XML 26 R13.htm IDEA: XBRL DOCUMENT v3.19.3
Investments
 9 Months Ended
Sep. 30, 2019
Investments [Abstract]  
Investments Investments

The details of our investments are set forth below:
Accounting Method
 
September 30,
2019
 
December 31,
2018
 
in millions
Equity (a):
 
 
 
VodafoneZiggo JV (b)
$
3,356.6

 
$
3,761.5

All3Media Group (All3Media) (c)
136.7

 
72.2

Formula E Holdings Ltd (Formula E)
76.4

 
45.4

Other
37.9

 
67.9

Total — equity
3,607.6

 
3,947.0

Fair value:
 
 
 
ITV plc (ITV) — subject to re-use rights (d)
616.6

 
634.2

ITI Neovision S.A. (ITI Neovision)
116.9

 
125.4

Lions Gate Entertainment Corp (Lionsgate) (e)
59.3

 
77.5

Casa Systems, Inc. (Casa)
19.5

 
39.5

Other
308.1

 
298.2

Total — fair value
1,120.4

 
1,174.8

Total
$
4,728.0

 
$
5,121.8

_______________

(a)
Our equity method investments are originally recorded at cost and are adjusted to recognize our share of net earnings or losses of the affiliates as they occur rather than as dividends or other distributions are received, with our recognition of
losses generally limited to the extent of our investment in, and advances and commitments to, the investee. At September 30, 2019 and December 31, 2018, the carrying amount of our equity method investment in the VodafoneZiggo JV exceeded our proportionate share of that entity’s net assets by the amount of the VodafoneZiggo JV Receivable, as defined and described below. The carrying amounts of our other equity method investments did not materially exceed our proportionate share of the respective investee’s net assets at September 30, 2019 and December 31, 2018.

(b)
Amounts include a euro-denominated note receivable (the VodafoneZiggo JV Receivable) with a principal amount of $872.2 million and $916.1 million, respectively, due from a subsidiary of the VodafoneZiggo JV to a subsidiary of Liberty Global. The VodafoneZiggo JV Receivable bears interest at 5.55% and matures on January 16, 2028. During the nine months ended September 30, 2019, interest accrued on the VodafoneZiggo JV Receivable was $37.8 million, all of which has been cash settled.

(c)
Amounts include our investment in All3Media together with amounts we are owed under a long-term loan receivable.

(d)
In connection with our investment in ITV,we have entered into (i) the ITV Collar (as defined in note 6) and (ii) a related borrowing agreement (the ITV Collar Loan). As of September 30, 2019, the fair value of the ITV Collar was a net asset of $697.1 million and principal borrowings outstanding under the ITV Collar Loan were $1,330.2 million.

(e)
In connection with our investment in Lionsgate, we have entered into (i) the Lionsgate Forward (as defined in note 6) and (ii) a related borrowing agreement (the Lionsgate Loan). As of September 30, 2019, the fair value of the Lionsgate Forward was a net asset of $39.2 million and principal borrowings outstanding under the Lionsgate Loan were $55.3 million.

Fair Value Investments

The following table sets forth the details of our realized and unrealized gains (losses) due to changes in fair values of certain investments, net:
 
Three months ended September 30,
 
Nine months ended
September 30,
 
2019
 
2018
 
2019
 
2018
 
in millions
 
 
 
 
 
 
 
 
Lionsgate
$
(15.9
)
 
$
(1.5
)
 
$
(33.7
)
 
$
(44.7
)
ITV
70.2

 
(94.5
)
 
(17.6
)
 
(71.6
)
Casa
4.6

 
(6.6
)
 
(13.8
)
 
(5.4
)
ITI Neovision
0.2

 
4.9

 
0.7

 
11.6

Other
(0.1
)
 
13.5

 
(0.8
)
 
1.1

Total
$
59.0

 
$
(84.2
)
 
$
(65.2
)
 
$
(109.0
)


Equity Method Investments

The following table sets forth the details of our share of results of affiliates, net:
 
Three months ended September 30,
 
Nine months ended
September 30,
 
2019
 
2018
 
2019
 
2018
 
in millions
 
 
 
 
 
 
 
 
VodafoneZiggo JV (a)
$
(21.8
)
 
$
(8.5
)
 
$
(124.1
)
 
$
(98.5
)
All3Media
(11.5
)
 
(0.5
)
 
(34.2
)
 
(20.1
)
Formula E
1.2

 
(0.9
)
 
(8.7
)
 
(8.1
)
Other
(0.7
)
 
(1.2
)
 
(6.0
)
 
(3.2
)
Total
$
(32.8
)

$
(11.1
)
 
$
(173.0
)
 
$
(129.9
)
_______________

(a)
Amounts include the net effect of (i) 100% of the interest income earned on the VodafoneZiggo JV Receivable and (ii) our 50% share of the remaining results of operations of the VodafoneZiggo JV.

VodafoneZiggo JV. Pursuant to an agreement entered into in connection with the formation of the VodafoneZiggo JV (the Framework Agreement), Liberty Global provides certain services to the VodafoneZiggo JV on a transitional or ongoing basis (collectively, the JV Services). The JV Services provided by Liberty Global consist primarily of (i) technology and other services and (ii) capital-related expenditures for assets that will be used by, or will otherwise benefit, the VodafoneZiggo JV. Liberty Global charges both fixed and usage-based fees to the VodafoneZiggo JV for the JV Services provided during the term of the Framework Agreement. We recorded revenue from the VodafoneZiggo JV of $66.1 million and $44.5 million during the three months ended September 30, 2019 and 2018, respectively, and $156.1 million and $132.8 million during the nine months ended September 30, 2019 and 2018, respectively, primarily related to (a) the JV Services and (b) sales of customer premises equipment at a mark-up. In addition, during the nine months ended September 30, 2019 and 2018, we purchased certain assets on the VodafoneZiggo JV’s behalf with an aggregate cost of $15.5 million and $12.3 million, respectively. At September 30, 2019 and December 31, 2018, $37.6 million and $24.4 million, respectively, were due from the VodafoneZiggo JV related to the aforementioned transactions. The amounts due from the VodafoneZiggo JV, which are periodically cash settled, are included in other current assets on our condensed consolidated balance sheets.

The VodafoneZiggo JV is experiencing significant competition. In particular, the mobile operations of the VodafoneZiggo JV continue to experience competitive pressure on pricing. In light of this competition, as well as regulatory and economic factors, we could conclude in future periods that our investment in the VodafoneZiggo JV is impaired or management of the VodafoneZiggo JV could conclude that an impairment of the VodafoneZiggo JV’s goodwill and, to a lesser extent, long-lived assets, is required. Any such impairment of the VodafoneZiggo JV’s goodwill or our investment in the VodafoneZiggo JV would be reflected as a component of share of results of affiliates, net, in our condensed consolidated statement of operations. Our share of any such impairment charges could be significant.

The summarized results of operations of the VodafoneZiggo JV are set forth below:
 
Three months ended September 30,
 
Nine months ended
September 30,
 
2019
 
2018
 
2019
 
2018
 
in millions
 
 
 
 
 
 
 
 
Revenue
$
1,096.9

 
$
1,138.6

 
$
3,275.3

 
$
3,468.5

Loss before income taxes
$
(83.7
)
 
$
(94.7
)
 
$
(407.0
)
 
$
(381.6
)
Net loss
$
(68.0
)
 
$
(69.8
)
 
$
(322.3
)
 
$
(283.1
)