Solid start to the year; on-track to achieve guidance
65,000 organic broadband and postpaid mobile net adds
Integration efforts progressing well; significant synergy
benefits anticipated
Additional share repurchase authorization of up to $200
million
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 (“Q1”) ended
March 31, 2023.
CEO Balan Nair commented, “We had a good start to the year,
delivering solid subscriber growth in the first quarter and remain
on track to achieve our 2023 financial guidance targets.”
“We added internet and mobile postpaid subscribers across all of
our reporting segments in Q1. Broadband additions were particularly
strong led by improved performance in C&W Caribbean as we
continue to make our networks Giga-Ready and delight our customers
with differentiated converged propositions. In connection with our
enhanced services and offers, we recently implemented nominal price
increases in select markets to reflect the added value being
delivered to our customers, in most cases, these rate adjustments
follow several years without any increase.”
“Inorganically, 2023 is a key year as we work to complete our
integrations in Puerto Rico, Panama and Costa Rica, which will
deliver significant value for our stakeholders. We have started to
migrate prepaid mobile customers onto our own platform in Puerto
Rico and are taking swift action to drive synergies in Panama
following the removal of integration-related restrictions in
January.”
“We remain confident in our cash generation for the business,
and have renewed our buyback authorization for up to an additional
$200 million through the end of 2025.”
“Our first quarter performance provides a solid foundation for
2023. As we progress through the year, we plan to maintain a
relentless focus on delivering value for our customers, executing
our integration initiatives, and driving further growth for
shareholders.”
Business Highlights
- C&W Caribbean: strong start to the year
- Broadband and mobile postpaid organic adds more than doubled
YoY
- Reported and rebased Adj. OIBDA growth of 8%
- C&W Panama: investments and acquisition benefits drive
growth
- Reported and rebased revenue growth of 30% and 4%,
respectively
- Reported and rebased Adj. OIBDA growth of 7% and 16%,
respectively
- C&W Networks & LatAm: solid financial momentum
- Reported and rebased revenue growth of 1% and 6%,
respectively
- Reported and rebased Adj. OIBDA growth of 2% and 4%,
respectively
- Liberty Puerto Rico: sequential Adj. OIBDA improvement
- Broadband subscriber growth continuing to drive fixed revenue
growth YoY
- Migration of prepaid mobile customers to new Liberty Puerto
Rico platform underway
- Liberty Costa Rica: strong operational and financial
performance
- Over 15,000 broadband and mobile postpaid organic adds
- Adj. OIBDA up 50% and 28% on a reported and rebased basis,
respectively
FY 2023 LLA Financial Guidance - Reconfirmed
- Adjusted OIBDA mid-to-high single digit rebased growth
- P&E additions as a percentage of revenue at ~16%
- Adjusted FCF of ~$300 million, before distributions to
noncontrolling interests
Share Repurchase Program
On February 22, 2022, our Board of Directors approved a new
share repurchase program. The program authorized us to repurchase
from time to time up to $200 million of our Class A common shares
and/or Class C common shares through December 2024. At March 31,
2023, the remaining amount authorized for share repurchases under
the share repurchase program was $32 million.
On May 8, 2023, our Board of Directors authorized us to
repurchase from time to time up to an additional $200 million of
our Class A common shares and/or Class C common shares under our
share repurchase program through December 2025.
Financial and Operating Highlights
Financial Highlights
Q1 2023
Q1 2022
YoY Growth / (Decline)
YoY Rebased
Growth1
(USD in millions)
Revenue
$
1,104
$
1,216
(9
%)
1
%
Revenue (excluding VTR)2
$
1,104
$
1,045
6
%
Operating income
$
113
$
185
(39
%)
Adjusted OIBDA3
$
407
$
437
(7
%)
4
%
Adjusted OIBDA3 (excluding VTR)2
$
407
$
390
4
%
Property & equipment additions
$
145
$
175
(18
%)
As a percentage of revenue
13
%
14
%
Adjusted FCF4
$
(50
)
$
(56
)
Cash provided by operating activities
$
62
$
122
Cash used by investing activities
$
(132
)
$
(189
)
Cash used by financing activities
$
(35
)
$
(78
)
Operating Highlights5
Q1 2023
Q1 2022
Total customers
1,937,100
3,227,600
Organic customer additions
(losses)
23,900
(7,900
)
Fixed RGUs
3,853,500
6,453,300
Organic RGU additions
56,300
3,200
Organic internet additions
29,400
13,700
Mobile subscribers
8,027,700
7,590,000
Organic mobile (losses)
additions
(16,000
)
49,700
Organic postpaid additions
35,200
121,100
*
Q1 2023 figures include mobile subscribers
related to the Claro Panama Acquisition, which was completed on
July 1, 2022, and are therefore not included in Q1 2022 subscriber
data. Q1 2023 figures exclude VTR as it was deconsolidated in
October 2022 in connection with the closing of our joint venture in
Chile with América Móvil.
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)
March 31,
2023
2022
%
Rebased %
in millions, except %
amounts
C&W Caribbean
$
353.8
$
354.8
—
(1
)
C&W Panama
165.3
127.2
30
4
C&W Networks & LatAm
108.7
107.6
1
6
Liberty Puerto Rico
365.8
366.7
—
—
Liberty Costa Rica
129.2
107.4
20
4
VTR
—
170.8
N.M.
N.M.
Corporate
6.4
5.6
14
14
Eliminations
(25.4
)
(23.9
)
N.M.
N.M.
Total
1,103.8
1,216.2
(9
)
1
Less: VTR
—
170.8
Total excluding VTR2
$
1,103.8
$
1,045.4
6
N.M. – Not Meaningful.
- Reported revenue for the three months ended March 31, 2023
declined by 9%.
- Reported revenue declined in Q1 as (1) the addition of $35
million from the acquisition of América Móvil's Panama operations
(Claro Panama) on July 1, 2022, (2) a net foreign exchange benefit
of $14 million, and (3) organic growth in C&W Networks &
LatAm and C&W Panama, were more than offset by the negative
year-over-year impact of VTR's deconsolidation further to the
formation of the Chile JV in October 2022.
Q1 2023 Revenue Growth – Segment
Highlights
- C&W Caribbean: revenue was flat on a reported basis and
declined by 1% on a rebased basis.
- Fixed residential revenue decreased 3% on a reported and
rebased basis. This was driven by reduced ARPU and revenue
reduction related to the removal of certain programming rights,
partly offset by a higher average number of fixed subscribers.
- Mobile revenue was up 11% on a reported basis and by 10% on a
rebased basis. The increase is primarily attributable to higher
average numbers of postpaid mobile subscribers, year-over-year,
driven by growth from fixed-mobile convergence efforts. There has
also been an increase in inbound roaming revenue as tourism has
recovered in the region.
- B2B revenue was 5% lower on both a reported and rebased basis.
Underlying B2B growth was more than offset by the discontinuation
of a non-core voice transit services arrangement in C&W
Jamaica, which contributed $10 million of revenue in the prior-year
period with a slightly negative gross margin.
- C&W Panama: revenue grew by 30% and 4% on a reported and
rebased basis, respectively. Reported performance benefited from
the inclusion of América Móvil's Panama operations in the quarter.
- Fixed residential revenue was up 15% and 6% on a reported and
rebased basis, respectively. Rebased growth was driven by RGU
additions over the past twelve months, resulting from investments
in our networks, products and commercial activities.
- Mobile revenue increased by 47% on a reported basis and 2% on a
rebased basis. Increased usage and ARPU levels drove rebased
growth, more than offsetting volume reduction in our prepaid
subscriber base.
- B2B revenue grew by 20% and 7% on a reported and rebased basis,
respectively. The year-over-year rebased performance was driven by
growth in mobile services and an increase in the volume of certain
government-related projects.
- C&W Networks & LatAm: revenue grew by 1% and 6% on a
reported and rebased basis, respectively. Growth on a rebased basis
was driven by higher subsea network revenue associated with a
significant customer that is recognized on a cash basis, and growth
in B2B service-related connectivity and managed services.
- Liberty Puerto Rico: revenue was flat on a reported and rebased
basis.
- Residential fixed revenue growth was driven by subscriber
additions over the past twelve months, partly offset by reduced
ARPU.
- Residential mobile revenue was lower compared to the prior-year
period, as higher volumes of handset sales were more than offset by
(1) lower ARPU from mobile services, including the impact of higher
contract asset amortization driven by increases in handset sales
and subsidy levels, and (2) a decline in the average number of
prepaid mobile subscribers.
- Sequentially, subscription revenue and ARPU was stable with
overall revenue lower driven by the step down from seasonally
strong handset sales in the fourth quarter.
- B2B revenue growth was driven by increased data services
volumes and new customers.
- Liberty Costa Rica: revenue grew by 20% and 4% on a reported
and rebased basis, respectively. Reported performance benefited
from a $16 million positive foreign exchange impact year-over-year,
as the Costa Rican colon appreciated against the U.S. dollar.
Rebased growth was driven by our mobile operations, with strong
postpaid subscriber additions over the past twelve months.
Operating Income
- Operating income was $113 million and $185 million for the
three months ended March 31, 2023 and 2022, respectively.
- We reported lower operating income during the three months
ended March 31, 2023, as compared with the corresponding period in
2022, primarily due to the net impact of (i) a decline in Adjusted
OIBDA and (ii) increases in impairment, restructuring and other
operating items, net, and depreciation and amortization.
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
March 31,
Increase (decrease)
2023
2022
%
Rebased %
in millions, except %
amounts
C&W Caribbean
$
140.2
$
129.9
8
8
C&W Panama
43.5
40.5
7
16
C&W Networks & LatAm
63.6
62.6
2
4
Liberty Puerto Rico
134.4
140.6
(4
)
(4
)
Liberty Costa Rica
45.2
30.2
50
28
VTR
—
46.5
N.M.
N.M.
Corporate
(20.4
)
(13.8
)
(48
)
(44
)
Total
$
406.5
$
436.5
(7
)
4
Less: VTR
—
46.5
Total excluding VTR2
$
406.5
$
390.0
4
Operating income margin
10.2
%
15.2
%
Adjusted OIBDA margin
36.8
%
35.9
%
Adjusted OIBDA margin excl. VTR2
36.8
%
37.3
%
N.M. – Not Meaningful.
- Our reported Adjusted OIBDA for the three months ended March
31, 2023 was 7% lower, as compared to the corresponding prior-year
period.
- Reported Adjusted OIBDA performance in Q1 was primarily driven
by the deconsolidation of VTR.
Q1 2023 Adjusted OIBDA Growth – Segment
Highlights
- C&W Caribbean: Adjusted OIBDA increased by 8% on a reported
and rebased basis. Performance was driven by lower direct costs,
primarily those related to programming rights. Our Adjusted OIBDA
margin improved by ~300 basis points year-over-year to 40%.
- C&W Panama: Adjusted OIBDA increased on a reported and
rebased basis by 7% and 16%, respectively. Rebased growth was
driven by the aforementioned revenue performance and value capture
activities related to the Claro Panama acquisition.
- C&W Networks & LatAm: Adjusted OIBDA increased on a
reported and rebased basis by 2% and 4%, respectively. Our rebased
performance was driven by revenue growth.
- Liberty Puerto Rico: Adjusted OIBDA declined by 4% on a
reported and rebased basis. The decline was driven by higher
operating costs, partly offset by lower direct costs following
equipment credits received in Q1 2023 related to historical handset
purchases.
- Liberty Costa Rica: Adjusted OIBDA grew by 50% and 28% on a
reported and rebased basis, respectively. Rebased performance was
driven by the aforementioned rebased revenue growth, favorable
foreign exchange movements on non-CRC denominated costs and
execution of the integration plan.
Net Earnings (Loss) Attributable to Shareholders
- Net earnings (loss) attributable to shareholders was ($50
million) and $81 million for the three months ended March 31, 2023
and 2022, 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
March 31,
2023
2022
USD in millions
Customer Premises Equipment
$
46.9
$
82.8
New Build & Upgrade
28.0
30.1
Capacity
19.4
24.6
Baseline
39.4
25.0
Product & Enablers
11.0
12.9
Property & equipment
additions
144.7
175.4
Assets acquired under
capital-related vendor financing arrangements
(35.9
)
(31.9
)
Changes in current liabilities
related to capital expenditures and other
5.3
20.7
Capital expenditures, net
$
114.1
$
164.2
Property & equipment
additions as % of revenue
13.1
%
14.4
%
Property & Equipment
Additions:
C&W Caribbean
$
46.0
$
44.0
C&W Panama
19.6
15.0
C&W Networks & LatAm
10.8
7.6
Liberty Puerto Rico
47.7
44.5
Liberty Costa Rica
12.7
9.9
VTR
—
44.7
Corporate
7.9
9.7
Property & equipment
additions
$
144.7
$
175.4
Property & Equipment
Additions as a Percentage of Revenue by Reportable Segment:
C&W Caribbean
13.0
%
12.4
%
C&W Panama
11.9
%
11.8
%
C&W Networks & LatAm
9.9
%
7.1
%
Liberty Puerto Rico
13.0
%
12.1
%
Liberty Costa Rica
9.8
%
9.2
%
VTR
N/A
26.2
%
New Build and Homes Upgraded by
Reportable Segment1:
C&W Caribbean
44,200
31,300
C&W Panama
27,200
44,300
Liberty Puerto Rico
8,900
7,400
Liberty Costa Rica
9,600
13,700
VTR
—
65,000
Total
89,900
161,700
- Table excludes C&W Networks & LatAm as that segment
only provides B2B-related services.
Summary of Debt, Finance Lease Obligations and Cash and 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 March 31, 2023:
Debt
Finance lease
obligations
Debt and finance lease
obligations
Cash and cash
equivalents
in millions
Liberty Latin America1
$
378.2
$
—
$
378.2
$
84.0
C&W2
4,533.1
—
4,533.1
493.8
Liberty Puerto Rico
2,633.4
5.6
2,639.0
61.0
Liberty Costa Rica
456.4
3.0
459.4
33.0
Total
$
8,001.1
$
8.6
$
8,009.7
$
671.8
Consolidated Leverage and Liquidity
Information:
March 31, 2023
December 31,
2022
Consolidated debt and finance lease
obligations to operating income ratio
17.8x
15.0x
Consolidated net debt and finance lease
obligations to operating income ratio
16.3x
13.5x
Consolidated gross leverage ratio3
4.9x
5.1x
Consolidated net leverage ratio3
4.5x
4.6x
Weighted average debt tenor4
5.0 years
4.9 years
Fully-swapped borrowing costs
5.9%
5.7%
Unused borrowing capacity (in
millions)5
$957.3
$898.7
- Represents the amount held by Liberty Latin America on a
standalone basis plus 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, C&W Networks & LatAm and C&W Panama
reportable segments.
- Consolidated leverage ratios are non-GAAP measures. The
December 31, 2022 leverage ratios exclude the Adjusted OIBDA of VTR
in light of the deconsolidation of VTR that occurred in connection
with the formation of the Chile JV in October 2022. 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 and finance lease obligations.
- At March 31, 2023, 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 March 31,
2023 compliance reporting requirements.
Quarterly Subscriber Variance
Fixed and Mobile Subscriber
Variance Table — March 31, 2023 vs December 31, 2022
Homes Passed
Two-way Homes
Passed
Fixed-line Customer
Relationships
Video RGUs
Internet RGUs
Telephony RGUs
Total RGUs
Prepaid
Postpaid
Total Mobile
Subscribers
C&W Caribbean:
Jamaica
6,800
6,700
5,500
(700
)
7,400
9,100
15,800
13,400
9,300
22,700
The Bahamas
—
(100
)
(1,100
)
700
1,600
200
2,500
(2,000
)
(100
)
(2,100
)
Trinidad and Tobago
—
—
(2,800
)
(300
)
(2,100
)
1,200
(1,200
)
—
—
—
Barbados
—
—
300
200
700
(200
)
700
(1,700
)
2,200
500
Other
—
—
(100
)
(400
)
2,900
100
2,600
(2,400
)
8,100
5,700
Total C&W Caribbean
6,800
6,600
1,800
(500
)
10,500
10,400
20,400
7,300
19,500
26,800
C&W Panama
9,300
9,400
3,200
2,900
9,000
6,700
18,600
(71,800
)
900
(70,900
)
Total C&W
16,100
16,000
5,000
2,400
19,500
17,100
39,000
(64,500
)
20,400
(44,100
)
Liberty Puerto Rico
1,600
1,600
17,100
(100
)
7,500
2,700
10,100
(15,700
)
1,400
(14,300
)
Liberty Costa Rica
7,700
7,800
1,800
(400
)
2,400
5,200
7,200
29,000
13,400
42,400
Total Organic Change
25,400
25,400
23,900
1,900
29,400
25,000
56,300
(51,200
)
35,200
(16,000
)
Q1 2023 Adjustments:
C&W Caribbean - Jamaica
—
—
—
—
—
—
—
(10,700
)
—
(10,700
)
C&W Caribbean - Other
6,800
6,800
—
—
—
—
—
—
—
—
C&W Panama1
—
—
(3,400
)
(2,700
)
(3,400
)
(2,400
)
(8,500
)
(115,100
)
—
(115,100
)
Liberty Costa Rica
14,000
14,000
(8,100
)
(5,400
)
(6,500
)
(1,900
)
(13,800
)
—
—
—
Total Q1 2023 Adjustments:
20,800
20,800
(11,500
)
(8,100
)
(9,900
)
(4,300
)
(22,300
)
(125,800
)
—
(125,800
)
Net Adds
46,200
46,200
12,400
(6,200
)
19,500
20,700
34,000
(177,000
)
35,200
(141,800
)
- The mobile non-organic adjustment relates to a change to the
policy associated with prepaid subscribers, whereby a revenue
generating event greater than $3 must occur for a subscriber to be
included in the count.
ARPU per Customer Relationship
The following table provides ARPU per customer relationship for
the indicated periods:
Three months ended
FX-Neutral1
March 31, 2023
December 31, 2022
% Change
% Change
Reportable Segment:
C&W Caribbean
$
48.55
$
48.81
(1
%)
(1
%)
C&W Panama
$
37.74
$
36.68
3
%
3
%
Liberty Puerto Rico
$
73.95
$
74.29
—
%
—
%
Liberty Costa Rica2
$
43.89
$
40.27
9
%
1
%
Cable & Wireless Borrowing
Group
$
46.04
$
45.97
—
%
—
%
Mobile ARPU
The following table provides ARPU per mobile subscriber for the
indicated periods:
Three months ended
FX-Neutral1
March 31, 2023
December 31, 2022
% Change
% Change
Reportable Segment:
C&W Caribbean
$
13.85
$
14.31
(3
%)
(3
%)
C&W Panama
$
10.68
$
9.97
7
%
7
%
Liberty Puerto Rico
$
38.90
$
38.91
—
%
—
%
Liberty Costa Rica3
$
6.42
$
5.90
9
%
—
%
Cable & Wireless Borrowing
Group
$
12.23
$
11.98
2
%
2
%
- The FX-Neutral change represents the percentage change on
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 sequential prior
quarter amounts.
- The ARPU per customer relationship amounts in Costa Rican
colones for the three months ended March 31, 2023 and December 31,
2022 were CRC 24,692 and CRC 24,512, respectively.
- The mobile ARPU amount in Costa Rican colones for the three
months ended March 31, 2023 and December 31, 2022 were CRC 3,609
and CRC 3,597, 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 for 2023;
our digital strategy, product innovation and commercial plans and
projects; subscriber growth; expectations on demand for
connectivity in the region; our anticipated integration plans,
synergies, opportunities and integration costs in Puerto Rico
following the AT&T Acquisition, in Costa Rica following the
acquisition of Telefónica's Costa Rica business and in Panama
following the acquisition of América Móvil’s Panama operations; the
strength of our balance sheet and tenor of our debt; our share
repurchase program; 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
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, and through ClaroVTR, our joint venture in Chile. 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 (i) an
acquisition, (ii) a disposition, (iii) the acquisition by our
Liberty Costa Rica segment of the B2B Costa Rican operations within
our C&W Networks & LatAm segment and (iv) FX. See Non-GAAP
Reconciliations below.
- We provide rebased revenue and Adjusted OIBDA growth rates,
each a non-GAAP measure, for Liberty Latin America excluding VTR in
light of the October 2022 deconsolidation of VTR that occurred in
connection with the closing of our joint venture in Chile with
América Móvil. See the tables below for the required non-GAAP
reconciliations.
- 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
March 31,
Change
Rebased change1
2023
2022
in millions, except %
amounts
Revenue
$
607.2
$
570.1
7
%
2
%
Operating income
$
60.6
$
73.6
(18
%)
Adjusted OIBDA
$
247.0
$
233.0
6
%
8
%
Property & equipment additions
$
76.5
$
66.7
15
%
Operating income as a percentage of
revenue
10.0
%
12.9
%
Adjusted OIBDA as a percentage of
revenue
40.7
%
40.9
%
Proportionate Adjusted OIBDA
$
212.0
$
200.2
- Indicated growth rates are rebased for the estimated impacts of
an acquisition, FX and the acquisition by our Liberty Costa Rica
borrowing group of the B2B Costa Rican operations within our
C&W Networks & LatAm operations.
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:
March 31,
December 31,
Facility Amount
2023
2022
in millions
Credit Facilities:
Revolving Credit Facility due 2023 (LIBOR
+ 3.25%)
$
50.0
$
—
$
—
Revolving Credit Facility due 2027 (LIBOR
+ 3.25%)
$
580.0
—
—
Term Loan Facility B-5 due 2028 (LIBOR +
2.25%)
$
1,510.0
1,510.0
1,510.0
Term Loan Facility B-6 due 2029 (LIBOR +
3.00%)
$
590.0
590.0
590.0
Total Senior Secured Credit Facilities
2,100.0
2,100.0
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
Other debt:
4.25% CWP Term Loan due 2028
$
435.0
435.0
435.0
Other regional debt
62.1
70.2
Vendor financing
221.0
199.4
Total third-party debt
4,533.1
4,519.6
Less: premiums, discounts and deferred
financing costs, net
(30.5
)
(31.6
)
Total carrying amount of third-party
debt
4,502.6
4,488.0
Less: cash and cash equivalents
(493.8
)
(536.2
)
Net carrying amount of third-party
debt
$
4,008.8
$
3,951.8
- At March 31, 2023, our third-party total and proportionate net
debt was $4.0 billion and $3.8 billion, respectively, our
Fully-swapped Borrowing Cost was 5.3%, and the average tenor of our
debt obligations (excluding vendor financing) was approximately 4.9
years.
- Our portion of Adjusted OIBDA, after deducting the
noncontrolling interests' share, (“Proportionate Adjusted OIBDA”)
was $212 million for Q1 2023.
- Based on Q1 results, our Proportionate Net Leverage Ratio was
4.0x, calculated in accordance with C&W's Credit
Agreement.
- At March 31, 2023, we had maximum undrawn commitments of $725
million, including $95 million under our regional facilities. At
March 31, 2023, 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 March 31,
2023 compliance reporting requirements.
Liberty Puerto Rico (LPR) Borrowing Group
The following table reflects 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
March 31,
Change
2023
2022
in millions, except %
amounts
Revenue
$
365.8
$
366.7
—
%
Operating income
$
61.6
$
65.7
(6
) %
Adjusted OIBDA
$
134.4
$
140.6
(4
) %
Property & equipment additions
$
47.7
$
44.5
7
%
Operating income as a percentage of
revenue
16.8
%
17.9
%
Adjusted OIBDA as a percentage of
revenue
36.7
%
38.3
%
The following table details the nominal amount outstanding of
Liberty Puerto Rico's third-party debt, finance lease obligations
and cash and cash equivalents:.
March 31,
December 31,
Facility amount
2023
2022
in millions
Credit Facilities:
Revolving Credit Facility due 2027 (LIBOR
+ 3.50%)
$
172.5
$
—
$
—
Term Loan Facility due 2028 (LIBOR +
3.75%)
$
620.0
620.0
620.0
Total Senior Secured Credit Facilities
620.0
620.0
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
32.4
16.7
Finance lease obligations
5.6
5.7
Total debt and finance lease
obligations
2,639.0
2,623.4
Less: premiums and deferred financing
costs, net
(26.5
)
(28.6
)
Total carrying amount of debt
2,612.5
2,594.8
Less: cash and cash equivalents
(61.0
)
(72.3
)
Net carrying amount of debt
$
2,551.5
$
2,522.5
- At March 31, 2023, our Fully-swapped Borrowing Cost was 6.1%
and the average tenor of our debt (excluding vendor financing) was
approximately 5.3 years.
- Based on our results for Q1 2023, our Consolidated Net Leverage
Ratio was 4.9x, calculated in accordance with LPR’s Group Credit
Agreement.
- At March 31, 2023, we had maximum undrawn commitments of $173
million. At March 31, 2023, the full amount of unused borrowing
capacity under our revolving credit facility was available to be
borrowed, both before and after completion of the March 31, 2023
compliance reporting requirements.
Liberty Costa Rica Borrowing Group
The following table reflects 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
March 31,
Change
Rebased change1
2023
2022
CRC in billions, except %
amounts
Revenue
72.7
69.2
5
%
4
%
Operating income
8.4
8.2
2
%
Adjusted OIBDA
25.4
19.4
31
%
28
%
Property & equipment additions
7.1
6.4
11
%
Operating income as a percentage of
revenue
11.6
%
11.8
%
Adjusted OIBDA as a percentage of
revenue
34.9
%
28.0
%
1. Indicated growth rates are rebased for the acquisition by the
Liberty Costa Rica borrowing group of the B2B Costa Rican
operations within our C&W borrowing group.
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, finance lease obligations and cash
and cash equivalents:
March 31,
December 31,
2023
2022
Borrowing currency in
millions
CRC equivalent in
billions
10.875% Term Loan A Facility due 20311
$
50.0
27.1
—
10.875% Term Loan B Facility due 20311
$
400.0
216.7
—
Term Loan B-1 Facility due 2024 (LIBOR +
5.50%)
$
276.7
—
163.8
Term Loan B-2 Facility due 2024 (TBP2 +
6.75%)
CRC
79,635.2
—
79.6
Revolving Credit Facility due 2028 (SOFR3
+ 4.25%)
$
60.0
—
—
Revolving Credit Facility due 2024 (LIBOR
+ 4.25%)
$
15.0
—
4.7
Total credit facilities
243.8
248.1
Other
3.5
3.6
Finance lease obligations
1.6
1.7
Total debt and finance lease
obligations
248.9
253.4
Less: discounts and deferred financing
costs
(8.3
)
(3.3
)
Total carrying amount of debt
240.6
250.1
Less: cash and cash equivalents
(17.9
)
(9.5
)
Net carrying amount of debt
222.7
240.6
Exchange rate (CRC to $)
541.9
591.8
- From July 15, 2028 and thereafter, the interest rate is subject
to increase by 0.125% per annum for each of the Sustainability
Performance Targets (as defined in the credit agreement) not
achieved by Liberty Costa Rica by no later than December 31,
2027.
- Tasa Básica Pasiva rate.
- Reference rate based on the secured overnight financing rate
administered by the Federal Reserve Bank of New York.
- In January 2023, Liberty Costa Rica entered into the 2031 LCR
Term Loan A and the 2031 LCR Term Loan B, both issued at par. The
proceeds from the 2031 LCR Term Loan A and 2031 LCR Term Loan B
were primarily used to repay the LCR Term Loan B-1 Facility and LCR
Term Loan B-2 Facility.
- In January 2023, the LCR Revolving Credit Facility was amended
and restated. The amended and restated agreement increased the
borrowing capacity to $60 million, extended the tenor to January
15, 2028 and changed the rate of interest to SOFR plus a margin of
4.25%.
- At March 31, 2023, our Fully-swapped Borrowing Cost was 10.9%
and the average tenor of our debt was approximately 7.8 years.
- Based on our results for Q1 2023, our Consolidated Net Leverage
Ratio was 2.5x, calculated in accordance with LCR’s Credit
Agreement.
- At March 31, 2023, we had maximum undrawn commitments of $60
million. At March 31, 2023, the full amount of unused borrowing
capacity under our revolving credit facility was available to be
borrowed, both before and after completion of the March 31, 2023
compliance reporting requirements.
Subscriber Table
Consolidated Operating Data —
March 31, 2023
Homes Passed
Two-way Homes Passed
Fixed-line Customer
Relationships
Video RGUs
Internet RGUs
Telephony RGUs
Total RGUs
Prepaid
Postpaid
Total Mobile
Subscribers
C&W Caribbean:
Jamaica
692,500
692,400
337,300
131,300
315,600
310,000
756,900
1,122,700
83,000
1,205,700
The Bahamas
120,900
120,800
34,800
6,300
24,700
33,800
64,800
144,400
23,900
168,300
Trinidad and Tobago
340,900
340,900
152,800
101,500
138,200
95,400
335,100
—
—
—
Barbados
140,400
140,400
84,600
38,200
76,400
70,100
184,700
85,900
42,600
128,500
Other
342,800
322,900
215,000
74,000
190,100
115,100
379,200
330,800
108,200
439,000
Total C&W Caribbean
1,637,500
1,617,400
824,500
351,300
745,000
624,400
1,720,700
1,683,800
257,700
1,941,500
C&W Panama
838,500
838,600
251,500
159,500
213,000
204,200
576,700
1,633,800
359,100
1,992,900
Total C&W
2,476,000
2,456,000
1,076,000
510,800
958,000
828,600
2,297,400
3,317,600
616,800
3,934,400
Liberty Puerto Rico 1,2
1,175,200
1,175,200
568,200
242,700
531,500
260,100
1,034,300
166,600
904,700
1,071,300
Liberty Costa Rica 3
722,000
716,200
292,900
199,000
264,100
58,700
521,800
2,191,400
830,600
3,022,000
Total
4,373,200
4,347,400
1,937,100
952,500
1,753,600
1,147,400
3,853,500
5,675,600
2,352,100
8,027,700
- Prepaid mobile subscribers include 46,000 mobile reseller
subscribers.
- Postpaid mobile subscribers include 208,600 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 and
finance lease obligations outstanding 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 and finance lease obligations outstanding less cash and cash
equivalents 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), including the effects of
derivative instruments, original issue premiums or discounts, which
includes a discount on the convertible notes issued by Liberty
Latin America associated with a conversion option feature, 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 and finance lease obligations outstanding, 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 (including the convertible notes) less
cash and cash equivalents. 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.
Two-way Homes Passed – Homes passed by those sections of
our networks that are technologically capable of providing two-way
services, including video, internet and telephony services.
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, 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
March 31,
2023
2022
in millions
Operating income
$
113.0
$
184.6
Share-based compensation expense
29.2
30.0
Depreciation and amortization
234.6
214.1
Impairment, restructuring and other
operating items, net
29.7
7.8
Adjusted OIBDA
$
406.5
$
436.5
Operating income margin1
10.2
%
15.2
%
Adjusted OIBDA margin2
36.8
%
35.9
%
- Calculated by dividing operating income 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) insurance recoveries
related to damaged and destroyed property and equipment and (iv)
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, and (d) 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
March 31,
2023
2022
in millions
Net cash provided by operating
activities
$
62.4
$
122.3
Cash payments for direct acquisition and
disposition costs
1.4
1.7
Expenses financed by an intermediary1
41.3
31.7
Capital expenditures, net
(114.1
)
(164.2
)
Principal payments on amounts financed by
vendors and intermediaries
(40.2
)
(47.3
)
Principal payments on finance leases
(0.2
)
(0.2
)
Adjusted FCF before distributions to
noncontrolling interest owners
(49.4
)
(56.0
)
Distributions to noncontrolling interest
owners
(0.4
)
—
Adjusted FCF
$
(49.8
)
$
(56.0
)
- For purposes of our condensed consolidated statements of cash
flows, expenses, including value-added taxes, financed by an
intermediary 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 or exclude the
pre-acquisition amounts of acquired, disposed or transferred
business, as applicable, to the same extent they are included or
excluded from the current year. The businesses that were acquired,
disposed or transferred impacting the comparative periods are as
follows:
- Claro Panama, which was acquired on July 1, 2022;
- VTR, which was disposed of on October 6, 2022; and
- the January 2023 acquisition by our Liberty Costa Rica segment
of the B2B Costa Rican operations within our C&W Networks &
LatAm segment.
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 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 (generally pre-acquisition financial statements), 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 these
transactions had occurred on the dates 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 table sets forth the reconciliation from reported
revenue to rebased revenue and related change calculations.
Three months ended March 31,
2022
C&W Caribbean
C&W Panama
C&W Network &
LatAm
Liberty Puerto Rico
Liberty Costa Rica
VTR
Corporate
Intersegment
eliminations
Total
In millions
Revenue – Reported
$
354.8
$
127.2
$
107.6
$
366.7
$
107.4
$
170.8
$
5.6
$
(23.9
)
$
1,216.2
Rebase adjustments:
Acquisition
—
31.2
—
—
—
—
—
—
31.2
Disposition
—
—
—
—
—
(170.8
)
—
—
(170.8
)
Foreign currency
1.3
—
(3.2
)
—
15.7
—
—
0.2
14.0
Other1
—
—
(1.6
)
—
1.6
—
—
—
—
Revenue – Rebased
$
356.1
$
158.4
$
102.8
$
366.7
$
124.7
$
—
$
5.6
$
(23.7
)
$
1,090.6
Reported percentage change
—
%
30
%
1
%
—
%
20
%
N.M.
14
%
N.M.
(9
)%
Rebased percentage change
(1
)%
4
%
6
%
—
%
4
%
N.M.
14
%
N.M.
1
%
N.M. – Not Meaningful.
- On January 1, 2023, the B2B Costa Rican operations within our
C&W Networks & LatAm segment was acquired by our Liberty
Costa Rica segment. This acquisition did not have a significant
impact on the financial results of our C&W Networks & LatAm
or Liberty Costa Rica segments.
The following table sets forth the reconciliation from reported
Adjusted OIBDA to rebased Adjusted OIBDA and related change
calculations.
Three months ended March 31,
2022
C&W Caribbean
C&W Panama
C&W Networks &
LatAm
Liberty Puerto Rico
Liberty Costa Rica
VTR
Corporate
Total
In millions
Adjusted OIBDA – Reported
$
129.9
$
40.5
$
62.6
$
140.6
$
30.2
$
46.5
$
(13.8
)
$
436.5
Rebase adjustments:
Acquisition
—
(3.0
)
—
—
—
—
—
(3.0
)
Disposition
—
—
—
—
—
(46.5
)
(0.4
)
(46.9
)
Foreign currency
0.3
—
(0.8
)
—
4.4
—
—
3.9
Other1
—
—
(0.8
)
—
0.8
—
—
—
Adjusted OIBDA – Rebased
$
130.2
$
37.5
$
61.0
$
140.6
$
35.4
$
—
$
(14.2
)
$
390.5
Reported percentage change
8
%
7
%
2
%
(4
)%
50
%
N.M.
(48
)%
(7
)%
Rebased percentage change
8
%
16
%
4
%
(4
)%
28
%
N.M.
(44
)%
4
%
N.M. – Not Meaningful.
- On January 1, 2023, the B2B Costa Rican operations within our
C&W Networks & LatAm segment was acquired by our Liberty
Costa Rica segment. This acquisition did not have a significant
impact on the financial results of our C&W Networks & LatAm
or Liberty Costa Rica segments.
The following table sets forth the reconciliations from reported
revenue by product for our C&W Caribbean segment to rebased
revenue by product and related change calculations.
Three months ended March 31,
2022
Residential fixed
revenue
Residential mobile
revenue
Total residential
revenue
B2B revenue
Total revenue
In millions
Revenue by product – Reported
$
130.8
$
91.0
$
221.8
$
133.0
$
354.8
Rebase adjustment:
Foreign currency
0.6
0.3
0.9
0.4
1.3
Revenue by product – Rebased
$
131.4
$
91.3
$
222.7
$
133.4
$
356.1
Reported percentage change
(3
)%
11
%
3
%
(5
)%
—
%
Rebased percentage change
(3
)%
10
%
2
%
(5
)%
(1
)%
The following table sets forth the reconciliations from reported
revenue by product for our C&W Panama segment to rebased
revenue by product and related change calculations.
Three months ended March 31,
2022
Residential fixed
revenue
Residential mobile
revenue
Total residential
revenue
B2B revenue
Total revenue
In millions
Revenue by product – Reported
$
25.9
$
53.4
$
79.3
$
47.9
$
127.2
Rebase adjustment:
Acquisition
2.0
23.7
25.7
5.5
31.2
Revenue by product – Rebased
$
27.9
$
77.1
$
105.0
$
53.4
$
158.4
Reported percentage change
15
%
47
%
36
%
20
%
30
%
Rebased percentage change
6
%
2
%
3
%
7
%
4
%
Non-GAAP Reconciliation for Consolidated Leverage
Ratios
We have set forth below our consolidated leverage and net
leverage ratios. The December 31, 2022 leverage ratios exclude the
Adjusted OIBDA of VTR in light of the deconsolidation of VTR that
occurred in connection with the formation of the Chile JV in
October 2022. Our consolidated leverage and net leverage ratios,
each a non-GAAP measure, are defined as (i) adjusted total debt and
finance lease obligations (total carrying value of debt and finance
lease obligations plus discounts, premiums and deferred finance
costs) less cash and cash equivalents divided by (ii) last two
quarters annualized Adjusted OIBDA as of March 31, 2023. 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 March 31, 2023 and December
31, 2022 are set forth below:
March 31, 2023
December 31,
2022
Liberty Latin America
Liberty Latin America
VTR
LLA, excluding VTR
in millions, except leverage
ratios
Total debt and finance lease
obligations
$
7,915.2
$
7,880.7
$
—
$
7,880.7
Discounts, premiums and deferred financing
costs, net
94.5
94.0
—
94.0
Adjusted total debt and finance lease
obligations
8,009.7
7,974.7
—
7,974.7
Less:
Cash and cash equivalents
671.8
781.0
—
781.0
Net debt and finance lease
obligations
$
7,337.9
$
7,193.7
$
—
$
7,193.7
Operating income1:
Operating income for the three months
ended September 30, 2022
N/A
$
152.9
$
30.4
$
122.5
Operating income for the three months
ended December 31, 2022
$
109.5
109.5
—
109.5
Operating income for the three months
ended March 31, 2023
113.0
N/A
N/A
N/A
Operating income – last two quarters
222.5
262.4
30.4
232.0
Annualized operating income – last two
quarters annualized
$
445.0
$
524.8
$
60.8
$
464.0
Adjusted OIBDA2:
Adjusted OIBDA for the three months ended
September 30, 2022
N/A
$
415.0
$
31.9
$
383.1
Adjusted OIBDA for the three months ended
December 31, 2022
$
405.2
405.2
—
405.2
Adjusted OIBDA for the three months ended
March 31, 2023
406.5
N/A
N/A
N/A
Adjusted OIBDA – last two quarters
$
811.7
$
820.2
$
31.9
$
788.3
Annualized Adjusted OIBDA – last two
quarters annualized
$
1,623.4
$
1,640.4
$
63.8
$
1,576.6
Consolidated debt and finance lease
obligations to operating income ratio
17.8 x
15.0 x
N/A
Consolidated net debt and finance lease
obligations to operating income ratio
16.3 x
13.5 x
N/A
Consolidated leverage ratio
4.9 x
N/A
5.1 x
Consolidated net leverage ratio
4.5 x
N/A
4.6 x
N/A – Not Applicable.
- 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 March 31, 2023. A reconciliation
of our operating income to Adjusted OIBDA for the three months
ended September 30, 2022 and December 31, 2022 is presented in the
following table:
Three months ended
September 30, 2022
December 31, 2022
Liberty Latin America
VTR
Liberty Latin America
in millions
Operating income
$
152.9
$
30.4
$
109.5
Share-based compensation expense
20.8
0.3
10.9
Depreciation and amortization
234.3
—
249.0
Impairment, restructuring and other
operating items, net
7.0
1.2
35.8
Adjusted OIBDA
$
415.0
$
31.9
$
405.2
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, 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
March 31,
2023
2022
in millions
Operating income
$
60.6
$
73.6
Share-based compensation expense
6.2
8.5
Depreciation and amortization
147.6
137.5
Related-party fees and allocations
15.4
9.9
Impairment, restructuring and other
operating items, net
17.2
3.5
Adjusted OIBDA
247.0
233.0
Noncontrolling interests' share of
Adjusted OIBDA
35.0
32.8
Proportionate Adjusted OIBDA
$
212.0
$
200.2
A reconciliation of Liberty Puerto Rico's operating income to
Adjusted OIBDA is presented in the following table:
Three months ended
March 31,
2023
2022
in millions
Operating income
$
61.6
$
65.7
Share-based compensation expense
1.8
3.2
Depreciation and amortization
55.9
57.7
Related-party fees and allocations
12.1
12.6
Impairment, restructuring and other
operating items, net
3.0
1.4
Adjusted OIBDA
$
134.4
$
140.6
A reconciliation of Liberty Costa Rica's operating income to
Adjusted OIBDA is presented in the following table:
Three months ended
March 31,
2023
2022
CRC in billions
Operating income
8.4
8.2
Share-based compensation expense
0.1
0.6
Depreciation and amortization
12.8
10.5
Related-party fees and allocations
0.3
0.3
Impairment, restructuring and other
operating items, net
3.8
(0.2
)
Adjusted OIBDA
25.4
19.4
The following table sets forth the reconciliations from reported
revenue for our C&W borrowing group to rebased revenue and
related change calculations (USD in millions).
Three months ended March 31,
2022
Revenue – Reported
$
570.1
Rebase adjustments:
Acquisition
31.2
Foreign currency
(1.8
)
Other1
(1.6
)
Revenue – Rebased
$
597.9
Reported percentage change
7
%
Rebased percentage change
2
%
- On January 1, 2023, the B2B Costa Rican operation within our
C&W borrowing group was sold to our Liberty Costa Rica
borrowing group. This sale did not have a significant impact on the
financial results of our C&W borrowing group.
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 March 31,
2022
In millions
Adjusted OIBDA – Reported
$
233.0
Rebase adjustments:
Acquisition
(3.0
)
Foreign currency
(0.5
)
Other1
(0.8
)
Adjusted OIBDA – Rebased
$
228.7
Reported percentage change
6
%
Rebased percentage change
8
%
- On January 1, 2023, the B2B Costa Rican operation within our
C&W borrowing group was sold to our Liberty Costa Rica
borrowing group. This sale did not have a significant impact on the
financial results of our C&W borrowing group.
The following table sets forth the reconciliations from reported
revenue for our Liberty Costa Rica borrowing group to rebased
revenue and related change calculations.
Three months ended March 31,
2022
CRC in billions
Revenue – As reported
69.2
Rebased adjustment – Other1
0.9
Revenue – As rebased
70.1
Reported percent change
5
%
Rebased percent change
4
%
The following table sets forth the reconciliations from reported
Adjusted OIBDA for our Liberty Costa Rica borrowing group to
rebased Adjusted OIBDA and related change calculations.
Three months ended March 31,
2022
CRC in billions
Adjusted OIBDA – Reported
19.4
Rebased adjustment – Other1
0.5
Adjusted OIBDA – Rebased
19.9
Reported percent change
31
%
Rebased percent change
28
%
- On January 1, 2023, the B2B Costa Rican operation within our
C&W borrowing group was acquired by our Liberty Costa Rica
borrowing group. This acquisition did not have a significant impact
on the financial results of Liberty Costa Rica.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230508005537/en/
Investor Relations Kunal Patel ir@lla.com Corporate
Communications Kim Larson llacommunications@lla.com
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