Liberty Cablevision of Puerto Rico Llc
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LIBERTY CABLEVISION OF PUERTO RICO LLC Condensed Consolidated Financial Statements September 30, 2019 LIBERTY CABLEVISION OF PUERTO RICO LLC 279 Ponce de Leon Ave. San Juan, Puerto Rico 00918-1485 LIBERTY CABLEVISION OF PUERTO RICO LLC TABLE OF CONTENTS Page Number CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018 (unaudited) ........... 3 Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2019 4 and 2018 (unaudited)........................................................................................................................................... Condensed Consolidated Statements of Changes in Members’ Capital for the Three and Nine Months Ended 5 September 30, 2019 and 2018 (unaudited).......................................................................................................... Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018 6 (unaudited)........................................................................................................................................................... Notes to Condensed Consolidated Financial Statements (unaudited) .................................................................... 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 22 OPERATIONS........................................................................................................................................................... LIBERTY CABLEVISION OF PUERTO RICO LLC CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) September 30, December 31, 2019 2018 in millions ASSETS Current assets: Cash and cash equivalents......................................................................................................... $ 37.8 $ 19.8 Trade receivables, net of allowances of $9.1 million and $10.0 million, respectively ............. 21.4 21.7 Prepaid expenses ....................................................................................................................... 9.3 7.1 Derivative instruments............................................................................................................... — 10.5 Insurance settlement receivable................................................................................................. — 26.9 Other current assets ................................................................................................................... 4.4 2.9 Total current assets.................................................................................................................. 72.9 88.9 Property and equipment, net ........................................................................................................ 509.0 494.5 Goodwill ...................................................................................................................................... 277.7 277.7 Cable television franchise rights.................................................................................................. 540.0 540.0 Customer relationships, net.......................................................................................................... 54.7 68.5 Other assets, net ........................................................................................................................... 7.9 3.9 Total assets ........................................................................................................................ $ 1,462.2 $ 1,473.5 LIABILITIES AND MEMBERS’ CAPITAL Current liabilities: Accounts payable....................................................................................................................... $ 25.2 $ 14.9 Deferred revenue ....................................................................................................................... 10.9 11.1 Accrued capital expenditures .................................................................................................... 15.4 26.2 Third-party accrued interest ...................................................................................................... 2.5 13.1 Derivative instruments............................................................................................................... 12.4 — Related-party accrued liabilities................................................................................................ 5.1 6.3 Other accrued and current liabilities.......................................................................................... 16.9 21.5 Total current liabilities ............................................................................................................ 88.4 93.1 Long-term debt: Third-party................................................................................................................................. 915.6 933.7 Related-party ............................................................................................................................. 75.9 70.2 Other long-term liabilities............................................................................................................ 47.9 17.8 Total liabilities..................................................................................................................... 1,127.8 1,114.8 Commitments and contingencies Members’ capital: Members’ capital ....................................................................................................................... 353.1 377.4 Cayman Holding Receivable..................................................................................................... (18.7) (18.7) Members’ capital after deducting loan receivable from member........................................ 334.4 358.7 Total liabilities and members’ capital................................................................................ $ 1,462.2 $ 1,473.5 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 LIBERTY CABLEVISION OF PUERTO RICO LLC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three months ended Nine months ended September 30, September 30, 2019 2018 2019 2018 in millions Revenue ................................................................................................................. $ 104.3 $ 99.6 $ 306.7 $ 241.7 Operating costs and expenses (exclusive of depreciation and amortization, shown separately below): Programming and other direct costs of services ................................................. 22.9 21.3 69.3 57.5 Other operating ................................................................................................... 16.0 14.6 44.9 41.3 Selling, general and administrative (SG&A)...................................................... 15.3 14.0 44.0 40.0 Related-party fees and allocations ...................................................................... 1.4 — 4.2 — Depreciation and amortization ............................................................................ 21.1 23.0 64.1 64.1 Impairment, restructuring and other operating items, net................................... 2.2 0.4 2.6 (0.6) 78.9 73.3 229.1 202.3 Operating income.............................................................................................. 25.4 26.3 77.6 39.4 Non-operating income (expense): Interest expense: Third-party........................................................................................................ (14.9) (15.6) (45.7) (45.8) Related-party..................................................................................................... (2.0) (1.8) (5.8) (3.9) Realized and unrealized gains (losses) on derivative instruments, net ............... (16.3) 2.7 (40.6) 15.3 Other expense, net............................................................................................... — (0.2) (0.1) — (33.2) (14.9) (92.2) (34.4) Net earnings (loss).......................................................................................... $ (7.8) $ 11.4 $ (14.6) $ 5.0 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 LIBERTY CABLEVISION OF PUERTO RICO LLC CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL (unaudited) Members’ capital Class A Class B Total Cayman after deducting preferred common Members’ Holding loan receivable units units capital Receivable from member in millions Balance at July 1, 2018 .................................................. $ 219.7 $ 85.7 $ 305.4 $ (55.7) $ 249.7 Net earnings................................................................. — 11.4 11.4 — 11.4 Priority Return............................................................. 2.6 (2.6) — — — Capital charge in connection with exercise or release of share-based compensation incentive awards ....... — (0.4) (0.4) — (0.4) Share-based compensation .......................................... — 0.3 0.3 — 0.3 Balance at September 30, 2018...................................... $ 222.3 $ 94.4 $ 316.7 $ (55.7) $ 261.0 Balance at January 1, 2018, before effect of accounting change ...................................................... $ 214.5 $ 96.9 $ 311.4 $ (55.7) $ 255.7 Accounting change ...................................................... — (0.1) (0.1) — (0.1) Balance at January 1, 2018, as adjusted for accounting change......................................................................... 214.5 96.8 311.3 (55.7) 255.6 Net