Liberty Global plc (LBTYA)

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Liberty Global, Inc. (LBTYA)

Q1 FY08 Earnings Call

May 08, 2008, 11:00 AM ET


Michael T. Fries - President and CEO

W. Gene Musselman

President, Liberty Global Latin America and Chief Executive Officer, VTR Global Com S.A.

Miranda Curtis - President, Liberty Global Japan

Bernard G. Dvorak - Sr. VP, Co-CFO

Balan Nair - Sr. VP and CTO

Shane O'Neill - Sr. VP, Chief Strategy Officer, and President, Chellomedia

Charles H.R. Bracken - Sr. VP, Co-CFO

Lehman Brothers

David Joyce

Morgan Joseph & Co.

Frank Knowles

Janco Partners Incorporated

President and Chief Operating Officer, UPC Broadband

Mauricio Ramos


Jeffrey Wlodarczak - Wachovia Securities

Vijay Jayant

Miller Tabak Roberts Securities

David Kestenbaum

New Street Research

Gregory Kolb



Good morning, ladies and gentlemen and thank you for standing by. Welcome to Liberty Global's Investor Call. This call and the associated web cast are the property of Liberty Global and any redistribution, retransmission or rebroadcast of this call or web cast 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. 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, May 8, 2008.

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

Michael T. Fries - President and Chief Executive Officer

Great. And welcome everybody to our first quarter call. Let me just take a moment to introduce who's on here with us. We have Bernard Dvorak and Charlie Bracken, our Co-CFOs, of course; Gene Musselman, President of our UPC Division; I've got Miranda Curtis and Graham Hollis, who will oversee Japan and Mauricio Ramos, President of VTR in Chile.

We also have on the call, folks, you might hear from Rick Westerman, you all know, Balan Nair our CTO and Shane O'Neill, our Chief Strategist. So with that, I think I'll turn it back to operator.

But first let me remind you that the slides will speak from today are online and hopefully easily accessible to you. So, while we're going through the lengthy Safe Harbor statement, you might want to track those down.



Thank you so much, sir. Page two of the slide details the company's Safe Harbor statement 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 with respect to Liberty Global's outlook, future growth prospects and rollout of advanced services, its expectations regarding competition and M&A activity and other 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 included those detailed from time to time in Liberty Global's filings with the Securities and Exchange Commission, including its most recently filed Form 10-K and Form 10-Q. Liberty Global disclaims any obligation to update or revise any of these forward-looking statements to reflect any change in its expectations 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 - President and Chief Executive Officer

Thanks. We are big fans of consistency here. So, the agenda will be that I'll make some opening remarks and then we'll hear from Gene who will spent a couple of minutes on Europe, Miranda will take us through a slide on Japan, Mauricio will take us through a slide on Chile and then Bernie will walk through the financials and then we'll get your questions, hoping this will take about an hour.

So, I'm on slide 4, which provide some highlights and I think as you walk through results here, you'll find that this was a pretty strong operating quarter for us across most of our global footprint with a few markets, which we will discuss impacting more heavily, some of the headline figures in particular revenues and we'll talk a lot about that today. What should jump out to you, of course, is our operating cash flow performance, which exceeded $1.1 billion for the quarter or about $4.4 billion on an annualized basis and this represents 14% rebased growth as we typically calculate and 34% reported growth. And it might be worth pointing out that we do continue the benefit from strong local currencies versus the dollar here with most of our main currencies up 10% to 15% over last 12 months.

OCF margins are now over 42%, that's up nearly 300 basis points over last year. So, we are achieving on our profitability goals or I might even say overachieving on our profitability goals. And let me just assure that's not coming from marketing and sales. It's mostly efficiencies and smart management of our cost, which we continue to, I think, do a very good job of. There's really not much to report on the M&A front. But we did close in a few small tuck-in acquisitions in Japan and Europe, totaling about $62,000 RGUs. I'm not going to dwell on it today. I would be take questions I suppose. But there are small signs that the second half of the year could be more active for us both in the capital markets and in the consolidation pipeline.

In the meantime, we're mostly focused on our own stock and, not surprisingly. We've already purchased about 7% of the stock year-to-date over $900 million in the first four months and you've seen I'm sure that we announced another $500 million top-up to your prior authorization, which brings our current buyback availability to $650 million.

And if you've been keeping track, which perhaps some of you have, our running total is now over 30% of our equity repurchase since we started or about $4.5 billion. In my opinion that should tell you really all you need to know about how we view our business and growth opportunity and the confidence we have in the broader strategic and financial plan that we're executing.

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