Reported revenue of $1.1bn; sequential financial improvement
Positioned to accelerate financial performance in Q4
Delivered successful $1bn debt refinancing in C&W credit
silo
Cultivated an FTTH Peruvian broadband investment with ~3m homes
passed
Completed acquisition of mobile spectrum and prepaid subscribers
in PR & USVI
Liberty Latin America Ltd. (“Liberty Latin America” or “LLA”)
(NASDAQ: LILA and LILAK, OTC Link: LILAB) today announced its
financial and operating results for the three months (“Q3”) and
nine months (“YTD”) ended September 30, 2024.
CEO Balan Nair commented, “We are continuing our strategy to
connect communities and drive broadband and postpaid mobile
penetration across our markets. We are encouraged by our
transformation programs, which are increasingly gaining momentum
and enabling us to connect with our customers through their
channels of choice.”
“In the third quarter, our businesses in Costa Rica and Panama
demonstrated continued operational execution, adding nearly 50,000
broadband and postpaid subscribers, roughly double the prior-year
period. Although C&W Caribbean experienced adverse operational
impacts from Hurricane Beryl during the quarter, financial
performance was resilient, outperforming our expectations as we
delivered sequential and year-over-year reported Adj. OIBDA
growth.”
“Importantly, we grew Adj. OIBDA in Puerto Rico sequentially in
the third quarter, however churn from the migration was higher than
anticipated. We are seeing improved sales and customer sentiment.
Our operating team is focused on the customer and growing our
business back. In Q4, we expect to see acceleration in our Adj.
OIBDA performance, but at this point, and given that the recovery
is taking longer than previously anticipated, we no longer expect
to achieve a monthly Adj. OIBDA of $45 million by year-end. As we
look to 2025, the completion of our acquisition of spectrum and
prepaid subscribers from Echostar will further underpin our growth
prospects.”
“Additionally, we are highlighting an investment in Peru that we
have been cultivating since 2021. This FTTH business, WOW, in which
we own nearly 50%, passes 3 million homes and has been successful
in driving broadband market share primarily in areas outside
Lima.”
“Beyond our existing business, we are excited about the
prospects for growth and value creation related to our announced
submarine expansion with two strategic partners, connecting
Colombia, Panama, Mexico and the USA. Together with our new landing
station in Florida, we expect to see strong traffic growth driven
by hyperscalers.”
“Turning to the fourth quarter, we plan to deliver a strong
performance driven by B2B growth and further progress in the
recovery of our Puerto Rican operations, and we aim to produce our
strongest quarter in cash flow generation this year.”
Q3 Business Highlights
- C&W Caribbean: robust performance despite impacts from
Hurricane Beryl
- Flat YoY revenue performance, including $5m negative impact
from Hurricane Beryl
- YoY reported and rebased Adj. OIBDA growth of 5%
- C&W Panama: strong operating and financial progress
- 12,000 broadband and mobile postpaid additions
- YoY Adj. OIBDA growth of 17%
- Liberty Networks: stable underlying performance
- Growing recurring revenue across wholesale and enterprise
businesses
- Performance impacted by IRU amortization and contract
timing
- Liberty Puerto Rico: turnaround underway
- LOOP converged proposition launched in September 2024;
improving NPS
- Sequential Adj. OIBDA growth
- Liberty Costa Rica: continued subscriber momentum, postpaid
base now above 1 million
- Q3 postpaid net adds 23% higher YoY, over 125,000 adds LTM
- Reported Q3 revenue and Adj. OIBDA growth
Financial and Operating Highlights
Financial Highlights
Q3 2024
Q3 2023
YoY Decline
YoY Rebased
Decline1
YTD 2024
YTD 2023
YoY Decline
YoY Rebased
Decline1
(USD in millions)
Revenue
$
1,089
$
1,126
(3
%)
(4
%)
$
3,307
$
3,348
(1
%)
(2
%)
Operating income (loss)
$
(380
)
$
163
N.M.
$
(176
)
$
405
N.M.
Adjusted OIBDA2
$
403
$
428
(6
%)
(6
%)
$
1,166
$
1,270
(8
%)
(9
%)
Property & equipment additions
$
171
$
187
(9
%)
$
485
$
524
(7
%)
As a percentage of revenue
16
%
17
%
15
%
16
%
Adjusted FCF before distributions to
noncontrolling interest owners
$
77
$
33
$
(80
)
$
55
Distributions to noncontrolling interest
owners
$
(12
)
$
—
$
(23
)
$
(41
)
Adjusted FCF3
$
65
$
33
$
(102
)
$
14
Cash provided by operating activities
$
178
$
219
$
358
$
507
Cash used by investing activities
$
(231
)
$
(161
)
$
(513
)
$
(453
)
Cash used by financing activities
$
47
$
(122
)
$
(234
)
$
(255
)
Amounts may not recalculate due to rounding.
N.M. – Not Meaningful.
Operating Highlights
4
Q3 2024
Q2 2024
Total customers
1,947,400
1,966,300
Organic customer additions (losses)
(18,900
)
900
Fixed RGUs
3,986,100
3,997,400
Organic RGU additions (losses)
(11,300
)
19,300
Organic internet additions (losses)
(7,600
)
8,900
Mobile subscribers
7,989,300
7,912,300
Organic mobile gains
9,400
20,800
Organic postpaid additions (losses)
(4,000
)
8,100
Revenue Highlights
The following table presents (i) revenue of each of our segments
and corporate operations for the periods indicated and (ii) the
percentage change from period-to-period on both a reported and
rebased basis:
Three months ended
Increase/(decrease)
Nine months ended
Increase/(decrease)
September 30,
September 30,
2024
2023
%
Rebased %
2024
2023
%
Rebased %
in millions, except %
amounts
C&W Caribbean
$
359.5
$
360.5
—
—
$
1,092.0
$
1,070.6
2
2
C&W Panama
188.0
190.4
(1
)
(1
)
554.4
536.5
3
3
Liberty Networks
109.9
112.5
(2
)
(2
)
337.5
339.8
(1
)
(2
)
Liberty Puerto Rico
308.2
351.2
(12
)
(13
)
944.0
1,064.2
(11
)
(12
)
Liberty Costa Rica
145.5
134.6
8
5
445.0
399.0
12
5
Corporate
4.5
6.5
(31
)
(31
)
15.5
18.5
(16
)
(16
)
Eliminations
(26.4
)
(29.9
)
N.M.
N.M.
(81.8
)
(81.1
)
N.M.
N.M.
Total
$
1,089.2
$
1,125.8
(3
)
(4
)
3,306.6
$
3,347.5
(1
)
(2
)
N.M. – Not Meaningful.
- Reported revenue for the three and nine months ended September
30, 2024 was 3% and 1% lower, respectively, as compared to the
corresponding prior-year periods.
- Reported revenue declined in Q3 primarily driven by an organic
reduction in Liberty Puerto Rico, which was partly offset by
organic growth in Liberty Costa Rica.
- Reported revenue was lower YTD mostly due to reduced revenue in
Liberty Puerto Rico, partly offset by: (1) net organic growth in
Liberty Costa Rica, C&W Caribbean and C&W Panama and (2)
net foreign exchange benefits of $26 million.
Q3 2024 Revenue Growth – Segment
Highlights
- C&W Caribbean: revenue was flat on both a reported and
rebased basis, year-over-year, as mobile revenue growth was offset
by declines in fixed and B2B where we saw negative impacts from
Hurricane Beryl in the quarter.
- Fixed residential revenue declined by 3% on a reported and
rebased basis. Performance was driven by a $5m negative impact
related to Hurricane Beryl, primarily in Jamaica.
- Mobile residential revenue increased by 7% on both a reported
and rebased basis. Performance resulted from an organic increase of
over 50,000 postpaid subscribers year-over-year, driven by our
fixed-mobile convergence propositions, and higher prepaid ARPU
following price increases. Prepaid subscriber additions in Jamaica
were driven by demand prior to Hurricane Beryl.
- B2B revenue was 3% and 2% lower, respectively, on a reported
and rebased basis. The decrease was mainly driven by a reduction in
fixed and managed services, mostly due to impacts related to
Hurricane Beryl.
- C&W Panama: revenue was broadly stable, declining by 1% on
a reported and rebased basis, year-over-year.
- Fixed residential revenue was up 5%, driven by broadband RGU
additions following expansion of our FTTH networks, products and
commercial activities.
- Mobile residential revenue grew by 9%, driven in part by
improved prepaid ARPU as our products and promotions led to
increased recharge activity as well as increased handset
sales.
- B2B revenue fell by 13% primarily due to lower revenue from
government-related projects, some of which we anticipate to be
executed in the fourth quarter.
- Liberty Networks: revenue declined by 2% on both a reported and
rebased basis. The year-over-year decline was driven by lower
wholesale network revenue associated with a reduction of $4 million
in non-cash IRU revenue primarily due to lower amortization
year-over-year. This was partly offset by higher enterprise revenue
due primarily to continued growth in managed services and B2B
connectivity.
- Liberty Puerto Rico: revenue was 12% and 13% lower on a
reported and rebased basis, respectively, year-over-year. The
rebased comparison includes the acquisition of Echostar's Puerto
Rico and USVI prepaid mobile customer base on September 3, 2024,
which contributed $3 million of revenue in each of the current and
prior-period quarters.
- Residential fixed revenue declined by 4% year-over-year, on
both a reported and rebased basis, primarily due to lower ARPU
caused by retention-related discounts. The year-over-year decline
also includes the impact of credits issued to customers following
Hurricane Ernesto, which impacted Puerto Rico in August 2024.
- Residential mobile revenue was 21% and 22% lower compared to
the prior-year period on a reported and rebased basis,
respectively. This was driven by a reduction in mobile subscribers,
year-over-year, impacted by disruption related to the migration of
customers to our mobile network, and lower equipment sales due to
the reduced customer base and higher volumes related to the iPhone
15 launch in 2023 as compared to the iPhone 16 launch in 2024.
- B2B revenue declined by 5% year-over-year, on both a reported
and rebased basis, primarily reflecting the cancellation of the
FCC's Emergency Connectivity Fund (ECF) which led to a reduction of
74,000 mobile postpaid subs over the past year as well as a
reduction in subscribers related to migration.
- Other revenue declined by $2 million as compared to the
prior-year quarter due to a reduction in revenue recognized on
funds received from the FCC.
Sequentially, revenue was flat on a reported
basis and prepaid subscribers grew organically for the second
consecutive quarter.
- Liberty Costa Rica: revenue grew by 8% on a reported basis and
5% on a rebased basis, year-over-year. Reported performance
benefited from a $5 million positive foreign exchange impact as the
Costa Rican colon appreciated against the U.S. dollar. The strong
year-over-year rebased performance was mainly driven by higher
mobile revenue primarily due to postpaid subscriber growth.
Operating Income (loss)
- Operating income (loss) was ($380 million) and $163 million for
the three months ended September 30, 2024 and 2023, respectively,
and ($176 million) and $405 million for the nine months ended
September 30, 2024 and 2023, respectively.
- We reported operating losses during the three and nine months
ended September 30, 2024, as compared to operating income during
the corresponding periods in 2023, primarily due to (i) the
impairment of the goodwill balance at Liberty Puerto Rico and (ii)
declines in Adjusted OIBDA.
Adjusted OIBDA Highlights
The following table presents (i) Adjusted OIBDA of each of our
reportable segments and our corporate category for the periods
indicated and (ii) the percentage change from period-to-period on
both a reported and rebased basis:
Three months ended
Increase (decrease)
Nine months ended
Increase (decrease)
September 30,
September 30,
2024
2023
%
Rebased %
2024
2023
%
Rebased %
in millions, except %
amounts
C&W Caribbean
$
157.7
$
150.4
5
5
$
465.3
$
436.9
7
7
C&W Panama
68.7
58.5
17
17
190.3
161.0
18
18
Liberty Networks
59.3
64.2
(8
)
(8
)
181.6
200.0
(9
)
(10
)
Liberty Puerto Rico
88.2
116.4
(24
)
(24
)
228.4
381.6
(40
)
(40
)
Liberty Costa Rica
50.8
49.9
2
(1
)
162.5
145.2
12
6
Corporate
(21.6
)
(11.0
)
(96
)
(96
)
(61.7
)
(55.0
)
(12
)
(12
)
Total
$
403.1
$
428.4
(6
)
(6
)
$
1,166.4
$
1,269.7
(8
)
(9
)
Operating income margin
(34.9
)%
14.5
%
(5.3
)%
12.1
%
Adjusted OIBDA margin
37.0
%
38.1
%
35.3
%
37.9
%
N.M. – Not Meaningful.
- Reported Adjusted OIBDA for the three and nine months ended
September 30, 2024 decreased by 6% and 8%, respectively, as
compared to the corresponding prior-year periods.
- Reported Adjusted OIBDA declined in Q3 and YTD as organic
reductions in Liberty Puerto Rico were partly offset by growth in
C&W Panama and C&W Caribbean.
Q3 2024 Adjusted OIBDA Growth – Segment
Highlights
- C&W Caribbean: Adjusted OIBDA increased by 5% on a reported
and rebased basis. Our Adjusted OIBDA margin improved by over 200
basis points year-over-year to 43.9%.
- C&W Panama: Adjusted OIBDA increased by 17% on both a
reported and rebased basis, driven by lower project-related costs
and synergies from the Claro Panama acquisition.
- Liberty Networks: Adjusted OIBDA decreased by 8% on both a
reported and rebased basis. Our rebased performance was driven
primarily by the aforementioned non-cash related revenue decline in
the quarter, and higher bad debt expense mostly driven by an
adjustment for a large customer.
- Liberty Puerto Rico: Adjusted OIBDA declined by 24% on a
reported and rebased basis. The performance was driven primarily by
the net impact of our aforementioned revenue decline, and lower
direct costs, primarily due to lower handset sales. TSA and
integration costs related to the migration were $3 million in the
quarter.
- Liberty Costa Rica: Adjusted OIBDA grew by 2% and declined by
1% on a reported and rebased basis, respectively. Rebased
performance resulted from the aforementioned revenue growth being
more than offset by higher direct costs, and operating costs
related to bad debt expense, mainly associated with installment
plans on equipment sales, and higher operating lease expense
associated with an increase in tower leases.
Net Earnings (Loss) Attributable to Shareholders
- Net earnings (loss) attributable to shareholders was ($436
million) and ($479 million) for the three and nine months ended
September 30, 2024, respectively, and $60 million and $29 million
for the three and nine months ended September 30, 2023,
respectively.
Property & Equipment Additions and Capital
Expenditures
The table below highlights the categories of the property and
equipment additions (P&E Additions) for the indicated periods
and reconciles to cash paid for capital expenditures, net.
Three months ended
Nine months ended
September 30,
September 30,
2024
2023
2024
2023
USD in millions
Customer Premises Equipment
$
32.2
$
45.8
$
119.5
$
137.3
New Build & Upgrade
34.4
39.9
102.1
102.5
Capacity
23.0
24.5
72.6
70.1
Baseline
64.1
58.2
154.1
166.9
Product & Enablers
17.0
18.8
36.9
47.5
Property & equipment additions
170.7
187.2
485.2
524.3
Assets acquired under capital-related
vendor financing arrangements
(45.4
)
(45.8
)
(117.5
)
(117.7
)
Changes in current liabilities related to
capital expenditures and other
1.2
8.4
9.0
16.3
Capital expenditures, net
$
126.5
$
149.8
$
376.7
$
422.9
Property & equipment additions as % of
revenue
15.7
%
16.6
%
14.7
%
15.7
%
Property & Equipment Additions:
C&W Caribbean
$
51.2
$
55.6
$
150.6
$
173.8
C&W Panama
26.9
37.3
74.9
82.8
Liberty Networks
9.8
13.2
36.2
37.1
Liberty Puerto Rico
45.9
56.7
135.8
158.4
Liberty Costa Rica
23.3
15.9
55.3
46.2
Corporate
13.6
8.5
32.4
26.0
Property & equipment additions
$
170.7
$
187.2
$
485.2
$
524.3
Property & Equipment Additions as a
Percentage of Revenue by Reportable Segment:
C&W Caribbean
14.2
%
15.4
%
13.8
%
16.2
%
C&W Panama
14.3
%
19.6
%
13.5
%
15.4
%
Liberty Networks
8.9
%
11.7
%
10.7
%
10.9
%
Liberty Puerto Rico
14.9
%
16.1
%
14.4
%
14.9
%
Liberty Costa Rica
16.0
%
11.8
%
12.4
%
11.6
%
New Build and Homes Upgraded by Reportable
Segment1:
C&W Caribbean
24,000
32,900
87,800
116,300
C&W Panama
6,700
41,200
37,100
94,000
Liberty Puerto Rico
9,100
16,900
38,500
41,400
Liberty Costa Rica
94,600
10,200
137,500
33,200
Total
134,400
101,200
300,900
284,900
- Table excludes Liberty Networks as that segment only provides
B2B-related services.
Summary of Debt, Finance Lease Obligations and Cash &
Cash Equivalents
The following table details the U.S. dollar equivalent balances
of the outstanding principal amounts of our debt and finance lease
obligations, and cash and cash equivalents at September 30,
2024:
Debt
Finance lease
obligations
Debt and
finance lease
obligations
Cash, cash equivalents and
restricted cash related to debt
in millions
Liberty Latin America1
$
2.7
$
—
$
2.7
$
74.2
C&W2
4,970.1
—
4,970.1
479.0
Liberty Puerto Rico3
2,778.0
4.7
2,782.7
39.7
Liberty Costa Rica
456.0
—
456.0
8.7
Total
$
8,206.8
$
4.7
$
8,211.5
$
601.6
Consolidated Leverage and Liquidity
Information:
September 30,
2024
June 30, 2024
Consolidated debt and finance lease
obligations to operating income (loss) ratio
(15.3)x
20.0x
Consolidated net debt and finance lease
obligations to operating income (loss) ratio
(14.2)x
18.5x
Consolidated gross leverage ratio4
5.2x
5.3x
Consolidated net leverage ratio4
4.8x
4.9x
Weighted average debt tenor5
3.6 years
3.9 years
Fully-swapped borrowing costs
6.1%
6.0%
Unused borrowing capacity (in
millions)6
$710.1
$843.3
- Represents the aggregate amount held by subsidiaries of Liberty
Latin America that are outside our borrowing groups.
- Represents the C&W borrowing group, including the C&W
Caribbean, Liberty Networks and C&W Panama reportable
segments.
- Cash amount includes restricted cash that serves as collateral
against certain letters of credit associated with the funding
received from the FCC to continue to expand and improve our fixed
network in Puerto Rico.
- Consolidated leverage ratios are non-GAAP measures. For
additional information, including definitions of our consolidated
leverage ratios and required reconciliations, see Non-GAAP
Reconciliations below.
- For purposes of calculating our weighted average tenor, total
debt excludes vendor financing, debt related to the Tower
Transactions, other debt and finance lease obligations.
- At September 30, 2024, the full amount of unused borrowing
capacity under our subsidiaries' revolving credit facilities was
available to be borrowed, both before and after completion of the
September 30, 2024 compliance reporting requirements.
Quarterly Subscriber Variance
Fixed and Mobile Subscriber
Variance Table — September 30, 2024 vs June 30, 2024
Homes Passed
Fixed-line Customer
Relationships
Video RGUs
Internet
RGUs
Telephony
RGUs
Total
RGUs
Prepaid
Postpaid
Total Mobile
Subscribers
C&W Caribbean:
Jamaica
700
(9,800
)
(2,300
)
(8,800
)
(8,900
)
(20,000
)
16,300
2,100
18,400
The Bahamas
—
(400
)
200
300
(400
)
100
(4,800
)
(200
)
(5,000
)
Trinidad and Tobago
—
(1,900
)
(400
)
(1,400
)
200
(1,600
)
—
—
—
Barbados
—
(300
)
(300
)
—
(700
)
(1,000
)
(200
)
1,000
800
Other1
(4,500
)
(4,700
)
(2,100
)
(3,200
)
(2,200
)
(7,500
)
(1,200
)
2,300
1,100
Total C&W Caribbean
(3,800
)
(17,100
)
(4,900
)
(13,100
)
(12,000
)
(30,000
)
10,100
5,200
15,300
C&W Panama
5,200
400
(4,600
)
6,100
6,000
7,500
1,500
6,100
7,600
Total C&W
1,400
(16,700
)
(9,500
)
(7,000
)
(6,000
)
(22,500
)
11,600
11,300
22,900
Liberty Puerto Rico
3,400
(5,500
)
(1,300
)
(4,600
)
4,600
(1,300
)
2,500
(48,400
)
(45,900
)
Liberty Costa Rica
29,300
3,300
3,900
4,000
4,600
12,500
(700
)
33,100
32,400
Total Organic Change
34,100
(18,900
)
(6,900
)
(7,600
)
3,200
(11,300
)
13,400
(4,000
)
9,400
Q3 2024 Adjustments:
C&W Caribbean - Jamaica2
—
—
—
—
—
—
(13,500
)
—
(13,500
)
Liberty Puerto Rico3
—
—
—
—
—
—
81,100
—
81,100
Total Q3 2024 Adjustments:
—
—
—
—
—
—
67,600
—
67,600
Net additions (losses)
34,100
(18,900
)
(6,900
)
(7,600
)
3,200
(11,300
)
81,000
(4,000
)
77,000
- The decrease in homes passed at the other C&W Caribbean
markets is due to Hurricane Beryl, which resulted in the loss of
4,700 homes passed during Q3 2024.
- Jamaica prepaid adjustment relates to mobile 2G shutdown, which
was completed during the third quarter of 2024.
- Liberty Puerto Rico adjustment relates to the addition of
mobile subscribers on September 3, 2024 related to the close of the
acquisition of spectrum and prepaid subscribers in Puerto Rico and
USVI from EchoStar.
ARPU per Customer Relationship
The following table provides ARPU per customer relationship for
the indicated periods:
Three months ended
FX-Neutral1
September 30, 2024
June 30, 2024
% Change
% Change
Reportable Segment:
C&W Caribbean
$
48.06
$
49.38
(3
%)
(2
%)
C&W Panama
$
38.78
$
37.79
3
%
3
%
Liberty Puerto Rico
$
71.60
$
73.05
(2
%)
(2
%)
Liberty Costa Rica2
$
41.85
$
43.33
(3
%)
(2
%)
Cable & Wireless Borrowing
Group
$
45.78
$
46.58
(2
%)
(2
%)
Mobile ARPU
The following table provides ARPU per mobile subscriber for the
indicated periods:
Three months ended
FX-Neutral1
September 30, 2024
June 30, 2024
% Change
% Change
Reportable Segment:
C&W Caribbean
$
15.62
$
14.78
6
%
6
%
C&W Panama
$
12.28
$
12.19
1
%
1
%
Liberty Puerto Rico3,4
$
40.72
$
39.75
2
%
2
%
Liberty Costa Rica5
$
7.01
$
7.11
(1
%)
—
%
Cable & Wireless Borrowing
Group
$
13.96
$
13.52
3
%
3
%
- The FX-Neutral change represents the percentage change on a
sequential basis adjusted for FX impacts and is calculated by
adjusting the current-period figures to reflect translation at the
foreign currency rates used to translate the prior quarter
amounts.
- The ARPU per customer relationship amounts in Costa Rican
colones for the three months ended September 30, 2024 and June 30,
2024 were CRC 21,888 and CRC 22,261, respectively.
- The mobile ARPU amount for the three months ended June 30, 2024
excludes the impact of 39,300 ECF subscribers that were
disconnected on April 1.
- The mobile ARPU for the three months ended June 30, 2024 does
not include the revenue and mobile subscribers associated with the
LPR Acquisition (acquisition of spectrum and prepaid subscribers in
Puerto Rico and USVI from EchoStar) as the LPR Acquisition closed
on September 3, 2024. Excluding the LPR Acquisition, ARPU would
have increased sequentially by 3% on a reported and FX-Neutral
basis during the three months ended September 30, 2024.
- The mobile ARPU amount in Costa Rican colones for the three
months ended September 30, 2024 and June 30, 2024 were CRC 3,666
and CRC 3,652, respectively.
Forward-Looking Statements and Disclaimer
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding our strategies, priorities and
objectives, performance, guidance and growth expectations; our
digital strategy, product innovation and commercial plans and
projects; subscriber growth; expectations on demand for
connectivity in the region; the recovery by our Puerto Rico
operations; the anticipated benefits of our acquisition of spectrum
and prepaid subscribers in Puerto Rico and USVI from EchoStar, our
FTTH broadband investment in Peru and our announced submarine
expansion with two strategic partners, connecting Colombia, Panama,
Mexico and the USA; the strength of our balance sheet and tenor of
our debt; our share repurchase program; the impact of Hurricane
Beryl on our business; and other information and statements that
are not historical fact. These forward-looking statements involve
certain risks and uncertainties that could cause actual results to
differ materially from those expressed or implied by these
statements. These risks and uncertainties include events that are
outside of our control, such as hurricanes and other natural
disasters, political or social events, and pandemics, such as
COVID-19, the uncertainties surrounding such events, the ability
and cost to restore networks in the markets impacted by hurricanes
or generally to respond to any such events; the continued use by
subscribers and potential subscribers of our services and their
willingness to upgrade to our more advanced offerings; our ability
to meet challenges from competition, to manage rapid technological
change or to maintain or increase rates to our subscribers or to
pass through increased costs to our subscribers; the effects of
changes in laws or regulation; general economic factors; our
ability to successfully acquire and integrate new businesses and
realize anticipated efficiencies from acquired businesses; the
ability to obtain regulatory approvals and satisfy the other
conditions to closing with respect to the transaction with Millicom
in Costa Rica; the availability of attractive programming for our
video services and the costs associated with such programming; our
ability to achieve forecasted financial and operating targets; the
outcome of any pending or threatened litigation; the ability of our
operating companies to access cash of their respective
subsidiaries; the impact of our operating companies' future
financial performance, or market conditions generally, on the
availability, terms and deployment of capital; fluctuations in
currency exchange and interest rates; the ability of suppliers and
vendors to timely deliver quality products, equipment, software,
services and access; our ability to adequately forecast and plan
future network requirements including the costs and benefits
associated with network expansions; and other factors detailed from
time to time in our filings with the Securities and Exchange
Commission, including our most recently filed Form 10-K and Form
10-Q. These forward-looking statements speak only as of the date of
this press release. We expressly disclaim any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in
our expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is
based.
About Liberty Latin America
Liberty Latin America is a leading communications company
operating in over 20 countries across Latin America and the
Caribbean under the consumer brands BTC, Flow, Liberty and Más
Móvil. The communications and entertainment services that we offer
to our residential and business customers in the region include
digital video, broadband internet, telephony and mobile services.
Our business products and services include enterprise-grade
connectivity, data center, hosting and managed solutions, as well
as information technology solutions with customers ranging from
small and medium enterprises to international companies and
governmental agencies. In addition, Liberty Latin America operates
a subsea and terrestrial fiber optic cable network that connects
approximately 40 markets in the region.
Liberty Latin America has three separate classes of common
shares, which are traded on the NASDAQ Global Select Market under
the symbols “LILA” (Class A) and “LILAK” (Class C), and on the OTC
link under the symbol “LILAB” (Class B).
For more information, please visit www.lla.com.
Footnotes
- Rebased growth rates are a non-GAAP measure. The indicated
growth rates are rebased for the estimated impacts of FX and
acquisition. See Non-GAAP Reconciliations below.
- Consolidated Adjusted OIBDA is a non-GAAP measure. For the
definition of Adjusted OIBDA and required reconciliations, see
Non-GAAP Reconciliations below.
- Adjusted Free Cash Flow (“Adjusted FCF”) is a non-GAAP measure.
For the definition of Adjusted FCF and required reconciliations,
see Non-GAAP Reconciliations below.
- See Glossary for the definition of RGUs and mobile subscribers.
Organic figures exclude RGUs and mobile subscribers of acquired
entities at the date of acquisition and other non-organic
adjustments, but include the impact of changes in RGUs and mobile
subscribers from the date of acquisition. All subscriber / RGU
additions or losses refer to net organic changes, unless otherwise
noted.
Additional Information | Cable & Wireless Borrowing
Group
The following tables reflect preliminary unaudited selected
financial results, on a consolidated C&W basis, for the periods
indicated, in accordance with U.S. GAAP.
Three months ended
September 30,
Change
Rebased change1
2024
2023
in millions, except %
amounts
Revenue
$
636.5
$
640.9
(1
%)
—
%
Operating income
$
94.4
$
90.2
5
%
Adjusted OIBDA
$
286.5
$
273.4
5
%
5
%
Property & equipment additions
$
87.9
$
106.0
(17
%)
Operating income as a percentage of
revenue
14.8
%
14.1
%
Adjusted OIBDA as a percentage of
revenue
45.0
%
42.7
%
Proportionate Adjusted OIBDA
$
237.9
$
230.7
Nine months ended
September 30,
Change
Rebased change1
2024
2023
in millions, except %
amounts
Revenue
$
1,919.1
$
1,882.6
2
%
2
%
Operating income
$
272.8
$
205.0
33
%
Adjusted OIBDA
$
837.6
$
798.1
5
%
7
%
Property & equipment additions
$
261.7
$
293.6
(11
%)
Operating income as a percentage of
revenue
14.2
%
10.9
%
Adjusted OIBDA as a percentage of
revenue
43.6
%
42.4
%
Proportionate Adjusted OIBDA
$
697.2
$
677.5
1. Indicated growth rates are rebased for the estimated impacts
of FX.
The following table details the U.S. dollar equivalent of the
nominal amount outstanding of C&W's third-party debt and cash
and cash equivalents:
September 30,
June 30,
Facility Amount
2024
2024
in millions
Credit Facilities:
Revolving Credit Facility due 2027
(Adjusted Term SOFR + 3.25%)
$
580.0
$
110.0
$
—
Term Loan Facility B-5 due 2028 (Adjusted
Term SOFR + 2.25%)
$
1,510.0
1,510.0
1,510.0
Term Loan Facility B-6 due 2029 (Adjusted
Term SOFR + 3.00%)
$
590.0
590.0
590.0
Total Senior Secured Credit Facilities
2,210.0
2,100.0
4.25% CWP Term Loan due 2028
$
435.0
435.0
435.0
Regional and other debt
124.6
125.2
Total Credit Facilities
2,769.6
2,660.2
Notes:
5.75% USD Senior Secured Notes due
2027
$
495.0
495.0
495.0
6.875% USD Senior Notes due 2027
$
1,220.0
1,220.0
1,220.0
Total Notes
1,715.0
1,715.0
Vendor financing and Tower
Transactions
485.5
458.7
Total third-party debt
4,970.1
4,833.9
Less: premiums, discounts and deferred
financing costs, net
(24.3
)
(22.8
)
Total carrying amount of third-party
debt
4,945.8
4,811.1
Less: cash and cash equivalents
(479.0
)
(465.7
)
Net carrying amount of third-party
debt
$
4,466.8
$
4,345.4
- At September 30, 2024, our third-party total and proportionate
net debt was $4.5 billion and $4.2 billion, respectively, our
Fully-swapped Borrowing Cost was 5.5%, and the average tenor of our
debt obligations (excluding vendor financing and debt related to
the Tower Transactions) was approximately 3.3 years.
- Our portion of Adjusted OIBDA, after deducting the
noncontrolling interests' share, (“Proportionate Adjusted OIBDA”)
was $238 million for Q3 2024.
- C&W's Covenant Proportionate Net Leverage Ratio was 4.0x,
which is calculated by annualizing the last two quarters of
Covenant EBITDA in accordance with C&W's Credit Agreement.
- At September 30, 2024, we had maximum undrawn commitments of
$534 million, including $80 million under our regional facilities.
At September 30, 2024, the full amount of unused borrowing capacity
under our credit facilities (including regional facilities) was
available to be borrowed, both before and after completion of the
September 30, 2024 compliance reporting requirements.
- In September 2024, an extension agreement was executed on the
C&W Revolving Credit Facility which extends the maturity date
to: (i) July 31, 2027 upon the refinancing of the 2027 C&W
Senior Secured Notes and 2027 C&W Senior Notes in full, (ii)
then April 15, 2029, upon the refinancing of the C&W Term Loan
B-5 Facility and (iii) then September 24, 2029, upon the
refinancing of the C&W Term Loan B-6 Facility.
- In October 2024, C&W issued $1 billion principal amount of
7.125% senior secured notes due October 15, 2032. The 2032 C&W
Senior Secured Notes were issued at par. The proceeds from the 2032
C&W Senior Secured Notes were primarily used to (i) fully repay
$495 million of the 2027 C&W Senior Secured Notes and (ii)
repay $485 million of the 2027 C&W Senior Notes.
Liberty Puerto Rico (LPR) Borrowing Group
The following tables reflect preliminary unaudited selected
financial results, on a consolidated Liberty Puerto Rico basis, for
the periods indicated, in accordance with U.S. GAAP:
Three months ended
September 30,
Change
Rebased change1
2024
2023
in millions, except %
amounts
Revenue
$
308.2
$
351.2
(12
)%
(13
)%
Operating income (loss)
$
(486.6
)
$
48.4
(1105
)%
Adjusted OIBDA
$
88.2
$
116.4
(24
)%
(24
)%
Property & equipment additions
$
45.9
$
56.7
(19
)%
Operating income (loss) as a percentage of
revenue
(157.9
)%
13.8
%
Adjusted OIBDA as a percentage of
revenue
28.6
%
33.1
%
Nine months ended
September 30,
Change
Rebased change1
2024
2023
in millions, except %
amounts
Revenue
$
944.0
$
1,064.2
(11
)%
(12
)%
Operating income (loss)
$
(515.1
)
$
165.5
(411
)%
Adjusted OIBDA
$
228.4
$
381.6
(40
)%
(40
)%
Property & equipment additions
$
135.8
$
158.4
(14
)%
Operating income (loss) as a percentage of
revenue
(54.6
)%
15.6
%
Adjusted OIBDA as a percentage of
revenue
24.2
%
35.9
%
1. Indicated growth rates are rebased for the estimated impacts
of an acquisition.
The following table details the nominal amount outstanding of
Liberty Puerto Rico's third-party debt, finance lease obligations
and cash and cash equivalents:
September 30,
June 30,
Facility amount
2024
2024
in millions
Credit Facilities:
Revolving Credit Facility due 2027
(Adjusted Term SOFR + 3.50%)
$
172.5
$
50.0
$
25.0
Term Loan Facility due 2028 (Adjusted Term
SOFR + 3.75%)
$
620.0
620.0
620.0
Total Senior Secured Credit Facilities
670.0
645.0
Notes:
6.75% Senior Secured Notes due 2027
$
1,161.0
1,161.0
1,161.0
5.125% Senior Secured Notes due 2029
$
820.0
820.0
820.0
Total Notes
1,981.0
1,981.0
Vendor financing, Tower Transactions and
other
127.0
81.6
Finance lease obligations
4.7
5.2
Total debt and finance lease
obligations
2,782.7
2,712.8
Less: premiums and deferred financing
costs, net
(18.4
)
(19.2
)
Total carrying amount of debt
2,764.3
2,693.6
Less: cash, cash equivalents and
restricted cash related to debt1
(39.7
)
(31.8
)
Net carrying amount of debt
$
2,724.6
$
2,661.8
- Cash amounts include restricted cash that serves as collateral
against certain letters of credit associated with funding received
from the FCC to continue to expand and improve our fixed network in
Puerto Rico.
- At September 30, 2024, our Fully-swapped Borrowing Cost was
6.2% and the average tenor of our debt (excluding vendor financing,
debt related to the Tower Transactions and other debt) was
approximately 3.8 years.
- LPR's Covenant Consolidated Net Leverage Ratio was 7.4x, which
is calculated by annualizing the last two quarters of Covenant
EBITDA in accordance with LPR’s Group Credit Agreement.
- At September 30, 2024, we had maximum undrawn commitments of
$123 million. At September 30, 2024, the full amount of unused
borrowing capacity under our revolving credit facility was
available to be borrowed, both before and after completion of the
September 30, 2024 compliance reporting requirements.
- Subsequent to September 30, 2024, we borrowed $20 million on
the LPR Revolving Credit Facility.
Liberty Costa Rica Borrowing Group
The following tables reflect preliminary unaudited selected
financial results, on a consolidated Liberty Costa Rica basis, for
the periods indicated, in accordance with U.S. GAAP:
Three months ended
September 30,
Change
2024
2023
CRC in billions, except %
amounts
Revenue
76.1
72.7
5
%
Operating income
12.9
16.0
(19
%)
Adjusted OIBDA
26.6
26.9
(1
%)
Property & equipment additions
12.3
8.6
43
%
Operating income as a percentage of
revenue
17.0
%
22.0
%
Adjusted OIBDA as a percentage of
revenue
35.0
%
37.0
%
Nine months ended
September 30,
Change
2024
2023
CRC in billions, except %
amounts
Revenue
230.0
218.4
5
%
Operating income
44.5
37.4
19
%
Adjusted OIBDA
84.0
79.4
6
%
Property & equipment additions
28.7
25.2
14
%
Operating income as a percentage of
revenue
19.3
%
17.1
%
Adjusted OIBDA as a percentage of
revenue
36.5
%
36.4
%
The following table details the borrowing currency and Costa
Rican colón equivalent of the nominal amount outstanding of Liberty
Costa Rica's third-party debt and cash and cash equivalents:
September 30,
June 30,
2024
2024
Borrowing currency in
millions
CRC equivalent in
billions
10.875% Term Loan A Facility due 20311
$
50.0
26.0
26.3
10.875% Term Loan B Facility due 20311
$
400.0
207.9
210.6
Revolving Credit Facility due 2028 (Term
SOFR2 + 4.25%)
$
6.0
3.1
Total debt
237.0
236.9
Less: deferred financing costs
(6.7
)
(7.0
)
Total carrying amount of debt
230.3
229.9
Less: cash and cash equivalents
(4.5
)
(5.2
)
Net carrying amount of debt
225.8
224.7
Exchange rate (CRC to $)
519.8
526.5
1. From July 15, 2028 and thereafter, the interest rate is
subject to increase by 0.125% per annum for each of the two
Sustainability Performance Targets (as defined in the credit
agreement) not achieved by Liberty Costa Rica by no later than
December 31, 2027.
2. Forward-looking term rate based on SOFR as published by CME
Group Benchmark Administration Limited.
- At September 30, 2024, our Fully-swapped Borrowing Cost was
10.9% and the average tenor of our debt was approximately 6.2
years.
- LCR's Covenant Consolidated Net Leverage Ratio was 2.2x, which
is calculated by annualizing the last two quarters of Covenant
EBITDA in accordance with LCR’s Credit Agreement.
- At September 30, 2024, we had maximum undrawn commitments of
$54 million (CRC 28 billion). At September 30, 2024, the full
amount of unused borrowing capacity under our revolving credit
facility was available to be borrowed, both before and after
completion of the September 30, 2024 compliance reporting
requirements.
- Subsequent to September 30, 2024, we repaid $6 million (CRC 3
billion) on the LCR Revolving Credit Facility.
Subscriber Table
Consolidated Operating Data —
September 30, 2024
Homes
Passed
Fixed-line Customer
Relationships
Video RGUs
Internet
RGUs
Telephony
RGUs
Total
RGUs
Prepaid
Postpaid
Total Mobile
Subscribers
C&W Caribbean:
Jamaica
744,700
345,800
125,500
332,700
328,100
786,300
1,092,100
123,100
1,215,200
The Bahamas
125,700
32,600
7,800
26,600
31,600
66,000
128,500
25,500
154,000
Trinidad and Tobago
341,700
141,600
96,400
125,500
88,500
310,400
—
—
—
Barbados
140,400
85,100
38,500
78,900
67,600
185,000
79,700
53,100
132,800
Other
384,400
212,400
68,900
190,300
106,900
366,100
312,200
138,700
450,900
Total C&W Caribbean
1,736,900
817,500
337,100
754,000
622,700
1,713,800
1,612,500
340,400
1,952,900
C&W Panama
975,200
268,000
168,900
251,900
239,200
660,000
1,503,800
414,000
1,917,800
Total C&W
2,712,100
1,085,500
506,000
1,005,900
861,900
2,373,800
3,116,300
754,400
3,870,700
Liberty Puerto Rico 1
1,184,500
576,200
230,800
545,500
280,000
1,056,300
178,800
691,200
870,000
Liberty Costa Rica 2
816,400
285,700
192,100
273,100
90,800
556,000
2,246,000
1,002,600
3,248,600
Total
4,713,000
1,947,400
928,900
1,824,500
1,232,700
3,986,100
5,541,100
2,448,200
7,989,300
- Postpaid mobile subscribers include 136,400 CRUs.
- Our homes passed in Liberty Costa Rica include 54,000 homes on
a third-party network that provides us long-term access.
Glossary
Adjusted OIBDA Margin – Calculated by dividing Adjusted
OIBDA by total revenue for the applicable period.
ARPU – Average revenue per unit refers to the average
monthly subscription revenue (subscription revenue excludes
interconnect, mobile handset sales and late fees) per average
customer relationship or mobile subscriber, as applicable. ARPU per
average customer relationship is calculated by dividing the average
monthly subscription revenue from residential fixed and SOHO fixed
services by the average of the opening and closing balances for
customer relationships for the indicated period. ARPU per average
mobile subscriber is calculated by dividing the average monthly
mobile service revenue by the average of the opening and closing
balances for mobile subscribers for the indicated period. Unless
otherwise indicated, ARPU per customer relationship or mobile
subscriber is not adjusted for currency impacts. ARPU per average
RGU is calculated by dividing the average monthly subscription
revenue from the applicable residential fixed service by the
average of the opening and closing balances of the applicable RGUs
for the indicated period. Unless otherwise noted, ARPU in this
release is considered to be ARPU per average customer relationship
or mobile subscriber, as applicable. Customer relationships, mobile
subscribers and RGUs of entities acquired during the period are
normalized.
Consolidated Debt and Finance Lease Obligations to Operating
Income Ratio – Defined as total principal amount of debt
outstanding (including liabilities related to vendor financing,
debt related to the Tower Transactions, other debt and finance
lease obligations) to annualized operating income from the most
recent two consecutive fiscal quarters.
Consolidated Net Debt and Finance Lease Obligations to
Operating Income Ratio – Defined as total principal amount of
debt outstanding (including liabilities related to vendor
financing, debt related to the Tower Transactions, other debt and
finance lease obligations) less cash, cash equivalents and
restricted cash related to debt to annualized operating income from
the most recent two consecutive fiscal quarters.
CRU – Corporate responsible user.
Customer Relationships – The number of customers who
receive at least one of our video, internet or telephony services
that we count as RGUs, without regard to which or to how many
services they subscribe. To the extent that RGU counts include
equivalent billing unit (“EBU”) adjustments, we reflect
corresponding adjustments to our customer relationship counts. For
further information regarding our EBU calculation, see Additional
General Notes below. Customer relationships generally are counted
on a unique premises basis. Accordingly, if an individual receives
our services in two premises (e.g., a primary home and a vacation
home), that individual generally will count as two customer
relationships. We exclude mobile-only customers from customer
relationships.
Fully-swapped Borrowing Cost – Represents the weighted
average interest rate on our debt (excluding finance leases and
including vendor financing obligations, debt related to the Tower
Transactions and other debt), including the effects of derivative
instruments, original issue premiums or discounts and commitment
fees, but excluding the impact of financing costs.
Homes Passed – Homes, residential multiple dwelling units
or commercial units that can be connected to our networks without
materially extending the distribution plant. Certain of our homes
passed counts are based on census data that can change based on
either revisions to the data or from new census results.
Internet (Broadband) RGU – A home, residential multiple
dwelling unit or commercial unit that receives internet services
over our network.
Leverage – Our gross and net leverage ratios, each a
non-GAAP measure, are defined as total debt (total principal amount
of debt outstanding, including liabilities related to vendor
financing, debt related to the Tower Transactions, other debt and
finance lease obligations, net of projected derivative
principal-related cash payments (receipts)) and net debt to
annualized Adjusted OIBDA of the latest two quarters. Net debt is
defined as total debt less cash, cash equivalents and restricted
cash related to debt. For purposes of these calculations, debt is
measured using swapped foreign currency rates, consistent with the
covenant calculation requirements of our subsidiary debt
agreements.
Mobile Subscribers – Our mobile subscriber count
represents the number of active subscriber identification module
(“SIM”) cards in service rather than services provided. For
example, if a mobile subscriber has both a data and voice plan on a
smartphone this would equate to one mobile subscriber.
Alternatively, a subscriber who has a voice and data plan for a
mobile handset and a data plan for a laptop (via a dongle) would be
counted as two mobile subscribers. Customers who do not pay a
recurring monthly fee are excluded from our mobile telephony
subscriber counts after periods of inactivity ranging from 30 to 90
days, based on industry standards within the respective country. In
a number of countries, our mobile subscribers receive mobile
services pursuant to prepaid contracts. Our Liberty Puerto Rico
segment prepaid subscriber count includes mobile reseller
subscribers, which represent organizations that purchase minutes
and data at wholesale prices and subsequently resell it under the
purchaser's brand name. These reseller subscribers result in a
significantly lower ARPU than the remaining subscribers included in
our prepaid balance. Additionally, our Liberty Puerto Rico segment
postpaid subscriber count includes CRUs, which represent an
individual receiving mobile services through an organization that
has entered into a contract for mobile services with us and where
the organization is responsible for the payment of the CRU’s mobile
services.
NPS – Net promoter score.
Property and Equipment Addition Categories
- Customer Premises Equipment: Includes capitalizable equipment
and labor, materials and other costs directly associated with the
installation of such CPE;
- New Build & Upgrade: Includes capitalizable costs of
network equipment, materials, labor and other costs directly
associated with entering a new service area and upgrading our
existing network;
- Capacity: Includes capitalizable costs for network capacity
required for growth and services expansions from both existing and
new customers. This category covers Core and Access parts of the
network and includes, for example, fiber node splits,
upstream/downstream spectrum upgrades and optical equipment
additions in our international backbone connections;
- Baseline: Includes capitalizable costs of equipment, materials,
labor and other costs directly associated with maintaining and
supporting the business. Relates to areas such as network
improvement, property and facilities, technical sites, information
technology systems and fleet; and
- Product & Enablers: Discretionary capitalizable costs that
include investments (i) required to support, maintain, launch or
innovate in new customer products, and (ii) in infrastructure,
which drive operational efficiency over the long term.
Proportionate Net Leverage Ratio (C&W) – Calculated
in accordance with C&W's Credit Agreement, taking into account
the ratio of outstanding indebtedness (subject to certain
exclusions) less cash and cash equivalents to EBITDA (subject to
certain adjustments) for the last two quarters annualized, with
both indebtedness and EBITDA reduced proportionately to remove any
noncontrolling interests' share of the C&W group.
Revenue Generating Unit (RGU) – RGU is separately a video
RGU, internet RGU or telephony RGU. A home, residential multiple
dwelling unit, or commercial unit may contain one or more RGUs. For
example, if a residential customer in Puerto Rico subscribed to our
video service, fixed-line telephony service and broadband internet
service, the customer would constitute three RGUs. RGUs are
generally counted on a unique premises basis such that a given
premises does not count as more than one RGU for any given service.
On the other hand, if an individual receives one of our services in
two premises (e.g., a primary home and a vacation home), that
individual will count as two RGUs for that service. Each bundled
video, internet or telephony service is counted as a separate RGU
regardless of the nature of any bundling discount or promotion.
Non-paying subscribers are counted as RGUs during their free
promotional service period. Some of these subscribers may choose to
disconnect after their free service period. Services offered
without charge on a long-term basis (e.g., VIP subscribers or free
service to employees) generally are not counted as RGUs. We do not
include subscriptions to mobile services in our externally reported
RGU counts. In this regard, our RGU counts exclude our separately
reported postpaid and prepaid mobile subscribers.
SOHO – Small office/home office customers.
Telephony RGU – A home, residential multiple dwelling
unit or commercial unit that receives voice services over our
network. Telephony RGUs exclude mobile subscribers.
Tower Transactions – Transactions entered into during
2023 associated with certain of our mobile towers across various
markets that (i) have terms of 15 or 20 years and did not meet the
criteria to be accounted for as a sale and leaseback and (ii) also
include "build to suit" sites that we are obligated to construct
over the next 5 years.
U.S. GAAP – Generally accepted accounting principles in
the United States.
Video RGU – A home, residential multiple dwelling unit or
commercial unit that receives our video service over our network,
primarily via a digital video signal while subscribing to any
recurring monthly service that requires the use of
encryption-enabling technology. Video RGUs that are not counted on
an EBU basis are generally counted on a unique premises basis. For
example, a subscriber with one or more set-top boxes that receives
our video service in one premises is generally counted as just one
RGU.
Additional General Notes
Most of our operations provide telephony, broadband internet,
mobile data, video or other B2B services. Certain of our B2B
service revenue is derived from SOHO customers that pay a premium
price to receive enhanced service levels along with video, internet
or telephony services that are the same or similar to the mass
marketed products offered to our residential subscribers. All mass
marketed products provided to SOHO customers, whether or not
accompanied by enhanced service levels and/or premium prices, are
included in the respective RGU and customer counts of our
operations, with only those services provided at premium prices
considered to be “SOHO RGUs” or “SOHO customers.” To the extent our
existing customers upgrade from a residential product offering to a
SOHO product offering, the number of SOHO RGUs and SOHO customers
will increase, but there is no impact to our total RGU or customer
counts. With the exception of our B2B SOHO customers, we generally
do not count customers of B2B services as customers or RGUs for
external reporting purposes.
Certain of our residential and commercial RGUs are counted on an
EBU basis, including residential multiple dwelling units and
commercial establishments, such as bars, hotels, and hospitals, in
Puerto Rico. Our EBUs are generally calculated by dividing the bulk
price charged to accounts in an area by the most prevalent price
charged to non-bulk residential customers in that market for the
comparable tier of service. As such, we may experience variances in
our EBU counts solely as a result of changes in rates.
While we take appropriate steps to ensure that subscriber and
homes passed statistics are presented on a consistent and accurate
basis at any given balance sheet date, the variability from country
to country in (i) the nature and pricing of products and services,
(ii) the distribution platform, (iii) billing systems, (iv) bad
debt collection experience and (v) other factors add complexity to
the subscriber and homes passed counting process. We periodically
review our subscriber and homes passed counting policies and
underlying systems to improve the accuracy and consistency of the
data reported on a prospective basis. Accordingly, we may from time
to time make appropriate adjustments to our subscriber and homes
passed statistics based on those reviews.
Non-GAAP Reconciliations
We include certain financial measures in this press release that
are considered non-GAAP measures, including (i) Adjusted OIBDA and
Adjusted OIBDA Margin, each on a consolidated basis, (ii) Adjusted
Free Cash Flow, (iii) rebased revenue and rebased Adjusted OIBDA
growth rates, and (iv) consolidated leverage ratios. The following
sections set forth reconciliations of the nearest GAAP measure to
our non-GAAP measures, as well as information on how and why
management of the Company believes such information is useful to an
investor.
Adjusted OIBDA
On a consolidated basis, Adjusted OIBDA, a non-GAAP measure, is
the primary measure used by our chief operating decision maker to
evaluate segment operating performance. Adjusted OIBDA is also a
key factor that is used by our internal decision makers to
determine how to allocate resources to segments. As we use the
term, Adjusted OIBDA is defined as operating income or loss before
share-based compensation and other Employee Incentive Plan-related
expense, depreciation and amortization, provisions and provision
releases related to significant litigation and impairment,
restructuring and other operating items. Other operating items
include (i) gains and losses on the disposition of long-lived
assets, (ii) third-party costs directly associated with successful
and unsuccessful acquisitions and dispositions, including legal,
advisory and due diligence fees, as applicable, and (iii) other
acquisition-related items, such as gains and losses on the
settlement of contingent consideration. Our internal decision
makers believe Adjusted OIBDA is a meaningful measure because it
represents a transparent view of our recurring operating
performance that is unaffected by our capital structure and allows
management to (i) readily view operating trends, (ii) perform
analytical comparisons and benchmarking between segments and (iii)
identify strategies to improve operating performance in the
different countries in which we operate. We believe our Adjusted
OIBDA measure is useful to investors because it is one of the bases
for comparing our performance with the performance of other
companies in the same or similar industries, although our measure
may not be directly comparable to similar measures used by other
public companies. Adjusted OIBDA should be viewed as a measure of
operating performance that is a supplement to, and not a substitute
for, operating income or loss, net earnings or loss and other U.S.
GAAP measures of income. A reconciliation of our operating income
or loss to total Adjusted OIBDA is presented in the following
table:
Three months ended
Nine months ended
September 30,
September 30,
2024
2023
2024
2023
in millions
Operating income (loss)
$
(379.6
)
$
162.7
$
(176.0
)
$
404.7
Share-based compensation and other
Employee Incentive Plan-related expense1
15.9
24.1
58.9
77.8
Depreciation and amortization
245.4
230.5
729.9
705.6
Impairment, restructuring and other
operating items, net
521.4
11.1
553.6
81.6
Adjusted OIBDA
$
403.1
$
428.4
$
1,166.4
$
1,269.7
Operating income (loss) margin2
(34.9
)%
14.5
%
(5.3
)%
12.1
%
Adjusted OIBDA margin3
37.0
%
38.1
%
35.3
%
37.9
%
- Includes expense associated with our LTVP, the vesting of which
can be settled in either common shares or cash at the discretion of
Liberty Latin America’s Compensation Committee.
- Calculated by dividing operating income or (loss) by total
revenue for the applicable period.
- Calculated by dividing Adjusted OIBDA by total revenue for the
applicable period.
Adjusted Free Cash Flow Definition and Reconciliation
We define Adjusted Free Cash Flow (Adjusted FCF), a non-GAAP
measure, as net cash provided by our operating activities, plus (i)
cash payments for third-party costs directly associated with
successful and unsuccessful acquisitions and dispositions, (ii)
expenses financed by an intermediary, (iii) proceeds received in
connection with handset receivables securitization, (iv) insurance
recoveries related to damaged and destroyed property and equipment
and (v) certain net interest payments or receipts incurred or
received, including associated derivative instrument payments and
receipts, in advance of a significant acquisition, less (a) capital
expenditures, net, (b) principal payments on amounts financed by
vendors and intermediaries, (c) principal payments on finance
leases, (d) repayments made associated with a handset receivables
securitization, and (e) distributions to noncontrolling interest
owners. We believe that our presentation of Adjusted FCF provides
useful information to our investors because this measure can be
used to gauge our ability to service debt and fund new investment
opportunities. Adjusted FCF should not be understood to represent
our ability to fund discretionary amounts, as we have various
mandatory and contractual obligations, including debt repayments,
which are not deducted to arrive at this amount. Investors should
view Adjusted FCF as a supplement to, and not a substitute for,
U.S. GAAP measures of liquidity included in our consolidated
statements of cash flows.
The following table provides the reconciliation of our net cash
provided by operating activities to Adjusted FCF for the indicated
period:
Three months ended
Nine months ended
September 30,
September 30,
2024
2023
2024
2023
in millions
Net cash provided by operating
activities
$
177.5
$
218.5
$
357.7
$
506.5
Cash payments for direct acquisition and
disposition costs
1.7
1.5
5.0
5.0
Expenses financed by an intermediary1
63.8
38.4
144.6
132.3
Capital expenditures, net
(126.5
)
(149.8
)
(376.7
)
(422.9
)
Principal payments on amounts financed by
vendors and intermediaries
(84.0
)
(75.5
)
(236.0
)
(164.9
)
Principal payments on finance leases
(0.2
)
(0.2
)
(0.7
)
(0.7
)
Proceeds from handset receivables
securitization, net
45.0
—
26.6
—
Adjusted FCF before distributions to
noncontrolling interest owners
77.3
32.9
(79.5
)
55.3
Distributions to noncontrolling interest
owners
(11.8
)
—
(22.5
)
(41.2
)
Adjusted FCF
$
65.5
$
32.9
$
(102.0
)
$
14.1
- For purposes of our condensed consolidated statements of cash
flows, expenses financed by an intermediary, including value-added
taxes, are treated as operating cash outflows and financing cash
inflows when the expenses are incurred. When we pay the financing
intermediary, we record financing cash outflows in our condensed
consolidated statements of cash flows. For purposes of our Adjusted
FCF definition, we add back the operating cash outflows when these
financed expenses are incurred and deduct the financing cash
outflows when we pay the financing intermediary.
Rebase Information
Rebase growth rates are a non-GAAP measure. For purposes of
calculating rebased growth rates on a comparable basis for all
businesses that we owned during the current year, we have adjusted
our historical revenue and Adjusted OIBDA to include an estimate of
the pre-acquisition amounts of acquired businesses, to the same
extent they are included in the current year. The business that we
acquired impacting the comparative periods relates to the LPR
Acquisition (acquisition of spectrum and prepaid subscribers in
Puerto Rico and USVI from EchoStar), which was completed on
September 3, 2024.
In addition, we reflect the translation of our rebased amounts
for the prior-year periods at the applicable average foreign
currency exchange rates that were used to translate our results for
the corresponding current-year periods.
We have reflected the revenue and Adjusted OIBDA of the acquired
entities in our prior-year rebased amounts based on what we believe
to be the most reliable information that is currently available to
us (in the case of the LPR Acquisition, an estimated carve-out of
revenue and Adjusted OIBDA associated with the acquired business),
as adjusted for the estimated effects of (a) any significant
differences between U.S. GAAP and local generally accepted
accounting principles, (b) any significant effects of acquisition
accounting adjustments, (c) any significant differences between our
accounting policies and those of the acquired entities and (d)
other items we deem appropriate. We do not adjust pre-acquisition
periods to eliminate nonrecurring items or to give retroactive
effect to any changes in estimates that might be implemented during
post-acquisition periods. As we did not own or operate the acquired
entities during the pre-acquisition periods, no assurance can be
given that we have identified all adjustments necessary to present
their revenue and Adjusted OIBDA on a basis that is comparable to
the corresponding post-acquisition amounts that are included in our
historical results or that the pre-acquisition financial statements
we have relied upon do not contain undetected errors. In addition,
the rebased growth percentages are not necessarily indicative of
the revenue and Adjusted OIBDA that would have occurred if this
transaction had occurred on the date assumed for purposes of
calculating our rebased amounts or the revenue and Adjusted OIBDA
that will occur in the future. The rebased growth percentages have
been presented as a basis for assessing growth rates on a
comparable basis and should be viewed as measures of operating
performance that are a supplement to, and not a substitute for,
U.S. GAAP reported growth rates.
The following tables provide the aforementioned adjustments made
to the revenue and Adjusted OIBDA amounts for the periods
indicated, to derive our rebased growth rates. Due to rounding,
certain rebased growth rate percentages may not recalculate.
In the tables set forth below:
- reported percentage changes are calculated as current period
measure, as applicable, less prior-period measure divided by
prior-period measure; and
- rebased percentage changes are calculated as current period
measure, as applicable, less rebased prior-period measure divided
by rebased prior-period measure.
The following tables set forth the reconciliation from reported
revenue to rebased revenue and related change calculations.
Three months ended September
30, 2023
C&W Caribbean
C&W Panama
Liberty Networks
Liberty Puerto Rico
Liberty Costa Rica
Corporate
Intersegment
eliminations
Total
In millions
Revenue – Reported
$
360.5
$
190.4
$
112.5
$
351.2
$
134.6
$
6.5
$
(29.9
)
$
1,125.8
Rebase adjustment:
Acquisition
—
—
—
2.9
—
—
—
2.9
Foreign currency
(1.9
)
—
(0.3
)
—
4.3
—
0.2
2.3
Revenue – Rebased
$
358.6
$
190.4
$
112.2
$
354.1
$
138.9
$
6.5
$
(29.7
)
$
1,131.0
Reported percentage change
—
%
(1
)%
(2
)%
(12
)%
8
%
(31
)%
N.M.
(3
)%
Rebased percentage change
—
%
(1
)%
(2
)%
(13
)%
5
%
(31
)%
N.M.
(4
)%
N.M. – Not Meaningful.
Nine months ended September
30, 2023
C&W Caribbean
C&W Panama
Liberty Networks
Liberty Puerto Rico
Liberty Costa Rica
Corporate
Intersegment
eliminations
Total
In millions
Revenue – Reported
$
1,070.6
$
536.5
$
339.8
$
1,064.2
$
399.0
$
18.5
$
(81.1
)
$
3,347.5
Rebase adjustment:
Acquisition
—
—
—
2.9
—
—
—
2.9
Foreign currency
(4.3
)
—
5.3
—
23.2
—
0.2
24.4
Revenue – Rebased
$
1,066.3
$
536.5
$
345.1
$
1,067.1
$
422.2
$
18.5
$
(80.9
)
$
3,374.8
Reported percentage change
2
%
3
%
(1
)%
(11
)%
12
%
(16
)%
N.M.
(1
)%
Rebased percentage change
2
%
3
%
(2
)%
(12
)%
5
%
(16
)%
N.M.
(2
)%
N.M. – Not Meaningful.
The following tables set forth the reconciliation from reported
Adjusted OIBDA to rebased Adjusted OIBDA and related change
calculations.
Three months ended September
30, 2023
C&W Caribbean
C&W Panama
Liberty Networks
Liberty Puerto Rico
Liberty Costa Rica
Corporate
Total
In millions
Adjusted OIBDA – Reported
$
150.4
$
58.5
$
64.2
$
116.4
$
49.9
$
(11.0
)
$
428.4
Rebase adjustment:
Acquisition
—
—
—
0.3
—
—
0.3
Foreign currency
(0.9
)
—
0.1
—
1.6
—
0.8
Adjusted OIBDA – Rebased
$
149.5
$
58.5
$
64.3
$
116.7
$
51.5
$
(11.0
)
$
429.5
Reported percentage change
5
%
17
%
(8
)%
(24
)%
2
%
(96
)%
(6
)%
Rebased percentage change
5
%
17
%
(8
)%
(24
)%
(1
)%
(96
)%
(6
)%
Nine months ended September
30, 2023
C&W Caribbean
C&W Panama
Liberty Networks
Liberty Puerto Rico
Liberty Costa Rica
Corporate
Total
In millions
Adjusted OIBDA – Reported
$
436.9
$
161.0
$
200.0
$
381.6
$
145.2
$
(55.0
)
$
1,269.7
Rebase adjustment:
Acquisition
—
—
—
0.3
—
—
0.3
Foreign currency
(1.9
)
—
0.9
—
8.3
—
7.3
Adjusted OIBDA – Rebased
$
435.0
$
161.0
$
200.9
$
381.9
$
153.5
$
(55.0
)
$
1,277.3
Reported percentage change
7
%
18
%
(9
)%
(40
)%
12
%
(12
)%
(8
)%
Rebased percentage change
7
%
18
%
(10
)%
(40
)%
6
%
(12
)%
(9
)%
N.M. – Not Meaningful.
The following table sets forth the reconciliation from reported
revenue by product for our C&W Caribbean segment to rebased
revenue by product and related change calculations.
Three months ended September
30, 2023
Residential fixed
revenue
Residential mobile
revenue
Total residential
revenue
B2B revenue
Total revenue
In millions
Revenue by product – Reported
$
129.1
$
102.3
$
231.4
$
129.1
$
360.5
Rebase adjustment:
Foreign currency
(0.7
)
(0.6
)
(1.3
)
(0.6
)
(1.9
)
Revenue by product – Rebased
$
128.4
$
101.7
$
230.1
$
128.5
$
358.6
Reported percentage change
(3
)%
7
%
1
%
(3
)%
—
%
Rebased percentage change
(3
)%
7
%
2
%
(2
)%
—
%
The following table sets forth the reconciliation from reported
revenue by product for our Liberty Puerto Rico segment to rebased
revenue by product and related change calculations.
Three months ended September
30, 2023
Residential fixed
revenue
Residential mobile
revenue
Total residential
revenue
B2B revenue
Other revenue
Total revenue
In millions
Revenue by product – Reported
$
128.2
$
158.1
$
286.3
$
56.8
$
8.1
$
351.2
Rebase adjustment:
Acquisition
—
2.9
2.9
—
—
2.9
Revenue by product – Rebased
$
128.2
$
161.0
$
289.2
$
56.8
$
8.1
$
354.1
Reported percentage change
(4
)%
(21
)%
(13
)%
(5
)%
(23
)%
(12
)%
Rebased percentage change
(4
)%
(22
)%
(14
)%
(5
)%
(24
)%
(13
)%
Non-GAAP Reconciliation for Consolidated Leverage
Ratios
We have set forth below our consolidated leverage and net
leverage ratios. Our consolidated leverage and net leverage ratios
(Consolidated Leverage Ratios), each a non-GAAP measure, are
defined as (i) the principal amount of debt and finance lease
obligations less cash and cash equivalents and restricted cash
related to debt divided by (ii) last two quarters of annualized
Adjusted OIBDA. We generally use Adjusted OIBDA for the last two
quarters annualized when calculating our Consolidated Leverage
Ratios to maintain as much consistency as possible with the
calculations established by our debt covenants included in the
credit facilities or bond indentures for our respective borrowing
groups, which are predominantly determined on a last two quarters
annualized basis. For purposes of these calculations, adjusted
total debt and finance lease obligations is measured using swapped
foreign currency rates. We believe our consolidated leverage and
net leverage ratios are useful because they allow our investors to
consider the aggregate leverage on the business inclusive of any
leverage at the Liberty Latin America level, not just at each of
our operations. Investors should view consolidated leverage and net
leverage as supplements to, and not substitutes for, the ratios
calculated based upon measures presented in accordance with U.S.
GAAP. Reconciliations of the numerator and denominator used to
calculate the consolidated leverage and net leverage ratios as of
September 30, 2024 and June 30, 2024 are set forth below:
September 30,
2024
June 30, 2024
in millions, except leverage
ratios
Total debt and finance lease
obligations
$
8,155.9
$
8,080.7
Discounts, premiums and deferred financing
costs, net
55.6
55.6
Adjusted total debt and finance lease
obligations
8,211.5
8,136.3
Less:
Cash and cash equivalents
588.6
598.6
Restricted cash related to debt1
13.0
13.0
Net debt and finance lease
obligations
$
7,609.9
$
7,524.7
Operating income2:
Operating income for the three months
ended March 31, 2024
N/A
$
92.8
Operating income for the three months
ended June 30, 2024
$
110.8
110.8
Operating income (loss) for the three
months ended September 30, 2024
(379.6
)
N/A
Operating income (loss) – last two
quarters
$
(268.8
)
$
203.6
Annualized operating income (loss) –
last two quarters annualized
$
(537.6
)
$
407.2
Adjusted OIBDA3:
Adjusted OIBDA for the three months ended
March 31, 2024
N/A
$
374.2
Adjusted OIBDA for the three months ended
June 30, 2024
$
389.1
389.1
Adjusted OIBDA for the three months ended
September 30, 2024
403.1
N/A
Adjusted OIBDA – last two quarters
$
792.2
$
763.3
Annualized Adjusted OIBDA – last two
quarters annualized
$
1,584.4
$
1,526.6
Consolidated debt and finance lease
obligations to operating income (loss) ratio
(15.3) x
20.0 x
Consolidated net debt and finance lease
obligations to operating income (loss) ratio
(14.2) x
18.5 x
Consolidated leverage ratio
5.2 x
5.3 x
Consolidated net leverage ratio
4.8 x
4.9 x
N/A – Not Applicable.
- Amount relates to restricted cash at Liberty Puerto Rico that
serves as collateral against certain letters of credit associated
with the funding received from the FCC to continue to expand and
improve our fixed network in Puerto Rico.
- Operating income or loss is the closest U.S. GAAP measure to
Adjusted OIBDA, as discussed in Adjusted OIBDA above. Accordingly,
we have presented consolidated debt and finance lease obligations
to operating income and consolidated net debt and finance lease
obligations to operating income as the most directly comparable
financial ratios to our non-GAAP consolidated leverage and
consolidated net leverage ratios.
- Adjusted OIBDA is a non-GAAP measure. See Adjusted OIBDA above
for reconciliation of Adjusted OIBDA to the nearest U.S. GAAP
measure for the three months ended September 30, 2024. A
reconciliation of our operating income to Adjusted OIBDA for the
three months ended June 30, 2024 and March 31, 2024 is presented in
the following table:
Three months ended
June 30, 2024
March 31, 2024
in millions
Operating income
$
110.8
$
92.8
Share-based compensation and other
Employee Incentive Plan-related expense
16.0
27.0
Depreciation and amortization
236.7
247.8
Impairment, restructuring and other
operating items, net
25.6
6.6
Adjusted OIBDA
$
389.1
$
374.2
Non-GAAP Reconciliations for Our Borrowing Groups
The financial statements of each of our borrowing groups are
prepared in accordance with U.S. GAAP. We include certain financial
measures for our C&W, Liberty Puerto Rico and Liberty Costa
Rica borrowing groups in this press release that are considered
non-GAAP measures, including: (i) Adjusted OIBDA; (ii) Adjusted
OIBDA Margin; (iii) Proportionate Adjusted OIBDA, (iv) rebased
revenue and (v) rebased Adjusted OIBDA.
Adjusted OIBDA is defined as operating income or loss before
share-based compensation and other Employee Incentive Plan-related
expense, depreciation and amortization, related-party fees and
allocations, provisions and provision releases related to
significant litigation and impairment, restructuring and other
operating items. Proportionate Adjusted OIBDA is defined as
Adjusted OIBDA less the noncontrolling interests' share of Adjusted
OIBDA. We believe these measures at the borrowing group level are
useful to investors because they are one of the bases for comparing
our performance with the performance of other companies in the same
or similar industries, although our measures may not be directly
comparable to similar measures used by other public companies.
These measures should be viewed as measures of operating
performance that are a supplement to, and not a substitute for,
operating income or loss, net earnings or loss and other U.S. GAAP
measures of income.
A reconciliation of C&W's operating income to Adjusted OIBDA
and Proportionate Adjusted OIBDA is presented in the following
table:
Three months ended
Nine months ended
September 30,
September 30,
2024
2023
2024
2023
in millions
Operating income
$
94.4
$
90.2
$
272.8
$
205.0
Share-based compensation and other
Employee Incentive Plan-related expense
5.7
6.4
20.1
20.3
Depreciation and amortization
149.4
148.5
445.9
446.7
Related-party fees and allocations
21.6
21.0
69.6
64.6
Impairment, restructuring and other
operating items, net
15.4
7.3
29.2
61.5
Adjusted OIBDA
286.5
273.4
837.6
798.1
Noncontrolling interests' share of
Adjusted OIBDA
48.6
42.7
140.4
120.6
Proportionate Adjusted OIBDA
$
237.9
$
230.7
$
697.2
$
677.5
A reconciliation of Liberty Puerto Rico's operating income
(loss) to Adjusted OIBDA is presented in the following table:
Three months ended
Nine months ended
September 30,
September 30,
2024
2023
2024
2023
in millions
Operating income (loss)
$
(486.6
)
$
48.4
$
(515.1
)
$
165.5
Share-based compensation and other
Employee Incentive Plan-related expense
1.0
2.4
5.4
5.9
Depreciation and amortization
61.2
52.1
186.0
166.8
Related-party fees and allocations
9.0
13.0
35.0
37.5
Impairment, restructuring and other
operating items, net
503.6
0.5
517.1
5.9
Adjusted OIBDA
$
88.2
$
116.4
$
228.4
$
381.6
A reconciliation of Liberty Costa Rica's operating income to
Adjusted OIBDA is presented in the following table:
Three months ended
Nine months ended
September 30,
September 30,
2024
2023
2024
2023
CRC in billions
Operating income
12.9
16.0
44.5
37.4
Share-based compensation and other
Employee Incentive Plan-related expense
0.2
0.5
0.6
0.8
Depreciation and amortization
13.2
12.7
37.7
39.1
Related-party fees and allocations
0.3
0.4
1.0
1.0
Impairment, restructuring and other
operating items, net
—
(2.7
)
0.2
1.1
Adjusted OIBDA
26.6
26.9
84.0
79.4
The following table sets forth the reconciliations from reported
revenue for our C&W borrowing group to rebased revenue and
related change calculations:
Three months ended September
30, 2023
Nine months ended September
30, 2023
in millions
Revenue – Reported
$
640.9
$
1,882.6
Rebase adjustment:
Foreign currency
(2.1
)
1.1
Revenue – Rebased
$
638.8
$
1,883.7
Reported percentage change
(1
)%
2
%
Rebased percentage change
—
%
2
%
The following table sets forth the reconciliation from Adjusted
OIBDA for our C&W borrowing group to rebased Adjusted OIBDA and
related change calculations:
Three months ended September
30, 2023
Nine months ended September
30, 2023
in millions
Adjusted OIBDA – Reported
$
273.4
$
798.1
Rebase adjustment:
Foreign currency
(0.9
)
(1.2
)
Adjusted OIBDA – Rebased
$
272.5
$
796.9
Reported percentage change
5
%
5
%
Rebased percentage change
5
%
7
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241106523924/en/
Investor Relations Kunal Patel ir@lla.com
Corporate Communications Kim Larson
llacommunications@lla.com
Liberty Latin America (NASDAQ:LILAK)
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