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Liberty Global Reports Third Quarter 2018 Results

DENVER, Colorado--(BUSINESS WIRE)--

Record Q3 RGU additions at Virgin Media, driven by 104,000 net adds in the U.K.

Q3 continuing operations operating income of $209 million

Q3 continuing operations rebased OCF growth of 5.2% led by Belgium & U.K.

Reconfirming all full-year 2018 guidance

_______________________________________________________________________________________

Q3 Continuing Operations
Revenue & YoY Growth4
$3.0bn | +1.9%

OCF & YoY Growth4
$1.3bn | +5.2%

YTD Continuing Operations
Revenue & YoY Growth4
$9.1bn | +2.4%

OCF & YoY Growth4
$3.9bn | +3.6%

Full Company 1
Q3 OCF & YoY Growth4
$1.8bn | +5.3%

YTD OCF & YoY Growth4
$5.7bn | +4.6%

Liberty Global plc today announced its three months ("Q3") and nine months ("YTD") 2018 financial results. Our operations in Germany, Austria, Hungary, Romania and the Czech Republic (collectively, the "Discontinued European Operations") and the former LiLAC Group have been accounted for as discontinued operations. Unless otherwise indicated, the information in this release relates only to our continuing operations. As used in this release, the term "Full Company" includes our continuing operations and the Discontinued European Operations. For additional information, including the reasons that we present selected information on a Full Company basis, see note 1. In addition, on January 1, 2018, we adopted new revenue recognition rules on a prospective basis and a new presentation of certain components of our pension expense on a retrospective basis. All information in this release is presented on a comparable basis with respect to both of these accounting changes. For additional information concerning our discontinued operations and these accounting changes, see notes 2 and 3.

CEO Mike Fries stated, "The continued operating and financial momentum at Virgin Media helped fuel our Q3 results. With respect to our U.K. subscriber growth, we generated over 100,000 net additions, which represents a record third quarter performance. This achievement was supported by strong volume growth in both our Project Lightning and legacy footprints. From a product perspective, we continue to reap the benefits of our next-generation V6 set-top box and Hub 3 WiFi router deployments, as we saw meaningful year-over-year improvement in churn. We also announced a 4.5% average U.K. customer price rise, which should underpin our results in the coming quarters. In our other markets, we reported mixed results as Telenet delivered 8.4% rebased OCF growth in the quarter, driven by synergy realization, while we posted a 9% rebased OCF contraction in Switzerland.

               
2018 Guidance* Rebased

OCF Growth

P&E

Additions

New Build

& Upgrade

Adjusted Free
Cash Flow

Continuing Operations ~4% $4.0 BN $0.8 BN Not provided
Full Company ~5% $5.1 BN $1.2 BN $1.6 BN

* Absolute U.S. dollar guidance figures based on FX rates as of February 13, 2018; EUR/USD 1.23; GBP/USD 1.38. New build and upgrade spend excludes related CPE

"The Swiss market remains challenging but we have a number of initiatives that we believe will improve performance. Our turnaround plan is underpinned by revamped video products, a refreshed MySports programming line-up, the launch of 1 Gig broadband speeds and a new and improved MVNO offering. The cornerstone of our enhanced video offering is the introduction of Horizon 4, our cutting-edge, next-generation TV entertainment platform, which will revolutionize the video experience for our customers. Switzerland is the first market where we've launched this innovation and we look forward to expanding the platform across more markets in the coming years.

Our previously announced deal to sell our German and certain CEE operations to Vodafone remains on track. Last month, Vodafone officially filed the submission paperwork with the European Union and we still expect that the deal will close in mid-2019.

Turning to our balance sheet, at the end of Q3 our continuing operations had an average debt tenor5 of more than seven years, a fully-swapped borrowing cost of 4.3% and a liquidity6 position in excess of $3 billion. During the quarter we bought back nearly $400 million of stock and continue to anticipate at least $2 billion of share repurchases in 2018."

About Liberty Global

Liberty Global (NASDAQ: LBTYA, LBTYB and LBTYK) is the world’s largest international TV and broadband company, with operations in 10 European countries under the consumer brands Virgin Media, Unitymedia, Telenet and UPC. We invest in the infrastructure and digital platforms that empower our customers to make the most of the video, internet and communications revolution. Our substantial scale and commitment to innovation enable us to develop market-leading products delivered through next-generation networks that connect 21 million customers subscribing to 45 million TV, broadband internet and telephony services. We also serve 6 million mobile subscribers and offer WiFi service through 12 million access points across our footprint.*

In addition, Liberty Global owns 50% of VodafoneZiggo, a joint venture in the Netherlands with 4 million customers subscribing to 10 million fixed-line and 5 million mobile services, as well as significant investments in ITV, All3Media, ITI Neovision, Casa Systems, LionsGate, the Formula E racing series and several regional sports networks.

* The figures included in this paragraph include both the continuing and discontinued operations that we owned on September 30, 2018

YTD and Q3 Highlights (on a continuing operations basis unless otherwise noted)

  • YTD and Q3 rebased revenue up 2.4% and 1.9%, respectively
    • Q3 residential cable revenue7 of $2.0 billion decreased 0.7% year-over-year
    • Q3 residential mobile revenue7 increased 2.4% year-over-year to $416.8 million
    • Q3 B2B8 revenue7 increased 6.1% year-over-year to $491.8 million
  • YTD operating income decreased 4.8% year-over-year to $592.9 million
    • Q3 operating income decreased 1.0% year-over-year to $208.6 million
  • YTD rebased OCF growth was 3.6% to $3.9 billion, including 5.2% growth in Q3
    • YTD results supported by strong performances in Belgium and Virgin Media
  • RGU additions of 28,000 in Q3
  • Built nearly 150,000 new premises in Q3
    • Virgin Media delivered 109,000 new premises in the U.K. & Ireland
  • Solid balance sheet with $3.4 billion of liquidity
  • Net leverage9 of 4.9x for the Full Company
  • Fully-swapped borrowing cost of 4.3%

Subscribers

               
Organic RGU Net Additions10 28,100 (51.0 %) 28,500 (87.3 %)
 

Financial (in USD millions)

Revenue
Continuing operations $ 2,958.1 1.9 % $ 9,097.7 2.4 %
OCF:
Continuing operations $ 1,294.1 5.2 % $ 3,875.7 3.6 %
Full Company(ii) 5.3 % 4.6 %
Operating income $ 208.6 (1.0 %) $ 592.9 (4.8 %)
 
Adjusted FCF:
Continuing operations $ 165.3 $ (962.6 )
Pro forma continuing operations(iii) $ 244.8 $ (746.9 )
Full Company $ 394.6 $ (15.7 )
Cash provided by operating activities $ 587.2 $ 2,730.1
Cash provided by investing activities $ 1,687.1 $ 790.8
Cash used by financing activities $ (2,388.8 ) $ (5,426.3 )
(i)   Revenue and OCF YoY growth rates are on a rebased basis
(ii) Full Company rebased OCF growth in the Q3 and YTD periods includes the net positive impacts of certain German channel carriage settlements of $13.7 million and $36.9 million, respectively
(iii) Pro forma Adjusted FCF gives pro forma effect to certain increases in our recurring cash flows that we expect to realize following the disposition of the Discontinued European Operations. For additional details, see the information and reconciliation included within the Glossary
 

Subscriber Growth

    Three months ended     Nine months ended
September 30, September 30,
2018     2017 2018*     2017
 
Organic RGU net additions (losses) by product
Video (36,700 ) (29,100 ) (120,100 ) (55,300 )
Data 24,000 62,700 73,600 203,700
Voice 40,800   23,800   75,000   76,300  
Total 28,100   57,400   28,500   224,700  
 
Organic RGU net additions (losses) by market
U.K./Ireland 105,300 92,400 262,400 328,500
Belgium (52,900 ) (14,600 ) (99,800 ) (41,900 )
Switzerland (41,500 ) (15,500 ) (139,000 ) (18,300 )
Continuing CEE (Poland, Slovakia and DTH) 17,200   (4,900 ) 4,900   (43,600 )
Total 28,100   57,400   28,500   224,700  
 
Organic Mobile SIM additions (losses) by product
Postpaid 54,800 67,000 248,700 240,700
Prepaid (37,100 ) (27,600 ) (122,900 ) (193,500 )
Total 17,700   39,400   125,800   47,200  
 
Organic Mobile SIM additions (losses) by market
U.K./Ireland 5,000 (16,200 ) 50,900 (20,300 )
Belgium 4,500 43,400 52,600 43,800
Other 8,200   12,200   22,300   23,700  
Total 17,700   39,400   125,800   47,200  

* Amounts have been restated. See note (vi) to the subscriber table

  • Cable Product Performance: During Q3 we added 28,000 RGUs, a decline compared to the 57,000 RGUs added in the prior-year period, as an improved performance at Virgin Media was largely offset by weakness in Belgium and Switzerland. From a product perspective, data and video adds showed a year-over-year decrease, while telephony net adds increased year-over-year
  • U.K./Ireland: Record Q3 RGU additions of 105,000 were 14% higher than the prior year, with contributions both from our new build areas and our existing footprint. A shift in our sales and marketing focus to high value triple-play bundles has successfully driven growth in telephony, broadband and video product subscriptions
  • Belgium: RGU attrition of 53,000 in Q3 was primarily due to intensified competition and churn stemming from our July price increase
  • Switzerland: Lost 41,500 RGUs in Q3, compared to a loss of 15,500 in Q3 2017, primarily due to heightened competition
  • Continuing CEE (Poland, Slovakia and DTH): Gained 17,000 RGUs in Q3, as compared to a loss of 5,000 in the prior-year period, mainly driven by stronger video and voice adds in Poland
  • Next-Generation Video Penetration (including Horizon TV, Horizon-Lite, TiVo, Virgin TV V6 and Yelo TV): Added 70,000 subscribers to our advanced platforms in Q3 and reached 6.7 million or 78% of our total cable video base (excluding DTH) by the end of the quarter
  • WiFi Connect Box: Deployments of our latest WiFi Connect box increased by 552,000 in Q3, ending the quarter with an installed base of nearly 5.6 million or 61% of broadband subscribers across our continuing operations
  • Mobile: Added 18,000 mobile subscribers in Q3, as 55,000 postpaid additions were partially offset by continued attrition in our low-ARPU prepaid base
    • Belgium added 4,500 mobile subscribers during Q3
    • U.K./Ireland added 5,000 mobile subscribers in Q3 as postpaid growth was partially offset by low-ARPU prepaid losses. The penetration of 4G at Virgin Media increased to 75% of our postpaid base at the end of Q3, and over 50% of our mobile base has now migrated to our full MVNO platform in the U.K. allowing us to offer more converged bundles
    • Switzerland added 8,000 mobile subscribers in Q3, driven by bundling success

Revenue Highlights

The following table presents (i) revenue of each of our consolidated reportable segments for the comparative periods and (ii) the percentage change from period to period on both a reported and rebased basis:

    Three months ended     Increase/(decrease)     Nine months ended     Increase/(decrease)
September 30, September 30,
Revenue 2018     20173 %     Rebased % 2018     20173 %     Rebased %
in millions, except % amounts
 
Continuing operations:
U.K./Ireland $ 1,667.7 $ 1,609.9 3.6 4.1 $ 5,180.8 $ 4,676.2 10.8 4.5
Belgium 746.8 758.7 (1.6 ) (1.5 ) 2,260.3 2,103.5 7.5 (1.2 )
Switzerland 323.3 351.7 (8.1 ) (6.3 ) 1,000.4 1,020.7 (2.0 ) (3.2 )
Continuing CEE 148.6 149.9 (0.9 ) 1.0 462.0 426.2 8.4 0.8
Central and Corporate 71.9 53.0 35.7 31.7 197.4 137.8 43.3 31.7
Intersegment eliminations (0.2 ) (3.0 ) N.M.

N.M.

(3.2 ) (8.3 ) N.M. N.M.
Total continuing operations $ 2,958.1   $ 2,920.2   1.3   1.9   $ 9,097.7   $ 8,356.1   8.9   2.4  
 
Discontinued European Operations(i):
Germany $ 714.4 $ 685.5 4.2 5.1 $ 2,226.1 $ 1,943.7 14.5 6.6
Austria 35.2 103.2 (65.9 ) 3.0 253.7 291.9 (13.1 ) 3.4
Discontinued CEE 159.6 156.6 1.9 5.4 494.7 439.4 12.6 5.6
Intersegment eliminations (1.0 ) (0.9 ) N.M. N.M. (4.4 ) (2.6 ) N.M. N.M.
Total discontinued European operations $ 908.2   $ 944.4   (3.8 ) 5.3   $ 2,970.1   $ 2,672.4   11.1   6.2  

N.M. - Not Meaningful

(i) For information concerning our discontinued operations, see note 2.

  • Reported revenue for the three and nine months ended September 30, 2018, increased 1.3% and 8.9% year-over-year, respectively
    • The YTD results were primarily driven by the impact of (i) positive foreign exchange ("FX") movements, mainly related to the strengthening of the British Pound and Euro against the U.S. dollar, and (ii) organic revenue growth
  • Rebased revenue grew 1.9% and 2.4% in the Q3 and YTD 2018 periods, respectively. The result in the YTD period included:
    • A $6.4 million headwind from the release of unclaimed customer credits in Switzerland in H1 2017
    • A $5.6 million headwind from the expected recovery of VAT paid in prior periods with respect to copyright fees in Belgium, which benefited revenue in H1 2017
    • The unfavorable $3.9 million impact due to the reversal during the first quarter of 2018 of revenue in Switzerland that was recognized during prior-year periods
    • The favorable impact of $3.8 million of mobile subscription revenue recognized in the U.K. during the third quarter of 2018 related to the expected recovery of certain prior-period VAT payments

Q3 2018 Rebased Revenue Growth - Segment Highlights

  • U.K./Ireland: Rebased revenue growth of 4.1% in Q3 reflects (i) 2.9% rebased growth in our residential cable business supported by subscriber growth and accelerating cable ARPU, (ii) 13.0% rebased growth in residential mobile revenue (including interconnect and mobile handset revenue), reflecting higher value mobile handset sales and the aforementioned benefit related to the expected recovery of certain prior-period VAT payments, and (iii) 2.8% rebased revenue growth in our B2B business, driven by continued growth in our SOHO base
  • Belgium: Rebased revenue decline of 1.5% in Q3 was mainly driven by the net effect of (i) lower mobile revenue growth, (ii) higher B2B growth and (iii) lower cable subscription revenue due to lower video subscribers
  • Switzerland: Rebased revenue declined 6.3% in Q3, primarily due to the net effect of lower residential cable subscription revenue, which was driven primarily by competitive pressures, and higher mobile revenue due to increases in the average number of mobile subscribers
  • Continuing CEE (Poland, Slovakia and DTH): Rebased revenue growth of 1.0% in Q3, due to the net effect of growth in our B2B business and a decrease in residential cable subscription revenue
  • Central and Corporate: Rebased revenue increased 31.7% in Q3 due largely to the low-margin sale of customer premises equipment to the VodafoneZiggo JV, which began in the second quarter of 2018

Operating Income

  • Operating income of $208.6 million and $210.7 million in Q3 2018 and Q3 2017, respectively, representing a decrease of 1.0% year-over-year. For the nine months ended September 30, 2018, our operating income of $592.9 million reflects a decrease of 4.8% as compared to $622.7 million in YTD 2017
  • The decrease in operating income in the QTD period resulted from the net effect of (i) higher OCF, as further described below, (ii) an increase in impairment, restructuring and other operating items, net, including higher provisions for litigation, (iii) an increase in share-based compensation expense and (iv) a decrease in depreciation and amortization expense
  • The decrease in operating income in the YTD period resulted from the net effect of (i) higher OCF, as further described below, (ii) an increase in depreciation and amortization expense, (iii) an increase in impairment, restructuring and other operating items, net, including the aforementioned increase in litigation provisions, and (iv) an increase in share-based compensation expense

Operating Cash Flow Highlights

The following table presents (i) OCF of each of our consolidated reportable segments for the comparative periods, and (ii) the percentage change from period to period on both a reported and rebased basis:

    Three months ended     Increase/(decrease)     Nine months ended     Increase/(decrease)
September 30, September 30,
OCF 2018     20173 %     Rebased % 2018     20173 %     Rebased %
in millions, except % amounts
 
Continuing operations:
U.K./Ireland $ 742.1 $ 708.2 4.8 5.3 $ 2,268.3 $ 2,052.1 10.5 4.3
Belgium 383.4 356.4 7.6 8.4 1,124.7 969.6 16.0 6.7
Switzerland 191.0 214.1 (10.8 ) (9.0 ) 566.5 630.2 (10.1 ) (11.2 )
Continuing CEE 69.6 70.6 (1.4 ) 0.5 209.4 193.7 8.1 0.7
Central and Corporate (88.7 ) (104.0 ) 14.7 14.0 (283.3 ) (307.5 ) 7.9 12.6
Intersegment eliminations (3.3 ) (4.8 ) N.M. N.M. (9.9 ) (9.2 ) N.M. N.M.
Total continuing operations $ 1,294.1   $ 1,240.5   4.3   5.2   $ 3,875.7   $ 3,528.9   9.8   3.6  
 
OCF margin - continuing operations 43.7 % 42.5 % 42.6 % 42.2 %
 
Discontinued European Operations(i):
Germany $ 463.4 $ 440.5 5.2 6.2 $ 1,418.9 $ 1,231.8 15.2 7.4
Austria 19.6 57.2 (65.7 ) 5.8 137.3 159.7 (14.0 ) 3.2
Discontinued CEE 66.0 67.4 (2.1 ) 0.7 201.8 178.1 13.3 6.1
Intersegment eliminations 6.2   10.5   N.M. N.M. 24.8   28.2   N.M. N.M.
Total discontinued European operations $ 555.2   $ 575.6   (3.5 ) 5.8   $ 1,782.8   $ 1,597.8   11.6   6.9  
 
Full Company 5.3   4.6  

N.M. - Not Meaningful

(i) For information concerning our discontinued operations, see note 2.

  • Reported OCF for the three and nine months ended September 30, 2018, increased 4.3% and 9.8% year-over-year, respectively
    • The YTD result was primarily driven by (i) the aforementioned positive impact of FX movements and (ii) organic OCF growth
  • Rebased OCF growth of 5.2% in Q3 and 3.6% in YTD 2018 included:
    • The net unfavorable impact on our revenue of certain items, as discussed in the "Revenue Highlights" section above
    • Higher costs of $23.8 million in U.K./Ireland in the YTD period resulting from the net impact of credits recorded during the second quarter of 2017 ($28.8 million) and the second quarter of 2018 ($5.0 million) in connection with a telecommunications operator's agreement to compensate Virgin Media and other communications providers for certain prior-period contractual breaches related to network charges
    • Unfavorable network tax increases of $4.7 million and $17.7 million, respectively, following an increase in the rateable value of our existing U.K. networks, which is being phased in over a six-year period ending in 2022
    • Favorable impacts of $9.3 million and $28.7 million, respectively, due to the expected settlement of a portion of our 2018 annual incentive compensation with Liberty Global ordinary shares through a shareholding incentive program that was implemented in 2018
    • The impacts of the reassessment of certain accruals in the U.K., including a $5.2 million aggregate decrease in costs in Q3 and a $6.4 million increase in costs during the second quarter of 2018.
  • As compared to the prior-year periods, our Q3 and YTD 2018 OCF margins were up 120 and up 40 basis points, respectively, to 43.7% and 42.6%

Q3 2018 Rebased Operating Cash Flow Growth - Segment Highlights

  • U.K./Ireland: Rebased OCF growth of 5.3% was attributable to strong revenue growth and lower marketing spend partially offset by higher mobile handset costs, increased programming expenses and an increase in network taxes
  • Belgium: Rebased OCF growth of 8.4%, largely driven by the net effect of lower direct costs as a result of the migration of subscribers to our own mobile network and the aforementioned revenue decrease
  • Switzerland: Rebased OCF decline of 9.0% in Q3, largely due to the aforementioned residential cable subscription revenue decline
  • Continuing CEE (Poland, Slovakia and DTH): Rebased OCF growth of 0.5%, driven by the net effect of the aforementioned revenue trend and an increase in interconnect costs

Net Earnings (Loss) Attributable to Liberty Global Shareholders

  • Net earnings (loss) attributable to Liberty Global shareholders was $974.1 million and ($804.5 million) for the three months ended September 30, 2018 and 2017, respectively, and $700.2 million and ($1,814.2 million) during the nine months ended September 30, 2018 and 2017, respectively

Leverage and Liquidity

  • Total capital leases and principal amount of third-party debt: $29.7 billion for continuing operations
  • Leverage ratios9: At September 30, 2018, our adjusted gross and net leverage ratios for the Full Company were 5.1x and 4.9x, respectively.
  • Average debt tenor: Over 7 years, with ~74% not due until 2024 or thereafter for continuing operations
  • Borrowing costs: Blended fully-swapped borrowing cost of our third-party debt was 4.3% for continuing operations
  • Liquidity: $3.4 billion, including (i) $0.9 billion of cash at September 30, 2018 and (ii) aggregate unused borrowing capacity11 under our credit facilities of $2.5 billion, for our continuing operations

Forward-Looking Statements and Disclaimer

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements with respect to our strategies, future growth prospects and opportunities; expectations with respect to our OCF growth, our Adjusted FCF, our new build and upgrade and our P&E additions, each on a continuing operations and full company basis; expectations with respect to the development, launch and benefits of our innovative and advanced products and services, including Horizon 4; expectations with respect to our capital intensity for 2019; the anticipated closing of the Vodafone transaction; expectations regarding our share buyback program; the expected settlement of a portion of our 2018 annual incentive compensation with Liberty Global ordinary shares; the strength of our balance sheet and tenor of our third-party debt; 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 events that are outside of our control, such as the continued use by subscribers and potential subscribers of our and our affiliates’ services and their willingness to upgrade to our more advanced offerings; our and our affiliates’ ability to meet challenges from competition, to manage rapid technological change or to maintain or increase rates to subscribers or to pass through increased costs to subscribers; the effects of changes in laws or regulation; general economic factors; our and our affiliates’ ability to obtain regulatory approval and satisfy regulatory conditions associated with acquisitions and dispositions; our and affiliates’ ability to successfully acquire and integrate new businesses and realize anticipated efficiencies from acquired businesses; the availability of attractive programming for our and our affiliates’ video services and the costs associated with such programming; our and our affiliates’ ability to achieve forecasted financial and operating targets; the outcome of any pending or threatened litigation; the ability of our operating companies and affiliates to access cash of their respective subsidiaries; the impact of our operating companies' and affiliates’ future financial performance, or market conditions generally, on the availability, terms and deployment of capital; fluctuations in currency exchange and interest rates; the ability of suppliers and vendors (including our third-party wireless network providers under our MVNO arrangements) to timely deliver quality products, equipment, software, services and access; our and our affiliates’ ability to adequately forecast and plan future network requirements including the costs and benefits associated with network expansions; and other factors detailed from time to time in our filings with the Securities and Exchange Commission, including our most recently filed Forms 10-K and 10-Q. 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.

Balance Sheets, Statements of Operations and Statements of Cash Flows

The condensed consolidated balance sheets, statements of operations and statements of cash flows of Liberty Global are in our 10-Q.

Rebase Information

For purposes of calculating rebased growth rates on a comparable basis for all businesses that we owned during 2018, we have adjusted our historical revenue and OCF for the three and nine months ended September 30, 2017 to (i) include the pre-acquisition revenue and OCF of entities acquired during 2018 and 2017 in our rebased amounts for the three and nine months ended September 30, 2017 to the same extent that the revenue and OCF of these entities are included in our results for the three and nine months ended September 30, 2018, (ii) exclude the revenue and OCF of UPC Austria to the same extent that the revenue and OCF of UPC Austria is excluded from our results for the three and nine months ended September 30, 2018, and to exclude the revenue and OCF of entities disposed of during 2017, (iii) include revenue for the temporary elements of transition and other services provided to the VodafoneZiggo JV, Deutsche Telekom (the buyer of UPC Austria) and Liberty Latin America, to reflect amounts related to these services equal to those included in our results for the three and nine months ended September 30, 2018, (iv) reflect the January 1, 2018 adoption of the new revenue recognition standard (ASU 2014-09, Revenue from Contracts with Customers) as if such adoption had occurred on January 1, 2017 and (v) reflect the translation of our rebased amounts for the three and nine months ended September 30, 2017 at the applicable average foreign currency exchange rates that were used to translate our results for the three and nine months ended September 30, 2018. We have reflected the revenue and OCF of these acquired entities in our 2017 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 (a) any significant differences between U.S. GAAP and local generally accepted accounting principles, (b) any significant effects of acquisition accounting adjustments, (c) any significant differences between our accounting policies and those of the acquired entities and (d) other items we deem appropriate. We do not adjust pre-acquisition periods to eliminate nonrecurring 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.

The following table provides adjustments made to the 2017 amounts to derive our rebased growth rates:

    Revenue     OCF

Three months
ended
September 30,

   

Nine months
ended
September 30,

Three months
ended
September 30,

   

Nine months
ended
September 30,

2017 2017 2017 2017
in millions
Continuing operations:
Acquisitions $ 16.4 $ 57.2 $ 2.9 $ 22.4
Revenue Recognition (ASU 2014-09) (8.8 ) (17.6 ) (10.9 ) (24.3 )
Dispositions(i) (5.7 ) (20.7 ) (2.1 ) (9.2 )
Foreign Currency (26.6 ) 487.6   (10.7 ) 198.8  
Total increase (decrease) $ (24.7 ) $ 506.5   $ (20.8 ) $ 187.7  
 
Discontinued European Operations:
Revenue Recognition (ASU 2014-09) $ (5.2 ) $ (15.2 ) $ (4.7 ) $ (9.8 )
Dispositions (68.0 ) (68.0 ) (37.6 ) (37.6 )
Foreign Currency (13.6 ) 192.1   (12.8 ) 108.0  
Total increase (decrease) $ (86.8 ) $ 108.9   $ (55.1 ) $ 60.6  
 
Full Company:
Acquisitions $ 16.4 $ 57.2 $ 2.9 $ 22.4
Revenue Recognition (ASU 2014-09) (14.0 ) (32.8 ) (15.6 ) (34.1 )
Dispositions(i) (73.7 ) (88.7 ) (39.7 ) (46.8 )
Foreign Currency (40.2 ) 679.7   (23.5 ) 306.8  
Total increase (decrease) $ (111.5 ) $ 615.4   $ (75.9 ) $ 248.3  
(i)   Includes rebase adjustments related to agreements to provide transitional and other services to the VodafoneZiggo JV, Liberty Latin America and UPC Austria. These adjustments result in an equal amount of fees in both the 2018 and 2017 periods for those services that are deemed to be temporary in nature. The net amount of these adjustments resulted in an increase (decrease) in revenue and OCF of $1.2 million and ($0.7 million), respectively, for the three months ended September 30, 2017 and decreases in revenue and OCF of $0.4 million and $2.2 million, respectively, for the nine months ended September 30, 2017.
 

Summary of Debt, Capital Lease Obligations & Cash and Cash Equivalents

The following table(i) details the U.S. dollar equivalent balances of the outstanding principal amount of our continuing operations debt, capital lease obligations and cash and cash equivalents at September 30, 2018:

        Capital     Debt & Capital     Cash
Lease Lease and Cash
Debt(ii), (iii) Obligations Obligations Equivalents
in millions
Liberty Global and unrestricted subsidiaries $ 1,583.7 $ 49.4 $ 1,633.1 $ 795.7
Virgin Media(iv) 16,398.7 70.9 16,469.6 42.6
UPC Holding 5,951.0 78.0 6,029.0 14.7
Telenet 5,265.1   464.9   5,730.0   96.2
Total $ 29,198.5   $ 663.2   $ 29,861.7   $ 949.2

______________________________

(i)   Except as otherwise indicated, the amounts reported in the table include the named entity and its subsidiaries.
(ii) Debt amounts for UPC Holding and Telenet include notes issued by special purpose entities that are consolidated by the respective subsidiary.
(iii) Debt amounts for UPC Holding include those amounts that are not a direct obligation of the entities to be disposed within the UPC Holding borrowing group. Certain of these obligations have been or are expected to be repaid with portions of the proceeds from the disposition of UPC Austria and the Vodafone Disposal Group.
(iv) The Virgin Media borrowing group includes certain subsidiaries of Virgin Media, but excludes the parent entity, Virgin Media Inc. The cash and cash equivalents amount includes cash and cash equivalents held by the Virgin Media borrowing group, but excludes cash and cash equivalents held by Virgin Media Inc. This amount is included in the amount shown for Liberty Global and unrestricted subsidiaries.
 

Property and Equipment Additions and Capital Expenditures

The tables below highlight the categories of the property and equipment additions for the indicated periods and reconcile those additions to the capital expenditures that are presented in the condensed consolidated statements of cash flows in our 10-Q.

    Three months ended September 30,
2018     2017     2018     2017     2018     2017

Continuing
operations

Discontinued
European Operations

Full Company
in millions, except % amounts
Customer premises equipment $ 202.7 $ 227.9 $ 60.9 $ 75.0 $ 263.6 $ 302.9
New Build & Upgrade 153.2 244.1 69.9 79.6 223.1 323.7
Capacity 96.7 133.8 32.5 39.4 129.2 173.2
Baseline 264.5 235.3 40.5 56.4 305.0 291.7
Product & Enablers 174.2   185.2   25.7   11.5   199.9   196.7
Total P&E Additions 891.3 1,026.3 $ 229.5   $ 261.9   $ 1,120.8   $ 1,288.2
Reconciliation of P&E Additions to capital expenditures:
Assets acquired under capital-related vendor financing arrangements(i) (471.3 ) (576.4 )
Assets acquired under capital leases (21.6 ) (30.5 )
Changes in current liabilities related to capital expenditures (53.3 ) (156.6 )
Total capital expenditures, net(ii) $ 345.1   $ 262.8  
 
Capital expenditures, net:
Third-party payments $ 361.0 $ 356.6
Proceeds received for transfers to related parties(iii) (15.9 ) (93.8 )
Total capital expenditures, net $ 345.1   $ 262.8  
 
P&E Additions as % of revenue3 30.1 % 35.1 %
    Nine months ended September 30,
2018     2017     2018     2017     2018     2017

Continuing
operations

Discontinued
European Operations

Full Company
in millions, except % amounts
Customer premises equipment $ 719.5 $ 668.6 $ 197.4 $ 234.5 $ 916.9 $ 903.1
New Build & Upgrade 541.1 608.7 218.6 210.3 759.7 819.0
Capacity 312.4 362.6 92.6 90.2 405.0 452.8
Baseline 605.6 507.3 145.9 141.6 751.5 648.9
Product & Enablers 563.1   510.7   85.3   41.9   648.4   552.6
Total P&E Additions 2,741.7 2,657.9 $ 739.8   $ 718.5   $ 3,481.5   $ 3,376.4
Reconciliation of P&E Additions to capital expenditures:
Assets acquired under capital-related vendor financing arrangements(i) (1,659.2 ) (1,740.2 )
Assets acquired under capital leases (68.1 ) (128.4 )
Changes in current liabilities related to capital expenditures 128.5   61.4  
Total capital expenditures, net(ii) $ 1,142.9   $ 850.7  
 
Capital expenditures, net:
Third-party payments $ 1,216.1 $ 1,139.5
Proceeds received for transfers to related parties(iii) (73.2 ) (288.8 )
Total capital expenditures, net $ 1,142.9   $ 850.7  
 
P&E Additions as % of revenue3 30.1 % 31.8 %

______________________________

(i)   Amounts exclude related VAT of $82 million and $101 million during the three months ended September 30, 2018 and 2017, respectively, and $268 million and $285 million during the nine months ended September 30, 2018 and 2017, respectively, that were also financed by our vendors under these arrangements.
(ii) The capital expenditures that we report in our consolidated statements of cash flows do not include amounts that are financed under vendor 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 related principal is repaid.
(iii) Primarily relates to transfers of centrally-procured property and equipment to our discontinued operations and the VodafoneZiggo JV.
 

ARPU per Cable Customer Relationship

The following table provides ARPU per cable customer relationship for the indicated periods:

    Three months ended September 30,     %     Rebased
2018     20173 Change % Change
 
Liberty Global $ 57.17 $ 57.06 0.2 % 1.7 %
U.K. & Ireland (Virgin Media) £ 51.09 £ 50.10 2.0 % 1.9 %
Belgium (Telenet) 56.49 55.07 2.6 % 2.6 %
UPC 31.27 32.20 (2.9 %) (1.8 %)
 

Mobile ARPU

The following tables provide ARPU per mobile subscriber for the indicated periods:

null
    ARPU per Mobile Subscriber
Three months ended September 30,     %     Rebased
2018     20173 Change % Change
Liberty Global:
Including interconnect revenue $ 19.39 $ 20.09