Segment Reporting

We generally identify our reportable segments as those consolidated subsidiaries that represent 10% or more of our revenue, operating cash flow (as defined below) or total assets. In certain cases, we may elect to include an operating segment in our segment disclosure that does not meet the above-described criteria for a reportable segment. We evaluate performance and make decisions about allocating resources to our operating segments based on financial measures such as revenue and operating cash flow (as defined below). In addition, we review non-financial measures such as subscriber growth, as appropriate.

Operating cash flow is the primary measure used by our chief operating decision maker to evaluate segment operating performance. Operating cash flow is also a key factor that is used by our internal decision makers to (i) determine how to allocate resources to segments and (ii) evaluate the effectiveness of our management for purposes of annual and other incentive compensation plans. As we use the term, operating cash flow is defined as revenue less operating and SG&A expenses (excluding share-based compensation, depreciation and amortization, provisions and provision releases related to significant litigation and impairment, restructuring and other operating items). Other operating items include (a) gains and losses on the disposition of long-lived assets, (b) third-party costs directly associated with successful and unsuccessful acquisitions and dispositions, including legal, advisory and due diligence fees, as applicable, and (c) other acquisition-related items, such as gains and losses on the settlement of contingent consideration. Our internal decision makers believe operating cash flow is a meaningful measure and is superior to available GAAP measures because it represents a transparent view of our recurring operating performance that is unaffected by our capital structure and allows management to (1) readily view operating trends, (2) perform analytical comparisons and benchmarking between segments and (3) identify strategies to improve operating performance in the different countries in which we operate. We believe our operating cash flow measure is useful to investors because it is one of the bases for comparing our performance with the performance of other companies in the same or similar industries, although our measure may not be directly comparable to similar measures used by other public companies. Operating cash flow should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income, net earnings (loss), cash flow from operating activities and other GAAP measures of income or cash flows. A reconciliation of total segment operating cash flow to our earnings (loss) from continuing operations before income taxes is presented below.

During the second quarter of 2013, we began presenting our Belgium (Telenet) segment within our European Operations Division as a result of our decision to change how Telenet reports into our management structure. Segment information for the prior period has been retrospectively revised to reflect this change and to present the Chellomedia Disposal Group as a discontinued operation. Unless otherwise noted, we present only the reportable segments of our continuing operations in the tables below. We have identified the following consolidated operating segments as our reportable segments:


•	European Operations Division:


•	U.K. (Virgin Media)


•	Germany (Unitymedia KabelBW)


•	Belgium (Telenet)


•	The Netherlands


•	Switzerland


•	Other Western Europe


•	Central and Eastern Europe


•	Chile (VTR Group)

All of the reportable segments set forth above derive their revenue primarily from broadband communications services, including video, broadband internet and fixed-line telephony services. Most of our reportable segments also provide B2B services and certain of our reportable segments provide mobile services. At March 31, 2014, our operating segments in the European Operations Division provided broadband communications services in 12 European countries and DTH services to customers in the Czech Republic, Hungary, Romania and Slovakia through a Luxembourg-based organization that we refer to as “UPC DTH.” Our Other Western Europe segment includes our broadband communications operating segments in Austria and Ireland. Our Central and Eastern Europe segment includes our broadband communications operating segments in the Czech Republic, Hungary, Poland, Romania and Slovakia. The European Operations Division’s central and other category includes (i) the UPC DTH operating segment, (ii) costs associated with certain centralized functions, including billing systems, network operations, technology, marketing, facilities, finance and other administrative functions, and (iii) intersegment eliminations within the European Operations Division. In Chile, the VTR Group includes VTR GlobalCom, which provides video, broadband internet and fixed-line telephony services, and VTR Wireless, which provides mobile services through a third-party wireless access arrangement. Our corporate and other category includes (a) less significant consolidated operating segments that provide (1) broadband communications services in Puerto Rico and (2) programming and other services and (b) our corporate category. Intersegment eliminations primarily represent the elimination of intercompany transactions between our broadband communications and programming operations.

Performance Measures of Our Reportable Segments

The amounts presented below represent 100% of each of our reportable segment’s revenue and operating cash flow. As we have the ability to control Telenet and Liberty Puerto Rico, we consolidate 100% of the revenue and expenses of these entities in our condensed consolidated statements of operations despite the fact that third parties own significant interests in these entities. The noncontrolling owners’ interests in the operating results of Telenet, Liberty Puerto Rico and other less significant majority-owned subsidiaries are reflected in net earnings or loss attributable to noncontrolling interests in our condensed consolidated statements of operations.



	Revenue
	Three months ended March 31,
	2014			2013
	in millions
European Operations Division:
U.K. (Virgin Media)	$	1,727.9		$	—
Germany (Unitymedia KabelBW)	695.9			618.2
Belgium (Telenet)	574.2			536.2
The Netherlands	318.1			314.8
Switzerland	352.8			326.0
Other Western Europe	230.6			222.6
Total Western Europe	3,899.5			2,017.8
Central and Eastern Europe	289.2			287.8
Central and other	33.9			31.8
Total European Operations Division	4,222.6			2,337.4
Chile (VTR Group)	225.3			250.4
Corporate and other	93.1			93.0
Intersegment eliminations (a)	(7.3		)	(8.9		)
Total	$	4,533.7		$	2,671.9

______________


(a)	Amounts are primarily related to transactions between our European Operations Division and our continuing programming operations.



	Operating cash flow
	Three months ended March 31,
	2014			2013
	in millions
European Operations Division:
U.K. (Virgin Media)	$	736.5		$	—
Germany (Unitymedia KabelBW)	429.0			360.0
Belgium (Telenet)	302.1			247.5
The Netherlands	183.3			184.8
Switzerland	206.4			182.2
Other Western Europe	113.1			104.8
Total Western Europe	1,970.4			1,079.3
Central and Eastern Europe	147.0			140.6
Central and other	(59.7		)	(45.8		)
Total European Operations Division	2,057.7			1,174.1
Chile (VTR Group)	82.7			85.2
Corporate and other	(16.9		)	(10.6		)
Intersegment eliminations (a)	4.0			11.3
Total	$	2,127.5		$	1,260.0

______________


(a)	Amounts are primarily related to transactions between our European Operations Division and the Chellomedia Disposal Group, which eliminations are no longer recorded following the completion of the Chellomedia Transaction on January 31, 2014.

The following table provides a reconciliation of total segment operating cash flow from continuing operations to earnings (loss) from continuing operations before income taxes:



	Three months ended March 31,
	2014			2013
	in millions

Total segment operating cash flow from continuing operations	$	2,127.5		$	1,260.0
Share-based compensation expense	(55.1		)	(26.3		)
Depreciation and amortization	(1,377.1		)	(684.6		)
Impairment, restructuring and other operating items, net	(113.6		)	(20.9		)
Operating income	581.7			528.2
Interest expense	(653.5		)	(471.5		)
Interest and dividend income	13.8			13.7
Realized and unrealized gains (losses) on derivative instruments, net	(376.6		)	195.5
Foreign currency transaction losses, net	(20.8		)	(136.3		)
Realized and unrealized gains (losses) due to changes in fair values of certain investments, net	(60.2		)	70.8
Losses on debt modification and extinguishment, net	(20.9		)	(158.3		)
Other expense, net	(0.5		)	(1.7		)
Earnings (loss) from continuing operations before income taxes	$	(537.0	)	$	40.4

Revenue by Major Category

Our revenue by major category is set forth below:



	Three months ended March 31,
	2014		2013
	in millions
Subscription revenue (a):
Video	$	1,640.5	$	1,212.7
Broadband internet (b)	1,141.7		659.3
Fixed-line telephony (b)	823.1		409.4
Cable subscription revenue	3,605.3		2,281.4
Mobile subscription revenue (c)	257.3		62.1
Total subscription revenue	3,862.6		2,343.5
B2B revenue (d)	372.5		117.3
Other revenue (b) (c) (e)	298.6		211.1
Total revenue	$	4,533.7	$	2,671.9

_______________


(a)	Subscription revenue includes amounts received from subscribers for ongoing services, excluding installation fees and late fees. Subscription revenue from subscribers who purchase bundled services at a discounted rate is generally allocated proportionally to each service based on the standalone price for each individual service.


(b)	In connection with the Virgin Media Acquisition, we determined that we would no longer externally report digital subscriber line (DSL) subscribers as revenue generating units (RGUs). Accordingly, for the three months ended March 31, 2013, we have reclassified the revenue from our DSL subscribers in Austria from broadband internet and fixed-line telephony subscription revenue to other revenue.


(c)	Mobile subscription revenue excludes $60.8 million and $23.2 million, respectively, of mobile interconnect revenue. Mobile interconnect revenue and revenue from mobile handset sales are included in other revenue.

(d)

These amounts include B2B revenue from business broadband internet, video, voice, wireless and data services offered to medium to large enterprises and, on a wholesale basis, to other operators. We also provide services to certain small office and home office (SOHO) subscribers. SOHO subscribers pay a premium price to receive enhanced service levels along with video, broadband internet or fixed-line telephony services that are the same or similar to the mass marketed products offered to our residential subscribers. Revenue from SOHO subscribers, which aggregated $46.5 million and $32.8 million, respectively, is included in cable subscription revenue.


(e)	Other revenue includes, among other items, interconnect, carriage fee and installation revenue.

Geographic Segments

The revenue of our geographic segments is set forth below:



	Three months ended March 31,
	2014		2013
	in millions
European Operations Division:
U.K.	$	1,727.9	$	—
Germany	695.9		618.2
Belgium	574.2		536.2
Switzerland	352.8		326.0
The Netherlands	318.1		314.8
Poland	120.5		116.5
Ireland	119.6		114.4
Austria	111.0		108.2
Hungary	64.0		63.4
The Czech Republic	51.5		57.5
Romania	36.9		34.6
Slovakia	16.3		15.8
Other (a)	33.9		31.8
Total European Operations Division	4,222.6		2,337.4
Chile	225.3		250.4
Puerto Rico	74.7		73.2
Other, including intersegment eliminations	11.1		10.9
Total	$	4,533.7	$	2,671.9

_______________


(a)	Primarily represents revenue of UPC DTH from customers located in the Czech Republic, Hungary, Romania and Slovakia.