(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification #) |
Title of Each Class | Trading Symbols | Name of Each Exchange on Which Registered |
Exhibit No. | Exhibit Name |
99.1 | |
101.SCH | XBRL Inline Taxonomy Extension Schema Document. |
101.CAL | XBRL Inline Taxonomy Extension Calculation Linkbase Document. |
101.DEF | XBRL Inline Taxonomy Extension Definition Linkbase. |
101.LAB | XBRL Inline Taxonomy Extension Label Linkbase Document. |
101.PRE | XBRL Inline Taxonomy Extension Presentation Linkbase Document. |
104 | Cover Page Interactive Data File.* (formatted as Inline XBRL and contained in Exhibit 101) |
LIBERTY LATIN AMERICA LTD. | ||
By: | /s/ BRIAN ZOOK | |
Brian Zook | ||
Chief Accounting Officer |
Exhibit 99.1 | ![]() |
• | C&W's revitalized propositions resonating well with customers: |
◦ | Record Q2 RGU additions of 30,000 with growth across all three fixed products |
◦ | Delivered 34,000 mobile subscriber additions, powered by Jamaica |
◦ | Successful start to UTS integration; expected to deliver material synergies over time |
• | VTR/Cabletica focused on further enhancing customer experience: |
◦ | Added 31,000 RGUs, driven by broadband gains |
◦ | Cabletica continued strong financial and operational performance in Q2 |
◦ | New build initiatives delivered over 55,000 new homes across Chile and Costa Rica |
• | Liberty Puerto Rico delivered another strong quarter: |
◦ | Added 5,000 RGUs and achieved a record NPS score in June |
◦ | Leading video proposition enhanced with launch of Replay TV |
◦ | Expanded footprint with 5,000 new homes passed |
• | Reconfirming our OCF guidance of >$1.525 billion |
◦ | Based on USDCLP of 670 and USDJMD of 130 (as provided on February 20, 2019) |
• | Reconfirming P&E additions as a percentage of revenue at ~19% |
• | Increasing our Adjusted FCF guidance to ~$150 million from ~$125 million |
Liberty Latin America | Q2 2019 | Q2 2018 | YoY Growth/(Decline)* | YTD 2019 | YTD 2018 | YoY Growth/(Decline)* | ||||||||||||||||
(in millions, except % amounts) | ||||||||||||||||||||||
Revenue | $ | 983 | $ | 922 | 3 | % | $ | 1,926 | $ | 1,832 | 3 | % | ||||||||||
OCF | $ | 387 | $ | 353 | 8 | % | $ | 753 | $ | 694 | 8 | % | ||||||||||
Property & equipment additions | $ | 166 | $ | 218 | (24 | %) | $ | 305 | $ | 412 | (26 | %) | ||||||||||
As a percentage of revenue | 17 | % | 24 | % | 16 | % | 22 | % | ||||||||||||||
Operating income | $ | 144 | $ | 124 | 16 | % | $ | 257 | $ | 223 | 15 | % | ||||||||||
Adjusted FCF | $ | 68 | $ | (14 | ) | $ | 116 | $ | (60 | ) | ||||||||||||
Cash provided by operating activities | $ | 244 | $ | 235 | $ | 431 | $ | 398 | ||||||||||||||
Cash used by investing activities | $ | (136 | ) | $ | (237 | ) | $ | (421 | ) | $ | (425 | ) | ||||||||||
Cash provided by financing activities | $ | 281 | $ | 235 | $ | 320 | $ | 223 |
* | Revenue and OCF YoY growth rates are on a rebased basis. |
Three months ended | Six months ended | ||||||||||
June 30, | June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Organic RGU net additions (losses) by product | |||||||||||
Video | 17,700 | 14,700 | 32,600 | 17,100 | |||||||
Data | 44,400 | 44,900 | 94,500 | 81,900 | |||||||
Voice | 4,500 | 1,500 | 12,500 | (4,600 | ) | ||||||
Total | 66,600 | 61,100 | 139,600 | 94,400 | |||||||
Organic RGU net additions (losses) by segment | |||||||||||
C&W | 30,400 | 28,600 | 62,000 | 53,700 | |||||||
VTR/Cabletica | 31,100 | 21,600 | 50,800 | 45,200 | |||||||
Liberty Puerto Rico | 5,100 | 10,900 | 26,800 | (4,500 | ) | ||||||
Total | 66,600 | 61,100 | 139,600 | 94,400 | |||||||
Organic Mobile SIM additions (losses) by product | |||||||||||
Postpaid | 8,200 | 10,000 | 18,600 | 13,400 | |||||||
Prepaid | 35,900 | (85,900 | ) | 36,300 | (100,300 | ) | |||||
Total | 44,100 | (75,900 | ) | 54,900 | (86,900 | ) | |||||
Organic Mobile SIM additions (losses) by segment | |||||||||||
C&W | 34,300 | (88,500 | ) | 35,100 | (108,300 | ) | |||||
VTR/Cabletica | 9,800 | 12,600 | 19,800 | 21,400 | |||||||
Total | 44,100 | (75,900 | ) | 54,900 | (86,900 | ) |
• | Fixed-line customer additions: Reported organic additions of 30,000 in Q2 2019, with gains across all of our three segments led by VTR/Cabletica with 21,000. |
• | Product additions: Delivered organic fixed RGU additions of 67,000, supported by our new build/upgrade program, and organic mobile subscriber additions of 44,000 in Q2 2019. |
• | C&W added 30,000 fixed RGUs during Q2; our best Q2 result since 2016. |
◦ | Broadband RGU additions of 15,000 were up 4,000 year-over-year; mainly driven by success in our largest markets of Panama and Jamaica, where each added 5,000 RGUs. Key drivers across C&W were (1) the success of our revitalized customer propositions centered around our leading broadband speeds and (2) the penetration of our expanding network. |
◦ | Video RGU additions of 8,000 were flat year-over-year. Panama and Barbados both saw year-over-year improvements with additions of 4,000 and 3,000 RGUs, respectively, driven by the aforementioned new propositions, offset by lower growth in Jamaica. |
◦ | Fixed-line telephony RGU additions of 8,000 were slightly down by 2,000 year-over-year. Additions in Q2 were mainly driven by Trinidad and Panama. |
◦ | Mobile subscribers increased by 34,000 in Q2, our second consecutive quarter of growth and a material year-over-year improvement. |
▪ | Jamaica anchored this strong growth with 76,000 mobile additions, our best quarterly result in any market since Q2 2016. This success was driven by our new customer value propositions launched in April. |
▪ | In Panama, we recorded net subscriber losses of 26,000, as compared to the prior quarter, mainly as a result of heightened competition, especially in the low-end prepaid segment. |
• | VTR/Cabletica added 31,000 fixed RGUs during Q2, with additions across both markets. VTR added 22,000 RGUs driven by 18,000 broadband and 9,000 video RGU additions, partially offset by fixed-line telephony RGU losses. We continue to leverage our superior network in Chile and increased our top broadband speed to 600 Mbps across our full network of 3.2 million two-way homes in July. Cabletica added 9,000 RGUs, driven by broadband gains. |
◦ | VTR delivered a consistent mobile performance, adding another 10,000 subscribers in Q2. At June 30, 2019, our mobile subscriber base totaled 276,000, of which 97% were on postpaid plans. |
• | Liberty Puerto Rico added 5,000 fixed RGUs in Q2, returning to more normalized RGU growth levels as compared to prior quarters following the completion of our network restoration in 2018. This result was fueled by broadband additions as our market-leading speeds continue to resonate well with our customers. |
Three months ended | Increase/(decrease) | Six months ended | Increase/(decrease) | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||
2019 | 2018 | % | Rebased % | 2019 | 2018 | % | Rebased % | ||||||||||||||||||
in millions, except % amounts | |||||||||||||||||||||||||
C&W | $ | 606.6 | $ | 583.7 | 3.9 | (0.5 | ) | $ | 1,176.4 | $ | 1,169.2 | 0.6 | (1.1 | ) | |||||||||||
VTR/Cabletica | 274.5 | 260.2 | 5.5 | 3.0 | 551.0 | 524.0 | 5.2 | 3.5 | |||||||||||||||||
Liberty Puerto Rico | 103.8 | 80.3 | 29.3 | 24.9 | 202.4 | 142.1 | 42.4 | 39.5 | |||||||||||||||||
Intersegment eliminations | (2.0 | ) | (2.1 | ) | N.M. | N.M. | (4.2 | ) | (3.3 | ) | N.M. | N.M. | |||||||||||||
Total | $ | 982.9 | $ | 922.1 | 6.6 | 2.7 | $ | 1,925.6 | $ | 1,832.0 | 5.1 | 3.3 |
• | Our reported revenue for the three and six months ended June 30, 2019 increased by 7% and 5%, respectively. |
◦ | Reported revenue growth in Q2 2019 was largely driven by (1) an increase of $24 million at Liberty Puerto Rico, primarily attributable to a strong recovery from the 2017 hurricanes, and (2) increases of $33 million for each segment of C&W and VTR/Cabletica related to the acquisitions of UTS and Cabletica, respectively. These increases were partially offset by a negative foreign exchange (“FX”) impact of $31 million, primarily related to a depreciation of the Chilean peso in relation to the US dollar. |
◦ | Reported revenue growth in H1 2019 was primarily driven by (1) an increase of $65 million related to the acquisition of Cabletica and $33 million related to the acquisition of UTS and (2) an increase of $60 million at Liberty Puerto Rico, mainly driven by the recovery mentioned above. These increases were partially offset by a negative FX impact of $63 million, primarily related to the Chilean peso. |
• | C&W: Rebased revenue decline of less than 1% year-over-year, which reflects an improvement from Q1 2019 performance. |
◦ | Mobile revenue attrition of 9% on a rebased basis was partly offset by rebased revenue growth of 4% in B2B and 1% in residential fixed. The reduction in mobile revenue year-over-year was primarily attributable to lower service revenue in Panama and the Bahamas where continued competition drove decreases in ARPU and the average number of subscribers. Growth in B2B was supported by increased managed services revenue in Jamaica and LatAm, while growth in residential fixed revenue was largely fueled by broadband, as C&W added over 50,000 subscribers over the last twelve months. |
• | VTR/Cabletica: Rebased revenue growth of 3% was largely driven by subscriber growth across our three business lines; residential fixed, B2B and mobile. |
• | Liberty Puerto Rico: Rebased revenue performance was supported by strong subscriber growth over the last twelve months. In fact, Q2 revenue of $104 million compares well to the revenue that was generated in the last full quarter preceding the hurricanes ($108 million in Q2 2017). |
• | Operating income was $144 million and $124 million for the three months ended June 30, 2019 and 2018, respectively, and $257 million and $223 million for the six months ended June 30, 2019 and 2018, respectively. |
◦ | Operating income increased during the three and six months ended June 30, 2019, as compared with the corresponding periods during 2018, primarily due to the net effect of (i) higher OCF, as further described below, and (ii) an increase in depreciation and amortization expense. |
Three months ended | Increase | Six months ended | Increase | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2019 | 2018 | % | Rebased % | 2019 | 2018 | % | Rebased % | ||||||||||||||||
in millions, except % amounts | |||||||||||||||||||||||
C&W | $ | 235.4 | $ | 223.6 | 5.3 | 3.3 | $ | 457.9 | $ | 452.7 | 1.1 | 0.7 | |||||||||||
VTR/Cabletica | 112.3 | 105.1 | 6.9 | 6.1 | 219.2 | 210.1 | 4.3 | 4.7 | |||||||||||||||
Liberty Puerto Rico | 51.6 | 35.7 | 44.5 | 41.8 | 99.5 | 53.7 | 85.3 | 82.0 | |||||||||||||||
Corporate | (11.9 | ) | (11.0 | ) | 8.2 | 8.2 | (23.4 | ) | (22.3 | ) | 4.9 | 4.9 | |||||||||||
Total | $ | 387.4 | $ | 353.4 | 9.6 | 7.8 | $ | 753.2 | $ | 694.2 | 8.5 | 8.1 | |||||||||||
OCF Margin | 39.4 | % | 38.3 | % | 39.1 | % | 37.9 | % |
• | Our reported OCF for the three and six months ended June 30, 2019 increased by 10% and 8.5%, respectively. |
◦ | Reported OCF growth in Q2 2019 was primarily driven by (1) an increase of $16 million at Liberty Puerto Rico, primarily related to our strong recovery from the 2017 hurricanes, (2) organic growth at C&W and VTR/Cabletica, (3) an increase of $12 million from the inclusion of Cabletica and (4) an increase of $9 million from the inclusion of UTS. These items were partially offset by a negative FX impact of $12 million, primarily related to the Chilean peso. |
◦ | Reported OCF growth in H1 2019 was primarily driven by (1) an increase of $46 million at Liberty Puerto Rico, primarily related to the aforementioned recovery, (2) an increase of $24 million from the inclusion of Cabletica, (3) organic growth at VTR/Cabletica, (4) an increase of $9 million from the inclusion of UTS. These items were partially offset by a negative FX impact of $25 million, primarily related to the Chilean peso. |
• | C&W: Despite a slight rebased revenue decline, C&W delivered rebased OCF growth of 3% driven by a net decrease in operating costs (other operating costs and SG&A), consistent with our cost efficiency strategy. Lower bad debt from improved collections and lower staffing levels positively contributed to our rebased OCF growth during Q2, as C&W delivered $235 million of OCF at a 38.8% OCF margin. |
• | VTR/Cabletica: Rebased OCF growth of 6% was due in part to the operating segment's 3% rebased revenue growth and reductions in interconnect and mobile access costs. Specifically, VTR returned to rebased OCF growth in the quarter, as compared to Q1 results. VTR/Cabletica posted an OCF margin of 40.9% in Q2 2019. |
• | Liberty Puerto Rico: Rebased OCF growth was mainly driven by revenue performance with the business delivering $52 million of OCF and an OCF margin of 49.7% during Q2 2019. |
• | Corporate: The modest increase in corporate costs was primarily due to higher personnel costs. |
• | Net loss attributable to shareholders was $116 million and $42 million for the three months ended June 30, 2019 and 2018, respectively, and $158 million and $87 million for the six months ended June 30, 2019 and 2018, respectively. |
Three months ended | Six months ended | ||||||||||||||
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2019 | 2018 | 2019 | 2018 | ||||||||||||
in millions, except % amounts | |||||||||||||||
Customer Premises Equipment | $ | 76.1 | $ | 81.1 | $ | 148.0 | $ | 146.6 | |||||||
New Build & Upgrade | 27.6 | 59.3 | 49.2 | 139.6 | |||||||||||
Capacity | 23.9 | 39.2 | 34.8 | 46.4 | |||||||||||
Baseline | 23.3 | 17.8 | 46.6 | 45.5 | |||||||||||
Product & Enablers | 15.2 | 20.2 | 26.6 | 33.5 | |||||||||||
Property and equipment additions | 166.1 | 217.6 | 305.2 | 411.6 | |||||||||||
Assets acquired under capital-related vendor financing arrangements | (15.1 | ) | (14.3 | ) | (26.0 | ) | (35.0 | ) | |||||||
Assets acquired under finance leases | (0.1 | ) | (0.3 | ) | (0.2 | ) | (0.9 | ) | |||||||
Changes in current liabilities related to capital expenditures | (15.1 | ) | 33.9 | 16.4 | 49.4 | ||||||||||
Capital expenditures1 | $ | 135.8 | $ | 236.9 | $ | 295.4 | $ | 425.1 | |||||||
Property and equipment additions as % of revenue | 16.9 | % | 23.6 | % | 15.8 | % | 22.5 | % | |||||||
Property and Equipment Additions of our Reportable Segments: | |||||||||||||||
C&W | $ | 82.1 | $ | 102.0 | $ | 145.7 | $ | 169.2 | |||||||
VTR/Cabletica | 63.0 | 59.0 | 117.1 | 116.0 | |||||||||||
Liberty Puerto Rico | 19.3 | 45.2 | 39.1 | 115.0 | |||||||||||
Corporate | 1.7 | 11.4 | 3.3 | 11.4 | |||||||||||
Property and equipment additions | $ | 166.1 | $ | 217.6 | $ | 305.2 | $ | 411.6 |
1. | The capital expenditures that we report in our condensed consolidated statements of cash flows do not include amounts that are financed under capital-related vendor financing or finance lease arrangements. Instead, these amounts are reflected as non-cash additions to our property and equipment when the underlying assets are delivered and as repayments of debt when the principal is repaid. |
• | C&W: Property and equipment additions of $82 million represented 14% of revenue in Q2 2019, a reduction compared to the 17% of revenue in the corresponding prior-year period, and 12% of revenue in YTD 2019 compared to 14% in YTD 2018. The reduction is related mainly to lower Customer Premises Equipment and Capacity spend in Q2 2019 compared to Q2 2018. In Q2 2019, new build and upgrade initiatives delivered over 95,000 new or upgraded homes. |
• | VTR/Cabletica: Property and equipment additions of $63 million represented 23% of revenue in Q2 2019, in-line with the prior-year period and 21% of revenue in YTD 2019 compared to 22% in YTD 2018. The reduction in the YTD period was driven by the inclusion of Cabletica. In Q2 2019, new build and upgrade initiatives delivered over 55,000 new homes passed, the vast majority of which were added in Chile. |
• | Liberty Puerto Rico: Property and equipment additions of $19 million represented 19% of revenue in Q2 2019, a significant reduction compared to the prior-year period, primarily due to a decline in property and equipment additions together with an increase in revenue following the recovery from the 2017 hurricanes. In Q2 2019, new build and upgrade initiatives delivered 5,000 new homes passed. |
• | Total principal amount of debt and finance leases: $7,174 million. |
• | Leverage ratios: Consolidated gross and net leverage ratios of 4.8x and 4.1x, respectively, as calculated on a latest two quarters annualized ("L2QA") basis. |
◦ | These ratios include the recent issuance of $403 million of Convertible Notes by Liberty Latin America. |
• | Average debt tenor5: 5.6 years, with approximately 96% not due until 2022 or beyond. |
• | Borrowing costs: Blended, fully-swapped borrowing cost of our debt was approximately 6.4%. |
• | Cash and borrowing availability: $957 million of cash and $1,056 million of aggregate unused borrowing capacity6 under our revolving credit facilities. |
1. | The indicated growth rates are rebased for the estimated impacts of acquisitions, FX and, for the C&W and Liberty Puerto Rico segments, the impact of a small common control transaction between these segments. See Rebase Information below. |
2. | For the definition of Operating Cash Flow (“OCF”) and required reconciliations, see OCF Definition and Reconciliation below. |
3. | For the definition of Adjusted Free Cash Flow (“Adjusted FCF”) and required reconciliations, see Adjusted Free Cash Flow Definition and Reconciliation below. |
4. | See Glossary for the definition of RGUs and mobile subscribers. Organic figures exclude RGUs and mobile subscribers of acquired entities at the date of acquisition and other nonorganic adjustments, but include the impact of changes in RGUs and mobile subscribers from the date of acquisition. All subscriber/RGU additions or losses refer to net organic changes, unless otherwise noted. Cabletica is only included in the 2019 periods. UTS is only included in the Q2 2019 period. |
5. | For purposes of calculating our average tenor, total debt excludes vendor financing and finance lease obligations. |
6. | At June 30, 2019, we had undrawn commitments of $1,056 million. At June 30, 2019, 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 June 30, 2019 compliance reporting requirements. For information regarding limitations on our ability to access this liquidity, see the discussion under "Material Changes in Financial Condition" in our most recently filed Quarterly Report on Form 10-Q. |
Revenue | OCF | ||||||||||||||
Three months ended June 30, 2018 | Six months ended June 30, 2018 | Three months ended June 30, 2018 | Six months ended June 30, 2018 | ||||||||||||
in millions | |||||||||||||||
Acquisition | $ | 65.9 | $ | 95.7 | $ | 17.8 | $ | 27.2 | |||||||
Foreign currency | (31.3 | ) | (65.0 | ) | (11.8 | ) | (24.7 | ) | |||||||
Total | $ | 34.6 | $ | 30.7 | $ | 6.0 | $ | 2.5 |
Three months ended | Six months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
in millions | |||||||||||||||
Operating income | $ | 143.5 | $ | 124.2 | $ | 256.8 | $ | 222.5 | |||||||
Share-based compensation expense | 15.4 | 8.7 | 30.1 | 15.2 | |||||||||||
Depreciation and amortization | 222.0 | 207.6 | 439.3 | 409.9 | |||||||||||
Impairment, restructuring and other operating items, net | 6.5 | 12.9 | 27.0 | 46.6 | |||||||||||
Total OCF | $ | 387.4 | $ | 353.4 | $ | 753.2 | $ | 694.2 |
Debt | Finance lease obligations | Debt and finance lease obligations | Cash and cash equivalents | ||||||||||||
in millions | |||||||||||||||
Liberty Latin America1 | $ | 402.5 | $ | 1.5 | $ | 404.0 | $ | 407.3 | |||||||
C&W | 4,094.4 | 8.8 | 4,103.2 | 389.3 | |||||||||||
VTR | 1,615.8 | 0.3 | 1,616.1 | 121.0 | |||||||||||
Liberty Puerto Rico | 922.5 | — | 922.5 | 22.3 | |||||||||||
Cabletica | 127.7 | — | 127.7 | 17.5 | |||||||||||
Total | $ | 7,162.9 | $ | 10.6 | $ | 7,173.5 | $ | 957.4 |
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. Subsidiaries of Liberty Latin America that are outside our borrowing groups rely on funds provided by our borrowing groups to satisfy their liquidity needs. |
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June 30, | June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
in millions | |||||||||||||||
Net cash provided by operating activities | $ | 243.6 | $ | 234.8 | $ | 431.4 | $ | 398.0 | |||||||
Cash payments for direct acquisition and disposition costs | 1.9 | 1.2 | 0.6 | 1.3 | |||||||||||
Expenses financed by an intermediary1 | 25.5 | 62.6 | 56.8 | 94.9 | |||||||||||
Capital expenditures | (135.8 | ) | (236.9 | ) | (295.4 | ) | (425.1 | ) | |||||||
Recovery on damaged or destroyed property and equipment | — | — | 33.9 | — | |||||||||||
Distributions to noncontrolling interest owners | (2.5 | ) | (19.8 | ) | (2.5 | ) | (19.8 | ) | |||||||
Principal payments on amounts financed by vendors and intermediaries | (63.6 | ) | (53.9 | ) | (105.9 | ) | (105.0 | ) | |||||||
Principal payments on finance leases | (1.1 | ) | (1.8 | ) | (2.5 | ) | (3.8 | ) | |||||||
Adjusted FCF | $ | 68.0 | $ | (13.8 | ) | $ | 116.4 | $ | (59.5 | ) |
1. | For purposes of our condensed consolidated statements of cash flows, expenses, including value-added taxes, financed by an intermediary are treated as hypothetical operating cash outflows and hypothetical financing cash inflows when the expenses are incurred. When we pay the financing intermediary, we record financing cash outflows in our condensed consolidated statements of cash flows. For purposes of our Adjusted FCF definition, we add back the hypothetical operating cash outflow when these financed expenses are incurred and deduct the financing cash outflows when we pay the financing intermediary. |
Three months ended June 30, | FX-Neutral1 | ||||||||||||
2019 | 2018 | % Change | % Change | ||||||||||
Liberty Latin America2,3,4,5 | $ | 47.64 | $ | 51.05 | (6.7 | %) | (1.5 | %) | |||||
C&W2,4 | $ | 47.67 | $ | 46.05 | 3.5 | % | 4.1 | % | |||||
VTR/Cabletica5 | $ | 47.62 | $ | 54.21 | (12.2 | %) | (4.7 | %) | |||||
VTR | CLP | 33,223 | CLP | 33,688 | (1.4 | %) | (1.4 | %) | |||||
Cabletica | CRC | 24,708 | — | N.M. | N.M. |
Three months ended June 30, | FX-Neutral1 | ||||||||||||
2019 | 2018 | % Change | % Change | ||||||||||
Liberty Latin America2,4 | $ | 14.43 | $ | 15.55 | (7.2 | %) | (5.6 | %) | |||||
C&W2,4 | $ | 14.03 | $ | 15.02 | (6.6 | %) | (5.9 | %) | |||||
VTR | $ | 19.50 | $ | 23.25 | (16.1 | %) | (7.8 | %) |
1. | The FX-neutral change represents the percentage change on a year-over-year basis adjusted for FX impacts and is calculated by adjusting the current-year figures to reflect translation at the foreign currency rates used to translate the prior year amounts. |
2. | In order to provide a more meaningful comparison of ARPU per customer relationship and ARPU per mobile subscriber, we have reflected any nonorganic adjustments in the customer and mobile subscriber figures used to calculate ARPU per customer relationship and ARPU per mobile subscriber for the three months ended June 30, 2018. |
3. | Due to the uncertainties surrounding our Q2 2018 customer count in Puerto Rico as a result of the hurricanes, we have omitted Liberty Puerto Rico ARPU for each of the three months ended June, 2019 and 2018. For the three months ended June 30, 2019, Liberty Puerto Rico ARPU was $77.05. Including Liberty Puerto Rico, consolidated Liberty Latin America ARPU was $51.35 for the three months ended June 30, 2019. |
4. | The amounts for the three months ended June 30, 2018 do not include UTS. |
5. | The amounts for the three months ended June 30, 2018 do not include Cabletica. |
6. | Mobile ARPU amounts are calculated excluding interconnect revenue. |
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June 30, | Rebased change1 | June 30, | Rebased change1 | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
in millions, except % amounts | |||||||||||||||||||||
Residential revenue: | |||||||||||||||||||||
Residential fixed revenue: | |||||||||||||||||||||
Subscription revenue: | |||||||||||||||||||||
Video | $ | 46.8 | $ | 43.2 | $ | 90.7 | $ | 85.9 | |||||||||||||
Broadband internet | 65.5 | 56.4 | 125.7 | 110.1 | |||||||||||||||||
Fixed-line telephony | 26.7 | 25.9 | 51.0 | 52.8 | |||||||||||||||||
Total subscription revenue | 139.0 | 125.5 | 267.4 | 248.8 | |||||||||||||||||
Non-subscription revenue | 14.9 | 16.9 | 29.9 | 32.4 | |||||||||||||||||
Total residential fixed revenue | 153.9 | 142.4 | 1.4 | % | 297.3 | 281.2 | 3.1 | % | |||||||||||||
Residential mobile revenue: | |||||||||||||||||||||
Service revenue | 142.1 | 151.1 | 277.1 | 306.2 | |||||||||||||||||
Interconnect, equipment sales and other | 22.2 | 21.6 | 41.2 | 43.7 | |||||||||||||||||
Total residential mobile revenue | 164.3 | 172.7 | (9.3 | %) | 318.3 | 349.9 | (11.1 | %) | |||||||||||||
Total residential revenue | 318.2 | 315.1 | (4.4 | %) | 615.6 | 631.1 | (4.8 | %) | |||||||||||||
B2B revenue: | |||||||||||||||||||||
Service revenue | 226.8 | 204.2 | 439.3 | 414.1 | |||||||||||||||||
Subsea network revenue | 61.6 | 64.4 | 121.5 | 124.0 | |||||||||||||||||
Total B2B revenue | 288.4 | 268.6 | 4.2 | % | 560.8 | 538.1 | 3.2 | % | |||||||||||||
Total | $ | 606.6 | $ | 583.7 | (0.5 | %) | $ | 1,176.4 | $ | 1,169.2 | (1.1 | %) | |||||||||
OCF | $ | 235.4 | $ | 223.6 | 3.3 | % | $ | 457.9 | $ | 452.7 | 0.7 | % | |||||||||
Operating income | $ | 61.3 | $ | 51.5 | $ | 113.6 | $ | 86.8 | |||||||||||||
Share-based compensation expense | 5.2 | 2.8 | 8.9 | 4.7 | |||||||||||||||||
Depreciation and amortization | 155.7 | 155.9 | 306.3 | 310.0 | |||||||||||||||||
Related-party fees and allocations | 7.8 | 7.0 | 15.7 | 13.6 | |||||||||||||||||
Impairment, restructuring and other operating items, net | 5.4 | 6.4 | 13.4 | 37.6 | |||||||||||||||||
OCF | 235.4 | 223.6 | 457.9 | 452.7 | |||||||||||||||||
Noncontrolling interests' share of OCF2 | 40.6 | 42.0 | 78.9 | 89.9 | |||||||||||||||||
Proportionate OCF | $ | 194.8 | $ | 181.6 | $ | 379.0 | $ | 362.8 | |||||||||||||
OCF as a percentage of revenue | 38.8 | % | 38.3 | % | 38.9 | % | 38.7 | % | |||||||||||||
Operating income as a percentage of revenue | 10.1 | % | 8.8 | % | 9.7 | % | 7.4 | % |
1. | Indicated growth rates are rebased for the estimated impacts of the UTS acquisition, the transfer of certain B2B operations in Puerto Rico from our C&W segment to our Liberty Puerto Rico segment and FX. |
2. | The decrease in the noncontrolling interests' share of OCF during the 2019 periods, as compared to corresponding periods in 2018, includes the net impact of (i) an increase in our ownership interests in Cable & Wireless Jamaica Limited during the first half of 2018 from 82.0% to 92.3% and (ii) the 12.5% noncontrolling interests' share of UTS effective March 31, 2019. |
June 30, | March 31, | ||||||||||
Facility Amount | 2019 | 2019 | |||||||||
in millions | |||||||||||
Credit Facilities: | |||||||||||
Term Loan Facility B-4 due 2026 (LIBOR + 3.25%) | $ | 1,640.0 | $ | 1,640.0 | $ | 1,875.0 | |||||
Revolving Credit Facility due 2023 (LIBOR + 3.25%) | $ | 625.0 | — | 170.0 | |||||||
Total Senior Secured Credit Facilities | 1,640.0 | 2,045.0 | |||||||||
Notes: | |||||||||||
Senior Secured Notes: | |||||||||||
5.75% USD Senior Secured Notes due 2027 | $ | 400.0 | 400.0 | — | |||||||
Senior Notes: | |||||||||||
6.875% USD Senior Notes due 2022 | $ | 210.0 | 210.0 | 475.0 | |||||||
7.5% USD Senior Notes due 2026 | $ | 500.0 | 500.0 | 500.0 | |||||||
6.875% USD Senior Notes due 2027 | $ | 1,000.0 | 1,000.0 | 700.0 | |||||||
Total Notes | 2,110.0 | 1,675.0 | |||||||||
Other Regional Debt | 303.6 | 312.3 | |||||||||
Vendor financing | 40.8 | 58.3 | |||||||||
Finance lease obligations | 8.8 | 9.8 | |||||||||
Total debt and finance lease obligations | 4,103.2 | 4,100.4 | |||||||||
Discounts and deferred financing costs, net | (26.2 | ) | (6.8 | ) | |||||||
Total carrying amount of debt and finance lease obligations | 4,077.0 | 4,093.6 | |||||||||
Less: cash and cash equivalents | 389.3 | 324.6 | |||||||||
Net carrying amount of debt and finance lease obligations | $ | 3,687.7 | $ | 3,769.0 |
• | At June 30, 2019, our total net debt was $3.7 billion, our proportionate net debt was $3.6 billion, our Fully-swapped Borrowing Cost was 6.2%, and the average tenor of our debt obligations (excluding vendor financing) was approximately 6.8 years. |
• | Our portion of OCF, after deducting the noncontrolling interests' share, (“Proportionate OCF”) was $195 million in Q2 2019 and $182 million for Q2 2018. |
• | Based on Q2 results, our Proportionate Net Leverage Ratio was 4.26x, calculated in accordance with C&W's Credit Agreement. At June 30, 2019, we had maximum undrawn commitments of $750 million, including $125 million under our regional facilities. At June 30, 2019, the full amount of unused borrowing capacity under our credit facilities (including regional facilities) was available to be borrowed, both before and after completion of the June 30, 2019 compliance reporting requirements. |
• | In April 2019, we issued $300 million of additional 6.875% Senior Notes due 2027 (increasing the total outstanding notional to $1 billion), as well as new $400 million 5.75% Senior Secured Notes due 2027. Proceeds of the issuances were used to repay (i) $265 million of the 6.875% Senior Notes due 2022, (ii) $235 million of Term Loan B-4 due 2026 and (iii) $170 million of Revolving Credit Facility drawings related to the acquisition of UTS, and pay transaction-related fees and expenses. |
• | Subsequent to June 30, 2019, we issued an additional $220 million of 6.875% Senior Notes due 2027 at a price of 103.625, reflecting a yield to worst of approximately 6.2%. The proceeds of the issuance will primarily be used to repay the remaining $210 million of the 6.875% Senior Notes due 2022 in August 2019. |
Three months ended | Six months ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||
CLP in billions, except % amounts | |||||||||||||||||
Revenue | 165.3 | 161.6 | 2.3 | % | 328.1 | 320.5 | 2.4 | % | |||||||||
OCF | 68.5 | 65.3 | 4.9 | % | 131.7 | 128.5 | 2.5 | % | |||||||||
Operating income | 39.3 | 43.5 | 66.4 | 85.1 | |||||||||||||
Share-based compensation expense | 1.0 | 0.4 | 1.9 | 0.8 | |||||||||||||
Related-party fees and allocations | 1.4 | 1.9 | 3.6 | 3.7 | |||||||||||||
Depreciation | 26.6 | 17.8 | 52.6 | 35.7 | |||||||||||||
Impairment, restructuring and other operating items, net | 0.2 | 1.7 | 7.2 | 3.2 | |||||||||||||
OCF | 68.5 | 65.3 | 131.7 | 128.5 | |||||||||||||
OCF as a percentage of revenue | 41.4 | % | 40.4 | % | 40.1 | % | 40.1 | % | |||||||||
Operating income as a percentage of revenue | 23.8 | % | 26.9 | % | 20.2 | % | 26.6 | % |
June 30, | March 31, | ||||||||
2019 | 2019 | ||||||||
Borrowing currency in millions | CLP equivalent in billions | ||||||||
Credit Facilities: | |||||||||
Term Loan Facility B-1 due 20231 (ICP2+ 3.80%) | CLP 140,900 | 140.9 | 140.9 | ||||||
Term Loan Facility B-2 due 2023 (7.000%) | CLP 33,100 | 33.1 | 33.1 | ||||||
Revolving Credit Facility A due 2023 (TAB3+3.35%) | CLP 45,000 | — | — | ||||||
Revolving Credit Facility B due 20244 (LIBOR + 2.75%) | $ | 185.0 | — | — | |||||
Total Senior Secured Credit Facilities | 174.0 | 174.0 | |||||||
Senior Notes: | |||||||||
6.875% USD Senior Notes due 2024 | $ | 1,260.0 | 855.2 | 856.4 | |||||
Vendor Financing | 67.5 | 69.6 | |||||||
Finance lease obligations | 0.2 | 0.3 | |||||||
Total third-party debt and finance lease obligations | 1,096.9 | 1,100.3 | |||||||
Deferred financing costs | (14.3 | ) | (15.0 | ) | |||||
Total carrying amount of third-party debt and finance lease obligations | 1,082.6 | 1,085.3 | |||||||
Less: cash and cash equivalents | 82.1 | 74.6 | |||||||
Net carrying amount of third-party debt and finance lease obligations | 1,000.5 | 1,010.7 | |||||||
Exchange rate (CLP to $) | 678.7 | 679.7 |
1. | Under the terms of the credit agreement, VTR is obligated to repay 50% of the outstanding aggregate principal amount of the Term Loan Facility B-1 on November 23, 2022, with the remaining principal amount due on May 23, 2023, which represents the ultimate maturity date of the facility. |
2. | Índice de Cámara Promedio rate. |
3. | Tasa Activa Bancaria rate. |
4. | Includes a $1 million credit facility that matures on May 23, 2023. |
• | At June 30, 2019, our Fully-swapped Borrowing Cost was 6.8% and the average tenor of debt (excluding vendor financing) was approximately 4.4 years. |
• | Based on our results for Q2 2019, and subject to the completion of the corresponding compliance reporting requirements, our Consolidated Net Leverage ratio was 3.64x, calculated in accordance with the indenture governing the 6.875% USD Senior Notes due 2024. |
• | At June 30, 2019, we had maximum undrawn commitments of $185 million (CLP 126 billion) and CLP 45 billion. At June 30, 2019, the full amount of unused borrowing capacity under our credit facilities was available to be borrowed, both before and after completion of the June 30, 2019 compliance reporting requirements. |
Facility amount | June 30, 2019 | March 31, 2019 | |||||||||
in millions | |||||||||||
First Lien Term Loan due 20221 (LIBOR + 3.50%) | $ | 850.0 | $ | 850.0 | $ | 850.0 | |||||
Second Lien Term Loan due 20231 (LIBOR + 6.75%) | $ | 72.5 | 72.5 | 92.5 | |||||||
Revolving Credit Facility due 2020 (LIBOR + 3.50%) | $ | 40.0 | — | — | |||||||
Third-party debt before discounts and deferred financing costs | 922.5 | 942.5 | |||||||||
Discounts and deferred financing costs | (7.5 | ) | (8.2 | ) | |||||||
Total carrying amount of third-party debt | 915.0 | 934.3 | |||||||||
Less: cash and cash equivalents | 22.3 | 55.2 | |||||||||
Net carrying amount of third-party debt | $ | 892.7 | $ | 879.1 |
1. | The First Lien Term Loan and the Second Lien Term Loan credit agreements each have a LIBOR floor of 1.0%. |
• | During the second quarter of 2019, we repaid $20 million of the Second Lien Term Loan due 2023. |
June 30, | March 31, | ||||||||
2019 | 2019 | ||||||||
Borrowing currency in millions | CRC equivalent in billions | ||||||||
Term Loan B-1 Facility due 20231 (LIBOR + 5.00%) | $ | 53.5 | 31.1 | 32.0 | |||||
Term Loan B-2 Facility due 20231 (TBP2 + 6.00%) | CRC 43,177.4 | 43.2 | 43.2 | ||||||
Revolving Credit Facility due 2023 (LIBOR + 4.25%) | $ | 15.0 | — | — | |||||
Third-party debt before discounts and deferred financing costs | 74.3 | 75.2 | |||||||
Deferred financing costs | (2.1 | ) | (2.3 | ) | |||||
Total carrying amount of third-party debt | 72.2 | 72.9 | |||||||
Less: cash and cash equivalents | 10.2 | 10.4 | |||||||
Net carrying amount of third-party debt | 62.0 | 62.5 | |||||||
Exchange rate (CRC to $) | 582.2 | 599.2 |
1. | Under the terms of the credit agreement, Cabletica is obligated to repay 50% of the outstanding aggregate principal amounts of the Cabletica Term Loan B-1 Facility and the Cabletica Term Loan B-2 Facility on April 5, 2023, with the remaining respective principal amounts due on October 5, 2023, which represents the ultimate maturity date of the facilities. |
2. | Tasa Básica Pasiva rate. |
Consolidated Operating Data — June 30, 2019 | ||||||||||||||||||||||||
Homes Passed | Two-way Homes Passed | Fixed-line Customer Relationships | Total Video | Internet Subscribers | Telephony Subscribers | Total RGUs | Total Mobile Subscribers2 | |||||||||||||||||
C&W: | ||||||||||||||||||||||||
Panama | 574,000 | 574,000 | 182,800 | 94,600 | 123,200 | 133,500 | 351,300 | 1,564,200 | ||||||||||||||||
Jamaica | 523,800 | 513,800 | 251,700 | 118,700 | 201,800 | 201,500 | 522,000 | 997,700 | ||||||||||||||||
The Bahamas | 128,900 | 128,900 | 47,100 | 6,100 | 25,700 | 44,400 | 76,200 | 213,500 | ||||||||||||||||
Trinidad and Tobago | 327,800 | 327,800 | 156,200 | 108,600 | 133,000 | 73,600 | 315,200 | — | ||||||||||||||||
Barbados | 125,200 | 125,200 | 82,400 | 24,100 | 64,800 | 72,500 | 161,400 | 119,700 | ||||||||||||||||
Other1 | 354,900 | 335,100 | 254,200 | 90,500 | 169,900 | 131,000 | 391,400 | 498,400 | ||||||||||||||||
C&W Total | 2,034,600 | 2,004,800 | 974,400 | 442,600 | 718,400 | 656,500 | 1,817,500 | 3,393,500 | ||||||||||||||||
VTR/Cabletica: | ||||||||||||||||||||||||
VTR | 3,610,000 | 3,158,200 | 1,492,900 | 1,092,300 | 1,290,500 | 557,700 | 2,940,500 | 276,100 | ||||||||||||||||
Cabletica | 592,400 | 586,500 | 245,200 | 201,600 | 180,600 | 20,900 | 403,100 | — | ||||||||||||||||
Total VTR/Cabletica | 4,202,400 | 3,744,700 | 1,738,100 | 1,293,900 | 1,471,100 | 578,600 | 3,343,600 | 276,100 | ||||||||||||||||
Liberty Puerto Rico | 1,098,900 | 1,098,900 | 392,000 | 220,000 | 340,400 | 205,000 | 765,400 | — | ||||||||||||||||
Total | 7,335,900 | 6,848,400 | 3,104,500 | 1,956,500 | 2,529,900 | 1,440,100 | 5,926,500 | 3,669,600 |
Organic Subscriber Variance Table — June 30, 2019 vs March 31, 2019 | ||||||||||||||||||||||||
Organic Change Summary: | Homes Passed | Two-way Homes Passed | Fixed-line Customer Relationships | Total Video | Internet Subscribers | Telephony Subscribers | Total RGUs | Total Mobile Subscribers2 | ||||||||||||||||
C&W: | ||||||||||||||||||||||||
Panama | 23,900 | 23,900 | 2,900 | 3,600 | 5,300 | 4,900 | 13,800 | (26,300 | ) | |||||||||||||||
Jamaica | 2,800 | 2,800 | 2,200 | 1,400 | 4,500 | 1,200 | 7,100 | 75,700 | ||||||||||||||||
The Bahamas | — | — | (1,100 | ) | (500 | ) | (500 | ) | (1,900 | ) | (2,900 | ) | (9,300 | ) | ||||||||||
Trinidad and Tobago | 1,200 | 1,200 | — | 900 | 1,800 | 5,600 | 8,300 | — | ||||||||||||||||
Barbados | — | — | (900 | ) | 3,000 | (100 | ) | (600 | ) | 2,300 | (2,400 | ) | ||||||||||||
Other1 | — | — | 2,000 | (800 | ) | 3,800 | (1,200 | ) | 1,800 | (3,400 | ) | |||||||||||||
C&W Total | 27,900 | 27,900 | 5,100 | 7,600 | 14,800 | 8,000 | 30,400 | 34,300 | ||||||||||||||||
VTR/Cabletica: | ||||||||||||||||||||||||
VTR | 51,500 | 52,100 | 16,100 | 8,600 | 18,400 | (4,700 | ) | 22,300 | 9,800 | |||||||||||||||
Cabletica | 6,200 | 6,200 | 4,700 | 2,600 | 6,300 | (100 | ) | 8,800 | — | |||||||||||||||
Total VTR/Cabletica | 57,700 | 58,300 | 20,800 | 11,200 | 24,700 | (4,800 | ) | 31,100 | 9,800 | |||||||||||||||
Liberty Puerto Rico | 5,100 | 5,100 | 4,200 | (1,100 | ) | 4,900 | 1,300 | 5,100 | — | |||||||||||||||
Total Organic Change | 90,700 | 91,300 | 30,100 | 17,700 | 44,400 | 4,500 | 66,600 | 44,100 | ||||||||||||||||
Q2 2019 Adjustments: | ||||||||||||||||||||||||
C&W - Other - UTS Acquisition | 9,500 | 9,500 | 47,100 | 14,600 | 33,000 | 37,100 | 84,700 | 112,000 | ||||||||||||||||
C&W - Jamaica | 8,800 | 8,800 | — | — | — | — | — | — | ||||||||||||||||
Net Adjustments | 18,300 | 18,300 | 47,100 | 14,600 | 33,000 | 37,100 | 84,700 | 112,000 | ||||||||||||||||
Net Adds | 109,000 | 109,600 | 77,200 | 32,300 | 77,400 | 41,600 | 151,300 | 156,100 |
1. | C&W's "Other" category includes subscriber data related to UTS. Subscriber information for UTS is preliminary and subject to adjustment until we have completed our review of such information and determined that it is presented in accordance with our policies. |
2. | Mobile subscribers are comprised of the following: see next page |
Mobile Subscribers | |||||||||||||||||
Consolidated Operating Data | Q2 Organic Subscriber Variance | ||||||||||||||||
Prepaid | Postpaid | Total | Prepaid | Postpaid | Total | ||||||||||||
C&W: | |||||||||||||||||
Panama | 1,422,700 | 141,500 | 1,564,200 | (23,500 | ) | (2,800 | ) | (26,300 | ) | ||||||||
Jamaica | 978,000 | 19,700 | 997,700 | 74,200 | 1,500 | 75,700 | |||||||||||
The Bahamas | 188,000 | 25,500 | 213,500 | (10,000 | ) | 700 | (9,300 | ) | |||||||||
Barbados | 92,200 | 27,500 | 119,700 | (2,400 | ) | — | (2,400 | ) | |||||||||
Other1 | 439,200 | 59,200 | 498,400 | (2,600 | ) | (800 | ) | (3,400 | ) | ||||||||
C&W Total | 3,120,100 | 273,400 | 3,393,500 | 35,700 | (1,400 | ) | 34,300 | ||||||||||
VTR | 7,700 | 268,400 | 276,100 | 200 | 9,600 | 9,800 | |||||||||||
Total / Net Adds | 3,127,800 | 541,800 | 3,669,600 | 35,900 | 8,200 | 44,100 |
• | Customer Premises Equipment: Includes capitalizable equipment and labor, materials and other costs directly associated with the installation of such CPE; |
• | New Build & Upgrade: Includes capitalizable costs of network equipment, materials, labor and other costs directly associated with entering a new service area and upgrading our existing network; |
• | Capacity: Includes capitalizable costs for network capacity required for growth and services expansions from both existing and new customers. This category covers Core and Access parts of the network and includes, for example, fiber node splits, upstream/downstream spectrum upgrades and optical equipment additions in our international backbone connections; |
• | Baseline: Includes capitalizable costs of equipment, materials, labor and other costs directly associated with maintaining and supporting the business. Relates to areas such as network improvement, property and facilities, technical sites, information technology systems and fleet; and |
• | Product & Enablers: Discretionary capitalizable costs that include investments (i) required to support, maintain, launch or innovate in new customer products, and (ii) in infrastructure, which drive operational efficiency over the long term. |
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