UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	June 30, 2019

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from                     to

Commission file number 001-35961

Liberty Global plc

(Exact name of Registrant as specified in its charter)

England and Wales	98-1112770
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Griffin House
161 Hammersmith Rd
London
United Kingdom	W6 8BS
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:

+44.208.483.6449 or 303.220.6600

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A ordinary shares	LBTYA	Nasdaq Global Select Market
Class B ordinary shares	LBTYB	Nasdaq Global Select Market
Class C ordinary shares	LBTYK	Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ         No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  þ        No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer  þ Accelerated Filer ¨  Non-Accelerated Filer ¨  

Smaller Reporting Company ☐ Emerging Growth Company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act  ¨

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.  Yes  ☐ No  þ

The number of outstanding ordinary shares of Liberty Global plc as of July 31, 2019 was: 205,023,926 class A ordinary shares, 12,157,826 class B ordinary shares and 513,200,480 class C ordinary shares.

LIBERTY GLOBAL PLC

TABLE OF CONTENTS

		Page Number
	PART I — FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS
	Condensed Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018 (unaudited)	1
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2019 and 2018 (unaudited)	3
	Condensed Consolidated Statements of Comprehensive Earnings (Loss) for the Three and Six Months Ended June 30, 2019 and 2018 (unaudited)	4
	Condensed Consolidated Statements of Equity for the Three and Six Months Ended June 30, 2019 and 2018 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018 (unaudited)	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	9
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	48
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	78
ITEM 4.	CONTROLS AND PROCEDURES	82
	PART II — OTHER INFORMATION
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	83
ITEM 6.	EXHIBITS	84

LIBERTY GLOBAL PLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

	June 30, 2019		December 31, 2018
	in millions
ASSETS
Current assets:
Cash and cash equivalents	$	1,269.0	$	1,480.5
Trade receivables, net	1,298.4		1,342.1
Derivative instruments (note 6)	439.0		394.2
Prepaid expenses	227.9		171.4
Current assets of discontinued operations (note 4)	405.8		356.5
Other current assets (notes 3 and 5)	431.3		396.7
Total current assets	4,071.4		4,141.4
Investments and related note receivables (including $1,070.0 million and $1,174.8 million, respectively, measured at fair value on a recurring basis) (note 5)	4,945.0		5,121.8
Property and equipment, net (notes 8 and 10)	13,622.9		13,878.9
Goodwill (note 8)	13,731.8		13,715.8
Deferred tax assets (note 11)	2,572.9		2,488.2
Long-term assets of discontinued operations (note 4)	10,874.8		10,174.6
Other assets, net (notes 3, 6, 8 and 10)	4,168.2		3,632.9
Total assets	$	53,987.0	$	53,153.6

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

LIBERTY GLOBAL PLC

CONDENSED CONSOLIDATED BALANCE SHEETS — (Continued)

(unaudited)

 

	June 30, 2019			December 31, 2018
	in millions
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	771.9		$	874.3
Deferred revenue	793.3			847.1
Current portion of debt and finance lease obligations (notes 9 and 10)	3,680.5			3,615.2
Accrued capital expenditures	407.0			543.2
Current liabilities of discontinued operations (note 4)	2,068.1			1,967.5
Other accrued and current liabilities (notes 6, 10 and 14)	2,612.4			2,458.8
Total current liabilities	10,333.2			10,306.1
Long-term debt and finance lease obligations (notes 9 and 10)	26,235.6			26,190.0
Long-term liabilities of discontinued operations (note 4)	10,541.0			10,072.4
Other long-term liabilities (notes 6, 10, 11 and 14)	3,206.5			2,436.8
Total liabilities	50,316.3			49,005.3
Commitments and contingencies (notes 6, 9, 11 and 16)
Equity (note 12):
Liberty Global shareholders:
Class A ordinary shares, $0.01 nominal value. Issued and outstanding 205,007,296 and 204,450,499 shares, respectively	2.0			2.0
Class B ordinary shares, $0.01 nominal value. Issued and outstanding 12,159,888 shares and 11,099,593 shares, respectively	0.1			0.1
Class C ordinary shares, $0.01 nominal value. Issued and outstanding 513,170,513 and 531,174,389 shares, respectively	5.1			5.3
Additional paid-in capital	8,747.3			9,214.5
Accumulated deficit	(5,111.0		)	(5,172.2		)
Accumulated other comprehensive earnings, net of taxes	490.1			631.8
Treasury shares, at cost	(0.1		)	(0.1		)
Total Liberty Global shareholders	4,133.5			4,681.4
Noncontrolling interests	(462.8		)	(533.1		)
Total equity	3,670.7			4,148.3
Total liabilities and equity	$	53,987.0		$	53,153.6

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

LIBERTY GLOBAL PLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three months ended						Six months ended
	June 30,						June 30,
	2019			2018			2019			2018
	in millions, except per share amounts
Revenue (notes 3, 5 and 17)	$	2,850.4		$	3,015.6		$	5,718.4		$	6,079.1
Operating costs and expenses (exclusive of depreciation and amortization, shown separately below):
Programming and other direct costs of services	786.3			803.5			1,586.7			1,650.6
Other operating (note 13)	417.8			425.3			837.2			887.3
Selling, general and administrative (SG&A) (note 13)	542.6			528.8			1,074.8			1,064.2
Depreciation and amortization	921.8			964.0			1,861.4			2,004.7
Impairment, restructuring and other operating items, net (note 14)	33.2			29.9			104.1			90.6
	2,701.7			2,751.5			5,464.2			5,697.4
Operating income	148.7			264.1			254.2			381.7
Non-operating income (expense):
Interest expense	(363.6		)	(380.4		)	(730.9		)	(755.7		)
Realized and unrealized gains on derivative instruments, net (note 6)	152.9			675.5			70.1			464.2
Foreign currency transaction gains (losses), net	(27.0		)	51.5			111.6			(50.2		)
Realized and unrealized gains (losses) due to changes in fair values of certain investments and debt, net (notes 5, 7 and 9)	(138.7		)	61.5			(146.9		)	4.3
Losses on debt modification and extinguishment, net (note 9)	(48.3		)	(20.1		)	(48.8		)	(22.7		)
Share of results of affiliates, net (note 5)	(69.3		)	(82.3		)	(140.2		)	(118.8		)
Other income, net (note 4)	32.5			6.4			39.0			16.2
	(461.5		)	312.1			(846.1		)	(462.7		)
Earnings (loss) from continuing operations before income taxes	(312.8		)	576.2			(591.9		)	(81.0		)
Income tax benefit (expense) (note 11)	(26.8		)	92.8			(54.6		)	(617.2		)
Earnings (loss) from continuing operations	(339.6		)	669.0			(646.5		)	(698.2		)
Discontinued operations (note 4):
Earnings from discontinued operations, net of taxes	315.5			281.5			638.1			470.1
Gain on disposal of discontinued operations, net of taxes	106.6			—			106.6			—
	422.1			281.5			744.7			470.1
Net earnings (loss)	82.5			950.5			98.2			(228.1		)
Net earnings attributable to noncontrolling interests	(29.5		)	(37.9		)	(38.2		)	(45.8		)
Net earnings (loss) attributable to Liberty Global shareholders	$	53.0		$	912.6		$	60.0		$	(273.9	)
Basic and diluted earnings (loss) from continuing operations attributable to Liberty Global shareholders per share (note 15)	$	(0.50	)	$	0.80		$	(0.93	)	$	(0.93	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

LIBERTY GLOBAL PLC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS)

(unaudited)

	Three months ended						Six months ended
	June 30,						June 30,
	2019			2018			2019			2018
	in millions
Net earnings (loss)	$	82.5		$	950.5		$	98.2		$	(228.1	)
Other comprehensive loss, net of taxes:
Continuing operations:
Foreign currency translation adjustments	(25.5		)	(1,009.3		)	(141.5		)	(428.1		)
Pension-related adjustments and other	(0.4		)	(6.2		)	(0.8		)	(7.1		)
Other comprehensive loss from continuing operations	(25.9		)	(1,015.5		)	(142.3		)	(435.2		)
Other comprehensive earnings (loss) from discontinued operations	19.6			(48.5		)	1.0			(36.6		)
Other comprehensive loss	(6.3		)	(1,064.0		)	(141.3		)	(471.8		)
Comprehensive earnings (loss)	76.2			(113.5		)	(43.1		)	(699.9		)
Comprehensive earnings attributable to noncontrolling interests	(29.7		)	(35.7		)	(38.6		)	(43.6		)
Comprehensive earnings (loss) attributable to Liberty Global shareholders	$	46.5		$	(149.2	)	$	(81.7	)	$	(743.5	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

LIBERTY GLOBAL PLC

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited)

	Liberty Global shareholders																							Non-controlling interests			Total equity
	Ordinary shares								Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive earnings, net of taxes			Treasury shares, at cost			Total Liberty Global shareholders
	Class A			Class B		Class C
	in millions
Balance at January 1, 2018, before effect of accounting change	$	2.2		$	0.1	$	5.8		$	11,358.6		$	(6,217.6	)	$	1,656.0		$	(0.1	)	$	6,805.0		$	(412.0	)	$	6,393.0
Impact of ASU No. 2014-09, Revenue from Contracts with Customers	—			—		—			—			320.1			—			—			320.1			4.4			324.5
Balance at January 1, 2018, as adjusted for accounting change	2.2			0.1		5.8			11,358.6			(5,897.5		)	1,656.0			(0.1		)	7,125.1			(407.6		)	6,717.5
Net loss	—			—		—			—			(1,186.5		)	—			—			(1,186.5		)	7.9			(1,178.6		)
Other comprehensive earnings, net of taxes	—			—		—			—			—			592.2			—			592.2			—			592.2
Repurchase and cancellation of Liberty Global ordinary shares (note 12)	—			—		(0.1		)	(496.2		)	—			—			—			(496.3		)	—			(496.3		)
Share-based compensation (note 13)	—			—		—			40.4			—			—			—			40.4			—			40.4
Repurchase by Telenet of its outstanding shares	—			—		—			(34.7		)	—			—			—			(34.7		)	2.6			(32.1		)
Adjustments due to changes in subsidiaries’ equity and other, net	—			—		—			(7.6		)	—			—			—			(7.6		)	(0.8		)	(8.4		)
Balance at March 31, 2018	2.2			0.1		5.7			10,860.5			(7,084.0		)	2,248.2			(0.1		)	6,032.6			(397.9		)	5,634.7
Net earnings	—			—		—			—			912.6			—			—			912.6			37.9			950.5
Other comprehensive loss, net of taxes	—			—		—			—			—			(1,061.8		)	—			(1,061.8		)	(2.2		)	(1,064.0		)
Repurchase and cancellation of Liberty Global ordinary shares (note 12)	(0.1		)	—		(0.1		)	(791.8		)	—			—			—			(792.0		)	—			(792.0		)
Share-based compensation (note 13)	—			—		—			44.0			—			—			—			44.0			—			44.0
Repurchase by Telenet of its outstanding shares	—			—		—			(14.5		)	—			—			—			(14.5		)	1.6			(12.9		)
Adjustments due to changes in subsidiaries’ equity and other, net	—			—		—			(2.7		)	—			—			—			(2.7		)	(5.7		)	(8.4		)
Balance at June 30, 2018	$	2.1		$	0.1	$	5.6		$	10,095.5		$	(6,171.4	)	$	1,186.4		$	(0.1	)	$	5,118.2		$	(366.3	)	$	4,751.9

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

LIBERTY GLOBAL PLC

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY — (Continued)

(unaudited)

	Liberty Global shareholders																						Non-controlling interests			Total equity
	Ordinary shares							Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive earnings, net of taxes			Treasury shares, at cost			Total Liberty Global shareholders
	Class A		Class B		Class C
	in millions
Balance at January 1, 2019, before effect of accounting change	$	2.0	$	0.1	$	5.3		$	9,214.5		$	(5,172.2	)	$	631.8		$	(0.1	)	$	4,681.4		$	(533.1	)	$	4,148.3
Accounting change (note 2)	—		—		—			—			1.2			—			—			1.2			—			1.2
Balance at January 1, 2019, as adjusted for accounting change	2.0		0.1		5.3			9,214.5			(5,171.0		)	631.8			(0.1		)	4,682.6			(533.1		)	4,149.5
Net earnings	—		—		—			—			7.0			—			—			7.0			8.7			15.7
Other comprehensive loss, net of taxes	—		—		—			—			—			(135.2		)	—			(135.2		)	0.2			(135.0		)
Repurchase and cancellation of Liberty Global ordinary shares (note 12)	—		—		(0.1		)	(214.0		)	—			—			—			(214.1		)	—			(214.1		)
Repurchase by Telenet of its outstanding shares	—		—		—			(68.2		)	—			—			—			(68.2		)	11.3			(56.9		)
Share-based compensation (note 13)	—		—		—			55.6			—			—			—			55.6			—			55.6
Adjustments due to changes in subsidiaries’ equity and other, net	—		—		—			32.4			—			—			—			32.4			2.4			34.8
Balance at March 31, 2019	2.0		0.1		5.2			9,020.3			(5,164.0		)	496.6			(0.1		)	4,360.1			(510.5		)	3,849.6
Net earnings	—		—		—			—			53.0			—			—			53.0			29.5			82.5
Other comprehensive loss, net of taxes	—		—		—			—			—			(6.5		)	—			(6.5		)	0.2			(6.3		)
Repurchase and cancellation of Liberty Global ordinary shares (note 12)	—		—		(0.1		)	(288.3		)	—			—			—			(288.4		)	—			(288.4		)
Share-based compensation (note 13)	—		—		—			70.0			—			—			—			70.0			—			70.0
Repurchase by Telenet of its outstanding shares	—		—		—			(66.3		)	—			—			—			(66.3		)	9.1			(57.2		)
Adjustments due to changes in subsidiaries’ equity and other, net	—		—		—			11.6			—			—			—			11.6			8.9			20.5
Balance at June 30, 2019	$	2.0	$	0.1	$	5.1		$	8,747.3		$	(5,111.0	)	$	490.1		$	(0.1	)	$	4,133.5		$	(462.8	)	$	3,670.7

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

LIBERTY GLOBAL PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited) 

	Six months ended
	June 30,
	2019			2018
	in millions
Cash flows from operating activities:
Net earnings (loss)	$	98.2		$	(228.1	)
Earnings from discontinued operations	744.7			470.1
Loss from continuing operations	(646.5		)	(698.2		)
Adjustments to reconcile loss from continuing operations to net cash provided by operating activities of continuing operations:
Share-based compensation expense	154.3			88.2
Depreciation and amortization	1,861.4			2,004.7
Impairment, restructuring and other operating items, net	104.1			90.6
Amortization of deferred financing costs and non-cash interest	27.0			29.1
Realized and unrealized gains on derivative instruments, net	(70.1		)	(464.2		)
Foreign currency transaction losses (gains), net	(111.6		)	50.2