FY 2022 reported revenue flat YoY at $4.8 billion and up 1% on
rebased basis; 3% rebased growth ex VTR
445,000 organic broadband and postpaid mobile adds in 2022, ex
VTR
Executing inorganic strategy and advancing integration
efforts
Repurchased a record $170 million of shares in the year
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 (“Q4”) and
twelve months (“YTD” and “FY”) ended December 31, 2022.
CEO Balan Nair commented, “We continued to drive top-line growth
in the fourth quarter, led by strong performances in our C&W
Caribbean and Networks & LatAm operations and in Costa Rica.
Puerto Rico's performance was impacted by residual negative impacts
from Hurricane Fiona, and higher levels of promotional
activity.”
“Subscriber growth underpinned our performance with continued
broadband additions across our reporting segments. Mobile postpaid
additions also more than doubled as compared to the prior year,
fueled by our convergent offers and focus on prepaid to postpaid
migration.”
“Inorganically, we have now completed our outstanding
transactions and are focused on integration activities in Puerto
Rico, Panama and Costa Rica, which are set to deliver significant
value for stakeholders.”
“We have continued to be aggressive with our share buyback
activity, purchasing a record amount during the year and taking our
total since commencing activity to over $240 million as we remain
confident in our plans and outlook for the business.”
“Overall, we continued to drive operating momentum in 2022 and
are well positioned to create value in 2023. Our focus this year is
on delivering further broadband and postpaid mobile subscriber
growth, and making significant progress towards the successful
integration of our acquisitions in Puerto Rico, Costa Rica and
Panama. Through these actions, we expect to generate mid-to-high
single digit adjusted OIBDA expansion in 2023 and strong adjusted
free cash flow growth.”
Business Highlights
- C&W Caribbean: strong growth in FY 2022
- Subscriber adds drove reported and rebased revenue up 3% and
4%, respectively
- Reported and rebased Adj. OIBDA growth of 11% for the year
- C&W Panama: strong fixed operating momentum
- 25,000 broadband adds in the year drove fixed service revenue
growth
- Claro Panama acquisition completed; integration and synergy
capture underway
- C&W Networks & LatAm: top-line and Adj. OIBDA growth
with strong margins in FY 2022
- Reported and rebased revenue growth of 4% and 7%,
respectively
- Reported and rebased Adj. OIBDA growth of 5%
- Liberty Puerto Rico: fixed growth driven by continued
subscriber additions
- 36,000 broadband adds in 2022, Q4 up 35% YoY
- Adj. OIBDA impacted by Hurricane Fiona and increased
promotional activity
- Liberty Costa Rica: subscriber additions and cost control
driving Adj. OIBDA growth
- Reported and rebased revenue growth of 71% and 7%,
respectively, YTD
- Adj. OIBDA up 68% and 10% on a reported and rebased basis,
respectively, YTD
FY 2023 LLA Financial Guidance
- Adjusted OIBDA mid-to-high single digit rebased growth
- P&E additions as a percentage of revenue at ~16%
- Adjusted FCF of ~$300 million, before distributions to
noncontrolling interests
50/50 Joint Venture with América Móvil in Chile
VTR has been deconsolidated from Liberty Latin America effective
upon our contribution of VTR into the Chile JV, at the beginning of
October 2022.
Financial and Operating Highlights
Financial Highlights
Q4 2022
Q4 2021
YoY Growth / (Decline)
YoY Rebased Growth /
(Decline)1
FY 2022
FY 2021
YoY Growth / (Decline)
YoY Rebased Growth /
(Decline)1
(USD in millions)
Revenue
$
1,161
$
1,281
(9
%)
1
%
$
4,815
$
4,815
—
%
1
%
Revenue (excluding VTR)2
$
1,161
$
1,106
5
%
1
%
$
4,365
$
4,027
8
%
3
%
Adjusted OIBDA3
$
405
$
464
(13
%)
(1
%)
$
1,718
$
1,815
(5
%)
(3
%)
Adjusted OIBDA3 (excluding VTR)2
$
405
$
408
(1
%)
(1
%)
$
1,602
$
1,556
3
%
—
%
Operating income (loss)
$
110
$
(418
)
(126
%)
$
94
$
67
40
%
Property & equipment additions
$
225
$
257
(12
%)
$
816
$
856
(5
%)
As a percentage of revenue
19
%
20
%
17
%
18
%
Adjusted FCF4
$
210
$
51
$
189
$
200
Cash provided by operating activities
$
377
$
298
$
869
$
1,016
Cash used by investing activities
$
(378
)
$
(193
)
$
(1,123
)
$
(1,269
)
Cash provided (used) by financing
activities
$
(51
)
$
(104
)
$
(29
)
$
427
Operating Highlights5
Q4 2022
Q4 2021
Total customers
1,924,700
3,226,400
Organic customer losses
(3,300
)
(10,300
)
Fixed RGUs
3,819,500
6,441,000
Organic RGU additions
31,300
35,800
Organic internet additions
24,700
5,200
Mobile subscribers
8,169,500
7,540,300
Organic mobile additions
59,000
246,400
Organic postpaid additions
58,200
68,700
*
Q4 2022 figures include mobile subscribers
related to the Claro Panama Acquisition, which was completed on
July 1, 2022, and are therefore not included in Q4 2021 subscriber
data. Q4 2022 excludes VTR as it has been deconsolidated as further
described above.
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)
Year ended
Increase/(decrease)
December 31,
December 31,
2022
2021
%
Rebased %
2022
2021
%
Rebased %
in millions, except %
amounts
C&W Caribbean
$
367.3
$
356.9
3
3
$
1,436.8
$
1,389.9
3
4
C&W Panama
201.4
173.6
16
(3
)
642.7
568.1
13
1
C&W Networks & LatAm
124.0
111.9
11
14
450.8
431.9
4
7
Liberty Puerto Rico
373.7
371.2
1
—
1,470.1
1,449.7
1
1
Liberty Costa Rica
116.7
108.2
8
3
441.3
258.5
71
7
VTR
—
174.8
N.M.
N.M.
450.6
787.5
(43
)
(15
)
Corporate
5.7
5.4
6
6
22.2
21.6
3
3
Eliminations
(28.1
)
(21.4
)
N.M.
N.M.
(99.4
)
(92.4
)
N.M.
N.M.
Total
$
1,160.7
$
1,280.6
(9
)
1
$
4,815.1
$
4,814.8
—
1
Less: VTR
—
174.8
450.6
787.5
Total excluding VTR2
$
1,160.7
$
1,105.8
5
1
$
4,364.5
$
4,027.3
8
3
N.M. – Not Meaningful.
- Reported revenue for the three months and year ended December
31, 2022 declined by 9% and was flat, respectively.
- Reported revenue declined in Q4 2022 as (1) the addition of $35
million from the acquisition of América Móvil's Panama operations
(Claro Panama) on July 1, 2022, and (2) organic growth in C&W
Networks & LatAm and C&W Caribbean, were more than offset
by the negative year-over-year impact of VTR's deconsolidation
further to the formation of the Chile JV in October 2022.
- Reported revenue performance in FY 2022 was driven by (1) the
addition of $239 million, from the acquisitions of Telefónica's
Costa Rica operations and América Móvil's Panama operations, (2)
the impact of VTR's deconsolidation, (3) organic growth in C&W
Caribbean, C&W Networks & LatAm and Liberty Costa Rica, (4)
a net negative FX impact of $94 million, and (5) organic declines
at VTR. The FX impact was driven by depreciation of the Chilean
peso in the nine months ended September 30, 2022 as compared to the
corresponding prior-year period.
Q4 2022 Revenue Growth – Segment
Highlights
- C&W Caribbean: revenue grew by 3% on a reported and rebased
basis.
- Fixed residential revenue was flat on a reported and rebased
basis, as subscription revenue growth was offset by lower
interconnect and other revenue year-over-year.
- Mobile revenue was up 5% on a reported and rebased basis, as
compared to the prior-year period. Rebased growth was primarily
driven by a higher average number of mobile subscribers, resulting
from sales initiatives, including converged offerings. Inbound
roaming also grew year-over-year, as a recovery in tourism led to
increased traffic.
- B2B revenue was 4% higher on both a reported and rebased basis.
Performance was driven by internet services-related growth as well
as mobile subscriber growth.
- C&W Panama: revenue grew by 16% and declined by 3% on a
reported and rebased basis, respectively. Reported performance
benefited from the inclusion of América Móvil's Panama operations
in the quarter.
- Fixed residential revenue was up 15% and 5% on a reported and
rebased basis, respectively. Rebased growth was driven by more than
60,000 RGU additions over the past twelve months, resulting from
investments in our networks, products and commercial
activities.
- Mobile revenue increased by 45% on a reported basis and was 1%
lower on a rebased basis. Revenue declined slightly on a rebased
basis as postpaid service revenue growth in our legacy C&W
Panama operation was more than offset by year-over-year declines in
our newly acquired business.
- B2B revenue declined by 1% and 7% on a reported and rebased
basis, respectively. The year-over-year rebased decline was driven
by the successful award of certain infrastructure projects in the
prior-year period.
- C&W Networks & LatAm: revenue grew by 11% and 14% on a
reported and rebased basis, respectively. Growth on a rebased basis
was driven by higher revenue associated with a significant subsea
network customer that is recognized on a cash basis, increased
affiliate revenue, and growth in B2B service-related connectivity
and managed services. This growth was partially offset by higher
IRU accelerations in Q4 2021.
- Liberty Puerto Rico: revenue grew by 1% on a reported basis and
was flat on a rebased basis. Reported performance benefited from
the inclusion of our fixed operations in the USVI in the quarter.
- On a rebased basis, residential fixed revenue growth was driven
by subscriber additions as we added nearly 40,000 RGUs in the year,
partly offset by the negative impact of $5 million of customer
credits following Hurricane Fiona.
- Residential mobile revenue was broadly flat compared to the
prior-year period, as higher volumes of handset sales were offset
by (1) lower ARPU from mobile services, including the impact of
higher contract asset amortization driven by increases in handset
sales and subsidy levels, and (2) a decline in the average number
of prepaid mobile subscribers.
- Liberty Costa Rica: revenue grew by 8% and 3% on a reported and
rebased basis, respectively. Rebased growth was driven by strong
subscriber additions across both our mobile and fixed businesses
over the past twelve months.
Operating Income (Loss)
- Operating income (loss) was $110 million and ($418 million) for
the three months ended December 31, 2022 and 2021, respectively,
and $94 million and $67 million for the year ended December 31,
2022 and 2021, respectively.
- We reported operating income during the three months ended
December 31, 2022 compared with an operating loss during the
corresponding period in 2021. The increase during the three-month
comparison is due to lower expenses associated with impairment,
restructuring and other operating items, net, which were partially
offset by a decline in Adjusted OIBDA.
- We reported higher operating income during the year ended
December 31, 2022 compared with the corresponding period in 2021,
primarily due to the net effect of (i) decreases in depreciation
and amortization, goodwill impairments and stock-based compensation
expense and (ii) a decline in Adjusted OIBDA. We experienced a
decrease in depreciation and amortization expense as we ceased
recording depreciation expense for the Chile JV Entities during the
third quarter of 2021 when we began accounting for them as held for
sale.
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
Year ended
December 31,
Increase (decrease)
December 31,
Increase (decrease)
2022
2021
%
Rebased %
2022
2021
%
Rebased %
in millions, except %
amounts
C&W Caribbean
$
138.1
$
125.0
10
10
$
535.2
$
482.9
11
11
C&W Panama
57.2
62.6
(9
)
(10
)
188.8
200.1
(6
)
(7
)
C&W Networks & LatAm
79.7
71.2
12
13
276.3
264.3
5
5
Liberty Puerto Rico
120.2
135.3
(11
)
(11
)
538.4
580.9
(7
)
(8
)
Liberty Costa Rica
36.1
29.4
23
17
134.7
80.2
68
10
VTR
—
55.3
N.M.
N.M.
115.6
259.6
(55
)
(34
)
Corporate
(26.1
)
(15.2
)
(72
)
(72
)
(71.5
)
(52.9
)
(35
)
(35
)
Total
$
405.2
$
463.6
(13
)
(1
)
$
1,717.5
$
1,815.1
(5
)
(3
)
Less: VTR
—
55.3
115.6
259.6
Total excluding VTR2
$
405.2
$
408.3
(1
)
(1
)
$
1,601.9
$
1,555.5
3
—
Operating income (loss) margin
9.4
%
(32.6
) %
2.0
%
1.4
%
Adjusted OIBDA margin
34.9
%
36.2
%
35.7
%
37.7
%
Adjusted OIBDA margin excl. VTR2
34.9
%
36.9
%
36.7
%
38.6
%
N.M. – Not Meaningful.
- Our reported Adjusted OIBDA for the three months and year ended
December 31, 2022 was 13% and 5% lower, respectively, as compared
to the corresponding prior-year periods.
- Reported Adjusted OIBDA performance in Q4 was primarily driven
by the deconsolidation of VTR.
- Reported Adjusted OIBDA performance YTD was primarily driven by
(1) organic declines in Chile and Puerto Rico partly offset by
growth in C&W Caribbean, and (2) FX headwinds in Chile.
Q4 2022 Adjusted OIBDA Growth – Segment
Highlights
- C&W Caribbean: Adjusted OIBDA increased by 10% on a
reported and rebased basis. Performance was driven by the
aforementioned rebased revenue growth. Our Adjusted OIBDA margin
improved by ~250 basis points year-over-year to 38%.
- C&W Panama: Adjusted OIBDA decreased on a reported and
rebased basis by 9% and 10%, respectively. The rebased decline was
driven by lower revenue and higher bad debt provisions, including
the cost of factoring certain receivables, year-over-year.
- C&W Networks & LatAm: Adjusted OIBDA increased on a
reported and rebased basis by 12% and 13%, respectively. Our
rebased performance was driven by the aforementioned revenue
growth.
- Liberty Puerto Rico: Adjusted OIBDA declined by 11% on a
reported and rebased basis. The decline in the quarter was driven
by (i) $7 million in revenue credits and costs associated with
Hurricane Fiona (aforementioned revenue credits and increased
network-related expenses), (ii) increased facilities costs driven
by higher electricity and maintenance expense, (iii) higher
personnel costs including higher commissions expense impacted by
the accounting for the AT&T acquisition, and (iv) increased
negative margins on equipment sales driven by a higher volume of
handset sales and promotions.
- Liberty Costa Rica: Adjusted OIBDA grew by 23% and 17% on a
reported and rebased basis, respectively. Rebased performance was
driven by the aforementioned rebased revenue growth and cost
control driving a nearly 400 basis point improvement in Adjusted
OIBDA margin, year-over-year.
Net Earnings (Loss) Attributable to Shareholders
- Net earnings (loss) attributable to shareholders was $135
million and ($612 million) for the three months ended December 31,
2022 and 2021, respectively, and ($176 million) and ($438 million)
for the year ended December 31, 2022 and 2021, 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
Year ended
December 31,
December 31,
2022
2021
2022
2021
USD in millions
Customer Premises Equipment
$
40.9
$
61.0
$
246.3
$
296.2
New Build & Upgrade
44.9
51.5
156.7
163.2
Capacity
41.4
35.8
127.3
130.9
Baseline
71.6
68.3
210.8
172.7
Product & Enablers
26.4
40.3
75.2
92.9
Property & equipment additions
225.2
256.9
816.3
855.9
Assets acquired under capital-related
vendor financing arrangements
(46.9
)
(35.5
)
(161.1
)
(100.5
)
Changes in current liabilities related to
capital expenditures and other
(12.3
)
(29.8
)
4.9
(19.1
)
Capital expenditures, net
$
166.0
$
191.6
$
660.1
$
736.3
Property & equipment additions as % of
revenue
19.4
%
20.1
%
17.0
%
17.8
%
Property & Equipment Additions:
C&W Caribbean
$
79.3
$
67.4
$
230.7
$
222.9
C&W Panama
26.8
24.4
98.4
88.9
C&W Networks & LatAm
8.2
9.9
40.2
45.3
Liberty Puerto Rico
78.7
80.1
233.5
219.2
Liberty Costa Rica
19.8
19.4
65.5
45.0
VTR
—
41.1
107.3
199.1
Corporate
12.4
14.6
40.7
35.5
Property & equipment additions
$
225.2
$
256.9
$
816.3
$
855.9
Property & Equipment Additions as a
Percentage of Revenue by Reportable Segment:
C&W Caribbean
21.6
%
18.9
%
16.1
%
16.0
%
C&W Panama
13.3
%
14.1
%
15.3
%
15.6
%
C&W Networks & LatAm
6.6
%
8.8
%
8.9
%
10.5
%
Liberty Puerto Rico
21.1
%
21.6
%
15.9
%
15.1
%
Liberty Costa Rica
17.0
%
17.9
%
14.8
%
17.4
%
VTR
—
%
23.5
%
23.8
%
25.3
%
New Build and Homes Upgraded by Reportable
Segment1:
C&W Caribbean
15,800
47,100
106,700
150,100
C&W Panama
19,100
16,600
148,400
121,400
Liberty Puerto Rico
16,900
9,500
41,800
22,600
Liberty Costa Rica
11,000
10,600
50,300
43,800
VTR
—
64,200
137,400
400,900
Total
62,800
148,000
484,600
738,800
1.
Table excludes C&W Networks & LatAm as that segment only
provides B2B-related services.
Summary of Debt, Finance Lease Obligations and Cash and Cash
Equivalents
The following table details the U.S. dollar equivalent balances
of the outstanding principal amounts of our debt and finance lease
obligations, and cash and cash equivalents at December 31,
2022:
Debt
Finance lease
obligations
Debt and finance lease
obligations
Cash and cash
equivalents
in millions
Liberty Latin America1
$ 403.4
$ —
$ 403.4
$ 156.5
C&W2
4,519.6
—
4,519.6
536.2
Liberty Puerto Rico
2,617.7
5.7
2,623.4
72.3
Liberty Costa Rica
425.4
2.9
428.3
16.0
Total
$ 7,966.1
$ 8.6
$ 7,974.7
$ 781.0
Consolidated Leverage and Liquidity
Information:
December 31,
2022
September 30,
2022
Consolidated debt and finance lease
obligations to operating income (loss) ratio
15.0x
(23.1)x
Consolidated net debt and finance lease
obligations to operating income (loss) ratio
13.5x
(21.1)x
Consolidated gross leverage ratio3
5.1x
4.9x
Consolidated net leverage ratio3
4.6x
4.5x
Average debt tenor4
4.9 years
5.2 years
Fully-swapped borrowing costs
5.7%
5.6%
Unused borrowing capacity (in
millions)5
$898.7
$971.7
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, C&W Networks & LatAm and
C&W Panama reporting segments.
3.
Consolidated leverage ratios are non-GAAP
measures. The leverage ratios exclude the Adjusted OIBDA of VTR in
light of the deconsolidation of VTR and the fact that our December,
31, 2022 balance sheet does not include any VTR debt. For
additional information, including definitions of our consolidated
leverage ratios and required reconciliations, see Non-GAAP
Reconciliations below.
4.
For purposes of calculating our average
tenor, total debt excludes vendor financing, finance lease
obligations and, as of September 30, 2022, VTR debt.
5.
At December 31, 2022, 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 December 31, 2022 compliance reporting
requirements. The September 30, 2022 amount excludes VTR's then
unused borrowing capacity of $247 million.
Quarterly Subscriber Variance
Fixed and Mobile Subscriber
Variance Table — December 31, 2022 vs September 30, 2022
Homes Passed
Two-way Homes
Passed
Fixed-line Customer
Relationships
Video RGUs
Internet RGUs
Telephony RGUs
Total RGUs
Prepaid
Postpaid
Total Mobile
Subscribers
C&W Caribbean:
Jamaica
6,900
6,900
2,600
(400
)
4,100
4,600
8,300
18,900
8,800
27,700
The Bahamas
—
—
(7,900
)
(200
)
(100
)
(900
)
(1,200
)
4,500
(600
)
3,900
Trinidad and Tobago
—
—
(800
)
(600
)
(1,100
)
600
(1,100
)
—
—
—
Barbados
—
—
400
300
900
(100
)
1,100
1,200
2,600
3,800
Other
200
100
2,700
500
3,900
400
4,800
200
11,500
11,700
Total C&W Caribbean
7,100
7,000
(3,000
)
(400
)
7,700
4,600
11,900
24,800
22,300
47,100
C&W Panama
4,900
4,900
600
600
5,400
5,100
11,100
(65,900
)
8,700
(57,200
)
Total C&W
12,000
11,900
(2,400
)
200
13,100
9,700
23,000
(41,100
)
31,000
(10,100
)
Liberty Puerto Rico1
4,100
4,100
(3,100
)
(4,700
)
10,400
(3,300
)
2,400
(5,300
)
17,000
11,700
Liberty Costa Rica
8,600
8,600
2,200
—
1,200
4,700
5,900
47,200
10,200
57,400
VTR
—
—
—
—
—
—
—
—
—
—
Total Organic Change
24,700
24,600
(3,300
)
(4,500
)
24,700
11,100
31,300
800
58,200
59,000
Q4 2022 Adjustments:
C&W Caribbean - Jamaica
—
—
—
—
—
—
—
(14,400
)
—
(14,400
)
C&W Caribbean - Bahamas
—
—
1,300
(3,800
)
(8,400
)
3,400
(8,800
)
—
(6,500
)
(6,500
)
C&W Caribbean - Other
5,800
5,800
—
—
—
—
—
—
—
—
C&W Panama
—
—
—
—
—
—
—
—
18,700
18,700
VTR2
(4,292,100
)
(3,926,500
)
(1,311,500
)
(967,900
)
(1,171,800
)
(486,100
)
(2,625,800
)
(6,300
)
(257,900
)
(264,200
)
Total Q4 2022 Adjustments:
(4,286,300
)
(3,920,700
)
(1,310,200
)
(971,700
)
(1,180,200
)
(482,700
)
(2,634,600
)
(20,700
)
(245,700
)
(266,400
)
Net Adds
(4,261,600
)
(3,896,100
)
(1,313,500
)
(976,200
)
(1,155,500
)
(471,600
)
(2,603,300
)
(19,900
)
(187,500
)
(207,400
)
1.
Included in Liberty Puerto Rico's mobile prepaid organic loss is
a decrease of 3,300 mobile reseller subscribers.
2.
During October 2022, we contributed our Chilean operation into a
joint venture with Claro Chile, which resulted in a non-organic
adjustment that represents the removal of VTR from our consolidated
subscriber balances.
ARPU per Customer Relationship
The following table provides ARPU per customer relationship for
the indicated periods:
Three months ended December
31,
FX-Neutral1
2022
2021
% Change
% Change
Reportable Segment:
C&W Caribbean
$
48.81
$
48.13
1
%
1
%
C&W Panama
$
36.68
$
38.97
(6
%)
(6
%)
Liberty Puerto Rico
$
74.29
$
75.90
(2
%)
(2
%)
Liberty Costa Rica2
$
40.27
$
41.62
(3
%)
(8
%)
Cable & Wireless Borrowing
Group
$
45.97
$
46.36
(1
%)
(1
%)
Mobile ARPU
The following table provides ARPU per mobile subscriber for the
indicated periods:
Three months ended December
31,
FX-Neutral1
2022
2021
% Change
% Change
Reportable Segment:
C&W Caribbean
$
14.31
$
14.36
—
%
—
%
C&W Panama
$
9.97
$
8.73
14
%
14
%
Liberty Puerto Rico3
$
38.91
$
46.04
(15
%)
(15
%)
Liberty Costa Rica4
$
5.90
$
5.49
7
%
3
%
Cable & Wireless Borrowing
Group
$
11.98
$
11.65
3
%
3
%
1.
The FX-Neutral change represents the
percentage change on a year-over-year 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 year amounts.
2.
The ARPU per customer relationship amounts
in Costa Rican colones for the three months ended December 31, 2022
and 2021 were CRC 24,512 and CRC 26,495, respectively.
3.
The year-over-year decline in mobile ARPU
was primarily driven by increased promotional activity on postpaid
plans, an increase in lower ARPU data subscribers driven by a large
Department of Education contract, and lower prepaid ARPU including
the prepaid reseller channel.
4.
The mobile ARPU amount in Costa Rican
colones for the three months ended December 31, 2022 and 2021 were
CRC 3,597 and CRC 3,498, respectively.
Forward-Looking Statements and Disclaimer
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding our strategies, priorities and
objectives, performance, guidance and growth expectations for 2023;
our digital strategy, product innovation and commercial plans and
projects; subscriber growth; expectations on demand for
connectivity in the region; our anticipated integration plans,
synergies, opportunities and integration costs in Puerto Rico
following the AT&T Acquisition, in Costa Rica following the
acquisition of Telefónica's Costa Rica business and in Panama
following the acquisition of América Móvil’s Panama operations; the
strength of our balance sheet and tenor of our debt; our share
repurchase program; and other information and statements that are
not historical fact. These forward-looking statements involve
certain risks and uncertainties that could cause actual results to
differ materially from those expressed or implied by these
statements. These risks and uncertainties include events that are
outside of our control, such as hurricanes and other natural
disasters, political or social events, and pandemics, such as
COVID-19, the uncertainties surrounding such events, the ability
and cost to restore networks in the markets impacted by hurricanes
or generally to respond to any such events; the continued use by
subscribers and potential subscribers of our services and their
willingness to upgrade to our more advanced offerings; our ability
to meet challenges from competition, to manage rapid technological
change or to maintain or increase rates to our subscribers or to
pass through increased costs to our subscribers; the effects of
changes in laws or regulation; general economic factors; our
ability to successfully acquire and integrate new businesses and
realize anticipated efficiencies from acquired businesses; the
availability of attractive programming for our video services and
the costs associated with such programming; our ability to achieve
forecasted financial and operating targets; the outcome of any
pending or threatened litigation; the ability of our operating
companies to access cash of their respective subsidiaries; the
impact of our operating companies' future financial performance, or
market conditions generally, on the availability, terms and
deployment of capital; fluctuations in currency exchange and
interest rates; the ability of suppliers and vendors to timely
deliver quality products, equipment, software, services and access;
our ability to adequately forecast and plan future network
requirements including the costs and benefits associated with
network expansions; and other factors detailed from time to time in
our filings with the Securities and Exchange Commission, including
our most recently filed Form 10-K. 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 (i) acquisitions and (ii) FX. See Non-GAAP
Reconciliations below.
2.
We provide rebased revenue and Adjusted
OIBDA growth rates, each a non-GAAP measure, for Liberty Latin
America excluding VTR in light of the October deconsolidation of
VTR that occurred in connection with the closing of our joint
venture in Chile with América Móvil. See the tables below for the
required non-GAAP reconciliations.
3.
Adjusted OIBDA is a non-GAAP measure. For
the definition of Adjusted OIBDA and required reconciliations, see
Non-GAAP Reconciliations below.
4.
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.
5.
See Glossary for the definition of RGUs
and mobile subscribers. Organic figures exclude RGUs and mobile
subscribers of acquired entities at the date of acquisition and
other non-organic adjustments, but include the impact of changes in
RGUs and mobile subscribers from the date of acquisition. All
subscriber / RGU additions or losses refer to net organic changes,
unless otherwise noted.
Additional Information | Cable & Wireless Borrowing
Group
The following tables reflect preliminary unaudited selected
financial results, on a consolidated C&W basis, for the periods
indicated, in accordance with U.S. GAAP.
Three months ended
December 31,
Change
Rebased change1
2022
2021
in millions, except %
amounts
Revenue
$
669.3
$
624.4
7
%
2
%
Operating income (loss)
$
77.1
$
(526.9
)
(115
%)
Adjusted OIBDA
$
275.0
$
258.8
6
%
6
%
Operating income (loss) as a percentage of
revenue
11.5
%
(84.4
)%
Adjusted OIBDA as a percentage of
revenue
41.1
%
41.4
%
Proportionate Adjusted OIBDA
$
231.7
$
215.6
Year ended
December 31,
Change
Rebased change1
2022
2021
in millions, except %
amounts
Revenue
$
2,448.6
$
2,310.6
6
%
4
%
Operating loss
$
(252.1
)
$
(340.0
)
(26
%)
Adjusted OIBDA
$
1,000.0
$
947.3
6
%
6
%
Operating loss as a percentage of
revenue
(10.3
)%
(14.7
)%
Adjusted OIBDA as a percentage of
revenue
40.8
%
41.0
%
Proportionate Adjusted OIBDA
$
852.4
$
801.6
1.
Indicated growth rates are rebased for the
estimated impacts of an acquisition and 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:
December 31,
September 30,
Facility Amount
2022
2022
in millions
Credit Facilities:
Revolving Credit Facility due 2023 (LIBOR
+ 3.25%)
$
50.0
$
—
$
—
Revolving Credit Facility due 2027 (LIBOR
+ 3.25%)
$
580.0
—
—
Term Loan Facility B-5 due 2028 (LIBOR +
2.25%)
$
1,510.0
1,510.0
1,510.0
Term Loan Facility B-6 due 2029 (LIBOR +
3.00%)
$
590.0
590.0
590.0
Total Senior Secured Credit Facilities
2,100.0
2,100.0
Notes:
5.75% USD Senior Secured Notes due
2027
$
495.0
495.0
495.0
6.875% USD Senior Notes due 2027
$
1,220.0
1,220.0
1,220.0
Total Notes
1,715.0
1,715.0
Other debt:
4.25% CWP Term Loan due 2028
$
435.0
435.0
435.0
Other regional debt
70.2
83.1
Vendor financing
199.4
178.0
Total third-party debt
4,519.6
4,511.1
Less: premiums, discounts and deferred
financing costs, net
(31.6
)
(33.3
)
Total carrying amount of third-party
debt
4,488.0
4,477.8
Less: cash and cash equivalents
(536.2
)
(458.3
)
Net carrying amount of third-party
debt
$
3,951.8
$
4,019.5
- At December 31, 2022, our third-party total and proportionate
net debt was $4.0 billion and $3.7 billion, respectively, our
Fully-swapped Borrowing Cost was 5.1%, and the average tenor of our
debt obligations (excluding vendor financing) was approximately 5.1
years.
- Our portion of Adjusted OIBDA, after deducting the
noncontrolling interests' share, (“Proportionate Adjusted OIBDA”)
was $232 million for Q4 2022.
- Based on Q4 results, our Proportionate Net Leverage Ratio was
4.0x, calculated in accordance with C&W's Credit Agreement. At
December 31, 2022, we had maximum undrawn commitments of $719
million, including $89 million under our regional facilities. At
December 31, 2022, 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
December 31, 2022 compliance reporting requirements.
Liberty Puerto Rico (LPR) Borrowing Group
The following table details the nominal amount outstanding of
Liberty Puerto Rico's debt, finance lease obligations and cash and
cash equivalents:
December 31,
September 30,
Facility amount
2022
2022
in millions
Credit Facilities:
Revolving Credit Facility due 2027 (LIBOR
+ 3.50%)
$
172.5
$
—
$
—
Term Loan Facility due 2028 (LIBOR +
3.75%)
$
620.0
620.0
620.0
Total Senior Secured Credit Facilities
620.0
620.0
Notes:
6.75% Senior Secured Notes due 2027
$
1,161.0
1,161.0
1,161.0
5.125% Senior Secured Notes due 2029
$
820.0
820.0
820.0
Total Notes
1,981.0
1,981.0
Vendor financing
16.7
—
Finance lease obligations
5.7
6.1
Total debt and finance lease
obligations
2,623.4
2,607.1
Less: discounts and deferred financing
costs, net
(28.6
)
(29.6
)
Total carrying amount of debt
2,594.8
2,577.5
Less: cash and cash equivalents
(72.3
)
(118.2
)
Net carrying amount of debt
$
2,522.5
$
2,459.3
- At December 31, 2022, our Fully-swapped Borrowing Cost was 6.1%
and the average tenor of our debt was approximately 5.6 years.
- Based on our results for Q4 2022, and subject to the completion
of the corresponding compliance reporting requirements, our
Consolidated Net Leverage Ratio was 4.5x, calculated in accordance
with LPR’s Group Credit Agreement.
- At December 31, 2022, we had maximum undrawn commitments of
$173 million. At December 31, 2022, the full amount of unused
borrowing capacity under our revolving credit facility was
available to be borrowed, both before and after completion of the
December 31, 2022 compliance reporting requirements.
Liberty Costa Rica Borrowing Group
The following table details the borrowing currency and Costa
Rican colón equivalent of the nominal amount outstanding of Liberty
Costa Rica's debt and cash and cash equivalents:
December 31,
September 30,
2022
2022
Borrowing currency in
millions
CRC equivalent in
billions
Term Loan B-1 Facility due 20241 (LIBOR +
5.50%)
$
276.7
163.8
173.9
Term Loan B-2 Facility due 20241 (TBP2 +
6.75%)
CRC
79,635.2
79.6
79.6
Revolving Credit Facility due 2024 (LIBOR
+ 4.25%)
$
15.0
4.7
5.0
Total credit facilities
248.1
258.5
Other
3.6
10.5
Finance lease obligations
1.7
1.9
Total debt and finance lease
obligations
253.4
270.9
Less: discounts and deferred financing
costs
(3.3
)
(4.5
)
Total carrying amount of debt
250.1
266.4
Less: cash and cash equivalents
(9.5
)
(4.3
)
Net carrying amount of debt
240.6
262.1
Exchange rate (CRC to $)
591.8
628.5
1.
Under the terms of the credit agreement,
Liberty Costa Rica was obligated to repay 50% of the outstanding
aggregate principal amounts of the LCR Term Loan B-1 Facility and
the LCR Term Loan B-2 Facility on February 1, 2024, with the
remaining respective principal amounts due on August 1, 2024, which
represented the ultimate maturity date of the facilities.
2.
Tasa Básica Pasiva rate.
- In January 2023, Liberty Costa Rica entered into the 2031 LCR
Term Loan A and the 2031 LCR Term Loan B, both issued at par. The
proceeds from the 2031 LCR Term Loan A and 2031 LCR Term Loan B
were primarily used to repay the LCR Term Loan B-1 Facility and LCR
Term Loan B-2 Facility.
- In January 2023, the LCR Revolving Credit Facility was amended
and restated. The amended and restated $60 million LCR Revolving
Credit Facility bears interest at SOFR plus a margin of 4.25% and
matures on January 15, 2028.
Subscriber Table
Consolidated Operating Data —
December 31, 2022
Homes Passed
Two-way Homes Passed
Fixed-line Customer
Relationships
Video RGUs
Internet RGUs
Telephony RGUs
Total RGUs
Prepaid
Postpaid
Total Mobile
Subscribers
C&W Caribbean:
Jamaica
685,700
685,700
331,800
132,000
308,200
300,900
741,100
1,120,000
73,700
1,193,700
The Bahamas
120,900
120,900
35,900
5,600
23,100
33,600
62,300
146,400
24,000
170,400
Trinidad and Tobago
340,900
340,900
155,600
101,800
140,300
94,200
336,300
—
—
—
Barbados
140,400
140,400
84,300
38,000
75,700
70,300
184,000
87,600
40,400
128,000
Other
336,000
316,100
215,100
74,400
187,200
115,000
376,600
333,200
100,100
433,300
Total C&W Caribbean
1,623,900
1,604,000
822,700
351,800
734,500
614,000
1,700,300
1,687,200
238,200
1,925,400
C&W Panama
829,200
829,200
251,700
159,300
207,400
199,900
566,600
1,820,700
358,200
2,178,900
Total C&W
2,453,100
2,433,200
1,074,400
511,100
941,900
813,900
2,266,900
3,507,900
596,400
4,104,300
Liberty Puerto Rico 1,2
1,173,600
1,173,600
551,100
242,800
524,000
257,400
1,024,200
182,300
903,300
1,085,600
Liberty Costa Rica 3
700,300
694,400
299,200
204,800
268,200
55,400
528,400
2,162,400
817,200
2,979,600
Total
4,327,000
4,301,200
1,924,700
958,700
1,734,100
1,126,700
3,819,500
5,852,600
2,316,900
8,169,500
1.
Prepaid mobile subscribers include 52,200 mobile reseller
subscribers.
2.
Postpaid mobile subscribers include 206,700 CRUs.
3.
Our homes passed in Liberty Costa Rica include 57,000 homes on a
third-party network that provides us long-term access.
Glossary
Adjusted OIBDA Margin – Calculated by dividing Adjusted
OIBDA by total revenue for the applicable period.
ARPU – Average revenue per unit refers to the average
monthly subscription revenue (subscription revenue excludes
interconnect, mobile handset sales and late fees) per average
customer relationship or mobile subscriber, as applicable. ARPU per
average customer relationship is calculated by dividing the average
monthly subscription revenue from residential fixed and SOHO fixed
services by the average of the opening and closing balances for
customer relationships for the indicated period. ARPU per average
mobile subscriber is calculated by dividing the average monthly
mobile service revenue by the average of the opening and closing
balances for mobile subscribers for the indicated period. Unless
otherwise indicated, ARPU per customer relationship or mobile
subscriber is not adjusted for currency impacts. ARPU per average
RGU is calculated by dividing the average monthly subscription
revenue from the applicable residential fixed service by the
average of the opening and closing balances of the applicable RGUs
for the indicated period. Unless otherwise noted, ARPU in this
release is considered to be ARPU per average customer relationship
or mobile subscriber, as applicable. Customer relationships, mobile
subscribers and RGUs of entities acquired during the period are
normalized.
Consolidated Debt and Finance Lease Obligations to Operating
Income Ratio – Defined as total principal amount of debt and
finance lease obligations outstanding to annualized operating
income from the most recent two consecutive fiscal quarters.
Consolidated Net Debt and Finance Lease Obligations to
Operating Income Ratio – Defined as total principal amount of
debt and finance lease obligations outstanding less cash and cash
equivalents to annualized operating income from the most recent two
consecutive fiscal quarters.
Consolidated Net Leverage Ratio (LPR) – Defined in
accordance with LPR's Group Credit Agreement, taking into account
the ratio of its outstanding indebtedness less its cash and cash
equivalents to its annualized EBITDA from the most recent two
consecutive fiscal quarters.
CRU – Corporate responsible user.
Customer Relationships – The number of customers who
receive at least one of our video, internet or telephony services
that we count as RGUs, without regard to which or to how many
services they subscribe. To the extent that RGU counts include
equivalent billing unit (“EBU”) adjustments, we reflect
corresponding adjustments to our customer relationship counts. For
further information regarding our EBU calculation, see Additional
General Notes below. Customer relationships generally are counted
on a unique premises basis. Accordingly, if an individual receives
our services in two premises (e.g., a primary home and a vacation
home), that individual generally will count as two customer
relationships. We exclude mobile-only customers from customer
relationships.
Fully-swapped Borrowing Cost – Represents the weighted
average interest rate on our debt (excluding finance leases and
including vendor financing obligations), including the effects of
derivative instruments, original issue premiums or discounts, which
includes a discount on the convertible notes issued by Liberty
Latin America associated with a conversion option feature, and
commitment fees, but excluding the impact of financing costs.
Homes Passed – Homes, residential multiple dwelling units
or commercial units that can be connected to our networks without
materially extending the distribution plant. Certain of our homes
passed counts are based on census data that can change based on
either revisions to the data or from new census results.
Internet (Broadband) RGU – A home, residential multiple
dwelling unit or commercial unit that receives internet services
over our network.
Leverage – Our gross and net leverage ratios, each a
non-GAAP measure, are defined as total debt (total principal amount
of debt and finance lease obligations outstanding, net of projected
derivative principal-related cash payments (receipts)) and net debt
to annualized Adjusted OIBDA of the latest two quarters. Net debt
is defined as total debt (including the convertible notes) less
cash and cash equivalents. For purposes of these calculations, debt
is measured using swapped foreign currency rates, consistent with
the covenant calculation requirements of our subsidiary debt
agreements.
Mobile Subscribers – Our mobile subscriber count
represents the number of active subscriber identification module
(“SIM”) cards in service rather than services provided. For
example, if a mobile subscriber has both a data and voice plan on a
smartphone this would equate to one mobile subscriber.
Alternatively, a subscriber who has a voice and data plan for a
mobile handset and a data plan for a laptop (via a dongle) would be
counted as two mobile subscribers. Customers who do not pay a
recurring monthly fee are excluded from our mobile telephony
subscriber counts after periods of inactivity ranging from 30 to 90
days, based on industry standards within the respective country. In
a number of countries, our mobile subscribers receive mobile
services pursuant to prepaid contracts. Our Liberty Puerto Rico
segment prepaid subscriber count includes mobile reseller
subscribers, which represent organizations that purchase minutes
and data at wholesale prices and subsequently resell it under the
purchaser's brand name. These reseller subscribers result in a
significantly lower ARPU than the remaining subscribers included in
our prepaid balance. Additionally, our Liberty Puerto Rico segment
postpaid subscriber count includes CRUs, which represent an
individual receiving mobile services through an organization that
has entered into a contract for mobile services with us and where
the organization is responsible for the payment of the CRU’s mobile
services.
NPS – Net promoter score.
Property and Equipment Addition Categories
- Customer Premises Equipment: Includes capitalizable equipment
and labor, materials and other costs directly associated with the
installation of such CPE;
- New Build & Upgrade: Includes capitalizable costs of
network equipment, materials, labor and other costs directly
associated with entering a new service area and upgrading our
existing network;
- Capacity: Includes capitalizable costs for network capacity
required for growth and services expansions from both existing and
new customers. This category covers Core and Access parts of the
network and includes, for example, fiber node splits,
upstream/downstream spectrum upgrades and optical equipment
additions in our international backbone connections;
- Baseline: Includes capitalizable costs of equipment, materials,
labor and other costs directly associated with maintaining and
supporting the business. Relates to areas such as network
improvement, property and facilities, technical sites, information
technology systems and fleet; and
- Product & Enablers: Discretionary capitalizable costs that
include investments (i) required to support, maintain, launch or
innovate in new customer products, and (ii) in infrastructure,
which drive operational efficiency over the long term.
Proportionate Net Leverage Ratio (C&W) – Calculated
in accordance with C&W's Credit Agreement, taking into account
the ratio of outstanding indebtedness (subject to certain
exclusions) less cash and cash equivalents to EBITDA (subject to
certain adjustments) for the last two quarters annualized, with
both indebtedness and EBITDA reduced proportionately to remove any
noncontrolling interests' share of the C&W group.
Revenue Generating Unit (RGU) – RGU is separately a video
RGU, internet RGU or telephony RGU. A home, residential multiple
dwelling unit, or commercial unit may contain one or more RGUs. For
example, if a residential customer in Puerto Rico subscribed to our
video service, fixed-line telephony service and broadband internet
service, the customer would constitute three RGUs. RGUs are
generally counted on a unique premises basis such that a given
premises does not count as more than one RGU for any given service.
On the other hand, if an individual receives one of our services in
two premises (e.g., a primary home and a vacation home), that
individual will count as two RGUs for that service. Each bundled
video, internet or telephony service is counted as a separate RGU
regardless of the nature of any bundling discount or promotion.
Non-paying subscribers are counted as RGUs during their free
promotional service period. Some of these subscribers may choose to
disconnect after their free service period. Services offered
without charge on a long-term basis (e.g., VIP subscribers or free
service to employees) generally are not counted as RGUs. We do not
include subscriptions to mobile services in our externally reported
RGU counts. In this regard, our RGU counts exclude our separately
reported postpaid and prepaid mobile subscribers.
SOHO – Small office/home office customers.
Telephony RGU – A home, residential multiple dwelling
unit or commercial unit that receives voice services over our
network. Telephony RGUs exclude mobile subscribers.
Two-way Homes Passed – Homes passed by those sections of
our networks that are technologically capable of providing two-way
services, including video, internet and telephony services.
U.S. GAAP – Generally accepted accounting principles in
the United States.
Video RGU – A home, residential multiple dwelling unit or
commercial unit that receives our video service over our network
primarily via a digital video signal while subscribing to any
recurring monthly service that requires the use of
encryption-enabling technology. Video RGUs that are not counted on
an EBU basis are generally counted on a unique premises basis. For
example, a subscriber with one or more set-top boxes that receives
our video service in one premises is generally counted as just one
RGU.
Additional General Notes
Most of our operations provide telephony, broadband internet,
mobile data, video or other B2B services. Certain of our B2B
service revenue is derived from SOHO customers that pay a premium
price to receive enhanced service levels along with video, internet
or telephony services that are the same or similar to the mass
marketed products offered to our residential subscribers. All mass
marketed products provided to SOHO customers, whether or not
accompanied by enhanced service levels and/or premium prices, are
included in the respective RGU and customer counts of our
operations, with only those services provided at premium prices
considered to be “SOHO RGUs” or “SOHO customers.” To the extent our
existing customers upgrade from a residential product offering to a
SOHO product offering, the number of SOHO RGUs and SOHO customers
will increase, but there is no impact to our total RGU or customer
counts. With the exception of our B2B SOHO customers, we generally
do not count customers of B2B services as customers or RGUs for
external reporting purposes.
Certain of our residential and commercial RGUs are counted on an
EBU basis, including residential multiple dwelling units and
commercial establishments, such as bars, hotels, and hospitals, in
Puerto Rico. Our EBUs are generally calculated by dividing the bulk
price charged to accounts in an area by the most prevalent price
charged to non-bulk residential customers in that market for the
comparable tier of service. As such, we may experience variances in
our EBU counts solely as a result of changes in rates.
While we take appropriate steps to ensure that subscriber and
homes passed statistics are presented on a consistent and accurate
basis at any given balance sheet date, the variability from country
to country in (i) the nature and pricing of products and services,
(ii) the distribution platform, (iii) billing systems, (iv) bad
debt collection experience and (v) other factors add complexity to
the subscriber and homes passed counting process. We periodically
review our subscriber and homes passed counting policies and
underlying systems to improve the accuracy and consistency of the
data reported on a prospective basis. Accordingly, we may from time
to time make appropriate adjustments to our subscriber and homes
passed statistics based on those reviews.
Non-GAAP Reconciliations
We include certain financial measures in this press release that
are considered non-GAAP measures, including (i) Adjusted OIBDA,
Adjusted OIBDA Margin and Adjusted OIBDA less P&E Additions,
(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 and Adjusted OIBDA less P&E
Additions
Adjusted OIBDA and Adjusted OIBDA less P&E Additions, each a
non-GAAP measure, are the primary measures used by our chief
operating decision maker to evaluate segment operating performance.
Adjusted OIBDA and Adjusted OIBDA less P&E Additions are also
key factors that are 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 and Adjusted OIBDA less
P&E Additions are meaningful measures because they represent 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 and Adjusted OIBDA less
P&E Additions measures 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. Adjusted OIBDA and Adjusted OIBDA less
P&E Additions 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 our operating income or
loss to total Adjusted OIBDA and Adjusted OIBDA less P&E
Additions are presented in the following table:
Three months ended
Year ended
December 31,
December 31,
2022
2021
2022
2021
in millions
Operating income (loss)
$
109.5
$
(417.7
)
$
94.1
$
67.3
Share-based compensation expense
10.9
29.2
93.5
118.1
Depreciation and amortization
249.0
228.4
910.7
964.7
Impairment, restructuring and other
operating items, net
35.8
623.7
619.2
665.0
Adjusted OIBDA
405.2
463.6
1,717.5
1,815.1
Less: Property and equipment additions
225.2
256.9
816.3
855.9
Adjusted OIBDA less P&E additions
$
180.0
$
206.7
$
901.2
$
959.2
Operating income (loss) margin1
9.4
%
(32.6
)%
2.0
%
1.4
%
Adjusted OIBDA margin2
34.9
%
36.2
%
35.7
%
37.7
%
1.
Calculated by dividing operating
income (loss) 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) insurance recoveries
related to damaged and destroyed property and equipment and (iv)
certain net interest payments or receipts incurred or received,
including associated derivative instrument payments and receipts,
in advance of a significant acquisition, less (a) capital
expenditures, net, (b) principal payments on amounts financed by
vendors and intermediaries, (c) principal payments on finance
leases, and (d) distributions to noncontrolling interest owners. We
believe that our presentation of Adjusted FCF provides useful
information to our investors because this measure can be used to
gauge our ability to service debt and fund new investment
opportunities. Adjusted FCF should not be understood to represent
our ability to fund discretionary amounts, as we have various
mandatory and contractual obligations, including debt repayments,
which are not deducted to arrive at this amount. Investors should
view Adjusted FCF as a supplement to, and not a substitute for,
U.S. GAAP measures of liquidity included in our consolidated
statements of cash flows.
The following table provides the reconciliation of our net cash
provided by operating activities to Adjusted FCF for the indicated
period:
Three months ended
Year ended
December 31,
December 31,
2022
2021
2022
2021
in millions
Net cash provided by operating
activities
$
377.0
$
298.4
$
868.8
$
1,016.2
Cash payments for direct acquisition and
disposition costs
8.1
12.3
26.5
34.4
Expenses financed by an intermediary1
33.4
28.1
149.1
110.0
Capital expenditures, net
(166.0
)
(191.6
)
(660.1
)
(736.3
)
Principal payments on amounts financed by
vendors and intermediaries
(42.6
)
(47.0
)
(196.7
)
(184.0
)
Pre-acquisition interest payments,
net2
—
—
3.9
11.2
Principal payments on finance leases
(0.2
)
(2.6
)
(1.1
)
(4.1
)
Adjusted FCF before distributions to
noncontrolling interest owners
209.7
97.6
190.4
247.4
Distributions to noncontrolling interest
owners
—
(46.3
)
(1.9
)
(47.6
)
Adjusted FCF
$
209.7
$
51.3
$
188.5
$
199.8
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 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.
2.
The amount for the year ended December 31, 2022 reflects the
portion of interest paid that relates to the pre-acquisition debt
for the Claro Panama Acquisition. The amount for the year ended
December 31, 2021 relates to (i) the LCR Term Loan B-1 Facility and
LCR Term Loan B-2 Facility that were entered into in advance of the
Telefónica Costa Rica Acquisition and (ii) the portion of interest
paid in April 2021 that relates to pre-acquisition debt for the
AT&T Acquisition.
Rebase Information
Rebase growth rates are a non-GAAP measure. For purposes of
calculating rebased growth rates on a comparable basis for all
businesses that we owned during the current year, we have adjusted
our historical revenue and Adjusted OIBDA to include or exclude the
pre-acquisition amounts of acquired or disposed business, as
applicable, to the same extent they are included or excluded from
the current year. The businesses that were acquired or disposed
impacting the comparative periods are as follows:
i.
Telefónica Costa Rica, which was acquired
on August 9, 2021;
ii.
Broadband VI, LLC, which was acquired
effective December 31, 2021;
iii.
Claro Panama, which was acquired on July
1, 2022; and
iv.
VTR, which was disposed of on October 6,
2022.
In addition, we reflect the translation of our rebased amounts
for the prior-year periods at the applicable average foreign
currency exchange rates that were used to translate our results for
the corresponding current-year periods.
We have reflected the revenue and Adjusted OIBDA of acquired
entities in our prior-year rebased amounts based on what we believe
to be the most reliable information that is currently available to
us (generally pre-acquisition financial statements), as adjusted
for the estimated effects of (a) any significant differences
between U.S. GAAP and local generally accepted accounting
principles, (b) any significant effects of acquisition accounting
adjustments, (c) any significant differences between our accounting
policies and those of the acquired entities and (d) other items we
deem appropriate. We do not adjust pre-acquisition periods to
eliminate nonrecurring items or to give retroactive effect to any
changes in estimates that might be implemented during
post-acquisition periods. As we did not own or operate the acquired
entities during the pre-acquisition periods, no assurance can be
given that we have identified all adjustments necessary to present
their revenue and Adjusted OIBDA on a basis that is comparable to
the corresponding post-acquisition amounts that are included in our
historical results or that the pre-acquisition financial statements
we have relied upon do not contain undetected errors. In addition,
the rebased growth percentages are not necessarily indicative of
the revenue and Adjusted OIBDA that would have occurred if these
transactions had occurred on the dates assumed for purposes of
calculating our rebased amounts or the revenue and Adjusted OIBDA
that will occur in the future. The rebased growth percentages have
been presented as a basis for assessing growth rates on a
comparable basis and should be viewed as measures of operating
performance that are a supplement to, and not a substitute for,
U.S. GAAP reported growth rates.
The following tables provide the aforementioned adjustments made
to the revenue and Adjusted OIBDA amounts for the periods
indicated, to derive our rebased growth rates. Due to rounding,
certain rebased growth rate percentages may not recalculate.
In the tables set forth below:
- reported percentage changes are calculated as current period
measure, as applicable, less prior-period measure divided by
prior-period measure; and
- rebased percentage changes are calculated as current period
measure, as applicable, less rebased prior-period measure divided
by rebased prior-period measure.
The following tables set forth the reconciliations from reported
revenue to rebased revenue and related change calculations.
Three months ended December
31, 2021
C&W Caribbean
C&W Panama
C&W Network &
LatAm
Liberty Puerto Rico
Liberty Costa Rica
VTR
Corporate
Intersegment
eliminations
Total
In millions
Revenue – Reported
$
356.9
$
173.6
$
111.9
$
371.2
$
108.2
$
174.8
$
5.4
$
(21.4
)
$
1,280.6
Rebase adjustments:
Acquisitions
—
33.9
—
2.9
—
—
—
—
36.8
Disposition
—
—
—
—
—
(174.8
)
—
—
(174.8
)
Foreign currency
0.2
—
(3.5
)
—
4.8
—
—
—
1.5
Revenue – Rebased
$
357.1
$
207.5
$
108.4
$
374.1
$
113.0
$
—
$
5.4
$
(21.4
)
$
1,144.1
Reported percentage change
3
%
16
%
11
%
1
%
8
%
N.M.
6
%
N.M.
(9
)%
Rebased percentage change
3
%
(3
)%
14
%
—
%
3
%
N.M.
6
%
N.M.
1
%
N.M. – Not Meaningful.
Year ended December 31,
2021
C&W Caribbean
C&W Panama
C&W Networks &
LatAm
Liberty Puerto Rico
Liberty Costa Rica
VTR
Corporate
Intersegment
eliminations
Total
In millions
Revenue – Reported
$
1,389.9
$
568.1
$
431.9
$
1,449.7
$
258.5
$
787.5
$
21.6
$
(92.4
)
$
4,814.8
Rebase adjustments:
Acquisitions
—
69.4
—
11.7
169.5
—
—
—
250.6
Disposition
—
—
—
—
—
(174.8
)
—
—
(174.8
)
Foreign currency
(7.2
)
—
(8.6
)
—
(15.9
)
(85.6
)
—
(0.1
)
(117.4
)
Revenue – Rebased
$
1,382.7
$
637.5
$
423.3
$
1,461.4
$
412.1
$
527.1
$
21.6
$
(92.5
)
$
4,773.2
Reported percentage change
3
%
13
%
4
%
1
%
71
%
(43
) %
3
%
N.M.
—
%
Rebased percentage change
4
%
1
%
7
%
1
%
7
%
(15
) %
3
%
N.M.
1
%
N.M. – Not Meaningful.
The following tables set forth the reconciliations from reported
Adjusted OIBDA to rebased Adjusted OIBDA and related change
calculations.
Three months ended December
31, 2021
C&W Caribbean
C&W Panama
C&W Networks &
LatAm
Liberty Puerto Rico
Liberty Costa Rica
VTR
Corporate
Total
In millions
Adjusted OIBDA – Reported
$
125.0
$
62.6
$
71.2
$
135.3
$
29.4
$
55.3
$
(15.2
)
$
463.6
Rebase adjustments:
Acquisitions
—
0.9
—
0.2
—
—
—
1.1
Disposition
—
—
—
—
—
(55.3
)
—
(55.3
)
Foreign currency
0.1
—
(0.7
)
—
1.4
—
—
0.8
Adjusted OIBDA – Rebased
$
125.1
$
63.5
$
70.5
$
135.5
$
30.8
$
—
$
(15.2
)
$
410.2
Reported percentage change
10
%
(9
) %
12
%
(11
) %
23
%
N.M.
(72
) %
(13
) %
Rebased percentage change
10
%
(10
) %
13
%
(11
) %
17
%
N.M.
(72
) %
(1
) %
N.M. – Not Meaningful.
Year ended December 31,
2021
C&W Caribbean
C&W Panama
C&W Networks &
LatAm
Liberty Puerto Rico
Liberty Costa Rica
VTR
Corporate
Total
In millions
Adjusted OIBDA – Reported
$
482.9
$
200.1
$
264.3
$
580.9
$
80.2
$
259.6
$
(52.9
)
$
1,815.1
Rebase adjustments:
Acquisitions
—
2.3
—
1.1
47.5
—
—
50.9
Disposition
—
—
—
—
—
(55.3
)
—
(55.3
)
Foreign currency
(2.7
)
—
(2.1
)
—
(5.3
)
(28.7
)
—
(38.8
)
Adjusted OIBDA – Rebased
$
480.2
$
202.4
$
262.2
$
582.0
$
122.4
$
175.6
$
(52.9
)
$
1,771.9
Reported percentage change
11
%
(6
) %
5
%
(7
) %
68
%
(55
) %
(35
) %
(5
) %
Rebased percentage change
11
%
(7
) %
5
%
(8
) %
10
%
(34
) %
(35
) %
(3
) %
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 December
31, 2021
Residential fixed
revenue
Residential mobile
revenue
Total residential
revenue
B2B revenue
Total revenue
In millions
Revenue by product – Reported
$
128.4
$
96.2
$
224.6
$
132.3
$
356.9
Rebase adjustment:
Foreign currency
0.1
0.1
0.2
—
0.2
Revenue by product – Rebased
$
128.5
$
96.3
$
224.8
$
132.3
$
357.1
Reported percentage change
—
%
5
%
2
%
4
%
3
%
Rebased percentage change
—
%
5
%
2
%
4
%
3
%
Year ended December 31,
2021
Residential fixed
revenue
Residential mobile
revenue
Total residential
revenue
B2B revenue
Total revenue
In millions
Revenue by product – Reported
$
508.0
$
364.1
$
872.1
$
517.8
$
1,389.9
Rebase adjustment:
Foreign currency
(2.3
)
(1.7
)
(4.0
)
(3.2
)
(7.2
)
Revenue by product – Rebased
$
505.7
$
362.4
$
868.1
$
514.6
$
1,382.7
Reported percentage change
2
%
5
%
3
%
4
%
3
%
Rebased percentage change
2
%
6
%
4
%
4
%
4
%
The following tables set forth the reconciliations from reported
revenue by product for our C&W Panama segment to rebased
revenue by product and related change calculations.
Three months ended December
31, 2021
Residential fixed
revenue
Residential mobile
revenue
Total residential
revenue
B2B revenue
Total revenue
In millions
Revenue by product – Reported
$
25.5
$
54.9
$
80.4
$
93.2
$
173.6
Rebase adjustment:
Acquisition
2.2
25.5
27.7
6.2
33.9
Revenue by product – Rebased
$
27.7
$
80.4
$
108.1
$
99.4
$
207.5
Reported percentage change
15
%
45
%
35
%
(1
) %
16
%
Rebased percentage change
5
%
(1
) %
1
%
(7
) %
(3
) %
Year ended December 31,
2021
Residential
fixed revenue
Residential mobile
revenue
Total residential
revenue
B2B revenue
Total revenue
In millions
Revenue by product – Reported
$
97.4
$
220.9
$
318.3
$
249.8
$
568.1
Rebase adjustment:
Acquisition
4.3
52.0
56.3
13.1
69.4
Revenue by product – Rebased
$
101.7
$
272.9
$
374.6
$
262.9
$
637.5
Reported percentage change
13
%
21
%
19
%
6
%
13
%
Rebased percentage change
8
%
(2
)%
1
%
1
%
1
%
The following tables set forth the reconciliations from reported
revenue for our C&W borrowing group to rebased revenue and
related change calculations (USD in millions).
Three months ended December
31, 2021
Year ended December 31,
2021
Revenue by product – Reported
$
624.4
$
2,310.6
Rebase adjustments:
Acquisition
33.9
69.4
Foreign currency
(3.4
)
(15.6
)
Revenue by product – Rebased
$
654.9
$
2,364.4
Reported percentage change
7
%
6
%
Rebased percentage change
2
%
4
%
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 December
31, 2021
Year ended December 31,
2021
In millions
Adjusted OIBDA – Reported
$
258.8
$
947.3
Rebase adjustments:
Acquisition
0.9
2.3
Foreign currency
(0.6
)
(4.8
)
Adjusted OIBDA – Rebased
$
259.1
$
944.8
Reported percentage change
6
%
6
%
Rebased percentage change
6
%
6
%
Non-GAAP Reconciliation for Consolidated Leverage
Ratios
We have set forth below our consolidated leverage and net
leverage ratios, inclusive and exclusive of VTR in light of the
deconsolidation of VTR that occurred in connection with the
formation of the Chile JV in October 2022. Our consolidated
leverage and net leverage ratios, each a non-GAAP measure, are
defined as (i) adjusted total debt and finance lease obligations
(total carrying value of debt and finance lease obligations plus
discounts, premiums and deferred finance costs, less projected
derivative principal-related cash receipts) less cash and cash
equivalents divided by (ii) last two quarters annualized Adjusted
OIBDA as of December 31, 2022. 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 December 31, 2022 and September 30, 2022 are
set forth below:
December 31,
2022
September 30,
2022
Liberty Latin America
VTR
LLA, excluding VTR
Liberty Latin America
VTR
LLA, excluding VTR
in millions, except leverage
ratios
Total debt and finance lease
obligations
$
7,880.7
$
—
$
7,880.7
$
9,254.7
$
1,403.2
$
7,851.5
Discounts, premiums and deferred financing
costs, net
94.0
—
94.0
120.4
18.2
102.2
Projected derivative principal-related
cash receipts, net1
—
—
—
(167.6
)
(167.6
)
—
Adjusted total debt and finance lease
obligations
7,974.7
—
7,974.7
9,207.5
1,253.8
7,953.7
Less:
Cash and cash equivalents
781.0
—
781.0
832.2
63.0
769.2
Net debt and finance lease
obligations
$
7,193.7
$
—
$
7,193.7
$
8,375.3
$
1,190.8
$
7,184.5
Operating income2:
Operating income (loss) for the three
months ended June 30, 2022
N/A
N/A
N/A
$
(352.9
)
$
31.4
$
(384.3
)
Operating income for the three months
ended September 30, 2022
$
152.9
$
30.4
$
122.5
152.9
30.4
122.5
Operating income for the three months
ended December 31, 2022
109.5
—
109.5
N/A
N/A
N/A
Operating income (loss) – last two
quarters
262.4
30.4
232.0
(200.0
)
61.8
(261.8
)
Annualized operating income (loss) –
last two quarters annualized
$
524.8
$
60.8
$
464.0
$
(400.0
)
$
123.6
$
(523.6
)
Adjusted OIBDA3:
Adjusted OIBDA for the three months ended
June 30, 2022
N/A
N/A
N/A
$
460.8
$
38.3
$
422.5
Adjusted OIBDA for the three months ended
September 30, 2022
$
415.0
$
31.9
$
383.1
415.0
31.9
383.1
Adjusted OIBDA for the three months ended
December 31, 2022
405.2
—
405.2
N/A
N/A
N/A
Adjusted OIBDA – last two quarters
$
820.2
$
31.9
$
788.3
$
875.8
$
70.2
$
805.6
Annualized Adjusted OIBDA – last two
quarters annualized
$
1,640.4
$
63.8
$
1,576.6
$
1,751.6
$
140.4
$
1,611.2
Consolidated debt and finance lease
obligations to operating income (loss) ratio
15.0
x
N/A
(23.1
)x
N/A
Consolidated net debt and finance lease
obligations to operating income (loss) ratio
13.5
x
N/A
(21.1
)x
N/A
Consolidated leverage ratio
N/A
5.1 x
N/A
4.9
x
Consolidated net leverage ratio
N/A
4.6 x
N/A
4.5
x
N/A – Not Applicable.
1.
Amounts represent the U.S. dollar equivalents and are based on
interest rates and exchange rates that were in effect as of
December 31, 2022 and September 30, 2022, respectively.
2.
Operating income or loss is the closest U.S. GAAP measure to
Adjusted OIBDA, as discussed in Adjusted OIBDA and Adjusted OIBDA
less P&E Additions above. Accordingly, we have presented
consolidated debt and finance lease obligations to operating income
(loss) and consolidated net debt and finance lease obligations to
operating income (loss) 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 and
Adjusted OIBDA less P&E Additions above for reconciliation of
Adjusted OIBDA to the nearest U.S. GAAP measure for the three
months ended December 31, 2022. A reconciliation of our operating
income (loss) to Adjusted OIBDA for the three months ended June 30,
2022 and September 30, 2022 is presented in the following
table:
Three months ended
June 30, 2022
September 30, 2022
Liberty Latin America
VTR
Liberty Latin America
VTR
Operating income (loss)
$
(352.8
)
$
31.4
$
152.9
$
30.4
Share-based compensation expense
31.8
4.2
20.8
0.3
Depreciation and amortization
213.3
—
234.3
—
Impairment, restructuring and other
operating items, net
568.5
2.7
7.0
1.2
Adjusted OIBDA
$
460.8
$
38.3
$
415.0
$
31.9
Non-GAAP Reconciliations for Our C&W Borrowing
Group
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 borrowing group in this press release that
are considered non-GAAP measures, including: (i) Adjusted OIBDA;
(ii) Adjusted OIBDA Margin; and (iii) Proportionate 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 (loss) to
Adjusted OIBDA and Proportionate Adjusted OIBDA is presented in the
following table:
Three months ended
Year ended
December 31,
December 31,
2022
2021
2022
2021
in millions
Operating income (loss)
$
77.1
$
(526.9
)
$
(252.1
)
$
(340.0
)
Share-based compensation expense
3.2
8.5
27.8
36.8
Depreciation and amortization
152.2
146.1
574.2
578.5
Related-party fees and allocations
15.0
14.3
54.2
42.6
Impairment, restructuring and other
operating items, net
27.5
616.8
595.9
629.4
Adjusted OIBDA
275.0
258.8
1,000.0
947.3
Noncontrolling interests' share of
Adjusted OIBDA
43.3
43.2
147.6
145.7
Proportionate Adjusted OIBDA
$
231.7
$
215.6
$
852.4
$
801.6
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230222005822/en/
Investor Relations Kunal Patel ir@lla.com
Corporate Communications Kim Larson
llacommunications@lla.com
Liberty Latin America (NASDAQ:LILA)
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