Acquisitions and Dispositions

3 Months Ended

Mar. 31, 2022

Acquisitions and Dispositions [Abstract]

Pending Disposition

On March 25, 2022, Telenet entered into a sale and purchase agreement (the Telenet Tower Sale Agreement) with a third party for the sale of substantially all of Telenet’s passive infrastructure and tower assets for total consideration of €745.0 million ($825.6 million). As part of the Telenet Tower Sale Agreement, Telenet will enter into a master lease agreement to lease back the associated assets for an initial period of 15 years. This sale and leaseback transaction is expected to close in the second quarter of 2022. Effective with the signing of the Telenet Tower Sale Agreement, we began accounting for the associated assets and liabilities as held for sale and, accordingly, we ceased to depreciate or amortize the associated long-lived assets. At March 31, 2022, the held-for-sale assets and liabilities (which are included within other current assets and other accrued and current liabilities, respectively, on our condensed consolidated balance sheet) are as follows (in millions):


Current assets	$	205.7
Current liabilities	$	129.4

2022 Disposition

UPC Poland

On September 22, 2021, we entered into a sale and purchase agreement (the UPC Poland Purchase Agreement), pursuant to which we agreed to sell 100% of our operations in Poland (UPC Poland) to a third party for a total enterprise value of Polish zloty (PLN) 7,025.0 million ($1,672.7 million). This transaction closed on April 1, 2022.

A portion of the net proceeds from the sale, after reflecting the impact of derivative settlements, were used to repurchase certain of UPC Holding’s outstanding indebtedness, with the remainder available for general corporate purposes. For additional information regarding these financing transactions, see note 17.

We have agreed to provide certain transitional services for a period of up to five years, depending on the service. These services will principally comprise network and information technology-related functions. The annual charges will depend on the actual level of services required by the purchaser.

Effective with the signing of the UPC Poland Purchase Agreement, we began presenting UPC Poland as a discontinued operation and, accordingly, we ceased to depreciate or amortize the associated long-lived assets. In our condensed consolidated balance sheets, statements of operations and cash flows, UPC Poland is reflected as a discontinued operation for all periods presented. Our operations in Poland were held through UPC Holding. No debt, interest or derivative instruments of the UPC Holding borrowing group have been allocated to discontinued operations. Prior to being presented as a discontinued operation, the operations of UPC Poland were included in our former “Central and Eastern Europe” reportable segment.

The carrying amounts of the major classes of assets and liabilities of UPC Poland as of March 31, 2022 and December 31, 2021 are summarized in the following table.


	March 31, 2022		December 31, 2021
	in millions

Assets:
Current assets	$	22.2	$	23.4
Property and equipment, net	409.6		406.8
Goodwill	445.7		464.7
Other assets, net	29.0		30.1
Total assets	$	906.5	$	925.0

Liabilities:
Current portion of debt and finance lease obligations	$	0.8	$	42.7
Other accrued and current liabilities	96.4		97.3
Long-term debt and finance lease obligations	4.6		5.0
Other long-term liabilities	54.9		56.3
Total liabilities	$	156.7	$	201.3

The operating results of UPC Poland for the three months ended March 31, 2022 and 2021 are summarized in the following table. These amounts exclude intercompany revenue and expenses that are eliminated within our condensed consolidated statements of operations.


	Three months ended March 31,
	2022		2021
	in millions

Revenue	$	109.5	$	115.4
Operating income	$	45.0	$	24.1
Earnings before income taxes and noncontrolling interests	$	43.9	$	22.9
Income tax expense	(9.3)		(5.3)
Net earnings attributable to Liberty Global shareholders	$	34.6	$	17.6

2021 Disposition

U.K. JV Transaction

On June 1, 2021, pursuant to a Contribution Agreement dated May 7, 2020 (the Contribution Agreement) with, among others, Telefónica, (i) we contributed Virgin Media’s U.K. operations and certain other Liberty Global subsidiaries (together, the U.K. JV Entities) to the VMO2 JV and (ii) Telefónica contributed its U.K. mobile business to the VMO2 JV, creating a nationwide integrated communications provider (herein referred to as the “U.K. JV Transaction”). We account for our 50% interest in the VMO2 JV as an equity method investment, as further described in note 5.

A summary of the preliminary fair value of the assets and liabilities of the VMO2 JV at the June 1, 2021 transaction date is presented in the following table. The preliminary amounts below are subject to adjustment based on the final assessment of the fair values of the identifiable assets and liabilities (in millions):


Current assets	$	4,186.7
Property and equipment, net	12,523.2
Goodwill	29,502.7
Intangible assets subject to amortization, net	13,274.6
Other assets, net	4,116.2
Current portion of debt and finance lease obligations	(4,352.5)
Other accrued and current liabilities	(5,780.8)
Long-term debt and finance lease obligations	(21,879.2)
Other long-term liabilities	(2,170.9)
Total preliminary fair value of the net assets of the VMO2 JV	$	29,420.0

Our condensed consolidated statement of operations for the three months ended March 31, 2021 includes aggregate earnings from continuing operations before income taxes attributable to the U.K. JV Entities of $721.6 million.

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. However, the U.K. JV Entities were not presented as discontinued operations as the U.K. JV Transaction did not represent a strategic shift as defined by GAAP.