Derivative Instruments

In general, we seek to enter into derivative instruments to protect against (i) increases in the interest rates on our variable-rate debt and (ii) foreign currency movements, particularly with respect to borrowings that are denominated in a currency other than the functional currency of the borrowing entity. In this regard, through our subsidiaries, we have entered into various derivative instruments to manage interest rate exposure and foreign currency exposure with respect to the U.S. dollar ($), the euro (€), the British pound sterling (£), the Swiss franc (CHF), the Chilean peso (CLP), the Czech koruna (CZK), the Hungarian forint (HUF), the Polish zloty (PLN) and the Romanian lei (RON). With the exception of a limited number of our foreign currency forward contracts, we do not apply hedge accounting to our derivative instruments. Accordingly, changes in the fair values of most of our derivative instruments are recorded in realized and unrealized gains or losses on derivative instruments, net, in our condensed consolidated statements of operations.

The following table provides details of the fair values of our derivative instrument assets and liabilities:



	June 30, 2015						December 31, 2014
	Current		Long-term (a)		Total		Current		Long-term (a)		Total
	in millions
Assets:
Cross-currency and interest rate derivative contracts:
Liberty Global Group	$	187.8	$	1,239.5	$	1,427.3	$	443.6	$	812.5	$	1,256.1
LiLAC Group	—		189.4		189.4		—		101.2		101.2
Total cross-currency and interest rate derivative contracts (b)	187.8		1,428.9		1,616.7		443.6		913.7		1,357.3
Equity-related derivative instruments - Liberty Global Group (c)	54.1		280.6		334.7		—		400.2		400.2
Foreign currency forward contracts:
Liberty Global Group	1.6		—		1.6		1.4		—		1.4
LiLAC Group	3.3		—		3.3		1.1		—		1.1
Total foreign currency forward contracts	4.9		—		4.9		2.5		—		2.5
Other - Liberty Global Group	1.5		1.0		2.5		0.5		0.9		1.4
Total assets:
Liberty Global Group	245.0		1,521.1		1,766.1		445.5		1,213.6		1,659.1
LiLAC Group	3.3		189.4		192.7		1.1		101.2		102.3
Total	$	248.3	$	1,710.5	$	1,958.8	$	446.6	$	1,314.8	$	1,761.4



	June 30, 2015						December 31, 2014
	Current		Long-term (a)		Total		Current		Long-term (a)		Total
	in millions
Liabilities:
Cross-currency and interest rate derivative contracts:
Liberty Global Group	$	309.8	$	1,636.5	$	1,946.3	$	987.9	$	1,443.9	$	2,431.8
LiLAC Group	32.6		3.0		35.6		39.5		—		39.5
Total cross-currency and interest rate derivative contracts (b)	342.4		1,639.5		1,981.9		1,027.4		1,443.9		2,471.3
Equity-related derivative instruments - Liberty Global Group (c)	33.4		231.9		265.3		15.3		73.1		88.4
Foreign currency forward contracts:
Liberty Global Group	9.3		—		9.3		0.6		—		0.6
LiLAC Group	—		—		—		0.2		—		0.2
Total foreign currency forward contracts	9.3		—		9.3		0.8		—		0.8
Other - Liberty Global Group	0.1		0.1		0.2		0.2		0.1		0.3
Total liabilities:
Liberty Global Group	352.6		1,868.5		2,221.1		1,004.0		1,517.1		2,521.1
LiLAC Group	32.6		3.0		35.6		39.7		—		39.7
Total	$	385.2	$	1,871.5	$	2,256.7	$	1,043.7	$	1,517.1	$	2,560.8

_______________


(a)	Our long-term derivative assets and liabilities are included in other assets, net, and other long-term liabilities, respectively, in our condensed consolidated balance sheets.

(b)

We consider credit risk in our fair value assessments. As of June 30, 2015 and December 31, 2014, (i) the fair values of our cross-currency and interest rate derivative contracts that represented assets have been reduced by credit risk valuation adjustments aggregating $63.3 million and $30.9 million, respectively, and (ii) the fair values of our cross-currency and interest rate derivative contracts that represented liabilities have been reduced by credit risk valuation adjustments aggregating $155.4 million and $64.6 million, respectively. The adjustments to our derivative assets relate to the credit risk associated with counterparty nonperformance and the adjustments to our derivative liabilities relate to credit risk associated with our own nonperformance. In all cases, the adjustments take into account offsetting liability or asset positions within a given contract. Our determination of credit risk valuation adjustments generally is based on our and our counterparties’ credit risks, as observed in the credit default swap market and market quotations for certain of our subsidiaries’ debt instruments, as applicable. The changes in the credit risk valuation adjustments associated with our cross-currency and interest rate derivative contracts resulted in a net gain (loss) of $77.2 million and ($19.4 million) during the three months ended June 30, 2015 and 2014, respectively, and a net gain (loss) of $60.3 million and ($48.9 million) during the six months ended June 30, 2015 and 2014, respectively. These amounts are included in realized and unrealized losses on derivative instruments, net, in our condensed consolidated statements of operations. For further information regarding our fair value measurements, see note 5.

(c)

Our equity-related derivative instruments primarily include the fair value of (i) the share collar (the ITV Collar) with respect to the ITV plc (ITV) shares held by our company at June 30, 2015, (ii) the share collar (the Sumitomo Collar) with respect to the shares of Sumitomo Corporation held by our company and (iii) Virgin Media’s conversion hedges (the Virgin Media Capped Calls) with respect to Virgin Media’s 6.50% convertible senior notes. The fair values of our equity collars do not include credit risk valuation adjustments as we assume that any losses incurred by our company in the event of nonperformance by the respective counterparty would be, subject to relevant insolvency laws, fully offset against amounts we owe to such counterparty pursuant to the related secured borrowing arrangements.

The details of our realized and unrealized losses on derivative instruments, net, are as follows:



	Three months ended						Six months ended
	June 30,						June 30,
	2015			2014			2015			2014
	in millions
Cross-currency and interest rate derivative contracts:
Liberty Global Group	$	(547.7	)	$	(287.6	)	$	114.6		$	(580.3	)
LiLAC Group	(0.6		)	1.9			77.6			(125.6		)
Total cross-currency and interest rate derivative contracts	(548.3		)	(285.7		)	192.2			(705.9		)
Equity-related derivative instruments - Liberty Global Group:
ITV Collar	(53.5		)	—			(158.9		)	—
Sumitomo Collar	(61.8		)	(23.8		)	(71.9		)	(15.3		)
Ziggo Collar	—			(21.3		)	—			(5.9		)
Other	0.5			0.7			1.1			0.9
Total equity-related derivative instruments	(114.8		)	(44.4		)	(229.7		)	(20.3		)
Foreign currency forward contracts:
Liberty Global Group	(18.1		)	0.5			(27.4		)	19.6
LiLAC Group	1.8			(0.1		)	3.0			0.8
Total foreign currency forward contracts	(16.3		)	0.4			(24.4		)	20.4
Other - Liberty Global Group	(0.3		)	1.1			0.7			0.6

Total Liberty Global Group	(680.9		)	(330.4		)	(141.8		)	(580.4		)
Total LiLAC Group	1.2			1.8			80.6			(124.8		)
Total	$	(679.7	)	$	(328.6	)	$	(61.2	)	$	(705.2	)

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. For foreign currency forward contracts that are used to hedge capital expenditures, the net cash received or paid is classified as an adjustment to capital expenditures in our condensed consolidated statements of cash flows. For derivative contracts that are terminated prior to maturity, the cash paid or received upon termination that relates to future periods is classified as a financing activity. The classification of these cash outflows is as follows:



	Six months ended
	June 30,
	2015			2014
	in millions
Operating activities:
Liberty Global Group	$	(161.3	)	$	(252.1	)
LiLAC Group	(17.7		)	3.6
Total operating activities	(179.0		)	(248.5		)
Investing activities - LiLAC Group	(0.4		)	—
Financing activities:
Liberty Global Group	(303.3		)	(140.2		)
LiLAC Group	—			(37.4		)
Total financing activities	(303.3		)	(177.6		)
Total cash outflows:
Liberty Global Group	(464.6		)	(392.3		)
LiLAC Group	(18.1		)	(33.8		)
Total	$	(482.7	)	$	(426.1	)

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. Collateral is generally not posted by either party under the derivative instruments of our subsidiary borrowing groups. At June 30, 2015, our exposure to counterparty credit risk included derivative assets with an aggregate fair value of $1,559.9 million.

Details of our Derivative Instruments

In the following tables, we present the details of the various categories of our subsidiaries’ derivative instruments. For each subsidiary, the notional amount of multiple derivative instruments that mature within the same calendar month are shown in the aggregate and interest rates are presented on a weighted average basis. In addition, for derivative instruments that were in effect as of June 30, 2015, we present a single date that represents the applicable final maturity date. For derivative instruments that become effective subsequent to June 30, 2015, we present a range of dates that represents the period covered by the applicable derivative instruments.

Cross-currency and Interest Rate Derivative Contracts

Cross-currency Swaps:

The terms of our outstanding cross-currency swap contracts at June 30, 2015 are as follows:



Subsidiary / Final maturity date	Notional amount due from counterparty		Notional amount due to counterparty		Interest rate due from counterparty	Interest rate due to counterparty
	in millions

Virgin Media Investment Holdings Limited (VMIH), a subsidiary of Virgin Media:
January 2023	$	400.0	€	339.6	5.75%	4.33%
June 2023	$	1,855.0	£	1,198.3	6 mo. LIBOR + 2.75%	6 mo. GBP LIBOR + 3.18%
February 2022	$	1,400.0	£	873.6	5.01%	5.49%
January 2023	$	1,000.0	£	648.6	5.25%	5.32%
January 2021	$	500.0	£	308.9	5.25%	6 mo. GBP LIBOR + 2.06%
October 2022	$	450.0	£	272.0	6.00%	6.43%
January 2022	$	425.0	£	255.8	5.50%	5.82%
April 2019	$	191.5	£	122.3	5.38%	5.49%
November 2016 (a)	$	55.0	£	27.7	6.50%	7.03%
October 2019	$	50.0	£	30.3	8.38%	8.98%
October 2019 - October 2022	$	50.0	£	30.7	6.00%	5.75%
UPC Broadband Holding BV (UPC Broadband Holding), a subsidiary of UPC Holding:
January 2023	$	1,140.0	€	1,043.7	5.38%	3.71%
July 2021	$	440.0	€	337.2	6 mo. LIBOR + 2.50%	6 mo. EURIBOR + 2.87%
January 2017 - July 2021	$	262.1	€	194.1	6 mo. LIBOR + 2.50%	6 mo. EURIBOR + 2.51%
January 2020	$	252.5	€	192.5	6 mo. LIBOR + 4.93%	7.49%
November 2019	$	250.0	€	181.5	7.25%	7.74%
November 2021	$	250.0	€	181.4	7.25%	7.50%
October 2020	$	125.0	€	91.3	6 mo. LIBOR + 3.00%	6 mo. EURIBOR + 3.04%
January 2020	$	122.5	€	93.4	6 mo. LIBOR + 4.94%	6 mo. EURIBOR + 4.87%
December 2016	$	340.0	CHF	370.9	6 mo. LIBOR + 3.50%	6 mo. CHF LIBOR + 4.01%
July 2016 - January 2020	$	225.0	CHF	206.3	6 mo. LIBOR + 4.81%	5.44%
July 2016 (a)	$	225.0	CHF	206.3	6 mo. LIBOR + 4.81%	1.00%
July 2021	$	200.0	CHF	186.0	6 mo. LIBOR + 2.50%	6 mo. CHF LIBOR + 2.55%
January 2017 - July 2023	$	200.0	CHF	185.5	6 mo. LIBOR + 2.50%	6 mo. CHF LIBOR + 2.48%
November 2019	$	175.0	CHF	158.7	7.25%	6 mo. CHF LIBOR + 5.01%
January 2017 - July 2021	$	100.0	CHF	92.8	6 mo. LIBOR + 2.50%	6 mo. CHF LIBOR + 2.49%



Subsidiary / Final maturity date	Notional amount due from counterparty		Notional amount due to counterparty		Interest rate due from counterparty	Interest rate due to counterparty
	in millions

July 2016 (a)	$	201.5	RON	489.3	6 mo. LIBOR + 3.50%	1.40%
July 2016 - July 2020	$	201.5	RON	489.3	6 mo. LIBOR + 3.50%	11.34%
January 2021	€	720.8	CHF	877.0	6 mo. EURIBOR + 2.50%	6 mo. CHF LIBOR + 2.62%
January 2017 - September 2022	€	383.8	CHF	477.0	6 mo. EURIBOR + 2.00%	6 mo. CHF LIBOR + 2.22%
January 2017	€	360.4	CHF	589.0	6 mo. EURIBOR + 3.75%	6 mo. CHF LIBOR + 3.94%
April 2018	€	285.1	CHF	346.7	10.51%	9.87%
January 2020	€	175.0	CHF	258.6	7.63%	6.76%
July 2020	€	107.4	CHF	129.0	6 mo. EURIBOR + 3.00%	6 mo. CHF LIBOR + 3.28%
July 2023	€	85.3	CHF	95.0	6 mo. EURIBOR + 2.21%	6 mo. CHF LIBOR + 2.65%
July 2021	€	76.1	CHF	92.1	6 mo. EURIBOR + 2.50%	6 mo. CHF LIBOR + 2.88%
January 2017	€	75.0	CHF	110.9	7.63%	6.98%
December 2015	€	69.1	CLP	53,000.0	3.50%	5.75%
January 2020	€	318.9	CZK	8,818.7	5.58%	5.44%
January 2017	€	60.0	CZK	1,703.1	5.50%	6.99%
July 2017	€	39.6	CZK	1,000.0	3.00%	3.75%
July 2016 (a)	€	260.0	HUF	75,570.0	5.50%	5.00%
July 2016 - January 2017	€	260.0	HUF	75,570.0	5.50%	10.56%
December 2016	€	150.0	HUF	43,367.5	5.50%	2.00%
July 2018	€	78.0	HUF	19,500.0	5.50%	9.15%
January 2017	€	245.0	PLN	1,000.6	5.50%	9.03%
September 2016	€	200.0	PLN	892.7	6.00%	3.91%
January 2020	€	144.6	PLN	605.0	5.50%	7.98%
July 2017	€	82.0	PLN	318.0	3.00%	5.60%
December 2015	CLP 53,000.0		€	69.1	5.75%	3.50%
Amsterdamse Beheer-en Consultingmaatschappij BV (ABC B.V.), a subsidiary of Ziggo Group Holding:
January 2022	$	2,350.0	€	1,727.0	6 mo. LIBOR + 2.75%	4.56%
January 2023	$	400.0	€	339.0	5.88%	4.58%
Unitymedia Hessen GmbH & Co. KG (Unitymedia Hessen), a subsidiary of Unitymedia:
January 2023	$	1,652.9	€	1,252.5	5.67%	4.50%
January 2021	$	797.1	€	546.5	5.50%	5.60%
VTR:
January 2022	$	1,400.0	CLP	760,340.0	6.88%	10.94%

_______________


(a)	Unlike the other cross-currency swaps presented in this table, the identified cross-currency swaps do not involve the exchange of notional amounts at the inception and maturity of the instruments. Accordingly, the only cash flows associated with these instruments are interest payments and receipts.

Interest Rate Swaps:

The terms of our outstanding interest rate swap contracts at June 30, 2015 are as follows:



Subsidiary / Final maturity date	Notional amount		Interest rate due from counterparty	Interest rate due to counterparty
	in millions
VMIH:
October 2018	£	2,155.0	6 mo. GBP LIBOR	1.52%
October 2018 - June 2023	£	1,200.0	6 mo. GBP LIBOR	2.49%
January 2021	£	650.0	5.50%	6 mo. GBP LIBOR + 1.84%
January 2021	£	650.0	6 mo. GBP LIBOR + 1.84%	3.87%
December 2015	£	600.0	6 mo. GBP LIBOR	2.90%
April 2018	£	300.0	6 mo. GBP LIBOR	1.37%
UPC Broadband Holding:
January 2022	$	675.0	6.88%	6 mo. LIBOR + 4.90%
July 2020	€	750.0	6.38%	6 mo. EURIBOR + 3.16%
July 2016	€	503.4	6 mo. EURIBOR	0.20%
July 2016 - January 2021	€	250.0	6 mo. EURIBOR	2.52%
July 2016 - January 2023	€	210.0	6 mo. EURIBOR	2.88%
November 2021	€	107.0	6 mo. EURIBOR	2.89%
July 2016 - July 2020	€	43.4	6 mo. EURIBOR	3.95%
July 2016	CHF	900.0	6 mo. CHF LIBOR	0.05%
January 2022	CHF	711.5	6 mo. CHF LIBOR	1.89%
July 2016 - January 2021	CHF	500.0	6 mo. CHF LIBOR	1.65%
July 2016 - January 2018	CHF	400.0	6 mo. CHF LIBOR	2.51%
December 2016	CHF	370.9	6 mo. CHF LIBOR	3.82%
November 2019	CHF	226.8	6 mo. CHF LIBOR + 5.01%	6.88%
ABC B.V.:
January 2022	€	1,566.0	6 mo. EURIBOR	1.66%
January 2016	€	689.0	1 mo. EURIBOR + 3.75%	6 mo. EURIBOR + 3.59%
January 2021	€	500.0	6 mo. EURIBOR	2.60%
July 2016	€	290.0	6 mo. EURIBOR	0.20%
July 2016 - January 2023	€	290.0	6 mo. EURIBOR	2.84%
March 2021	€	175.0	6 mo. EURIBOR	2.32%
July 2016	€	171.3	6 mo. EURIBOR	0.20%
July 2016 - January 2022	€	171.3	6 mo. EURIBOR	3.44%
Telenet International Finance S.a.r.l (Telenet International), a subsidiary of Telenet:
June 2023	€	500.0	3 mo. EURIBOR	1.45%



Subsidiary / Final maturity date	Notional amount		Interest rate due from counterparty	Interest rate due to counterparty
	in millions
July 2017 - June 2022	€	420.0	3 mo. EURIBOR	2.08%
June 2021	€	400.0	3 mo. EURIBOR	0.41%
July 2017 - June 2023	€	382.0	3 mo. EURIBOR	1.89%
July 2017	€	150.0	3 mo. EURIBOR	3.55%
August 2015 - June 2022	€	55.0	3 mo. EURIBOR	1.81%
Liberty Puerto Rico:
October 2016 - January 2022	$	506.3	3 mo. LIBOR	2.49%
October 2016 - January 2019	$	168.8	3 mo. LIBOR	1.96%

Interest Rate Caps

Our purchased and sold interest rate cap contracts with respect to EURIBOR at June 30, 2015 are detailed below:



Subsidiary / Final maturity date	Notional amount		EURIBOR cap rate
	in millions
Interest rate caps purchased (a):
Liberty Global Europe Financing BV (LGE Financing), the immediate parent of UPC Holding:
January 2020	€	735.0	7.00%
Telenet International:
June 2017	€	50.0	4.50%
Telenet NV, a subsidiary of Telenet:
December 2017	€	0.5	6.50%
December 2017	€	0.5	5.50%

Interest rate cap sold (b):
UPC Broadband Holding:
January 2020	€	735.0	7.00%

_______________


(a)	Our purchased interest rate caps entitle us to receive payments from the counterparty when EURIBOR exceeds the EURIBOR cap rate.


(b)	Our sold interest rate cap requires that we make payments to the counterparty when EURIBOR exceeds the EURIBOR cap rate.

Interest Rate Collars

Our interest rate collar contracts establish floor and cap rates with respect to EURIBOR on the indicated notional amounts at June 30, 2015, as detailed below:



Subsidiary / Final maturity date	Notional amount		EURIBOR floor rate (a)	EURIBOR cap rate (b)
	in millions
UPC Broadband Holding:
January 2020	€	1,135.0	1.00%	3.54%
Telenet International:
July 2017	€	650.0	2.00%	4.00%

_______________


(a)	We make payments to the counterparty when EURIBOR is less than the EURIBOR floor rate.


(b)	We receive payments from the counterparty when EURIBOR is greater than the EURIBOR cap rate.

Foreign Currency Forwards

The following table summarizes our outstanding foreign currency forward contracts at June 30, 2015:



Subsidiary	Currency purchased forward		Currency sold forward		Maturity dates
	in millions

LGE Financing	$	375.6	€	334.8	July 2015 - June 2016
UPC Broadband Holding	$	16.6	CZK	405.0	July 2015 - March 2016
UPC Broadband Holding	€	50.5	CHF	58.3	July 2015 - March 2016
UPC Broadband Holding	€	14.6	CZK	405.0	July 2015 - March 2016
UPC Broadband Holding	€	14.4	HUF	4,500.0	July 2015 - March 2016
UPC Broadband Holding	€	28.3	PLN	120.0	July 2015 - December 2015
UPC Broadband Holding	€	27.0	RON	121.1	July 2015 - March 2016
UPC Broadband Holding	£	2.7	€	3.6	July 2015 - March 2016
UPC Broadband Holding	CHF	35.5	€	34.0	July 2015
UPC Broadband Holding	CZK	500.0	€	18.4	July 2015
UPC Broadband Holding	HUF	6,000.0	€	19.2	July 2015
UPC Broadband Holding	PLN	60.0	€	14.4	July 2015
UPC Broadband Holding	RON	5.0	€	1.1	July 2015
Telenet NV	$	54.3	€	48.4	July 2015 - June 2016
VTR	$	84.1	CLP	52,149.9	July 2015 - May 2016