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. 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 or 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 loss from continuing operations before income taxes is presented below.

During the fourth quarter of 2014, we began presenting (i) our operating segments in the U.K. and Ireland as one combined reportable segment, (ii) our operating segments in Switzerland and Austria as one combined reportable segment and (iii) our UPC DTH operating segment, as described below, as part of our Central and Eastern Europe reportable segment. These changes were made as a result of internal changes in organizational structures, changes in how these segments are evaluated and monitored by the chief operating decision maker and the integration of certain functions within these reportable segments. Previously, (a) our operating segments in the U.K. and Switzerland were each separate reportable segments, (b) our operating segments in Ireland and Austria were combined into one reportable segment, “Other Western Europe,” and (c) our UPC DTH operating segment was included in the European Operations Division’s central and other category. Segment information for all periods presented has been revised to reflect the above-described changes. We present only the reportable segments of our continuing operations in the tables below.

As of December 31, 2014, our reportable segments are as follows:


•	European Operations Division:


•	U.K./Ireland


•	The Netherlands


•	Germany


•	Belgium


•	Switzerland/Austria


•	Central and Eastern Europe


•	Chile

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 December 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 Central and Eastern Europe segment includes (i) our broadband communications operating segments in the Czech Republic, Hungary, Poland, Romania and Slovakia and (ii) our UPC DTH operating segment. The European Operations Division’s central and other category includes (a) costs associated with certain centralized functions, including billing systems, network operations, technology, marketing, facilities, finance and other administrative functions, and (b) intersegment eliminations within the European Operations Division. In Chile, we provide video, broadband internet, fixed-line telephony and mobile services. Our corporate and other category includes (A) less significant consolidated operating segments that provide (I) broadband communications services in Puerto Rico and (II) 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 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 consolidated statements of operations.



	Year ended December 31,
	2014						2013						2012
	Revenue			Operating cash flow			Revenue			Operating cash flow			Revenue			Operating cash flow
	in millions
European Operations Division:
U.K./Ireland (a)	$	7,409.9		$	3,235.7		$	4,117.4		$	1,742.8		$	426.4		$	189.1
The Netherlands (b)	1,498.5			857.9			1,242.4			721.7			1,229.1			737.1
Germany	2,711.5			1,678.2			2,559.2			1,541.1			2,311.0			1,364.3
Belgium	2,279.4			1,125.0			2,185.9			1,049.4			1,918.0			940.7
Switzerland/Austria	1,846.1			1,056.4			1,767.1			1,005.7			1,681.8			936.5
Total Western Europe	15,745.4			7,953.2			11,872.0			6,060.7			7,566.3			4,167.7
Central and Eastern Europe	1,259.5			583.0			1,272.0			584.5			1,231.2			589.2
Central and other	(7.1		)	(282.7		)	(0.4		)	(239.1		)	1.5			(195.7		)
Total European Operations Division	16,997.8			8,253.5			13,143.6			6,406.1			8,799.0			4,561.2
Chile	898.5			351.0			991.6			353.6			940.6			314.2
Corporate and other	376.9			(86.2		)	374.3			(63.8		)	224.1			(83.1		)
Intersegment eliminations (c)	(24.9		)	4.0			(35.3		)	44.8			(32.9		)	38.6
Total	$	18,248.3		$	8,522.3		$	14,474.2		$	6,740.7		$	9,930.8		$	4,830.9

______________


(a)	The amounts presented for 2013 include the post-acquisition revenue and operating cash flow of Virgin Media from June 8, 2013 through December 31, 2013.


(b)	The amounts presented for 2014 include the post-acquisition revenue and operating cash flow of Ziggo from November 12, 2014 through December 31, 2014.

(c)

The intersegment eliminations that are applicable to revenue are primarily related to transactions between our European Operations Division and our continuing programming operations. The intersegment eliminations that are applicable to operating cash flow are 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 loss from continuing operations before income taxes:



	Year ended December 31,
	2014			2013			2012
	in millions
Total segment operating cash flow from continuing operations	$	8,522.3		$	6,740.7		$	4,830.9
Share-based compensation expense	(257.2		)	(300.7		)	(110.1		)
Depreciation and amortization	(5,500.1		)	(4,276.4		)	(2,661.5		)
Release of litigation provision	—			146.0			—
Impairment, restructuring and other operating items, net	(536.8		)	(297.5		)	(76.2		)
Operating income	2,228.2			2,012.1			1,983.1
Interest expense	(2,544.7		)	(2,286.9		)	(1,673.6		)
Interest and dividend income	31.7			113.1			42.1
Realized and unrealized gains (losses) on derivative instruments, net	88.8			(1,020.4		)	(1,070.3		)
Foreign currency transaction gains (losses), net	(836.5		)	349.3			438.4
Realized and unrealized gains (losses) due to changes in fair values of certain investments, net	205.2			524.1			(10.2		)
Losses on debt modification, extinguishment and conversion, net	(186.2		)	(212.2		)	(213.8		)
Other expense, net	(42.4		)	(5.6		)	(4.6		)
Loss from continuing operations before income taxes	$	(1,055.9	)	$	(526.5	)	$	(508.9	)

Balance Sheet Data of our Reportable Segments

Selected balance sheet data of our reportable segments is set forth below:



	Long-lived assets				Total assets
	December 31,				December 31,
	2014		2013		2014		2013
	in millions
European Operations Division:
U.K./Ireland	$	21,754.2	$	24,322.1	$	25,487.2	$	30,598.8
The Netherlands	17,092.7		2,496.5		17,387.0		2,845.3
Germany	9,117.9		10,754.7		9,512.8		11,968.2
Belgium	4,149.5		4,737.4		4,828.8		5,909.2
Switzerland/Austria	5,300.9		5,961.8		5,643.9		6,484.8
Total Western Europe	57,415.2		48,272.5		62,859.7		57,806.3
Central and Eastern Europe	2,459.9		2,898.7		2,566.4		3,127.4
Central and other	499.4		463.5		2,613.2		1,639.1
Total European Operations Division	60,374.5		51,634.7		68,039.3		62,572.8
Chile	1,017.3		1,139.7		1,513.2		1,628.9
Corporate and other	1,197.2		1,214.9		3,289.4		2,760.3
Total - continuing operations	62,589.0		53,989.3		72,841.9		66,962.0
Discontinued operation (a)	—		513.6		—		752.3
Total	$	62,589.0	$	54,502.9	$	72,841.9	$	67,714.3

______________


(a)	At December 31, 2013, the long-lived assets and total assets of the Chellomedia Disposal Group are presented in long-term assets of discontinued operation in our consolidated balance sheet.

Property and Equipment Additions of our Reportable Segments

The property and equipment additions of our reportable segments (including capital additions financed under vendor financing or capital lease arrangements) are presented below and reconciled to the capital expenditure amounts included in our consolidated statements of cash flows. For additional information concerning capital additions financed under vendor financing and capital lease arrangements, see note 9.



	Year ended December 31,
	2014			2013			2012
	in millions
European Operations Division:
U.K./Ireland (a)	$	1,506.7		$	827.5		$	74.5
The Netherlands (b)	268.0			242.4			221.8
Germany	574.5			543.4			559.5
Belgium	448.9			453.7			440.0
Switzerland/Austria	327.2			306.4			292.8
Total Western Europe	3,125.3			2,373.4			1,588.6
Central and Eastern Europe	264.8			271.6			248.7
Central and other	257.9			256.0			144.3
Total European Operations Division	3,648.0			2,901.0			1,981.6
Chile	195.8			188.5			243.4
Corporate and other	65.4			72.1			33.6
Property and equipment additions	3,909.2			3,161.6			2,258.6
Assets acquired under capital-related vendor financing arrangements	(975.3		)	(573.5		)	(246.5		)
Assets acquired under capital leases	(127.2		)	(143.0		)	(63.1		)
Changes in current liabilities related to capital expenditures	(122.3		)	36.4			(80.7		)
Total capital expenditures	$	2,684.4		$	2,481.5		$	1,868.3

______________


(a)	The amount presented for 2013 includes the post-acquisition property and equipment additions of Virgin Media from June 8, 2013 through December 31, 2013.


(b)	The amount presented for 2014 includes the post-acquisition property and equipment additions of Ziggo from November 12, 2014 through December 31, 2014.

Revenue by Major Category

Our revenue by major category is set forth below:



	Year ended December 31,
	2014		2013		2012
	in millions
Subscription revenue (a):
Video	$	6,544.0	$	5,724.1	$	4,637.6
Broadband internet	4,724.6		3,538.7		2,407.0
Fixed-line telephony	3,261.4		2,508.5		1,518.9
Cable subscription revenue	14,530.0		11,771.3		8,563.5
Mobile subscription revenue (b)	1,085.6		669.9		131.5
Total subscription revenue	15,615.6		12,441.2		8,695.0
B2B revenue (c)	1,517.9		986.9		467.9
Other revenue (b) (d)	1,114.8		1,046.1		767.9
Total revenue	$	18,248.3	$	14,474.2	$	9,930.8

_______________

(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. As a result, changes in the standalone pricing of our cable and mobile products or the composition of bundles can contribute to changes in our product revenue categories from period to period.


(b)	Mobile subscription revenue excludes mobile interconnect revenue of $245.0 million, $175.2 million and $35.1 million during 2014, 2013 and 2012, respectively. Mobile interconnect revenue and revenue from mobile handset sales are included in other revenue.

(c)

B2B revenue includes 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, fixed-line telephony or mobile services that are the same or similar to the mass marketed products offered to our residential subscribers. Revenue from SOHO subscribers, which aggregated $204.1 million, $152.5 million and $59.7 million during 2014, 2013 and 2012, respectively, is included in cable subscription revenue.


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

Geographic Segments

The revenue of our geographic segments is set forth below:



	Year ended December 31,
	2014		2013		2012
	in millions
European Operations Division:
U.K. (a)	$	6,941.1	$	3,653.7	$	—
Germany	2,711.5		2,559.2		2,311.0
Belgium	2,279.4		2,185.9		1,918.0
Switzerland	1,414.4		1,332.1		1,259.8
The Netherlands (b)	1,498.5		1,242.4		1,229.1
Ireland	468.8		463.7		426.4
Poland	469.9		460.4		450.0
Austria	431.7		435.0		422.0
Hungary	310.2		313.8		298.9
The Czech Republic	221.0		248.9		253.4
Romania	173.3		163.8		149.4
Slovakia	74.5		74.6		70.5
Other	3.5		10.1		10.5
Total European Operations Division	16,997.8		13,143.6		8,799.0
Chile	898.5		991.6		940.6
Puerto Rico	306.1		297.2		145.5
Other, including intersegment eliminations	45.9		41.8		45.7
Total	$	18,248.3	$	14,474.2	$	9,930.8

_______________


(a)	The amount presented for 2013 reflects the post-acquisition revenue of Virgin Media from June 8, 2013 through December 31, 2013.


(b)	The amount presented for 2014 reflects the post-acquisition revenue of Ziggo from November 12, 2014 through December 31, 2014.

The long-lived assets of our geographic segments are set forth below:



	December 31,
	2014		2013
	in millions
European Operations Division:
U.K.	$	21,098.3	$	23,570.6
The Netherlands	17,092.7		2,496.5
Germany	9,117.9		10,754.7
Switzerland	4,218.9		4,745.7
Belgium	4,149.5		4,737.4
Austria	1,082.0		1,216.1
Poland	983.5		1,178.5
Ireland	655.9		751.5
The Czech Republic	580.4		679.7
Hungary	535.7		640.6
Romania	209.1		226.0
Slovakia	110.5		131.0
Other (a)	540.1		506.4
Total European Operations Division	60,374.5		51,634.7
Puerto Rico	1,128.3		1,131.9
Chile	1,017.3		1,139.7
U.S. and other (b)	68.9		83.0
Total - continuing operations	62,589.0		53,989.3
Discontinued operation (c)	—		513.6
Total	$	62,589.0	$	54,502.9

_______________


(a)	Primarily represents long-lived assets of the European Operations Division’s central operations, which are located in the Netherlands.


(b)	Primarily represents the assets of our corporate offices.


(c)	At December 31, 2013, the long-lived assets of the Chellomedia Disposal Group are presented in long-term assets of discontinued operation in our consolidated balance sheet.