Good morning, ladies and gentlemen, and thank you for standing by. Today's call is being recorded. I'll now turn the call over to Veenod Kurup, Interim Chief Technology Officer of Liberty Latin America.

Good morning, and welcome to Liberty Latin America's Third Quarter 2021 Investor Call. At this time, all participants are in listen-only mode. Today's formal presentation materials can be found under the Investors' section of Liberty Latin America's website at www.lla.com. Following today's formal presentation, instructions will be given for a question-and-answer session. As a reminder, this call is being recorded and will be available under the Investors section of our website. Today's remarks may include forward-looking statements, including the company's expectations with respect to its outlook and future growth prospects and other information in statements that are not historical fact. Actual results may differ materially from those expressed or implied by these statements. For more information, please refer to the risk factors discussed in Liberty Latin America's most recently filed annual report on Form 10-K and the most recent Form 8-K filed with the SEC, along with the associated press release. Liberty Latin America disclaims any obligation to update any forward-looking statements or information to reflect any change in its expectations or in the conditions on which any such statement or information is based. In addition, on this call, we will refer to certain non-GAAP financial measures, which are reconciled to the most comparable GAAP financial measures, which can be found in the appendices to this presentation, which is accessible under the Investors' section of our website. I would now like to turn the call over to our CEO, Mr. Balan Nair.

Thank you, Veenod, and welcome everybody to Liberty Latin America's results presentation for the third quarter of 2021. I'll begin with our group highlights and operating results before handing over to Chris Noyes, our CFO, who will provide a review of the company’s financial performance. After that, we will get straight to your questions. As always, I'm joined by my executive team from across the region. I'll get them involved as needed during Q&A, following our prepared remarks. As a point of housekeeping, we will both be working from slides, which you can find on our website at www.lla.com. Starting on Slide 4 and our highlights. We delivered 84,000 fixed RGU adds in Q3, representing our strongest quarter of the year so far. This continued our momentum from the first half, and we've now added nearly a quarter of a million RGUs year-to-date. C&W Panama and C&W Caribbean & Networks, drove the majority of additions. In mobile, we had another strong quarter, adding 74,000 new subscribers, about half of which were postpaid. We also saw good initial contributions from our mobile operations in Costa Rica, which we acquired from Telefónica on August 9th. As we've previously highlighted, new build and upgrade plants are a core element of our growth strategy, and we continued to build aggressively in the third quarter, taking our year-to-date homes added or upgraded to approximately 600,000. About 99% of these adds have been true fiber to the home technology. Free cash flow is our key focus, and we delivered a strong performance in the quarter, with year-to-date adjusted free cash flow now at $149 million to the end of September. We are clearly on track to exceed our guidance of $200 million this year. And Chris will cover this further in his section. Finally, we have…

Thanks, Balan. One housekeeping item to start. We closed the Telefónica Costa Rica acquisition on August 9. So, their results are only in for a portion of this quarter. Our reported revenue increased by 34% or about $300 million to reach revenue of $1.19 billion in Q3, helped in large part by the positive impact from acquisitions. On a rebased basis, our revenue grew 3%, led by strong year-over-year performances in Costa Rica and Panama. From a product perspective, our residential mobile business picked up steam, and delivered rebased growth of 6% in the quarter, while residential fixed and B2B also grew. On a year-to-date basis, rebased revenue maintained a consistent 4% growth rate. Turning to adjusted OIBDA. We posted $446 million in Q3, reflecting reported growth of 24%, and flat rebased growth, consistent with our Q2 statement regarding lower expected rebased rates in the second half of the year. Cost increases varied across certain markets, but in aggregate, we experienced a combination of higher direct costs, including programming and roaming, and higher operating costs. Similar to revenue, our year-to-date adjusted OIBDA rebased growth was 4%. Slide 11 summarizes our revenue and adjusted OIBDA performance by operating segment for Q3. And the bottom of the slide displays year-over-year adjusted OIBDA results. Beginning with C&W Caribbean & Networks, we reported $435 million of revenue or 4% rebased growth, led by double-digit revenue growth in Jamaica. Mobile revenue performance was the largest contributor to our topline progression, with rebased growth of 9%, reflecting modest recovery from COVID, and early success from our focus on converged offerings. Additionally, we experienced year-over-year rebased revenue growth of 3% in both B2B and fixed residential. Adjusted OIBDA was $182 million, or up 3% on a rebased basis in the quarter, as both direct and operating costs…

Thank you. [Operator Instructions]. And we will take our first question from Jeffrey Wlodarczak with Pivotal Research Group. Please go ahead.

Good morning. I had a couple questions on Puerto Rico. I was hoping you could provide more color on the wireless revenue decline. Is it fair to say that's mostly COVID related? And then if you could give any color on when you guys intend on rolling out converged offer to consumers in Puerto Rico, that would be helpful. And I had one follow-up.

Good morning, Jeff. Let me maybe address that a bit, then I'll ask Naji to jump in here. The wireless business in Puerto Rico is actually doing really well. We actually added postpaid subscribers in the quarter. We did have some headwind, and - but it's not really COVID-related. It’s bouncing around a bit on roaming. Some of the equipment deals moved up a bit. But we’re quite bullish on that front. And on the converge side, we've already started our converged offerings, and - but we’re going to improve even more so once the system's cut over to outside. Naji, do you want to add on that?

Yes, sure. And good morning, Jeffrey. Yes. I mean to echo Balan’s point, for us, the fundamentals are very strong. If you look at service revenue, both sequentially and year-over-year there, it's growing. There’s some volatility a bit on the roaming as Balan discussed, as well as equipment revenue. As you know as well, the iPhone launched late September and the peak was in October. People usually hold their purchase until the new phone come in. So, we does see the seasonality. And as you know, in most cases, it is also a negative contributor as well when it comes to equipment revenue. The roaming I think was expected. There was seasonality and more people are traveling as well, which in some case add expense, in some case reduces revenue as well. For the convergence, really excited about the way this is unfolding. As Balan mentioned, we did converge our brand on September 28. The feedback has been really positive. And not only our offer are converging now, but our sales channels are converging. So, customers are walking into our retail stores. So they are able to purchase both fixed and mobile. And initial results are really positive. And again, we're just literally four weeks into this. So, really excited and very optimistic about the future from that perspective.

Thanks. And then is there any update on your subsea assets? You were thinking about selling a portion of that. I think you were going to let us know in fourth quarter. Is that not happening, you're still thinking about it? Any update would be great.

Well, Jeff, you can clearly see that business is a very good, strong business, very stable and predictable cash flow. We've been thinking about some of parts of it and giving better and more clear line of sight to it. I expect that in our February call, we'll give you a very a clear view on what our plans are on that asset.

Great. Thank you very much.

And up next, we'll take a question from Michael Rollins with Citi. Please go ahead.

Thanks, and good morning. I'm curious if you could discuss, when you have fixed and mobile convergence in the market, what are the typical revenue or margin advantages over not having that level of convergence?

Sure. There's a few drivers for the convergence. Clearly the bundle gives a better ARPC for the - the average revenue per customer. Secondly, it improves the churn as well. And thirdly, especially in our case where we have a lot of prepaid customers, FMC, this convergence actually moves a lot of our unpredictable prepaid customers to a postpaid customer. Or even in some cases, even kind of a hybrid postpaid, but the goal really is to get the customer to stick with us longer, create value through the bundle, have them see or actually experience a much better service from us, and theoretically also a better value for them. And it is working and it's working very strongly. As Naji pointed out, in Puerto Rico, we started that and we’re seeing not only green shoots, actual growth. I mean, you look at our fixed business, one of our best performances last quarter, driven by FMC as well. Costa Rica, we just acquired the Telefónica asset, and it is working now already with our Cabletica business and Telefónica’s business. And that combination, we are launching some very innovative products. In cable and wireless, our general manager there has introduced really innovative FMC products. And we are seeing the success as well, moving the prepaid to postpaid. That's why we are driving it, and clearly margin improves as well as predictability of that cash flow.

Thanks.

All right. And up next, we'll hear from James Ratcliffe with Evercore ISI. Please go ahead.

Morning. Thanks for the question. Two if I could. First of all, on the margin front, I know there's a lot of noise in the data with COVID plus M&A and the like, but can you help us look through that to what the underlying margin trends look like, particularly at cable and wireless? And how much more room do you have to run in your cost reduction work there? And secondly, fixed telephony continues to be surprisingly strong. Can you talk about what you're doing with that product? What's the impact in terms of RPU and churn and what the strategy around it is? Thanks.

So on the cost margins cable wireless and my General Manager there, Inge, is on the call as well. I’ll ask her to maybe provide some thoughts on the cost reductions that she's taken on. We think there's some - there's going to be margin expansion there on two fronts, one on the OpEx side. We’ve actually also improved on the COGS side. And then clearly as time goes on, even on the CapEx as well. We expect a few more points in the combination of all those three cost segments. And Inge has done some really good work, both at the center, as well as in the islands, in driving some of the cost reduction. So, maybe Inge, if you want to comment on that.

Yes. Good morning, Balan. Good morning, James. Indeed. So, we really look at it line for line, business line for business line. We really work through every single aspect of, whether it's the OpEx side or whether it's the cost site. And really looking for the return on investment. And we've really started that work in the last three years and next year we'll continue. And also in the next part, we will really do - we'll continue to drive that piece of the - like Balan said, both in the markets and at the center. And there's clearly some room to improve that side.

Thanks, Inge. And then on your second question on fixed telephony, this is an interesting thing. I mean, clearly this product is not a super growth product, but we found still a way where customers through the bundle in a kind of an innovative pricing proposition, getting our existing customers to just - to add on voice to the service. You can imagine, the gross margin on this is like close to 100%. And so, we've just taken the advantage to drive more and more of it, and it's working in some areas. We’re not counting on this as a growth drive for our business. We do not count on this as - in our LRP as a driver, but when you get it, you take it. And we saw an opportunity and we put our salespeople on it, and we were able to put up some good numbers.

Great. Thank you.

[Operator instructions]. And up next, we'll hear from Soomit Datta with New Street Research. Please go ahead.

Hi, guys. Yes. Thanks for the presentation. A couple of questions, please. One just on Chile, please. You talked about the subspace kind of stabilizing a little bit, but the broadband adds are particularly weak, I think. So, we've seen accelerating broadband losses through this year. So, I just wondered how you thought about the momentum in that business. And again, as a kind of joined question, how do you see the deal you are doing in Chile kind of helping on the fixed side in particular? And I guess also, is there anything you can do before that deal closes to help the broadband business? So, that's one question, please. Maybe I'll wait for the answer and then just go with another one.

Sure. And I'll ask Vivek to jump in here in a bit as well. The broadband business there has been all over the map. Our gross adds on broadbands are really good. There's some leakage clearly, and that's why the net adds went off. But there's three things that we are doing. One, we’re improving our retention on broadband, and we're getting a lot more creative on that as well. Two, as you can imagine, we are repricing a product, and you can see that in our EBITDA. And that has also slowed a lot of the churn part of broadband. And third, we are going to re-vector some of our sales team, not some, a lot of our sales team, to now focus just specifically on broadband. So - and so, you'll see some numbers standing on that, but I'll tell you, we are adding - gross adds are coming in still strong on broadband. It's just at the churn level. And so, we are trying to address the next stage, the churn part of the broadband proposition. Vivek, would you mind adding a bit more to that?

Yes. Thanks, Balan, and thanks, Soomit, for the question. Yes. I think as Balan said, really focusing on the churn side of that equation, which continues to be challenged with the competitive intensity here as our competitors continue to expand their footprint. Our churn improvement initiatives, we've seen reductions in technical services calls, structurals, et cetera. So, those should - it does have a lagging effect, but we should see the upside of churn in a while. But we've been having some record months on gross adds, I think, given the seasonality, we've seen like probably the best gross adds you have done in the last few years on the broadband side. Of course, also fueled by some of the new builds we have added into the market. So, I would say, the competitive intensity continues to be difficult in the marketplace, which is kind of reflected in the numbers, but the opportunity for containing to add broadband subscribers is still there.

Thanks, Vivek.

Okay, that's great. Thank you very much. Can I follow up, please, just with just a quick question for Chris actually on cash flow? I think the integration costs are coming in a little bit lower this year. Could you just give us a quick update please on, as we move into 2022, what will the delta be between integration costs this year and next year, and also then synergies? So, what would be the movement to free cash flow from the combination of all those things, please?

Yes. Without - I mean, we're obviously still working through our plans for next year and the budget process. In terms of integration, as it relates to Puerto Rico, what we've communicated is we expect Q4 integration to be around $10 million. So, that's a little bit of a step-up from where we've been year-to-date. So, that would bring the total to roughly $15 million on the cost side this year. I think as of today, we would expect it to be higher integration costs, next year in ‘22. A lot of the hard work that Naji and the T&I team are doing around the mobile core and things of that nature, happen during the year next year. So, I'd expect to step up there. I think CapEx, we continue to spend CapEx on integration, and that will stay pretty constant, I think in integration land next year as well. We'll have more detail on some of the synergies and views as we kind of finish the outlook for Puerto Rico when we report in February.

Okay, great. Thanks.

And we'll take a follow-up question from Jeffrey Wlodarczak with Pivotal Research Group. Please go ahead.

Thanks for letting me ask a follow-up. I had a couple on Chile and this VTR Claro deal, which given how competitive it's getting, looks particularly smart transaction. I guess, what are the regulatory milestones we should be looking for? The deal is moving towards getting approved. I guess that's the first question. You’re lighting up a lot of two-way enabled homes in Chile right now. Is that something you can modify so you aren't sort of overbuilding your future network, or kind of - it's already kind of built in? And then third, are there any opportunities post-deal to potentially like monetize towers or anything like that that we're not aware of? Thanks.

I'll answer question two and three, and John Winter, our General Counsel, who's working really hard on the regulatory front, will take on one. On the new build, we will continue to aggressively new - build out fiber to the home. And clearly, Jeff, we can't coordinate with our partner yet. So, we are not coordinating with them and overbuilding them, or them overbuilding us. We’re doing our own thing and until the deal closes. But we’re really bullish on the new builds. And I think Chris may have mentioned it. I don't know if he did, that we are in a lockbox situation right now after the signing. And so, all spending is really JV spending at this point. And so, we are just charging ahead. You had a second question. What was the third question again? I forgot. Towers. Yes.

Yes, towers.

Yes, the towers.

And how to monetize

Not much of the tower. There won't be much towers. I mean, you can imagine tele-sites and what they've done with that. We are not expecting any much activity in towers. Now, we do own some towers as well, but there's nothing to write home about. John, you want to talk about the regulatory?

Yes, sure. Thanks, Balan. So, we filed with the regulator at the end of last week the formal application process. We had already been working with our partner and with the regulator on that. So, that got filed formally. So, that kicks off the phase one process, which will take about 45 to 60 days, maybe 90 days to get through and answer all their questions. We do expect that it will go on to a phase two, given kind of the competitive environment and everything in Chile. But we feel good about the approval process. We feel good about the advantages this will bring to Chile and the consumers. So, eventually, we'll get it closed. It's just a longer process in Chile and we're still expecting closing in the second half of next year.

Thanks, John.

All right. Thank very much.

And there are no further questions in queue. I'll turn the call back over to Balan Nair for additional remarks.

Thank you, Operator. And I do want to thank all of you on the call. And just to reiterate, we feel good about the quarter. I mean, strong operational growth, organic growth in RGUs, good numbers on postpaid and fixed. I would also say that our new builds, we are really excited about the new builds and we continue to do that. We are really leaning into our thesis. The cash flow numbers that Chris talked about, clearly meeting and exceeding guidance on that front. And as you pointed out as well, Jeff, on the call, some really smart M&A decisions and transactions that we executed on this last quarter. So, for all those reasons and more, we remain really bullish about this business and in the future for LLA. Thank you so much for all your support and have a great day.

And this concludes today's call. We thank you again for your participation, and you may now disconnect.