PART I - FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for the quarter ended March 31, 2025, including Balance Sheets, Statements of Operations, Comprehensive Earnings, Equity, and Cash Flows, with detailed notes Condensed Consolidated Balance Sheet (in millions) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $2,059.8 | $2,131.5 | | Total assets | $12,597.5 | $12,800.0 | | Total current liabilities | $1,913.3 | $2,043.9 | | Total liabilities | $11,071.8 | $11,174.0 | | Total equity | $1,525.7 | $1,626.0 | | Total liabilities and equity | $12,597.5 | $12,800.0 | Condensed Consolidated Statement of Operations (in millions, except per share) | | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | $1,083.5 | $1,099.4 | | Operating income | $128.1 | $92.8 | | Net loss | $(126.7) | $(0.5) | | Net loss attributable to Liberty Latin America shareholders | $(136.4) | $(0.5) | | Basic and diluted net loss per share | $(0.69) | $— | Condensed Consolidated Statement of Cash Flows (in millions) | | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $24.6 | $23.3 | | Net cash used by investing activities | $(95.0) | $(116.9) | | Net cash provided (used) by financing activities | $3.4 | $(225.7) | | Net decrease in cash, cash equivalents and restricted cash | $(78.8) | $(320.1) | Notes to Condensed Consolidated Financial Statements These notes provide detailed information supporting the financial statements, covering pending acquisitions, debt structure, derivative instruments, segment reporting, and share repurchase programs - Pending Transactions: The company has an agreement with Millicom to combine operations in Costa Rica, expected to close in H2 2025, with Liberty Latin America holding an approximate 86% interest, and an additional agreement to acquire an 8.5% equity stake for approximately $84 million5657 - 2024 LPR Acquisition: The company acquired EchoStar's prepaid business and spectrum assets in Puerto Rico and USVI for an aggregate cash consideration of $256 million, paid in four annual installments starting September 3, 202458 Total Debt Principal by Borrowing Group (March 31, 2025, in millions) | Borrowing Group | Principal Amount | Unused Capacity | | :--- | :--- | :--- | | C&W Notes & Credit Facilities | $4,491.5 | $620.7 | | LPR Senior Secured Notes & Credit Facilities | $2,651.0 | $122.5 | | LCR Credit Facilities | $485.0 | $25.0 | | Vendor financing, Tower Transactions and other | $617.7 | $— | | Total Debt | $8,245.2 | $768.2 | - Share Repurchase Programs: As of March 31, 2025, $242 million remained authorized for share repurchases, with no repurchases made in the three months ended March 31, 2025, compared to 9 million shares repurchased in the same period in 2024103104 Segment Revenue and Adjusted OIBDA (Q1 2025, in millions) | Reportable Segment | Revenue | Adjusted OIBDA | | :--- | :--- | :--- | | C&W Caribbean | $363.9 | $173.3 | | C&W Panama | $177.0 | $64.6 | | Liberty Networks | $110.4 | $57.9 | | Liberty Puerto Rico | $298.4 | $81.5 | | Liberty Costa Rica | $158.2 | $58.9 | | Total Reportable Segments | $1,107.9 | $436.2 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance and condition, highlighting increased operating income and Adjusted OIBDA despite a revenue decline, alongside details on liquidity and cash flow activities Overview The company provides fixed, mobile, and subsea telecommunications services across Latin America and the Caribbean, serving millions of subscribers and pursuing strategic acquisitions and combinations - As of March 31, 2025, the company served 4,007,900 Revenue Generating Units (RGUs) and 6,728,500 mobile subscribers155 - The company is proceeding with a transaction to combine its Costa Rica operations with Millicom, expected to close in H2 2025, and completed the acquisition of EchoStar's assets in Puerto Rico and USVI in September 2024157159 Material Changes in Results of Operations Operating income and Adjusted OIBDA increased in Q1 2025 due to reduced operating costs, despite a revenue decline, with derivative results and debt extinguishment losses impacting below-operating income Changes in Operating Income (Q1 2025 vs Q1 2024, in millions) | Component | 2025 | 2024 | Change | Organic Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,083.5 | $1,099.4 | $(15.9) | $(25.4) | | Operating Costs & Expenses | $955.4 | $1,006.6 | $(51.2) | $(60.2) | | Operating Income | $128.1 | $92.8 | $35.3 | $34.8 | Adjusted OIBDA Reconciliation and Change (Q1 2025 vs Q1 2024, in millions) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Operating income | $128.1 | $92.8 | | Share-based compensation | $34.0 | $27.0 | | Depreciation and amortization | $228.8 | $247.8 | | Impairment, restructuring, etc. | $15.7 | $6.6 | | Consolidated Adjusted OIBDA | $406.6 | $374.2 | - Depreciation and amortization expense decreased by $19 million (8%) in Q1 2025 compared to Q1 2024, mainly because customer relationship assets in C&W Panama became fully amortized216 - The company recorded a net loss on derivative instruments of $62.9 million in Q1 2025, a significant reversal from a net gain of $46.4 million in Q1 2024, primarily due to changes in interest rates221 Material Changes in Financial Condition The company's financial condition as of March 31, 2025, shows $575.5 million in cash and $8.25 billion in total debt, with 95% at fixed or capped interest rates, and compliance with all debt covenants Cash and Cash Equivalents by Holder (March 31, 2025, in millions) | Holder | Amount | | :--- | :--- | | Liberty Latin America (standalone) | $10.5 | | Unrestricted subsidiaries | $50.6 | | Borrowing Groups: | | | C&W | $482.6 | | Liberty Puerto Rico | $24.7 | | Liberty Costa Rica | $7.1 | | Total | $575.5 | - Total outstanding principal debt was $8.25 billion at March 31, 2025, with $539 million classified as current, and the company was in compliance with all debt covenants244243 Property & Equipment Additions vs. Cash Capex (in millions) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Property and equipment additions (accrual) | $120.3 | $134.9 | | Less: Vendor financing | $(37.6) | $(34.0) | | Changes in liabilities & other | $14.0 | $8.8 | | Capital expenditures, net (cash) | $96.7 | $109.7 | - Net cash from financing activities was a $3.4 million inflow in Q1 2025, compared to a $225.7 million outflow in Q1 2024, driven by net debt borrowings versus repayments and share repurchases251 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company manages market risks from foreign currency and interest rates using derivatives, with 95% of total debt at fixed or capped rates, and quantifies the impact of interest rate changes on derivative fair values - The company actively manages its exposure to interest rate risk on its variable-rate debt, with 95% of total debt at a fixed or capped interest rate as of March 31, 2025, including derivative contracts258 - A hypothetical 100 basis point (1.0%) increase in base interest rates would increase the aggregate fair value of C&W's interest rate derivatives by approximately $115 million and Liberty Puerto Rico's by $16 million260261 Projected Net Derivative Cash Payments (Receipts) (in millions) | Period | Interest-related | Other | Total | | :--- | :--- | :--- | :--- | | Remainder of 2025 | $(20.1) | $— | $(20.1) | | 2026 | $(30.9) | $11.6 | $(19.3) | | 2027 | $(65.8) | $1.1 | $(64.7) | | 2028 | $(44.0) | $— | $(44.0) | | Thereafter | $(5.6) | $— | $(5.6) | | Total | $(166.4) | $12.7 | $(153.7) | Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were ineffective as of March 31, 2025, due to ongoing material weaknesses in internal control over financial reporting, with remediation efforts underway - Due to ongoing remediation of previously identified material weaknesses, management concluded that the company's disclosure controls and procedures were ineffective as of March 31, 2025266 - Remediation actions during the quarter included implementing additional manual procedures and controls, rolling out a new payroll technology solution, hiring third-party experts, and conducting risk and control training workshops for employees270 PART II - OTHER INFORMATION Item 1. Legal Proceedings The company is involved in various legal proceedings and contingent liabilities, including a new claim received in Q1 2025 for which a potential loss cannot be estimated - The company faces contingent liabilities from legal proceedings, tax issues, and disputes in the ordinary course of business, including a Q1 2025 claim from a third party for possible overpayments, for which a potential loss cannot currently be estimated114272 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's share repurchase activities, noting no repurchases in Q1 2025 and $242 million remaining authorized under its programs - No repurchases of Class A or Class C common shares were made during the three months ended March 31, 2025274 - As of March 31, 2025, the remaining amount authorized for repurchases under the Share Repurchase Programs was $242 million274 Item 5. Other Information The company reports that no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - During the three months ended March 31, 2025, no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement275 Item 6. Exhibits This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including officer certifications, Section 1350 certifications, and XBRL data files - The exhibits filed with this report include officer certifications, Section 1350 certifications, and XBRL Inline Taxonomy documents as required by the SEC276
Liberty Latin America(LILAK) - 2025 Q1 - Quarterly Report