Liberty Latin America Reports Q1 2024 Results

45,000 organic broadband and postpaid mobile subscriber net adds

Strong Adjusted OIBDA growth across Panama, Costa Rica & Caribbean

Puerto Rico migration completed; performance set to improve

5% of shares outstanding repurchased in Q1; increased buyback authorization

DENVER, Colorado–(BUSINESS WIRE)–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 (“Q1”) ended March 31, 2024.

CEO Balan Nair commented, “We delivered strong operating and financial results across Panama, Costa Rica and C&W Caribbean in the first quarter. In Puerto Rico, we have achieved the significant milestone of migrating all our mobile customers to our own operating platform and are now positioned to drive sequential improvement throughout the year following significant integration-related expenses during the first quarter. We remain on track for significant Adj. OIBDA and cash flow expansion in the second half of the year.”

“The focus on our broadband and postpaid bases continued to drive subscriber additions through the first quarter. All of our reporting segments added broadband subscribers in Q1, led by our Jamaica and Panama markets. In postpaid mobile, Costa Rica was our strongest performer with Puerto Rico impacted by migration efforts. We have implemented price increases in our largest C&W Caribbean markets and Costa Rica which are expected to support our revenue growth ambitions.”

“In Puerto Rico, while we are incurring increased costs related to the final stages of customer migration and transitioning to new IT systems and a wireless core network, we believe we have the right strategic assets and team to be successful. Looking forward, we expect synergies, operating cost improvements and top line sequential growth will drive Adj. OIBDA to more than $45 million per month at some point in the second half. We are confident for a bright future and are well positioned for meaningful operating and financial expansion in 2025 and beyond.”

“We see a significant value opportunity in our equity. In the first quarter, we acted aggressively, repurchasing 9 million shares or about 5% of our equity. In addition, we increased our share repurchase authorization by $200 million.”

Business Highlights

• C&W Caribbean: operating momentum driving strong performance
  • 24,000 internet and postpaid mobile organic adds
  • Reported and rebased revenue growth of 3%
• C&W Panama: acquisition synergies contribute to strong growth
  • Reported and rebased revenue growth of 2%
  • Double-digit reported and rebased Adj. OIBDA growth of 31%
• Liberty Networks: solid recurring revenue growth
  • Wholesale performance impacted by reduction in non-cash IRU amortization
  • Double-digit enterprise services revenue growth
• Liberty Puerto Rico: broadband growth; mobile migration complete
  • Q1 Adj. OIBDA impacted by significant integration expenses
  • Operating and financial performance to improve sequentially through 2024
• Liberty Costa Rica: postpaid strength continues
  • Postpaid net adds higher sequentially and more than double prior-year quarter
  • Adj. OIBDA up 29% and 18% on a reported and rebased basis, respectively

Share Repurchase Program

On February 22, 2022, our Board of Directors approved a new share repurchase program. The program initially authorized us to repurchase from time to time up to $200 million of our Class A common shares and/or Class C common shares through December 2024. On May 8, 2023, our Board of Directors authorized us to repurchase from time to time up to an additional $200 million of our Class A common shares and/or Class C common shares under our share repurchase program through December 2025. At March 31, 2024, the remaining amount authorized for share repurchases under the share repurchase program was $79 million.

On May 7, 2024, our Board of Directors authorized us to repurchase from time to time up to an additional $200 million of our Class A common shares and/or Class C common shares under our share repurchase program through December 2026.

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:

N.M. – Not Meaningful.

• Reported revenue for the three months ended March 31, 2024 was flat as compared to the corresponding prior-year period.
  • Reported revenue in Q1 was flat as (1) net organic growth driven by C&W Caribbean and Liberty Costa Rica and (2) net foreign exchange benefits of $16 million, were offset by organic declines in Liberty Puerto Rico.

Q1 2024 Revenue Growth – Segment Highlights

• C&W Caribbean: revenue grew 3% on both a reported and rebased basis, year-over-year, driven by growth across all product areas.
  • Fixed residential revenue increased by 2% on a reported and rebased basis. Rebased performance was driven by broadband subscriber growth, primarily in Jamaica, and higher broadband ARPU following price increases across a number of markets over the past year.
  • Mobile residential revenue increased by 5% on a reported and rebased basis. Performance resulted from an increase in postpaid subscribers year-over-year driven by our fixed-mobile convergence propositions and higher prepaid ARPU following price increases in 2023.
  • B2B revenue was 2% higher on both a reported and rebased basis. Growth was driven by a number of newly awarded projects and underlying growth in recurring fixed and managed services revenue.
• C&W Panama: revenue grew by 2% on a reported and rebased basis, year-over-year.
  • Fixed residential revenue was up 6%, driven by broadband RGU additions over the past twelve months, following investments in our networks, products and commercial activities.
  • Mobile residential revenue decreased by 5%, driven by lower prepaid performance as volume reductions were partly offset by higher ARPU. Postpaid additions of 12,000 in the quarter were driven by our focus on FMC and improved commercial execution.
  • B2B revenue grew by 10% driven by increased revenue from government-related projects and data and managed services.
• Liberty Networks: revenue was flat and declined by 3% on a reported and rebased basis, respectively, year-over-year. The year-over-year rebased decline was driven by lower wholesale network revenue associated with a reduction of $7 million in non-cash IRU revenue due to lower amortization and accelerations year-over-year. This was partly offset by higher enterprise revenue due to continued growth in B2B connectivity and managed services.
• Liberty Puerto Rico: revenue was 10% lower on a reported and rebased basis, year-over-year.
  • Residential fixed revenue growth of 2% was primarily driven by broadband subscriber additions over the past twelve months.
  • Residential mobile revenue was 20% lower compared to the prior-year period. This was mostly driven by a $26 million reduction in equipment sales due primarily to a focus on migration activities. Subscription revenue was also lower year-over-year, driven primarily by a decrease in subscribers impacted by migration.
  • Other revenue declined by $4 million as compared to the prior-year quarter due to a reduction in revenue recognized on funds received from the FCC.
• Liberty Costa Rica: revenue grew by 18% on a reported basis and 8% on a rebased basis, year-over-year. Reported performance benefited from an $13 million positive foreign exchange impact year-over-year, as the Costa Rican colon appreciated against the U.S. dollar. The strong year-over-year rebased performance was driven by higher mobile revenue due to postpaid subscriber growth and equipment sales.

Operating Income

• Operating income was $93 million and $107 million for the three months ended March 31, 2024 and 2023, respectively.
  • We reported lower operating income during the three months ended March 31, 2024, as compared to the corresponding period in 2023, primarily due to the net impact of (i) a decline in Adjusted OIBDA, (ii) a decrease in impairment, restructuring and other operating items, net, and (iii) higher depreciation and amortization.

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:

N.M. – Not Meaningful.

• Reported Adjusted OIBDA for the three months ended March 31, 2024 decreased by 6%.
  • Reported Adjusted OIBDA declined as organic growth in C&W Panama, C&W Caribbean, and Liberty Costa Rica, was more than offset by a reduction in Liberty Puerto Rico.

Q1 2024 Adjusted OIBDA Growth – Segment Highlights

• C&W Caribbean: Adjusted OIBDA increased by 7% on a reported and 8% rebased basis, driven by the aforementioned revenue growth. Our Adjusted OIBDA margin improved by over 150 basis points year-over-year to 41%.
• C&W Panama: Adjusted OIBDA increased by 31% on a reported and rebased basis. The performance was driven by revenue growth and value capture activities related to the Claro Panamá acquisition.
• Liberty Networks: Adjusted OIBDA decreased by 7% and 8% on a reported and rebased basis, respectively. Our rebased performance was driven primarily by the aforementioned non-cash related revenue decline in the quarter.
• Liberty Puerto Rico: Adjusted OIBDA declined by 46% on a reported and rebased basis. The performance was driven by the net impact of our aforementioned revenue decline, lower direct costs, primarily due to lower equipment sales, and higher other operating costs mainly related to migration and integration activities, year-over-year.
  • Q1 Adjusted OIBDA was impacted by the following integration-related items: (i) TSA costs of $18 million, (ii) migration and integration-related costs of $14 million, and (iii) inventory-related costs of $9 million.
• Liberty Costa Rica: Adjusted OIBDA grew by 29% and 18% on a reported and rebased basis, respectively. Rebased performance was driven by the aforementioned revenue growth and favorable foreign exchange movements on non-CRC denominated costs.

Net Loss Attributable to Shareholders

• Net loss attributable to shareholders was $1 million and $66 million for the three months ended March 31, 2024 and 2023, 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, net.

1. Table excludes Liberty Networks 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 March 31, 2024:

1. Represents the amount held by Liberty Latin America on a standalone basis plus the aggregate amount held by subsidiaries of Liberty Latin America that are outside our borrowing groups.
2. Represents the C&W borrowing group, including the C&W Caribbean, Liberty Networks and C&W Panama reportable segments.
3. Cash amount includes restricted cash that serves as collateral against certain lines of credit associated with the funding received from the FCC to continue to expand and improve our fixed network in Puerto Rico.
4. Consolidated leverage ratios are non-GAAP measures. For additional information, including definitions of our consolidated leverage ratios and required reconciliations, see Non-GAAP Reconciliations below.
5. For purposes of calculating our weighted average tenor, total debt excludes vendor financing, debt related to the Tower Transactions, other debt and finance lease obligations.
6. At March 31, 2024, the full amount of unused borrowing capacity under our subsidiaries’ revolving credit facilities was available to be borrowed, both before and after completion of the March 31, 2024 compliance reporting requirements.

Quarterly Subscriber Variance

1. Jamaica prepaid adjustment relates to mobile 2G shutdown.

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:

1. The FX-Neutral change represents the percentage change on a sequential basis adjusted for FX impacts and is calculated by adjusting the current-period figures to reflect translation at the foreign currency rates used to translate the prior quarter amounts.
2. The ARPU per customer relationship amounts in Costa Rican colones for the three months ended March 31, 2024 and December 31, 2023 were CRC 22,947 and CRC 23,564, respectively.
3. The mobile ARPU amount in Costa Rican colones for the three months ended March 31, 2024 and December 31, 2023 were CRC 3,641 and CRC 3,580, respectively.

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; our digital strategy, product innovation and commercial plans and projects; subscriber growth; expectations on demand for connectivity in the region; our anticipated integration plans, including timing for completion, synergies, opportunities and integration costs in Puerto Rico following the AT&T Acquisition; 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, 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 successfully acquire and integrate new businesses and realize anticipated efficiencies from acquired businesses; the ability to obtain regulatory approvals for the transaction with DISH Networks and satisfy the other conditions to closing; 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).

Contacts

Investor Relations

Kunal Patel

ir@lla.com

Corporate Communications

Kim Larson

llacommunications@lla.com

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