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Item 7. Management’s Discussion and Analysis

2021-03-01 compared with 2020-02-19 · 964 added, 266 removed, 383 unchanged (76% of the section changed)

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Unless otherwise indicated, convenience translations into U.S.

dollars are calculated, and operational data (including subscriber statistics) is presented, as of December 31, 2019 .

A discussion regarding our financial condition and results of operations for the year ended December 31, 2018 compared with the year ended December 31, 2017 can be found under captions entitled “ Results of Operations ” and “ Liquidity and Capital Resources ” in the section entitled “ Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations ” of our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 21, 2019, which is available free of charge through the SEC’s website at www.sec.gov or the Company’s website, www.lla.com/ir.html.

The Company’s website and the information contained therein, or incorporated therein, are not intended to be incorporated into this Annual Report on Form 10-K .

dollars are calculated, and operational data (including subscriber statistics) are presented, as of December 31, 2020.

We are an international provider of fixed, mobile and subsea telecommunications services.

We provide residential and B2B communications services in (i) over 20 countries, primarily in Latin America and the Caribbean, through C&W , (ii) Chile and Costa Rica, through VTR/Cabletica , and (iii) Puerto Rico, through Liberty Puerto Rico .

C&W also provides (i) B2B services in certain other countries in Latin America and the Caribbean and (ii) wholesale communication services over its subsea and terrestrial fiber optic cable networks that connect over 40 markets in that region.

C&W owns less than 100% of certain of its consolidated subsidiaries, including C&W Bahamas (a 49.0%-owned entity that owns all of our operations in the Bahamas), C&W Jamaica (a 92.3%-owned entity that owns the majority of our operations in Jamaica), and C&W Panama (a 49.0%-owned entity that owns most of our operations in Panama).

We provide residential and B2B services in (i) over 20 countries across Latin America and the Caribbean, through two of our reportable segments, C&W Caribbean and Networks and C&W Panama, (ii) Chile and Costa Rica, through our reportable segment, VTR/Cabletica, and (iii) Puerto Rico, through our reportable segment, Liberty Puerto Rico.

Through our Networks & LatAm business, C&W Caribbean and Networks also provides (i) B2B services in certain other countries in Latin America and the Caribbean and (ii) wholesale communication services over its subsea and terrestrial fiber optic cable networks that connect over 40 markets in that region.

C&W owns less than 100% of certain of its consolidated subsidiaries, including C&W Bahamas (a 49%-owned entity that owns all of our operations in the Bahamas), C&W Jamaica (a 92%-owned entity that owns the majority of our operations in Jamaica), and CWP (a 49%-owned entity that owns most of our operations in Panama).

In addition, we own Cabletica through our 80.0% ownership of its parent, LBT CT Communications, S.A..

At December 31, 2019 , we (i) owned and operated fixed networks that passed 7,524,300 homes and served 6,047,200 revenue generating units ( RGU s ), comprising 2,610,300 broadband internet subscribers, 1,981,300 video subscribers and 1,455,600 fixed-line telephony subscribers and (ii) served 3,658,500 mobile subscribers.

At December 31, 2020, we (i) owned and operated fixed networks that passed 7,848,500 homes and served 6,186,300 revenue generating units (RGUs), comprising 2,763,900 broadband internet subscribers, 1,951,000 video subscribers and 1,471,400 fixed-line telephony subscribers and (ii) served 4,451,300 mobile subscribers.

During the fourth quarter of 2020, we completed an organizational change with respect to our C&W operations whereby management of the CWP subsidiary of C&W now reports directly to the Chief Operating Officer of Liberty Latin America and no longer reports to the former C&W segment decision maker.

As a result, CWP is now a separate operating and reportable segment, herein referred to as the C&W Panama segment.

Accordingly, as of December 31, 2020, our reportable segments are as follows:

• C&W Caribbean and Networks;

• C&W Panama;

• VTR/Cabletica;

• Liberty Puerto Rico.

As a result of the aforementioned segment change, we have revised the presentation of the discussion and analysis set forth below in order to align with the current segment presentation included in our consolidated financial statements.

In December 2019, COVID-19 was reported in Wuhan, China.

On March 11, 2020, the World Health Organization declared the outbreak a “pandemic,” pointing to the sustained risk of further global spread.

To date, confirmed cases of COVID-19 have been experienced in each of the markets in which we operate.

During 2020, COVID-19 has negatively impacted our operations, primarily within our C&W Caribbean and Networks, C&W Panama and VTR/Cabletica segments, due to resulting lockdowns, moratoriums, cancellation of live sporting events, and mobility, travel and tourism restrictions across many of the markets in which we operate.

The implications of these restrictions have been (i) the issuance of discounts to customers, (ii) the pause in certain managed service projects, particularly with government agencies, (iii) at VTR, customers experiencing network connection-related issues stemming from the significant increase, over a short period of time, in the capacity usage by our customers, and (iv) delayed or deferred customer payments and increased customer churn.

In VTR, our most competitive consumer fixed market, we experienced increased RGU churn following network challenges related to the increased bandwidth demand earlier in the year.

We have carried out a number of operational actions to improve the experience for our customers.

Within our mobile operations, the lockdowns negatively impacted, primarily at C&W Caribbean and Networks and C&W Panama during the second quarter of 2020, our customers’ ability to recharge their prepaid mobile devices.

During the third and fourth quarters of 2020, we witnessed partial recovery.

Since March 2020, we experienced declines in inbound roaming activity as a result of travel restrictions and reduced tourism activities in the markets in which we operate.

These factors collectively resulted in declines in revenue within our B2B and mobile operations and lower ARPU (as defined below) associated with our residential fixed subscription services.

The extent to which COVID-19 continues to impact our operational and financial performance will depend on certain developments, which include, among other factors:

• the duration and spread of the outbreak;

• the ability of governments and medical professionals in our markets to respond further to the outbreak, including securing access to a vaccine and vaccinating citizens;

• the actions by governments to require the extension of services for individuals regardless of payment status;

• the impact of changes to, or new, government regulations imposed in response to the pandemic, including laws and moratoriums;

• the impact on our customers and our sales cycles;

• the impact on actual and expected customer receivable collection patterns, including the impact of such patterns on our allowance for bad debt provisions following the adoption of ASU 2016-13 on January 1, 2020;

• the impact on our employees, including that from labor shortages or work from home initiatives;

• the impacts on foreign currency and interest rate fluctuations;

• the effect on our vendors, as COVID-19 could have adverse impacts on our supply chain thereby impacting our customers’ ability to use our services.

Given the impacts of COVID-19 continue to rapidly evolve, the extent to which COVID-19 may further impact our financial condition or results of operations continues to be uncertain and cannot be predicted at this time.

The heightened volatility of global markets resulting from COVID-19 further expose us to risks and uncertainties.

As COVID-19 continues to spread, we have, and expect to continue to take, a variety of measures to promote the safety and security of our employees, and ensure the availability of our communication services.

To this end, we upgraded our network in an effort to handle peak traffic, accelerated our digital transformation efforts, including self-installations for as many of our services and customers as possible, developed innovative pricing plans that meet customers’ needs across our products and services, and changed our cost structure.

AT&T Acquisition

On October 9, 2019, Liberty Latin America’s wholly-owned subsidiary, Liberty Puerto Rico, agreed to acquire AT&T’s wireless and wireline operations in Puerto Rico and the U.S.

Virgin Islands in an all-cash transaction.

The AT&T Acquisition closed on October 31, 2020.

In connection with the AT&T Acquisition we paid $1.9 billion, as further described in note 4 to the consolidated financial statements.

We financed this acquisition through a combination of net proceeds from the 2026 SPV Credit Facility, the 2027 LPR Senior Secured Notes and available liquidity.

In connection with the AT&T Acquisition, we expect to incur significant operating and capital costs to integrate the businesses of AT&T with our existing operations in Puerto Rico, including during 2021 approximately $35 million to $40 million of integration-related costs.

We expect that we will generate synergies during 2021 of approximately $10 million.

As a regulatory condition to close, we were required to dispose of, among other assets, a small B2B business in our existing Puerto Rico operations.

The disposal of this B2B business closed in early January 2021.

Rights Offering

On August 5, 2020, our Directors authorized the Rights Distribution of Class C Rights to holders of Liberty Latin America Shares to acquire Class C common shares in the Rights Offering.

In the Rights Distribution, we distributed 0.269 of a Class C Right for each share of Class A, Class B or Class C common shares held as of September 8, 2020, which was the record date for the Rights Distribution.

Fractional Class C Rights were rounded up to the nearest whole right.

Each whole Class C Right entitled the holder to purchase, pursuant to the basic subscription privilege, one share of LILAK at a subscription price of $7.14, which was equal to an approximate 25% discount to the volume weighted average trading price of LILAK for the 3-day trading period ending on and including September 2, 2020.

Each Class C Right also entitled the holder to subscribe for additional shares of LILAK that were unsubscribed for in the Rights Offering pursuant to an over-subscription privilege.

The Rights Offering commenced on September 11, 2020, which was also the ex-dividend date for the Rights Distribution.

The Rights Offering expired in accordance with its terms on September 25, 2020 and was fully subscribed with 49,049,073 shares of LILAK issued to those rights holders exercising basic and, if applicable, over-subscription privileges.

The proceeds from the Rights Offering, which aggregated $350 million before expenses, are expected to be used to finance acquisitions, including the Telefónica-Costa Rica Acquisition, and for other general corporate purposes.

Telefónica-Costa Rica Acquisition

On July 30, 2020, we entered into a definitive agreement to acquire Telefónica S.A.’s wireless operations in Costa Rica in an all-cash transaction based upon an enterprise value of $500 million on a cash- and debt-free basis.

The transaction is subject to certain customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2021.

Strategy and Management Focus

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As discussed further under Liquidity and Capital Resources—Capitalization below, we also seek to maintain our debt at levels that provide for attractive equity returns without assuming undue risk.

We strive to achieve organic revenue and customer growth in our operations by developing and marketing bundled entertainment and information and communications services, and extending and upgrading the quality of our networks where appropriate.

We strive to achieve “organic” revenue and customer growth in our operations by developing and marketing bundled entertainment, information and communications services, and extending and upgrading the quality of our networks where appropriate.

As we use the term, organic growth excludes foreign currency translation effects ( FX ) and the estimated impact of acquisitions and disposals.

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From an operational perspective, we are focused on our customer experience and increasing efficiencies.

During 2019, we initiated the process of centralizing key parts of our business into our new operations center in Panama City.

Beginning in 2019 and continuing on during 2020, we have been centralizing key parts of our business into our new operations center in Panama City, Panama.

In addition, we embarked on digital transformation efforts across our company.

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For information regarding our expectation with regard to property and equipment additions as a percent of revenue during 2021, see Liquidity and Capital Resources—Consolidated Statements of Cash Flows below.

AT&T Acquisition

On October 9, 2019, Liberty Latin America ’s wholly-owned subsidiary, Leo Cable , agreed to acquire AT&T ’s wireless and wireline operations in Puerto Rico and the U.S.

Virgin Islands in an all-cash transaction.

The AT&T Acquisition is valued at an enterprise value of $1.95 billion on a cash- and debt-free basis, subject to certain adjustments.

We intend to finance this acquisition through a combination of net proceeds from the 2026 SPV Credit Facility , the 2027 LPR Senior Secured Notes (each as defined in note 10 to our consolidated financial statements) and available liquidity.

In connection with the AT&T Acquisition, we expect to incur significant operating and capital costs to integrate the businesses of AT&T with our existing operations in Puerto Rico.

The AT&T Acquisition is subject to the satisfaction of customary closing conditions, including reviews by the FCC and clearance by the U.S.

Department of Justice (the DOJ ) under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended (the HSR Act ).

On January 10, 2020, we received a request for additional information and documentary materials (a Second Request ) from the DOJ regarding the AT&T Acquisition .

This information request was issued in conjunction with the DOJ ’s review of the transaction under the HSR Act .

Issuance of the Second Request extends the waiting period under the HSR Act until 30 days after both Liberty Latin America and AT&T have substantially complied with the Second Request or such later time as such parties may agree with the DOJ , unless the waiting period is terminated earlier by the DOJ .

We intend to respond to the information request as quickly as practicable and will continue to work cooperatively with the DOJ in connection with its review.

We still expect the AT&T Acquisition to close in the second quarter of 2020.

For additional information regarding the AT&T Acquisition and the terms of the related financing arrangements, see notes 4 and 10 , respectively, to our consolidated financial statements.

Hurricane Dorian

In September 2019, Hurricane Dorian impacted certain islands of the Bahamas, resulting in significant damage to homes, businesses and infrastructure in those areas.

In connection with Hurricane Dorian , we experienced adverse impacts to revenue, Adjusted OIBDA and RGUs in our C&W segment.

As a result, during 2019, we recorded a $16 million impairment of fully damaged or destroyed assets, primarily comprising property and equipment.

The effect of Hurricane Dorian negatively impacted C&W ’s 2019 revenue and Adjusted OIBDA by an estimated $9 million and $12 million , respectively.

We substantially completed our restoration of the damaged networks in Grand Bahamas and continue to make progress on our restoration efforts in Abaco.

As of December 31, 2019, we incurred approximately $21 million in property and equipment additions.

The amounts payable under C&W ’s Weather Derivative (as defined in note 3 to our consolidated financial statements) did not exceed the deductible threshold for Hurricane Dorian .

As such, we will not receive a third-party payment to cover this damage under this instrument.

Competition and Other External Factors

We are experiencing significant competition from other telecommunications operators, direct-to-home ( DTH ) operators and other communication service providers in all of our markets.

In Panama, competition is increasing, in particular in relation to the prepaid mobile business where competitors began introducing new aggressive offers during the second quarter of 2018.

In certain of its markets, C&W is also experiencing increased regulatory intervention that would, if implemented, facilitate increased competition.

The significant competition we are experiencing, together with macroeconomic factors, has adversely impacted our revenue, RGU s and/or average monthly subscription revenue per average fixed residential RGU or mobile subscriber, as applicable, ( ARPU ) in a number of C&W ’s markets.

We are experiencing significant competition from other telecommunications operators and other communication service providers in all of our markets.

The significant competition we are experiencing, together with macroeconomic factors, has adversely impacted our revenue, RGUs and/or average monthly subscription revenue per average fixed residential RGU or mobile subscriber, as applicable, (ARPU) in a number of C&W’s markets.

In Chile, competition increased in 2019, as VTR’s fixed-line competitors upgraded their networks at a faster rate than in prior years.

For additional information regarding the revenue impact of changes in the RGU s and ARPU of our reportable segments, see Discussion and Analysis of our Reportable Segments below .

During the fourth quarter of 2019, Chile experienced civil unrest and violence resulting from civilian frustration with the cost of living and income inequalities.

Protests lead to infrastructure damage, looting and arson, causing the government to impose a

state of emergency in certain cities, which was ultimately lifted at the end of October.

While the state of emergency has been lifted, minor conflict continues in certain locations in Chile.

As a result, there has been significant currency volatility associated with the Chilean peso, negative impacts to the local stock market, significant impacts to retails sales, and interest rate volatility.

Notwithstanding this socioeconomic environment, the operations, network and commercial activities of VTR were not significantly impacted by the recent unrest.

For additional information regarding the revenue impact of changes in the RGUs and ARPU of our reportable segments, see discussion below .

Results of Operations

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In the following discussion, we quantify the estimated impact on the operating results of the periods under comparison that is attributable to acquisitions and disposals.

We (i) acquired (a) AT&T’s wireless and wireline operations in Puerto Rico and the U.S.

Virgin Islands in October 2020, (b) a small B2B operation in the Cayman Islands in July 2020, (c) UTS in March 2019 and (d) Cabletica in October 2018, and (ii) disposed of our operations in the Seychelles in November 2019.

With respect to acquisitions, organic changes and the calculations of our organic change percentages exclude the operating results of an acquired entity during the first 12 months following the date of acquisition.

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Our primary exposure to FX risk is to the Chilean peso, as a significant portion of our revenue is derived from VTR.

For example, the average FX rate (utilized to translate our consolidated financial statements) for the U.S.

dollar per one Chilean peso appreciated by 12% for the year ended December 31, 2020, as compared to 2019, and appreciated by 10% for the year ended December 31, 2019, as compared to 2018.

The impacts to the various components of our results of operations that are attributable to changes in FX are highlighted below.

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The noncontrolling owners’ interests in the operating results of (i) certain subsidiaries of C&W, (ii) Cabletica and (iii) prior to October 17, 2018, LCPR, are reflected in net earnings or loss attributable to noncontrolling interests in our consolidated statements of operations.

On April 1, 2019, certain B2B operations in Puerto Rico were transferred from our C&W to our Liberty Puerto Rico segment.

This did not have a significant impact on the financial results of our C&W or Liberty Puerto Rico segments.

On April 1, 2019, certain B2B operations in Puerto Rico were transferred from our C&W Caribbean and Networks segment to our Liberty Puerto Rico segment, and on January 1, 2020, our captive insurance operation was transferred from our C&W Caribbean and Networks segment to our corporate operations.

These transfers did not have a significant impact on the financial results of our C&W Caribbean and Networks or Liberty Puerto Rico segments.

We are subject to inflationary pressures with respect to certain costs and foreign currency exchange risk with respect to costs and expenses that are denominated in currencies other than the respective functional currencies of our reportable segments.

Any cost increases that we are not able to pass on to our subscribers would result in increased pressure on our operating margins.

All of our segments derive their revenue primarily from (i) residential fixed services, including video, broadband internet and telephony, (ii) with the exception of Liberty Puerto Rico , residential mobile services, and (iii) B2B services.

Year Ended December 31, 2020 as Compared with Year Ended December 31, 2019

Consolidated Adjusted OIBDA

On a consolidated basis, Adjusted OIBDA is a non-U.S.

GAAP measure.

Adjusted OIBDA is the primary measure used by our chief operating decision maker to evaluate segment operating performance.

Adjusted OIBDA is also a key factor that is used by our internal decision makers to (i) determine how to allocate resources to segments and (ii) evaluate the effectiveness of our management for purposes of incentive compensation plans.

As we use the term, Adjusted OIBDA is defined as operating income or loss before share-based compensation, depreciation and amortization, provisions and provision releases related to significant litigation and impairment, restructuring and other operating items.

Other operating items include (i) gains and losses on the disposition of long-lived assets, (ii) third-party costs directly associated with successful and unsuccessful acquisitions and dispositions, including legal, advisory and due diligence fees, as applicable, and (iii) other acquisition-related items, such as gains and losses on the settlement of contingent consideration.

Our internal decision makers believe Adjusted OIBDA is a meaningful measure because it represents a transparent view of our recurring operating performance that is unaffected by our capital structure and allows management to (i) readily view operating trends, (ii) perform analytical comparisons and benchmarking between segments and (iii) identify strategies to improve operating performance in the different countries in which we operate.

We believe our Adjusted OIBDA measure is useful to investors because it is one of the bases for comparing our performance with the performance of other companies in the same or similar industries, although our measures may not be directly comparable to similar measures used by other public companies.

Adjusted OIBDA should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income or loss, net earnings or loss and other U.S.

GAAP measures of income (loss).

A reconciliation of total operating income (loss), the nearest U.S.

GAAP measure, to Adjusted OIBDA on a consolidated basis, is presented below.

Year ended December 31,

Operating income $ 91.7 $ 353.8

Share-based compensation expense 97.5 57.5

Depreciation and amortization 914.6 871.0

Impairment, restructuring and other operating items, net 380.9 259.1

Consolidated Adjusted OIBDA $ 1,484.7 $ 1,541.4

The following table sets forth organic and non-organic changes in Adjusted OIBDA for the period indicated:

C&W Caribbean and Networks C&W Panama VTR/Cabletica Liberty Puerto Rico Corporate Intersegment eliminations Consolidated

Adjusted OIBDA for the twelve months ending:

December 31, 2019 $ 732.1 $ 227.6 $ 433.6 $ 203.2 $ (55.1) $ — $ 1,541.4

Organic changes related to:

Revenue (58.2) (82.5) (21.5) 37.8 2.7 (3.8) (125.5)

Programming and other direct costs 27.2 28.7 — (6.1) — 3.3 53.1

Other operating costs and expenses 30.3 3.4 (10.5) (14.0) 7.9 0.5 17.6

Non-organic increases (decreases):

FX (11.8) — (39.7) — — — (51.5)

Acquisitions/disposition, net (6.4) — — 56.0 — — 49.6

December 31, 2020 $ 713.2 $ 177.2 $ 361.9 $ 276.9 $ (44.5) $ — $ 1,484.7

Adjusted OIBDA Margin

The following table sets forth the Adjusted OIBDA margins (Adjusted OIBDA divided by revenue) of each of our reportable segments:

Year ended December 31,

C&W Caribbean and Networks 41.8 40.4

C&W Panama 35.4 39.1

VTR/Cabletica 38.1 40.4

Liberty Puerto Rico 44.4 49.3

Adjusted OIBDA margin is impacted by organic changes in revenue, programming and other direct costs of services and other operating costs and expenses, as further discussed below, which include the impacts relating to COVID-19.

The organic changes in Adjusted OIBDA for the VTR market of our VTR/Cabletica segment, was negatively impacted by $21 million from foreign currency impact of contracts denominated in U.S.

dollars during the year ended December 31, 2020, of which $15 million related to programming and the remaining in various other cost categories.

The significant decrease in the Adjusted OIBDA margin for Liberty Puerto Rico is primarily related to lower Adjusted OIBDA margins associated with the new mobile operations at Liberty Puerto Rico following the closing of the AT&T Acquisition.

For additional information regarding the impacts of COVID-19, see discussion in Overview above.

All of our segments derive their revenue primarily from (i) residential fixed services, including video, broadband internet and fixed-line telephony, (ii) residential mobile services, including, beginning in November 2020, at Liberty Puerto Rico following the closing of the AT&T Acquisition, and (iii) B2B services.

C&W also provides wholesale communication services over its subsea and terrestrial fiber optic cable networks.

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In the following discussion, we discuss ARPU changes in terms of the net impact of the above factors on the ARPU that is derived from our video, broadband internet, fixed-line telephony and mobile products .

The 2017 Hurricanes had a significant impact on the variances in revenue at Liberty Puerto Rico for the comparative periods, as further discussed below.

Additionally, Hurricane Dorian negatively impacted variances in revenue at C&W for the comparative periods, as further discussed below.

For the 2020 and 2019 comparison below, revenue variances, including changes in ARPU, were influenced by the impacts of COVID-19, as further discussed below and in the Overview above.

The following table sets forth revenue by reportable segment:

Year ended December 31, Increase (decrease)

2020 2019 $ %

in millions, except percentages

C&W Caribbean and Networks $ 1,706.8 $ 1,812.8 $ (106.0) (5.8)

C&W Panama 500.2 582.7 (82.5) (14.2)

VTR/Cabletica 949.0 1,073.8 (124.8) (11.6)

Liberty Puerto Rico 624.1 412.1 212.0 51.4

Corporate 2.7 — 2.7 N.M.

Intersegment eliminations (18.2) (14.4) (3.8) N.M.

Total $ 3,764.6 $ 3,867.0 $ (102.4) (2.6)

— Not Meaningful.

Consolidated.

The decrease during 2020, as compared to 2019, includes (i) an increase of $209 million associated with the impact of acquisitions and (ii) a decrease of $49 million associated with the impact of a disposal and (iii) a decrease of $137 million attributable to FX.

Excluding the effects of acquisitions, a disposal and FX, revenue decreased $126 million or 3.2%.

The organic decrease primarily includes increases (decreases) of ($58 million), ($83 million), ($22 million) and $38 million at C&W Caribbean and Networks, C&W Panama, VTR/Cabletica and Liberty Puerto Rico, respectively, as further discussed below.

C&W Caribbean and Networks .

C&W Caribbean and Networks’s revenue by major category is set forth below:

Year ended December 31, Increase (decrease)

2020 2019 $ %

in millions, except percentages

Residential revenue:

Residential fixed revenue:

Subscription revenue:

Video $ 142.4 $ 150.1 $ (7.7) (5.1)

Broadband internet 250.0 225.1 24.9 11.1

Fixed-line telephony 74.6 79.5 (4.9) (6.2)

Total subscription revenue 467.0 454.7 12.3 2.7

Non-subscription revenue 42.2 47.5 (5.3) (11.2)

Total residential fixed revenue 509.2 502.2 7.0 1.4

Residential mobile revenue:

Service revenue 294.1 339.1 (45.0) (13.3)

Interconnect, inbound roaming, equipment sales and other (a) 44.4 65.3 (20.9) (32.0)

Total residential mobile revenue 338.5 404.4 (65.9) (16.3)

Total residential revenue 847.7 906.6 (58.9) (6.5)

Service revenue 600.4 659.3 (58.9) (8.9)

Subsea network revenue 258.7 246.9 11.8 4.8

Total B2B revenue 859.1 906.2 (47.1) (5.2)

Total $ 1,706.8 $ 1,812.8 $ (106.0) (5.8)

(a) Revenue from inbound roaming was $14 million and $34 million, respectively.

For additional information regarding a change in presentation of revenue by product, see note 21 to the consolidated financial statements.

The details of the changes in C&W Caribbean and Networks’s revenue during 2020, as compared to 2019, are set forth below (in millions):

Increase (decrease) in residential fixed subscription revenue due to change in:

Average number of RGUs (a) $ 27.7

ARPU (b) (10.9)

Decrease in residential fixed non-subscription revenue (c)

Total increase in residential fixed revenue 13.4

Decrease in residential mobile service revenue (d) (29.2)

Decrease in residential mobile interconnect, inbound roaming, equipment sales and other (e) (20.9)

Decrease in B2B service revenue (f) (38.0)

Increase in B2B subsea network revenue (g)

Total organic decrease (58.2)

Net impact of acquisitions and a disposal (14.1)

Impact of FX (33.7)

Total $ (106.0)

(a) The increase is attributable to higher average broadband internet and video RGUs.

The increase in broadband internet RGUs is partially attributable to an increase in telecommuting during COVID-19 due to work-from-home mandates.

(b) The decrease is primarily due to the net effect of (i) lower ARPU from video and fixed-line telephony services and (ii) higher ARPU from broadband internet services.

(d) The decrease is primarily attributable to (i) lower ARPU from mobile services, as COVID-19 lockdowns and travel restrictions reduced (a) demand for mobile data services and (b) outbound roaming activity, and (ii) lower average prepaid mobile subscribers, primarily due to declines in the Bahamas, as a result of COVID-19 impacts, as further discussed in the Overview above.

(e) The decrease is primarily attributable to an organic decrease of $18 million in inbound roaming fees, primarily related to travel restrictions associated with COVID-19.

(f) The decrease is primarily due to (i) lower revenues from mobile and fixed services partially due to discounts and credits related to reduced or suspended service across our markets as a result of the COVID-19 lockdowns and (ii) lower wholesale interconnect revenues.

(g) The increase is primarily attributable to (i) an increase of $7 million associated with revenue recognized on a cash basis for services provided to a significant customer and (ii) an increase in the demand for telecommunications capacity on our subsea network during COVID-19.

C&W Panama’s revenue by major category is set forth below:

Year ended December 31, Increase (decrease)

2020 2019 $ %

in millions, except percentages

Residential revenue:

Residential fixed revenue:

Subscription revenue:

Video $ 27.8 $ 31.0 $ (3.2) (10.3)

Broadband internet 39.0 34.9 4.1 11.7

Fixed-line telephony 18.8 22.4 (3.6) (16.1)

Total subscription revenue 85.6 88.3 (2.7) (3.1)

Non-subscription revenue 11.8 14.5 (2.7) (18.6)

Total residential fixed revenue 97.4 102.8 (5.4) (5.3)

Residential mobile revenue:

Service revenue 160.1 183.8 (23.7) (12.9)

Interconnect, inbound roaming, equipment sales and other (a) 41.0 56.8 (15.8) (27.8)

Total residential mobile revenue 201.1 240.6 (39.5) (16.4)

Total residential revenue 298.5 343.4 (44.9) (13.1)

B2B service revenue 201.7 239.3 (37.6) (15.7)

Total $ 500.2 $ 582.7 $ (82.5) (14.2)

(a) Revenue from inbound roaming was $2 million and $3 million, respectively.

For additional information regarding a change in presentation of revenue by product, see note 21 to the consolidated financial statements.

The details of the changes in C&W Panama’s revenue during 2020, as compared to 2019, are set forth below (in millions):

Increase (decrease) in residential fixed subscription revenue due to change in:

Average number of RGUs (a) $ 8.4

ARPU (b) (11.1)

Decrease in residential fixed non-subscription revenue (c) (2.7)

Total decrease in residential fixed revenue

Decrease in residential mobile service revenue (d) (23.7)

Decrease in residential mobile interconnect, inbound roaming, equipment sales and other revenue (e) (15.8)

Decrease in B2B service revenue (f)

Total organic decrease $ (82.5)

(a) The increase is primarily attributable to higher average broadband internet RGUs, partially attributable to an increase in telecommuting during COVID-19 due to work-from-home mandates.

(b) The decrease is primarily due to lower ARPU from fixed-line telephony and video services.

(d) The decrease is primarily attributable to (i) lower ARPU from mobile services , as COVID-19 lockdowns and travel restrictions negatively impacted customers’ ability to recharge handset devices, and (ii) lower average mobile subscribers, primarily resulting from the impacts of COVID-19 and competition, as further discussed in the Overview above.

(e) The decrease is primarily attributable to (i) lower volumes of handset sales, as COVID-19 related lockdowns negatively impacted customers’ ability to purchase handsets and (ii) lower interconnect volumes.

(f) The decrease is primarily due to (i) lower revenues from managed services, primarily driven by certain non-recurring projects that have been put on hold due to the economic uncertainty of the impact of COVID-19, (ii) lower revenues from mobile and fixed services partially due to discounts and credits related to reduced or suspended service as a result of the COVID-19 lockdowns.

VTR/Cabletica .

VTR/Cabletica’s revenue by major category is set forth below:

Year ended December 31, Increase (decrease)

2020 2019 $ %

in millions, except percentages

Residential revenue:

Residential fixed revenue:

Subscription revenue:

Video $ 370.6 $ 422.1 $ (51.5) (12.2)

Broadband internet 382.7 412.0 (29.3) (7.1)

Fixed-line telephony 77.2 100.7 (23.5) (23.3)

Total subscription revenue 830.5 934.8 (104.3) (11.2)

Non-subscription revenue 24.3 34.3 (10.0) (29.2)

Total residential fixed revenue 854.8 969.1 (114.3) (11.8)

Residential mobile revenue:

Service revenue 55.7 62.7 (7.0) (11.2)

Interconnect, inbound roaming, equipment sales and other 8.2 12.0 (3.8) (31.7)

Total residential mobile revenue 63.9 74.7 (10.8) (14.5)

Total residential revenue 918.7 1,043.8 (125.1) (12.0)

B2B service revenue 30.3 30.0 0.3 1.0

Total $ 949.0 $ 1,073.8 $ (124.8) (11.6)

The details of the changes in VTR/Cabletica’s revenue during 2020, as compared to 2019, are set forth below (in millions):

Increase (decrease) in residential fixed subscription revenue due to change in:

Average number of RGUs (a) $ 4.6

ARPU (b) (20.2)

Decrease in residential fixed non-subscription revenue (c) (7.6)

Total decrease in residential fixed revenue

Increase in residential mobile service revenue (d) 0.3

Decrease in residential mobile interconnect, inbound roaming, equipment sales and other revenue (e)

Increase in B2B service revenue (f) 4.2

Total organic decrease (21.5)

Impact of FX (103.3)

Total $ (124.8)

(a) The increase is primarily attributable to the net effect of (i) higher average broadband internet RGUs, partially attributable to an increase in telecommuting during COVID-19 due to work-from-home mandates, and (ii) lower average fixed-line telephony RGUs at VTR.

(b) The decrease, which relates to VTR, is primarily due to lower ARPU from (i) video, primarily attributable to declines associated with the cancellation of live soccer matches broadcast on our premium programming, and (ii) fixed-line telephony.

(c) The decrease is primarily attributable to (i) lower activations and installations at VTR as a result of COVID-19 and (ii) lower equipment sales at Cabletica.

(d) The increase, which relates to VTR, is due to the net effect of (i) higher average numbers of mobile subscribers and (ii) lower ARPU from mobile services.

(e) The decrease, which relates to VTR, is primarily attributable to declines in (i) interconnect revenue due to decreased rates, partially offset by higher traffic, and (ii) handset sales due to the temporary closure of physical stores, as a result of COVID-19-related lockdowns.

(f) The increase is largely attributable to higher broadband internet and fixed-line telephony services at VTR.

Liberty Puerto Rico Liberty Puerto Rico’s revenue by major category is set forth below:

Year ended December 31, Increase (decrease)

2020 2019 $ %

in millions, except percentages

Residential fixed revenue:

Subscription revenue:

$ 147.2 $ 140.9 $ 6.3 4.5

Broadband internet

204.7 175.0 29.7 17.0

Fixed-line telephony

25.5 23.4 2.1 9.0

Total subscription revenue

377.4 339.3 38.1 11.2

Non-subscription revenue

17.7 21.7 (4.0) (18.4)

Total residential fixed revenue

395.1 361.0 34.1 9.4

Residential mobile revenue:

Service revenue 82.9 — 82.9 N.M.

Interconnect, inbound roaming, equipment sales and other (a) 50.6 — 50.6 N.M.

Total residential mobile revenue 133.5 — 133.5 N.M.

Total residential revenue 528.6 361.0 167.6 46.4

B2B service revenue 89.8 51.1 38.7 75.7

Other revenue (b) 5.7 — 5.7 N.M.

$ 624.1 $ 412.1 $ 212.0 51.4

— Not Meaningful.

(a) Revenue from inbound roaming was $11 million in 2020.

(b) Amount relates to funds received from the FCC related to Liberty Mobile following the closing of the AT&T Acquisition.

The details of the changes in Liberty Puerto Rico’s revenue during the year ended December 31, 2020, as compared to 2019, are set forth below (in millions):

Increase in residential fixed subscription revenue due to change in:

Average number of RGUs (a) $ 33.2

Decrease in residential fixed non-subscription revenue (c) (4.0)

Total increase in residential fixed revenue

Increase in B2B service (d)

Total organic increase 37.8

Impact of an acquisition 174.2

Total $ 212.0

(a) The increase is primarily attributable to higher average broadband internet RGUs, as we experienced increased demand due in part to the impact of COVID-19 work-from-home mandates.

(b) The increase is primarily attributable to the net effect of (i) higher ARPU from broadband internet and video services and (ii) $2 million of credits issued to customers in connection with the earthquakes that impacted Puerto Rico in January 2020.

(c) The decrease is primarily due to reconnect and late fee revenues, as such fees were generally waived during the second and third quarters in response to impacts of COVID-19.

(d) The increase primarily relates to the transfer of certain B2B operations in Puerto Rico from our C&W Caribbean and Networks segment to our Liberty Puerto Rico segment.

Programming and other direct costs of services

Programming and other direct costs of services include programming and copyright costs, interconnect and access costs, commissions, costs of mobile handsets and other devices, and other direct costs related to our operations.

Programming and copyright costs, which represent a significant portion of our operating costs, may increase in future periods as a result of (i) higher costs associated with the expansion of our digital video content, including rights associated with ancillary product offerings and rights that provide for the broadcast of live sporting events, (ii) rate increases or (iii) growth in the number of our video subscribers.

The following table sets forth the organic and non-organic changes in programming and other direct costs of services on a consolidated basis:

Increase (decrease) from:

Year ended December 31, Increase (decrease) Acquisition (disposition), net Organic

Programming and copyright $ 389.3 $ 404.8 $ (15.5) $ (21.5) $ (0.9) $ 6.9

Interconnect and commissions 249.9 280.0 (30.1) (12.2) 3.4 (21.3)

Equipment and other

206.8 193.0 13.8 (2.8) 55.3 (38.7)

Total programming and other direct costs

$ 846.0 $ 877.8 $ (31.8) $ (36.5) $ 57.8 $ (53.1)

C&W Caribbean and Networks .

The following table sets forth the organic and non-organic changes in programming and other direct costs of services for our C&W Caribbean and Networks segment.

Decrease from:

Year ended December 31, Decrease FX Acquisition (disposition), net Organic

Programming and copyright $ 88.8 $ 105.3 $ (16.5) $ (1.3) $ (2.8) $ (12.4)

Interconnect and commissions 163.0 174.4 (11.4) (6.8) (2.6) (2.0)

Equipment and other 59.1 75.0 (15.9) (0.9) (2.2) (12.8)

Total programming and other direct costs $ 310.9 $ 354.7 $ (43.8) $ (9.0) $ (7.6) $ (27.2)

• Programming and copyright:

The organic decrease is primarily due to the net effect of (i) lower sports content costs and (ii) the net negative impact of $9 million, resulting from the reassessment and release of various accruals in certain of our markets during 2020 and 2019.

• Interconnect and commissions:

The organic decrease is primarily due to the net effect of (i) lower wholesale call volumes and (ii) the negative impact resulting from the reassessment of an accrual during 2019.

• Equipment and other:

The organic decrease is primarily due to lower volume of mobile handset sales.

The following table sets forth the organic changes in programming and other direct costs of services for our C&W Panama segment.

Year ended December 31, Organic decrease

Programming and copyright $ 13.9 $ 14.6 $ (0.7)

Interconnect and commissions 41.1 52.0 (10.9)

Equipment and other

74.0 91.1 (17.1)

Total programming and other direct costs

$ 129.0 $ 157.7 $ (28.7)

• Interconnect and commissions:

The organic decrease is primarily due to lower wholesale call volumes.

• Equipment and other:

The organic decrease is primarily due to (i) lower volume of mobile handset sales and (ii) a decrease driven by certain non-recurring projects that have been put on hold due to the economic uncertainty of the impact of COVID-19, .

VTR/Cabletica .

The following table sets forth the organic and non-organic changes in programming and other direct costs of services for our VTR/Cabletica segment.

Increase (decrease) from:

Year ended December 31, Decrease FX Organic

Programming and copyright $ 194.7 $ 199.9 $ (5.2) $ (20.2) $ 15.0

Interconnect and commissions 45.0 57.4 (12.4) (5.4) (7.0)

Equipment and other

18.2 28.1 (9.9) (1.9) (8.0)

Total programming and other direct costs

$ 257.9 $ 285.4 $ (27.5) $ (27.5) $ —

• Programming and copyright:

The organic increase, mostly in the VTR market, is primarily due to the net effect of (i) an increase of $15 million in the foreign currency impact of programming contracts denominated in U.S.

dollars, and (ii) a net decrease in certain premium and basic content costs, primarily due to (a) a decline associated with the renegotiation of a programming contract that governs content rates for live soccer matches that were cancelled, (b) an increase in rates in other premium and basic content cost and (c) lower subscribers of other premium and basic content.

• Interconnect and commissions:

The organic decrease, which relates to the VTR market, is primarily due to lower rates that were partially offset by higher volumes.

• Equipment and other:

The organic decrease, mostly in the VTR market, is primarily due to the net effect of (i) lower volumes of equipment sales as a result of changes in market dynamics and customer usage due to COVID-19-related restrictions and (ii) an increase of $3 million in the foreign currency impact on costs of handsets sales.

Liberty Puerto Rico .

The following table sets forth the organic changes in programming and other direct costs of services for our Liberty Puerto Rico segment.

Increase from:

Year ended December 31, Increase Acquisition Organic

Programming and copyright $ 91.9 $ 85.0 $ 6.9 $ 1.9 $ 5.0

Interconnect and commissions 14.2 7.5 6.7 6.0 0.7

Equipment and other

58.2 0.3 57.9 57.5 0.4

Total programming and other direct costs

$ 164.3 $ 92.8 $ 71.5 $ 65.4 $ 6.1

• Programming and copyright:

The organic increase is primarily due to (i) a higher average number of video subscribers, (ii) an accrual recorded in the second quarter of 2020 related to an audit of programming services provided in 2018 and 2019 and (iii) higher programming rates.

• Interconnect and commissions:

The organic increase is primarily due to the transfer of certain B2B operations in Puerto Rico from our C&W Caribbean and Networks segment to our Liberty Puerto Rico segment during the first quarter of 2019.

Other operating costs and expenses

Other operating costs and expenses set forth in the tables below comprise the following cost categories:

• Personnel and contract labor-related costs, which primarily include salary-related and cash bonus expenses, net of capitalizable labor costs, and temporary contract labor costs;

• Network-related expenses, which primarily include costs related to network access, system power, core network, and CPE repair, maintenance and test costs;

• Service-related costs, which primarily include professional services, information technology-related services, audit, legal and other services;

• Commercial , which primarily includes sales and marketing costs, such as advertising, commissions and other sales and marketing-related costs, and customer care costs related to outsourced call centers;

• Facility, provision, franchise and other , which primarily includes facility-related costs, provision for bad debt expense, franchise-related fees, bank fees, insurance, travel and entertainment and other operating-related costs;

• Share-based compensation costs that relate to (i) SARs, RSUs and PSUs issued to our employees and Directors and (ii) bonus-related expenses that will be paid in the form of equity.

Consolidated .

The following table sets forth the organic and non-organic changes in other operating costs and expenses on a consolidated basis.

Increase (decrease) from:

Year ended December 31, Increase (decrease) Acquisition (disposition), net Organic

Personnel and contract labor $ 483.6 $ 500.4 $ (16.8) $ (13.0) $ 14.1 $ (17.9)

Network-related 261.4 264.4 (3.0) (11.4) 1.1 7.3

Service-related 161.7 149.9 11.8 (5.0) 9.7 7.1

Commercial 168.1 172.6 (4.5) (11.2) 5.4 1.3

Facility, provision, franchise and other

359.1 360.5 (1.4) (8.4) 22.4 (15.4)

Share-based compensation expense

97.5 57.5 40.0 (1.0) 0.8 40.2

Total other operating costs and expenses

$ 1,531.4 $ 1,505.3 $ 26.1 $ (50.0) $ 53.5 $ 22.6

In the following section, we provide a discussion and analysis of the organic changes of other operating costs and expenses, which excludes, where applicable, the impact of acquisitions, dispositions and FX for each of our reportable segments and our Corporate operations.

For additional information regarding our share-based compensation, see Results of Operations (below Adjusted OIBDA)—2020 compared to 2019 discussion and analysis below and note 17 to our consolidated financial statements.

C&W Caribbean and Networks .

The following table sets forth the organic and non-organic changes in other operating costs and expenses for our C&W Caribbean and Networks segment.

Increase (decrease) from:

Year ended December 31, Increase (decrease) Acquisition (disposition), net Organic

Personnel and contract labor $ 254.2 $ 270.6 $ (16.4) $ (5.1) $ 0.6 $ (11.9)

Network-related 140.5 147.3 (6.8) (3.2) (1.4) (2.2)

Service-related 70.6 70.6 — (0.6) 1.8 (1.2)

Commercial 45.4 57.4 (12.0) (1.2) (0.3) (10.5)

Facility, provision, franchise and other 171.9 180.0 (8.1) (2.8) (0.8) (4.5)

Share-based compensation expense 28.4 16.5 11.9 (0.1) 0.8 11.2

Total other operating costs and expenses $ 711.0 $ 742.4 $ (31.4) $ (13.0) $ 0.7 $ (19.1)

• Personnel and contract labor:

The organic decrease is primarily due to the net effect of (i) lower salaries and other personnel costs, primarily associated with the benefit of certain ongoing restructuring activities, (ii) $7 million of estimated bonus-related expenses that have been recognized as share-based compensation expense, as certain 2020 bonuses will be paid in the form of equity, as further discussed below under S hare-based compensation expense , and (iii) lower capitalized labor costs due to the curtailment of certain projects as a result of the impact of COVID-19.

• Commercial:

The organic decrease is primarily due to lower marketing and sales costs, largely due to reductions in promotional and sponsorship costs, as a result of certain adverse economic impacts caused by the COVID-19 pandemic across our markets.

• Facility, provision, franchise and other costs:

The organic decrease is primarily due to the net effect of:

◦ lower (i) travel and entertainment costs and (ii) office-related expenses due to the curtailment of such costs as a result of the impact of COVID-19;

◦ an increase due to the negative impact of a $10 million decline in 2019 associated with withholding taxes on third-party supplier services, primarily related to the expiration of statute of limitations;

◦ lower insurance costs of $4 million due in part to our Weather Derivative, as further described below and in notes 3 and 5 to our consolidated financial statements;

◦ bad debt expense, which remained relatively unchanged, as (i) higher bad debt provisions due to the impacts of COVID-19, which have generally resulted in (a) delays in collections, (b) higher expected credit losses associated with certain B2B customers and (c) changes in our general expectations related to our customers’ ability to pay, were offset by (ii) the beneficial impacts of (a) a $3 million provision in 2019 related to certain B2B customers and (b) a $2 million provision in 2019 related to the impact of Hurricane Dorian.

The following table sets forth the organic changes in other operating costs and expenses for our C&W Panama segment.

Year ended December 31, Organic increase (decrease)

Personnel and contract labor $ 70.9 $ 70.2 $ 0.7

Network-related 39.7 43.0 (3.3)

Service-related 13.3 15.8 (2.5)

Commercial 20.5 22.0 (1.5)

Facility, provision, franchise and other 49.6 46.4 3.2

Share-based compensation expense 2.7 0.9 1.8

Total other operating costs and expenses $ 196.7 $ 198.3 $ (1.6)

• Personnel and contract labor:

The organic increase is net of the impact of $1 million of estimated bonus-related expense that has been recognized as share-based compensation expense, as certain 2020 bonuses will be paid in the form of equity, as further discussed below under S hare-based compensation expense.

• Facility, provision, franchise and other costs:

The organic increase is primarily due to the net effect of (i) higher bad debt provisions during 2020, as the impacts of COVID-19 have generally resulted in (a) delays in collections, (b) higher expected credit losses associated with certain B2B customers and (c) changes in our general expectations related to our customers’ ability to pay, and (ii) the beneficial impact of a $2 million increase to the bad debt provision during 2019, primarily related to certain government customers.

VTR/Cabletica .

The following table sets forth the organic and non-organic changes in other operating costs and expenses for our VTR/Cabletica segment.

Increase (decrease) from:

Year ended December 31, Increase (decrease) FX Organic

Personnel and contract labor $ 76.1 $ 91.5 $ (15.4) $ (7.9) $ (7.5)

Network-related 75.8 71.1 4.7 (8.2) 12.9

Service-related 38.4 39.9 (1.5) (4.4) 2.9

Commercial 83.2 82.3 0.9 (10.0) 10.9

Facility, provision, franchise and other 55.7 70.0 (14.3) (5.6) (8.7)

Share-based compensation expense 8.9 4.9 4.0 (0.9) 4.9

Total other operating costs and expenses $ 338.1 $ 359.7 $ (21.6) $ (37.0) $ 15.4

• Personnel and contract labor:

The organic decrease, mostly related to the VTR market, is primarily due to (i) a decrease in salary-related costs, which includes $3 million of estimated bonus-related expense that has been recognized as share-based compensation expense, as certain 2020 bonuses will be paid in the form of equity, as further

discussed below under Share-based compensation expense , and (ii) higher capitalized labor costs associated with certain development-related projects.

• Network-related:

The organic increase, mostly related to the VTR market, is primarily due to (i) higher volumes of network access-related contracted labor and (ii) higher costs related to CPE refurbishment activity.

• Service-related:

The organic increase, mostly related to the VTR market, is primarily due to (i) increased information technology costs associated with software maintenance and support and (ii) higher professional consultancy services.

• Commercial:

The organic increase is primarily due to the net effect of (i) an increase in call center volumes as a result of the impact from COVID-19, (ii) a decrease in marketing and advertising expenses and (iii) higher sales commissions to third-party dealers.

• Facility, provision, franchise and other costs:

The organic decrease is primarily due to (i) lower travel and entertainment costs due to curtailment of such costs as a result of the impact of COVID-19, (ii) lower bank-related fees and (iii) lower bad debt and collection expenses.

Liberty Puerto Rico .

The following table sets forth the organic changes in other operating costs and expenses for our Liberty Puerto Rico segment.

Increase (decrease) from:

Year ended December 31, Increase Acquisition Organic

Personnel and contract labor $ 62.1 $ 39.5 $ 22.6 $ 13.5 $ 9.1

Network-related 6.7 4.5 2.2 2.5 (0.3)

Service-related 24.9 10.6 14.3 7.9 6.4

Commercial 19.0 10.9 8.1 5.7 2.4

Facility, provision, franchise and other 70.2 50.6 19.6 23.2 (3.6)

Share-based compensation expense 5.1 2.2 2.9 — 2.9

Total other operating costs and expenses $ 188.0 $ 118.3 $ 69.7 $ 52.8 $ 16.9

• Personnel and contract labor:

The organic increase is primarily due to the net effect of (i) annual salary increases, (ii) higher sales commissions and (iii) $1 million of estimated bonus-related expense that has been recognized as share-based compensation expense, as certain 2020 bonuses will be paid in the form of equity, as further discussed below under Share-based compensation expense.

• Service-related:

The organic increase is primarily due to integration costs of $6 million associated with the AT&T Acquisition.

• Facility, provision, franchise and other:

The organic decrease is primarily due to lower bad debt expense driven by improved collections.

The following tables set forth the organic changes in other operating costs and expenses for our corporate operations.

Year ended December 31, Organic increase (decrease)

Personnel and contract labor $ 20.3 $ 28.6 $ (8.3)

Network-related 1.1 — 1.1

Service-related 14.5 13.0 1.5

Facility, provision, franchise and other 11.7 13.5 (1.8)

Share-based compensation expense 52.4 33.0 19.4

Total other operating costs and expenses $ 100.0 $ 88.1 $ 11.9

• Personnel and contract labor:

The organic decrease is primarily attributable to $6 million of estimated bonus-related expense that has been recognized as share-based compensation expense, as certain 2020 bonuses will be paid in the form of equity, as further discussed below under Share-based compensation expense .

• Facility, provision, franchise and other:

The organic decrease is primarily attributable to the net effect of (i) lower travel and entertainment costs due to curtailment of such costs as a result of the impact of COVID-19 and (ii) higher expenses associated with a mobile handset insurance program that began during the fourth quarter of 2020 following the closing of the AT&T Acquisition.

Results of operations (below Adjusted OIBDA)—2020 compared to 2019

Share-based compensation expense (included in other operating costs and expenses)

Share-based compensation expense increased $40 million during 2020, as compared to 2019.

This increase is primarily due to (i) an increase of $19 million related to estimated bonus-related expenses that will be paid in the form of equity.

Accordingly, such expenses have been included in share-based compensation expense effective January 1, 2020 and (ii) an increase of $7 million related to the extension of the expiration period for certain Liberty Global awards held by our employees.

For additional information regarding our share-based compensation, see note 17 to our consolidated financial statements.

Depreciation and amortization

Our depreciation and amortization expense increased $44 million or 5.0% during 2020 , as compared to 2019.

Excluding the impacts of FX, acquisitions and a disposal, depreciation and amortization expense increased $48 million or 5.5%.

The organic increase is primarily due to the net effect of (i) an increase in property and equipment additions, primarily associated with the installation of CPE, baseline additions, support-related equipment expenditures and the expansion and upgrade of our networks and other capital initiatives , and (ii) a decrease associated with certain assets becoming fully depreciated.

Impairment, restructuring and other operating items, net

We recognized impairment, restructuring and other operating items, net, of $381 million and $259 million during 2020 and 2019, respectively.

The 2020 amount primarily includes (i) impairment charges of $283 million, (ii) direct acquisition and disposition costs of $64 million and (iii) restructuring charges of $28 million.

The impairment charges, which are primarily due to the economic impacts associated with COVID-19, include (i) $177 million related to an impairment of goodwill at C&W Panama and (ii) $99 million related to an impairment of goodwill at various reporting units within the C&W Caribbean and Networks segment.

The restructuring charges, which are primarily related to C&W Caribbean and Networks, VTR and C&W Panama, include employee severance and termination costs related to certain reorganization activities and contract termination and other related charges.

The direct acquisition costs are primarily related to the AT&T Acquisition.

The 2019 amount primarily includes (i) impairment charges of $199 million, (ii) restructuring charges of $46 million, (iii) $10 million of direct acquisition and disposition costs and (iv) a $3 million loss due to the Seychelles Disposition.

The impairment charges primarily include (i) $182 million related to an impairment of goodwill at C&W Panama and (ii) $16 million related to charges at C&W Caribbean and Networks primarily to reduce the carrying value of property and equipment as a result of the impact of Hurricane Dorian.

The restructuring charges, which are primarily at C&W Caribbean and Networks and VTR, include employee severance and termination costs related to certain reorganization activities and contract termination and other related charges.

The direct acquisition costs and disposition costs relate to the AT&T Acquisition and, to a lesser extent, the UTS Acquisition and the Seychelles Disposition.

For additional information regarding our impairment and restructuring charges, see notes 9 and 12 to our consolidated financial statements.

Interest expense

Our interest expense increased $34 million during 2020, as compared to 2019.

The increase is primarily due to (i) the net effect of (a) higher average outstanding debt balances and (b) lower weighted-average interest rates and (ii) higher amortization of (a) discounts and premiums, net, and (b) deferred financing costs.

For additional information regarding our outstanding indebtedness, see note 10 to our consolidated financial statements.

It is possible that the interest rates on (i) any new borrowings could be higher than the current interest rates on our existing indebtedness and (ii) our variable-rate indebtedness could increase in future periods.

As further discussed in note 5 to our consolidated financial statements and under Item 7A.

Qualitative and Quantitative Disclosures about Market Risk below, we use derivative instruments to manage our interest rate risks.

Realized and unrealized losses on derivative instruments, net

Our realized and unrealized gains or losses on derivative instruments primarily include (i) unrealized changes in the fair values of our derivative instruments that are non-cash in nature until such time as the derivative contracts are fully or partially settled and (ii) realized gains or losses upon the full or partial settlement of the derivative contracts.

The details of our realized and unrealized losses on derivative instruments, net, are as follows:

Year ended December 31,

Increase (decrease)

Cross-currency and interest rate derivative contracts (a) (b) $ (328.6) $ (21.0)

Foreign currency forward contracts (7.8) 9.4

Weather Derivatives (c) (16.3) (5.6)

Total $ (352.7) $ (17.2)

(a) The loss during 2020 includes a realized gain of $71 million associated with the settlement of certain cross-currency interest rate swaps at VTR in June 2020 that were unwound in connection with the July 2020 refinancing of certain VTR debt.

For additional information regarding the refinancing, see note 10 to our consolidated financial statements.

(b) The loss during 2020 is primarily attributable to the net effect of (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.

In addition, the loss during 2020 includes a net gain of $47 million resulting from changes in our credit risk valuation adjustments, which are primarily due to increased credit risk stemming from market reaction to the COVID-19 outbreak.

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.

In addition, the loss during 2019 includes a net gain of $4 million resulting from changes in our credit risk valuation adjustments.

(c) Amounts represent the amortization of the premiums associated with our Weather Derivatives, which we initially entered into during the second quarter of 2019.

For additional information concerning our derivative instruments, see notes 5 and 6 to our consolidated financial statements and Item 7A.

Qualitative and Quantitative Disclosures about Market Risk below.

Foreign currency transaction gains (losses), net

Our foreign currency transaction gains or losses primarily result from the remeasurement of monetary assets and liabilities that are denominated in currencies other than the underlying functional currency of the applicable entity.

Unrealized foreign currency transaction gains or losses are computed based on period-end exchange rates and are non-cash in nature until such time as the amounts are settled.

The details of our foreign currency transaction gains (losses), net, are as follows:

Year ended December 31,

dollar-denominated debt issued by a Chilean peso functional currency entity

$ 61.7 $ (98.4)

Intercompany payables and receivables denominated in a currency other than the entity’s functional currency

(53.2) (10.0)

British pound sterling-denominated debt issued by a U.S.

dollar functional currency entity

Total $ 1.2 $ (112.5)

Losses on debt modification and extinguishment, net

We recognized losses on debt modification and extinguishment, net, of $45 million and $20 million during 2020 and 2019, respectively.

The losses during 2020 are associated with (i) the payment of redemption premiums and the write-off of unamortized deferred financing costs related to the repayment of the VTR Finance Senior Notes and (ii) the write-off of unamortized discounts and deferred financing costs related to the repayment of the C&W Term Loan B-4 Facility.

The loss during 2019 primarily includes the payment of redemption premiums.

For additional information concerning our losses on debt modification and extinguishment, see note 10 to our consolidated financial statements.

Other income (expense), net

Our other income and expense, net, generally includes (i) certain amounts associated with our defined benefit plans, including interest expense and expected return on plan assets, and (ii) interest income on cash, cash equivalents and restricted cash.

We recognized other income, net, of nil and $14 million during 2020 and 2019, respectively.

The amount during 2020 primarily relates to the net effect of (i) interest income, including interest on the AT&T Acquisition Restricted Cash, and (ii) other individually insignificant expenses.

The amount during 2019 primarily relates to interest income.

For additional information regarding our defined benefit plans, see note 16 to our consolidated financial statements.

Income tax benefit (expense)

Liberty Latin America was formed as a corporation in Bermuda and, therefore, the “statutory” or “expected” tax rate for the 2020 and 2019 tax years is 0% as we are exempt from income taxes on ordinary income and capital gains.

However, a majority of our subsidiaries operate in jurisdictions where income tax is imposed at local applicable statutory rates.

For additional information, see note 15 to our consolidated financial statements.

We recognized income tax benefit of $29 million and $98 million during 2020 and 2019, respectively.

The income tax benefit attributable to our loss before income taxes during 2020 differs from the amounts computed using the statutory tax rate (based on the Bermuda statutory tax rate of 0%), primarily due to t he beneficial effects of (i) international rate differences, (ii) changes in enacted tax laws (but which are nearly entirely offset by valuation allowance), and (iii) net favorable changes in uncertain tax positions.

These beneficial impacts to our effective tax rate were partially offset by the negative effects of (i) increases in valuation allowances, (ii) permanent items, such as non-deductible goodwill impairment and other non-deductible expenses, as well as (iii) the inclusion of withholding taxes on cross-border payments.

The income tax expense attributable to our loss before income taxes during 2019 differs from the amounts computed using the statutory tax rate (based on the Bermuda statutory tax rate of 0%), primarily due to the beneficial effects of (i) net favorable changes in uncertain tax positions, (ii) international rate differences, (iii) basis adjustments associated with investments in

Liberty Latin America entities and (iv) enacted tax rate changes, which are offset by the detrimental effects of (i) increases in valuation allowances, (ii) non-deductible goodwill impairments and (iii) net unfavorable permanent difference.

For additional information regarding our income taxes, see note 15 to our consolidated financial statements.

The following table sets forth selected summary financial information of our net loss:

Year ended December 31,

Operating income $ 91.7 $ 353.8

Net non-operating expenses $ (929.9) $ (634.4)

Income tax benefit $ 29.3 $ 98.2

Net loss $ (808.9) $ (182.4)

Gains or losses associated with (i) changes in the fair values of derivative instruments and (ii) movements in foreign currency exchange rates are subject to a high degree of volatility and, as such, any gains from these sources do not represent a reliable source of income.

In the absence of significant gains in the future from these sources or from other non-operating items, our ability to achieve earnings is largely dependent on our ability to increase our aggregate Adjusted OIBDA to a level that more than offsets the aggregate amount of our (i) share-based compensation expense, (ii) depreciation and amortization, (iii) impairment, restructuring and other operating items, (iv) interest expense, (v) other non-operating expenses and (vi) income tax expenses.

Due largely to the fact that we seek to maintain our debt at levels that provide for attractive equity returns, as discussed under Liquidity and Capital Resources—Capitalization below, we expect that we will continue to report significant levels of interest expense for the foreseeable future.

For information concerning our expectations with respect to trends that may affect certain aspects of our operating results in future periods, see the discussion under Overview above.

Net loss attributable to noncontrolling interests

We reported net losses attributable to noncontrolling interests of $122 million and $102 million during 2020 and 2019, respectively.

The change during 2020, as compared to 2019, is primarily attributable to net increases in losses incurred by our less-than-wholly-owned subsidiaries at C&W.

Year Ended December 31, 2019 as Compared with Year Ended December 31, 2018

Consolidated Adjusted OIBDA

As further described above, consolidated Adjusted OIBDA is a non-U.S.

GAAP measure.

A reconciliation of total operating income (loss), the nearest U.S.

GAAP measure, to Adjusted OIBDA on a consolidated basis, is presented below.

Year ended December 31,

Operating income (loss) $ 353.8 $ (23.6)

Share-based compensation expense 57.5 39.8

Depreciation and amortization 871.0 829.8

Impairment, restructuring and other operating items, net 259.1 640.5

Consolidated Adjusted OIBDA $ 1,541.4 $ 1,486.5

The following table sets forth organic and non-organic changes in Adjusted OIBDA for the period indicated:

C&W Caribbean and Networks C&W Panama VTR/Cabletica Liberty Puerto Rico Corporate Intersegment eliminations Consolidated

Adjusted OIBDA for the twelve months ending:

December 31, 2018 $ 664.3 $ 251.4 $ 421.1 $ 195.8 $ (46.1) $ — $ 1,486.5

Organic changes related to:

Revenue 9.9 (18.2) 20.2 76.5 — (1.1) 87.3

Programming and other direct costs 25.9 (11.8) 4.7 (13.4) — 0.9 6.3

Other operating costs and expenses 25.7 6.1 (16.0) (7.2) (9.0) 0.2 (0.2)

Business interruption loss recovery (11.0) — — (48.5) — (59.5)

Non-organic increases (decreases):

FX (8.0) 0.1 (33.3) — — — (41.2)

Acquisitions/disposition, net 25.3 — 36.9 — — — 62.2

December 31, 2019 $ 732.1 $ 227.6 $ 433.6 $ 203.2 $ (55.1) $ — $ 1,541.4

Adjusted OIBDA Margin

The following table sets forth the Adjusted OIBDA margins of each of our reportable segments:

Year ended December 31,

C&W Caribbean and Networks 40.4 38.2

C&W Panama 39.1 41.8

VTR/Cabletica 40.4 40.3

Liberty Puerto Rico 49.3 58.3

Adjusted OIBDA margin is impacted by organic changes in revenue, programming and other direct costs of services and other operating costs and expenses, as further discussed below.

The decrease in Liberty Puerto Rico’s Adjusted OIBDA margin, is attributable to (i) a 1,460 basis point decrease resulting from the 2018 insurance settlement related to the 2017 Hurricanes and (ii) a 330 basis point decrease due to funding from the FCC received during 2018.

Excluding the impacts of the insurance settlement and FCC funding, Liberty Puerto Rico’s Adjusted OIBDA margin increased, primarily due to an increase in revenue following the recovery from the 2017 Hurricanes.

The following table sets forth revenue by reportable segment:

Year ended December 31, Increase (decrease)

2019 2018 $ %

in millions, except percentages

C&W Caribbean and Networks $ 1,812.8 $ 1,738.7 $ 74.1 4.3

C&W Panama 582.7 600.9 (18.2) (3.0)

VTR/Cabletica 1,073.8 1,043.7 30.1 2.9

Liberty Puerto Rico 412.1 335.6 76.5 22.8

Intersegment eliminations

Intersegment eliminations (14.4) (13.2) (1.2) N.M.

Total $ 3,867.0 $ 3,705.7 $ 161.3 4.4

— Not Meaningful.

2 unchanged sentences

Excluding the effects of acquisitions, a disposal and FX, revenue increased $87 million or 2.4%.

The organic increase primarily includes increases (decreases) of ( $8 million ), $20 million and $77 million at C&W , VTR/Cabletica and Liberty Puerto Rico , respectively, as further discussed below.

C&W ’s revenue by major category is set forth below:

Year ended December 31,

Increase (decrease)

The organic increase primarily includes increases (decreases) of $10 million, ($18 million), $20 million and $77 million at C&W Caribbean and Networks, C&W Panama, VTR/Cabletica and Liberty Puerto Rico, respectively, as further discussed below.

C&W Caribbean and Networks .

C&W Caribbean and Networks’s revenue by major category is set forth below:

Year ended December 31, Increase (decrease)

2019 2018 $ %

in millions, except percentages

2 unchanged sentences

Subscription revenue:

Video $ 150.1 $ 143.0 $ 7.1 5.0

Broadband internet 225.1 194.3 30.8 15.9

5 unchanged sentences

Service revenue 339.1 344.5 (5.4) (1.6)

Interconnect, equipment sales and other

Interconnect, inbound roaming, equipment sales and other (a) 65.3 71.8 (6.5) (9.1)

Total residential mobile revenue 404.4 416.3 (11.9) (2.9)

3 unchanged sentences

Total B2B revenue 906.2 858.5 47.7 5.6

The details of the changes in C&W ’s revenue during 2019 , as compared to 2018 , are set forth below (in millions):

Total $ 1,812.8 $ 1,738.7 $ 74.1 4.3

(a) Revenue from inbound roaming was $34 million and $35 million, respectively.

For additional information regarding a change in presentation of revenue by product, see note 21 to the consolidated financial statements.

The details of the changes in C&W Caribbean and Networks’s revenue during 2019, as compared to 2018, are set forth below (in millions):

Increase (decrease) in residential fixed subscription revenue due to change in:

Average number of RGUs (a) $ 22.8

ARPU (b) (4.7)

Decrease in residential fixed non-subscription revenue (c) (3.8)

1 unchanged sentence

Decrease in residential mobile service revenue (d) (23.4)

Decrease in residential mobile interconnect, equipment sales and other (e)

Decrease in residential mobile interconnect, inbound roaming, equipment sales and other (e) (10.4)

Increase in B2B service revenue (f) 25.5

Increase in B2B subsea network revenue 3.9

Total organic decrease

Net impact of acquisitions and a disposal

The increase is primarily attributable to higher broadband internet and video RGU s.

The increase is partially offset by a decrease in RGU s as a result of Hurricane Dorian in the Bahamas.

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.

Total organic increase 9.9

Net impact of an acquisition and a disposal 86.4

Impact of FX (22.2)

(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.

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.

The decrease is primarily attributable to lower ARPU and average subscribers in Panama, the Bahamas and other C&W markets.

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

(d) The decrease is primarily attributable to lower ARPU in the Bahamas and other markets in this segment.

In addition, the decrease in mobile service revenue in the Bahamas includes an estimated $3 million attributable to the impact of Hurricane Dorian.

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.

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 .

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

(f) The increase is primarily due to the net effect of (i) higher managed services revenue at Networks & LatAm and Jamaica, (ii) lower revenue from fixed-line telephony services, primarily in Jamaica 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.

The change also includes a decrease related to the transfer of certain B2B operations in Puerto Rico from our C&W Caribbean and Networks segment to our Liberty Puerto Rico segment.

C&W Panama’s revenue by major category is set forth below:

Year ended December 31, Increase (decrease)

2019 2018 $ %

in millions, except percentages

Residential revenue:

Residential fixed revenue:

Subscription revenue:

Video $ 31.0 $ 29.0 $ 2.0 6.9

Broadband internet 34.9 31.0 3.9 12.6

Fixed-line telephony 22.4 24.4 (2.0) (8.2)

Total subscription revenue 88.3 84.4 3.9 4.6

Non-subscription revenue 14.5 18.3 (3.8) (20.8)

Total residential fixed revenue 102.8 102.7 0.1 0.1

Residential mobile revenue:

Service revenue 183.8 211.3 (27.5) (13.0)

Interconnect, inbound roaming, equipment sales and other (a) 56.8 56.2 0.6 1.1

Total residential mobile revenue 240.6 267.5 (26.9) (10.1)

Total residential revenue 343.4 370.2 (26.8) (7.2)

B2B service revenue 239.3 230.7 8.6 3.7

Total $ 582.7 $ 600.9 $ (18.2) (3.0)

(a) Revenue from inbound roaming was $3 million and $4 million, respectively.

For additional information regarding a change in presentation of revenue by product, see note 21 to the consolidated financial statements.

The details of the changes in C&W Panama’s revenue during 2019, as compared to 2018, are set forth below (in millions):

Increase (decrease) in residential fixed subscription revenue due to change in:

Average number of RGUs (a) $ 10.1

ARPU (b) (6.2)

Decrease in residential fixed non-subscription revenue (c) (3.8)

Total increase in residential fixed revenue 0.1

Decrease in residential mobile service revenue (d) (27.5)

Increase in residential mobile interconnect, inbound roaming, equipment sales and other revenue 0.6

Increase in B2B service revenue (e)

Total organic decrease $ (18.2)

(a) The increase is primarily attributable to higher video and broadband internet RGUs.

(b) The decrease is primarily due lower ARPU from fixed-line telephony and video services.

(d) The decrease is due to lower ARPU and average subscribers as a result of increased competition in our prepaid mobile business.

(e) The increase is primarily due to the net effect of (i) higher managed services revenue, driven by an increase in nonrecurring projects and (ii) lower revenue from fixed-line telephony services.

VTR/Cabletica .

VTR/Cabletica’s revenue by major category is set forth below:

Year ended December 31,

Increase (decrease)

Year ended December 31, Increase (decrease)

2019 2018 $ %

in millions, except percentages

2 unchanged sentences

Subscription revenue:

Video $ 422.1 $ 401.4 $ 20.7 5.2

Broadband internet 412.0 386.5 25.5 6.6

5 unchanged sentences

Service revenue 62.7 62.9 (0.2) (0.3)

Interconnect, equipment sales and other

Interconnect, inbound roaming, equipment sales and other 12.0 13.2 (1.2) (9.1)

Total residential mobile revenue 74.7 76.1 (1.4) (1.8)

1 unchanged sentence

B2B service revenue 30.0 25.7 4.3 16.7

Total $ 1,073.8 $ 1,043.7 $ 30.1 2.9

The details of the changes in VTR/Cabletica’s revenue during 2019, as compared to 2018, are set forth below (in millions):

4 unchanged sentences

Increase in residential mobile service revenue (c) 5.8

Decrease in residential mobile interconnect, equipment sales and other revenue

Decrease in residential mobile interconnect, inbound roaming, equipment sales and other revenue (0.2)

Increase in B2B service revenue (d) 7.2

1 unchanged sentence

Impact of the Cabletica Acquisition 98.3

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

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.

Impact of FX (88.4)

(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.

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

The increase is primarily attributable to higher average numbers of broadband internet, video and fixed-line telephony RGU s.

(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.

Liberty Puerto Rico Liberty Puerto Rico’s revenue by major category is set forth below:

Year ended December 31,

Increase (decrease)

Year ended December 31, Increase (decrease)

2019 2018 $ %

in millions, except percentages

1 unchanged sentence

Subscription revenue:

Video $ 140.9 $ 118.9 $ 22.0 18.5

Broadband internet 175.0 132.5 42.5 32.1

5 unchanged sentences

Other revenue — 11.1 (11.1) (100.0)

Total $ 412.1 $ 335.6 $ 76.5 22.8

Liberty Puerto Rico’s revenue increased $77 million during 2019, as compared to 2018.

1 unchanged sentence

The FCC granted these funds to help restore and improve coverage and service quality from damages caused by the 2017 Hurricanes.

The increase in revenue also includes $8 million related to the transfer of certain B2B operations in Puerto Rico from our C&W segment to our Liberty Puerto Rico segment.

The increase in revenue also includes $8 million related to the transfer of certain B2B operations in Puerto Rico from our C&W Caribbean and Networks segment to our Liberty Puerto Rico segment.

Excluding the impact of the FCC funding and the transfer of the B2B operations discussed above, the increase is primarily attributable to recovery following the 2017 Hurricanes.

Programming and other direct costs of services

Programming and other direct costs of services include programming and copyright costs, interconnect and access costs, costs of mobile handsets and other devices, and other direct costs related to our operations.

The following table sets forth programming and other direct costs of services by reportable segment:

Year ended December 31,

Increase (decrease)

in millions, except percentages

VTR/Cabletica

Liberty Puerto Rico

Intersegment eliminations

— Not Meaningful.

Consolidated .

The decrease in programming and other direct costs of services during 2019 , as compared to 2018 , includes (i) a net increase of $37 million attributable to the impacts of acquisitions and a disposal and (ii) a decrease of $29 million due to FX .

Excluding the effects of acquisitions, a disposal and FX , our programming and other direct costs of services decreased $9 million or 1.0% .

The organic decrease primarily includes increases (decreases) of ( $15 million ), ( $6 million ) and $13 million at C&W , VTR/Cabletica and Liberty Puerto Rico , respectively, as further discussed below.

The decrease in C&W ’s programming and other direct costs of services includes (i) a net increase of $8 million attributable to the impacts of the UTS Acquisition and the Seychelles Disposition and (ii) a decrease of $6 million attributable to FX .

Excluding the effects of the UTS Acquisition , the Seychelles Disposition and FX , C&W ’s programming and other direct costs of services decreased $15 million or 2.7% .

This decrease includes the following factors:

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;

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.

VTR/Cabletica .

The increase in VTR/Cabletica ’s programming and other direct costs of services includes (i) an increase of $29 million attributable to the impact of the Cabletica Acquisition and (ii) a decrease of $23 million attributable to FX .

Excluding the effects of the Cabletica Acquisition and FX , VTR/Cabletica ’s programming and other direct costs of services decreased $6 million or 2.1% .

This decrease includes the following factors:

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;

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;

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 .

Liberty Puerto Rico .

The increase in Liberty Puerto Rico ’s programming and other direct costs of services primarily includes the following factors:

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;

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

Other operating expenses

Other operating expenses include (i) network operations, (ii) customer operations, which includes personnel costs and call center costs, (iii) bad debt and collection expenses, and (iv) other costs related to our operations.

The following table sets forth other operating expenses by reportable segment:

Year ended December 31,

in millions, except percentages

The following table sets forth the organic and non-organic changes in programming and other direct costs of services on a consolidated basis for the period indicated:

Increase (decrease) from:

Year ended December 31, Increase (decrease) Acquisition (disposition), net Organic

Programming and copyright $ 404.8 $ 401.1 $ 3.7 $ (17.0) $ 25.1 $ (4.4)

Interconnect and commissions 280.0 298.7 (18.7) (9.4) 6.5 (15.8)

Equipment and other 193.0 177.4 15.6 (3.8) 5.5 13.9

Total programming and other direct costs $ 877.8 $ 877.2 $ 0.6 $ (30.2) $ 37.1 $ (6.3)

C&W Caribbean and Networks .

The following table sets forth the organic and non-organic changes in programming and other direct costs of services for our C&W Caribbean and Networks segment.

Increase (decrease) from:

Year ended December 31, Increase (decrease) FX Acquisition (disposition), net Organic

Programming and copyright $ 105.3 $ 128.4 $ (23.1) $ (0.1) $ 2.4 $ (25.4)

Interconnect and commissions 174.4 175.8 (1.4) (4.3) 2.5 0.4

Equipment and other 75.0 74.3 0.7 (1.3) 2.9 (0.9)

Total programming and other direct costs $ 354.7 $ 378.5 $ (23.8) $ (5.7) $ 7.8 $ (25.9)

• Programming and copyright:

The organic decrease is 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.

• Interconnect and commissions:

The organic increase is 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.

The following table sets forth the organic and non-organic changes in programming and other direct costs of services for our C&W Panama segment.

Year ended December 31, Organic increase (decrease)

Programming and copyright $ 14.6 $ 12.2 $ 2.4

Interconnect and commissions 52.0 56.3 (4.3)

Equipment and other 91.1 77.4 13.7

Total programming and other direct costs $ 157.7 $ 145.9 $ 11.8

• Programming and copyright:

The organic increase is primarily due higher costs associated with an increase in video subscribers.

• Interconnect and commissions:

The organic decrease is primarily due to lower rates and wholesale call volumes.

• Equipment and other:

The organic increase primarily relates to costs associated with B2B managed services projects.

VTR/Cabletica .

The following table sets forth the organic and non-organic changes in programming and other direct costs of services for our VTR/Cabletica segment.

Increase (decrease) from:

Year ended December 31, Increase (decrease) FX Acquisition Organic

Programming and copyright $ 199.9 $ 191.6 $ 8.3 $ (16.9) $ 22.7 $ 2.5

Interconnect and commissions 57.4 68.7 (11.3) (5.1) 4.0 (10.2)

Equipment and other 28.1 25.0 3.1 (2.5) 2.6 3.0

Total programming and other direct costs $ 285.4 $ 285.3 $ 0.1 $ (24.5) $ 29.3 $ (4.7)

• Programming and copyright:

The organic increase is 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.

• Interconnect and commissions:

The organic decrease is primarily due to 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.

• Equipment and other:

The organic increase is primarily due to the net effect of (i) higher mobile handset sales in VTR and (ii) lower equipment sales at Cabletica.

Liberty Puerto Rico .

Total other operating expenses excluding share-based compensation expense

The following table sets forth the organic changes in programming and other direct costs of services for our Liberty Puerto Rico segment.

Year ended December 31, Organic increase (decrease)

Programming and copyright $ 85.0 $ 68.9 $ 16.1

Interconnect and commissions 7.5 9.8 (2.3)

Equipment and other 0.3 0.7 (0.4)

Total programming and other direct costs $ 92.8 $ 79.4 $ 13.4

• Programming and copyright:

The organic increase is 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.

• Interconnect and commission:

The organic decrease is primarily due to lower rates.

Other operating costs and expenses

The following table sets forth the organic and non-organic changes in other operating costs and expenses on a consolidated basis.

Increase (decrease) from:

Year ended December 31, Increase (decrease) Acquisition (disposition), net Organic

Personnel and contract labor $ 500.4 $ 475.3 $ 25.1 $ (11.5) $ 31.6 $ 5.0

Network-related 264.4 266.6 (2.2) (7.9) 16.2 (10.5)

Service-related 149.9 144.5 5.4 (4.0) 9.3 0.1

Commercial 172.6 166.7 5.9 (8.4) 3.6 10.7

Facility, provision, franchise and other 360.5 348.4 12.1 (7.5) 24.7 (5.1)

Share-based compensation expense 57.5 39.8 17.7 (0.4) — 18.1

Consolidated .

The increase in other operating expenses during 2019 , as compared to 2018 , includes (i) a net increase of $50 million attributable to the impacts of acquisitions and a disposal and (ii) a decrease of $18 million attributable to FX .

Excluding the effects of acquisitions, a disposal, FX and share-based compensation expense, our other operating expenses decreased $2 million or 0.3% .

The organic decrease includes increases (decreases) of ( $10 million ), $5 million and $3 million at C&W , VTR/Cabletica and Liberty Puerto Rico , respectively, as further discussed below.

The increase in C&W ’s other operating expenses includes (i) a net increase of $31 million attributable to the impacts of the UTS Acquisition and the Seychelles Disposition and (ii) a decrease of $5 million attributable to FX .

Excluding the effects of the UTS Acquisition , the Seychelles Disposition and FX , C&W ’s other operating expenses (exclusive of share-based compensation expense) decreased $10 million or 2.2% .

This decrease includes the following factors:

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;

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;

A net increase resulting from other individually insignificant changes.

VTR/Cabletica .

The increase in VTR/Cabletica ’s other operating expenses includes (i) an increase of $20 million attributable to the impact of the Cabletica Acquisition and (ii) a decrease of $13 million attributable to FX .

Excluding the effects of the Cabletica Acquisition and FX , VTR/Cabletica ’s other operating expenses (exclusive of share-based compensation expense) increased $5 million or 3.2% .

This increase includes the following factors:

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

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.

Liberty Puerto Rico .

The increase in Liberty Puerto Rico ’s other operating expenses primarily includes the following factors:

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 ;

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 .

SG&A expenses

SG&A expenses include human resources, information technology, general services, management, finance, legal, sales and marketing costs, share-based compensation and other general expenses.

The following table sets forth SG&A by reportable segment and our corporate category:

Year ended December 31,

Increase (decrease)

in millions, except percentages

VTR/Cabletica

Liberty Puerto Rico

Total SG&A expenses excluding share-based compensation expense

Total other operating costs and expenses $ 1,505.3 $ 1,441.3 $ 64.0 $ (39.7) $ 85.4 $ 18.3

For additional information regarding our share-based compensation, see Results of Operations (below Adjusted OIBDA) discussion and analysis below and note 17 to our consolidated financial statements.

C&W Caribbean and Networks .

The following table sets forth the organic and non-organic changes in other operating costs and expenses for our C&W Caribbean and Networks segment.

Increase (decrease) from:

Year ended December 31, Increase (decrease) Acquisition (disposition), net Organic

Personnel and contract labor $ 270.6 $ 249.8 $ 20.8 $ (3.9) $ 19.7 $ 5.0

Network-related 147.3 144.5 2.8 (1.8) 10.5 (5.9)

Service-related 70.6 76.3 (5.7) (0.4) 8.0 (13.3)

Commercial 57.4 61.2 (3.8) (0.7) 1.3 (4.4)

Facility, provision, franchise and other 180.0 175.2 4.8 (1.9) 13.8 (7.1)

Share-based compensation expense 16.5 11.5 5.0 — — 5.0

Consolidated .

The increase in SG&A expenses during 2019 , as compared to 2018 , includes (i) a net increase of $35 million attributable to the impacts of acquisitions and a disposal and (ii) a decrease of $20 million attributable to FX .

Excluding the effects of acquisitions, a disposal, FX and share-based compensation expense, our SG&A expenses increased $3 million or 0.3% .

The organic increase includes increases (decreases) of ( $21 million ), $10 million , $4 million and $9 million at C&W , VTR/Cabletica , Liberty Puerto Rico and Corporate , respectively, as further discussed below.

The decrease in C&W ’s SG&A expenses includes (i) a net increase of $23 million attributable to the impacts of the UTS Acquisition and the Seychelles Disposition and (ii) a decrease of $3 million attributable to FX .

Excluding the effects of the UTS Acquisition , the Seychelles Disposition and FX , C&W ’s SG&A expenses (exclusive of share-based compensation expense) decreased $21 million or 4.6% .

This decrease includes the following factors:

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;

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;

A net decrease resulting from individually insignificant changes.

VTR/Cabletica .

The increase in VTR/Cabletica ’s SG&A expenses includes (i) an increase of $12 million attributable to the Cabletica Acquisition and (ii) a decrease of $16 million due to FX .

Excluding the effects of the Cabletica Acquisition and FX , VTR/Cabletica ’s SG&A expenses (exclusive of share-based compensation expense) increased $10 million or 5.4% .

This increase includes the following factors:

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;

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.

Liberty Puerto Rico .

The increase in Liberty Puerto Rico ’s SG&A expenses (exclusive of share-based compensation expense) is primarily attributable to the following factors:

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 ;

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

The increase in Corporate SG&A expenses is primarily attributable to higher personnel costs and professional services, including with respect to establishing our new operations center in Panama.

Business interruption loss recovery

As further described in note 8 to our consolidated financial statements, during 2018, we settled insurance claims associated with the 2017 Hurricanes and Hurricane Matthew resulting in the recognition of business interruption loss recoveries of $49 million and $11 million at Liberty Puerto Rico and C&W , respectively.

This benefit to our operating income is included in our Adjusted OIBDA performance metric as it represents the recovery of operating losses stemming from these hurricanes, which were also included in our Adjusted OIBDA metric.

Adjusted OIBDA

Adjusted OIBDA is the primary measure used by our chief operating decision maker to evaluate segment operating performance.

For the definition of this performance measure and for a reconciliation of total Adjusted OIBDA to our loss before income taxes, see note 19 to our consolidated financial statements.

The following table sets forth Adjusted OIBDA by reportable segment and our corporate category:

Year ended December 31,

Increase (decrease)

in millions, except percentages

VTR/Cabletica

Liberty Puerto Rico

Adjusted OIBDA Margin— 2019 and 2018

The following table sets forth the Adjusted OIBDA margins ( Adjusted OIBDA divided by revenue) of each of our reportable segments:

Year ended December 31,

Total other operating costs and expenses $ 742.4 $ 718.5 $ 23.9 $ (8.7) $ 53.3 $ (20.7)

• Personnel and contract labor:

The organic increase is primarily due to lower capitalized labor costs.

• Network-related:

The organic decrease is primarily due to lower (i) maintenance costs and (ii) hurricane restoration costs.

• Service-related:

The organic decrease is primarily due to declines in professional service costs associated with legal and advisory-related services and lower information and technology-related costs.

• Commercial:

The organic decrease is primarily due to lower marketing and sales costs mainly due to lower sponsorship costs and sales commissions.

• Facility, provision, franchise and other costs:

The organic decrease is primarily due to the net effect of:

◦ a decline of $10 million associated with withholding taxes on third-party supplier services, primarily related to the expiration of statute of limitations;

◦ an increase of bad debt expense primarily due to the net effect of (i) changes in provisions during 2019, including (a) a $3 million increase in provisions primarily related to certain B2B 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 decrease in insurance costs due in part to the impact of our Weather Derivative, as further described below and in notes 3 and 5 to our consolidated financial statements.

The following table sets forth the organic and non-organic changes in other operating costs and expenses for our C&W Panama segment.

Year ended December 31, Organic increase (decrease)

Personnel and contract labor $ 70.2 $ 73.9 $ (3.7)

Network-related 43.0 49.7 (6.7)

Service-related 15.8 18.9 (3.1)

Commercial 22.0 13.1 8.9

Facility, provision, franchise and other 46.4 47.9 (1.5)

Share-based compensation expense 0.9 0.9 —

Total other operating costs and expenses $ 198.3 $ 204.4 $ (6.1)

• Personnel and contract labor:

The organic decrease is primarily due to lower staff levels largely stemming from various restructuring activities.

• Network-related:

The organic decrease is primarily due to lower maintenance and utility costs.

• Commercial:

The organic increase is primarily due to increases in (i) outsourced call center costs and (ii) marketing and sales costs.

• Facility, provision, franchise and other costs:

The organic decrease is primarily due to general declines in bad debt provisions, which was net of the impact of a $2 million increase in provisions primarily related to certain government customers.

VTR/Cabletica .

The following table sets forth the organic and non-organic changes in other operating costs and expenses for our VTR/Cabletica segment.

Increase (decrease) from:

Year ended December 31, Increase (decrease) FX Acquisition Organic

Personnel and contract labor $ 91.5 $ 86.7 $ 4.8 $ (7.6) $ 11.9 $ 0.5

Network-related 71.1 71.3 (0.2) (6.1) 5.7 0.2

Service-related 39.9 32.9 7.0 (3.6) 1.3 9.3

Commercial 82.3 79.7 2.6 (7.7) 2.3 8.0

Facility, provision, franchise and other 70.0 66.7 3.3 (5.6) 10.9 (2.0)

Share-based compensation expense 4.9 3.4 1.5 (0.4) — 1.9

Total other operating costs and expenses $ 359.7 $ 340.7 $ 19.0 $ (31.0) $ 32.1 $ 17.9

• Network-related:

These costs remained relatively flat on an organic basis as higher costs related to CPE materials and refurbishment activity was mostly offset by a decrease resulting from higher proportions of capitalized labor associated with installation activities.

• Service-related:

The organic increase is primarily due to (i) increased information technology costs associated with the implementation of a business support system and (ii) higher professional consultancy services.

• Commercial:

The organic increase is primarily due to increased call center volume in the VTR market.

• Facility, provision, franchise and other costs:

The organic decrease is primarily due to lower facility related costs.

Liberty Puerto Rico .

Adjusted OIBDA margin is impacted by organic changes in revenue, programming and other direct costs of services, other operating expenses and SG&A expenses, as further discussed above.

The decrease in Liberty Puerto Rico ’s Adjusted OIBDA margin during 2019 , as compared with 2018 , is attributable to (i) a 1,460 basis point decrease resulting from the 2018 insurance settlement related to the 2017 Hurricanes and (ii) a 330 basis point decrease due to funding from the FCC received during 2018.

Excluding the impacts of the insurance settlement and FCC funding, Liberty Puerto Rico ’s Adjusted OIBDA margin increased, primarily due to an increase in revenue following the recovery from the 2017 Hurricanes .

Results of operations (below Adjusted OIBDA)

Share-based compensation expense (included in other operating and SG&A expenses)

The following table sets forth the organic changes in other operating costs and expenses for our Liberty Puerto Rico segment.

Year ended December 31, Organic increase (decrease)

Personnel and contract labor $ 39.5 $ 41.5 $ (2.0)

Network-related 4.5 2.0 2.5

Service-related 10.6 7.8 2.8

Commercial 10.9 12.6 (1.7)

Facility, provision, franchise and other 50.6 45.0 5.6

Share-based compensation expense 2.2 1.2 1.0

Total other operating costs and expenses $ 118.3 $ 110.1 $ 8.2

• Personnel and contract labor:

The organic decrease is primarily due to the net effect of (i) lower overtime-related personnel activities, as the 2018 period was impacted by the 2017 Hurricanes, and (ii) an increase resulting from a $2 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.

• Network-related:

The organic increase is 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.

• Service-related:

The organic increase is primarily due to information and technology-related expenses, mostly driven by new software services.

• Commercial:

The organic decrease is driven by declines in outsourced call center costs.

• Facility, provision, franchise and other:

The organic change is primarily due to increased facility-related costs and franchise fees, as the 2018 period was impacted by the 2017 Hurricanes.

The following tables set forth the organic changes in other operating costs and expenses for our corporate operations.

Year ended December 31, Organic increase (decrease)

Personnel and contract labor $ 28.6 $ 23.4 $ 5.2

Service-related 13.0 9.0 4.0

Facility, provision, franchise and other 13.5 13.6 (0.1)

Share-based compensation expense 33.0 22.8 10.2

Total other operating costs and expenses $ 88.1 $ 68.8 $ 19.3

• Personnel and contract labor :

The organic increase is primarily attributable to establishing our new operations center in Panama.

• Service-related:

The organic increase is primarily attributable to higher professional consultancy services.

Results of operations (below Adjusted OIBDA)—2019 compared to 2018

Share-based compensation expense (included in other operating costs and expenses)

Share-based compensation expense increased $18 million during 2019, as compared to 2018.

This increase is primarily due to share-based incentive awards granted during 2019 and 2018.

For additional information regarding our share-based compensation, see note 16 to our consolidated financial statements.

Depreciation and amortization

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The impairment charges primarily include (i) $182 million related to an impairment of goodwill of the Panamanian reporting unit of our C&W segment and (ii) $16 million related to charges at C&W primarily to reduce the carrying value of property and equipment as a result of the impact of Hurricane Dorian .

The restructuring charges, which are primarily at C&W and VTR , include (i) $36 million of employee severance and termination costs related to certain reorganization activities and (ii) $9 million of contract termination and other related charges.

The direct acquisition costs and disposition costs relate to the pending AT&T Acquisition and, to a lesser extent, the UTS Acquisition and the Seychelles Disposition .

The 2018 amount primarily includes (i) impairment charges of $616 million , (ii) a $36 million benefit related to the recovery of damaged or destroyed property and equipment and (iii) restructuring charges of $34 million , including $26 million of employee severance and termination costs related to certain reorganization activities, primarily at C&W , and (iv) $18 million of direct acquisition and disposition costs.

The impairment charges include $608 million related to an impairment of goodwill of the Panamanian reporting unit of our C&W segment.

The restructuring charges, which are primarily at C&W Caribbean and Networks and VTR, include (i) employee severance and termination costs related to certain reorganization activities and (ii) contract termination and other related charges.

The direct acquisition costs and disposition costs relate to the AT&T Acquisition and, to a lesser extent, the UTS Acquisition and the Seychelles Disposition.

The 2018 amount primarily includes (i) impairment charges of $616 million, (ii) restructuring charges of $43 million, (iii) a $36 million benefit related to the recovery of damaged or destroyed property and equipment and (iv) $18 million of direct acquisition and disposition costs.

The impairment charges include $608 million related to an impairment of goodwill at C&W Panama.

The restructuring charges, which are primarily at C&W Caribbean and Networks, include (i) employee severance and termination costs related to certain reorganization activities and (ii) contract termination and other related charges.

The direct acquisition costs and disposition costs primarily relate to the UTS Acquisition.

In December 2018, we settled our insurance claims for the 2017 Hurricanes, as further defined and described in note 8 to our consolidated financial statements, resulting in, among other things, the recovery associated with damaged or destroyed property and equipment.

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The increase is primarily due to (i) higher average outstanding debt balances, largely due to borrowings related to the (a) AT&T Acquisition, (b) Cabletica Acquisition and (c) Convertible Notes, and (ii) higher amortization of discounts and premiums, net, and deferred financing costs.

As further discussed in note 5 to our consolidated financial statements and under Item 7A.

Qualitative and Quantitative Disclosures about Market Risk below, we use derivative instruments to manage our interest rate risks.

For additional information regarding our outstanding indebtedness, see note 10 to our consolidated financial statements.

Realized and unrealized gains (losses) on derivative instruments, net

The details of our realized and unrealized gains (losses) on derivative instruments, net, are as follows:

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Cross-currency and interest rate derivative contracts (a) $ (21.0) $ 69.6

Foreign currency forward contracts and other (b)

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.

Foreign currency forward contracts 9.4 25.2

Weather Derivatives (b) (5.6) —

Total $ (17.2) $ 94.8

(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.

In addition, the loss during 2019 includes a net gain of $4 million resulting from changes in our credit risk valuation adjustments.

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In addition, the gain during 2018 includes a net loss of $23 million resulting from changes in our credit risk valuation adjustments

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.

(b) Represents the amortization of the premiums associated with our Weather Derivatives, which we entered into during the second quarter of 2019.

For additional information concerning our derivative instruments, see notes 5 and 6 to our consolidated financial statements and Item 7A.

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Foreign currency transaction losses, net

Unrealized foreign currency transaction gains or losses are computed based on period-end exchange rates and are non-cash in nature until such time as the amounts are settled.

The details of our foreign currency transaction losses, net, are as follows:

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dollar functional currency entity (3.7) 11.4

Other (0.4) (10.4)

Total $ (112.5) $ (180.0)

Losses on debt modification and extinguishment, net

We recognized losses on debt modification and extinguishment, net, of $20 million and $32 million during 2019 and 2018, respectively.

The net loss during 2019 primarily includes the payment of $21 million of redemption premiums.

The loss during 2018 primarily includes (i) the payment of $21 million of redemption premiums and (ii) a net loss of $10 million associated with the write-off of unamortized premiums, discounts and deferred financing costs.

The net loss during 2019 primarily includes the payment of redemption premiums.

The loss during 2018 primarily includes the payment of redemption premiums and the write-off of unamortized premiums, discounts and deferred financing costs.

For additional information concerning our losses on debt modification and extinguishment, see note 10 to our consolidated financial statements.

Other income (expense), net

We recognized other income of $14 million and nil during 2019 and 2018, respectively.

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Income tax benefit (expense)

On July 11, 2017, Liberty Latin America was formed as a corporation in Bermuda and, therefore, the “statutory” or “expected” tax rate for the 2019, 2018 and 2017 tax years is 0% as we are exempt from income taxes on ordinary income and capital gains.

However, a majority of our subsidiaries operate in jurisdictions where income tax is imposed at local applicable statutory rates.

For additional information, see note 12 to our consolidated financial statements.

We recognized income tax benefit (expense) of $98 million and ($51 million) during 2019 and 2018, respectively.

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Income tax benefit (expense) $ 98.2 $ (51.1)

For information concerning our expectations with respect to trends that may affect certain aspects of our operating results in future periods, see the discussion under Overview above.

Net loss $ (182.4) $ (635.8)

Net loss attributable to noncontrolling interests

We reported net losses attributable to noncontrolling interests of $102 million and $291 million during 2019 and 2018, respectively.

The change during 2019 , as compared to 2018 , is primarily attributable to (i) a decrease in losses of our less-than-wholly-owned subsidiaries at C&W , due in part to the net effect of (a) a decline in the goodwill impairment charge incurred during 2019, as compared with 2018 at C&W Panama , and (b) losses at C&W Bahamas associated with Hurricane Dorian in 2019, and (ii) our acquisition of the remaining 40% partnership interests in Liberty Puerto Rico from Searchlight during October 2018.

The change during 2019, as compared to 2018, is primarily attributable to (i) a decrease in losses of our less-than-wholly-owned subsidiaries at C&W, due in part to the net effect of (a) a decline in the goodwill impairment charge incurred during 2019, as compared with 2018 at CWP, and (b) losses at C&W Bahamas associated with Hurricane Dorian in 2019, and (ii) our acquisition of the remaining 40% partnership interests in Liberty Puerto Rico from Searchlight during October 2018.

For additional information on the goodwill impairment charge and noncontrolling interests acquisition activity, see notes 9 and 19, respectively, to our consolidated financial statements.

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Sources and Uses of Cash

As of December 31, 2019 , we have four primary “borrowing groups,” which include the respective restricted parent and subsidiary entities of C&W , VTR Finance , Liberty Puerto Rico and Cabletica .

As of December 31, 2020, we have four primary “borrowing groups,” which include the respective restricted parent and subsidiary entities of C&W, VTR, Liberty Puerto Rico and Cabletica.

Our borrowing groups, which typically generate cash from operating activities, held a significant portion of our consolidated cash and cash equivalents at December 31, 2020.

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Liberty Puerto Rico 79.4

Cabletica 7.6

Total borrowing groups 646.8

Total cash and cash equivalents

Restricted cash (d)

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).

Represents the aggregate amount held by subsidiaries of Liberty Latin America that are outside of our borrowing groups.

(a) Represents the amount held by Liberty Latin America on a standalone basis.

(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.

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

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.

Liquidity of Liberty Latin America and its unrestricted subsidiaries

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

Liquidity and capital resources of Liberty Latin America and its unrestricted subsidiaries

Our current sources of corporate liquidity include (i) cash and cash equivalents held by Liberty Latin America and, subject to certain tax and legal considerations, Liberty Latin America’s unrestricted subsidiaries, and (ii) interest and dividend income received on our and, subject to certain tax and legal considerations, our unrestricted subsidiaries’ cash and cash equivalents and investments.

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As noted above, various factors may limit our ability to access the cash of our borrowing groups.

For information regarding certain limitations imposed by our subsidiaries’ debt instruments at December 31, 2019 , see note 10 to our consolidated financial statements.

For limitations imposed by our subsidiaries’ debt instruments at December 31, 2020, see note 10 to our consolidated financial statements.

Our corporate liquidity requirements include (i) corporate general and administrative expenses and (ii) other liquidity needs that may arise from time to time.

In addition, Liberty Latin America and its unrestricted subsidiaries may require cash in connection with (i) the repayment of third-party and intercompany debt, (ii) the satisfaction of contingent liabilities, (iii) acquisitions and other investment opportunities, (iv) the repurchase of debt securities, (v) tax payments or (vi) any funding requirements of our consolidated subsidiaries.

Our liquidity requirements related to acquisitions include funding the AT&T Acquisition .

The AT&T Acquisition is structured as an all-cash transaction with a purchase price of $1,950 million , subject to adjustment as provided in the related stock purchase agreement.

We intend to finance this acquisition through a combination of a portion of the net proceeds from the 2026 SPV Credit Facility and the 2027 LPR Senior Secured Notes ( $1,256 million of which is restricted cash held in escrow) and available liquidity.

For additional information regarding the AT&T Acquisition and the terms of the related financing arrangements, see notes 4 and 10 , respectively, to our consolidated financial statements.

Liquidity of borrowing groups

In March 2020, our Directors approved a $100 million Share Repurchase Program.

During 2020, the aggregate amount of our share repurchases was $9 million.

For additional information regarding our Share Repurchase Program, see note 19 to our consolidated financial statements and above Part II—Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities .

Liquidity and capital resources of borrowing groups

The cash and cash equivalents of our borrowing groups are detailed in the table above.

In addition to cash and cash equivalents, the primary sources of liquidity of our borrowing groups are cash provided by operations and borrowing availability under their respective debt instruments.

For the details of the borrowing availability of such subsidiaries at December 31, 2019 , see note 10 to our consolidated financial statements.

For the details of the borrowing availability of our borrowing groups at December 31, 2020, see note 10 to our consolidated financial statements.

The aforementioned sources of liquidity may be supplemented in certain cases by contributions and/or loans from Liberty Latin America and its unrestricted subsidiaries.

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We seek to maintain our debt at levels that provide for attractive equity returns without assuming undue risk.

The ratio of our December 31, 2019 consolidated debt (total principal amount of debt and finance lease obligations outstanding, net of projected derivative principal-related cash payments (receipts)) to our annualized consolidated Adjusted OIBDA for the quarter ended December 31, 2019 was 5.3x , or 4.5x excluding $1,253 million of incremental debt borrowed by Liberty Puerto Rico to fund the AT&T Acquisition .

In addition, the ratio of our December 31, 2019 consolidated net debt (debt, as defined above, less cash and cash equivalents and the AT&T Acquisition Restricted Cash ) to our annualized consolidated Adjusted OIBDA for the quarter ended December 31, 2019 was 3.8x .

These ratios, which were calculated on a latest two quarters annualized basis, include the impact of 0.3x and nil , respectively, related to the Convertible Notes .

When it is cost effective, we generally seek to match the denomination of the borrowings of our subsidiaries with the functional currency of the operations that support the respective borrowings.

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At December 31, 2020, the outstanding principal amount of our debt, together with our finance lease obligations, aggregated $8,514 million, including $162 million that is classified as current in our consolidated balance sheet and $7,225 million that is not due until 2026 or thereafter.

At December 31, 2019 , $8,109 million of our debt and finance lease obligations have been borrowed

or incurred by our subsidiaries.

At December 31, 2020, $8,108 million of our debt and finance lease obligations have been borrowed or incurred by our subsidiaries.

Included in the outstanding principal amount of our debt at December 31, 2020 is $168 million of vendor financing, which we use to finance certain of our operating expenses and property and equipment additions.

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The weighted average impact of the derivative instruments, excluding forward-starting derivative instruments, on our borrowing costs at December 31, 2020 was as follows:

Borrowing group

Increase (decrease) to borrowing costs

Borrowing group Increase to borrowing costs

Liberty Puerto Rico 0.86 %

Cabletica 1.24 %

Liberty Latin America borrowing groups 0.69 %

Including the effects of derivative instruments, original issue premiums or discounts, including the discount on the Convertible Notes associated with the Conversion Option , and commitment fees, but excluding the impact of financing costs, the weighted average interest rate on our indebtedness was 6.6% at December 31, 2019 ;

excluding the discount on the Convertible Notes associated with the Conversion Option , the weighted average interest rate was 6.3% .

Including the effects of derivative instruments, original issue premiums or discounts, including the discount on the Convertible Notes associated with the instrument’s conversion option, and commitment fees, but excluding the impact of financing costs, the weighted average interest rate on our indebtedness was 6.3% at December 31, 2020.

We believe that we have sufficient resources to repay or refinance the current portion of our debt and finance lease obligations and to fund our foreseeable liquidity requirements during the next 12 months.

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Quantitative and Qualitative Disclosures about Market Risk—Foreign Currency Risk below.

Consolidated Statements of Cash Flows

Consolidated Statements of Cash Flows—2020 compared to 2019

Our 2020 and 2019 consolidated statements of cash flows are summarized as follows:

Year ended December 31,

2020 2019 Change

Net cash provided by operating activities $ 640.1 $ 918.2 $ (278.1)

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Net cash provided by financing activities 271.1 1,539.8 (1,268.7)

Effect of exchange rate changes on cash

Effect of exchange rate changes on cash, cash equivalents and restricted cash (4.9) (7.7) 2.8

Net increase (decrease) in cash, cash equivalents and restricted cash $ (1,544.5) $ 1,815.0 $ (3,359.5)

Operating Activities.

The decrease in net cash provided by our operating activities is primarily attributable to the net effect of (i) $73 million of cash used for the purchase of prepaid roaming services in conjunction with the AT&T Acquisition, (ii) a decrease of $61 million related to derivative activities, (iii) a decrease from our consolidated Adjusted OIBDA (a non-GAAP measure), (iv) lower tax payments of $49 million, and (v) the negative impact for the comparative period resulting from $33 million of the cash received during 2019 associated with the final insurance settlement for hurricanes Irma, Maria, and Matthew that was reflected as an operating cash inflow.

Additionally, the working capital changes in our consolidated statement of cash flows for the 2020 and 2019 periods include the negative impacts of a $33 million and $185 million release of an uncertain tax position liability, respectively, that have been reflected as a tax benefit in our consolidated statements of operations, as further described in note 15 to our consolidated financial statements.

For additional information relating to the purchase of prepaid roaming services, see note 4 to our consolidated financial statements.

For additional information regarding our non-GAAP measure of consolidated Adjusted OIBDA, including a reconciliation to the nearest U.S.

GAAP measure, see Results of Operations—Year ended December 31, 2020 as Compared with Year Ended December 31, 2019—Adjusted OIBDA above.

Investing Activities.

Our cash used during 2020 primarily includes (i) $1,886 million primarily related the AT&T Acquisition, (ii) and $566 million related to capital expenditures.

Our cash used during 2019 primarily includes (i) $589 million of cash used related to capital expenditures, (ii) $161 million of cash used for the UTS Acquisition in March 2019, (iii) $78 million of net cash received in connection with the Seychelles Disposition, and (iv) $34 million of cash we received during the first quarter of 2019 related to the recovery on damaged or destroyed property and equipment resulting from hurricanes Maria, Irma and Matthew.

For additional information regarding the settlement of our insurance claims associated with these hurricanes, see note 8 to our consolidated financial statements.

See below for additional information relating to cash used for capital expenditures.

The capital expenditures that we report in our consolidated statements of cash flows, which includes cash paid for property and equipment and intangible assets acquired not part of an acquisition, does not include amounts that are financed under capital-related vendor financing or finance lease arrangements.

Instead, these amounts are reflected as non-cash additions to our property and equipment when the underlying assets are delivered and as repayments of debt when the principal is repaid.

In this discussion, we refer to (i) our capital expenditures, as reported in our consolidated statements of cash flows, and (ii) our total property and equipment additions, which include our capital expenditures on an accrual basis and amounts financed under capital-related vendor financing or finance lease arrangements.

A reconciliation of our property and equipment additions to our capital expenditures, as reported in our consolidated statements of cash flows, is set forth below:

Year ended December 31,

Property and equipment additions $ 631.1 $ 721.5

Assets acquired under capital-related vendor financing arrangements (99.1) (96.1)

Acquisition of intangible assets

Assets acquired under finance leases — (0.2)

Changes in current liabilities related to capital expenditures 26.0 (36.1)

Capital expenditures $ 565.8 $ 589.1

The decrease in our property and equipment additions during 2020, as compared to 2019, is primarily due to a decrease in (i) new build & upgrade equipment and (ii) customer premise equipment.

During 2020 and 2019, our property and equipment additions represented 16.8% and 18.7% of revenue, respectively.

We expect the percentage of revenue represented by our aggregate 2021 property and equipment additions to be approximately 18%.

The actual amount of the 2021 consolidated property and equipment additions may vary from expected amounts for a variety of reasons, including (i) potential impacts from COVID-19, (ii) changes in (a) the competitive or regulatory environment, (b) business plans, (c) our expected future operating results and (d) foreign currency exchange rates and, (iii) the availability of sufficient capital.

Accordingly, no assurance can be given that our actual property and equipment additions will not vary materially from our expectations.

Financing Activities.

During 2020, we generated $271 million of cash from financing activities primarily due to (i) $347 million related to the Rights Offering and (ii) $183 million of net cash related to derivative instruments.

These items were slightly offset by (i) $120 million of net repayment of debt and (ii) $99 million related to payments of financing costs and debt premiums.

The net cash received related to derivative instruments is primarily due to the unwinding of cross-currency swaps held at our VTR borrowing group as further described in note 5 to the consolidated financial statements .

During 2019, we received $1,540 million in net cash from financing activities, primarily due to $1,691 million of net borrowings of debt, which was slightly offset by $55 million related to payments of financing costs and debt premiums, $46 million of cash used related to the purchase of Capped Calls, and $38 million for the distribution to noncontrolling interest owners, primarily related to Panama operations.

The net borrowings of debt primarily relates to the $1.2 billion principal amount of 2027 LPR Senior Secured Notes issued related to the then pending AT&T Acquisition and the issuance of the Convertible Notes, each as further described in note 10 to our consolidated financial statements.

Consolidated Statements of Cash Flows—2019 compared to 2018

Our 2019 and 2018 consolidated statements of cash flows are summarized as follows:

Year ended December 31,

2019 2018 Change

Net cash provided by operating activities $ 918.2 $ 816.8 $ 101.4

Net cash used by investing activities (635.3) (980.5) 345.2

Net cash provided by financing activities 1,539.8 256.1 1,283.7

Effect of exchange rate changes on cash, cash equivalents and restricted cash (7.7) (18.6) 10.9

Net increase in cash, cash equivalents and restricted cash $ 1,815.0 $ 73.8 $ 1,741.2

Operating Activities.

The increase in net cash provided by our operating activities is primarily attributable to the net effect of (i) an increase from our Adjusted OIBDA , (ii) a decrease from our working capital items, including (a) the release of an uncertain tax position liability of approximately $185 million that has been reflected as a tax benefit in our consolidated statement of operations, as further described in note 12 to our consolidated financial statements, and (b) changes resulting from insurance receipts as discussed below, ( iii) increased interest payments, (iv) an increase in cash related to derivative instruments, as we received (paid) net amounts of $11 million and ( $16 million ) during 2019 and 2018, respectively, and (v) decrease in cash paid for taxes.

insurance receipts as discussed below, ( iii) increased interest payments, (iv) an increase in cash related to derivative instruments, as we received (paid) net amounts of $11 million and ($16 million) during 2019 and 2018, respectively, and (v) decrease in cash paid for taxes.

During the first quarter of 2019, $33 million of the cash received associated with the final insurance settlement for the 2017 Hurricanes was reflected as an operating cash inflow.

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For additional information regarding the settlement of our insurance claims associated with these hurricanes, see note 8 to our consolidated financial statements.

The capital expenditures that we report in our consolidated statements of cash flows do not include amounts that are financed under capital-related vendor financing or finance lease arrangements.

Instead, these amounts are reflected as non-cash additions to our property and equipment when the underlying assets are delivered and as repayments of debt when the principal is repaid.

A reconciliation of our property and equipment additions to our capital expenditures, as reported in our consolidated statements of cash flows, is set forth below:

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Capital expenditures $ 589.1 $ 776.4

The decrease in our property and equipment additions during 2019 , as compared to 2018 , is primarily due to the net effect of (i) lower additions relating to hurricane restoration activities, as 2018 included $92 million and $27 million of these additions by Liberty Puerto Rico and C&W , respectively, and (ii) excluding the impact of hurricane restoration activities, an increase in additions for the expansion and upgrade of our networks and other capital initiatives.

The decrease in our property and equipment additions during 2019, as compared to 2018, is primarily due to the net effect of (i) lower additions relating to hurricane restoration activities, as 2018 included $92 million and $27 million of these additions by Liberty Puerto Rico and C&W Caribbean and Networks, respectively, and (ii) excluding the impact of hurricane restoration activities, an increase in additions for the expansion and upgrade of our networks and other capital initiatives.

During 2019 and 2018, our property and equipment additions represented 18.7% and 20.8% of revenue, respectively.

Our property and equipment additions as a percentage of revenue decreased primarily due to declines in property and equipment additions at Liberty Puerto Rico together with an increase in revenue at Liberty Puerto Rico following the recovery from the 2017 Hurricanes.

We expect the percentage of revenue represented by our aggregate 2020 property and equipment additions to be approximately 18%.

The actual amount of the 2020 consolidated property and equipment additions may vary from expected amounts for a variety of reasons, including (i) changes in (a) the competitive or regulatory environment, (b) business plans, (c) our expected future operating results and (d) foreign currency exchange rates and (ii) the availability of sufficient capital.

Accordingly, no assurance can be given that our actual property and equipment additions will not vary materially from our expectations.

Financing Activities.

During 2019, we received $1,540 million in net cash from financing activities, primarily due to $1,691 million of net borrowings of debt, which was slightly offset by $55 million related to payments of financing costs and debt premiums, $46 million of cash used related to the purchase of the Capped Calls, and $38 million for the distribution to noncontrolling interest owners, primarily related to Panama operations.

The net borrowings of debt primarily relates to the $1.2 billion principal amount of 2027 LPR Senior Secured Notes issued related to the pending AT&T Acquisition and the issuance of the Convertible Notes , each as further described in note 10 to our consolidated financial statements.

During 2018, we received $256 million in net cash from financing activities, due in part to $310 million in net borrowings of debt, primarily at VTR, and $18 million in capital contributions from funds affiliated with Searchlight.

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We define adjusted free cash flow, a non-GAAP measure, as net cash provided by our operating activities, plus (i) cash payments for third-party costs directly associated with successful and unsuccessful acquisitions and dispositions, (ii) expenses financed by an intermediary, (iii) insurance recoveries related to damaged and destroyed property and equipment and (iv) certain net interest payments (receipts) incurred or received, including associated derivative instrument payments and receipts, in advance of a significant acquisition, less (a) capital expenditures, (b) distributions to noncontrolling interest owners, (c) principal payments on amounts financed by vendors and intermediaries and (d) principal payments on finance leases.

As a result of the pending AT&T Acquisition , we have changed the way we define adjusted free cash flow effective December 31, 2019 to adjust (i) for pre-acquisition interest incurred on the incremental debt issued in advance of the AT&T Acquisition , (ii) to exclude pre-acquisition interest earned related to the AT&T Acquisition Restricted Cash that will be used to fund a portion of the AT&T Acquisition and (iii) the impact of associated pre-acquisition derivative contracts.

As the debt was incurred directly as a result of the pending acquisition and will be supported by cash flows of the acquisition from the date of the closing, we believe this results in the most meaningful presentation of adjusted free cash flow.

Additionally, as set forth in the reconciliation and further discussed below, we have excluded the portion of the stated purchase price for the AT&T Acquisition that has been bifurcated and accounted for separately as the acquisition of future services from AT&T.

See footnote to the table below for additional information.

We believe that our presentation of adjusted free cash flow provides useful information to our investors because this measure can be used to gauge our ability to service debt and fund new investment opportunities.

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Year ended December 31,

2020 2019 2018

Net cash provided by operating activities

$ 640.1 $ 918.2 $ 816.8

Cash payments for direct acquisition and disposition costs

49.8 4.8 12.9

Expenses financed by an intermediary (a)

108.1 129.7 171.7

Capital expenditures

(565.8) (589.1) (776.4)

Recovery on damaged or destroyed property and equipment — 33.9 20.7

Distributions to noncontrolling interest owners

(18.8) (37.7) (22.7)

Principal payments on amounts financed by vendors and intermediaries (218.0) (224.5) (196.5)

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Principal payments on finance leases

(2.2) (8.7) (7.7)

Credit for services in AT&T Acquisition (c) 73.3 — —

Adjusted free cash flow $ 148.0 $ 223.1 $ 18.8

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.

(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.

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

(b) Amount during 2020 primarily represents interest paid on pre-acquisition debt related to the AT&T Acquisition, net of interest received on the AT&T Acquisition Restricted Cash.

Amount during 2019 primarily relates to interest received on the AT&T Acquisition Restricted Cash.

(c) In connection with the Acquisition Agreement, AT&T agreed to give us a $75 million credit against certain roaming services that AT&T provides to the AT&T Acquired Entities for a seven-year period following the closing of the AT&T Acquisition.

If the credits are not used for roaming services in that time period, any remaining credit may be used to acquire certain other services from AT&T thereafter.

For accounting purposes, we have bifurcated the discounted value of these services from the stated purchase consideration for the AT&T Acquisition.

The discounted value associated with this asset is reflected as an outflow in our net cash provided by operating activities in our consolidated statement of cash flows, and is therefore not accounted for as an investing activity related to the AT&T Acquisition.

However, as this credit was negotiated as part of the overall Acquisition Agreement, we have added this item back to arrive at adjusted free cash flow.

Off Balance Sheet Arrangements

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Historically, these arrangements have not resulted in our company making any material payments and we do not believe that they will result in material payments in the future.

For information concerning certain indemnifications provided by C&W , see note 18 to our consolidated financial statements.

Contractual Commitments

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dollar equivalents of our commitments as of December 31, 2020:

Payments due during

Payments due during Total

2021 2022 2023 2024 2025 Thereafter

Debt (excluding interest)

$ 160.0 $ 117.2 $ 270.6 $ 584.8 $ 146.0 $ 7,222.3 $ 8,500.9

Finance leases (excluding interest)

1.7 2.6 2.3 2.3 2.2 2.3 13.4

Operating leases 78.7 62.7 51.4 44.4 34.6 136.9 408.7

Programming commitments

139.9 89.7 52.8 43.2 0.5 — 326.1

Network and connectivity commitments

57.5 13.7 10.0 9.1 6.3 9.5 106.1

Purchase commitments

98.2 6.5 1.4 — — — 106.1

Other commitments 9.4 1.9 1.6 1.5 1.4 8.4 24.2

Total (a) $ 545.4 $ 294.3 $ 390.1 $ 685.3 $ 191.0 $ 7,379.4 $ 9,485.5

Projected cash interest payments on debt and finance lease obligations (b)

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.

$ 448.4 $ 447.5 $ 434.1 $ 424.4 $ 403.4 $ 766.5 $ 2,924.3

(a) The commitments included in this table do not reflect any liabilities that are included in our December 31, 2020 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 ($45 million at December 31, 2020) 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 15 to our consolidated financial statements.

Amounts are based on interest rates, interest payment dates, commitment fees and contractual maturities in effect as of December 31, 2019 .

(b) Amounts are based on interest rates, interest payment dates, commitment fees and contractual maturities in effect as of December 31, 2020.

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.

For information concerning our debt, operating lease obligations and commitments, see notes 10 , 11 and 18 , respectively, to our consolidated financial statements.

For information concerning our debt and finance lease obligations, operating leases and commitments, see notes 10, 11 and 20, respectively, to our consolidated financial statements.

In addition to the commitments set forth in the table above, we have commitments under (i) derivative instruments and (ii) defined benefit plans and similar agreements, pursuant to which we expect to make payments in future periods.

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Assets to be disposed of are recorded at the lower of their carrying amount or fair value less costs to sell.

We evaluate goodwill and other indefinite-lived intangible assets (primarily cable television franchise rights) for impairment at least annually on October 1 and whenever facts and circumstances indicate that the fair value of a reporting unit or an indefinite-lived intangible asset may be less than its carrying value.

We evaluate goodwill and other indefinite-lived intangible assets (primarily cable television franchise rights and spectrum licenses) for impairment at least annually on October 1 and whenever facts and circumstances indicate that the fair value of a reporting unit or an indefinite-lived intangible asset may be less than its carrying value.

When evaluating impairment with respect to goodwill and other indefinite-lived intangibles, we first make a qualitative assessment to determine if the goodwill or other indefinite-lived intangible may be impaired.

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Our determination of the discount rate is based on a weighted average cost of capital approach, which uses a market participant’s cost of equity and after-tax cost of debt and reflects certain risks inherent in the future cash flows.

With respect to a market-value approach, the fair value of a reporting unit is estimated based upon a market multiple typically applied to the reporting unit’s Adjusted OIBDA .

With respect to a market-value approach, the

fair value of a reporting unit is estimated based upon a market multiple typically applied to the reporting unit’s Adjusted OIBDA.

We determine the market multiple for each reporting unit taking the following into consideration:

(i) public company trading multiples for entities with similar business characteristics as the respective reporting unit, adjusted to reflect an appropriate control premium or discount, a “trading multiple;” and (ii) multiples derived from the value of recent transactions for businesses with similar operations and in geographically similar locations, a “transaction multiple.” Changes in the underlying assumptions used in both the income-based and market-value valuation methods can result in materially different determinations of fair value.

During 2019 and 2018, we recorded goodwill impairments of $182 million and $608 million , respectively, related to our Panamanian reporting unit of C&W .

An increase/decrease of 0.1x to the market multiple used would have resulted in an increase/decrease of approximately $23 million to the related to the 2019 impairment.

During 2020 we recorded goodwill impairments of $177 million and $99 million related to C&W Panama and C&W Caribbean and Networks, respectively.

During 2019 and 2018, we recorded goodwill impairments of $182 million and $608 million, respectively, related to C&W Panama.

A hypothetical increase/(decrease) of 0.1% in the discount rate used in the goodwill impairment assessment that resulted in our 2020 goodwill impairment charges would have resulted in an increase/(decrease) of approximately $33 million/($30 million) in aggregate to the goodwill impairment.

For additional information regarding impairments recorded during 2020, 2019 and 2018, see notes 6 and 9 to our consolidated financial statements.

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For additional information, including the specific weighted average discount rates we used to complete certain nonrecurring valuations, see note 6 to our consolidated financial statements.

For information regarding our acquisitions and long-lived assets, see notes 4 and 9 to our consolidated financial statements.

For information regarding our acquisitions and long-lived assets, see notes 4 and 9, respectively, to our consolidated financial statements.

Income Tax Accounting

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Establishing or reducing a tax valuation allowance requires us to make assessments about the timing of future events, including the probability of expected future taxable income and available tax planning strategies.

At December 31, 2019 , the aggregate valuation allowance provided against deferred tax assets was $1,403 million .

December 31, 2020, the aggregate valuation allowance provided against deferred tax assets was $1,631 million.

The actual amount of deferred income tax benefits realized in future periods will likely differ from the net deferred tax assets reflected in our December 31, 2020 consolidated balance sheet due to, among other factors, possible future changes in income tax law or interpretations thereof in the jurisdictions in which we operate and differences between estimated and actual future taxable income.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis