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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, 2022 |
OR
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☐ | 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, 2022 was: 43,984,123 Class A; 2,055,034 Class B; and 171,378,371 Class C.
LIBERTY LATIN AMERICA LTD.
TABLE OF CONTENTS
| | | | | | | | |
| | Page Number |
| PART I - FINANCIAL INFORMATION | |
Item 1. | FINANCIAL STATEMENTS | |
| Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 (unaudited) | |
| Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited) | |
| Condensed Consolidated Statements of Comprehensive Earnings (Loss) for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited) | |
| Condensed Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited) | |
| Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021 (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 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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2021 Form 10-K | Annual Report on Form 10-K 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 | $160 million principal amount 4.25% term loan facility due January 18, 2028 issued by CWP |
2028 LPR Term Loan | $620 million principal amount LIBOR + 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 Notes | $392 million principal amount 4.375% senior secured notes due April 15, 2029 issued by VTR Comunicaciones SpA |
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 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, LLC 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&W Networks & LatAm segments |
C&W Credit Facilities | Senior secured credit facilities of certain subsidiaries of C&W comprised of: (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: (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 of credit facilities at CWP, Columbus Communications Trinidad Limited and C&W Jamaica |
C&W Revolving Credit Facility | $630 million LIBOR + 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 LIBOR + 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 LIBOR + 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 joint venture between Liberty Latin America and América Móvil that is 50:50 owned by each investee |
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 | $403 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; (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 by CWP |
Directors | Members of Liberty Latin America’s board of directors |
EIP | Equipment installment-plan |
EPS | Earnings or loss per share |
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 |
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 |
LCPR Senior Secured Financing | LCPR Senior Secured Financing Designated Activity Company, a consolidated special purpose financing entity |
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 of 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 Puerto Rico | Reportable segment comprising Liberty Communications PR, which has operations in Puerto Rico and the U.S. Virgin Islands |
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: (i) LPR Revolving Credit Facility; and (ii) 2028 LPR Term Loan |
LPR Revolving Credit Facility | $173 million LIBOR + 3.5% revolving credit facility due March 15, 2027 of LCPR |
LPR Senior Secured Notes | Senior secured notes of Liberty Puerto Rico comprised of: (i) 2029 LPR Senior Secured Notes; (ii) 2027 LPR Senior Secured Notes; and (iii) 2027 LPR Senior Secured Notes Add-on |
MVNO | Mobile virtual network operator |
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 |
SARs | Stock appreciation rights |
SEC | U.S. Securities and Exchange Commission |
SERNAC | Servicio Nacional del Consumidor (the Chilean National Consumer Authority) |
Share Repurchase Programs | Collectively, the 2020 Share Repurchase Program and the 2022 Share Repurchase Program |
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)
| | | | | |
TBP | Tasa Básica Pasiva interest rate |
Telefónica | Telefónica, S.A., a telecommunications company with operations primarily in Europe and Latin America |
Telefónica Acquisition Agreement | The agreement dated July 30, 2020 with Telefónica for our acquisition of their operations in Costa Rica |
U.K. | United Kingdom |
U.S. | United States |
U.S. GAAP | Generally accepted accounting principles in the United States |
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 Facilities | Senior secured credit facilities 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, 2026 of VTR |
VTR RCF – B | $200 million LIBOR + 2.75% revolving credit facility due June 15, 2026 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) |
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 |
|
| in millions |
ASSETS | | | |
Current assets: | | | |
Cash and cash equivalents | $ | 769.2 | | | $ | 956.7 | |
Trade receivables, net | 590.4 | | | 526.6 | |
| | | |
Prepaid expenses | 87.5 | | | 67.7 | |
Current notes receivable, net | 99.9 | | | 100.2 | |
Other current assets, net | 561.6 | | | 400.7 | |
Total current assets | 2,108.6 | | | 2,051.9 | |
| | | |
Goodwill | 3,416.6 | | | 3,948.0 | |
Property and equipment, net | 4,275.0 | | | 4,168.4 | |
| | | |
Intangible assets not subject to amortization | 1,592.8 | | | 1,592.4 | |
Intangible assets subject to amortization, net | 717.3 | | | 788.6 | |
Assets held for sale | 1,399.6 | | | 1,568.7 | |
Other assets, net | 1,553.0 | | | 1,247.7 | |
Total assets | $ | 15,062.9 | | | $ | 15,365.7 | |
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 |
|
| in millions |
LIABILITIES AND EQUITY | | | |
Current liabilities: | | | |
Accounts payable | $ | 412.2 | | | $ | 398.0 | |
Current portion of deferred revenue | 143.4 | | | 148.0 | |
Current portion of debt and finance lease obligations | 208.0 | | | 106.3 | |
Accrued interest | 95.5 | | | 113.0 | |
| | | |
Accrued payroll and employee benefits | 84.9 | | | 100.5 | |
Current operating lease liabilities | 75.6 | | | 82.0 | |
Other accrued and current liabilities | 571.2 | | | 566.7 | |
Total current liabilities | 1,590.8 | | | 1,514.5 | |
Long-term debt and finance lease obligations | 7,643.5 | | | 7,459.6 | |
Deferred tax liabilities | 703.8 | | | 692.1 | |
Deferred revenue | 113.0 | | | 152.6 | |
Liabilities associated with assets held for sale | 1,668.5 | | | 1,854.1 | |
Other long-term liabilities | 817.4 | | | 795.4 | |
Total liabilities | 12,537.0 | | | 12,468.3 | |
| | | |
Commitments and contingencies | | | |
| | | |
Equity: | | | |
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) | |
Additional paid-in capital | 5,164.1 | | | 5,075.3 | |
Accumulated deficit | (3,004.2) | | | (2,693.9) | |
Accumulated other comprehensive loss, net of taxes | (59.7) | | | (89.7) | |
Total Liberty Latin America shareholders | 1,876.2 | | | 2,220.0 | |
Noncontrolling interests | 649.7 | | | 677.4 | |
Total equity | 2,525.9 | | | 2,897.4 | |
Total liabilities and equity | $ | 15,062.9 | | | $ | 15,365.7 | |
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, |
| 2022 | | 2021 | | 2022 | | 2021 |
| in millions, except per share amounts |
| | | | | | | |
Revenue | $ | 1,222.0 | | | $ | 1,196.3 | | | $ | 3,654.4 | | | $ | 3,534.2 | |
Operating costs and expenses (exclusive of depreciation and amortization, shown separately below): | | | | | | | |
Programming and other direct costs of services | 299.1 | | | 297.2 | | | 903.3 | | | 864.8 | |
Other operating costs and expenses | 528.7 | | | 489.0 | | | 1,521.4 | | | 1,406.8 | |
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 | |
| 1,069.1 | | | 1,060.3 | | | 3,669.8 | | | 3,049.2 | |
Operating income (loss) | 152.9 | | | 136.0 | | | (15.4) | | | 485.0 | |
Non-operating income (expense): | | | | | | | |
Interest expense | (149.2) | | | (137.1) | | | (415.8) | | | (397.2) | |
Realized and unrealized gains on derivative instruments, net | 135.4 | | | 292.0 | | | 385.0 | | | 464.2 | |
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) | |
Other expense, net | (1.8) | | | (41.1) | | | (7.0) | | | (42.1) | |
| (31.0) | | | (24.3) | | | (218.6) | | | (206.3) | |
Earnings (loss) before income taxes | 121.9 | | | 111.7 | | | (234.0) | | | 278.7 | |
Income tax expense | (39.1) | | | (39.8) | | | (101.6) | | | (110.7) | |
Net earnings (loss) | 82.8 | | | 71.9 | | | (335.6) | | | 168.0 | |
Net loss attributable to noncontrolling interests | 1.3 | | | 4.2 | | | 25.3 | | | 6.0 | |
Net earnings (loss) attributable to Liberty Latin America shareholders | $ | 84.1 | | | $ | 76.1 | | | $ | (310.3) | | | $ | 174.0 | |
| | | | | | | |
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 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
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, |
| 2022 | | 2021 | | 2022 | | 2021 |
| in millions |
| | | | | | | |
Net earnings (loss) | $ | 82.8 | | | $ | 71.9 | | | $ | (335.6) | | | $ | 168.0 | |
Other comprehensive earnings, net of taxes: | | | | | | | |
Foreign currency translation adjustments | 21.7 | | | 52.6 | | | 52.9 | | | 9.5 | |
Reclassification adjustments included in net earnings (loss) | (3.2) | | | (0.2) | | | (6.7) | | | 2.4 | |
Other | (7.6) | | | 9.9 | | | (16.7) | | | 13.1 | |
Other comprehensive earnings | 10.9 | | | 62.3 | | | 29.5 | | | 25.0 | |
Comprehensive earnings (loss) | 93.7 | | | 134.2 | | | (306.1) | | | 193.0 | |
Comprehensive loss attributable to noncontrolling interests | 0.8 | | | 4.0 | | | 25.8 | | | 6.4 | |
Comprehensive earnings (loss) attributable to Liberty Latin America shareholders | $ | 94.5 | | | $ | 138.2 | | | $ | (280.3) | | | $ | 199.4 | |
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 |
| 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 |
| 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 | |
Net earnings | — | | | — | | | — | | | — | | | — | | | 76.1 | | | — | | | 76.1 | | | (4.2) | | | 71.9 | |
Other comprehensive earnings | — | | | — | | | — | | | — | | | — | | | — | | | 62.1 | | | 62.1 | | | 0.2 | | | 62.3 | |
Repurchase of Liberty Latin America common shares | — | | | — | | | — | | | (20.0) | | | — | | | — | | | — | | | (20.0) | | | — | | | (20.0) | |
| | | | | | | | | | | | | | | | | | | |
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 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 | |
Other comprehensive earnings | — | | | — | | | — | | | — | | | — | | | — | | | 25.4 | | | 25.4 | | | (0.4) | | | 25.0 | |
Repurchase of Liberty Latin America common shares | — | | | — | | | — | | | (30.0) | | | — | | | — | | | — | | | (30.0) | | | — | | | (30.0) | |
Distributions to noncontrolling interest owners | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (1.3) | | | (1.3) | |
Contributions from noncontrolling interest owners | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 46.9 | | | 46.9 | |
Share-based compensation | — | | | — | | | — | | | — | | | 75.7 | | | — | | | — | | | 75.7 | | | — | | | 75.7 | |
| | | | | | | | | | | | | | | | | | | |
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 | |
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 |
| 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 |
| 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 | |
Net earnings | — | | | — | | | — | | | — | | | — | | | 84.1 | | | — | | | 84.1 | | | (1.3) | | | 82.8 | |
Other comprehensive earnings | — | | | — | | | — | | | — | | | — | | | — | | | 10.4 | | | 10.4 | | | 0.5 | | | 10.9 | |
Repurchase of Liberty Latin America common shares | — | | | — | | | — | | | (33.6) | | | — | | | — | | | — | | | (33.6) | | | — | | | (33.6) | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Share-based compensation | — | | | — | | | — | | | — | | | 17.9 | | | — | | | — | | | 17.9 | | | — | | | 17.9 | |
| | | | | | | | | | | | | | | | | | | |
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 | |
| | | | | | | | | | | | | | | | | | | |
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 | |
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 | | | |