v3.10.0.1
Segment Reporting
 12 Months Ended
Dec. 31, 2018
Segment Reporting, Measurement Disclosures [Abstract]  
Segment Reporting Segment Reporting

We generally identify our reportable segments as (i) those consolidated subsidiaries that represent 10% or more of our revenue, Adjusted OIBDA (as defined below) or total assets or (ii) those equity method affiliates where our investment or share of revenue or Adjusted OIBDA represents 10% or more of our total assets, revenue or Adjusted OIBDA, respectively. In certain cases, we may elect to include an operating segment in our segment disclosure that does not meet the above-described criteria for a reportable segment. We evaluate performance and make decisions about allocating resources to our operating segments based on financial measures such as revenue and Adjusted OIBDA. In addition, we review non-financial measures such as subscriber growth, as appropriate.

Adjusted OIBDA 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 OIBDA” is defined as operating income before 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 OIBDA 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. A reconciliation of Adjusted OIBDA from continuing operations to our earnings (loss) from continuing operations before income taxes is presented below.

As of December 31, 2018, our reportable segments are as follows:

Consolidated:

•
U.K./Ireland
•
Belgium
•
Switzerland
•
Central and Eastern Europe

Nonconsolidated:

•
VodafoneZiggo JV

All of our reportable segments derive their revenue primarily from residential and B2B communications services, including video, broadband internet, fixed-line telephony and mobile services.

Segment information for all periods has been retrospectively revised to present (i) our operating segments in Austria, Germany, Hungary, the Czech Republic and Romania and (ii) UPC DTH, which was previously included in our Central and Eastern Europe reportable segment, as discontinued operations. As a result, (a) our former Switzerland/Austria reportable segment now only includes our operations in Switzerland and (b) our Central and Eastern Europe reportable segment now only includes our operations in Poland and Slovakia. Our central and corporate functions (Central and Corporate) primarily include (1) revenue earned from services provided to the VodafoneZiggo JV, (2) revenue from sales of customer premises equipment to the VodafoneZiggo JV, (3) costs associated with certain centralized functions, including billing systems, network operations, technology, marketing, facilities, finance and other administrative functions and (4) less significant consolidated operating segments that provide programming and other services. On January 1, 2018, our wholesale handset program was transferred from Germany to an entity included in Central and Corporate. In connection with our presentation of our operating segment in Germany as a discontinued operation, we have retrospectively revised 2017 and 2016 to reflect this change.

On December 31, 2016, we completed the VodafoneZiggo JV Transaction, whereby we contributed VodafoneZiggo Holding (including Ziggo Sport) to the VodafoneZiggo JV. In our segment presentation for the year ended December 31, 2016, VodafoneZiggo Holding (exclusive of Ziggo Sport, which became a subsidiary of VodafoneZiggo Holding in October 2016) is separately reported as “The Netherlands” and Ziggo Sport is included in Central and Corporate. Effective January 1, 2017, following the closing of the VodafoneZiggo JV Transaction, we have identified the VodafoneZiggo JV as a nonconsolidated reportable segment. Accordingly, our results of operations for 2016 include the operations of VodafoneZiggo Holding and Ziggo Sport while our results of operations for 2017 and 2018 and our consolidated balance sheets as of December 31, 2017 and 2018 exclude such entities. For additional information regarding the VodafoneZiggo JV Transaction, see note 6 to our consolidated financial statements.

Performance Measures of Our Reportable Segments

The amounts presented below represent 100% of each of our reportable segment’s revenue and Adjusted OIBDA. As we have the ability to control Telenet, we consolidate 100% of Telenet’s revenue and expenses in our consolidated statements of operations despite the fact that third parties own a significant interest. The noncontrolling owners’ interests in the operating results of Telenet and other less significant majority-owned subsidiaries are reflected in net earnings or loss attributable to noncontrolling interests in our consolidated statements of operations. Similarly, despite only holding a 50% noncontrolling interest in the VodafoneZiggo JV, we present 100% of its revenue and Adjusted OIBDA in the tables below. Our share of the VodafoneZiggo JV's operating results is included in share of results of affiliates, net, in our consolidated statements of operations. For additional information, see notes 1 and 5.
 
Year ended December 31,
 
2018
 
2017
 
2016
 
Revenue
 
Adjusted OIBDA
 
Revenue
 
Adjusted OIBDA
 
Revenue
 
Adjusted OIBDA
 
in millions
 
 
 
 
 
 
 
 
 
 
 
 
U.K./Ireland
$
6,875.1

 
$
3,057.2

 
$
6,398.7

 
$
2,884.0

 
$
6,508.8

 
$
2,921.7

Belgium
2,993.6

 
1,480.0

 
2,865.3

 
1,300.3

 
2,691.1

 
1,173.6

Switzerland
1,326.0

 
748.7

 
1,370.1

 
832.6

 
1,377.4

 
862.8

Central and Eastern Europe
492.2

 
249.1

 
467.5

 
233.5

 
441.3

 
227.4

The Netherlands
—

 
—

 
—

 
—

 
2,690.8

 
1,472.7

Central and Corporate
274.2

 
(371.7
)
 
189.4

 
(415.8
)
 
84.1

 
(573.6
)
Intersegment eliminations (a)
(3.2
)
 
(11.8
)
 
(14.6
)
 
(9.5
)
 
(62.4
)
 
(4.2
)
Total
$
11,957.9

 
$
5,151.5

 
$
11,276.4

 
$
4,825.1

 
$
13,731.1

 
$
6,080.4

 
 
 
 
 
 
 
 
 
 
 
 
VodafoneZiggo JV
$
4,602.2

 
$
2,009.7

 
$
4,512.5

 
$
1,910.6

 
$
—

 
$
—


_______________

(a)
Amounts are related to transactions between our continuing and discontinued operations prior to the disposal dates of such discontinued operations.

The following table provides a reconciliation of Adjusted OIBDA from continuing operations to earnings (loss) from continuing operations before income taxes:
 
Year ended December 31,
 
2018
 
2017
 
2016
 
in millions
 
 
 
 
 
 
Adjusted OIBDA from continuing operations
$
5,151.5

 
$
4,825.1

 
$
6,080.4

Share-based compensation expense
(206.0
)
 
(162.2
)
 
(268.1
)
Depreciation and amortization
(3,858.2
)
 
(3,790.6
)
 
(4,117.7
)
Impairment, restructuring and other operating items, net
(248.2
)
 
(79.9
)
 
(124.5
)
Operating income
839.1

 
792.4

 
1,570.1

Interest expense
(1,478.7
)
 
(1,416.1
)
 
(1,866.1
)
Realized and unrealized gains (losses) on derivative instruments, net
1,125.8

 
(1,052.8
)
 
1,022.3

Foreign currency transaction gains (losses), net
90.4

 
(181.5
)
 
(326.3
)
Realized and unrealized gains (losses) due to changes in fair values of certain investments and debt, net
(384.5
)
 
43.4

 
(456.1
)
Losses on debt modification and extinguishment, net
(65.0
)
 
(252.2
)
 
(233.8
)
Share of results of affiliates, net
(8.7
)
 
(95.2
)
 
(111.6
)
Gain on the VodafoneZiggo JV Transaction
—

 
4.5

 
520.8

Other income, net
43.4

 
46.4

 
124.0

Earnings (loss) from continuing operations before income taxes
$
161.8

 
$
(2,111.1
)
 
$
243.3



Balance Sheet Data of our Reportable Segments

Selected balance sheet data of our reportable segments is set forth below:
 
Long-lived assets
 
Total assets
 
December 31,
 
December 31,
 
2018
 
2017
 
2018
 
2017
 
in millions
U.K./Ireland
$
16,254.6

 
$
17,678.3

 
$
20,702.5

 
$
21,968.4

Belgium
5,979.4

 
6,067.9

 
6,972.1

 
6,992.8

Switzerland
4,165.4

 
4,212.5

 
4,496.0

 
4,528.9

Central and Eastern Europe
1,087.4

 
1,161.2

 
1,130.8

 
1,191.8

Central and Corporate (a)
1,142.2

 
994.8

 
9,321.1

 
11,401.5

Total - continuing operations
$
28,629.0

 
$
30,114.7

 
$
42,622.5

 
$
46,083.4

 
 
 
 
 
 
 
 
VodafoneZiggo JV
$
22,026.2

 
$
24,017.4

 
$
23,255.3

 
$
24,900.2


_______________

(a)
The total asset amounts include our equity method investment in the VodafoneZiggo JV and related receivables.
Property and Equipment Additions of our Reportable Segments

The property and equipment additions of our reportable segments (including capital additions financed under vendor financing or capital lease arrangements) are presented below and reconciled to the capital expenditure amounts included in our consolidated statements of cash flows. For additional information concerning capital additions financed under vendor financing and capital lease arrangements, see note 10.
 
Year ended December 31,
 
2018
 
2017
 
2016
 
in millions
 
 
 
 
 
 
U.K./Ireland
$
1,988.9

 
$
2,161.8

 
$
1,761.1

Belgium
790.8

 
691.0

 
588.4

Switzerland
249.6

 
244.4

 
260.4

Central and Eastern Europe
152.8

 
158.2

 
128.6

The Netherlands
—

 
—

 
588.9

Central and Corporate (a)
523.5

 
448.1

 
406.4

Total property and equipment additions
3,705.6

 
3,703.5

 
3,733.8

Assets acquired under capital-related vendor financing arrangements
(2,175.5
)
 
(2,336.2
)
 
(1,811.2
)
Assets acquired under capital leases
(102.4
)
 
(106.7
)
 
(100.4
)
Changes in current liabilities related to capital expenditures
25.3

 
(10.6
)
 
(282.3
)
Total capital expenditures, net
$
1,453.0

 
$
1,250.0

 
$
1,539.9

 
 
 
 
 
 
Capital expenditures, net:
 
 
 
 
 
Third-party payments
$
1,552.7

 
$
1,586.5

 
$
1,738.2

Proceeds received for transfers to related parties (b)
(99.7
)
 
(336.5
)
 
(198.3
)
Total capital expenditures, net
$
1,453.0

 
$
1,250.0

 
$
1,539.9

 
 
 
 
 
 
Property and equipment additions - VodafoneZiggo JV
$
988.7

 
$
933.9

 
$
—

_______________

(a)
Includes amounts that represent the net impact of changes in inventory levels associated with certain centrally-procured network equipment. Most of this equipment is ultimately transferred to our operating subsidiaries.

(b)
Primarily relates to transfers of centrally-procured property and equipment to our discontinued operations and the VodafoneZiggo JV.

Revenue by Major Category

Our revenue by major category for our consolidated reportable segments is set forth below:
 
Year ended December 31,
 
2018
 
2017
 
2016
 
in millions
Residential revenue:
 
 
 
 
 
Residential cable revenue (a):
 
 
 
 
 
Subscription revenue (b):
 
 
 
 
 
Video
$
2,863.2

 
$
2,786.5

 
$
4,060.0

Broadband internet
3,226.6

 
2,979.7

 
3,579.0

Fixed-line telephony
1,607.8

 
1,599.8

 
2,149.5

Total subscription revenue
7,697.6

 
7,366.0

 
9,788.5

Non-subscription revenue
279.1

 
343.6

 
311.9

Total residential cable revenue
7,976.7

 
7,709.6

 
10,100.4

Residential mobile revenue (c):
 
 
 
 
 
Subscription revenue (b)
983.5

 
999.7

 
1,103.9

Non-subscription revenue
694.8

 
607.1

 
590.8

Total residential mobile revenue
1,678.3

 
1,606.8

 
1,694.7

Total residential revenue
9,655.0

 
9,316.4

 
11,795.1

B2B revenue (d):
 
 
 
 
 
Subscription revenue
446.4

 
367.6

 
366.3

Non-subscription revenue
1,537.1

 
1,372.5

 
1,487.9

Total B2B revenue
1,983.5

 
1,740.1

 
1,854.2

Other revenue (e)
319.4

 
219.9

 
81.8

Total
$
11,957.9

 
$
11,276.4

 
$
13,731.1

_______________

(a)
Residential cable subscription revenue includes amounts received from subscribers for ongoing services. Residential cable non-subscription revenue includes, among other items, channel carriage fees, late fees, and revenue from the sale of equipment. As described in note 2, we adopted ASU 2014-09 on January 1, 2018 using the cumulative effect transition method. For periods subsequent to our adoption of ASU 2014-09, installation revenue is generally deferred and recognized over the contractual period as residential cable subscription revenue. For periods prior to the adoption of ASU 2014-09, installation revenue is included in residential cable non-subscription revenue.

(b)
Residential subscription revenue from subscribers who purchase bundled services at a discounted rate is generally allocated proportionally to each service based on the standalone price for each individual service. As a result, changes in the standalone pricing of our cable and mobile products or the composition of bundles can contribute to changes in our product revenue categories from period to period.

(c)
Residential mobile subscription revenue includes amounts received from subscribers for ongoing services. Residential mobile non-subscription revenue includes, among other items, interconnect revenue and revenue from sales of mobile handsets and other devices.

(d)
B2B subscription revenue represents revenue from services to certain small or home office (SOHO) subscribers. SOHO subscribers pay a premium price to receive expanded service levels along with video, broadband internet, fixed-line telephony or mobile services that are the same or similar to the mass marketed products offered to our residential subscribers. B2B non-subscription revenue includes business broadband internet, video, fixed-line telephony, mobile and data services offered to medium to large enterprises and, on a wholesale basis, to other operators.

(e)
Other revenue includes, among other items, revenue earned from the JV Services, broadcasting revenue in Ireland and revenue from Central and Corporate’s wholesale handset program. In addition, the amount for 2018 includes revenue earned from (i) sales of customer premises equipment to the VodafoneZiggo JV and (ii) transitional and other services provided to Deutsche Telekom and Liberty Latin America.

Geographic Segments

The revenue of our geographic segments is set forth below:
 
Year ended December 31,
 
2018
 
2017
 
2016
 
in millions
 
 
 
 
 
 
U.K.
$
6,351.2

 
$
5,927.9

 
$
6,070.4

Belgium
2,993.6

 
2,865.3

 
2,691.1

Switzerland
1,326.0

 
1,370.1

 
1,377.4

Ireland
523.9

 
470.8

 
438.4

Poland
440.7

 
417.9

 
391.4

Slovakia
51.5

 
49.6

 
49.9

The Netherlands
—

 
—

 
2,690.8

Other, including intersegment eliminations
271.0

 
174.8

 
21.7

Total
$
11,957.9

 
$
11,276.4

 
$
13,731.1

 
 
 
 
 
 
VodafoneZiggo JV (the Netherlands)
$
4,602.2

 
$
4,512.5

 
$
—



The long-lived assets of our geographic segments are set forth below:
 
December 31,
 
2018
 
2017
 
in millions
 
 
 
 
U.K.
$
15,489.2

 
$
16,902.9

Belgium
5,979.4

 
6,067.9

Switzerland
4,165.4

 
4,212.5

Poland
958.7

 
1,028.4

Ireland
765.4

 
775.4

Slovakia
128.7

 
132.8

U.S. and other (a)
1,142.2

 
994.8

Total
$
28,629.0

 
$
30,114.7

 
 
 
 
VodafoneZiggo JV (the Netherlands)
$
22,026.2

 
$
24,017.4

_______________ 

(a)
Primarily relates to certain long-lived assets included in Central and Corporate.