Good morning, ladies and gentlemen, and thank you for standing by. Today's call is being recorded. I will now turn the call over to Danilo Fernandes, Senior Director of Corporate Business, C&W Panama.

Good morning and welcome to Liberty Latin America's Second Quarter 2024 Investor Call. At this time, all participants are in listen-only mode. Today's formal presentation materials can be found under the Investor Relations 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. Today remarks may include forward-looking statements including the company's expectations with respect to its outlook and future growth prospects and other information and statements that are not historical facts. 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 quarterly report on Form 10-Q, along with the associated press release. Liberty Latin America disclaims any obligation to update any forward-looking statement 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, Danilo. And welcome everyone to Liberty Latin America's second quarter and first half results presentation. I'll begin with our group highlights and an overview of our operating results by reporting segment. Chris Noyes, our CFO, will then follow with 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, and I will invite them to contribute as needed during the 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.llla.com. Starting on slide 4 and our highlights, we continued to grow our high-speed broadband and postpaid mobile bases in the first half, adding 62,000 subscribers in total across the group. This was close to 200,000 additions, excluding Puerto Rico, where we experienced specific challenges related to the completion of mobile subscriber migration and the sunset of the ECF program, which I'll cover later in the presentation. We reported adjusted OIBDA of $763 million in the first half. This included double-digit rebased growth in Panama and Costa Rica, in addition to high single-digit growth in Cable & Wireless Caribbean. We expect these businesses to continue their momentum in the second half and growth for the overall group to improve as we drive better results in our Puerto Rico operations. We have been aggressive with our buyback activity this year, including the redemption of our convertible notes in July. We have now repurchased over $300 million of our equity and converts, which is equivalent to the total capital allocated during 2023. Finally, we continue to look at inorganic ways in which to drive additional stakeholder value, and we are excited to announce our combination with Millicom…

Thanks, Balan. I'll now take you through our financial results in greater detail, starting with our group revenue and adjusted OIBDA performance on slide 13. Sequentially, reported revenue grew by 2% to $1.1 billion and adjusted OIBDA was 4% higher at $389 million in the second quarter. Revenue progression in the quarter reflects the positive financial results of the operational actions Balan highlighted. OIBDA growth was bolstered by operational leverage with our margin improving by 75 basis points to 34.8%. Year-over-year revenue was 1% lower on a rebased basis, and adjusted OIBDA declined by 12%. Revenue declined slightly as positive momentum in C&W Panama, C&W Caribbean, and Costa Rica was more than offset by declines in Puerto Rico and Liberty Networks. With respect to adjusted OIBDA, C&W Panama was our best performing segment, posting double-digit rebased growth and C&W Caribbean delivered high-single-digit rebased growth. Similar to revenue, the growth in these segments was more than offset by significant declines in Liberty Puerto Rico and Liberty Networks, both of which we'll discuss in subsequent slides. Moving to slide 14 and our P&E additions and adjusted FCF results for Q2. On the left, we incurred P&E additions of $180 million in Q2 or 16% of revenue. This compares to $192 million or 17% of revenue last year Q2. During Q2, we built and/or upgraded nearly 100,000 homes and launched initial 5G service in Costa Rica and Cayman. On the right, we posted adjusted FCF before partner distributions of negative $7 million, partner distributions in Bahamas of $11 million, which brought our adjusted FCF to negative $18 million for Q2. This result compares to adjusted FCF of $31 million for Q2 2023. The primary driver of the year-over-year change was principally related to our lower adjusted OIBDA. Slide 15 recaps our segment results.…

[Operator Instructions]. Our first question today is from the line of Vitor Tomita of Goldman Sachs.

We have two from our side. Both of them would be on Puerto Rico. The first one is if you could give us some more color on the retention discounts that you applied to ACP subscribers. Mainly, if those discounts affected revenues only starting in June, if they were applied to the entire ACP base or to a smaller percentage of it and if you see risk of potential churn or bad debt issues going into Q3, particularly on non-discounted subscribers, if there are any? The second question from our side would be also on Puerto Rico. If you could go into a bit more detail on the drivers for the further EBITDA improvement in Puerto Rico that you expect in the second half of the year. Basically, how much of that improvement will depend on cost cuts versus expected revenue improvement in there?

I'll ask Eduardo to also jump in here. On the ACP, we have roughly about 85,000 subscribers in fixed and about 3,000 mobile, so very little exposure in mobile. On the fixed, we've been able to retain the bulk of it, more than 90-some percent. I think the effective discount – and Eduardo, you can jump in here – I think was about $14 was the effective discount that we provided. Let me put it a different way. The subsidy was about $30, and our effective subsidy was about $14. So you're close to $14, $15 on the effective discount, but we've been able to retain the bulk of our customers on ACP. Now, there's another group of customers, and this particularly hits mobile, and it's another program called ECF, where we actually have kind of like a little dongle for our customers. It's a very low ARPU on that, and that was what really impacted our operating numbers with that disconnect on the ECF side, and you see that manifest itself in the postpaid numbers. On the EBITDA side, we're actually quite bullish on our outlook when we guided to the $45 million towards the end of the year on a monthly basis for EBITDA. There's a number of drivers around that, specifically, of course, the TSA dropouts. We have a whole bunch of one-off costs that don't recur again, and then it's a couple of additional drivers of recovery here. One of it is cost takeout. And as we probably – I don't know if you recall, we said we were taking out about 300 headcounts in Puerto Rico, which we've effectively completed. And in addition to that, there's a number of line items that we've been looking at, both on the cost of goods sold and the actual OpEx line that we are very well on our way to take those costs out. So those would add into our monthly OIBDA. And then finally, we will be launching our new campaigns, and after the campaign launch, it's going to drive additional gross adds. It will have a slight impact on our OpEx because of customer acquisition, but it will drive revenue and bottom line as well into the fourth quarter, which is kind of why we've kind of pushed $45 million towards the end of the year because there is some slight additional cost in customer acquisition as well. But that's how the ladder builds back into the $45 million. Eduardo, you want to give a little bit more color on the ACP and maybe if you want to share thoughts on OIBDA?

We believe that the results on ACP at the end of the program were quite successful. We were able to retain over 92% of the base. And when we think about the impact overall of that base, the ARPU reduction overall is only about 4%. There are some discounts that we did mostly on retention, as Balan mentioned, on some customers that were probably in more, let me call it, dire circumstances to continue with the service. But in general, the impact on the ARPU is also coming from customers downgrading their plans, given the fact that the subsidy finished. And so, you have both combinations, if you will, some retention offers with discounts and customers downgrading their services to be able to meet their budget needs. But, overall, I would say, very successful. And in the case of mobile, a very small number, and we were able to retain most of those customers as well. So that would be on ACP. In terms of EBITDA improvements, certainly, we're looking to extract all the opportunities that the integration of both our mobile operations and fixed operations can give us to become really a convergent company. And the teams are working extremely hard. I think that, in terms of sales, the last couple of months have shown very, very good traction. Not necessarily where we wanted to go, but I think that we're starting to see the improvements now that we control our systems and, therefore, are able to build our offers and certainly leverage our base, both on the fixed and mobile sides to create cross-selling options. I hope that gives you a better color.

Our next question today is from the line of Michael Rollins of Citigroup.

Just following up on Puerto Rico, so if you take the expectation to get to a monthly run rate of $45 million, does that put the 2025 EBITDA contribution for Puerto Rico at roughly $540 million? And if not, what would be the variances?

Well, I wouldn't straight line the number. Here's how I'd look at it. And the big part of our business is always about opening balances. And it's opening balances at the monthly level, at the quarterly level. And certainly, if we build our 2025 budget, it would be the opening balance in December going into January. Our goal is to get to the $45 million by the end of this year in the last couple of months. And then, we'll have going into 2025, an opening balance of both subscribers and fixed and postpaid, as well as with our B2B trajectory. I expect that to not be $45 million every month for the year 2025. So you'll start seeing growth coming in. And as the year progresses, since we add net adds, the first quarter net adds will certainly drive the second, third, and fourth quarter. And then the second quarter net adds, third and fourth. So I suspect by the end of 2025, just shoot me if you're still at $45 million. It's going to be a better number. And then you can just figure out how you want to model EBITDA for 2025.

And as you look at the broader portfolio, does 2025 mark the year where you would expect rebased revenue growth for the entirety of the portfolio to be positive for the year? Or are there still just significant variability between markets and products where it's just harder to assess when you get to that sustainable rebased revenue growth level? Thanks.

There will be revenue growth positive in 2025. That's a given. And let me explain why I feel so confident of it. We have essentially five segments here. Our Cable & Wireless Caribbean business, we've spent a lot of years rebuilding that platform, building not only a great team supporting that platform, but also an infrastructure and a product base. So for the most part, we've eliminated most of – all our twisted pair copper. By 2025, actually, by the first, second quarter, 2025, there'll be no more copper, but we're no longer relying on that. So you don't have any headwinds there on copper. It's a wobbly market. And we continue to grow both on fixed, postpaid mobile as well. And we think, for sure, between all of the competitors in that market, whoever we are facing, I think for sure that's going to be the drivers for price increases in our products next year. So you've got a great network, great products, and very high probabilities of price increases. Then you move to our Panama business. We've also rebuilt that business quite a bit. And you see the tremendous growth this year. And with our management team and our new management team in Panama, very focused not only in the top line growth, but the efficiency of the business, you'll see top line growth and expansion in the OSCF margin in that business. And that's clear as day. We are investing in the network, almost all of it now, fiber and very new HFC, we are 5G in that network. It's one of our best mobile networks as well. And clearly, we will be back in the front driver seat. We are already the leader in mobile. And we're doing a very good job as an attacker on…

Our next question today is from the line of Matthew Harrigan of Benchmark Company.

I was going to go for Puerto Rico 540 question as well. But beyond that, I think a fair amount of level 4 data center activity, I think particularly in pure cell and some hyperscalers seem pretty active, in particular the Caribbean, I think more than Central America. Is there a tailwind there for your network business off that? And then, secondly, very broadly, clearly, you don't have any direct exposure to Venezuela, but is there anything on the political or regulatory side that could be positive, create opportunities across your markets and they are fairly open-ended? Thanks and congratulation on the results.

I'll now ask Ray Collins to also jump in here in a bit on the data center, Ray. On the data center business, we have a number of data centers. Actually, we do have a data center in Curaçao, which we support for internally and external customers as well. It's a great island. It's an island that's very, very rarely – and I touch wood here – impacted by hurricanes. It's a great location for us to build our data center. And we've been building also micro data centers for specific customers in a number of markets. But I think as we look at the data center business, the three areas that could be real good opportunities for us is Panama, Costa Rica, and Mexico. And Mexico, as you know, we are building fiber going into the Cancun area and Querétaro in Mexico, where the data center business has been growing. So we are building connectivity into that. And then of course, you look at Panama and Costa Rica, they're both countries where the CHIPS Act has flowed money and you can see Intel building plants in Costa Rica. So we are also focused, hyper focused on that. And so on the data center business, it's kind of how we're looking at. But you really have to have the contracts with the large hyperscalers for you to really allocate significant amount of capital in the space. And then on Venezuela, we follow every political change and challenge in our region. And we'll see how that plays out. And we have absolutely no plans right now to go into Venezuela, even though we have a good business into Venezuela with our subsea. We have really good customers there. They pay us in US dollars. And we are very appreciative of that. And we like those businesses. If the world changes in the future, of course, Venezuela would be a great market at some point in the future when their political turmoil changes. The other market, of course, is Argentina as well. Once the political turmoil changes there, it could be a really good market. These are all dislocated markets. And clearly, Ray Collins from our M&A team, Chris Noyes, John Winter, and myself, we look closely at all these markets. And when the time is right, we'll be very opportunistic. But right now, I don't see it. Ray?

Yes, just to add on the data center business. We also provide data center to data center connectivity in our B2B business and in our networks business. And actually, one of the drivers of the new system, which we announced, is really connecting some of the hyperscale data centers that we see. The build that you see in Querétaro in Mexico, where we're connecting from Veracruz back up to a new connectivity that we'll put into the Appalachia coast of Florida, connecting into Virginia and Georgia, and then down to Colombia. So the new network that we've announced is really all about serving that hyperscale data center traffic. As Balan said, we don't have current plans to build data centers ourselves for hyperscalers, but we see a strong tailwind from enabling and connecting the various deployments that we see in the region.

And our next question today is from the line of Gabriel Vaz de Lima of Morgan Stanley.

I just wanted to get a bit more color on the possible regions impacted by the hurricane season this time around. Any kind of color you can provide to us in terms of what kind of impacts we should expect and how this could impact your businesses in Jamaica and the regions that were already impacted?

Well, the Hurricane Beryl that went through us impacted three of our operations, Grenada, St. Vincent, and Jamaica. And in many cases, the biggest driver of our challenges have been power outages. Primarily, if you look especially in Jamaica, where our customers went offline, not because the network went down, but because of power. We have significant amount of towers in Jamaica, which only like seven towers got damaged. And by the way, we did a deal with – if you recall from the last quarter with PTI, and PTI is responsible for rebuilding those towers. And so, from a mobile tower standpoint, we're good. From a fixed network standpoint, for the most part, our network withstood it. We have some network that we have to rebuild. And we're going to rebuild our backbone. It's about 170 kilometers of our backbone. We're going to underground the whole backbone. And that's built into our budget as well. Now, in one or two smaller islands, Curaçao, Union Islands of St. Vincent and Grenada, it was damaged significantly. And we've gone back in there, rebuilt the mobile. And on the fixed side, we are using an alternative technology with fixed wireless access to get customers back up quickly and as well cost efficiently. So, when you look at this year's hurricane season, we got hit pretty early, but the team is resilient. We've rebuilt what we needed to rebuild. Some of the cost impacts that Chris alluded to was really around some credits that we will be giving back our customers, because they didn't have power and didn't have our network service. And we'll give them some credits back if they didn't have the service. All in all, we feel really good. And by the way, our team did a tremendous job on the insurance. This parametric insurance clearly delivered. And as Chris pointed out, we've closed out with our brokers and the insurance consortium. And we will be paid for the damage. And it should relatively have very little financial impact to us with this hurricane.

Thank you. And this will conclude today's question-and-answer session. I'd like to hand back to Balan Nair there for any additional or closing remarks.

Thank you, operator. And thank you, everybody, for joining us this morning. As you can see, our business is moving. And we've got momentum behind us in all of our businesses. And I would say the same in Puerto Rico. And I hope to share with you in the third quarter some more positive data out of Puerto Rico. As Eduardo pointed out and Chris pointed out, we're seeing greenshoots already. Our prepaid business is growing there. And that was the first group of customers we migrated. And already, a lot of the systems, et cetera, have started to get better. And as we look even at our customer sentiment, for all the new customers we've vetted on the, what we call, NPS, Net Promoter Scores, of our customers, it's been extremely positive. It's actually one of the best in our whole company. And then for existing customers, it's in two buckets, the ones that we migrated successfully and cleanly. And that's 80% of our customers, they are feeling good. The 20% of customers that we had challenges in billing, of course, we need to rectify that. And we will. And you'll see some of that results in the third and fourth quarter of this year. I remain very bullish about our business. And I thank you so much for your support.

Ladies and gentlemen, this concludes Liberty Latin America's second quarter 2024 investor call. As a reminder, a replay of the call will be available in the Investor Relations section of Liberty Latin America's website at www.lla.com. There you can also find a copy of today's presentation materials.