,000 7,300 14,700
Total Western 9,800 30,300 (56,200 ) 41,400 (104,600 ) 43,600 — (2,300 ) (63,300 ) 29,200 42,500 32,900 62,200
Europe
Poland 18,200 24,100 8,200 56,200 (46,700 ) 40,900 — — (5,800 ) 24,100 34,600 24,600 27,400
Hungary 7,200 5,800 10,300 37,500 (13,600 ) 13,300 10,900 — 10,600 5,800 9,100 5,800 17,800
Romania 4,100 7,400 25,300 58,300 (17,700 ) 19,400 23,600 — 25,300 7,400 16,300 7,500 16,700
Czech Republic 3,200 3,200 1,000 2,800 3,800 (4,700 ) 6,000 — 5,100 3,200 300 3,300 (2,600 )
Slovakia 9,000 5,400 10,100 16,900 700 4,800 2,900 400 8,800 6,000 5,400 4,100 2,700
Total CEE 41,700 45,900 54,900 171,700 (73,500 ) 73,700 43,400 400 44,000 46,500 65,700 45,300 62,000
Total UPC Europe 51,500 76,200 (1,300 ) 213,100 (178,100 ) 117,300 43,400 (1,900 ) (19,300 ) 75,700 108,200 78,200 124,200
VTR (Chile) 41,500 52,000 14,900 19,100 (9,400 ) 24,600 — — 15,200 52,000 6,400 52,400 (2,500 )
Grand Total 93,000 128,200 13,600 232,200 (187,500 ) 141,900 43,400 (1,900 ) (4,100 ) 127,700 114,600 130,600 121,700
ORGANIC CHANGE
SUMMARY:
UPC Europe 40,500 72,000 (9,900 ) 203,000 (184,900 ) 116,500 43,400 (2,300 ) (27,300 ) 71,700 106,100 75,900 124,200
VTR (Chile) 41,500 52,000 14,900 19,100 (9,400 ) 24,600 — — 15,200 52,000 6,400 52,400 (2,500 )
Total Organic 82,000 124,000 5,000 222,100 (194,300 ) 141,100 43,400 (2,300 ) (12,100 ) 123,700 112,500 128,300 121,700
Change
Q4 2012
ADJUSTMENTS:
Acquisition - HU 1,300 1,000 600 1,000 200 400 — — 600 800 400 800 —
Acquisition - SK 7,000 1,700 8,000 9,100 6,600 400 — 400 7,400 1,700 1,700 — —
PL adjustment 2,700 1,500 — — — — — — — 1,500 — 1,500 —
CH (47,900 ) (31,900 ) (30,700 ) (35,600 ) (30,700 ) — — — (30,700 ) (31,900 ) (4,900 ) — —
adjustment^(14)
AT 47,900 31,900 30,700 35,600 30,700 — — — 30,700 31,900 4,900 — —
adjustment^(14)
Net Adjustments 11,000 4,200 8,600 10,100 6,800 800 — 400 8,000 4,000 2,100 2,300 —
Total Adds 93,000 128,200 13,600 232,200 (187,500 ) 141,900 43,400 (1,900 ) (4,100 ) 127,700 114,600 130,600 121,700
(Reductions)
Footnotes for Operating Data and Subscriber Variance Tables
Homes Passed are homes, residential multiple dwelling units or
commercial units that can be connected to our networks without
materially 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
^(1) results. We do not count homes passed for DTH. With 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 in Switzerland
and the Netherlands (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 Switzerland’s
and the Netherlands’ 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, internet and telephony services. Due to the
^(2) fact that we do not own the partner networks used in Switzerland and
the Netherlands or the unbundled loop and shared access network used
by Austria GmbH, we do not report two-way homes passed for
Switzerland’s or the Netherlands’ 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 telephony 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 unit (“EBU”) adjustments, we reflect
corresponding adjustments to our Customer Relationship counts. For
^(3) further information regarding our EBU calculation, see Additional
General Notes to Tables below. Customer Relationships generally are
counted on a unique premises basis. Accordingly, if an individual
receives our services in two premises (e.g., a primary home and a
vacation home), that individual generally 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 premises basis
such that a given premises does not count as more than one RGU for any
given service. On the other hand, if an individual receives one of our
services in two premises (e.g. a primary home and a vacation home),
^(4) that individual will count as two RGUs for that service. 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 long-term basis (e.g., VIP subscribers, free service to
employees) generally are not counted as RGUs. We do not include
subscriptions to mobile services in our externally reported RGU
counts. In this regard, our December 31, 2012 RGU counts exclude
34,500, 3,500 and 2,800 postpaid subscriber identification module
(“SIM”) cards in service in Poland, the Netherlands and Hungary,
respectively.
Analog Cable Subscriber is a home, residential multiple dwelling unit
or commercial unit that receives our analog cable service over our
broadband network. The Analog Cable Subscriber count reported for
Switzerland also include subscribers who may use a purchased set-top
box or other non-verifiable means to receive our basic digital cable
^(5) channels without subscribing to any services that would require the
payment of recurring monthly fees in addition to the basic analog
service fee (“Basic Digital Cable Subscriber”). In Europe, we have
approximately 400,500 “lifeline” customers that are counted on a per
connection basis, representing the least expensive regulated tier of
video 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 in one premises as just one subscriber. A Digital Cable
Subscriber is not counted as an Analog Cable Subscriber. As we migrate
^(6) customers from analog to digital cable services, we report a decrease
in our Analog Cable Subscribers equal to the increase in our Digital
Cable Subscribers. As discussed in further detail in note 5 above,
Basic Digital Cable Subscribers are not included in the respective
Digital Cable Subscriber count reported for Switzerland. Subscribers
to digital cable services provided by our operations in Switzerland
and the Netherlands over partner networks receive analog cable
services from the partner networks as opposed to our operations.
DTH Subscriber is a home, residential multiple dwelling unit or
^(7) commercial unit that receives our video programming broadcast directly
via a geosynchronous satellite.
^(8) MMDS Subscriber is a home, residential multiple dwelling unit or
commercial unit that receives our video programming via MMDS.
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 agreement, for the provision of broadband internet services if
^(9) requested by the customer, building owner or housing association, as
applicable. 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
^(10) Austria include 73,000 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 agreement, for the provision of telephony services if
^(11) requested by the customer, building owner or housing association, as
applicable. 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
^(12) that we service through a partner network. Telephony Subscribers
exclude mobile telephony subscribers. Our Telephony Subscribers in
Austria include 59,000 subscribers of Austria GmbH that are not
serviced over our networks.
Pursuant to service agreements, Switzerland 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 Serviceable with
^(13) respect to partner networks have been estimated by our Switzerland
operations. These estimates may change in future periods as more
accurate information becomes available. At December 31, 2012,
Switzerland’s partner networks account for 125,500 Customer
Relationships, 236,500 RGUs, 91,900 Digital Cable Subscribers, 466,600
Internet and Telephony Homes Serviceable, 83,500 Internet Subscribers,
and 61,100 Telephony Subscribers. In addition, partner networks
account for 454,100 of Switzerland’s digital cable homes serviceable
that are not included in Homes Passed or Two-way Homes Passed in our
December 31, 2012 subscriber table.
During the fourth quarter of 2012, the management responsibility for
^(14) certain of our operations in Switzerland was transferred to our
Austrian operations resulting in a non-organic adjustment to record
the transfer between these two operating segments.
Additional General Notes to Tables:
All of our subsidiaries provide telephony, broadband internet, data, video or
other business-to-business (“B2B”) services. Certain of our B2B revenue is
derived from small or home office (“SOHO”) subscribers that pay a premium
price to receive enhanced service levels along with video, internet or
telephony services that are the same or similar to the mass marketed products
offered to our residential subscribers. Effective January 1, 2012, we recorded
non-organic adjustments to begin including the SOHO subscribers of UPC Europe
in our RGU and customer counts. As a result, all mass marketed products
provided to SOHOs, whether or not accompanied by enhanced service levels
and/or premium prices, are now included in the respective RGU and customer
counts of our broadband communications operations, with only those services
provided at premium prices considered to be “SOHO RGUs” or “SOHO customers.”
With the exception of our B2B SOHO subscribers, we generally do not count
customers of B2B services as customers or RGUs for external reporting
purposes.
Certain of our residential and commercial RGUs are counted on an EBU basis,
including residential multiple dwelling units and commercial establishments,
such as bars, hotels and hospitals, in Chile and certain commercial
establishments in Europe. Our EBUs are generally 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. As such, we may experience variances in our EBU counts solely as a
result of changes in rates.
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 on a prospective basis. 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.
Contact:
UPC Holding
Investor Relations:
Christopher Noyes, +1 303-220-6693
or
Oskar Nooij, +1 303-220-4218
or
Corporate Communications:
Hanne Wolf, +1 303-220-6678
or
Bert Holtkamp, +31 20-778-9800
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