Liberty Global plc (LBTYA)

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Liberty Global, Inc. (LBTYA)

Q4 2011 Earnings Call

February 23, 2012, 9:00 am ET


Michael T. Fries – President and Chief Executive Officer

Bernard G. Dvorak – Senior Vice President and Co-Chief Financial Officer

Charles H.R. Bracken – Senior Vice President and Co-Chief Financial Officer

Diederik Karsten – MD, European Broadband Operations

Balan Nair – Senior Vice President and Chief Technology Officer

Bryan H. Hall – Senior Vice President, Secretary and General Counsel


Matthew Harrigan – Wunderlich Securities

James Ratcliffe – Barclays Capital

Jeff Wlodarczak – Pivotal Research Group

Ryan Fiftal – Morgan Stanley

David Joyce – Miller Tabak

Hugh McCaffrey – Goldman Sachs

Will Milner – Arete Research

Vivek Khanna – Deutsche Bank

Daniel Morris – JPMorgan



Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Liberty Global’s Investor Call. This call and the associated webcast are the property of Liberty Global, and any redistribution, retransmission or rebroadcast of this call or webcast in any form without the expressed written consent of Liberty Global is strictly prohibited.

At this time, all participants are in a listen-only mode. Today’s formal presentation materials can be found under the Investor Relations section of Liberty Global’s at website at Following today’s formal presentation, instructions will be given for a question-and-answer session. As a reminder, this conference call is being recorded on this date, February 23, 2012.

I would now like to turn the conference call over to Mr. Mike Fries, President and CEO of Liberty Global. Please go ahead, sir.

Michael T. Fries

Thank you, and good morning or good afternoon, wherever you might be. I just want to introduce the folks in the call here with me. As usual, we have a large group of individuals from various locations. But I’m going to introduce the five EVPs; Bernie Dvorak and Charlie Bracken, of course, our Co-CFOs; Diederik Karsten in Amsterdam, who runs our European Operations; Balan Nair; I’m not sure where Balan is today in the world, but he’s our Chief Technology officer. Bryan Hall who’s just joined us from after eight years with Virgin Media is our new General Counsel. Bryan is on the call and of course Rick Westerman; who everybody knows. I’m going to turn it back to operator for the safe harbor and then we’ll get started. Operator?


Thank you. Page 2 of the slides details the company’s safe harbor statements regarding forward-looking statements. Today’s presentation may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the company’s expectation with respect to its outlook for 2012 and future growth prospects, and other information and statements that are not historical facts.

These forward-looking statements involve certain risks that could cause actual results to differ materially from those expressed or implied by these statements. These risks include those detailed from time-to-time in Liberty Global's filings with the Securities and Exchange Commission, including its most recently filed Forms 10-K. Liberty Global disclaims any obligation to update any of these forward-looking statements to reflect any change in its expectation or in the conditions on which any such statement is based.

I would now like to turn the call back over to Mr. Mike Fries.

Michael T. Fries

Great, thank you. So our format is going to be the same as usual. Bernie and I will run through the slides and then we’ll get right to your Q&A. I’m going to start with slide 4; hope you had a chance to get our slides off our website. And this is a recap of what we believe was a really, really strong year for us, across the board. Of course, our number one goal each and every year is to drive steady and sustainable organic growth. And we certainly did that in 2011. And with 1.2 million net RGU adds up 42% year-over-year.

Financially, we generated rebased revenue and OCF growth at around 5% for the full year. And we achieved or exceeded all of our public guidance targets as Bernie will outline for you later. Strategically as you know, we’re focused on rebalancing our business into Europe. And we made good progress in that goal in 2011 with the addition of KBW in Germany, and Aster in Poland. We also expect to complete the sale of our Australian business in the second quarter, and over the last seven years we’ve completed well over $20 billion in M&A transactions and accretive to our growth opportunity. Well priced and more recently geared towards building scale in Europe. And then lastly we’re committed to delivering levered equity returns to shareholders, which starts with a balance sheet.

We ended 2011 with $3.5 billion of total liquidity, including $1.7 billion of consolidated cash of course those figures do not include the $1 billion of proceeds that we expect to receive from the Austar sale, which would bring total liquidity to over $4.5 billion. Our access to capital markets remains very strong with over $15 billion in financings completed in the last two years, most of which in lengthening the average duration of our debt structure, which now sits at seven years and minimizing debt repayments in the medium term.

As long with our strong big numbers around here is another one with the equity we’ve repurchased in 2011 we’ve now bought back over 275 million shares representing in the aggregate over $8 billion since 2005 and we just announced our target of another $1 billion in 2012.

On slide five, we added a simplified map of our current footprint. Since we haven’t shown you one of these in quite a while and as you can see today over 90% of 33 million RGUs and 20 million customers reside in 10 contiguous European markets plus Ireland. And as you might expect we’re already seeing the benefits of this concentration and consolidation. Of course operationally in our cash flow margins, procurement savings, talent management, content relationships and network efficiencies, and more strategically in our influence with regulators, negotiating leverage of programmers and free to air broadcasters, ability to source and close acquisitions and of course our access to capital. Now I might just pause to put our size into perspective for a minute. In a last five years or so, we’ve grown to be the second largest cable operator in the world in terms of subscribers, you heard to say that many times.

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