On May 7, 2020, we entered into a Contribution Agreement (the Contribution Agreement) with, among others, Telefonica SA (Telefonica). Pursuant to the Contribution Agreement, Liberty Global and Telefonica agreed to form a 50:50 joint venture (the U.K. JV), which will combine Virgin Media’s operations in the U.K. along with certain other Liberty Global subsidiaries created as a result of the pending U.K. JV (together, the U.K. JV Entities) with Telefonica’s mobile business in the U.K. to create a nationwide integrated communications provider. In our segment presentation, the U.K. JV Entities are included in our U.K./Ireland segment.

In connection with the transaction, we have completed certain recapitalization financings, as described in note 9. The outstanding third-party debt associated with the U.K. JV Entities will be contributed in full to the U.K. JV, and Telefonica’s business in the U.K. will be contributed on a debt-free basis. The transaction will not trigger a change of control under Virgin Media’s debt agreements.

Effectively all of Liberty Global’s U.K. tax capital allowances and tax loss carryforwards, which primarily resulted from prior infrastructure investments, reside in the U.K. JV Entities and, therefore, will be available for use solely within the U.K. JV upon the closing of the transaction.

At closing, we expect to pay Telefonica an equalization payment estimated to be approximately £2.5 billion ($3.2 billion), as adjusted for debt and debt-like items and certain working capital and other adjustments. After taking into account the recapitalizations and the equalization payment, Liberty Global is expected to receive an estimated £1.4 billion ($1.8 billion) in total, including approximately £800 million ($1.0 billion) from the recapitalization of Virgin Media’s retained and 100.0% owned Ireland business.

Pursuant to the framework agreement that we expect to enter into in connection with the closing of the U.K. JV, our company and Telefonica will provide certain services to the U.K. JV. The annual charges to the U.K. JV will ultimately depend on the actual level of services required by the U.K. JV.

The U.K. JV intends to distribute available cash to the shareholders periodically and is expected to undertake periodic further recapitalizations, subject to market and operating conditions, to maintain a target net leverage ratio ranging between 4.0 and 5.0 times EBITDA (as defined in the applicable shareholders’ agreement). Our company will retain the cash generated by the operations of the U.K. JV Entities through the closing date and is required to fund any deficit in the associated defined pension plans that arises from the next triennial actuarial valuation.

The consummation of the transaction contemplated by the Contribution Agreement is subject to certain conditions, including competition clearance by the applicable regulatory authorities. The Contribution Agreement also includes customary termination rights, including a right of the parties to terminate the agreement if the transaction has not closed within 24 months following the date of the Contribution Agreement, which may be extended by six months under certain circumstances. Following completion of the transaction, we expect to account for our 50% interest in the U.K. JV as an equity method investment.

Effective with the signing of the Contribution Agreement, we began accounting for the U.K. JV Entities as held for sale. Accordingly, we ceased to depreciate or amortize the long-lived assets of the U.K. JV Entities. We have not presented the U.K. JV Entities as a discontinued operation as this transaction does not represent a strategic shift that will have a major effect on our financial results or operations. The carrying amounts of the major classes of assets and liabilities that are classified as held for sale at September 30, 2020 are summarized below (in millions):



Assets:
Current assets (a)	$	4,324.2
Property and equipment, net	7,786.4
Goodwill	7,489.3
Other assets, net	3,671.4
Total assets	$	23,271.3

Liabilities:
Current portion of debt and finance lease obligations	$	2,369.9
Other accrued and current liabilities	1,916.3
Long-term debt and finance lease obligations	16,364.7
Other long-term liabilities	1,179.1
Total liabilities	$	21,830.0

Sunrise Acquisition. On August 12, 2020, we entered into a transaction agreement (the Sunrise Transaction Agreement) with Sunrise Communications Group AG (Sunrise), to launch a tender offer (the Offer) to acquire all of the outstanding shares of Sunrise (the Sunrise Shares) (the Sunrise Acquisition). The per share consideration for the tendered Sunrise Shares will be CHF 110 per share in cash, for a total estimated purchase price of CHF 5.0 billion ($5.4 billion) based on the total number of outstanding Sunrise Shares as of August 11, 2020.

The consummation of the Offer contemplated by the Sunrise Transaction Agreement is subject to certain conditions, including (i) the tender of such number of Sunrise Shares that represent, when combined with any Sunrise Shares that Liberty Global and its subsidiaries own, at least 66 2/3% of the fully diluted share capital of Sunrise and (ii) regulatory approval from the applicable merger control authorities. On November 2, 2020, Liberty Global announced the definitive end results of the Offer, whereby 96.6% of the fully diluted share capital of Sunrise had been tendered. Subsequent to the settlement of the Offer, we intend to initiate a “squeeze-out” procedure in order to acquire any remaining Sunrise Shares. It is anticipated that the Sunrise Acquisition will close during the fourth quarter of 2020.

The Sunrise Transaction Agreement also contains certain termination rights. The Sunrise Transaction Agreement obligates Sunrise to pay our company a termination fee of CHF 50.0 million ($54.3 million) upon termination of the Sunrise Transaction Agreement for certain events.

The Offer will be funded through (i) available borrowings of up to CHF 3.2 billion ($3.5 billion) under new term loan facilities, including amounts expected to be used to refinance Sunrise’s existing debt (CHF 1.7 billion ($1.8 billion) principal amount as of June 30, 2020, excluding lease obligations), and (ii) existing liquidity of Liberty Global. For additional information regarding financing arrangements entered into by UPC Holding in connection with the Sunrise Acquisition, see note 9.

De Vijver Media. Prior to June 3, 2019, Telenet owned a 50.0% equity method investment in De Vijver Media NV (De Vijver Media), which provides content production, broadcasting and advertising services in Belgium. On June 3, 2019, Telenet acquired the remaining 50.0% ownership interest in De Vijver Media (the De Vijver Media Acquisition) for cash consideration of €52.5 million ($58.9 million at the transaction date) after post-closing adjustments.

Vodafone Disposal Group. On July 31, 2019, we completed the sale of our operations in Germany, Romania, Hungary and the Czech Republic to Vodafone. The operations of Germany, Romania, Hungary and the Czech Republic are collectively referred to herein as the “Vodafone Disposal Group.” After considering debt and working capital adjustments (including cash disposed) and €183.7 million ($205.8 million at the transaction date) of cash paid by our company to settle centrally-held vendor financing obligations associated with the Vodafone Disposal Group, we received net cash proceeds of €10.0 billion ($11.1 billion at the applicable rates). Pursuant to the agreement underlying the sale of the Vodafone Disposal Group, we transferred cash to fund certain third-party escrow accounts (the Vodafone Escrow Accounts) pending the fulfillment by our company of certain terms of the agreement. The current and long-term portions of the receivables associated with the Vodafone Escrow Accounts are included in “other current assets” and “other assets, net”, respectively, on our condensed consolidated balance sheets. The aggregate balance of the Vodafone Escrow Accounts was $277.9 million and $295.2 million at September 30, 2020 and December 31, 2019, respectively.

In connection with the sale of the Vodafone Disposal Group, we have agreed to provide certain transitional services to Vodafone for a period of up to four years. These services principally comprise network and information technology-related functions. During the nine months ended September 30, 2020 and 2019, we recorded revenue of $116.3 million and $25.5 million, respectively, associated with these transitional services.

In connection with the sale of UPC DTH, we have agreed to provide certain transitional services to M7 for a period of up to two years. These services principally comprise network and information technology-related functions. During the nine months ended September 30, 2020 and 2019, we recorded revenue of $1.5 million and $0.9 million, respectively, associated with these transitional services.

The operations of the Vodafone Disposal Group and UPC DTH are presented as discontinued operations in our condensed consolidated statements of operations and cash flows for the three and nine months ended September 30, 2019, as applicable, and are summarized in the following tables. These amounts exclude intercompany revenue and expenses that are eliminated within our condensed consolidated statement of operations. For information regarding our basic and diluted weighted average ordinary shares outstanding, see note 15.



	Vodafone Disposal Group (a)
	in millions, except per share amount
Three months ended September 30, 2019
Revenue	$	290.3
Operating income	$	156.1
Earnings before income taxes	$	127.4
Income tax expense	(35.2		)
Net earnings attributable to Liberty Global shareholders	$	92.2
Basic and diluted earnings from discontinued operations attributable to Liberty Global shareholders per share	$	0.13



	Vodafone Disposal Group (a)			UPC DTH (b)		Total
	in millions, except per share amount
Nine months ended September 30, 2019
Revenue	$	2,017.9		$	36.7	$	2,054.6
Operating income	$	1,165.6		$	10.7	$	1,176.3
Earnings before income taxes	$	994.7		$	9.5	$	1,004.2
Income tax expense	(273.9		)	—		(273.9		)
Net earnings attributable to Liberty Global shareholders	$	720.8		$	9.5	$	730.3
Basic and diluted earnings from discontinued operations attributable to Liberty Global shareholders per share						$	1.00