Liberty Latin America Ltd. - Annual Report: 2019 (Form 10-K)

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Item 1.	BUSINESS

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•	the disposition on November 5, 2019 of Cable & Wireless Seychelles based on an enterprise value of approximately $104 million to a consortium of local investors (the Seychelles Disposition);

•	entry into a stock purchase agreement on October 9, 2019 with certain subsidiaries of AT&T Inc. (AT&T) to acquire AT&T’s wireless and wireline operations in Puerto Rico and the U.S. Virgin Islands in an all cash transaction valued at approximately $1.95 billion on a cash and debt-free basis, subject to certain adjustments (the AT&T Acquisition);

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the acquisition on March 31, 2019 of an 87.5% stake from the government of Curacao in United Telecommunications Services N.V. (UTS, and the acquisition, the UTS Acquisition), which provides fixed and mobile services to the island nations of Curacao, St. Maarten, St. Martin, Bonaire, St. Barths, St. Eustatius and Saba, and on September 10, 2019 of the remaining 12.5% from the government of St. Maarten, each in an all cash transaction;

•	the acquisition on October 17, 2018 of Searchlight Capital Partners L.P.’s 40% interest in both Leo Cable and Leo Cable L.L.C., which in turn gave us 100% ownership of Liberty Puerto Rico, in exchange for 9,500,000 unregistered Class C common shares;

•	the acquisition on October 1, 2018 of an 80% stake in Cabletica (the Cabletica Acquisition), which is a leading cable operator in Costa Rica that provides television, broadband internet and fixed-line telephony services to residential customers, from Televisora de Costa Rica S.A. in an all cash transaction;

•	the acquisition on May 16, 2016 of C&W, a full-service telecommunications operator with a well-recognized and respected brand that has been in use for more than 70 years; and

•	the acquisition on June 3, 2015 of Choice Cable TV, a cable and broadband services provider in Puerto Rico, which has been integrated into our Liberty Puerto Rico operations, in an all cash transaction.

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•	economic and business conditions and industry trends in the countries in which we operate;

•	the competitive environment in the industries in the countries in which we operate, including competitor responses to our products and services;

•	fluctuations in currency exchange rates, inflation rates and interest rates;

•	instability in global financial markets, including sovereign debt issues and related fiscal reforms;

•	consumer disposable income and spending levels, including the availability and amount of individual consumer debt;

•	changes in consumer viewing preferences and habits, including on mobile devices that function on various operating systems and specifications, limited bandwidth, and different processing power and screen sizes;

•	customer acceptance of our existing service offerings, including our video, broadband internet, fixed-line telephony, mobile and business service offerings, and of new technology, programming alternatives and other products and services that we may offer in the future;

•	our ability to manage rapid technological changes;

•	the impact of 5G and wireless technologies;

•	our ability to maintain or increase the number of subscriptions to our video, broadband internet, fixed-line telephony and mobile service offerings and our average revenue per household;

•	our ability to provide satisfactory customer service, including support for new and evolving products and services;

•	our ability to maintain or increase rates to our subscribers or to pass through increased costs to our subscribers;

•	the impact of our future financial performance, or market conditions generally, on the availability, terms and deployment of capital;

•	changes in, or failure or inability to comply with, government regulations in the countries in which we operate and adverse outcomes from regulatory proceedings;

•	government intervention that requires opening our broadband distribution networks to competitors;

•	our ability to obtain regulatory approval and satisfy other conditions necessary to close acquisitions and dispositions, and the impact of conditions imposed by competition and other regulatory authorities in connection with acquisitions, such as the AT&T Acquisition;

•	our ability to successfully acquire new businesses and, if acquired, to integrate, realize anticipated efficiencies from and implement our business plan with respect to the businesses we have acquired or that we expect to acquire, such as with respect to the AT&T Acquisition;

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•	changes in laws or treaties relating to taxation, or the interpretation thereof, in the U.S. or in other countries in which we operate;

•	changes in laws and government regulations that may impact the availability and cost of capital and the derivative instruments that hedge certain of our financial risks;

•	the ability of suppliers and vendors, including third-party channel providers and broadcasters (including our third-party wireless network provider under our mobile virtual network operator (MVNO) arrangement), to timely deliver quality products, equipment, software, services and access;

•	the availability of attractive programming for our video services and the costs associated with such programming, including retransmission and copyright fees payable to public and private broadcasters;

•	uncertainties inherent in the development and integration of new business lines and business strategies;

•	our ability to adequately forecast and plan future network requirements, including the costs and benefits associated with our network extension and upgrade programs;

•	the availability of capital for the acquisition and/or development of telecommunications networks and services, including property and equipment additions;

•	problems we may discover post-closing with the operations, including the internal controls and financial reporting process, of businesses we acquire, such as with respect to the AT&T Acquisition;

•	piracy, targeted vandalism against our networks, and cybersecurity threats or other security breaches, including the leakage of sensitive customer data, which could harm our business or reputation;

•	the outcome of any pending or threatened litigation;

•	the loss of key employees and the availability of qualified personnel;

•	changes in the nature of key strategic relationships with partners and joint venturers;

•	our equity capital structure;

•	changes in and compliance with applicable data privacy laws, rules, and regulations;

•	our ability to recoup insurance reimbursements and settlements from third-party providers;

•	our ability to comply with economic and trade sanctions laws, such as the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC); and

•	events that are outside of our control, such as political conditions and unrest in international markets, terrorist attacks, malicious human acts, hurricanes and other natural disasters, pandemics and other similar events.

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(a)

In September 2019, Hurricane Dorian impacted certain islands of the Bahamas, resulting in significant damage to homes, businesses and infrastructure. For those areas of the Bahamas impacted by Hurricane Dorian, the homes passed and subscriber counts reflect the pre-hurricane homes passed and subscriber counts as of August 31, 2019 as adjusted through December 31, 2019 for net voluntary disconnects. We are still in the process of assessing the impact of the hurricane on our networks and subscriber counts. The impacted areas in the Bahamas include approximately 30,200 homes passed, 7,700 telephony RGUs, 3,800 internet RGUs, 900 video RGUs, 4,400 postpaid mobile subscribers and 36,500 prepaid mobile subscribers. For those areas of the Bahamas not impacted by Hurricane Dorian, the homes passed and subscriber counts reflect counts as of December 31, 2019.

(b)	C&W's "Other" category includes subscriber data related to UTS. Subscriber information for UTS is preliminary and subject to adjustment until we have completed our review of such information and determined that it is presented in accordance with our policies.

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(c)	Mobile subscribers are comprised of the following:

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(1)	Percentage of total homes passed that are two-way homes passed.

(2)	Percentage of two-way homes passed served by a cable, fiber-to-the-home/-cabinet/-building/-node (FTTx) or digital subscriber line (DSL) network, as applicable.“VDSL” refers to both our DSL and very high-speed DSL technology networks.

(3)	Percentage of total homes passed that subscribe to cable television services (basic video or enhanced video).

(4)	Percentage of two-way homes passed that subscribe to broadband internet or fixed-line telephony services, as applicable.

(5)	Percentage of total customers that subscribe to two services (double-play customers) or three services (triple-play customers) offered by our operations (video, broadband internet and fixed-line telephony), as applicable.

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(1)	These are the primary systems used for delivery of services in the countries indicated. “HFC” refers to hybrid fiber coaxial cable networks.

(2)	Represents an average as speeds vary by market.

(3)	Fastest available technology. “LTE” refers to the Long Term Evolution Standard.

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•	VoIP and circuit-switch telephony, on-premise and hosted private branch exchange solutions and conferencing options, hosted contact center solutions;

•	Data services for internet access, virtual private networks, high capacity point-to-point, point-to-multi-point and multi-point-to-multi-point services, managed networking services such as wide area networks and WiFi networks;

•	Wireless services for mobile voice and data;

•	Interactive TV service with specialized channel lineups for targeted industries; and

•	Value added services, including cloud IT services such as disaster recovery as a service, backup services, and IaaS; managed network security services; and specialized services such as digital signage, retail analytics and location based marketing.

•	recapturing bandwidth and optimizing our networks by:

◦	increasing the number of nodes in our markets;

◦	increasing the bandwidth of our hybrid fiber coaxial cable networks;

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◦	converting analog channels to digital;

◦	bonding additional data over cable service interface specification (DOCSIS) 3.0 channels;

◦	deploying VDSL over our fixed telephony network;

◦	replacing copper lines with modern optic fibers; and

◦	using digital compression technologies.

•	freeing spectrum for high-speed internet, VoD and other services by encouraging customers to move from analog to digital services;

•	increasing the efficiency of our networks by moving headend functions (encoding, transcoding and multiplexing) to cloud storage systems;

•	enhancing our network to accommodate further business services;

•	using our wireless technologies to extend services outside of the home;

•	offering remote access to our video services through laptops, smart phones and tablets;

•	expanding the availability of next generation decoder and set-top boxes and related products, as well as developing and introducing online media sharing and streaming or cloud-based video; and

•	testing new technologies.

•	proposition (meeting and exceeding our customers’ expectations on content and entertainment);

•	product (enabling access anywhere and anytime, including live, catch-up and/or VoD);

•	acquisition (investment in the most relevant channels, VoD content and sports); and

•	partnering (strategic alliances with content partners and leading distributors).

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•	net neutrality principles mandating equal access to all content and applications regardless of the source and without favoring, degrading, interrupting, intercepting, blocking access or throttling speeds;

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Video. The provision of cable television services requires a franchise issued by the TRB. Franchises are subject to termination proceedings in the event of a material breach or failure to comply with certain material provisions set forth in the franchise agreement governing a franchisee’s system operations, although such terminations are rare. In addition, franchises require payment of a franchise fee as a requirement to the grant of authority. Franchises establish comprehensive facilities and service requirements, as well as specific customer service standards and monetary penalties for non- compliance. Franchises are generally granted for fixed terms of up to ten years and must be periodically renewed.

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Internet. Liberty Puerto Rico offers high-speed internet access throughout its entire footprint. In March 2015, the FCC issued an order classifying mass-market broadband internet access service as a “telecommunications service,” changing its long-standing treatment of this offering as an “information service,” which the FCC traditionally has subjected to limited regulation. The rules adopted by the FCC prohibited, among other things, broadband providers from: (i) blocking access to lawful content, applications, services or non-harmful devices; (ii) impairing or degrading lawful internet traffic on the basis of content, applications, services or non-harmful devices; and (iii) favoring some lawful internet traffic over other lawful internet traffic in exchange for consideration (collectively, 2015 Restrictions). In addition, the FCC prohibited broadband providers from unreasonably interfering with users’ ability to access lawful content or use devices that do not harm the network, or with edge providers’ ability to disseminate their content, and imposed more detailed disclosure obligations on broadband providers than were previously in place. On December 14, 2017, the FCC adopted a Declaratory Ruling, Report and Order (the 2017 Order) that, in large part, reversed the regulations issued by the FCC in 2015. The 2017 Order, among other things, restores the classifications of broadband Internet access as an information service under Title I of the Communications Act, and mobile broadband Internet access service as a private mobile service, and eliminates the 2015 Restrictions. The 2017 Order does require ISPs to disclose information to consumers regarding practices such as throttling, paid prioritization and affiliated prioritization, and restores broadband consumer protection authority to the Federal Trade Commission. On October 1, 2019, the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) ruled on numerous appeals of the 2017 Order by interested parties. The D.C. Circuit largely upheld the 2017 Order. However, it vacated that portion of the 2017 Order preempting inconsistent state or local regulations, and remanded the 2017 Order to the FCC for further consideration of its effect on public safety, pole attachment regulation, and the Lifeline support program. The D.C. Circuit’s ruling may be subject to further judicial review. Legislative proposals regarding the net neutrality rules also are pending in Congress.

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Fixed-Line Telephony Services. Liberty Puerto Rico offers fixed-line telephony services, including both circuit-switched telephony and VoIP. Its circuit-switched telephony services are subject to FCC and local regulations regarding the quality and technical aspects of service. All local telecommunications providers, including Liberty Puerto Rico, are obligated to provide telephony service to all customers within the service area, subject to certain exceptions under FCC regulations, and must give long distance telephony service providers equal access to their network. Under the Communications Act, competitive local exchange carriers (CLECs), like us, may require interconnection with the incumbent local exchange carrier (ILEC), and the ILEC must negotiate a reasonable and nondiscriminatory interconnection agreement with the CLEC. Such arrangement requires the ILEC to interconnect with the CLEC at any technically feasible point within the ILEC’s network, provide access to certain unbundled network elements of the ILEC’s network, and allow physical collocation of the CLEC’s equipment in the ILEC’s facilities to permit interconnection or access to unbundled network

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C&W. C&W competes with a variety of pay TV service providers, with several of these competitors offering double-play and triple-play packages. Fixed-mobile convergence services are not a significant factor in most of C&W’s residential markets. In several of C&W’s other markets, including Jamaica, Trinidad and Tobago and Barbados, C&W is the largest or one of the largest video service providers. In these markets, C&W’s primary competition is from DTH providers, such as DIRECTV Latin America Holdings, Inc. (DirecTV), which is now called Vrio Corp., and operators of IPTV services over VDSL and FTTx, such as Digicel. In Panama, C&W competes primarily with Cable Onda, which is 80% owned by Millicom and which offers video, internet and fixed-line telephony over its cable network, and with the DTH services of Claro. To compete effectively, C&W invests in leading mobile and fixed networks and content.

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VTR. VTR competes primarily with DTH service providers, including Movistar, Claro, Entel, GTD Manquehue (GTD) and DirecTV, among others. Movistar offers double-play and triple-play packages using DTH for video and DSL for internet and fixed-line telephony and offers mobile services. On a smaller scale, Movistar also offers IPTV services over FTTx networks in Chile. Claro offers triple-play packages using DTH and, in most major cities in Chile, through a hybrid fiber coaxial cable network. It also offers mobile services. To a lesser extent, VTR also competes with video services offered by or over networks of fixed-line telecommunication providers using DSL technology. To compete effectively, VTR focuses on enhancing its subscribers’ viewing options in and out of the home through offering VoD, catch-up television, DVR functionality, Horizon TV and a variety of premium channels. These services and its variety of bundled options, including internet and telephony, enhance VTR’s competitive position.

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Liberty Puerto Rico. Liberty Puerto Rico is the largest provider of fixed-line video services in Puerto Rico. Liberty Puerto Rico’s primary competition for video customers is from DTH satellite providers DirecTV and Dish Network Corporation (Dish Network). Dish Network is an aggressive competitor, offering low introductory offers, free HD channels and, in its top tier packages, a free multi-room DVR service. DirecTV is also a significant competitor offering similar programming in Puerto Rico compared to Dish Network. In order to compete, Liberty Puerto Rico focuses on offering video packages with attractive programming, including HD and Spanish language channels, plus a specialty video package of Spanish-only channels that has gained popularity. In addition, Liberty Puerto Rico uses its bundled offers that include high-speed internet with download speeds of up to 500 Mbps to drive its video services.

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•	C&W. Where C&W is the incumbent telecommunications provider, it competes with cable operators, the largest of which are Cable Onda in Panama, Cable Bahamas in the Bahamas, and Digicel in certain of C&W’s markets. To distinguish itself from these competitors, C&W uses its bundled offers with video and telephony to promote its broadband internet services.

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VTR. VTR faces competition primarily from non-cable-based ISPs, such as Movistar and Entel, and from other cable-based providers, such as Claro and GTD. Competition is particularly intense with each of these companies offering competitively priced services, including bundled offers with high-speed internet services. Mobile broadband competition is significant as well. Movistar, Claro and Entel have launched LTE networks for high-speed mobile data. To compete effectively, VTR is expanding its two-way coverage and offering attractive bundling with fixed-line telephony and digital video service and high-speed internet with download speeds of up to 600 Mbps.

•	Liberty Puerto Rico. Liberty Puerto Rico competes primarily with Claro and other operators using fiber networks or fixed wireless access technologies. To compete with these providers, Liberty Puerto Rico offers its high-speed internet with download speeds of up to 500 Mbps.

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Item 1A.	RISK FACTORS

•	risks that relate to the competition we face and the technology used in our businesses;

•	risks that relate to our operating in overseas markets and being subject to foreign and domestic regulation;

•	risks that relate to certain financial matters;

•	risks relating to our corporate history and structure; and

•	risks relating to our common shares and the securities market.

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•	fluctuations in foreign currency exchange rates;

•	difficulties in staffing and managing operations consistently through our several operating areas;

•	export and import restrictions, custom duties, tariffs and other trade barriers;

•	burdensome tax, customs, duties or regulatory assessments based on new or differing interpretations of law or regulations, including increases in taxes and governmental fees;

•	economic and political instability, social unrest, and public health crises, such as the occurrence of a contagious disease like the novel coronavirus;

•	changes in foreign and domestic laws and policies that govern operations of foreign-based companies;

•	interruptions to essential energy inputs;

•	direct and indirect price controls;

•	cancellation of contract rights and licenses;

•	delays or denial of governmental approvals;

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•	a lack of reliable security technologies;

•	privacy concerns; and

•	uncertainty regarding intellectual property rights and other legal issues.

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•	impair our ability to use our bandwidth in ways that would generate maximum revenue and cash flow;

•	create a shortage of capacity on our networks, which could limit the types and variety of services we seek to provide our customers;

•	impact our ability to access spectrum for our mobile services;

•	strengthen our competitors by granting them access and lowering their costs to enter into our markets; and

•	otherwise have a significant adverse impact on our results of operations.

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•	incur or guarantee additional indebtedness;

•	pay dividends or make other upstream distributions;

•	make investments;

•	transfer, sell or dispose of certain assets, including their stock;

•	merge or consolidate with other entities;

•	engage in transactions with us or other affiliates; or

•	create liens on their assets.

•	fund property and equipment additions or acquisitions that could improve our value;

•	meet their loan and capital commitments to their business affiliates;

•	invest in companies in which they would otherwise invest;

•	fund any operating losses or future development of their business affiliates;

•	obtain lower borrowing costs that are available from secured lenders or engage in advantageous transactions that monetize their assets; or

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•	conduct other necessary or prudent corporate activities.

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•	authorizing a capital structure with multiple classes of shares: a Class B that entitles the holders to ten votes per share, a Class A that entitles the holders to one vote per share and a Class C that entitles the holder to no voting rights, except as otherwise required by applicable law (in which case, the holder is entitled to 1/100 of a vote per share);

•	authorizing the issuance of “blank check” preferred shares, which could be issued by our board to increase the number of outstanding shares and thwart a takeover attempt;

•	classifying our board with staggered three-year terms, which may lengthen the time required to gain control of our board;

•	prohibiting shareholder action by written consent, thereby requiring all shareholder actions to be taken at a meeting of the shareholders;

•	establishing advance notice requirements for nominations of candidates for election to our board or for proposing matters that can be acted upon by shareholders at shareholder meetings;

•	requiring supermajority shareholder approval with respect to certain extraordinary matters, such as certain mergers, amalgamations, or consolidations of the company, or in the case of amendments to our bye-laws; and

•	the existence of authorized and unissued shares which would allow our board to issue shares to persons friendly to current management, thereby protecting the continuity of its management, or which could be used to dilute the share ownership of persons seeking to obtain control of us.

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Item 1B.	UNRESOLVED STAFF COMMENTS

Item 2.	PROPERTIES

Item 3.	LEGAL PROCEEDINGS

Item 4.	MINE SAFETY DISCLOSURES

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Item 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

(a)	No trades occurred during the first quarter of 2018.

(b)	The Class B common shares trade infrequently. During the third and fourth quarters of 2019, no trades occurred. As such, the high and low prices shown for this period relate to the second quarter of 2019.

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Item 6.	SELECTED FINANCIAL DATA

(a)	We acquired UTS effective March 31, 2019, Cabletica on October 1, 2018, C&W on May 16, 2016 and Choice Cable TV on June 3, 2015.

(b)

We adopted ASU 2016-02, as defined and described in note 2 to our consolidated financial statements, on January 1, 2019 using the effective date transition method. The main impact of the adoption of this standard was the recognition of right-of-use assets and lease liabilities. At December 31, 2019, we had $151 million in right-of-use assets recorded in our consolidated balance sheet associated with contracts that qualify as operating leases under ASU 2016-02.

(c)

Amounts are calculated based on weighted average number of shares outstanding of 181,506,875, 173,313,575, 171,850,041, 125,627,811 and 43,925,871, respectively. The 2019 and 2018 amounts represent the weighted average number of Liberty Latin America Shares outstanding during the year, respectively. The 2017 amount represents (i) the weighted average number of LiLAC Shares outstanding during the year prior to the Split-Off and (ii) the weighted average number of Liberty Latin America Shares outstanding during the year subsequent to the Split-Off. The 2016 amount represents the actual weighted average number of LiLAC Shares outstanding, as adjusted to reflect the total 117,430,965 Class A and Class C LiLAC Shares issued to holders of Class A and Class C Liberty Global Shares pursuant to the LiLAC Distribution as if such distribution was completed on the May 16, 2016 date of the C&W Acquisition. The 2015 amount represents the actual weighted average number of LiLAC Shares outstanding for the period from July 1, 2015 through December 31, 2015, as adjusted to reflect the LiLAC Transaction as if such transaction was completed on January 1, 2015.

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Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

•	Overview. This section provides a general description of our business and recent events.

•	Results of Operations. This section provides an analysis of our results of operations for the years ended December 31, 2019 and 2018.

•	Liquidity and Capital Resources. This section provides an analysis of our liquidity, consolidated statements of cash flows and contractual commitments.

•	Critical Accounting Policies, Judgments and Estimates. This section discusses those material accounting policies that involve uncertainties and require significant judgment in their application.

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(a)	The increase is primarily attributable to higher broadband internet and video RGUs. The increase is partially offset by a decrease in RGUs as a result of Hurricane Dorian in the Bahamas.

(b)	The decrease is primarily due to the net effect of (i) lower ARPU from fixed-line telephony and video services and (ii) higher ARPU from broadband internet services. The decrease also includes a reduction in ARPU as a result of Hurricane Dorian in the Bahamas.

(c)	The decrease is primarily attributable to lower interconnect revenue, mainly due to lower (i) volumes in Panama, Barbados and other C&W markets and (ii) fixed termination rates in other C&W markets.

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(d)	The decrease is primarily attributable to lower ARPU and average subscribers in Panama, the Bahamas and other C&W markets. In addition, the decrease in mobile service revenue in the Bahamas includes an estimated $3 million attributable to the impact of Hurricane Dorian.

(e)

The decrease is primarily attributable to (i) lower interconnect revenue, primarily associated with (a) lower volumes at Panama and (b) reduced rates at other C&W markets, and (ii) lower handset sales, primarily a result of (a) decreased volumes in our Cayman Islands operations, the Bahamas and other C&W markets and (b) customers purchasing lower priced products in the Bahamas and other C&W markets.

(f)

The increase is primarily due to the net effect of (i) higher managed services revenue, largely driven by an increase in nonrecurring projects in Panama, as well as increases at Networks & LatAm and Jamaica, (ii) lower revenue from fixed-line telephony services, primarily in Jamaica, Panama and the Bahamas and (iii) increased interconnect revenue, primarily driven by higher volumes in Jamaica. The increase in B2B service revenue is partially offset by an estimated $3 million decrease related to the impact of Hurricane Dorian. The change also includes a decrease related to the transfer of certain B2B operations in Puerto Rico from our C&W segment to our Liberty Puerto Rico segment.

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(a)	The increase is attributable to the net effect of (i) higher broadband internet and video RGUs and (ii) lower fixed-line telephony RGUs.

(b)	The increase is due to the net effect of (i) higher ARPU from broadband internet services, (ii) an improvement in product mix and (iii) lower ARPU from video and fixed-line telephony services. The increase in ARPU from video services is partially offset by $2 million in discounts given to customers due to content not provided as a result of civil unrest in Chile during the fourth quarter of 2019.

(c)	The increase is due to the net effect of (i) a higher average number of mobile subscribers and (ii) lower ARPU from mobile services.

(d)	The increase is primarily attributable to higher average numbers of broadband internet, video and fixed-line telephony RGUs.

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A decrease in programming and copyright costs of $23 million or 16.3%, primarily due to the net effect of (i) a $13 million benefit during 2019 from content accrual adjustments, largely related to the entry into new agreements with various content providers and, to a lesser extent, reassessments of content accruals, (ii) lower sports content costs, (iii) higher costs associated with an increase in subscribers during 2019, and (iv) a benefit from an accrual adjustment related to settlement discussions on a copyright dispute;

•	Higher costs related to B2B managed services projects in Panama; and

•	A decrease in interconnect and access costs of $2 million or 0.8%, primarily due to the net effect of (i) an increase in wholesale call volumes in Jamaica, (ii) the beneficial impact of the reassessment of an accrual during the second quarter of 2019 and (iii) lower rates.

•	A decrease in interconnect and access costs of $10 million or 15.3%, primarily as a result of the net effect of (i) decreases in interconnect costs and MVNO charges due to lower rates and (ii) the impact of a $3 million credit received during the fourth quarter of 2018 in connection with the renegotiation of our MVNO contract;

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An increase in programming and copyright costs of $3 million or 1.5%, primarily due to (i) higher costs associated with video-on-demand (VoD) services and catch-up television, (ii) an increase in copyright costs and (iii) an increase in certain premium and basic content costs, primarily resulting from higher rates.The increase in certain premium and basic content costs is partially offset by $2 million in lower costs due to certain premium services that were not provided during the fourth quarter of 2019; and

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•	An increase in equipment costs of $2 million or 8.2%, primarily due to the net effect of (i) higher mobile handset sales in VTR and (ii) lower equipment sales in Cabletica.

•	An increase in programming and copyright costs of $16 million or 22.2%, mostly attributable to (i) the impact of $11 million in credits received from programming vendors in 2018 resulting from the 2017 Hurricanes and (ii) higher programming rates; and

•	A decrease in interconnect costs of $2 million or 24.1%, primarily resulting from lower rates.

•	A decrease of $10 million in withholding taxes on third-party supplier services, primarily related to the expiration of statute of limitations;

•	A decrease in network-related expenses of $4 million or 2.3%, primarily due to lower (i) maintenance costs and (ii) hurricane restoration costs;

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An increase in bad debt and collection expenses of $1 million or 2.2%, primarily due to the net effect of (i) changes in provisions during 2019, including (a) a $5 million increase in provisions primarily related to certain B2B and government customers, (b) the release of certain other provisions and (c) a $2 million provision related to the impact of Hurricane Dorian, (ii) improved collections in 2019 and (iii) a $3 million recovery in the first quarter of 2018 related to provisions established following the impacts of the 2017 Hurricanes;

•	A net decrease of $4 million in revenue-based taxes in certain of our markets; and

•	A net increase resulting from other individually insignificant changes.

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•	An increase in outsourced labor and professional fees of $7 million or 35.7%, primarily due to increased call center volume in VTR; and

•	A decrease in network-related expenses of $2 million or 2.1%, primarily related to the net effect of (i) a decrease resulting from higher proportions of capitalized labor associated with installation activities, and (ii) higher costs related to customer premises equipment (CPE) materials and refurbishment activity.

•	An increase in network-related expenses of $3 million or 39.0%, primarily due to (i) an increase in system power expenses, as the 2018 period was impacted by the 2017 Hurricanes and (ii) higher CPE repair costs;

•	An increase in other various operating expenses of $2 million, as the 2018 period was impacted by the 2017 Hurricanes; and

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A decrease in personnel costs of $3 million or 14.8%, mostly driven by the net effect of (i) lower overtime-related personnel activities, as the 2018 period was impacted by the 2017 Hurricanes, and (ii) a $1 million hurricane disaster relief credit received during the third quarter of 2018 from the Puerto Rico Treasury Department, representing relief for wages paid to employees during the period of time our business was inoperable as a result of the 2017 Hurricanes.

•	A decrease in outsourced labor and professional services of $5 million or 13.1%, primarily due to lower legal and advisory-related costs in 2019;

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•	A decrease in marketing and advertising expenses of $4 million or 5.8%, primarily due to lower sponsorship costs and sales commissions;

•	A decrease in personnel costs of $2 million or 0.9%, primarily due to lower staffing levels largely stemming from various restructuring activities, as further described below;

•	A decrease in insurance costs of $2 million, due in part to the impact of C&W’s Weather Derivative, as further described below and in notes 3 and 5 to our consolidated financial statements; and

•	A net decrease resulting from individually insignificant changes.

•	An increase in professional services of $7 million or 36.9%, primarily due to (i) increased information technology costs associated with the implementation of a business support system and (ii) higher professional consultancy services; and

•	An increase in sales, marketing and advertising expenses of $2 million or 4.0%, primarily due to the net effect of (i) higher sales commissions to third-party dealers and (ii) lower costs associated with advertising campaigns.

•	Higher personnel costs of $2 million or 10.7%, mostly driven by a $1 million hurricane disaster relief credit received during the third quarter of 2018 from the Puerto Rico Treasury Department, representing relief for wages paid to employees during the period of time our business was inoperable as a result of the 2017 Hurricanes; and

•	An increase in information and technology-related expenses of $2 million or 60.9%, mostly driven by new software services.

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(a)

The loss during 2019 is primarily attributable to (i) changes in interest rates and (ii) changes in FX rates, predominantly due to changes in the value of the Chilean peso relative to the U.S. dollar. In addition, the loss during 2019 includes a net gain of $4 million resulting from changes in our credit risk valuation adjustments. The gain during 2018 is primarily attributable to (i) changes in FX rates, predominantly due to changes in the value of the Chilean peso relative to the U.S. dollar, and (ii) changes in interest rates. In addition, the gain during 2018 includes a net loss of $23 million resulting from changes in our credit risk valuation adjustments.

(b)	The amount for the 2019 period includes $6 million of amortization of the premiums associated with our Weather Derivatives, which we entered into during the second quarter of 2019.

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(a)	Represents the amount held by Liberty Latin America on a standalone basis, which includes the proceeds resulting from the offering of the Convertible Notes, net of issue costs and payments for the Capped Calls (as further described in note 13 to our consolidated financial statements).

(b)	Represents the aggregate amount held by subsidiaries of Liberty Latin America that are outside of our borrowing groups. All of these companies rely on funds provided by our borrowing groups to satisfy their liquidity needs.

(c)	Represents the aggregate amounts held by the parent entity of the applicable borrowing group and their restricted subsidiaries.

(d)	Includes $1,256 million of restricted cash held in escrow that will be used to fund a portion of the AT&T Acquisition (the AT&T Acquisition Restricted Cash). For additional information on the AT&T Acquisition and cash held in escrow see notes 4 and 10, respectively, to our consolidated financial statements.

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(a)

For purposes of our consolidated statements of cash flows, expenses, including VAT, financed by an intermediary are treated as hypothetical operating cash outflows and hypothetical financing cash inflows when the expenses are incurred. When we pay the financing intermediary, we record financing cash outflows in our consolidated statements of cash flows. For purposes of our adjusted free cash flow definition, we add back the hypothetical operating cash outflow when these financed expenses are incurred and deduct the financing cash outflows when we pay the financing intermediary.

(b)	Amount represents interest received on the AT&T Acquisition Restricted Cash.

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(a)

The commitments included in this table do not reflect any liabilities that are included in our December 31, 2019 consolidated balance sheet other than (i) debt and (ii) finance and operating lease obligations. Our liability for uncertain tax positions, including accrued interest, in the various jurisdictions in which we operate ($79 million at December 31, 2019) has been excluded from the table as the amount and timing of any related payments are not subject to reasonable estimation. For additional information regarding our liability for uncertain tax positions, see note 12 to our consolidated financial statements.

(b)	Amounts are based on interest rates, interest payment dates, commitment fees and contractual maturities in effect as of December 31, 2019. These amounts are presented for illustrative purposes only and will likely differ from the actual cash payments required in future periods. In addition, the amounts presented do not include the impact of our derivative contracts.

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Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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(a)	Includes the interest-related cash flows of our cross-currency and interest rate derivative contracts.

(b)	Includes the principal-related cash flows of our cross-currency derivative contracts.

(c)	Includes amounts related to our foreign currency forward contracts.

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Item 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Item 9A.	CONTROLS AND PROCEDURES

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•	The Company did not have a sufficient number of trained resources with the appropriate skills and knowledge with assigned responsibilities and accountability for the design and operation of internal controls over financial reporting.

•	The Company did not have an effective risk assessment process that successfully identified and assessed risks of misstatement to ensure controls were designed and implemented to respond to those risks. The Company did not adequately communicate the changes necessary in financial reporting and related internal controls throughout its organization and to affected third parties.

•	The Company did not have an effective monitoring process to assess the consistent operation of internal control over financial reporting and to remediate known control deficiencies.

•	The Company did not have an effective information and communication process to identify, capture and process relevant information necessary for financial accounting and reporting.

•

The Company did not i) establish effective general information technology controls (GITCs), specifically program change controls and access controls, commensurate with financial and IT personnel job responsibilities that support the consistent operation of the Company’s IT operating systems, databases and IT applications, and end user computing over all financial reporting, ii) have policies and procedures through which general information technology controls are deployed across the organization. Automated process-level controls and manual controls dependent upon the accuracy and completeness of information derived from information technology systems were also rendered ineffective because they are affected by the lack of GITCs.

•	Hire, train, and retain individuals with appropriate skills and experience, assign responsibilities and hold individuals accountable for their roles related to internal control over financial reporting.

•	Design and implement a comprehensive and continuous risk assessment process to identify and assess risks of material misstatement and ensure that the impacted financial reporting processes and related internal controls are properly designed and in place to respond to those risks in our financial reporting.

•	Design and implement additional monitoring controls to assess the consistent operation of controls, including those performed by our service providers, and to remediate deficiencies.

•	Design and implement general control activities over IT to support business processes.

•	Enhance the design of existing control activities and implement additional process-level control activities (including controls over the order-to-cash, procure-to-pay, hire-to-pay, long-lived assets, inventory, and other financial reporting processes) and ensure they are properly evidenced and operating effectively.

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•	The company did not have effective control activities related to the design, implementation and operation of process-level control activities related to goodwill impairment expense and business combinations.

•	Enhanced our risk assessment process and designed and implemented our additional or improved procedures and control activities to respond to material risks in our financial reporting.

•	Designed and implemented additional procedures and control activities related to our business combinations process surrounding the review and use of valuation reports and our recording of purchase price accounting adjustments.

•	Designed and implemented enhanced procedures and internal control activities surrounding the annual goodwill impairment analysis.

Item 9B.	OTHER INFORMATION

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•	The Company did not have a sufficient number of trained resources with the appropriate skills and knowledge with assigned responsibilities and accountability for the design and operation of internal controls over financial reporting.

•	The Company did not have an effective risk assessment process that successfully identified and assessed risks of misstatement to ensure controls were designed and implemented to respond to those risks. The Company did not adequately communicate the changes necessary in financial reporting and related internal controls throughout its organization and to affected third parties.

•	The Company did not have an effective monitoring process to assess the consistent operation of internal control over financial reporting and to remediate known control deficiencies.

•	The Company did not have an effective information and communication process to identify, capture and process relevant information necessary for financial accounting and reporting.

•

The Company did not i) establish effective general information technology controls (GITCs), specifically program change controls and access controls, commensurate with financial and IT personnel job responsibilities that support the consistent operation of the Company’s IT operating systems, databases and IT applications, and end user computing over all financial reporting, ii) have policies and procedures through which general information technology controls are deployed across the organization. Automated process-level controls and manual controls dependent upon the accuracy and completeness of information derived from information technology systems were also rendered ineffective because they are affected by the lack of GITCs.

•

The Company did not have effective control activities related to the design, implementation and operation of process-level control activities related to order-to-cash (including revenue, trade receivables, and deferred revenue), procure-to-pay (including operating expenses, prepaid expenses, accounts payable, and accrued liabilities), hire-to-pay (including compensation expense and accrued liabilities), long-lived assets, inventory, and other financial reporting processes.

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(1)	Basis of Presentation

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(2)	Accounting Changes and Recent Accounting Pronouncements

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•

We enter into certain long-term capacity contracts with customers where the customer pays the transaction consideration at inception of the contract. Under previous accounting standards, we did not impute interest for advance payments from customers related to services that are provided over time. Under ASU 2014-09, payment received from a customer significantly in advance of the provision of services is indicative of a financing component within the contract. If the financing component is significant, interest expense is accreted over the life of the contract with a corresponding increase to revenue.

•

ASU 2014-09 requires the identification of deliverables in contracts with customers that qualify as performance obligations. The transaction price consideration from customers is allocated to each performance obligation under the contract on the basis of relative standalone selling price. Under previous accounting standards, when we offered discounted equipment, such as handsets under a subsidized contract, upfront revenue recognition was limited to the upfront cash collected from the customer as the remaining monthly fees to be received from the customer, including fees associated with the equipment, were contingent upon delivering future airtime. This limitation is not applied under ASU 2014-09. The primary impact on revenue reporting is that when we sell discounted equipment together with airtime services to customers, revenue allocated to equipment and recognized when control of the device passes to the customer will increase and revenue recognized as services are delivered will decrease.

•

When we enter into contracts to provide services to our customers, we often charge installation or other upfront fees. Under previous accounting standards, installation fees related to services provided over our fixed networks were recognized as revenue during the period in which the installation occurred to the extent those fees were equal to or less than direct selling costs. Under ASU 2014-09, these fees are generally deferred and recognized as revenue over the contractual period for those contracts with substantive termination penalties, or for the period of time the upfront fees convey a material right for month-to-month contracts and contracts that do not include substantive termination penalties.

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(3)	Summary of Significant Accounting Policies

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(a)	Represent the weighted average number of Liberty Latin America Shares outstanding during the year.

(b)	Represents (i) the weighted average number of LiLAC Shares outstanding during the year prior to the Split-Off and (ii) the weighted average number of Liberty Latin America Shares outstanding during the year subsequent to the Split-Off. The amount was used for both basic and dilutive EPS, as no Company equity awards were outstanding prior to the Split-Off.

(4)	Acquisitions and Disposition

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(a)	The goodwill recognized in connection with the UTS Acquisition is primarily attributable to (i) the ability to take advantage of UTS’s existing broadband communications and mobile networks to gain immediate access to potential customers, and (ii) synergies that are expected to be achieved through the integration of UTS with C&W’s existing business in Curacao.

(b)	Amount represents the estimated aggregate fair value of the noncontrolling interest in UTS as of March 31, 2019.

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(c)	Excludes $3 million of direct acquisition costs, including $1 million incurred during 2018. Direct acquisition costs are included in impairment, restructuring and other operating items, net, in our consolidated statements of operations.

(a)	The goodwill recognized in connection with the Cabletica Acquisition is primarily attributable to the ability to take advantage of Cabletica’s existing advanced broadband communications network as a base on which to expand our footprint in the region, and to gain immediate access to potential customers.

(b)	Amount primarily includes intangible assets related to customer relationships. As of October 1, 2018, the weighted average useful life of Cabletica’s intangible assets was approximately eleven years.

(c)	Amount represents the fair value of Televisora’s interest in Cabletica as of the October 1, 2018 acquisition date.

(d)	Excludes $5 million of direct acquisition costs, including $3 million incurred during 2018.

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(5)	Derivative Instruments

(a)	Our current derivative assets, current derivative liabilities, long-term derivative assets and long-term derivative liabilities are included in other current assets, net, other accrued and current liabilities, other assets, net, and other long-term liabilities, respectively, in our consolidated balance sheets.

(b)

We consider credit risk relating to our and our counterparties’ nonperformance in the fair value assessment of our derivative instruments. In all cases, the adjustments take into account offsetting liability or asset positions within each of our primary borrowing groups (see note 10). The changes in the credit risk valuation adjustments associated with our cross-currency and interest rate derivative contracts resulted in net gains (losses) of $4 million, ($23 million) and $23 million during 2019, 2018 and 2017, respectively. These amounts are included in realized and unrealized gains (losses) on derivative instruments, net, in our consolidated statements of operations. For further information regarding our fair value measurements, see note 6.

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(a)	The amount for 2019 includes $6 million of amortization of the premiums associated with our Weather Derivatives, which we entered into during the second quarter of 2019.

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(a)	Includes forward-starting derivative instruments.

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(a)	Includes forward-starting derivative instruments.

(6)	Fair Value Measurements

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•

Customer relationships. The valuation of customer relationships is primarily based on an excess earnings methodology, which is a form of a discounted cash flow analysis. The excess earnings methodology for customer relationship intangible assets requires us to estimate the specific cash flows expected from the acquired customer relationships, considering such factors as estimated customer life, the revenue expected to be generated over the life of the customer relationships, contributory asset charges and other factors.

•	Property and equipment. Property and equipment is typically valued using a replacement or reproduction cost approach, considering factors such as current prices of the same or similar equipment, the age of the equipment and economic obsolescence.

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(7)	Investments

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(8)	Insurance Recoveries

(a)	The 2017 amount represents recoveries related to Hurricane Matthew.

(b)	The 2018 amount includes $3 million attributable to Hurricane Matthew.

(c)	Amounts for each year include $3 million attributable to Hurricane Matthew.

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(9)	Long-lived Assets

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(a)	Amount primarily represents an impairment charge associated with the Panamanian reporting unit of our C&W segment.

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(10)	Debt and Finance Lease Obligations

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(a)

Represents the weighted average interest rate in effect at December 31, 2019 for all borrowings outstanding pursuant to each debt instrument, including any applicable margin. The interest rates presented represent stated rates and do not include the impact of derivative instruments, deferred financing costs, original issue premiums or discounts and commitment fees, all of which affect our overall cost of borrowing.

(b)

Unused borrowing capacity represents the maximum availability under the applicable facility at December 31, 2019 without regard to covenant compliance calculations or other conditions precedent to borrowing. At December 31, 2019, the full amount of unused borrowing capacity was available to be borrowed under each of the respective subsidiary facilities, both before and after completion of the December 31, 2019 compliance reporting requirements. At December 31, 2019, there were no restrictions on the respective subsidiary’s ability to make loans or distributions from this availability to Liberty Latin America or its subsidiaries or other equity holders.

(c)

The estimated fair values of our debt instruments are determined using the average of applicable bid and ask prices (mostly Level 1 of the fair value hierarchy) or, when quoted market prices are unavailable or not considered indicative of fair value, discounted cash flow models (mostly Level 2 of the fair value hierarchy).  The discount rates used in the cash flow models are based on the market interest rates and estimated credit spreads of the applicable entity, to the extent available, and other relevant factors. For additional information regarding fair value hierarchies, see note 6.

(d)	The interest rate reflects the stated rate of the Convertible Notes. The effective interest rate of the Convertible Notes is 6.7%, which considers the impact of the discount recorded in connection with the Conversion Option, as further described below.

(e)	The VTR Credit Facilities comprise certain CLP term loans and U.S. dollar and CLP revolving credit facilities, including unused borrowing capacity. For further information, see VTR Credit Facilities below.

(f)	The Cabletica Credit Facilities comprise certain Costa Rican colón (CRC) and U.S. dollar term loans and a U.S. dollar revolving credit facility. For further information, see Cabletica Credit Facilities below.

(g)

Represents amounts owed pursuant to interest-bearing vendor financing arrangements that are used to finance certain of our operating expenses and property and equipment additions. These obligations are generally due within one year and include VAT that was paid on our behalf by the vendor. Our operating expenses include $130 million, $172 million and $83 million for the years ended December 31, 2019, 2018 and 2017, respectively, that were financed by an intermediary and are reflected on the borrowing date as a hypothetical cash outflow within net cash provided by operating activities and a hypothetical cash inflow within net cash provided by financing activities in our consolidated statements of cash flows. Repayments of vendor financing obligations are included in payments of principal amounts of debt and finance lease obligations in our consolidated statements of cash flows.

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•	Our credit facilities contain certain net leverage ratios, as specified in the relevant credit facility, which are required to be complied with on an incurrence and/or maintenance basis;

•

Our credit facilities contain certain restrictions which, among other things, restrict the ability of the entities of the relevant borrowing group to (i) incur or guarantee certain financial indebtedness, (ii) make certain disposals and acquisitions, (iii) create certain security interests over their assets, in each case, subject to certain customary and agreed exceptions, and (iv) make certain restricted payments to their direct and/or indirect parent companies through dividends, loans or other distributions, subject to compliance with applicable covenants;

•	Our credit facilities require that certain entities of the relevant borrowing group guarantee the payment of all sums payable under the relevant credit facility and such entities are required to have first-ranking security granted over their shares and, in certain borrowing groups, over substantially all of their assets to secure the payment of all sums payable thereunder;

•	In addition to certain mandatory prepayment events, the instructing group of lenders under the relevant credit facility may cancel the commitments thereunder and declare the loans thereunder due and payable after the applicable notice period following the occurrence of a change of control (as specified in the relevant credit facility);

•	Our credit facilities contain certain customary events of default, the occurrence of which, subject to certain exceptions and materiality qualifications, would allow the instructing group of lenders to (i) cancel the total commitments, (ii) accelerate all outstanding loans and terminate their commitments thereunder and/or (iii) declare that all or part of the loans be payable on demand;

•	Our credit facilities require entities of the relevant borrowing group to observe certain affirmative and negative undertakings and covenants, which are subject to certain materiality qualifications and other customary and agreed exceptions; and

•	In addition to customary default provisions, our credit facilities generally include certain cross-default and cross-acceleration provisions with respect to other indebtedness of entities of the relevant borrowing group, subject to agreed minimum thresholds and other customary and agreed exceptions.

•

Our notes contain certain customary incurrence-based covenants. In addition, our notes provide that any failure to pay principal prior to expiration of any applicable grace period, or any acceleration with respect to other indebtedness of the issuer or certain other members of the relevant borrowing group, over agreed minimum thresholds (as specified under the applicable indenture), is an event of default under the respective notes;

•

Our notes contain certain restrictions that, among other things, restrict the ability of the entities of the relevant borrowing group to (i) incur or guarantee certain financial indebtedness, (ii) make certain disposals and acquisitions, (iii) create certain security interests over their assets, in each case, subject to certain customary and agreed exceptions and (iv) make certain restricted payments to its direct and/or indirect parent companies through dividends, loans or other distributions, subject to compliance with applicable covenants; and

•	If the relevant issuer or certain of its subsidiaries (as specified in the applicable indenture) sell certain assets, such issuer must offer to repurchase the applicable notes at par, or if a change of control (as specified in the applicable indenture) occurs, such issuer must offer to repurchase all of the relevant notes at a redemption price of 101%.

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during any calendar quarter commencing after September 30, 2019 (and only during such calendar quarter), if the last reported sale price of our Class C common shares for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on and including the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the applicable conversion price of the Convertible Notes on each applicable trading day;

•

during the five consecutive business day period immediately after any five consecutive trading day period (the “measurement period”), in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of that measurement period was less than 98% of the product of the last reported sale price of our Class C common shares and the conversion rate on each such trading day;

•	if we give notice of redemption, as described below; or

•	upon the occurrence of specified corporate transactions.

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(a)	Amounts are inclusive or net of original issue premiums, discounts and deferred financing costs, as applicable.

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•	The 2026 C&W Senior Notes, 2027 C&W Senior Notes and 2027 C&W Senior Secured Notes are non-callable until October 15, 2021, September 15, 2022 and September 7, 2022, respectively.

•

At any time prior to (i) October 15, 2021 in the case of the 2026 C&W Senior Notes, (ii) September 15, 2022 in the case of the 2027 C&W Senior Notes and (iii) September 7, 2022 in the case of the 2027 C&W Senior Secured Notes, Sable and C&W Senior Financing (as applicable) may redeem some or all of the applicable notes by paying a price equal to 100% of the principal amount of the applicable notes redeemed plus accrued and unpaid interest and a “make-whole” premium, which is generally the present value of all remaining scheduled interest payments to October 15, 2021, September 15, 2022 or September 7, 2022 (as applicable) using the discount rate (as specified in the indenture) as of the redemption date plus 50 basis points.

•

At any time prior to (i) October 15, 2021 in the case of the 2026 C&W Senior Notes, (ii) September 15, 2022 in the case of the 2027 C&W Senior Notes and (iii) September 7, 2022 in the case of the 2027 C&W Senior Secured Notes, subject to certain restrictions (as specified in the applicable indenture), up to 40% of each of the 2026 C&W Senior Notes, 2027 C&W Senior Notes and 2027 C&W Senior Secured Notes may be redeemed with the net proceeds of one or more specified equity offerings at a redemption price equal to 107.500%, 106.875% and 105.750%, respectively, of the principal amount redeemed, plus accrued and unpaid interest and additional amounts (as specified in the applicable indenture), if any, to the applicable redemption date.

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•	Prior to September 7, 2022, during each 12-month period commencing on April 5, 2019, up to 10% of the principal amount of the 2027 C&W Senior Secured Notes may be redeemed at a redemption price equal to 103% of the principal amount redeemed plus accrued and unpaid interest to the redemption date.

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(a)	Amounts are net of discounts and deferred financing costs, as applicable.

(b)	In March 2018, we amended and restated the credit agreement originally dated May 16, 2016, as amended and restated as of May 26, 2017, providing for the additional C&W Term Loan B-4 Facility, as further described below, and a $625 million revolving credit facility. The C&W Revolving Credit Facility has a fee on unused commitments of 0.5% per year.

(c)	London Interbank Offered Rate.

(d)	Subsequent to December 31, 2019, the outstanding principal amount under the C&W Term Loan B-4 Facility was repaid in full. For additional information, see note 21.

(e)	Primarily represents amounts borrowed by C&W Panama, C&W Jamaica and Columbus Communications Trinidad Limited (collectively, the C&W Regional Facilities).

(f)	Represents a weighted average rate for all C&W Regional Facilities.

(g)	The unused borrowing capacity on the C&W Regional Facilities comprise certain U.S. dollar and Trinidad & Tobago dollar denominated revolving credit facilities.

(h)	The outstanding principal amount on the C&W Regional Facilities comprise certain U.S. dollar, JMD, Trinidad & Tobago dollar and East Caribbean dollar denominated credit facilities.

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(a)	Amounts are net of deferred financing costs.

(b)	Under the terms of the credit agreement, VTR is obligated to repay 50% of the outstanding aggregate principal amount of the VTR TLB-1 Facility on November 23, 2022, with the remaining principal amount due on May 23, 2023, which represents the ultimate maturity date of the facility.

(c)	Índice de Cámara Promedio rate.

(d)	In March 2019, the commitment under the VTR RCF – A was increased to CLP 45 billion ($60 million). The VTR RCF – A has a fee on unused commitments of 1.34% per year.

(e)	Tasa Activa Bancaria rate.

(f)	Includes a $1 million credit facility that matures on May 23, 2023. The VTR RCF – B has a fee on unused commitments of 1.10% per year.

•	The 2027 LPR Senior Secured Notes are non-callable until October 15, 2022.

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At any time prior to October 15, 2022, LCPR Senior Secured Financing may redeem some or all of the 2027 LPR Senior Secured Notes by paying a price equal to 100% of the principal amount of the 2027 LPR Senior Secured Notes redeemed plus accrued and unpaid interest and a “make-whole” premium, which is generally the present value of all remaining scheduled interest payments to October 15, 2022 using the discount rate (as specified in the indenture) as of the redemption date plus 50 basis points.

•

At any time prior to October 15, 2022, subject to certain restrictions (as specified in the indenture), up to 40% of the 2027 LPR Senior Secured Notes may be redeemed with the net proceeds of one or more specified equity offerings at a redemption price equal to 106.750% of the principal amount redeemed, plus accrued and unpaid interest and additional amounts (as specified in the indenture), if any, to the redemption date.

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•	Prior to October 15, 2022, during each 12-month period commencing on October 9, 2019, up to 10% of the principal amount of the 2027 LPR Senior Secured Notes may be redeemed at a redemption price equal to 103% of the principal amount redeemed, plus accrued and unpaid interest and additional amounts (as specified in the indenture), if any, to the redemption date.

(a)	Amounts are net of discounts and deferred financing costs.

(b)	The 2019 LPR Revolving Credit Facility has a fee on unused commitments of 0.5% per year.

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(a)	Amounts are net of deferred financing costs.

(b)	Under the terms of the credit agreement, Cabletica is obligated to repay 50% of the outstanding aggregate principal amounts of the Cabletica Term Loan B-1 Facility and the Cabletica Term Loan B-2 Facility on April 5, 2023, with the remaining respective principal amounts due on October 5, 2023, which represents the ultimate maturity date of each facility.

(c)	Tasa Básica Pasiva rate.

(d)	The Cabletica Revolving Credit Facility has a fee on unused commitments of 1.70% per year.

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(a)	Represents the amount held by Liberty Latin America on a standalone basis plus the aggregate amount held by subsidiaries of Liberty Latin America that are outside our borrowing groups.

(11)	Leases

(a)	Amounts reflect operating lease expense recorded under ASC 840, Leases, prior to adoption of ASU 2016-02 on January 1, 2019. Accordingly, amounts are not comparable.

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(a)	Represents non-cash transactions associated with operating leases entered into during the year ended December 31, 2019.

(12)	Income Taxes

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(a)	Liberty Latin America is considered a stand-alone Bermuda entity.

(b)

Amounts for the years ended December 31, 2019 and 2018 include impairment charges at our Panamanian reporting unit of $182 million and $608 million, respectively. The amount for the year ended December 31, 2017 includes impairment charges of $211 million, $191 million, $113 million and $97 million at our Puerto Rico, Trinidad and Tobago, British Virgin Islands and Bahamas reporting units, respectively. For additional information regarding asset impairments, see note 9.

(c)

For the year ended December 31, 2019, material jurisdictions that comprise the “foreign” component of our loss before income taxes include Bahamas, Barbados, Chile, Costa Rica, Jamaica, the Netherlands, Panama, Puerto Rico, Trinidad, the U.K. and the U.S. For the year ended December 31, 2018, material jurisdictions that comprise the “foreign” component of our loss before income taxes include Barbados, Chile, the Netherlands, Panama, Puerto Rico and the U.K. For the year ended December 31, 2017, material jurisdictions that comprise the “foreign” component of our loss before income taxes include Bahamas, Barbados, Chile, Jamaica, the Netherlands, Panama, Puerto Rico, the U.K. and the U.S.

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(a)

On July 11, 2017, Liberty Latin America was formed as a corporation in Bermuda where the company is exempt from income taxes on ordinary income and capital gains, and therefore has a “statutory” or “expected” tax rate of 0% in 2019, 2018 and 2017. The majority of our subsidiaries operate in jurisdictions where income tax is imposed at local applicable rates, resulting in “international rate differences,” as shown in the table above that reflect the computed tax benefit (expense) of pre-tax book income (loss) in the respective taxable jurisdiction.

(b)	Permanent differences primarily relate to various non-taxable income or non-deductible expenses, such as Caricom treaty income, limitations on deductible management fees, or executive compensation, among others.

(c)	The 2019 corporate tax rates applicable to our primary tax jurisdictions are as follows: Chile, 27%; Puerto Rico, 37.5%; the U.K., 19%; the Netherlands, 25%; Panama, 25%; and the U.S., 21%.

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(d)

During 2018, legislation was enacted that changed the income tax rate in Barbados from 25.0% to 30.0% on Regular Barbados Companies. Substantially all of the impact of this rate change on our deferred tax balances was recorded during the fourth quarter of 2018 when the change in law was enacted. During 2019, legislation was enacted that changed the income tax rate in Barbados from 30.0% on Regular Business Companies to a regressive tax rate ranging from 5.5% to 1% applicable to all Barbados companies, dependent upon taxable income levels. Substantially all of the impact of this rate change on our deferred tax balances was recorded during the first quarter of 2019 when the change in law was enacted.

(e)

On December 27, 2019, legislation was enacted in Colombia that replaces tax reform which had previously been enacted in 2018 but had been declared unconstitutional due to procedural flaws. The legislation confirms provisions from the original 2018 reform, including a phasing down of the corporate tax rates through 2022, whereby the rate will be 30% going forward. Substantially all of the impact of this rate change on our deferred tax balances was recorded during the fourth quarter of 2019 when the change in law was enacted.

(f)	On December 10, 2018, legislation was enacted that changed the total corporate income tax rate in Puerto Rico from 39.0% to 37.5% for tax years beginning after December 31, 2018. Substantially all of the impact of this rate change on our deferred balances was recorded during the fourth quarter of 2018 when the change in law was enacted.

(g)	On January 1, 2017, legislation was enacted that changed the income tax rate in Trinidad and Tobago from 25.0% to 30.0%. Substantially all of the impact of this rate change on our deferred tax balances was recorded during the first quarter of 2017 when the change in tax law was enacted.

(h)	On December 22, 2017, the Tax Cuts and Jobs Act legislation was enacted in the U.S., which permanently reduced the corporate income tax rate to 21.0% (effective January 1, 2018), among other corporate income tax changes. Substantially all of the impact of this rate change on our U.S. deferred tax balances was recorded during the fourth quarter of 2017 when the change in tax law was enacted.

(i)

The corporate tax rate applicable to our Chilean operations increased to 25.5% in 2017. In 2018 and future years, the tax rate is 27.0%. As of 2017, the 35.0% withholding tax applicable to payments made by our Chilean operations to non-resident shareholders will be based only on actual distributions to shareholders and only 65.0% of the actual corporate tax paid by our Chilean operations will be available to be used as a credit against this withholding tax. In the case of shareholders residing in countries that have tax treaties in force with Chile, there will be a full credit for the corporate tax paid.

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(13)	Equity

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(14)	Restructuring Liabilities

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(15)	Defined Benefit Plans

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•	Investment returns: Our net pension assets (liabilities) and contribution requirements are heavily dependent upon the return on the invested assets;

•	Longevity: The cost to the company of the pensions promised to members is dependent upon the expected term of these payments. To the extent that members live longer than expected this will increase the cost of these arrangements; and

•	Inflation rate risk: In the U.K., pension obligations are impacted by inflation and, as such, higher inflation will lead to higher pension liabilities.

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(a)	Amounts represent the initial projected benefit obligation of the UTS unfunded defined benefit plan at the UTS Acquisition date and a corresponding plan asset associated with the expected cash flows from the insurance policy covering the projected benefit obligation.

(b)	During 2018, C&W recognized a net pension liability that is largely indemnified by a government entity. At December 31, 2019 and 2018, the indemnification asset balance was $155 million and $132 million, respectively, which is included in other assets, net, in our consolidated balance sheets.

(c)	The 2018 amount relates to an allowance recorded in connection with expected costs associated with guaranteed minimum pension equalization in the CWSF.

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(a)	We review the asset allocations within the respective portfolios on a regular basis. Generally, the plans do not have explicit asset mix targets other than for the equity securities and bond portfolios within the CWSF on a consolidated basis. The asset mix is primarily subject to, among other considerations, a de-risking plan related to the CWSF.

(b)	Amounts primarily include (i) fixed-interest and index-linked U.K. Government Gilts held by the CWSF and (ii) bonds held by the Bahamas and Jamaica plans.

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(c)

The trustees of the CWSF, Jamaica plan and UTS unfunded liabilities have each purchased annuity policies pursuant to which the insurer assumed responsibility for the benefits payable to certain participants of the CWSF, Jamaica plan and UTS liabilities. The liabilities in the CWSF, Jamaica plan and at UTS are matched by related annuity policy assets, which reduces our funding risk for these plans, as follows:

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(a)	Represents the actual less expected return on plan assets.

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(16)	Share-based Compensation

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(a)	Amounts represent the noncontrolling interest owners’ share of our foreign currency translation adjustments and pension-related adjustments.

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(18)	Commitments and Contingencies

(a)	The commitments included in this table do not reflect any liabilities that are included in our December 31, 2019 consolidated balance sheet.

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(19)	Segment Reporting

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(a)	The amounts presented exclude the pre-acquisition revenue of UTS, which was acquired effective March 31, 2019.

(b)	The amounts presented for 2018 and 2017 exclude the pre-acquisition revenue of Cabletica, which was acquired on October 1, 2018.

(a)	The amounts presented exclude the pre-acquisition Adjusted OIBDA of UTS, which was acquired effective March 31, 2019.

(b)	The amounts presented for 2018 and 2017 exclude the pre-acquisition Adjusted OIBDA of Cabletica, which was acquired on October 1, 2018.

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(a)	The amounts presented exclude the pre-acquisition property and equipment additions of UTS, which was acquired effective March 31, 2019.

(b)	The amounts presented for 2018 and 2017 exclude the pre-acquisition property and equipment additions of Cabletica, which was acquired on October 1, 2018.

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(a)	The amounts presented exclude the pre-acquisition revenue of UTS, which was acquired effective March 31, 2019.

(b)	Represents intersegment transactions between (i) C&W and Liberty Puerto Rico and (ii) C&W and VTR/Cabletica.

(c)	Residential fixed subscription and residential mobile services revenue include amounts received from subscribers for ongoing fixed and airtime services, respectively.

(d)	Residential fixed non-subscription revenue primarily includes interconnect and advertising revenue.

(e)	The total amount includes $43 million of revenue from sales of mobile handsets and other devices.

(f)	B2B service revenue primarily includes broadband internet, video, fixed-line telephony, mobile and managed services (including equipment installation contracts) offered to small (including small or home office), medium and large enterprises

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(g)	B2B subsea network revenue includes long-term capacity contracts with customers where the customer either pays a fee over time or prepays for the capacity upfront and pays a portion related to operating and maintenance of the network over time.

(a)	The amounts presented exclude the pre-acquisition revenue of Cabletica, which was acquired on October 1, 2018.

(b)	Represents intersegment transactions between C&W and Liberty Puerto Rico.

(c)	The total amount includes $47 million of revenue from sales of mobile handsets and other devices.

(d)	The total amount includes $23 million of revenue from sales of mobiles handsets and other devices.

(e)	Represents funds received by Liberty Puerto Rico from the FCC, which were granted to help restore and improve coverage and service quality from damages caused by the 2017 Hurricanes.

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(a)	Represents intersegment transactions between C&W and Liberty Puerto Rico.

(b)	The total amount includes $44 million of revenue from sales of mobile handsets and other devices.

(c)	The total amount includes $17 million of revenue from sales of mobile handsets and other devices.

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(a)	The amounts represent managed services and wholesale revenue from various jurisdictions across Latin America and the Caribbean, primarily related to the sale and lease of telecommunications capacity on C&W’s subsea and terrestrial fiber optic cable networks.

(b)	The amounts presented exclude the pre-acquisition revenue of UTS, which was acquired effective March 31, 2019.

(c)	Represents revenue associated with Cabletica, which was acquired on October 1, 2018.

(d)	The amounts relate to a number of countries in which C&W has less significant operations, all of which are located in Latin America and the Caribbean.

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(a)	Amounts for 2018 have been revised to conform with the current period presentation, which excludes intangible assets and goodwill.

(b)	Represents long-lived assets related to C&W’s subsea and terrestrial fiber optic cable networks that connect over 40 markets in Latin America and the Caribbean.

(c)	The amount presented for 2019 includes the long-lived assets of UTS, which was acquired effective March 31, 2019.

(d)	The amounts primarily include long-lived assets of C&W’s other operations, which are primarily located in the Caribbean.

(a)	As discussed in note 4, we completed the UTS Acquisition in March 2019.

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(b)

The basic net earnings (loss) per share attributable to Liberty Latin America shareholders amounts are calculated based on a weighted average number of Liberty Latin America Shares outstanding of 181,036,790, 181,504,385, 181,588,912 and 181,887,158, respectively. The dilutive net earnings per share attributable to Liberty Latin America shareholders amounts for the third and fourth quarters of 2019 are calculated based on a weighted average number of Liberty Latin America Shares outstanding of 181,943,750 and 181,952,454, respectively.

(c)	As discussed in note 4, we completed the Cabletica Acquisition in October 2018.

(d)	Amounts are calculated based on a weighted average number of shares outstanding of 171,231,111, 171,278,819, 171,378,608 and 179,288,782, respectively.

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Item 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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***	Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Liberty Latin America hereby undertakes to furnish supplemental copies of any of the omitted schedules and exhibits upon request by the SEC; provided, however, that the Company may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any schedule or exhibit so furnished.

Item 16.	FORM 10-K SUMMARY

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