Acquisitions

3 Months Ended

Mar. 31, 2017

Business Combinations [Abstract]

Acquisitions

Acquisitions

Pending Acquisitions

SFR BeLux. On December 22, 2016, a subsidiary of Telenet entered into a definitive agreement to acquire Coditel Brabant sprl, operating under the SFR brand (SFR BeLux), for €400.0 million ($427.9 million) on a cash and debt free basis. SFR BeLux provides cable services to households and businesses in Brussels, Wallonia and Luxembourg and offers mobile services in Belgium through a mobile virtual network operator (MVNO) agreement with BASE, as defined and described below. Telenet intends to finance the acquisition of SFR BeLux through a combination of existing cash and cash equivalents and available liquidity under its revolving credit facilities. The transaction is subject to customary closing conditions, including approval from the relevant competition authorities, and is expected to close during the second half of 2017.

Multimedia. On October 18, 2016, our subsidiary UPC Polska SP Z.o.o. entered into a definitive agreement to acquire the cable business of Multimedia Polska S.A. (Multimedia), the third-largest cable operator in Poland, for cash consideration of PLN 3.0 billion ($758.6 million), which is equal to the enterprise value assigned to Multimedia for purposes of this transaction. We intend to finance the acquisition of Multimedia with existing liquidity. The final purchase price is subject to potential downward adjustments for the operational and financial performance of Multimedia prior to closing. The transaction is subject to customary closing conditions, including regulatory approval, and is expected to close in late 2017 or early 2018.

2016 Acquisitions

CWC. On May 16, 2016, we acquired CWC for shares of Liberty Global (the CWC Acquisition). The CWC Acquisition triggered regulatory approval requirements in certain jurisdictions in which CWC operates. The regulatory authorities in certain of these jurisdictions, including the Bahamas, Jamaica, Trinidad and Tobago, the Seychelles and the Cayman Islands, have not completed their review of the CWC Acquisition or granted their approval. While we expect to receive all outstanding approvals, such approvals may include binding conditions or requirements that could have an adverse impact on CWC’s operations and financial condition.

In connection with the CWC Acquisition and an acquisition made by CWC in 2015, certain entities (the Carve-out Entities) that held licenses granted by the U.S. Federal Communications Commission (the FCC) were transferred to entities not controlled by our company or CWC. The arrangements with respect to the Carve-out Entities, which were executed in connection with the CWC Acquisition, contemplated that upon receipt of regulatory approval, we would acquire the Carve-out Entities.  On March 8, 2017, the FCC granted its approval for our acquisition of the Carve-out Entities.  Accordingly, on April 1, 2017, subsidiaries of CWC acquired the Carve-out Entities for an aggregate purchase price of $86.2 million. At March 31, 2017, the Carve-out Entities owed $148.8 million to a subsidiary of CWC.

We have accounted for the CWC Acquisition using the acquisition method of accounting, whereby the total purchase price was allocated to the acquired identifiable net assets of CWC based on assessments of their respective fair values, and the excess of the purchase price over the fair values of these identifiable net assets was allocated to goodwill. The preliminary opening balance sheet is subject to adjustment based on our final assessment of the fair values of the acquired identifiable assets and liabilities. Although most items in the valuation process remain open, the items with the highest likelihood of changing upon finalization of the valuation process include property and equipment, goodwill, customer relationships and income taxes. A summary of the purchase price and the preliminary opening balance sheet of CWC at the May 16, 2016 acquisition date is presented in the following table (in millions):

Cash and cash equivalents	$	210.8
Other current assets	579.5
Property and equipment, net	2,975.7
Goodwill (a)	5,390.9
Intangible assets subject to amortization, net (b)	1,422.0
Other assets, net	621.4
Current portion of debt and capital lease obligations	(94.1		)
Other accrued and current liabilities	(746.5		)
Long-term debt and capital lease obligations	(3,305.4		)
Other long-term liabilities	(801.5		)
Noncontrolling interests (c)	(1,568.9		)
Total purchase price (d)	$	4,683.9

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(a) The goodwill recognized in connection with the CWC Acquisition is primarily attributable to (i) the ability to take advantage of CWC’s existing terrestrial and sub-sea networks to gain immediate access to potential customers and (ii) synergies that are expected to be achieved through the integration of CWC with other operations in the LiLAC Group.

(b) Amount primarily includes intangible assets related to customer relationships. At May 16, 2016, the preliminary assessment of the weighted average useful life of CWC’s intangible assets was approximately eight years.

(c) Represents the estimated aggregate fair value of the noncontrolling interests in CWC’s subsidiaries as of May 16, 2016.

(d) Excludes direct acquisition costs of $132.9 million, most of which were incurred during 2016. Direct acquisition costs are included in impairment, restructuring and other operating items, net, in our consolidated statements of operations.

BASE. On February 11, 2016, Telenet acquired Telenet Group BVBA, formerly known as BASE Company NV (BASE), for a cash purchase price of €1,318.9 million ($1,494.3 million at the transaction date) (the BASE Acquisition). BASE is the third-largest mobile network operator in Belgium.

Pro Forma Information

The following unaudited pro forma condensed consolidated operating results give effect to (i) the CWC Acquisition and (ii) the BASE Acquisition as if they had been completed as of January 1, 2015. These pro forma amounts are not necessarily indicative of the operating results that would have occurred if these transactions had occurred on such date. The pro forma adjustments are based on certain assumptions that we believe are reasonable.

	Three months ended
	March 31,
	2016
Revenue (in millions):
Liberty Global Group	$	4,358.5
LiLAC Group	911.3
Total	$	5,269.8
Net earnings (loss) attributable to Liberty Global shareholders (in millions):
Liberty Global Shares	$	(334.1	)
LiLAC Shares	98.3
Total	$	(235.8	)
Basic and diluted earnings (loss) attributable to Liberty Global shareholders per share:
Liberty Global Shares – basic and diluted	$	(0.35	)
LiLAC Shares:
Basic	$	1.74
Diluted	$	1.73