Liberty Latin America Ltd. — 2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This is an annual report, not a standalone fourth-quarter filing. The company provides fixed, mobile, broadband, video, telephony and wholesale network services across Latin America and the Caribbean. Comparisons below are with 2022; reported results are affected by foreign exchange, the 2022 Claro Panama acquisition and the October 2022 Chile JV transaction.
Financial performance and liquidity
| Metric | 2023 | 2022 |
|---|---|---|
| Revenue | $4.511 billion | $4.809 billion |
| Operating income | $517.7 million | $86.5 million |
| Adjusted OIBDA | $1.702 billion | $1.710 billion |
| Adjusted OIBDA margin | 37.7% (calculated) | 35.6% (calculated) |
| Net loss attributable to shareholders | $73.6 million; $0.35 per share | $170.7 million; $0.77 per share |
| Cash provided by operating activities | $897.0 million | $868.8 million |
| Capital expenditures, net | $585.0 million | $660.1 million |
| Total property and equipment additions | $730.9 million | $816.3 million |
| Cash and cash equivalents at year-end | $988.6 million | $781.0 million |
| Debt and finance lease obligations, carrying amount | $8.180 billion | $7.881 billion |
Operating cash flow less reported net capital expenditures was approximately $312 million, calculated from the filing. Year-end current assets were $2.412 billion and current liabilities were $2.133 billion. The company reported $869 million of unused borrowing capacity, subject to facility terms and conditions. Debt principal and finance lease obligations totaled $8.248 billion before premiums, discounts and financing costs; $581.9 million was classified as current. The stated weighted-average borrowing rate was 7.1%, or 6.0% including specified derivative and other adjustments.
Material changes versus 2022
- Revenue fell $297.5 million, or about 6%. The Chile JV transaction removed $450.6 million of VTR revenue included in 2022, while Claro Panama contributed $69.6 million of acquisition-related revenue growth and foreign exchange added $84.1 million. Organic revenue was approximately flat, down $0.6 million.
- Adjusted OIBDA decreased $8.3 million. Reported segment performance varied: Costa Rica Adjusted OIBDA rose to $203.1 million from $134.7 million, while Liberty Puerto Rico declined to $485.5 million from $530.8 million and Liberty Networks to $261.5 million from $276.3 million.
- Operating income increased substantially as impairment, restructuring and other operating items declined to $86.9 million from $619.2 million. The 2022 amount included $555.3 million of C&W Caribbean goodwill impairment; 2023 included $67.0 million of impairment, primarily lease assets associated with decommissioned towers.
- Net loss narrowed, but remained a loss. Interest expense increased to $601.7 million from $556.7 million, while derivative results shifted from a $359.4 million gain to a $34.2 million loss. Foreign-currency transaction results improved from a $194.3 million loss to a $70.3 million gain. These volatile non-operating items materially affect reported earnings.
- Operating cash flow increased $28.2 million; investing cash outflow declined, mainly reflecting the prior-year acquisitions and Chile JV transaction. Financing cash outflow was $62.4 million, including $118.3 million of share repurchases and $75.4 million of distributions to noncontrolling owners.
Outlook, transactions and key risks
- The filing provides no specific numerical revenue, earnings or cash-flow guidance. Management says it expects sufficient resources to repay or refinance current debt and fund foreseeable liquidity needs over the next 12 months, but expects to refinance or extend later maturities and gives no assurance that financing will be available on favorable terms.
- In 2023, the company received approximately $244 million from mobile tower transactions with Phoenix Tower International. The arrangements did not qualify as a sale and leaseback; proceeds were recorded as debt, and tower assets remain on the balance sheet. The agreement also contemplates approximately 500 additional sites to be built over five years.
- The proposed Dish Network spectrum and prepaid-subscriber acquisition in Puerto Rico and USVI has a stated purchase price of $256 million, payable in four annual installments from closing, subject to adjustments and regulatory approvals. Closing was expected in 2024.
- Liberty Puerto Rico receives FCC support for network expansion and service programs. Transitional mobile support is declining, and the Affordable Connectivity Program was expected to run out of funding around April 2024; continuation depended on further congressional funding.
- Leverage, refinancing needs, variable interest rates, foreign-exchange movements, inflation and restrictions on moving cash from subsidiaries are material financial risks. Debt maturities are concentrated in 2027–2029, and the filing lists $586.9 million of debt principal due in 2024.
- Other significant risks include intense competition and pricing pressure, regulatory and license-renewal uncertainty, natural disasters and climate exposure, cybersecurity and service disruptions, and potential litigation, tax or government-customer collection issues. The company reports $3.483 billion of goodwill, whose valuation is sensitive to forecast performance and discount-rate assumptions.
Investor facts to verify
- Assess refinancing plans, near-term maturities, covenant headroom, borrowing costs and the extent to which subsidiary cash is accessible to the parent.
- Confirm the Dish transaction’s regulatory status, closing date, final consideration and payment schedule, and the tower arrangements’ ongoing debt and lease-like cash obligations.
- Track organic revenue, subscriber and ARPU trends—particularly Puerto Rico mobile performance, Costa Rica growth excluding FX, and Panama growth excluding acquisition effects.
- Monitor FCC funding and ACP-related changes and their effects on Liberty Puerto Rico revenue, customer affordability and network investment.
- Review remediation of the material weaknesses in internal control over financial reporting. Management reported ineffective controls at year-end, and KPMG issued an adverse opinion on their effectiveness, although it gave an unqualified opinion on the consolidated financial statements.
- Review the disclosed correction of immaterial errors in previously reported periods, the related revisions, and whether control remediation prevents further errors. The filing says 2023 control deficiencies also resulted in immaterial misstatements, some corrected.