Liberty Latin America Reports Q1 2024 Results

45,000 organic broadband and postpaid mobile subscriber net adds

Strong Adjusted OIBDA growth across Panama, Costa Rica & Caribbean

Puerto Rico migration completed; performance set to improve

5% of shares outstanding repurchased in Q1; increased buyback authorization

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, 2024.

CEO Balan Nair commented, “We delivered strong operating and financial results across Panama, Costa Rica and C&W Caribbean in the first quarter. In Puerto Rico, we have achieved the significant milestone of migrating all our mobile customers to our own operating platform and are now positioned to drive sequential improvement throughout the year following significant integration-related expenses during the first quarter. We remain on track for significant Adj. OIBDA and cash flow expansion in the second half of the year.”

“The focus on our broadband and postpaid bases continued to drive subscriber additions through the first quarter. All of our reporting segments added broadband subscribers in Q1, led by our Jamaica and Panama markets. In postpaid mobile, Costa Rica was our strongest performer with Puerto Rico impacted by migration efforts. We have implemented price increases in our largest C&W Caribbean markets and Costa Rica which are expected to support our revenue growth ambitions.”

“In Puerto Rico, while we are incurring increased costs related to the final stages of customer migration and transitioning to new IT systems and a wireless core network, we believe we have the right strategic assets and team to be successful. Looking forward, we expect synergies, operating cost improvements and top line sequential growth will drive Adj. OIBDA to more than $45 million per month at some point in the second half. We are confident for a bright future and are well positioned for meaningful operating and financial expansion in 2025 and beyond.”

“We see a significant value opportunity in our equity. In the first quarter, we acted aggressively, repurchasing 9 million shares or about 5% of our equity. In addition, we increased our share repurchase authorization by $200 million.”

Business Highlights

• C&W Caribbean: operating momentum driving strong performance
  • 24,000 internet and postpaid mobile organic adds
  • Reported and rebased revenue growth of 3%
• C&W Panama: acquisition synergies contribute to strong growth
  • Reported and rebased revenue growth of 2%
  • Double-digit reported and rebased Adj. OIBDA growth of 31%
• Liberty Networks: solid recurring revenue growth
  • Wholesale performance impacted by reduction in non-cash IRU amortization
  • Double-digit enterprise services revenue growth
• Liberty Puerto Rico: broadband growth; mobile migration complete
  • Q1 Adj. OIBDA impacted by significant integration expenses
  • Operating and financial performance to improve sequentially through 2024
• Liberty Costa Rica: postpaid strength continues
  • Postpaid net adds higher sequentially and more than double prior-year quarter
  • Adj. OIBDA up 29% and 18% on a reported and rebased basis, respectively

Share Repurchase Program

On February 22, 2022, our Board of Directors approved a new share repurchase program. The program initially 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. 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. At March 31, 2024, the remaining amount authorized for share repurchases under the share repurchase program was $79 million.

On May 7, 2024, 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 2026.

Financial and Operating Highlights

Financial Highlights

 

Q1 2024

 

Q1 2023

 

YoY Decline

 

YoY Rebased Decline1

(USD in millions)

 

 

 

 

 

 

 

 

Revenue

 

$

1,099

 

 

$

1,102

 

 

—

%

 

(1

%)

Operating income

 

$

93

 

 

$

107

 

 

(13

%)

 

 

Adjusted OIBDA2

 

$

374

 

 

$

400

 

 

(6

%)

 

(7

%)

Property & equipment additions

 

$

135

 

 

$

145

 

 

(7

%)

 

 

As a percentage of revenue

 

 

12

%

 

 

13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted FCF3

 

$

(150

)

 

$

(50

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash provided by operating activities

 

$

23

 

 

$

62

 

 

 

 

 

Cash used by investing activities

 

$

(117

)

 

$

(132

)

 

 

 

 

Cash used by financing activities

 

$

(226

)

 

$

(35

)

 

 

 

 

Amounts may not recalculate due to rounding.

Operating Highlights4

 

Q1 2024

 

Q4 2023

Total customers

 

1,965,400

 

 

1,950,900

 

Organic customer additions

 

14,500

 

 

10,600

 

Fixed RGUs

 

3,978,100

 

 

3,933,400

 

Organic RGU additions

 

44,700

 

 

39,200

 

Organic internet additions

 

21,800

 

 

17,900

 

Mobile subscribers

 

7,907,400

 

 

7,977,400

 

Organic mobile losses

 

(57,000

)

 

(41,900

)

Organic postpaid additions

 

23,200

 

 

8,100

 

Revenue Highlights

The following table presents (i) revenue of each of our segments and corporate operations for the periods indicated and (ii) the percentage change from period-to-period on both a reported and rebased basis:

 

Three months ended

 

Increase/(decrease)

 

March 31,

 

 

 

2024

 

 

 

2023

 

 

%

 

 

Rebased %

 

in millions, except % amounts

 

 

 

 

 

 

 

 

C&W Caribbean

$

364.2

 

 

$

353.8

 

 

3

 

 

3

 

C&W Panama

 

169.2

 

 

 

165.3

 

 

2

 

 

2

 

Liberty Networks

 

108.5

 

 

 

108.7

 

 

—

 

 

(3

)

Liberty Puerto Rico

 

327.2

 

 

 

363.5

 

 

(10

)

 

(10

)

Liberty Costa Rica

 

152.3

 

 

 

129.2

 

 

18

 

 

8

 

Corporate

 

5.1

 

 

 

6.4

 

 

(20

)

 

(20

)

Eliminations

 

(27.1

)

 

 

(25.4

)

 

N.M.

 

N.M.

Total

 

1,099.4

 

 

$

1,101.5

 

 

—

 

 

(1

)

N.M. – Not Meaningful.

• Reported revenue for the three months ended March 31, 2024 was flat as compared to the corresponding prior-year period.
  • Reported revenue in Q1 was flat as (1) net organic growth driven by C&W Caribbean and Liberty Costa Rica and (2) net foreign exchange benefits of $16 million, were offset by organic declines in Liberty Puerto Rico.

Q1 2024 Revenue Growth – Segment Highlights

• C&W Caribbean: revenue grew 3% on both a reported and rebased basis, year-over-year, driven by growth across all product areas.
  • Fixed residential revenue increased by 2% on a reported and rebased basis. Rebased performance was driven by broadband subscriber growth, primarily in Jamaica, and higher broadband ARPU following price increases across a number of markets over the past year.
  • Mobile residential revenue increased by 5% on a reported and 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 in 2023.
  • B2B revenue was 2% higher on both a reported and rebased basis. Growth was driven by a number of newly awarded projects and underlying growth in recurring fixed and managed services revenue.
• C&W Panama: revenue grew by 2% on a reported and rebased basis, year-over-year.
  • Fixed residential revenue was up 6%, driven by broadband RGU additions over the past twelve months, following investments in our networks, products and commercial activities.
  • Mobile residential revenue decreased by 5%, driven by lower prepaid performance as volume reductions were partly offset by higher ARPU. Postpaid additions of 12,000 in the quarter were driven by our focus on FMC and improved commercial execution.
  • B2B revenue grew by 10% driven by increased revenue from government-related projects and data and managed services.
• Liberty Networks: revenue was flat and declined by 3% on a reported and rebased basis, respectively, year-over-year. The year-over-year rebased decline was driven by lower wholesale network revenue associated with a reduction of $7 million in non-cash IRU revenue due to lower amortization and accelerations year-over-year. This was partly offset by higher enterprise revenue due to continued growth in B2B connectivity and managed services.
• Liberty Puerto Rico: revenue was 10% lower on a reported and rebased basis, year-over-year.
  • Residential fixed revenue growth of 2% was primarily driven by broadband subscriber additions over the past twelve months.
  • Residential mobile revenue was 20% lower compared to the prior-year period. This was mostly driven by a $26 million reduction in equipment sales due primarily to a focus on migration activities. Subscription revenue was also lower year-over-year, driven primarily by a decrease in subscribers impacted by migration.
  • 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 18% on a reported basis and 8% on a rebased basis, year-over-year. Reported performance benefited from an $13 million positive foreign exchange impact year-over-year, 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 postpaid subscriber growth and equipment sales.

Operating Income

• Operating income was $93 million and $107 million for the three months ended March 31, 2024 and 2023, respectively.
  • We reported lower operating income during the three months ended March 31, 2024, as compared to the corresponding period in 2023, primarily due to the net impact of (i) a decline in Adjusted OIBDA, (ii) a decrease in impairment, restructuring and other operating items, net, and (iii) higher 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)

 

 

2024

 

 

 

2023

 

 

%

 

Rebased %

 

in millions, except % amounts

 

 

 

 

 

C&W Caribbean

$

150.6

 

$

140.2

 

7

 

8

 

C&W Panama

 

56.8

 

 

43.5

 

31

 

31

 

Liberty Networks

 

59.2

 

 

63.6

 

(7

)

(8

)

Liberty Puerto Rico

 

69.1

 

 

128.0

 

(46

)

(46

)

Liberty Costa Rica

 

58.3

 

 

45.2

 

29

 

18

 

Corporate

 

(19.8

)

 

(20.4

)

3

 

3

 

Total

$

374.2

 

$

400.1

 

(6

)

(7

)

Operating income margin

 

8.4

%

 

9.7

%

 

 

 

 

 

 

 

Adjusted OIBDA margin

 

34.0

%

 

36.3

%

 

 

N.M. – Not Meaningful.

• Reported Adjusted OIBDA for the three months ended March 31, 2024 decreased by 6%.
  • Reported Adjusted OIBDA declined as organic growth in C&W Panama, C&W Caribbean, and Liberty Costa Rica, was more than offset by a reduction in Liberty Puerto Rico.

Q1 2024 Adjusted OIBDA Growth – Segment Highlights

• C&W Caribbean: Adjusted OIBDA increased by 7% on a reported and 8% rebased basis, driven by the aforementioned revenue growth. Our Adjusted OIBDA margin improved by over 150 basis points year-over-year to 41%.
• C&W Panama: Adjusted OIBDA increased by 31% on a reported and rebased basis. The performance was driven by revenue growth and value capture activities related to the Claro Panamá acquisition.
• Liberty Networks: Adjusted OIBDA decreased by 7% and 8% on a reported and rebased basis, respectively. Our rebased performance was driven primarily by the aforementioned non-cash related revenue decline in the quarter.
• Liberty Puerto Rico: Adjusted OIBDA declined by 46% on a reported and rebased basis. The performance was driven by the net impact of our aforementioned revenue decline, lower direct costs, primarily due to lower equipment sales, and higher other operating costs mainly related to migration and integration activities, year-over-year.
  • Q1 Adjusted OIBDA was impacted by the following integration-related items: (i) TSA costs of $18 million, (ii) migration and integration-related costs of $14 million, and (iii) inventory-related costs of $9 million.
• Liberty Costa Rica: Adjusted OIBDA grew by 29% and 18% 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.

Net Loss Attributable to Shareholders

• Net loss attributable to shareholders was $1 million and $66 million for the three months ended March 31, 2024 and 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

 

March 31,

 

 

2024

 

 

 

2023

 

 

USD in millions

 

 

 

Customer Premises Equipment

$

41.3

 

$

46.9

 

New Build & Upgrade

 

24.0

 

 

28.0

 

Capacity

 

23.5

 

 

19.4

 

Baseline

 

37.9

 

 

39.4

 

Product & Enablers

 

8.2

 

 

11.0

 

Property & equipment additions

 

134.9

 

 

144.7

 

Assets acquired under capital-related vendor financing arrangements

 

(34.0

)

 

(35.9

)

Changes in current liabilities related to capital expenditures and other

 

8.8

 

 

5.3

 

Capital expenditures, net

$

109.7

 

$

114.1

 

Property & equipment additions as % of revenue

 

12.3

%

 

13.1

%

Property & Equipment Additions:

 

 

C&W Caribbean

$

44.3

 

$

46.0

 

C&W Panama

 

16.6

 

 

19.6

 

Liberty Networks

 

11.8

 

 

10.8

 

Liberty Puerto Rico

 

41.0

 

 

47.7

 

Liberty Costa Rica

 

11.1

 

 

12.7

 

Corporate

 

10.1

 

 

7.9

 

Property & equipment additions

$

134.9

 

$

144.7

 

Property & Equipment Additions as a Percentage of Revenue by Reportable Segment:

 

 

C&W Caribbean

 

12.2

%

 

13.0

%

C&W Panama

 

9.8

%

 

11.9

%

Liberty Networks

 

10.9

%

 

9.9

%

Liberty Puerto Rico

 

12.5

%

 

13.1

%

Liberty Costa Rica

 

7.3

%

 

9.8

%

New Build and Homes Upgraded by Reportable Segment1:

 

 

C&W Caribbean

 

22,400

 

 

44,200

 

C&W Panama

 

17,300

 

 

27,200

 

Liberty Puerto Rico

 

13,800

 

 

8,900

 

Liberty Costa Rica

 

19,100

 

 

9,600

 

Total

 

72,600

 

 

89,900

 

1. Table excludes Liberty Networks 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, 2024:

 

Debt

 

Finance lease obligations

 

Debt and

finance lease obligations

 

Cash, cash equivalents and restricted cash related to debt

 

in millions

 

 

 

 

 

 

 

 

Liberty Latin America1

$

140.3

 

$

—

 

$

140.3

 

 

$

90.6

 

C&W2

 

4,824.1

 

 

—

 

 

4,824.1

 

 

 

513.2

 

Liberty Puerto Rico3

 

2,682.7

 

 

5.3

 

 

2,688.0

 

 

 

59.9

 

Liberty Costa Rica

 

464.0

 

 

—

 

 

464.0

 

 

 

12.8

 

Total

$

8,111.1

 

$

5.3

 

$

8,116.4

 

 

$

676.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Leverage and Liquidity Information:

 

March 31, 2024

 

December 31, 2023

 

 

 

 

 

 

 

 

Consolidated debt and finance lease obligations to operating income ratio

 

19.7x

 

15.0x

Consolidated net debt and finance lease obligations to operating income ratio

 

18.1x

 

13.2x

Consolidated gross leverage ratio4

 

5.0x

 

4.8x

Consolidated net leverage ratio4

 

4.6x

 

4.2x

Weighted average debt tenor5

 

4.1 years

 

4.3 years

Fully-swapped borrowing costs

 

 

6.0%

 

 

6.0%

Unused borrowing capacity (in millions)6

 

$

870.5

 

 

$

869.0

 

1. 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.
2. Represents the C&W borrowing group, including the C&W Caribbean, Liberty Networks and C&W Panama reportable segments.
3. Cash amount includes restricted cash that serves as collateral against certain lines of credit associated with the funding received from the FCC to continue to expand and improve our fixed network in Puerto Rico.
4. 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.
5. 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.
6. At March 31, 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 March 31, 2024 compliance reporting requirements.

Quarterly Subscriber Variance

 

Fixed and Mobile Subscriber Variance Table — March 31, 2024 vs December 31, 2023

 

Homes Passed

 

Fixed-line Customer Relationships

 

Video RGUs

 

Internet

RGUs

 

Telephony

RGUs

 

Total

RGUs

 

 

Prepaid

 

Postpaid

 

Total Mobile Subscribers

 

 

 

 

 

C&W Caribbean:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jamaica

900

 

5,700

 

 

(700

)

 

7,200

 

 

7,000

 

 

13,500

 

 

 

9,000

 

 

7,200

 

 

16,200

 

The Bahamas

—

 

(300

)

 

200

 

 

400

 

 

(700

)

 

(100

)

 

 

(1,100

)

 

1,600

 

 

500

 

Trinidad and Tobago

—

 

(1,400

)

 

—

 

 

(1,700

)

 

(1,800

)

 

(3,500

)

 

 

—

 

 

—

 

 

—

 

Barbados

—

 

400

 

 

200

 

 

700

 

 

(300

)

 

600

 

 

 

(300

)

 

1,900

 

 

1,600

 

Other

—

 

(200

)

 

(1,000

)

 

1,600

 

 

(1,300

)

 

(700

)

 

 

(600

)

 

5,100

 

 

4,500

 

Total C&W Caribbean

900

 

4,200

 

 

(1,300

)

 

8,200

 

 

2,900

 

 

9,800

 

 

 

7,000

 

 

15,800

 

 

22,800

 

C&W Panama

7,600

 

4,800

 

 

2,200

 

 

6,300

 

 

6,000

 

 

14,500

 

 

 

(69,000

)

 

12,000

 

 

(57,000

)

Total C&W

8,500

 

9,000

 

 

900

 

 

14,500

 

 

8,900

 

 

24,300

 

 

 

(62,000

)

 

27,800

 

 

(34,200

)

Liberty Puerto Rico

1,000

 

2,400

 

 

(2,100

)

 

3,400

 

 

5,400

 

 

6,700

 

 

 

(22,100

)

 

(38,900

)

 

(61,000

)

Liberty Costa Rica

17,200

 

3,100

 

 

3,200

 

 

3,900

 

 

6,600

 

 

13,700

 

 

 

3,900

 

 

34,300

 

 

38,200

 

Total Organic Change

26,700

 

14,500

 

 

2,000

 

 

21,800

 

 

20,900

 

 

44,700

 

 

 

(80,200

)

 

23,200

 

 

(57,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1 2024 Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C&W Caribbean - Jamaica1

—

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

(13,000

)

 

—

 

 

(13,000

)

Total Q1 2024 Adjustments:

—

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

(13,000

)

 

—

 

 

(13,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Adds (Losses)

26,700

 

14,500

 

 

2,000

 

 

21,800

 

 

20,900

 

 

44,700

 

 

 

(93,200

)

 

23,200

 

 

(70,000

)

1. 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

 

March 31, 2024

 

December 31, 2023

 

% Change

 

% Change

 

 

 

 

 

 

 

 

Reportable Segment:

 

 

 

 

 

 

 

C&W Caribbean

$

48.69

 

$

49.66

 

(2

%)

 

(2

%)

C&W Panama

$

38.44

 

$

38.58

 

—

%

 

—

%

Liberty Puerto Rico

$

72.82

 

$

73.32

 

(1

%)

 

(1

%)

Liberty Costa Rica2

$

44.64

 

$

44.32

 

1

%

 

(3

%)

Cable & Wireless Borrowing Group

$

46.24

 

$

47.03

 

(2

%)

 

(2

%)

Mobile ARPU

The following table provides ARPU per mobile subscriber for the indicated periods:

 

Three months ended

 

 

 

FX-Neutral1

 

March 31, 2024

 

December 31, 2023

 

% Change

 

% Change

 

 

 

 

 

 

 

 

Reportable Segment:

 

 

 

 

 

 

 

C&W Caribbean

$

14.49

 

$

14.55

 

—

%

 

—

%

C&W Panama

$

11.28

 

$

11.12

 

1

%

 

1

%

Liberty Puerto Rico

$

40.48

 

$

38.95

 

4

%

 

4

%

Liberty Costa Rica3

$

7.07

 

$

6.74

 

5

%

 

2

%

Cable & Wireless Borrowing Group

$

12.94

 

$

12.85

 

1

%

 

1

%

1. 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.
2. The ARPU per customer relationship amounts in Costa Rican colones for the three months ended March 31, 2024 and December 31, 2023 were CRC 22,947 and CRC 23,564, respectively.
3. The mobile ARPU amount in Costa Rican colones for the three months ended March 31, 2024 and December 31, 2023 were CRC 3,641 and CRC 3,580, 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 timing for completion, synergies, opportunities and integration costs in Puerto Rico following the AT&T Acquisition; 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 ability to obtain regulatory approvals for the transaction with DISH Networks and satisfy the other conditions to closing; 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

1. 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.
2. Consolidated Adjusted OIBDA is a non-GAAP measure. For the definition of Adjusted OIBDA and required reconciliations, see Non-GAAP Reconciliations below.
3. 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.
4. 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

 

 

 

 

 

March 31,

 

Change

 

Rebased change1

 

 

2024

 

 

 

2023

 

 

 

 

in millions, except % amounts

 

 

 

 

 

 

 

 

Revenue

$

620.3

 

 

$

607.2

 

 

2

%

 

2

%

 

 

 

 

 

 

 

 

Operating income

$

81.6

 

 

$

60.6

 

 

35

%

 

 

 

 

 

 

 

 

 

 

Adjusted OIBDA

$

266.7

 

 

$

247.0

 

 

8

%

 

8

%

 

 

 

 

 

 

 

 

Property & equipment additions

$

72.7

 

 

$

76.5

 

 

(5

%)

 

 

 

 

 

 

 

 

 

 

Operating income as a percentage of revenue

 

13.2

%

 

 

10.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted OIBDA as a percentage of revenue

 

43.0

%

 

 

40.7

%

 

 

 

 

 

 

 

 

 

 

 

 

Proportionate Adjusted OIBDA

$

223.2

 

 

$

212.0

 

 

 

 

 

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:

 

 

 

March 31,

 

December 31,

 

Facility Amount

 

 

2024

 

 

 

2023

 

 

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 debt1

 

 

126.4

 

 

 

159.2

 

Total Credit Facilities

 

 

2,661.4

 

 

 

2,694.2

 

Notes:

 

 

 

 

 

5.75% USD Senior Secured Notes due 2027

$

495.0

 

 

495.0

 

 

 

495.0

 

6.875% USD Senior Notes due 2027

$

1,220.0

 

 

1,220.0

 

 

 

1,220.0

 

Total Notes

 

 

1,715.0

 

 

 

1,715.0

 

Vendor financing and Tower Transactions

 

 

447.7

 

 

 

460.3

 

Total third-party debt

 

 

4,824.1

 

 

 

4,869.5

 

Less: premiums, discounts and deferred financing costs, net

 

 

(24.3

)

 

 

(25.9

)

Total carrying amount of third-party debt

 

 

4,799.8

 

 

 

4,843.6

 

Less: cash and cash equivalents

 

 

(513.2

)

 

 

(737.9

)

Net carrying amount of third-party debt

 

$

4,286.6

 

 

$

4,105.7

 

1. Amounts include $69 million of amortizing loans which are due in three annual installments beginning in May 2024.

• At March 31, 2024, our third-party total and proportionate net debt was $4.3 billion and $4.0 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 3.9 years.
• Our portion of Adjusted OIBDA, after deducting the noncontrolling interests' share, (“Proportionate Adjusted OIBDA”) was $223 million for Q1 2024.
• C&W's Covenant Proportionate Net Leverage Ratio was 3.9x, which is calculated by annualizing the last two quarters of Covenant EBITDA in accordance with C&W's Credit Agreement.
• At March 31, 2024, we had maximum undrawn commitments of $652 million, including $80 million under our regional facilities. At March 31, 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 March 31, 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

 

 

 

March 31,

 

Change

 

 

2024

 

 

 

2023

 

 

 

in millions, except % amounts

 

 

 

 

 

 

Revenue

$

327.2

 

 

$

363.5

 

 

(10

)%

 

 

 

 

 

 

Operating income (loss)

$

(9.4

)

 

$

55.2

 

 

(117

)%

 

 

 

 

 

 

Adjusted OIBDA

$

69.1

 

 

$

128.0

 

 

(46

)%

 

 

 

 

 

 

Property & equipment additions

$

41.0

 

 

$

47.7

 

 

(14

)%

 

 

 

 

 

 

Operating income (loss) as a percentage of revenue

 

(2.9

)%

 

 

15.2

%

 

 

 

 

 

 

 

 

Adjusted OIBDA as a percentage of revenue

 

21.1

%

 

 

35.2

%

 

 

The following table details the nominal amount outstanding of Liberty Puerto Rico's third-party debt, finance lease obligations and cash and cash equivalents:

 

 

 

March 31,

 

December 31,

 

Facility amount

 

 

2024

 

 

 

2023

 

 

in millions

 

 

 

 

 

 

Credit Facilities:

 

 

 

 

 

Revolving Credit Facility due 2027 (Adjusted Term SOFR + 3.50%)

$

172.5

 

$

—

 

 

$

—

 

Term Loan Facility due 2028 (Adjusted Term SOFR + 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, Tower Transactions and other

 

 

81.7

 

 

 

100.3

 

Finance lease obligations

 

 

5.3

 

 

 

5.5

 

Total debt and finance lease obligations

 

 

2,688.0

 

 

 

2,706.8

 

Less: premiums and deferred financing costs, net

 

 

(20.4

)

 

 

(21.9

)

Total carrying amount of debt

 

 

2,667.6

 

 

 

2,684.9

 

Less: cash, cash equivalents and restricted cash related to debt1

 

 

(59.9

)

 

 

(127.9

)

Net carrying amount of debt

 

$

2,607.7

 

 

$

2,557.0

 

1. Cash amounts include restricted cash that serves as collateral against certain lines of credit associated with funding received from the FCC to continue to expand and improve our fixed network in Puerto Rico.

• At March 31, 2024, our Fully-swapped Borrowing Cost was 6.1% and the average tenor of our debt (excluding vendor financing, debt related to the Tower Transactions and other debt) was approximately 4.3 years.
• LPR's Covenant Consolidated Net Leverage Ratio was 6.3x, which is calculated by annualizing the last two quarters of Covenant EBITDA in accordance with LPR’s Group Credit Agreement.
• At March 31, 2024, we had maximum undrawn commitments of $173 million. At March 31, 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 March 31, 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

 

 

 

March 31,

 

Change

 

2024

 

2023

 

 

CRC in billions, except % amounts

 

 

 

 

 

 

Revenue

78.3

 

 

72.7

 

 

8

%

 

 

 

 

 

 

Operating income

17.4

 

 

8.4

 

 

107

%

 

 

 

 

 

 

Adjusted OIBDA

30.0

 

 

25.4

 

 

18

%

 

 

 

 

 

 

Property & equipment additions

5.7

 

 

7.1

 

 

(20

%)

 

 

 

 

 

 

Operating income as a percentage of revenue

22.2

%

 

11.6

%

 

 

 

 

 

 

 

 

Adjusted OIBDA as a percentage of revenue

38.3

%

 

34.9

%

 

 

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:

 

March 31,

 

December 31,

 

2024

 

2023

 

Borrowing currency in millions

 

CRC equivalent in billions

 

 

 

 

 

 

 

10.875% Term Loan A Facility due 20311

$

50.0

 

25.1

 

 

26.2

 

10.875% Term Loan B Facility due 20311

$

400.0

 

200.6

 

 

209.2

 

Revolving Credit Facility due 2028 (Term SOFR2 + 4.25%)

$

60.0

 

7.0

 

 

—

 

Total credit facilities

 

232.7

 

 

235.4

 

Other

 

—

 

 

0.3

 

Total debt and finance lease obligations

 

232.7

 

 

235.7

 

Less: deferred financing costs

 

(7.1

)

 

(7.5

)

Total carrying amount of debt

 

225.6

 

 

228.2

 

Less: cash and cash equivalents

 

(6.4

)

 

(15.9

)

Net carrying amount of debt

 

219.2

 

 

212.3

 

 

 

 

 

 

 

 

Exchange rate (CRC to $)

 

501.4

 

 

523.0

 

1. From July 15, 2028 and thereafter, the interest rate is subject to increase by 0.125% per annum for each of the two Sustainability Performance Targets (as defined in the credit agreement) not achieved by Liberty Costa Rica by no later than December 31, 2027.
2. Forward-looking term rate based on SOFR as published by CME Group Benchmark Administration Limited.

• At March 31, 2024, our Fully-swapped Borrowing Cost was 10.9% and the average tenor of our debt was approximately 6.6 years.
• LCR's Covenant Consolidated Net Leverage Ratio was 1.9x, which is calculated by annualizing the last two quarters of Covenant EBITDA in accordance with LCR’s Credit Agreement.
• At March 31, 2024, we had maximum undrawn commitments of $46 million. At March 31, 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 March 31, 2024 compliance reporting requirements.

Subscriber Table

 

Consolidated Operating Data — 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

743,000

 

353,900

 

129,300

 

338,100

 

333,900

 

801,300

 

 

1,117,100

 

113,600

 

1,230,700

The Bahamas

125,700

 

33,600

 

7,800

 

26,600

 

32,600

 

67,000

 

 

136,700

 

26,200

 

162,900

Trinidad and Tobago

341,700

 

146,000

 

97,100

 

129,500

 

90,100

 

316,700

 

 

—

 

—

 

—

Barbados

140,400

 

85,600

 

39,000

 

78,700

 

68,900

 

186,600

 

 

81,900

 

50,800

 

132,700

Other

388,700

 

217,300

 

72,100

 

194,800

 

110,300

 

377,200

 

 

321,300

 

132,200

 

453,500

Total C&W Caribbean

1,739,500

 

836,400

 

345,300

 

767,700

 

635,800

 

1,748,800

 

 

1,657,000

 

322,800

 

1,979,800

C&W Panama

961,200

 

265,200

 

169,100

 

238,800

 

227,100

 

635,000

 

 

1,442,200

 

357,200

 

1,799,400

Total C&W

2,700,700

 

1,101,600

 

514,400

 

1,006,500

 

862,900

 

2,383,800

 

 

3,099,200

 

680,000

 

3,779,200

Liberty Puerto Rico 1

1,179,700

 

583,200

 

235,000

 

550,500

 

274,200

 

1,059,700

 

 

93,100

 

825,200

 

918,300

Liberty Costa Rica 2

766,700

 

280,600

 

186,300

 

266,200

 

82,100

 

534,600

 

 

2,271,000

 

938,900

 

3,209,900

Total

4,647,100

 

1,965,400

 

935,700

 

1,823,200

 

1,219,200

 

3,978,100

 

 

5,463,300

 

2,444,100

 

7,907,400

1. Postpaid mobile subscribers include 192,400 CRUs.
2. 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, 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,

 

2024

 

2023

 

in millions

 

 

 

Operating income

$

92.8

 

$

106.6

 

Share-based compensation expense

 

27.0

 

 

29.2

 

Depreciation and amortization

 

247.8

 

 

234.6

 

Impairment, restructuring and other operating items, net

 

6.6

 

 

29.7

 

Adjusted OIBDA

$

374.2

 

$

400.1

 

Operating income margin1

 

8.4

%

 

9.7

%

 

 

 

Adjusted OIBDA margin2

 

34.0

%

 

36.3

%

1. Calculated by dividing operating income by total revenue for the applicable period.
2. 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

 

March 31,

 

2024

 

2023

 

in millions

 

 

 

 

Net cash provided by operating activities

$

23.3

 

 

$

62.4

 

Cash payments for direct acquisition and disposition costs

 

0.8

 

 

 

1.4

 

Expenses financed by an intermediary1

 

32.2

 

 

 

41.3

 

Capital expenditures, net

 

(109.7

)

 

 

(114.1

)

Principal payments on amounts financed by vendors and intermediaries

 

(77.7

)

 

 

(40.2

)

Principal payments on finance leases

 

(0.2

)

 

 

(0.2

)

Repayments of handset receivables securitization

 

(18.4

)

 

 

—

 

Adjusted FCF before distributions to noncontrolling interest owners

 

(149.7

)

 

 

(49.4

)

Distributions to noncontrolling interest owners

 

—

 

 

 

(0.4

)

Adjusted FCF

$

(149.7

)

 

$

(49.8

)

1. 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.

Adjusted FCF performance as compared to the prior-year quarter was impacted by the following items:

• Increased interest and taxes year-over-year, including one-time VAT and income tax impacts of the Tower Transactions entered into during 2023; and
• An adverse vendor financing impact including incremental pay downs in Panama.

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 table sets forth the reconciliation from reported revenue to rebased revenue and related change calculations.

 

Three months ended March 31, 2023

 

C&W Caribbean

 

C&W Panama

 

Liberty Networks

 

Liberty Puerto Rico

 

Liberty Costa Rica

 

Corporate

 

Intersegment eliminations

 

Total

 

In millions

 

 

 

 

 

 

 

 

 

Revenue – Reported

$

353.8

 

$

165.3

 

$

108.7

 

$

363.5

 

$

129.2

 

$

6.4

 

$

(25.4

)

$

1,101.5

 

Rebase adjustment:

 

 

 

 

 

 

 

 

Foreign currency

 

(0.9

)

 

—

 

 

3.4

 

 

—

 

 

12.0

 

 

—

 

 

—

 

 

14.5

 

Revenue – Rebased

$

352.9

 

$

165.3

 

$

112.1

 

$

363.5

 

$

141.2

 

$

6.4

 

$

(25.4

)

$

1,116.0

 

Reported percentage change

 

3

%

 

2

%

 

—

%

 

(10

)%

 

18

%

 

(20

)%

N.M.

 

—

%

 

 

 

 

 

 

 

 

 

Rebased percentage change

 

3

%

 

2

%

 

(3

)%

 

(10

)%

 

8

%

 

(20

)%

N.M.

 

(1

)%

N.M. – Not Meaningful.

The following table sets forth the reconciliation from reported Adjusted OIBDA to rebased Adjusted OIBDA and related change calculations.

 

Three months ended March 31, 2023

 

C&W Caribbean

 

C&W Panama

 

Liberty Networks

 

Liberty Puerto Rico

 

Liberty Costa Rica

 

Corporate

 

Total

 

In millions

 

 

 

 

 

 

 

 

Adjusted OIBDA – Reported

$

140.2

 

$

43.5

 

$

63.6

 

$

128.0

 

$

45.2

 

$

(20.4

)

$

400.1

 

Rebase adjustment:

 

 

 

 

 

 

 

Foreign currency

 

(0.4

)

 

—

 

 

0.5

 

 

—

 

 

4.1

 

 

—

 

 

4.2

 

Adjusted OIBDA – Rebased

$

139.8

 

$

43.5

 

$

64.1

 

$

128.0

 

$

49.3

 

$

(20.4

)

$

404.3

 

Reported percentage change

 

7

%

 

31

%

 

(7

)%

 

(46

)%

 

29

%

 

3

%

 

(6

)%

 

 

 

 

 

 

 

 

Rebased percentage change

 

8

%

 

31

%

 

(8

)%

 

(46

)%

 

18

%

 

3

%

 

(7

)%

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, 2023

 

Residential fixed revenue

 

Residential mobile revenue

 

Total residential revenue

 

B2B revenue

 

Total revenue

 

In millions

 

 

 

 

 

 

 

 

 

 

Revenue by product – Reported

$

126.9

 

 

$

100.8

 

 

$

227.7

 

 

$

126.1

 

 

$

353.8

 

Rebase adjustment:

 

 

 

 

 

 

 

 

 

Foreign currency

 

(0.3

)

 

 

(0.4

)

 

 

(0.7

)

 

 

(0.2

)

 

 

(0.9

)

Revenue by product – Rebased

$

126.6

 

 

$

100.4

 

 

$

227.0

 

 

$

125.9

 

 

$

352.9

 

 

 

 

 

 

 

 

 

 

 

Reported percentage change

 

2

%

 

 

5

%

 

 

3

%

 

 

2

%

 

 

3

%

 

 

 

 

 

 

 

 

 

 

Rebased percentage change

 

2

%

 

 

5

%

 

 

4

%

 

 

2

%

 

 

3

%

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 March 31, 2024 and December 31, 2023 are set forth below:

 

March 31, 2024

 

December 31, 2023

 

in millions, except leverage ratios

 

 

 

 

Total debt and finance lease obligations

$

8,056.0

 

$

8,179.9

Discounts, premiums and deferred financing costs, net

 

60.4

 

 

67.8

Adjusted total debt and finance lease obligations

 

8,116.4

 

 

8,247.7

Less:

 

 

 

Cash and cash equivalents

 

668.5

 

 

988.6

Restricted cash related to debt1

 

8.0

 

 

8.0

Net debt and finance lease obligations

$

7,439.9

 

$

7,251.1

 

 

 

 

Operating income2:

 

 

 

Operating income for the three months ended September 30, 2023

 

N/A

 

$

162.7

Operating income for the three months ended December 31, 2023

$

113.0

 

 

113.0

Operating income for the three months ended March 31, 2024

 

92.8

 

 

N/A

Operating income – last two quarters

$

205.8

 

$

275.7

Annualized operating income – last two quarters annualized

$

411.6

 

$

551.4

Adjusted OIBDA3:

 

 

 

Adjusted OIBDA for the three months ended September 30, 2023

 

N/A

 

$

428.4

Adjusted OIBDA for the three months ended December 31, 2023

$

431.9

 

 

431.9

Adjusted OIBDA for the three months ended March 31, 2024

 

374.2

 

 

N/A

Adjusted OIBDA – last two quarters

$

806.1

 

$

860.3

Annualized Adjusted OIBDA – last two quarters annualized

$

1,612.2

 

$

1,720.6

 

 

 

 

Consolidated debt and finance lease obligations to operating income ratio

19.7 x

 

15.0 x

Consolidated net debt and finance lease obligations to operating income ratio

18.1 x

 

13.2 x

Consolidated leverage ratio

5.0 x

 

4.8 x

Consolidated net leverage ratio

4.6 x

 

4.2 x

N/A – Not Applicable.

1. Amount relates to restricted cash at Liberty Puerto Rico that serves as collateral against certain lines of credit associated with the funding received from the FCC to continue to expand and improve our fixed network in Puerto Rico.
2. 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.
3. 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, 2024. A reconciliation of our operating income to Adjusted OIBDA for the three months ended September 30, 2023 and December 31, 2023 is presented in the following table:

 

Three months ended

 

December 31, 2023

 

September 30, 2023

 

in millions

 

 

 

 

Operating income

$

113.0

 

$

162.7

Share-based compensation expense

 

10.9

 

 

24.1

Depreciation and amortization

 

302.7

 

 

230.5

Impairment, restructuring and other operating items, net

 

5.3

 

 

11.1

Adjusted OIBDA

$

431.9

 

$

428.4

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,

 

 

2024

 

 

2023

 

in millions

 

 

 

 

Operating income

$

81.6

 

$

60.6

Share-based compensation expense

 

7.9

 

 

6.2

Depreciation and amortization

 

152.4

 

 

147.6

Related-party fees and allocations

 

21.2

 

 

15.4

Impairment, restructuring and other operating items, net

 

3.6

 

 

17.2

Adjusted OIBDA

 

266.7

 

 

247.0

Noncontrolling interests' share of Adjusted OIBDA

 

43.5

 

 

35.0

Proportionate Adjusted OIBDA

$

223.2

 

$

212.0

A reconciliation of Liberty Puerto Rico's operating income to Adjusted OIBDA is presented in the following table:

 

Three months ended

 

March 31,

 

2024

 

2023

 

in millions

 

 

 

 

Operating income

$

(9.4

)

 

$

55.2

Share-based compensation expense

 

2.5

 

 

 

1.8

Depreciation and amortization

 

62.8

 

 

 

55.9

Related-party fees and allocations

 

12.6

 

 

 

12.1

Impairment, restructuring and other operating items, net

 

0.6

 

 

 

3.0

Adjusted OIBDA

$

69.1

 

 

$

128.0

A reconciliation of Liberty Costa Rica's operating income to Adjusted OIBDA is presented in the following table:

 

Three months ended

 

March 31,

 

2024

 

2023

 

CRC in billions

 

 

 

 

Operating income

17.4

 

8.4

Share-based compensation expense

—

 

0.1

Depreciation and amortization

12.2

 

12.8

Related-party fees and allocations

0.3

 

0.3

Impairment, restructuring and other operating items, net

0.1

 

3.8

Adjusted OIBDA

30.0

 

25.4

The following table sets forth the reconciliations from reported revenue for our C&W borrowing group to rebased revenue and related change calculations:

 

Three months ended March 31, 2023

 

in millions

 

 

Revenue – Reported

$

607.2

 

Rebase adjustments:

 

Foreign currency

 

2.4

 

Revenue – Rebased

$

609.6

 

Reported percentage change

 

2

%

 

 

Rebased percentage change

 

2

%

The following table sets forth the reconciliation from Adjusted OIBDA for our C&W borrowing group to rebased Adjusted OIBDA and related change calculations:

 

Three months ended March 31, 2023

 

in millions

 

 

Adjusted OIBDA – Reported

$

247.0

 

Rebase adjustments:

 

Foreign currency

 

0.1

 

Adjusted OIBDA – Rebased

$

247.1

 

Reported percentage change

 

8

%

 

 

Rebased percentage change

 

8

%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240507701887/en/

Investor Relations Kunal Patel [e-mail] Corporate Communications Kim Larson [e-mail]