v3.10.0.1
Investments
 6 Months Ended
Jun. 30, 2018
Investments [Abstract]  
Investments Investments

The details of our investments are set forth below:
Accounting Method
 
June 30,
2018
 
December 31,
2017
 
in millions
Equity (a):
 
 
 
VodafoneZiggo JV (b)
$
3,993.0

 
$
4,162.8

Other
160.7

 
161.8

Total — equity
4,153.7

 
4,324.6

Fair value:
 
 
 
ITV plc (ITV) — subject to re-use rights
914.9

 
892.0

Sumitomo Corporation (Sumitomo)
600.0

 
776.5

ITI Neovision S.A.
163.8

 
161.9

Lions Gate Entertainment Corp (Lionsgate)
120.7

 
163.9

Casa Systems, Inc. (Casa)
72.4

 
76.3

Other
292.3

 
244.7

Total — fair value
2,164.1

 
2,315.3

Cost (c)
—

 
31.5

Total
$
6,317.8

 
$
6,671.4

_______________

(a)
At June 30, 2018 and December 31, 2017, the carrying amounts of each of our equity method investments did not materially exceed our proportionate share of the respective investee’s net assets.

(b)
Amounts include a related-party euro-denominated note receivable (the VodafoneZiggo JV Receivable) with a principal amount of $1,050.9 million and $1,081.9 million, respectively, due from a subsidiary of the VodafoneZiggo JV (as defined below) to a subsidiary of Liberty Global. The VodafoneZiggo JV Receivable bears interest at 5.55% and requires €100.0 million ($116.8 million) of principal to be paid annually through December 31, 2019, with the remaining principal due on January 16, 2027. The accrued interest on the VodafoneZiggo JV Receivable will be payable in a manner mutually agreed upon by Liberty Global and the VodafoneZiggo JV. During the six months ended June 30, 2018, interest accrued on the VodafoneZiggo JV Receivable was $30.2 million, all of which has been cash settled.

(c)
As a result of the January 1, 2018 adoption of ASU 2016-01, all of our cost investments have been reclassified to fair value investments.

For information regarding the impact of the adoption of ASU 2014-09 on our accumulated deficit and our investment in the VodafoneZiggo JV, see note 2.

Equity Method Investments

The following table sets forth the details of our share of losses of affiliates, net:
 
Three months ended June 30,
 
Six months ended
June 30,
 
2018
 
2017
 
2018
 
2017
 
in millions
 
 
 
 
 
 
 
 
VodafoneZiggo JV (a)
$
(63.2
)
 
$
6.5

 
$
(90.0
)
 
$
5.2

Other
(19.1
)
 
(10.1
)
 
(28.8
)
 
(24.5
)
Total
$
(82.3
)

$
(3.6
)
 
$
(118.8
)
 
$
(19.3
)
_______________

(a)
Amounts include the net effect of (i) 100% of the interest income earned on the VodafoneZiggo JV Receivable, (ii) 100% of the share-based compensation expense associated with Liberty Global awards held by VodafoneZiggo JV employees who were formerly employees of Liberty Global, as these awards remain our responsibility, and (iii) our 50% share of the remaining results of operations of the VodafoneZiggo JV.

VodafoneZiggo JV. On December 31, 2016, one of our wholly-owned subsidiaries contributed VodafoneZiggo Holding B.V. and its subsidiaries (VodafoneZiggo Holding) to VodafoneZiggo Group Holding B.V., an entity that was formed as a 50:50 joint venture (the VodafoneZiggo JV) between Vodafone and Liberty Global (the VodafoneZiggo JV Transaction).

On January 4, 2017, in connection with the completion of the VodafoneZiggo JV Transaction, we received cash of €2.2 billion ($2.4 billion at the transaction date) comprising (i) a distribution reflecting our 50% share of the €2.8 billion ($2.9 billion at the transaction date) of net proceeds from the various debt financing arrangements entered into by certain subsidiaries of VodafoneZiggo Holding during the third quarter of 2016 and (ii) an equalization payment from Vodafone of €802.9 million ($840.8 million at the transaction date) that was subject to post-closing adjustments. During the second quarter of 2017, the equalization amount was finalized, resulting in the receipt of an additional €3.9 million ($4.5 million at the transaction date) from Vodafone.

During the first quarter of 2017, we paid $162.6 million of VAT on behalf of the VodafoneZiggo JV associated with the termination of a services agreement with Ziggo Group Holding B.V. that was in effect prior to the closing of the VodafoneZiggo JV Transaction. This advance was repaid during the first quarter of 2017. In addition, during the second quarters of 2018 and 2017, we received dividend distributions from the VodafoneZiggo JV of $116.6 million and $87.3 million, respectively, which were accounted for as returns on capital for purposes of our condensed consolidated statements of cash flows.

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 $53.8 million and $31.8 million during the three months ended June 30, 2018 and 2017, respectively, and $88.3 million and $63.3 million during the six months ended June 30, 2018 and 2017, respectively. These amounts include revenue from (a) the JV Services and (b) during the 2018 periods, sales of customer premises equipment at a mark-up. During the six months ended June 30, 2018 and 2017, we transferred certain assets to the VodafoneZiggo JV that we purchased on its behalf with an aggregate cost of $30.3 million and $107.8 million, respectively. At June 30, 2018 and December 31, 2017, $46.8 million and $33.3 million, respectively, were due from the VodafoneZiggo JV, primarily related to the aforementioned transactions. Amounts due from the VodafoneZiggo JV, which are periodically cash settled, are included in other current assets in our condensed consolidated balance sheet.

The VodafoneZiggo JV is experiencing significant competition. In particular, the mobile operations of the VodafoneZiggo JV continue to experience competitive pressure on pricing, characterized by aggressive promotion campaigns, heavy marketing efforts and increasing or unlimited data bundles. 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 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
 
Six months ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
 
in millions
 
 
 
 
 
 
 
 
Revenue
$
1,114.5

 
$
1,081.3

 
$
2,296.1

 
$
2,165.2

Loss before income taxes
$
(201.2
)
 
$
(25.8
)
 
$
(319.8
)
 
$
(69.1
)
Net loss
$
(150.8
)
 
$
(18.3
)
 
$
(238.1
)
 
$
(48.6
)