Liberty Global Ltd (LBTYA) 2008 Q3 法說會逐字稿

Welcome to Liberty Global's investor call. This call and the associated webcast are the property of Liberty Global. Any redistribution, retransmission or rebroadcast of this call or webcast in any form without the express 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 website at www.LGI.com. 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, November 6, 2008.

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

Thanks. And good morning or good afternoon, wherever you may be. Let me just take a second to introduce who is on the call with us today. In addition to myself, we have Gene Musselman, Miranda Curtis and Mauricio Ramos, who will each talk about their respective regions in Europe, Japan and Chile; Charlie Bracken and Bernie Dvorak, our co-CFOs; Rick Westerman, who you all know; and various other senior management. Before I get started, I think we have a Safe Harbor Statement.

Thank you. Page two of the slides 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 and future growth prospects, its expectations regarding competitive and economic conditions and the liquidity, and other statements that are not historical fact.

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 and 10-Q. Liberty Global disclaims any obligation to update 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.

Okay. Thanks. So as usual we're speaking from some slides that I think are available on our website. On the agenda slide you will see there are three parts to the call as usual. I'll make some introductory remarks. Gene, Miranda and Mauricio will spend a couple of minutes on their respective operations. Charlie is going to hit the financial results and balance sheet and we'll get to your questions.

I'm on slide four entitled where are we today, and when we were thinking about how to start this call, we decided that it might be a good idea to step back and take a moment to put our business in the proper context here given the current environment. As we did that, I think we quickly landed on four key points that represent both the foundation of our story and the factors that set us apart from any of our peers in the media and telecom sector.

I think the first, perhaps the most important, despite all the concern around consumer spending and recession, our business continues to grow. That means we're adding digital TV, broadband and voice subscribers at a steady clip. We're increasing the amount of revenue we generate out of each home in every region. We're delivering above average cash flow growth, both operating and free cash and we're achieving record OCF margins. I think it bears repeating we're not selling cars, high-end clothing or organic food here. We provide utility like services that connect the most important devices in your daily life, your phone, your PC and your TV to the outside world and at times like this, that is a pretty good business to be in.

Second point that should jump out at you is our geographic diversity is a strength in this environment. Let's take currencies for example. If you look at our platform of 15 countries and four continents, they represent a basket of 11 different currencies, including a healthy blend of first world countries like Japan and Switzerland which have actually appreciated or held their own against the dollar. On a macro level, the vast majority of our cable revenue, around 70%, comes from western Europe and Japan, which are experiencing their own challenges, but not necessarily the same type of consumer-related issues resulting from the subprime housing crisis here in the US.

Where we expect to feel some pressure in the future, like in certain central and eastern European countries, Hungary and Romania, for example, I think it's important to note that we've already repositioned our products because of competition to be extremely cost effective for consumers in those markets. We actually think the situation could help us in the long run by flushing out some of the weaker, lower quality operators in central and eastern Europe who are clearly feeling financial pressure.

Third point should also resonate with investors, given the dislocation in credit markets today. I'm referring of course to the strength of our balance sheet. There's three key things to stress here. First, we have substantial liquidity totaling $3.2 billion in cash and undrawn facilities at quarter end. We consider this to be a significant asset.

Second, we're working or have worked diligently and purposely over the last three years to derisk our balance sheet by extending our maturity dates with around 90% of our debt due after 2011, so 2012 and beyond, and we've also fixed our interest rates and hedged our currency exposure.

Lastly and perhaps most importantly, each of our major operations generate positive free cash flow to support their own balance sheets. We currently sit around -- just under four times leverage and we're certainly not going to do suboptimal financings to stay within our target of four to five. We'll naturally delever over time if the markets remain as they are.

Finally, I'll just say a few words about our core value creation strategies, which remain largely intact, especially on the operating front where we continue to launch and drive penetration of new products like DVRs, HD and most recently DOCSIS 3.0. We now have 100 megabit plus broadband speeds available in two markets and expect to have the vast majority of our footprint launched next year.

On the M&A front the pipeline remains large, but as you might expect, slow moving. We had done a couple of important deals in Belgium and Japan recently. Perhaps more interesting, though, is the possibility that we might find ourselves well positioned to consolidate smaller or struggling operators again who are feeling the pressure. Of course, we'll also look at asset sales where we think we can derive a private market premium.

Lastly, we will continue to buy our stock on an opportunistic basis. At these levels, that shouldn't surprise anyone. We've purchased 18 million shares or about 6% since August 1 and nearly 40% since we started the program a few years back and today I'm sure you all saw we announced another $250 million authorization.

Before I turn it over to Gene to kick off the regional updates, I just want to spend a minute providing a bit more color on the first point I made about growth. To do that we've laid out four charts on slide five. All of them I think pretty good illustrations of the fact that most of our core operating metrics are stable. The top left chart shows our quarterly growth in advanced services, so digital TV, broadband and voice. You can see that we added 630,000 advanced service subscriptions in Q3, typically our slowest quarter, and just under 2 million year to date.

So as you sit here today, nearly 65% or 16 million of our 25 million RGUs generally represent high ARPU value added products. Our biggest gainer continues to be digital TV which is now rolled out everywhere and increased by 363,000 in the quarter. You'll hear from Gene in a minute, but UPC has turned the gas on here with digital net adds up over 100% year over year, their biggest quarter ever and digital cable revenue up 45% year to date. New applications like DVRs and HD are driving demand. In fact, we're well ahead of expectations on our DVR penetration. We've still got a long way to go with only 33% digital cable penetration worldwide.

Voice and data net adds were off a bit in the quarter at 270,000, but with internet at 22% penetration and voice at 17% penetration, we think there's plenty of demand ahead for us. In the case of data, it's just too early to draw conclusions, but 3.0 appears to be the game changer we hoped it would be. We expect it to have a meaningful impact over time, in particular on our broadband ARPU trends. We did lose a net 53,000 video RGUs in the quarter, again to mostly low priced, low end services, but that number was down 26% from the second quarter this year.

One of the benefits we derive from the penetration of digital voice and data is the related growth in customer ARPUs which we've laid out on the bottom left of the slide. You can see that UPC, telenet and VTR all continue to grow household revenue in the 8% to 10% range.

In the top right box you'll see our financial performance. It's also stable with rebased revenue growth of approximately 6% and rebased OCF growth of approximately 13.5% for the quarter and year to date. Clearly we're dropping a lot of revenue to the bottom line and picking up margin as a result of continued cost efficiencies which will serve us well as we move forward into 2009.

Lastly, the bottom right of the chart shows our free cash flow performance. This is a good news story all the way around. Charlie will get into more detail, but we more than doubled free cash flow year to date to $545 million and our fourth quarter is one of our largest periods of free cash flow growth.

So I'll conclude by saying we feel good about our growth, even in the face of continued competition and a less certain economic environment. We feel good about our liquidity, which is on everyone's mind these days and we feel good about our strategic initiatives, in particular our desire to put a prudent amount of our excess cash back into the hands of shareholders through our stock buyback program.

Our Chairman likes to say and has said many times if you live long enough, you get to see everything twice. I think for most of us on this management team, we know what that means. This is a veteran group, morale of the team is great. We're actually focused on coming out of this period stronger. In fact, I think we would be disappointed if we weren't able to find a prudent way to take advantage of the current environment and our relative position of strength.

With that, let me turn it over to Gene Musselman who will give us a quick update on UPC. Gene?

Thank you very much, Mike. Turning for a moment to UPC. I'd like to draw your attention to our third quarter highlights, marked by rebased OCF growth in the mid-teens, the introduction of EuroDOCSIS 3.0, and as Mike said, another record digital quarter.

Firstly I'd like to point out that Q3 was our strongest OCF performance of the year with 31% year on year growth on a reported basis and 15% growth when rebased for foreign exchange and acquisitions, which brings our OCF margin to a robust 49%. I think this is the highest number that we've reported.

Another key achievement this quarter was the September launch of EuroDOCSIS 3.0 in the Netherlands. As you can see from the upper right-hand graph on the slides, it provides an example of how we're using Fiber Power to position our data products as the speed leader. Using the 3.0 standard, we are the first in the Netherlands, and by the way, I think one of the first in entire Europe to launch data speeds up to 120 megabits, and capitalizing on our considerable bandwidth advantage over ADSL, we introduced UPC Fiber Power 60 megabit and 120 megabit products. These are offered at EUR60 and EUR80, respectively.

Just as importantly, our bandwidth advantage allows us to significantly increase speeds across our entire data portfolio, which we also began to implement in September. It's too early at this point to give any real subscriber details from NL, but I can say at this point that we plan to very aggressively roll this program out and by the end of '09, EuroDOCSIS 3.0 will be deployed in the majority of the UPC markets and will finish up early in 2010.

In addition our digital success continues as Q3 marked the full launch of DTV across all 10 of our markets, contributing to our second consecutive quarter with record organic digital cable adds of 187,000. That's an improvement of more than 100% over Q3 of last year and 6% higher than Q2.

Looking at value-added services, high def, DVR and VoD continue to accelerate our growth as we ended with over one half million HD and DVR subscribers, representing a 20% increase in the last three months. In terms of VoD, NL is currently the only market where we have full video-on-demand functionality based upon our current usage, but we see considerable future upside in VoD and we plan to roll out four new markets in '09 starting with the -- in January. Overall the combination of growing digital base and the addition of key value added services helped us to achieve rebased digital cable revenue growth of over 45% year on year.

Also during Q3, a total of 128,000 organic data and voice subs were added, demonstrating the steady growth of our other advanced services in what is typically our slowest quarter. And we continue to see competitive challenges, particularly in Austria, Hungary and Romania, but are reacting aggressively to these markets. In Austria, Q3 was our highest net add quarter in '08, including 28,000 digital adds. Also UPC's Austria's introduction of what we call the fit bundle or the triple play bundle helped reduce data churn to the lowest level of the year and has driven record voice growth. And in October, we partnered with Orange to launch a combination of fixed and mobile data whereby customers benefit from the speed advantage of UPC, of course, and the mobility of the Orange data card.

In Hungary, we added 35,000 organic advanced service subscriptions in Q3, more than 45% higher year on year. Building on the early success of our DTV launch in April, 16,000 of these were digital additions. Romania, as Mike mentioned, remains one of our most competitive markets, particularly with regard to low-end competition. Here we continue to fight the low-end offers with our existing entry tiers and loyalty discounts. Most of those we've introduced in the last 12 to 18 months. We have also accelerated the rollout of DTV and introduced the market's first DVR in October, which better positions us to drive ARPU.

While recent macro economic events did not have a significant impact on our Q3 results, we do not rule out some future effects given the recent lower projections for the national economies, the volatile currency markets and the slowdown in real estate. Although these are early days given the fast-changing environment, it is reasonable to draw a few conclusions.

Number one, consumers in the hardest hit economies such as Hungary may cut back on household spending. This may lead to more customers seeking out inexpensive options and downsizing existing services. Yet, I think experience shows us that video and telecom services are among the most resilient products in difficult economic times. I think Mike mentioned this earlier as well.

Furthermore, low end pressure is not a new phenomenon for UPC as we've experienced this in many of our markets over the past 12 to 18 months. Fortunately, we've taken the time to implement a mix of compelling products along with promotional and retention strategies to necessarily -- necessary to succeed in such environments.

Conversely, there may be some upside. Economic forces may force consolidation among industry players with weak balance sheets and we're already starting to see signs of this in a couple of our markets. In addition, this could lead to market rationalization as these weaker competitors may reduce their capital investments, operating expenses and/or increase their prices to remain financially stable. And again, I think we're starting to see early signs in a couple of our markets of this kind of activity. Then finally, it's conceivable that incumbents within our market may become less aggressive. For example, scaling back and/or delaying fiber-to-the-home construction projects until market conditions stabilize and improve.

In closing, I'd like to stress again that we're only beginning to unlock the growth potential of our digital TV and our next generation data products. Furthermore, we remain confident in our ability to realize the potential of these new products throughout all of our markets. And with that said, I will introduce you to Miranda. Miranda, would you like to take over, please?

Thanks very much, Gene. Let me now just give you an update on J:COM. J:COM continues to deliver consistent revenue and OCF growth with rebased revenue growth of 7% both for the quarter and for the nine months ended in September. Rebased OCF growth was 12% in the third quarter and year-to-date OCF is up 11% to nearly $850 million.

With 75% digital penetration already achieved, J:COM is ready to start planning the final push to 100% digitalization in a controlled and phased manner. We expect that process to take place over the next year or so, which would still be well ahead of the analogue switchoff mandated by the Japanese government in 2011. J:COM's DOCSIS 3.0 rollout in Japan is now nationwide with growing demand for the high end 160 megabit product. 28% of third quarter RGU additions took the 160 meg product compared to 19% in Q3 last year. So we're gaining traction despite the 10% premium they charge.

At the same time, the Company is successfully trying different bundles and tiers to support new subscriber acquisitions. For example, J:COM launched a telephone broadband bundle for MDUs, priced at around JPY5,000. This has resulted in a 20% increase in sales productivity and also boosted TV sales. 40% of those taking this bundle also take TV. J:COM have also retiered their HSD offering in certain areas to provide more competitive mid-speed and low-speed tiers; and again, we're seeing a similar increase in sales productivity. Meantime, J:COM continues to monitor acquisition and consolidation opportunities both in distribution and in content. For example, they completed the FCN acquisition in Q3 and announced the Taito acquisition. On a combined basis, those two will add over 600,000 homes passed and 200,000 RGUs to J:COM's consolidated footprint.

In terms of the economic environment, the average consumer in Japan has one of the highest levels of household savings in the world. She has very little personal debt and remains a loyal customer relatively unaffected by the global financial situation.

In recent surveys, the Japanese government concluded that private consumption is flat, consistent with a statistic that average monthly household spending on communications and broadcasting as a percent of total average monthly expenditure was 4.2% for the third quarter, similar to the 2007 annual average of 4%. Overall, we believe the Japanese economy is well positioned given the current global environment. It's worth pointing out that the yen's recent strengthening against the US dollar benefits LGI and balances to some extent the impact that other depreciating currencies to the US dollar have had on the Company.

So all in all, J:COM is in good shape. It's producing steady growth in RGUs, in revenue and in cash flow, with a strong balance sheet, with leverage still less than two times and its growing free cash flow profiles.

Let me now turn you over to Mauricio to discuss VTR.

Thank you, Miranda. Q3 was overall a good quarter for VTR. You will see on this slide that we added 63,000 advanced services including 39,000 digital subscribers, and this was our third best quarter ever for digital additions. We also sustained rebased revenue growth of 12% with 12% OCF growth for the quarter; and on a year-to-date basis, we have delivered 18% OCF rebased growth. So we're still growing at a very good clip.

You will notice that Q3 OCF growth decreased to 12%, while our growth has typically averaged around 20%. This is primarily due to the timing of our CPI increases, which happen every six months whereas our costs generally rise with inflation on a much more frequent basis, usually on a monthly -- on a monthly basis. Therefore, we just took a six-month inflation adjustment to all of our rates in late September, which will, of course, flow through our results in Q4 and should enable us to post a stronger rebased OCF growth in Q4, stronger than reported in Q3.

Having explained this and said this, it is important to know that we are feeling some of the economic pressures in Chile and more importantly that we are working on a number of strategies to counter these and, of course, to continue growing. For example, we have strengthened our retention efforts over the last few months. We have strengthened our outbound marketing efforts. We've improved our collection protocols and we have beefed up our lower tier video and data products, including the speed increases on our data tiers that we just announced a few days ago.

The overall strategy, as you can imagine, is largely focused on retaining customers and sustaining customer growth during this period. This will retain for us and improve for us the ability to cross sell and upgrade when times are better again. So far, we have fared well in this strategy as our net customer gain of about 34,000 customers year to date remains similar to our growth of last year.

And with those comments, I will turn it over to Charlie for an update on our financials.

Thanks, Mauricio. For those following along, I'm on slide 10 now and this shows the year-to-date financial highlights. Revenue was up 22% to $7.99 billion on a reported basis with FX movements driving most of the increase as rebased growth was around 6%. Markets to highlight include Poland, Chile and Australia, which were all double digit rebased growth markets.

OCF for the nine months increased 32% to $3.42 billion, primarily from FX and organic growth. On a rebased basis this equates to 14%. I'll give you some more segment detail on that in just a minute.

The OCF margin for the nine months was 43% -- or 42.8%. That's an increase of 300 basis points from the prior year. And the key drivers of the margin expansion remained the same as the previous quarters -- high contribution margins from our advanced service RGU adds, together with operating leverage in our cost base, particularly in the OpEx and corporate costs.

CapEx for the nine months was $1.7 billion, compared to $1.5 billion last year. The increase was mainly due to FX, as well as an increase in CPE which is a good news story because it is related to digital box demand. But as a percentage of sales, it's down to 21% year to date versus 22% last year. As always, in previous quarters, over 50% of our spend was variable and directly tied to volume growth.

Moving to slide 11, this is showing the revenue detail by the division for both the three and nine months. Now, rebased revenue growth was consistent for both periods, up 6% for each to $2.65 billion and $7.99 billion respectively.

The European operation UPC was also consistent over both periods. Western and central and eastern Europe were both 3% to 4% rebased growth range with UPC generating $1.14 billion of revenue for the three months and $3.45 billion year to date.

But we had better top line performance in our other operations which was led by VTR with 12% rebased revenue growth in Q3, which got them to $180 million; and 11% revenue growth for the nine months, year to date to $560 million. J:COM in Japan and Telenet in Belgium both posted rebased revenue growth of 7% for the nine months.

Consistent with the prior quarters, UPC's growth was negatively impacted by performance in Romania, Hungary and Austria; and these three markets remain challenged as Gene discussed. But if you'd excluded those three, Romania, Hungary and Austria, our rebased revenue growth year to date would have been in excess of 7% for LGI overall. And as it relates to our revenue guidance, we would expect to come in around the 6% level for the year.

I'm now on page 12 with the OCF. This is really the same detail as the previous page, except it's our OCF breakdown. Rebased OCF grew 13% in Q3 to $1.17 billion and stands at 14% year to date to $3.42 billion. Our top performing operations in Q3 were UPC and J:COM which generated rebased OCF growth rates of 15% and 12% respectively, both reporting their strongest quarters of 2008.

Western Europe delivered 15% rebased OCF growth while central and eastern Europe posted 7% growth, and that was dragged down by Romania which was down actually over 25% in the quarter. Telenet was up only 8% in Q3, but rebased OCF for the nine months was up 10% to $550 million.

As Mauricio discussed, VTR's growth rate of 12% in Q3 was impacted by the timing difference between inflation based cost increases and a September rate increase across all product lines. Year to date, VTR is actually up 18%.

So excluding our three challenging markets of Hungary, Romania and Austria, our OCF growth for the nine months year to date was over 16%; and as it relates to OCF guidance, we're confirming the 13% to 15% rebased range for 2008.

Now, on slide 13 we highlight our free cash flow progression for the first nine months of the year. Q3 free cash flow was down $25 million compared to the prior year due to the high capital spend in this year's Q3 versus last year. But the LGI overall free cash flow in Q3 came in ahead of our internal estimates.

More importantly, free cash flow on a year-to-date basis was still up 143% to $545 million and that's an increase of $320 million. It's driven by an increase in cash and operating activities of around $550 million and partly offset by an increase in CapEx of $225 million. But as we look to Q4, 2008, we can expect to report a very strong quarter in comparison with Q3 due to -- largely to the timing of both our cash interest and tax payments as well as favorable working capital swings in Q4 because many customers in certain European markets prepay for a full year of service, particularly in Switzerland.

Now let's talk a bit about the balance sheet which obviously everyone is very focused on. We feel very good about our balance sheet. Page 14 is the first slide here. Total debt in Q3 decreased around $525 million from Q2 of '08 to around $19.3 billion. The reduction in debt is attributable to the FX translation impact, particularly as the dollar has strengthened to the Euro. But the decrease was partly offset by incremental borrowings in the quarter, mainly as we drew down the revolvers that we have in the UPC credit group. Remember that our weighted average cost of debt is very low in our opinion. At Q3 it's still around 6%.

Now, our cash position was $2.1 billion. Excluding restricted cash it was around $1.6 billion. And our cash increased by $370 million from Q2 of '08, and the increase is largely attributable to the cash we took down from the incremental borrowings, partly offset by the cash we used for stock repurchases.

In terms of where our cash resides, at quarter end we had $780 million in cash at LGI and in our nonoperating subs and $800 million in our operating subs. At September 30, we were levered on a gross basis of 4.1 times and on a net basis of 3.7 times. These ratios have steadily declined in 2008 due largely to our underlying OCF growth. As you can see in the far column on an adjusted basis, excluding the impact of the debt related to our shares in News Corp. and Sumitomo, both of which we expect to be repaid with the underlying shares, our gross leverage actually would fall to under 4 times on our last quarter annualized basis.

On page 15, what we tried to do is give you an update on where we are in our capital structure. Clearly the markets are in terrible shape from a credit point of view, but we want to reassure you that we think we've got a good capital structure for this part of the cycle. As part of our capital structure philosophy, we strive to maintain distinct separate credit pools which can stand alone and support their own borrowings. So first of all we don't cross guarantee or cross collateralize our credit pools. So this limits the risk that any one credit pool could impact the others.

From an LGI perspective, in addition to our $1.6 billion of cash, we also have around $1.6 billion of undrawn borrowing capacity through our subsidiaries at September 30. This breaks down as follows -- UPC, $550 million; J:COM, $530 million; Telenet, $440 million; and Austar, $50 million. On a consolidated basis as of September 30, we could borrow $1.4 billion of the $1.6 billion.

Now, we are committed to the levered equity strategy, but as Mike said up front, to the extent that the financing markets remain challenged for an extended period, we could see our leverage fall below the 4 times level because we're not going to pursue incremental debt financings on sub-optimal terms just to keep it at the 4 times.

As most of you are aware, we're focused on hedging balance sheet risk, both with respect to variable interest rates and currencies. In terms of the interest rates, we've hedged over 90% of our exposure to floating rates; and on the currencies, where all our debt is not in the local currency of the operation, which is primarily in the UPC credit group where we have mostly Euro denominated debts -- but we have a number of nonEuro countries like Switzerland, central and eastern Europe and Chile -- we've swapped the exposure to match the underlying cash flow of the operations; and we've done that to maturity. So we're not in any way impacted by the issues that are going on in Hungary, for example. Many of these contracts roll our hedges out to 2014 and most of the -- most of the hedges are generally set in the 3 to 5 times range of trading OCF.

In terms of counter party risk, we focused a lot of on this and we have got a very diverse group of lenders and counter parties; and we just don't see any issues in terms of funding our revolver commitments.

And as most of you know, we strive to be free cash flow positive at each of the credit pools and we're positive free cash flow year to date in all of them.

But perhaps most importantly we have an extended maturity profile. I'm going to illustrate that on the following slide 16. On slide 16 you can see the bulk of our debt, including the capital leases, matures in 2014 or later. Over the next couple of years, two and a quarter years, about 4% of our debt matures, but that's primarily related to J:COM, which is around 1 times levered and certainly there's no issues there, and that's in a very cheap and stable capital lease structure. Approximately 90% of our debt matures beyond 2011 and about 50% beyond 2013. So there's really no near term amortizations of any significance. Now we're very happy with our maturity profile and certainly as we look out over the next several years, we'll opportunistically look for windows where we continue to push this schedule out and we have a structure in place in all our borrowing pools to do this should the markets return.

Let me just go to the conclusions, page 17, before we go to questions. We're generating strong growth in advanced services RGUs and with increasing availability of DVRs, high def and VoD, as well as our rapidly expanding 3.0 rollouts. We feel really good about our growth prospects and we are looking forward to a healthy Q4 and carrying that momentum into '09.

The OCF growth in margins were a clear highlight to the quarter and we still believe that we can be more efficient in how we operate our business and that OCF margins can continue to climb albeit at a slower pace as we drive global scale.

Running a levered balance sheet like we do, we feel we've made some smart decisions in how we manage the risk, and through a combination of cash on hand, borrowing availability and our free cash flow profile, we've got the necessary liquidity to weather the extension of the current credit environment.

Additionally, we're not backing away from our levered equity strategy. We may not buy back stock at the same pace as recent quarters in light of the current environment, but we are committed to allocating our capital to what we see as the single best investment we can make, and that certainly is our stock at these levels.

With that, I'd like to turn it back to the operator for perhaps some questions.

(OPERATOR INSTRUCTIONS). And we'll take our first question now from Mr. Vijay Jayant from Barclay's Capital. Please go ahead.

Hi. It's James Ratcliffe for Vijay. A couple of questions. You mentioned counter parties on the debt side. Can you talk about how reliable you believe your derivative and currency hedge counter parties are.

Second you talked about repurchasing equity. Given to where some of your debt is trading is that, A, something you can do given your covenants, and B, something you'd consider to repurchase some of the debt at a discount?

Third, looking at eastern Europe as a whole, can you talk about what, if anything, about the eastern European markets that haven't been significantly affected, so essentially outside of Hungary and Romania? What makes those either from a macro point of view or competitively different and more or less likely to experience the same sort of effects? Thank you.

Let's just dole these out. So Charlie, why don't you start preparing for the counter party risk question. I don't think it's that complicated or going to take that long.

On the issue of our debt versus our stock, I mean I think we believe, as we said, on a prudent basis there's nothing better out there to buy than our stock. So we will certainly continue to do that first and foremost. And while we're not -- we haven't changed our debt profile or objectives in the 4 to 5 range, certainly reducing our debt is not a bad thing to do in this environment as well. But I think given the choice between the two, it's our view at this point since we don't have any balance sheet challenges, as I think we spent a fair amount of time discussing this morning, and our stock is probably a better value for shareholders.

Do you want to talk to the counter party risk issue, Charlie, real quickly?

Yes. We're learning a lot, as I'm sure you are all about CDS and clearly where all the banks trade, and we obviously have a big derivative portfolio because of these currencies and interest rates. The first point is it's heavily diversified, so we're not reliant on any one single counter party. As it turns out, we're generally in a situation where we owe the counter parties rather than they owe us, which is not necessarily a good thing, but it means if there was any default, we would -- we would actually be in the money if you like. And the third thing is as I look at our key counter parties, I mean our top three would be Paribas, HSBC, SocGen, which I think we'd all agree are probably some of the most credit worthy banks, certainly if the CDS's are to be believed. I don't want to pick on any individual bank by name, but we're not in any of the banks which are trading with CDS's north of 300 -- if that gives any clues in terms of swaps or derivatives.

And I think in terms of -- just kind of to give a perspective, if you extend a CDS in some of the countries -- and obviously the countries that look pretty strong in eastern Europe -- certainly the Czech Republic is trading extremely well from a macro economic point of view. And so whilst you do have issues around Hungary and Romania, we're not looking too bad in all our central and eastern European profiles. Slovenia, Slovakia, and the Czechs aren't looking too bad.

I'd also add that if you look at expected growth in GDP in, say, Pole and Czech Republic, Hungary, Slovakia, Romania, with the exception of Hungary, they're all in the 5% to 7% range roughly; and if you look at estimates -- even estimates as recently as last week -- for 2009, these countries including Romania are expected to grow anywhere from 3% to 6%. So these are still growing economies.

The unique situation in Hungary and Romania -- and Hungary in particular -- relate to the fact a lot of housing loans were taken down in foreign currency. So volatility in the foreign currency could impact consumer confidence and disposable income. But -- and you're all following, I'm sure, the structural macro developments in those markets as well. But they're still growing economies and I think that makes it a lot easier to manage these sort of challenges.

Next question, operator.

Thank you.

Certainly. Our next question goes to Mr. Alan Gould with Natixis.

Alan?

Mr. Gould, your line is now open.

Hearing no response, we'll move on to Mr. Matthew Harrigan.

When you look at your local currency costs and you back into them, it looks like there are a number of markets including the Netherlands where you're actually having sequential and year-over-year absolute declines in your cost base, and I'm curious as to whether there are some anomalies there as Mauricio talked about with VTR in Chile. And I would think going forward your costs would probably move at least the rate of inflation.

Secondly, on the Dutch digital ARPU, you said it was up about 70% year-over-year. It looks like you've got very nice critical mass now, north of 40% penetration. What's fading on the revenue side that isn't giving you a better local currency number in the Netherlands? Are you seeing a lot more price compression on the voice and data products in that particular market?

Well, on the Dutch point, I will let Gene add some comments here, but if you look at -- I don't think we've reported this specifically, but ARPU per household in Holland is up pretty meaningfully, over 15% year over year and that's driven mostly by digital. Naturally, Matt, as you know, the number we're focused on most closely is what can we generate out of each home and that is up over [15%] year over year. And digital is a big driver of that.

The issue around the other ARPU for other products, principally it's been data that has affected us most significantly in the past. Our data ARPUs in that market are around EUR20 plus and, you know, our goal moving forward is to try to not only maintain that ARPU, but try to grow that ARPU through a combination of this 3.0 rollout at higher ARPUs and driving people to more advanced products.

So the name of the game in Holland is clearly digital TV, which is, as you noted, having significant success in the ARPU equation, and trying to put a floor under data ARPU and perhaps over the medium term drive up that data ARPU through the launch of these game changing technologies. If we achieve those two things, you'll see a nice spiral, I think, a nice pop in the overall revenue in that market.

And on the cost base, you know, in a couple of markets like Chile where currency will have a small impact on our operating numbers because we do have some dollar-based costs, in programming, for example. For the most part our costs are in the local currency of the operation, and what you'll see is simply a reported variance. The vast majority of the cost efficiencies realized in a market like Holland or Europe in particular have been real cost efficiencies -- real head count maintenance, real synergies from mergers that are still being finalized or implemented, for example, in Switzerland, IT cost savings associated with the rollout of [Darby]. So we're realizing real cost efficiencies, and to me that's a terrific position to be in as we move into 2009 and 2010. I would rather be very, very efficient and at a high margin point at this stage of the game than trying to achieve those numbers in the next couple, three years. So I think it's been an effort well delivered.

Thank you.

Yeah. Operator?

All right. And we're going to go ahead and go back to Mr. Alan Gould with Natixis.

Yes, hi. Can you hear me now?

Yes, we certainly can.

Okay, thank you. Mike, a couple of big picture questions. First is with respect to your management incentive plan. I like the fact that management is aligned with shareholders, but I never thought, I'm sure you never thought that the stock would be trading around $15 when we're getting close to paying that out. It looks like you're going to be hitting the high end of the bogey in terms of EBITDA growth, but $400 million divided by $15 is a lot more dilutive than we anticipated. Can you give us some help as to what's going to occur there, do you think? And are you close to that 17% growth on an apples to apples basis?

Well, on that point, we haven't run the exact math for the benefit of the Board or the comp committee and it's pretty well described in the plan itself how that -- how that is calculated. I don't think we're going to be at the top end of that, Alan. I think we're going to be shy of that, but, you know, not hugely shy of that. I think the number you cite in terms of the overall comp amount is actually less than that and if you back that off by the amount we'll be short of the goal, it will be even less, and I'm not here -- I'm not prepared to give you a figure, because I don't have one in my head, but it will be less than the amount you disclosed.

I was combining the two plans.

Yeah. And even by combining the two plans.

Okay.

If you -- you know, the plan is very specific. It says that it's at the comp committee's and the board's discretion as to whether to payout in cash or stock. The intention has been and has been stated that they will pay out in stock, but they reserve the right to at any point adjust at that point -- at that position; and honestly, we haven't had that conversation. I think it's -- certainly I think it's prudent that they'll look at dilution and the impact of dilution. And again, the point I'd make, Alan, is they don't have to make the decision necessarily at one point. They can make that decision every six months.

Okay.

So it's a -- you know, technically, the payments could be spread out over six month periods and they can determine at every six month period if they choose what the best thing to do for the company is. So I don't -- I think there's a lot of flexibility there and I think the Board and the comp committee will be extremely prudent and thoughtful about how they approach that.

Okay. My second question is with respect to the EBITDA margins. I mean 44% or so in the quarter is way higher than anyone I've seen. Is there a trade off between that EBITDA margin and your revenue and sub growth?

Well, you know, we get that question every quarter. I think that -- and we ask ourselves that question every month when we look at our numbers. I think the fact is that if I were to give you the answer yes, then I would have to say that marketing and sales expenditures were down, but really we're spending a lot of money in -- you know, both from a point of view of promotions and discounts as well as marketing and sales pushing our products. We don't generally have a sales problem. I mean Gene will tell you that our sales results year over year and year to date to budget are pretty much on target. So if I were -- if we're sitting here today having achieved 70% of sales or 50% of sales, then I would say to you, boy, let's go back and -- we would be looking at our marketing and spend, and our marketing and sales costs, and is that having some kind of impact. But the fact is we're selling.

Our issues if we have them are more related to churn and retention and that's really the place where we're focusing our attention and time. The savings we're realizing are coming out of a number of areas. Marketing and sales is principally not the main area. It's coming out of head count in overall operations and, as I said before, IT and things of that nature. So I don't think so. And I really don't believe that we could simply spend our way to greater RGU sales or greater RGU net adds. That's generally not the way it's worked in these markets, and the money we are putting in we're putting largely into retention.

Gene, do you want to add something from the European perspective to that?

I guess the only thing I might add is this question came up at our Board meeting about a week ago and in preparation for the Board, I had gone back and looked at this very issue and essentially what we found was that in eight out of the ten countries, our offers were actually stronger than what we had put into the market the year before. Only in two instances were they about equal.

And I think another thing that you have to take a look at when you're looking at our marketing spend, particularly if you compare it on a metric of revenue -- against revenue, as a percentage of revenue, we don't include in our reporting for that purpose or looking at the metric the discount, and when you add the discount that we use to drive sales and as part of our retention program, I think we're spending about the right amount of money. From time to time I ask our managing directors, if you had 10% more, 20% more, would that make a huge difference? And the answer always comes back, no. Of course it would make a difference, probably, but then you have to look at the marginal return on that sale.

Okay. And my last question, Mike, I know you started the call differentiating yourself from the US operators, but on Time Warner Cable's call yesterday, they said they saw a meaningful change decline in new subs beginning in October. Can I confirm that you have not seen the same results?

That's another question we're always asking ourselves more weekly and daily than monthly and the fact is I think we've identified the areas where we think there might be some weakness moving forward and/or where we perhaps have felt a bit of weakness. Chile is one, and I think Mauricio addressed that, and potentially Hungary, where both the interest rate environment as well as what's happening there on a macro level could impact broader sales. But I think the fact is we have not as of this point seen a meaningful change, but I -- to be prudent, Alan, you know, I think we've been saying here all along, we might. And so we're prepared for that and I think we're well positioned for that, but at this stage, you know, I would not say we -- I can't remember the word you used, but I would not use the word meaningful in this context if that's the word.

Maybe I can phrase it a different way since we just looked at that as well. And I haven't seen -- or we haven't seen any noticeable change in the level or volume of sales. If you look at the month of October, sales were slightly below budget, but they had not fallen in volume.

Okay. Thank you very much, guys.

Yep.

All right. And our next question will be going to David Joyce with Miller Tabak.

Excuse me, thank you. I was wondering on Belgium if there is further consolidation that you would be allowed -- that Telenet would be allowed after the recent deal early in October? And secondly, on the European front, was there any new development in the Netherlands related to opening up the analogue -- the analogue system?

Well, in Belgium, you know, I -- the deal they just completed or -- with Intercable is a pretty significant transaction and, as you say, helps consolidate the Flemish market which is where Telenet's strength and core operations reside. I mean they have looked at historically opportunities to move into Wallonia and other areas in the south and I don't believe at this point there's anything actionable there, but it's certainly a possibility that they might look at that -- those areas down the road. But I wouldn't put it necessarily number one on their list. And they're in a pretty strong position where they sit today in Flanders.

And on the OPTA question, I think we discussed that on our last call in August -- sometime in August, they issued to draft decision to try to impose a resale on us and other operators in Holland around our television product. We obviously went immediately to the EU and expressed to them in very simple terms that this seems to us to be absurd given the increased level of competition in this marketplace, in particular, increased level of digital competition in this marketplace. Since then, I think OPTA has retrenched, they have gone back to prepare their own more formal response and submission to the EU, which we expect to have some -- they might deliver sometime yet this year. It's unclear if they will or when they will and -- or how long the EU will take to determine that.

So I think it's very cloudy. It's not the first time we've had to deal with these cloudy approaches from a regulatory point of view locally and we expect to fight them diligently as we have done. I think this is the third attempt in this marketplace. Again, just looking at the trend here in terms of relative competitive dynamics now versus the prior two attempts, we think it's sort of laughable. But we deal with it seriously and we'll keep you updated if we get any more information.

All right. On the M&A pipeline front, we normally think about the end distribution opportunities, your core competency there. But I was wondering if there was anything in the M&A opportunities that might be along the content front, especially as you want to be adding some more VoD content in the event that you might be sort of a JV partner or something. Is there anything happening along those lines?

Well, Shane O'Neill is on the line. Shane, do you want to maybe talk for a minute about what we've been doing in Europe in the content area?

I think he's on the line. Shane? Not on the line.

Well, I think the answer to the first question, we have been relatively active in the M&A environment from a content point of view historically. So, you know, it's certainly something we've -- we closed for example in September a relatively large transaction, about a $95 million deal in central and eastern Europe on a documentary channel that is one of the higher rated services we carry in Hungary and Czech and Slovac. We continue to look at expanding our presence in the kids' area and some other smaller transactions. So I think we've been looking at content deals. We don't always disclose every content deal we do, but we certainly are active in the content space and have today a pretty large and substantial platform of channels and subscribers run out of Europe, probably something we need to do a better job of highlighting for folks, generating pretty substantial EBITDA today and growing at one of our faster growth rates.

In terms of VoD, the areas on the content side we're most focused on would be high def content first and foremost and VoD content secondly. The reason for that is we do have high def launched just about everywhere, but we're still ramping up the VoD platforms. We're rolled out in Japan, of course. We're rolled out in Holland and we are seeing some pretty good take up in both markets -- and in Belgium, I should add -- in both -- in all three markets from the point of view of both free and transactional VoD services.

But the European market in particular hasn't reached a tipping point, either for VoD or for HD and I think when it does reach that tipping point, we're well positioned to exploit our advantages both in terms of scale and, you know, our ability to negotiate with content providers and be in a position to push the product. So there's nothing immediate that jumps at us that says, hey, this is an -- this is one of the things we can do in this environment to take advantage. I would say no.

Thank you, Mike.

Yeah.

All right. And we have another question from Jason Bazinet with Citi. Please go ahead when you're ready.

Thanks so much. On the CapEx front, if you had an opportunity to either tweak the -- and holding the amount of dollar amount of CapEx flat, because that's not really my question, but either reallocate the CapEx by country or reallocate the CapEx into certain specific areas of your business, where would you -- where would you -- where do you think you would get the biggest return based on that sort of marginal dollar of investment?

Well, I think we're putting it -- let me make you feel better about the question. We ask ourselves that every year when we put our budget together and then regularly throughout the year. So we approach the capital budget from the point of view of what will generate the highest return to the company, both in terms of cash on cash and any other way you want to look at it. So we already filter every project through that prism if you will and then land on the ones we're going to develop. For example, we look at all new builds and all rebuilds, which are still very -- relatively substantial in our business on a market by market, project by project basis and we set relatively high return expectations before we'll approach those projects. We look at every product, whether it's digital TV or broadband with 3.0 or any content investments. We look at each of those on a stand alone basis.

So I'm not trying to be facetious, but I think we already have at this point allocated our capital, we believe, in the areas that generate the highest return and the most appropriate return for that capital. If you want to ask about a specific product or area, we can sort of look at that. The pieces of the CapEx that we are focused intently on reducing over time are the areas of CapEx that are largely maintenance or more fixed in nature. So we are hopeful that our IT costs, as we finish up the process of converting, for example, most of the appropriate markets in Europe to Darby, that those one-off expenses will go away. And we think that's coming this direction. So there are some areas where we have maintenance costs and more fixed costs where we are focused -- certainly will be focused this upcoming budget year, I can assure you, on looking at every single project there that may or may not have a revenue component with it to ensure that it's a valuable spend from the point of view of shareholders and ourselves.

Okay, thank you.

Yeah.

All right. And we have our next question from David Gober with Morgan Stanley.

Thanks for taking the question, guys. I had two that are pretty unrelated. But back on the topic of CapEx, I was just wondering what percentage of your CapEx is not in local currencies, for instance maybe some of the eastern European CapEx that might be in Euros and whether or not you guys hedge out that exposure. And also, I think we're a little over a year away from when the Super Media relationship expires in Japan. I'm just curious how you guys are thinking about that right now and especially given the strength of that balance sheet and the dynamics of that market.

Charlie, do you want to take the CapEx question?

Sure. I think we are very focused on matching functional currency to the underlying operations in terms of CapEx. To be across the group, our OpEx is sub $50 million and the way we hedge it is we usually do 12 months rolling forward. It's about 50 million in Chili -- sorry. And it's just under 50 in Europe. So this is in relation to the eastern European businesses particularly. We hedge it out 12 months forward or we hold dollars on our balance sheet. So we hedge it there. But clearly 12 months out we have to kind of roll again.

On the CapEx side, these are contracts that are obviously looked at every year. In Europe, it's sub $100 million is spent in dollars on CapEx, albeit some of the contracts are (inaudible) most in Europe but linked to dollar pricing. And certainly (inaudible) we're very focused on making sure we don't get hit here by the movements in the currencies. And we do have a few alternative suppliers which are local (inaudible) euro denominated so it's not quite as bad a story. But if you take the whole in the round, it's of de minimis impact to be honest, in relation. We've run some stress tests, and we really are relatively unexposed to any movements.

Miranda, do you want to address Super Media?

Sure. As you know, we have a very long-standing relationship with Sumitomo. It's been a very successful partnership and we remain extremely committed to the market. So as you'd imagine, we're looking at a whole range of options but with a primary focus on how we strengthen the Company going forward. As you can imagine, there's a whole range of topics that we talk about, but we're looking at them in a very constructive way and we have a good engagement with Sumitomo.

Great. Thank you. Thanks, guys.

And our next question goes to David Kestenbaum with Morgan Joseph. Mr. Kestenbaum?

Okay, thanks. I guess the first one is more Miranda. I just wanted to know what the acquisition environment is like in Japan? I see you completed a pretty big one this quarter. And how many more like that size? And then how was your relationship with Sumitomo affecting your ability to complete acquisitions?

I think that Sumitomo share our interest in seeing J:COM continue to grow and in certain potential transactions are very helpful in deploying some of their existing corporate relationships in talking to major shareholders involved in other companies. There are probably two or three mid-size acquisitions that might come up over the next couple of years. There's nothing immediately on the horizon that we're actively engaged in. We continue -- J:COM, of course, continues to look at conversations with Midyat Tek but Sumitomo remains positive and supportive of acquisitions.

I also think there are going to be some quite interesting opportunities on the content side where we're beginning to see some consolidation opportunities and the JTV management team is looking at, whether some mergers or some channel acquisitions as well as possible expansion into the BS platform. So there's not a flood gate, but there's a steady stream of acquisitions that we review with management and (inaudible).

Okay. Thanks. And then in Chile, obviously they have had recently very high inflation. I was just wondering what happened the last time inflation reached these type of levels and how the Company reacted to it at that point?

Mauricio, are you on still?

Yes, I'm on. Thank you. It was a long time ago. Inflation in Chile has been held at around the 3% level, 3% to 4% level pretty much ever since I can remember, certainly throughout the latter part of the '90s and the 2000s. What is important, I guess, to characterize here, this is an inflation-based economy and by that I mean there is a legacy from prior years to rebase everything according to CPI. So we have in place a policy that just does exactly that. We rebased our revenues on inflation, we take inflation hikes regularly on a six-month basis. The difference this time around is that the spike has occurred as a result of basically high electricity bills and gas prices and it has happened within this last six-month period and that's what causes this lag that we're catching up with the CPI, 100% CPI rate hike that we just took in late September.

So are you saying that you have the flexibility to change your customers' bills every six months, so you can adjust to inflation?

Yes. We have the ability to adjust it to inflation, yes. We do 100 -- we pass on 100% of CPI to the customer.

Okay. Thanks.

All right. And we're -- take our final question from Steve Malcolm with Arete Research.

Thank you. Good afternoon, guys. Three questions, please. First of all on cablecom in Switzerland, I believe you've had some pretty big, well publicized customer service problems, which I think at least partially reflects in the KPI's in the quarter. Can you talk us through what is going on there, what you've done to fix it and what we should expect in the next couple of quarters as a result of that? Secondly Gene's comments on kind of seeing distressed operators and the first signs of consolidation in a couple of the markets. Can you maybe elaborate on that where you see that most likely to happen and how you may benefit? And finally, just on advertising revenues within Chellomedia, can you just give us an idea of what your exposure is to advertising revenues and how that might play through Chello's financial performance in the next 12 months. Thank you.

I'll take the Swiss one. Gene, why don't you talk about the consolidation or stress points. Charlie, I don't know if Shane's there, but you can deal with the advertising.

I'll deal with the advertising, yeah.

I was just in Switzerland, I guess it was ten days ago and, you know, what I'll tell you is if you compare the performance of that asset, first of all, to our other European businesses, it is performing extremely well. They have had year-to-date OCF growth in the 13% to 13.5% range which for a large mature western European market is terrific and their revenue growth has also been pretty steady. So I think the business first and foremost is a very high performing business from our perspective.

The issues around customer service relate principally to our recent conversion or continued conversion of the IT system to the standard centralized platform we use in five other countries and inevitably you are going to have those types of challenges when you convert a large system over. So I think we believe those are largely behind us. We have all the issues and bugs fixed and are working aggressively and actively every single day to work down the back log of change orders and issues. So I think the management team there is extremely focused, extremely energetic. It's a challenging market because it's a very demanding consumer and a very small market in that respect. I think the business there is performing well. Their digital product is performing actually better than we had anticipated. 3.0 is around the corner. VoD is around the corner. I think they're doing all the right things in that marketplace and it's really one of the most stable marketplaces we operate in from both a competitive and regulatory point of view and I think you can see that in our results. I think the biggest issue was IT related and I think it's largely behind them.

I would just -- before leaving cablecom, I would just echo what Mike said. We went through a major change out of a billing system, but it's a lot more than just a billing system, it's a whole end to end platform that handles the customer from point of sale right through to the billing and provisioning and those are fairly complicated and sophisticated systems that you put into place. And I -- one of the things I would like to mention there is it's not the IT system per se that you put in place that creates some of those kinds of problems. It's the fact that the organization has to adjust so much to the new system and what we're going through now is really what I would call process reengineering and I've been in communications regularly with management almost on a daily basis in some cases. We've got a task force of some 50 odd people supporting them out of this office and we're shooting by the end of the year to have this fixed and get off to a good start in '09.

On a consolidation point, Gene, do you want to talk about any operators we feel are experiencing the stress that we --

That's in the markets and not the operators because a lot of it is innuendo and rumors, but it's the kind of feedback that we get on a day-to-day basis as we monitor what's going on in the markets, and in Romania and Hungary and Czech, I think we're seeing signs of one particular operator maybe who is experiencing perhaps financial distress, that may be a strong word, but we're not seeing the same level of competition nor quite the same type of aggressive offers that we've seen in prior years.

There's another operator in the Romanian market that has cut back substantially in their operations in terms of spending and head count. Whether at the end of the day it will prove that these are consolidation opportunities or more importantly even if they weren't consolidation opportunities, if it's an opportunity to rationalize the market where these low-end competitors start behaving more rationally, start moving rates up, then we would benefit from that as well.

So I say two things, there's a possibility of a rationalization happening as a result of what's going on in these markets and in some cases there's even an opportunity maybe to consolidate the markets further. But I wouldn't want to go into operator names.

That's fair enough. Thank you.

I think on the Chello advertising side, Chello's business actually is largely subscription although obviously over time that will change. So today it's broadly speaking about 20, 25% is ad revenues and we have been hit in the UK, there's a bit of (inaudible) media and I've certainly been struggling a little over the UK advertising cycle, although surprisingly it's held up pretty well elsewhere. They do (inaudible) have a bit more advertising revenue related to reseller business, but that has very, very low margins. I would say the right number is about 20%, 25% of their revenues. And then just actually what Mike said, those guys have done a very good job of consolidating some assets, depending on your view on the exchange rates, they're closing in on the $75 million plus EBITDA, building quite a lot of value here and the business is still a 10% grower even despite what's going on on the ad cycle. So there's certainly a lot of hidden value here and something which I think there's still opportunities to consolidate and get smaller assets from here folded in.

Okay. Well, I think that concludes the call. Thanks for sticking with us if you still are on. And we certainly appreciate you making the time. We believe that -- I think I speak for all of the management here, as I said, our morale is good, we think the business is on a great footing here and we're hopeful to come out of this actually not just stronger, but perhaps taking advantage of some of these opportunities and we will speak to you all soon on our fourth quarter results. Thanks very much.

Ladies and gentlemen, this concludes Liberty Global's investor call. As a reminder, a replay of the call will be available in the investor relations section of Liberty Global's website at www.lgi.com. There you can also find a copy of today's presentation materials. Thank you and have a nice day.