UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
| | | | | | | | | | | |
| ☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the quarterly period ended | September 30, 20222023 |
OR
| | | | | |
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from to |
Commission file number: 001-38335
Liberty Latin America Ltd.
(Exact name of Registrant as specified in its charter)
| | | | | | | | |
| Bermuda | | 98-1386359 |
| (State or Other Jurisdiction of Incorporation or Organization) | | (I.R.S. Employer Identification No.) |
| |
| 2 Church Street, | | |
| Hamilton | | HM 11 |
| (Address of Principal Executive Offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (441) 295-5950 or (303) 925-6000
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
| Title of Each Class | Trading Symbols | Name of Each Exchange on Which Registered |
| Class A Common Shares, par value $0.01 per share | LILA | The NASDAQ Stock Market LLC |
| Class C Common Shares, par value $0.01 per share | LILAK | The NASDAQ Stock Market LLC |
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes þ No ¨
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | | | | |
| Large Accelerated Filer | ☑ | Accelerated Filer | ☐ | Non-Accelerated Filer | ☐ |
| Smaller Reporting Company | ☐ | Emerging Growth Company | ☐ | | |
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨
| | | | | | | | | | | | | | |
| Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). | Yes | ☐ | No | þ |
The number of outstanding common shares of Liberty Latin America Ltd. as of October 31, 20222023 was: 43,984,12340.8 million Class A; 2,055,0342.2 million Class B; and 171,378,371161.7 million Class C.
LIBERTY LATIN AMERICA LTD.
TABLE OF CONTENTS
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| | | Page
Number |
| PART I - FINANCIAL INFORMATION | |
| Item 1. | FINANCIAL STATEMENTS | |
| Condensed Consolidated Balance Sheets as of September 30, 20222023 and December 31, 20212022 (unaudited) | |
| Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 20222023 and 20212022 (unaudited) | |
| Condensed Consolidated Statements of Comprehensive Earnings (Loss) for the Three and Nine Months Ended September 30, 20222023 and 20212022 (unaudited) | |
| Condensed Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 20222023 and 20212022 (unaudited) | |
| Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 20222023 and 20212022 (unaudited) | |
| Notes to Condensed Consolidated Financial Statements (unaudited) | |
| Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | |
| Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | |
| Item 4. | CONTROLS AND PROCEDURES | |
| PART II - OTHER INFORMATION | |
| Item 1. | LEGAL PROCEEDINGS | |
| Item 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | |
| Item 5. | OTHER INFORMATION | |
| Item 6. | EXHIBITS | |
GLOSSARY OF DEFINED TERMS
Unless the context requires otherwise, references to Liberty Latin America, “we,” “our,” “our company” and “us” in this Quarterly Report on Form 10-Q (as defined below) may refer to Liberty Latin America Ltd. or collectively to Liberty Latin America Ltd. and its subsidiaries. We have used several other terms in this Quarterly Report on Form 10-Q, most of which are defined or explained below.
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20212022 Form 10-K | Annual Report on Form 10-K as filed with the SEC under the Exchange Act for the year ended December 31, 2021 |
2020 Share Repurchase Program | The share repurchase program that was authorized by our Directors on March 16, 2020 that authorized us to repurchase from time to time up to $100 million of our Class A and/or Class C common shares and expired in March 2022 |
2022 Share Repurchase Program | The share repurchase program that was authorized by our Directors on February 22, 2022 that authorizes us to repurchase from time to time up to $200 million of our Class A and/or Class C common shares through December 2024 |
2026 SPV Credit Facility | $1.0 billion principal amount LIBOR + 5.0% term loan facility due October 15, 2026 issued by LCPR Loan Financing (repaid during 2021) |
| 2027 C&W Senior Notes | $1.2 billion aggregate principal amount 6.875% senior notes due September 15, 2027 issued by C&W Senior Finance |
| 2027 C&W Senior Secured Notes | $495 million aggregate principal amount 5.75% senior secured notes due September 7, 2027 issued by Sable International Finance Limited |
| 2027 LPR Senior Secured Notes | $1.2 billion aggregate principal amount 6.75% senior secured notes due October 15, 2027 issued by LCPR Senior Secured Financing |
2027 LPR Senior Secured Notes Add-on | $90 million principal amount issued at 102.5% of par under the existing 2027 LPR Senior Secured Notes indenture |
2028 CWP Term Loan A | $275 million principal amount 4.25% term loan facility due January 18, 2028 issued by CWP |
2028 CWP Term Loan B | $160435 million principal amount 4.25% term loan facility due January 18, 2028 issued by CWP |
| 2028 LPR Term Loan | $620 million principal amount LIBORAdjusted Term SOFR + 3.75% term loan facility due October 15, 2028 issued by LCPR Loan Financing |
2028 VTR Senior Notes | $483 million principal amount 6.375% senior notes due July 15, 2028 issued by VTR Finance N.V. |
2028 VTR Senior Secured Notes | $474 million principal amount 5.125% senior secured notes due January 15, 2028 issued by VTR Comunicaciones SpA |
| 2029 LPR Senior Secured Notes | $820 million principal amount 5.125% senior secured notes due July 15, 2029 issued by LCPR Senior Secured Financing |
2029 VTR Senior Secured Notes2031 LCR Term Loan A | $39250 million principal amount 4.375%10.875% senior secured notesterm loan due AprilJanuary 15, 2029 issued2031 borrowed by VTR Comunicaciones SpALiberty Servicios; from July 15, 2028 and thereafter, the applicable interest rate will increase by 0.125% per annum for each of the Sustainability Performance Targets (as defined in the credit agreement) not achieved by Liberty Costa Rica by no later than December 31, 2027 |
| 2031 LCR Term Loan B | $400 million principal amount 10.875% senior secured term loan due January 15, 2031 borrowed by Liberty Servicios; from July 15, 2028 and thereafter, the applicable interest rate will increase by 0.125% per annum for each of the Sustainability Performance Targets (as defined in the credit agreement) not achieved by Liberty Costa Rica by no later than December 31, 2027 |
| Adjusted OIBDA | Operating income or loss before share-based compensation, depreciation and amortization, provisions and provision releases related to significant litigation and impairment, restructuring and other operating items. Other operating items include (i) gains and losses on the disposition of long-lived assets, (ii) third-party costs directly associated with successful and unsuccessful acquisitions and dispositions, including legal, advisory and due diligence fees, as applicable, and (iii) other acquisition-related items, such as gains and losses on the settlement of contingent consideration. |
| Adjusted OIBDA Margin | Adjusted OIBDA divided by revenue |
| Adjusted Term SOFR | SOFR U.S. dollar denominated loans adjusted as follows: (i) 0.11448% for a one-month interest period, (ii) 0.26161% for a three-month interest period and (iii) 0.42826% for a six-month interest period |
| América Móvil | América Móvil S.A.B. de C.V. |
Annual Report on Form 10-K | Annual Report on Form 10-K as filed with the SEC under the Exchange Act |
| ARPU | Average monthly subscription revenue per average fixed RGU or mobile subscriber, as applicable |
| ASU | Accounting Standards Update |
| AT&T | AT&T Inc. |
| AT&T Acquisition | October 31, 2020 acquisition of all of the outstanding shares of the AT&T Acquired Entities |
| AT&T Acquired Entities | Collectively, Liberty Mobile Inc., Liberty Mobile Puerto Rico Inc. and Liberty Mobile USVI Inc. |
| B2B | Business-to-business |
GLOSSARY OF DEFINED TERMS – (Continued)
| | | | | |
Broadband VI, LLCBBVI Acquisition | December 31, 2021 acquisition of 96% of Broadband VI, LLC |
| C&W | Cable & Wireless Communications Limited and its subsidiaries |
| C&W Bahamas | The Bahamas Telecommunications Company Limited, a 49%-owned subsidiary of C&W that owns all of our operations in the Bahamas |
| C&W Caribbean | Reportable segment that includes all subsidiaries of C&W, excluding those within our C&W Panama and C&WLiberty Networks & LatAm segments |
GLOSSARY OF DEFINED TERMS – (Continued)
| | | | | |
| C&W Credit Facilities | Senior secured credit facilities of certain subsidiaries of C&W comprised of:comprising: (i) C&W Term Loan B-6 Facility; (ii) C&W Term Loan B-5 Facility; (iii) C&W Revolving Credit Facility; and (iv) C&W Regional Facilities |
| C&W Jamaica | Cable & Wireless Jamaica Limited, a 92%-owned subsidiary of C&W |
C&W Networks & LatAm | Reportable segment comprising our managed services and wholesale business, which primarily operates through our subsea and terrestrial fiber optic cable networks; the segment comprises certain subsidiaries of C&W |
C&W Notes | The senior and senior secured notes of C&W comprised of:comprising: (i) 2027 C&W Senior Secured Notes; and (ii) 2027 C&W Senior Notes |
| C&W Panama | Reportable segment for our operations in Panama |
| C&W Regional Facilities | Primarily comprised ofcomprises credit facilities at CWP, Columbus Communications Trinidad Limited and C&WColumbus Communications Jamaica Limited |
| C&W Revolving Credit Facility | $630580 million LIBORAdjusted Term SOFR + 3.25% revolving credit facility $50 million of which is due June 30, 2023 and $580 million due January 30, 2027, of C&W |
| C&W Senior Finance | C&W Senior Finance Limited, a wholly-owned subsidiary of C&W |
| C&W Term Loan B-5 Facility | $1,510 million principal amount LIBORAdjusted Term SOFR + 2.25% term loan B-5 facility due January 31, 2028 of C&W |
| C&W Term Loan B-6 Facility | $590 million principal amount LIBORAdjusted Term SOFR + 3.00% term loan B-6 facility due October 15, 2029 of C&W |
| Capped Calls | Capped call option contracts issued in connection with the issuance of our Convertible Notes |
| Chile JV | Defined as the October 2022 formation of a jointJoint venture between Liberty Latin America and América Móvil that is 50:50 owned by each investee, the formation of which occurred during October 2022 |
| Chile JV Entities | Represents the entities that were contributed to the Chile JV, consisting of Lila Chile Holding BV and its subsidiaries, which include VTR |
| CIP | Construction-in-process |
| Claro Panama | América Móvil's operations in Panama |
| Claro Panama Acquisition | July 1, 2022 acquisition of Claro Panama |
| CLP | Chilean peso |
| Convertible Notes | $403220 million principal amount 2% convertible senior notes due July 15, 2024 issued by Liberty Latin America |
| COP | Colombian peso |
| CPE | Customer premises equipment |
| CRC | Costa Rican colón |
| CWP | Cable & Wireless Panama, S.A., a 49%-owned subsidiary of C&W that owns most of our operations in Panama |
| CWP Credit Facilities | Credit facilities of CWP comprised of: (i) 2028 CWP Term Loan A;and (ii) 2028 CWP Term Loan B; and (iii) CWP Revolving Credit Facility |
| CWP Revolving Credit Facility | $20 million principal amount at Adjusted Term SOFR + 3.75% revolving credit facility due January 18, 2027 issued byat CWP |
| CWSF | Cable & Wireless Superannuation Fund |
| Directors | Members of Liberty Latin America’s board of directors |
EIPEmployee Incentive Plan | Equipment installment-planLiberty Latin America Ltd. 2018 Incentive Plan |
| EPS | Earnings or loss per share |
| ESPP | Employee stock purchase plan |
| Exchange Act | Securities Exchange Act of 1934, as amended |
| Executives | Liberty Latin America's Principal Executive Officer and Principal Financial Officer |
| FASB | Financial Accounting Standards Board |
| FCC | United States Federal Communications Commission |
| FCPA | United States Foreign Corrupt Practices Act of 1977, as amended |
| FX | Foreign currency translation effects |
| JMD | Jamaican dollar |
| LCPR | Liberty Communications of Puerto Rico LLC |
GLOSSARY OF DEFINED TERMS – (Continued)
| | | | | |
FX | Foreign currency translation effects |
Hurricane Fiona | Hurricane impacting our operations in Puerto Rico during September 2022 |
JMD | Jamaican dollar |
LCPR | Liberty Communications of Puerto Rico LLC |
| LCPR Loan Financing | LCPR Loan Financing LLC, a consolidated special purpose financing entity that was created for the primary purpose of facilitating the issuance of certain term loan debt. LCPR is required to consolidate LCPR Loan Financing as a result of certain variable interests in LCPR Loan Financing, for which LCPR is considered the primary beneficiary. |
| LCPR Senior Secured Financing | LCPR Senior Secured Financing Designated Activity Company, a consolidated special purpose financing entity that was created for the primary purpose of facilitating the issuance of certain debt offerings. Liberty Mobile is required to consolidate LCPR Senior Secured Financing as a result of certain variable interests in LCPR Senior Secured Financing, of which Liberty Mobile is considered the primary beneficiary. |
| LCR Credit Facilities | Senior secured credit facilities of Liberty Servicios comprised of: (i) 2031 LCR Term Loan A; (ii) 2031 LCR Term Loan B; and (iii) LCR Revolving Credit Facility |
| LCR Revolving Credit Facility | $60 million Term SOFR + 4.25% amended and restated revolving credit facility due January 15, 2028 of Liberty Servicios |
| LCR Term Loan B-1 Facility | $277 million principal amount LIBOR + 5.50% term loan facility, 50% of which was due February 1, 2024 and 50% due August 1, 2024, of Liberty Servicios (repaid January 2023) |
| LCR Term Loan B-2 Facility | CRC 80 billion principal amount TBP + 6.75% term loan facility, 50% of which was due February 1, 2024 and 50% due August 1, 2024, of Liberty Servicios (repaid January 2023) |
| Liberty Communications PR | Liberty Communications PR Holding LP and its subsidiaries, which include LCPR and Liberty Mobile and its subsidiaries |
| Liberty Costa Rica | Reportable segment comprised ofcomprising Liberty Servicios and Liberty Telecomunicaciones |
Liberty Costa Rica Credit Facilities | Senior secured credit facilities of Liberty Servicios comprised of: (i) Liberty Servicios Term Loan B-1 Facility; (ii) Liberty Servicios Term Loan B-2 Facility; and (iii) Liberty Servicios Revolving Credit Facility |
| Liberty Latin America Shares | Collectively, Class A, Class B and Class C common shares of Liberty Latin America |
| Liberty Mobile | Liberty Mobile Inc. and it subsidiaries |
| Liberty Networks | Reportable segment (formerly referred to as our reportable segment, C&W Networks & LatAm) comprising our managed services and wholesale business, which primarily operates through our subsea and terrestrial fiber optic cable networks; the segment comprises certain subsidiaries of C&W |
| Liberty Puerto Rico | Reportable segment comprising Liberty Communications PR, which has operations in Puerto Rico and the U.S. Virgin IslandsUSVI |
| Liberty Servicios | Liberty Servicios Fijos LY, S.A. (formerly known as Cabletica, S.A.), an indirectly 80%-owned subsidiary in Costa Rica, and its subsidiaries, including Liberty Telecomunicaciones |
Liberty Servicios Revolving Credit Facility | $15 million LIBOR + 4.25% revolving credit facility due August 1, 2024 of Liberty Servicios |
Liberty Servicios Term Loan B-1 Facility | $277 million principal amount LIBOR + 5.50% term loan facility, 50% of which is due February 1, 2024 and 50% due August 1, 2024, of Liberty Servicios |
Liberty Servicios Term Loan B-2 Facility | CRC 80 billion principal amount TBP + 6.75% term loan facility, 50% of which is due February 1, 2024 and 50% due August 1, 2024, of Liberty Servicios |
| Liberty Telecomunicaciones | Liberty Telecomunicaciones de Costa Rica LY, S.A. (formerly known as Telefónica de Costa Rica TC, S.A.), an indirectly 80%-owned subsidiary in Costa Rica and it's subsidiary |
| Liberty Telecomunicaciones Acquisition | August 9, 2021 acquisition of Telefónica’s wireless operations in Costa Rica |
| LIBOR | London Inter-Bank Offered Rate |
| LPR Credit Facilities | Senior secured credit facilities of Liberty Puerto Rico comprised of:comprising: (i) 2028 LPR Term Loan; and (ii) LPR Revolving Credit Facility; and (ii) 2028 LPR Term LoanFacility |
| LPR Revolving Credit Facility | $173 million LIBORAdjusted Term SOFR + 3.5% revolving credit facility due March 15, 2027 of LCPRLPR |
| LPR Senior Secured Notes | Senior secured notes of Liberty Puerto Rico comprised of:comprising: (i) 2029 LPR Senior Secured Notes; and (ii) 2027 LPR Senior Secured Notes; and (iii) 2027 LPR Senior Secured Notes Add-on |
MVNOLTVP | Mobile virtual network operatorLong-term Value Plan that represents a new component of the Employee Incentive Plan implemented during the second quarter of 2023 whereby employees receive a fixed-value award that vests annually over three years and can be settled in either common shares or cash at the discretion of Liberty Latin America's Compensation Committee. |
| OFAC | Office of Foreign Assets Control |
| PSARs | Performance-based stock appreciation rights |
| PSUs | Performance-based restricted stock units |
| Quarterly Report on Form 10-Q | Quarterly Report on Form 10-Q as filed with the SEC under the Exchange Act |
| RGU | Revenue generating unit |
| RSUs | Restricted stock units |
GLOSSARY OF DEFINED TERMS – (Continued)
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| SARs | Stock appreciation rights |
| SEC | U.S. Securities and Exchange Commission |
SERNAC | Servicio Nacional del Consumidor (the Chilean National Consumer Authority) |
Share Repurchase ProgramsProgram | Collectively,The share repurchase program that was authorized by our Directors on February 22, 2022 that authorizes us to repurchase from time to time up to $200 million of our Class A and/or Class C common shares through December 2024. On May 8, 2023, our Directors approved an additional $200 million for the 2020repurchase of our Class A common shares and/or Class C common shares under the Share Repurchase Program and the 2022 Share Repurchase Programthrough December 2025. |
| SOFR | Reference rate based on secured overnight financing rate administered by the Federal Reserve Bank of New York |
TAB | Tasa Activa Bancaria interest rate |
GLOSSARY OF DEFINED TERMS – (Continued)
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| TBP | Tasa Básica Pasiva interest rate |
| Telefónica | Telefónica, S.A., a telecommunications company with operations primarily in Europe and Latin America |
Telefónica Acquisition AgreementTerm SOFR | The agreement dated July 30, 2020 with Telefónica for our acquisition of their operations in Costa Rica |
U.K. | United KingdomForward-looking term rate based on SOFR as published by CME Group Benchmark Administration Limited |
| U.S. | United States |
| U.S. GAAP | Generally accepted accounting principles in the United States |
| USVI | U.S. Virgin Islands |
| VAT | Value-added taxes |
| VTR | VTR Finance N.V. and its subsidiaries, a reportable segment through the date of close of the Chile JV |
VTR Credit FacilitiesNotes | Senior and senior secured credit facilitiesnotes issued by certain entities of VTR comprising: (i) VTR RCF – A; and (ii) VTR RCF – B |
VTR RCF – A | CLP 45 billion TAB + 3.35% revolving credit facility due June 15, 2026that were disposed of VTR |
VTR RCF – B | $200 million LIBOR + 2.75% revolving credit facility due June 15, 2026upon the formation of VTR |
VTR TLB-1 Facility | CLP 141 billion principal amount ICP +3.8% term loan facility of VTR (repaid during 2021) |
VTR TLB-2 Facility | CLP 33 billion principal amount 7% term loan facility of VTR (repaid during 2021)the Chile JV |
| Weather Derivatives | Weather derivative contracts that provide insurance coverage for certain weather-related events |
LIBERTY LATIN AMERICA LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
| | | September 30,
2022 | | December 31,
2021 | | September 30,
2023 | | December 31,
2022 |
| | September 30,
2023 | | December 31,
2022 | |
| | | in millions | | in millions |
| ASSETS | ASSETS | | ASSETS | |
| Current assets: | Current assets: | | Current assets: | |
| Cash and cash equivalents | Cash and cash equivalents | $ | 769.2 | | | $ | 956.7 | | Cash and cash equivalents | $ | 571.6 | | | $ | 781.0 | |
| Trade receivables, net | Trade receivables, net | 590.4 | | | 526.6 | | Trade receivables, net | 648.1 | | | 603.3 | |
| | Prepaid expenses | Prepaid expenses | 87.5 | | | 67.7 | | Prepaid expenses | 91.1 | | | 65.1 | |
| Current derivative assets | | Current derivative assets | 101.9 | | | 91.3 | |
| Current notes receivable, net | Current notes receivable, net | 99.9 | | | 100.2 | | Current notes receivable, net | 84.0 | | | 92.0 | |
| Current contract assets | | Current contract assets | 107.6 | | | 107.3 | |
| Other current assets, net | Other current assets, net | 561.6 | | | 400.7 | | Other current assets, net | 366.3 | | | 338.9 | |
| Total current assets | Total current assets | 2,108.6 | | | 2,051.9 | | Total current assets | 1,970.6 | | | 2,078.9 | |
| | Goodwill | Goodwill | 3,416.6 | | | 3,948.0 | | Goodwill | 3,469.8 | | | 3,421.3 | |
| Property and equipment, net | Property and equipment, net | 4,275.0 | | | 4,168.4 | | Property and equipment, net | 4,254.7 | | | 4,293.6 | |
| | Intangible assets not subject to amortization | Intangible assets not subject to amortization | 1,592.8 | | | 1,592.4 | | Intangible assets not subject to amortization | 1,592.8 | | | 1,592.8 | |
| Intangible assets subject to amortization, net | Intangible assets subject to amortization, net | 717.3 | | | 788.6 | | Intangible assets subject to amortization, net | 577.3 | | | 688.1 | |
| Assets held for sale | 1,399.6 | | | 1,568.7 | | |
| Other assets, net | Other assets, net | 1,553.0 | | | 1,247.7 | | Other assets, net | 1,443.3 | | | 1,500.5 | |
| Total assets | Total assets | $ | 15,062.9 | | | $ | 15,365.7 | | Total assets | $ | 13,308.5 | | | $ | 13,575.2 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
1
LIBERTY LATIN AMERICA LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS – (Continued)
(unaudited)
| | | September 30,
2022 | | December 31,
2021 | | September 30,
2023 | | December 31,
2022 |
| | September 30,
2023 | | December 31,
2022 | |
| | | in millions | | in millions |
| LIABILITIES AND EQUITY | LIABILITIES AND EQUITY | | LIABILITIES AND EQUITY | |
| Current liabilities: | Current liabilities: | | Current liabilities: | |
| Accounts payable | Accounts payable | $ | 412.2 | | | $ | 398.0 | | Accounts payable | $ | 404.5 | | | $ | 525.1 | |
| Current portion of deferred revenue | Current portion of deferred revenue | 143.4 | | | 148.0 | | Current portion of deferred revenue | 150.8 | | | 151.7 | |
| Current portion of debt and finance lease obligations | Current portion of debt and finance lease obligations | 208.0 | | | 106.3 | | Current portion of debt and finance lease obligations | 558.1 | | | 226.9 | |
| Accrued interest | Accrued interest | 95.5 | | | 113.0 | | Accrued interest | 110.8 | | | 118.2 | |
| | Accrued payroll and employee benefits | Accrued payroll and employee benefits | 84.9 | | | 100.5 | | Accrued payroll and employee benefits | 83.3 | | | 82.1 | |
| Current operating lease liabilities | 75.6 | | | 82.0 | | |
| Current derivative liabilities | | Current derivative liabilities | 19.0 | | | 42.3 | |
| Current portion of operating lease liabilities | | Current portion of operating lease liabilities | 83.4 | | | 76.7 | |
| Other accrued and current liabilities | Other accrued and current liabilities | 571.2 | | | 566.7 | | Other accrued and current liabilities | 520.1 | | | 550.8 | |
| Total current liabilities | Total current liabilities | 1,590.8 | | | 1,514.5 | | Total current liabilities | 1,930.0 | | | 1,773.8 | |
| Long-term debt and finance lease obligations | Long-term debt and finance lease obligations | 7,643.5 | | | 7,459.6 | | Long-term debt and finance lease obligations | 7,356.6 | | | 7,653.8 | |
| Deferred tax liabilities | Deferred tax liabilities | 703.8 | | | 692.1 | | Deferred tax liabilities | 674.7 | | | 688.7 | |
| Deferred revenue | Deferred revenue | 113.0 | | | 152.6 | | Deferred revenue | 89.4 | | | 109.3 | |
| Liabilities associated with assets held for sale | 1,668.5 | | | 1,854.1 | | |
| Other long-term liabilities | Other long-term liabilities | 817.4 | | | 795.4 | | Other long-term liabilities | 829.1 | | | 792.9 | |
| Total liabilities | Total liabilities | 12,537.0 | | | 12,468.3 | | Total liabilities | 10,879.8 | | | 11,018.5 | |
| | Commitments and contingencies | Commitments and contingencies | | Commitments and contingencies | |
| | Equity: | Equity: | | Equity: | |
| Liberty Latin America shareholders: | Liberty Latin America shareholders: | | Liberty Latin America shareholders: | |
| Class A, $0.01 par value; 500,000,000 shares authorized; 51,788,297 and 44,489,381 shares issued and outstanding, respectively, at September 30, 2022; 50,127,969 and 45,482,853 shares issued and outstanding, respectively, at December 31, 2021 | 0.5 | | | 0.5 | | |
| Class B, $0.01 par value; 50,000,000 shares authorized; 2,055,034 shares issued and outstanding at September 30, 2022; 1,930,907 shares issued and outstanding at December 31, 2021 | — | | | — | | |
| Class C, $0.01 par value; 500,000,000 shares authorized; 187,329,320 and 171,675,362 shares issued and outstanding, respectively, at September 30, 2022; 183,643,584 and 182,270,626 shares issued and outstanding, respectively, at December 31, 2021 | 1.9 | | | 1.8 | | |
| Undesignated preference shares, $0.01 par value; 50,000,000 shares authorized; nil shares issued and outstanding at each period | — | | | — | | |
| Treasury shares, at cost; 22,952,874 and 6,018,074 shares, respectively | (226.4) | | | (74.0) | | |
| Class A, $0.01 par value; 500.0 million shares authorized; 52.6 million and 40.9 million shares issued and outstanding, respectively, at September 30, 2023; 51.8 million and 42.7 million shares issued and outstanding, respectively, at December 31, 2022 | | Class A, $0.01 par value; 500.0 million shares authorized; 52.6 million and 40.9 million shares issued and outstanding, respectively, at September 30, 2023; 51.8 million and 42.7 million shares issued and outstanding, respectively, at December 31, 2022 | 0.5 | | | 0.5 | |
| Class B, $0.01 par value; 50.0 million shares authorized; 2.2 million shares issued and outstanding at September 30, 2023; 2.1 million shares issued and outstanding at December 31, 2022 | | Class B, $0.01 par value; 50.0 million shares authorized; 2.2 million shares issued and outstanding at September 30, 2023; 2.1 million shares issued and outstanding at December 31, 2022 | — | | | — | |
| Class C, $0.01 par value; 500.0 million shares authorized; 189.6 million and 162.5 million shares issued and outstanding, respectively, at September 30, 2023; 187.4 million and 171.3 million shares issued and outstanding, respectively, at December 31, 2022 | | Class C, $0.01 par value; 500.0 million shares authorized; 189.6 million and 162.5 million shares issued and outstanding, respectively, at September 30, 2023; 187.4 million and 171.3 million shares issued and outstanding, respectively, at December 31, 2022 | 1.9 | | | 1.9 | |
| Undesignated preference shares, $0.01 par value; 50.0 million shares authorized; nil shares issued and outstanding at each period | | Undesignated preference shares, $0.01 par value; 50.0 million shares authorized; nil shares issued and outstanding at each period | — | | | — | |
| Treasury shares, at cost; 38.8 million and 25.3 million shares, respectively | | Treasury shares, at cost; 38.8 million and 25.3 million shares, respectively | (354.7) | | | (243.4) | |
| Additional paid-in capital | Additional paid-in capital | 5,164.1 | | | 5,075.3 | | Additional paid-in capital | 5,252.4 | | | 5,177.1 | |
| Accumulated deficit | Accumulated deficit | (3,004.2) | | | (2,693.9) | | Accumulated deficit | (2,838.9) | | | (2,868.1) | |
| Accumulated other comprehensive loss, net of taxes | Accumulated other comprehensive loss, net of taxes | (59.7) | | | (89.7) | | Accumulated other comprehensive loss, net of taxes | (193.6) | | | (149.2) | |
| Total Liberty Latin America shareholders | Total Liberty Latin America shareholders | 1,876.2 | | | 2,220.0 | | Total Liberty Latin America shareholders | 1,867.6 | | | 1,918.8 | |
| Noncontrolling interests | Noncontrolling interests | 649.7 | | | 677.4 | | Noncontrolling interests | 561.1 | | | 637.9 | |
| Total equity | Total equity | 2,525.9 | | | 2,897.4 | | Total equity | 2,428.7 | | | 2,556.7 | |
| Total liabilities and equity | Total liabilities and equity | $ | 15,062.9 | | | $ | 15,365.7 | | Total liabilities and equity | $ | 13,308.5 | | | $ | 13,575.2 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
LIBERTY LATIN AMERICA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| | | | Three months ended September 30, | | Nine months ended September 30, | | Three months ended September 30, | | Nine months ended September 30, |
| | | 2022 | | 2021 | | 2022 | | 2021 | | 2023 | | 2022 | | 2023 | | 2022 |
| | | in millions, except per share amounts | | in millions, except per share amounts |
| | Revenue | Revenue | $ | 1,222.0 | | | $ | 1,196.3 | | | $ | 3,654.4 | | | $ | 3,534.2 | | Revenue | $ | 1,125.8 | | | $ | 1,220.8 | | | $ | 3,347.5 | | | $ | 3,649.4 | |
| Operating costs and expenses (exclusive of depreciation and amortization, shown separately below): | Operating costs and expenses (exclusive of depreciation and amortization, shown separately below): | | | | | | | | Operating costs and expenses (exclusive of depreciation and amortization, shown separately below): | | | | | | | |
| Programming and other direct costs of services | Programming and other direct costs of services | 299.1 | | | 297.2 | | | 903.3 | | | 864.8 | | Programming and other direct costs of services | 259.1 | | | 299.1 | | | 740.2 | | | 903.3 | |
| Other operating costs and expenses | Other operating costs and expenses | 528.7 | | | 489.0 | | | 1,521.4 | | | 1,406.8 | | Other operating costs and expenses | 462.4 | | | 528.7 | | | 1,415.4 | | | 1,521.4 | |
| Depreciation and amortization | Depreciation and amortization | 234.3 | | | 252.0 | | | 661.7 | | | 736.3 | | Depreciation and amortization | 230.5 | | | 234.3 | | | 705.6 | | | 661.7 | |
| Impairment, restructuring and other operating items, net | Impairment, restructuring and other operating items, net | 7.0 | | | 22.1 | | | 583.4 | | | 41.3 | | Impairment, restructuring and other operating items, net | 11.1 | | | 7.0 | | | 81.6 | | | 583.4 | |
| | 1,069.1 | | | 1,060.3 | | | 3,669.8 | | | 3,049.2 | | | 963.1 | | | 1,069.1 | | | 2,942.8 | | | 3,669.8 | |
| Operating income (loss) | Operating income (loss) | 152.9 | | | 136.0 | | | (15.4) | | | 485.0 | | Operating income (loss) | 162.7 | | | 151.7 | | | 404.7 | | | (20.4) | |
Non-operating income (expense): | Non-operating income (expense): | | | | | | | | Non-operating income (expense): | | | | | | | |
| Interest expense | Interest expense | (149.2) | | | (137.1) | | | (415.8) | | | (397.2) | | Interest expense | (152.3) | | | (149.2) | | | (448.0) | | | (415.8) | |
| Realized and unrealized gains on derivative instruments, net | Realized and unrealized gains on derivative instruments, net | 135.4 | | | 292.0 | | | 385.0 | | | 464.2 | | Realized and unrealized gains on derivative instruments, net | 47.5 | | | 135.4 | | | 52.8 | | | 385.0 | |
| Foreign currency transaction losses, net | (56.5) | | | (136.2) | | | (221.9) | | | (206.0) | | |
| Gains (losses) on debt extinguishments | 41.1 | | | (1.9) | | | 41.1 | | | (25.2) | | |
| Foreign currency transaction gains (losses), net | | Foreign currency transaction gains (losses), net | 3.7 | | | (56.5) | | | 46.2 | | | (221.9) | |
| Gains (losses) on debt extinguishments, net | | Gains (losses) on debt extinguishments, net | 0.3 | | | 41.1 | | | (3.9) | | | 41.1 | |
| Other expense, net | Other expense, net | (1.8) | | | (41.1) | | | (7.0) | | | (42.1) | | Other expense, net | (3.6) | | | (1.8) | | | (4.0) | | | (7.0) | |
| | (31.0) | | | (24.3) | | | (218.6) | | | (206.3) | | | (104.4) | | | (31.0) | | | (356.9) | | | (218.6) | |
Earnings (loss) before income taxes | Earnings (loss) before income taxes | 121.9 | | | 111.7 | | | (234.0) | | | 278.7 | | Earnings (loss) before income taxes | 58.3 | | | 120.7 | | | 47.8 | | | (239.0) | |
| Income tax expense | Income tax expense | (39.1) | | | (39.8) | | | (101.6) | | | (110.7) | | Income tax expense | (10.4) | | | (38.8) | | | (51.9) | | | (100.6) | |
| Net earnings (loss) | Net earnings (loss) | 82.8 | | | 71.9 | | | (335.6) | | | 168.0 | | Net earnings (loss) | 47.9 | | | 81.9 | | | (4.1) | | | (339.6) | |
Net loss attributable to noncontrolling interests | 1.3 | | | 4.2 | | | 25.3 | | | 6.0 | | |
| Net loss (earnings) attributable to noncontrolling interests | | Net loss (earnings) attributable to noncontrolling interests | 11.8 | | | (6.2) | | | 33.3 | | | 30.3 | |
Net earnings (loss) attributable to Liberty Latin America shareholders | Net earnings (loss) attributable to Liberty Latin America shareholders | $ | 84.1 | | | $ | 76.1 | | | $ | (310.3) | | | $ | 174.0 | | Net earnings (loss) attributable to Liberty Latin America shareholders | $ | 59.7 | | | $ | 75.7 | | | $ | 29.2 | | | $ | (309.3) | |
| | Basic net earnings (loss) per share attributable to Liberty Latin America shareholders | $ | 0.38 | | | $ | 0.33 | | | $ | (1.38) | | | $ | 0.75 | | |
| | Dilutive net earnings (loss) per share attributable to Liberty Latin America shareholders | $ | 0.38 | | | $ | 0.32 | | | $ | (1.38) | | | $ | 0.74 | | |
| Basic and diluted net earnings (loss) per share attributable to Liberty Latin America shareholders | | Basic and diluted net earnings (loss) per share attributable to Liberty Latin America shareholders | $ | 0.29 | | | $ | 0.34 | | | $ | 0.14 | | | $ | (1.38) | |
| |
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
LIBERTY LATIN AMERICA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS)
(unaudited)
| | | | Three months ended September 30, | | Nine months ended September 30, | | Three months ended September 30, | | Nine months ended September 30, |
| | | 2022 | | 2021 | | 2022 | | 2021 | | 2023 | | 2022 | | 2023 | | 2022 |
| | | in millions | | in millions |
| | Net earnings (loss) | Net earnings (loss) | $ | 82.8 | | | $ | 71.9 | | | $ | (335.6) | | | $ | 168.0 | | Net earnings (loss) | $ | 47.9 | | | $ | 81.9 | | | $ | (4.1) | | | $ | (339.6) | |
| Other comprehensive earnings, net of taxes: | | | | | | | | |
| Other comprehensive earnings (loss), net of taxes: | | Other comprehensive earnings (loss), net of taxes: | | | | | | | |
| Foreign currency translation adjustments | Foreign currency translation adjustments | 21.7 | | | 52.6 | | | 52.9 | | | 9.5 | | Foreign currency translation adjustments | 8.6 | | | 21.7 | | | 31.0 | | | 52.9 | |
| Reclassification adjustments included in net earnings (loss) | Reclassification adjustments included in net earnings (loss) | (3.2) | | | (0.2) | | | (6.7) | | | 2.4 | | Reclassification adjustments included in net earnings (loss) | — | | | (3.2) | | | — | | | (6.7) | |
| Other | (7.6) | | | 9.9 | | | (16.7) | | | 13.1 | | |
| Other comprehensive earnings | 10.9 | | | 62.3 | | | 29.5 | | | 25.0 | | |
| Pension-related adjustments and other, net | | Pension-related adjustments and other, net | (4.0) | | | (7.6) | | | (74.5) | | | (16.7) | |
| Other comprehensive earnings (loss) | | Other comprehensive earnings (loss) | 4.6 | | | 10.9 | | | (43.5) | | | 29.5 | |
| Comprehensive earnings (loss) | Comprehensive earnings (loss) | 93.7 | | | 134.2 | | | (306.1) | | | 193.0 | | Comprehensive earnings (loss) | 52.5 | | | 92.8 | | | (47.6) | | | (310.1) | |
| Comprehensive loss attributable to noncontrolling interests | 0.8 | | | 4.0 | | | 25.8 | | | 6.4 | | |
| Comprehensive loss (earnings) attributable to noncontrolling interests | | Comprehensive loss (earnings) attributable to noncontrolling interests | 11.6 | | | (6.7) | | | 32.4 | | | 30.8 | |
| Comprehensive earnings (loss) attributable to Liberty Latin America shareholders | Comprehensive earnings (loss) attributable to Liberty Latin America shareholders | $ | 94.5 | | | $ | 138.2 | | | $ | (280.3) | | | $ | 199.4 | | Comprehensive earnings (loss) attributable to Liberty Latin America shareholders | $ | 64.1 | | | $ | 86.1 | | | $ | (15.2) | | | $ | (279.3) | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
LIBERTY LATIN AMERICA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(unaudited)
| | | Liberty Latin America shareholders | | Non-controlling
interests | | Total equity | | Liberty Latin America shareholders | | Non-controlling
interests | | Total equity |
| | Common shares | | Treasury Stock | | Additional paid-in capital | | Accumulated deficit | | Accumulated
other
comprehensive loss, net of taxes | | Total Liberty Latin America shareholders | | Common shares | | Treasury Stock | | Additional paid-in capital | | Accumulated deficit | | Accumulated
other
comprehensive loss, net of taxes | | Total Liberty Latin America shareholders |
| | Class A | | Class B | | Class C | | Class A | | Class B | | Class C |
| | in millions | | in millions |
| | Balance at July 1, 2021 | $ | 0.5 | | | $ | — | | | $ | 1.8 | | | $ | (19.5) | | | $ | 5,032.5 | | | $ | (2,158.2) | | | $ | (162.3) | | | $ | 2,694.8 | | | $ | 725.3 | | | $ | 3,420.1 | | |
| Balance at July 1, 2022 | | Balance at July 1, 2022 | $ | 0.5 | | | $ | — | | | $ | 1.9 | | | $ | (192.8) | | | $ | 5,146.2 | | | $ | (3,082.4) | | | $ | (70.1) | | | $ | 1,803.3 | | | $ | 638.0 | | | $ | 2,441.3 | |
| Net earnings | Net earnings | — | | | — | | | — | | | — | | | — | | | 76.1 | | | — | | | 76.1 | | | (4.2) | | | 71.9 | | Net earnings | — | | | — | | | — | | | — | | | — | | | 75.7 | | | — | | | 75.7 | | | 6.2 | | | 81.9 | |
| Other comprehensive earnings | Other comprehensive earnings | — | | | — | | | — | | | — | | | — | | | — | | | 62.1 | | | 62.1 | | | 0.2 | | | 62.3 | | Other comprehensive earnings | — | | | — | | | — | | | — | | | — | | | — | | | 10.4 | | | 10.4 | | | 0.5 | | | 10.9 | |
| Repurchase of Liberty Latin America common shares | Repurchase of Liberty Latin America common shares | — | | | — | | | — | | | (20.0) | | | — | | | — | | | — | | | (20.0) | | | — | | | (20.0) | | Repurchase of Liberty Latin America common shares | — | | | — | | | — | | | (33.6) | | | — | | | — | | | — | | | (33.6) | | | — | | | (33.6) | |
| Share-based compensation | | Share-based compensation | — | | | — | | | — | | | — | | | 17.9 | | | — | | | — | | | 17.9 | | | — | | | 17.9 | |
| | Contributions from noncontrolling interest owners | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 46.9 | | | 46.9 | | |
| Share-based compensation | — | | | — | | | — | | | — | | | 25.1 | | | — | | | — | | | 25.1 | | | — | | | 25.1 | | |
| Other | — | | | — | | | — | | | — | | | 0.1 | | | — | | | — | | | 0.1 | | | — | | | 0.1 | | |
| Balance at September 30, 2021 | $ | 0.5 | | | $ | — | | | $ | 1.8 | | | $ | (39.5) | | | $ | 5,057.7 | | | $ | (2,082.1) | | | $ | (100.2) | | | $ | 2,838.2 | | | $ | 768.2 | | | $ | 3,606.4 | | |
| Balance at September 30, 2022 | | Balance at September 30, 2022 | $ | 0.5 | | | $ | — | | | $ | 1.9 | | | $ | (226.4) | | | $ | 5,164.1 | | | $ | (3,006.7) | | | $ | (59.7) | | | $ | 1,873.7 | | | $ | 644.7 | | | $ | 2,518.4 | |
| | Balance at January 1, 2021 | $ | 0.5 | | | $ | — | | | $ | 1.8 | | | $ | (9.5) | | | $ | 4,982.0 | | | $ | (2,256.1) | | | $ | (125.6) | | | $ | 2,593.1 | | | $ | 729.0 | | | $ | 3,322.1 | | |
| Net earnings | — | | | — | | | — | | | — | | | — | | | 174.0 | | | — | | | 174.0 | | | (6.0) | | | 168.0 | | |
| Balance at January 1, 2022 | | Balance at January 1, 2022 | $ | 0.5 | | | $ | — | | | $ | 1.8 | | | $ | (74.0) | | | $ | 5,075.3 | | | $ | (2,697.4) | | | $ | (89.7) | | | $ | 2,216.5 | | | $ | 677.4 | | | $ | 2,893.9 | |
| Net loss | | Net loss | — | | | — | | | — | | | — | | | — | | | (309.3) | | | — | | | (309.3) | | | (30.3) | | | (339.6) | |
| Other comprehensive earnings | Other comprehensive earnings | — | | | — | | | — | | | — | | | — | | | — | | | 25.4 | | | 25.4 | | | (0.4) | | | 25.0 | | Other comprehensive earnings | — | | | — | | | — | | | — | | | — | | | — | | | 30.0 | | | 30.0 | | | (0.5) | | | 29.5 | |
| Repurchase of Liberty Latin America common shares | Repurchase of Liberty Latin America common shares | — | | | — | | | — | | | (30.0) | | | — | | | — | | | — | | | (30.0) | | | — | | | (30.0) | | Repurchase of Liberty Latin America common shares | — | | | — | | | — | | | (152.4) | | | — | | | — | | | — | | | (152.4) | | | — | | | (152.4) | |
| Distributions to noncontrolling interest owners | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (1.3) | | | (1.3) | | |
| Contributions from noncontrolling interest owners | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 46.9 | | | 46.9 | | |
| Distribution to noncontrolling interest owner | | Distribution to noncontrolling interest owner | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (1.9) | | | (1.9) | |
| Share-based compensation | Share-based compensation | — | | | — | | | — | | | — | | | 75.7 | | | — | | | — | | | 75.7 | | | — | | | 75.7 | | Share-based compensation | — | | | — | | | 0.1 | | | — | | | 88.8 | | | — | | | — | | | 88.9 | | | — | | | 88.9 | |
| | Balance at September 30, 2021 | $ | 0.5 | | | $ | — | | | $ | 1.8 | | | $ | (39.5) | | | $ | 5,057.7 | | | $ | (2,082.1) | | | $ | (100.2) | | | $ | 2,838.2 | | | $ | 768.2 | | | $ | 3,606.4 | | |
| Balance at September 30, 2022 | | Balance at September 30, 2022 | $ | 0.5 | | | $ | — | | | $ | 1.9 | | | $ | (226.4) | | | $ | 5,164.1 | | | $ | (3,006.7) | | | $ | (59.7) | | | $ | 1,873.7 | | | $ | 644.7 | | | $ | 2,518.4 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
LIBERTY LATIN AMERICA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY – (Continued)
(unaudited)
| | | Liberty Latin America shareholders | | Non-controlling
interests | | Total equity | | Liberty Latin America shareholders | | Non-controlling
interests | | Total equity |
| | Common shares | | Treasury Stock | | Additional paid-in capital | | Accumulated deficit | | Accumulated
other
comprehensive loss, net of taxes | | Total Liberty Latin America shareholders | | Common shares | | Treasury Stock | | Additional paid-in capital | | Accumulated deficit | | Accumulated
other
comprehensive loss, net of taxes | | Total Liberty Latin America shareholders |
| | Class A | | Class B | | Class C | | Class A | | Class B | | Class C |
| | in millions | | in millions |
| | Balance at July 1, 2022 | $ | 0.5 | | | $ | — | | | $ | 1.9 | | | $ | (192.8) | | | $ | 5,146.2 | | | $ | (3,088.3) | | | $ | (70.1) | | | $ | 1,797.4 | | | $ | 650.5 | | | $ | 2,447.9 | | |
| Balance at July 1, 2023 | | Balance at July 1, 2023 | $ | 0.5 | | | $ | — | | | $ | 1.9 | | | $ | (325.2) | | | $ | 5,227.5 | | | $ | (2,898.6) | | | $ | (198.0) | | | $ | 1,808.1 | | | $ | 567.2 | | | $ | 2,375.3 | |
| Net earnings | Net earnings | — | | | — | | | — | | | — | | | — | | | 84.1 | | | — | | | 84.1 | | | (1.3) | | | 82.8 | | Net earnings | — | | | — | | | — | | | — | | | — | | | 59.7 | | | — | | | 59.7 | | | (11.8) | | | 47.9 | |
| Other comprehensive earnings | Other comprehensive earnings | — | | | — | | | — | | | — | | | — | | | — | | | 10.4 | | | 10.4 | | | 0.5 | | | 10.9 | | Other comprehensive earnings | — | | | — | | | — | | | — | | | — | | | — | | | 4.4 | | | 4.4 | | | 0.2 | | | 4.6 | |
| Repurchase of Liberty Latin America common shares | Repurchase of Liberty Latin America common shares | — | | | — | | | — | | | (33.6) | | | — | | | — | | | — | | | (33.6) | | | — | | | (33.6) | | Repurchase of Liberty Latin America common shares | — | | | — | | | — | | | (29.5) | | | — | | | — | | | — | | | (29.5) | | | — | | | (29.5) | |
| Share-based compensation | | Share-based compensation | — | | | — | | | — | | | — | | | 24.9 | | | — | | | — | | | 24.9 | | | — | | | 24.9 | |
| Other | | Other | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 5.5 | | | 5.5 | |
| Balance at September 30, 2023 | | Balance at September 30, 2023 | $ | 0.5 | | | $ | — | | | $ | 1.9 | | | $ | (354.7) | | | $ | 5,252.4 | | | $ | (2,838.9) | | | $ | (193.6) | | | $ | 1,867.6 | | | $ | 561.1 | | | $ | 2,428.7 | |
| | Balance at January 1, 2023 | | Balance at January 1, 2023 | $ | 0.5 | | | $ | — | | | $ | 1.9 | | | $ | (243.4) | | | $ | 5,177.1 | | | $ | (2,868.1) | | | $ | (149.2) | | | $ | 1,918.8 | | | $ | 637.9 | | | $ | 2,556.7 | |
| Net loss | | Net loss | — | | | — | | | — | | | — | | | — | | | 29.2 | | | — | | | 29.2 | | | (33.3) | | | (4.1) | |
| Other comprehensive loss | | Other comprehensive loss | — | | | — | | | — | | | — | | | — | | | — | | | (44.4) | | | (44.4) | | | 0.9 | | | (43.5) | |
| Repurchase of Liberty Latin America common shares | | Repurchase of Liberty Latin America common shares | — | | | — | | | — | | | (111.3) | | | — | | | — | | | — | | | (111.3) | | | — | | | (111.3) | |
| Cash and non-cash distributions to noncontrolling interest owners | | Cash and non-cash distributions to noncontrolling interest owners | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (49.9) | | | (49.9) | |
| Share-based compensation | Share-based compensation | — | | | — | | | — | | | — | | | 17.9 | | | — | | | — | | | 17.9 | | | — | | | 17.9 | | Share-based compensation | — | | | — | | | — | | | — | | | 75.3 | | | — | | | — | | | 75.3 | | | — | | | 75.3 | |
| | Balance at September 30, 2022 | $ | 0.5 | | | $ | — | | | $ | 1.9 | | | $ | (226.4) | | | $ | 5,164.1 | | | $ | (3,004.2) | | | $ | (59.7) | | | $ | 1,876.2 | | | $ | 649.7 | | | $ | 2,525.9 | | |
| | Balance at January 1, 2022 | $ | 0.5 | | | $ | — | | | $ | 1.8 | | | $ | (74.0) | | | $ | 5,075.3 | | | $ | (2,693.9) | | | $ | (89.7) | | | $ | 2,220.0 | | | $ | 677.4 | | | $ | 2,897.4 | | |
| Net loss | — | | | — | | | — | | | — | | | — | | | (310.3) | | | — | | | (310.3) | | | (25.3) | | | (335.6) | | |
| Other comprehensive earnings | — | | | — | | | — | | | — | | | — | | | — | | | 30.0 | | | 30.0 | | | (0.5) | | | 29.5 | | |
| Repurchase of Liberty Latin America common shares | — | | | — | | | — | | | (152.4) | | | — | | | — | | | — | | | (152.4) | | | — | | | (152.4) | | |
| Distributions to noncontrolling interest owners | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (1.9) | | | (1.9) | | |
| Share-based compensation | — | | | — | | | 0.1 | | | — | | | 88.8 | | | — | | | — | | | 88.9 | | | — | | | 88.9 | | |
| Balance at September 30, 2022 | $ | 0.5 | | | $ | — | | | $ | 1.9 | | | $ | (226.4) | | | $ | 5,164.1 | | | $ | (3,004.2) | | | $ | (59.7) | | | $ | 1,876.2 | | | $ | 649.7 | | | $ | 2,525.9 | | |
| Other | | Other | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 5.5 | | | 5.5 | |
| Balance at September 30, 2023 | | Balance at September 30, 2023 | $ | 0.5 | | | $ | — | | | $ | 1.9 | | | $ | (354.7) | | | $ | 5,252.4 | | | $ | (2,838.9) | | | $ | (193.6) | | | $ | 1,867.6 | | | $ | 561.1 | | | $ | 2,428.7 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
LIBERTY LATIN AMERICA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| | | | | | | | | | | |
| | Nine months ended September 30, |
| | 2022 | | 2021 |
| | in millions |
| Cash flows from operating activities: | | | |
| Net earnings (loss) | $ | (335.6) | | | $ | 168.0 | |
| Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | | | |
| Share-based compensation expense | 82.6 | | | 88.9 | |
| Depreciation and amortization | 661.7 | | | 736.3 | |
| Impairments | 558.5 | | | 3.0 | |
| Losses (gains) on dispositions | 1.9 | | | (10.0) | |
| Amortization of deferred financing costs, premiums and discounts, net | 27.8 | | | 24.4 | |
| Realized and unrealized gains on derivative instruments, net | (385.0) | | | (464.2) | |
| Foreign currency transaction losses, net | 221.9 | | | 206.0 | |
| Losses (gains) on debt extinguishments | (41.1) | | | 25.2 | |
| Impairment of an investment | — | | | 41.1 | |
| Deferred income tax expense | 15.0 | | | 51.7 | |
| Changes in operating assets and liabilities, net of the effect of acquisitions and dispositions | (315.9) | | | (152.6) | |
| Net cash provided by operating activities | 491.8 | | | 717.8 | |
| | | |
| Cash flows from investing activities: | | | |
| Capital expenditures | (497.7) | | | (544.7) | |
| Cash paid in connection with acquisitions, net of cash acquired | (234.1) | | | (520.6) | |
| Proceeds from dispositions | 3.6 | | | 20.6 | |
| Other investing activities, net | (16.4) | | | (30.6) | |
| Net cash used by investing activities | $ | (744.6) | | | $ | (1,075.3) | |
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| | Nine months ended September 30, |
| | 2023 | | 2022 |
| | in millions |
| Cash flows from operating activities: | | | |
| Net loss | $ | (4.1) | | | $ | (339.6) | |
| Adjustments to reconcile net loss to net cash provided by operating activities: | | | |
| Share-based compensation expense | 77.8 | | | 82.6 | |
| Depreciation and amortization | 705.6 | | | 661.7 | |
| Impairments and other non-cash charges, net | 49.5 | | | 566.6 | |
| Amortization of debt financing costs, premiums and discounts, net | 23.5 | | | 27.8 | |
| Realized and unrealized gains on derivative instruments, net | (52.8) | | | (385.0) | |
| Foreign currency transaction losses (gains), net | (46.2) | | | 221.9 | |
| Losses (gains) on debt extinguishments, net | 3.9 | | | (41.1) | |
| Deferred income tax expense (benefit) | (12.7) | | | 14.0 | |
| Changes in operating assets and liabilities, net of the effect of acquisitions | (238.0) | | | (317.1) | |
| Net cash provided by operating activities | 506.5 | | | 491.8 | |
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| Cash flows from investing activities: | | | |
| Capital expenditures, net | (422.9) | | | (494.1) | |
| Cash paid in connection with acquisitions, net of cash acquired | — | | | (234.1) | |
| Other investing activities, net | (29.6) | | | (16.4) | |
| Net cash used by investing activities | $ | (452.5) | | | $ | (744.6) | |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
7
LIBERTY LATIN AMERICA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS -– (Continued)
(unaudited)
| | | | Nine months ended September 30, | | Nine months ended September 30, |
| | | 2022 | | 2021 | | 2023 | | 2022 |
| | | in millions | | in millions |
| Cash flows from financing activities: | Cash flows from financing activities: | | Cash flows from financing activities: | |
| Borrowings of debt | Borrowings of debt | $ | 315.3 | | | $ | 1,046.2 | | Borrowings of debt | $ | 756.3 | | | $ | 315.3 | |
| Payments of principal amounts of debt and finance lease obligations | Payments of principal amounts of debt and finance lease obligations | (220.8) | | | (443.8) | | Payments of principal amounts of debt and finance lease obligations | (855.6) | | | (220.8) | |
| Repurchase of Liberty Latin America common shares | Repurchase of Liberty Latin America common shares | (152.9) | | | (30.0) | | Repurchase of Liberty Latin America common shares | (110.8) | | | (152.9) | |
| Net cash received (paid) related to derivative instruments | 97.6 | | | (43.0) | | |
| Net cash received related to derivative instruments | | Net cash received related to derivative instruments | 9.8 | | | 97.6 | |
| Payment of financing costs and debt redemption premiums | Payment of financing costs and debt redemption premiums | (6.5) | | | (37.2) | | Payment of financing costs and debt redemption premiums | (15.4) | | | (6.5) | |
| Distributions to noncontrolling interest owners | Distributions to noncontrolling interest owners | (1.9) | | | (1.3) | | Distributions to noncontrolling interest owners | (41.2) | | | (1.9) | |
| Capital contribution from noncontrolling interest owner | — | | | 46.9 | | |
| Other financing activities, net | Other financing activities, net | (8.9) | | | (7.2) | | Other financing activities, net | 2.0 | | | (8.9) | |
| Net cash provided by financing activities | 21.9 | | | 530.6 | | |
| Net cash provided (used) by financing activities | | Net cash provided (used) by financing activities | (254.9) | | | 21.9 | |
| | Effect of exchange rate changes on cash, cash equivalents and restricted cash | Effect of exchange rate changes on cash, cash equivalents and restricted cash | (3.5) | | | (6.7) | | Effect of exchange rate changes on cash, cash equivalents and restricted cash | (5.3) | | | (3.5) | |
| | Net increase (decrease) in cash, cash equivalents and restricted cash | (234.4) | | | 166.4 | | |
| Net decrease in cash, cash equivalents and restricted cash | | Net decrease in cash, cash equivalents and restricted cash | (206.2) | | | (234.4) | |
| | Cash, cash equivalents and restricted cash: | Cash, cash equivalents and restricted cash: | | Cash, cash equivalents and restricted cash: | |
| Beginning of period | Beginning of period | 1,074.2 | | | 912.5 | | Beginning of period | 788.9 | | | 1,074.2 | |
| End of period | End of period | $ | 839.8 | | | $ | 1,078.9 | | End of period | $ | 582.7 | | | $ | 839.8 | |
| Cash paid for interest | Cash paid for interest | $ | 403.4 | | | $ | 361.0 | | Cash paid for interest | $ | 423.6 | | | $ | 403.4 | |
Net cash paid for taxes | Net cash paid for taxes | $ | 83.6 | | | $ | 21.7 | | Net cash paid for taxes | $ | 60.3 | | | $ | 83.6 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
8
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements
September 30, 20222023
(unaudited)
(1) Basis of Presentation
See the Glossary of defined terms at the beginning of this Quarterly Report on Form 10-Q for terms used throughout the condensed consolidated financial statements.
General
Liberty Latin America Ltd. is a registered company in Bermuda that primarily includes (i) C&W; (ii) Liberty Communications PR; (iii) LBT CT Communications, S.A. (a less than wholly-owned entity) and its subsidiaries, which include Liberty Servicios and as of August 9, 2021 and as further described in note 4, Liberty Telecomunicaciones; and (iv) VTR.prior to the closing of the formation of the Chile JV in October 2022, VTR, as further described below. C&W owns less than 100% of certain of its consolidated subsidiaries, including C&W Bahamas, C&W Jamaica and CWP.
We are an international provider of fixed, mobile and subsea telecommunications services. We provide:
A.residential and B2B services in:
i.over 20 countries across Latin America and the Caribbean through two of our reportable segments, C&W Caribbean and C&W Panama;
ii.Puerto Rico and the USVI, through our reportable segment Liberty Puerto Rico; and
iii.Costa Rica, through our reportable segment Liberty Costa Rica;
iv.Chile, through our reportable segment VTR; andRica.
B.through our reportable segment C&WLiberty Networks, & LatAm, (i) B2Benterprise services in certain other countries in Latin America and the Caribbean and (ii) wholesale communication services over itsour subsea and terrestrial fiber optic cable networks that connect approximately 40 markets in that region.
As further described in note 8, we are accounting for the Chile JV Entities as "held for sale”. Consistent with the applicable guidance, we have not reflected reclassifications to exclude the Chile JV Entities from continuing operations in our condensed consolidated statements of operations or cash flows or related footnote disclosures. Subsequent to September 30,In October 2022, we completed the formation of the Chile JV by contributing the Chile JV Entities into the Chile JV. Subsequent to the formation of the Chile JV, we began accounting for our 50% interest in the Chile JV as an equity method investment. Prior to the formation of the Chile JV, VTR was a wholly owned subsidiary. As such, our condensed consolidated statements of operations and cash flows for the 2022 periods include VTR.
Unless otherwise indicated, ownership percentages are calculated as of September 30, 2022.2023.
The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and with the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these financial statements do not include all of the information required by U.S. GAAP or Securities and Exchange CommissionSEC rules and regulations for complete financial statements. In the opinion of management, these financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results of operations for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year. These condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our 20212022 Form 10-K.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates and assumptions are used in accounting for, among other things, the valuation of acquisition-related assets and liabilities, expected credit losses, programming and copyright expenses, deferred income taxes and related valuation allowances, loss contingencies, fair value measurements, impairment assessments, capitalization of internal costs associated with construction and installation activities, useful lives of long-lived assets and actuarial liabilities associated with certain benefit plans. Actual results could differ from those estimates. Certain prior-period amounts have been reclassified to conform to the current period presentation.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 20222023
(unaudited)
Correction of Immaterial Errors
We identified certain errors in our previously reported consolidated financial statements, primarily related to revenue, programmingdeferred tax liabilities, and other direct costs of services, trade receivables, note receivables, other assets, depreciation and amortization of long-lived assets and asset impairments.non-controlling interests. We have completed a quantitative and qualitative evaluation of the errors and concluded that they are immaterial to the previously issued condensed consolidated financial statements. Notwithstanding this evaluation, we have revised (i) our December 31, 20212022 consolidated balance sheet, (ii) our consolidated statements of operations, comprehensive earnings (loss), and equity for the three and nine months ended September 30, 2021,2022, and (iii) our cash flows for the nine months ended September 30, 20212022 for these errors. The tables below set forth the adjustments to the primary condensed consolidated financial statement line items resulting from these adjustments:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, 2021 | | Nine months ended September 30, 2021 |
| As Previously Reported | | Adjustments | | As Adjusted | | As Previously Reported | | Adjustments | | As Adjusted |
| in millions |
| | | | | | | | | | | |
| Revenue | $ | 1,192.0 | | | $ | 4.3 | | | $ | 1,196.3 | | | $ | 3,519.9 | | | $ | 14.3 | | | $ | 3,534.2 | |
| Operating income | $ | 137.4 | | | $ | (1.4) | | | $ | 136.0 | | | $ | 475.8 | | | $ | 9.2 | | | $ | 485.0 | |
| Earnings before income taxes | $ | 113.1 | | | $ | (1.4) | | | $ | 111.7 | | | $ | 269.5 | | | $ | 9.2 | | | $ | 278.7 | |
| Net earnings attributable to Liberty Latin America shareholders | $ | 78.2 | | | $ | (2.1) | | | $ | 76.1 | | | $ | 170.4 | | | $ | 3.6 | | | $ | 174.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, 2022 | | Nine months ended September 30, 2022 |
| As Previously Reported | | Adjustments | | As Adjusted | | As Previously Reported | | Adjustments | | As Adjusted |
| in millions |
| | | | | | | | | | | |
| Revenue | $ | 1,222.0 | | | $ | (1.2) | | | $ | 1,220.8 | | | $ | 3,654.4 | | | $ | (5.0) | | | $ | 3,649.4 | |
| Operating income (loss) | $ | 152.9 | | | $ | (1.2) | | | $ | 151.7 | | | $ | (15.4) | | | $ | (5.0) | | | $ | (20.4) | |
| Earnings (loss) before income taxes | $ | 121.9 | | | $ | (1.2) | | | $ | 120.7 | | | $ | (234.0) | | | $ | (5.0) | | | $ | (239.0) | |
| Net earnings (loss) attributable to Liberty Latin America shareholders | $ | 84.1 | | | $ | (8.4) | | | $ | 75.7 | | | $ | (310.3) | | | $ | 1.0 | | | $ | (309.3) | |
| | | December 31, 2021 | | December 31, 2022 |
| | As Previously Reported | | Adjustments | | As Adjusted | | As Previously Reported | | Adjustments | | As Adjusted |
| | in millions | | in millions |
| | Current assets | $ | 2,066.2 | | | $ | (14.3) | | | $ | 2,051.9 | | |
| Total assets | $ | 15,386.0 | | | $ | (20.3) | | | $ | 15,365.7 | | |
| Total liabilities | Total liabilities | $ | 12,472.6 | | | $ | (4.3) | | | $ | 12,468.3 | | Total liabilities | $ | 11,009.1 | | | $ | 9.4 | | | $ | 11,018.5 | |
| | Total equity | Total equity | $ | 2,913.4 | | | $ | (16.0) | | | $ | 2,897.4 | | Total equity | $ | 2,566.1 | | | $ | (9.4) | | | $ | 2,556.7 | |
(2) Accounting Changes and Recent Accounting Pronouncements
Accounting ChangesChange
ASU 2020-062022-04
In August 2020,September 2022, the FASB issued ASU No. 2020-06,2022-04, Debt—Debt with Conversion and Other Options and Derivatives and Hedging—Contracts in Entity’s Own Equity: Accounting for Convertible Instruments and Contracts in an Entity’s Own EquityLiabilities—Supplier Finance Programs (ASU 2020-062022-04)), which requires that a buyer in a supplier finance program disclose certain information about the program to allow financial statement users to understand the nature of the program, activity during the period and changes to the program from period to period. In each annual reporting period, the disclosure requirements include (i) reduces the numberkey terms of accounting modelsthe program, including payment terms, (ii) the amount and location in the balance sheet of obligations outstanding with the finance provider or intermediary, and (iii) a rollforward of the obligations during the annual period. In each interim reporting period, the disclosure requirements include the amount of obligations outstanding that the buyer has confirmed as valid to the finance provider or intermediary as of the end of the interim period. The rollforward disclosure is effective for convertible instruments and allows more contractsfiscal years beginning after December 15, 2023, while the remaining annual disclosures are required to qualify for equity classification and (ii) makes targeted improvements to convertible instruments and earnings-per-sharebe disclosed on an interim basis in the year of adoption. With the exception of the rollforward disclosure requirements. Werequirements, we adopted ASU 2020-062022-04 effective January 1, 2022 and it did not have a material impact on2023. Disclosures surrounding our condensed consolidated financial statements.supplier finance programs are included in note 8.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2022
(unaudited)
Recent Accounting Pronouncements
ASU 2022-04
In September 2022, the FASB issued2020-04, ASU No. 2022-04, Liabilities—Supplier Finance Programs (ASU 2022-04), which requires that a buyer in a supplier finance program to disclose certain information about the program to allow financial statement users to understand the nature of the program, activity during the period and changes to the program from period to period. The disclosure requirements include (i) the key terms of the program, including payments terms, (ii) the amount and location in the balance sheet of obligations outstanding with the finance provider or intermediary, and (iii) a rollforward of the obligations during the annual period. With the exception of the rollforward disclosure requirements, ASU 2022-04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The rollforward information is effective for fiscal years beginning after December 15, 2023. We are currently evaluating the impact ASU 2022-04 will have to the disclosures of our consolidated financial statements.
ASU 2020-042021-01 and ASU 2021-012022-06
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04), which provides optional guidance for a limited time to ease the
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2023
(unaudited)
potential accounting burden associated with transitioning away from reference rates, such as the LIBOR. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848) (ASU 2021-01), which clarifies certain optional expedients and exceptions in ASCTopic 848. The expedients and exceptions provided by ASU 2020-04 and ASU 2021-01 are for the application of U.S. GAAP to contracts, hedging relationships and other transactions affected by the rate reform.reform, and was initially not intended to be available after December 31, 2022, other than for certain hedging relationships entered into before December 31, 2022. In March 2021, LIBOR’s regulator announced that certain tenorsDecember 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 (ASU 2022-06), which defers the expiration date of Topic 848 from December 31, 2022, to December 31, 2024, and permits companies to apply the guidance in Topic 848 through the expected cessation date of USD LIBOR will continue to be published through June 30, 2023. We do not currently expect that theLIBOR. The phase out of LIBOR will havehas not had a material impact on our condensed consolidated financial statements.
(3) Current Expected Credit Losses
The changes in our allowance for expected credit losses associated with trade receivables are set forth below:
| | | | | | | | | | | |
| Nine months ended September 30, |
| 2022 | | 2021 |
| in millions |
| | | |
| Balance at beginning of period | $ | 80.3 | | | $ | 100.0 | |
| Provision for expected losses, net | 52.2 | | | 38.6 | |
| Write-offs | (44.4) | | | (48.7) | |
| Foreign currency translation adjustments and other | (1.3) | | | (9.4) | |
| Balance at end of period | $ | 86.8 | | | $ | 80.5 | |
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2022
(unaudited)
Theaggregate changes in our allowance for expected credit losses associated with our trade receivables, and current and long-term notes receivables are set forth below:
| | | Nine months ended September 30, | | Nine months ended September 30, |
| | 2022 | | 2021 | | 2023 | | 2022 |
| | in millions | | in millions |
| | Balance at beginning of period | Balance at beginning of period | $ | 32.3 | | | $ | 16.2 | | Balance at beginning of period | $ | 101.1 | | | $ | 112.6 | |
| Provision for expected losses, net | Provision for expected losses, net | 0.1 | | | 1.1 | | Provision for expected losses, net | 54.4 | | | 52.3 | |
| Write-offs | | Write-offs | (63.5) | | | (44.4) | |
| Foreign currency translation adjustments and other | Foreign currency translation adjustments and other | (21.8) | | | 10.1 | | Foreign currency translation adjustments and other | 2.5 | | | (23.1) | |
| Balance at end of period | Balance at end of period | $ | 10.6 | | | $ | 27.4 | | Balance at end of period | $ | 94.5 | | | $ | 97.4 | |
(4) Acquisitions
2022 Acquisition
Claro Panama Acquisition. On September 14, 2021, we entered into a definitive agreement to acquire América Móvil’s operations in Panama in an all-cash transaction based upon an enterprise value of $200 million on a cash- and debt-free basis. On July 1, 2022, we completed the acquisition of Claro Panama, which was financed through a combination of debt and existing cash.
The following table sets forth a reconciliation of the stated purchase price to the net cash paid (in millions):
| | | | | |
Stated purchase price | $ | 200.0 | |
Preliminary working capital adjustments | 12.6 | |
Total purchase price | 212.6 | |
Opening balance sheet cash | (1.2) | |
Net cash paid for the Claro Panama Acquisition | $ | 211.4 | |
We have accounted for the Claro Panama Acquisition as a business combination using the acquisition method of accounting, whereby the total purchase price was allocated to the acquired identifiable net assets of Claro Panama based on assessments of their respective fair values, and the excess of the purchase price over the fair values of these identifiable net assets was allocated to goodwill. The preliminary opening balance sheet is subject to adjustment based on our final assessment of the fair values of the acquired identifiable net assets and liabilities. The items with the highest likelihood to change upon finalization of the valuation process include property and equipment, goodwill, intangible assets, leases and income taxes.values. A summary of the purchase price and the preliminary opening balance sheet of Claro Panama at the July 1, 2022 acquisition date is presented in the following table (in millions):
| | | | | |
Current assets | $ | 42.8 | |
Goodwill (a) | 16.5 | |
Property and equipment | 139.6 | |
Intangible assets subject to amortization (b) | 49.8 | |
Other assets (c) | 130.6 | |
Current liabilities | (48.1) | |
Long-term liabilities (d) | (118.6) | |
Total purchase price | $ | 212.6 | |
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2022
(unaudited)
(a)The goodwill recognized in connection with the Claro Panama Acquisition is primarily attributable to synergies that are expected to be achieved through the integration of Claro Panama with Liberty Latin America’s existing business in Panama. Due to the nature of the Claro Panama Acquisition, no tax deductions related to goodwill are expected.
(b)At July 1, 2022, the preliminary assessment of the weighted average useful life of the spectrum intangible assets was approximately6 years.
(c)Primarily consists of operating lease right-of-use assets.
(d)Primarily consists of the non-current portion of operating lease obligations.
Our condensed consolidated statements of operations for each of the three and nine months ended September 30, 2022 include revenue and net loss of $35 million and $7 million, respectively, attributable to Claro Panama.
2021 Acquisition
Liberty Telecomunicaciones Acquisition. On July 30, 2020, we entered into the Telefónica Acquisition Agreement to acquire Telefónica S.A.’s operations in Costa Rica in an all-cash transaction based upon an enterprise value of $500 million on a cash- and debt-free basis. On August 9, 2021, we completed the acquisition of all of the outstanding shares of Liberty Telecomunicaciones. The Liberty Telecomunicaciones Acquisition was financed through a combination of debt, existing cash and a $47 million equity contribution from the noncontrolling interest owner of our Liberty Servicios entity.
During the first quarter of 2022, we finalized the purchase price for the Liberty Telecomunicaciones Acquisition, which resulted in a reduction in total consideration paid of $12 million. The proceeds received from the final purchase price adjustments have been reflected as an investing activity in our condensed consolidated statement of cash flows.
We have accounted for the Liberty Telecomunicaciones Acquisition as a business combination using the acquisition method of accounting, whereby the total purchase price was allocated to the acquired identifiable net assets of Liberty Telecomunicaciones based on assessments of their respective fair values, and the excess of the purchase price over the fair values of these identifiable net assets was allocated to goodwill. A summary of the purchase price and the opening balance sheet of Liberty Telecomunicaciones at the August 9, 2021 acquisition date is presented in the following table. The opening balance sheet presented below reflects our final purchase price allocation (in millions):
| | | | | |
Current assets (a) | $ | 74.7 | |
Goodwill (b) | 256.724.4 | |
| Property and equipment | 150.6136.3 | |
Intangible assets subject to amortization (c)(a) | 139.947.9 | |
Other assets (d)(b) | 145.7198.2 | |
Current liabilities (e) | (74.2)(64.8) | |
Long-term liabilities (f)(c) | (168.3)(132.7) | |
| Total purchase price | $ | 525.1209.3 | |
(a)Primarily consists of trade receivables, notes receivables related to EIP receivables and cash.
(b)The goodwill recognized in connection with the Liberty Telecomunicaciones Acquisition is primarily attributable to (i) the ability to take advantage of Liberty Telecomunicaciones’s existing mobile network to gain immediate access to potential customers, and (ii) synergies that are expected to be achieved through the integration of Liberty Telecomunicaciones with Liberty Latin America’s existing business in Costa Rica, Liberty Servicios. Due to the nature of the Liberty Telecomunicaciones Acquisition, no tax deductions related to goodwill are expected.
(c)At August 9, 2021, the weighted average useful lives of the acquired customer relationship intangible assets and spectrum intangible assets were approximately 7 years and 25 years, respectively.
(d)Primarily consists of operating lease right-of-use assets and the long-term portion of note receivables related to EIP receivables.
(e)Primarily consists of accounts payable and the current portion of operating lease obligations.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 20222023
(unaudited)
(f)(a)At July 1, 2022, the weighted average useful life of the acquired spectrum intangible assets was approximately6 years.
(b)Primarily consists of operating lease right-of-use assets.
(c)Primarily consists of the non-current portion of operating lease obligations and deferred tax liabilities.obligations.
2021 Acquisition
Broadband VI, LLCBBVI Acquisition. Effective December 31, 2021, we acquired 96% of the outstanding shares of Broadband VI, LLC for $33 million, the payment of which occurred in January 2022, subject to certain post-closing adjustments.2022. Broadband VI, LLC provides fixed services to residential and business customers in the U.S. Virgin Islands and is included in our Liberty Puerto Rico reportable segment.
Supplemental Pro Forma Information
The pro forma financial information set forth in the tablestable below is based on available information and assumptions that we believe are reasonable. The pro forma financial information is for illustrative and informational purposes only and is not intended to represent or be indicative of what our results of operations would have been had these acquisitionsthis acquisition occurred on the date indicated nor should it be considered representative of our future financial condition or results of operations. The pro forma information set forth in the tablestable below include,includes, as applicable, tax-effected pro forma adjustments primarily related to:
i.the impact of estimated costs associated with the transition services agreement entered into in connection with the Liberty Telecomunicaciones Acquisition;
ii.the alignment of accounting policies;
iii.interest expense related to additional borrowings in conjunction with the Claro Panama Acquisition and the Liberty Telecomunicaciones Acquisition;
iv.ii.depreciation expense related to acquired tangible assets;
v.iii.amortization expense related to acquired intangible assets; and
vi.iv.the elimination of direct acquisition costs.
The following unaudited pro forma condensed consolidated operating results for the nine months ended September 30, 2022 give effect to the Claro Panama Acquisition, as if it had been completed as of January 1, 2021:2021 (in millions):
| | | | | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | Nine months ended September 30, 2022 | | | |
| | | in millions | | | |
| | | | | | |
| Revenue | | | $ | 3,718.93,713.9 | | | | |
| Net loss attributable to Liberty Latin America shareholders | | | $ | (323.0)(327.4) | | | | |
The following unaudited pro forma condensed consolidated operating results give effect to (i) the Claro Panama Acquisition, as if it had been completed as of January 1, 2021, and (ii) the Liberty Telecomunicaciones Acquisition, as if it had been completed as of January 1, 2020:
| | | | | | | | | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| Three months ended September 30, 2021 | | Nine months ended September 30, 2021 | | |
| in millions | | |
| | | | | |
| Revenue | $ | 1,260.7 | | | $ | 3,806.4 | | | |
| Net earnings attributable to Liberty Latin America shareholders | $ | 70.5 | | | $ | 152.7 | | | |
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2022
(unaudited)
(5) Derivative Instruments
In general, we seek to enter into derivative instruments to mitigate risk associated withprotect against (i) increases in the interest rates on our variable-rate debt and (ii) foreign currency movements, particularly with respect to borrowings that are denominated in a currency other than the functional currency of the borrowing entity. In this regard, through our subsidiaries, we have entered into various derivative instruments to manage interest rate exposure and foreign currency exposure with respect to the U.S. dollar, the CLP, the COP and the CRC.movements. With the exception of certain foreign currency forward contracts, we do not apply hedge accounting to our derivative instruments. Accordingly, changes in the fair values of most of our derivative instruments are recorded in realized and unrealized gains or losses on derivative instruments in our condensed consolidated statements of operations.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2023
(unaudited)
The following table provides details of the fair values of our derivative instrument assets and liabilities:
| | | | September 30, 2022 | | December 31, 2021 | | September 30, 2023 | | December 31, 2022 |
| | | Current (a) | | Long-term (a) | | Total | | Current (a) | | Long-term (a) | | Total | | Current | | Long-term (a) | | Total | | Current | | Long-term (a) | | Total |
| | | in millions | | in millions |
| Assets (b): | Assets (b): | | Assets (b): | |
| Cross-currency and interest rate derivative contracts (c) | $ | 67.6 | | | $ | 261.1 | | | $ | 328.7 | | | $ | 15.1 | | | $ | 25.3 | | | $ | 40.4 | | |
| Foreign currency forward contracts | — | | | — | | | — | | | 0.1 | | | — | | | 0.1 | | |
| Interest rate derivative contracts | | Interest rate derivative contracts | $ | 101.6 | | | $ | 245.8 | | | $ | 347.4 | | | $ | 91.3 | | | $ | 224.2 | | | $ | 315.5 | |
| Other | | Other | 0.3 | | | — | | | 0.3 | | | — | | | — | | | — | |
| Total | Total | $ | 67.6 | | | $ | 261.1 | | | $ | 328.7 | | | $ | 15.2 | | | $ | 25.3 | | | $ | 40.5 | | Total | $ | 101.9 | | | $ | 245.8 | | | $ | 347.7 | | | $ | 91.3 | | | $ | 224.2 | | | $ | 315.5 | |
| | Liabilities (b): | Liabilities (b): | | Liabilities (b): | |
| Cross-currency and interest rate derivative contracts (c) | $ | 24.2 | | | $ | 0.2 | | | $ | 24.4 | | | $ | 33.3 | | | $ | 62.1 | | | $ | 95.4 | | |
| Interest rate derivative contracts | | Interest rate derivative contracts | $ | 2.5 | | | $ | 36.3 | | | $ | 38.8 | | | $ | 30.4 | | | $ | — | | | $ | 30.4 | |
| Foreign currency forward contracts | Foreign currency forward contracts | 15.5 | | | — | | | 15.5 | | | 5.8 | | | — | | | 5.8 | | Foreign currency forward contracts | 16.5 | | | 2.6 | | | 19.1 | | | 11.9 | | | — | | | 11.9 | |
| Total | Total | $ | 39.7 | | | $ | 0.2 | | | $ | 39.9 | | | $ | 39.1 | | | $ | 62.1 | | | $ | 101.2 | | Total | $ | 19.0 | | | $ | 38.9 | | | $ | 57.9 | | | $ | 42.3 | | | $ | — | | | $ | 42.3 | |
(a)Our current derivative assets, long-term derivative assets current derivative liabilities and long-term derivative liabilities are included in other current assets, net other assets, net, other accrued and current liabilities and other long-term liabilities, respectively, in our condensed consolidated balance sheets.
(b)Effective with the agreement to form the Chile JV, the derivative assets and liabilities associated with the Chile JV Entities are included in assets held for sale and liabilities associated with assets held for sale, respectively, on our condensed consolidated balance sheets. For information regarding the formation of the Chile JV and the held-for-sale presentation of the Chile JV Entities, see note 8.
(c)We consider credit risk relating to our nonperformance and the nonperformance of our counterparties’ nonperformancecounterparties in the fair value assessment of our derivative instruments. In all cases, the adjustments take into account offsetting liability or asset positions within each of our primary borrowing groups (see note 9)8) and are recorded in realized and unrealized gains or losses on derivative instruments, net, in our condensed consolidated statements of operations. For further information regarding our fair value measurements, see note 6.
The derivative assets set forth in the table above exclude our Weather Derivatives as they are not accounted for at fair value. The premium payments associated with our Weather Derivatives are included in other current assets, net, in our condensed consolidated balance sheets.
The details of our realized and unrealized gains on derivative instruments, net, are as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, | | Nine months ended September 30, |
| | 2023 | | 2022 | | 2023 | | 2022 |
| | in millions |
| | | | | | | |
| Interest rate and cross-currency derivative contracts | $ | 60.1 | | | $ | 159.3 | | | $ | 99.8 | | | $ | 417.8 | |
| Foreign currency forward contracts and other | (5.0) | | | (16.0) | | | (23.9) | | | (9.3) | |
| Weather Derivatives | (7.6) | | | (7.9) | | | (23.1) | | | (23.5) | |
| Total | $ | 47.5 | | | $ | 135.4 | | | $ | 52.8 | | | $ | 385.0 | |
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 20222023
(unaudited)
The details of our realized and unrealized gains on derivative instruments, net, are as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, | | Nine months ended September 30, |
| | 2022 | | 2021 | | 2022 | | 2021 |
| | in millions |
| | | | | | | |
| Cross-currency and interest rate derivative contracts (a) | $ | 159.3 | | | $ | 285.1 | | | $ | 417.8 | | | $ | 464.2 | |
| Foreign currency forward contracts | (16.0) | | | 15.4 | | | (9.3) | | | 20.1 | |
| Weather Derivatives | (7.9) | | | (8.5) | | | (23.5) | | | (20.1) | |
| Total | $ | 135.4 | | | $ | 292.0 | | | $ | 385.0 | | | $ | 464.2 | |
(a) Changes in the credit risk valuation adjustments associated with our cross-currency and interest rate derivative contracts resulted in net losses of $5 million and $15 million during the three months ended September 30, 2022 and 2021, respectively, and $14 million and $44 million during the nine months ended September 30, 2022 and 2021, respectively. Included in these amounts are net losses of $3 million and $12 million during the three months ended September 30, 2022 and 2021, respectively, and $3 million and $29 million during the nine months ended September 30, 2022 and 2021, respectively, related to the Chile JV Entities.
The following table sets forth the classification of the net cash inflows (outflows) of our derivative instruments:
| | | | Nine months ended September 30, | | Nine months ended September 30, |
| | | 2022 | | 2021 | | 2023 | | 2022 |
| | | in millions | | in millions |
| | Operating activities | Operating activities | $ | (30.9) | | | $ | (109.0) | | Operating activities | $ | 17.4 | | | $ | (30.9) | |
| Investing activities | Investing activities | 5.3 | | | (2.0) | | Investing activities | — | | | 5.3 | |
Financing activities (a) | Financing activities (a) | 97.6 | | | (43.0) | | Financing activities (a) | 9.8 | | | 97.6 | |
| Total | Total | $ | 72.0 | | | $ | (154.0) | | Total | $ | 27.2 | | | $ | 72.0 | |
(a) The 2022 amount is primarily related to the settlement of certain cross currency swaps at VTR. The 2021 amount is primarily related to (i) $11 million associated with the settlement of interest rate swaps at VTR in connection with the refinancing of the VTR Credit Facilities and (ii) $32 million associated with the settlement of interest rate swaps at Liberty Puerto Rico in connection with the refinancing of the LPR Credit Facilities. For additional information regarding our debt refinancing activity, see note 9.
Counterparty Credit Risk
We are exposed to the risk that the counterparties to the derivative instruments of our borrowing groups will default on their obligations to us. We manage these credit risks through the evaluation and monitoring of the creditworthiness of, and concentration of risk with, the respective counterparties. In this regard, credit risk associated with our derivative instruments is spread across a relatively broad counterparty base of banks and financial institutions. Collateral has not been posted by either party under the derivative instruments of our borrowing groups. At September 30, 2022,2023, our exposure to counterparty credit risk associated with our derivative instruments, as set forth in the assets and liabilities table above, included derivative assets with an aggregate fair value of $302$309 million.
Each of our borrowing groups has entered into derivative instruments under agreements with each counterparty that contain master netting arrangements that are applicable in the event of early termination by either party to such derivative instrument. The master netting arrangements under each of these master agreements are limited to the derivative instruments governed by the relevant master agreement within each individual borrowing group and are independent of similar arrangements of our other subsidiary borrowing groups.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2022
(unaudited)
Details of our Derivative Instruments
Cross-currency Derivative Contracts
As noted above, we are exposed to foreign currency exchange rate risk in situations where our debt is denominated in a currency other than the functional currency of the operations whose cash flows support our ability to service, repay or refinance such debt. Although we generally seek to match the denomination of our borrowings with the functional currency of the operations that are supporting the respective borrowings, market conditions or other factors may cause us to enter into borrowing arrangements that are not denominated in the functional currency of the underlying operations (unmatched debt). Our policy is generally to provide for an economic hedge against foreign currency exchange rate movements, whenever possible and when cost effective to do so, by using derivative instruments to synthetically convert unmatched debt into the applicable underlying currency. At September 30, 2022, not including derivative instruments held by the Chile JV Entities, we did not have any cross-currency swap contracts outstanding.
Interest Rate Derivative Contracts
In connection with the phase-out of LIBOR, we amended or entered into certain derivative contracts to reference Adjusted Term SOFR for interest periods commencing after June 30, 2023.
Interest Rate Swaps
As noted above, weWe enter into interest rate swaps to mitigate risk associated withprotect against increases in the interest rates on our variable-rate debt. Pursuant to these derivative instruments, we typically pay fixed interest rates and receive variable interest rates on specified notional amounts. The following table sets forth the total U.S. dollar equivalents of the notional amounts and the related weighted average remaining contractual lives of our interest rate swap contracts at September 30, 2022:2023:
| | Borrowing group | Borrowing group | | Notional amount due from counterparty | | Weighted average remaining life | Borrowing group | | Notional amount due from counterparty | | Weighted average remaining life |
| | | | in millions | | in years | | | in millions | | in years |
| | C&W (a) | C&W (a) | $ | 2,690.0 | | | 4.6 | C&W (a) | $ | 2,100.0 | | | 4.8 |
| | Liberty Puerto Rico | Liberty Puerto Rico | $ | 500.0 | | | 6.0 | Liberty Puerto Rico | $ | 500.0 | | | 5.0 |
| | Liberty Costa Rica (b) | $ | 276.7 | | | 1.3 | |
(a)Includes forward-starting derivative instruments and,embedded floors of 0% on certain interest rate swaps, an embedded floor of 0%.contracts.
(b)Includes an embedded floor of 0.75%.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2023
(unaudited)
Basis Swaps
Basis swaps involve the exchange of attributes used to calculate our floating interest rates, including (i) the benchmark rate, (ii) the underlying currency and/or (iii) the borrowing period. We typically enter into these swaps to optimize our interest rate profile based on our current evaluations of yield curves, our risk management policies and other factors. The following table sets forth the total U.S. dollar equivalents of the notional amounts and the related weighted average remaining contractual lives of our basis swap contracts at September 30, 2022:2023:
| | | | | | | | | | | | | | |
| Borrowing group | | Notional amount due from counterparty | | Weighted average remaining life |
| | | in millions | | in years |
| | | | |
| C&W | $ | 2,100.0 | | | 0.8 |
| | | | |
| Liberty Puerto Rico | $ | 620.0 | | | 0.8 |
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2022
(unaudited)
| | | | | | | | | | | | | | |
| Borrowing group | | Notional amount due from counterparty | | Weighted average remaining life |
| | | in millions | | in years |
| | | | |
| C&W | $ | 2,100.0 | | | 1.3 |
| | | | |
| Liberty Puerto Rico | $ | 620.0 | | | 1.3 |
Interest Rate Floors
Interest rate floors provide protection against interest rates falling below a pre-set level. At September 30, 2022,2023, our Liberty Puerto Rico borrowing group had an interest rate floor with a total notional amount of $620 million and a remaining contractual life of 6.05.0 years.
Interest Rate Caps
Interest rate caps provide protection against interest rates rising above a pre-set level. At September 30, 2022,2023, our Liberty Puerto Rico borrowing group had interest rate caps with total notional amounts of $120 million and a remaining weighted average contractual life of 6.05.0 years.
Foreign Currency Forwards Contracts
We enter into foreign currency forward contracts with respect to non-functional currency exposure. The following table sets forth theAt September 30, 2023, our Liberty Costa Rica borrowing group had foreign currency forward contracts with total U.S. dollar equivalents of the notional amounts due from and the relatedto counterparties of $204 million and CRC 120 billion, respectively, with a weighted average remaining contractual liveslife of our foreign currency forwards contracts at September 30, 2022:
| | | | | | | | | | | | | | | | | | | | | | | |
| Notional amount due from counterparty | | Notional amount due
to counterparty | | Weighted average remaining life |
| | | in millions | | in years |
| | | | | | | |
| LLA UK Holding Limited (a) | CLP | 73,000.0 | | $ | 88.3 | | 0.0 |
| | | | | | | |
| Liberty Costa Rica borrowing group | $ | 37.5 | | | CRC | 25,585.2 | | 0.1 |
(a)Represents a foreign currency forward contract entered into in connection with the Chile JV transaction that was closed subsequent to September 30, 2022, as discussed further in note 8.0.6 years.
(6) Fair Value Measurements
General
We use the fair value method to account for most of our derivative instruments. The reported fair values of our derivative instruments likely will not represent the value that will be paid or received upon the ultimate settlement or disposition of these assets and liabilities, as we expect that the values realized generally will be based on market conditions at the time of settlement, which generally occurs at the maturity of the derivative instrument or at the time of the repayment or refinancing of the underlying debt instrument.settlement.
U.S. GAAP provides for a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2023
(unaudited)
Recurring Fair Value Measurements
Derivatives
In order to manage our interest rate and foreign currency exchange risk, we have entered into various derivative instruments, as further described in note 5. The recurring fair value measurements of these derivative instruments are determined using discounted cash flow models. Most of the inputs to these discounted cash flow models consist of, or are derived from, observable Level 2 data for substantially the full term of these derivative instruments. This observable data mostly includes interest rate futures and swap rates, which are retrieved or derived from available market data. Although we may extrapolate or interpolate this data, we do not otherwise alter this data in performing our valuations. We incorporate a
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2022
(unaudited)
credit risk valuation adjustment in our fair value measurements to estimate the impact of both our own nonperformance risk and the nonperformance risk of our counterparties. Our and our counterparties’ credit spreads represent our most significant Level 3 inputs, and these inputs are used to derive the credit risk valuation adjustments with respect to these instruments. As we would not expect changes in our or our counterparties’ credit spreads to have a significant impact on the valuations of these instruments, we have determined that these valuations fall under Level 2 of the fair value hierarchy. Our credit risk valuation adjustments with respect to our interest rate and cross-currency derivative contracts are quantified and further explained in note 5.
Non-recurring Fair Value Measurements
Fair value measurements may also be used for purposes of non-recurring valuations performed in connection with our acquisition accounting and impairment assessments.
Acquisition Accounting
The nonrecurring valuations associated with acquisition accounting, which use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy, primarily include the valuation of property and equipment, customer relationships and spectrum intangible assets, as further described below:
•Property and equipment. The valuation of property and equipment may use either an indirect cost approach, which utilizes trends based on historical cost information, or a combination of indirect cost approach, market approach and direct replacement cost method, which considers factors such as current prices of the same or similar equipment, the age of the equipment and economic obsolescence.
•Customer relationships. The valuation of customer relationships is primarily based on an excess earnings methodology, which is a form of a discounted cash flow analysis. The excess earnings methodology for customer relationship intangible assets requires us to estimate the specific cash flows expected from the acquired customer relationships, considering such factors as estimated customer life, the revenue expected to be generated over the life of the customer relationships, contributory asset charges and other factors.
•Spectrum intangible assets. The valuation of spectrum intangible assets may use either an adjusted market-based approach, which requires the calibration of observable market inputs to reflect the fair value of the assets acquired, or a combination of an adjusted market-based approach with other methods, such as an income-based approach (e.g. the “greenfield” valuation method), which requires a wide range of assumptions and inputs, including forecasting costs associated with building a complementary asset base.
During the third quarter of 2022, we performed certain nonrecurring valuations related to the preliminary acquisition accounting for the Claro Panama Acquisition. For information related to the status of valuation work associated with assets acquired in connection with the Claro Panama Acquisition, see note 4.
During the second quarter of 2022,2023, we finalized our acquisition accounting for the Liberty TelecomunicacionesClaro Panama Acquisition, which did not result in any material changes to our opening balance sheet.sheet associated with the Claro Panama Acquisition. For additional information relating to the opening balance sheet associated withfor the Liberty TelecomunicacionesClaro Panama Acquisition, see note 4.
Impairment Assessments
The nonrecurring valuations associated with impairment assessments, which use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy, primarily include the valuation of reporting units for the purpose of testing for goodwill impairment. Unless a reporting unit has a readily determinable fair value, we estimate the fair value of the reporting unit using either a market-based or income-based approach.
Goodwill
During the third quarter of 2023, we completed our annual goodwill impairment assessment. Additionally, during the second quarter of 2022, primarily due to significant increases in interest rates, we performed goodwill impairment analyses of all of our reporting units. WeFor both of these assessments, we used an income approach to determine the estimated fair values of these reporting units. Under this approach, we utilized a discounted cash flow model as the valuation technique to estimate the fair values of the reporting units from a market participant’s perspective. This approach uses certain inputs and assumptions that
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2022
(unaudited)
require estimates and judgments, including forecasted cash flows and an appropriate discount rate.rates. Forecasts of future cash flows are largely based on our assumptions using Level 3 inputs, which we consider to be consistent with a market participant’s approach. We used the weighted-average cost of capital for each reporting unit as the basis for the discount rate to establish the present value of the expected cash flows for the respective reporting unit. The inputs for our weighted average cost of capital calculations include Level 2 and Level 3 inputs, generally derived from third-party pricing services. We used discount rates ranging from 7% to 15% in the valuation of the various reporting units.
Based upon the results of the aforementioned analysis,analyses, we (i) did not recognize any goodwill impairment charges during the third quarter of 2023, and (ii) recognized impairment charges associated with certain reporting units of our C&W Caribbean segment.segment during the second quarter of 2022. For additional information regarding goodwill impairment charges resulting from these impairment analyses, see note 7.
Other
During the third quarter of 2021, we recorded a $41 million impairment charge in connection with an impairment assessment of a cost basis investment.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2023
(unaudited)
(7) Long-lived Assets
Goodwill
Changes in the carrying amount of our goodwill are set forth below:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| January 1,
2022 | | Acquisitions
and related
adjustments | | Foreign
currency
translation
adjustments and other | | Impairment | | September 30,
2022 |
| | in millions |
| | | | | | | | | |
| C&W Caribbean | $ | 1,787.0 | | | $ | (11.5) | | | $ | 5.0 | | | $ | (555.3) | | | $ | 1,225.2 | |
| C&W Panama | 617.1 | | | 16.5 | | | — | | | — | | | 633.6 | |
| C&W Networks & LatAm | 646.9 | | | 11.5 | | | (3.0) | | | — | | | 655.4 | |
| Liberty Puerto Rico | 498.3 | | | 0.4 | | | — | | | — | | | 498.7 | |
| Liberty Costa Rica | 398.7 | | | (3.8) | | | 8.8 | | | — | | | 403.7 | |
| Total | $ | 3,948.0 | | | $ | 13.1 | | | $ | 10.8 | | | $ | (555.3) | | | $ | 3,416.6 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| C&W Caribbean | | C&W Panama | | Liberty Networks | | Liberty Puerto Rico | | Liberty Costa Rica | | Total |
| | in millions |
| | | | | | | | | | | |
| January 1, 2023 | $ | 1,220.4 | | | $ | 617.1 | | | $ | 654.0 | | | $ | 501.1 | | | $ | 428.7 | | | $ | 3,421.3 | |
| Acquisitions and related adjustments | — | | | — | | | (5.7) | | | — | | | 5.7 | | | — | |
| | | | | | | | | | | |
| Foreign currency translation adjustments and other | (1.7) | | | — | | | 6.1 | | | — | | | 44.1 | | | 48.5 | |
| | | | | | | | | | | |
| September 30, 2023 | $ | 1,218.7 | | | $ | 617.1 | | | $ | 654.4 | | | $ | 501.1 | | | $ | 478.5 | | | $ | 3,469.8 | |
DuringBased on the second quarterresults of 2022,our annual goodwill impairment test, we recorded a $555 milliondetermined no impairment of goodwill within certain reporting units of our C&W Caribbean segment. This impairment was driven primarily by macroeconomic factors, including higher interest rates, that drove an increase in the discount rates used to value these reporting units. After recording these impairments, the associated reporting units have $496 million of goodwill remaining at September 30, 2022.required. If, among other factors, (i) our equity values were to decline significantly, (ii) we experiencedexperience additional adverse impacts associated with macroeconomic factors, including increases in our estimated weighted average cost of capital, or (iii) the adverse impacts stemming from competition, economic, regulatory or other factors were to cause our results of operations or cash flows to be worse than currently anticipated, we could conclude in future periods that additional impairment charges of certain reporting units are required in order to reduce the carrying values of goodwill. Any such impairment charges could be significant.
During the nine months ended September 30, 2022, we recorded a $555 million impairment of goodwill within certain reporting units of our C&W Caribbean segment. This impairment was driven primarily by macroeconomic factors, including higher interest rates, that drove an increase in the discount rates used to value these reporting units, and is recorded in impairment, restructuring and other operating items, net, in our condensed consolidated statement of operations.
Our accumulated goodwill impairments were $2,784 million and $2,229 millionasat each of September 30, 20222023 and December 31, 2021, respectively.2022.
During the third quarter of 2022, we changed our annual goodwill impairment testing date from October 1 to July 1 of each year. This change did not have an impact on our consolidated financial statements.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2022
(unaudited)
Property and Equipment, Net
The details of our property and equipment and the related accumulated depreciation are set forth below:
| | | September 30,
2022 | | December 31,
2021 | | September 30,
2023 | | December 31,
2022 |
| | | in millions | | in millions |
| | Distribution systems | Distribution systems | $ | 4,378.7 | | | $ | 4,208.8 | | Distribution systems | $ | 4,852.8 | | | $ | 4,419.1 | |
| Support equipment, buildings, land and CIP | Support equipment, buildings, land and CIP | 2,096.3 | | | 1,641.6 | | Support equipment, buildings, land and CIP | 2,093.5 | | | 2,232.7 | |
| CPE | CPE | 893.3 | | | 893.7 | | CPE | 1,048.8 | | | 919.0 | |
| | 7,368.3 | | | 6,744.1 | | | 7,995.1 | | | 7,570.8 | |
| Accumulated depreciation | Accumulated depreciation | (3,093.3) | | | (2,575.7) | | Accumulated depreciation | (3,740.4) | | | (3,277.2) | |
| Total | Total | $ | 4,275.0 | | | $ | 4,168.4 | | Total | $ | 4,254.7 | | | $ | 4,293.6 | |
During the nine months ended September 30, 20222023 and 2021,2022, we recorded non-cash increases to our property and equipment related to vendor financing arrangements aggregating $114$118 million and $65$114 million, respectively.
Intangible Assets Not Subject
Liberty Latin America Ltd.
Notes to AmortizationCondensed Consolidated Financial Statements – (Continued)
The details of our intangible assets not subject to amortization are set forth below:September 30, 2023
| | | | | | | | | | | |
| September 30,
2022 | | December 31,
2021 |
| | in millions |
| | | |
| Spectrum licenses | $ | 1,051.0 | | | $ | 1,050.9 | |
| Cable television franchise rights | 540.0 | | | 540.0 | |
| Other | 1.8 | | | 1.5 | |
| Total | $ | 1,592.8 | | | $ | 1,592.4 | |
Intangible Assets Subject to Amortization, Net
The details of our intangible assets subject to amortization and the related accumulated amortization are set forth below:
| | | | | | | | | | | | | September 30,
2023 | | December 31,
2022 |
| | September 30,
2022 | | December 31,
2021 | | in millions |
| | | in millions | |
| Customer relationships | Customer relationships | $ | 1,450.4 | | | $ | 1,527.6 | | Customer relationships | $ | 1,321.6 | | | $ | 1,464.4 | |
| Licenses and other (a) | 276.8 | | | 220.2 | | |
| Licenses and other | | Licenses and other | 284.8 | | | 278.9 | |
| | 1,727.2 | | | 1,747.8 | | | 1,606.4 | | | 1,743.3 | |
| Accumulated amortization | Accumulated amortization | (1,009.9) | | | (959.2) | | Accumulated amortization | (1,029.1) | | | (1,055.2) | |
| Total | Total | $ | 717.3 | | | $ | 788.6 | | Total | $ | 577.3 | | | $ | 688.1 | |
(a)Intangible Assets Not Subject to Amortization
The 2022 amount includes $50 milliondetails of spectrum licenses attributableour intangible assets not subject to the Claro Panama Acquisition. For additional information regarding the assets acquired as part of the Claro Panama Acquisition, see note 4.amortization are set forth below:
| | | | | | | | | | | |
| September 30,
2023 | | December 31,
2022 |
| | in millions |
| | | |
| Spectrum licenses | $ | 1,051.0 | | | $ | 1,051.0 | |
| Cable television franchise rights and other | 541.8 | | | 541.8 | |
| Total | $ | 1,592.8 | | | $ | 1,592.8 | |
(8) Debt and Finance Lease Obligations
The U.S. dollar equivalents of the components of our debt are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2023 | | Estimated fair value (c) | | Principal amount |
| Weighted
average
interest
rate (a) | | Unused borrowing capacity (b) | |
| | Borrowing currency | | US $ equivalent | | September 30,
2023 | | December 31, 2022 | | September 30,
2023 | | December 31, 2022 |
| | | | | | |
| | | in millions |
| | | | | | | | | | | | | |
| Convertible Notes (d) | 2.00 | % | | — | | | $ | — | | | $ | 209.5 | | | $ | 357.4 | | | $ | 220.3 | | | $ | 402.5 | |
| C&W Notes | 6.55 | % | | — | | | — | | | 1,523.3 | | | 1,591.6 | | | 1,715.0 | | | 1,715.0 | |
| C&W Credit Facilities | 7.27 | % | | (e) | | 654.5 | | | 2,645.7 | | | 2,505.0 | | | 2,684.3 | | | 2,605.2 | |
| LPR Senior Secured Notes | 6.08 | % | | — | | | — | | | 1,729.0 | | | 1,772.7 | | | 1,981.0 | | | 1,981.0 | |
| LPR Credit Facilities | 9.20 | % | | $ | 172.5 | | | 172.5 | | | 614.6 | | | 613.8 | | | 620.0 | | | 620.0 | |
| LCR Credit Facilities (f) | 10.88 | % | | $ | 60.0 | | | 60.0 | | | 451.0 | | | 382.9 | | | 450.0 | | | 419.3 | |
| Vendor financing and other (g) | 7.88 | % | | — | | | — | | | 309.2 | | | 223.1 | | | 309.2 | | | 223.1 | |
| Total debt before premiums, discounts and deferred financing costs | 7.05 | % | | | | $ | 887.0 | | | $ | 7,482.3 | | | $ | 7,446.5 | | | $ | 7,979.8 | | | $ | 7,966.1 | |
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 20222023
(unaudited)
(8) Assets Held for Sale
On September 29, 2021, we entered into an agreement with América Móvil to contribute the Chile JV Entities to América Móvil’s Chilean operations to form the Chile JV that will be owned 50:50 by Liberty Latin America and América Móvil. Subsequent to September 30, 2022, we completed the formation of the Chile JV.
During October 2022, and in connection with the closing on the formation of the Chile JV, we made a balancing payment to América Móvil totaling $76 million. The transaction didnot trigger a change of control under VTR’s debt agreements, and was not subject to Liberty Latin America or América Móvil shareholder approvals. Beginning in October 2022, we will account for our 50% interest in the Chile JV as an equity method investment.
Effective with the agreement to form the Chile JV, we began accounting for the Chile JV Entities as held for sale. Accordingly, we ceased to depreciate the long-lived assets and amortization of the right of use assets of the Chile JV Entities. We have not presented the Chile JV Entities as a discontinued operation, as this transaction does not represent a strategic shift that will have a major effect on our financial results or operations. The carrying amounts of the major classes of assets and liabilities that are classified as held for sale are summarized below:
| | | | | | | | | | | |
| September 30,
2022 | | December 31,
2021 |
| in millions |
| Assets: | | | |
| Cash and cash equivalents | $ | 63.0 | | | $ | 109.7 | |
| Other current assets, net (a) | 104.4 | | | 132.6 |
| Property and equipment, net | 697.5 | | | 686.0 |
| Goodwill | 275.6 | | | 313.0 |
| Other assets, net (a) | 259.1 | | | 327.4 |
| Total assets | $ | 1,399.6 | | | $ | 1,568.7 | |
| | | |
| Liabilities: | | | |
| Current portion of debt | $ | 72.4 | | | $ | 82.2 | |
| Other accrued and current liabilities (b) | 210.1 | | | 294.2 |
| Long-term debt (c) | 1,330.9 | | | 1,416.8 |
| Other long-term liabilities (b) | 55.1 | | | 60.9 |
| Total liabilities | $ | 1,668.5 | | | $ | 1,854.1 | |
(a)Other current assets, net includes $15 million and $27 million, respectively, and other assets, net, includes $211 million and $277 million, respectively, related to derivative assets.
(b)Other accrued and current liabilities includes $3 million and $16 million, respectively, and other long-term liabilities includes $2 million and $2 million, respectively, related to derivative liabilities.
(c)The estimated fair values of the Chile JV Entities debt instruments were $829 million and $1,470 million, respectively.
Our condensed consolidated statements of operations include earnings (losses) before income taxes attributable to the Chile JV Entities of $32 million and $159 million for the three months ended September 30, 2022 and 2021, respectively, and ($26 million) million and $200 million for the nine months ended September 30, 2022 and 2021, respectively.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2022
(unaudited)
(9) Debt and Finance Lease Obligations
Prior to the formation of the Chile JV, the outstanding third-party debt and vendor financing of the Chile JV Entities has been reflected in liabilities associated with assets held for sale on our condensed consolidated balance sheets. For information regarding the formation of the Chile JV and the held-for-sale presentation of the Chile JV Entities, see note 8.
The U.S. dollar equivalents of the components of our debt are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2022 | | Estimated fair value (c) | | Principal amount |
| Weighted
average
interest
rate (a) | | Unused borrowing capacity (b) | |
| | Borrowing currency | | US $ equivalent | | September 30,
2022 | | December 31, 2021 | | September 30,
2022 | | December 31, 2021 |
| | | | | | |
| | | in millions |
| | | | | | | | | | | | | |
| Convertible Notes (d) | 2.00 | % | | — | | | $ | — | | | $ | 347.7 | | | $ | 396.5 | | | $ | 402.5 | | | $ | 402.5 | |
| C&W Notes | 6.55 | % | | — | | | — | | | 1,425.3 | | | 1,774.3 | | | 1,715.0 | | | 1,715.0 | |
| C&W Credit Facilities | 5.12 | % | | (e) | | 792.2 | | | 2,491.3 | | | 2,422.7 | | | 2,618.1 | | | 2,451.3 | |
| LPR Senior Secured Notes | 6.08 | % | | — | | | — | | | 1,588.0 | | | 2,058.1 | | | 1,981.0 | | | 1,981.0 | |
| LPR Credit Facilities | 6.57 | % | | $ | 172.5 | | | 172.5 | | | 600.6 | | | 623.1 | | | 620.0 | | | 620.0 | |
| Liberty Costa Rica Credit Facilities (f) | 8.65 | % | | $ | 7.0 | | | 7.0 | | | 345.3 | | | 407.1 | | | 411.4 | | | 408.7 | |
| Vendor financing and other (g) | 4.83 | % | | — | | | — | | | 195.9 | | | 99.8 | | | 195.9 | | | 99.8 | |
| Total debt before premiums, discounts and deferred financing costs | 5.80 | % | | | | $ | 971.7 | | | $ | 6,994.1 | | | $ | 7,781.6 | | | $ | 7,943.9 | | | $ | 7,678.3 | |
The following table provides a reconciliation of total debt before premiums, discounts and deferred financing costs to total debt and finance lease obligations:
| | | September 30,
2022 | | December 31, 2021 | | September 30,
2023 | | December 31, 2022 |
| | in millions | | in millions |
| | Total debt before premiums, discounts and deferred financing costs | Total debt before premiums, discounts and deferred financing costs | $ | 7,943.9 | | | $ | 7,678.3 | | Total debt before premiums, discounts and deferred financing costs | $ | 7,979.8 | | | $ | 7,966.1 | |
| Premiums, discounts and deferred financing costs, net | Premiums, discounts and deferred financing costs, net | (102.2) | | | (120.0) | | Premiums, discounts and deferred financing costs, net | (73.1) | | | (94.0) | |
| Total carrying amount of debt | Total carrying amount of debt | 7,841.7 | | | 7,558.3 | | Total carrying amount of debt | 7,906.7 | | | 7,872.1 | |
| Finance lease obligations | Finance lease obligations | 9.8 | | | 7.6 | | Finance lease obligations | 8.0 | | | 8.6 | |
Total debt and finance lease obligations | Total debt and finance lease obligations | 7,851.5 | | | 7,565.9 | | Total debt and finance lease obligations | 7,914.7 | | | 7,880.7 | |
| Less: Current maturities of debt and finance lease obligations | Less: Current maturities of debt and finance lease obligations | (208.0) | | | (106.3) | | Less: Current maturities of debt and finance lease obligations | (558.1) | | | (226.9) | |
| Long-term debt and finance lease obligations | Long-term debt and finance lease obligations | $ | 7,643.5 | | | $ | 7,459.6 | | Long-term debt and finance lease obligations | $ | 7,356.6 | | | $ | 7,653.8 | |
(a)Represents the weighted average interest rate in effect at September 30, 20222023 for all borrowings outstanding (excluding those of the Chile JV Entities) pursuant to each debt instrument, including any applicable margin. The interest rates presented represent stated rates and do not include the impact of derivative instruments, deferred financing costs, original issue premiums or discounts and commitment fees, all of which affect our overall cost of borrowing.
(b)Unused borrowing capacity represents the maximum availability under the applicable facility at September 30, 20222023 without regard to covenant compliance calculations or other conditions precedent to borrowing. At September 30, 2022,2023, the full amount of unused borrowing capacity was available to be borrowed under each of the respective subsidiary facilities, both before and after completion of the September 30, 20222023 compliance reporting requirements. At September 30, 2022,2023, except as may be limited by tax and legal considerations, the presence of noncontrolling interests,
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2022
(unaudited)
foreign currency exchange restrictions with respect to certain C&W subsidiaries and other factors, there were no restrictions on the respective subsidiary’s ability to upstream cash from this availability to Liberty Latin America or its subsidiaries or other equity holders.
(c)The estimated fair values of our debt instruments are determined using the applicable bid prices (mostly Level 1 of the fair value hierarchy) or from quoted prices for similar instruments in active markets adjusted for the estimated credit spreads of the applicable entity, to the extent available, and other relevant factors (Level 2 of the fair value hierarchy). For additional information regarding fair value hierarchies, see note 6.
(d)The interest rate reflects the stated rate of the Convertible Notes. The effective interest rate of the Convertible Notes is 6.7%, which considers the impact of a discount recorded in connection with the value ascribed to the instrument’s conversion option. At September 30, 2022,2023, the carrying value of the Convertible Notes was $370$212 million and the unamortized debt discount on the Convertible Notes was $31$8 million.
(e)The C&W Credit Facilities unused borrowing capacity comprise certain U.S. dollar, Trinidad & Tobago dollar and Jamaican dollarJMD revolving credit facilities.
(f)The Liberty Costa RicaLCR Credit Facilities at December 31, 2022 comprise certain Costa Rican colónCRC and U.S. dollar term loans and a U.S. dollar revolving credit facility. For information on the LCR Credit Facilities at September 30, 2023, see Financing Activity below.
(g)Primarily represents amounts$303 million and $217 million at September 30, 2023 and December 31, 2022, respectively, owed pursuant to interest-bearing vendor financing arrangements that are used to finance certain of our operating expenses and property and equipment additions. These obligations are generally due within one year and include VAT that were paid on our behalf by the vendor. Our operating expenses include $116$132 million and $82$116 million for the nine months ended September 30, 20222023 and 2021,2022, respectively, that were financed by an intermediary and are reflected on the borrowing date as a cash outflow within net cash provided by operating activities and a cash inflow within net cash providedused by financing activities in our condensed consolidated statements of cash flows. Repayments of vendor financing obligations
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2023
(unaudited)
are included in payments of principal amounts of debt and finance lease obligations in our condensed consolidated statements of cash flows.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2022
(unaudited)
Financing Activity
During May 2023, the terms of the agreements underlying the C&W Credit Facilities and the LPR Credit Facilities were amended, which resulted in (i) the replacement of LIBOR-based benchmark rates with Adjusted Term SOFR for the C&W Term Loan B-5 Facility, the C&W Term Loan B-6 Facility, the C&W Revolving Credit Facility, the 2028 LPR Term Loan and the LPR Revolving Credit Facility for interest periods commencing after June 30, 2023, (ii) the modification of the provisions for determining an alternative rate of interest upon the occurrence of certain events relating to the availability of interest rate benchmarks and (iii) certain conforming changes. The credit adjustment spreads applicable to the aforementioned debt instruments are 0.11448%, 0.26161% and 0.42826% for interest periods of one, three and six months, respectively.
In the tables below, non-cash activity relates to cash borrowedborrowings that did not pass through our bank accounts, as financing proceeds from the issuance of debt were used to directly repay some or all of the outstanding debt instruments within the same borrowing group.
During the nine months ended September 30, 20222023 and 2021,2022, borrowings related to significant notes we issued and credit facilities we drew down, entered into or amended, including activity related to the Chile JV Entities, are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Borrowing | | |
| Period | | Borrowing group | | Instrument | | Issued at | | Maturity | | Interest rate | | Borrowing currency | | USD equivalent (a) | | Non-cash component |
| | | | | | | | | | | | in millions |
| | | | | | | | | | | | | | | | | |
| 2022 | | C&W | | 2028 CWP Term Loan A | | 100% | | January 18, 2028 | | 4.25% | | | $ | 275.0 | | | $ | 275.0 | | | $ | 272.9 | |
| 2022 | | C&W | | 2028 CWP Term Loan B (b) | | 100% | | January 18, 2028 | | 4.25% | | | $ | 160.0 | | | $ | 160.0 | | | $ | — | |
| 2022 | | C&W | | CWP Revolving Credit Facility (c) | | 100% | | January 18, 2027 | | SOFR + 3.75% | | | $ | 12.0 | | | $ | 12.0 | | | N/A |
| | | | | | | | | | | | | | | | | |
| 2021 | | C&W | | C&W Revolving Credit Facility | | N/A | | January 30, 2027 | | LIBOR + 3.25% | | | (d) | | $ | — | |
| | | | | | | | | | | | | | | | | |
| 2021 | | Liberty Puerto Rico | | 2029 LPR Senior Secured Notes | | 100% | | July 15, 2029 | | 5.125% | | | $ | 820.0 | | | $ | 820.0 | | | $ | 500.0 | |
| 2021 | | Liberty Puerto Rico | | 2028 LPR Term Loan | | 100% | | October 15, 2028 | | LIBOR + 3.75% | | | $ | 500.0 | | | $ | 500.0 | | | $ | 500.0 | |
| 2021 | | Liberty Puerto Rico | | LPR Revolving Credit Facility | | N/A | | March 15, 2027 | | LIBOR + 3.50% | | | (e) | | N/A |
| | | | | | | | | | | | | | | | | |
| 2021 | | VTR | | 2029 VTR Senior Secured Notes | | 100% | | April 15, 2029 | | 4.375% | | | $ | 410.0 | | | $ | 410.0 | | | $ | 60.0 | |
| 2021 | | VTR | | VTR RCF – A | | N/A | | June 15, 2026 | | TAB + 3.35% | | | $ | — | | | $ | — | | | N/A |
| | | | | | | | | | | | | | | | | |
| 2021 | | Liberty Costa Rica (f) | | Liberty Servicios Term Loan B-1 Facility | | 100% | | August 1, 2024 | | LIBOR + 5.50% (g) | | | $ | 227.5 | | | $ | 227.5 | | | $ | — | |
| 2021 | | Liberty Costa Rica (f) | | Liberty Servicios Term Loan B-2 Facility | | 100% | | August 1, 2024 | | TAB + 6.75% | | CRC | 36,457.9 | | | $ | 58.8 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Period | | Borrowing group/ Borrower | | Instrument | | Issued at | | Maturity | | Interest rate | | | Borrowing currency | | | | Non-cash component |
| | | | | | | | | | | | | in millions |
| | | | | | | | | | | | | | | | | |
| 2023 | | C&W | | Other | | 100% | | (a) | | 6.483% | | | $ | 69.0 | | | | | $ | — | |
| 2023 | | C&W | | C&W Revolving Credit Facility | | N/A | | January 30, 2027 | | Adjusted Term SOFR + 3.25% | | | $ | 40.0 | | | | | $ | — | |
| | | | | | | | | | | | | | | | | |
| 2023 | | Liberty Puerto Rico | | LPR Revolving Credit Facility (b) | | N/A | | March 15, 2027 | | Adjusted Term SOFR + 3.50% | | | $ | 65.0 | | | | | $ | — | |
| | | | | | | | | | | | | | | | | |
| 2023 | | Liberty Costa Rica | | 2031 LCR Term Loan A | | 100% | | January 15, 2031 | | 10.875% | | | $ | 50.0 | | | | | $ | — | |
| 2023 | | Liberty Costa Rica | | 2031 LCR Term Loan B | | 100% | | January 15, 2031 | | 10.875% | | | $ | 400.0 | | | | | $ | — | |
| 2023 | | Liberty Costa Rica | | LCR Revolving Credit Facility (c) | | N/A | | January 15, 2028 | | Term SOFR + 4.25% | | | $ | — | | | | | N/A |
| | | | | | | | | | | | | | | | | |
| 2022 | | C&W | | 2028 CWP Term Loan | | 100% | | January 18, 2028 | | 4.25% | | | $ | 435.0 | | | | | $ | 272.9 | |
| 2022 | | C&W | | CWP Revolving Credit Facility (d) | | 100% | | January 18, 2027 | | Adjusted Term SOFR + 3.75% | | | $ | 12.0 | | | | | N/A |
N/A – Not applicable.
(a)Translated at the transaction date, as applicable.This borrowing is due in three annual installments beginning in May 2024.
(b)Borrowings underDuring the 2028 CWP Term Loan B were used to fund a portionsecond and third quarters of 2023, we borrowed, and repaid within the Claro Panama Acquisition.respective quarter, $30 million and $35 million, respectively.
(c)In January 2023, the LCR Revolving Credit Facility was amended and restated. The amended and restated $60 million LCR Revolving Credit Facility has a fee on unused commitments of 0.5% per year.
(d)The CWP Revolving Credit Facility has a fee on unused commitments of 0.50%0.5%.
(d)The C&W Revolving Credit Facility was amended to extend the maturity of $580 million in underlying commitments from January 30, 2026 to January 30, 2027.
(e)Total commitments under the LPR Revolving Credit Facility were increased by $43 million.
(f)Borrowings under the Liberty Servicios Term Loan B-1 Facility and Liberty Servicios Term Loan B-2 Facility were used to fund a portion of the Liberty Telecomunicaciones Acquisition.
(g)Subject to a LIBOR floor of 75 basis points.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 20222023
(unaudited)
During the nine months ended September 30, 20222023 and 2021,2022, we made certain repurchases or repayments on the following debt instruments, including activityrepayments related to the Chile JV Entities:
| | | Amount paid | | | Amount paid | |
| Period | Period | | Borrowing group | | Instrument | | Redemption price | | Borrowing currency | | USD equivalent (a) | | Non-cash component | | Gain (loss) on debt extinguishment | Period | | Borrowing group / Borrower | | Instrument | | Redemption price | | Borrowing currency | | USD equivalent (a) | | Non-cash component |
| | | | | | | | | in millions | | | | | | | | | USD in millions, CRC in billions |
| | 2022 | | C&W | | CWP Credit Facilities | | 100% | | $ | 272.9 | | | $ | 272.9 | | | $ | 272.9 | | | $ | — | | |
| 2023 | | 2023 | | C&W | | C&W Revolving Credit Facility | | 100% | | $ | 20.0 | | | $ | 20.0 | | | $ | — | |
| | 2023 | | 2023 | | Liberty Puerto Rico | | LPR Revolving Credit Facility | | 100% | | $ | 65.0 | | | $ | 65.0 | | | $ | — | |
| | 2023 | | 2023 | | Liberty Costa Rica | | LCR Term Loan B-1 Facility | | 100% | | $ | 276.7 | | | $ | 276.7 | | | $ | — | |
| 2023 | | 2023 | | Liberty Costa Rica | | LCR Term Loan B-2 Facility | | 100% | | CRC | 79.6 | | | $ | 138.6 | | | $ | — | |
| 2023 | | 2023 | | Liberty Costa Rica | | LCR Revolving Credit Facility | | 100% | | $ | 8.0 | | | $ | 8.0 | | | $ | — | |
| | 2023 | | 2023 | | Liberty Latin America | | Convertible Notes | | (b) | | $ | 173.0 | | | $ | 173.0 | | | $ | — | |
| | 2022 | 2022 | | VTR | | 2029 VTR Senior Secured Notes | | (b) | | $ | 12.2 | | | $ | 12.2 | | | $ | — | | | $ | 6.0 | | 2022 | | C&W | | CWP Credit Facilities | | 100% | | $ | 272.9 | | | $ | 272.9 | | | $ | 272.9 | |
| 2022 | 2022 | | VTR | | 2028 VTR Senior Secured Notes | | (b) | | $ | 4.3 | | | $ | 4.3 | | | $ | — | | | $ | 1.7 | | 2022 | | VTR | | VTR Notes | | (c) | | $ | 48.1 | | | $ | 48.1 | | | $ | — | |
| 2022 | | VTR | | 2028 VTR Senior Notes | | (b) | | $ | 31.6 | | | $ | 31.6 | | | $ | — | | | $ | 33.4 | | |
| | 2021 | | Liberty Puerto Rico | | 2026 SPV Credit Facility | | 100% | | $ | 1,000.0 | | | $ | 1,000.0 | | | $ | 1,000.0 | | | $ | (14.3) | | |
| | 2021 | | VTR | | 2028 VTR Senior Secured Notes | | 103% | | $ | 120.0 | | | $ | 120.0 | | | $ | 60.0 | | | $ | (4.0) | | |
| 2021 | | VTR | | VTR TLB-1 Facility | | 100% | | CLP | 140,900.0 | | | $ | 196.4 | | | $ | — | | | $ | (5.6) | | |
| 2021 | | VTR | | VTR TLB-2 Facility | | 100% | | CLP | 33,100.0 | | | $ | 46.1 | | | $ | — | | | $ | (1.3) | | |
(a)Translated at the transaction date, as applicable.
(b)During 2023, we repurchased and cancelled $182 million original principal amount of the Convertible Notes at a weighted average redemption price of 94.9%. In connection with these repurchases, we unwound $182 million of the related Capped Calls.
(c)Prior to the disposition of the Chile JV Entities and during the third quarter of 2022, in aggregate we repurchased and cancelled approximately $91 million original principal amount of certain of the outstanding senior secured notes and senior notes of the Chile JV Entities.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 20222023
(unaudited)
Maturities of Debt
Maturities of our debt as of September 30, 20222023 are presented below. The table below excludes the debt of the Chile JV Entities as it has been reflected in liabilities associated with assets held for sale on our September 30, 2022 condensed consolidated balance sheet. Amounts presented below represent U.S. dollar equivalents based on September 30, 20222023 exchange rates:
| | | C&W | | Liberty Puerto Rico | | Liberty Costa Rica | | Liberty Latin America (a) | | Consolidated | | C&W | | Liberty Puerto Rico | | Liberty Costa Rica | | Liberty Latin America (a) | | Consolidated |
| | in millions | | in millions |
| Years ending December 31: | Years ending December 31: | | Years ending December 31: | |
| 2022 (remainder of year) | $ | 43.8 | | | $ | — | | | $ | 13.1 | | | $ | 0.4 | | | $ | 57.3 | | |
| 2023 | 140.9 | | | — | | | 3.5 | | | 0.6 | | | 145.0 | | |
| 2023 (remainder of year) | | 2023 (remainder of year) | $ | 114.8 | | | $ | 16.7 | | | $ | 6.5 | | | $ | 0.4 | | | $ | 138.4 | |
| 2024 | 2024 | 49.7 | | | — | | | 411.4 | | | 402.8 | | | 863.9 | | 2024 | 188.8 | | | 24.9 | | | — | | | 220.6 | | | 434.3 | |
| 2025 | 2025 | 1.8 | | | — | | | — | | | — | | | 1.8 | | 2025 | 26.2 | | | — | | | — | | | — | | | 26.2 | |
| 2026 | 2026 | 0.6 | | | — | | | — | | | — | | | 0.6 | | 2026 | 23.6 | | | — | | | — | | | — | | | 23.6 | |
| 2027 | 2027 | 1,727.5 | | | 1,161.0 | | | — | | | — | | | 2,888.5 | | 2027 | 1,715.5 | | | 1,161.0 | | | — | | | — | | | 2,876.5 | |
| 2028 | | 2028 | 1,997.6 | | | 620.0 | | | — | | | — | | | 2,617.6 | |
| Thereafter | Thereafter | 2,546.8 | | | 1,440.0 | | | — | | | — | | | 3,986.8 | | Thereafter | 593.2 | | | 820.0 | | | 450.0 | | | — | | | 1,863.2 | |
| Total debt maturities | Total debt maturities | 4,511.1 | | | 2,601.0 | | | 428.0 | | | 403.8 | | | 7,943.9 | | Total debt maturities | 4,659.7 | | | 2,642.6 | | | 456.5 | | | 221.0 | | | 7,979.8 | |
| Premiums, discounts and deferred financing costs, net | Premiums, discounts and deferred financing costs, net | (33.3) | | | (29.6) | | | (7.0) | | | (32.3) | | | (102.2) | | Premiums, discounts and deferred financing costs, net | (27.4) | | | (23.5) | | | (14.3) | | | (7.9) | | | (73.1) | |
| Total debt | Total debt | $ | 4,477.8 | | | $ | 2,571.4 | | | $ | 421.0 | | | $ | 371.5 | | | $ | 7,841.7 | | Total debt | $ | 4,632.3 | | | $ | 2,619.1 | | | $ | 442.2 | | | $ | 213.1 | | | $ | 7,906.7 | |
| Current portion | Current portion | $ | 194.6 | | | $ | — | | | $ | 11.9 | | | $ | 0.8 | | | $ | 207.3 | | Current portion | $ | 296.3 | | | $ | 41.6 | | | $ | 6.5 | | | $ | 213.1 | | | $ | 557.5 | |
| Noncurrent portion | Noncurrent portion | $ | 4,283.2 | | | $ | 2,571.4 | | | $ | 409.1 | | | $ | 370.7 | | | $ | 7,634.4 | | Noncurrent portion | $ | 4,336.0 | | | $ | 2,577.5 | | | $ | 435.7 | | | $ | — | | | $ | 7,349.2 | |
(a)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.
(10)(9) Operating Leases
The following table provides details of our operating lease expense:
| | | Three months ended September 30, | | Nine months ended September 30, | | Three months ended September 30, | | Nine months ended September 30, |
| | 2022 | | 2021 | | 2022 | | 2021 | | 2023 | | 2022 | | 2023 | | 2022 |
| | in millions | | in millions |
| Operating lease expense: | Operating lease expense: | | Operating lease expense: | |
| Operating lease cost | Operating lease cost | $ | 29.4 | | | $ | 25.6 | | | $ | 85.3 | | | $ | 66.1 | | Operating lease cost | $ | 34.8 | | | $ | 29.4 | | | $ | 100.2 | | | $ | 85.3 | |
| Short-term lease cost | Short-term lease cost | 5.9 | | | 5.3 | | | 17.9 | | | 15.2 | | Short-term lease cost | 7.0 | | | 5.9 | | | 21.8 | | | 17.9 | |
| Total operating lease expense | Total operating lease expense | $ | 35.3 | | | $ | 30.9 | | | $ | 103.2 | | | $ | 81.3 | | Total operating lease expense | $ | 41.8 | | | $ | 35.3 | | | $ | 122.0 | | | $ | 103.2 | |
Our operating lease expense is included in facility, provision, franchise and other expense, in other operating costs and expenses, in our condensed consolidated statements of operations.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 20222023
(unaudited)
Certain other details of our operating leases are set forth in the tables below:
| | | | | | | | | | | |
| September 30, 2022 | | December 31,
2021 |
| in millions |
| | | |
| Operating lease right-of-use assets | $ | 525.2 | | | $ | 441.0 | |
| Operating lease liabilities: | | | |
| Current | $ | 75.6 | | | $ | 82.0 | |
| Noncurrent | 473.7 | | | 371.0 | |
| Total operating lease liabilities | $ | 549.3 | | | $ | 453.0 | |
| | | |
| Weighted-average remaining lease term | 7.0 years | | 7.5 years |
| | | |
| Weighted-average discount rate | 5.6 | % | | 6.2 | % |
| | | | | | | | | | | |
| September 30,
2023 | | December 31,
2022 |
| in millions |
| | | |
| Operating lease right-of-use assets (a) | $ | 482.3 | | | $ | 550.8 | |
| Operating lease liabilities: | | | |
| Current | $ | 83.4 | | | $ | 76.7 | |
| Noncurrent | 490.6 | | | 438.5 | |
| Total operating lease liabilities | $ | 574.0 | | | $ | 515.2 | |
| | | | | | | | | | | |
| Weighted-average remaining lease term | 7.6 years | | 8.2 years |
| | | |
| Weighted-average discount rate | 7.7 | % | | 7.5 | % |
| | | Nine months ended September 30, | | Nine months ended September 30, | |
| | 2022 | | 2021 | | | 2023 | | 2022 | |
| | in millions | | in millions |
| | Operating cash outflows related to operating leases | Operating cash outflows related to operating leases | $ | 92.8 | | | $ | 63.6 | | | Operating cash outflows related to operating leases | $ | 99.6 | | | $ | 92.8 | | |
Right-of-use assets obtained in exchange for new operating lease liabilities (a)(b) | Right-of-use assets obtained in exchange for new operating lease liabilities (a)(b) | $ | 171.7 | | | $ | 138.9 | | | Right-of-use assets obtained in exchange for new operating lease liabilities (a)(b) | $ | 38.1 | | | $ | 171.7 | | |
(a)During the three and nine months ended September 30, 2023, we recorded impairment charges totaling $7 million and $50 million, respectively, associated with certain operating lease right-of-use assets, predominantly related to decommissioned tower leases at C&W Panama. These charges are included in impairment, restructuring and other, net, in our condensed consolidated statements of operations.
(b)Represents non-cash transactions associated with operating leases entered into during the nine months ended September 30, 2023 and 2022, and 2021, respectively, including amounts related to acquisitions as further described in note 4.respectively.
Our operating lease right-of-use assets are included in other assets, net, and our noncurrent operating lease liabilities are included inother long-term liabilities in our condensed consolidated balance sheets.
Maturities of Operating Leases
Maturities of our operating lease liabilities as of September 30, 20222023 are presented below. The table below excludes the operating lease liabilities of the Chile JV Entities as they have been reflected in liabilities associated with assets held for sale on our September 30, 2022 condensed consolidated balance sheet.Amounts presented below represent U.S. dollar equivalents (in millions) based on September 30, 20222023 exchange rates.
| | Years ending December 31: | Years ending December 31: | | Years ending December 31: | |
| 2022 (remainder of year) | $ | 26.2 | | |
| 2023 | 108.9 | | |
| 2023 (remainder of year) | | 2023 (remainder of year) | $ | 31.8 | |
| 2024 | 2024 | 98.5 | | 2024 | 119.2 | |
| 2025 | 2025 | 87.6 | | 2025 | 110.8 | |
| 2026 | 2026 | 76.1 | | 2026 | 100.1 | |
| 2027 | 2027 | 61.5 | | 2027 | 85.7 | |
| 2028 | | 2028 | 77.5 | |
| Thereafter | Thereafter | 199.0 | | Thereafter | 254.0 | |
| Total operating lease liabilities on an undiscounted basis | Total operating lease liabilities on an undiscounted basis | 657.8 | | Total operating lease liabilities on an undiscounted basis | 779.1 | |
| Present value discount | Present value discount | (108.5) | | Present value discount | (205.1) | |
| Present value of operating lease liabilities | Present value of operating lease liabilities | $ | 549.3 | | Present value of operating lease liabilities | $ | 574.0 | |
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 20222023
(unaudited)
(11)(10) Unfulfilled Performance Obligations
We enter into certain long-term capacity contracts with customers where the customer either pays a fixed fee over time or prepays for the capacity upfront and pays a portion related to operating and maintenance of the network over time. We assess whether prepaid capacity contracts contain a significant financing component. If the financing component is significant, interest expense is accreted over the life of the contract using the effective interest method. The revenue associated with prepaid capacity contracts is deferred and generally recognized on a straight-line basis over the life of the contract. As of September 30, 2022,2023, we have approximately $325$285 million of unfulfilled performance obligations relating to our long-term capacity contracts, primarily subsea contracts, that generally will be recognized as revenue over an average remaining life of 5five years.
(1211) Programming and Other Direct Costs of Services
Programming and other direct costs of services include programming and copyright costs, interconnect and access costs, equipment costs, which primarily relate to costs of mobile handsets and other devices, and other direct costs related to our operations.
Our programming and other direct costs of services by major category are set forth below:
| | | | Three months ended September 30, | | Nine months ended September 30, | | Three months ended September 30, | | Nine months ended September 30, |
| | | 2022 | | 2021 | | 2022 | | 2021 | | 2023 | | 2022 | | 2023 | | 2022 |
| | | in millions | | in millions |
| | Programming and copyright | Programming and copyright | $ | 91.6 | | | $ | 108.5 | | | $ | 302.1 | | | $ | 334.7 | | Programming and copyright | $ | 60.2 | | | $ | 91.6 | | | $ | 180.3 | | | $ | 302.1 | |
| Interconnect | Interconnect | 88.6 | | | 92.0 | | | 262.7 | | | 252.7 | | Interconnect | 77.5 | | | 88.6 | | | 227.5 | | | 262.7 | |
| Equipment and other (a) | Equipment and other (a) | 118.9 | | | 96.7 | | | 338.5 | | | 277.4 | | Equipment and other (a) | 121.4 | | | 118.9 | | | 332.4 | | | 338.5 | |
| Total programming and other direct costs of services | Total programming and other direct costs of services | $ | 299.1 | | | $ | 297.2 | | | $ | 903.3 | | | $ | 864.8 | | Total programming and other direct costs of services | $ | 259.1 | | | $ | 299.1 | | | $ | 740.2 | | | $ | 903.3 | |
(a)Includes amounts related to cost of goods sold from equipment sales of $88$75 million and $74$88 million for the three months ended September 30, 20222023 and 2021,2022, respectively, and $258$231 million and $213$258 million for the nine months ended September 30, 20222023 and 2021 include,2022, respectively.
(13)(12) Other Operating Costs and Expenses
Other operating costs and expenses set forth in the table below comprise the following cost categories:
•Personnel and contract labor-related costs, which primarily include salary-related and cash bonus expenses, net of capitalizable labor costs, and temporary contract labor costs;
•Network-related expenses, which primarily include costs related to network access, system power, core network, and CPE repair, maintenance and test costs;
•Service-related costs, which primarily include professional services, information technology-related services, audit, legal and other services;
•Commercial, which primarily includes sales and marketing costs, such as advertising, commissions and other sales and marketing-related costs, and customer care costs related to outsourced call centers;
•Facility, provision, franchise and other, which primarily includes facility-related costs, provision for bad debt expense, operating lease rent expense, franchise-related fees, bank fees, insurance, vehicle-related, travel and entertainment and other operating-related costs; and
•Share-based compensation expense that relates to (i) equity awards issued to our employees and Directors and (ii) certain bonus-related expenses that are paid in the form of equity.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 20222023
(unaudited)
Our other operating costs and expenses by major category are set forth below:
| | | | Three months ended September 30, | | Nine months ended September 30, | | Three months ended September 30, | | Nine months ended September 30, |
| | | 2022 | | 2021 | | 2022 | | 2021 | | 2023 | | 2022 | | 2023 | | 2022 |
| | | in millions | | in millions |
| | Personnel and contract labor | Personnel and contract labor | $ | 155.3 | | | $ | 142.9 | | | $ | 453.6 | | | $ | 425.1 | | Personnel and contract labor | $ | 130.8 | | | $ | 155.3 | | | $ | 418.1 | | | $ | 453.6 | |
| Network-related | Network-related | 88.6 | | | 86.0 | | | 250.1 | | | 247.1 | | Network-related | 65.2 | | | 88.6 | | | 193.6 | | | 250.1 | |
| Service-related | Service-related | 52.8 | | | 47.4 | | | 158.6 | | | 140.2 | | Service-related | 52.3 | | | 52.8 | | | 162.6 | | | 158.6 | |
| Commercial | Commercial | 58.9 | | | 57.4 | | | 182.5 | | | 163.5 | | Commercial | 47.1 | | | 58.9 | | | 136.2 | | | 182.5 | |
| Facility, provision, franchise and other | Facility, provision, franchise and other | 152.3 | | | 122.2 | | | 394.0 | | | 342.0 | | Facility, provision, franchise and other | 142.9 | | | 152.3 | | | 427.1 | | | 394.0 | |
| Share-based compensation expense | Share-based compensation expense | 20.8 | | | 33.1 | | | 82.6 | | | 88.9 | | Share-based compensation expense | 24.1 | | | 20.8 | | | 77.8 | | | 82.6 | |
| Total other operating costs and expenses | Total other operating costs and expenses | $ | 528.7 | | | $ | 489.0 | | | $ | 1,521.4 | | | $ | 1,406.8 | | Total other operating costs and expenses | $ | 462.4 | | | $ | 528.7 | | | $ | 1,415.4 | | | $ | 1,521.4 | |
(14)(13) Income Taxes
We evaluate and update our estimated annual effective income tax rate on a quarterly basis based on current and forecasted operating results and tax laws. For interim tax reporting, we estimate an annual effective tax rate that is applied to year-to-date ordinary income or loss. The tax effects of significant unusual or infrequently occurring items are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur.
Our interim estimate of our annual effective tax rate and our interim tax provision are subject to volatility due to factors such as jurisdictions in which our deferred taxes and/or tax attributes are subject to a full valuation allowance, relative changes in unrecognized tax benefits and changes in tax laws. Based upon the mix and timing of our actual annual earnings or loss compared to annual projections, as well as changes in the factors noted above, our effective tax rate may vary quarterly and may make quarterly comparisons not meaningful.
Income taxexpensewas $39$10 million and $40$39 million during the three months ended September 30, 20222023 and 2021,2022, respectively, and $102$52 million and $111$101 million during the nine months ended September 30, 20222023 and 2021,2022, respectively. This represents an effective income tax rate of (32.1%)(17.8)% and (35.6%(32.1%) for the three months ended September 30, 20222023 and 2021,2022, respectively, and 43.4%(108.6)% and (39.7%)42.1% for the nine months ended September 30, 20222023 and 2021,2022, respectively, including items treated discretely.
For the three and nine months ended September 30, 2022,2023, the income tax expense attributable to our earnings before income taxes differs from the amounts computed using the statutory tax rate, primarily due to the detrimental effects of net increases in valuation allowances, negative effects of permanent tax differences, such as non-deductible expenses and inclusion of withholding taxes on cross-border payments. These negative impacts to our effective tax rate were partially offset by the beneficial effects of international rate differences and permanent tax differences, such as non-taxable income.
For the three and nine months ended September 30, 2022, the income tax expense attributable to our earnings (loss)before income taxes differs from the amounts computed using the statutory tax rate, primarily due to the detrimental effects of non-deductible goodwill impairment, negative effects of permanent tax differences, such as non-deductible expenses, tax effect of the enactment of a Barbados Pandemic Contribution Levy, and inclusion of withholding taxes on cross-border payments. These negative impacts to our effective tax rate were partially offset by the beneficial effects of permanent tax differences, such as non-taxable income and net decreases in valuation allowances. Additionally, for the three months ended September 30, 2022, income tax expense reflects the detrimental effects of international rate differences and for the nine months ended September 30, 2022, income tax expense reflects the beneficial effects of international rate differences.
For the three and nine months ended September 30, 2021, the income tax expense attributable to our earnings before income taxes differs from the amounts computed using the statutory tax rate, primarily due to detrimental effects of international rate differences, net increases in valuation allowances, negative effects of permanent tax differences, such as non-deductible expenses, and inclusion of withholding taxes on cross-border payments. These negative impacts to our effective tax rate were partially offset by the beneficial effects of permanent tax differences, such as non-taxable income. For the three months ended September 30, 2021, income tax expense reflects net favorable changes in uncertain tax positions. For the nine months ended September 30, 2021, income tax expense reflects net unfavorable changes in uncertain tax positions.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 20222023
(unaudited)
(1514) Earnings or Loss Per Share
Basic EPS is computed by dividing net earnings or loss attributable to Liberty Latin America shareholders by the weighted average number of Liberty Latin America Shares outstanding during the periods presented, as further described below. Diluted EPS presents the dilutive effect, if any, on a per share basis of potential sharesdilutive securities as if they had been exercised, vested or converted at the beginning of the periods presented.
The details of our weighted average shares outstanding are set forth below:
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Nine months ended September 30, |
| | 2022 | | 2021 | | 2022 | | 2021 |
| Weighted average shares outstanding: | | | | | | | |
| Basic | 220,186,543 | | | 232,801,996 | | | 224,414,274 | | | 233,059,215 | |
| Diluted | 240,551,950 | | | 253,429,864 | | | 224,414,274 | | | 233,871,985 | |
The details of the calculations of our basic and diluted EPS for the three months ended September 30, 2022 and 2021, andare set forth below:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, | | Nine months ended September 30, |
| 2023 | | 2022 | | 2023 | | 2022 |
| in millions, except per share amounts |
| Numerator: | | | | | | | |
| Basic EPS computation: | | | | | | | |
| Net earnings (loss) attributable to Liberty Latin America shareholders - basic | $ | 59.7 | | | $ | 75.7 | | | $ | 29.2 | | | $ | (309.3) | |
| Diluted EPS computation: | | | | | | | |
| Add back: interest expense, amortization of deferred financing costs and discounts, and net loss on debt extinguishment associated with Convertible Notes (if-converted method) | — | | | 6.3 | | | — | | | — | |
| Net earnings (loss) attributable to Liberty Latin America shareholders - diluted | $ | 59.7 | | | $ | 82.0 | | | $ | 29.2 | | | $ | (309.3) | |
| | | | | | | |
| Denominator: | | | | | | | |
| Basic EPS computation: | | | | | | | |
| Weighted average shares - basic (a) | 207.2 | | | 220.2 | | | 211.7 | | | 224.4 | |
| Diluted EPS computation: | | | | | | | |
| Incremental shares attributable to the release of SARs, PSUs and RSUs upon vesting, the LTVP and the ESPP (treasury stock method) | 1.4 | | | 0.9 | | | 1.1 | | | — | |
| Number of shares issuable under our Convertible Notes (if-converted method) (b) | — | | | 19.5 | | | — | | | — | |
| Weighted average shares - diluted (c) | 208.6 | | | 240.6 | | | 212.8 | | | 224.4 | |
| | | | | | | |
| Basic and diluted net earnings (loss) per share attributable to Liberty Latin America shareholders | $ | 0.29 | | | $ | 0.34 | | | $ | 0.14 | | | $ | (1.38) | |
| | | | | | | |
(a)We reported a net loss attributable to Liberty Latin America shareholders during the nine months ended September 30, 2021 are set forth below2022. As a result, the potentially dilutive effect at September 30, 2022 of the following items was not included in the computation of diluted EPS for such period because their inclusion would have been anti-dilutive to the computation or, in the case of certain PSUs and PSARs, because such awards had not yet met the applicable performance criteria (in millions, except for share amounts)millions):
| | | | | | | | | | | | | | | | | |
| Three months ended September 30, 2022 | | Three months ended September 30, 2021 | | Nine months ended September 30, 2021 |
| | | | | |
| | | | | |
| Numerator: | | | | | |
| Net earnings attributable to holders of Liberty Latin America Shares (basic EPS computation) | $ | 84.1 | | | $ | 76.1 | | | $ | 174.0 | |
| Add back: interest expense and amortization of deferred financing costs and premiums associated with Convertible Notes (if-converted method) | 6.3 | | | 6.0 | | | — | |
| Net earnings attributable to holders of Liberty Latin America Shares (basic and diluted EPS computation) | $ | 90.4 | | | $ | 82.1 | | | $ | 174.0 | |
| Denominator: | | | | | |
| Weighted average shares (basic EPS computation) | 220,186,543 | | | 232,801,996 | | | 233,059,215 | |
| Incremental shares attributable to an employee stock purchase plan and the release of PSUs and RSUs upon vesting (treasury stock method) | 871,728 | | | 1,134,189 | | | 812,770 | |
| Number of shares issuable under our Convertible Notes (if-converted method) (a) | 19,493,679 | | | 19,493,679 | | | — | |
| Weighted average shares (diluted EPS computation) (b) | 240,551,950 | | | 253,429,864 | | | 233,871,985 | |
| | | | | | | |
| | | |
| | | |
| Aggregate number of shares issuable pursuant to: | | | |
| Outstanding options, SARs and RSUs | | | 35.8 | |
| Outstanding PSUs and PSARs | | | 8.7 | |
| | | |
| | | |
| Aggregate number of shares potentially issuable under our Convertible Notes (if-converted method) | | | 19.5 | |
(a)
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2023
(unaudited)
(b)With regards to the aggregate number of shares potentially issuable under our Convertible Notes, the Capped Calls provide an economic hedge to reduce or offset potential dilution to our Class C common shares upon any conversion of the Convertible Notes and/or offset any cash payments we are required to make in excess of the principal amount of such converted notes, as the case may be, with such reduction and/or offset subject to a cap.
(b)(c)ForWe reported net earnings attributable to Liberty Latin America shareholders during the 2022 period, we have excluded (i)three and nine months ended September 30, 2023 and the aggregate number of shares issuable pursuant to outstanding options, SARs, and RSUs of35.1 million, and (ii) the aggregate number of shares issuable pursuant to outstanding PSARs of 8.5 million, because their inclusion wouldthree months ended September 30, 2022. The following table sets forth items that have been anti-dilutive to the computation.For the 2021 periods, we have excluded (i) the aggregate numberfrom our computation of shares issuable pursuant to outstanding options, SARs, and RSUs of19.9 million, (ii) the aggregate number of shares issuable pursuant to outstanding PSARs and PSUs of 8.2 millionand (iii) for the nine-month period, using the if-converted method, the aggregate number of shares potentially issuable under our Convertible Notes of 19.5 million,diluted EPS because their inclusion would have been anti-dilutive to the computation or, in the case of certain PSUs and PSARs, because such awards had not yet met the applicable performance criteria.criteria:
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2022
(unaudited)
We reported a net loss attributable to Liberty Latin America shareholders during the nine months ended September 30, 2022. The potentially dilutive effect at September 30, 2022 of the following items was not included in the computation of diluted loss per share for such period because their inclusion would have been anti-dilutive to the computation: (i) the aggregate number of shares issuable pursuant to outstanding options, SARs and RSUs of 35.8 million, and (ii) the aggregate number of shares issuable pursuant to outstanding PSUs and PSARs of8.7 million and (iii) using the if-converted method, the aggregate number of shares potentially issuable under our Convertible Notes of 19.5 million. | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended September 30, | | Nine months ended September 30, |
| | | 2023 | | 2022 | | 2023 | | |
| | in millions | | |
| Aggregate number of shares issuable pursuant to: | | | | | | | | |
| Outstanding options, SARs and RSUs | | 32.0 | | | 35.1 | | | 32.8 | | | |
| Outstanding PSUs and PSARs | | 8.8 | | | 8.5 | | | 8.8 | | | |
| | | | | | | | |
| ESPP | | 0.1 | | | — | | | 0.1 | | | |
| Aggregate number of shares potentially issuable under our Convertible Notes (if-converted method) | | 10.7 | | | — | | | 10.7 | | | |
(16)(15) Equity
Share Repurchase ProgramsProgram
On March 16, 2020,May 8, 2023, our Directors approved an additional $200 million for the 2020 Share Repurchase Program, which 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, subject to certain limitations and conditions. On February 22, 2022, our Directors approvedunder the 2022 Share Repurchase Program. This 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. The 2022 Share Repurchase Program does not obligate us to repurchase any of our Class A or C common shares. Under the 2022 Share Repurchase Program, we may repurchase our common shares inthrough December 2025 through open market purchases at prevailing market prices, in privately negotiated transactions, in block trades, derivative transactions and/or through other legally permissible means.
During the nine months ended September 30, 2022,2023, we repurchased 2,653,800 2.6 millionand 14,281,00011.0 million Class A and Class C common shares, respectively, under the Share Repurchase Programs.respectively. During the nine months ended September 30, 2021,2022, we repurchased 2,169,7002.7 million and 14.3 million Class A and Class C common shares.shares, respectively. At September 30, 2022,2023, the remaining amount authorized for share repurchases under the 2022 Share Repurchase Program was $74 million.$146 million.
ContributionPension Buy-in
In May 2023, the CWSF completed an additional buy-in bulk annuity, resulting in 100% of the plan’s liabilities being covered by insurance annuity policies. The buy-in resulted in the remeasurement of $75 million from noncontrolling interest owners
Duringnet pension assets to accumulated other comprehensive income during the thirdsecond quarter of 2021, we received an equity contribution of $47 million from2023, which represents the noncontrolling interest owner of our Liberty Servicios entity,loss associated with the proceeds of which were used to partially funddifference between the Liberty Telecomunicaciones Acquisition. This contribution represented their pro-rata shareprojected benefit obligations and the cost of the equity portion of the purchase price for the Liberty Telecomunicaciones Acquisition, and has been reflected as a contribution from noncontrolling interest owners in our condensed consolidated statements of equity and as a financing activity in our condensed consolidated statement of cash flows.bulk annuity policy.
(17)(16) Commitments and Contingencies
Guarantees and Other Credit Enhancements
In the ordinary course of business, we may provide (i) indemnifications to our lenders, our vendors and certain other parties and (ii) performance and/or financial guarantees to local municipalities, our customers and vendors. Historically, these arrangements have not resulted in our company making any material payments and we do not believe that they will result in material payments in the future.
Legal and Regulatory Proceedings and Other Contingencies
Liberty Latin America Ltd.
VTR Class Action. On August 25, 2020, VTR was notified that SERNAC had filed a class action complaint against VTR in the 14th Civil Court of Santiago. The complaint relatesNotes to consumer complaints regarding VTR’s broadband service and capacity during the pandemic and raises claims regarding, among other things, VTR’s disclosure of its broadband speeds and aggregate capacity availability and VTR’s response to address the causes of service instability during the pandemic. We believe that the allegations are without merit, in particular as it relates to VTR’s service and response during the pandemic. See note 8 regarding the closing of the Chile JV subsequent to Condensed Consolidated Financial Statements – (Continued)
September 30, 2022.2023
(unaudited)
Regulatory Issues.Issues
We have contingent liabilities related to matters arising in the ordinary course of business, including (i) legal proceedings, (ii) issues involving wage, property, withholding and other tax issues and (iii) disputes over interconnection, programming and copyright fees. While we generally expect that the amounts required to satisfy these contingencies will not materially differ from any estimated amounts we have accrued, no assurance can be given that the resolution of one or more of
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2022
(unaudited)
these contingencies will not result in a material impact on our results of operations, cash flows or financial position in any given period. Due, in general, to the complexity of the issues involved and, in certain cases, the lack of a clear basis for predicting outcomes, we cannot provide a meaningful range of potential losses or cash outflows that might result from any unfavorable outcomes.
(18)(17) Segment Reporting
Our reportable segments derive their revenue primarily from residential and B2B services, including video, broadband internet, fixed-line telephony and mobile services. Our corporate category includes our corporate operations, which derive revenue from mobile handset insurance services. We generally identify our reportable segments as those operating segments that represent 10% or more of our revenue, Adjusted OIBDA or total assets.
During the third quarter of 2022, we completed an organizational change with respect to our C&W operations whereby management of certain subsidiaries of C&W, which primarily operate our subsea and fiber optic cable networks, now report directly to the Senior Vice President, Infrastructure and Corporate Strategy of Liberty Latin America and no longer report to the former C&W Caribbean and Networks segment decision maker. As a result, the aforementioned subsidiaries of C&W are now a separate operating and reportable segment, herein referred to as the C&W Networks & LatAm segment. In connection with this change, we have revised our segment presentation for all periods to separately present (i) C&W Caribbean and (ii) C&W Networks & LatAm. Accordingly, as of September 30, 2022,2023, unless otherwise specified below, our reportable segments are as follows:
•C&W Caribbean;
•C&W Panama;
•C&W Networks & LatAm;Liberty Networks;
•Liberty Puerto Rico;
•Liberty Costa Rica; and
•VTR.VTR (through September 30, 2022).
Performance Measures of our Reportable Segments
We evaluate performance and make decisions about allocating resources to our reportable segments based on financial measures, such as revenue and Adjusted OIBDA. In addition, we review non-financial measures, such as subscriber growth. We account for intersegment sales as if they were to third parties, that is,or at current market prices.
Adjusted OIBDA is the primary measure used by our chief operating decision maker to evaluate segment operating performance. Adjusted OIBDA is also a key factor that is used by our internal decision makers to (i) determine how to allocate resources to segments and (ii) evaluate the effectiveness of our management for purposes of incentive compensation plans. Our internal decision makers believe Adjusted OIBDA is a meaningful measure because it represents a transparent view of our recurring operating performance that is unaffected by our capital structure and allows management to (i) readily view operating trends, (ii) perform analytical comparisons and benchmarking between segments and (iii) identify strategies to improve operating performance in the different countries in which we operate. A reconciliation of total Adjusted OIBDA to operating income or loss and to earnings or loss before income taxes is presented below.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 20222023
(unaudited)
The amounts presented below represent 100% of the revenue and Adjusted OIBDA of each of our reportable segments and our corporate operations. As we have the ability to control certain subsidiaries that are not wholly-owned, we include 100% of the revenue and expenses of these entities in our condensed consolidated statements of operations despite the fact that third parties own significant interests in these entities. The noncontrolling owners’ interests in the operating results of (i) certain subsidiaries of (a) C&W and (b) Liberty Puerto Rico, and (ii) Liberty Costa Rica are reflected in net earnings or loss attributable to noncontrolling interests in our condensed consolidated statements of operations. Subsequent to the formation of the Chile JV during October 2022, VTR is no longer consolidated.
| | | Revenue | | Revenue |
| | | Three months ended September 30, | | Nine months ended September 30, | | Three months ended September 30, | | Nine months ended September 30, |
| | 2022 | | 2021 | | 2022 | | 2021 | | 2023 | | 2022 | | 2023 | | 2022 |
| | | in millions | | in millions |
| | C&W Caribbean | C&W Caribbean | $ | 359.1 | | | $ | 347.4 | | | $ | 1,069.5 | | | $ | 1,033.0 | | C&W Caribbean | $ | 360.5 | | | $ | 359.1 | | | $ | 1,070.6 | | | $ | 1,069.5 | |
| C&W Panama | C&W Panama | 172.5 | | | 133.9 | | | 441.3 | | | 394.5 | | C&W Panama | 190.4 | | | 172.5 | | | 536.5 | | | 441.3 | |
| C&W Networks & LatAm | 102.8 | | | 106.5 | | | 326.8 | | | 320.0 | | |
| Liberty Networks | | Liberty Networks | 112.5 | | | 102.8 | | | 339.8 | | | 326.8 | |
| Liberty Puerto Rico | Liberty Puerto Rico | 366.9 | | | 357.3 | | | 1,096.4 | | | 1,078.5 | | Liberty Puerto Rico | 351.2 | | | 365.7 | | | 1,064.2 | | | 1,091.4 | |
| Liberty Costa Rica | Liberty Costa Rica | 109.2 | | | 77.8 | | | 324.6 | | | 150.3 | | Liberty Costa Rica | 134.6 | | | 109.2 | | | 399.0 | | | 324.6 | |
| VTR | VTR | 129.8 | | | 193.1 | | | 450.6 | | | 612.7 | | VTR | — | | | 129.8 | | | — | | | 450.6 | |
| Corporate | Corporate | 5.4 | | | 5.4 | | | 16.5 | | | 16.2 | | Corporate | 6.5 | | | 5.4 | | | 18.5 | | | 16.5 | |
| Intersegment eliminations | Intersegment eliminations | (23.7) | | | (25.1) | | | (71.3) | | | (71.0) | | Intersegment eliminations | (29.9) | | | (23.7) | | | (81.1) | | | (71.3) | |
| Total | Total | $ | 1,222.0 | | | $ | 1,196.3 | | | $ | 3,654.4 | | | $ | 3,534.2 | | Total | $ | 1,125.8 | | | $ | 1,220.8 | | | $ | 3,347.5 | | | $ | 3,649.4 | |
| | | Adjusted OIBDA | | Adjusted OIBDA |
| | | Three months ended September 30, | | Nine months ended September 30, | | Three months ended September 30, | | Nine months ended September 30, |
| | 2022 | | 2021 | | 2022 | | 2021 | | 2023 | | 2022 | | 2023 | | 2022 |
| | | in millions | | in millions |
| | C&W Caribbean | C&W Caribbean | $ | 132.7 | | | $ | 119.6 | | | $ | 397.1 | | | $ | 357.9 | | C&W Caribbean | $ | 150.4 | | | $ | 132.7 | | | $ | 436.9 | | | $ | 397.1 | |
| C&W Panama | C&W Panama | 46.7 | | | 47.9 | | | 131.6 | | | 137.5 | | C&W Panama | 58.5 | | | 46.7 | | | 161.0 | | | 131.6 | |
| C&W Networks & LatAm | 58.9 | | | 62.0 | | | 196.6 | | | 193.1 | | |
| Liberty Networks | | Liberty Networks | 64.2 | | | 58.9 | | | 200.0 | | | 196.6 | |
| Liberty Puerto Rico | Liberty Puerto Rico | 131.5 | | | 139.3 | | | 418.2 | | | 445.6 | | Liberty Puerto Rico | 116.4 | | | 130.3 | | | 381.6 | | | 413.2 | |
| Liberty Costa Rica | Liberty Costa Rica | 32.8 | | | 24.0 | | | 98.6 | | | 50.8 | | Liberty Costa Rica | 49.9 | | | 32.8 | | | 145.2 | | | 98.6 | |
| VTR | VTR | 31.2 | | | 65.1 | | | 115.6 | | | 204.3 | | VTR | — | | | 31.2 | | | — | | | 115.6 | |
| Corporate | Corporate | (18.8) | | | (14.7) | | | (45.4) | | | (37.7) | | Corporate | (11.0) | | | (18.8) | | | (55.0) | | | (45.4) | |
| | Total | Total | $ | 415.0 | | | $ | 443.2 | | | $ | 1,312.3 | | | $ | 1,351.5 | | Total | $ | 428.4 | | | $ | 413.8 | | | $ | 1,269.7 | | | $ | 1,307.3 | |
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 20222023
(unaudited)
The following table provides a reconciliation of total Adjusted OIBDA to operating income (loss) and to earnings (loss) before income taxes:
| | | | Three months ended September 30, | | Nine months ended September 30, | | Three months ended September 30, | | Nine months ended September 30, |
| | | 2022 | | 2021 | | 2022 | | 2021 | | 2023 | | 2022 | | 2023 | | 2022 |
| | | in millions | | in millions |
| | Total Adjusted OIBDA | Total Adjusted OIBDA | $ | 415.0 | | | $ | 443.2 | | | $ | 1,312.3 | | | $ | 1,351.5 | | Total Adjusted OIBDA | $ | 428.4 | | | $ | 413.8 | | | $ | 1,269.7 | | | $ | 1,307.3 | |
| Share-based compensation expense | Share-based compensation expense | (20.8) | | | (33.1) | | | (82.6) | | | (88.9) | | Share-based compensation expense | (24.1) | | | (20.8) | | | (77.8) | | | (82.6) | |
| Depreciation and amortization | Depreciation and amortization | (234.3) | | | (252.0) | | | (661.7) | | | (736.3) | | Depreciation and amortization | (230.5) | | | (234.3) | | | (705.6) | | | (661.7) | |
| Impairment, restructuring and other operating items, net | Impairment, restructuring and other operating items, net | (7.0) | | | (22.1) | | | (583.4) | | | (41.3) | | Impairment, restructuring and other operating items, net | (11.1) | | | (7.0) | | | (81.6) | | | (583.4) | |
| Operating income (loss) | Operating income (loss) | 152.9 | | | 136.0 | | | (15.4) | | | 485.0 | | Operating income (loss) | 162.7 | | | 151.7 | | | 404.7 | | | (20.4) | |
| Interest expense | Interest expense | (149.2) | | | (137.1) | | | (415.8) | | | (397.2) | | Interest expense | (152.3) | | | (149.2) | | | (448.0) | | | (415.8) | |
| Realized and unrealized gains on derivative instruments, net | Realized and unrealized gains on derivative instruments, net | 135.4 | | | 292.0 | | | 385.0 | | | 464.2 | | Realized and unrealized gains on derivative instruments, net | 47.5 | | | 135.4 | | | 52.8 | | | 385.0 | |
| Foreign currency transaction losses, net | (56.5) | | | (136.2) | | | (221.9) | | | (206.0) | | |
| Gains (losses) on debt extinguishments | 41.1 | | | (1.9) | | | 41.1 | | | (25.2) | | |
| Foreign currency transaction gains (losses), net | | Foreign currency transaction gains (losses), net | 3.7 | | | (56.5) | | | 46.2 | | | (221.9) | |
| Gains (losses) on debt extinguishments, net | | Gains (losses) on debt extinguishments, net | 0.3 | | | 41.1 | | | (3.9) | | | 41.1 | |
| Other expense, net | Other expense, net | (1.8) | | | (41.1) | | | (7.0) | | | (42.1) | | Other expense, net | (3.6) | | | (1.8) | | | (4.0) | | | (7.0) | |
| Earnings (loss) before income taxes | Earnings (loss) before income taxes | $ | 121.9 | | | $ | 111.7 | | | $ | (234.0) | | | $ | 278.7 | | Earnings (loss) before income taxes | $ | 58.3 | | | $ | 120.7 | | | $ | 47.8 | | | $ | (239.0) | |
Property and Equipment Additions of our Reportable Segments
The property and equipment additions of our reportable segments and corporate operations (including capital additions financed under vendor financing or finance lease arrangements) are presented below and reconciled to the capital expenditureexpenditures, net, amounts included in our condensed consolidated statements of cash flows. For additional information concerning capital additions financed under vendor financing, see note 7.
| | | | Nine months ended September 30, | | Nine months ended September 30, |
| | | 2022 | | 2021 | | 2023 | | 2022 |
| | | in millions | | in millions |
| | C&W Caribbean | C&W Caribbean | $ | 151.4 | | | $ | 155.5 | | C&W Caribbean | $ | 173.8 | | | $ | 151.4 | |
| C&W Panama | C&W Panama | 71.6 | | | 64.5 | | C&W Panama | 82.8 | | | 71.6 | |
| C&W Networks & LatAm | 32.0 | | | 35.4 | | |
| Liberty Networks | | Liberty Networks | 37.1 | | | 32.0 | |
| Liberty Puerto Rico | Liberty Puerto Rico | 154.8 | | | 139.1 | | Liberty Puerto Rico | 158.4 | | | 154.8 | |
| Liberty Costa Rica | Liberty Costa Rica | 45.7 | | | 25.6 | | Liberty Costa Rica | 46.2 | | | 45.7 | |
| VTR | VTR | 107.3 | | | 158.0 | | VTR | — | | | 107.3 | |
| Corporate | Corporate | 28.3 | | | 20.9 | | Corporate | 26.0 | | | 28.3 | |
| Total property and equipment additions | Total property and equipment additions | 591.1 | | | 599.0 | | Total property and equipment additions | 524.3 | | | 591.1 | |
| Assets acquired under capital-related vendor financing arrangements | Assets acquired under capital-related vendor financing arrangements | (114.2) | | | (65.0) | | Assets acquired under capital-related vendor financing arrangements | (117.7) | | | (114.2) | |
| | Changes in current liabilities related to capital expenditures | 20.8 | | | 10.7 | | |
| Total capital expenditures | $ | 497.7 | | | $ | 544.7 | | |
| Changes in current liabilities related to capital expenditures and other | | Changes in current liabilities related to capital expenditures and other | 16.3 | | | 17.2 | |
| Total capital expenditures, net | | Total capital expenditures, net | $ | 422.9 | | | $ | 494.1 | |
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 20222023
(unaudited)
Revenue by Major Category
Our revenue by major category for our reportable segments is set forth in the tables below and includes the following categories:
•residential fixed subscription and residential mobile services revenue, which includes amounts received from subscribers for ongoing fixed and airtime services, respectively;
•residential fixed non-subscription revenue, which primarily includes interconnect and advertising revenue; and
•B2B service revenue, which comprises (i) enterprise revenue that primarily includes broadband internet, video, fixed-line telephony, mobile and managed services (including equipment installation contracts) offered to small (including small or home office), medium and large enterprises and on a wholesale basis, other telecommunication operators; and
•B2B subsea network (ii) wholesale revenue, which includes long-term capacity contracts with customers where the customer either pays a fee over time or prepays for the capacity upfront and pays a portion related to operating and maintenance of the network over time.
| | | Three months ended September 30, 2022 | | Three months ended September 30, 2023 |
| | | C&W Caribbean | | C&W Panama | | C&W Networks & LatAm | | Liberty Puerto Rico | | Liberty Costa Rica | | VTR | | Corporate | | Intersegment Eliminations | | Total | | C&W Caribbean | | C&W Panama | | Liberty Networks | | Liberty Puerto Rico | | Liberty Costa Rica | | | Corporate | | Intersegment Eliminations | | Total |
| | | in millions | | in millions |
| Residential revenue: | Residential revenue: | | Residential revenue: | | | |
| Residential fixed revenue: | Residential fixed revenue: | | Residential fixed revenue: | | | |
| | Subscription revenue | Subscription revenue | $ | 122.2 | | | $ | 27.3 | | | $ | — | | | $ | 111.7 | | | $ | 33.8 | | | $ | 112.7 | | | $ | — | | | $ | — | | | $ | 407.7 | | Subscription revenue | $ | 122.6 | | | $ | 29.6 | | | $ | — | | | $ | 120.5 | | | $ | 37.9 | | | | $ | — | | | $ | — | | | $ | 310.6 | |
| Non-subscription revenue | Non-subscription revenue | 7.6 | | | 1.7 | | | — | | | 5.0 | | | 1.0 | | | 2.4 | | | — | | | — | | | 17.7 | | Non-subscription revenue | 6.5 | | | 1.4 | | | — | | | 7.7 | | | 4.0 | | | | — | | | (1.8) | | | 17.8 | |
| Total residential fixed revenue | Total residential fixed revenue | 129.8 | | | 29.0 | | | — | | | 116.7 | | | 34.8 | | | 115.1 | | | — | | | — | | | 425.4 | | Total residential fixed revenue | 129.1 | | | 31.0 | | | — | | | 128.2 | | | 41.9 | | | | — | | | (1.8) | | | 328.4 | |
| Residential mobile revenue: | Residential mobile revenue: | | | | | | | | | | | | | | | | | | Residential mobile revenue: | | | | | | | | | | | | | | | | |
| Service revenue | Service revenue | 78.8 | | | 65.8 | | | — | | | 112.2 | | | 48.0 | | | 7.8 | | | — | | | — | | | 312.6 | | Service revenue | 83.9 | | | 66.0 | | | — | | | 99.3 | | | 60.7 | | | | — | | | — | | | 309.9 | |
| Interconnect, inbound roaming, equipment sales and other (a) | Interconnect, inbound roaming, equipment sales and other (a) | 17.3 | | | 14.4 | | | — | | | 64.1 | | | 16.4 | | | 0.8 | | | 5.4 | | | — | | | 118.4 | | Interconnect, inbound roaming, equipment sales and other (a) | 18.4 | | | 13.6 | | | — | | | 58.8 | | | 19.3 | | | | 5.6 | | | — | | | 115.7 | |
| Total residential mobile revenue | Total residential mobile revenue | 96.1 | | | 80.2 | | | — | | | 176.3 | | | 64.4 | | | 8.6 | | | 5.4 | | | — | | | 431.0 | | Total residential mobile revenue | 102.3 | | | 79.6 | | | — | | | 158.1 | | | 80.0 | | | | 5.6 | | | — | | | 425.6 | |
| Total residential revenue | Total residential revenue | 225.9 | | | 109.2 | | | — | | | 293.0 | | | 99.2 | | | 123.7 | | | 5.4 | | | — | | | 856.4 | | Total residential revenue | 231.4 | | | 110.6 | | | — | | | 286.3 | | | 121.9 | | | | 5.6 | | | (1.8) | | | 754.0 | |
| | B2B revenue (b) | B2B revenue (b) | 133.2 | | | 63.3 | | | 102.8 | | | 53.0 | | | 10.0 | | | 6.1 | | | — | | | (23.7) | | | 344.7 | | B2B revenue (b) | 129.1 | | | 79.8 | | | 112.5 | | | 56.8 | | | 12.7 | | | | 0.9 | | | (28.1) | | | 363.7 | |
| Other revenue | Other revenue | — | | | — | | | — | | | 20.9 | | | — | | | — | | | — | | | — | | | 20.9 | | Other revenue | — | | | — | | | — | | | 8.1 | | | — | | | | — | | | — | | | 8.1 | |
| Total | Total | $ | 359.1 | | | $ | 172.5 | | | $ | 102.8 | | | $ | 366.9 | | | $ | 109.2 | | | $ | 129.8 | | | $ | 5.4 | | | $ | (23.7) | | | $ | 1,222.0 | | Total | $ | 360.5 | | | $ | 190.4 | | | $ | 112.5 | | | $ | 351.2 | | | $ | 134.6 | | | | $ | 6.5 | | | $ | (29.9) | | | $ | 1,125.8 | |
(a)The total amount includes $60 million of revenue from sales of mobile handsets and other devices.devices to residential mobile customers.
(b)The total amount includes $75 million of revenue from sales of mobile handsets and other devices to B2B mobile customers.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 20222023
(unaudited)
| | | Three months ended September 30, 2021 | | Three months ended September 30, 2022 |
| | | C&W Caribbean | | C&W Panama | | C&W Networks & LatAm | | Liberty Puerto Rico | | Liberty Costa Rica | | VTR | | Corporate | | Intersegment Eliminations | | Total | | C&W Caribbean | | C&W Panama | | Liberty Networks | | Liberty Puerto Rico | | Liberty Costa Rica | | VTR | | Corporate | | Intersegment Eliminations | | Total |
| | | in millions | | in millions |
| Residential revenue: | Residential revenue: | | Residential revenue: | |
| Residential fixed revenue: | Residential fixed revenue: | | Residential fixed revenue: | |
| | Subscription revenue | Subscription revenue | $ | 118.1 | | | $ | 22.3 | | | $ | — | | | $ | 110.6 | | | $ | 34.9 | | | $ | 167.8 | | | $ | — | | | $ | — | | | $ | 453.7 | | Subscription revenue | $ | 122.2 | | | $ | 27.3 | | | $ | — | | | $ | 111.7 | | | $ | 33.8 | | | $ | 112.7 | | | $ | — | | | $ | — | | | $ | 407.7 | |
| Non-subscription revenue | Non-subscription revenue | 8.5 | | | 2.3 | | | — | | | 5.0 | | | 1.5 | | | 3.8 | | | — | | | — | | | 21.1 | | Non-subscription revenue | 7.6 | | | 1.7 | | | — | | | 5.0 | | | 1.0 | | | 2.4 | | | — | | | — | | | 17.7 | |
| Total residential fixed revenue | Total residential fixed revenue | 126.6 | | | 24.6 | | | — | | | 115.6 | | | 36.4 | | | 171.6 | | | — | | | — | | | 474.8 | | Total residential fixed revenue | 129.8 | | | 29.0 | | | — | | | 116.7 | | | 34.8 | | | 115.1 | | | — | | | — | | | 425.4 | |
| Residential mobile revenue: | Residential mobile revenue: | | | | | | | | | | | | | | | | | | Residential mobile revenue: | | | | | | | | | | | | | | | | | |
| Service revenue | Service revenue | 76.1 | | | 43.6 | | | — | | | 122.0 | | | 28.5 | | | 11.5 | | | — | | | — | | | 281.7 | | Service revenue | 78.8 | | | 65.8 | | | — | | | 111.0 | | | 48.0 | | | 7.8 | | | — | | | — | | | 311.4 | |
| Interconnect, inbound roaming, equipment sales and other (a) | Interconnect, inbound roaming, equipment sales and other (a) | 14.9 | | | 11.6 | | | — | | | 55.3 | | | 7.0 | | | 1.7 | | | 5.4 | | | — | | | 95.9 | | Interconnect, inbound roaming, equipment sales and other (a) | 17.3 | | | 14.4 | | | — | | | 64.1 | | | 16.4 | | | 0.8 | | | 5.4 | | | — | | | 118.4 | |
| Total residential mobile revenue | Total residential mobile revenue | 91.0 | | | 55.2 | | | — | | | 177.3 | | | 35.5 | | | 13.2 | | | 5.4 | | | — | | | 377.6 | | Total residential mobile revenue | 96.1 | | | 80.2 | | | — | | | 175.1 | | | 64.4 | | | 8.6 | | | 5.4 | | | — | | | 429.8 | |
| Total residential revenue | Total residential revenue | 217.6 | | | 79.8 | | | — | | | 292.9 | | | 71.9 | | | 184.8 | | | 5.4 | | | — | | | 852.4 | | Total residential revenue | 225.9 | | | 109.2 | | | — | | | 291.8 | | | 99.2 | | | 123.7 | | | 5.4 | | | — | | | 855.2 | |
| | B2B revenue (b) | B2B revenue (b) | 129.8 | | | 54.1 | | | 106.5 | | | 54.2 | | | 5.9 | | | 8.3 | | | — | | | (25.1) | | | 333.7 | | B2B revenue (b) | 133.2 | | | 63.3 | | | 102.8 | | | 53.0 | | | 10.0 | | | 6.1 | | | — | | | (23.7) | | | 344.7 | |
| Other revenue | Other revenue | — | | | — | | | — | | | 10.2 | | | — | | | — | | | — | | | — | | | 10.2 | | Other revenue | — | | | — | | | — | | | 20.9 | | | — | | | — | | | — | | | — | | | 20.9 | |
| Total | Total | $ | 347.4 | | | $ | 133.9 | | | $ | 106.5 | | | $ | 357.3 | | | $ | 77.8 | | | $ | 193.1 | | | $ | 5.4 | | | $ | (25.1) | | | $ | 1,196.3 | | Total | $ | 359.1 | | | $ | 172.5 | | | $ | 102.8 | | | $ | 365.7 | | | $ | 109.2 | | | $ | 129.8 | | | $ | 5.4 | | | $ | (23.7) | | | $ | 1,220.8 | |
(a)The total amount includes $49$60 million of revenue from sales of mobile handsets and other devices.devices to residential mobile customers.
(b)The total amount includes $10$7 million of revenue from sales of mobile handsets and other devices to B2B mobile customers.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 20222023
(unaudited)
| | | Nine months ended September 30, 2022 | | Nine months ended September 30, 2023 |
| | | C&W Caribbean | | C&W Panama | | C&W Networks & LatAm | | Liberty Puerto Rico | | Liberty Costa Rica | | VTR | | Corporate | | Intersegment Eliminations | | Total | | C&W Caribbean | | C&W Panama | | Liberty Networks | | Liberty Puerto Rico | | Liberty Costa Rica | | Corporate | | Intersegment Eliminations | | Total |
| | | in millions | | in millions |
| Residential revenue: | Residential revenue: | | Residential revenue: | |
| Residential fixed revenue: | Residential fixed revenue: | | Residential fixed revenue: | |
| | Subscription revenue | Subscription revenue | $ | 363.5 | | | $ | 75.1 | | | $ | — | | | $ | 343.0 | | | $ | 101.9 | | | $ | 392.3 | | | $ | — | | | $ | — | | | $ | 1,275.8 | | Subscription revenue | $ | 363.9 | | | $ | 86.6 | | | $ | — | | | $ | 358.6 | | | $ | 115.1 | | | $ | — | | | $ | — | | | $ | 924.2 | |
| Non-subscription revenue | Non-subscription revenue | 25.2 | | | 5.7 | | | — | | | 16.0 | | | 2.6 | | | 8.9 | | | — | | | — | | | 58.4 | | Non-subscription revenue | 21.2 | | | 4.2 | | | — | | | 19.4 | | | 9.1 | | | — | | | (1.8) | | | 52.1 | |
| Total residential fixed revenue | Total residential fixed revenue | 388.7 | | | 80.8 | | | — | | | 359.0 | | | 104.5 | | | 401.2 | | | — | | | — | | | 1,334.2 | | Total residential fixed revenue | 385.1 | | | 90.8 | | | — | | | 378.0 | | | 124.2 | | | — | | | (1.8) | | | 976.3 | |
| Residential mobile revenue: | Residential mobile revenue: | | | | | | | | | | | | | | | | | | Residential mobile revenue: | | | | | | | | | | | | | | | |
| Service revenue | Service revenue | 232.9 | | | 152.7 | | | — | | | 343.5 | | | 142.8 | | | 25.8 | | | — | | | — | | | 897.7 | | Service revenue | 245.3 | | | 196.8 | | | — | | | 302.2 | | | 178.8 | | | — | | | — | | | 923.1 | |
| Interconnect, inbound roaming, equipment sales and other (a) | Interconnect, inbound roaming, equipment sales and other (a) | 48.1 | | | 35.9 | | | — | | | 188.2 | | | 48.5 | | | 2.9 | | | 16.5 | | | — | | | 340.1 | | Interconnect, inbound roaming, equipment sales and other (a) | 57.7 | | | 40.5 | | | — | | | 183.9 | | | 56.4 | | | 17.6 | | | — | | | 356.1 | |
| Total residential mobile revenue | Total residential mobile revenue | 281.0 | | | 188.6 | | | — | | | 531.7 | | | 191.3 | | | 28.7 | | | 16.5 | | | — | | | 1,237.8 | | Total residential mobile revenue | 303.0 | | | 237.3 | | | — | | | 486.1 | | | 235.2 | | | 17.6 | | | — | | | 1,279.2 | |
| Total residential revenue | Total residential revenue | 669.7 | | | 269.4 | | | — | | | 890.7 | | | 295.8 | | | 429.9 | | | 16.5 | | | — | | | 2,572.0 | | Total residential revenue | 688.1 | | | 328.1 | | | — | | | 864.1 | | | 359.4 | | | 17.6 | | | (1.8) | | | 2,255.5 | |
| | B2B revenue (b) | B2B revenue (b) | 399.8 | | | 171.9 | | | 326.8 | | | 164.3 | | | 28.8 | | | 20.7 | | | — | | | (71.3) | | | 1,041.0 | | B2B revenue (b) | 382.5 | | | 208.4 | | | 339.8 | | | 168.7 | | | 39.6 | | | 0.9 | | | (79.3) | | | 1,060.6 | |
| Other revenue | Other revenue | — | | | — | | | — | | | 41.4 | | | — | | | — | | | — | | | — | | | 41.4 | | Other revenue | — | | | — | | | — | | | 31.4 | | | — | | | — | | | — | | | 31.4 | |
| Total | Total | $ | 1,069.5 | | | $ | 441.3 | | | $ | 326.8 | | | $ | 1,096.4 | | | $ | 324.6 | | | $ | 450.6 | | | $ | 16.5 | | | $ | (71.3) | | | $ | 3,654.4 | | Total | $ | 1,070.6 | | | $ | 536.5 | | | $ | 339.8 | | | $ | 1,064.2 | | | $ | 399.0 | | | $ | 18.5 | | | $ | (81.1) | | | $ | 3,347.5 | |
(a)The total amount includes $176$186 million of revenue from sales of mobile handsets and other devices.devices to residential mobile customers.
(b)The total amount includes $22 million of revenue from sales of mobile handsets and other devices to B2B mobile customers.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2023
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine months ended September 30, 2022 |
| | C&W Caribbean | | C&W Panama | | Liberty Networks | | Liberty Puerto Rico | | Liberty Costa Rica | | VTR | | Corporate | | Intersegment Eliminations | | Total |
| | in millions |
| Residential revenue: | | | | | | | | | | | | | | | | | |
| Residential fixed revenue: | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Subscription revenue | $ | 363.5 | | | $ | 75.1 | | | $ | — | | | $ | 343.0 | | | $ | 101.9 | | | $ | 392.3 | | | $ | — | | | $ | — | | | $ | 1,275.8 | |
| Non-subscription revenue | 25.2 | | | 5.7 | | | — | | | 16.0 | | | 2.6 | | | 8.9 | | | — | | | — | | | 58.4 | |
| Total residential fixed revenue | 388.7 | | | 80.8 | | | — | | | 359.0 | | | 104.5 | | | 401.2 | | | — | | | — | | | 1,334.2 | |
| Residential mobile revenue: | | | | | | | | | | | | | | | | | |
| Service revenue | 232.9 | | | 152.7 | | | — | | | 338.5 | | | 142.8 | | | 25.8 | | | — | | | — | | | 892.7 | |
| Interconnect, inbound roaming, equipment sales and other (a) | 48.1 | | | 35.9 | | | — | | | 188.2 | | | 48.5 | | | 2.9 | | | 16.5 | | | — | | | 340.1 | |
| Total residential mobile revenue | 281.0 | | | 188.6 | | | — | | | 526.7 | | | 191.3 | | | 28.7 | | | 16.5 | | | — | | | 1,232.8 | |
| Total residential revenue | 669.7 | | | 269.4 | | | — | | | 885.7 | | | 295.8 | | | 429.9 | | | 16.5 | | | — | | | 2,567.0 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| B2B revenue (b) | 399.8 | | | 171.9 | | | 326.8 | | | 164.3 | | | 28.8 | | | 20.7 | | | — | | | (71.3) | | | 1,041.0 | |
| Other revenue | — | | | — | | | — | | | 41.4 | | | — | | | — | | | — | | | — | | | 41.4 | |
| Total | $ | 1,069.5 | | | $ | 441.3 | | | $ | 326.8 | | | $ | 1,091.4 | | | $ | 324.6 | | | $ | 450.6 | | | $ | 16.5 | | | $ | (71.3) | | | $ | 3,649.4 | |
(a)The total amount includes$176 million of revenue from sales of mobile handsets and other devices to residential mobile customers.
(b)The total amount includes $19 million of revenue from sales of mobile handsets and other devices to B2B mobile customers.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 20222023
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine months ended September 30, 2021 |
| | C&W Caribbean | | C&W Panama | | C&W Networks & LatAm | | Liberty Puerto Rico | | Liberty Costa Rica | | VTR | | Corporate | | Intersegment Eliminations | | Total |
| | in millions |
| Residential revenue: | | | | | | | | | | | | | | | | | |
| Residential fixed revenue: | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Subscription revenue | $ | 353.7 | | | $ | 64.7 | | | $ | — | | | $ | 327.1 | | | $ | 104.1 | | | $ | 532.9 | | | $ | — | | | $ | — | | | $ | 1,382.5 | |
| Non-subscription revenue | 25.9 | | | 7.2 | | | — | | | 14.1 | | | 4.8 | | | 11.2 | | | — | | | — | | | 63.2 | |
| Total residential fixed revenue | 379.6 | | | 71.9 | | | — | | | 341.2 | | | 108.9 | | | 544.1 | | | — | | | — | | | 1,445.7 | |
| Residential mobile revenue: | | | | | | | | | | | | | | | | | |
| Service revenue | 222.9 | | | 132.8 | | | — | | | 359.8 | | | 28.5 | | | 37.7 | | | — | | | — | | | 781.7 | |
| Interconnect, inbound roaming, equipment sales and other (a) | 45.0 | | | 33.2 | | | — | | | 188.8 | | | 7.0 | | | 5.8 | | | 16.2 | | | — | | | 296.0 | |
| Total residential mobile revenue | 267.9 | | | 166.0 | | | — | | | 548.6 | | | 35.5 | | | 43.5 | | | 16.2 | | | — | | | 1,077.7 | |
| Total residential revenue | 647.5 | | | 237.9 | | | — | | | 889.8 | | | 144.4 | | | 587.6 | | | 16.2 | | | — | | | 2,523.4 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| B2B revenue (b) | 385.5 | | | 156.6 | | | 320.0 | | | 161.5 | | | 5.9 | | | 25.1 | | | — | | | (71.0) | | | 983.6 | |
| Other revenue | — | | | — | | | — | | | 27.2 | | | — | | | — | | | — | | | — | | | 27.2 | |
| Total | $ | 1,033.0 | | | $ | 394.5 | | | $ | 320.0 | | | $ | 1,078.5 | | | $ | 150.3 | | | $ | 612.7 | | | $ | 16.2 | | | $ | (71.0) | | | $ | 3,534.2 | |
(a)The total amount includes$153 million of revenue from sales of mobile handsets and other devices.
(b)The total amount includes $23 million of revenue from sales of mobile handsets and other devices to B2B mobile customers.
Liberty Latin America Ltd.
Notes to Condensed Consolidated Financial Statements – (Continued)
September 30, 2022
(unaudited)
Revenue by Geographic Market
The revenue from third-party customers for each of our geographic markets is set forth in the table below.
| | | | Three months ended September 30, | | Nine months ended September 30, | | Three months ended September 30, | | Nine months ended September 30, |
| | | 2022 | | 2021 | | 2022 | | 2021 | | 2023 | | 2022 | | 2023 | | 2022 |
| | | in millions | | in millions |
| | Puerto Rico | Puerto Rico | $ | 354.0 | | | $ | 344.0 | | | $ | 1,057.6 | | | $ | 1,037.4 | | Puerto Rico | $ | 340.0 | | | $ | 352.8 | | | $ | 1,031.0 | | | $ | 1,052.6 | |
| Chile | 129.8 | | | 193.1 | | | 450.6 | | | 612.7 | | |
| Panama | Panama | 171.6 | | | 133.2 | | | 439.0 | | | 392.7 | | Panama | 189.6 | | | 171.6 | | | 534.3 | | | 439.0 | |
| Costa Rica | Costa Rica | 109.0 | | | 77.7 | | | 324.1 | | | 150.2 | | Costa Rica | 134.3 | | | 109.0 | | | 398.3 | | | 324.1 | |
| Jamaica | Jamaica | 108.5 | | | 100.6 | | | 318.6 | | | 297.3 | | Jamaica | 103.2 | | | 108.5 | | | 301.6 | | | 318.6 | |
| Networks & LatAm (a) | Networks & LatAm (a) | 83.5 | | | 85.6 | | | 269.4 | | | 260.8 | | Networks & LatAm (a) | 89.6 | | | 83.5 | | | 274.5 | | | 269.4 | |
| The Bahamas | The Bahamas | 48.4 | | | 47.8 | | | 144.5 | | | 140.5 | | The Bahamas | 48.9 | | | 48.4 | | | 143.6 | | | 144.5 | |
| Trinidad and Tobago | Trinidad and Tobago | 39.5 | | | 38.7 | | | 119.7 | | | 118.3 | | Trinidad and Tobago | 39.2 | | | 39.5 | | | 117.2 | | | 119.7 | |
| Barbados | Barbados | 37.3 | | | 35.6 | | | 110.6 | | | 104.5 | | Barbados | 39.5 | | | 37.3 | | | 117.5 | | | 110.6 | |
| Curacao | Curacao | 34.2 | | | 34.6 | | | 99.9 | | | 104.2 | | Curacao | 34.0 | | | 34.2 | | | 102.8 | | | 99.9 | |
| Chile | | Chile | — | | | 129.8 | | | — | | | 450.6 | |
| Other (b) | Other (b) | 106.2 | | | 105.4 | | | 320.4 | | | 315.6 | | Other (b) | 107.5 | | | 106.2 | | | 326.7 | | | 320.4 | |
| Total | Total | $ | 1,222.0 | | | $ | 1,196.3 | | | $ | 3,654.4 | | | $ | 3,534.2 | | Total | $ | 1,125.8 | | | $ | 1,220.8 | | | $ | 3,347.5 | | | $ | 3,649.4 | |
(a)The amountsAmounts represent managed servicesenterprise revenue and wholesale revenue from various jurisdictions across Latin America and the Caribbean primarily related to the sale and lease of telecommunications capacity on C&W Networks & LatAm’sLiberty Networks’ subsea and terrestrial fiber optic cable networks.
(b)The amountsAmounts primarily relate to a number of countries in which we have less significant operations, all of which are located in the Caribbean, and to a lesser extent, in Latin America.
(18) Subsequent Events
On November 5, 2023, we entered into an asset purchase agreement and a license purchase agreement with DISH Network (DISH) to acquire DISH spectrum assets in Puerto Rico and the United States Virgin Islands and approximately 120,000 prepaid mobile subscribers in those markets in exchange for cash and international roaming credits. The aggregate asset purchase price of $256 million will be paid in four annual installments commencing on the closing date. The transaction is subject to certain customary closing conditions, including regulatory approvals, and is expected to close next year.
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
See the Glossary of defined terms at the beginning of this Quarterly Report on Form 10-Q.
The following discussion and analysis, which should be read in conjunction with our 20212022 Form 10-K and the condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q, is intended to assist in providing an understanding of our financial condition, changes in financial condition and results of operations and is organized as follows:
•Forward-looking Statements. This section provides a description of certain factors that could cause actual results or events to differ materially from anticipated results or events.
•Overview. This section provides a general description of our business and recent events.
•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, 20222023 and 2021.2022.
•Material Changes in Financial Condition. This section provides an analysis of our liquidity, condensed consolidated statements of cash flows and contractual commitments.
Unless otherwise indicated, operational data (including subscriber statistics) is presented as of September 30, 2022.2023.
Forward-looking Statements
Certain statements in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. To the extent that statements in this Quarterly Report on Form 10-Q are not recitations of historical fact, such statements constitute forward-looking statements, which, by definition, involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. In particular, statements under Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Item 3. Quantitative and Qualitative Disclosures About Market Risk and Item 4.Controls and Proceduresmay contain forward-looking statements, including statements regarding: our business, products, foreign currency and finance strategies; our property and equipment additions; grants or renewals of licenses; subscriber growth and retention rates; changes in competitive, regulatory and economic factors; our anticipated integration plans, synergies, opportunities and integration costs in Puerto Rico following the AT&T Acquisition, in Costa Rica following the Liberty Telecomunicaciones Acquisition and in Panama following the Claro Panama Acquisition; changes in our revenue, expenses,costs, or growth rates; debt levels; our liquidity and our ability to access the liquidity of our subsidiaries; interest rate risks; credit risks; internal control over financial reporting and the remediation of material weaknesses; foreign currency risks; interest rate risks; compliance with debt, financial and other covenants; our future projected sources and uses of cash; the Liberty Telecomunicaciones Acquisition; the Claro Panama Acquisition; the impacts of the formation of the Chile JV; the effects and potential impacts of COVID-19 on our business and results of operations; reductions in operating and capital costs; our 2022 Share Repurchase Program; the outcome and impact of pending litigation; and other information and statements that are not historical fact. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. In addition to the risk factors described in Part I, Item 1A in our 20212022 Form 10-K, the following are some but not all of the factors that could cause actual results or events to differ materially from anticipated results or events:
•economic and business conditions and industry trends in the countries in which we operate;
•the competitive environment in the industries in the countries in which we operate, including competitor responses to our products and services;
•fluctuations in currency exchange rates, inflation rates and interest rates;
•our relationships with third-party programming providers and broadcasters, some of which are also offering content directly to consumers, and our ability to maintain access to desirable programming on acceptable economic terms;
•our relationships with suppliers and licensors and the ability to maintain equipment, software and certain services;
•instability in global financial markets, including sovereign debt issues and related fiscal reforms;
•our ability to obtain additional financing and generate sufficient cash to meet our debt obligations;
•the impact of restrictions contained in certain of our subsidiaries’ debt instruments;
•consumer disposable income and spending levels, including the availability and amount of individual consumer debt;
•changes in consumer viewing preferences and habits, including on mobile devices that function on various operating systems and specifications, limited bandwidth, and different processing power and screen sizes;
•customer acceptance of our existing service offerings, including our video, broadband internet, fixed-line telephony, mobile and business service offerings, and of new technology, programming alternatives and other products and services that we may offer in the future;
•our ability to manage rapid technological changes;
•the impact of 5G and wireless technologies on broadband internet;
•our ability to maintain or increase the number of subscriptions to our video, broadband internet, fixed-line telephony and mobile service offerings and our average revenue per household and mobile subscriber;
•our ability to provide satisfactory customer service, including support for new and evolving products and services;
•our ability to maintain or increase rates to our subscribers or to pass through increased costs to our subscribers;
•the impact of our future financial performance, or market conditions generally, on the availability, terms and deployment of capital;
•changes in, or failure or inability to comply with, government regulations in the countries in which we operate and adverse outcomes from regulatory proceedings;
•government intervention that requires opening our broadband distribution networks to competitors;
•our ability to renew necessary regulatory licenses, concessions or other operating agreements and to otherwise acquire future spectrum or other licenses that we need to offer new mobile data or other technologies or services;
•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;
•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 Chile JV,AT&T Acquisition, the Liberty Telecomunicaciones Acquisition, and the Claro Panama Acquisition and the Liberty Telecomunicaciones Acquisition;
•changes in laws or treaties relating to taxation, or the interpretation thereof, in the U.S. or in other countries in which we operate and the results of any tax audits or tax disputes;
•changes in laws and government regulations that may impact the availability and cost of capital and the derivative instruments that hedge certain of our financial risks;
•the ability of suppliers and vendors, including third-party channel providers and broadcasters, to timely deliver quality products, equipment, software, services and access;
•the availability of attractive programming for our video services and the costs associated with such programming, including retransmission and copyright fees payable to public and private broadcasters;
•uncertainties inherent in the development and integration of new business lines and business strategies;
•our ability to adequately forecast and plan future network requirements, including the costs and benefits associated with our network extension and upgrade programs;
•the availability of capital for the acquisition and/or development of telecommunications networks and services, including property and equipment additions;
•problems we may discover post-closing with the operations, including the internal controls and financial reporting process, of businesses we acquire, such as with respect to the AT&T Acquired Entities, the Liberty Telecomunicaciones Acquisition and the Claro Panama Acquisition;
•our ability to profit from investments in joint ventures that we do not solely control;
•the effect of any of the identified material weaknesses in our internal control over financial reporting;
•piracy, targeted vandalism against our networks, and cybersecurity threats or other security breaches, including the leakage of sensitive customer data, which could harm our business or reputation;
•the outcome of any pending or threatened litigation;
•the loss of key employees and the availability of qualified personnel;
•the effect of any strikes, work stoppages or other industrial actions that could affect our operations;
•changes in the nature of key strategic relationships with partners and joint venturers;
•our equity capital structure;
•our ability to realize the full value of our intangible assets;
•changes in and compliance with applicable data privacy laws, rules, and regulations;
•our ability to recoup insurance reimbursements and settlements from third-party providers;
•our ability to comply with anti-corruption laws and regulations, such as the FCPA;
•our ability to comply with economic and trade sanctions laws, such as the U.S. Treasury Department’s Office of Foreign Assets Control;OFAC;
•the impacts of climate change such as rising sea levels or increasing frequency and intensity of certain weather phenomena; and
•events that are outside of our control, such as political conditions and unrest in international markets, terrorist attacks, malicious human acts, hurricanes volcanoes and other natural disasters, pandemics, including the COVID-19 pandemic, and other similar events.
The broadband distribution and mobile service industries are changing rapidly and, therefore, the forward-looking statements of expectations, plans and intent in this Quarterly Report on Form 10-Q are subject to a significant degree of risk. These forward-looking statements and the above described risks, uncertainties and other factors speak only as of the date of this Quarterly Report on Form 10-Q, and 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 other change in events, conditions or circumstances on which any such statement is based. Readers are cautioned not to place undue reliance on any forward-looking statement.
Overview
General
We are an international provider of fixed, mobile and subsea telecommunications services. We provide,
A.residential and B2B services in:
i.over 20 countries across Latin America and the Caribbean through two of our reportable segments, C&W Caribbean and C&W Panama;
ii.Puerto Rico and the USVI, through our reportable segment Liberty Puerto Rico; and
iii.Costa Rica, through our reportable segment Liberty Costa Rica;
iv.Chile, through our reportable segment VTR; andRica.
B.through our reportable segment C&WLiberty Networks, & LatAm (as further described below), (i) B2Benterprise services in certain other countries in Latin America and the Caribbean and (ii) wholesale communication services over itsour subsea and terrestrial fiber optic cable networks that connect approximately 40 markets in that region.
At September 30, 2022,2023, we (i) owned and operated fixed networks that passed 8,588,6004,524,400 homes and served 6,422,8003,898,000 RGUs, comprising 2,889,6001,785,500 broadband internet subscribers, 1,934,900 video subscribers and 1,598,3001,178,800 fixed-line telephony subscribers and 933,700 video subscribers and (ii) served 8,376,9008,033,000 mobile subscribers.
During the third quarter of 2022, we completed an organizational change with respect to our C&W operations whereby management of certain subsidiaries of C&W, which primarily operate our subsea and fiber optic cable networks, now report directly to the Senior Vice President, Infrastructure and Corporate Strategy of Liberty Latin America and no longer report to the former C&W Caribbean and Networks segment decision maker. As a result, the aforementioned subsidiaries of C&W are now a separate operating and reportable segment, herein referred to as the C&W Networks & LatAm segment. In connection with this change, we have restated our segment presentation for all periods to separately present (i) C&W Caribbean and (ii) C&W Networks & LatAm.
Transactions
Claro Panama Acquisition. On September 14, 2021, we entered into a definitive agreement to acquire América Móvil’s operations in Panama in an all-cash transaction based upon an enterprise value of $200 million on a cash- and debt-free basis. On July 1, 2022, we completed the acquisition of Claro Panama, which was financed through a combination of debt and existing cash.
Chile JV.On September 29, 2021, we entered into an agreement with América Móvil to contribute the Chile JV Entities to América Móvil’s Chilean operations to form the Chile JV that will be owned 50:50 by Liberty Latin America and América Móvil. Subsequent to September 30, In October 2022, we completed the formation of the Chile JV by contributing the Chile JV Entities into the Chile JV. During October 2022, and in connection with this transaction,Subsequent to the formation of the Chile JV, we made a balancing payment to América Móvil totaling $76 million. The transaction didnot trigger a change of control under VTR’s debt agreements, and was not subject to Liberty Latin America or América Móvil shareholder approvals. Beginning in October, we will accountbegan accounting for our 50% interest in the Chile JV as an equity method investment. Prior to the formation of the Chile JV, VTR was a wholly owned subsidiary. As such, our condensed consolidated statements of operations and cash flows for the 2022 periods include VTR.
Material Changes in Results of Operations
The comparability of our operating results during the three and nine months ended September 30, 20222023 and 20212022 is affected by acquisitionsa disposition, FX and, FX effects.for the nine-month comparison, an acquisition. As we use the term, “organic” changes exclude FX and the impacts of acquisitions and disposals, each as further discussed below.
In the following discussion, we quantify the estimated impactimpacts on the operating results of the periods under comparison that isare attributable to acquisitions.acquisitions and disposals. We acquired (i) Telefónica’s operations in Costa Rica during August 2021, (ii) 96% of Broadband VI, LLC’s operations in the U.S. Virgin Islands effective December 2021 and (iii)acquired América Móvil’s operations in Panama during July 2022 and (ii) in connection with the formation of the Chile JV, disposed of the Chile JV Entities in October 2022. With respect to acquisitions, organic changes and the calculations of our organic change percentages exclude the estimated operating results of an acquired entity during the first 12 months following the date of acquisition.
With respect to disposals, the prior-year operating results of disposed entities are excluded from organic changes and the calculations of our organic change percentages to the same extent that those operations are not included in the current year.Changes in foreign currency exchange rates may have a significant impact on our operating results, as VTR, Liberty Costa Rica and certain entities within C&W have functional currencies other than the U.S. dollar. Through September 30, 2022, our primary FX exchange risk relates to the Chilean peso. For example, the average FX rate (utilized to translate our condensed consolidated statements of operations) for the U.S. dollar per one Chilean peso appreciated by 20% and 17% for the three and nine months ended September 30, 2022, respectively, as compared to the corresponding periods in 2021. The impacts to the various components of our results of operations that are attributable to changes in FX are highlighted below. For information concerning our foreign currency risks and applicable foreign currency exchange rates, see Item 3. Quantitative and Qualitative Disclosures About Market Risk—Foreign Currency Rates below.
The amounts presented and discussed below represent 100% of the revenue and expenses of each reportable segment and our corporate operations. As we have the ability to control certain subsidiaries that are not wholly-owned, we include 100% of the revenue and expenses of these entities in our condensed consolidated statements of operations despite the fact that third parties own significant interests in these entities. The noncontrolling owners’ interests in the operating results of (i) certain subsidiaries of (a) C&W and (b) Liberty Puerto Rico, and (ii) Liberty Costa Rica are reflected in net earnings or loss attributable to noncontrolling interests in our condensed consolidated statements of operations.
On January 1, 2023, the B2B Costa Rican operations within our Liberty Networks segment was sold to our Liberty Costa Rica segment. This sale did not have a significant impact on the financial results of our Liberty Networks or Liberty Costa Rica segments.
We are subject to inflationary pressures with respect to certain costs and foreign currency exchange risk with respect to costs and expenses that are denominated in currencies other than the respective functional currencies of our reportable segments. Any cost increases that we are not able to pass on to our customerssubscribers would result in increased pressure on our operating margins.
Operating Income or Loss
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, 2023, as compared to the corresponding periods in 2022.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, | | | | Increase (decrease) from: |
| | | Increase (decrease) | | | | | | A disposition | | |
| | 2023 | | 2022 | | | FX | | | | Organic |
| | in millions |
| | | | | | | | | | | | | |
| Revenue | $ | 1,125.8 | | | $ | 1,220.8 | | | $ | (95.0) | | | $ | 24.3 | | $ | 24.3 | | | | $ | (129.8) | | | $ | 10.5 | |
| Operating costs and expenses (exclusive of depreciation and amortization, shown separately below): | | | | | | | | | | | | | |
| Programming and other direct costs of services | 259.1 | | | 299.1 | | | (40.0) | | | 5.3 | | | | | (38.6) | | | (6.7) | |
| Other operating costs and expenses | 462.4 | | | 528.7 | | | (66.3) | | | 10.7 | | | | | (60.2) | | | (16.8) | |
| Depreciation and amortization | 230.5 | | | 234.3 | | | (3.8) | | | 4.1 | | | | | — | | | (7.9) | |
| Impairment, restructuring and other operating items, net | 11.1 | | | 7.0 | | | 4.1 | | | (0.8) | | | | | (1.2) | | | 6.1 | |
| 963.1 | | | 1,069.1 | | | (106.0) | | | 19.3 | | | | | (100.0) | | | (25.3) | |
| Operating income | $ | 162.7 | | | $ | 151.7 | | | $ | 11.0 | | | $ | 5.0 | | | | | $ | (29.8) | | | $ | 35.8 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine months ended September 30, | | | | Increase (decrease) from: |
| | | Increase (decrease) | | | | An acquisition | | A disposition | | |
| | 2023 | | 2022 | | | FX | | | | Organic |
| | in millions |
| | | | | | | | | | | | | |
| Revenue | $ | 3,347.5 | | | $ | 3,649.4 | | | $ | (301.9) | | | $ | 63.3 | | | $ | 69.6 | | | $ | (450.6) | | | $ | 15.8 | |
| Operating costs and expenses (exclusive of depreciation and amortization, shown separately below): | | | | | | | | | | | | | |
| Programming and other direct costs of services | 740.2 | | | 903.3 | | | (163.1) | | | 13.5 | | | 17.8 | | | (138.6) | | | (55.8) | |
| Other operating costs and expenses | 1,415.4 | | | 1,521.4 | | | (106.0) | | | 26.2 | | | 50.2 | | | (204.0) | | | 21.6 | |
| Depreciation and amortization | 705.6 | | | 661.7 | | | 43.9 | | | 11.7 | | | 17.0 | | | — | | | 15.2 | |
| Impairment, restructuring and other operating items, net | 81.6 | | | 583.4 | | | (501.8) | | | 0.2 | | | — | | | (4.8) | | | (497.2) | |
| 2,942.8 | | | 3,669.8 | | | (727.0) | | | 51.6 | | | 85.0 | | | (347.4) | | | (516.2) | |
| Operating income (loss) | $ | 404.7 | | | $ | (20.4) | | | $ | 425.1 | | | $ | 11.7 | | | $ | (15.4) | | | $ | (103.2) | | | $ | 532.0 | |
The changes to our operating income (loss) for the three and nine months ended September 30, 2023, as compared to the corresponding periods during 2022, as reflected in the tables above, are primarily due to (i) for the nine-month comparison, decreases associated with impairment, restructuring and other operating items, net, (ii) the disposition of the Chile JV Entities and (iii) organic changes. For further discussion and analysis of organic changes in revenue and costs, see Revenue, Programming and Other Direct Costs of Services, and Other Operating Costs sections below.
Consolidated Adjusted OIBDA
On a consolidated basis, Adjusted OIBDA is a non-U.S. GAAP measure. Adjusted OIBDA is the primary measure used by our chief operating decision maker to evaluate segment operating performance. Adjusted OIBDA is also a key factor that is used by our internal decision makers to determine how to allocate resources to segments. Our internal decision makers believe Adjusted OIBDA is a meaningful measure because it represents a transparent view of our recurring operating performance that is unaffected by our capital structure and allows management to (i) readily view operating trends, (ii) perform analytical comparisons and benchmarking between segments and (iii) identify strategies to improve operating performance in the different countries in which we operate. We believe our Adjusted OIBDA measure is useful to investors because it is one of the bases for comparing our performance with the performance of other companies in the same or similar industries, although our measures may not be directly comparable to similar measures used by other public companies. Adjusted OIBDA should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income or loss, net earnings or loss and other U.S. GAAP measures of income or loss.
A reconciliation of total operating income (loss), the nearest U.S. GAAP measure, to Adjusted OIBDA on a consolidated basis, is presented below.
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Nine months ended September 30, |
| | 2022 | | 2021 | | 2022 | | 2021 |
| | in millions |
| | | | | | | |
| Operating income (loss) | $ | 152.9 | | | $ | 136.0 | | | $ | (15.4) | | | $ | 485.0 | |
| Share-based compensation expense | 20.8 | | | 33.1 | | | 82.6 | | | 88.9 | |
| Depreciation and amortization | 234.3 | | | 252.0 | | | 661.7 | | | 736.3 | |
| Impairment, restructuring and other operating items, net | 7.0 | | | 22.1 | | | 583.4 | | | 41.3 | |
| Consolidated Adjusted OIBDA | $ | 415.0 | | | $ | 443.2 | | | $ | 1,312.3 | | | $ | 1,351.5 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Nine months ended September 30, |
| | 2023 | | 2022 | | 2023 | | 2022 |
| | in millions |
| | | | | | | |
| Operating income (loss) | $ | 162.7 | | | $ | 151.7 | | | $ | 404.7 | | | $ | (20.4) | |
| Share-based compensation expense | 24.1 | | | 20.8 | | | 77.8 | | | 82.6 | |
| Depreciation and amortization | 230.5 | | | 234.3 | | | 705.6 | | | 661.7 | |
| Impairment, restructuring and other operating items, net | 11.1 | | | 7.0 | | | 81.6 | | | 583.4 | |
| Consolidated Adjusted OIBDA | $ | 428.4 | | | $ | 413.8 | | | $ | 1,269.7 | | | $ | 1,307.3 | |
The following tables set forth the organic and non-organic changes in Adjusted OIBDA forduring the three and nine months ended September 30, 2023, as compared to the corresponding periods indicated:in 2022:
| | | C&W Caribbean | | C&W Panama | | C&W Networks & LatAm | | Liberty Puerto Rico | | Liberty Costa Rica | | VTR | | Corporate | | Intersegment eliminations | | Consolidated | | C&W Caribbean | | C&W Panama | | Liberty Networks | | Liberty Puerto Rico | | Liberty Costa Rica | | VTR | | Corporate | | Intersegment eliminations | | Consolidated |
| | | in millions | | in millions |
| Adjusted OIBDA for the three months ending: | Adjusted OIBDA for the three months ending: | | Adjusted OIBDA for the three months ending: | |
| September 30, 2021 | $ | 119.6 | | | $ | 47.9 | | | $ | 62.0 | | | $ | 139.3 | | | $ | 24.0 | | | $ | 65.1 | | | $ | (14.7) | | | $ | — | | | $ | 443.2 | | |
| September 30, 2022 | | September 30, 2022 | $ | 132.7 | | | $ | 46.7 | | | $ | 58.9 | | | $ | 130.3 | | | $ | 32.8 | | | $ | 31.2 | | | $ | (18.8) | | | $ | — | | | $ | 413.8 | |
| Organic changes related to: | Organic changes related to: | | Organic changes related to: | |
| Revenue | Revenue | 11.5 | | | 3.8 | | | (1.3) | | | (3.8) | | | 12.2 | | | (37.5) | | | — | | | 1.4 | | | (13.7) | | Revenue | 2.7 | | | 17.9 | | | 8.2 | | | (14.5) | | | 1.1 | | | — | | | 1.1 | | | (6.0) | | | 10.5 | |
| Programming and other direct costs | Programming and other direct costs | 2.8 | | | (2.0) | | | (2.3) | | | (3.1) | | | (0.7) | | | 9.6 | | | — | | | (0.6) | | | 3.7 | | Programming and other direct costs | 12.2 | | | (15.4) | | | (1.2) | | | 7.8 | | | 2.3 | | | — | | | — | | | 1.0 | | | 6.7 | |
| Other operating costs and expenses | Other operating costs and expenses | (1.4) | | | (4.4) | | | 1.0 | | | (12.4) | | | (6.6) | | | 0.1 | | | (4.1) | | | (0.8) | | | (28.6) | | Other operating costs and expenses | 3.4 | | | 9.3 | | | (2.1) | | | (7.2) | | | 5.0 | | | — | | | 6.7 | | | 5.0 | | | 20.1 | |
| Non-organic increases (decreases): | | |
| Non-organic changes related to: | | Non-organic changes related to: | |
| FX | FX | 0.2 | | | — | | | (0.5) | | | — | | | (1.4) | | | (6.1) | | | — | | | — | | | (7.8) | | FX | (0.6) | | | — | | | 0.4 | | | — | | | 8.7 | | | — | | | — | | | — | | | 8.5 | |
| Acquisitions | — | | | 1.4 | | | — | | | 11.5 | | | 5.3 | | | — | | | — | | | — | | | 18.2 | | |
| September 30, 2022 | $ | 132.7 | | | $ | 46.7 | | | $ | 58.9 | | | $ | 131.5 | | | $ | 32.8 | | | $ | 31.2 | | | $ | (18.8) | | | $ | — | | | $ | 415.0 | | |
| A disposition | | A disposition | — | | | — | | | — | | | — | | | — | | | (31.2) | | | — | | | — | | | (31.2) | |
| September 30, 2023 | | September 30, 2023 | $ | 150.4 | | | $ | 58.5 | | | $ | 64.2 | | | $ | 116.4 | | | $ | 49.9 | | | $ | — | | | $ | (11.0) | | | $ | — | | | $ | 428.4 | |
| | | C&W Caribbean | | C&W Panama | | C&W Networks & LatAm | | Liberty Puerto Rico | | Liberty Costa Rica | | VTR | | Corporate | | Intersegment eliminations | | Consolidated | | C&W Caribbean | | C&W Panama | | Liberty Networks | | Liberty Puerto Rico | | Liberty Costa Rica | | VTR | | Corporate | | Intersegment eliminations | | Consolidated |
| | | in millions | | in millions |
| Adjusted OIBDA for the nine months ending: | Adjusted OIBDA for the nine months ending: | | Adjusted OIBDA for the nine months ending: | |
| September 30, 2021 | $ | 357.9 | | | $ | 137.5 | | | $ | 193.1 | | | $ | 445.6 | | | $ | 50.8 | | | $ | 204.3 | | | $ | (37.7) | | | $ | — | | | $ | 1,351.5 | | |
| September 30, 2022 | | September 30, 2022 | $ | 397.1 | | | $ | 131.6 | | | $ | 196.6 | | | $ | 413.2 | | | $ | 98.6 | | | $ | 115.6 | | | $ | (45.4) | | | $ | — | | | $ | 1,307.3 | |
| Organic changes related to: | Organic changes related to: | | Organic changes related to: | |
| Revenue | Revenue | 44.7 | | | 12.0 | | | 12.0 | | | (1.4) | | | 14.1 | | | (89.7) | | | 0.3 | | | (0.3) | | | (8.3) | | Revenue | 0.4 | | | 25.6 | | | 17.2 | | | (27.2) | | | 7.4 | | | — | | | 2.0 | | | (9.6) | | | 15.8 | |
| Programming and other direct costs | Programming and other direct costs | (8.0) | | | (8.7) | | | (5.1) | | | (14.9) | | | (0.7) | | | 15.0 | | | — | | | 6.1 | | | (16.3) | | Programming and other direct costs | 41.8 | | | (16.5) | | | (5.3) | | | 27.4 | | | 8.3 | | | — | | | — | | | 0.1 | | | 55.8 | |
| Other operating costs and expenses | Other operating costs and expenses | 5.3 | | | (10.6) | | | (2.1) | | | (23.5) | | | (9.5) | | | 4.4 | | | (8.0) | | | (5.8) | | | (49.8) | | Other operating costs and expenses | (2.6) | | | 18.7 | | | (8.0) | | | (31.8) | | | 6.7 | | | — | | | (11.6) | | | 9.5 | | | (19.1) | |
| Non-organic increases (decreases): | | |
| Non-organic changes related to: | | Non-organic changes related to: | |
| FX | FX | (2.8) | | | — | | | (1.3) | | | — | | | (3.1) | | | (18.4) | | | — | | | — | | | (25.6) | | FX | 0.2 | | | — | | | (0.5) | | | — | | | 24.2 | | | — | | | — | | | — | | | 23.9 | |
| Acquisitions | — | | | 1.4 | | | — | | | 12.4 | | | 47.0 | | | — | | | — | | | — | | | 60.8 | | |
| September 30, 2022 | $ | 397.1 | | | $ | 131.6 | | | $ | 196.6 | | | $ | 418.2 | | | $ | 98.6 | | | $ | 115.6 | | | $ | (45.4) | | | $ | — | | | $ | 1,312.3 | | |
| Acquisition (disposition), net | | Acquisition (disposition), net | — | | | 1.6 | | | — | | | — | | | — | | | (115.6) | | | — | | | — | | | (114.0) | |
| September 30, 2023 | | September 30, 2023 | $ | 436.9 | | | $ | 161.0 | | | $ | 200.0 | | | $ | 381.6 | | | $ | 145.2 | | | $ | — | | | $ | (55.0) | | | $ | — | | | $ | 1,269.7 | |
|
Adjusted OIBDA Margin
The following table sets forth the Adjusted OIBDA margin (Adjusted OIBDA divided by revenue)Margin of each of our reportable segments:
| | | | Three months ended September 30, | | Nine months ended September 30, | | Three months ended September 30, | | Nine months ended September 30, |
| | | 2022 | | 2021 | | 2022 | | 2021 | | 2023 | | 2022 | | 2023 | | 2022 |
| | | % | | % |
| | C&W Caribbean | C&W Caribbean | 37.0 | | | 34.4 | | | 37.1 | | | 34.6 | | C&W Caribbean | 41.7 | | | 37.0 | | | 40.8 | | | 37.1 | |
| C&W Panama | C&W Panama | 27.1 | | | 35.8 | | | 29.8 | | | 34.9 | | C&W Panama | 30.7 | | | 27.1 | | | 30.0 | | | 29.8 | |
| C&W Networks & LatAm | 57.3 | | | 58.2 | | | 60.2 | | | 60.3 | | |
| Liberty Networks | | Liberty Networks | 57.1 | | | 57.3 | | | 58.9 | | | 60.2 | |
| Liberty Puerto Rico | Liberty Puerto Rico | 35.8 | | | 39.0 | | | 38.1 | | | 41.3 | | Liberty Puerto Rico | 33.1 | | | 35.6 | | | 35.9 | | | 37.9 | |
| Liberty Costa Rica | Liberty Costa Rica | 30.0 | | | 30.8 | | | 30.4 | | | 33.8 | | Liberty Costa Rica | 37.1 | | | 30.0 | | | 36.4 | | | 30.4 | |
| VTR | 24.0 | | | 33.7 | | | 25.7 | | | 33.3 | | |
Adjusted OIBDA marginMargin is impacted by organic changes in revenue, programming and other direct costs of services and other operating costs and expenses, as further discussed below. The decrease in Adjusted OIBDA marginexpenses. Within our Liberty Puerto Rico, Liberty Costa Rica, and for the 2022 periods, C&W Panama is due in part from the inclusion of Claro Panama operations following the Claro Panama Acquisition, which generates a lower Adjusted OIBDA margin compared to legacy operations. The decrease in the Adjusted OIBDA margin for VTR is primarily related to a decline in revenue, RGUs and ARPU resulting from significant competition in Chile, as further discussed below.Additionally,segments, we incurred in aggregate integration costs of $3 million and $13 million during the three and nine months ended September 30, 2023, respectively, and $8 million and $19 million of integration costs during the three and nine months ended September 30, 2022, respectively, in our Liberty Puerto Rico, Liberty Costa Rica and C&W Panama segments. During the three and nine months ended September 30, 2021, we incurred $3 million and $6 million, respectively, in our Liberty Puerto Rico and Liberty Costa Rica segments.respectively.
Revenue
AllMost of our segments derive their revenue primarily from (i) residential fixed services, including video, broadband internet and fixed-line telephony, (ii) residential mobile services and (iii) B2B enterprise services. C&WLiberty Networks & LatAm also provides wholesale communication services over its subsea and terrestrial fiber optic cable networks.
While not specifically discussed in the below explanations of the changes in revenue, we are experiencing significant competition in all of our markets. This competition has an adverse impact on our ability to increase or maintain our RGUs and/or ARPU.
Variances in the subscription revenue that we receive from our customers are a function of (i) changes in the number of RGUs or mobile subscribers during the period and (ii) changes in ARPU. Changes in ARPU can be attributable to (i) changes in prices, (ii) changes in bundling or promotional discounts, (iii) changes in the tier of services selected, (iv) variances in subscriber usage patterns and (v) the overall mix of fixed and mobile products during the period. In the following discussion, we discuss ARPU changes in terms of the net impact of the above factors on the ARPU that is derived from our video, broadband internet, fixed-line telephony and mobile products.
The following tables set forth the organic and non-organic changes in revenue by reportable segment forduring the three and nine months ended September 30, 2023, as compared to the corresponding periods indicated.in 2022.
| | | | Three months ended September 30, | | Increase (decrease) | | Increase (decrease) from: | | Three months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | | 2022 | | 2021 | | FX | | Acquisitions | | Organic | | 2023 | | 2022 | | FX | | A disposition | | Organic |
| | | in millions | | in millions |
| | C&W Caribbean | C&W Caribbean | $ | 359.1 | | | $ | 347.4 | | | $ | 11.7 | | | $ | 0.2 | | | $ | — | | | $ | 11.5 | | C&W Caribbean | $ | 360.5 | | | $ | 359.1 | | | $ | 1.4 | | | $ | (1.3) | | | $ | — | | | $ | 2.7 | |
| C&W Panama | C&W Panama | 172.5 | | | 133.9 | | | 38.6 | | | — | | | 34.8 | | | 3.8 | | C&W Panama | 190.4 | | | 172.5 | | | 17.9 | | | — | | | — | | | 17.9 | |
| C&W Networks & LatAm | 102.8 | | | 106.5 | | | (3.7) | | | (2.4) | | | — | | | (1.3) | | |
| Liberty Networks | | Liberty Networks | 112.5 | | | 102.8 | | | 9.7 | | | 1.5 | | | — | | | 8.2 | |
| Liberty Puerto Rico | Liberty Puerto Rico | 366.9 | | | 357.3 | | | 9.6 | | | — | | | 13.4 | | | (3.8) | | Liberty Puerto Rico | 351.2 | | | 365.7 | | | (14.5) | | | — | | | — | | | (14.5) | |
| Liberty Costa Rica | Liberty Costa Rica | 109.2 | | | 77.8 | | | 31.4 | | | (4.3) | | | 23.5 | | | 12.2 | | Liberty Costa Rica | 134.6 | | | 109.2 | | | 25.4 | | | 24.3 | | | — | | | 1.1 | |
| VTR | VTR | 129.8 | | | 193.1 | | | (63.3) | | | (25.8) | | | — | | | (37.5) | | VTR | — | | | 129.8 | | | (129.8) | | | — | | | (129.8) | | | — | |
| Corporate | Corporate | 5.4 | | | 5.4 | | | — | | | — | | | — | | | — | | Corporate | 6.5 | | | 5.4 | | | 1.1 | | | — | | | — | | | 1.1 | |
| Intersegment eliminations | Intersegment eliminations | (23.7) | | | (25.1) | | | 1.4 | | | — | | | — | | | 1.4 | | Intersegment eliminations | (29.9) | | | (23.7) | | | (6.2) | | | (0.2) | | | — | | | (6.0) | |
| Total | Total | $ | 1,222.0 | | | $ | 1,196.3 | | | $ | 25.7 | | | $ | (32.3) | | | $ | 71.7 | | | $ | (13.7) | | Total | $ | 1,125.8 | | | $ | 1,220.8 | | | $ | (95.0) | | | $ | 24.3 | | | $ | (129.8) | | | $ | 10.5 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Nine months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | 2022 | | 2021 | | | FX | | Acquisitions | | Organic |
| | in millions |
| | | | | | | | | | | |
| C&W Caribbean | $ | 1,069.5 | | | $ | 1,033.0 | | | $ | 36.5 | | | $ | (8.2) | | | $ | — | | | $ | 44.7 | |
| C&W Panama | 441.3 | | | 394.5 | | | 46.8 | | | — | | | 34.8 | | | 12.0 | |
| C&W Networks & LatAm | 326.8 | | | 320.0 | | | 6.8 | | | (5.2) | | | — | | | 12.0 | |
| Liberty Puerto Rico | 1,096.4 | | | 1,078.5 | | | 17.9 | | | — | | | 19.3 | | | (1.4) | |
| Liberty Costa Rica | 324.6 | | | 150.3 | | | 174.3 | | | (9.4) | | | 169.6 | | | 14.1 | |
| VTR | 450.6 | | | 612.7 | | | (162.1) | | | (72.4) | | | — | | | (89.7) | |
| Corporate | 16.5 | | | 16.2 | | | 0.3 | | | — | | | — | | | 0.3 | |
| Intersegment eliminations | (71.3) | | | (71.0) | | | (0.3) | | | — | | | — | | | (0.3) | |
| Total | $ | 3,654.4 | | | $ | 3,534.2 | | | $ | 120.2 | | | $ | (95.2) | | | $ | 223.7 | | | $ | (8.3) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Nine months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | 2023 | | 2022 | | | FX | | Acquisition (disposition), net | | Organic |
| | in millions |
| | | | | | | | | | | |
| C&W Caribbean | $ | 1,070.6 | | | $ | 1,069.5 | | | $ | 1.1 | | | $ | 0.7 | | | $ | — | | | $ | 0.4 | |
| C&W Panama | 536.5 | | | 441.3 | | | 95.2 | | | — | | | 69.6 | | | 25.6 | |
| Liberty Networks | 339.8 | | | 326.8 | | | 13.0 | | | (4.2) | | | — | | | 17.2 | |
| Liberty Puerto Rico | 1,064.2 | | | 1,091.4 | | | (27.2) | | | — | | | — | | | (27.2) | |
| Liberty Costa Rica | 399.0 | | | 324.6 | | | 74.4 | | | 67.0 | | | — | | | 7.4 | |
| VTR | — | | | 450.6 | | | (450.6) | | | — | | | (450.6) | | | — | |
| Corporate | 18.5 | | | 16.5 | | | 2.0 | | | — | | | — | | | 2.0 | |
| Intersegment eliminations | (81.1) | | | (71.3) | | | (9.8) | | | (0.2) | | | — | | | (9.6) | |
| Total | $ | 3,347.5 | | | $ | 3,649.4 | | | $ | (301.9) | | | $ | 63.3 | | | $ | (381.0) | | | $ | 15.8 | |
C&W Caribbean. C&W Caribbean’s revenue by major category is set forth below:
| | | | Three months ended September 30, | | Increase (decrease) | | Three months ended September 30, | | Increase (decrease) |
| | | 2022 | | 2021 | | $ | | % | | 2023 | | 2022 | | $ | | % |
| | | in millions, except percentages | | in millions, except percentages |
| Residential revenue: | Residential revenue: | | Residential revenue: | |
| Residential fixed revenue: | Residential fixed revenue: | | Residential fixed revenue: | |
| | Subscription revenue | Subscription revenue | $ | 122.2 | | | $ | 118.1 | | | $ | 4.1 | | | 3 | | Subscription revenue | $ | 122.6 | | | $ | 122.2 | | | $ | 0.4 | | | — | |
| Non-subscription revenue | Non-subscription revenue | 7.6 | | | 8.5 | | | (0.9) | | | (11) | | Non-subscription revenue | 6.5 | | | 7.6 | | | (1.1) | | | (14) | |
| Total residential fixed revenue | Total residential fixed revenue | 129.8 | | | 126.6 | | | 3.2 | | | 3 | | Total residential fixed revenue | 129.1 | | | 129.8 | | | (0.7) | | | (1) | |
| Residential mobile revenue: | Residential mobile revenue: | | | | | | | | Residential mobile revenue: | | | | | | | |
| Service revenue | Service revenue | 78.8 | | | 76.1 | | | 2.7 | | | 4 | | Service revenue | 83.9 | | | 78.8 | | | 5.1 | | | 6 | |
| Interconnect, inbound roaming, equipment sales and other | Interconnect, inbound roaming, equipment sales and other | 17.3 | | | 14.9 | | | 2.4 | | | 16 | | Interconnect, inbound roaming, equipment sales and other | 18.4 | | | 17.3 | | | 1.1 | | | 6 | |
| Total residential mobile revenue | Total residential mobile revenue | 96.1 | | | 91.0 | | | 5.1 | | | 6 | | Total residential mobile revenue | 102.3 | | | 96.1 | | | 6.2 | | | 6 | |
| Total residential revenue | Total residential revenue | 225.9 | | | 217.6 | | | 8.3 | | | 4 | | Total residential revenue | 231.4 | | | 225.9 | | | 5.5 | | | 2 | |
| | B2B revenue | B2B revenue | 133.2 | | | 129.8 | | | 3.4 | | | 3 | | B2B revenue | 129.1 | | | 133.2 | | | (4.1) | | | (3) | |
| | Total | Total | $ | 359.1 | | | $ | 347.4 | | | $ | 11.7 | | | 3 | | Total | $ | 360.5 | | | $ | 359.1 | | | $ | 1.4 | | | — | |
| | | | Nine months ended September 30, | | Increase (decrease) | | Nine months ended September 30, | | Increase (decrease) |
| | | 2022 | | 2021 | | $ | | % | | 2023 | | 2022 | | $ | | % |
| | | in millions, except percentages | | in millions, except percentages |
| Residential revenue: | Residential revenue: | | Residential revenue: | |
| Residential fixed revenue: | Residential fixed revenue: | | Residential fixed revenue: | |
| | Subscription revenue | Subscription revenue | $ | 363.5 | | | $ | 353.7 | | | $ | 9.8 | | | 3 | | Subscription revenue | $ | 363.9 | | | $ | 363.5 | | | $ | 0.4 | | | — | |
| Non-subscription revenue | Non-subscription revenue | 25.2 | | | 25.9 | | | (0.7) | | | (3) | | Non-subscription revenue | 21.2 | | | 25.2 | | | (4.0) | | | (16) | |
| Total residential fixed revenue | Total residential fixed revenue | 388.7 | | | 379.6 | | | 9.1 | | | 2 | | Total residential fixed revenue | 385.1 | | | 388.7 | | | (3.6) | | | (1) | |
| Residential mobile revenue: | Residential mobile revenue: | | | | | | | | Residential mobile revenue: | | | | | | | |
| Service revenue | Service revenue | 232.9 | | | 222.9 | | | 10.0 | | | 4 | | Service revenue | 245.3 | | | 232.9 | | | 12.4 | | | 5 | |
| Interconnect, inbound roaming, equipment sales and other | Interconnect, inbound roaming, equipment sales and other | 48.1 | | | 45.0 | | | 3.1 | | | 7 | | Interconnect, inbound roaming, equipment sales and other | 57.7 | | | 48.1 | | | 9.6 | | | 20 | |
| Total residential mobile revenue | Total residential mobile revenue | 281.0 | | | 267.9 | | | 13.1 | | | 5 | | Total residential mobile revenue | 303.0 | | | 281.0 | | | 22.0 | | | 8 | |
| Total residential revenue | Total residential revenue | 669.7 | | | 647.5 | | | 22.2 | | | 3 | | Total residential revenue | 688.1 | | | 669.7 | | | 18.4 | | | 3 | |
| | B2B revenue | B2B revenue | 399.8 | | | 385.5 | | | 14.3 | | | 4 | | B2B revenue | 382.5 | | | 399.8 | | | (17.3) | | | (4) | |
| | Total | Total | $ | 1,069.5 | | | $ | 1,033.0 | | | $ | 36.5 | | | 4 | | Total | $ | 1,070.6 | | | $ | 1,069.5 | | | $ | 1.1 | | | — | |
The details of the changes in C&W Caribbean’s revenue during the three and nine months ended September 30, 2022,2023, as compared to the corresponding periods in 2021,2022, are set forth below (in millions):
| | | Three-month comparison | | Nine-month comparison | | Three-month comparison | | Nine-month comparison |
Increase (decrease) in residential fixed subscription revenue due to change in: | Increase (decrease) in residential fixed subscription revenue due to change in: | | | | Increase (decrease) in residential fixed subscription revenue due to change in: | | | |
| Average number of RGUs (a) | Average number of RGUs (a) | $ | 2.9 | | | $ | 15.1 | | Average number of RGUs (a) | $ | 1.6 | | | $ | 2.8 | |
| ARPU (b) | ARPU (b) | 1.1 | | | (2.8) | | ARPU (b) | (0.7) | | | (2.6) | |
Decrease in residential fixed non-subscription revenue | Decrease in residential fixed non-subscription revenue | (0.9) | | | (0.6) | | Decrease in residential fixed non-subscription revenue | (1.1) | | | (4.1) | |
| Total increase in residential fixed revenue | 3.1 | | | 11.7 | | |
| Total decrease in residential fixed revenue | | Total decrease in residential fixed revenue | (0.2) | | | (3.9) | |
Increase in residential mobile service revenue (c)(d) | Increase in residential mobile service revenue (c)(d) | 2.7 | | | 11.9 | | Increase in residential mobile service revenue (c)(d) | 5.4 | | | 12.3 | |
Increase in residential mobile interconnect, inbound roaming, equipment sales and other revenue (d)(e) | Increase in residential mobile interconnect, inbound roaming, equipment sales and other revenue (d)(e) | 2.2 | | | 3.2 | | Increase in residential mobile interconnect, inbound roaming, equipment sales and other revenue (d)(e) | 1.1 | | | 9.6 | |
| Increase in B2B revenue (e) | 3.5 | | | 17.9 | | |
| Decrease in B2B revenue (f) | | Decrease in B2B revenue (f) | (3.6) | | | (17.6) | |
| | Total organic increase | Total organic increase | 11.5 | | | 44.7 | | Total organic increase | 2.7 | | | 0.4 | |
| Impact of FX | Impact of FX | 0.2 | | | (8.2) | | Impact of FX | (1.3) | | | 0.7 | |
| Total | Total | $ | 11.7 | | | $ | 36.5 | | Total | $ | 1.4 | | | $ | 1.1 | |
(a)The increases are primarily attributabledue tohigher average broadband internet RGUs partially offset by lower average video RGUs.
(b)The increase during the three-month comparison isdecreases are primarily due to higherthe net impact of (i) lower ARPU from fixed-line telephony services, due in part to fixed-mobile convergence efforts, and video services, partially offset by lower(ii) higher ARPU from broadband internet service.and video services.
(c)The decreases are partially attributable to lower interconnect revenue. The decrease during the nine-month comparison is due lower ARPUalso includes the impact from video and broadband internet services,the removal of certain programming rights during the second quarter of 2022, which were partially offset by higher ARPU from fixed-line telephony service.the addition of new programming rights during the third quarter of 2023.
(c)(d)The increases are primarily attributable to the net effect of (i) higher average numbers of postpaid mobile subscribers, mostly due to growth from fixed-mobile convergence efforts, and (ii) increases in sales initiatives, and (ii) declines inprepaid ARPU as a resultresulting from price increases implemented during the first quarter of certain pricing strategies.2023.
(d)(e)The increases are primarily attributable to higheran increase in inbound roaming driven by higher volumes of traffic.
(e)(f)The increasesdecreases are attributable to the net effect of(i) the discontinuation of a non-core transit services arrangement at C&W Jamaica, which decrease will continue for the remainder of 2023, and (ii) higher revenues from (i) fixed and managed services, primarily due to broadband internet services-related growth, (ii) mobile services, driven by higher average numbers of subscribers, and (iii) for the nine-month comparison, certain non-recurring B2B contracts.
C&W Panama. C&W Panama’s revenue by major category is set forth below:
| | | | Three months ended September 30, | | Increase (decrease) | | Three months ended September 30, | | Increase (decrease) |
| | | 2022 | | 2021 | | $ | | % | | 2023 | | 2022 | | $ | | % |
| | | in millions, except percentages | | in millions, except percentages |
| Residential revenue: | Residential revenue: | | Residential revenue: | |
| Residential fixed revenue: | Residential fixed revenue: | | Residential fixed revenue: | |
| | Subscription revenue | Subscription revenue | $ | 27.3 | | | $ | 22.3 | | | $ | 5.0 | | | 22 | | Subscription revenue | $ | 29.6 | | | $ | 27.3 | | | $ | 2.3 | | | 8 | |
| Non-subscription revenue | Non-subscription revenue | 1.7 | | | 2.3 | | | (0.6) | | | (26) | | Non-subscription revenue | 1.4 | | | 1.7 | | | (0.3) | | | (18) | |
| Total residential fixed revenue | Total residential fixed revenue | 29.0 | | | 24.6 | | | 4.4 | | | 18 | | Total residential fixed revenue | 31.0 | | | 29.0 | | | 2.0 | | | 7 | |
| Residential mobile revenue: | Residential mobile revenue: | | | | | | | | Residential mobile revenue: | | | | | | | |
| Service revenue | Service revenue | 65.8 | | | 43.6 | | | 22.2 | | | 51 | | Service revenue | 66.0 | | | 65.8 | | | 0.2 | | | — | |
| Interconnect, inbound roaming, equipment sales and other | Interconnect, inbound roaming, equipment sales and other | 14.4 | | | 11.6 | | | 2.8 | | | 24 | | Interconnect, inbound roaming, equipment sales and other | 13.6 | | | 14.4 | | | (0.8) | | | (6) | |
| Total residential mobile revenue | Total residential mobile revenue | 80.2 | | | 55.2 | | | 25.0 | | | 45 | | Total residential mobile revenue | 79.6 | | | 80.2 | | | (0.6) | | | (1) | |
| Total residential revenue | Total residential revenue | 109.2 | | | 79.8 | | | 29.4 | | | 37 | | Total residential revenue | 110.6 | | | 109.2 | | | 1.4 | | | 1 | |
| | B2B revenue | B2B revenue | 63.3 | | | 54.1 | | | 9.2 | | | 17 | | B2B revenue | 79.8 | | | 63.3 | | | 16.5 | | | 26 | |
| Total | Total | $ | 172.5 | | | $ | 133.9 | | | $ | 38.6 | | | 29 | | Total | $ | 190.4 | | | $ | 172.5 | | | $ | 17.9 | | | 10 | |
| | | | Nine months ended September 30, | | Increase (decrease) | | Nine months ended September 30, | | Increase (decrease) |
| | | 2022 | | 2021 | | $ | | % | | 2023 | | 2022 | | $ | | % |
| | | in millions, except percentages | | in millions, except percentages |
| Residential revenue: | Residential revenue: | | Residential revenue: | |
| Residential fixed revenue: | Residential fixed revenue: | | Residential fixed revenue: | |
| | Subscription revenue | Subscription revenue | $ | 75.1 | | | $ | 64.7 | | | $ | 10.4 | | | 16 | | Subscription revenue | $ | 86.6 | | | $ | 75.1 | | | $ | 11.5 | | | 15 | |
| Non-subscription revenue | Non-subscription revenue | 5.7 | | | 7.2 | | | (1.5) | | | (21) | | Non-subscription revenue | 4.2 | | | 5.7 | | | (1.5) | | | (26) | |
| Total residential fixed revenue | Total residential fixed revenue | 80.8 | | | 71.9 | | | 8.9 | | | 12 | | Total residential fixed revenue | 90.8 | | | 80.8 | | | 10.0 | | | 12 | |
| Residential mobile revenue: | Residential mobile revenue: | | | | | | | | Residential mobile revenue: | | | | | | | |
| Service revenue | Service revenue | 152.7 | | | 132.8 | | | 19.9 | | | 15 | | Service revenue | 196.8 | | | 152.7 | | | 44.1 | | | 29 | |
| Interconnect, inbound roaming, equipment sales and other | Interconnect, inbound roaming, equipment sales and other | 35.9 | | | 33.2 | | | 2.7 | | | 8 | | Interconnect, inbound roaming, equipment sales and other | 40.5 | | | 35.9 | | | 4.6 | | | 13 | |
| Total residential mobile revenue | Total residential mobile revenue | 188.6 | | | 166.0 | | | 22.6 | | | 14 | | Total residential mobile revenue | 237.3 | | | 188.6 | | | 48.7 | | | 26 | |
| Total residential revenue | Total residential revenue | 269.4 | | | 237.9 | | | 31.5 | | | 13 | | Total residential revenue | 328.1 | | | 269.4 | | | 58.7 | | | 22 | |
| | B2B revenue | B2B revenue | 171.9 | | | 156.6 | | | 15.3 | | | 10 | | B2B revenue | 208.4 | | | 171.9 | | | 36.5 | | | 21 | |
| Total | Total | $ | 441.3 | | | $ | 394.5 | | | $ | 46.8 | | | 12 | | Total | $ | 536.5 | | | $ | 441.3 | | | $ | 95.2 | | | 22 | |
The details of the changes in C&W Panama’s revenue during the three and nine months ended September 30, 2022,2023, as compared to the corresponding periods in 2021,2022, are set forth below (in millions):
| | | Three-month comparison | | Nine-month comparison | | Three-month comparison | | Nine-month comparison |
| Increase (decrease) in residential fixed subscription revenue due to change in: | Increase (decrease) in residential fixed subscription revenue due to change in: | | | | Increase (decrease) in residential fixed subscription revenue due to change in: | | | |
| Average number of RGUs (a) | Average number of RGUs (a) | $ | 3.5 | | | $ | 10.3 | | Average number of RGUs (a) | $ | 3.6 | | | $ | 8.1 | |
ARPU (b) | ARPU (b) | (0.7) | | | (2.1) | | ARPU (b) | (1.3) | | | (1.3) | |
Decrease in residential fixed non-subscription revenue | Decrease in residential fixed non-subscription revenue | (0.7) | | | (1.6) | | Decrease in residential fixed non-subscription revenue | (0.3) | | | (1.8) | |
| Total increase in residential fixed revenue | Total increase in residential fixed revenue | 2.1 | | | 6.6 | | Total increase in residential fixed revenue | 2.0 | | | 5.0 | |
| Increase (decrease) in residential mobile service revenue (c) | 0.5 | | | (1.8) | | |
| Increase in residential mobile service revenue (b) | | Increase in residential mobile service revenue (b) | 0.2 | | | 1.0 | |
Decrease in residential mobile interconnect, inbound roaming, equipment sales and other revenue | Decrease in residential mobile interconnect, inbound roaming, equipment sales and other revenue | (2.3) | | | (2.4) | | Decrease in residential mobile interconnect, inbound roaming, equipment sales and other revenue | (0.8) | | | (5.3) | |
| Increase in B2B revenue (d) | Increase in B2B revenue (d) | 3.5 | | | 9.6 | | Increase in B2B revenue (d) | 16.5 | | | 24.9 | |
| Total organic increase | Total organic increase | 3.8 | | | 12.0 | | Total organic increase | 17.9 | | | 25.6 | |
| Impact of an acquisition | Impact of an acquisition | 34.8 | | | 34.8 | | Impact of an acquisition | — | | | 69.6 | |
| Total | Total | $ | 38.6 | | | $ | 46.8 | | Total | $ | 17.9 | | | $ | 95.2 | |
(a)The increases are primarily attributabledue to higher average broadband internet and video RGUs.
(b)The decreases are primarily due to lower ARPU from fixed-line telephony as customers shift to lower priced plans.
(c)The increase inchange for the three-month comparison is primarily due towas flat as the net effectincrease from higher average numbers of (i) a decrease inpostpaid mobile subscribers was offset by lower ARPU on both postpaid and prepaid mobile subscribers, and (ii) an increase in postpaid subscribers, largely driven by migrationsgenerally resulting from prepaid plans. The decrease inretention discounts. For the nine-month comparison, the increase is primarily due to the net effect of (i) lower average numbers of prepaid mobile subscribers, (ii) higher ARPU from prepaid mobile services, mainly attributable to lowerhigher prepaid recharging activity, and (ii)(iii) higher average numbers of postpaid mobile subscribers.
(c)The decreases are primary due to the net effect of (i) lower handset revenue, (ii) lower interconnect revenue, primarily due to lower traffic, and (iii) higher inbound roaming.
(d)The increases are primarily due to (i) increases in the volume of certain projects and (ii) higher revenue from data services.government-related projects.
C&W Networks & LatAm.Liberty Networks. C&W Networks & LatAm’sLiberty Networks’ revenue by major category is set forth below:
| | | | Three months ended September 30, | | Increase (decrease) | | Three months ended September 30, | | Increase |
| | | 2022 | | 2021 | | $ | | % | | 2023 | | 2022 | | $ | | % |
| | | in millions, except percentages | | in millions, except percentages |
| | B2B revenue: | B2B revenue: | | B2B revenue: | |
| Service revenue | $ | 27.9 | | | $ | 27.0 | | | $ | 0.9 | | | 3 | | |
| Subsea network revenue | 74.9 | | | 79.5 | | | (4.6) | | | (6) | | |
| Enterprise revenue | | Enterprise revenue | $ | 31.0 | | | $ | 27.9 | | | $ | 3.1 | | | 11 | |
| Wholesale revenue | | Wholesale revenue | 81.5 | | | 74.9 | | | 6.6 | | | 9 | |
| | Total | Total | $ | 102.8 | | | $ | 106.5 | | | $ | (3.7) | | | (3) | | Total | $ | 112.5 | | | $ | 102.8 | | | $ | 9.7 | | | 9 | |
| | | | Nine months ended September 30, | | Increase | | Nine months ended September 30, | | Increase |
| | | 2022 | | 2021 | | $ | | % | | 2023 | | 2022 | | $ | | % |
| | | in millions, except percentages | | in millions, except percentages |
| | B2B revenue: | B2B revenue: | | B2B revenue: | |
| Service revenue | $ | 84.8 | | | $ | 80.6 | | | $ | 4.2 | | | 5 | | |
| Subsea network revenue | 242.0 | | | 239.4 | | | 2.6 | | | 1 | | |
| Enterprise revenue | | Enterprise revenue | $ | 88.0 | | | $ | 84.8 | | | $ | 3.2 | | | 4 | |
| Wholesale revenue | | Wholesale revenue | 251.8 | | | 242.0 | | | 9.8 | | | 4 | |
| | Total | Total | $ | 326.8 | | | $ | 320.0 | | | $ | 6.8 | | | 2 | | Total | $ | 339.8 | | | $ | 326.8 | | | $ | 13.0 | | | 4 | |
The details of the changes in C&W Networks & LatAm’sLiberty Networks’ revenue during the three and nine months ended September 30, 2022,2023, as compared to the corresponding periods in 2021,2022, are set forth below (in millions):
| | | | | | | | | | | |
| Three-month comparison | | Nine-month comparison |
| | | |
| Increase in B2B service revenue (a) | $ | 2.3 | | | $ | 7.0 | |
| Increase (decrease) in B2B subsea network revenue (b) (c) | (3.6) | | | 5.0 | |
| Total organic increase (decrease) | (1.3) | | | 12.0 | |
| Impact of FX | (2.4) | | | (5.2) | |
| Total | $ | (3.7) | | | $ | 6.8 | |
| | | | | | | | | | | |
| Three-month comparison | | Nine-month comparison |
| | | |
| Increase in enterprise revenue (a) | $ | 1.9 | | | $ | 5.6 | |
| Increase in wholesale revenue (b) | 6.3 | | | 11.6 | |
| Total organic increase | 8.2 | | | 17.2 | |
| Impact of FX | 1.5 | | | (4.2) | |
| Total | $ | 9.7 | | | $ | 13.0 | |
(a)The increases are primarily attributable to the net effect of (i) higher B2B connectivity revenue, (ii) decreases attributable to our B2B operations that were sold to the Liberty Costa Rica segment in January 2023, (iii) increases associated with sales-type leases on CPE installed on long-term customer solutions and (iv) growth in managed services and (iii) for the nine-month comparison, higher equipment sales.services.
(b)The decrease during the three-month comparison isincreases are primarily due to the net effect of (i) lowerhigher lease capacity revenue as sales growth was offsetdriven by service disconnections and lower revenue from existing customers due to price erosion, and (ii) lower affiliate revenue.
(c)Thean increase during the nine-month comparison is primarily due to (i) the net positive impact associated with the recognition of deferred revenue and penalties upon termination ofrecognized on a cash basis for services provided to a significant customer, contracts, (ii) lower affiliatehigher inter-segment revenue and (iii) a net increaselower amortized prepaid capacity and operating and maintenance revenue driven by the cancellation of prepaid capacity contracts in lease capacity revenue, resulting from customer growth, partially offset by service disconnections and lower revenue from existing customers due to price erosion.prior periods.
Liberty Puerto Rico. Liberty Puerto Rico’s revenue by major category is set forth below:
| | | | Three months ended September 30, | | Increase (decrease) | | Three months ended September 30, | | Increase (decrease) |
| | | 2022 | | 2021 | | $ | | % | | 2023 | | 2022 | | $ | | % |
| | | in millions, except percentages | | in millions, except percentages |
| Residential fixed revenue: | | Residential fixed revenue: | |
| Residential fixed revenue: | Residential fixed revenue: | | Residential fixed revenue: | |
| | Subscription revenue | Subscription revenue | $ | 111.7 | | | $ | 110.6 | | | $ | 1.1 | | | 1 | | Subscription revenue | $ | 120.5 | | | $ | 111.7 | | | $ | 8.8 | | | 8 | |
| Non-subscription revenue | Non-subscription revenue | 5.0 | | | 5.0 | | | — | | | — | | Non-subscription revenue | 7.7 | | | 5.0 | | | 2.7 | | | 54 | |
| Total residential fixed revenue | Total residential fixed revenue | 116.7 | | | 115.6 | | | 1.1 | | | 1 | | Total residential fixed revenue | 128.2 | | | 116.7 | | | 11.5 | | | 10 | |
| Residential mobile revenue: | Residential mobile revenue: | | | | | | | | Residential mobile revenue: | | | | | | | |
| Service revenue | Service revenue | 112.2 | | | 122.0 | | | (9.8) | | | (8) | | Service revenue | 99.3 | | | 111.0 | | | (11.7) | | | (11) | |
| Interconnect, inbound roaming, equipment sales and other | Interconnect, inbound roaming, equipment sales and other | 64.1 | | | 55.3 | | | 8.8 | | | 16 | | Interconnect, inbound roaming, equipment sales and other | 58.8 | | | 64.1 | | | (5.3) | | | (8) | |
| Total residential mobile revenue | Total residential mobile revenue | 176.3 | | | 177.3 | | | (1.0) | | | (1) | | Total residential mobile revenue | 158.1 | | | 175.1 | | | (17.0) | | | (10) | |
| Total residential revenue | Total residential revenue | 293.0 | | | 292.9 | | | 0.1 | | | — | | Total residential revenue | 286.3 | | | 291.8 | | | (5.5) | | | (2) | |
| B2B revenue | B2B revenue | 53.0 | | | 54.2 | | | (1.2) | | | (2) | | B2B revenue | 56.8 | | | 53.0 | | | 3.8 | | | 7 | |
| Other revenue | Other revenue | 20.9 | | | 10.2 | | | 10.7 | | | 105 | | Other revenue | 8.1 | | | 20.9 | | | (12.8) | | | (61) | |
| Total | Total | $ | 366.9 | | | $ | 357.3 | | | $ | 9.6 | | | 3 | | Total | $ | 351.2 | | | $ | 365.7 | | | $ | (14.5) | | | (4) | |
| | | | Nine months ended September 30, | | Increase (decrease) | | Nine months ended September 30, | | Increase (decrease) |
| | | 2022 | | 2021 | | $ | | % | | 2023 | | 2022 | | $ | | % |
| | | in millions, except percentages | | in millions, except percentages |
| Residential revenue: | | Residential revenue: | |
| Residential fixed revenue: | Residential fixed revenue: | | Residential fixed revenue: | |
| | Subscription revenue | Subscription revenue | $ | 343.0 | | | $ | 327.1 | | | $ | 15.9 | | | 5 | | Subscription revenue | $ | 358.6 | | | $ | 343.0 | | | $ | 15.6 | | | 5 | |
| Non-subscription revenue | Non-subscription revenue | 16.0 | | | 14.1 | | | 1.9 | | | 13 | | Non-subscription revenue | 19.4 | | | 16.0 | | | 3.4 | | | 21 | |
| Total residential fixed revenue | Total residential fixed revenue | 359.0 | | | 341.2 | | | 17.8 | | | 5 | | Total residential fixed revenue | 378.0 | | | 359.0 | | | 19.0 | | | 5 | |
| Residential mobile revenue: | Residential mobile revenue: | | | | | | | | Residential mobile revenue: | | | | | | | |
| Service revenue | Service revenue | 343.5 | | | 359.8 | | | (16.3) | | | (5) | | Service revenue | 302.2 | | | 338.5 | | | (36.3) | | | (11) | |
| Interconnect, inbound roaming, equipment sales and other | Interconnect, inbound roaming, equipment sales and other | 188.2 | | | 188.8 | | | (0.6) | | | — | | Interconnect, inbound roaming, equipment sales and other | 183.9 | | | 188.2 | | | (4.3) | | | (2) | |
| Total residential mobile revenue | Total residential mobile revenue | 531.7 | | | 548.6 | | | (16.9) | | | (3) | | Total residential mobile revenue | 486.1 | | | 526.7 | | | (40.6) | | | (8) | |
| Total residential revenue | Total residential revenue | 890.7 | | | 889.8 | | | 0.9 | | | — | | Total residential revenue | 864.1 | | | 885.7 | | | (21.6) | | | (2) | |
| B2B revenue | B2B revenue | 164.3 | | | 161.5 | | | 2.8 | | | 2 | | B2B revenue | 168.7 | | | 164.3 | | | 4.4 | | | 3 | |
| Other revenue | Other revenue | 41.4 | | | 27.2 | | | 14.2 | | | 52 | | Other revenue | 31.4 | | | 41.4 | | | (10.0) | | | (24) | |
| Total | Total | $ | 1,096.4 | | | $ | 1,078.5 | | | $ | 17.9 | | | 2 | | Total | $ | 1,064.2 | | | $ | 1,091.4 | | | $ | (27.2) | | | (2) | |
The details of the changes in Liberty Puerto Rico’s revenue during the three and nine months ended September 30, 2022,2023, as compared to the corresponding periods in 2021,2022, are set forth below (in millions):
| | | | | | | | | | | |
| Three-month comparison | | Nine-month comparison |
Increase (decrease) in residential fixed subscription revenue due to change in: | | | |
| Average number of RGUs (a) | $ | 5.1 | | | $ | 18.6 | |
| ARPU (b) | (6.3) | | | (10.0) | |
| Increase (decrease) in residential fixed non-subscription revenue | (0.5) | | | 0.5 | |
Total increase (decrease) in residential fixed revenue | (1.7) | | | 9.1 | |
| Decrease in residential mobile service revenue (c) | (9.8) | | | (16.3) | |
| Increase (decrease) in residential mobile interconnect, inbound roaming, equipment sales and other revenue (d) | 8.8 | | | (0.6) | |
| Increase (decrease) in B2B revenue | (1.2) | | | 2.8 | |
| Increase in other revenue | 0.1 | | | 3.6 | |
| Total organic decrease | (3.8) | | | (1.4) | |
| Impact of an acquisition (e) | 13.4 | | | 19.3 | |
| Total | $ | 9.6 | | | $ | 17.9 | |
| | | | | | | | | | | |
| Three-month comparison | | Nine-month comparison |
| Increase in residential fixed subscription revenue due to change in: | | | |
| Average number of RGUs (a) | $ | 3.4 | | | $ | 13.0 | |
| ARPU (b) | 5.4 | | | 2.6 | |
| Increase in residential fixed non-subscription revenue | 2.7 | | | 3.4 | |
| Total increase in residential fixed revenue | 11.5 | | | 19.0 | |
| Decrease in residential mobile service revenue (c) | (11.7) | | | (36.3) | |
| Decrease in residential mobile interconnect, inbound roaming, equipment sales and other revenue (d) | (5.3) | | | (4.3) | |
| Increase in B2B revenue (e) | 3.8 | | | 4.4 | |
| Decrease in other revenue (f) | (12.8) | | | (10.0) | |
| Total | $ | (14.5) | | | $ | (27.2) | |
| | | |
| | | |
(a)The increases are primarily attributable to higher average broadband internet and video RGUs.
(b)The decreasesincreases are primarily attributabledue to the net effect of (i) higher ARPU from video services, as rate increases were only partly offset by customer downgrades to lower ARPU from video and broadband internet services, which includeplans, (ii) the impact of credits issued to customers during the third quarter of 2022 as a result of Hurricane Fiona. In addition, the decreaseFiona and (iii) for the nine-month comparison, includes(a) lower ARPU from broadband internet services, driven by customer downgrades to low-tier plans, and (b) the impact of credits issued to customers during the second quarter of 2022 as a result of power outages.
(c)The decreases are primarily due to (i) lower ARPU from mobile services, primarily resulting from (a) a higher number of low-cost and discounted plans and (b) higher contract asset amortization, and (ii) declines in the average number of prepaid mobile subscribers and lower ARPU from mobile services.subscribers.
(d)The increasedecreases are primarily driven by lower inbound roaming revenue including the impact of changing to a fixed contract for part of our inbound roaming traffic. In addition, equipment revenue was (i) flat during the three-month comparison, is primarily due toas lower sales were offset by lower subsidy levels, and (ii) higher volumes of handset sales and higher inbound roaming. The decrease forduring the nine-month comparison, ismainly due to lower subsidy levels.
(e)The increases are primarily due to the net effectimpact of higher promotions associated with handset salescredits issued to customers during the third quarter of 2022 as a result of Hurricane Fiona and higher inbound roaming.revenue from new customers and fixed services.
(e)(f)The decreases are primarily attributable to funds received from the FCC, which we receive in relationship to expanding and improving our fixed and mobile networks, related to (i) the impact of an acquisition primarily relates to FCC revenuefrom amounts we recognized during the third quarter of 2022.2022 in USVI and (ii) a decline in the rate of funding beginning in the second half of 2023.
Liberty Costa Rica. Liberty Costa Rica’s revenue by major category is set forth below:
| | | | Three months ended September 30, | | Increase (decrease) | | Three months ended September 30, | | Increase |
| | | 2022 | | 2021 | | $ | | % | | 2023 | | 2022 | | $ | | % |
| | | in millions, except percentages | | in millions, except percentages |
| Residential revenue: | Residential revenue: | | Residential revenue: | |
| Residential fixed revenue: | Residential fixed revenue: | | Residential fixed revenue: | |
| | Subscription revenue | Subscription revenue | $ | 33.8 | | | $ | 34.9 | | | $ | (1.1) | | | (3) | | Subscription revenue | $ | 37.9 | | | $ | 33.8 | | | $ | 4.1 | | | 12 | |
| Non-subscription revenue | Non-subscription revenue | 1.0 | | | 1.5 | | | (0.5) | | | (33) | | Non-subscription revenue | 4.0 | | | 1.0 | | | 3.0 | | | 300 | |
| Total residential fixed revenue | Total residential fixed revenue | 34.8 | | | 36.4 | | | (1.6) | | | (4) | | Total residential fixed revenue | 41.9 | | | 34.8 | | | 7.1 | | | 20 | |
| Residential mobile revenue: | Residential mobile revenue: | | | | | | | | Residential mobile revenue: | | | | | | | |
| Service revenue | Service revenue | 48.0 | | | 28.5 | | | 19.5 | | | 68 | | Service revenue | 60.7 | | | 48.0 | | | 12.7 | | | 26 | |
| Interconnect, inbound roaming, equipment sales and other | Interconnect, inbound roaming, equipment sales and other | 16.4 | | | 7.0 | | | 9.4 | | | 134 | | Interconnect, inbound roaming, equipment sales and other | 19.3 | | | 16.4 | | | 2.9 | | | 18 | |
| Total residential mobile revenue | Total residential mobile revenue | 64.4 | | | 35.5 | | | 28.9 | | | 81 | | Total residential mobile revenue | 80.0 | | | 64.4 | | | 15.6 | | | 24 | |
| Total residential revenue | Total residential revenue | 99.2 | | | 71.9 | | | 27.3 | | | 38 | | Total residential revenue | 121.9 | | | 99.2 | | | 22.7 | | | 23 | |
| B2B revenue | B2B revenue | 10.0 | | | 5.9 | | | 4.1 | | | 69 | | B2B revenue | 12.7 | | | 10.0 | | | 2.7 | | | 27 | |
| Total | Total | $ | 109.2 | | | $ | 77.8 | | | $ | 31.4 | | | 40 | | Total | $ | 134.6 | | | $ | 109.2 | | | $ | 25.4 | | | 23 | |
| | | | Nine months ended September 30, | | Increase (decrease) | | Nine months ended September 30, | | Increase |
| | | 2022 | | 2021 | | $ | | % | | 2023 | | 2022 | | $ | | % |
| | | in millions, except percentages | | in millions, except percentages |
| Residential revenue: | Residential revenue: | | Residential revenue: | |
| Residential fixed revenue: | Residential fixed revenue: | | Residential fixed revenue: | |
| | Subscription revenue | Subscription revenue | $ | 101.9 | | | $ | 104.1 | | | $ | (2.2) | | | (2) | | Subscription revenue | $ | 115.1 | | | $ | 101.9 | | | $ | 13.2 | | | 13 | |
| Non-subscription revenue | Non-subscription revenue | 2.6 | | | 4.8 | | | (2.2) | | | (46) | | Non-subscription revenue | 9.1 | | | 2.6 | | | 6.5 | | | 250 | |
| Total residential fixed revenue | Total residential fixed revenue | 104.5 | | | 108.9 | | | (4.4) | | | (4) | | Total residential fixed revenue | 124.2 | | | 104.5 | | | 19.7 | | | 19 | |
| Residential mobile revenue: | Residential mobile revenue: | | | | | | | | Residential mobile revenue: | | | | | | | |
| Service revenue | Service revenue | 142.8 | | | 28.5 | | | 114.3 | | | 401 | | Service revenue | 178.8 | | | 142.8 | | | 36.0 | | | 25 | |
| Interconnect, inbound roaming, equipment sales and other | Interconnect, inbound roaming, equipment sales and other | 48.5 | | | 7.0 | | | 41.5 | | | 593 | | Interconnect, inbound roaming, equipment sales and other | 56.4 | | | 48.5 | | | 7.9 | | | 16 | |
| Total residential mobile revenue | Total residential mobile revenue | 191.3 | | | 35.5 | | | 155.8 | | | 439 | | Total residential mobile revenue | 235.2 | | | 191.3 | | | 43.9 | | | 23 | |
| Total residential revenue | Total residential revenue | 295.8 | | | 144.4 | | | 151.4 | | | 105 | | Total residential revenue | 359.4 | | | 295.8 | | | 63.6 | | | 22 | |
| | B2B revenue | B2B revenue | 28.8 | | | 5.9 | | | 22.9 | | | 388 | | B2B revenue | 39.6 | | | 28.8 | | | 10.8 | | | 38 | |
| | Total | Total | $ | 324.6 | | | $ | 150.3 | | | $ | 174.3 | | | 116 | | Total | $ | 399.0 | | | $ | 324.6 | | | $ | 74.4 | | | 23 | |
The details of the changes in Liberty Costa Rica’s revenue during the three and nine months ended September 30, 2022,2023, as compared to the corresponding periods in 2021,2022, are set forth below (in millions):
| | | Three-month comparison | | Nine-month comparison | | Three-month comparison | | Nine-month comparison |
| Increase (decrease) in residential fixed subscription revenue due to change in: | | | | |
| Decrease in residential fixed subscription revenue due to change in: | | Decrease in residential fixed subscription revenue due to change in: | | | |
| Average number of RGUs (a) | Average number of RGUs (a) | $ | 4.2 | | | $ | 11.5 | | Average number of RGUs (a) | $ | (1.7) | | | $ | (0.7) | |
| ARPU (b) | ARPU (b) | (3.1) | | | (6.8) | | ARPU (b) | (1.1) | | | (5.6) | |
| Decrease in residential fixed non-subscription revenue (c) | (0.6) | | | (2.3) | | |
Total increase in residential fixed revenue | 0.5 | | | 2.4 | | |
| Increase in residential fixed non-subscription revenue (c) | | Increase in residential fixed non-subscription revenue (c) | 2.1 | | | 4.9 | |
| Total decrease in residential fixed revenue | | Total decrease in residential fixed revenue | (0.7) | | | (1.4) | |
| Increase in residential mobile service revenue (d) | Increase in residential mobile service revenue (d) | 5.4 | | | 5.4 | | Increase in residential mobile service revenue (d) | 1.6 | | | 5.5 | |
| Increase in residential mobile interconnect, inbound roaming, equipment sales and other revenue (e) | 4.6 | | | 4.6 | | |
| Decrease in residential mobile interconnect, inbound roaming, equipment sales and other revenue | | Decrease in residential mobile interconnect, inbound roaming, equipment sales and other revenue | (0.5) | | | (1.7) | |
Increase in B2B revenue | Increase in B2B revenue | 1.7 | | | 1.7 | | Increase in B2B revenue | 0.7 | | | 5.0 | |
| Total organic increase | Total organic increase | 12.2 | | | 14.1 | | Total organic increase | 1.1 | | | 7.4 | |
| Impact of an acquisition | 23.5 | | | 169.6 | | |
| Impact of FX | Impact of FX | (4.3) | | | (9.4) | | Impact of FX | 24.3 | | | 67.0 | |
| Total | Total | $ | 31.4 | | | $ | 174.3 | | Total | $ | 25.4 | | | $ | 74.4 | |
(a)The increasesdecreases are primarily attributabledue to the net impact of (i) lower average video RGUs and (ii) higher average fixed-line telephony RGUs. During the nine-month comparison, the decrease was partially offset by higher average broadband internet RGUs.
(b)The decreases are primarily dueattributable to the net effect of (i) lower ARPU from video services and, fixed-line telephony, (ii) the impact of product mix and (iii) for the nine-month comparison, higher ARPU from broadband internet services. These decreases are in part due to (i) higher retention discounts and (ii) declines in higher ARPU plans.
(c)The decreases are primarily attributable to a discontinued Costa Rica government-sponsored assistance program that provided computer equipment to low-income households.
(d)The increases are primarily attributable to higher volumes of CPE sales.
(d)The increases are primarily due to the net effect of (i) higher average postpaid mobile subscribers, (ii) lower prepaid and postpaid mobile ARPU and (iii) higher average prepaid mobile subscribers.
(e)The increases are primarily attributable to (i) higher inbound roaming and (ii) higher volumes of handset sales.the B2B operations within our Liberty Networks segment that was acquired by the Liberty Costa Rica segment in January 2023.
VTR. VTR’s revenue by major category is set forth below:
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Decrease |
| | 2022 | | 2021 | | $ | | % |
| | in millions, except percentages |
| Residential revenue: | | | | | | | |
| Residential fixed revenue: | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Subscription revenue | $ | 112.7 | | | $ | 167.8 | | | $ | (55.1) | | | (33) | |
| Non-subscription revenue | 2.4 | | | 3.8 | | | (1.4) | | | (37) | |
| Total residential fixed revenue | 115.1 | | | 171.6 | | | (56.5) | | | (33) | |
| Residential mobile revenue: | | | | | | | |
| Service revenue | 7.8 | | | 11.5 | | | (3.7) | | | (32) | |
| Interconnect, inbound roaming, equipment sales and other | 0.8 | | | 1.7 | | | (0.9) | | | (53) | |
| Total residential mobile revenue | 8.6 | | | 13.2 | | | (4.6) | | | (35) | |
| Total residential revenue | 123.7 | | | 184.8 | | | (61.1) | | | (33) | |
| | | | | | | |
| B2B revenue | 6.1 | | | 8.3 | | | (2.2) | | | (27) | |
| Total | $ | 129.8 | | | $ | 193.1 | | | $ | (63.3) | | | (33) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | Nine months ended September 30, | | Decrease |
| | 2022 | | 2021 | | $ | | % |
| | in millions, except percentages |
| Residential revenue: | | | | | | | |
| Residential fixed revenue: | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Subscription revenue | $ | 392.3 | | | $ | 532.9 | | | $ | (140.6) | | | (26) | |
| Non-subscription revenue | 8.9 | | | 11.2 | | | (2.3) | | | (21) | |
| Total residential fixed revenue | 401.2 | | | 544.1 | | | (142.9) | | | (26) | |
| Residential mobile revenue: | | | | | | | |
| Service revenue | 25.8 | | | 37.7 | | | (11.9) | | | (32) | |
| Interconnect, inbound roaming, equipment sales and other | 2.9 | | | 5.8 | | | (2.9) | | | (50) | |
| Total residential mobile revenue | 28.7 | | | 43.5 | | | (14.8) | | | (34) | |
| Total residential revenue | 429.9 | | | 587.6 | | | (157.7) | | | (27) | |
| | | | | | | |
| B2B revenue | 20.7 | | | 25.1 | | | (4.4) | | | (18) | |
| Total | $ | 450.6 | | | $ | 612.7 | | | $ | (162.1) | | | (26) | |
The details of the changes in VTR’s revenue during the three and nine months ended September 30, 2022, as compared to the corresponding periods in 2021, are set forth below (in millions):
| | | | | | | | | | | |
| Three-month comparison | | Nine-month comparison |
Decrease in residential fixed subscription revenue due to change in: | | | |
| Average number of RGUs (a) | $ | (10.1) | | | $ | (22.2) | |
| ARPU (b) | (22.7) | | | (55.5) | |
| Decrease in residential fixed non-subscription revenue | (0.9) | | | (0.9) | |
| Total decrease in residential fixed revenue | (33.7) | | | (78.6) | |
Decrease in residential mobile service revenue (c) | (2.3) | | | (7.8) | |
| Decrease in residential mobile interconnect, inbound roaming, equipment sales and other revenue | (0.8) | | | (2.5) | |
Decrease in B2B revenue | (0.7) | | | (0.8) | |
Total organic decrease | (37.5) | | | (89.7) | |
| Impact of FX | (25.8) | | | (72.4) | |
| Total | $ | (63.3) | | | $ | (162.1) | |
(a)The decreases are primarily attributable to lower average broadband internet and video RGUs.
(b)The decreases are primarily due to lower ARPU from broadband internet services, mainly associated with (i) increased competition that generally resulted in (a) the churn of higher-ARPU customers and (b) the addition of lower-ARPU customers, and (ii) strategic initiatives implemented during the first quarter of 2022. Higher discounts and lower-ARPU customers related to video and telephony services also contributed to the decline in ARPU.
(c)Thedecreases are primarily due to (i) lower ARPU from mobile services, mainly associated with strategic initiatives implemented during the first quarter of 2022, and (ii) for the nine-month comparison, lower average numbers of mobile subscribers.
Programming and other direct costs of services
Programming and other direct costs of services include programming and copyright costs, interconnect and access costs, equipment costs, which primarily relate to costs of mobile handsets and other devices, and other direct costs related to our operations. Programming and copyright costs, which represent a significant portion of our operating costs, may increase in future periods as a result of (i) higher costs associated with the expansion of our digital video content, including rights associated with ancillary product offerings and rights that provide for the broadcast of live sporting events, (ii) rate increases or (iii) growth in the number of our video subscribers.
Consolidated. The following tables set forth the organic and non-organic changes in programming and other direct costs of services on a consolidated basis for the periods indicated.basis.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | | Three months ended September 30, | | Increase (decrease) | | Increase (decrease) from: | | | | A disposition | |
| | | 2022 | | 2021 | | FX | | Acquisitions | | Organic | | 2023 | | 2022 | | FX | | | | Organic |
| | | in millions | | in millions |
| | Programming and copyright | Programming and copyright | $ | 91.6 | | | $ | 108.5 | | | $ | (16.9) | | | $ | (6.7) | | | $ | 0.5 | | | $ | (10.7) | | Programming and copyright | $ | 60.2 | | | $ | 91.6 | | | $ | (31.4) | | | $ | 1.5 | | | | $ | (30.9) | | | $ | (2.0) | |
| Interconnect | Interconnect | 88.6 | | | 92.0 | | | (3.4) | | | (1.7) | | | 6.8 | | | (8.5) | | Interconnect | 77.5 | | | 88.6 | | | (11.1) | | | 1.4 | | | | (6.8) | | | (5.7) | |
| Equipment and other | Equipment and other | 118.9 | | | 96.7 | | | 22.2 | | | (0.9) | | | 7.6 | | | 15.5 | | Equipment and other | 121.4 | | | 118.9 | | | 2.5 | | | 2.4 | | | | (0.9) | | | 1.0 | |
| Total programming and other direct costs of services | Total programming and other direct costs of services | $ | 299.1 | | | $ | 297.2 | | | $ | 1.9 | | | $ | (9.3) | | | $ | 14.9 | | | $ | (3.7) | | Total programming and other direct costs of services | $ | 259.1 | | | $ | 299.1 | | | $ | (40.0) | | | $ | 5.3 | | | | $ | (38.6) | | | $ | (6.7) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Nine months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | 2022 | | 2021 | | | FX | | Acquisitions | | Organic |
| | in millions |
| | | | | | | | | | | |
| Programming and copyright | $ | 302.1 | | | $ | 334.7 | | | $ | (32.6) | | | $ | (20.4) | | | $ | 0.5 | | | $ | (12.7) | |
| Interconnect | 262.7 | | | 252.7 | | | 10.0 | | | (5.9) | | | 23.2 | | | (7.3) | |
| Equipment and other | 338.5 | | | 277.4 | | | 61.1 | | | (1.8) | | | 26.6 | | | 36.3 | |
| Total programming and other direct costs of services | $ | 903.3 | | | $ | 864.8 | | | $ | 38.5 | | | $ | (28.1) | | | $ | 50.3 | | | $ | 16.3 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Nine months ended September 30, | | Decrease | | Increase (decrease) from: |
| | | | | An acquisition | | A disposition | | |
| | 2023 | | 2022 | | | FX | | | | Organic |
| | in millions |
| | | | | | | | | | | | | |
| Programming and copyright | $ | 180.3 | | | $ | 302.1 | | | $ | (121.8) | | | $ | 4.3 | | | $ | 1.0 | | | $ | (113.5) | | | $ | (13.6) | |
| Interconnect | 227.5 | | | 262.7 | | | (35.2) | | | 3.8 | | | 7.6 | | | (21.9) | | | (24.7) | |
| Equipment and other | 332.4 | | | 338.5 | | | (6.1) | | | 5.4 | | | 9.2 | | | (3.2) | | | (17.5) | |
| Total programming and other direct costs of services | $ | 740.2 | | | $ | 903.3 | | | $ | (163.1) | | | $ | 13.5 | | | $ | 17.8 | | | $ | (138.6) | | | $ | (55.8) | |
C&W Caribbean. The following tables set forth the organic and non-organic changes in programming and other direct costs of services for our C&W Caribbean segment for the periods indicated.segment.
| | | | Three months ended September 30, | | Increase (decrease) | | Increase (decrease) from: | | Three months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | | 2022 | | 2021 | | FX | | Organic | | 2023 | | 2022 | | FX | | Organic |
| | | in millions | | in millions |
| | Programming and copyright | Programming and copyright | $ | 21.0 | | | $ | 22.4 | | | $ | (1.4) | | | $ | — | | | $ | (1.4) | | Programming and copyright | $ | 17.9 | | | $ | 21.0 | | | $ | (3.1) | | | $ | (0.1) | | | $ | (3.0) | |
| Interconnect | Interconnect | 29.2 | | | 30.7 | | | (1.5) | | | — | | | (1.5) | | Interconnect | 18.3 | | | 29.2 | | | (10.9) | | | (0.1) | | | (10.8) | |
| Equipment and other | Equipment and other | 20.1 | | | 20.0 | | | 0.1 | | | — | | | 0.1 | | Equipment and other | 21.6 | | | 20.1 | | | 1.5 | | | (0.1) | | | 1.6 | |
| Total programming and other direct costs of services | Total programming and other direct costs of services | $ | 70.3 | | | $ | 73.1 | | | $ | (2.8) | | | $ | — | | | $ | (2.8) | | Total programming and other direct costs of services | $ | 57.8 | | | $ | 70.3 | | | $ | (12.5) | | | $ | (0.3) | | | $ | (12.2) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Nine months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | 2023 | | 2022 | | | FX | | Organic |
| | in millions |
| | | | | | | | | |
| Programming and copyright | $ | 55.1 | | | $ | 66.9 | | | $ | (11.8) | | | $ | — | | | $ | (11.8) | |
| Interconnect | 56.2 | | | 87.4 | | | (31.2) | | | 0.2 | | | (31.4) | |
| Equipment and other | 62.0 | | | 60.6 | | | 1.4 | | | — | | | 1.4 | |
| Total programming and other direct costs of services | $ | 173.3 | | | $ | 214.9 | | | $ | (41.6) | | | $ | 0.2 | | | $ | (41.8) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Nine months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | 2022 | | 2021 | | | FX | | Organic |
| | in millions |
| | | | | | | | | |
| Programming and copyright | $ | 66.9 | | | $ | 69.3 | | | $ | (2.4) | | | $ | (0.5) | | | $ | (1.9) | |
| Interconnect | 87.4 | | | 89.4 | | | (2.0) | | | (1.7) | | | (0.3) | |
| Equipment and other | 60.6 | | | 50.8 | | | 9.8 | | | (0.4) | | | 10.2 | |
| Total programming and other direct costs of services | $ | 214.9 | | | $ | 209.5 | | | $ | 5.4 | | | $ | (2.6) | | | $ | 8.0 | |
•EquipmentProgramming and other:copyright: The organic increasedecreases are due in part to the renegotiation of certain content agreements. The decrease during the nine-month comparison isalso includes the impact from the removal of certain programming rights during the second quarter of 2022, which were partially offset by the addition of new programming rights during 2023.
•Interconnect: The organic decreases are primarily due to (i) higher port-to-port capacity fees incurred in connection with the purchasediscontinuation of wholesalea non-core transit services fromarrangement at C&W Networks & LatAm, (ii) higher costs associated with certain non-recurring B2B contracts and (iii) higher volumesJamaica as of handset sales.
C&W Panama. The following tables set forth the organic and non-organic changes in programming and other direct costs of services for our C&W Panama segment for the periods indicated.segment.
| | | Three months ended September 30, | | Increase (decrease) from: | | | | | | | | | | | | | | | | |
| | | | Increase | | An acquisition | | Organic | | Three months ended September 30, | | Increase | |
| | | 2022 | | 2021 | | | 2023 | | 2022 | | |
| | | in millions | | in millions |
| | Programming and copyright | Programming and copyright | $ | 4.9 | | | $ | 3.7 | | | $ | 1.2 | | | $ | 0.5 | | | $ | 0.7 | | Programming and copyright | $ | 5.8 | | | $ | 4.9 | | | $ | 0.9 | | |
| Interconnect | Interconnect | 16.5 | | | 14.6 | | | 1.9 | | | 3.8 | | | (1.9) | | Interconnect | 18.6 | | | 16.5 | | | 2.1 | | |
| Equipment and other | Equipment and other | 30.9 | | | 23.1 | | | 7.8 | | | 4.6 | | | 3.2 | | Equipment and other | 43.3 | | | 30.9 | | | 12.4 | | |
| Total programming and other direct costs of services | Total programming and other direct costs of services | $ | 52.3 | | | $ | 41.4 | | | $ | 10.9 | | | $ | 8.9 | | | $ | 2.0 | | Total programming and other direct costs of services | $ | 67.7 | | | $ | 52.3 | | | $ | 15.4 | | |
| | | Nine months ended September 30, | | Increase (decrease) from: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Increase | | An acquisition | | Organic | | Nine months ended September 30, | | Increase | | Increase (decrease) from: |
| | | 2022 | | 2021 | | | 2023 | | 2022 | | An acquisition | | Organic |
| | | in millions | | in millions |
| | Programming and copyright | Programming and copyright | $ | 13.2 | | | $ | 11.3 | | | $ | 1.9 | | | $ | 0.5 | | | $ | 1.4 | | Programming and copyright | $ | 15.9 | | | $ | 13.2 | | | $ | 2.7 | | | $ | 1.0 | | | $ | 1.7 | |
| Interconnect | Interconnect | 46.9 | | | 45.3 | | | 1.6 | | | 3.8 | | | (2.2) | | Interconnect | 54.0 | | | 46.9 | | | 7.1 | | | 7.6 | | | (0.5) | |
| Equipment and other | Equipment and other | 77.2 | | | 63.1 | | | 14.1 | | | 4.6 | | | 9.5 | | Equipment and other | 101.7 | | | 77.2 | | | 24.5 | | | 9.2 | | | 15.3 | |
| Total programming and other direct costs of services | Total programming and other direct costs of services | $ | 137.3 | | | $ | 119.7 | | | $ | 17.6 | | | $ | 8.9 | | | $ | 8.7 | | Total programming and other direct costs of services | $ | 171.6 | | | $ | 137.3 | | | $ | 34.3 | | | $ | 17.8 | | | $ | 16.5 | |
•Programming and copyright: The organic increases are primarily due to RGU growth.
•Interconnect: The organic decreases are primarily due to lower call volumes.
•Equipment and other: The organic increases are primarily due to (i) higher costs associated with certain non-recurring B2B contracts and (ii) for the nine-month comparison, higher volumes of handset sales.government-related projects.
C&WLiberty Networks & LatAm. The following tables set forth the organic and non-organic changes in programming and other direct costs of services for our C&WLiberty Networks & LatAm segment for the periods indicated.segment.
| | | | Three months ended September 30, | | Increase | | Increase (decrease) from: | | Three months ended September 30, | | Increase | | Increase from: |
| | | 2022 | | 2021 | | FX | | Organic | | 2023 | | 2022 | | FX | | Organic |
| | | in millions | | in millions |
| | | Interconnect | Interconnect | $ | 12.0 | | | $ | 11.6 | | | $ | 0.4 | | | $ | (0.2) | | | $ | 0.6 | | Interconnect | $ | 12.6 | | | $ | 12.0 | | | $ | 0.6 | | | $ | 0.1 | | | $ | 0.5 | |
| Equipment and other | Equipment and other | 3.9 | | | 2.6 | | | 1.3 | | | (0.4) | | | 1.7 | | Equipment and other | 4.8 | | | 3.9 | | | 0.9 | | | 0.2 | | | 0.7 | |
| Total programming and other direct costs of services | Total programming and other direct costs of services | $ | 15.9 | | | $ | 14.2 | | | $ | 1.7 | | | $ | (0.6) | | | $ | 2.3 | | Total programming and other direct costs of services | $ | 17.4 | | | $ | 15.9 | | | $ | 1.5 | | | $ | 0.3 | | | $ | 1.2 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Nine months ended September 30, | | Increase | | Increase (decrease) from: |
| | 2022 | | 2021 | | | FX | | Organic |
| | in millions |
| | | | | | | | | |
| | | | | | | | | |
| Interconnect | $ | 34.9 | | | $ | 33.9 | | | $ | 1.0 | | | $ | (0.4) | | | $ | 1.4 | |
| Equipment and other | 10.3 | | | 7.2 | | | 3.1 | | | (0.6) | | | 3.7 | |
| Total programming and other direct costs of services | $ | 45.2 | | | $ | 41.1 | | | $ | 4.1 | | | $ | (1.0) | | | $ | 5.1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Nine months ended September 30, | | Increase | | Increase (decrease) from: |
| | 2023 | | 2022 | | | FX | | Organic |
| | in millions |
| | | | | | | | | |
| | | | | | | | | |
| Interconnect | $ | 35.3 | | | $ | 34.9 | | | $ | 0.4 | | | $ | (0.5) | | | $ | 0.9 | |
| Equipment and other | 14.1 | | | 10.3 | | | 3.8 | | | (0.6) | | | 4.4 | |
| Total programming and other direct costs of services | $ | 49.4 | | | $ | 45.2 | | | $ | 4.2 | | | $ | (1.1) | | | $ | 5.3 | |
•Equipment and other: The organic increases are primarily due to higher costs associated with sales-type leases on CPE installed on long-term customer solutions.
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 for the periods indicated.segment.
| | | Three months ended September 30, | | Increase (decrease) from: | |
| | | | Increase (decrease) | | An acquisition | | Organic | | Three months ended September 30, | | Increase (decrease) | |
| | | 2022 | | 2021 | | | 2023 | | 2022 | | |
| | | in millions | | in millions |
| | Programming and copyright | Programming and copyright | $ | 27.9 | | | $ | 27.2 | | | $ | 0.7 | | | $ | — | | | $ | 0.7 | | Programming and copyright | $ | 28.5 | | | $ | 27.9 | | | $ | 0.6 | | |
| Interconnect | Interconnect | 20.0 | | | 26.6 | | | (6.6) | | | 0.7 | | | (7.3) | | Interconnect | 25.0 | | | 20.0 | | | 5.0 | | |
| Equipment and other | Equipment and other | 57.5 | | | 47.6 | | | 9.9 | | | 0.2 | | | 9.7 | | Equipment and other | 44.1 | | | 57.5 | | | (13.4) | | |
| Total programming and other direct costs of services | Total programming and other direct costs of services | $ | 105.4 | | | $ | 101.4 | | | $ | 4.0 | | | $ | 0.9 | | | $ | 3.1 | | Total programming and other direct costs of services | $ | 97.6 | | | $ | 105.4 | | | $ | (7.8) | | |
| | | Nine months ended September 30, | | Increase (decrease) from: | |
| | | | Increase (decrease) | | An acquisition | | Organic | | Nine months ended September 30, | | Increase (decrease) | |
| | | 2022 | | 2021 | | | 2023 | | 2022 | | |
| | | in millions | | in millions |
| | Programming and copyright | Programming and copyright | $ | 83.8 | | | $ | 82.2 | | | $ | 1.6 | | | $ | — | | | $ | 1.6 | | Programming and copyright | $ | 85.1 | | | $ | 83.8 | | | $ | 1.3 | | |
| Interconnect | Interconnect | 61.3 | | | 68.0 | | | (6.7) | | | 2.0 | | | (8.7) | | Interconnect | 71.0 | | | 61.3 | | | 9.7 | | |
| Equipment and other | Equipment and other | 170.7 | | | 148.2 | | | 22.5 | | | 0.5 | | | 22.0 | | Equipment and other | 132.3 | | | 170.7 | | | (38.4) | | |
| Total programming and other direct costs of services | Total programming and other direct costs of services | $ | 315.8 | | | $ | 298.4 | | | $ | 17.4 | | | $ | 2.5 | | | $ | 14.9 | | Total programming and other direct costs of services | $ | 288.4 | | | $ | 315.8 | | | $ | (27.4) | | |
•Programming and copyright: The increases are primarily due to the net effect of higher programming rates and lower average subscribers.
•Interconnect: The organic decreasesincreases are primarily due to lowerhigher roaming costs.costs, including the impact of changing to a fixed contract for part of our inbound roaming traffic.
•Equipment and other: The organic increasesdecreases are primarily due to (i) lower handset sales due to changes in our subsidy programs and (ii) equipment credits for handset purchases that we began receiving in 2023, including an amount recognized during the first half of 2023 associated with (i) higher volumes of handset sales, (ii) increases relatedhandsets purchased prior to 2023. In addition, the decrease for the nine-month comparison includes lower equipment-related integration costs associated with the AT&T Acquisition and a decrease associated with a lower of cost or market adjustmentsadjustment on equipment-related inventory recognized during the second and third quarters of 2022, and (iii) an unfavorable charge associated with equipment costs included in the transition services agreement entered into with AT&T. Also contributing to the organic increase for the nine-month comparison are (a) higher volumes of equipment sales associated with a contract entered into in the first quarter of 2022 and (b) equipment-related integration costs incurred during the first half of 2022.
Liberty Costa Rica. The following tables set forth the organic and non-organic changes in programming and other direct costs of services for our Liberty Costa Rica segment for the periods indicated.segment.
| | | Three months ended September 30, | | Increase (decrease) | | Increase (decrease) from: | | Three months ended September 30, | | Increase | | Increase (decrease) from: |
| | | An acquisition | | |
| | | 2022 | | 2021 | | FX | | Organic | | 2023 | | 2022 | | FX | | | Organic |
| | | in millions | | in millions |
| | Programming and copyright | Programming and copyright | $ | 7.8 | | | $ | 9.1 | | | $ | (1.3) | | | $ | (0.5) | | | $ | — | | | $ | (0.8) | | Programming and copyright | $ | 8.3 | | | $ | 7.8 | | | $ | 0.5 | | | $ | 1.6 | | | | $ | (1.1) | |
| Interconnect | Interconnect | 7.9 | | | 5.2 | | | 2.7 | | | (0.2) | | | 2.3 | | | 0.6 | | Interconnect | 8.1 | | | 7.9 | | | 0.2 | | | 1.4 | | | | (1.2) | |
| Equipment and other | Equipment and other | 9.7 | | | 6.2 | | | 3.5 | | | (0.2) | | | 2.8 | | | 0.9 | | Equipment and other | 11.9 | | | 9.7 | | | 2.2 | | | 2.2 | | | | — | |
| Total programming and other direct costs of services | Total programming and other direct costs of services | $ | 25.4 | | | $ | 20.5 | | | $ | 4.9 | | | $ | (0.9) | | | $ | 5.1 | | | $ | 0.7 | | Total programming and other direct costs of services | $ | 28.3 | | | $ | 25.4 | | | $ | 2.9 | | | $ | 5.2 | | | | $ | (2.3) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | | | | An acquisition | | |
| | 2022 | | 2021 | | | FX | | | Organic |
| | in millions |
| | | | | | | | | | | |
| Programming and copyright | $ | 25.6 | | | $ | 26.9 | | | $ | (1.3) | | | $ | (1.8) | | | $ | — | | | $ | 0.5 | |
| Interconnect | 24.2 | | | 6.5 | | | 17.7 | | | (0.3) | | | 17.4 | | | 0.6 | |
| Equipment and other | 28.6 | | | 7.7 | | | 20.9 | | | (0.2) | | | 21.5 | | | (0.4) | |
| Total programming and other direct costs of services | $ | 78.4 | | | $ | 41.1 | | | $ | 37.3 | | | $ | (2.3) | | | $ | 38.9 | | | $ | 0.7 | |
VTR. The following tables set forth the organic and non-organic changes in programming and other direct costs of services for our VTR segmentfor the periods indicated.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Decrease | | Increase (decrease) from: |
| | 2022 | | 2021 | | | FX | | Organic |
| | in millions |
| | | | | | | | | |
| Programming and copyright | $ | 30.9 | | | $ | 46.1 | | | $ | (15.2) | | | $ | (6.2) | | | $ | (9.0) | |
| Interconnect | 6.8 | | | 7.4 | | | (0.6) | | | (1.3) | | | 0.7 | |
| Equipment and other | 0.9 | | | 2.5 | | | (1.6) | | | (0.3) | | | (1.3) | |
| Total programming and other direct costs of services | $ | 38.6 | | | $ | 56.0 | | | $ | (17.4) | | | $ | (7.8) | | | $ | (9.6) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Nine months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | | Nine months ended September 30, | | Increase (decrease) | | Increase (decrease) from: | |
| | | 2022 | | 2021 | | FX | | Organic | | 2023 | | 2022 | | FX | | | Organic |
| | | in millions | | in millions |
| | Programming and copyright | Programming and copyright | $ | 113.5 | | | $ | 145.0 | | | $ | (31.5) | | | $ | (18.1) | | | $ | (13.4) | | Programming and copyright | $ | 25.1 | | | $ | 25.6 | | | $ | (0.5) | | | $ | 4.3 | | | | $ | (4.8) | |
| Interconnect | Interconnect | 21.9 | | | 21.8 | | | 0.1 | | | (3.5) | | | 3.6 | | Interconnect | 24.6 | | | 24.2 | | | 0.4 | | | 4.1 | | | | (3.7) | |
| Equipment and other | Equipment and other | 3.2 | | | 9.0 | | | (5.8) | | | (0.6) | | | (5.2) | | Equipment and other | 34.7 | | | 28.6 | | | 6.1 | | | 5.9 | | | | 0.2 | |
| Total programming and other direct costs of services | Total programming and other direct costs of services | $ | 138.6 | | | $ | 175.8 | | | $ | (37.2) | | $-37.2 | $ | (22.2) | | | $ | (15.0) | | Total programming and other direct costs of services | $ | 84.4 | | | $ | 78.4 | | | $ | 6.0 | | | $ | 14.3 | | | | $ | (8.3) | |
•Programming and copyright:The organic decreases are primarily due to the net effect of (i) lower average subscribers, (ii) lower content rates and (iii) the positive impacts associated with the renegotiation of certain content agreements. The decrease during the nine-month comparison was also impacted by (a) the positive impact of FX associated with the reassessment of an accrualnon-CRC denominated contracts and (ii) lower programming costs associated with video-on-demand content-related costs during the second quarter of 2022 and (b) an increase related to a settlement associated with a programming contract that occurred during the first quarter of 2022.declines in video RGUs.
•Interconnect:The organic increases are primarily due to (i) higher rates and (ii) higher national leased capacity.
•Equipment and other: The organic decreases are primarily due to lower volumes of equipment sales.local and international traffic.
Other operating costs and expenses
Other operating costs and expenses set forth in the tables below comprise the following cost categories:
•Personnel and contract labor-related costs, which primarily include salary-related and cash bonus expenses, net of capitalizable labor costs, and temporary contract labor costs;
•Network-related expenses, which primarily include costs related to network access, system power, core network, and CPE repair, maintenance and test costs;
•Service-related costs, which primarily include professional services, information technology-related services, audit, legal and other services;
•Commercial, which primarily includes sales and marketing costs, such as advertising, commissions and other sales and marketing-related costs, and customer care costs related to outsourced call centers;
•Facility, provision, franchise and other, which primarily includes facility-related costs, provision for bad debt expense, operating lease rent expense, franchise-related fees, bank fees, insurance, vehicle-related, travel and entertainment and other operating-related costs; and
•Share-based compensationexpense that relates to (i) equity awards issued to our employees and Directors and (ii) certain bonus-related expenses that are paid in the form of equity.
Consolidated. The following tables set forth the organic and non-organic changes in other operating costs and expenses on a consolidated basis for the periods indicated.basis.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | | Three months ended September 30, | | Increase (decrease) | | Increase (decrease) from: | | | | A disposition | |
| | | 2022 | | 2021 | | FX | | Acquisitions | | Organic | | 2023 | | 2022 | | FX | | | | Organic |
| | | in millions | | in millions |
| | Personnel and contract labor | Personnel and contract labor | $ | 155.3 | | | $ | 142.9 | | | $ | 12.4 | | | $ | (3.6) | | | $ | 4.4 | | | $ | 11.6 | | Personnel and contract labor | $ | 130.8 | | | $ | 155.3 | | | $ | (24.5) | | | $ | 1.4 | | | | $ | (14.6) | | | $ | (11.3) | |
| Network-related | Network-related | 88.6 | | | 86.0 | | | 2.6 | | | (4.4) | | | 6.0 | | | 1.0 | | Network-related | 65.2 | | | 88.6 | | | (23.4) | | | 1.9 | | | | (17.5) | | | (7.8) | |
| Service-related | Service-related | 52.8 | | | 47.4 | | | 5.4 | | | (1.9) | | | 3.2 | | | 4.1 | | Service-related | 52.3 | | | 52.8 | | | (0.5) | | | 1.1 | | | | (7.5) | | | 5.9 | |
| Commercial | Commercial | 58.9 | | | 57.4 | | | 1.5 | | | (3.0) | | | 8.5 | | | (4.0) | | Commercial | 47.1 | | | 58.9 | | | (11.8) | | | 2.9 | | | | (12.7) | | | (2.0) | |
| Facility, provision, franchise and other | Facility, provision, franchise and other | 152.3 | | | 122.2 | | | 30.1 | | | (2.3) | | | 16.5 | | | 15.9 | | Facility, provision, franchise and other | 142.9 | | | 152.3 | | | (9.4) | | | 3.2 | | | | (7.7) | | | (4.9) | |
| Share-based compensation expense | Share-based compensation expense | 20.8 | | | 33.1 | | | (12.3) | | | — | | | — | | | (12.3) | | Share-based compensation expense | 24.1 | | | 20.8 | | | 3.3 | | | 0.2 | | | | (0.2) | | | 3.3 | |
| Total other operating costs and expenses | Total other operating costs and expenses | $ | 528.7 | | | $ | 489.0 | | | $ | 39.7 | | | $ | (15.2) | | | $ | 38.6 | | | $ | 16.3 | | Total other operating costs and expenses | $ | 462.4 | | | $ | 528.7 | | | $ | (66.3) | | | $ | 10.7 | | | | $ | (60.2) | | | $ | (16.8) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nine months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | | Nine months ended September 30, | | Increase (decrease) | | Increase (decrease) from: | | | An acquisition | | A disposition | |
| | | 2022 | | 2021 | | FX | | Acquisitions | | Organic | | 2023 | | 2022 | | FX | | Organic |
| | | in millions | | in millions |
| | Personnel and contract labor | Personnel and contract labor | $ | 453.6 | | | $ | 425.1 | | | $ | 28.5 | | | $ | (9.9) | | | $ | 12.2 | | | $ | 26.2 | | Personnel and contract labor | $ | 418.1 | | | $ | 453.6 | | | $ | (35.5) | | | $ | 2.7 | | | $ | 6.0 | | | $ | (41.8) | | | $ | (2.4) | |
| Network-related | Network-related | 250.1 | | | 247.1 | | | 3.0 | | | (11.5) | | | 16.5 | | | (2.0) | | Network-related | 193.6 | | | 250.1 | | | (56.5) | | | 4.3 | | | 9.0 | | | (55.7) | | | (14.1) | |
| Service-related | Service-related | 158.6 | | | 140.2 | | | 18.4 | | | (4.7) | | | 12.0 | | | 11.1 | | Service-related | 162.6 | | | 158.6 | | | 4.0 | | | 3.1 | | | 1.4 | | | (24.0) | | | 23.5 | |
| Commercial | Commercial | 182.5 | | | 163.5 | | | 19.0 | | | (9.4) | | | 31.2 | | | (2.8) | | Commercial | 136.2 | | | 182.5 | | | (46.3) | | | 7.6 | | | 9.8 | | | (52.2) | | | (11.5) | |
| Facility, provision, franchise and other | Facility, provision, franchise and other | 394.0 | | | 342.0 | | | 52.0 | | | (6.0) | | | 40.7 | | | 17.3 | | Facility, provision, franchise and other | 427.1 | | | 394.0 | | | 33.1 | | | 8.2 | | | 24.0 | | | (22.7) | | | 23.6 | |
| Share-based compensation expense | Share-based compensation expense | 82.6 | | | 88.9 | | | (6.3) | | | (1.2) | | | 0.8 | | | (5.9) | | Share-based compensation expense | 77.8 | | | 82.6 | | | (4.8) | | | 0.3 | | | — | | | (7.6) | | | 2.5 | |
| Total other operating costs and expenses | Total other operating costs and expenses | $ | 1,521.4 | | | $ | 1,406.8 | | | $ | 114.6 | | | $ | (42.7) | | | $ | 113.4 | | | $ | 43.9 | | Total other operating costs and expenses | $ | 1,415.4 | | | $ | 1,521.4 | | | $ | (106.0) | | | $ | 26.2 | | | $ | 50.2 | | | $ | (204.0) | | | $ | 21.6 | |
C&W Caribbean. The following tables set forth the organic and non-organic changes in other operating costs and expenses for our C&W Caribbean segment for the periods indicated.segment.
| | | | Three months ended September 30, | | Increase (decrease) | | Increase (decrease) from: | | Three months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | | 2022 | | 2021 | | FX | | Organic | | 2023 | | 2022 | | FX | | Organic |
| | | in millions | | in millions |
| | Personnel and contract labor | Personnel and contract labor | $ | 51.3 | | | $ | 50.9 | | | $ | 0.4 | | | $ | (0.1) | | | $ | 0.5 | | Personnel and contract labor | $ | 47.3 | | | $ | 51.3 | | | $ | (4.0) | | | $ | (0.1) | | | $ | (3.9) | |
| Network-related | Network-related | 36.4 | | | 38.8 | | | (2.4) | | | — | | | (2.4) | | Network-related | 35.9 | | | 36.4 | | | (0.5) | | | (0.1) | | | (0.4) | |
| Service-related | Service-related | 18.1 | | | 15.6 | | | 2.5 | | | — | | | 2.5 | | Service-related | 19.2 | | | 18.1 | | | 1.1 | | | — | | | 1.1 | |
| Commercial | Commercial | 12.1 | | | 12.3 | | | (0.2) | | | — | | | (0.2) | | Commercial | 11.8 | | | 12.1 | | | (0.3) | | | — | | | (0.3) | |
| Facility, provision, franchise and other | Facility, provision, franchise and other | 38.2 | | | 37.1 | | | 1.1 | | | 0.1 | | | 1.0 | | Facility, provision, franchise and other | 38.1 | | | 38.2 | | | (0.1) | | | (0.2) | | | 0.1 | |
| Share-based compensation expense | Share-based compensation expense | 4.3 | | | 9.7 | | | (5.4) | | | 0.1 | | | (5.5) | | Share-based compensation expense | 5.2 | | | 4.3 | | | 0.9 | | | — | | | 0.9 | |
| Total other operating costs and expenses | Total other operating costs and expenses | $ | 160.4 | | | $ | 164.4 | | | $ | (4.0) | | | $ | 0.1 | | | $ | (4.1) | | Total other operating costs and expenses | $ | 157.5 | | | $ | 160.4 | | | $ | (2.9) | | | $ | (0.4) | | | $ | (2.5) | |
| | | | Nine months ended September 30, | | Increase (decrease) | | Increase (decrease) from: | | Nine months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | | 2022 | | 2021 | | FX | | Organic | | 2023 | | 2022 | | FX | | Organic |
| | in millions | | in millions |
| | Personnel and contract labor | Personnel and contract labor | $ | 154.9 | | | $ | 154.1 | | | $ | 0.8 | | | $ | (0.8) | | | $ | 1.6 | | Personnel and contract labor | $ | 153.4 | | | $ | 154.9 | | | $ | (1.5) | | | $ | 0.1 | | | $ | (1.6) | |
| Network-related | Network-related | 108.0 | | | 119.2 | | | (11.2) | | | (1.0) | | | (10.2) | | Network-related | 101.9 | | | 108.0 | | | (6.1) | | | — | | | (6.1) | |
| Service-related | Service-related | 52.1 | | | 49.0 | | | 3.1 | | | (0.2) | | | 3.3 | | Service-related | 56.7 | | | 52.1 | | | 4.6 | | | 0.1 | | | 4.5 | |
| Commercial | Commercial | 33.8 | | | 35.3 | | | (1.5) | | | (0.4) | | | (1.1) | | Commercial | 34.0 | | | 33.8 | | | 0.2 | | | 0.1 | | | 0.1 | |
| Facility, provision, franchise and other | Facility, provision, franchise and other | 108.7 | | | 108.0 | | | 0.7 | | | (0.4) | | | 1.1 | | Facility, provision, franchise and other | 114.4 | | | 108.7 | | | 5.7 | | | — | | | 5.7 | |
| Share-based compensation expense | Share-based compensation expense | 16.6 | | | 22.7 | | | (6.1) | | | — | | | (6.1) | | Share-based compensation expense | 14.6 | | | 16.6 | | | (2.0) | | | — | | | (2.0) | |
| Total other operating costs and expenses | Total other operating costs and expenses | $ | 474.1 | | | $ | 488.3 | | | $ | (14.2) | | | $ | (2.8) | | | $ | (11.4) | | Total other operating costs and expenses | $ | 475.0 | | | $ | 474.1 | | | $ | 0.9 | | | $ | 0.3 | | | $ | 0.6 | |
•Personnel and contract labor: The organic decreases are primarily due to the net effect of (i) lower costs resulting from increases in capitalized labor, (ii) salary increases and (iii) lower headcount.
•Network-related: The organic decreases are primarily due to declines associated with lower (i) truck rolls, (ii) system power costs and (iii) network-related professional service costs resulting from the net impact of (i) lowerbusiness strategy to transition certain third-party services to internal resources. These declines were partially offset by higher capacity charges associated with the use of C&W Networks & LatAm’sLiberty Networks’ subsea network, (ii) savings on vendornetwork. In addition, the decrease during the nine-month comparison is also impacted by lower leased line costs as a result ofresulting from the renegotiation and cancellation of certain contracts as well as lower overall spending and (iii) higher utilities costs.pole rental contracts.
•Service-related: The organic increases are primarily due to charges allocated fromincreases in professional services in connection with various projects across certain of our Corporate operations.markets.
C&W Panama. The following tables set forth the organic and non-organic changes in other operating costs and expenses for our C&W Panama segment for the periods indicated.segment.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, | | | | Increase (decrease) from: |
| | | Increase (decrease) | | An acquisition | | Organic |
| | 2022 | | 2021 | | | |
| | in millions | | | | |
| | | | | | | | | |
| Personnel and contract labor | $ | 20.6 | | | $ | 16.8 | | | $ | 3.8 | | | $ | 3.0 | | | $ | 0.8 | |
| Network-related | 14.4 | | | 9.6 | | | 4.8 | | | 4.5 | | | 0.3 | |
| Service-related | 3.5 | | | 3.7 | | | (0.2) | | | 0.7 | | | (0.9) | |
| Commercial | 9.6 | | | 4.7 | | | 4.9 | | | 4.9 | | | — | |
| Facility, provision, franchise and other | 25.4 | | | 9.8 | | | 15.6 | | | 11.4 | | | 4.2 | |
| Share-based compensation expense | 1.0 | | | 1.0 | | | — | | | — | | | — | |
| Total other operating costs and expenses | $ | 74.5 | | | $ | 45.6 | | | $ | 28.9 | | | $ | 24.5 | | | $ | 4.4 | |
| | | Nine months ended September 30, | | Increase (decrease) from: | | | | | | | | | | | | | | | | |
| | | | Increase | | An acquisition | | Organic | | Three months ended September 30, | | Increase (decrease) | |
| | | 2022 | | 2021 | | | 2023 | | 2022 | | |
| | | in millions | | in millions |
| | Personnel and contract labor | Personnel and contract labor | $ | 56.9 | | | $ | 50.9 | | | $ | 6.0 | | | $ | 3.0 | | | $ | 3.0 | | Personnel and contract labor | $ | 19.5 | | | $ | 20.6 | | | $ | (1.1) | | |
| Network-related | Network-related | 34.6 | | | 29.6 | | | 5.0 | | | 4.5 | | | 0.5 | | Network-related | 13.9 | | | 14.4 | | | (0.5) | | |
| Service-related | Service-related | 11.7 | | | 11.4 | | | 0.3 | | | 0.7 | | | (0.4) | | Service-related | 4.5 | | | 3.5 | | | 1.0 | | |
| Commercial | Commercial | 20.4 | | | 14.8 | | | 5.6 | | | 4.9 | | | 0.7 | | Commercial | 6.2 | | | 9.6 | | | (3.4) | | |
| Facility, provision, franchise and other | Facility, provision, franchise and other | 48.8 | | | 30.6 | | | 18.2 | | | 11.4 | | | 6.8 | | Facility, provision, franchise and other | 20.1 | | | 25.4 | | | (5.3) | | |
| Share-based compensation expense | Share-based compensation expense | 4.4 | | | 2.6 | | | 1.8 | | | — | | | 1.8 | | Share-based compensation expense | 0.6 | | | 1.0 | | | (0.4) | | |
| Total other operating costs and expenses | Total other operating costs and expenses | $ | 176.8 | | | $ | 139.9 | | | $ | 36.9 | | | $ | 24.5 | | | $ | 12.4 | | Total other operating costs and expenses | $ | 64.8 | | | $ | 74.5 | | | $ | (9.7) | | |
•Personnel and contract labor: The organic increases are primarily due to higher staff costs related to increased sales activities.
•Facility, provision, franchise and other: The organic increases are primarily driven by higher bad debt provisions.
C&W Networks & LatAm. The following tables set forth the organic and non-organic changes in other operating costs and expenses for our C&W Networks & LatAm segment for the periods indicated.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | 2022 | | 2021 | | | FX | | Organic |
| | in millions |
| | | | | | | | | |
| Personnel and contract labor | $ | 10.9 | | | $ | 10.0 | | | $ | 0.9 | | | $ | (0.7) | | | $ | 1.6 | |
| Network-related | 10.2 | | | 14.0 | | | (3.8) | | | (0.2) | | | (3.6) | |
| Service-related | 1.1 | | | 0.8 | | | 0.3 | | | — | | | 0.3 | |
| Commercial | 0.4 | | | 0.3 | | | 0.1 | | | — | | | 0.1 | |
| Facility, provision, franchise and other | 5.4 | | | 5.2 | | | 0.2 | | | (0.4) | | | 0.6 | |
| Share-based compensation expense | 1.0 | | | 1.1 | | | (0.1) | | | — | | | (0.1) | |
| Total other operating costs and expenses | $ | 29.0 | | | $ | 31.4 | | | $ | (2.4) | | | $ | (1.3) | | | $ | (1.1) | |
| | | | Nine months ended September 30, | | Increase (decrease) | | Increase (decrease) from: | | Nine months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | | 2022 | | 2021 | | FX | | Organic | | 2023 | | 2022 | | An acquisition | | Organic |
| | in millions | | in millions |
| | Personnel and contract labor | Personnel and contract labor | $ | 32.9 | | | $ | 33.2 | | | $ | (0.3) | | | $ | (1.5) | | | $ | 1.2 | | Personnel and contract labor | $ | 62.7 | | | $ | 56.9 | | | $ | 5.8 | | | $ | 6.0 | | | $ | (0.2) | |
| Network-related | Network-related | 32.3 | | | 35.7 | | | (3.4) | | | (0.6) | | | (2.8) | | Network-related | 40.8 | | | 34.6 | | | 6.2 | | | 9.0 | | | (2.8) | |
| Service-related | Service-related | 3.2 | | | 2.8 | | | 0.4 | | | — | | | 0.4 | | Service-related | 13.1 | | | 11.7 | | | 1.4 | | | 1.4 | | | — | |
| Commercial | Commercial | 1.0 | | | 0.9 | | | 0.1 | | | — | | | 0.1 | | Commercial | 20.7 | | | 20.4 | | | 0.3 | | | 9.8 | | | (9.5) | |
| Facility, provision, franchise and other | Facility, provision, franchise and other | 15.6 | | | 13.2 | | | 2.4 | | | (0.8) | | | 3.2 | | Facility, provision, franchise and other | 66.6 | | | 48.8 | | | 17.8 | | | 24.0 | | | (6.2) | |
| Share-based compensation expense | Share-based compensation expense | 3.7 | | | 3.2 | | | 0.5 | | | — | | | 0.5 | | Share-based compensation expense | 2.9 | | | 4.4 | | | (1.5) | | | — | | | (1.5) | |
| Total other operating costs and expenses | Total other operating costs and expenses | $ | 88.7 | | | $ | 89.0 | | | $ | (0.3) | | | $ | (2.9) | | | $ | 2.6 | | Total other operating costs and expenses | $ | 206.8 | | | $ | 176.8 | | | $ | 30.0 | | | $ | 50.2 | | | $ | (20.2) | |
•Network-related:Commercial: The organic decreases are primarily due to (i) lower subsea cable repairsthird-party sales commissions, mainly resulting from integration-related activities, and (ii) lower operating and maintenance-relatedmarketing costs.
•Facility, provision, franchise and other: The organic increasesdecreases are primarily due to higher(i) lower office and facility-related costs, mainly resulting from integration efforts and (ii) lower bad debt provisions.
Liberty Puerto RicoNetworks. The following tables set forth the organic and non-organic changes in other operating costs and expenses for our Liberty Puerto Rico segment for the periods indicated.Networks segment.
| | | Three months ended September 30, | | Increase (decrease) from: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Increase (decrease) | | An acquisition | | Organic | | Three months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | 2022 | | 2021 | | | 2023 | | 2022 | | FX | | Organic |
| | | in millions | | in millions |
| | Personnel and contract labor | Personnel and contract labor | $ | 41.2 | | | $ | 36.8 | | | $ | 4.4 | | | $ | 0.4 | | | $ | 4.0 | | Personnel and contract labor | $ | 11.1 | | | $ | 10.9 | | | $ | 0.2 | | | $ | 0.3 | | | $ | (0.1) | |
| Network-related | Network-related | 16.9 | | | 13.6 | | | 3.3 | | | (0.1) | | | 3.4 | | Network-related | 11.4 | | | 10.2 | | | 1.2 | | | 0.2 | | | 1.0 | |
| Service-related | Service-related | 9.2 | | | 10.3 | | | (1.1) | | | 0.2 | | | (1.3) | | Service-related | 1.4 | | | 1.1 | | | 0.3 | | | 0.1 | | | 0.2 | |
| Commercial | Commercial | 11.0 | | | 11.8 | | | (0.8) | | | — | | | (0.8) | | Commercial | 0.3 | | | 0.4 | | | (0.1) | | | — | | | (0.1) | |
| Facility, provision, franchise and other | Facility, provision, franchise and other | 51.7 | | | 44.1 | | | 7.6 | | | 0.5 | | | 7.1 | | Facility, provision, franchise and other | 6.7 | | | 5.4 | | | 1.3 | | | 0.2 | | | 1.1 | |
| Share-based compensation expense | Share-based compensation expense | 1.2 | | | 1.7 | | | (0.5) | | | — | | | (0.5) | | Share-based compensation expense | 0.6 | | | 1.0 | | | (0.4) | | | — | | | (0.4) | |
| Total other operating costs and expenses | Total other operating costs and expenses | $ | 131.2 | | | $ | 118.3 | | | $ | 12.9 | | | $ | 1.0 | | | $ | 11.9 | | Total other operating costs and expenses | $ | 31.5 | | | $ | 29.0 | | | $ | 2.5 | | | $ | 0.8 | | | $ | 1.7 | |
| | | Nine months ended September 30, | | Increase (decrease) from: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Increase (decrease) | | An acquisition | | Organic | | Nine months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | | 2022 | | 2021 | | | 2023 | | 2022 | | FX | | Organic |
| | | in millions | | in millions |
| | Personnel and contract labor | Personnel and contract labor | $ | 120.1 | | | $ | 104.4 | | | $ | 15.7 | | | $ | 1.4 | | | $ | 14.3 | | Personnel and contract labor | $ | 33.5 | | | $ | 32.9 | | | $ | 0.6 | | | $ | (1.4) | | | $ | 2.0 | |
| Network-related | Network-related | 38.5 | | | 37.5 | | | 1.0 | | | 0.1 | | | 0.9 | | Network-related | 32.8 | | | 32.3 | | | 0.5 | | | (0.5) | | | 1.0 | |
| Service-related | Service-related | 34.5 | | | 30.1 | | | 4.4 | | | 1.0 | | | 3.4 | | Service-related | 3.7 | | | 3.2 | | | 0.5 | | | — | | | 0.5 | |
| Commercial | Commercial | 35.3 | | | 35.4 | | | (0.1) | | | — | | | (0.1) | | Commercial | 1.4 | | | 1.0 | | | 0.4 | | | — | | | 0.4 | |
| Facility, provision, franchise and other | Facility, provision, franchise and other | 134.0 | | | 127.1 | | | 6.9 | | | 1.9 | | | 5.0 | | Facility, provision, franchise and other | 19.0 | | | 15.6 | | | 3.4 | | | (0.7) | | | 4.1 | |
| Share-based compensation expense | Share-based compensation expense | 6.0 | | | 5.8 | | | 0.2 | | | — | | | 0.2 | | Share-based compensation expense | 2.8 | | | 3.7 | | | (0.9) | | | — | | | (0.9) | |
| Total other operating costs and expenses | Total other operating costs and expenses | $ | 368.4 | | | $ | 340.3 | | | $ | 28.1 | | | $ | 4.4 | | | $ | 23.7 | | Total other operating costs and expenses | $ | 93.2 | | | $ | 88.7 | | | $ | 4.5 | | | $ | (2.6) | | | $ | 7.1 | |
•Personnel and contract labor: The organic increase for the nine-month comparison is primarily due to higher bonus and salary-related expenses.
•Facility, provision, franchise and other: The organic increases are primarily due to bad debt provisions and other insignificant changes across numerous cost categories.
Liberty Puerto Rico. The following tables set forth the changes in other operating costs and expenses for our Liberty Puerto Rico segment.
| | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, | | | | |
| | Increase (decrease) | | | | |
| 2023 | | 2022 | | | |
| | in millions |
| | | | | | | | | |
| Personnel and contract labor | $ | 39.2 | | | $ | 41.2 | | | $ | (2.0) | | | | | |
| Network-related | 12.2 | | | 16.9 | | | (4.7) | | | | | |
| Service-related | 17.8 | | | 9.2 | | | 8.6 | | | | | |
| Commercial | 13.2 | | | 11.0 | | | 2.2 | | | | | |
| Facility, provision, franchise and other | 54.8 | | | 51.7 | | | 3.1 | | | | | |
| Share-based compensation expense | 2.4 | | | 1.2 | | | 1.2 | | | | | |
| Total other operating costs and expenses | $ | 139.6 | | | $ | 131.2 | | | $ | 8.4 | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Nine months ended September 30, | | | | |
| | | Increase (decrease) | | | | |
| | 2023 | | 2022 | | | |
| | in millions |
| | | | | | | | | |
| Personnel and contract labor | $ | 113.5 | | | $ | 120.1 | | | $ | (6.6) | | | | | |
| Network-related | 37.8 | | | 38.5 | | | (0.7) | | | | | |
| Service-related | 54.5 | | | 34.5 | | | 20.0 | | | | | |
| Commercial | 36.1 | | | 35.3 | | | 0.8 | | | | | |
| Facility, provision, franchise and other | 152.3 | | | 134.0 | | | 18.3 | | | | | |
| Share-based compensation expense | 5.9 | | | 6.0 | | | (0.1) | | | | | |
| Total other operating costs and expenses | $ | 400.1 | | | $ | 368.4 | | | $ | 31.7 | | | | | |
•Personnel and contract labor: The decrease for the three-month comparison is primarily driven by lower bonus costs that were partially offset by a shift in bonus payments in the form of equity to cash. The decrease for the nine-month comparison is primarily due to the net effect of (i) decline resulting from the receipt of a payroll tax credits during the first and second quarters of 2023 awarded to businesses that continued to pay employees or that experienced significant declines in gross receipts during the COVID-19 pandemic, (ii) higher salaries and otherrelated personnel costs, including the impact of higher amortization of deferred commissions in connection with the AT&T Acquisition, and (ii)(iii) lower bonus-related expenses.costs.
•Network-related:The organic increases, and in particular the increasedecrease for the three-month comparison, are primarily due to incremental expenses incurred in operating the network as a result of the impacts from Hurricane Fiona, and increases in network-related integration costs associated with the AT&T Acquisition. For the nine-month comparison, the increase was further impacted by a decline associated with the termination of the transition services agreement entered into with AT&T associated with network maintenance and licenses.
•Service-related: The organic increase during the nine-month comparison is primarily due to higherlower repair and maintenance costs and a decline resulting from costs associated with Hurricane Fiona incurred during the corresponding 2022 period. For the nine-month comparison, costs are broadly flat as the aforementioned declines were broadly offset by an increase in maintenance costs and fees related to the migration of customers to our mobile network.
•Service-related: The increases are primarily due to higher (i) professional services charges, allocatedincluding the impact of certain accrual adjustments during the third quarter of 2022, (ii) IT-related services, including higher software license costs,(iii) fees charged from our Corporatecorporate operations and (ii) software licenses. Service-related integration costs associated with the AT&T Acquisition remained relatively flat during each of the three and nine-month comparisons, but are expected to grow in future periods.(iv) regulatory fees.
•Facility, provision, franchise and other: The organic increases for both the three and nine-month comparisons were impacted by increasesare primarily related to (i) a reassessment of an accrual associated with certain services being provided under a transaction service agreement and (ii) utility costs. The increase for the nine-month comparison is further impacted by the net effect of (i) a decrease in bad debt expense, resultingincluding the impact from the benefit during the second quarter of 2022 associated with lower expected credit loss rates established, during the second quarter of 2022, (ii) an increase in rent expense, driven by purchase accounting adjustments associated with the AT&T Acquisition that were recorded during the second quarter of 2021,certain tax-related costs, such as sales and property taxes, and (iii) a decrease resulting from a payment made during the second quarter of 2021 to settle certain 2011 property tax claims.
Liberty Costa Rica. The following tables set forth the organic and non-organic changes in other operating costs and expenses for our Liberty Costa Rica segment for the periods indicated.segment.
| | | | Three months ended September 30, | | Increase | | Increase (decrease) from: | | Three months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | | An acquisition | | |
| | | 2022 | | 2021 | | FX | | Organic | | 2023 | | 2022 | | FX | | | Organic |
| | | in millions | | in millions |
| | Personnel and contract labor | Personnel and contract labor | $ | 6.4 | | | $ | 5.6 | | | $ | 0.8 | | | $ | (0.3) | | | $ | 1.0 | | | $ | 0.1 | | Personnel and contract labor | $ | 6.7 | | | $ | 6.4 | | | $ | 0.3 | | | $ | 1.2 | | | | $ | (0.9) | |
| Network-related | Network-related | 8.1 | | | 5.2 | | | 2.9 | | | (0.2) | | | 1.6 | | | 1.5 | | Network-related | 10.4 | | | 8.1 | | | 2.3 | | | 2.1 | | | | 0.2 | |
| Service-related | Service-related | 6.5 | | | 3.0 | | | 3.5 | | | (0.2) | | | 2.3 | | | 1.4 | | Service-related | 6.1 | | | 6.5 | | | (0.4) | | | 1.0 | | | | (1.4) | |
| Commercial | Commercial | 13.0 | | | 8.0 | | | 5.0 | | | (0.5) | | | 3.6 | | | 1.9 | | Commercial | 15.6 | | | 13.0 | | | 2.6 | | | 2.9 | | | | (0.3) | |
| Facility, provision, franchise and other | Facility, provision, franchise and other | 17.0 | | | 11.5 | | | 5.5 | | | (0.8) | | | 4.6 | | | 1.7 | | Facility, provision, franchise and other | 17.6 | | | 17.0 | | | 0.6 | | | 3.2 | | | | (2.6) | |
| Share-based compensation expense | Share-based compensation expense | 0.5 | | | 0.3 | | | 0.2 | | | — | | | — | | | 0.2 | | Share-based compensation expense | 1.1 | | | 0.5 | | | 0.6 | | | 0.2 | | | | 0.4 | |
| Total other operating costs and expenses | Total other operating costs and expenses | $ | 51.5 | | | $ | 33.6 | | | $ | 17.9 | | | $ | (2.0) | | | $ | 13.1 | | | $ | 6.8 | | Total other operating costs and expenses | $ | 57.5 | | | $ | 51.5 | | | $ | 6.0 | | | $ | 10.6 | | | | $ | (4.6) | |
| | | | Nine months ended September 30, | | Increase | | Increase (decrease) from: | | Nine months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | | An acquisition | | |
| | | 2022 | | 2021 | | FX | | Organic | | 2023 | | 2022 | | FX | | | Organic |
| | | in millions | | in millions |
| | Personnel and contract labor | Personnel and contract labor | $ | 20.2 | | | $ | 12.6 | | | $ | 7.6 | | | $ | (0.8) | | | $ | 7.8 | | | $ | 0.6 | | Personnel and contract labor | $ | 24.1 | | | $ | 20.2 | | | $ | 3.9 | | | $ | 4.0 | | | | $ | (0.1) | |
| Network-related | Network-related | 24.9 | | | 11.2 | | | 13.7 | | | (0.8) | | | 11.9 | | | 2.6 | | Network-related | 30.3 | | | 24.9 | | | 5.4 | | | 5.1 | | | | 0.3 | |
| Service-related | Service-related | 17.9 | | | 4.8 | | | 13.1 | | | (0.5) | | | 10.3 | | | 3.3 | | Service-related | 18.1 | | | 17.9 | | | 0.2 | | | 3.0 | | | | (2.8) | |
| Commercial | Commercial | 39.7 | | | 11.9 | | | 27.8 | | | (0.8) | | | 26.3 | | | 2.3 | | Commercial | 44.0 | | | 39.7 | | | 4.3 | | | 7.5 | | | | (3.2) | |
| Facility, provision, franchise and other | Facility, provision, franchise and other | 44.9 | | | 17.9 | | | 27.0 | | | (1.1) | | | 27.4 | | | 0.7 | | Facility, provision, franchise and other | 52.9 | | | 44.9 | | | 8.0 | | | 8.9 | | | | (0.9) | |
| Share-based compensation expense | Share-based compensation expense | 1.9 | | | 0.7 | | | 1.2 | | | — | | | 0.8 | | | 0.4 | | Share-based compensation expense | 1.6 | | | 1.9 | | | (0.3) | | | 0.3 | | | | (0.6) | |
| Total other operating costs and expenses | Total other operating costs and expenses | $ | 149.5 | | | $ | 59.1 | | | $ | 90.4 | | | $ | (4.0) | | | $ | 84.5 | | | $ | 9.9 | | Total other operating costs and expenses | $ | 171.0 | | | $ | 149.5 | | | $ | 21.5 | | | $ | 28.8 | | | | $ | (7.3) | |
•Network-related: The organic increases are primarily due to higher maintenance-related costs.
•Service-related: The organic increasesdecreases are primarily due to higher information technology-related project costs.professional services incurred during 2022 related to a software implementation.
•Commercial:The organic increases are primarily due to higher third-party sales commission costs.
•Facility, provision, franchise and other costs: The organic increases are primarily due to higher bad debt provisions.
•Included in the increases from an acquisition in the tables above, are significant integration-related costs associated with the Liberty Telecomunicaciones Acquisition, which we expect will continue to grow during the remainder of 2022.
VTR. The following tables set forth the organic and non-organic changes in other operating costs and expenses for our VTR segmentfor the periods indicated.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Increase (decrease) | | Increase (decrease) from: |
| | 2022 | | 2021 | | | FX | | | Organic |
| | in millions |
| | | | | | | | | | |
| Personnel and contract labor | $ | 14.6 | | | $ | 13.9 | | | $ | 0.7 | | | $ | (2.8) | | | | $ | 3.5 | |
| Network-related | 17.5 | | | 20.2 | | | (2.7) | | | (3.5) | | | | 0.8 | |
| Service-related | 7.5 | | | 8.2 | | | (0.7) | | | (1.6) | | | | 0.9 | |
| Commercial | 12.7 | | | 20.3 | | | (7.6) | | | (2.7) | | | | (4.9) | |
| Facility, provision, franchise and other | 7.7 | | | 9.4 | | | (1.7) | | | (1.3) | | | | (0.4) | |
| Share-based compensation expense | 0.2 | | | 4.2 | | | (4.0) | | | (0.1) | | | | (3.9) | |
| Total other operating costs and expenses | $ | 60.2 | | | $ | 76.2 | | | $ | (16.0) | | | $ | (12.0) | | | | $ | (4.0) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Nine months ended September 30, | | Decrease | | Increase (decrease) from: |
| | 2022 | | 2021 | | | FX | | | Organic |
| | in millions |
| | | | | | | | | | |
| Personnel and contract labor | $ | 41.8 | | | $ | 46.8 | | | $ | (5.0) | | | $ | (6.8) | | | | $ | 1.8 | |
| Network-related | 55.7 | | | 63.8 | | | (8.1) | | | (9.1) | | | | 1.0 | |
| Service-related | 24.0 | | | 28.0 | | | (4.0) | | | (4.0) | | | | — | |
| Commercial | 52.2 | | | 65.2 | | | (13.0) | | | (8.2) | | | | (4.8) | |
| Facility, provision, franchise and other | 22.7 | | | 28.8 | | | (6.1) | | | (3.7) | | | | (2.4) | |
| Share-based compensation expense | 7.6 | | | 8.1 | | | (0.5) | | | (1.2) | | | | 0.7 | |
| Total other operating costs and expenses | $ | 204.0 | | | $ | 240.7 | | | $ | (36.7) | | | $ | (33.0) | | | | $ | (3.7) | |
•Personnel and contract labor: The organic increases are primarily due to higher salaries and other personnel costs due to the effect of inflation. For the nine-month comparison, this increase is partially offset by lower bonus-related expenses.
•Commercial: The organic decreases are due to the net effect of (i) lower sales commissions and (ii) lower call center activity. For the nine-month comparison, the decrease is partially offset by higher marketing and advertising costs, primarily related to a commitment to sponsor a music festival that was postponed during each of the past two years due to COVID-19.
•Facility, provision, franchise and other costs: The organic decreaseschanges are primarily due to the net effectimpact of (i) lower operating lease rent expense as a result of ceasingintegration costs incurred during 2022 related to rebranding associated with the amortization of our right of use assets in connection with held for sale accounting of the Chile JV Entities, as further described in note 8 to our condensed consolidated financial statements,Liberty Telecomunicaciones Acquisition and (ii) higher bad debt provisions.
Corporateincreases in sales commissions. The following tables set forth the organic changes in other operating costs and expenses for our corporate operations for the periods indicated.
| | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Organic increase (decrease) |
| | 2022 | | 2021 | |
| | in millions |
| | | | | |
| Personnel and contract labor | $ | 10.2 | | | $ | 9.2 | | | $ | 1.0 | |
| Service-related | 6.9 | | | 5.7 | | | 1.2 | |
| Facility, provision, franchise and other | 7.3 | | | 5.4 | | | 1.9 | |
| Share-based compensation expense | 12.6 | | | 15.1 | | | (2.5) | |
| Total other operating costs and expenses | $ | 37.0 | | | $ | 35.4 | | | $ | 1.6 | |
| | | | | | | | | | | | | | | | | |
| | Nine months ended September 30, | | Organic increase (decrease) |
| | 2022 | | 2021 | |
| | in millions |
| | | | | |
| Personnel and contract labor | $ | 26.7 | | | $ | 23.4 | | | $ | 3.3 | |
| | | | | |
| Service-related | 15.2 | | | 14.0 | | | 1.2 | |
| Facility, provision, franchise and other | 20.2 | | | 16.7 | | | 3.5 | |
| Share-based compensation expense | 42.4 | | | 45.8 | | | (3.4) | |
| Total other operating costs and expenses | $ | 104.5 | | | $ | 99.9 | | | $ | 4.6 | |
•Personnel and contract labor: The organic increases are primarily attributable to higher salaries and other personnel costs, mainly resulting from higher staffing levels in our operations in Panama.
•Facility, provision, franchise and other: The organic increasesdecreases are primarily due to the net impact of (i) the positive impact of FX associated with non-CRC denominated contracts, (ii) declines in lease costs as a result of renegotiated contracts and (iii) increases in bad debt expense. The nine-month comparison also includes the negative impact of purchase accounting adjustments associated with the Liberty Telecomunicaciones Acquisition that decreased rent expense during 2022.
Corporate. The following tables set forth the changes in other operating costs and expenses for our corporate operations.
| | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Increase (decrease) |
| | 2023 | | 2022 | |
| | in millions |
| | | | | |
| Personnel and contract labor | $ | 7.1 | | | $ | 10.2 | | | $ | (3.1) | |
| Service-related | 3.4 | | | 6.9 | | | (3.5) | |
| Facility, provision, franchise and other | 7.2 | | | 7.3 | | | (0.1) | |
| Share-based compensation expense | 14.3 | | | 12.6 | | | 1.7 | |
| Total other operating costs and expenses | $ | 32.0 | | | $ | 37.0 | | | $ | (5.0) | |
| | | | | | | | | | | | | | | | | |
| | Nine months ended September 30, | | Increase |
| | 2023 | | 2022 | |
| | in millions |
| | | | | |
| Personnel and contract labor | $ | 31.0 | | | $ | 26.7 | | | $ | 4.3 | |
| | | | | |
| Service-related | 16.6 | | | 15.2 | | | 1.4 | |
| Facility, provision, franchise and other | 26.1 | | | 20.2 | | | 5.9 | |
| Share-based compensation expense | 50.1 | | | 42.4 | | | 7.7 | |
| Total other operating costs and expenses | $ | 123.8 | | | $ | 104.5 | | | $ | 19.3 | |
•Personnel and contract labor: The decrease for the three-month comparison is primarily driven by lower bonus costs that were partially offset by a shift in bonus payments in the form of equity to cash. The increase for the nine-month comparison is primarily attributable to the net effect of (i) higher bonus costs due to a shift in bonus payments in the form of equity to cash, (ii) an increase in travel-related costs.capitalized labor costs and (iii) higher salaries and related personnel costs, mainly resulting from higher staffing levels in our operations center in Panama.
•Facility, provision, franchise and other: The increase during the nine-month comparison is primarily due to insurance costs related to (i) claims associated with cable breaks that occurred during the first nine months of 2023, and (ii) business interruption claims submitted by our Liberty Puerto Rico business during 2022.
Results of Operations (below Adjusted OIBDA)
Depreciation and amortization
Our depreciation and amortization expense decreased $18increased (decreased) ($4 million) or (2%) and $44 million or 7% and $75 million or 10% during the three and nine months ended September 30, 2022,2023, respectively, as compared to the corresponding periods in 2021,2022. The increase during the nine-month comparison is primarily due to the net effect of (i) declinesan increase in property and equipment additions, primarily associated with baseline related additions, the installation of $41 millionCPE and $138 million, respectively,the expansion and upgrade of our networks and other capital initiatives, (ii) a decrease associated with customer relationship assets becoming fully amortized in Liberty Puerto Rico and (iii) an increase at VTR as we ceased recording depreciation expense during the third quarter of 2021 when we began accounting for the Chile JV Entities as held for sale, (ii) increases at Liberty Costa Rica and C&W Panama resulting from the Liberty Telecomunicaciones Acquisition and the Claro Panama Acquisition, respectively, and (iii) increases in property and equipment additions, mainly at Liberty Puerto Rico.Acquisition.
Impairment, restructuring and other operating items, net
The details of our impairment, restructuring and other operating items, net, are as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Nine months ended September 30, |
| | 2022 | | 2021 | | 2022 | | 2021 |
| | in millions |
| | | | | | | |
| Impairment charges (a) | $ | — | | | $ | 0.1 | | | $ | 558.5 | | | $ | 3.0 | |
| Restructuring charges | 4.6 | | | 9.6 | | | 10.2 | | | 24.6 | |
| Other operating items, net (b) | 2.4 | | | 12.4 | | | 14.7 | | | 13.7 | |
| Total | $ | 7.0 | | | $ | 22.1 | | | $ | 583.4 | | | $ | 41.3 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | Nine months ended September 30, |
| | 2023 | | 2022 | | 2023 | | 2022 |
| | in millions |
| | | | | | | |
| Impairment charges (a) | $ | 8.2 | | | $ | — | | | $ | 55.8 | | | $ | 558.5 | |
| Restructuring charges (b) | 2.7 | | | 4.6 | | | 30.2 | | | 10.2 | |
| Other operating items, net (c) | 0.2 | | | 2.4 | | | (4.4) | | | 14.7 | |
| Total | $ | 11.1 | | | $ | 7.0 | | | $ | 81.6 | | | $ | 583.4 | |
(a)The 2023 amounts primarily relate to the impairment of certain operating lease right-of-use assets, predominantly related to decommissioned tower leases at C&W Panama. The amount for the nine months ended September 30, 2022 primarily consists of goodwill impairment charges associated with certain reporting units within the C&W Caribbean segment. For additional information, see note 7 to our condensed consolidated financial statements.
(b)The 20222023 amounts include employee severance and termination costs related to reorganization activities, primarily at C&W Caribbean and C&W Panama.
(c)The 2023 amounts primarily includesinclude the net effect of gains on asset dispositions and direct acquisition costs. The 20212022 amounts primarily include direct acquisition costs related to the Liberty Telecomunicaciones Acquisition and, for the nine-month period, a gain on the disposition of certain B2B operations in our Liberty Puerto Rico segment that was completed in January 2021.costs.
Interest expense
Our interest expense increased $12$3 million and $19$32 million during the three and nine months ended September 30, 2022,2023, respectively, as compared to the corresponding periods in 2021.2022. The increases are primarily attributable to the net effect of (i) higher weighted-average interest rates and (ii) higherlower average outstanding debt balances.balances, primarily resulting from the disposition of the Chile JV Entities in October 2022.
For additional information regarding our outstanding indebtedness, see note 98 to our condensed consolidated financial statements.
It is possible that the interest rates on (i) any new borrowings could be higher than the current interest rates on our existing indebtedness and (ii) our variable-rate indebtedness could increase in future periods. As further discussed in note 5 to our condensed consolidated financial statements, we use derivative instruments to manage our interest rate risks.
Realized and unrealized gains or losses on derivative instruments, net
Our realized and unrealized gains or losses on derivative instruments primarily include (i) unrealized changes in the fair values of our derivative instruments that are non-cash in nature until such time as the derivative contracts are fully or partially settled and (ii) realized gains or losses upon the full or partial settlement of the derivative contracts. The details of our realized and unrealized gains on derivative instruments, net, are as follows:
| | | | Three months ended September 30, | | Nine months ended September 30, | | Three months ended September 30, | | Nine months ended September 30, |
| | | 2022 | | 2021 | | 2022 | | 2021 | | 2023 | | 2022 | | 2023 | | 2022 |
| | | in millions | | in millions |
| | Cross-currency and interest rate derivative contracts (a) | $ | 159.3 | | | $ | 285.1 | | | $ | 417.8 | | | $ | 464.2 | | |
| Foreign currency forward contracts | (16.0) | | | 15.4 | | | (9.3) | | | 20.1 | | |
| Interest rate and cross-currency derivative contracts (a) | | Interest rate and cross-currency derivative contracts (a) | $ | 60.1 | | | $ | 159.3 | | | $ | 99.8 | | | $ | 417.8 | |
| Foreign currency forward contracts and other (b) | | Foreign currency forward contracts and other (b) | (5.0) | | | (16.0) | | | (23.9) | | | (9.3) | |
Weather Derivatives (b)(c) | Weather Derivatives (b)(c) | (7.9) | | | (8.5) | | | (23.5) | | | (20.1) | | Weather Derivatives (b)(c) | (7.6) | | | (7.9) | | | (23.1) | | | (23.5) | |
| Total | Total | $ | 135.4 | | | $ | 292.0 | | | $ | 385.0 | | | $ | 464.2 | | Total | $ | 47.5 | | | $ | 135.4 | | | $ | 52.8 | | | $ | 385.0 | |
(a)The gains during the three and nine months ended September 30, 20222023 and 20212022 are primarily attributable to the net effect of (i) changes in interest rates and (ii) for the 2022 periods, changes in FX rates predominantly due to changes in the value of the Chilean pesoCLP relative to the U.S. dollar. These amounts include net losses associated with changes indollar prior to the credit risk valuation adjustmentsdisposition of $5 million and $15 million during the three months ended September 30, 2022 and 2021, respectively, and $14 million and $44 million during the nine months ended September 30, 2022 and 2021, respectively. Included in the credit risk valuation adjustments are net losses of $3 million and $12 million during the three months ended September 30, 2022 and 2021, respectively,and $3 million and $29 million during the nine months ended September 30, 2022 and 2021, respectively, related to the Chile JV Entities.
(b)The losses during the three and nine months ended September 30, 2023 and 2022 are primarily attributable to changes in FX rates due to (i) the value of the CRC relative to the U.S. dollar and (ii) for the 2022 periods, the value of the CLP relative to the U.S. dollar prior to the disposition of the Chile JV Entities.
(c)Amounts represent the amortization of premiums associated with our Weather Derivatives.
For additional information concerning our derivative instruments, see notes 5 and 6 to our condensed consolidated financial statements and Item 3. Quantitative and Qualitative Disclosures about Market Risk below.
Foreign currency transaction gains or losses, net
Our foreign currency transaction gains or losses primarily result from the remeasurement of monetary assets and liabilities that are denominated in currencies other than the underlying functional currency of the applicable entity. Unrealized foreign currency transaction gains or losses are computed based on period-end exchange rates and are non-cash in nature until such time as the amounts are settled. The details of our foreign currency transaction losses,gains (losses), net, are as follows:
| | | | Three months ended September 30, | | Nine months ended September 30, | | Three months ended September 30, | | Nine months ended September 30, |
| | | 2022 | | 2021 | | 2022 | | 2021 | | 2023 | | 2022 | | 2023 | | 2022 |
| | | in millions | | in millions |
| | U.S. dollar-denominated debt issued by a Chilean peso functional currency entity | $ | (61.7) | | | $ | (145.2) | | | $ | (181.1) | | | $ | (177.0) | | |
| U.S. dollar-denominated debt issued by non-U.S. dollar functional currency entities (a) | | U.S. dollar-denominated debt issued by non-U.S. dollar functional currency entities (a) | $ | 7.2 | | | $ | (35.9) | | | $ | 39.9 | | | $ | (175.0) | |
| Intercompany payables and receivables denominated in a currency other than the entity’s functional currency | Intercompany payables and receivables denominated in a currency other than the entity’s functional currency | (15.7) | | | 6.9 | | | (5.0) | | | (19.9) | | Intercompany payables and receivables denominated in a currency other than the entity’s functional currency | (1.0) | | | (15.7) | | | 5.2 | | | (5.0) | |
Other (a)(b) | Other (a)(b) | 20.9 | | | 2.1 | | | (35.8) | | | (9.1) | | Other (a)(b) | (2.5) | | | (4.9) | | | 1.1 | | | (41.9) | |
| Total | Total | $ | (56.5) | | | $ | (136.2) | | | $ | (221.9) | | | $ | (206.0) | | Total | $ | 3.7 | | | $ | (56.5) | | | $ | 46.2 | | | $ | (221.9) | |
(a) The gains during the three and nine months ended September 30, 2023 are primarily related to a CRC functional currency entity. The losses during the three and nine months ended September 30, 2022 are primarily related to a CLP functional currency entity prior to the disposition of the Chile JV Entities in October 2022.
(b) Primarily includes (i) third-party receivables and payables denominated in a currency other than an entity’s functional currency (ii) U.S. dollar-denominated debt issued by a CRC functional currency entity and (iii)(ii) cash denominated in a currency other than an entity’s functional currency.
Gains or losses on debt modification and extinguishment, net
Our gains or losses on debt modification and extinguishment generally include (i) premiums or discounts associated with redemptions and/or repurchases of debt, (ii) the write-off of unamortized deferred financing costs, premiums and/or discounts and/or (iii) breakage fees.
We recognized gains (losses) on debt extinguishment, net, of nil and ($4 million) during the three and nine months ended September 30, 2023, respectively, and $41 million during each of the three and nine months ended September 30, 20222022. The activity during the 2023 periods is due to the net effect of (i) losses associated with refinancing activity at Liberty Costa Rica during January 2023 and ($2 million) and ($25 million)(ii) net gains during the three and nine months ended September 30, 2021, respectively.month periods associated with the partial repurchases of the Convertible Notes. The net gains during the 2022 periods are associated with the buyback of certain VTR debt at fair value. The losses during 2021 are primarily associated with refinancing activity at Liberty Puerto Rico and VTR.value prior to the disposition of the Chile JV Entities in October 2022.
For additional information concerning our gainsdebt repurchases and losses on debt extinguishment,repayments, see note 98 to our condensed consolidated financial statements.
OtherIncome tax benefit or expense
We recognized income ortax expense netof $10 million and $39 million during the three months ended September 30, 2023 and 2022, respectively, and $52 million and $101 million during the nine months ended September 30, 2023 and 2022, respectively.
Our otherincome or expense, net, generally includes (i) certain amounts associated with our defined benefit plans, including interest expense and expected return on plan assets, (ii) interest income on cash and cash equivalents, and (iii) share of affiliate income or loss. Other income or expensewas not materialforFor the three and nine months ended September 30, 2022. We had other expense of $41 million and $42 million during2023, the three and nine months ended September 30, 2021, respectively, which primarily relates to an impairment associated with a cost method investment.
Income tax expense
We recognized income tax expense attributable to our earnings before income taxes differs from the amounts computed using the statutory tax rate, primarily due to the detrimental effects of $39 millionnet increases in valuation allowances, negative effects of permanent tax differences, such as non-deductible expenses and $102 million duringinclusion of withholding taxes on cross-border payments. These negative impacts to our effective tax rate were partially offset by the threebeneficial effects of international rate differences and nine months ended September 30, 2022, respectively, and $40 million and $111 million during the three and nine months ended September 30, 2021, respectively.permanent tax differences, such as non-taxable income.
For the three and nine months ended September 30, 2022, the income tax expense attributable to our earnings (loss) before income taxes differs from the amounts computed using the statutory tax rate, primarily due to the detrimental effects of non-deductible goodwill impairment, negative effects of permanent tax differences, such as non-deductible expenses, tax effect of the enactment of a Barbados Pandemic Contribution Levy, and inclusion of withholding taxes on cross-border payments. These negative impacts to our effective tax rate were partially offset by the beneficial effects of permanent tax differences, such as non-taxable income and net decreases in valuation allowances. Additionally, for the three months ended September 30, 2022, income tax expense reflects the detrimental effects of international rate differences and for the nine months ended September 30, 2022, income tax expense reflects the beneficial effects of international rate differences.
For the three and nine months ended September 30, 2021, the income tax expense attributable to our earnings before income taxes differs from the amounts computed using the statutory tax rate, primarily due to detrimental effects of international rate differences, net increases in valuation allowances, negative effects of permanent tax differences, such as non-deductible expenses, and inclusion of withholding taxes on cross-border payments. These negative impacts to our effective tax rate were partially offset by the beneficial effects of permanent tax differences, such as non-taxable income. For the three months ended September 30, 2021, income tax expense reflects net favorable changes in uncertain tax positions. For the nine months ended September 30, 2021, income tax expense reflects net unfavorable changes in uncertain tax positions.
For additional information regarding our income taxes, see note 1413 to our condensed consolidated financial statements.
Net earnings or loss
The following table sets forth selected summary financial information of our net earnings (loss):
| | | | Three months ended September 30, | | Nine months ended September 30, | | Three months ended September 30, | | Nine months ended September 30, |
| | | 2022 | | 2021 | | 2022 | | 2021 | | 2023 | | 2022 | | 2023 | | 2022 |
| | | in millions | | in millions |
| | Operating income (loss) | Operating income (loss) | $ | 152.9 | | | $ | 136.0 | | | $ | (15.4) | | | $ | 485.0 | | Operating income (loss) | $ | 162.7 | | | $ | 151.7 | | | $ | 404.7 | | | $ | (20.4) | |
| Net non-operating expenses | Net non-operating expenses | $ | (31.0) | | | $ | (24.3) | | | $ | (218.6) | | | $ | (206.3) | | Net non-operating expenses | $ | (104.4) | | | $ | (31.0) | | | $ | (356.9) | | | $ | (218.6) | |
| Income tax expense | Income tax expense | $ | (39.1) | | | $ | (39.8) | | | $ | (101.6) | | | $ | (110.7) | | Income tax expense | $ | (10.4) | | | $ | (38.8) | | | $ | (51.9) | | | $ | (100.6) | |
| Net earnings (loss) | Net earnings (loss) | $ | 82.8 | | | $ | 71.9 | | | $ | (335.6) | | | $ | 168.0 | | Net earnings (loss) | $ | 47.9 | | | $ | 81.9 | | | $ | (4.1) | | | $ | (339.6) | |
Gains or losses associated with (i) changes in the fair values of derivative instruments and (ii) movements in foreign currency exchange rates are subject to a high degree of volatility and, as such, any gains from these sources do not represent a reliable source of income. In the absence of significant gains in the future from these sources or from other non-operating items, our ability to achieve earnings is largely dependent on our ability to increase our aggregate Adjusted OIBDA to a level that more than offsets the aggregate amount of our (i) share-based compensation expense, (ii) depreciation and amortization, (iii) impairment, restructuring and other operating items, (iv) interest expense, (v) other non-operating expenses and (vi) income tax expenses.
Due largely to the fact that we seek to maintain our debt at levels that provide for attractive equity returns, as discussed under Material Changes in Financial Condition—Capitalization below, we expect that we will continue to report significant levels of interest expense for the foreseeable future.
Net earnings or loss attributable to noncontrolling interests
We reported net loss attributable to noncontrolling interests of $1 million and $25 million during three and nine months ended September 30, 2022, respectively, and $4 million and $6 million during the three and nine months ended September 30, 2021, respectively.
Material Changes in Financial Condition
Sources and Uses of Cash
Subsequent to the closingAs of the Chile JV as further described in note 8 to our condensed consolidated financial statements,September 30, 2023, we have three primary “borrowing groups,” which include the respective restricted parent and subsidiary entities of C&W, Liberty Puerto Rico and Liberty Costa Rica. Our borrowing groups, which typically generate cash from operating activities, held a significant portion of our consolidated cash and cash equivalents at September 30, 2022.2023. Our ability to access the liquidity of these and other subsidiaries may be limited by tax and legal considerations, the presence of noncontrolling interests, foreign currency exchange restrictions with respect to certain C&W subsidiaries and other factors. For details of the restrictions on our subsidiaries to make payments to us through dividends, loans or other distributions see note 98 to our condensed consolidated financial statements.
Cash and cash equivalents
The details of the U.S. dollar equivalent balances of our cash and cash equivalents at September 30, 20222023 are set forth in the following table (in millions):
| | | | | |
| Cash and cash equivalents held by: | |
| Liberty Latin America and unrestricted subsidiaries: | |
| Liberty Latin America (a) | $ | 17.622.7 | |
| Unrestricted subsidiaries (b) | 168.396.0 | |
| Total Liberty Latin America and unrestricted subsidiaries | 185.9118.7 | |
| Borrowing groups (c): | |
| C&W (d) | 458.3384.1 | |
| Liberty Puerto Rico | 118.244.2 | |
| Liberty Costa Rica | 6.824.6 | |
| Total borrowing groups | 583.3452.9 | |
| Total cash and cash equivalents | $ | 769.2571.6 | |
(a)Represents the amount held by Liberty Latin America on a standalone basis.
(b)Represents the aggregate amount held by subsidiaries of Liberty Latin America that are outside of our borrowing groups. All of these companies rely on funds provided by our borrowing groups to satisfy their liquidity needs.
(c)Represents the aggregate amounts held by the parent entity of the applicable borrowing group and their restricted subsidiaries.
(d)Includes $25 million and $38 million of cash held by operations in C&W Panama and C&W Bahamas, respectively.
Liquidity and capital resources of Liberty Latin America and its unrestricted subsidiaries
Our current sources of corporate liquidity include (i) cash and cash equivalents held by Liberty Latin America and, subject to certain tax and legal considerations, Liberty Latin America’s unrestricted subsidiaries, and (ii) interest and dividend income received on our and, subject to certain tax and legal considerations, our unrestricted subsidiaries’ cash and cash equivalents and investments. From time to time, Liberty Latin America and its unrestricted subsidiaries may also receive (i) proceeds in the form of distributions or loan repayments from Liberty Latin America’s borrowing groups upon (a) the completion of recapitalizations, refinancings, asset sales or similar transactions by these entities or (b) the accumulation of excess cash from operations or other means, (ii) proceeds upon the disposition of investments and other assets of Liberty Latin America and its unrestricted subsidiaries and (iii) proceeds in connection with the incurrence of debt by Liberty Latin America or its unrestricted subsidiaries or the issuance of equity securities by Liberty Latin America. No assurance can be given that any external funding would be available to Liberty Latin America or its unrestricted subsidiaries on favorable terms, or at all. As noted above, various factors may limit our ability to access the cash of our borrowing groups.
Our corporate liquidity requirements include (i) corporate general and administrative expenses and (ii) other liquidity needs that may arise from time to time. In addition, Liberty Latin America and its unrestricted subsidiaries may require cash in connection with (i) the repayment of third-party and intercompany debt, (ii) the satisfaction of contingent liabilities, (iii) acquisitions and other investment opportunities, (iv) the repurchase of debt securities, (v) tax payments or (vi) any funding requirements of our consolidated subsidiaries.
During the threenine months ended September 30, 2022,2023, the aggregate amountvalue of our share repurchases was $34$111 million. For additional information regarding our Share Repurchase Programs,Program, see note 1615 to our condensed consolidated financial statements and Part II—Item 2 Unregistered Sales of Equity Securities and Use of Proceeds below.
Liquidity and capital resources of borrowing groups
The cash and cash equivalents of our borrowing groups are detailed in the table above. In addition to cash and cash equivalents, the primary sources of liquidity of our borrowing groups are cash provided by operations and borrowing availability under their respective debt instruments. For the details of the borrowing availability of our borrowing groups at September 30, 2022,2023, see note 98 to our condensed consolidated financial statements. The aforementioned sources of liquidity
may be supplemented in certain cases by contributions and/or loans from Liberty Latin America and its unrestricted subsidiaries. The liquidity of our borrowing groups generally is used to fund capital expenditures, debt service requirements and
income tax payments. From time to time, our borrowing groups may also require liquidity in connection with (i) acquisitions and other investment opportunities, (ii) loans to Liberty Latin America, (iii) capital distributions to Liberty Latin America and other equity owners or (iv) the satisfaction of contingent liabilities. No assurance can be given that any external funding would be available to our borrowing groups on favorable terms, or at all.
For additional information regarding our cash flows, see the discussion under Condensed Consolidated Statements of Cash Flows below.
Capitalization
We seek to maintain our debt at levels that provide for attractive equity returns without assuming undue risk. When it is cost effective, we generally seek to match the denomination of the borrowings of our subsidiaries with the functional currency of the operations that support the respective borrowings. As further discussed under Item 3. Quantitative and Qualitative Disclosures about Market Risk and in note 5 to our condensed consolidated financial statements, we also use derivative instruments to mitigate foreign currency and interest rate risks associated with our debt instruments.
Our ability to service or refinance our debt and, where applicable, to maintain compliance with the leverage covenants in the credit agreements of our borrowing groups is dependent primarily on our ability to maintain covenant EBITDA of our operating subsidiaries, as specified by our subsidiaries’ debt agreements (Covenant EBITDA), and to achieve adequate returns on our property and equipment additions and acquisitions. In addition, our ability to obtain additional debt financing is limited by incurrence-based and/or maintenance-based leverage covenants contained in the various debt instruments of our borrowing groups. For example, if the Covenant EBITDA of one of our borrowing groups were to decline, our ability to support or obtain additional debt in that borrowing group could be limited. No assurance can be given that we would have sufficient sources of liquidity, or that any external funding would be available on favorable terms, or at all, to fund any such required repayment. At September 30, 2022,2023, each of our borrowing groups was in compliance with its debt covenants. We do not anticipate any instances of non-compliance with respect to the debt covenants of our borrowing groups that would have a material adverse impact on our liquidity during the next 12 months.
At September 30, 2022,2023, the outstanding principal amount of our debt, together with our finance lease obligations, excluding VTR, aggregated $7,954$7,988 million, including $208$558 million that is classified as current in our condensed consolidated balance sheet and $6,881$7,363 million that is not due until 2027 or thereafter. At September 30, 2022, $7,5492023, $7,767 million of our debt and finance lease obligations have been borrowed or incurred by our subsidiaries. Included in the outstanding principal amount of our debt at September 30, 20222023 is $196$303 million of vendor financing, which we use to finance certain of our operating expenses and property and equipment additions. These obligations are generally due within one year, other than for certain licensing arrangements that generally are due over the term of the related license. For additional information concerning our debt, including our debt maturities, see note 98 to our condensed consolidated financial statements.
The weighted average interest rate in effect at September 30, 20222023 for all borrowings outstanding pursuant to each debt instrument, including any applicable margin, was 5.8%7.1%. The interest rate is based on stated rates and does not include the impact of derivative instruments, deferred financing costs, original issue premiums or discounts and commitment fees, all of which affect our overall cost of borrowing. The weighted average impact of the derivative instruments excluding forward-starting derivative instruments, on our borrowing costs at September 30, 20222023 was as follows:
| | | | | | | | |
| Borrowing group | | Decrease to borrowing costs |
| | |
| C&W | (0.60)(1.7) | % |
| Liberty Puerto Rico | (0.13)(0.8) | % |
| Liberty Costa Rica | (0.62)— | % |
Liberty Latin America borrowing groups combined | (0.42)(1.3) | % |
Including the effects of derivative instruments, original issue premiums or discounts, including the discount on the Convertible Notes associated with the instrument’s conversion option, and commitment fees, but excluding the impact of financing costs, the weighted average interest rate on our indebtedness was 5.6%6.0% at September 30, 2022.2023.
We believe that we have sufficient resources to repay or refinance the current portion of our debt and finance lease obligations and to fund our foreseeable liquidity requirements during the next 12 months. However, as our debt maturities grow in later years, we anticipate that we will seek to refinance or otherwise extend our debt maturities. No assurance can be given
that we will be able to complete refinancing transactions or otherwise extend our debt maturities. In this regard, it is difficult to predict how political, economic and social conditions, sovereign debt concerns or any adverse regulatory developments will impact the credit and equity markets we access and our future financial position. Our ability to access debt financing on favorable terms, or at all, could be adversely impacted by (i) the financial failure of any of our counterparties, which could (a) reduce amounts available under committed credit facilities and (b) adversely impact our ability to access cash deposited with any failed financial institution, and (ii) tightening of the credit markets. In addition, any weakness in the equity markets could make it less attractive to use our shares to satisfy contingent or other obligations, and sustained or increased competition, particularly in combination with adverse economic or regulatory developments, could have an unfavorable impact on our cash flows and liquidity.
Condensed Consolidated Statements of Cash Flows
General. Our cash flows are subject to variations due to FX.
Summary. Our condensed consolidated statements of cash flows for the nine months ended September 30, 20222023 and 20212022 are summarized as follows:
| | | | Nine months ended September 30, | | | Nine months ended September 30, | |
| | | 2022 | | 2021 | | Change | | 2023 | | 2022 | | Change |
| | | in millions | | in millions |
| | Net cash provided by operating activities | Net cash provided by operating activities | $ | 491.8 | | | $ | 717.8 | | | $ | (226.0) | | Net cash provided by operating activities | $ | 506.5 | | | $ | 491.8 | | | $ | 14.7 | |
| Net cash used by investing activities | Net cash used by investing activities | (744.6) | | | (1,075.3) | | | 330.7 | | Net cash used by investing activities | (452.5) | | | (744.6) | | | 292.1 | |
| Net cash provided by financing activities | 21.9 | | | 530.6 | | | (508.7) | | |
| Net cash provided (used) by financing activities | | Net cash provided (used) by financing activities | (254.9) | | | 21.9 | | | (276.8) | |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | Effect of exchange rate changes on cash, cash equivalents and restricted cash | (3.5) | | | (6.7) | | | 3.2 | | Effect of exchange rate changes on cash, cash equivalents and restricted cash | (5.3) | | | (3.5) | | | (1.8) | |
| Net increase (decrease) in cash, cash equivalents and restricted cash | $ | (234.4) | | | $ | 166.4 | | | $ | (400.8) | | |
| Net decrease in cash, cash equivalents and restricted cash | | Net decrease in cash, cash equivalents and restricted cash | $ | (206.2) | | | $ | (234.4) | | | $ | 28.2 | |
Operating Activities. The decreaseincrease in cash provided by operating activities is primarily due to timingthe net effect of (i) an increase resulting from lower net derivative payments, (ii) a decrease associated with changesa decline in working capital.Adjusted OIBDA, (iii) an increase associated with lower tax payments and (iv) a decrease associated with higher interest payments.
Investing Activities. The cash used by investing activities during 2023 primarily relates to (i) capital expenditures, as further discussed below, and (ii) the purchase of additional investments made during the year. The cash used by investing activities during 2022 primarily relates to (i) capital expenditures, as further discussed below, (ii) the Claro Panama Acquisition and Broadband VI, LLC Acquisition,acquisitions and (iii) additional investments made in an equity method investee. The cash used for acquisitions during the 2022 period comprises cash paid for the Claro Panama Acquisition and the BBVI Acquisition, partially offset by investing activities during 2021 primarily relates to (i) capital expenditures, as further discussed below, and (ii)cash received in connection with finalizing the purchase price of the Liberty Telecomunicaciones Acquisition.
For additional information regarding our acquisitions, see note 4 to our condensed consolidated financial statements.
The capital expenditures, net, that we report in our condensed consolidated statements of cash flows, which relates to cash paid for property and equipment, doesdo 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. In this discussion, we refer to (i) our capital expenditures, net, as reported in our condensed consolidated statements of cash flows, and (ii) our total property and equipment additions, which include our capital expenditures, net, on an accrual basis and amounts financed under capital-related vendor financing or finance lease arrangements.
A reconciliation of our property and equipment additions to our capital expenditures, net, as reported in our condensed consolidated statements of cash flows, is set forth below:
| | | Nine months ended September 30, | | Nine months ended September 30, |
| | 2022 | | 2021 | | 2023 | | 2022 |
| | in millions | | in millions |
| | Property and equipment additions | Property and equipment additions | $ | 591.1 | | | $ | 599.0 | | Property and equipment additions | $ | 524.3 | | | $ | 591.1 | |
| Assets acquired under capital-related vendor financing arrangements | Assets acquired under capital-related vendor financing arrangements | (114.2) | | | (65.0) | | Assets acquired under capital-related vendor financing arrangements | (117.7) | | | (114.2) | |
| Changes in current liabilities related to capital expenditures | 20.8 | | | 10.7 | | |
| Capital expenditures | $ | 497.7 | | | $ | 544.7 | | |
| Changes in current liabilities related to capital expenditures and other | | Changes in current liabilities related to capital expenditures and other | 16.3 | | | 17.2 | |
| Capital expenditures, net | | Capital expenditures, net | $ | 422.9 | | | $ | 494.1 | |
PropertyThe decrease in our property and equipment additions during the nine months ended September 30, 2022, were consistent with2023,as compared to the corresponding period in 2021, as decreases2022,is primarily due to the net effect of (i) a decrease associated with the disposition of the Chile JV Entities in CPE-relatedOctober 2022, and (ii) an increase related to baseline additions and capacity were mostly offset by baseline additions.new build activity. During the nine months ended September 30, 20222023 and 2021,2022, our property and equipment additions represented 16.2%15.7% and 16.9%16.2% of revenue, respectively.
Financing Activities. During the nine months ended September 30, 2023, we used$255 million in cash for financing activities, primarily due to(i) $111 million of cash outflows associated with the repurchase of Liberty Latin America common shares,(ii) $99 million in net debt repayments, (iii) $41 million in payments related to distributions to noncontrolling interest owners in C&W Panama and C&W Bahamas, and (iv) $15 million of payments for financing costs and debt premiums, primarily associated with refinancing activity at Liberty Costa Rica. During the nine months ended September 30, 2022, we generated $22 million of cash from financing activities, primarily due to the net effect of (i) $98 million of net cash received related to derivativesderivative instruments, primarily related to the settlement of certain cross currency swaps at VTR prior to the disposition of the Chile JV Entities, and (ii) $95 million of net borrowings of debt, which include the impact of $48 million of cash used to extinguish debt at VTR. These net inflows were largely offset by $153 million associated with the repurchase of Liberty Latin America common shares.
During the nine months ended September 30, 2021, we generated $531 million of cash from financing activities, primarily due to the net effect of (i) $602 million of net borrowings of debt, (ii) $47 million related to the contribution from noncontrolling interest owner, as further described in note 16 of the condensed consolidated financial statements, (iii) $43 million related to payments of derivatives, (iv) $37 million related to payments of financing costs and debt redemption premiums, and (v) $30 million of cash used associated with the repurchase of Liberty Latin America common shares.
Off Balance Sheet Arrangements
In the ordinary course of business, we may provide (i) indemnifications to our lenders, our vendors and certain other parties and (ii) performance and/or financial guarantees to local municipalities, our customers and vendors. Historically, these arrangements have not resulted in our company making any material payments and we do not believe that they will result in material payments in the future.
Contractual Commitments
For information concerning our debt and operating lease obligations, see notes 98 and 10,9, respectively, to our condensed consolidated financial statements. In addition, we have commitments under (i) derivative instruments and (ii) defined benefit plans and similar agreements, pursuant to which we expect to make payments in future periods. For information regarding projected cash flows associated with our derivative instruments, see Item 3. Quantitative and Qualitative Disclosures About Market Risk—Projected Cash Flows Associated with Derivative Instruments below. For information regarding our derivative instruments, including the net cash paid or received in connection with these instruments during the nine months ended September 30, 20222023 and 2021,2022, see note 5 to our condensed consolidated financial statements.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information in this section should be read in conjunction with the more complete discussion that appears under Quantitative and Qualitative Disclosures About Market Risk in our 20212022 Form 10-K.
We are exposed to market risk in the normal course of our business operations due to our investments in various countries and ongoing investing and financing activities. Market risk refers to the risk of loss arising from adverse changes in foreign currency exchange rates, interest rates and stock prices. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings. As further described below, we have established policies, procedures and processes governing our management of market risks and the use of derivative instruments to manage our exposure to such risks.
Cash and Investments
We invest our cash in highly liquid instruments that meet high credit quality standards. We are exposed to exchange rate risk to the extent that the denominations of our cash and cash equivalent balances, revolving lines of credit and other short-term sources of liquidity do not correspond to the denominations of Liberty Latin America’s short-term liquidity requirements. In order to mitigate this risk, we actively manage the denominations of our cash balances in consideration of Liberty Latin America’s forecasted liquidity requirements.
Foreign Currency Rates
The relationshiprelationships between the (i) CLP, JMD and CRC and (ii) the U.S. dollar, which is our reporting currency, isare shown below, per one U.S. dollar:
| | | September 30,
2022 | | December 31, 2021 | | September 30,
2023 | | December 31, 2022 |
| Spot rates: | Spot rates: | | | | Spot rates: | | | |
| CLP | 967.43 | | | 852.00 | | |
| JMD | JMD | 152.11 | | | 153.96 | | JMD | 153.96 | | | 151.92 | |
| CRC | CRC | 628.50 | | | 642.21 | | CRC | 536.78 | | | 591.80 | |
| | | | Three months ended September 30, | | Nine months ended September 30, | | Three months ended September 30, | | Nine months ended September 30, |
| | | 2022 | | 2021 | | 2022 | | 2021 | | 2023 | | 2022 | | 2023 | | 2022 |
| Average rates: | Average rates: | | | | | | | | Average rates: | | | | | | | |
| CLP | 926.42 | | | 773.18 | | | 859.78 | | | 737.78 | | |
| JMD | JMD | 151.62 | | | 151.86 | | | 153.47 | | | 149.69 | | JMD | 153.81 | | | 151.62 | | | 153.22 | | | 153.47 | |
| CRC | CRC | 660.58 | | | 622.53 | | | 659.93 | | | 617.19 | | CRC | 540.17 | | | 660.58 | | | 547.80 | | | 659.93 | |
Interest Rate Risks
In general, we seek to enter into derivative instruments to protect against increases in the interest rates on our variable-rate debt. Accordingly, we have entered into various derivative transactions to reduce exposure to increases in interest rates. We use interest rate derivative contracts to exchange, at specified intervals, the difference between fixed and variable interest rates calculated by reference to an agreed-upon notional principal amount. At September 30, 2022,2023, we paid a fixed or capped rate of interest on 96% of our total debt, which includes the impact of our interest rate derivative contracts. The final maturity dates of our various portfolios of interest rate derivative instruments match the respective maturities of the underlying variable-rate debt. In this regard, we use judgment to determine the appropriate maturity dates of our portfolios of interest rate derivative instruments, taking into account the relative costs and benefits of different maturity profiles in light of current and expected future market conditions, liquidity issues and other factors. For additional information concerning the impacts of these interest rate derivative instruments, see note 5 to our condensed consolidated financial statements.
Sensitivity Information
Information concerning the sensitivity of the fair value of certain of our more significant derivative instruments to changes in market conditions is set forth below. The potential changes in fair value set forth below do not include any amounts associated with the remeasurement of the derivative asset or liability into the applicable functional currency. For additional information, see notes 5 and 6 to our condensed consolidated financial statements.
C&W Interest Rate Derivative Contracts
Holding all other factors constant, at September 30, 2022,2023, an instantaneous increase (decrease) in the relevant base rate of 100 basis points (1.0%) would have increased (decreased) the aggregate fair value of the C&W interest rate derivative contracts by approximately $98$89 million ($9990 million).
Liberty Puerto Rico Interest Rate Derivative Contracts
Holding all other factors constant, at September 30, 2022,2023, an instantaneous increase (decrease) in the relevant base rate of 100 basis points (1.0%) would have increased (decreased) the aggregate fair value of the Liberty Puerto Rico interest rate derivative contracts by approximately $28 million ($2927 million).
Projected Cash Flows Associated with Derivative Instruments
The following table provides information regarding the projected cash flows associated with our derivative instruments. The U.S. dollar equivalents presented below are based on interest rates and exchange rates that were in effect as of September 30, 2022.2023. These amounts are presented for illustrative purposes only and will likely differ from the actual cash payments or receipts required in future periods. For additional information regarding our derivative instruments, including our counterparty credit risk, see note 5 to our condensed consolidated financial statements.
| | | | Payments (receipts) due during: | | Total | | Payments (receipts) due during: | | Total |
| | | Remainder of 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | 2027 | | Thereafter | | | Remainder of 2023 | | 2024 | | 2025 | | 2026 | | 2027 | | 2028 | | Thereafter | |
| | | in millions | | in millions |
| Projected derivative cash payments (receipts), net (a): | | |
| Projected derivative cash payments (receipts), net: | | Projected derivative cash payments (receipts), net: | |
Interest-related (b)(a) | Interest-related (b)(a) | $ | (4.5) | | | $ | 2.0 | | | $ | (20.1) | | | $ | (19.4) | | | $ | (19.4) | | | $ | (19.4) | | | $ | (17.7) | | | $ | (98.5) | | Interest-related (b)(a) | $ | (25.4) | | | $ | (103.2) | | | $ | (63.7) | | | $ | (102.1) | | | $ | (102.1) | | | $ | (61.8) | | | $ | (24.2) | | | $ | (482.5) | |
Other (c)(b) | Other (c)(b) | 16.1 | | | — | | | — | | | — | | | — | | | — | | | — | | | 16.1 | | Other (c)(b) | 6.9 | | | 11.2 | | | 1.8 | | | — | | | — | | | — | | | — | | | 19.9 | |
| Total | Total | $ | 11.6 | | | $ | 2.0 | | | $ | (20.1) | | | $ | (19.4) | | | $ | (19.4) | | | $ | (19.4) | | | $ | (17.7) | | | $ | (82.4) | | Total | $ | (18.5) | | | $ | (92.0) | | | $ | (61.9) | | | $ | (102.1) | | | $ | (102.1) | | | $ | (61.8) | | | $ | (24.2) | | | $ | (462.6) | |
(a)Amounts do not include projected cash flows related to derivatives of the Chile JV Entities, which comprise (i) total interest-related payments of $23 million, (ii) total principal-related receipts of $168 million and (iii) total foreign currency-related receipts of $15 million. For information regarding the formation of the Chile JV, see note 8 to our condensed consolidated financial statements.
(b)Includes the interest-related cash flows of our interest rate derivative contracts.
(c)(b)Includes amounts related to our foreign currency forward contracts.
Item 4. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures
We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Executives, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, the Executives recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply judgment in evaluating the cost-benefit relationship of possible controls and objectives.
As disclosed in our Annual Report on2022 Form 10-K, for our fiscal year ended December 31, 2021, we identified material weaknesses in our internal control over financial reporting. The material weaknesses will not be considered remediated until the applicable new or enhanced controls operate for a sufficient period of time and management has concluded, through testing, that these controls are designed and operating effectively. Our management, with the participation of the Executives, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2022.2023. As remediation is not completed, the Executives concluded that our disclosure controls and procedures continue to be ineffective as of September 30, 2022.2023.
Management’s Remediation Plans
Management, with oversight from the Audit Committee of the Board of Directors, is continuing to implement the remediation plans as disclosed in our Annual Report on2022 Form 10-K for our fiscal year ended December 31, 2021.10-K. We believe that these actions and the improvements we expect to achieve, when fully implemented, will strengthen our internal control over financial reporting and remediate the material weaknesses identified.
Changes in Internal Control over Financial Reporting
Except as listed below, there have been no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
During the quarter, we made the following changes in our internal control over financial reporting:
•designed and implemented additional manual procedures and controls were designed and implemented to enhance our internal control process through a combination of preventative and detective controls;
•key information technology resources were hiredmigration of customers to design, implement, perform,one customer relationship management billing system for one of our segments to reduce the number of systems and monitor the execution of general information technologystandardize related processes and controls; and
•held trainings were held to reinforce control concepts and responsibilities for control performers.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
From time to time, our subsidiaries and affiliates have become involved in litigation relating to claims arising out of their operations in the normal course of business. For additional information, see note 1716 to our condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q.
Item 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(c) Issuer Purchases of Equity Securities
On February 22, 2022, our Directors approved the 2022 Share Repurchase Program. This program authorizesauthorized 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 in2024. On May 8, 2023, our Directors approved an additional $200 million for the repurchase of our Class A common shares and/or Class C common shares under the Share Repurchase Program through December 2025 through open market purchases at prevailing market prices, in privately negotiated transactions, in block trades, derivative transactions and/or through other legally permissible means. The 2022 Share Repurchase Program does not obligate us to repurchase any of our Class A or C common shares.
The following table sets forth information concerning our company’s purchase of its own equity securities during the three months ended September 30, 2022:2023 (in millions, except per share amounts). Due to rounding, the total number of shares purchased during the quarter may not recalculate.
| | Period | Period | | Total number of shares purchased | | Average price
paid per share (a) | | Total number of
shares purchased as part of publicly
announced plans
or programs | | Approximate
dollar value of
shares that may
yet be purchased
under the plans or programs | Period | | Total number of shares purchased | | Average price
paid per share (a) | | Total number of
shares purchased as part of publicly
announced plans
or programs | | Approximate
dollar value of
shares that may
yet be purchased
under the plans or programs |
| | July 1, 2022 through July 31, 2022: | | |
| July 1, 2023 through July 31, 2023: | | July 1, 2023 through July 31, 2023: | |
| Class A | Class A | | 138,700 | | | $ | 7.22 | | | 138,700 | | | (b) | Class A | | — | | | $ | — | | | — | | | (b) |
| Class C | Class C | | 588,100 | | | $ | 7.23 | | | 588,100 | | | Class C | | 1.2 | | | $ | 8.38 | | | 1.2 | | |
| August 1, 2022 through August 31, 2022: | | |
| August 1, 2023 through August 31, 2023: | | August 1, 2023 through August 31, 2023: | |
| Class A | Class A | | — | | | $ | — | | | — | | | (b) | Class A | | 0.2 | | | $ | 8.97 | | | 0.2 | | | (b) |
| Class C | Class C | | 2,307,900 | | | $ | 7.49 | | | 2,307,900 | | | Class C | | 0.9 | | | $ | 8.62 | | | 0.9 | | |
| September 1, 2022 through September 30, 2022: | | |
| September 1, 2023 through September 30, 2023: | | September 1, 2023 through September 30, 2023: | |
| Class A | Class A | | 144,500 | | | $ | 6.71 | | | 144,500 | | | (b) | Class A | | 0.5 | | | $ | 8.40 | | | 0.5 | | | (b) |
| Class C | Class C | | 1,544,600 | | | $ | 6.50 | | | 1,544,600 | | | Class C | | 0.7 | | | $ | 8.34 | | | 0.7 | | |
| Total – July 1, 2022 through September 30, 2022: | | |
| Total – July 1, 2023 through September 30, 2023: | | Total – July 1, 2023 through September 30, 2023: | |
| Class A | Class A | | 283,200 | | | $ | 6.96 | | | 283,200 | | | (b) | Class A | | 0.7 | | | $ | 8.56 | | | 0.7 | | | (b) |
| Class C | Class C | | 4,440,600 | | | $ | 7.11 | | | 4,440,600 | | | Class C | | 2.8 | | | $ | 8.45 | | | 2.8 | | |
|
(a)Average price paid per share includes direct acquisition costs.
(b)At September 30, 2022,2023, the remaining amount authorized for repurchases under the 2022 Share Repurchase Program was $74$146 million.
Item 5. OTHER INFORMATION
(c) Insider Trading Arrangements and Policies
During the three months ended September 30, 2023, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 6. EXHIBITS
Listed below are the exhibits filed as part of this Quarterly Report on Form 10-Q (according to the number assigned to them in Item 601 of Regulation S-K):
| | | | | |
10.1 | |
10.2 | |
| 31.1 | |
| 31.2 | |
| 32 | |
| 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) |
* Filed herewith
** Furnished herewith
† Exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Liberty Latin America hereby agrees to furnish supplementally a copy of such exhibits to the SEC upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | | | | | | | | | | |
| | | | LIBERTY LATIN AMERICA LTD. |
| | |
| Dated: | November 8, 20229, 2023 | | /s/ BALAN NAIR |
| | | Balan Nair President and Chief Executive Officer |
| | | |
| Dated: | November 8, 20229, 2023 | | /s/ CHRISTOPHER NOYES |
| | | Christopher Noyes Senior Vice President and Chief Financial Officer |
