Liberty Global Reports Q3 2022 Results

Liberty Global plc today announced its Q3 2022 financial results.

CEO Mike Fries stated, “Despite the macroeconomic challenges in Europe we clearly have a resilient business model, as demonstrated by our solid results in Q3. Connectivity remains an essential service with strong demand across our footprint for reliable and seamless access to high-quality fixed and mobile networks. We also remain focused on supporting our customers who are experiencing higher living costs by offering connectivity services that are both affordable and robust. Simultaneously, we are offsetting the impact of high energy and labor costs by driving digital initiatives, taking reasonable price increases and executing on synergies in the U.K. and Switzerland.

In Q3, we delivered aggregate² broadband and postpaid mobile growth of 186,000 new subscribers, supported mostly by broadband subscriber gains in the U.K. and positive postpaid trends across all our core FMC markets. Financially, we reported stable to growing revenues in Switzerland, Belgium and the Netherlands, with the latter two markets supported by recent price adjustments. Synergy execution, price rises and strong cost controls supported strong Adjusted EBITDA growth in the U.K., Belgium and all the Netherlands. Meanwhile, the continued realization of synergies in the U.K. is expected to drive cash flow growth throughout the remainder of the year.

We continue advancing our network development strategies. Each of our markets has attractive investment opportunities utilizing combinations of FTTH and DOCSIS and we are already offering gigabit speeds to customers across nearly 100% of our footprint. In the U.K. we continue to advance our Lightning build-out while upgrading the existing HFC network to FTTH. We are also setting up the new fiber JV with Infravia to build the additional 5 to 7 million homes that we announced last quarter, which will give us significantly greater reach to exploit fixed-mobile convergence.

We are reiterating all of the original, full-year guidance metrics at our operating companies and $1.7 billion⁽ⁱ⁾ of Full Company³ Distributable Cash Flow⁴ at Liberty Global. Liberty Global’s balance sheet remains strong with ~$4 billion⁽ⁱⁱ⁾ of cash and ~$5 billion of total liquidity,⁵ providing appealing optionality against an increasingly challenged macro environment. Our attractive share buyback of $1.7 billion this year was supported by our strong cash flow generation and the compelling value in our stock. We have retired 50% of our total shares outstanding since 2017 and we remain committed to our 10% repurchase floor of shares outstanding in 2023."

Q3 Operating Company Highlights

Sunrise (Consolidated)

Continued strong mobile postpaid intake; Revenue growth in Q3 supported by mobile and B2B momentum

Operating highlights: Sunrise continues to deliver strong mobile performance, supported by robust B2B delivery and its flanker brand yallo which continues to perform well as the business generates revenue growth in Q3. Sunrise continues to reinforce yallo's full service offerings, launching yallo Free TV for new and prospective customers, and has also launched a Smart Upgrade program through a partnership with Apple. The Sunrise rebranding continues to resonate with strong postpaid mobile performance across all brands, achieving 42,000 net adds in the quarter. Broadband performance was flat as expected in Q3 given the ongoing phase out of the UPC brand. Supported by a strong mobile offering together with the powerful fixed line network, FMC penetration remains high at 57% of Sunrise's broadband base.

Financial highlights: Revenue of $789.8 million in Q3 2022 decreased 4.9% YoY on a reported basis and increased 1.5% YoY on a rebased⁶ basis. The rebased increase was largely driven by (i) low margin business wholesale revenue and (ii) strong trading momentum in yallo and handset revenues, partially offset by a decrease in fixed subscription revenue due to subscriber losses and ARPU pressures. Adjusted EBITDA decreased 8.6% on a reported basis and 2.3% on a rebased basis to $302.5 million in Q3 2022, including $6 million of opex costs to capture⁷. The rebased decline was largely driven by a more limited tailwind from synergies following the annualizing of MVNO synergies, the impact of fixed ARPU declines and increased investments in yallo and digitalization projects. Adjusted EBITDA less P&E Additions of $161.8 million in Q3 decreased 17.4% YoY on a reported basis and 10.8% on a rebased basis, including $35 million of opex and capex costs to capture. While Sunrise is integrating the two businesses, costs to capture have short term impacts but are incurred to promote future synergies, more efficient operations and enhanced operations and profitability.

Telenet (Consolidated)

Continued FMC customer expansion; Improved financial trends in Q3 2022; FY 2022 outlook unchanged

Operating highlights: Continued growth of Telenet's FMC customer base in Q3 2022 was driven by continued uptake of “ONE(Up)” bundles as growth in the mobile customer base accelerated with 18,000 postpaid mobile net additions. Telenet also recently entered into a binding agreement with Fluvius to develop “the data network of the future” in Flanders. Both companies will contribute their fixed network assets to incorporate a new infrastructure company “NetCo” that will invest in the evolution of the current HFC network into a FTTH network.

Financial highlights: Revenue of $665.1 million in Q3 2022 decreased 12.0% YoY on a reported basis and increased 3.1% on a rebased basis. The increase in rebased revenue was primarily driven by (i) higher fixed subscription revenue following the June price increase and (ii) an increase in mobile roaming revenue. Adjusted EBITDA decreased 13.7% on a reported basis and increased 4.8% on a rebased basis to $318.7 million in Q3. The increase in rebased Adjusted EBITDA reflects the aforementioned revenue performance, partially offset by the impact of higher inflation on energy costs and staff-related expenses. Reported and rebased Adjusted EBITDA less P&E Additions decreased 25.2% and 8.2%, respectively, to $176.3 million in Q3.

VMO2 (Non-consolidated Joint Venture)

VMO2 delivers strong strategic and operational progress combined with accelerating Adjusted EBITDA growth¹

Operating highlights: VMO2 continued growing its fixed and mobile customer base in Q3 while announcing the U.K.'s fastest WiFi guarantee. Growth in VMO2's fixed customer base and continued demand for fast, high-quality connectivity drove Q3 broadband net additions to 19,000. Postpaid mobile continued to show growth with net adds of 47,000 during the quarter. Average speed across the company's broadband base increased 29% YoY and now reaches 261Mbps, more than 4x the national average. Less than a year after the launch of VMO2's first FMC bundle, a significant milestone has been achieved with more than 1 million customers taking a Volt bundle, highlighting our rapid and substantial progress in fixed-mobile convergence. Meanwhile, Project Lightning has passed 330,000 premises since the start of the year and the company remains on-track to deliver over 500,000 premises in 2022.

Financial highlights (in U.S. GAAP): Revenue of $3,042.1 million in Q3 2022 decreased 15.8% YoY on a reported basis and 1.7% YoY on a rebased basis. This was due to the net effect of (i) a decline in consumer fixed revenue due to a change in customer mix, (ii) a decline in B2B fixed revenue and (iii) an overall increase in mobile revenue driven by an increase in service revenue partially offset by a decline in handset revenue. Adjusted EBITDA decreased 10.1% YoY on a reported basis and increased 8.1% YoY on a rebased basis to $1,060.5 million, including $16 million of opex costs to capture. The YoY increase in Adjusted EBITDA was supported by the realization of synergies, cost efficiencies, and a $35 million one-time non-cash benefit following the resolution of a legal matter, partially offset by increased energy costs. Adjusted EBITDA less P&E Additions decreased 30.0% YoY on a reported basis and decreased 11.0%⁸ on a rebased basis to $355.4 million, including $76 million of opex and capex costs to capture. P&E Additions increased 21.5% YoY to $705.1 million.

For more information regarding the VMO2 JV, including full IFRS disclosures, please visit their investor relations page to access the Q3 earnings release.

VodafoneZiggo(Non-consolidated Joint Venture)

Solid financial performance; Reconfirming 2022 guidance

Operating highlights: VodafoneZiggo continues to improve its commercial momentum despite increased promotional intensity in the Dutch market. At September 30th, VodafoneZiggo is passing 2.5 million converged SIMs and 1.5 million converged households⁹, which continues to drive improvement in Net Promoter Scores and reduce churn. VodafoneZiggo delivered 67,000 mobile postpaid additions in Q3 and grew mobile postpaid ARPU. Total broadband RGUs declined by 9,000 in Q3 while B2B broadband RGUs continued to record solid growth, with 6,000 added in the quarter. More than 90% of VodafoneZiggo's fixed network footprint is connected to Gigabit speeds and on track to deliver nationwide coverage in December. Successfully implemented an average 3.5% price increase as of July 2022 which helped generate rebased revenue growth in Q3.

Financial highlights: Revenue declined 13.6% on a reported basis and increased 1.0% on a rebased basis to $1,041.7 million in Q3. The increase in rebased revenue was primarily driven by ARPU growth and mobile postpaid and B2B fixed customer base growth, partially offset by B2C fixed customer base decline. Mobile service revenue grew 7.2% in Q3, recording the highest quarterly growth in five years. Adjusted EBITDA decreased 13.3% on a reported basis and increased 1.3% on a rebased basis to $501.4 million in Q3. The rebased increase was primarily driven by the aforementioned revenue growth and incremental cost efficiency measures, effectively mitigating higher energy costs related to inflation. Reported and rebased Adjusted EBITDA less P&E Additions decreased 24.3% and 11.5%, respectively, to $290.2 million in Q3. The rebased decrease was primarily driven by higher investment in customer premises equipment.

Q3 ESG Highlights

During the third quarter, we continued to progress our Environmental, Social and Governance (ESG) agenda across our business. As a founding member of the European Green Digital Coalition (EGDC), Liberty Global participated in the European Parliament Pilot Project that aims to develop digital solutions in support of key sectors, to assess their respective net environmental impacts. Liberty Global’s “Reducing Herbicides Solutions”, developed by Sunrise, was among the first round of six case studies selected. The solution uses high resolution images taken by drones, and sent through 5G networks to detect weed locations, allowing farmers to distinctly target and reduce the use of herbicides and their associated emissions. Also in the quarter, VodafoneZiggo became the first Dutch telecoms provider to introduce electric scooters as a mode of city transport for technicians. The idea came from Ziggo’s own technicians, and provides an emissions reduction of 99% for every kilometer traveled compared to a diesel van. This initiative not only supports VodafoneZiggo's ambition to halve the company's environmental impact by 2025, but also serves customers in zero-emission zones, where vehicles with carbon emissions will not be allowed in the coming two years. On the Social front, VMO2 partnered with environmental charity Hubbub to help provide tablets and data to people in need across the U.K. Tackling both digital equity and e-waste, the partnership is helping people improve their digital skills while enabling access to essential services, and supporting the circular economy – all part of the company’s Better Connections Plan and goals. Lastly, Liberty Global and its subsidiaries have been carefully monitoring the impacts of high inflation and the cost-of-living crisis, to both our people and customers across our markets. In recent weeks, the company has extended financial support to employees who need it most, while operations such as VMO2 are helping to keep people connected by donating data to serve those most affected.

Diversity, Equity and Inclusion (DE&I) continues to be a focus for us, reinforcing an inclusive work environment, where our people know their voices are heard, valued, respected and everyone feels they belong. Our dedicated DE&I Council continues to work with colleagues across the Liberty Global footprint to ensure DE&I is embedded into everything we do, including the products we design, the decisions we make, the communities in which we operate and the relationships we have with our customers, suppliers, and shareholders. We are accelerating across our priorities of inclusivity and representation in the workplace. Underpinning our strategic pillars of Gender, LGBTQIA+, Ability, Race and Ethnicity, and Multigenerational. We strongly believe in driving an inclusive culture through education, improving our practices, and measuring our progress. We have developed conscious inclusion training which our leaders and employees are attending to drive empowerment and capability of action towards a more inclusive culture. Continuing our focus on taking potential bias out of our recruitment practices, we have developed an inclusive hiring training, currently rolled out across our talent acquisition teams and hiring managers.

Liberty Global Consolidated Q3 Highlights

• Q3 revenue decreased 8.2% YoY on a reported basis and increased 3.7% on a rebased basis to $1,746.3 million
• Q3 earnings from continuing operations increased 670.5% YoY on a reported basis to $2,431.7 million
• Q3 Adjusted EBITDA decreased 12.5% YoY on a reported basis and increased 1.6% on a rebased basis to $664.0 million
• Q3 property & equipment additions were 21.3% of revenue, as compared to 19.1% in Q3 2021
• Balance sheet with $5.3 billion of total liquidity
  • Comprised of $1.6 billion of cash, $2.4 billion of investments held under SMAs and $1.3 billion of unused borrowing capacity¹⁰
• Fully-swapped borrowing cost of 3.2% on a debt balance of $13.3 billion

Customer Growth

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Earnings from Continuing Operations

• Earnings from continuing operations was $2,431.7 million and $315.6 million for the three months ended September 30, 2022 and 2021, respectively, and $5,789.6 million and $12,889.2 million for the nine months ended September 30, 2022 and 2021, respectively

Financial Highlights

The following tables present (i) revenue, Adjusted EBITDA and Adjusted EBITDA less P&E Additions for each of our reportable segments, including the non-consolidated VMO2 JV and VodafoneZiggo JV, for the comparative periods and (ii) the percentage change from period to period on both a reported and rebased basis. Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA less P&E Additions are non-GAAP measures. For additional information on how these measures are defined and why we believe they are meaningful, see the Glossary.

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Leverage and Liquidity

• Total principal amount of debt and finance leases: $13.3 billion
• Average debt tenor: Approximately6 years, with ~94%not due until 2028 or thereafter¹¹
• Borrowing costs: Blended, fully-swapped cost of debt was 3.2%
• Liquidity: $5.3 billion, including (i) $1.6 billion of cash at September 30, 2022, (ii) $2.4 billion of investments held under SMAs and (iii) $1.3 billion of aggregate unused borrowing capacityunder our credit facilities

Forward-Looking Statements and Disclaimer

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements with respect to our strategies, future growth prospects and opportunities; expectations regarding our and our businesses' financial performance, including Rebased Revenue, Adjusted Free Cash Flow and Distributable Cash Flow at the consolidated level, as well as the 2022 financial guidance provided by our operating companies and joint ventures; expectations of any macroeconomic dynamics that may be beneficial or detrimental to the company; expectations with respect to the integration and synergy plans at the VMO2 JV and at Sunrise, including the timing, costs and anticipated benefits thereof; expectations regarding network and product plans and initiatives; the expected progress of Project Lightning in the U.K., the new greenfield fiber joint venture with Infravia in the U.K., the full fiber overlays in the U.K.; expected network and 5G investments and making 1Gbps internet available across our global footprint; the implementation of the NetCo creation between Telenet and Fluvius in Belgium and any anticipated benefits to be derived therefrom; our commitments and aspirations with respect to ESG, including emissions reductions and DE&I matters; our share buyback program, including our commitment to repurchase 10% of our outstanding shares in each of 2022 and 2023 and the $400 million additional share buybacks anticipated to be completed in 2022; the strength of our and our affiliates' respective balance sheets (including cash and liquidity position), tenor of our third-party debt, anticipated borrowing capacity; and other information and statements that are not historical fact. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. These risks and uncertainties include events that are outside of our control, such as the continued use by subscribers and potential subscribers of our and our affiliates’ services and their willingness to upgrade to our more advanced offerings; our and our affiliates’ ability to meet challenges from competition, to manage rapid technological change or to maintain or increase rates to subscribers or to pass through increased costs to subscribers; the potential continued impact of the COVID-19 pandemic on us and our businesses as well as our customers; the effects of changes in laws or regulations; the effects of the U.K.'s exit from the E.U.; general economic factors; our and our affiliates’ ability to obtain regulatory approval and satisfy regulatory conditions associated with acquisitions and dispositions; our and affiliates’ ability to successfully acquire and integrate new businesses and realize anticipated efficiencies from acquired businesses; the availability of attractive programming for our and our affiliates’ video services and the costs associated with such programming; our and our affiliates’ ability to achieve forecasted financial and operating targets; the outcome of any pending or threatened litigation; the ability of our operating companies and affiliates to access the cash of their respective subsidiaries; the impact of our operating companies' and affiliates’ future financial performance, or market conditions generally, on the availability, terms and deployment of capital; fluctuations in currency exchange and interest rates; the ability of suppliers, vendors and contractors to timely deliver quality products, equipment, software, services and access; our and our affiliates’ ability to adequately forecast and plan future network requirements including the costs and benefits associated with network expansions; and other factors detailed from time to time in our filings with the Securities and Exchange Commission (the "SEC"), including our most recently filed Form 10-K, Form 10-K/A and Forms 10-Q. These forward-looking statements speak only as of the date of this release. We expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Share Repurchase Program

As previously announced, our Board of Directors authorized a share repurchase program whereby we have committed to repurchasing 10 percent of our outstanding shares in each of 2022 and 2023. In July 2022, our Board of Directors authorized an additional $400 million for 2022 share repurchases. Under the program, Liberty Global may acquire from time to time its Class A ordinary shares, Class C ordinary shares, or any combination of Class A and Class C ordinary shares. The program may be effected through open market transactions and/or privately negotiated transactions, which may include derivative transactions. The timing of the repurchase of shares pursuant to the program will depend on a variety of factors, including market conditions and applicable law. The program may be implemented in conjunction with brokers for the Company and other financial institutions with whom the Company has relationships within certain pre-set parameters, and purchases may continue during closed periods in accordance with applicable restrictions. The program may be suspended or discontinued at any time and will terminate in each applicable year upon repurchasing the authorized limits.

About Liberty Global

Liberty Global (NASDAQ: LBTYA, LBTYB and LBTYK) is a world leader in converged broadband, video and mobile communications services. We deliver next-generation products through advanced fiber and 5G networks, and currently provide over 86 million connections* across Europe and the United Kingdom. Our businesses operate under some of the best-known consumer brands, including Virgin Media-O2 in the U.K., VodafoneZiggo in The Netherlands, Telenet in Belgium, Sunrise in Switzerland, Virgin Media in Ireland and UPC in Slovakia. Through our substantial scale and commitment to innovation, we are building Tomorrow’s Connections Today, investing in the infrastructure and platforms that empower our customers to make the most of the digital revolution, while deploying the advanced technologies that nations and economies need to thrive.

Our consolidated businesses generate annual revenue of more than $7.5 billion, while the VodafoneZiggo JV and the VMO2 JV generate combined annual revenue of more than $19 billion.**

Liberty Global Ventures, our global investment arm, has a portfolio of more than 75 companies and funds across content, technology and infrastructure, including strategic stakes in companies like ITV, Televisa Univision, Plume, Lionsgate and the Formula E racing series.

* Represents aggregate consolidated and 50% owned non-consolidated fixed and mobile subscribers. Includes wholesale mobile subscribers of the VMO2 JV and B2B fixed subscribers of the VodafoneZiggo JV.

** Revenue figures above are provided based on full year 2021 Liberty Global consolidated results (excluding revenue from the U.K. JV Entities) and the combined as reported full year 2021 results for the VodafoneZiggo JV and estimated U.S. GAAP full year 2021 results for the VMO2 JV. For more information, please visit www.libertyglobal.com.

Balance Sheets, Statements of Operations and Statements of Cash Flows

The condensed consolidated balance sheets, statements of operations and statements of cash flows of Liberty Global are in our 10-Q.

Rebase Information

Rebase growth percentages, which are non-GAAP measures, are presented as a basis for assessing growth rates on a comparable basis. For purposes of calculating rebased growth rates on a comparable basis for all businesses that we owned during 2022, we have adjusted our historical revenue, Adjusted EBITDA and Adjusted EBITDA less P&E Additions for the three and nine months ended September 30, 2021 to (i) include the pre-acquisition revenue, Adjusted EBITDA and P&E additions of entities acquired during 2021 in our rebased amounts for the three and nine months ended September 30, 2021 to the same extent that the revenue, Adjusted EBITDA and P&E additions of these entities are included in our results for the three and nine months ended September 30, 2022, (ii) exclude from our rebased amounts the revenue, Adjusted EBITDA and P&E additions of entities disposed of during 2022 and 2021 to the same extent that the revenue, Adjusted EBITDA and P&E additions of these entities are excluded in our results for the three and nine months ended September 30, 2022, (iii) include in our rebased results the revenue and costs for the temporary elements of transitional and other services provided to the VMO2 JV, the VodafoneZiggo JV, iliad, Vodafone, Deutsche Telekom, Liberty Latin America and M7 Group, to reflect amounts related to these services equal to those included in our results for the three and nine months ended September 30, 2022 and (iv) reflect the translation of our rebased amounts at the applicable average foreign currency exchange rates that were used to translate our results for the three and nine months ended September 30, 2022. We have reflected the revenue, Adjusted EBITDA and P&E additions of these acquired entities in our 2021 rebased amounts based on what we believe to be the most reliable information that is currently available to us (generally pre-acquisition financial statements), as adjusted for the estimated effects of (a) any significant differences between U.S. GAAP and local generally accepted accounting principles, (b) any significant effects of acquisition accounting adjustments, (c) any significant differences between our accounting policies and those of the acquired entities and (d) other items we deem appropriate. We do not adjust pre-acquisition periods to eliminate nonrecurring items or to give retroactive effect to any changes in estimates that might be implemented during post-acquisition periods. As we did not own or operate the acquired businesses during the pre-acquisition periods, no assurance can be given that we have identified all adjustments necessary to present the revenue, Adjusted EBITDA and Adjusted EBITDA less P&E Additions of these entities on a basis that is comparable to the corresponding post-acquisition amounts that are included in our historical results or that the pre-acquisition financial statements we have relied upon do not contain undetected errors. In addition, the rebased growth percentages are not necessarily indicative of the revenue, Adjusted EBITDA and Adjusted EBITDA less P&E Additions that would have occurred if these transactions had occurred on the dates assumed for purposes of calculating our rebased amounts or the revenue, Adjusted EBITDA and Adjusted EBITDA less P&E Additions that will occur in the future. Investors should view rebased growth as a supplement to, and not a substitute for, U.S. GAAP measures of performance included in our condensed consolidated statements of operations.

The following table provides adjustments made to the 2021 amounts (i) in aggregate for our consolidated reportable segments and (ii) for the non-consolidated VMO2 JV and VodafoneZiggo JV to derive our rebased growth rates:

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Liquidity

The following table⁽ⁱ⁾ details the U.S. dollar equivalents of our liquidity position at September 30, 2022, which includes our (i) cash and cash equivalents, (ii) investments held under SMAs and (iii) unused borrowing capacity:

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Summary of Debt & Finance Lease Obligations

The following table⁽ⁱ⁾ details the September 30, 2022 U.S. dollar equivalents of the (i) outstanding principal amount of our debt and finance lease obligations, (ii) expected principal related derivative cash payments or receipts and (iii) swapped principal amount of our debt and finance lease obligations:

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Property and Equipment Additions and Capital Expenditures

The table below highlights the categories of property and equipment additions of our continuing operations for the indicated periods and reconciles those additions to the capital expenditures of our continuing operations that are presented in the condensed consolidated statements of cash flows in our 10-Q.

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ARPU per Fixed Customer Relationship

The following table provides ARPU per fixed customer relationship and percentage change from period to period on both a reported and rebased basis for the indicated periods:

Mobile ARPU

The following tables provide ARPU per mobile subscriber and percentage change from period to period on both a reported and rebased basis for the indicated periods:

Footnotes for Operating Data and Subscriber Variance Tables

Additional General Notes to Tables:

Most of our broadband communications subsidiaries provide telephony, broadband internet, data, video or other B2B services. Certain of our B2B revenue is derived from SOHO subscribers that pay a premium price to receive enhanced service levels along with video, internet or telephony services that are the same or similar to the mass marketed products offered to our residential subscribers. All mass marketed products provided to SOHOs, whether or not accompanied by enhanced service levels and/or premium prices, are included in the respective RGU and customer counts of our broadband communications operations, with only those services provided at premium prices considered to be “SOHO RGUs” or “SOHO customers.” To the extent our existing customers upgrade from a residential product offering to a SOHO product offering, the number of SOHO RGUs or SOHO customers will increase, but there is no impact to our total RGU or customer counts. With the exception of our B2B SOHO subscribers and mobile subscribers at medium and large enterprises, we generally do not count customers of B2B services as customers or RGUs for external reporting purposes.

In Belgium, Telenet leases a portion of its network under a long-term finance lease arrangement. These tables include operating statistics for Telenet's owned and leased networks.

While we take appropriate steps to ensure that subscriber statistics are presented on a consistent and accurate basis at any given balance sheet date, the variability from country to country in (i) the nature and pricing of products and services, (ii) the distribution platform, (iii) billing systems, (iv) bad debt collection experience and (v) other factors add complexity to the subscriber counting process. We periodically review our subscriber counting policies and underlying systems to improve the accuracy and consistency of the data reported on a prospective basis. Accordingly, we may from time to time make appropriate adjustments to our subscriber statistics based on those reviews.

Subscriber information for acquired entities is preliminary and subject to adjustment until we have completed our review of such information and determined that it is presented in accordance with our policies.

Footnotes

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Glossary

10-Q or 10-K: As used herein, the terms 10-Q and 10-K refer to our most recent quarterly or annual report as filed with the Securities and Exchange Commission on Form 10-Q or Form 10-K, as applicable.

Adjusted EBITDA, Adjusted EBITDA less P&E Additions and Property and Equipment Additions (P&E Additions):

• Adjusted EBITDA: Adjusted EBITDA is the primary measure used by our chief operating decision maker to evaluate segment operating performance and is also a key factor that is used by our internal decision makers to (i) determine how to allocate resources to segments and (ii) evaluate the effectiveness of our management for purposes of annual and other incentive compensation plans. As we use the term, Adjusted EBITDA is defined as earnings (loss) from continuing operations before net income tax benefit (expense), other non-operating income or expenses, net share of results of affiliates, net gains (losses) on debt extinguishment, net realized and unrealized gains (losses) due to changes in fair values of certain investments and debt, net foreign currency transaction gains (losses), net gains (losses) on derivative instruments, net interest expense, depreciation and amortization, share-based compensation, provisions and provision releases related to significant litigation and impairment, restructuring and other operating items. Other operating items include (a) gains and losses on the disposition of long-lived assets, (b) third-party costs directly associated with successful and unsuccessful acquisitions and dispositions, including legal, advisory and due diligence fees, as applicable, and (c) other acquisition-related items, such as gains and losses on the settlement of contingent consideration. Our internal decision makers believe Adjusted EBITDA is a meaningful measure because it represents a transparent view of our recurring operating performance that is unaffected by our capital structure and allows management to (1) readily view operating trends, (2) perform analytical comparisons and benchmarking between segments and (3) identify strategies to improve operating performance in the different countries in which we operate. We believe our consolidated Adjusted EBITDA measure, which is a non-GAAP measure, is useful to investors because it is one of the bases for comparing our performance with the performance of other companies in the same or similar industries, although our measure may not be directly comparable to similar measures used by other public companies. Consolidated Adjusted EBITDA should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, U.S. GAAP measures of income included in our condensed consolidated statements of operations.

• Adjusted EBITDA less P&E Additions: We define Adjusted EBITDA less P&E Additions, which is a non-GAAP measure, as Adjusted EBITDA less property and equipment additions on an accrual basis. Adjusted EBITDA less P&E Additions is a meaningful measure because it provides (i) a transparent view of Adjusted EBITDA that remains after our capital spend, which we believe is important to take into account when evaluating our overall performance and (ii) a comparable view of our performance relative to other telecommunications companies. Our Adjusted EBITDA less P&E Additions measure may differ from how other companies define and apply their definition of similar measures. Adjusted EBITDA less P&E Additions should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, U.S. GAAP measures of income included in our condensed consolidated statements of operations.

• P&E Additions: Includes capital expenditures on an accrual basis, amounts financed under vendor financing or finance lease arrangements and other non-cash additions. A reconciliation of earnings from continuing operations to Adjusted EBITDA and Adjusted EBITDA less P&E Additions is presented in the following table:

Adjusted EBITDA after leases (Adjusted EBITDAaL): We define Adjusted EBITDAaL as Adjusted EBITDA as further adjusted to include finance lease related depreciation and interest expense. Our internal decision makers believe Adjusted EBITDAaL is a meaningful measure because it represents a transparent view of our recurring operating performance that includes recurring lease expenses necessary to operate our business. We believe Adjusted EBITDAaL, which is a non-GAAP measure, is useful to investors because it is one of the bases for comparing our performance with the performance of other companies in the same or similar industries, although our measure may not be directly comparable to similar measures used by other public companies. Adjusted EBITDAaL should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, U.S. GAAP measures of income included in our condensed consolidated statements of operations.

Adjusted Free Cash Flow (Adjusted FCF) & Distributable Cash Flow:

• Adjusted FCF:We define Adjusted FCF as net cash provided by the operating activities of our continuing operations, plus operating-related vendor financed expenses (which represents an increase in the period to our actual cash available as a result of extending vendor payment terms beyond normal payment terms, which are typically 90 days or less, through non-cash financing activities), less (i) cash payments in the period for capital expenditures, (ii) principal payments on operating- and capital-related amounts financed by vendors and intermediaries (which represents a decrease in the period to our actual cash available as a result of paying amounts to vendors and intermediaries where we previously had extended vendor payments beyond the normal payment terms), and (iii) principal payments on finance leases (which represents a decrease in the period to our actual cash available), each as reported in our condensed consolidated statements of cash flows with each item excluding any cash provided or used by our discontinued operations. Prior to the fourth quarter of 2021, our definition of Adjusted FCF excluded cash payments for third-party costs directly associated with successful and unsuccessful acquisitions and dispositions. During the fourth quarter of 2021, we changed our definition of Adjusted FCF to include these cash payments. Cash paid for third-party costs directly associated with successful and unsuccessful acquisition and dispositions was $9.8 million and $8.1 million during the three months ended September 30, 2022 and 2021, respectively, and $32.0 million and $54.6 million during the nine months ended September 30, 2022 and 2021, respectively.