Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION/ ITEM 7.01 REGULATION FD DISCLOSURE
Liberty Global, Inc. (Liberty Global) indirectly owns 36.7% of Jupiter Telecommunications Co., Ltd. (J:COM). J:COM, a consolidated subsidiary of Liberty Global, is a separate public company with shares listed on the JASDAQ. J:COM is Japan's largest multiple system operator, based on the number of customers served, providing cable television, Internet access and telephone services in Japan.
On July 28, 2006, and pursuant to JASDAQ's rules, J:COM publicly announced in Japan its results for the six months ended June 30, 2006 by issuing a press release. The full text of an English language translation of that press release, appearing in Exhibit 99.1 hereto, is incorporated herein by reference.
That attached document is furnished under both Item 2.02 "Results of Operations and Financial Condition" and Item 7.01 "Regulation FD Disclosure."
The attached document refers to historical "Operating Cash Flow (OCF)" and "Free Cash Flow," which are non-GAAP financial measures within the meaning of Regulation G. A reconciliation of historical OCF to the most directly comparable GAAP financial measure is presented below (yen in billions):
Six months ended June 30, 2006 2005 OCF 41 33 Depreciation and amortization (25 ) (20 ) Stock compensation - (2 ) Operating income 16 11
Historical Free Cash Flow is reconciled to the most directly comparable GAAP financial measure on page 27 of Exhibit 99.1, under the heading "Highlight of 2006 1H Results."
J:COM defines (i) OCF as revenue less operating and programming costs and selling general and administrative expenses (exclusive of depreciation and amortization expense and stock compensation expense) and (ii) Free Cash Flow as cash provided by operating activities less capital expenditures and capital lease expenditures.
OCF and Free Cash Flow are important metrics by which J:COM's management evaluate the performance of J:COM's business. We believe that investors should have access to the same metrics. These non-GAAP financial measures should be considered in addition to results prepared in accordance in GAAP, but should not be considered a substitute for or superior to GAAP results.