Liberty Latin America Reports Q4 & FY 2021 Results

Record mobile and solid fixed additions in year

FY 2021 double-digit revenue growth driven by acquisitions, 4% rebased growth

~750,000 homes passed or upgraded in 2021; 99% fiber-to-the-home

Delivered 2021 guidance for all financial and operating metrics

Strategic acquisitions with significant synergies to enhance future performance

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 (“Q4”) and fiscal year (“FY”) ended December 31, 2021.

CEO Balan Nair commented, “The fourth quarter concluded a successful year for LLA. Despite continuing impacts from the pandemic and competitive challenges in Chile, we had strong operational performance across the rest of the group. We also made progress with the integration of our acquisitions in Puerto Rico and Costa Rica, and successfully delivered against our 2021 guidance targets.”

“High-speed connectivity is at the core of our customer offering and we invested to expand and improve our networks during the year. We added or upgraded approximately 750,000 homes passed across our operations, almost exclusively using fiber-to-the-home technology. Combining our network strength with attractive consumer propositions, we added more than 250,000 RGUs, which was over 50% higher than in the prior year. Our mobile operations delivered a particularly strong performance bolstered by the inclusion of the business we acquired in Costa Rica, as we added nearly 500,000 subscribers in 2021, of which over 25% were postpaid.”

“Our B2B operations continued to recover during the year as we utilized our high-speed and reliable subsea, terrestrial and mobile networks combined with innovative product offerings to deliver effective solutions for our customers.”

“LLA reported $4.8 billion in revenue, $81 million of operating income and $1.8 billion in Adjusted OIBDA in 2021. We grew our cash flow from operations and Adjusted Free Cash Flow during the year to $1.0 billion and $200 million, respectively, delivering our Adjusted Free Cash Flow guidance. We also increased our share repurchase activity, with $65 million spent in 2021, and today we are announcing a new program to buyback up to $200 million.”

“Overall, we were pleased with our robust operational execution and financial performance in 2021. As we look ahead to 2022, we intend to deliver further operational enhancements and financial growth, continue to progress the integrations in Puerto Rico and Costa Rica, and successfully complete the accretive transactions announced in Panama and Chile. We remain focused on driving Adjusted Free Cash Flow for the group and we are confident that the operational and strategic actions we are taking will enable a multi-year growth trajectory.”

Business Highlights

• C&W Caribbean & Networks: operating momentum drives strong 2021 performance
  • Record year for both fixed and mobile subscriber additions driven by Jamaica
  • FY reported and rebased Adj. OIBDA growth of 5% and 6%, respectively

• C&W Panama: strong operating and financial results; recovery from COVID-19
  • Operating momentum with mobile subscribers up 17% and fixed RGUs up 15% in 2021
  • FY reported and rebased Adj. OIBDA growth of 13% and 14%, respectively

• Liberty Puerto Rico: solid fixed and mobile postpaid momentum; integration on-track
  • Continued fixed subscriber adds driven by broadband; mobile postpaid base growing
  • Strong reported and rebased Adj. OIBDA growth in FY 2021

• VTR: performance continues to be challenged in LLA’s most competitive market
  • Continuing to invest, added 400,000 new build / upgraded homes passed in the year
  • 50/50 JV agreed with América Móvil expected to complete in H2 2022

• Costa Rica: strong start for recently acquired mobile operations; record fixed additions
  • Over 100,000 mobile subscribers added in Q4
  • Record quarterly fixed RGU additions of 15,000 driven by broadband

LLA 2022 Financial Guidance

• P&E additions as a percentage of revenue at ~18%
• Adding or upgrading ~600,000 homes passed
• Adjusted FCF guidance of ~$250 million; ~25% YoY reported growth

Share Repurchase Program

On March 16, 2020, our Directors approved a share repurchase program that authorized us to repurchase from time to time up to $100 million of our Class A common shares and/or Class C common shares through March 2022. As at market close on February 18, 2022, the remaining amount authorized for share repurchases was approximately $2 million.

On February 22, 2022, our Board of Directors approved a new share repurchase program. The program authorizes 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 through December 2024.

Additional information, including historic quarterly revenue, adjusted OIBDA, and P&E additions under our updated reporting segments, can be found on our website at https://www.lla.com/investors.

Financial and Operating Highlights

Financial Highlights		Q4 2021				Q4 2020				YoY Growth			YoY Rebase Growth1			FY 2021				FY 2020				YoY Growth / (Decline)			YoY Rebase Growth1
(USD in millions)
Revenue		$	1,279			$	1,097			17	%		6	%		$	4,799			$	3,765			27	%		4	%
Adjusted OIBDA2		$	470			$	428			10	%		3	%		$	1,829			$	1,485			23	%		4	%
Operating income (loss)		$	(412	)		$	100			N.M.						$	81			$	93			(13	%)
Property & equipment additions		$	257			$	188			37	%					$	856			$	631			36	%
As a percentage of revenue			20	%			17	%									18	%			17	%
Adjusted FCF3		$	51			$	89									$	200			$	148
Cash provided by operating activities		$	298			$	149									$	1,016			$	640
Cash used by investing activities		$	(193	)		$	(2,032	)								$	(1,269	)		$	(2,451	)
Cash provided (used) by financing activities		$	(104	)		$	(194	)								$	427			$	271
N.M. – Not Meaningful.

Operating Highlights4		Q4 2021			Q4 2020		YoY Growth / (Decline)			YoY FX-Neutral Growth / (Decline)5			FY 2021		FY 2020
Total Customers		3,226,400			3,204,600		1	%
Organic customer additions		(10,300	)		18,600								32,200		73,500
Fixed RGUs		6,441,000			6,186,300		4	%
Organic RGU additions		35,800			57,800								268,800		171,000
Mobile subscribers*		7,540,300			4,451,300		69	%
Organic mobile additions		246,400			47,800								493,400		(232,200	)
Fixed ARPU		$ 46.95			$ 48.94		(4	%)		—	%
Mobile ARPU*		$ 14.03			$ 16.99		(17	%)		(16	%)

*

Q4 2021 figures include mobile subscribers and ARPU related to operations in Costa Rica, which were acquired on August 9, 2021 and therefore not included in Q4 2020 subscriber data. Subscriber information related to our August 9, 2021 acquisition in Costa Rica 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.

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:

	Three months ended						Increase/(decrease)						Year ended						Increase/(decrease)
	December 31,												December 31,
	2021			2020			%			Rebased %			2021			2020			%			Rebased %
	in millions, except % amounts
C&W Caribbean & Networks	$ 452.7			$ 428.2			6			7			$ 1,751.2			$ 1,706.8			3			4
C&W Panama	168.6			130.8			29			30			547.6			500.2			9			10
Liberty Puerto Rico	376.0			296.0			27			2			1,456.7			624.1			133			7
VTR	174.8			207.7			(16	)		(8	)		787.5			809.0			(3	)		(7	)
Costa Rica	106.8			36.6			192			10			256.2			140.0			83			11
Corporate	5.4			2.7			100			100			21.6			2.7			N.M.			N.M
Eliminations	(5.2	)		(4.8	)		N.M.			N.M.			(21.8	)		(18.2	)		N.M.			N.M.
Total	$ 1,279.1			$ 1,097.2			17			6			$ 4,799.0			$ 3,764.6			27			4
N.M. – Not Meaningful.

• Our reported revenue for the quarter and year ended December 31, 2021 increased by 17% and 27%, respectively.
  • Reported revenue growth in Q4 2021 and FY 2021 was driven by (1) the addition of $80 million and $788 million, respectively, from Liberty Mobile, which was acquired on October 31, 2020, (2) $71 million and $112 million, respectively, from the acquisition of Telefónica’s Costa Rica operations on August 9, 2021, (3) organic growth across C&W Caribbean & Networks, Liberty Puerto Rico, C&W Panama, and Costa Rica, (4) organic declines at VTR and (5) for Q4 2021, a net foreign exchange (“FX”) impact of $(24) million.

Q4 2021 Revenue Growth – Segment Highlights

• C&W Caribbean & Networks: revenue increased by 6% on a reported basis and 7% on a rebased basis.
  • B2B revenue was 7% and 8% higher on a reported and rebased basis, respectively, as compared to the prior-year period. Performance was driven by the renegotiation of customer contracts recognized during 2021, increased non-recurring revenue and growth in revenue from fixed and mobile B2B services, as economic activity continues to steadily recover.
  • Fixed residential revenue grew 2% on a reported basis and 4% on a rebased basis as compared to the prior-year period. Our performance was driven by volume growth as new build / upgraded homes and continued residential demand for our products led to strong subscriber additions. Within the segment, Jamaica was once again the largest contributor, adding 27,000 RGUs in the quarter and 99,000 RGUs over the past twelve months.
  • Mobile continued to recover, as revenue was 8% higher on a reported basis and 10% on a rebased basis, as compared to the prior-year period. Growth was driven by increased inbound roaming activity, primarily due to the general relaxing of travel restrictions, and a higher average numbers of mobile subscribers, mostly due to sales initiatives, including converged offerings.

• C&W Panama: revenue increased by 29% on a reported basis and 30% on a rebased basis.
  • B2B revenue was 65% higher on a reported and rebased basis, primarily due to increased non-recurring revenue related to long-term government-related projects, some of which were put on hold during 2020 due to the impact of COVID-19.
  • Fixed residential revenue was 3% and 7% higher on a reported and rebased basis, respectively. Growth was driven by increased subscriber numbers, as we added 62,000 RGUs over the past twelve months, with traction from our high-speed data propositions.
  • Mobile revenue was in-line on a reported and rebased basis compared to the prior-year period. Subscription revenue was slightly lower year-over-year as growth in prepaid and postpaid subscribers was more than offset by lower prepaid ARPU. Non-subscription revenue grew year-over-year due to higher volumes of handset sales and an increase in inbound roaming as travel restrictions related to COVID-19 were relaxed.

• Liberty Puerto Rico: revenue grew by 27% and 2% on a reported and rebased basis, respectively. Reported growth benefited from the full inclusion of Liberty Mobile in Q4 2021, whereas it was only included for two months in the prior year quarter. Residential revenue was higher, year-over-year on a rebased basis. This was driven by subscriber growth in our fixed operations where we added 72,000 RGUs over the last twelve months, partly offset by mobile consumer revenue, which was lower overall, as higher subscription revenue was more than offset by reduced equipment sales. B2B revenue declined on a rebased basis as we aligned pricing across our fixed-line products.

• VTR: revenue was 16% and 8% lower on a reported and rebased basis, respectively. Competitive pressures have led to declines in ARPU and subscribers levels over the last twelve months, negatively impacting year-over-year performance.

• Costa Rica: revenue grew by 192% and 10% on a reported and rebased basis, respectively. Reported performance benefited from the inclusion of Telefónica’s Costa Rica operations in the quarter. The strong rebased growth was driven by increased customers across both our mobile and fixed businesses and higher handset sales, year-over-year.

Operating Income (Loss)

• Operating income (loss) was $(412) million and $100 million for the three months ended December 31, 2021 and 2020, respectively, and $81 million and $93 million for the year ended December 31, 2021 and 2020, respectively.
  • We reported an operating loss during the three months ended December 31, 2021, compared with operating income during the corresponding period in 2020. The 2021 period included goodwill impairments, the negative impact of which was slightly offset by an increase in Adjusted OIBDA and lower depreciation and amortization expense.
  • We reported lower operating income during the year ended December 31, 2021, as compared with the prior year, primarily due to the net effect of (i) higher Adjusted OIBDA, as further discussed below, (ii) higher goodwill impairments, and (iii) increases in depreciation, amortization and stock-based compensation expense.

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:

	Three months ended						Increase (decrease)						Year ended						Increase (decrease)
	December 31,												December 31,
	2021			2020			%			Rebased %			2021			2020			%			Rebased %
	in millions, except % amounts
C&W Caribbean & Networks	$ 196.2			$ 182.2			8			9			$ 747.2			$ 713.2			5			6
C&W Panama	62.6			51.4			22			24			200.1			177.2			13			14
Liberty Puerto Rico	141.3			115.9			22			1			594.8			276.9			115			12
VTR	55.3			74.7			(26	)		(20	)		259.6			307.0			(15	)		(19	)
Costa Rica	29.4			14.6			101			1			80.2			54.9			46			7
Corporate	(15.2	)		(10.8	)		(41	)		(41	)		(52.9	)		(44.5	)		(19	)		(19	)
Total	$ 469.6			$ 428.0			10			3			$ 1,829.0			$ 1,484.7			23			4
Operating income margin	(32.2	) %		9.1	%								1.7	%		2.5	%
Adjusted OIBDA margin	36.7	%		39.0	%								38.1	%		39.4	%

• Our reported Adjusted OIBDA for the quarter and year ended December 31, 2021 increased by 10% and 23%, respectively.
  • Reported Adjusted OIBDA increases in Q4 2021 and FY 2021 were largely driven by (1) the addition of $28 million and $289 million, respectively, contributed by Liberty Mobile, (2) the addition of $17 million and $29 million, respectively, contributed by operations acquired from Telefónica in Costa Rica and (3) organic growth in C&W Caribbean & Networks and C&W Panama for both periods and in Liberty Puerto Rico for FY 2021. These increases were partially offset by declines in VTR.

Q4 2021 Adjusted OIBDA Growth – Segment Highlights

• C&W Caribbean and Networks: Adjusted OIBDA increased on a reported and rebased basis by 8% and 9%, respectively. Performance was driven by the aforementioned rebased revenue growth and management of other operating costs and expenses as our reported Adjusted OIBDA margin improved by 70 basis points to 43.3%.

• C&W Panama: Adjusted OIBDA was higher on a reported and rebased basis by 22% and 24%, respectively. Rebased growth was driven by the increase in rebased revenue. While other operating costs and expenses were lower year-over-year, the aforementioned revenue growth drove higher direct costs related to B2B equipment and mobile handsets.

• Liberty Puerto Rico: Adjusted OIBDA grew on a reported and rebased basis by 22% and 1%, respectively. Reported growth was driven by the full inclusion of Liberty Mobile in Q4 2021, whereas it was only included for two months in the prior year quarter. Rebased Adjusted OIBDA was higher as revenue growth was partly offset by the net impact of higher mobile roaming expenses, integration costs related to the Liberty Mobile acquisition, video programming costs, and labor costs; and lower mobile handset costs.

• VTR: Adjusted OIBDA declined on a reported and rebased basis by 26% and 20%, respectively. The rebased decline was driven by the aforementioned revenue decline. Direct and other operating costs were lower overall year-over-year however these savings did not significantly benefit our Adjusted OIBDA margin as savings across most categories were partly offset by higher programming expenses and network costs driven by higher truck rolls.

• Costa Rica: Adjusted OIBDA grew by 101% and 1%, on a reported and rebased basis, respectively. Reported growth benefited from the inclusion of Telefónica’s Costa Rica operations in the quarter. Our rebased performance was impacted by higher equipment costs due to increased handset sales, integration costs in the current year period, and increased commission expenses due to customer additions.

Net Loss Attributable to Shareholders

• Net loss attributable to shareholders was $620 million and $30 million for the three months ended December 31, 2021 and 2020, respectively, and $440 million and $682 million for the year ended December 31, 2021 and 2020, 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.

	Three months ended							Year ended
	December 31,							December 31,
		2021			2020				2021				2020
	USD in millions
Customer Premises Equipment	$	61.0		$	71.5			$	296.2			$	256.9
New Build & Upgrade		51.5			19.0				163.2				91.9
Capacity		35.8			19.1				130.9				87.7
Baseline		68.3			61.7				172.7				133.7
Product & Enablers		40.3			16.7				92.9				60.9
Property & equipment additions		256.9			188.0				855.9				631.1
Assets acquired under capital-related vendor financing arrangements		(35.5	)		(18.6	)			(100.5	)			(99.1	)
Acquisition of intangible assets		—			7.8				—				7.8
Changes in current liabilities related to capital expenditures		(29.8	)		(29.7	)			(19.1	)			26.0
Capital expenditures	$	191.6		$	147.5			$	736.3			$	565.8
Property & equipment additions as % of revenue		20.1	%		17.1	%		17.8		%			16.8	%
Property & Equipment Additions:
C&W Caribbean & Networks	$	77.3		$	65.0			268.2			$		246.8
C&W Panama		24.4			18.1			88.9					70.4
Liberty Puerto Rico		80.1			45.0			219.2					97.3
VTR		41.1			45.5			199.1					172.2
Costa Rica		19.4			6.5			45.0					24.2
Corporate		14.6			7.9			35.5					20.2
Property & equipment additions	$	256.9		$	188.0			855.9			$		631.1
Property & Equipment Additions as a Percentage of Revenue by Reportable Segment:
C&W Caribbean & Networks		17.1	%		15.2	%		15.3		%			14.5	%
C&W Panama		14.5	%		13.8	%		16.2		%			14.1	%
Liberty Puerto Rico		21.3	%		15.2	%		15.0		%			15.6	%
VTR		23.5	%		21.9	%		25.3		%			21.3	%
Costa Rica		18.2	%		17.8	%		17.6		%			17.3	%
New Build and Homes Upgraded by Reportable Segment:
C&W Caribbean & Networks		47,100			17,600			150,100					75,000
C&W Panama		16,600			9,800			121,400					96,500
Liberty Puerto Rico		9,500			7,900			22,600					26,000
VTR		64,200			115,300			400,900					160,400
Costa Rica		10,600			5,700			43,800					29,500
Total		148,000			156,300			733,800					387,400

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 December 31, 2021:

	Debt		Finance lease obligations		Debt and finance lease obligations		Cash and cash equivalents
	in millions
Liberty Latin America1	$ 403.9		$ 1.0		$ 404.9		$ 179.8
C&W2	4,264.7		0.1		4,264.8		562.9
Liberty Puerto Rico	2,601.0		6.5		2,607.5		157.7
VTR3	1,522.2		—		1,522.2		141.8
Costa Rica	408.7		—		408.7		24.2
Total	$ 9,200.5		$ 7.6		$ 9,208.1		$ 1,066.4
Consolidated Leverage and Liquidity Information:					December 31, 2021		September 30, 2021
Consolidated debt and finance lease obligations to operating income ratio					(16.6)x		14.5x
Consolidated net debt and finance lease obligations to operating income ratio					(14.7)x		12.7x
Consolidated gross leverage ratio4,5					5.0x		5.0x
Consolidated net leverage ratio4,5					4.4x		4.4x
Average debt tenor6					5.9 years		5.9 years
Fully-swapped borrowing costs					5.8%		6.1%
Unused borrowing capacity (in millions)7					$1,211.6		$1,220.0

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 & Networks and C&W Panama reporting segments.
3.	Represents the debt and finance lease obligations of the VTR borrowing group, which are classified as held for sale on our December 31, 2021 consolidated balance sheet. The cash and cash equivalents amount also includes $110 million that is included in assets held for sale on our December 31, 2021 consolidated balance sheet. In addition, the consolidated leverage and liquidity information includes the impact of the VTR borrowing group.
4.	Consolidated leverage ratios are non-GAAP measures. For additional information, including definitions of our consolidated leverage ratios, required reconciliations, see Non-GAAP Reconciliations below.
5.	The consolidated leverage ratios include the impact of Telefónica Costa Rica’s Adjusted OIBDA for the post-acquisition period, August 9, 2021 to December 31, 2021, and do not include Adjusted OIBDA for the period prior to the close of the acquisition, which would have an estimated impact of 0.1x on the consolidated gross and net leverage ratios.
6.	For purposes of calculating our average tenor, total debt excludes vendor financing and finance lease obligations.
7.	At December 31, 2021, the full amount of unused borrowing capacity (inclusive of $253 million related to VTR) under our subsidiaries’ revolving credit facilities was available to be borrowed, both before and after completion of the December 31, 2021 compliance reporting requirements.

Quarterly Subscriber Variance

	Fixed and Mobile Subscriber Variance Table — December 31, 2021 vs September 30, 2021
	Homes Passed		Two-way Homes Passed		Fixed-line Customer Relationships			Video RGUs			Internet RGUs			Telephony RGUs			Total RGUs				Prepaid			Postpaid			Total Mobile Subscribers
C&W Caribbean & Networks:
Jamaica	10,600		10,600		8,900			3,500			10,300			13,200			27,000				25,600			4,900			30,500
The Bahamas	—		—		(1,100	)		(100	)		(1,200	)		(1,600	)		(2,900	)			900			400			1,300
Trinidad and Tobago	1,200		1,200		1,600			(200	)		1,400			(500	)		700				—			—			—
Barbados	—		—		600			700			1,100			100			1,900				1,000			1,100			2,100
Other	2,000		2,000		(700	)		(700	)		2,900			(200	)		2,000				11,400			5,400			16,800
Total C&W Caribbean & Networks	13,800		13,800		9,300			3,200			14,500			11,000			28,700				38,900			11,800			50,700
C&W Panama	13,000		13,000		2,800			5,000			4,100			3,800			12,900				82,500			23,100			105,600
Total C&W	26,800		26,800		12,100			8,200			18,600			14,800			41,600				121,400			34,900			156,300
Liberty Puerto Rico	9,400		9,400		3,900			1,800			7,700			2,400			11,900				(12,300	)		11,000			(1,300	)
VTR	48,900		51,700		(34,500	)		(10,000	)		(30,700	)		8,100			(32,600	)			(1,200	)		(8,300	)		(9,500	)
Costa Rica	5,500		5,500		8,200			1,400			9,600			3,900			14,900				69,800			31,100			100,900
Total Net Adds	90,600		93,400		(10,300	)		1,400			5,200			29,200			35,800				177,700			68,700			246,400
Q4 2021 Adjustments:
Costa Rica1	—		—		(10,000	)		(9,700	)		(3,800	)		(100	)		(13,600	)			—			—			—
Net Adds	90,600		93,400		(20,300	)		(8,300	)		1,400			29,100			22,200				177,700			68,700			246,400
Costa Rica’s non-organic adjustment relates to adjustment to LLA’s subscriber counting policies.

Contacts

Investor Relations

Kunal Patel

ir@lla.com

Corporate Communications
Claudia Restrepo

llacommunications@lla.com

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