Reported revenue up 2% to $1.2 billion and flat on rebased basis; 3% rebased growth ex VTR

Over 400,000 organic broadband and postpaid mobile adds in last twelve months

Completed 50:50 Chilean Joint Venture on October 6

Repurchased over $150 million of shares through to the end of Q3

Liberty Latin America Ltd. (“Liberty Latin America” or “LLA”) (NASDAQ: LILA and LILAK, OTC Link: LILAB) today announced its financial and operating results for the three months (“Q3”) and nine months (“YTD”) ended September 30, 2022.

CEO Balan Nair commented, “In the third quarter, we continued to drive top-line growth, excluding our Chilean operation, which we combined with Claro Chile through a 50:50 JV in early October. While we experienced some negative impacts from Hurricane Fiona, specifically in Puerto Rico where we anticipate a negative cash flow impact of $20 million this year, we don't anticipate any material ongoing challenges and remain excited about fully integrating our fixed-line and resilient mobile operations in that market.”

“Our focus on broadband and mobile postpaid subscriber growth continued to drive our revenue performance. Broadband subscriber additions were led by double-digit percentage growth, sequential and year-over-year, in Puerto Rico. Mobile postpaid additions for the group were nearly double the prior year period as we continued to grow postpaid penetration across our markets.”

“Strategically, we continue to progress our integration activities across Puerto Rico, Panama, and Costa Rica and are set to deliver significant value for stakeholders as we combine operations and work towards realizing full run-rate synergies in excess of $150 million. In early October, we completed the previously announced JV with Claro in Chile and the new management team is now in place. While that team is early in their planning and integration processes, we expect them to drive significant synergies consistent with our plans and to drive operational growth.”

“Overall, we continued to make progress in the quarter and anticipate a seasonally strong end to the year. We are focused on driving operational performance across the group and integrating our acquisitions. Through these initiatives, we expect to deliver significant Adjusted FCF growth in the coming years.”

Business Highlights

• C&W Caribbean: strong operating and financial performance
  • Q3 subscriber additions drive reported and rebased revenue up 3%
  • Reported and rebased Adj. OIBDA growth of 11% in Q3
• C&W Panama: subscriber growth, Claro Panama acquired on July 1
  • Revenue growth driven by broadband and B2B project wins
  • Integration and synergy capture underway
• C&W Networks & LatAm: first quarter as separate reporting segment
  • Stable top-line performance
  • Strong Adj. OIBDA less P&E additions as a percentage of revenue
• Liberty Puerto Rico: strong fixed performance
  • Broadband adds up 16% YoY and 51% sequentially
  • Adj. OIBDA impacted by Hurricane Fiona and integration related expenses
• Liberty Costa Rica: postpaid mobile subscriber additions driving revenue growth
  • Integration progressing well; market leadership in mobile
  • Reported and rebased revenue growth of 40% and 7%, respectively
• VTR: 50:50 JV with Claro Chile completed on October 6

LLA 2022 Financial Guidance - Update

• P&E additions as a percentage of revenue at ~18%
• Adjusted FCF guidance of ~$200 million
  • Previous guidance of ~$220 million reduced by ~$20 million to incorporate the impact of Hurricane Fiona

Financial and Operating Highlights

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:

• Our reported revenue for the three and nine months ended September 30, 2022 increased by 2% and 3%, respectively.
  • Reported revenue growth in Q3 was driven by (1) the addition of $72 million, primarily from the acquisitions of América Móvil's Panama operations on July 1, 2022 and Telefónica's Costa Rica operations on August 9, 2021, (2) organic growth in Liberty Costa Rica and C&W Caribbean, (3) organic declines at VTR and (4) a net foreign exchange (“FX”) impact of $(32) million. The FX impact was driven by an average year-over-year 20% depreciation of the Chilean peso in Q3.
  • Reported revenue growth YTD was driven by (1) the addition of $224 million, primarily from the acquisitions of Telefónica's Costa Rica operations and América Móvil's Panama operations, (2) organic growth in C&W Caribbean, Liberty Costa Rica, C&W Networks and C&W Panama, (3) organic declines at VTR and (4) a net FX impact of $(95) million. The FX impact was driven by an average year-over-year 17% depreciation of the Chilean peso YTD.

Q3 2022 Revenue Growth – Segment Highlights

• C&W Caribbean: revenue grew by 3% on both a reported and rebased basis.
  • Fixed residential revenue was 3% and 2% higher on a reported and rebased basis, respectively. Year-over-year rebased performance continued to be driven by growth in our internet subscriber base, which was 22,000 higher over the past twelve months driven by Jamaica.
  • Mobile revenue was up 6% and 5% on a reported and rebased basis, respectively, 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 3% higher on a reported and rebased basis, as compared to the prior-year period. Performance was driven by internet services-related growth as well as mobile subscriber growth.
• C&W Panama: revenue grew by 29% and 2% 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 18% and 9% on a reported and rebased basis, respectively. Rebased growth was driven by 63,000 subscriber 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 declined by 2% on a rebased basis. Revenue decreased on a rebased basis as postpaid service revenue growth was more than offset by prepaid revenue decline year-over-year.
  • B2B revenue grew by 17% and 4% on a reported and rebased basis, respectively. The year-over-year rebased growth was driven by the successful award of certain infrastructure projects, and growth in fixed and mobile recurring revenue.
• C&W Networks & LatAm: revenue decreased by 3% and 1% on a reported and rebased basis, respectively. Performance on a rebased basis was driven by higher B2B service-related connectivity revenue and growth in managed services, offset by lower pricing and reduced lease capacity revenue.
• Liberty Puerto Rico: revenue grew by 3% and 2% on a reported and rebased basis, respectively. Reported performance benefited from the inclusion of our fixed operations in the USVI in the quarter. On a rebased basis, residential fixed revenue was flat as subscriber growth was offset by the negative impact of customer credits following Hurricane Fiona during Q3 2022. Consumer mobile revenue declined as compared to the prior-year period, as higher roaming and equipment sales were more than offset by a reduction in the average number of mobile subscribers and lower ARPU.
• Liberty Costa Rica: revenue grew by 40% and 7% on a reported and rebased basis, respectively. Reported performance benefited from the inclusion of Telefónica's Costa Rica operations in the quarter. Rebased growth was driven by strong subscriber additions across both our mobile and fixed businesses over the past twelve months as well as higher inbound roaming and handset sales.
• VTR: revenue was 33% and 19% lower on a reported and rebased basis, respectively. The year-over-year revenue decline was primarily driven by residential fixed revenue performance. Over the past twelve months, intense competitive pressures have led to a reduction in ARPU and subscriber numbers. In addition, strategic initiatives implemented during the first quarter of 2022 have led to lower ARPU levels across our internet subscriber base.

Operating Income (Loss)

• Operating income (loss) was $153 million and $136 million for the three months ended September 30, 2022 and 2021, respectively, and ($15 million) and $485 million for the nine months ended September 30, 2022 and 2021, respectively.
  • The increase during the three-month comparison is due to lower expenses associated with depreciation and amortization, stock-based compensation and impairment, restructuring and other operating items, net, which were partially offset by 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. The decline for the nine-month comparison is primarily due to goodwill impairments incurred during the second quarter of 2022, and a decline in Adjusted OIBDA, which were partially offset by a decrease in depreciation and amortization expense.

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:

• Our reported Adjusted OIBDA for the three and nine months ended September 30, 2022 was 6% and 3% lower, respectively, as compared to the corresponding prior-year periods.
  • Reported Adjusted OIBDA performance in Q3 and YTD resulted from the net impact of organic declines in VTR and Puerto Rico, and FX headwinds in Chile, which were partly offset by $18 million and $61 million, respectively, contributed by acquisitions and organic growth at C&W Caribbean. Our Q3 reported results were also impacted negatively by $12 million related to Hurricane Fiona and $5 million of incremental integration costs.

Q3 2022 Adjusted OIBDA Growth – Segment Highlights

• C&W Caribbean: Adjusted OIBDA increased by 11% on both a reported and rebased basis. Performance was driven by the aforementioned rebased revenue growth and our focus on cost control. Our Adjusted OIBDA margin improved by ~250 basis points year-over-year to 37%.

• C&W Panama: Adjusted OIBDA decreased on a reported and rebased basis by 3% and 5%, respectively. The rebased decline was driven by higher equipment costs related to additional B2B projects, higher bad debt provisions as challenging economic conditions impacted customers in lower socio-economic groups and integration costs.

• C&W Networks & LatAm: Adjusted OIBDA decreased on a reported and rebased basis by 5% and 4%, respectively. Our rebased performance was driven by higher direct costs associated with equipment sales across B2B services.

• Liberty Puerto Rico: Adjusted OIBDA declined by 6% on a reported and rebased basis. The decline in the quarter was driven by (i) $12 million in revenue credits and costs associated with Hurricane Fiona (aforementioned revenue credits and increased network-related expenses), (ii) increased equipment costs due to a higher volume of handset sales, (iii) additional TSA-related charges, (iv) higher personnel costs as we establish an operating structure in advance of fully transitioning services from AT&T, and (v) increased integration costs as compared to the prior-year period. We anticipate a further ~$5 million of Hurricane Fiona related negative impacts to Adjusted OIBDA in Q4 2022.

• Liberty Costa Rica: Adjusted OIBDA grew by 37% on a reported basis and declined by 1% on a rebased basis. Reported growth benefited from the inclusion of Telefónica's Costa Rica operations in the quarter. Rebased performance was driven by the aforementioned rebased revenue growth, offset by $2 million of additional integration costs and higher other operating costs including a $2 million non-functional currency impact.

• VTR: Adjusted OIBDA was lower on a reported and rebased basis by 52% and 42%, respectively. The rebased decline was driven by the aforementioned decrease in revenue.

Net Earnings (Loss) Attributable to Shareholders

• Net earnings (loss) attributable to shareholders was $84 million and $76 million for the three months ended September 30, 2022 and 2021, respectively, and ($310 million) and $174 million for the nine months ended September 30, 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.

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 September 30, 2022:

Quarterly Subscriber Variance

ARPU per Customer Relationship

The following table provides ARPU per customer relationship for the indicated periods:

Mobile ARPU

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

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 2022; our digital strategy, product innovation and commercial plans and projects; 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, in Panama following the acquisition of América Móvil’s Panama operations and in Chile following the formation of the joint venture with Claro Chile; 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 and efforts to contain any pandemic, 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 obtain regulatory approval and satisfy conditions associated with acquisitions and dispositions; our ability to successfully acquire and integrate new businesses and realize anticipated efficiencies from acquired businesses; the availability of attractive programming for our video services and the costs associated with such programming; our ability to achieve forecasted financial and operating targets; the outcome of any pending or threatened litigation; the ability of our operating companies to access cash of their respective subsidiaries; the impact of our operating companies' future financial performance, or market conditions generally, on the availability, terms and deployment of capital; fluctuations in currency exchange and interest rates; the ability of suppliers and vendors to timely deliver quality products, equipment, software, services and access; our ability to adequately forecast and plan future network requirements including the costs and benefits associated with network expansions; and other factors detailed from time to time in our filings with the Securities and Exchange Commission, including our most recently filed Form 10-K and Form 10-Q. These forward-looking statements speak only as of the date of this press release. We expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

About Liberty Latin America

Liberty Latin America is a leading communications company operating in over 20 countries across Latin America and the Caribbean under the consumer brands BTC, Flow, Liberty and Más Móvil, and through ClaroVTR, our joint venture in Chile. The communications and entertainment services that we offer to our residential and business customers in the region include digital video, broadband internet, telephony and mobile services. Our business products and services include enterprise-grade connectivity, data center, hosting and managed solutions, as well as information technology solutions with customers ranging from small and medium enterprises to international companies and governmental agencies. In addition, Liberty Latin America operates a subsea and terrestrial fiber optic cable network that connects approximately 40 markets in the region.

Liberty Latin America has three separate classes of common shares, which are traded on the NASDAQ Global Select Market under the symbols “LILA” (Class A) and “LILAK” (Class C), and on the OTC link under the symbol “LILAB” (Class B).

For more information, please visit www.lla.com.

Footnotes

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.