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 Ray Collins, Chief Strategy Officer of Liberty Latin America..

Good morning, and welcome to Liberty Latin America's Full Year 2020 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'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 fact. Actual results may differ materially from those expressed or implied by these statements.

Additional information on factors or risks that could cause results to differ is available in Liberty Latin America's most recently filed Form 10-K. Liberty Latin America disclaims any obligation to update any of these forward-looking statements to reflect any change in its expectations or in the conditions on which any such statement 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 and on our Investor Relations website. I would now like to turn the call over to our CEO, Mr. Balan Nair..

Thank you, Ray and welcome everybody to our full year results presentation. I'll begin by taking you through our group highlights and operating results for each of our reporting segments before closing with an overview of our strategic focus in 2021.

Chris Noyes, our CFO will then follow with a review of the company's financial performance and our outlook. 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 get them involved 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.lla.com. Well, let's start on Slide 4 and our highlights for the year.

Operationally, we added 170,000 RGUs driven by strong performance in cable and wireless, and a record result in Puerto Rico where broadband demand drove subscriber growth of more than double of 2019 additions.

Our key financial objective is to deliver positive free cash flow in 2020, and I am pleased to say that we generated close to $115 million in a very challenging year.

In terms of momentum, even excluding AT&T's contribution, our results continued to improve in quarter four, as we reported revenue at a similar level to the pre-COVID water warrant and adjusted OIBDA, which was in fact higher than in the first quarter of the year.

We also made significant progress with our inorganic strategy as we completed the acquisition of AT&T's Puerto Rico and USs Virgin Island operations and in over 1 million mainly postpaid mobile subscribers to the grove. The operations are off to a good start, and I will cover our integration plans in more detail later in the presentation.

Finally, we continued to lean into our investment thesis despite COVID with the addition of approximately 400,000 new or upgraded homes in 2020. Over 80% of these homes will pass using fiber to the home technology, and we have exciting plans to increase our bill by 50% in 2021.

Moving to Slide 5, and a summary of our quarterly fixed and mobile subscriber ads. Starting with our fixed RGU evolution on the left of the slide, here you can see that we grew our RGU base in each quarter throughout the year with a dip in the second quarter as our market adjusted the impact at the pandemic.

One of these impacts was reduced mobility which drove higher demand for residential data connectivity as customers increasingly work and learn from home. As a result, our broadband ads contributed over 90% of our net subscriber additions in the year.

We believe that it's a significant opportunity to bring high speed connectivity to more households in the region and this underpins our organic growth strategy in the coming years. On the right of the slide, we show our mobile subscriber evolution.

Subscriber losses in the first half was primarily the result of mobility restrictions which limited our ability for customers to access services and reduce demand for top ups generally as customers spend an increasing amount of time in their homes.

In the second half, restrictions were eased across most markets and we saw a recovery in subscriber numbers. However this did not offset our first half subscriber losses. I'll cover this specific trend in more detail over the coming slides. Turning to Slide 6 in our Cable & Wireless Caribbean & Networks reporting segment.

We note that this represents the Cable & Wireless segment as reported in prior quarters. However, excluding Cable & Wireless Panama which we now disclose separately due to a change in our internal organizational structure, this change has no impact on our borrowing groups or legal structure.

Starting with the RGU trends on the left, and a similar evolution to the prior slide. We had a good year in fixed adding over 100,000 subscribers led by 92,000 ads in Jamaica, which was close to [pre-pandemic] markets 2019 performance, broadband was once again the main driver contributing over half of Jamaica's adds.

During 2020 over 80% of our new bill and upgrade volume in Cable & Wireless, Caribbean & Networks was in Jamaica which is the segments largest market. Mobile steadily recovered in the second half, once again led by Jamaica. However, we recorded losses for the year due to second quarter's adverse performance.

In the center of the slide we present an overview of our revenue mix and the sequential growth rates we saw in the fourth quarter. Our fixed operations remain robust and mobile revenue grew as prepaid recharges continue to recover. Subsea benefited from increased demand for international bandwidth and delivered healthy sequential growth of 5%.

Finally, B2B service revenues was 2% lower sequential overall. However, this is a tale of two different businesses with our LATAM operations growing, while the incumbent Caribbean market was slightly down in the quarter.

Taking subsea including intercompany revenue which is eliminated in our consolidated reporting and B2B LATAM in the aggregate this represents a business with approximately $400 million of mainly U.S. dollar revenue and an OIBDA margin above 50%.

Finally, I want to highlight that this segment actually grew adjusted OIBDA on a rebate basis in 2020 despite the impact of COVID-19. This was a great achievement by the team in a very tough year. Next to Slide 7, in Cable & Wireless Panama where we experienced the most severe COVID-19 restrictions across our operations.

This created a challenging operating backdrop leading to fixed and mobile subscriber losses in the second quarter as shown on the left of the slide which we recovered to an extent in the second half of the year as restrictions were eased.

In our residential fixed business, we delivered 35,000 net RGU ads for the year with second half additions more than offsetting second quarter's losses. Mobile app improved in the second half but were impacted by increased competitive intensity and did not recover losses from earlier in the year.

In the center of the slide you can see that revenue from each of our products grew sequentially in the fourth quarter. Note that B2B growth of 20% was driven by some significant contract wins.

As we look to continue growing our fixed operations we are focused on expanding our product and network offerings in combination with our new build activity where we added nearly 100,000 fiber to the home passings in 2020, we have also launched a hub TV platform bringing greater differentiation to our product bundle.

Overall, we believe that this business has a lot of potential given the fixed market structure and relatively a strong economic environment. Our organizational changes give Panama more senior management focus and it should provide a catalyst drive improved performance. Turning to Slide 8 in our VTR, Cabletica segment.

Starting with RGU evolution on the left of the slide, we've previously discussed the challenges we faced in Chile following the initial spike in bandwidth demand during the second quarter leading to network reliability and service issues.

We moved quickly to stabilize our networks and improve customer service and this drove better operational performance as can be seen in our RGU losses being half in Q4 compared to Q3 and really getting to flat result in January. We see the recovery. Our approach here is more detailed on the next slide.

Our Costa Rican business Cabletica continues to perform well during - adding RGUs in each quarter at 18,000 in aggregate during the year. The mobile chart in the lower left represents our business in Chile where we finished the year with 280,000 predominantly postpaid subscribers.

Store closures due to COVID-19 and a highly competitive market environment drove to softer performance year in second half. Moving to the center of the slide and revenue by product.

In contrast with the Cable & Wireless business, fixed residential services are by far the largest product in the VTR, Cabletica reporting segments contributing 90% of revenue and up 3% sequentially in Q4. Finally a key segment of our group strategy in 2021 is to accelerate our fiber-to-the-home new build program.

Across Chile and Costa Rica, we are planning to build more than 400,000 new homes which is a significant uplift on the 2020 activity. On Slide 9, we wanted to highlight some of the metrics that we as a management team have focused on as we look to improve operational and financial trends at VTR.

In the upper left, we show significant reductions in both the daily number of technical calls to our representatives and our capital rate of 73% and 49% respectively. These improvements follow previously discussed targeted network and customer service investments.

The points below the chart summarizes key pillars of the framework we are using to approach network and customer experience. Additional measures of our operational improvements are presented in the central charts with a reduction in an intent to disconnect and increase in retention rates over the past months.

Finally, on the upper right of the slide, we show how our new build ambitions in 2021 compares to prior years. A significant and exciting step up which we believe will reinforce our platform for sustained growth.

From a return on investment perspective, we have been successful in driving down the cost to pass home to fiber making these projects very attractive. Turning to Slide 10 and our best performing business in 2020, Liberty Puerto Rico. Starting with our RGU trends in the left of the slide.

As I mentioned earlier, 2020 was a record year for the business with 121,000 net RGU additions. Broadband net ad has contributed two-thirds of total RGU growth and as shown in the lower chart, our broadband base grew by nearly a quarter in the year.

To put this into perspective, Charter, Comcast and Altice USA grew their broadband subscribers by around 8%, 9%, 7% and 4% respectively in 2020. In the center of the slide, we wanted to provide a view of 2024 Puerto Rico operations including a full year for the AT&T business we acquired at the end of October.

We really like this market as you can see the acquisition provides a significant step up in scale making the combine business to $1.4 billion of revenue and over $0.5 billion of adjusted OIBDA.

One of the primary reasons we see a differentiated converge opportunity in Puerto Rico is that over 80% of our mobile service revenues come from postpaid customers. Finally we continue to innovate and invest in our networks to maintain a leading position in Puerto Rico. We are rolling out our hub TV platform and continuing to build out our footprint.

We passed 1.1 million out of a total of 1.4 million homes in Puerto Rico as at the end of 2020 and plan to continue to go. And this is further assisted by the Uniendo funding we have won, to improve broadband speeds in 43 municipalities out of 78 across the island, including San Juan and the other key metro areas.

On Slide 11, we provide an update on the integration work in Puerto Rico. Our key focus areas are - firstly to integrate and grow as a single company. This process began on day one of the acquisition and we are making good progress establishing a common culture.

Secondly, I've talked previously about leveraging our product suite and putting together a great proposition for our customers. This is already happening with our welcome offer, which had 20% enrollment of the week and continues to grow. The offer involves free fixed broadband speed upgrades - if a customer is fixed and mobile services business.

Thirdly, it is vital to ensure that service levels are not compromised as we move to a new mobile call and new operations and business support systems. We have a comprehensive TSA agreement with AT&T to help us here and we’re confident we can move to these new platforms with minimal friction.

Fourth, and something that is particularly exciting, we are creating a converged play in the market, which enables us to differentiate our product offerings, but also adds resilience given the fiber backbone and 5G mobile networks we now have.

And fifth, we have a unique opportunity to lead with digital channels and services as we create new IT platforms for the new business. Overall, I am very excited about the value we can generate for our customers, and other stakeholders through this acquisition.

Finally, to Slide 12 and our strategic focus areas as we look at 2021 as well as longer term shareholder value creation. First, we expect to recover and grow across our markets as the economic backdrop improves. In Chile and Panama specifically, we anticipate better transforming the operational actions we have taken in 2020.

Secondly, with respect to our commercial approach, we remain focused on product innovation and are distributing our hub TV products as we roll out new fiber-to-the-home networks. We are also developing a self install capability, which should both improve customer experience and drive cost efficiencies in the future.

Thirdly, we will continue to lean into our broadband penetration thesis for the region and add or upgrade approximately 600,000 mainly fiber-to-the-home - homes in 2021, a material ramp in activity from 2020. Fourth, our costs focus, Chris will talk to the numbers here in more detail in his section.

However, I would note that, we've made good progress since becoming a separately - listed company. And this remains an area where we see significant potential to improve and drive value.

Finally to M&A, our near-term focus is on integrating the assets acquired from AT&T, and closing the acquisition of Telefónica's Costa Rica business, which we anticipate will happen December some time. We see inorganic opportunities as a core driver of value creation in our region, but only if done at the right value.

We are very disciplined in our process to freeze assets and accretive levered free cash flow per share remains a key metric. With that, I'll pass you over to Chris Noyes, our Chief Financial Officer who will talk you through our financial performance, before we take your questions.

Chris?.

Thanks Balan. I’ll start on Slide 14 with our financial results. Two quick housekeeping items, our 2020 results include Liberty Mobile formerly AT&T Puerto Rico for the post acquisition period, which is for the last few months of Q4.

And as mentioned we are now showing Cable & Wireless Panama as a separate operating segment, reflecting the change in reporting lines. However, our Cable & Wireless credit silo will still include CWP within its results. In the upper left, we reported Q4 revenue of $1.1 billion including a $174 million in revenue from Liberty Mobile.

This compares to $975 million for Q4, 2019. Our Q4 result reflects a modest 1% year-over-year rebase decline much improved versus both Q2 and Q3 rebased levels, driven a large part by our strong quarterly performance in Puerto Rico. For the full year, we generated revenue of $3.8 billion for an annually rebased decline of 3%.

Moving to adjusted OIBDA we posted $428 million or 4% rebased decline for Q4 and $1.5 billion or a 2% rebased decline for the full year. Liberty Mobile contributed $56 million of adjusted OIBDA in the quarter.

Rebased performance in the quarter included a $13 million of net decremental impact in certain non-recurring items, primarily related content accrual of holding tax adjustments and disclosing our earnings release. Our key new additions in the bottom left of the slide were $188 million in Q4 or 17% of revenue.

This result brings our 2020 total to $641 million or 17% of revenue, which was a 100 basis points lower than our year ago pre-COVID 2020 target. For 2021, we are targeting a modest increase to approximately 80% of revenue for key new additions.

As Balan mentioned, we are planning to build approximately 600,000 homes in 2021, a substantial increase over 2020. And we'll have integration CapEx in Puerto Rico, as we embark on our three-year plan to fully integrate the business.

Moving to the bottom right, we generated $89 million of adjusted free cash flow in Q4, helped in part by a positive contribution from our newly acquired mobile operations in Puerto Rico. For the full year, we delivered $148 million in adjusted free cash flow comfortably achieving our COVID adjusted target, a positive free cash flow for 2020.

For 2021, we are targeting approximately $200 million of adjusted free cash flow which is more than a 30% increase over our 2020 results. Slide 15 highlights our continued recovery from Q2.

Excluding the impact of Liberty Mobile, our Q4 revenue of $923 million was nearly back to Q1 levels and our Q4 adjusted OIBDA of $370 million surpassed Q1 adjusted OIBDA by 2%. As we look to 2021, we expect to build momentum as we go through the year with Q1 being our toughest comp and as we begin to lap COVID impacts in Q2.

Additionally, Q4 to Q1 on an apples-to-apples basis typically steps down due to general seasonal factors. And Slide 16, we present our Q4 financial results and quarterly adjusted OIBDA evolution by segment. Starting in the left, with C&W Caribbean and Networks, we generated $428 million of revenue and $182 million of adjusted OIBDA in Q4.

Year-over-year Q4 revenue was 4% lower on a rebate basis with 2% growth in fixed residential revenue was more than offset by COVID impacts across our mobile and B2B businesses, which were 14% and 3% lower respectively.

As highlighted earlier, our rebased adjusted OIBDA declined for this segment of 10% for Q4 is in due large part to roughly $13 million of net non-recurring items. Despite these headwinds and the impact of COVID, C&W Caribbean and Networks grew adjusted OIBDA by 1% for the full year on a rebate basis and we achieved a 42% adjusted OIBDA margin.

The bottom chart highlights, our sequential improvement as our Q4 adjusted OIBDA result was $5 million higher than Q3 and nearly back to Q1 levels. Moving to our new segment Cable & Wireless Panama, across LLA, our Panama business has suffered from the most stringent COVID-related lockdowns.

Q4 revenue of $131 million and adjusted OIBDA $51 million or 19% and 13% lower on a rebased basis respectively as compared to the prior year period. Our year-over-year revenue result was driven primarily by double-digit declines in B2B and mobile.

Sequential to Q3, the business has continued to recover as quarterly adjusted OIBDA was $8 million or 19% higher. In fact as the bottom chart highlights, we delivered our strongest adjusted OIBDA quarter of 2020 in Q4.

Turning to VTR in Chile and Cabletica in Costa Rica, we reported Q4 revenue of $244 million reflecting year-over-year rebased decline of 3%. The rebased year-over-year decline was driven in large part by volume losses and ARPU pressure in VTR which more than offset continued rebased revenue growth in Cabletica.

VTR Cabletica closed at $89 million of adjusted OIBDA in Q4, which was 15% lower than the prior year period on a rebased basis. The year-over-year decline was driven by and increased operating expenses at VTR as we invested in our networks and customer service initiatives.

And through a lesser extent, a $3 million adverse FX impact of non-functional currency exposure in Chile. We laid into the depreciation of a Chilean peso to the U.S. dollar. Sequentially, the Q3 adjusted OIBDA was $4 million lower. However, it was above the $86 million posted in Q2.

Finally, to our strongest performing segment Liberty Puerto Rico, as Balan mentioned our business in Puerto Rico had both the strong Q4 in 2020. With too much of contribution from Liberty Mobile in the quarter, we deliver $296 million of revenue and $116 million of adjusted OIBDA processing double-digit rebase growth rates.

Our cable business continued to build momentum throughout 2020. In fact, our top line growth in Q4 excluding the impact of Liberty Mobile was our best of the year at roughly 50% rebase growth year-over-year. This result was due in large part to over 120,000 RGUs added over the last 12 months.

The newly acquired business contributed $174 million of revenue and $56 million of adjusted OIBDA in the quarter achieving double-digit rebased growth as well. Liberty Mobile’s growth was primarily driven by combination of revenue increases driven by strong postpaid ARPU, positive outlook roaming as well as equipment sales.

For 2021 it’s important to note that we expect to increase significant immigration costs in Puerto Rico as we begin to work off full year TSA for AT&T and operate on a standalone basis. During 2021 we estimate that we will incur integration operating costs of $35 million to $40 million in CapEx and integration costs of $25 million to $30 million.

In terms of benefits we anticipate generating $10 million of synergies in 2021 and a ramp towards our full run rate expectation of $70 million by the end of our integration. Moving to Slide 17 we have managed our cost and CapEx base well throughout the pandemic.

Our 2020 efforts allowed us to maintain our adjusted OIBDA margin in the 39% to 40% range while absorbing revenue contraction across many of our markets the inclusion of Liberty Mobile in Q4 compressed our full year LA margin by a 40 basis points as Liberty Mobile’s margin was 32% for the two months.

The little chart highlights our nearly 200 basis point drop and P&E additions from 2019 even though we continue to invest in new build capacity expansion and subscriber growth. The net impact as outlined in the right hand chart that we progressed our adjusted OIBDA less additions to 23% of revenue a solid increase from 2019 levels.

This metric is a key focus of ours as we have to further improve our future efficiency levels. Slide 18 summarizes out of the liquidity and credit profile at year end we reported $8.5 billion of total debt a $900 million of cash and $1.1 billion of availability under our RCF.

During Q4 we funded the AT&T transaction and we paid our outstanding C&W RCF. As previously highlighted our funding for the Telefónica Costa Rica acquisition is all set. We will use local borrowings of nearly $300 million and anticipate the remainder will come from cash on hand as well as a pro rata contribution from our local partner in Costa Rica.

We finished Q4 with growth in that leverage of 4.8 times and 4.3 times respectively. Our ratios on an LTQA basis on adjusted OIBDA and we gave four factor liberty mobile for the entire six month period. Turning to our debt maturity schedule on the right of the slide we made great progress during 2020 and turning out our debt at attractive rates.

We do not have any significant maturities over the next five years as about 85% of our debt is due in 2026 and beyond. Hopefully, [swap] island cost is in the low 60s and most of our debt is trading above par today implying even lower market yields. In 2021 we refocused on refinancing UTRs local term loans that mature over the next two years.

Turning to Slide 19, I'll wrap up our prepared remarks today. Continuing the theme from Q3 we sequentially improved both our absolute dollar revenue and adjusted OIBDA and maintained quarterly fixed and mobile subscriber additions. Definitely a solid improvement from our Q2 COVID impacted yields.

As both Balan and I have highlighted today our collective yields that will continue to take time for our markets to fully recover from the impacts of COVID and for commerce to return more broadly. It is also fair to assume our regions are reasonably lagged in US in terms of recovery and vaccination modes.

We are managing our business for the next couple of years with that in mind.

We as management teams are focused on what we can control, grow volume and market share, innovate for and service our customers, invest in new build and transformation and continue to reset our cost base, so this will benefit from incremental operational leverage as our markets recover.

Importantly with our ability to generate free cash flow across our operating businesses we are committed to investing for future growth. And we are targeting approximately 18% of revenue and P&E additions in 2021.

The key to our story and one that will become apparent in the coming quarters is the anticipated beneficial impact of Liberty mobile one that will underpin our free cash flow generation. There's a lot of integration including systems work to be done, but the business came in stronger than expected and things are progressing well.

Secondly, closing the Costa Rican transaction this summer will, strengthen our market leading cable business and we remain very excited about fixed-mobile convergence in that market.

Finally, not only are we planning for growth and revenue and adjusted OIBDA in 2021, we'll continue to drive towards higher adjusted free cash flow as our goal is to have approximately $200 million in 2021. We believe this is the right balance for LLA leading further while our markets have recovered. With that operator, we’re ready to take questions..

[Operator Instructions] And we will hear first from James Ratcliffe with Evercore ISI..

Thanks for taking the question. Two if I could, first of all on subsea, thanks for the color on that business. And that seems like the kind of infrastructure asset that's, really getting great multiples out there right now. Can you talk about, is that business to any degree separable from the rest of the business.

And secondly, can you talk about what the rationale for changing the structure to have Panama report directly versus being part of Cable & Wireless? Thanks..

Thank you. Well, I'll say, I think your point is just right on the subtheme for our business. And I think over the next quarters or so we'll give you and everybody more clear line of sight into that business, but we kind of highlighted already. It's a very good OIBDA business of $400 million in revenue all U.S. dollars.

We're quite excited about that asset. I think over the next quarters, you'll get more visibility to it. It's positive. On Panama, I think you know Panama you can clearly see the numbers there. And we are very focused on it. We have a great government partner there. We are very excited about that part of the world.

We think in Central America, Panama and Costa Rica, the two best markets. I mean both of them. And you'll see when we put more - I think it's probably a good thing, that we're going to put more attention on Panama. And over the next quarters on that to I think - stay tuned, you'll start to see some positive outcomes there..

We’ll now move to our next caller and we'll hear from Michael Rollins with Citi..

I'm curious on two things, if I could, the first could you give us an update on the framework for the overall strategy.

If you look out over the next three to five years, how do you think that the evolution of your assets both geographically as well as the product mix that you would like to have in each country or a country on average? And then just secondly, and maybe within this context, as investor try to contemplate where you may go next, can you highlight where your largest priorities are in terms of filling needs for the portfolio or where there might be, just market that you feel like are underpenetrated relative to their natural opportunity set? Thanks..

Sure, sure Michael, let me start by saying we are very happy with the geography that we are currently in. And I think we are in the best parts of Latin America and Central America and the Caribbean.

And we see quite a bit of growth opportunity still, broadband penetration its low fixed broadband, LTE penetration is low, B2B our play in B2B is also low. So we see, if I look over the next couple of three years the levers of growth was, certainly comes from our network expansion. It comes from getting to new products in B2B.

We’re quite excited about that. It also comes from the fact that we see lots of opportunities in our existing business on expanding margins in both our OpEx and CapEx. And I say that in the context of especially on CapEx it's not so much that - cut CapEx, because we are still very bullish on building out.

It's our cost for builds keeps getting better and better. So there's a number of growth drivers still in front of us on our existing geography, where we would expand would really depend on what's available out there. We are very opportunistic and there are a number of places that we like, but I can clearly tell you where we probably won't be in.

We won't probably be in Argentina. We definitely won't be in Venezuela. We are highly unlikely to be in Brazil, but the rest of Latin America - I think you know it's good - it's part of why we're in this region - the thesis is strong..

We’ll now move to Soomit Datta with New Street Research..

Couple of from me please - and just first of all on Chile - and you've guided up on the number of homes perhaps - that's a pretty big increase. I know some of it's in - Costa Rica, but obviously most of it is in Chile.

Can you give - just a little bit more color on that please? And then kind of interested in the new expansion areas - and what kind of areas are we talking here? And is that already existing with high-speed coverage, are you - or you going to be the first guy in - this area with a genuine high-speed product? And can you maybe sort of lay a path out for penetration of these new homes - how should we assume a similar rate and over time as - with your existing penetration or is that - maybe they'll be lower or take a little bit longer - if you could give a bit of color there and that would be super helpful? Thank you.

And then secondly, if I could, just on Puerto Rico question for Chris really - the EBITDA as you say came on - at a slightly higher number - it's only two months - it's a bit hard to kind of read too much into that maybe.

But if I annualize that it’s kind of $336 million - it's probably 10% ahead of where I was at? Is it the kind of a slightly higher base, we should think about going forward or maybe just, are you annualizing two months of contribution? Thank you..

All right Soomit, - look we'll get to both questions, I'll ask Guillermo also - you know jump in there - here in a bit. We see the runway in Chile to be very promising. It's still - you know we think with at least four to five years more builds that we can do there.

The increase home pass that we’ve targeted for 2021 is mostly because we see great opportunity in some of the B, C and even some of the D neighborhoods. And this is mostly because we’ve been able to drive our cost per home passed down very low.

And we actually where we’ve done trails where we’ve actually gone in, we’ve seen take rates that sometimes you must have passed where we were at A and B neighborhood. So, it’s quite positive. Then let me ask Guillermo, if you can just add on his view on the commercial front of these new builds..

Yes, thank you, Balan and good morning, Soomit. As Balan pointed out, we see a very exciting opportunity and continue to expand our current $3.8 million footprint to further cities and further municipalities in Chile.

We already started doing that during 2020 with close to 190,000 new homes added in - as you can see in the slide deck with very positive results. We are building all our new homes in fiber-to-the-home.

And we will continue doing that, providing accessibility and better quality to neighborhoods that historically had not - had such kind of products in the country. So very exciting - opportunity and also very proud of narrowing the digital gap in our country, which is I think that continues to improve over time..

Thanks Guillermo, maybe Chris can give some on the Puerto Rico OIBDA?.

Yes, I think obviously the, two mindset the talent of the year - typically as we have seen in our other businesses Q4 tends to be a pretty strong time for the mobile businesses. So I wouldn't - necessarily suggest annualizing those two months at this point. We did give in balance slide the full year 2020 number.

So as a reference point for folks on the OIBDA - revenue and OIBDA side, I would also caveat as we go into 2021. We do have you know the business didn’t come with the back office and standalone costs. We will be incurring those as we operate the business.

And as I highlighted in 2021 we have a pretty sizable amount of integration OpEx in the business as well as CapEx. So that that kind of get us moving towards being able to reap the synergies as we look out in year two, year three et cetera. So hopefully that provides a little bit of color for you Soomit..

It's really helpful.

Can’t you - sorry just quickly check the free cash flow guide that is after all of the integration expenses you’ve highlighted?.

Most certainly it is..

And Matthew Harrigan with Benchmark, has the next question..

If you read the press report I guess - you know Pope Francis want to go back to Argentina although that could actually be Liberty International Day. So I think [indiscernible] working for Tony Werner back in January and kind of droning.

I was just curious when you look at the fiber-to-the-home and you're obviously not throwing that out in the more affluent areas I assume? Because just were already picked-off by HSC networks long time ago, but the people were you have apples-to-apples that really conclude the OpEx, CapEx structure is pretty superior.

I know this one operator in Denmark and clearly I'll teach you, today’s it’s pretty active.

Do you have any comments there? And then as you get a convergence in these technologies and the latency between DOCSIS and 5G and DOCSIS 3.1 down the low milliseconds? Do you feel like there's even more utility for your network for 5G and our 5G is a ways off in some of these markets, but inevitably gets there.

And it feels like you've got a great opportunity to having all the quad play, engineering, in-house versus having to take a bit of a hodgepodge approach like some of the U.S. operators? Thank you..

Matthew, okay. Let me see, if I can - unpack all your questions there. One, I'll start with the fact that HFC is still strong, viable and an amazing network. We are not worried at all competing with fiber-to-the-home where we have HFC.

And I'll say that for a couple of reasons one, the plan that we have for the most part all being upgraded to 1 gigahertz and path. So you’ve tremendous amount of capacity on it. Secondly, HFC is actually one of the most reliable as well as very low maintenance type network unlike Christopher, and all these other networks.

Now, I'll tell you fiber-to-home obviously is better, but it doesn't mean that you cannot compete. Just look at the United States when you look at Charter and Comcast going up against Verizon, FiOS, AT&T, fiber-to-the-home or Google fiber and you win every day. And we have them for the longest time as well.

Now, having said that all our new builds going forward will all be fiber-to-the-home, and that's what we'll do. And we're not doing that for any other reason than one, we've got the cost price point now to where it just make sense to do fiber-to-the-home.

Now the second question that you had on 5G backhaul, we have never had plans to use HSC for 5G backhaul, as a matter of fact not even for 4G backhaul. We actually run fiber directly to these sites. So we’ve always used HFC as a consumer play, not necessarily a backhaul B2B play..

Now moving to Kevin Roe, Roe Equity Research..

A couple of questions first on Panama.

Do you think, is your crystal ball showing this could be the year for mobile consolidation? And on M&A in general you clearly reiterated your disciplined M&A strategy and the free cash flow accretive benchmark? But has COVID altered your appetite at all or changed your return thresholds for acquisition targets has COVID over the past year bubbled up any new opportunities or closed the doors on some?.

Yes, hey Kevin, on Panama let me say that we've always thought that mobile consolidation that makes sense. And we've all always said to be a buy you have to have a seller. And right now everybody says this, not everybody, but at least a couple said they are sellers.

But we've not been able to convince them that selling means actually selling at a price that makes sense to everybody. So as a result not much of move in Panama and, but I remain optimistic over time that it will get rational. And something will break loose there.

On the M&A front, you're right, we're very disciplined and to your question does COVID increased opportunity? I think all the opportunities out there are well known and of course - we look at everything that becomes available. We are quite opportunistic. You know levered free cash flow per share remains a key metric. It’s not the only metric.

There is quite a few metrics that we look at, but it is one of the key metrics that we look at. And does COVID give us more opportunity or makes us more cautious? No, I think our approach has been the same pre-COVID and post-COVID. If anything on COVID that makes it maybe a little harder it’s because you know where our equity stands.

And therefore, returns are judged on a capital allocation basis here, I mean where we have been - and buying back stock if it’s more accretive to us than making the acquisition we do that.

And if you look at where our stock is at right now, you need a pretty high hurdle, to justify, allocating capital to an acquisition as opposed to your internal project. And that’s how we look at it and its just straight math for us.

And so - and therefore it makes it easy, there is purity in our decision making here that makes it very, very, very non-emotional at all in M&A..

So, following up on that comment, could we see share repurchases returning at some point in 2021?.

Well, you know the Board has authorized this, I think $100 million in share repurchases over a period of two years. And you see what we are doing with new builds. You’re seeing a lot of things. So if you look at capital allocation - from our first choice of course is always going to be high return internal projects where we put money to work.

And then you've got inorganic activity, buybacks, paid on debt doing dividends. The last two is probably very low likelihood in this company. But right now, we've got lots of exciting projects and you can see we're guiding to some pretty nice free cash flow for a very, very tough couple of years..

And we'll take our last question today from Nitin Sacheti with Papyrus Capital..

Hi, just expanding on James's question, can you just talk about the subsea business and just how strategic you see in long-term.

I mean if you think about that Altice USA multiple on their fiber backbone and your $400 million and 50% EBITDA margin it's effectively the majority of your market cap? So I guess, if you could talk about that as you see this asset a strategic long-term or a source of funding for M&A?.

Hello, Nitin. Thanks for the question. Yes, I think the subsea business clearly right now we're not getting any credit on the some of the parts. And Chris and I've been thinking about this and you know how we crystalized and give people more clear view on the value of this asset. And there are many strategic opportunities in front of us.

Clearly, you can imagine if other things trade all the usual suspects are knocking on our doors as well and asking the same question. Listen, what we need to do internally.

This is not an easy separation if you want to separate the business, but we're working on at least the first stages of putting the math together and doing some of the legal work and the accounting work. So that people can really see the value of the standalone asset. It is a very strategic asset.

It's one of the best assets in the Caribbean and Central America, and it's great technology, a lot of growth potential in it. We've got great customers on it. We are one of the larger customers on it. I think I've got them in my best interest to say this, but I think it's one of the best subsea network.

And then when you link it by the way to the B2B deal circuit office. So, on the landing stations we actually expanded off the landing stations. We put in seals teams. We've got a management team that runs it. It's a pretty significant business very well linked.

So our sales teams can sell both like an Ethernet product or private line product in a country like Colombia as well as tied back onto a backhaul off a landing station. So it makes a very seamless transition as well. So it's a great asset. It's clear to the management team and I that we probably need to bring better view to do that.

But clearly, some of the parts did not reflect this really valuable thing that we have in our portfolio. ..

And that will conclude today's question-and-answer session. I'd like to turn the call back to Balan Nair, for any additional or closing remarks..

Thank you, Operator. Well, I'll tell you 2020 was probably one of the hardest years that - my management team and I’ve experienced, just because the nature where we operate. But we started this last year, we started the pandemic period with lots of concerns. We made some moves last year. If you recall we drew down the credit lines.

We were really, really worried. I’ll tell you at the end of the year and sitting where we are right now. We could not have imagined being a better spot. Now having said that, I’ll tell you 2021 is still tough. We’ve guided a free cash flow in number. It is not entirely clear that we are out of the woods yet.

In many where we operate, there are still curfews in the evenings. There are still lockdowns on weekends. And so, this is not super clear yet, and I imagine cruise ships will not be hitting the oceans in the Caribbean until perhaps November after the hurricane season this year. So our management team is focused on our cost.

It’s focused on cash collection. It’s focused on our revenue. It’s focused on where we can find growth and being very creative. It’s focus on getting Panama back in order. It’s focusing getting Chile back on track. These are things that we are focused on our management team and we are convinced - that we can execute. We're not out of the woods.

But there’s light at the end of the tunnel. Thank you very much for all your support. And we'll talk to you in 65, 70 days..

Ladies and gentlemen this will conclude the Liberty Latin America's full year 2020 investor call. As a reminder, a replay of the call will be available on the Investor Relations section of Liberty Latin America's website at www.lla.com. There you could find a copy of today's presentation materials. You may now disconnect..