ENGLEWOOD, Colo., Aug. 16 /PRNewswire-FirstCall/ -- Important Notice:
Liberty Media International, Inc. (LMI) (Nasdaq: LBTYA; LBTYB) Chairman,
President and CEO, John Malone, will discuss LMI's second quarter results in a
conference call which will begin at 11:30 a.m. (ET) August 16, 2004. The call
can be accessed by dialing (719) 457-2638 at least 10 minutes prior to the
start time. Replays of the conference call can be accessed from 2:30 p.m.
(ET) on August 16, 2004 through 12:00 a.m. (ET) August 23, 2004, by dialing
(719) 457-0280 plus the pass code 303197#. The call will also be broadcast
live across the internet. To access the web cast go to
http://www.libertymediainternational.com/ir/default.htm. Links to this press
release will also be available on the LMI web site.
On August 16, 2004, Liberty Media International, Inc.
(Nasdaq: LBTYA; LBTYB) (LMI) filed its Form 10-Q with the Securities and
Exchange Commission for the quarter ended June 30, 2004. This press release
is being provided to supplement the information provided to investors in LMI's
Form 10-Q as filed with the SEC. The information in this release is not meant
to serve as a release of financial results for LMI. For information regarding
LMI's financial results, investors should refer to LMI's financial statements
included in its Form 10-Q.
LMI owns interests in broadband distribution and content companies
operating outside the U.S., principally in Europe, Asia, and Latin America.
Through our subsidiaries and affiliates, we are the largest cable television
operator outside the United States in terms of video subscribers. Our
businesses include UnitedGlobalCom, Inc. (UGC), Jupiter Telecommunications
Co., Ltd. (J-COM), Jupiter Programming Co., Ltd. (JPC), Liberty Cablevision of
Puerto Rico, Inc. and Pramer S.C.A.
Following is summary financial information and a discussion of the results
of our largest subsidiary and our two largest equity affiliates. To enable
investors to better understand the results of these companies, this
information presents 100% of the revenue and operating cash flow for UGC,
J-COM and JPC even though we own less than 100% of these businesses. Unless
otherwise noted, the following discussion compares financial information for
the three months ended June 30, 2004 to the same period in 2003. Please see
page 9 of this press release for how we define of operating cash flow and a
discussion of management's use of this performance measure as well as a
reconciliation of operating cash flow to operating income calculated in
accordance with GAAP for the quarters ended June 30, 2004 and 2003 for the
aforementioned businesses.
The selected financial information presented for J-COM and JPC was
obtained directly from those equity affiliates. LMI does not control the
decision-making processes or business management practices of its equity
affiliates. Accordingly, LMI relies on the management of these affiliates and
their independent auditors to provide accurate financial information prepared
in accordance with generally accepted accounting principles that LMI uses in
the application of the equity method. As a result, LMI makes no
representations as to whether such information presented on a stand-alone
basis has been prepared in accordance with GAAP. LMI is not aware, however,
of any errors in or possible misstatements of the financial information
provided to it by its equity affiliates that would have a material effect on
LMI's consolidated financial statements. Further, LMI could not, among other
things, cause any noncontrolled affiliate to distribute to LMI its
proportionate share of the revenue or operating cash flow of such affiliate.
OPERATING RESULTS
UnitedGlobalCom, Inc. (UGC) (53% / 90%)
LMI owned 53% of UGC at June 30, 2004 and controlled 90% of the vote. UGC
is a leading international broadband communications provider of video, voice,
and Internet services with operations in 14 countries, principally operating
in Europe. As a separate publicly traded company (Nasdaq: UCOMA; UCOMB), UGC
reported its second quarter results on August 9, 2004.
UGC
Summary Financial Information
(in US$) (in primary functional currency)
2Q04 2Q03 2Q04 2Q03
(amounts in millions)
Revenue
UPC Broadband $444 377 euro 368 331
VTR 70 54 CP 43,884 38,331
Chellomedia & Other 31 34
Total Revenue $545 465
Operating Cash Flow
UPC Broadband $184 137 euro 152 120
VTR 24 16 CP 15,085 11,694
Chellomedia & Other (13) (4)
Total Operating Cash Flow $195 149
Operating Loss $(31) (77)
Outstanding Debt $4,106 7,019
Operating Statistics (1) (figures in thousands)
Homes Passed 12,324 12,124
Total Video Subscribers 7,551 7,391
Internet Subscribers 1,032 825
Telephone Subscribers 757 704
Total RGUs 9,340 8,920
Homes Receiving Service 7,633 N/A
(1) See definitions in Supplemental Operating Information section on
page 8.
Revenue for the three months ended June 30, 2004 was up 17% compared to
the prior year. Excluding the impact of exchange rates, organic year-over-
year revenue growth was approximately 11%. The increase was driven by higher
average monthly revenue per unit (ARPU) and RGU growth.
Operating cash flow for the second quarter was $195 million, an increase
of 31% compared to the prior year. Excluding the impact of exchange rates,
organic operating cash flow growth was approximately 23% for the period. UGC
continues to benefit from organizational, operating, and network efficiencies,
as the operating cash flow margin improved 380 basis points to 35.8% for the
three months ended June 30, 2004.
Capital expenditures increased to $96 million for the quarter compared to
$75 million in the same prior year period. The primary reason for the
increase was higher spending on customer premise equipment due to the
significant increase in RGU growth. UGC expects full year capital
expenditures to approximate 20% of sales.
As of June 30, 2004, total RGUs were 9.3 million, an increase of
5% compared to June 30, 2003. For the three months ended June 30, 2004, UGC
added 102,400 net new RGUs compared to 41,200 during the same period last
year.
Jupiter Telecommunications Co., Ltd. (J-COM) (45.3%)
LMI owned 45% of J-COM at June 30, 2004. J-COM is Japan's largest
multiple system operator (MSO) based on the number of customers served. J-COM
and its subsidiaries provide cable television, Internet access and telephony
services in Japan.
J-COM
Summary Financial Information
(in US$) (in yen)
2Q04 2Q03 2Q04 2Q03
(amounts in millions)
Revenue $367 294 yen 39,726 34,958
Operating Expenses 221 194 23,890 23,088
Operating Cash Flow $146 100 yen 15,836 11,870
Operating Income $57 28 yen 6,205 3,287
Third-Party Debt $963 935 yen 104,816 111,935
Shareholder Debt 1,421 1,251 154,601 149,784
Outstanding Debt $2,384 2,186 yen 259,417 261,719
Consolidated Operating
Statistics (1) (figures in thousands)
Total Video Subscribers 1,442 1,351
Internet Subscribers 652 530
Telephone Subscribers 622 429
Total RGUs 2,716 2,310
Managed Operating
Statistics (1), (2)
Homes Passed (3) 6,704 5,892
Total Video Subscribers 1,551 1,454
Internet Subscribers 692 561
Telephone Subscribers 659 446
Total RGUs 2,902 2,461
Homes Receiving Service 1,808 1,654
(1) See definitions in Supplemental Operating Information section on
page 8.
(2) In addition to consolidated systems, includes systems managed by
J-COM that are owned by entities that are not consolidated with J-COM
for financial reporting purposes. Excludes operating information
from Chofu Cable, Inc. J-COM manages Chofu's systems, but has no
ownership interest in Chofu.
(3) As a result of a mapping audit in June 2004, J-COM increased its
June 30, 2004 cable homes passed by approximately 700,000.
Revenue increased 25% in the second quarter of 2004 compared to the
corresponding quarter of 2003 due to increased distribution in all three
services and substantial growth in HSD and telephony revenue. Excluding the
effect of exchange rates, revenue increased 14%.
Operating cash flow increased 46% compared to the second quarter of last
year due to the revenue increases combined with margin improvements associated
with increased scale. Operating cash flow margins increased to 40% from 34%.
Excluding the effect of exchange rates, operating cash flow increased 33%.
For managed systems, video subscribers increased 7%, Internet subscribers
increased 23% and telephone subscribers increased 48%. Average monthly
revenue per household receiving at least one service increased 4% to
$65 (yen 6,974).
J-COM's managed systems served approximately 1.8 million homes at June 30,
2004, an increase of 9% from June 2003, and services per household (total
revenue generating units divided by total households served) rose from 1.49 to
1.60. Penetration of homes taking at least one service was 27% at June 30,
2004. Excluding the cable homes added in June 2004 as a result of the mapping
audit, penetration of homes taking at least one service increased by 200 basis
points.
Approximately 44% of J-COM's customers subscribed to more than one service
at June 30, 2004, which translated into approximately 799,000 homes with
multiple services. The triple play service option (taking all three services
available) has steadily increased to 16% of J-COM's managed homes at June 30,
2004 compared to 11% at June 30, 2003. Nearly 100% of J-COM's network
operates at 750 MHz capacity.
At June 30, 2004, J-COM's weighted average ownership of its managed RGUs
was 79.3% compared to 78.4% at the same time last year.
Jupiter Programming Co., Ltd. (JPC) (50.0%)
LMI owned 50% of JPC at June 30, 2004. JPC is the largest multi-channel
pay television programming and content provider in Japan based upon the number
of subscribers receiving the channels. JPC currently owns or has investments
in 15 channels.
JPC
Summary Financial Information
(in US$) (in yen)
2Q04 2Q03 2Q04 2Q03
(amount in millions)
Revenue $138 100 yen 14,944 11,862
Operating Expenses 114 87 12,369 10,341
Operating Cash Flow $24 13 yen 2,575 1,521
Operating Income $21 10 yen 2,267 1,225
Outstanding Debt (1) $51 56 yen 5,572 6,668
Cumulative
Subscribers (2)
(in thousands) 43,385 37,230
(1) Includes shareholder debt of $11 million and $17 million at June 30,
2004 and 2003, respectively.
(2) Includes subscribers at all consolidated and equity owned JPC
channels. Shop Channel subscribers are stated on a full-time
equivalent basis.
JPC's revenue increased 38% in the second quarter of 2004 compared to the
same quarter last year largely due to the increase in retail sales at Shop
Channel and in subscription and advertising revenues at the other channels.
Excluding the effect of exchange rates, revenue increased by 26%. Shop
Channel, which is 70% owned by JPC, was the largest contributor generating
approximately 87% of the increase during the quarter versus the corresponding
period in 2003. This increase was driven by an 11% increase in full-time
equivalent ("FTE") homes and an increase of 14% in sales per FTE. Other than
Shop Channel, subscribers grew by 9% at Movie Plus (formerly branded CSN), 9%
at Golf Network, 9% at J-Sky Sports, 12% at Discovery and 16% at Animal
Planet.
JPC's operating cash flow increased 85% for the quarter ended June 30,
2004 compared to the same quarter last year due to the revenue increase,
partially offset by increased cost of goods sold, fulfillment, telemarketing,
programming, marketing and general and administrative expenses. Excluding the
effect of exchange rates, operating cash flow increased 69%.
Free Cash Flow
For the six months ended June 30, 2004
UGC J-COM JPC
(amounts in millions)
Net cash provided by operations $298 226 15
Capital expenditures (1) (176) (184) (18)
Free cash flow $122 42 (3)
(1) Capital expenditures for J-COM and JPC include equipment purchased
under capital leases.
2004 OUTLOOK
UGC - 2004 Guidance Increased
Revenue estimates exclude the impact of foreign exchange rates and assume
continued organic year-over-year growth and positive contribution from recent
analog video rate increases in The Netherlands. Operating cash flow estimates
assume continued organic year-over-year growth and foreign currency exchange
rates of US$1.20 / euro 1 and 650CP / US$1.
For the full year 2004 versus 2003, UGC expects revenue to increase by 10%
and operating cash flow to increase at least 20%. Including the consolidation
of Noos beginning July 1, 2004, UGC expects to report full year operating cash
flow of at least $850 million.
J-COM -- 2004 Guidance Increased
The following estimates assume continued subscriber growth, foreign
currency exchange rates remain constant for the remainder of the year and
continued cost control efforts, including programming costs.
For full year 2004 versus 2003, J-COM expects revenue to increase by mid-
teens % and operating cash flow to increase by mid-20s%.
JPC - 2004 Guidance Unchanged
The following estimates assume continued subscriber growth across all
programming services, foreign currency exchange rates remain constant for the
remainder of the year, increases in sales per home at Shop Channel and gross
margins that are consistent with historical margins.
For full year 2004 versus 2003, JPC expects revenue to increase by
mid-20s% and operating cash flow to increase by between 45% and 60%.
CORPORATE & OTHER
Cash, Carrying Value of Non Strategic Holdings and Debt
June 30, 2004 March 31, 2004
(amounts in millions)
Consolidated Cash & Cash Equivalents $1,397 1,287
News Corp. ADSs (1), (2) $164 159
ABC Family Preferred (2) $390 413
Telewest plc (3) $253 273
SBS Broadcasting $184 215
Austar $23 18
Parent Debt $117 --
UGC Debt 4,106 3,878
Other Subsidiary Debt 56 54
Consolidated Debt $4,279 3,932
(1) LMI has entered into an equity collar with respect to this
investment.
(2) These investments were contributed to LMI as part of the June 2004
spin-off from Liberty Media Corporation.
(3) Represents Senior and Senior Discount Notes, which were converted
subsequent to June 30, 2004 into shares of common stock of Telewest
Global, Inc.
Included in consolidated cash is $1,369 million and $1,276 million of cash
at UGC at June 30, 2004 and March 31, 2004, respectively. LMI launched a
rights offering on July 26, 2004 which, if fully subscribed, would yield gross
proceeds of approximately $733 million, before deducting any offering
expenses.
Outstanding Shares
At June 30, 2004, there were approximately 146 million outstanding shares
(175 million assuming full subscription of the rights offering) of LBTYA and
LBTYB and 14 million shares of LBTYA and LBTYB reserved for issuance pursuant
to stock options.
Other Items
On July 1, 2004, UGC completed its previously announced acquisition of
Noos, the largest cable television operator in France.
On July 15, 2004, LMI invested an additional $18 million in Mediatti
Communications, Inc. As a result of this transaction, LMI's ownership
interest in Mediatti increased from 24% to 33%.
On July 26, 2004, LMI launched a rights offering which, if fully
subscribed, will yield gross proceeds of approximately $733 million.
On August 6, 2004, the shareholders of J-COM converted $276 million
(yen 30,000 million) of shareholder debt to equity. LMI's portion of the
converted debt was $129 million (yen 14,065 million). LMI converted a
slightly disproportionate share of its shareholder loans and as a result,
LMI's ownership interest in J-COM increased from 45.3% to 45.5%.
Certain statements in this press release may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the actual results,
performance or achievements of the assets of Liberty Media International, Inc.
included herein or industry results, to differ materially from any future
results, performance or achievements expressed or implied by such forward-
looking statements. Such risks, uncertainties and other factors include,
among others: the risks and factors described in the publicly filed documents
of LMI, including the most recently filed Form 10-Q of LMI; general economic
and business conditions and industry trends in the countries in which LMI's
subsidiaries and affiliates operate; currency exchange risks; consumer
disposable income and spending levels; spending on foreign advertising; the
regulatory and competitive environment in the broadband communications and
programming industries; continued consolidation of the foreign broadband
distribution industry; uncertainties inherent in proposed business strategies
and development plans; the expanded deployment of personal video recorders and
the impact of television advertising revenue; rapid technological changes;
future financial performance, including availability, terms and deployment of
capital; the ability of suppliers and vendors to timely deliver products,
equipment, software and services; availability of qualified personnel;
government intervention which opens broadband communications networks to
competitors; adverse outcomes in pending litigation or from regulatory
proceedings; changes in the nature of key strategic relationships with
partners and joint ventures; competitor responses to products and services,
and the overall market acceptance of such products and services, including
acceptance of the pricing of such products and services; and threatened
terrorist attacks and ongoing military action, including armed conflict in the
Middle East and other parts of the world. These forward-looking statements
speak only as of the date of this Release. LMI expressly disclaims any
obligation or undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in LMI's
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
SUPPLEMENTAL OPERATING INFORMATION
As a supplement to LMI's consolidated statements of operations, the
following is a presentation of quarterly operating metrics on a stand-alone
basis for LMI's two largest broadband distribution businesses (UCG and J-COM).
2Q04 1Q04 4Q03 3Q03 2Q03
UGC (53% / 90%) (amounts in thousands, except per unit information)
Homes Passed 12,324 12,289 12,260 12,167 12,124
Basic Cable Subscribers 7,135 7,139 7,146 7,106 7,093
Digital Cable Subscribers 202 168 146 140 137
DTH Subscribers 214 205 197 167 161
Total Video Subscribers 7,551 7,512 7,489 7,413 7,391
Internet Homes
Serviceable 7,327 7,127 7,045 6,789 6,580
Internet Subscribers 1,032 984 924 868 825
Telephone Homes
Serviceable 4,489 4,468 4,468 4,438 4,408
Telephone Subscribers 757 742 733 718 704
Revenue Generating
Units (RGUs) (1) 9,340 9,238 9,146 8,999 8,920
Homes Receiving
Service (2) 7,633 7,625 7,624 N/A N/A
Average Monthly
Revenue Per RGU $18.49 18.68 17.71 16.49 16.22
J-COM Managed
(45.3%) (3)
Homes Passed 6,704 5,974 5,959 5,935 5,892
Basic Cable Subscribers 1,464 1,505 1,501 1,458 1,430
Digital Cable
Subscribers 87 25 26 25 24
Total Video Subscribers 1,551 1,530 1,527 1,483 1,454
Internet Homes
Serviceable 6,673 5,960 5,947 5,918 5,851
Internet Subscribers 692 659 633 591 561
Telephone Homes
Serviceable 5,965 4,830 4,216 3,963 3,619
Telephone Subscribers 659 610 555 496 446
Revenue Generating
Units (RGUs) (1) 2,902 2,799 2,715 2,570 2,461
Homes Receiving
Service (2) 1,808 1,771 1,755 1,698 1,654
Services Per Household 1.60 1.58 1.55 1.51 1.49
Avg. Monthly Rev.
Per Managed Household
(in US$) $65 65 58 58 56
Avg. Monthly Rev.
Per Managed Household
(in Yen) yen 6,974 6,908 6,779 6,745 6,684
(1) Revenue Generating Units represent separately a basic cable
subscriber, digital cable subscriber, DTH subscriber, Internet
subscriber, and telephone subscriber. A home may contain more than
one RGU.
(2) Homes Receiving Service represent households subscribing to at least
one service.
(3) Includes managed systems owned by entities that are not consolidated
with J-COM for financial reporting purposes. Excludes operating
information from Chofu Cable, Inc. J-COM manages Chofu's systems,
but has no ownership interest in Chofu.
NON-GAAP FINANCIAL MEASURES
This press release includes a presentation of operating cash flow, which
is a non-GAAP financial measure, for UGC, J-COM and JPC. Set forth in the
table below is a reconciliation of that non-GAAP measure to each of the
business' operating income, determined under GAAP. LMI defines operating cash
flow as revenue less operating expenses, and selling, general and
administrative expenses (excluding stock compensation) and certain other non-
cash charges. Operating cash flow, as defined by LMI, excludes depreciation
and amortization, stock compensation and restructuring and impairment charges
that are included in the measurement of operating income pursuant to GAAP.
LMI believes operating cash flow is an important indicator of the
operational strength and performance of its businesses, including the ability
to service debt and fund capital expenditures. In addition, this measure
allows management to view operating results and perform analytical comparisons
and benchmarking between businesses and identify strategies to improve
performance. Because operating cash flow is used as a measure of operating
performance, LMI views operating income as the most directly comparable GAAP
measure. Operating cash flow is not meant to replace or supercede operating
income or any other GAAP measure, but rather to supplement the information to
present investors with the same information as LMI's management considers in
assessing the results of operations and performance of its assets. Please see
the schedule below for a reconciliation of operating cash flow to operating
income calculated in accordance with GAAP for the quarters ended June 30, 2004
and 2003 for UGC, J-COM and JPC.
UGC J-COM JPC
Three months ended June 30, 2004 (amounts in millions)
Operating Cash Flow $195 146 24
Depreciation and Amortization (214) (89) (3)
Stock Compensation Expense 10 -- --
Other Non Cash Charges (22) -- --
Operating (Loss) Income $(31) 57 21
Three months ended June 30, 2003
Operating Cash Flow $149 100 13
Depreciation and Amortization (211) (72) (3)
Stock Compensation Expense (8) -- --
Other Non Cash Charges (7) -- --
Operating (Loss) Income $(77) 28 10
SOURCE Liberty Media International, Inc.
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Related links:
http://www.libertymediainternational.com/ir/default.htm
CONTACT:
Mike Erickson of Liberty Media International,
Inc., +1-877-772-1518
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