Liberty Global Ltd. - Quarter Report: 2024 March (Form 10-Q)

Other current assets (notes 3 and 4)

Total current assets

Investments and related notes receivable (including $ million and $ million, respectively, measured at fair value on a recurring basis) (note 4)

Property and equipment, net (notes 7 and 9)

Goodwill (note 7)

Intangible assets subject to amortization, net (note 7)

Operating lease right-of-use (ROU) assets (note 9)

Other assets, net (notes 3 and 5)

Total assets$ $

The accompanying notes are an integral part of these condensed consolidated financial statements.

LIBERTY GLOBAL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS — (Continued)

(unaudited)

) ) ) )


	March 31, 2024				December 31, 2023
	in millions
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$				$
Deferred revenue (note 3)
Current portion of debt and finance lease obligations (notes 8 and 9)
Accrued capital expenditures
Accrued income taxes
Derivative instruments (note 5)
Other accrued and current liabilities (note 9)
Total current liabilities
Long-term debt and finance lease obligations (notes 8 and 9)
		()

		()




		()





			$	()



			$	()

)) ())))()$()

The accompanying notes are an integral part of these condensed consolidated financial statements.

LIBERTY GLOBAL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited)

Liberty Global shareholders

Non-controlling
interests

Total
equity

Common shares

Additional
paid-in
capital

Accumulated
earnings

Accumulated
other
comprehensive
earnings, net of taxes

Treasury shares, at cost

Total Liberty Global
shareholders

Class A

Class B

Class C

in millions

Balance at January 1, 2023

()

Net loss

—

()

—

()

Other comprehensive earnings, net of taxes

—

Repurchases and cancellations of Liberty Global common shares (note 11)

—

()

—

()

—

()

Share-based compensation (note 12)

—

Adjustments due to changes in subsidiaries’ equity and other, net

—

Balance at March 31, 2023

()

The accompanying notes are an integral part of these condensed consolidated financial statements.

LIBERTY GLOBAL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY — (Continued)

(unaudited)

Liberty Global shareholders

Non-controlling
interests

Total
equity

Common shares

Additional
paid-in
capital

Accumulated earnings

Accumulated
other
comprehensive
earnings, net of taxes

Treasury shares, at cost

Total Liberty Global
shareholders

Class A

Class B

Class C

in millions

Balance at January 1, 2024

()

Net earnings

—

Other comprehensive loss, net of taxes

—

()

—

()

Repurchases and cancellations of Liberty Global common shares (note 11)

—

()

—

()

—

()

Share-based compensation (note 12)

—

Adjustments due to changes in subsidiaries’ equity and other, net

—

()

Balance at March 31, 2024

()

The accompanying notes are an integral part of these condensed consolidated financial statements.

LIBERTY GLOBAL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Three months ended March 31,
	2024		2023
	in millions

Cash flows from operating activities:
Net earnings (loss)	$		$	()
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Share-based compensation expense
Depreciation and amortization
Impairment, restructuring and other operating items, net
Amortization of deferred financing costs and non-cash interest
Realized and unrealized losses (gains) on derivative instruments, net	()
Foreign currency transaction losses (gains), net	()
Realized and unrealized losses (gains) due to changes in fair values of certain investments, net	()
Share of results of affiliates, net
Deferred income tax expense (benefit)			()
Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions	()		()
Net cash provided by operating activities

Cash flows from investing activities:
Cash received from the sale of investments
Cash paid for investments	()		()
Capital expenditures, net	()		()
Cash paid in connection with acquisitions, net of cash acquired	()		()
Dividend distributions received from the VMO2 JV
Other investing activities, net	()
Net cash used by investing activities	$	()	$	()

The accompanying notes are an integral part of these condensed consolidated financial statements.

LIBERTY GLOBAL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)

(unaudited)

)) ) )) )))


	Three months ended March 31,
	2024		2023
	in millions

Cash flows from financing activities:
Borrowings of debt	$		$
Operating-related vendor financing additions
Repayments and repurchases of debt and finance lease obligations:
Debt (excluding vendor financing)	()		()
Principal payments on operating-related vendor financing	()		()
Principal payments on capital-related vendor financing	()		()
Principal payments on finance leases	()		()
Repurchases of Liberty Global common shares	()		()
Net cash paid related to derivative instruments	()		()
Other financing activities, net	()
Net cash provided (used) by financing activities	()

Effect of exchange rate changes on cash and cash equivalents and restricted cash	()
Net decrease in cash and cash equivalents and restricted cash	()		()
Cash and cash equivalents and restricted cash:
Beginning of period
Net decrease	()		()
End of period	$		$

Cash paid for interest	$		$
Net cash paid for taxes	$		$

Details of end of period cash and cash equivalents and restricted cash:
Cash and cash equivalents	$		$
Restricted cash included in other current assets and other assets, net
		()


Due in one year or less	$
Due in one to five years
Due in five to ten years
Total (a)	$

_______________

(a)The weighted average life of our total debt securities was years as of March 31, 2024.

LIBERTY GLOBAL LTD.

Notes to Condensed Consolidated Financial Statements — (Continued)

March 31, 2024

(unaudited)

(5)

$ $ $ $ $

Equity-related derivative instruments (c)

Foreign currency forward and option contracts

Other Total$ $ $ $ $ $ Liabilities (a):

Cross-currency and interest rate derivative contracts (b)

$ $ $ $ $ $

Equity-related derivative instruments (c)

Foreign currency forward and option contracts ) $()

The net cash received or paid related to our derivative instruments is classified as an operating, investing or financing activity in our condensed consolidated statements of cash flows based on the objective of the derivative instrument and the classification of the applicable underlying cash flows.

$ Financing activities()()Total$ $()

Counterparty Credit Risk

We are exposed to the risk that the counterparties to the derivative instruments of our subsidiary borrowing groups will default on their obligations to us. We manage these credit risks through the evaluation and monitoring of the creditworthiness of, and concentration of risk with, the respective counterparties. In this regard, credit risk associated with our derivative instruments is spread across a relatively broad counterparty base of banks and financial institutions, however notwithstanding, given the size of our derivative portfolio, the default of certain counterparties could have a significant impact on our consolidated statements of operations. Collateral is generally not posted by either party under our derivative instruments. At March 31, 2024, our exposure to counterparty credit risk included derivative assets with an aggregate fair value of $ million.

LIBERTY GLOBAL LTD.

Notes to Condensed Consolidated Financial Statements — (Continued)

March 31, 2024

(unaudited)

€ $ CHF (a)€ CHF —$

_______________

(a)Includes forward-starting derivative instruments.

(b) Represents contracts associated with our investment in a leveraged structured note. For additional information, see note 4.

LIBERTY GLOBAL LTD.

Notes to Condensed Consolidated Financial Statements — (Continued)

March 31, 2024

(unaudited)

Telenet$ VM Ireland$

Interest Rate Caps, Floors and Collars

From time to time, we enter into interest rate cap, floor and collar agreements. Purchased interest rate caps and collars lock in a maximum interest rate if variable rates rise, but also allow our company to benefit, to a limited extent in the case of collars, from declines in market rates. Purchased interest rate floors protect us from interest rates falling below a certain level, generally to match a floating rate floor on a debt instrument. At March 31, 2024, we had no interest rate collar agreements, and the total U.S. dollar equivalents of the notional amounts of our purchased interest rate caps and floors were $ billion and $ billion, respectively.

Impact of Derivative Instruments on Borrowing Costs

)%VM Ireland()%Telenet()%Total decrease to borrowing costs()%

_______________

Foreign Currency Forwards and Options

Certain of our subsidiaries enter into foreign currency forward and option contracts with respect to non-functional currency exposure. As of March 31, 2024, the total U.S. dollar equivalent of the notional amounts of our foreign currency forward and option contracts was $ billion.

LIBERTY GLOBAL LTD.

Notes to Condensed Consolidated Financial Statements — (Continued)

March 31, 2024

(unaudited)

(6)

LIBERTY GLOBAL LTD.

Notes to Condensed Consolidated Financial Statements — (Continued)

March 31, 2024

(unaudited)

$ $ $

Equity-related derivative instruments

Foreign currency forward and option contracts

Other

Total derivative instruments

Investments:

SMAs

Other investments

Total investments

Total assets$ $ $ $ Liabilities:Derivative instruments:Cross-currency and interest rate derivative contracts$ $ $ $ Equity-related derivative instruments Foreign currency forward and option contracts Total liabilities$ $ $ $

LIBERTY GLOBAL LTD.

Notes to Condensed Consolidated Financial Statements — (Continued)

March 31, 2024

(unaudited)

$ $ $

Equity-related derivative instruments

Foreign currency forward and option contracts

Other

Total derivative instruments

Investments:

SMAs

Other investments Total investments Total assets$ $ $ $ Liabilities:Derivative instruments:Cross-currency and interest rate derivative contracts$ $ $ $ Equity-related derivative instruments Foreign currency forward and option contracts ) ))))()$

If, among other factors the adverse impacts of economic, competitive, regulatory or other factors were to cause our results of operations or cash flows to be worse than anticipated, we could conclude in future periods that impairment charges are required in order to reduce the carrying values of our goodwill and, to a lesser extent, other long-lived assets. Any such impairment charges could be significant.

Intangible Assets Subject to Amortization, Net

$()$ $ $()$ Other () () Total$ $()$ $ $()$

LIBERTY GLOBAL LTD.

Notes to Condensed Consolidated Financial Statements — (Continued)

March 31, 2024

(unaudited)

(8)

%€ $ $ $ Sunrise Holding SPE Notes %— — Sunrise Holding Senior Notes %— — Telenet Credit Facility (d) %€ Telenet Senior Secured Notes %— — $

Vendor Financing Obligations

$ Operating-related vendor financing additions Capital-related vendor financing additions Principal payments on operating-related vendor financing()()Principal payments on capital-related vendor financing()()Foreign currency and other()

Balance at March 31

$ $

LIBERTY GLOBAL LTD.

Notes to Condensed Consolidated Financial Statements — (Continued)

March 31, 2024

(unaudited)

(9)

Lease Balances

$ Operating leases (b)

Total ROU assets

$ $ Lease liabilities:Finance leases (c)$ $ Operating leases (d) Total lease liabilities$ $

_______________

(a)Our operating lease expense and short-term lease expense are included in programming and other direct costs of services, other operating expenses, SG&A expenses and impairment, restructuring and other operating items, net, in our condensed consolidated statements of operations.

(b)Variable lease expense represents payments made to a lessor during the lease term that vary because of a change in circumstance that occurred after the lease commencement date. Variable lease payments are expensed as incurred and are included in other operating expenses in our condensed consolidated statements of operations.

A summary of our cash outflows from operating and finance leases is set forth below:

))))


				()

) $() ) )) )() ))) (43.9)238.6 2.8 (0.3)3.5 3.5 1.4 (1.5)%43.5 %

In addition to organic changes in the revenue, operating and SG&A expenses of our reportable segments, the Adjusted EBITDA margins presented above include the impact of acquisitions, as applicable. For discussion of the factors contributing to the changes in the Adjusted EBITDA margins of our consolidated reportable segments, see the analysis of our revenue included in Discussion and Analysis of our Reportable Segments above and the analysis of our expenses included in Discussion and Analysis of our Consolidated Operating Results below. For discussion of the factors contributing to the changes in the Adjusted EBITDA margins of the VMO2 JV and the VodafoneZiggo JV, see Discussion and Analysis of our Consolidated Operating Results — Share of results of affiliates, net below.

Discussion and Analysis of our Consolidated Operating Results

General

For more detailed explanations of the changes in our revenue, see Discussion and Analysis of our Reportable Segments above.

Revenue

Our revenue by major category is set forth below:

36.0

On an organic basis, our consolidated residential fixed subscription revenue decreased $15.9 million or 2.2% during the three months ended March 31, 2024, as compared to the corresponding period in 2023, primarily attributable to a decrease at Sunrise.

On an organic basis, our consolidated residential fixed non-subscription revenue decreased $1.2 million or 8.4% during the three months ended March 31, 2024, as compared to the corresponding period in 2023, primarily due to a decrease at Telenet.

On an organic basis, our consolidated residential mobile subscription revenue increased $4.8 million or 1.3% during the three months ended March 31, 2024, as compared to the corresponding period in 2023, primarily attributable to an increase at Sunrise.

On an organic basis, our consolidated residential mobile non-subscription revenue decreased $2.1 million or 1.6% during the three months ended March 31, 2024, as compared to the corresponding period in 2023, primarily due to the net effect of (i) a decrease at Sunrise and (ii) an increase at Telenet.

B2B revenue. On an organic basis, our consolidated B2B subscription revenue increased $8.3 million or 6.2% during the three months ended March 31, 2024, as compared to the corresponding period in 2023, primarily attributable to an increase at Telenet.

On an organic basis, our consolidated B2B non-subscription revenue decreased $5.0 million or 2.2% during the three months ended March 31, 2024, as compared to the corresponding period in 2023, primarily due to the net effect of (i) a decrease at Telenet and (ii) an increase at Sunrise.

Other revenue. On an organic basis, our consolidated other revenue increased $46.6 million or 16.5% during the three months ended March 31, 2024, as compared to the corresponding period in 2023, primarily due to an increase at Central and Other related to revenue earned from the sale of CPE to the VMO2 JV.

For additional information regarding the changes in our residential, B2B and other revenue, see Discussion and Analysis of our Reportable Segments above.

Programming and other direct costs of services

Programming and other direct costs of services include programming and copyright costs, interconnect and access costs, costs of mobile handsets and other devices and other direct costs related to our operations, including costs associated with our transitional service agreements and certain costs related to the development of externally marketed software. Programming and copyright costs represent a significant portion of our operating costs and are subject to rise in future periods due to various factors, including (i) higher costs associated with the expansion of our digital video content, including rights associated with ancillary product offerings and rights that provide for the broadcast of live sporting events and (ii) rate increases.

The details of our programming and other direct costs of services are as follows:


	Three months ended March 31,				Increase (decrease)			Organic increase (decrease)
	2024		2023		$		%	$		%
	in millions, except percentages

Sunrise	$	277.9	$	263.3	$	14.6	5.5	$	(0.8)	(0.3)
Telenet	198.6		204.5		(5.9)		(2.9)	(9.7)		(4.7)
VM Ireland	37.4		36.0		1.4		3.9	1.0		2.8
Central and Other	178.5		87.0		91.5		N.M.	90.4		N.M.
Intersegment eliminations	(20.3)		(20.1)		(0.2)		N.M.	(0.2)		N.M.
Total	$	672.1	$	570.7	$	101.4	17.8	$	80.7	14.1

_______________

N.M. — Not Meaningful.

Our programming and other direct costs of services increased $101.4 million or 17.8% during the three months ended March 31, 2024, as compared to the corresponding period in 2023. On an organic basis, our programming and other direct costs of services increased $80.7 million or 14.1%. This increase includes the following factors:

•An increase in costs of $45.3 million at Central and Other due to lower capitalization as a result of our decision during the second quarter of 2023 to market and sell certain of our internally-developed software to third parties;

•An increase in costs of $45.2 million at Central and Other related to the sale of CPE to the VMO2 JV; and

•A decrease in programming and copyright costs of $6.0 million or 3.1%, primarily attributable to lower costs for certain content at Telenet.

Other operating expenses

Other operating expenses include network operations, customer operations, customer care, share-based compensation and other costs related to our operations. We do not include share-based compensation in the following discussion and analysis of the other operating expenses of our consolidated reportable segments as share-based compensation expense is not included in the performance measures of our consolidated reportable segments. Share-based compensation expense is separately discussed further below.

The details of our other operating expenses are as follows:


	Three months ended March 31,				Increase (decrease)			Organic increase (decrease)
	2024		2023		$		%	$		%
	in millions, except percentages

Sunrise	$	135.0	$	128.5	$	6.5	5.1	$	(0.9)	(0.7)
Telenet	135.0		129.9		5.1		3.9	3.3		2.5
VM Ireland	30.8		30.4		0.4		1.3	—		—
Central and Other	27.7		33.8		(6.1)		(18.0)	(6.2)		(18.3)
Intersegment eliminations	(25.2)		(23.2)		(2.0)		N.M.	(2.0)		N.M.
Total other operating expenses excluding share-based compensation expense	303.3		299.4		3.9		1.3	$	(5.8)	(1.9)
Share-based compensation expense	5.3		2.2		3.1		N.M.
Total	$	308.6	$	301.6	$	7.0	2.3

_______________

N.M. — Not Meaningful.

Our other operating expenses (exclusive of share-based compensation expense) increased $3.9 million or 1.3% during the three months ended March 31, 2024, as compared to the corresponding period in 2023. On an organic basis, our other operating expenses decreased $5.8 million or 1.9%. This decrease includes the following factors:

•A decrease in core network and information technology-related costs of $7.9 million or 10.0%, primarily at Central and Other; and

•A decrease in customer service costs of $4.8 million or 12.8%, primarily related to lower call center costs at Sunrise and Telenet.

SG&A expenses

SG&A expenses include human resources, information technology, general services, management, finance, legal, external sales and marketing costs, share-based compensation and other general expenses. We do not include share-based compensation in the following discussion and analysis of the SG&A expenses of our consolidated reportable segments as share-based compensation expense is not included in the performance measures of our consolidated reportable segments. Share-based compensation expense is separately discussed further below.

The details of our SG&A expenses are as follows:


	Three months ended March 31,				Increase (decrease)			Organic increase (decrease)
	2024		2023		$		%	$		%
	in millions, except percentages

Sunrise	$	161.8	$	152.6	$	9.2	6.0	$	0.3	0.2
Telenet	120.6		117.2		3.4		2.9	1.8		1.5
VM Ireland	14.8		15.1		(0.3)		(2.0)	(0.5)		(3.3)

Central and Other	94.4		91.6		2.8		3.1	0.3		0.3
Intersegment eliminations	(3.3)		(2.7)		(0.6)		N.M.	(0.6)		N.M.
Total SG&A expenses excluding share-based compensation expense	388.3		373.8		14.5		3.9	$	1.3	0.3
Share-based compensation expense	39.3		41.6		(2.3)		(5.5)
Total	$	427.6	$	415.4	$	12.2	2.9

_______________

N.M. — Not Meaningful.

Supplemental SG&A expense information

0.8 — _______________


*			Filed herewith
**			Furnished herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		LIBERTY GLOBAL LTD.

Dated:	May 1, 2024	/s/ MICHAEL T. FRIES
		Michael T. Fries President and Chief Executive Officer

Dated:	May 1, 2024	/s/ CHARLES H.R. BRACKEN
		Charles H.R. Bracken Executive Vice President and Chief Financial Officer

Liberty Global Ltd. - Quarter Report: 2024 March (Form 10-Q)

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