Good morning, ladies and gentlemen, and thank you for standing by. Today's call is being recorded. I would now like to turn the call over to Beverly Reyes, Vice President, Securities & Corporate Governance Counsel of Liberty Latin America. Please go ahead.

Good morning, and welcome to Liberty Latin America's Third Quarter 2022 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 Web site 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 Web site. 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 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 the quarterly report on Form 10-Q most recently 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 Web site. I would now like to turn the call over to our CEO, Mr. Balan Nair.

Thank you, Beverly, and welcome, everybody to Liberty Latin America's third quarter results presentation. I'll begin with our group highlights and an overview of our operating results. Chris Noyes, our CFO, will then follow with a review of the company's financial performance. After that, we'll 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 Web site at www.lla.com. Starting on Slide 4 and our highlights for the quarter. The Group reported revenue of $1.2 billion in Q3. Without VTR which was still consolidated in the period, our revenue would have been $1.1 billion and up by 3% on a rebased basis, driven by top line growth across most broad reporting segments, particularly Liberty Costa Rica, and our Cable & Wireless Caribbean businesses. Our internet and mobile postpaid subscriber bases have grown by over 400,000 over the past 12 months, and by 80,000 in the third quarter. All markets have significant penetration opportunities, which will support further subscriber growth. This is a principal operational focus and driver of our financial performance. The ARPU and margins for postpaid subscribers and a fixed RGU have very similar characteristics. On October 6, we closed our joint venture with Claro, Chile to create the 50-50 own Claro VTR. We now have a new management team who are working to deliver significant synergies. We are optimistic with the future of Chile. Our combination will start the consolidation and rationalization of this market. Chile is an incredible country. Our new Claro VTR leadership is putting a growth plan together for our review in the near…

Thanks, Balan. Let's turn to Slide 12 to kick off the finance section. Three housekeeping items. First, we have separated our Cable & Wireless Caribbean and Network segment into two distinct segments going forward: C&W Caribbean and C&W Networks in LatAm. Second, our acquisition of Claro Panama is included for the full quarter. Third, given the close of the Chilean JV in early October, we will deconsolidate VTR for Q4 and reflect the JV as an equity investment going forward. Today, I will reference some key financial numbers without VTR included. The third quarter was modestly more challenging than we had expected when we reported Q2 in early August in large part because of Hurricane Fiona's impact in Puerto Rico, in particular, through damage to the island's power grid rather than to our infrastructure. Unfortunately, this event did impact our financial and operating results in Q3 and will carry over into Q4. I will highlight those impacts were relevant. Financially, we posted Q3 consolidated revenue of $1.22 billion as compared to $1.20 billion for Q3 2021. Our 2% reported growth was positively impacted by acquisitions and organic growth in Costa Rica and C&W Caribbean offset in part by a significant organic decline in Chile resulting from continued competitive intensity coupled with our aggressive pricing strategy, which we initially launched in late Q1. Additionally, our U.S. dollar reported results were hampered by a negative $32 million net foreign exchange impact as currencies like the Chilean peso, Colombian peso and Costa Rica Cologne, all depreciated against the U.S. dollar year-over-year. In terms of growth, we delivered flat rebased revenue performance in Q3. Excluding VTR for both periods, we delivered 3% rebased revenue growth as compared to Q3 2021. Importantly, without VTR, our mix shifts to around 75% of revenue denominated in U.S…

[Operator Instructions] Our first question today comes from Michael Rollins of Citi. Michael, your line is open.

Well, thanks and good morning. Curious if -- when we take a step back on a consolidated basis for the money that you're spending on integration, the opportunity to drive the synergy targets that you've outlined and to consider any reinvestments that you may make to accelerate marketing or sales within the operations, can you take us through like what the net impact of this merger integration is in terms of the potential drag on EBITDA in 2022? And what that turns into over a couple of year period in terms of the net benefit that actually should flow through to the EBITDA line? Thanks.

Sure. Good morning, Michael. So when we do these acquisitions, the dissynergies in the first, call to usually between 2, 2.5 years significant as you integrate systems. But remember, these are one-time costs, and you annualize the savings over a long period, so the returns are quite significant. And the way we look at it is the synergies -- dissynergies come from, of course, the systems, the IT systems. You want to consolidate that to give a great customer experience, branding, stores, that you invest in. You invest usually in the first couple of weeks, we launched massive programs either through rebranding or through new propositions. And we've kind of -- I think for this year, we are going to have some headwinds in the numbers that we've been entering about, it's about in the $70 million some range. And that eventually goes down. And by 2024, the bulk of it disappears. And then you see the synergies come in, the synergies, of course, when we look at synergies, it's kind of -- it's a net number. So there will be some trailing costs, but the synergies that we put out, that would be a net number in 2024.

Thanks.

Thank you for your question. Our next telephone question today comes from Kevin Roe of Roe Equity Research. Kevin, please put on your question.

Thank you. Good morning. Balan, the CWC properties, they're demonstrating to be very resilient in both fixed and postpaid mobile. You mentioned earlier fixed mobile convergence as being a driver. Could you drill down a little bit more on the primary drivers there on CWC's top line strength you're still edging out the network. How important is that to the growth that we are seeing versus the core? Are there market share gains going on here? And how are things trending into the fourth quarter? Do you expect this top line growth for CWC to continue in Q4? Thanks.

Sure. Hi, Kevin. So CWC, it's kind of unique. We've been investing in the last couple of years in CWC on a number of fronts. And it's bearing fruit, certainly it's not bear bad fruit this year. So a big driver of the revenue growth is also the analyzation of a lot of our net adds from last year. So our opening balance sheet is very good, and that drives a lot of the value creation this year. There are a couple of other inflection points, of course, in CWC. One, we kind of indicated, but did not put a clear date, we will do this at the end of this year, early next year when we announce our full year, we will be more detailed around the work -- sorry, the construction that we are doing in CWC. So essentially the inflection point would be: one, we are going to take away almost all of the twisted pair copper that in that business. Now remember, CWC is made up for a lot of incumbent businesses with a lot of twisted pair, the all Cable & Wireless network. Essentially, when we're done with this, we would be one of the first telcos that have removed all of the twisted pair. AT&T hasn't done that. Verizon hasn't done that. PTS done that. Deutsche Telekom hasn't done that. NTT hasn't done that. So will -- this is one that we've been very disciplined, we've been working on it over multiple years, and we are probably coming towards the end here in the next 18, 24 months. And so that's an inflection point. Second one, of course, is our focus, given all these builds, our broadband speeds have increased quite dramatically. And our FMC ties both our broadband and our mobile product. And you can see from the numbers, it is working. And we anticipate our broadband growth next year to be as good, if not slightly even better than this year. And clearly, our postpaid is on a good trajectory. So you have these two very high margin products coming up. And thirdly, we are not giving out much handsets in CWC. We budget for a certain amount, we are very careful at monitoring it. And -- but the handset subsidy in CWC are significantly lower than the United States or even Puerto Rico as an example. So there's a lot of value creation still coming in CWC. And then finally, I should probably add one last one, which is B2B. B2B is another inflection point for us, Inge and her team, she's appointed one person in the back office running CWC strategically and back office as well. And that's another level of growth. It's just quite a significant part of our revenue in that market.

Thank you. And is that through -- into Q4 here, are you seeing those CWC positive trends continuing? Did you see that in October and now into November?

Yes. Yes, we are.

Super. All right. Thank you.

Thanks, Kevin.

Thank you, Kevin. [Operator Instructions] Our next question today comes from Cesar Medina of Morgan Stanley. Please go ahead, Cesar.

Hi. Thanks for taking my question. It's very specific-related to VTR. Are there now that the JV has been approved, et cetera, are there any plans to inject capital on that asset near-term? And if so, any details on that front?

Hello, Cesar. So the way we do -- well, let me start with this, there is no requirement for [indiscernible] any capital -- its contemplated in any of our agreements in the JV. Having said that, we do all of our capital allocation based on returns. And so when we look at the plans, as I indicated in my opening comments, the management team is presenting -- is going to present to us a nice growth plan. And my team and I will look at it and then we will decide if we want to fund it and compare that against all the other plans that we have in LLA. And that's how we make capital allocation decisions. And it would be no different than what we would do in VTR. Sorry, Chris, do you want to add to that?

Yes, thank you so much.

Thanks, Cesar.

Thank you for your question. Our last question today comes from Soomit Datta of New Street Research. Soomit, please go ahead. Your line is open.

Hi, there. Thanks very much guys. A couple of questions, if I could, please. First of all, on Puerto Rico, just on the wireless business, I think on an underlying basis, the service revenue has been deteriorating there? And I guess that would be a bit of competition coming from [indiscernible] and AMX. Do you mind giving us a sense as to what's happening on the ground? Does that look like a temporary phenomenon? Or is that something we should be looking at as a risk going forward? That's one on Puerto Rico. The other quick thing, please, on Puerto Rico and U.S. merchant items. Just wondering on the funding from the SPC. I mean maybe sort of in the virgin island and Puerto Rico, can you give us a sense as to where that is kind of trending? Is that going to be kind of up or down or sort of stable. It's a reasonably big number. So that would be helpful. Thank you. And then just a final one. Sorry, if I could. Just on the -- you've kind of talked about the Networks business and there's been a kind of slight redefinition of that business. Can you give a sense as to what you're trying to achieve in terms of scale? Obviously, it sounds like you're excited about the possibility to kind of expand the operation. How much bigger can this get? And what kind of kind of capital do you need to deploy to make that happen? Thanks very much.

Okay. Soomit, hello. Let me answer your questions in the reverse order, and I'll let some of my colleagues to jump in here as well. We will start with the Networks. We've done the strategic review. And over the last few years, we've made the investments in that network, but clearly, what we would like to do going forward is make even more investments in the network based on the returns and the capital allocation decisions as I kind of described earlier with VTR. And we've identified new routes that we want to build that increases resiliency and opens up new markets to it. And we're very specific on it. I did indicate a new management team in here, Ray Collins, who leads our business there and corporate strategy is taken over in this segment, and we've done a deeper review, gone on downhaul visits with all of our employees, he's gone out and visit most of our customers, existing and new customers, and we put together kind of a review you and plan that I am very happy with. And I think it's one that we will probably look to fund the returns on this is going to be very good. And as you -- as I indicated on that business line in that segment, the free cash flow generation is pretty significant from a margin perspective. So we'll continue to make good decisions there. And -- but we are quite bullish on this segment, and we will build new routes, increase resiliency and I would say that to all our customers as well in this segment that we are back. The Mojo is back in this team, the investment is coming in, and we feel good about it. Now moving to the other two questions on U.S. Virgin…

Yes. Thanks, Balan. Hello and good morning, Soomit. Yes, I would add just to Balan's comment, the fact that there is definitely growth on our phone postpaid, it's growing in net adds, it's growing in revenue. ARPU is stable. And the difference, I think that Balan was referring to also is driven by having a lot more data devices like tablets, wearables as well as hotspot. And our churn in the market, I have to say, is equal or better than some -- the numbers you see in the mainland on the phone postpaid. So yes, there is competition on the ground, no doubt, but we are holding really well against the competition. And the hurricane actually was quite an interesting event that further highlighted the resiliency of our network, both on the mobile side and the fiber backhaul and we held it through and gross side improved after the hurricane, churn further declined as well. So we are feeling very comfortable going into Q4. And it's -- whatever we promised to our customers, we are delivering it, and that's good. So we will see the turnaround for sure in Q4 and on.

That's great color. Thanks. I can maybe follow-up after the call. I didn't quite get the point on the amortization of subsidies of handsets, right? We can kind of regroup on that.

Sure. We will get you the details and kind of explained it. It's kind of [indiscernible] when we acquired the AT&T business, we reset a lot of the amortization created new amortization. So the delta is a little bit outsized because you don't have trailing revenues to compensate for the amortization. And -- but we can get into the details with you. We anticipate that to probably wash it out in the next year or so.

Okay. That’s super. Very clear. Thank you.

Thank you. And our final question today comes from Diego Aragao of Goldman Sachs. Diego, please go ahead.

Yes. Hi, good morning, everyone. Thanks for taking my question. The first one is on VTR, and I'm sorry if I missed something from your opening remarks. Can you just comment a little bit more about the competitive dynamics in Chile considering recent market developments and maybe provide some colors on your gross additions as well as the churn dynamic in the Chilean market. And maybe I would love to get a sense on when do you expect net adds to eventually stabilize in that market. That's the first question -- this is the first question. And the second question is about your investments. Thinking about your guidance for CapEx considering this 18% of CapEx to sales ratio, how much of this is related to your first network maintenance plan? Secondly, fixed network expansion and customer upgrades. And lastly, mobile network rollout. Thank you.

Okay. Hey, Diego. Let me address the VTR and I will ask Aamir to also jump in on the investment -- the CapEx investments. On the VTR front, the competitive dynamics will continue on for a little bit. There has been consolidation of starting with this. You saw the Intel fiber-to-the-home sale and that went into a wholesale network with KKR. I anticipate there will be other such monetization consolidation as well. We think the broadband adds have stabilized. It's -- there's some minor losses, but it's stabilized. And the reason I say that is a lot of our ARPU, which was a big disconnect in that market have come back to close to the front book pricing. So a lot of our backlog. We think it's close to like a little north of 70% of our ARPU has now moved from a very high back book to close to the front book. And that's the best reset bodes well for future growth. So we've taken the pain. The second question you had on that was RGU declines when the test start. VTR was the leader in voice in that market. And clearly, that is and RGU that will continue to decline as people disconnect their voice circuit. And video has got slight declines as well. So between the two of them, you'll still see RGU declines, but our focus is on broadband. And the broadband product, you'll start to see that coming back to growth soon. And I say this in the context of not so much the competition of networks, but the competition of price. A lot of work of that, Geez we are losing because all these fiber providers. That's not really true. Why we were losing was because there were too many providers not just fiber…

Well, thank you, Balan. Good morning. I think, Balan, you've captured the essence of how we spend our capital. Our investment around broadband is key to our value proposition, and we continue to do that. So on broadband, our target really is to get as many homes on fiber as possible. And as you had mentioned earlier, on the call, we will hit close to 300,000 plus homes already. We have already hit that, and we are well on our way to complete our target for this year. We've got a three-pronged strategy. Whenever a new home build happens, it's fiber. We continue to invest in HFC, things like DOCSIS 3.1 gets us to our target of north of a gig per customer. And then we will be the first provider, I think, throughout the world who will have an opportunity to get it of all copper in our network by sometime next year. So those three strategies take a fair share of our CapEx investment. And then at the same time, we are investing in our mobile coverage improving our coverage in our markets, investing in IT transformation, investing in things like improving our overall capacity on mobile digital transformation. Those are key fundamentals of our investment thesis, and we continue to make good progress on that.

Thanks, Aamir.

[Indiscernible] very much. This was super helpful. Thank you.

Thanks, Diego.

Thank you. That concludes today's question-and-answer session. I'd like to hand the call back to Balan Nair for any additional or closing remarks.

Thank you, operator, and thanks, everybody, for joining us. Clearly, this quarter was a little choppy and the nature of our business, we remain committed to the guidance that we have for the full year. And we anticipate that when we get to the end of fourth quarter, you can clearly see the delta between third and the full year or year-to-date and the full year, I mean, that's a pretty good gap. And so we anticipate a pretty good fourth quarter and ending with meeting all of our guidances. And so thank you so much for your support, and we will talk to you again in about 90 days.

Ladies and gentlemen, this concludes Latin -- Liberty Latin America's third quarter 2022 investor call. As a reminder, a replay of the call will be available in the Investor Relations section of Liberty Latin America's Web site at www.lla.com. There you can also find a copy of today's presentation materials. Have a great rest of your day. You may now disconnect from the call.