Liberty Latin America(US:LILA)2020-08-05 20:32Acquisitions - The AT&T Acquisition is valued at an enterprise value of $1,950 million on a cash- and debt-free basis, subject to certain adjustments[48]. - The acquisition of United Telecommunication Services N.V. (UTS) was completed for an initial cash purchase price of $162 million, based on an enterprise value of $189 million[53]. - The acquisition of UTS was funded through a $170 million draw on the C&W Revolving Credit Facility[53]. - The company expects the AT&T Acquisition transaction to close during the fourth quarter of 2020, subject to customary closing conditions[51]. - The AT&T transition services agreement will provide ongoing support for up to 36 months post-acquisition, covering various operational areas[52]. - The total purchase price for the UTS Acquisition was $155.9 million, with goodwill recognized at $17.1 million primarily due to synergies and access to UTS's existing networks[54]. - A post-closing working capital adjustment reduced the UTS Acquisition purchase price by $6 million during Q1 2020, which was received in Q2 2020[57]. - The company entered into a definitive agreement to acquire Telefónica S.A.'s wireless operations in Costa Rica for an enterprise value of $500 million, expected to close in the first half of 2021[202]. Financial Performance - Total revenue for the three months ended June 30, 2020, was $848.9 million, a decrease of 13.5% compared to $982.9 million for the same period in 2019[163]. - Total revenue for the six months ended June 30, 2020, was $1,779.9 million, a decrease from $1,925.6 million in the same period of 2019, representing a decline of approximately 7.6%[188]. - The company reported a loss before income taxes of $496.4 million for the three months ended June 30, 2020, compared to a loss of $81.7 million in the same period of 2019[166]. - Adjusted OIBDA for the three months ended June 30, 2020, was $332.6 million, down 14.1% from $387.4 million in the prior year[164]. - Total residential revenue for the three months ended June 30, 2020, was $587.4 million, compared to $675.8 million in the same period of 2019, reflecting a decline of 13.1%[171]. - Total B2B revenue for the three months ended June 30, 2020, was $261.5 million, down from $307.1 million in the same period of 2019, representing a decrease of 14.8%[171]. - The company incurred impairment, restructuring, and other operating items, net, of $298.7 million for the three months ended June 30, 2020, compared to $6.5 million in 2019[166]. - Total programming and copyright costs of $194 million for the six months ended June 30, 2020, compared to $217 million for the same period in 2019[19]. Debt and Financing - Total debt before premiums, discounts, and deferred financing costs as of June 30, 2020, was $8,980.8 million, an increase from $8,512.5 million in 2019, reflecting a year-over-year growth of approximately 5.5%[95]. - The total carrying amount of debt, including finance lease obligations, was $8,841.0 million as of June 30, 2020, compared to $8,370.0 million in 2019, indicating a growth of about 5.6%[95]. - The company had unused borrowing capacity of $765.3 million as of June 30, 2020, which includes $312.5 million from the C&W Revolving Credit Facility[99]. - In January 2020, the company entered into a $1,510 million principal amount term loan facility with an interest rate of LIBOR plus 2.25%, due January 31, 2028[100]. - The company issued an additional $150 million under the existing 2027 C&W Senior Secured Notes indenture at 106.0% of par in January 2020[101]. - The net proceeds from the C&W Term Loan B-5 Facility and the 2027 C&W Senior Secured Notes Add-on were primarily used to repay the $1,640 million outstanding principal amount under the C&W Term Loan B-4 Facility[105]. - Total debt maturities amount to $8,980.8 million, with significant maturities in 2024 of $1,750.8 million[116]. Operational Metrics - The company operates a wholesale communication service over its subsea and terrestrial fiber optic cable networks connecting over 40 markets in the region[31]. - Liberty Latin America provides services in over 20 countries, primarily in Latin America and the Caribbean, through its various subsidiaries[31]. - The company operates in over 20 countries, primarily in Latin America and the Caribbean, providing residential and B2B services including video, broadband internet, and fixed-line telephony[19]. - The weighted average remaining lease term for operating leases is 6.5 years, with a weighted-average discount rate of 6.4%[120]. - As of June 30, 2020, the company has approximately $420 million of unfulfilled performance obligations related to long-term capacity contracts, expected to be recognized over an average remaining life of seven years[123]. Cost Management - Total other operating costs and expenses for the six months ended June 30, 2020, were $740.2 million, compared to $754.1 million in the same period of 2019[132]. - Programming and other direct costs of services decreased by $28 million or 12.6% for the six-month comparison, excluding the effects of UTS Acquisition, a disposal, and FX[249]. - The impact of the UTS Acquisition resulted in a $3 million increase in costs during the six-month comparison[249]. - Foreign exchange (FX) effects contributed to a decrease of $12 million and $25 million in costs for the three and six months ended June 30, 2020, respectively[249]. - The overall financial performance indicates a need for strategic adjustments in response to the revenue declines and cost management[249]. Shareholder Actions - The company repurchased 293,816 Class A shares and 673,158 Class C shares during the six months ended June 30, 2020, with $91 million remaining authorized for share repurchases[14]. - The company has approximately 18.1 million shares potentially issuable under its 2.0% convertible senior notes due July 15, 2024, and approximately 19.6 million shares issuable pursuant to outstanding options, SARs, and RSUs[16]. - During the six months ended June 30, 2020, the company granted SARs for 2,074,825 Class A shares and 4,149,650 Class C shares, with weighted average exercise prices of $10.42 and $10.48, respectively[15].