Liberty Latin America Ltd
For the period ended Sep 30, 2024. Filed Nov 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 6, 2024
LILA$8.910.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0001712184-24-000203
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0001712184-24-000254
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 245 previous paragraphs and 254 current paragraphs.
158 unchanged; 80 reworded; 16 added; 5 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 57 previous and 57 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
In July 2024, Hurricane Beryl impacted our Jamaica operations and certain smaller operations within C&W Caribbean, resulting in varying degrees of damage to homes, businesses, and infrastructures in these markets. In connection with Hurricane Beryl, during the third quarter of 2024, we experienced adverse impacts to revenue and RGUs, Adjusted OIBDA, and property and equipment additions, which we expect will continue during the fourth quarter of 2024. Specifically, during the third quarter of 2024, Hurricane Beryl had a negative impact on revenue and Adjusted OIBDA of approximately $5 million and $8 million, respectively, which includes the positive impact from the hurricane on prepaid revenue. In addition, we incurred property and equipment additions of approximately $7 million to replace infrastructure and equipment that has been damaged beyond repair or to enhance network resiliency. We did not recognize any material impairments in connection with Hurricane Beryl. As a result of the hurricane, during the third quarter of 2024, we estimate that we lost approximately 33,000 RGUs, comprising 16,000 broadband internet subscribers, 15,000 fixed-line telephony subscribers, and 2,000 video subscribers. We also saw a positive impact from the hurricane to our prepaid mobile subscribers. Hurricane Beryl did not have a material impact on our homes passed count.
Current report
Hurricane Beryl triggered a claim pursuant to the Weather Derivatives, which resulted in net proceeds of $44 million during the third quarter of 2024. The proceeds associated with this claim are reflected as a derivative gain in our condensed consolidated statement of operations and as a cash inflow related to operating activities in our condensed consolidated statement of cash flows.
Current report
During August 2024, we also entered into an agreement with the noncontrolling interest owner of Liberty Costa Rica where we agreed to acquire on January 30, 2026 shares representing 8.5% of equity of Liberty Costa Rica for aggregate cash consideration of approximately $82 million, comprising CRC 22 billion ($42 million) and $40 million, with 62.5% of the purchase price due upon closing and the remaining 37.5% due on January 29, 2027.
Current report
In the following discussion, we quantify the estimated impacts on the operating results of the periods under comparison that are attributable to the LPR Acquisition, which was completed on September 3, 2024. With respect to acquisitions, organic changes exclude the operating results of an acquired entity during the first 12 months following the date of acquisition.
Current report
(a)The changes are primarily due to the net effect of higher average broadband internet RGUs and lower average video RGUs. During the three-month comparison, the impact of lower average video RGUs was greater than the impact of higher average broadband internet RGUs.
Current report
(b)The decreases are primarily due to lower ARPU from broadband internet, video and fixed-line telephony services, mainly caused by the net effect of retention-related discounts that more than offset price increases during the third quarter of 2024. The decreases also include the impact of credits issued to customers following Hurricane Ernesto, which impacted Puerto Rico in August 2024.
Current report
(a)For the three-month comparison, the increase is due to higher average RGUs across all products. For the nine-month comparison, an increase driven by higher average fixed-line telephony and broadband internet RGUs was fully offset by a decrease associated with lower average video RGUs.
Current report
(b)The decreases are due to lower ARPU across all fixed products, the largest of which is from video services. The decreases are mainly due to market competition leading to customer retention efforts and higher financed equipment sales.
Current report
•Interconnect: The decreases are primarily due to lower volumes of traffic.
Current report
•Equipment: The increases are primarily attributable to higher volumes of handset sales to residential customers. For the nine-month comparison, this increase was partially offset by a decrease in costs driven by lower volumes of handset sales to B2B customers. During the three-month comparison, this increase was also attributable to higher volumes of handset sales to B2B customers at a higher unit cost.
Current report
•Project-related and other: The organic decreases are primarily due to a higher mix of contracts recognized on a net basis.
Current report
•Programming and copyright: The organic decreases are primarily due to the net effect of (i) lower average number of subscribers and (ii) rate increases.
Current report
•Project-related and other: The organic increases are primarily due to higher costs associated with portability and identity protection services.
Current report
•Interconnect: The organic decreases are primarily due to lower (i) rates, (ii) volumes of long-distance and international traffic, and (iii) commission costs associated with prepaid mobile distributors.
Current report
•Network-related: The organic decreases are primarily due to the net impact of (i) higher maintenance costs, (ii) lower power costs, and (iii) lower subsea capacity charges.
Current report
•Service-related: The changes are primarily due to the net effect of higher professional services costs and other insignificant changes across other service-related cost categories.
Removed paragraphs (5)
Previous report
Hurricane Beryl triggered the Weather Derivatives and we expect to receive net third-party proceeds of approximately $44 million that will be reflected as a derivative gain in our consolidated statement of operations. We are still in the process of assessing the impact of Hurricane Beryl on our homes passed and subscriber counts.
Previous report
(a)The increases are primarily due to higher average broadband internet and video RGUs.
Previous report
(b)The decreases are primarily due to lower ARPU from fixed-line telephony and broadband internet services, mainly caused by retention-related discounts.
Previous report
(a)The decreases are primarily due to the net effect of (i) lower average video RGUs and (ii) higher average fixed-line telephony RGUs.
Previous report
•Service-related: The decreases are primarily due to lower professional services costs.
Reworded paragraphs (80)
Previous wording
•Material Changes in Results of Operations. This section provides an analysis of our results of operations for the three and six months ended June 30, 2024 and 2023.
Current wording
•Material Changes in Results of Operations. This section provides an analysis of our results of operations for the three and nine months ended September 30, 2024 and 2023.
Previous wording
•our ability to obtain regulatory approval and satisfy other conditions necessary to close acquisitions and dispositions, and the impact of conditions imposed by competition and other regulatory authorities in connection with acquisitions, such as with respect to the Puerto Rico and USVI Spectrum Acquisition and the transaction with Millicom to combine our respective Costa Rica operations;
Current wording
•our ability to obtain regulatory approval and satisfy other conditions necessary to close acquisitions and dispositions, and the impact of conditions imposed by competition and other regulatory authorities in connection with acquisitions, such as with respect to the transaction with Millicom to combine our respective Costa Rica operations;
Previous wording
•our ability to successfully acquire new businesses and, if acquired, to integrate, realize anticipated efficiencies from and implement our business plan with respect to the businesses we have acquired or that we expect to acquire, such as with respect to the AT&T Acquisition;
Current wording
•our ability to successfully acquire new businesses and, if acquired, to integrate, realize anticipated efficiencies from and implement our business plan with respect to the businesses we have acquired or that we expect to acquire, such as with respect to the AT&T Acquisition and the transaction with Millicom to combine our respective Costa Rica operations;
Previous wording
•our ability to realize the full value of our intangible assets;
Current wording
•our ability to realize the full value of our intangible assets and the impact of any impairments;
Previous wording
At June 30, 2024, we (i) owned and operated fixed networks that passed 4,678,900 homes and served 3,997,400 RGUs, comprising 1,832,100 broadband internet subscribers, 1,229,500 fixed-line telephony subscribers and 935,800 video subscribers and (ii) served 7,912,300 mobile subscribers.
Current wording
At September 30, 2024, we (i) owned and operated fixed networks that passed 4,713,000 homes and served 3,986,100 RGUs, comprising 1,824,500 broadband internet subscribers, 1,232,700 fixed-line telephony subscribers and 928,900 video subscribers and (ii) served 7,989,300 mobile subscribers.
Previous wording
In July 2024, Hurricane Beryl impacted our Jamaica operation and certain smaller operations within C&W Caribbean, resulting in varying degrees of damage to homes, businesses and infrastructures in these markets. In connection with Hurricane Beryl, we expect to experience adverse impacts to revenue and RGUs, Adjusted OIBDA, long-lived asset impairments and property and equipment additions for the remainder of 2024. We currently estimate that Hurricane Beryl will negatively impact revenue and Adjusted OIBDA by between $10 million and $20 million for the remainder of 2024, primarily during the third quarter, based on certain factors, such as when power is fully restored to the impacted areas. We estimate that we will incur property and equipment additions of approximately $10 million to $20 million to replace infrastructure and equipment that has been damaged beyond repair or to enhance network resiliency.
Current wording
During the fourth quarter of 2024, we expect to continue to see adverse impacts from Hurricane Beryl on our impacted businesses. Currently, we estimate that Hurricane Beryl will negatively impact revenue and Adjusted OIBDA during the fourth quarter by between $5 million and $10 million, mainly driven by subscriber losses. We also expect to incur additional property and equipment additions of approximately $10 million to $15 million. Together with the third quarter impacts, we expect that the aggregate impact from Hurricane Beryl during 2024 for revenue and Adjusted OIBDA will be between $10 million and $20 million and toward the high end of our expected range of $10 million to $20 million for property and equipment additions.
Previous wording
The comparability of our operating results during the three and six months ended June 30, 2024 and 2023 is affected by FX. As we use the term, “organic” changes exclude FX.
Current wording
The comparability of our operating results during the three and nine months ended September 30, 2024 and 2023 is affected by an acquisition and FX. As we use the term, “organic” changes exclude FX and the impact of an acquisition.
Previous wording
The following tables set forth the organic and non-organic changes in the components of operating income or loss during the three and six months ended June 30, 2024, as compared to the corresponding periods in 2023.
Current wording
The following tables set forth the organic and non-organic changes in the components of operating income or loss during the three and nine months ended September 30, 2024, as compared to the corresponding periods in 2023.
Previous wording
As reflected in the table above, there were decreases to our operating income for the three and six months ended June 30, 2024, as compared to the corresponding periods in 2023. For further discussion and analysis of organic changes in revenue and operating costs and expenses, see Revenue, Programming and Other Direct Costs of Services, and Other Operating Costs sections below. For further discussion and analysis of changes in Depreciation and amortization, and Impairment, Restructuring and other operating items, net, see Results of Operations (below Adjusted OIBDA)sections below.
Current wording
As reflected in the tables above, we reported operating losses for the three and nine months ended September 30, 2024, as compared to operating income for the corresponding periods in 2023. For further discussion and analysis of organic changes in revenue and operating costs and expenses, see Revenue, Programming and Other Direct Costs of Services, and Other Operating Costs sections below. For further discussion and analysis of changes in Depreciation and amortization, and Impairment, Restructuring and other operating items, net, see Results of Operations (below Adjusted OIBDA)sections below.
Previous wording
A reconciliation of total operating income, the nearest U.S. GAAP measure, to Adjusted OIBDA on a consolidated basis, is presented below.
Current wording
A reconciliation of total operating income (loss), the nearest U.S. GAAP measure, to Adjusted OIBDA on a consolidated basis, is presented below.
Previous wording
The following tables set forth the organic and non-organic changes in Adjusted OIBDA during the three and six months ended June 30, 2024, as compared to the corresponding periods in 2023:
Current wording
The following tables set forth the organic and non-organic changes in Adjusted OIBDA during the three and nine months ended September 30, 2024, as compared to the corresponding periods in 2023:
Previous wording
Adjusted OIBDA Margin is impacted by organic changes in revenue, programming and other direct costs of services and other operating costs and expenses. We incurred aggregate integration costs (i) during the three and six months ended June 30, 2024 of $3 million and $17 million, respectively, within our Liberty Puerto Rico segment, and (ii) during the three and six months ended June 30, 2023 of $5 million and $10 million, respectively, within our Liberty Puerto Rico, Liberty Costa Rica and C&W Panama segments.
Current wording
Adjusted OIBDA Margin is impacted by organic changes in revenue, programming and other direct costs of services and other operating costs and expenses. We incurred aggregate integration costs (i) during the three and nine months ended September 30, 2024 of $1 million and $17 million, respectively, within our Liberty Puerto Rico segment, and (ii) during the three and nine months ended September 30, 2023 of $3 million and $13 million, respectively, within our Liberty Puerto Rico, Liberty Costa Rica and C&W Panama segments.
Previous wording
The following tables set forth the organic and non-organic changes in revenue by reportable segment during the three and six months ended June 30, 2024, as compared to the corresponding periods in 2023.
Current wording
The following tables set forth the organic and non-organic changes in revenue by reportable segment during the three and nine months ended September 30, 2024, as compared to the corresponding periods in 2023.
Previous wording
The details of the changes in C&W Caribbean’s revenue during the three and six months ended June 30, 2024, as compared to the corresponding periods in 2023, are set forth below (in millions):
Current wording
The details of the changes in C&W Caribbean’s revenue during the three and nine months ended September 30, 2024, as compared to the corresponding periods in 2023, are set forth below (in millions):
Previous wording
(b)The increases are primarily due to the net impact of (i) higher ARPU from broadband internet services, mainly due to price increases, (ii) lower ARPU from fixed-line telephony services, mostly due to growth from fixed-mobile convergence efforts, and (iii) lower ARPU from video services.
Current wording
(b)The changes are primarily due to the net impact of (i) higher ARPU from broadband internet services, mainly due to price increases, (ii) lower ARPU from fixed-line telephony services, mostly due to Hurricane Beryl-related rebates and fixed-mobile convergence efforts, and (iii) lower ARPU from video services. During the three-month comparison, the impact of lower ARPU from fixed-line telephony services and video services more than offset the impact of higher ARPU from broadband internet services.
Previous wording
(d)The increases are attributable to higher project-related revenue across various markets.
Current wording
(d)The increase during the nine-month comparison is mainly attributable to higher project-related revenue across various markets. The decrease during the three-month comparison is mainly driven by a decrease in fixed and managed services, mostly due to impacts related to Hurricane Beryl.
Previous wording
The details of the changes in C&W Panama’s revenue during the three and six months ended June 30, 2024, as compared to the corresponding periods in 2023, are set forth below (in millions):
Current wording
The details of the changes in C&W Panama’s revenue during the three and nine months ended September 30, 2024, as compared to the corresponding periods in 2023, are set forth below (in millions):
Previous wording
(a)The increases are primarily due to higher average broadband internet RGUs partially offset by lower average video RGUs.
Current wording
(a)The increases are primarily due to higher average broadband internet RGUs.
Previous wording
(b)The decreases are primarily due to lower ARPU from fixed-line telephony and video services, mainly driven by higher discounts.
Current wording
(b)The decreases are primarily due to lower ARPU from fixed-line telephony and video services, mainly driven by higher discounts and the migration of customers to lower ARPU plans.
Previous wording
(c)The changes are primarily due to the net effect of (i) lower average numbers of prepaid mobile subscribers, (ii) higher ARPU from prepaid mobile services. The decreases in prepaid mobile subscribers are driven by the net impact of churn related to the migration of customers to our network following the Claro Panama Acquisition, and the addition of customers to our base following the exit of a competitor from our market. During the three-month comparison, this decrease was more than offset by the increase in prepaid mobile ARPU, which was mainly attributable to higher recharges per customer.
Current wording
(c)The increases are primarily due to the net effect of (i) higher ARPU from prepaid mobile services, (ii) lower average numbers of prepaid mobile subscribers, and (iii) higher average numbers of postpaid mobile subscribers. The decreases in prepaid mobile subscribers are driven by the net impact of churn related to the migration of customers to our network following the Claro Panama Acquisition, and the addition of customers to our base following the exit of a competitor from our market. The increases in prepaid mobile ARPU are primarily due to higher ARPU packages offered to customers.
Previous wording
•Equipment: The decreases are primarily attributable to lower volumes of handset sales.
Current wording
(d)The increases are primarily due to higher volumes of handset sales.
Previous wording
(d)The increases are primarily due to revenue from government-related projects.
Current wording
(e)The increase during the nine-month comparison is primarily due to (i) higher revenue from government-related projects and (ii) higher revenue from fixed and managed services, primarily broadband internet services. During the three-month comparison, the increase in revenue from fixed and managed services was more than offset by a decrease in revenue from government-related projects, mainly driven by the phasing of projects that were previously approved but for which delivery and installation have not yet occurred.
Previous wording
The details of the changes in Liberty Networks’ revenue during the three and six months ended June 30, 2024, as compared to the corresponding periods in 2023, are set forth below (in millions):
Current wording
The details of the changes in Liberty Networks’ revenue during the three and nine months ended September 30, 2024, as compared to the corresponding periods in 2023, are set forth below (in millions):
Previous wording
(a)The increases are primarily attributable to (i) growth in managed services and (ii) higher B2B connectivity revenue.
Current wording
(a)The increases are primarily attributable to the net effect of (i) growth in managed services, (ii) higher B2B connectivity revenue, and (iii) decreases associated with sales-type leases on CPE installed on long-term customer solutions, due mostly to a higher mix of contracts recognized on a net basis.
Previous wording
(b)The decreases are primarily due to (i) lower amortized prepaid capacity and operating and maintenance revenue driven by the cancellation of prepaid capacity contracts in prior periods and (ii) net decreases in revenue associated with the recognition of deferred revenue and penalties upon the termination or modification of prepaid capacity contracts during the first and second quarters of 2023 and the second quarter of 2024.
Current wording
(b)The decreases are primarily due to (i) lower amortized prepaid capacity and operating and maintenance revenue driven by the cancellation of prepaid capacity contracts in prior periods and (ii) net decreases in revenue associated with the recognition of deferred revenue and penalties upon the termination or modification of prepaid capacity contracts during the first, second and third quarters of 2023 and the second quarter of 2024.
Previous wording
The details of the changes in Liberty Puerto Rico’s revenue during the three and six months ended June 30, 2024, as compared to the corresponding periods in 2023, are set forth below (in millions):
Current wording
The details of the changes in Liberty Puerto Rico’s revenue during the three and nine months ended September 30, 2024, as compared to the corresponding periods in 2023, are set forth below (in millions):
Previous wording
(a)The increases are primarily attributable to the net effect of (i) higher average broadband internet RGUs and (ii) lower average video RGUs.
Current wording
(a)The increases are primarily attributable to the net effect of (i) higher average broadband internet and fixed-line telephony RGUs and (ii) lower average video RGUs.
Previous wording
(c)The decreases are primarily due to declines in the average number of mobile subscribers, impacted by the migration of customers to our mobile network and network outages in 2024.
Current wording
(c)The decreases are primarily due to declines in the average number of mobile subscribers, impacted by the migration of customers to our mobile network and network challenges in 2024.
Previous wording
(d)The decreases are primarily driven by (i) lower equipment sales, due mostly to the migration of customers to our mobile network, and (ii) lower inbound roaming revenue.
Current wording
(d)The decreases are primarily driven by (i) lower equipment sales, which for the nine-month comparison includes the impact of the migration of customers to our mobile network during the first half of 2024, and (ii) lower inbound roaming revenue.
Previous wording
(e)The decreases are primarily attributable to lower revenue from mobile services, mainly driven by the termination of a government-sponsored program during the second quarter of 2024.
Current wording
(e)The decreases are primarily attributable to lower revenue from mobile services, mainly driven by lower average customers due to (i) the termination of a government-sponsored program during the second quarter of 2024 and (ii) the migration of customers to our mobile network.
Previous wording
The details of the changes in Liberty Costa Rica’s revenue during the three and six months ended June 30, 2024, as compared to the corresponding periods in 2023, are set forth below (in millions):
Current wording
The details of the changes in Liberty Costa Rica’s revenue during the three and nine months ended September 30, 2024, as compared to the corresponding periods in 2023, are set forth below (in millions):
Previous wording
(e)The increase during the six-month comparison is primarily attributable to the net effect of (i) higher volumes of equipment sales, (ii) lower interconnect revenue driven by a reduction in rates and lower volumes of traffic and (iii) lower inbound roaming revenue. For the three-month comparison, the decrease in interconnect and roaming revenue offset an increase to equipment sales.
Current wording
(e)The increase during the nine-month comparison is primarily attributable to the net effect of (i) higher volumes of equipment sales, (ii) lower interconnect revenue driven by a reduction in rates and lower volumes of traffic and (iii) lower inbound roaming revenue. For the three-month comparison, a decrease in interconnect and roaming revenue was almost entirely offset by an increase in equipment sales.
Previous wording
•Equipment: The organic increases are mainly due the net effect of (i) higher B2B project-related equipment costs and (ii) lower handset costs.
Current wording
•Equipment: The organic changes are mainly due the net effect of (i) higher B2B project-related equipment costs and (ii) lower handset costs. During the three-month comparison, the impact of lower handset costs more than offset the impact of higher B2B project-related equipment costs.
Previous wording
•Project-related and other: The increases are primarily due to higher costs associated with certain government-related projects.
Current wording
•Project-related and other: The increase during the nine-month comparison is primarily due to higher costs associated with certain government-related projects. During the three-month comparison, lower costs resulted from the phasing of projects that were previously approved but for which delivery and installation have not yet occurred.
Previous wording
•Interconnect: The organic increases are primarily due to higher backhaul expenses.
Current wording
•Interconnect: The organic increase for the nine-month comparison is primarily due to higher backhaul expenses.
Previous wording
Liberty Puerto Rico. The following tables set forth the changes in programming and other direct costs of services for our Liberty Puerto Rico segment.
Current wording
Liberty Puerto Rico. The following tables set forth the organic and non-organic changes in programming and other direct costs of services for our Liberty Puerto Rico segment.
Previous wording
•Interconnect: The decreases are mostly due to (i) lower interconnect costs associated with a transition service agreement that expired during 2024 and (ii) lower roaming costs, driven by decreased volumes.
Current wording
•Interconnect: The organic decreases are mostly due to lower interconnect costs associated with a transition service agreement that expired during 2024.
Previous wording
•Equipment: The decreases are primarily due to the net effect of (i) lower handset sales due mostly to the migration of customers to our mobile network, (ii) equipment credits for handset purchases recognized during the first and second quarters of 2023 associated with handsets purchased prior to 2023 and (iii) increases resulting from inventory adjustments during the first and second quarters of 2024 related to the migration of mobile customers to our network.
Current wording
•Equipment: The organic decreases are primarily due to the net effect of (i) lower handset sales, which for the nine-month comparison includes the impact of the migration of customers to our mobile network during the first half of 2024, (ii) equipment credits for handset purchases recognized during the first half of 2023 associated with handsets purchased prior to 2023 and (iii) increases resulting from inventory adjustments during 2024 related to the migration of mobile customers to our network.
Previous wording
•Equipment: The organic increases are primarily due to the net effect of (i) higher CPE costs associated with sales growth, (ii) the positive impact of FX associated with non-CRC denominated handset costs, (iii) higher handset costs associated with increased unit costs, and (iv) for the six-month comparison, higher handset costs associated with sales growth.
Current wording
•Equipment: The organic increases are primarily due to the net effect of (i) higher CPE costs associated with sales growth, (ii) higher handset costs associated with increased unit costs and (iii) the positive impact of FX associated with non-CRC denominated handset costs.
Previous wording
•Personnel and contract labor: The decreases are primarily due to the net effect of (i) higher capitalized labor, (ii) lower bonus-related expense, (iii) higher salaries and related personnel costs and (iv) lower headcount.
Current wording
•Personnel and contract labor: The organic changes are primarily due to the net effect of (i) higher salaries and related personnel costs, (ii) higher capitalized labor, (iii) higher bonus-related expense, and (iv) lower headcount.
Showing the first 40 of 80 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
(b)The decreases are primarily attributable to lower ARPU from video and fixed-line telephony services.
Previous report — wording carried elsewhere
•Interconnect: The organic decreases are primarily due to lower rates.