Liberty Global Annual Report 2020
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Liberty Global Annual Report 2020 Form 10-K (NASDAQ:LBTYB) Published: February 13th, 2020 PDF generated by stocklight.com UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-35961 Liberty Global plc (Exact name of Registrant as specified in its charter) England and Wales 98-1112770 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Griffin House 161 Hammersmith Rd London United Kingdom W6 8BS (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: +44.208.483.6449 or 303.220.6600 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Class A ordinary shares LBTYA Nasdaq Global Select Market Class B ordinary shares LBTYB Nasdaq Global Select Market Class C ordinary shares LBTYK Nasdaq Global Select Market Securities registered pursuant to Section 12(g) of the Act: none Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Y es ☑ No ☐ Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑ Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐ Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S- T during the preceding 12 months. Yes ☑ No ☐ Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Check one: Accelerated Filer ☐ ☐ Smaller Reporting Company Emerging Growth Company Large Accelerated Filer ☑ Non-Accelerated Filer ☐ ☐ If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐ Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑ State the aggregate market value of the voting and non-voting common equity held by non-affiliates, computed by reference to the price at which the common equity was last sold, or the average bid and ask price of such common equity, as of the last business day of the Registrant’s most recently completed second fiscal quarter: $18.5 billion. The number of outstanding ordinary shares of Liberty Global plc as of January 31, 2020 was: 181,568,323 shares of class A ordinary shares, 12,151,526 shares of class B ordinary shares and 438,884,260 shares of class C ordinary shares. DOCUMENTS INCORPORATED BY REFERENCE Portions of the definitive proxy statement for the Registrant’s 2020 Annual General Meeting of Shareholders are incorporated by reference in Part III of this Form1 0- K. LIBERTY GLOBAL PLC 2019 ANNUAL REPORT ON FORM 10-K TABLE OF CONTENTS Page Number PART I Item 1. Business I-1 Item 1A. Risk Factors I-29 Item 1B. Unresolved Staff Comments I-42 Item 2. Properties I-42 Item 3. Legal Proceedings I-42 Item 4. Mine Safety Disclosures I-42 PART II Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities II-1 Item 6. Selected Financial Data II-3 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations II-4 Item 7A. Quantitative and Qualitative Disclosures About Market Risk II-35 Item 8. Financial Statements and Supplementary Data II-40 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure II-40 Item 9A. Controls and Procedures II-40 Item 9B. Other Information II-40 PART III Item 10. Directors, Executive Officers and Corporate Governance III-1 Item 11. Executive Compensation III-1 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters III-1 Item 13. Certain Relationships and Related Transactions, and Director Independence III-1 Item 14. Principal Accounting Fees and Services III-1 PART IV Item 15. Exhibits, Financial Statement Schedules IV-1 Item 16. Form 10-K Summary IV-6 PART I Item 1. BUSINESS Who We Are We are Liberty Global plc ( Liberty Global), an international broadband and television company. We are focused on building a strong convergence of fixed and mobile communication opportunities and we are constantly striving to enhance and simplify our customers’ lives through quality services and products that give them the freedom to connect, converse, work and be entertained anytime, anywhere they choose. Liberty Global has consolidated operations in six European countries serving 10.7 million customers in Europe at December 31, 2019. Our primary business operations are listed below, all of which we consolidate, with the exception of the VodafoneZiggo JV (defined below). Brand Entity Location Ownership Virgin Media United Kingdom & Ireland 100.0% Telenet Belgium 60.2% UPC Holding Switzerland, Poland, Slovakia 100.0% VodafoneZiggo Netherlands 50.0% General Development of Business As a result of a series of mergers that were completed on June 7, 2013, Liberty Global became the publicly-held parent company of the successors by merger of Liberty Global, Inc. (the predecessor to Liberty Global) and Virgin Media Inc. (Virgin Media). In the following text, the terms “we”, “our”, “our company” and “us” may refer, as the context requires, to Liberty Global (or its predecessor) or collectively to Liberty Global (or its predecessor) and its subsidiaries. Unless otherwise indicated, convenience translations into United States (U.S.) dollars are calculated as of December 31, 2019, and operational data, including subscriber statistics and ownership percentages, are as of December 31, 2019. Expansion and Acquisitions We have expanded our broadband footprint through new build projects and strategically selected acquisitions. Our new build projects consist of network extension programs pursuant to which we connect additional homes and businesses to our broadband communications network (Network Extensions). Our investment in Network Extensions is critical not only for our business to grow, but also for the countries and communities in which we operate. The Network Extensions, together with upgrades to our existing networks and next generation customer premises equipment, provide our customers the means to enter the gigaworld society. During 2019, through our Network Extensions, our continuing operations connected approximately 649,000 additional residential and commercial premises (excluding upgrades) to our networks, including approximately 505,000 residential and commercial premises connected by Virgin Media in the United Kingdom ( U.K.), and Ireland. We expect to continue the Network Extensions in 2020. Depending on a variety of factors, however, including the financial and operations results of our new build programs, the Network Extensions may be continued, modified or cancelled at our discretion. Over the past five years, we have also completed several strategic acquisitions. We made these acquisitions in order to execute on our strategy to build broadband communications and mobile businesses that have strong prospects for future growth. Our significant acquisitions include: • On June 3, 2019, Telenet Group Holding N.V. (Telenet) acquired the remaining 50.0% of De Vijver Media NV ( De Vijver Media) that it did not already own (the De Vijver Media Acquisition ). De Vijver Media provides content production, broadcasting and advertising services in Belgium. • On June 19, 2017, Telenet acquired Coditel Brabant sprl, operating under the brand name SFR BeLux ( SFR BeLux), which provided broadband operations in Belgium (Brussels and Wallonia) and Luxembourg. • On May 16, 2016, we acquired Cable & Wireless Communications Limited ( C&W), a provider of telecommunication services, including mobile and high-speed broadband, focused in Latin America and the Caribbean. In connection with the Split-off Transaction referenced below under — Dispositions, we transferred C&W to Liberty Latin America Ltd. ( Liberty Latin America). • On February 11, 2016, Telenet acquired BASE Company N.V. ( BASE), the third-largest mobile network operator in Belgium. • On June 3, 2015, we acquired, together with investment funds affiliated with Searchlight Capital Partners, L.P., Choice Cable TV, a cable and broadband services provider in Puerto Rico, which was integrated into the operations of Liberty Cablevision of Puerto Rico LLC. In connection with the Split-off Transaction referenced below under —Dispositions, we transferred Liberty Cablevision of Puerto Rico LLC to Liberty Latin America. For additional information on our acquisitions see note 5 to our consolidated financial statements included in Part II of this Annual Report on Form 10- K. In addition, we have completed various other smaller acquisitions in the normal course of business. Dispositions We have completed the following dispositions during the past five years: • On July 31, 2019, we completed the sale of our operations in Germany, Romania, Hungary and the Czech Republic to Vodafone Group plc (Vodafone). The operations of Germany, Romania, Hungary and the Czech Republic are collectively referred to herein as the “ Vodafone Disposal Group.” In connection with the sale of the Vodafone Disposal Group, we have agreed to provide certain transitional services to Vodafone for a period of up to four years.