Sequential financial growth with Q2 reported revenue up 2%
Continued strong Adjusted OIBDA growth in C&W Panama &
C&W Caribbean
Post-migration impacts in Puerto Rico; performance to improve in
H2
Agreement to combine operations with Tigo in Costa Rica
>$300 million across share repurchases & convertible
redemption to date in 2024
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 (“Q2”) and six
months (“YTD” or “H1 2024”) ended June 30, 2024.
CEO Balan Nair commented, “We continued to drive operational and
financial growth across most of our businesses in the second
quarter with notably strong performances in Panama, Costa Rica and
the Caribbean. In Puerto Rico, whilst we experienced additional
challenges following completion of the mobile subscriber migration,
we remain confident of improved performance in the second
half.”
“Our focus on broadband and postpaid mobile additions continued
to drive positive results with over 100,000 net subscribers added
in the second quarter across Central America and C&W Caribbean.
This was more than double the prior-year and 28% higher than the
first quarter. The results were driven by strong mobile growth in
Panama, where we successfully won customers following the exit of a
competitor, and continued momentum in Costa Rica. We also recently
announced the combination of our business in Costa Rica with Tigo,
which we will control following closing.”
“Costa Rica is a great country to operate in and Liberty Costa
Rica is a strong business for us. By combining Liberty and Tigo,
the fixed operations will accelerate the transition to FTTH and
will enable us to deliver exceptional high-speed services for
consumers, provide enhanced customer experiences, drive innovation,
and offer growth opportunities for our people. In addition we just
launched 5G across the country and are gaining traction in the
market as shown by our mobile growth.”
“Looking to the second half of the year, we anticipate a
significant inflection in financial performance as we move past
impacts from our Puerto Rico migration and begin to execute on our
growth plans in that market, while maintaining healthy positive
momentum across the rest of the group. In Puerto Rico, we now
expect synergies, operating cost improvements and top line
sequential growth will drive Adjusted OIBDA to more than $45
million per month towards the end of the second half.”
“We remain confident in achieving our medium term targets, and
repurchased 12 million shares in the first half of the year, as
well as redeeming our convertible notes that were due in July. In
aggregate, this represents over $300 million of capital, which is
equivalent to our entire spend in 2023.”
Q2 Business Highlights
- C&W Caribbean: continued financial momentum
- YoY reported and rebased revenue growth of 3% and 4%,
respectively
- YoY reported and rebased Adj. OIBDA growth of 7% and 8%,
respectively
- C&W Panama: strong subscriber growth and financial
performance
- 51,000 postpaid mobile subscriber additions as competitor exits
market
- YoY revenue and Adj. OIBDA growth of 9% and 10%,
respectively
- Liberty Networks: Strong enterprise growth
- Resilient MRR performance in wholesale business with steady
growth
- YoY reported enterprise revenue up 17%
- Liberty Puerto Rico: additional impacts following migration
- Post migration operational challenges stabilizing
- Operating and financial performance to significantly improve in
H2 2024
- Liberty Costa Rica: mobile momentum driving growth
- Postpaid net adds 65% higher YoY
- YoY reported and rebased revenue growth of 9% and 4%,
respectively
Hurricane Beryl
In July 2024, Hurricane Beryl impacted our Jamaica operation and
certain smaller operations within C&W Caribbean, resulting in
varying degrees of damage to homes, businesses and infrastructure
in these markets. In connection with Hurricane Beryl, we expect to
experience adverse subscriber and financial impacts during the
remainder of 2024. We currently estimate that due to Hurricane
Beryl:
- Revenue and Adjusted OIBDA will be negatively impacted by
between $10 million and $20 million for the remainder of 2024,
primarily during the third quarter, based on certain factors, such
as when power is fully restored to the impacted areas.
- We will incur property and equipment additions of approximately
$10 million to $20 million to replace infrastructure and equipment
that has been damaged beyond repair or to enhance network
resiliency.
Hurricane Beryl triggered our weather derivatives and we expect
to receive net third-party proceeds of approximately $44 million
that will be reflected as a derivative gain in our financial
statements. We are still in the process of assessing the impact of
Hurricane Beryl on our homes passed and subscribers.
Stock Repurchase Activity & Convertible Bond
Redemption
During the quarter, we repurchased $22 million worth of stock,
bringing the YTD 2024 total to $83 million and representing 12
million shares.
In June 2024, we entered into a series of capped call option
contracts on a total of 6 million Liberty Latin America Class A and
Class C common shares with expiration of 12 to 18 months.
Subsequent to June 30, 2024, we repurchased and cancelled the
remaining $140 million of Convertible Notes upon maturity.
Liberty Latin America and Millicom Agree to Combine
Operations in Costa Rica
Liberty Latin America and Millicom International Cellular S.A.
("Millicom") announced on August 1, 2024, that they had entered
into an agreement to combine their respective operations in Costa
Rica. Under the terms of the all-stock agreement, Liberty Latin
America and its minority partner in Costa Rica will hold an
approximate 86% interest and Millicom 14% in the joint operations
with the final ownership percentage to be confirmed at closing.
The transaction reinforces the parties’ commitment to Costa Rica
by creating a scaled platform and accelerating investments in fiber
network expansion. In a market that is undergoing rapid
technological advancements with the deployment of fiber networks by
multiple operators, this combination increases fiber competition
ensuring high-quality, good value services and access to the
digital economy.
The transaction is subject to customary closing conditions,
including regulatory authorizations, and we expect the transaction
to be completed during the second half of 2025.
Financial and Operating Highlights
Financial Highlights
Q2 2024
Q2 2023
YoY Decline
YoY Rebased
Decline1
H1 2024
H1 2023
YoY Decline
YoY Rebased
Decline1
(USD in millions)
Revenue
$
1,118
$
1,120
—
%
(1
%)
$
2,217
$
2,222
—
%
(1
%)
Operating income
$
111
$
135
(18
%)
$
204
$
242
(16
%)
Adjusted OIBDA2
$
389
$
441
(12
%)
(12
%)
$
763
$
841
(9
%)
(10
%)
Property & equipment additions
$
180
$
192
(7
%)
$
315
$
337
(7
%)
As a percentage of revenue
16
%
17
%
14
%
15
%
Adjusted FCF before distributions to
noncontrolling interest owners
$
(7
)
$
72
$
(157
)
$
22
Distributions to noncontrolling interest
owners
$
(11
)
$
(41
)
$
(11
)
$
(41
)
Adjusted FCF3
$
(18
)
$
31
$
(168
)
$
(19
)
Cash provided by operating activities
$
157
$
226
$
180
$
288
Cash used by investing activities
$
(166
)
$
(159
)
$
(282
)
$
(291
)
Cash used by financing activities
$
(55
)
$
(97
)
$
(281
)
$
(133
)
Amounts may not recalculate due to
rounding.
Operating Highlights4
Q2 2024
Q1 2024
Total customers
1,966,300
1,965,400
Organic customer additions
900
14,500
Fixed RGUs
3,997,400
3,978,100
Organic RGU additions
19,300
44,700
Organic internet additions
8,900
21,800
Mobile subscribers
7,912,300
7,907,400
Organic mobile gains / (losses)
20,800
(57,000
)
Organic postpaid additions
8,100
23,200
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)
Six months ended
Increase/(decrease)
June 30,
June 30,
2024
2023
%
Rebased %
2024
2023
%
Rebased %
in millions, except %
amounts
C&W Caribbean
$
368.3
$
356.3
3
4
$
732.5
$
710.1
3
4
C&W Panama
197.2
180.8
9
9
366.4
346.1
6
6
Liberty Networks
119.1
118.6
—
(1
)
227.6
227.3
—
(2
)
Liberty Puerto Rico
308.6
349.5
(12
)
(12
)
635.8
713.0
(11
)
(11
)
Liberty Costa Rica
147.2
135.2
9
4
299.5
264.4
13
6
Corporate
5.9
5.6
5
5
11.0
12.0
(8
)
(8
)
Eliminations
(28.3
)
(25.8
)
N.M.
N.M.
(55.4
)
(51.2
)
N.M.
N.M.
Total
$
1,118.0
$
1,120.2
—
(1
)
2,217.4
$
2,221.7
—
(1
)
N.M. – Not Meaningful.
- Reported revenue for the three and six months ended June 30,
2024 was flat as compared to the corresponding prior-year periods.
- Reported revenue in Q2 and H1 2024 was flat as (1) net organic
growth driven by C&W Caribbean and C&W Panama and (2) net
foreign exchange benefits of $8 million and $24 million,
respectively, were offset by organic declines in Liberty Puerto
Rico.
Q2 2024 Revenue Growth – Segment
Highlights
- C&W Caribbean: revenue grew 3% on a reported basis and 4%
on a rebased basis, year-over-year, driven by growth across all
product areas.
- Fixed residential revenue increased by 1% on a reported basis
and by 2% on a rebased basis. Rebased performance was driven by
ARPU growth mainly due to price increases across a number of
markets, and supported by broadband subscriber growth, primarily in
Jamaica.
- Mobile residential revenue increased by 4% on a reported basis
and by 5% on a rebased basis. Performance resulted from an increase
in postpaid subscribers year-over-year driven by our fixed-mobile
convergence propositions and higher prepaid ARPU following price
increases.
- B2B revenue was 5% higher on both a reported and rebased basis.
Growth was driven by higher project-related revenue.
- C&W Panama: revenue grew by 9% on a reported and rebased
basis, year-over-year.
- Fixed residential revenue was up 4%, driven by broadband RGU
additions following expansion of our FTTH networks, products and
commercial activities.
- Mobile residential revenue grew by 4%, driven by improved
prepaid ARPU as our products and promotions led to increased
recharge activity. This was partly offset by decreases in prepaid
mobile subscribers over the past twelve months, driven by the net
impact of (i) churn related to the migration of customers to our
network following the Claro Panama Acquisition, and (ii) the
addition of customers to our base following the exit of a
competitor from our market.
- B2B revenue increased by 17% primarily due to increased revenue
from government-related projects.
- Liberty Networks: revenue was flat and declined by 1% on a
reported and rebased basis, respectively. The year-over-year
rebased decline was driven by lower wholesale network revenue
associated with a reduction of $6 million in non-cash IRU revenue
primarily due to lower amortization year-over-year. This was partly
offset by higher enterprise revenue due to continued growth in
managed services and B2B connectivity.
- Liberty Puerto Rico: revenue was 12% lower on a reported and
rebased basis, year-over-year.
- Residential fixed revenue was broadly stable year-over-year,
declining by 1%, as broadband subscriber additions over the past
twelve months were more than offset by lower ARPU, primarily due to
retention discounts, including for customers previously receiving
subsidized services through the Affordable Connectivity Program
(ACP).
- Residential mobile revenue was 21% lower compared to the
prior-year period. This was driven by a reduction in mobile
subscribers, impacted by disruption related to the migration of
customers to our mobile network and a reduction in roaming
revenue.
- B2B revenue declined by 6% year-over-year, 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.
- Other revenue declined by $4 million as compared to the
prior-year quarter due to a reduction in revenue recognized on
funds received from the FCC.
- Liberty Costa Rica: revenue grew by 9% on a reported basis and
4% on a rebased basis, year-over-year. Reported performance
benefited from a $7 million positive foreign exchange impact as the
Costa Rican colon appreciated against the U.S. dollar. The strong
year-over-year rebased performance was driven by higher mobile
revenue due to increased equipment sales and postpaid subscriber
growth.
Operating Income
- Operating income was $111 million and $135 million for the
three months ended June 30, 2024 and 2023, respectively, and $204
million and $242 million for the six months ended June 30, 2024 and
2023, respectively.
- We reported lower operating income during the three and six
months ended June 30, 2024, as compared to the corresponding
periods in 2023, primarily due to the net impact of (i) declines in
Adjusted OIBDA and (ii) decreases in impairment, restructuring and
other operating items, net.
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
Six months ended
June 30,
Increase (decrease)
June 30,
Increase (decrease)
2024
2023
%
Rebased %
2024
2023
%
Rebased %
in millions, except % amounts
C&W Caribbean
$
157.0
$
146.3
7
8
$
307.6
$
286.5
7
8
C&W Panama
64.8
59.0
10
10
121.6
102.5
19
19
Liberty Networks
63.1
72.2
(13
)
(13
)
122.3
135.8
(10
)
(10
)
Liberty Puerto Rico
71.1
137.2
(48
)
(48
)
140.2
265.2
(47
)
(47
)
Liberty Costa Rica
53.4
50.1
7
1
111.7
95.3
17
10
Corporate
(20.3
)
(23.6
)
14
14
(40.1
)
(44.0
)
9
9
Total
$
389.1
$
441.2
(12
)
(12
)
$
763.3
$
841.3
(9
)
(10
)
Operating income margin
9.9
%
12.1
%
9.2
%
10.9
%
Adjusted OIBDA margin
34.8
%
39.4
%
34.4
%
37.9
%
N.M. – Not Meaningful.
- Reported Adjusted OIBDA for the three and six months ended June
30, 2024 decreased by 12% and 9%, respectively, as compared to the
corresponding prior-year periods.
- Reported Adjusted OIBDA declined in Q2 and H1 2024 as organic
growth in C&W Panama and C&W Caribbean, was more than
offset by reductions in Liberty Puerto Rico and Liberty
Networks.
Q2 2024 Adjusted OIBDA Growth – Segment
Highlights
- C&W Caribbean: Adjusted OIBDA increased by 7% on a reported
and 8% rebased basis, respectively, primarily driven by the
aforementioned revenue growth and supported by cost containment.
Our Adjusted OIBDA margin improved by over 150 basis points
year-over-year to 42.6%.
- C&W Panama: Adjusted OIBDA increased by 10% on both a
reported and rebased basis, driven by the aforementioned revenue
growth.
- Liberty Networks: Adjusted OIBDA decreased by 13% 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
adjustments for two large customers.
- Liberty Puerto Rico: Adjusted OIBDA declined by 48% on a
reported and rebased basis. The performance was driven by the net
impact of: (i) our aforementioned revenue decline, (ii) lower
direct costs, primarily due to lower TSA and roaming costs, and
(iii) higher other operating costs mainly related to (a) migration
activities, including a $12 million increase in bad debt expense
related to billing and collection issues, (b) higher information
technology service and license expenses, as we transitioned mobile
customers to our internal systems and (c) an $8 million credit
related to the CARES Act received in the prior-year period. TSA,
integration and inventory costs related to the migration were $16
million in the quarter.
- Liberty Costa Rica: Adjusted OIBDA grew by 7% and 1% on a
reported and rebased basis, respectively. Rebased performance was
driven by the aforementioned revenue growth and favorable foreign
exchange movements on non-CRC denominated costs, partly offset by
higher operating costs related to sales activity.
Net Earnings (Loss) Attributable to Shareholders
- Net earnings (loss) attributable to shareholders was ($43
million) for each of the three and six months ended June 30, 2024,
and $35 million and ($31 million) for the three and six months
ended June 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
Six months ended
June 30,
June 30,
2024
2023
2024
2023
USD in millions
Customer Premises Equipment
$
46.0
$
44.6
$
87.3
$
91.5
New Build & Upgrade
43.7
34.6
67.7
62.6
Capacity
26.1
26.2
49.6
45.6
Baseline
52.1
69.3
90.0
108.7
Product & Enablers
11.7
17.7
19.9
28.7
Property & equipment additions
179.6
192.4
314.5
337.1
Assets acquired under capital-related
vendor financing arrangements
(38.1
)
(36.0
)
(72.1
)
(71.9
)
Changes in current liabilities related to
capital expenditures and other
(1.0
)
2.6
7.8
7.9
Capital expenditures, net
$
140.5
$
159.0
$
250.2
$
273.1
Property & equipment additions as % of
revenue
16.1
%
17.2
%
14.2
%
15.2
%
Property & Equipment Additions:
C&W Caribbean
$
55.1
$
72.2
$
99.4
$
118.2
C&W Panama
31.4
25.9
48.0
45.5
Liberty Networks
14.6
13.1
26.4
23.9
Liberty Puerto Rico
48.9
54.0
89.9
101.7
Liberty Costa Rica
20.9
17.6
32.0
30.3
Corporate
8.7
9.6
18.8
17.5
Property & equipment additions
$
179.6
$
192.4
$
314.5
$
337.1
Property & Equipment Additions as a
Percentage of Revenue by Reportable Segment:
C&W Caribbean
15.0
%
20.3
%
13.6
%
16.6
%
C&W Panama
15.9
%
14.3
%
13.1
%
13.1
%
Liberty Networks
12.3
%
11.0
%
11.6
%
10.5
%
Liberty Puerto Rico
15.8
%
15.5
%
14.1
%
14.3
%
Liberty Costa Rica
14.2
%
13.0
%
10.7
%
11.5
%
New Build and Homes Upgraded by Reportable
Segment1:
C&W Caribbean
41,400
39,200
63,800
83,400
C&W Panama
13,100
25,600
30,400
52,800
Liberty Puerto Rico
15,600
15,600
29,400
24,500
Liberty Costa Rica
23,800
13,400
42,900
23,000
Total
93,900
93,800
166,500
183,700
- 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 June 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
$
139.6
$
—
$
139.6
$
104.2
C&W2
4,833.9
—
4,833.9
465.7
Liberty Puerto Rico3
2,707.6
5.2
2,712.8
31.8
Liberty Costa Rica
450.0
—
450.0
9.9
Total
$
8,131.1
$
5.2
$
8,136.3
$
611.6
Consolidated Leverage and Liquidity
Information:
June 30, 2024
March 31, 2024
Consolidated debt and finance lease
obligations to operating income ratio
20.0x
19.7x
Consolidated net debt and finance lease
obligations to operating income ratio
18.5x
18.1x
Consolidated gross leverage ratio4
5.3x
5.0x
Consolidated net leverage ratio4
4.9x
4.6x
Weighted average debt tenor5
3.9 years
4.1 years
Fully-swapped borrowing costs
6.0%
6.0%
Unused borrowing capacity (in
millions)6
$843.3
$870.5
- 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, 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 June 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 June 30,
2024 compliance reporting requirements.
Quarterly Subscriber Variance
Fixed and Mobile Subscriber
Variance Table — June 30, 2024 vs March 31, 2024
Homes Passed
Fixed-line Customer
Relationships
Video RGUs
Internet RGUs
Telephony RGUs
Total RGUs
Prepaid
Postpaid
Total Mobile
Subscribers
C&W Caribbean:
Jamaica
1,000
1,700
(1,500
)
3,400
3,100
5,000
(11,900
)
7,400
(4,500
)
The Bahamas
—
(600
)
(200
)
(300
)
(600
)
(1,100
)
(3,400
)
(500
)
(3,900
)
Trinidad and Tobago
—
(2,500
)
(300
)
(2,600
)
(1,800
)
(4,700
)
—
—
—
Barbados
—
(200
)
(200
)
200
(600
)
(600
)
(2,000
)
1,300
(700
)
Other
200
(200
)
(1,100
)
(1,300
)
(1,200
)
(3,600
)
(7,900
)
4,200
(3,700
)
Total C&W Caribbean
1,200
(1,800
)
(3,300
)
(600
)
(1,100
)
(5,000
)
(25,200
)
12,400
(12,800
)
C&W Panama
8,800
2,400
4,400
7,000
6,100
17,500
60,100
50,700
110,800
Total C&W
10,000
600
1,100
6,400
5,000
12,500
34,900
63,100
98,000
Liberty Puerto Rico
1,400
(1,500
)
(2,900
)
(400
)
1,200
(2,100
)
2,100
(85,600
)
(83,500
)
Liberty Costa Rica
20,400
1,800
1,900
2,900
4,100
8,900
(24,300
)
30,600
6,300
Total Organic Change
31,800
900
100
8,900
10,300
19,300
12,700
8,100
20,800
Q2 2024 Adjustments:
C&W Caribbean - Jamaica1
—
—
—
—
—
—
(15,900
)
—
(15,900
)
Total Q2 2024 Adjustments:
—
—
—
—
—
—
(15,900
)
—
(15,900
)
Net additions (losses)
31,800
900
100
8,900
10,300
19,300
(3,200
)
8,100
4,900
- Jamaica prepaid adjustment relates to mobile 2G shutdown.
ARPU per Customer Relationship
The following table provides ARPU per customer relationship for
the indicated periods:
Three months ended
FX-Neutral1
June 30, 2024
March 31, 2024
% Change
% Change
Reportable Segment:
C&W Caribbean
$
49.38
$
48.69
1
%
2
%
C&W Panama
$
37.79
$
38.44
(2
%)
(2
%)
Liberty Puerto Rico
$
73.05
$
72.82
—
%
—
%
Liberty Costa Rica2
$
43.33
$
44.64
(3
%)
(3
%)
Cable & Wireless Borrowing
Group
$
46.58
$
46.24
1
%
1
%
Mobile ARPU
The following table provides ARPU per mobile subscriber for the
indicated periods:
Three months ended
FX-Neutral1
June 30, 2024
March 31, 2024
% Change
% Change
Reportable Segment:
C&W Caribbean
$
14.68
$
14.61
—
%
1
%
C&W Panama
$
12.19
$
11.28
8
%
8
%
Liberty Puerto Rico3
$
39.75
$
40.48
(2
%)
(2
%)
Liberty Costa Rica4
$
7.11
$
7.07
1
%
—
%
Cable & Wireless Borrowing
Group
$
13.47
$
13.00
4
%
4
%
- 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 June 30, 2024 and March 31, 2024
were CRC 22,261 and CRC 22,947, 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 amount in Costa Rican colones for the three
months ended June 30, 2024 and March 31, 2024 were CRC 3,652 and
CRC 3,641, 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; our anticipated integration plans,
including synergies, opportunities and integration costs in Puerto
Rico following the AT&T Acquisition; the timing, benefits and
expected impact of the transaction with Millicom; 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 DISH in Puerto Rico and USVI
and 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, 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 FX. 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 table reflects preliminary unaudited selected
financial results, on a consolidated C&W basis, for the periods
indicated, in accordance with U.S. GAAP.
Three months ended
June 30,
Change
Rebased change1
2024
2023
in millions, except %
amounts
Revenue
$
662.3
$
634.5
4
%
4
%
Operating income
$
98.0
$
54.2
81
%
Adjusted OIBDA
$
284.4
$
277.7
2
%
3
%
Property & equipment additions
$
101.1
$
111.1
(9
%)
Operating income as a percentage of
revenue
14.8
%
8.5
%
Adjusted OIBDA as a percentage of
revenue
42.9
%
43.8
%
Proportionate Adjusted OIBDA
$
236.1
$
234.8
Six months ended
June 30,
Change
Rebased change1
2024
2023
in millions, except %
amounts
Revenue
$
1,282.6
$
1,241.7
3
%
3
%
Operating income
$
178.4
$
114.8
55
%
Adjusted OIBDA
$
551.1
$
524.7
5
%
5
%
Property & equipment additions
$
173.8
$
187.6
(7
%)
Operating income as a percentage of
revenue
13.9
%
9.2
%
Adjusted OIBDA as a percentage of
revenue
43.0
%
42.3
%
Proportionate Adjusted OIBDA
$
459.3
$
446.8
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:
June 30,
March 31,
Facility Amount
2024
2024
in millions
Credit Facilities:
Revolving Credit Facility due 2027
(Adjusted Term SOFR + 3.25%)
$ 580.0
$ —
$ —
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
2,100.0
2,100.0
4.25% CWP Term Loan due 2028
$ 435.0
435.0
435.0
Regional and other debt
125.2
126.4
Total Credit Facilities
2,660.2
2,661.4
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
458.7
447.7
Total third-party debt
4,833.9
4,824.1
Less: premiums, discounts and deferred
financing costs, net
(22.8
)
(24.3
)
Total carrying amount of third-party
debt
4,811.1
4,799.8
Less: cash and cash equivalents
(465.7
)
(513.2
)
Net carrying amount of third-party
debt
$ 4,345.4
$ 4,286.6
- At June 30, 2024, our third-party total and proportionate net
debt was $4.3 billion and $4.1 billion, respectively, our
Fully-swapped Borrowing Cost was 5.4%, and the average tenor of our
debt obligations (excluding vendor financing and debt related to
the Tower Transactions) was approximately 3.6 years.
- Our portion of Adjusted OIBDA, after deducting the
noncontrolling interests' share, (“Proportionate Adjusted OIBDA”)
was $236 million for Q2 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 June 30, 2024, we had maximum undrawn commitments of $636
million, including $80 million under our regional facilities. At
June 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 June 30,
2024 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
June 30,
Change
2024
2023
in millions, except %
amounts
Revenue
$
308.6
$
349.5
(12
)%
Operating income
$
(19.1
)
$
61.9
(131
)%
Adjusted OIBDA
$
71.1
$
137.2
(48
)%
Property & equipment additions
$
48.9
$
54.0
(9
)%
Operating income as a percentage of
revenue
(6.2
)%
17.7
%
Adjusted OIBDA as a percentage of
revenue
23.0
%
39.3
%
Six months ended
June 30,
Change
2024
2023
in millions, except %
amounts
Revenue
$
635.8
$
713.0
(11
)%
Operating income (loss)
$
(28.5
)
$
117.1
(124
)%
Adjusted OIBDA
$
140.2
$
265.2
(47
)%
Property & equipment additions
$
89.9
$
101.7
(12
)%
Operating income (loss) as a percentage of
revenue
(4.5
)%
16.4
%
Adjusted OIBDA as a percentage of
revenue
22.1
%
37.2
%
The following table details the nominal amount outstanding of
Liberty Puerto Rico's third-party debt, finance lease obligations
and cash and cash equivalents:
June 30,
March 31,
Facility amount
2024
2024
in millions
Credit Facilities:
Revolving Credit Facility due 2027
(Adjusted Term SOFR + 3.50%)
$
172.5
$
25.0
$
—
Term Loan Facility due 2028 (Adjusted Term
SOFR + 3.75%)
$
620.0
620.0
620.0
Total Senior Secured Credit Facilities
645.0
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 and Tower
Transactions
81.6
81.7
Finance lease obligations
5.2
5.3
Total debt and finance lease
obligations
2,712.8
2,688.0
Less: premiums and deferred financing
costs, net
(19.2
)
(20.4
)
Total carrying amount of debt
2,693.6
2,667.6
Less: cash, cash equivalents and
restricted cash related to debt1
(31.8
)
(59.9
)
Net carrying amount of debt
$
2,661.8
$
2,607.7
- 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 June 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
4.0 years.
- LPR's Covenant Consolidated Net Leverage Ratio was 7.6x, which
is calculated by annualizing the last two quarters of Covenant
EBITDA in accordance with LPR’s Group Credit Agreement.
- At June 30, 2024, we had maximum undrawn commitments of $148
million. At June 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 June 30, 2024
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
June 30,
Change
2024
2023
CRC in billions, except %
amounts
Revenue
75.6
73.0
4
%
Operating income
14.2
13.0
9
%
Adjusted OIBDA
27.4
27.1
1
%
Property & equipment additions
10.7
9.5
13
%
Operating income as a percentage of
revenue
18.8
%
17.8
%
Adjusted OIBDA as a percentage of
revenue
36.2
%
37.1
%
Six months ended
June 30,
Change
2024
2023
CRC in billions, except %
amounts
Revenue
153.9
145.7
6
%
Operating income
31.6
21.4
48
%
Adjusted OIBDA
57.4
52.5
10
%
Property & equipment additions
16.4
16.6
(1
%)
Operating income as a percentage of
revenue
20.5
%
14.7
%
Adjusted OIBDA as a percentage of
revenue
37.3
%
36.0
%
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:
June 30,
March 31,
2024
2024
Borrowing currency in
millions
CRC equivalent in
billions
10.875% Term Loan A Facility due 20311
$
50.0
26.3
25.1
10.875% Term Loan B Facility due 20311
$
400.0
210.6
200.6
Revolving Credit Facility due 2028 (Term
SOFR2 + 4.25%)
$
60.0
—
7.0
Total debt
236.9
232.7
Less: deferred financing costs
(7.0
)
(7.1
)
Total carrying amount of debt
229.9
225.6
Less: cash and cash equivalents
(5.2
)
(6.4
)
Net carrying amount of debt
224.7
219.2
Exchange rate (CRC to $)
526.5
501.4
- 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.
- Forward-looking term rate based on SOFR as published by CME
Group Benchmark Administration Limited.
- At June 30, 2024, our Fully-swapped Borrowing Cost was 10.9%
and the average tenor of our debt was approximately 6.5 years.
- LCR's Covenant Consolidated Net Leverage Ratio was 2.0x, which
is calculated by annualizing the last two quarters of Covenant
EBITDA in accordance with LCR’s Credit Agreement.
- At June 30, 2024, we had maximum undrawn commitments of $60
million. At June 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 June 30, 2024
compliance reporting requirements.
Subscriber Table
Consolidated Operating Data —
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
744,000
355,600
127,800
341,500
337,000
806,300
1,089,300
121,000
1,210,300
The Bahamas
125,700
33,000
7,600
26,300
32,000
65,900
133,300
25,700
159,000
Trinidad and Tobago
341,700
143,500
96,800
126,900
88,300
312,000
—
—
—
Barbados
140,400
85,400
38,800
78,900
68,300
186,000
79,900
52,100
132,000
Other
388,900
217,100
71,000
193,500
109,100
373,600
313,400
136,400
449,800
Total C&W Caribbean
1,740,700
834,600
342,000
767,100
634,700
1,743,800
1,615,900
335,200
1,951,100
C&W Panama
970,000
267,600
173,500
245,800
233,200
652,500
1,502,300
407,900
1,910,200
Total C&W
2,710,700
1,102,200
515,500
1,012,900
867,900
2,396,300
3,118,200
743,100
3,861,300
Liberty Puerto Rico 1
1,181,100
581,700
232,100
550,100
275,400
1,057,600
95,200
739,600
834,800
Liberty Costa Rica 2
787,100
282,400
188,200
269,100
86,200
543,500
2,246,700
969,500
3,216,200
Total
4,678,900
1,966,300
935,800
1,832,100
1,229,500
3,997,400
5,460,100
2,452,200
7,912,300
- Postpaid mobile subscribers include 154,500 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, 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 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 (including the convertible notes and
liabilities related to vendor financing and finance lease
obligations) 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
Six months ended
June 30,
June 30,
2024
2023
2024
2023
in millions
Operating income
$
110.8
$
135.4
$
203.6
$
242.0
Share-based compensation and other
Employee Incentive Plan-related expense1
16.0
24.5
43.0
53.7
Depreciation and amortization
236.7
240.5
484.5
475.1
Impairment, restructuring and other
operating items, net
25.6
40.8
32.2
70.5
Adjusted OIBDA
$
389.1
$
441.2
$
763.3
$
841.3
Operating income margin2
9.9
%
12.1
%
9.2
%
10.9
%
Adjusted OIBDA margin3
34.8
%
39.4
%
34.4
%
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 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
Six months ended
June 30,
June 30,
2024
2023
2024
2023
in millions
Net cash provided by operating
activities
$
156.9
$
225.6
$
180.2
$
288.0
Cash payments for direct acquisition and
disposition costs
2.5
2.1
3.3
3.5
Expenses financed by an intermediary1
48.6
52.6
80.8
93.9
Capital expenditures, net
(140.5
)
(159.0
)
(250.2
)
(273.1
)
Principal payments on amounts financed by
vendors and intermediaries
(74.3
)
(49.2
)
(152.0
)
(89.4
)
Principal payments on finance leases
(0.3
)
(0.3
)
(0.5
)
(0.5
)
Repayments of handset receivables
securitization
—
—
(18.4
)
—
Adjusted FCF before distributions to
noncontrolling interest owners
(7.1
)
71.8
(156.8
)
22.4
Distributions to noncontrolling interest
owners
(10.7
)
(40.8
)
(10.7
)
(41.2
)
Adjusted FCF
$
(17.8
)
$
31.0
$
(167.5
)
$
(18.8
)
- For purposes of our 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, we reflect the translation of our
prior-year results at the applicable average foreign currency
exchange rates that were used to translate our results for the
corresponding current-year period.
The rebased growth percentages are not necessarily indicative of
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 June 30,
2023
C&W Caribbean
C&W Panama
Liberty Networks
Liberty Puerto Rico
Liberty Costa Rica
Corporate
Intersegment
eliminations
Total
In millions
Revenue – Reported
$
356.3
$
180.8
$
118.6
$
349.5
$
135.2
$
5.6
$
(25.8
)
$
1,120.2
Rebase adjustment:
Foreign currency
(1.5
)
—
2.2
—
6.9
—
—
7.6
Revenue – Rebased
$
354.8
$
180.8
$
120.8
$
349.5
$
142.1
$
5.6
$
(25.8
)
$
1,127.8
Reported percentage change
3
%
9
%
—
%
(12
)%
9
%
5
%
N.M.
—
%
Rebased percentage change
4
%
9
%
(1
)%
(12
)%
4
%
5
%
N.M.
(1
)%
N.M. – Not Meaningful.
Six months ended June 30,
2023
C&W Caribbean
C&W Panama
Liberty Networks
Liberty Puerto Rico
Liberty Costa Rica
Corporate
Intersegment
eliminations
Total
In millions
Revenue – Reported
$
710.1
$
346.1
$
227.3
$
713.0
$
264.4
$
12.0
$
(51.2
)
$
2,221.7
Rebase adjustment:
Foreign currency
(2.4
)
—
5.6
—
18.9
—
—
22.1
Revenue – Rebased
$
707.7
$
346.1
$
232.9
$
713.0
$
283.3
$
12.0
$
(51.2
)
$
2,243.8
Reported percentage change
3
%
6
%
—
%
(11
)%
13
%
(8
)%
N.M.
—
%
Rebased percentage change
4
%
6
%
(2
)%
(11
)%
6
%
(8
)%
N.M.
(1
)%
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 June 30,
2023
C&W Caribbean
C&W Panama
Liberty Networks
Liberty Puerto Rico
Liberty Costa Rica
Corporate
Total
In millions
Adjusted OIBDA – Reported
$
146.3
$
59.0
$
72.2
$
137.2
$
50.1
$
(23.6
)
$
441.2
Rebase adjustment:
Foreign currency
(0.6
)
—
0.3
—
2.6
—
2.3
Adjusted OIBDA – Rebased
$
145.7
$
59.0
$
72.5
$
137.2
$
52.7
$
(23.6
)
$
443.5
Reported percentage change
7
%
10
%
(13
)%
(48
)%
7
%
14
%
(12
)%
Rebased percentage change
8
%
10
%
(13
)%
(48
)%
1
%
14
%
(12
)%
Six months ended June 30,
2023
C&W Caribbean
C&W Panama
Liberty Networks
Liberty Puerto Rico
Liberty Costa Rica
Corporate
Total
In millions
Adjusted OIBDA – Reported
$
286.5
$
102.5
$
135.8
$
265.2
$
95.3
$
(44.0
)
$
841.3
Rebase adjustment:
Foreign currency
(1.0
)
—
0.8
—
6.7
—
6.5
Adjusted OIBDA – Rebased
$
285.5
$
102.5
$
136.6
$
265.2
$
102.0
$
(44.0
)
$
847.8
Reported percentage change
7
%
19
%
(10
)%
(47
)%
17
%
9
%
(9
)%
Rebased percentage change
8
%
19
%
(10
)%
(47
)%
10
%
9
%
(10
)%
N.M. – Not Meaningful.
The following tables set 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 June 30,
2023
Residential fixed
revenue
Residential mobile
revenue
Total residential
revenue
B2B revenue
Total revenue
In millions
Revenue by product – Reported
$
129.1
$
99.9
$
229.0
$
127.3
$
356.3
Rebase adjustment:
Foreign currency
(0.5
)
(0.4
)
(0.9
)
(0.6
)
(1.5
)
Revenue by product – Rebased
$
128.6
$
99.5
$
228.1
$
126.7
$
354.8
Reported percentage change
1
%
4
%
3
%
5
%
3
%
Rebased percentage change
2
%
5
%
3
%
5
%
4
%
Six months ended June 30,
2023
Residential fixed
revenue
Residential mobile
revenue
Total residential
revenue
B2B revenue
Total revenue
In millions
Revenue by product – Reported
$
256.0
$
200.7
$
456.7
$
253.4
$
710.1
Rebase adjustment:
Foreign currency
(0.8
)
(0.8
)
(1.6
)
(0.8
)
(2.4
)
Revenue by product – Rebased
$
255.2
$
199.9
$
455.1
$
252.6
$
707.7
Reported percentage change
2
%
5
%
3
%
3
%
3
%
Rebased percentage change
2
%
5
%
3
%
4
%
4
%
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
June 30, 2024 and March 31, 2024 are set forth below:
June 30, 2024
March 31, 2024
in millions, except leverage
ratios
Total debt and finance lease
obligations
$
8,080.7
$
8,056.0
Discounts, premiums and deferred financing
costs, net
55.6
60.4
Adjusted total debt and finance lease
obligations
8,136.3
8,116.4
Less:
Cash and cash equivalents
598.6
668.5
Restricted cash related to debt1
13.0
8.0
Net debt and finance lease
obligations
$
7,524.7
$
7,439.9
Operating income2:
Operating income for the three months
ended December 31, 2023
N/A
$
113.0
Operating income for the three months
ended March 31, 2024
$
92.8
92.8
Operating income for the three months
ended June 30, 2024
110.8
N/A
Operating income – last two quarters
$
203.6
$
205.8
Annualized operating income – last two
quarters annualized
$
407.2
$
411.6
Adjusted OIBDA3:
Adjusted OIBDA for the three months ended
December 31, 2023
N/A
$
431.9
Adjusted OIBDA for the three months ended
March 31, 2024
$
374.2
374.2
Adjusted OIBDA for the three months ended
June 30, 2024
389.1
N/A
Adjusted OIBDA – last two quarters
$
763.3
$
806.1
Annualized Adjusted OIBDA – last two
quarters annualized
$
1,526.6
$
1,612.2
Consolidated debt and finance lease
obligations to operating income ratio
20.0 x
19.7 x
Consolidated net debt and finance lease
obligations to operating income ratio
18.5 x
18.1 x
Consolidated leverage ratio
5.3 x
5.0 x
Consolidated net leverage ratio
4.9 x
4.6 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 June 30, 2024. A reconciliation
of our operating income to Adjusted OIBDA for the three months
ended March 31, 2024 and December 31, 2023 is presented in the
following table:
Three months ended
March 31, 2024
December 31, 2023
in millions
Operating income
$
92.8
$
113.0
Share-based compensation and other
Employee Incentive Plan-related expense
27.0
10.9
Depreciation and amortization
247.8
302.7
Impairment, restructuring and other
operating items, net
6.6
5.3
Adjusted OIBDA
$
374.2
$
431.9
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
Six months ended
June 30,
June 30,
2024
2023
2024
2023
in millions
Operating income
$
98.0
$
54.2
$
178.4
$
114.8
Share-based compensation and other
Employee Incentive Plan-related expense
6.5
7.7
14.4
13.9
Depreciation and amortization
143.0
150.6
296.5
298.2
Related-party fees and allocations
26.8
28.2
48.0
43.6
Impairment, restructuring and other
operating items, net
10.1
37.0
13.8
54.2
Adjusted OIBDA
284.4
277.7
551.1
524.7
Noncontrolling interests' share of
Adjusted OIBDA
48.3
42.9
91.8
77.9
Proportionate Adjusted OIBDA
$
236.1
$
234.8
$
459.3
$
446.8
A reconciliation of Liberty Puerto Rico's operating income to
Adjusted OIBDA is presented in the following table:
Three months ended
Six months ended
June 30,
June 30,
2024
2023
2024
2023
in millions
Operating income
$
(19.1
)
$
61.9
$
(28.5
)
$
117.1
Share-based compensation and other
Employee Incentive Plan-related expense
1.9
1.7
4.4
3.5
Depreciation and amortization
62.0
58.8
124.8
114.7
Related-party fees and allocations
13.4
12.4
26.0
24.5
Impairment, restructuring and other
operating items, net
12.9
2.4
13.5
5.4
Adjusted OIBDA
$
71.1
$
137.2
$
140.2
$
265.2
A reconciliation of Liberty Costa Rica's operating income to
Adjusted OIBDA is presented in the following table:
Three months ended
Six months ended
June 30,
June 30,
2024
2023
2024
2023
CRC in billions
Operating income
14.2
13.0
31.6
21.4
Share-based compensation and other
Employee Incentive Plan-related expense
0.4
0.2
0.4
0.3
Depreciation and amortization
12.3
13.6
24.5
26.4
Related-party fees and allocations
0.4
0.3
0.7
0.6
Impairment, restructuring and other
operating items, net
0.1
—
0.2
3.8
Adjusted OIBDA
27.4
27.1
57.4
52.5
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 June 30,
2023
Six months ended June 30,
2023
in millions
Revenue – Reported
$
634.5
$
1,241.7
Rebase adjustment:
Foreign currency
0.8
3.2
Revenue – Rebased
$
635.3
$
1,244.9
Reported percentage change
4
%
3
%
Rebased percentage change
4
%
3
%
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 June 30,
2023
Six months ended June 30,
2023
in millions
Adjusted OIBDA – Reported
$
277.7
$
524.7
Rebase adjustment:
Foreign currency
(0.4
)
(0.3
)
Adjusted OIBDA – Rebased
$
277.3
$
524.4
Reported percentage change
2
%
5
%
Rebased percentage change
3
%
5
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240806454315/en/
Investor Relations Kunal Patel ir@lla.com
Corporate Communications Kim Larson
llacommunications@lla.com
Liberty Latin America (NASDAQ:LILAK)
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From Nov 2024 to Dec 2024
Liberty Latin America (NASDAQ:LILAK)
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From Dec 2023 to Dec 2024
