Liberty Latin America(LILA)2024-11-06 22:10Subscriber and Revenue Metrics - Total subscribers as of September 30, 2024: 7,989,300 mobile subscribers and 3,986,100 RGUs (1,824,500 broadband, 1,232,700 fixed-line telephony, 928,900 video)[178] - Revenue for Q3 2024 decreased by $36.6 million (3.3%) compared to Q3 2023, with organic revenue decline of $42.0 million[188] - Revenue for the nine months ended September 30, 2024, decreased by $40.9 million (1.2%) compared to the same period in 2023, with organic revenue decline of $70.0 million[191] - Total revenue for the three months ended September 2024 decreased by $36.6 million to $1,089.2 million, with organic revenue decline of $42.0 million[204] - C&W Caribbean's revenue for the nine months ended September 2024 increased by $21.4 million to $1,092.0 million, driven by organic growth of $25.9 million[205] - Liberty Puerto Rico's revenue for the three months ended September 2024 decreased by $43.0 million to $308.2 million, with organic decline of $45.9 million[204] - Liberty Costa Rica's revenue for the three months ended September 2024 increased by $10.9 million to $145.5 million, with organic growth of $6.3 million[204] - Residential mobile service revenue for C&W Caribbean increased by $17.6 million to $262.9 million for the nine months ended September 2024[208] - C&W Panama's total revenue for the three months ended September 2024 decreased by $2.4 million to $188.0 million, with B2B revenue declining by $10.7 million[214] - Residential revenue for C&W Panama increased by $8.3 million to $118.9 million for the three months ended September 2024, driven by mobile service revenue growth of $4.5 million[214] - Total residential fixed revenue for C&W Caribbean decreased by $3.7 million to $234.1 million for the three months ended September 2024, primarily due to lower video RGUs[206][209] - Residential mobile service revenue for C&W Caribbean increased by $8.0 million for the three months ended September 2024, driven by postpaid subscriber growth[209] - B2B revenue for C&W Caribbean increased by $5.0 million to $387.5 million for the nine months ended September 2024, mainly due to higher project-related revenue[208][212] - C&W Panama's residential fixed revenue increased by $1.4 million in the three-month comparison and $4 million in the nine-month comparison, driven by higher average broadband internet RGUs[217] - C&W Panama's residential mobile service revenue increased by $4.5 million in the three-month comparison and $3 million in the nine-month comparison, primarily due to higher ARPU from prepaid mobile services[219] - Liberty Networks' B2B revenue decreased by $2.6 million (2%) in the three-month comparison, with enterprise revenue increasing by $0.7 million (2%) and wholesale revenue decreasing by $3.3 million (4%)[222] - Liberty Networks' B2B revenue decreased by $2.3 million (1%) in the nine-month comparison, with enterprise revenue increasing by $10.4 million (12%) and wholesale revenue decreasing by $12.7 million (5%)[224] - Liberty Puerto Rico's total residential revenue decreased by $38.4 million (13%) in the three-month comparison, with residential fixed revenue decreasing by $5.3 million (4%) and residential mobile revenue decreasing by $33.1 million (21%)[227] - Liberty Puerto Rico's total residential revenue decreased by $104.4 million (12%) in the nine-month comparison, with residential fixed revenue decreasing by $3.9 million (1%) and residential mobile revenue decreasing by $100.5 million (21%)[229] - Liberty Puerto Rico's residential mobile service revenue decreased by $19.4 million in the three-month comparison and $50 million in the nine-month comparison, primarily due to declines in the average number of mobile subscribers[230] - Liberty Puerto Rico's residential mobile interconnect, inbound roaming, equipment sales, and other revenue decreased by $16.6 million in the three-month comparison and $53 million in the nine-month comparison, driven by lower equipment sales and inbound roaming revenue[232] - Liberty Puerto Rico's B2B revenue decreased by $2.7 million (5%) in the three-month comparison and $6 million (4%) in the nine-month comparison, primarily due to lower revenue from mobile services[230] - Liberty Puerto Rico's other revenue decreased by $1.9 million (23%) in the three-month comparison and $9.8 million (31%) in the nine-month comparison, driven by declines in the rate of funding from the FCC[235] - Residential fixed subscription revenue decreased by $2.0 million (6%) in Q3 2024 compared to Q3 2023, driven by lower ARPU across all fixed products, particularly video services[236][240] - Residential fixed non-subscription revenue increased by $3.6 million (90%) in Q3 2024, primarily due to higher volumes of CPE sales[236][240] - Residential mobile service revenue increased by $7.3 million (12%) in Q3 2024, driven by higher average postpaid mobile subscribers and lower prepaid mobile ARPU[236][241] - Total residential revenue increased by $9.4 million (8%) in Q3 2024, with mobile revenue contributing $7.8 million (10%) of the growth[236] - B2B revenue increased by $1.5 million (10%) in Q3 2024, reflecting growth in business services[236] - Total revenue increased by $10.9 million (8%) in Q3 2024, with organic growth contributing $6.3 million and FX impact adding $4.6 million[239] Hurricane Beryl Impact - Hurricane Beryl negatively impacted Q3 2024 revenue by $5 million and Adjusted OIBDA by $8 million, with an estimated loss of 33,000 RGUs (16,000 broadband, 15,000 fixed-line telephony, 2,000 video)[179] - Expected Q4 2024 impact from Hurricane Beryl: revenue and Adjusted OIBDA to decline by $5 million to $10 million, with additional property and equipment additions of $10 million to $15 million[180] - Net proceeds of $44 million from Weather Derivatives claim related to Hurricane Beryl in Q3 2024[181] Costa Rica Transaction - Costa Rica transaction with Millicom announced on August 1, 2024, with Liberty Latin America to hold ~86% interest and Millicom ~14% upon closing, expected in H2 2025[182] - Agreement to acquire 8.5% equity of Liberty Costa Rica for $82 million, with 62.5% due on January 30, 2026 and 37.5% on January 29, 2027[183] Operating Costs and Expenses - Q3 2024 operating costs and expenses increased by $505.7 million YoY, primarily due to organic growth of $501.1 million, with FX and acquisition impacts of $2.0 million and $2.6 million respectively[189] - Q3 2024 operating loss improved to $379.6 million from $542.3 million in Q3 2023, with organic improvement of $543.1 million, partially offset by FX and acquisition impacts of $0.5 million and $0.3 million respectively[189] - Operating loss for Q3 2024 was $379.6 million, compared to an operating income of $162.7 million in Q3 2023[193] - Operating loss for the nine months ended September 30, 2024, was $176.0 million, compared to an operating income of $404.7 million in the same period in 2023[191] - Programming and other direct costs decreased by $22.8 million (3.1%) for the nine months ended September 30, 2024, compared to the same period in 2023[191] - Other operating costs and expenses increased by $66.3 million (4.7%) for the nine months ended September 30, 2024, compared to the same period in 2023[191] - Depreciation and amortization increased by $24.3 million (3.4%) for the nine months ended September 30, 2024, compared to the same period in 2023[191] - Impairment, restructuring, and other operating items increased by $472.0 million for the nine months ended September 30, 2024, compared to the same period in 2023[191] - Integration costs of $17 million incurred in the Liberty Puerto Rico segment during the nine months ended September 30, 2024[198] - Organic revenue decline of $70.0 million for the nine months ended September 30, 2024, driven by a $123.1 million decrease in Liberty Networks[196] - Programming and other direct costs decreased by $22.8 million (3.1%) for the nine months ended September 30, 2024, with organic savings of $30.5 million[191] - Other operating costs increased by $66.3 million (4.7%) for the nine months ended September 30, 2024, with organic growth of $53.4 million[191] - Depreciation and amortization increased by $24.3 million (3.4%) for the nine months ended September 30, 2024, with organic growth of $20.6 million[191] - Impairment, restructuring and other operating items increased by $472.0 million for the nine months ended September 30, 2024, primarily due to non-recurring charges[191] - Programming and copyright costs decreased by $1.7 million in Q3 2024, primarily due to the renegotiation of certain content agreements[245][249] - Interconnect costs decreased by $8.5 million in Q3 2024, mainly due to lower rates from contract renegotiations[245][250] - Equipment costs decreased by $4.5 million in Q3 2024, driven by lower handset costs offsetting higher B2B project-related equipment costs[245][250] - Total programming and other direct costs of services decreased by $27.2 million in Q3 2024, with organic decreases contributing $29.8 million[245] - Programming and copyright revenue decreased by $0.4 million (6.9%) to $5.4 million in Q3 2024 compared to Q3 2023[252] - Interconnect revenue decreased by $2.1 million (11.3%) to $16.5 million in Q3 2024 due to lower traffic volumes[252][257] - Equipment revenue increased by $6.0 million (67.4%) to $14.9 million in Q3 2024 driven by higher handset sales to residential and B2B customers[252][254] - Project-related and other revenue decreased by $13.0 million (37.8%) to $21.4 million in Q3 2024 due to project phasing[252][255] - Total programming and other direct costs of services decreased by $9.5 million (14.0%) to $58.2 million in Q3 2024[252] - Liberty Puerto Rico's total programming and other direct costs decreased by $17.3 million (17.7%) to $80.3 million in Q3 2024, with organic decreases of $19.3 million[259] - Liberty Costa Rica's total programming and other direct costs increased by $3.6 million (12.7%) to $31.9 million in Q3 2024, with organic increases of $2.6 million[265] - Equipment costs in Liberty Costa Rica increased by $3.3 million (27.7%) to $15.2 million in Q3 2024 due to higher CPE and handset costs[265][268] - Interconnect costs in Liberty Costa Rica decreased by $1.5 million (18.5%) to $6.6 million in Q3 2024 due to lower rates and volumes[265][268] - Total programming and other direct costs for Liberty Networks decreased by $2.2 million (12.6%) to $15.2 million in Q3 2024[256] - Personnel and contract labor costs increased by $10.7 million organically in 2024 compared to 2023, primarily due to higher salaries, capitalized labor, and bonus-related expenses[270][274] - Network-related costs decreased by $6.1 million organically in 2024, driven by lower power costs and consumption[270][275] - Service-related costs increased by $10.4 million organically in 2024, mainly due to declines in professional services from renegotiated vendor contracts[270][277] - Total other operating costs and expenses increased by $5.9 million organically in 2024, reaching $470.1 million[270] - C&W Caribbean segment saw a $5.6 million organic decrease in total operating costs, primarily due to lower network and service-related expenses[273] - C&W Panama segment's total operating costs decreased by $12.8 million, with facility and provision costs dropping by $16.7 million due to lower facilities costs and bad debt expense[281][282] - Liberty Networks segment's total operating costs increased by $4.5 million organically, driven by higher facility and provision costs[285] - Facility, provision, franchise, and other costs increased by $6.2 million organically in C&W Caribbean over nine months, impacted by Hurricane Beryl-related restoration costs and higher franchise fees[274][278] - Commercial costs in C&W Panama increased by $2.8 million over nine months, driven by higher marketing and commissions expenses[281][282] - Share-based compensation and other employee incentive plan-related expenses decreased by $8.2 million organically in 2024, reflecting lower headcount and restructuring impacts[270][281] - Personnel and contract labor increased by $14.6 million (12.9%) organically for the nine months ended September 30, 2024, driven by higher salaries, severance-related expenses, and lower bonus-related expenses[291] - Network-related costs decreased by $5.6 million (14.8%) organically for the nine months ended September 30, 2024, primarily due to the termination of a transition service agreement[292] - Service-related costs increased by $42.3 million (77.6%) organically for the nine months ended September 30, 2024, driven by higher integration costs and IT service expenses[292] - Commercial costs increased by $5.4 million (15.0%) organically for the nine months ended September 30, 2024, primarily due to higher call center costs[293] - Facility, provision, franchise, and other costs increased by $12.2 million (8.0%) organically for the nine months ended September 30, 2024, mainly due to higher bad debt expense and collection costs[294] - Total other operating costs and expenses increased by $68.4 million (17.1%) for the nine months ended September 30, 2024, with $67.8 million (16.9%) being organic growth[291] - Personnel and contract labor increased by $6.0 million (84.5%) for the three months ended September 30, 2024, primarily due to higher bonus-related expenses and lower capitalized labor[304][305] - Share-based compensation and other employee incentive plan-related expenses decreased by $17.8 million (35.5%) for the nine months ended September 30, 2024[305] - Facility, provision, franchise, and other costs decreased by $5.1 million (19.5%) for the nine months ended September 30, 2024, primarily due to insurance costs recognized in 2023[307] - Total other operating costs and expenses decreased by $14.3 million (11.6%) for the nine months ended September 30, 2024[305] - Depreciation and amortization expense increased by $15 million (6%) for the three months and $24 million (3%) for the nine months ended September 30, 2024, compared to 2023, driven by property and equipment additions and network expansions[308] - Impairment charges for the three and nine months ended September 30, 2024, were $511.5 million and $520.0 million, respectively, primarily due to goodwill impairment at Liberty Puerto Rico[310] - Restructuring charges for the three and nine months ended September 30, 2024, were $12.2 million and $27.0 million, respectively, mainly due to employee severance costs in C&W Panama and Liberty Puerto Rico[311] - Interest expense increased by $7 million for the three months and $23 million for the nine months ended September 30, 2024, driven by higher average outstanding debt balances and interest rates[312] - Realized and unrealized losses on derivative instruments for the three months ended September 30, 2024, were $31.3 million, primarily due to changes in interest rates and FX rates[317] - Foreign currency transaction losses for the three months ended September 30, 2024, were $7.6 million, mainly due to remeasurement of CRC-denominated assets and liabilities[321] - Income tax benefit for the three and nine months ended September 30, 2024, was $146 million and $177 million, respectively, driven by international rate differences and valuation allowance decreases[326] - Net loss for the three and nine months ended September 30, 2024, was $429.1 million and $466.5 million, respectively, compared to net earnings of $47.9 million and a net loss of $4.1 million in 2023[330] Financial Position and Liquidity - Total cash and cash equivalents as of September 30, 2024, were $588.6 million, with $514.4 million held by borrowing groups, including C&W, Liberty Puerto Rico, and Liberty Costa Rica[334] - The aggregate value of share repurchases during the nine months ended September 30, 2024 was $83 million[339] - The outstanding principal amount of debt and finance lease obligations at September 30, 2024 was $8,212 million, with $550 million classified as current and $7,604 million due in 2027 or later[343] - The weighted average interest rate on all borrowings at September 30, 2024 was 7.2%, decreasing to 6.1% when including the effects of derivative instruments, original issue premiums or discounts, and commitment fees[345][346] - Net cash provided