LIBERTY GLOBAL LTD. VMIE GROUP HOLDINGS LIMITED
Consolidated Financial Statements
December 31, 2023
VMIE GROUP HOLDINGS LIMITED | |
TABLE OF CONTENTS | |
Page | |
Number | |
Independent Auditors' Report | 1 |
Consolidated Balance Sheets as of December 31, 2023 and 2022 | 3 |
Consolidated Statements of Operations and Other Comprehensive Earnings (Loss) for the Years Ended | |
December 31, 2023, 2022 and 2021 | 4 |
Consolidated Statements of Owner's Deficit for the Years Ended December 31, 2023, 2022 and 2021 | 5 |
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021 | 6 |
Notes to Consolidated Financial Statements | 7 |
KPMG
Audit
1 Stokes Place
St. Stephen's Green
Dublin 2
D02 DE03
Ireland
Independent Auditor's Report to the Directors on the Audit of the Consolidated
Non-Statutory Financial Statements of VMIE Group Holdings Limited
Opinion
We have audited the consolidated non-statutory financial statements of VMIE Group Holdings Limited and its subsidiaries (the Company), which comprise the Consolidated Balance Sheet as of December 31, 2023, and the related Consolidated Statements of Operations and Other Comprehensive Earnings, Consolidated Statement of Owners' Deficit, and Consolidated Statement of Cash Flows for the year then ended, and the related notes to the consolidated non-statutory financial statements.
In our opinion, the accompanying consolidated non-statutory financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended in accordance with U.S. generally accepted accounting principles.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Non-Statutory Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Consolidated Non-Statutory Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated non-statutory financial statements in accordance with U.S. generally accepted accounting principles, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated non-statutory financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated non-statutory financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date that the consolidated non-statutory financial statements are available to be issued.
KPMG, an Irish partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.
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Independent Auditor's Report to the Directors on the Audit of the Consolidated Non-Statutory Financial Statements of VMIE Group Holdings Limited (continued)
Auditor's Responsibilities for the Audit of the Consolidated Non-Statutory Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated non-statutory financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated non-statutory financial statements.
In performing an audit in accordance with GAAS, we:
- Exercise professional judgment and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the consolidated non-statutory financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated non- statutory financial statements.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated non-statutory financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control - related matters that we identified during the audit.
KPMG
Dublin, Ireland
April 30, 2024
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VMIE GROUP HOLDINGS LIMITED
CONSOLIDATED BALANCE SHEETS
December 31, | |||||
2023 | 2022 | ||||
in millions | |||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | € | 0.7 | € | 0.8 | |
Trade receivables, net (note 3) | 45.7 | 48.2 | |||
Related-partyreceivables (note 10) | 0.8 | 57.5 | |||
Derivative instruments (note 5) | 31.2 | 10.6 | |||
Other current assets (note 4) | 27.5 | 23.1 | |||
Total current assets | 105.9 | 140.2 | |||
Property and equipment, net (note 6) | 593.4 | 502.6 | |||
Goodwill (note 6) | 242.3 | 242.3 | |||
Derivative instruments (note 5) | 80.0 | 135.6 | |||
Other assets, net (notes 6, 8, 9 and 11) | 42.8 | 36.6 | |||
Total assets | € | 1,064.4 | € | 1,057.3 | |
LIABILITIES AND OWNER'S DEFICIT | |||||
Current liabilities: | |||||
Accounts payable (note 10) | € | 41.2 | € | 68.1 | |
Deferred revenue (note 4) | 11.6 | 13.1 | |||
Derivative instruments (note 5) | 27.8 | 0.5 | |||
Current portion of related-partydebt (note 10) | 38.7 | - | |||
Accrued capital expenditures | 22.8 | 18.7 | |||
Other current liabilities (notes 8 and 10) | 82.5 | 96.8 | |||
Total current liabilities | 224.6 | 197.2 | |||
Long-termdebt (note 7) | 895.3 | 894.5 | |||
Other long-termliabilities (notes 4, 5 and 8) | 13.6 | 16.4 | |||
Total liabilities | 1,133.5 | 1,108.1 | |||
Commitments and contingencies (notes 5, 7, 8, 9, 11 and 12) | |||||
Owner's deficit | (69.1) | (50.8) | |||
Total liabilities and owner's deficit | € | 1,064.4 | € | 1,057.3 | |
The accompanying notes are an integral part of these consolidated financial statements.
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VMIE GROUP HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE EARNINGS (LOSS)
Year ended December 31, | ||||||||
2023 | 2022 | 2021 | ||||||
in millions | ||||||||
Revenue (notes 4, 10 and 13) | € | 468.1 | € | 470.0 | € | 465.3 | ||
Operating costs and expenses (exclusive of depreciation and | ||||||||
amortization, shown separately below): | ||||||||
Programming and other direct costs of services (note 10) | 128.6 | 127.3 | 133.3 | |||||
Other operating (notes 8 and 10) | 114.2 | 85.5 | 79.9 | |||||
Selling, general and administrative (SG&A) (notes 8 and 10) | 63.7 | 73.9 | 72.3 | |||||
Related-party fees and allocations, net (note 10) | 10.7 | 42.7 | 45.7 | |||||
Depreciation and amortization (note 6) | 74.5 | 65.7 | 67.4 | |||||
Impairment, restructuring and other operating items, net (note 8) | 5.6 | 3.6 | 9.5 | |||||
397.3 | 398.7 | 408.1 | ||||||
Operating income | 70.8 | 71.3 | 57.2 | |||||
Non-operating income (expense): | ||||||||
Interest expense (note 10) | (62.2) | (35.4) | (33.9) | |||||
Realized and unrealized gains (losses) on derivative instruments, net | (23.9) | 132.6 | 10.2 | |||||
(notes 5 and 10) | ||||||||
Other income, net (note 10) | 0.9 | 1.6 | 0.2 | |||||
(85.2) | 98.8 | (23.5) | ||||||
Earnings (loss) before income taxes | (14.4) | 170.1 | 33.7 | |||||
Income tax benefit (expense) (note 9) | 5.6 | 4.7 | (0.6) | |||||
Net earnings (loss) | (8.8) | 174.8 | 33.1 | |||||
Other comprehensive earnings (loss) - pension-related adjustments and | (0.2) | 2.4 | 4.6 | |||||
other, net of taxes | ||||||||
Comprehensive earnings (loss) | € | (9.0) | € | 177.2 | € | 37.7 | ||
The accompanying notes are an integral part of these consolidated financial statements.
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VMIE GROUP HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OWNER'S DEFICIT
Distributions | Accumulated | |||||||
and | other | Total | ||||||
accumulated | comprehensive | |||||||
losses in excess | losses, net of | owner's | ||||||
of contributions | taxes (a) | deficit | ||||||
in millions | ||||||||
Balance at January 1, 2021 | € | (261.7) | € | (9.9) | € | (271.6) | ||
Net earnings | 33.1 | - | 33.1 | |||||
Other comprehensive earnings, net of taxes | - | 4.6 | 4.6 | |||||
Share-basedcompensation (note 10) | 2.8 | - | 2.8 | |||||
Capital charge for technology-related services (note 10) | (2.7) | - | (2.7) | |||||
Other, net | 8.0 | - | 8.0 | |||||
Balance at December 31, 2021 | (220.5) | (5.3) | (225.8) | |||||
Net earnings | 174.8 | - | 174.8 | |||||
Other comprehensive earnings, net of taxes | - | 2.4 | 2.4 | |||||
Share-basedcompensation (note 10) | 3.7 | - | 3.7 | |||||
Capital charge for technology-related services (note 10) | (2.7) | - | (2.7) | |||||
Other, net | (3.2) | - | (3.2) | |||||
Balance at December 31, 2022 | (47.9) | (2.9) | (50.8) | |||||
Net loss | (8.8) | - | (8.8) | |||||
Other comprehensive loss, net of taxes | - | (0.2) | (0.2) | |||||
Technology-related transfer pricing recovery fee (note 10) | (12.5) | - | (12.5) | |||||
Share-basedcompensation (note 10) | 4.6 | - | 4.6 | |||||
Other | (1.4) | - | (1.4) | |||||
Balance at December 31, 2023 | € | (66.0) | € | (3.1) | € | (69.1) | ||
_______________ | ||||||||
- The pension related adjustments included in other comprehensive earnings (loss) are net of income tax expense of nil, €0.4 million and nil for the years ended December 31, 2023, 2022 and 2021, respectively.
The accompanying notes are an integral part of these consolidated financial statements.
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VMIE GROUP HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended December 31, | ||||||||
2023 | 2022 | 2021 | ||||||
in millions | ||||||||
Cash flows from operating activities: | ||||||||
Net earnings (loss) | € | (8.8) | € | 174.8 | € | 33.1 | ||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||
Share-basedcompensation expense | 6.1 | 4.4 | 5.2 | |||||
Related-partyfees and allocations, net | 10.7 | 42.7 | 45.7 | |||||
Depreciation and amortization | 74.5 | 65.7 | 67.4 | |||||
Impairment, restructuring and other operating items, net | 5.6 | 3.6 | 9.5 | |||||
Realized and unrealized losses (gains) on derivative instruments, net | 23.9 | (132.6) | (10.2) | |||||
Foreign currency transaction losses, net | - | 0.4 | 0.4 | |||||
Non-cashinterest on related-partyloan | - | - | 15.8 | |||||
Deferred income tax benefit | (2.3) | (9.7) | - | |||||
Changes in operating assets and liabilities | (10.4) | 24.0 | 1.9 | |||||
Net cash provided by operating activities | 99.3 | 173.3 | 168.8 | |||||
Cash flows from investing activities: | ||||||||
Capital expenditures, net | (161.4) | (115.8) | (64.6) | |||||
Repayments from (advances to) related parties, net | 33.9 | (87.5) | (69.7) | |||||
Net cash used by investing activities | (127.5) | (203.3) | (134.3) | |||||
Cash flows from financing activities: | ||||||||
Borrowings of third-partydebt | - | - | 903.5 | |||||
Borrowings (repayments) of related-partydebt, net | 10.4 | - | (912.2) | |||||
Repayments and repurchases of third-party debt | - | - | (19.7) | |||||
Payment of financing costs and debt premiums | - | - | (6.6) | |||||
Other financing activities, net | 17.7 | 30.4 | (14.5) | |||||
Net cash provided (used) by financing activities | 28.1 | 30.4 | (49.5) | |||||
Effect of exchange rate changes on cash and cash equivalents | - | - | 0.1 | |||||
Net increase (decrease) in cash and cash equivalents | (0.1) | 0.4 | (14.9) | |||||
Cash and cash equivalents: | ||||||||
Beginning of period | 0.8 | 0.4 | 15.3 | |||||
End of period | € | 0.7 | € | 0.8 | € | 0.4 | ||
Cash paid for interest | € | 73.7 | € | 35.0 | € | 0.4 | ||
Net cash paid for taxes | ||||||||
€ | 0.1 | € | - | € | - | |||
The accompanying notes are an integral part of these consolidated financial statements.
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VMIE GROUP HOLDINGS LIMITED
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
- Basis of Presentation
VMIE Group Holdings Limited (VM Ireland) is a wholly-owned subsidiary of Liberty Global Ltd. (Liberty Global). VM Ireland provides broadband internet, video, fixed-line telephony, mobile and broadcasting services to consumers and businesses in Ireland. In these notes, the terms "we," "our," "our company" and "us" may refer, as the context requires, to VM Ireland or collectively to VM Ireland and its subsidiaries.
These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). Unless otherwise indicated, convenience translations into euros are calculated as of December 31, 2023.
These consolidated financial statements reflect our consideration of the accounting and disclosure implications of subsequent events through April 30, 2024, the date of issuance.
- Accounting Changes and Recent Accounting Pronouncements
Accounting Changes
ASU 2022-04
In September 2022, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) No. 2022-04,Liabilities-SupplierFinance Programs (ASU 2022-04), which requires additional disclosures for buyers participating in supplier financing programs, which we refer to as vendor financing, including (i) the key terms of the arrangement, (ii) the confirmed amount outstanding at the end of the period, (iii) the balance sheet presentation of related amounts and (iv) a reconciliation of the balances from period to period. We adopted ASU 2022-04 on January 1, 2023, and such adoption did not have a significant impact on our consolidated financial statements. For additional information regarding our vendor financing obligations, see note 7.
ASU 2021-08
In October 2021, the FASB issued ASU No. 2021-08,Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08), which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured in accordance with Topic 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts. We adopted ASU 2021-08 on January 1, 2023. The main impact of the adoption of ASU 2021-08 is the recognition of contract assets and contract liabilities in business combinations at amounts generally consistent with the carrying value of such assets and liabilities of the acquiree immediately before the acquisition date.
ASU 2020-04
In March 2020, the FASB issued ASU No. 2020-04,Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04), which provides, for a limited time, optional expedients and exceptions for certain contract modifications that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued. In December 2022, the FASB deferred the expiration date of ASU 2020-04 from December 31, 2022 to December 31, 2024. In accordance with the optional expedients in ASU 2020-04 we have modified all applicable debt agreements to replace LIBOR with another reference rate and applied the practical expedient to account for the modification as a continuation of the existing contract. The use of optional expedients in ASU 2020-04 has not had a significant impact on our consolidated financial statements to date. For additional information regarding our debt, see note 7.
Recent Accounting Pronouncements
ASU 2023-09
In December 2023, the FASB issued ASU No. 2023-09,Improvements to Income Tax Disclosures (ASU 2023-09), which is intended to enhance the transparency of income tax matters within financial statements, providing stakeholders with a clearer
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VMIE GROUP HOLDINGS LIMITED
Notes to Consolidated Financial Statements - (Continued)
December 31, 2023, 2022 and 2021
understanding of tax positions and their associated risks and uncertainties. ASU 2023-09 requires public business entities to disclose, on an annual basis, specific categories in the rate reconciliation and provide additional information for reconciling items that meet a specific quantitative threshold. There is a further requirement that public business entities will need to disclose a tabular reconciliation, using both percentages and reporting currency amounts. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. We are currently evaluating the impact of ASU 2023-09 on our consolidated financial statements and disclosures.
ASU 2023-07
In November 2023, the FASB issued ASU No. 2023-07,Improvements to Reportable Segment Disclosures (ASU
2023-07), which aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures regarding significant segment expenses. ASU 2023-07 requires public companies to disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. ASU 2023-07 also requires a public entity to disclose, on an annual and interim basis for each reportable segment, an amount for other segment items and a description of its composition. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and is required to be applied on a retrospective basis. We are currently evaluating the impact of ASU 2023-07 on our consolidated financial statements and disclosures.
- Summary of Significant Accounting Policies
Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates and assumptions are used in accounting for, among other things, the valuation of acquisition-related assets and liabilities, deferred income taxes and related valuation allowances, loss contingencies, fair value measurements, impairment assessments, capitalization of internal costs associated with construction and installation activities and the development of internal-use software, useful lives of long-lived assets, share-based compensation and actuarial liabilities associated with certain benefit plans. Actual results could differ from those estimates.
Principles of Consolidation
The accompanying consolidated financial statements include our accounts and the accounts of all voting interest entities where we or Liberty Global exercise a controlling financial interest through the ownership of a direct or indirect controlling voting interest and variable interest entities for which our company is the primary beneficiary. All significant intercompany accounts and transactions have been eliminated in consolidation.
Cash and Cash Equivalents
Cash equivalents consist of money market funds and other investments that are readily convertible into cash and have maturities of three months or less at the time of acquisition. We record money market funds at the net asset value as there are no restrictions on our ability, contractual or otherwise, to redeem our investments at the stated net asset value.
Our significant non-cash investing and financing activities are disclosed in our consolidated statements of owner's deficit and in notes 6, 8 and 10.
Cash Flow Statement
For the purpose of determining the classification of cash flows in our consolidated statements of cash flows, payments on related-party loans are first applied to principal (included as cash flows from financing activities) and then to capitalized interest (included as cash flows from operating activities). Interest-bearing cash advances to related parties and repayments thereof are classified as investing activities. Receipts on related-party receivables are first applied to principal (included as cash flows from
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Liberty Global plc published this content on 30 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2024 20:19:06 UTC.
