Liberty Latin America Ltd. 10-K

Item 9A. CONTROLS AND PROCEDURES Evaluation of disclosure controls and procedures We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act ), that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Principle Executive Officer and our Principal Financial Officer (the Executives ), as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, the Executives recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply judgment in evaluating the cost-benefit relationship of possible controls and objectives. Our management, with the participation of the Executives, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2020. Based on that evaluation, the Executives concluded that our disclosure controls and procedures are not effective as of December 31, 2020 due to material weaknesses in internal control over financial reporting, as described below. Notwithstanding such material weaknesses in internal control over financial reporting, our management concluded that our consolidated financial statements in this Annual Report on Form 10-K present fairly, in all material respects, the company’s financial position, results of operations and cash flows as of the dates, and for the periods presented, in conformity with U.S. GAAP. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, (iii) provide reasonable assurance that receipts and expenditures are being made only in accordance with authorizations of management and directors, and (iv) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the consolidated financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Our management, with the participation of the Executives and Board of Directors, assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2020, using the criteria in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Our evaluation of II-54 internal control over financial reporting did not include the internal control over financial reporting of the AT&T Acquired Entities, which were acquired in 2020. The amount of total assets and revenue included in our consolidated financial statements as of and for the year ended December 31, 2020 that is attributable to the AT&T Acquired Entities was $2,707 million and $174 million, respectively. In our Annual Report on Form 10-K for our fiscal year ended December 31, 2018, management identified the following material weaknesses in internal control over financial reporting, which continue to exist as of December 31, 2020: • The Company did not have a sufficient number of trained resources with the appropriate skills and knowledge with assigned responsibilities and accountability for the design and operation of internal controls over financial reporting. • The Company did not have an effective risk assessment process that successfully identified and assessed risks of misstatement to ensure controls were designed and implemented to respond to those risks. The Company did not adequately communicate the changes necessary in financial reporting and related internal controls throughout its organization and to affected third parties. • The Company did not have an effective monitoring process to assess the consistent operation of internal control over financial reporting and to remediate known control deficiencies. • The Company did not have an effective information and communication process to identify, capture and process relevant information necessary for financial accounting and reporting. • The Company did not i) establish effective general information technology controls ( GITCs ), specifically program change controls and access controls, commensurate with financial and IT personnel job responsibilities that support the consistent operation of the Company’s IT operating systems, databases and IT applications, and end user computing over all financial reporting, ii) have policies and procedures through which general information technology controls are deployed across the organization. Automated process-level controls and manual controls dependent upon the accuracy and completeness of information derived from information technology systems were also rendered ineffective because they are affected by the lack of GITCs. As a consequence, the Company did not effectively design, implement and operate process-level control activities related to order-to-cash (including revenue, trade receivables, and deferred revenue), procure-to-pay (including operating expenses, prepaid expenses, accounts payable, and accrued liabilities), hire-to-pay (including compensation expense and accrued liabilities), long-lived assets, inventory and other financial reporting processes. These control deficiencies resulted in immaterial misstatements, some of which were corrected, in our consolidated financial statements as of and for the year ended December 31, 2020. These control deficiencies create a reasonable possibility that a material misstatement to the consolidated financial statements will not be prevented or detected on a timely basis, and therefore we conclude that the deficiencies represent material weaknesses in internal control over financial reporting and our internal control over financial reporting is not effective as of December 31, 2020. Our independent registered public accounting firm, KPMG, LLP, who audited the consolidated financial statements included in this Annual Report on Form 10-K, has expressed an adverse report on the operating effectiveness of the Company's internal control over financial reporting. KPMG LLP's report is included herein on page II-57 . Management’s Remediation Plan We, with the oversight from the Audit Committee of the Board of Directors continue to implement the remediation plans for the aforementioned material weaknesses in internal control over financial reporting as follows: • Hire additional individuals and retain employees with appropriate skills and experience and provide further training related to internal control over financial reporting and the design and implementation of information technology solutions. • Design and implement a comprehensive and continuous risk assessment process to identify and assess risks of material misstatement and ensure that the impacted financial reporting processes and related internal controls are properly designed and in place to respond to those risks in our financial reporting. • Implement monitoring controls to oversee the remediation and the consistent operation of control activities, including those performed by our service providers. II-55 • Enhance information and communication processes, including through information technology solutions of which include, but are not limited to, implementing new enterprise resource planning software, to ensure that information needed for financial reporting is accurate, complete, relevant, reliable, and communicated in a timely manner. • Design and implement GITCs, including the system development lifecycle controls, and ensure they are operating effectively to support process-level automated and manual control activities that are dependent upon information derived from IT systems. • Enhance the design of existing control activities and implement additional process-level control activities (including controls over the order-to-cash, procure-to-pay, hire-to-pay, long-lived assets, inventory, and other financial reporting processes) and ensure they are properly evidenced and operating effectively. We believe that these actions and the improvements we expect to achieve, when fully implemented, will strengthen our internal control over financial reporting and remediate the remaining material weaknesses. We are committed to making further progress in our remediation efforts during 2021; however, if our remedial measures are insufficient to address the material weaknesses, or if one or more additional material weaknesses in our internal controls over financial reporting are discovered, we may be required to take additional remedial measures from our plan as disclosed above. Changes in Internal Control over Financial Reporting Except as listed below, there have been no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during our fourth quarter of 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. During our fourth quarter, changes in our internal control over financial reporting include that we: • implemented additional procedures and controls to enhance our internal control process through a combination of preventative and detective controls, • developed specific roles and responsibilities for certain internal control activities of the Technology and Information group at two of our components, • provided personal coaching regarding performance of business process controls and GITCs, • designed and implemented certain manual controls to support the newly implemented enterprise resource planning software at two of our components; and, • designed and implemented certain GITCs for the IT systems used at two of our components. Item 9B. OTHER INFORMATION Not applicable. II-56 Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Liberty Latin America Ltd.: Opinion on Internal Control Over Financial Reporting We have audited Liberty Latin America Ltd. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, because of the effect of the material weaknesses, described below, on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive loss, equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes and financial statement schedule I (collectively, the consolidated financial statements), and our report dated March 1, 2021 expressed an unqualified opinion on those consolidated financial statements. The Company acquired AT&T Mobility Puerto Rico Inc., AT&T Mobility Virgin Islands Inc. & Beach Holding Corporation (the AT&T Acquired Entities) during 2020, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020, the AT&T Acquired Entities’ internal control over financial reporting associated with total assets of $2,707 million and total revenues of $174 million included in the consolidated financial statements of the Company as of and for the year ended December 31, 2020. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of the AT&T Acquired Entities. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in management’s assessment: • The Company did not have a sufficient number of trained resources with the appropriate skills and knowledge with assigned responsibilities and accountability for the design and operation of internal controls over financial reporting. • The Company did not have an effective risk assessment process that successfully identified and assessed risks of misstatement to ensure controls were designed and implemented to respond to those risks. The Company did not adequately communicate the changes necessary in financial reporting and related internal controls throughout its organization and to affected third parties. • The Company did not have an effective monitoring process to assess the consistent operation of internal control over financial reporting and to remediate known control deficiencies. • The Company did not have an effective information and communication process to identify, capture and process relevant information necessary for financial accounting and reporting. • The Company did not i) establish effective general information technology controls (GITCs), specifically program change controls and access controls, commensurate with financial and IT personnel job responsibilities that support the consistent operation of the Company’s IT operating systems, databases and IT applications, and end user computing over all financial reporting, ii) have policies and procedures through which general information technology controls are deployed across the organization. Automated process-level controls and manual controls dependent upon the accuracy and completeness of information derived from information technology systems were also rendered ineffective because they are affected by the lack of GITCs. • The Company did not effectively design, implement and operate process-level control activities related to order-to-cash (including revenue, trade receivables, and deferred revenue), procure-to-pay (including operating expenses, II-57 prepaid expenses, accounts payable, and accrued liabilities), hire-to-pay (including compensation expense and accrued liabilities), long-lived assets, inventory, and other financial reporting processes. The material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2020 consolidated financial statements, and this report does not affect our report on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting in Item 9A. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Denver, Colorado March 1, 2021 II-58 Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Liberty Latin America Ltd.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Liberty Latin America Ltd. and subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive loss, equity, and cash flows for each of the years in the three‑year period ended December 31, 2020, and the related notes and financial statement schedule I (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 1, 2021 expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting. Change in Accounting Principle As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2019 due to the adoption of Accounting Standards Update No. 2016-02, Leases . Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Capitalization of costs into property and equipment As discussed in Note 3 to the consolidated financial statements, the Company capitalizes costs associated with the construction of new cable and mobile transmission and distribution facilities, the installation of new cable services and the development of software supporting its operations. Capitalization, rather than expensing of costs, may result in a more favorable operating income (loss) in a given year. As of December 31, 2020, the property and equipment, net balance was $4,911 million. II-59 We identified the assessment of external costs capitalized into property and equipment as a critical audit matter. A high degree of auditor judgment was required to assess the nature of the supporting documentation. Third party technology related invoices can lack specificity of the item acquired or activity performed to support that the costs qualified for capitalization. The following are the primary procedures we performed to address this critical audit matter. We selected a sample of costs capitalized and inspected the related invoices. For those invoices selected lacking specificity, we inspected additional underlying documentation, such as the related statement of work or contract. Valuation of goodwill for certain reporting units As discussed in Note 3 to the consolidated financial statements, the Company tests for impairment of goodwill at least annually and whenever facts and circumstances indicate that the carrying value of a reporting unit might exceed its fair value. Fair value of each reporting unit was measured using an income approach, utilizing a discounted cash flow model valuation technique. As of December 31, 2020, the goodwill balance was $4,886 million and the Company recorded impairments totaling $276 million. We identified the assessment of the fair value of certain reporting units as a critical audit matter. There was a high degree of subjective auditor judgment required in assessing the Company’s key assumptions in measuring the fair value. Depending on the reporting unit, the key assumptions were projected revenues, projected direct costs, projected operating expenses, projected capital expenditures, discount rates and terminal growth rates. For these reporting units, certain valuations were sensitive to minor changes in these inputs which could have a significant impact on the estimated fair value. The following are the primary procedures we performed to address this critical audit matter. We performed procedures to test the projected revenues, direct costs, operating expenses, and capital expenditures by comparing them with the historical results of the respective reporting unit and assessing the impacts of internal and/or external economic factors considering the available information. We involved valuation professionals with specialized skills and knowledge, who assisted in: evaluating the discount rates used in the valuations by comparing them against independently developed discount rates using publicly available market data; evaluating the terminal growth rates used in the valuations by comparing them to publicly available market data, and comparing the implied market multiples from the Company’s fair value estimates using the income approach to the observed range of market multiples derived from comparable companies. Preliminary valuation of property and equipment and intangible assets associated with the acquisition of the AT&T Acquired Entities As discussed in Note 4 to the consolidated financial statements, the Company acquired the wireless and wireline operations of AT&T, Inc. located in Puerto Rico and the U.S. Virgin Islands on October 31, 2020, for consideration of $1,931 million. Based on the preliminary allocation of the purchase price, the Company recorded $711 million of acquired property and equipment, $1,329 million of acquired intangible assets, including $894 million of spectrum, and $83 million of customer relationships. The information that was available to the Company to allocate consideration to the acquired property and equipment and intangible assets was affected by the proximity of the acquisition date to the Company’s fiscal year-end date of December 31, 2020. As a result, the Company determined the preliminary fair value of property and equipment based on the historical cost basis of AT&T, Inc., the acquired spectrum intangible asset based on a range of prices indicated by an initial analysis of available market data, and the customer relationships based on a multi-period excess earnings method. Key assumptions used to value the customer relationships included the discount rate and required rates of return on property and equipment (including return of and on) and spectrum intangible assets. We identified the preliminary valuation of the acquired intangible assets of spectrum and customer relationships along with property and equipment associated with the acquisition of the AT&T Acquired Entities as a critical audit matter. Due to the extent of the information available as of the end of the reporting period, evaluating the preliminary valuation of these intangible assets and property and equipment involved a high degree of auditor judgment. Testing the key assumptions used to estimate the fair value of the customer relationship intangible assets, also involved a high degree of auditor judgment due to its sensitivity to changes in the key assumptions. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter. This included controls related to the determination of the preliminary fair value of the acquired intangible assets and property and equipment and II-60 the development of the key assumptions noted above. Based on the consideration and extent of the information available as of the end of the reporting period, we evaluated the reasonableness of the preliminary fair value of the acquired intangible assets and property and equipment. We involved a valuation professional with specialized skills and knowledge who assisted in: • evaluating the discount rate used to determine the preliminary fair value of the customer relationships acquired by comparing the Company’s inputs to the discount rate to publicly available data for comparable entities and assessing the resulting discount rate, and • evaluating the required rates of return on property and equipment (including return of and on) and spectrum intangible assets used to estimate the preliminary fair value of the customer relationships acquired by assessing the required rates of return considering the weighted-average cost of capital and the implied rate of return of the transaction. /s/ KPMG LLP We have served as the Company’s auditor since 2016. Denver, Colorado March 1, 2021 II-61 LIBERTY LATIN AMERICA LTD. CONSOLIDATED BALANCE SHEETS December 31, 2020 2019 in millions ASSETS Current assets: Cash and cash equivalents $ 894.2 $ 1,183.8 Trade receivables, net of allowances of $ 100.0 million and $ 87.3 million, respectively 560.7 585.2 Prepaid expenses 62.6 58.9 Other current assets, net 434.4 227.3 Total current assets 1,951.9 2,055.2 Goodwill 4,885.5 4,906.4 Property and equipment, net 4,911.4 4,301.1 Restricted cash 17.3 1,272.2 Intangible assets subject to amortization, net 858.9 969.2 Intangible assets not subject to amortization 1,465.6 560.8 Other assets, net 1,139.4 872.6 Total assets $ 15,230.0 $ 14,937.5 The accompanying notes are an integral part of these consolidated financial statements. II-62 LIBERTY LATIN AMERICA LTD. CONSOLIDATED BALANCE SHEETS – (Continued) December 31, 2020 2019 in millions LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 351.7 $ 346.6 Current portion of deferred revenue 184.9 160.9 Current portion of debt and finance lease obligations 161.9 180.2 Accrued capital expenditures 73.6 72.1 Accrued interest 132.3 132.6 Accrued payroll and employee benefits 97.8 88.9 Derivative instruments 90.2 35.4 Other accrued and current liabilities 612.6 559.3 Total current liabilities 1,705.0 1,576.0 Long-term debt and finance lease obligations 8,195.3 8,189.8 Deferred tax liabilities 619.9 401.8 Deferred revenue 185.3 210.9 Other long-term liabilities 1,080.8 579.1 Total liabilities 11,786.3 10,957.6 Commitments and contingencies Equity: Liberty Latin America shareholders: Class A, $ 0.01 par value; 500,000,000 shares authorized; 49,303,401 and 49,009,585 shares issued and outstanding, respectively, at December 31, 2020 and 48,795,552 shares issued and outstanding at December 31, 2019 0.5 0.5 Class B, $ 0.01 par value; 50,000,000 shares authorized; 1,932,386 shares issued and outstanding at December 31, 2020 and 1,934,686 shares issued and outstanding at December 31, 2019 — — Class C, $ 0.01 par value; 500,000,000 shares authorized; 181,786,924 and 181,113,766 shares issued and outstanding, respectively, at December 31, 2020 and 131,181,371 shares issued and outstanding at December 31, 2019 1.8 1.3 Undesignated preference shares, $ 0.01 par value; 50,000,000 shares authorized; nil shares issued and outstanding at each period — — Treasury shares, at cost; 966,974 and nil shares, respectively ( 9.5 ) — Additional paid-in capital 4,982.0 4,569.9 Accumulated deficit ( 2,134.5 ) ( 1,447.1 ) Accumulated other comprehensive loss, net of taxes ( 125.6 ) ( 14.8 ) Total Liberty Latin America shareholders 2,714.7 3,109.8 Noncontrolling interests 729.0 870.1 Total equity 3,443.7 3,979.9 Total liabilities and equity $ 15,230.0 $ 14,937.5 The accompanying notes are an integral part of these consolidated financial statements. II-63 LIBERTY LATIN AMERICA LTD. CONSOLIDATED STATEMENTS OF OPERATIONS Year ended December 31, 2020 2019 2018 in millions, except per share amounts Revenue $ 3,764.6 $ 3,867.0 $ 3,705.7 Operating costs and expenses (exclusive of depreciation and amortization, shown separately below): Programming and other direct costs of services 846.0 877.8 877.2 Other operating costs and expenses 1,531.4 1,505.3 1,441.3 Business interruption loss recovery — — ( 59.5 ) Depreciation and amortization 914.6 871.0 829.8 Impairment, restructuring and other operating items, net 380.9 259.1 640.5 3,672.9 3,513.2 3,729.3 Operating income (loss) 91.7 353.8 ( 23.6 ) Non-operating income (expense): Interest expense ( 533.4 ) ( 499.2 ) ( 443.7 ) Realized and unrealized gains (losses) on derivative instruments, net ( 352.7 ) ( 17.2 ) 94.8 Foreign currency transaction gains (losses), net 1.2 ( 112.5 ) ( 180.0 ) Losses on debt modification and extinguishment, net ( 45.1 ) ( 19.8 ) ( 32.1 ) Other income (expense), net 0.1 14.3 ( 0.1 ) ( 929.9 ) ( 634.4 ) ( 561.1 ) Loss before income taxes ( 838.2 ) ( 280.6 ) ( 584.7 ) Income tax benefit (expense) 29.3 98.2 ( 51.1 ) Net loss ( 808.9 ) ( 182.4 ) ( 635.8 ) Net loss attributable to noncontrolling interests 121.7 102.3 290.6 Net loss attributable to Liberty Latin America shareholders $ ( 687.2 ) $ ( 80.1 ) $ ( 345.2 ) Basic and diluted net loss per share attributable to Liberty Latin America shareholders $ ( 3.51 ) $ ( 0.43 ) $ ( 1.96 ) The accompanying notes are an integral part of these consolidated financial statements. II-64 LIBERTY LATIN AMERICA LTD. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS Year ended December 31, 2020 2019 2018 in millions Net loss $ ( 808.9 ) $ ( 182.4 ) $ ( 635.8 ) Other comprehensive earnings (loss), net of taxes: Foreign currency translation adjustments ( 119.0 ) 1.8 2.7 Reclassification adjustments included in net loss 0.6 ( 3.0 ) 2.2 Pension-related adjustments and other, net 6.8 2.4 34.5 Other comprehensive earnings (loss) ( 111.6 ) 1.2 39.4 Comprehensive loss ( 920.5 ) ( 181.2 ) ( 596.4 ) Comprehensive loss attributable to noncontrolling interests 122.5 102.6 291.9 Comprehensive loss attributable to Liberty Latin America shareholders $ ( 798.0 ) $ ( 78.6 ) $ ( 304.5 ) The accompanying notes are an integral part of these consolidated financial statements. II-65 LIBERTY LATIN AMERICA LTD. CONSOLIDATED STATEMENTS OF EQUITY Liberty Latin America shareholders Non- controlling interests Total equity Common shares Additional paid-in capital Accumulated deficit Accumulated other comprehensive loss, net of taxes Total Liberty Latin America shareholders Class A Class B Class C in millions Balance at January 1, 2018 $ 0.5 $ — $ 1.2 $ 4,402.8 $ ( 1,010.7 ) $ ( 64.2 ) $ 3,329.6 $ 1,361.0 $ 4,690.6 Accounting change (note 2) — — — — ( 11.1 ) — ( 11.1 ) 3.6 ( 7.5 ) Balance at January 1, 2018, as adjusted for accounting change 0.5 — 1.2 4,402.8 ( 1,021.8 ) ( 64.2 ) 3,318.5 1,364.6 4,683.1 Net loss — — — — ( 345.2 ) — ( 345.2 ) ( 290.6 ) ( 635.8 ) Other comprehensive earnings — — — — — 40.7 40.7 ( 1.3 ) 39.4 C&W Jamaica NCI Acquisition — — — ( 13.7 ) — 7.2 ( 6.5 ) ( 15.1 ) ( 21.6 ) Impact of the Cabletica Acquisition — — — — — — — 25.1 25.1 Capital contributions from noncontrolling interest owner — — — — — — — 18.0 18.0 LPR NCI Acquisition — — 0.1 68.2 — — 68.3 ( 68.3 ) — Distributions to noncontrolling interest owners — — — — — — — ( 22.7 ) ( 22.7 ) Shared-based compensation — — — 35.2 — — 35.2 1.1 36.3 Other — — — 1.6 — — 1.6 — 1.6 Balance at December 31, 2018 $ 0.5 $ — $ 1.3 $ 4,494.1 $ ( 1,367.0 ) $ ( 16.3 ) $ 3,112.6 $ 1,010.8 $ 4,123.4 The accompanying notes are an integral part of these consolidated financial statements. II-66 LIBERTY LATIN AMERICA LTD. CONSOLIDATED STATEMENTS OF EQUITY – (Continued) Liberty Latin America shareholders Non-controlling interests Total equity Common shares Additional paid-in capital Accumulated deficit Accumulated other comprehensive loss, net of taxes Total Liberty Latin America shareholders Class A Class B Class C in millions Balance at January 1, 2019 $ 0.5 $ — $ 1.3 $ 4,494.1 $ ( 1,367.0 ) $ ( 16.3 ) $ 3,112.6 $ 1,010.8 $ 4,123.4 Net loss — — — — ( 80.1 ) — ( 80.1 ) ( 102.3 ) ( 182.4 ) Other comprehensive earnings — — — — — 1.5 1.5 ( 0.3 ) 1.2 Impact of the UTS Acquisition — — — — — — — 11.6 11.6 Distributions to noncontrolling interest owners — — — — — — — ( 37.7 ) ( 37.7 ) Conversion Option, net — — — 77.3 — — 77.3 — 77.3 Capped Calls — — — ( 45.6 ) — — ( 45.6 ) — ( 45.6 ) UTS NCI Acquisition — — — 0.1 — — 0.1 ( 11.7 ) ( 11.6 ) Share-based compensation — — — 44.0 — — 44.0 — 44.0 Other — — — — — — — ( 0.3 ) ( 0.3 ) Balance at December 31, 2019 $ 0.5 $ — $ 1.3 $ 4,569.9 $ ( 1,447.1 ) $ ( 14.8 ) $ 3,109.8 $ 870.1 $ 3,979.9 The accompanying notes are an integral part of these consolidated financial statements. II-67 LIBERTY LATIN AMERICA LTD. CONSOLIDATED STATEMENTS OF EQUITY – (Continued) Liberty Latin America shareholders Non-controlling interests Total equity Common shares Treasury Stock Additional paid-in capital Accumulated deficit Accumulated other comprehensive loss, net of taxes Total Liberty Latin America shareholders Class A Class B Class C in millions Balance at January 1, 2020 $ 0.5 $ — $ 1.3 $ — $ 4,569.9 $ ( 1,447.1 ) $ ( 14.8 ) $ 3,109.8 $ 870.1 $ 3,979.9 Accounting change (note 2) — — — — — ( 0.2 ) — ( 0.2 ) 0.2 — Balance at January 1, 2020, as adjusted for accounting change 0.5 — 1.3 — 4,569.9 ( 1,447.3 ) ( 14.8 ) 3,109.6 870.3 3,979.9 Net loss — — — — — ( 687.2 ) — ( 687.2 ) ( 121.7 ) ( 808.9 ) Other comprehensive loss — — — — — — ( 110.8 ) ( 110.8 ) ( 0.8 ) ( 111.6 ) Repurchase of Liberty Latin America common shares — — — ( 9.5 ) — — — ( 9.5 ) — ( 9.5 ) Issuance of Liberty Latin America common shares, net — — 0.5 — 344.6 — — 345.1 — 345.1 Distributions to noncontrolling interest owners — — — — — — — — ( 18.8 ) ( 18.8 ) Share-based compensation — — — — 66.6 — — 66.6 — 66.6 Other — — — — 0.9 — — 0.9 — 0.9 Balance at December 31, 2020 $ 0.5 $ — $ 1.8 $ ( 9.5 ) $ 4,982.0 $ ( 2,134.5 ) $ ( 125.6 ) $ 2,714.7 $ 729.0 $ 3,443.7 The accompanying notes are an integral part of these consolidated financial statements. II-68 LIBERTY LATIN AMERICA LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS Year ended December 31, 2020 2019 2018 in millions Cash flows from operating activities: Net loss $ ( 808.9 ) $ ( 182.4 ) $ ( 635.8 ) Adjustments to reconcile net loss to net cash provided by operating activities: Share-based compensation expense 97.5 57.5 39.8 Depreciation and amortization 914.6 871.0 829.8 Impairment 283.1 199.4 615.7 Amortization of debt financing costs, premiums and discounts, net 30.4 16.8 ( 0.3 ) Realized and unrealized losses (gains) on derivative instruments, net 352.7 17.2 ( 94.8 ) Foreign currency transaction losses (gains), net ( 1.2 ) 112.5 180.0 Losses on debt modification and extinguishment, net 45.1 19.8 32.1 Loss on the Seychelles Disposition — 2.8 — Unrealized loss due to change in fair value of investment — — 16.4 Deferred income tax benefit ( 65.1 ) ( 32.7 ) ( 32.9 ) Changes in operating assets and liabilities, net of the effect of acquisitions and a disposition: Receivables and other operating assets ( 122.9 ) ( 11.9 ) ( 66.2 ) Payables and accruals ( 85.2 ) ( 151.8 ) ( 67.0 ) Net cash provided by operating activities 640.1 918.2 816.8 Cash flows from investing activities: Capital expenditures ( 565.8 ) ( 589.1 ) ( 776.4 ) Cash paid in connection with acquisitions, net of cash acquired ( 1,886.1 ) ( 161.2 ) ( 226.4 ) Recovery on damaged or destroyed property and equipment — 33.9 20.7 Proceeds from the Seychelles Disposition, net — 77.5 — Other investing activities, net 1.1 3.6 1.6 Net cash used by investing activities $ ( 2,450.8 ) $ ( 635.3 ) $ ( 980.5 ) The accompanying notes are an integral part of these consolidated financial statements. II-69 LIBERTY LATIN AMERICA LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS – (Continued) Year ended December 31, 2020 2019 2018 in millions Cash flows from financing activities: Borrowings of debt $ 1,319.0 $ 2,966.9 $ 1,235.3 Payments of principal amounts of debt and finance lease obligations ( 1,439.4 ) ( 1,275.9 ) ( 925.2 ) Issuance of Liberty Latin America common shares, net 347.0 — — Net cash received (paid) related to derivative instruments 182.5 ( 0.3 ) 10.0 Capped Calls — ( 45.6 ) — Distributions to noncontrolling interest owners ( 18.8 ) ( 37.7 ) ( 22.7 ) Payment of financing costs and debt premiums ( 99.0 ) ( 55.1 ) ( 39.3 ) Repurchase of Liberty Latin America common shares ( 9.5 ) — — Cash payments for the acquisition of noncontrolling interest ( 5.6 ) ( 5.1 ) ( 20.9 ) Capital contributions from noncontrolling interest owner — — 18.0 Other financing activities, net ( 5.1 ) ( 7.4 ) 0.9 Net cash provided by financing activities 271.1 1,539.8 256.1 Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 4.9 ) ( 7.7 ) ( 18.6 ) Net increase (decrease) in cash, cash equivalents and restricted cash ( 1,544.5 ) 1,815.0 73.8 Cash, cash equivalents and restricted cash: Beginning of year 2,457.0 642.0 568.2 End of year $ 912.5 $ 2,457.0 $ 642.0 Cash paid for interest $ 484.3 $ 444.9 $ 418.2 Net cash paid for taxes $ 81.6 $ 130.1 $ 145.6 The accompanying notes are an integral part of these consolidated financial statements. II-70 Liberty Latin America Ltd. Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 (1) Basis of Presentation General Liberty Latin America Ltd. ( Liberty Latin America ) is a registered company in Bermuda that primarily includes: (i) Cable & Wireless Communications Limited and its subsidiaries (collectively C&W ), which includes Cable & Wireless Panama, S.A. ( CWP ); (ii) VTR Finance N.V. and its subsidiaries (collectively VTR ); (iii) Liberty Communications PR Holding LP ( Liberty Communications ) and its subsidiaries (collectively Liberty Puerto Rico ), which include Liberty Communications of Puerto Rico LLC ( LCPR ) and, as of October 31, 2020 and as further described in note 4, Liberty Mobile Inc. ( Liberty Mobile ) and its subsidiaries; and (iv) LBT CT Communications, S.A. (a less than wholly-owned entity) and its subsidiary, Cabletica S.A. ( Cabletica ). VTR, Liberty Communications and LCPR were formerly known as VTR Finance B.V., Leo Cable LP and Liberty Cablevision of Puerto Rico LLC, respectively. C&W owns less than 100% of certain of its consolidated subsidiaries, including The Bahamas Telecommunications Company Limited ( C&W Bahamas ), Cable & Wireless Jamaica Limited ( C&W Jamaica ), and CWP. We are an international provider of fixed, mobile and subsea telecommunications services. We provide residential and business-to-business ( 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. The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ( U.S. GAAP ). In these notes, the terms “ we ,” “ our ,” “ our company ” and “ us ” may refer, as the context requires, to Liberty Latin America or collectively to Liberty Latin America and its subsidiaries. Unless otherwise indicated, ownership percentages and convenience translations into United States ( U.S. ) dollars are calculated as of December 31, 2020. (2) Accounting Changes and Recent Accounting Pronouncements Accounting Changes ASU 2019-12 In December 2019, the Financial Accounting Standards Board ( FASB ) issued Accounting Standards Update ( ASU ) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ( ASU 2019-12 ), which (i) simplifies the accounting for income taxes by removing certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocations and calculating income taxes in interim periods, and (ii) reduces the complexity in certain areas of existing tax guidance, including the recognition of deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. We early adopted ASU 2019-12 effective December 31, 2020 and it did not have a material impact on our consolidated financial statements. ASU 2018-15 In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software—Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract II-71 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 ( ASU 2018-15 ). ASU 2018-15 provides additional guidance on ASU No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software—Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which was issued to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The guidance (i) provides criteria for determining which implementation costs to capitalize as an asset related to the service contract and which costs to expense, (ii) requires an entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement and (iii) clarifies the presentation requirements for reporting such costs in the entity’s financial statements. We adopted ASU 2018-15 effective January 1, 2020 on a prospective basis for all implementation costs incurred after the date of adoption and it did not have a material impact on our consolidated financial statements. ASU 2016-13 In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses—Measurement of Credit Losses on Financial Instruments ( ASU 2016-13 ), as amended by (i) ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates , which amended certain effective dates, and (ii) ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses , which clarifies guidance around how to report expected recoveries. ASU 2016-13 replaces the incurred loss impairment methodology for recognizing credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. We are required to use a forward-looking expected credit loss model for accounts receivables, loans and other financial instruments. We adopted ASU 2016-13 effective January 1, 2020 using a modified retrospective approach through a cumulative-effect adjustment to retained earnings to align our credit loss methodology with the new standard. The comparative information has not been restated and continues to be reported under the accounting standards in effect for that period. Under the new model, we segment our receivables, unbilled revenue and contract assets based on days past due and record an allowance for current expected credit losses using average rates applied against each account’s applicable aggregate balance for each aging bucket. We establish the average rates based on consideration of the actual credit loss experience over the prior 12-month period, recent collection trends, current economic conditions and reasonable expectations of future payment delinquency. The cumulative effect of the changes to our consolidated balance sheet as of January 1, 2020 was not material. ASU 2016-02 In February 2016, the FASB issued ASU No. 2016-02, Leases ( ASU 2016-02 ), as amended by ASU No. 2018-11, Targeted Improvements , which provides an option to use one of two modified retrospective approaches in the adoption of ASU 2016-02. ASU 2016-02, for most leases, results in lessees recognizing right-of-use assets and lease liabilities on the balance sheet and additional disclosures. We adopted ASU 2016-02 effective January 1, 2019 using the effective date transition method. A number of optional practical expedients were applied in transition, as further described below. The main impact of the adoption of this standard was the recognition of right-of-use assets and lease liabilities in our consolidated balance sheet as of January 1, 2019 for those leases classified as operating leases under ASU 2016-02. We did not recognize right-of-use assets or lease liabilities for leases with a term of 12 months or less, as permitted by the short-term lease practical expedient in the standard. In transition, we applied the practical expedients that permit us not to reassess (i) whether expired or existing contracts are or contain a lease under the new standard, (ii) the lease classification for expired or existing leases, (iii) whether previously-capitalized initial direct costs would qualify for capitalization under the new standard and (iv) whether existing or expired land easements that were not previously accounted for as leases are or contain a lease. We also applied the practical expedient that permits us to account for customer service revenue contracts that include both non-lease and lease components as a single component in all instances where the non-lease component is the predominant component of the arrangement and the other applicable criteria are met. In addition, we did not use hindsight during the transition. We implemented internal controls to ensure we adequately evaluate our contracts and properly assessed the impact of ASU 2016-02 on our consolidated financial statements. We do not believe such controls represent significant changes to our internal control over financial reporting. II-72 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 For information regarding our accounting policies for leases following the adoption of ASU 2016-02, see note 3. ASU 2014-09 In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. We adopted ASU 2014-09 effective January 1, 2018 by recording the cumulative effect to the opening balance of our accumulated deficit. We applied the new standard to contracts that were not complete as of January 1, 2018. The most significant impacts of ASU 2014-09 on our revenue recognition policies relate to our accounting for (i) long-term capacity contracts, (ii) subsidized handset plans and (iii) certain installation and other upfront fees, each as set forth below: • We enter into certain long-term capacity contracts with customers where the customer pays the transaction consideration at inception of the contract. Under previous accounting standards, we did not impute interest for advance payments from customers related to services that are provided over time. Under ASU 2014-09, payment received from a customer significantly in advance of the provision of services is indicative of a financing component within the contract. If the financing component is significant, interest expense is accreted over the life of the contract with a corresponding increase to revenue. • ASU 2014-09 requires the identification of deliverables in contracts with customers that qualify as performance obligations. The transaction price consideration from customers is allocated to each performance obligation under the contract on the basis of relative standalone selling price. Under previous accounting standards, when we offered discounted equipment, such as handsets under a subsidized contract, upfront revenue recognition was limited to the upfront cash collected from the customer as the remaining monthly fees to be received from the customer, including fees associated with the equipment, were contingent upon delivering future airtime. This limitation is not applied under ASU 2014-09. The primary impact on revenue reporting is that when we sell discounted equipment together with airtime services to customers, revenue allocated to equipment and recognized when control of the device passes to the customer will increase and revenue recognized as services are delivered will decrease. • When we enter into contracts to provide services to our customers, we often charge installation or other upfront fees. Under previous accounting standards, installation fees related to services provided over our fixed networks were recognized as revenue during the period in which the installation occurred to the extent those fees were equal to or less than direct selling costs. Under ASU 2014-09, these fees are generally deferred and recognized as revenue over the contractual period for those contracts with substantive termination penalties, or for the period of time the upfront fees convey a material right for month-to-month contracts and contracts that do not include substantive termination penalties. ASU 2014-09 also impacted our accounting for certain upfront costs directly associated with obtaining and fulfilling customer contracts. Under our previous policy, these costs were expensed as incurred unless the costs were in the scope of other accounting standards that allowed for capitalization. Under ASU 2014-09, the upfront costs associated with contracts that have substantive termination penalties and a term of longer than one year are recognized as assets and amortized to other operating expenses over the applicable period benefited. We implemented internal controls to ensure we adequately evaluated our contracts and properly assessed the impact of ASU 2014-09 on our consolidated financial statements. We do not believe such new controls represent significant changes to our internal control over financial reporting. For information regarding our accounting policies for revenue following the adoption of ASU 2014-09 and our contract assets and deferred revenue balances, see note 3. For our disaggregated revenue by product, see note 21. II-73 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 The impact of our adoption of ASU 2014-09 to our consolidated statement of operations for the year ended December 31, 2018 is as follows: Before adoption of ASU 2014-09 Impact of ASU 2014-09 Increase (decrease) As reported in millions Revenue $ 3,697.3 $ 8.4 $ 3,705.7 Other operating costs and expenses $ 1,442.0 $ ( 0.7 ) $ 1,441.3 Non-operating expenses – interest expense $ 424.6 $ 19.1 $ 443.7 Income tax expense $ 52.6 $ ( 1.5 ) $ 51.1 Net loss $ 627.3 $ 8.5 $ 635.8 Recent Accounting Pronouncements ASU 2018-14 In August 2018, the FASB issued ASU No. 2018-14, Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans ( ASU 2018-14 ), which removes and modifies certain existing disclosure requirements and adds new disclosure requirements related to employer sponsored defined benefit pension or other postretirement plans. ASU 2018-14 is effective for annual reporting periods after December 15, 2020, including interim periods within those fiscal years, with early adoption permitted. ASU 2018-14 will not have a material impact on our consolidated financial statements. ASU 2020-04 and ASU 2021-01 In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ( ASU 2020-04 ), which provides optional guidance for a limited time to ease the potential accounting burden associated with transitioning away from reference rates, such as the London Inter-Bank Offered Rate ( LIBOR ), which regulators in the United Kingdom ( U.K. ) have announced will be phased out by the end of 2021. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848) ( ASU 2021-01 ), which clarifies certain optional expedients and exceptions in ASC 848. The expedients and exceptions provided by ASU 2020-04 and ASU 2021-01 are for the application of U.S. GAAP to contracts, hedging relationships and other transactions affected by the rate reform, and will not be available after December 31, 2022, other than for certain hedging relationships entered into before December 31, 2022. We do not currently expect that the phase out of LIBOR will have a material impact on our consolidated financial statements. ASU 2020-06 In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options and Derivatives and Hedging—Contracts in Entity’s Own Equity: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ( ASU 2020-06 ), which (i) reduces the number of accounting models for convertible instruments and allows more contracts to qualify for equity classification and (ii) makes targeted improvements to convertible instruments and earnings-per-share disclosure requirements. ASU 2020-06 is effective for annual reporting periods after December 15, 2021, including interim periods within those fiscal years, with early adoption permitted, but no earlier than annual and interim periods in fiscal years beginning after December 15, 2020. While we are still evaluating the impact of ASU 2020-06, we do not currently expect it will have a material impact on our consolidated financial statements. (3) Summary of Significant Accounting Policies Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates and assumptions are used in accounting for, among II-74 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 other things, the valuation of acquisition-related assets and liabilities, allowances for credit losses, programming and copyright expenses, deferred income taxes and related valuation allowances, loss contingencies, fair value measurements, impairment assessments, capitalization of internal costs associated with construction and installation activities, useful lives of long-lived assets and actuarial liabilities associated with certain benefit plans. Actual results could differ from those estimates. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. During 2020, we changed the presentation of certain operating costs and expenses in our consolidated statements of operations in order to better align with management’s approach to monitoring and evaluating such costs. Specifically, we have combined the costs previously reported in the consolidated statement of operations’ captions “other operating” and “selling, general and administrative” into one line, which is now referred to as “other operating costs and expenses.” In conjunction with this change, we have provided additional disclosure of the nature of other operating costs and expenses by function, as set forth in note 14. This change in presentation did not have any impact on operating income or loss, net loss or any of our key performance metrics. In addition, we have provided additional disclosure of the nature of our programming and other direct costs of services, as set forth in note 13. Principles of Consolidation The accompanying consolidated financial statements include our accounts and the accounts of all voting interest entities where we exercise a controlling financial interest through the ownership of a direct or indirect controlling voting interest and variable interest entities for which our company is the primary beneficiary. Intercompany accounts have been eliminated in consolidation. Cash, Cash Equivalents and Restricted Cash Cash equivalents consist of money market funds and other investments that are readily convertible into cash and have maturities of three months or less at the time of acquisition. We record money market funds at the net asset value as there are no restrictions on our ability, contractual or otherwise, to redeem our investments. Restricted cash consists of cash held in restricted accounts, including cash held as collateral for acquisitions, debt and other compensating balances, as applicable. Cash that is restricted to a specific use is classified as current or long-term based on, among other things, the expected use and timing of disbursement of the restricted cash. At December 31, 2020 and 2019, our current and long-term restricted cash balances aggregated $ 18 million and $ 1,273 million, respectively. For additional information regarding restricted cash that was used during 2020 to partially fund the AT&T Acquisition, see note 10. Our current restricted cash balances are included in other current assets, net, in our consolidated balance sheets. Receivables We have trade and note receivables that are each reported net of an allowance for credit losses. Our notes receivable, which we maintain following the closing of the AT&T Acquisition, consist of equipment installment-plan ( EIP ) receivables due from customers under contracts over a period of up to 30 months. The short and long-term portions of our notes receivable, net of allowance, are incurred in other current assets, net and other assets, net, respectively, in our consolidated balance sheets. The allowances on each of our trade and notes receivable are established using our best estimates of current expected credit losses based upon, among other things, actual credit loss experience over the prior 12-month period, recent collection trends, prevailing and anticipated economic conditions and specific customer credit risk. Receivables outstanding greater than 30 days are considered past due and we generally write-off receivables after they become past due for 365 days, with the exception of amounts due from certain governments. II-75 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 The changes in our trade receivables allowance for credit losses are set forth below: Year ended December 31, 2020 2019 2018 in millions Beginning balance $ 87.3 $ 144.4 $ 142.2 Provision for expected losses 62.6 61.8 52.6 Write-offs ( 60.3 ) ( 113.9 ) ( 48.5 ) Foreign currency translation adjustments and other 10.4 ( 5.0 ) ( 1.9 ) Ending balance $ 100.0 $ 87.3 $ 144.4 The change in our notes receivable allowance for credit losses for the year ended December 31, 2020 are set forth below (in millions): Beginning balance $ — Additions upon acquisition 14.9 Provision for expected losses 1.3 Ending balance $ 16.2 Concentration of credit risk with respect to trade receivables is limited due to the large number of customers and their dispersion across many different countries, with the exception of $ 72 million and $ 89 million at December 31, 2020 and 2019, respectively, due from a single government. Investments We hold an equity security in Telecommunications Services of Trinidad and Tobago Limited ( TSTT ) for which the fair value is not readily determinable. Accordingly, we measure this investment at cost minus impairment, plus or minus changes resulting from observable price changes. When indicators of impairment exist, we estimate the fair value and record an impairment charge if the carrying value of the investment exceeds its estimated fair value. Any impairment charges are recorded in other income (expense), net, in our consolidated statements of operations. We account for our investment in United Kingdom ( U.K. ) Government Gilts using the available-for-sale method. Available-for-sale securities are measured at fair value. Changes in the fair value of available-for-sale securities are reflected in other comprehensive income or loss until sold or other-than-temporarily impaired, at which time the amounts are reclassified from accumulated other comprehensive income or loss into non-operating income or expense in our consolidated statements of operations. For additional information regarding our fair value measurements, see note 6. For additional information regarding our investment in TSTT and the U.K. Government Gilts, see notes 7 and 16, respectively. Financial Instruments Due to the short maturities of cash and cash equivalents, trade and other receivables, other current assets, accounts payable, accrued liabilities and other accrued and current liabilities, their respective carrying values approximate their respective fair values. For information concerning the fair values of our derivative and debt instruments, see notes 5 and 10, respectively. For information regarding how we arrive at certain of our fair value measurements, see note 6. II-76 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Derivative Instruments Derivative Instruments Recorded at Fair Value Our derivative instruments, excluding our weather derivative contracts ( Weather Derivatives ), as discussed below, are recorded on our consolidated balance sheets at fair value, whether designated as a hedge or not. If the derivative instrument is not designated as a hedge, changes in the fair value of the derivative instrument are recognized in earnings. If the derivative instrument is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative instrument are recorded in other comprehensive earnings or loss and subsequently reclassified into our consolidated statements of operations when the hedged forecasted transaction affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in realized and unrealized gains or losses on derivative instruments in our consolidated statements of operations. With the exception of certain foreign currency forward contracts, we do not apply hedge accounting to our derivative instruments. The net cash received or paid related to our derivative instruments is classified as an operating, investing or financing activity in our consolidated statements of cash flows based on the objective of the derivative instrument and the classification of the applicable underlying cash flows, as follows: • Cross-currency and interest rate derivative contracts: The net cash paid or received related to principal and current interest is classified as a financing or operating activity, respectively. • Foreign currency forward contracts that are used to hedge capital expenditures: The net cash paid or received is reflected in capital expenditures, which are classified as an investing activity. • Foreign currency forward contracts that are used to hedge principal exposure on foreign currencies: The net cash paid or received is classified as a financing activity. • Derivative contracts that are terminated prior to maturity: The cash paid or received upon termination that relates to future periods is classified as a financing activity. Weather Derivatives Our Weather Derivatives provide us with insurance coverage for certain weather-related events and are not accounted for at fair value. The premiums paid associated with the Weather Derivatives are recorded in other current assets, net, in our consolidated balance sheets, and the amortization of the premiums is included in realized and unrealized gains or losses on derivative instruments, net, in our consolidated statements of operations. The cash paid associated with the premiums is classified as an operating activity in our consolidated statements of cash flows. In the event of a payout under our Weather Derivatives, the cash received would be classified as an operating activity in our consolidated statements of cash flows. For information regarding our derivative instruments, see note 5. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. We capitalize costs associated with the construction of new cable and mobile transmission and distribution facilities and the installation of new cable services. The nature and amount of labor and other costs to be capitalized with respect to construction and installation activities involves significant judgment. In addition to direct external and internal labor and materials, we also capitalize other costs directly attributable to our construction and installation activities, including dispatch costs, quality-control costs, vehicle-related costs and certain warehouse-related costs. The capitalization of these costs is based on time sheets, time studies, standard costs, call tracking systems and other verifiable means that directly link the costs incurred with the applicable capitalizable activity. We continuously monitor the appropriateness of our capitalization policies and update the policies when necessary to respond to changes in facts and circumstances, such as the development of new products and services and changes in the manner that installations or construction activities are performed. Installation activities that are capitalized include (i) the initial connection (or drop) from our cable system to a customer location, (ii) the replacement of a drop and (iii) the installation of equipment for additional services, such as digital cable, telephone or broadband internet service. The costs of other customer-facing activities, such as reconnecting and disconnecting customer locations and repairing or maintaining drops, are expensed as incurred. II-77 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 We capitalize internal and external costs directly associated with the development of internal-use software. Capitalized internal-use software is included as a component of property and equipment. We also capitalize costs associated with the purchase of software licenses. Costs associated with software obtained in a hosting arrangement are expensed over the life of the service contract, unless we have the right to take possession of the software at any time without significant penalty and it is feasible to run the software on our own hardware or contract with another party unrelated to the vendor to host the software. Maintenance and training costs, as well as costs incurred during the preliminary stage of an internal-use software development project, are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful life of the underlying asset. Equipment under finance leases is amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset and is included in depreciation and amortization in our consolidated statements of operations. Useful lives used to depreciate our property and equipment are assessed periodically and are adjusted when warranted. The useful lives of cable and mobile distribution systems that are undergoing a rebuild are adjusted such that property and equipment to be retired will be fully depreciated by the time the rebuild is completed. For additional information regarding the useful lives of our property and equipment, see note 9. Additions, replacements and improvements that extend the asset life are capitalized. Repairs and maintenance are expensed as incurred. We recognize a liability for asset retirement obligations in the period in which it is incurred if sufficient information is available to make a reasonable estimate of fair values. Asset retirement obligations primarily relate to assets placed on leased wireless towers and other premises. Asset retirement obligations of $ 41 million and $ 38 million at December 31, 2020 and 2019, respectively, are included in other long-term liabilities in our consolidated balance sheets. Intangible Assets Our primary intangible assets relate to goodwill, customer relationships, cable television franchise rights and spectrum licenses. Goodwill represents the excess purchase price over the fair value of the identifiable net assets acquired in a business combination. Customer relationships, cable television franchise rights and spectrum licenses that are acquired in connection with a business combination are initially recorded at their fair values. Goodwill and other intangible assets with indefinite useful lives are not amortized, but instead are tested for impairment at least annually. Intangible assets with finite lives are amortized on a straight-line basis over their respective estimated useful lives to their estimated residual values, and reviewed for impairment. We do not amortize our cable television franchise rights or spectrum licenses as these assets have indefinite lives. The spectrum licenses provide us with the exclusive right to utilize a certain radio frequency spectrum to provide wireless communications services. While spectrum licenses are issued for only a fixed time (generally, ten years), renewals of spectrum licenses occur routinely and at nominal cost. Moreover, we believe there are currently no significant legal, regulatory, contractual, competitive, economic or other factors limiting the useful lives of our spectrum licenses, and therefore we treat the spectrum licenses as indefinite-lived intangible assets. We believe we will be able to meet all requirements necessary to secure renewal of our spectrum licenses. For additional information regarding the useful lives of our intangible assets, see note 9. Impairment of Property and Equipment and Intangible Assets When circumstances warrant, we review the carrying amounts of our property and equipment and our intangible assets (other than goodwill and other indefinite-lived intangible assets) to determine whether such carrying amounts continue to be recoverable. Such changes in circumstance may include (i) the impact of natural disasters, such as hurricanes, (ii) an expectation of a sale or disposal of a long-lived asset or asset group, (iii) adverse changes in market or competitive conditions, (iv) an adverse change in legal factors or business climate in the markets in which we operate and (v) operating or cash flow losses. For purposes of impairment testing, long-lived assets are grouped at the lowest level for which cash flows are largely independent of other assets and liabilities, generally at or below the reporting unit level (see below). If the carrying amount of the asset or asset group is greater than the expected undiscounted cash flows to be generated by such asset or asset group, an impairment adjustment is recognized. Such adjustment is measured by the amount that the carrying value of such asset or asset II-78 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 group exceeds its fair value. We generally measure fair value by considering (i) sale prices for similar assets, (ii) discounted estimated future cash flows using an appropriate discount rate and/or (iii) estimated replacement cost. 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 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. For impairment evaluations with respect to both 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. In the case of goodwill, if it is more-likely-than-not that a reporting unit’s fair value is less than its carrying value, we then compare the fair value of the reporting unit to its respective carrying amount. A reporting unit is an operating segment or one level below an operating segment. Goodwill impairment is recorded as the excess of a reporting unit’s carrying value over its fair value and is charged to operations as an impairment loss. With respect to other indefinite-lived intangible assets, if it is more-likely-than-not that the fair value of an indefinite-lived intangible asset is less than its carrying value, we then estimate its fair value and any excess of the carrying value over the fair value is also charged to operations as an impairment loss. For additional information regarding the fair value measurements of our property and equipment and intangible assets, see note 6. For additional information regarding impairments, see note 9. Contract Assets When we transfer goods or services to a customer but do not have an unconditional right to payment, we record a contract asset. Contract assets are reclassified to trade receivables, net, in our consolidated balance sheet at the point in time we have the unconditional right to payment. Our contract assets were $ 82 million and $ 22 million as of December 31, 2020 and 2019, respectively. The current and long-term portion of contract assets are included in other current assets, net and other assets, net, respectively, in our consolidated balance sheets. Deferred Contract Costs Incremental costs to obtain a contract with a customer, such as incremental sales commissions, are recognized as an asset and amortized to other operating costs and expenses over the applicable period benefited, which is the longer of the contract life or the economic life of the commission. If, however, the amortization period is one year or less, we expense such costs in the period incurred. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained are recognized as an expense when incurred. Our deferred contract costs were $ 15 million and $ 8 million as of December 31, 2020 and 2019, respectively. The current and long-term portion of deferred contract costs are included in other current assets, net and other assets, net, respectively, in our consolidated balance sheets. Deferred Revenue We record deferred revenue when we have received payment prior to transferring goods or services to a customer. Deferred revenue primarily relates to (i) advanced payments on fixed subscription services, mobile airtime services and long-term capacity contracts and (ii) deferred installation and other upfront fees. Our aggregate current and long-term deferred revenue as of December 31, 2020 and 2019 was $ 370 million and $ 372 million, respectively. Long-term deferred revenue is included in other long-term liabilities in our consolidated balance sheets. Operating Leases Our operating leases primarily consist of (i) property leases for mobile tower locations that generally have initial terms of five to ten years with one or more renewal options and (ii) lease commitments for (a) retail stores, offices and facilities, (b) other network assets and (c) other equipment. It is expected that in the normal course of business, operating leases that expire generally will be renewed or replaced by similar leases. For additional information regarding our leases, see note 11. We classify leases with a term of greater than 12 months where substantially all risks and rewards incidental to ownership are retained by the third-party lessors as operating leases. We record a right-of-use asset and an operating lease liability at inception of the lease at the present value of the lease payments plus certain other payments, including variable lease payments and amounts probable of being owed by us under residual value guarantees. Payments made under operating leases, net of any incentives received from the lessors, are recognized to expense on a straight-line basis over the term of the lease. Initial direct costs incurred in negotiating and arranging operating leases are recognized to expense when incurred. Contingent rental payments are recognized to expense when incurred. Our right-of-use assets are included in other assets, net, in our consolidated II-79 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 balance sheets. Our current and non-current operating lease liabilities are included in other accrued and current liabilities and other long-term liabilities , respectively, in our consolidated balance sheets. We use a credit-adjusted discount rate to measure our operating lease liabilities. We derive the discount rates associated with each of our borrowing groups starting with a risk free rate, generally the U.S. Treasury Bill rate. To determine credit risk, we create an industry benchmark credit default swap ( CDS ) curve from an observable high-yield debt index using comparable telecommunication companies as a proxy. We then determine the maximum curve shift against this CDS curve derived from our own tradable debt within each borrowing group, and make adjustments to correct for the collateralized interest rate spread by comparing unsecured debt to asset-backed securities (secured debt) trades, which is based on the spread between the BB- and B+ industrial curves. We determine the discount factor from this adjusted curve for each borrowing group. Income Taxes The income taxes of Liberty Latin America are presented on a standalone basis, and each tax paying entity or group within Liberty Latin America is presented on a separate return basis. Income taxes are accounted for under the asset and liability method. We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts and income tax basis of assets and liabilities and the expected benefits of utilizing net operating loss and tax credit carryforwards, using enacted tax rates in effect for each taxing jurisdiction in which we operate for the year in which those temporary differences are expected to be recovered or settled. We recognize the financial statement effects of a tax position when it is more-likely-than-not, based on technical merits, that the position will be sustained upon examination. Net deferred tax assets are then reduced by a valuation allowance if we believe it is more-likely-than-not that such net deferred tax assets will not be realized. Certain of our valuation allowances and tax uncertainties are associated with entities that we acquired in business combinations. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. Deferred tax liabilities related to investments in foreign entities and foreign corporate joint ventures that are essentially permanent in duration are not recognized until it becomes apparent that such amounts will reverse in the foreseeable future. In order to be considered essentially permanent in duration, sufficient evidence must indicate that the foreign entity has invested or will invest its undistributed earnings indefinitely, or that earnings will be remitted in a tax-free liquidation. Interest and penalties related to income tax liabilities are included in income tax benefit or expense in our consolidated statements of operations. For additional information regarding our income taxes, see note 15. Employee Benefit Plans Certain of our subsidiaries maintain various employee defined benefit plans. Defined benefit pension plan costs are determined using actuarial methods and are accounted for using the projected unit credit method, which incorporates management’s best estimates of future salary levels, other cost escalations, retirement ages of employees, and other actuarial factors. Our net asset or liability in respect of defined benefit pension plans represents the fair value of the plan assets, less the present value of the defined benefit obligations. The fair value of plan assets and the projected benefit obligation for each plan is calculated annually by independent qualified actuaries. Defined benefit assets are only recognized to the extent they are deemed recoverable. For additional information regarding our defined benefit plans, see note 16. Certain of our subsidiaries participate in externally managed defined contribution pension plans. A defined contribution plan is a pension plan under which we have no further obligation once the fixed defined contribution has been paid to the third-party administrator of the plan. Contributions under our defined contribution pension plans are recognized as incurred in other operating costs and expenses in our consolidated statements of operations. II-80 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Foreign Currency Translation and Transactions The reporting currency of Liberty Latin America is the U.S. dollar. The functional currency of our foreign operations is the applicable local currency for each foreign entity. Assets and liabilities of our foreign subsidiaries (including intercompany balances for which settlement is not anticipated in the foreseeable future) are translated at the spot rate in effect at the applicable reporting date. With the exception of certain material transactions, the amounts reported in our consolidated statements of operations are translated at the average exchange rates in effect during the applicable period. The resulting unrealized cumulative translation adjustment, net of applicable income taxes, is recorded as a component of accumulated other comprehensive earnings or loss in our consolidated statements of equity. With the exception of certain material transactions, the cash flows from our operations in foreign countries are translated at the average rate for the applicable period in our consolidated statements of cash flows. The impacts of material transactions generally are recorded at the applicable spot rates in our consolidated statements of operations and cash flows. The effect of exchange rates on cash balances held in foreign currencies are separately reported in our consolidated statements of cash flows. Transactions denominated in currencies other than our or our subsidiaries’ functional currencies are recorded based on exchange rates at the time such transactions arise. Changes in exchange rates with respect to amounts recorded in our consolidated balance sheets related to these non-functional currency transactions result in transaction gains and losses that are reflected in our consolidated statements of operations as unrealized (based on the applicable period end exchange rates) or realized upon settlement of the transactions. Revenue Recognition We categorize revenue into two major categories: (i) residential revenue, which includes revenue from fixed and mobile services provided to residential customers, and (ii) B2B revenue, which includes B2B service and subsea network revenue. For additional information regarding our revenue by major category, see note 21. Our revenue recognition policies are as follows. General . Most of our fixed and mobile residential contracts are not enforceable or do not contain substantive early termination penalties. Accordingly, revenue relating to these customers is recognized on a basis consistent with customers that are not subject to contracts. We account for customer service revenue contracts that include both non-lease and lease components as a single component in all instances where the non-lease component is the predominant component of the arrangement and the other applicable criteria are met. Residential Fixed and B2B Service Revenue – Fixed Networks . We recognize revenue from video, broadband internet and fixed-line telephony services over our fixed networks to customers in the period the related residential fixed or B2B services are provided. Installation or other upfront fees related to services provided over our fixed networks are generally deferred and recognized as subscription revenue over the contractual period, or longer if the upfront fee results in a material renewal right. We defer upfront installation and certain nonrecurring fees received on B2B contracts where we maintain ownership of the installed equipment. The deferred fees are amortized into revenue on a straight-line basis over the term of the arrangement or the expected period of performance. We may also sell video, broadband internet and fixed-line telephony services to our customers in bundled packages at a rate lower than if the customer purchased each product on a standalone basis. Arrangement consideration from bundled packages generally is allocated proportionally to the individual service based on the relative standalone price for each respective product or service. Mobile Revenue – General. Consideration from mobile contracts is allocated to airtime services and handset sales based on the relative standalone prices of each performance obligation. Mobile Revenue – Airtime Services. We recognize revenue from mobile services in the period the related services are provided. Payments received from prepay customers are recorded as deferred revenue prior to the commencement of services and are recognized as revenue as the services are rendered or usage rights expire. Mobile Revenue – Handset Revenue. Arrangement consideration allocated to handsets is recognized as revenue when the goods have been transferred to the customer. Mobile Revenue – Handset Insurance Revenue. We recognize revenue associated with handset insurance on a straight-line basis over the coverage period. II-81 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 B2B Subsea Network Revenue – Long-term Capacity Contracts. We enter into certain long-term capacity contracts with customers where the customer either pays a fixed fee over time or prepays for the capacity upfront and pays a portion related to operating and maintenance of the network over time. We assess whether prepaid capacity contracts contain a significant financing component. If the financing component is significant, interest expense is accreted over the life of the contract using the effective interest method. The revenue associated with prepaid capacity contracts is deferred and generally recognized on a straight-line basis over the life of the contract. As of December 31, 2020, we have approximately $ 410 million of unfulfilled performance obligations relating to our long-term capacity contracts, primarily subsea contracts, that generally will be recognized as revenue over an average remaining life of six years . Government Funding Revenue. From time to time, we received funds from the Federal Communications Commission ( FCC ), primarily in Puerto Rico, related to hurricane restoration efforts. The FCC does not meet the definition of a “customer,” accordingly, we recognized the funds granted from the FCC as other revenue in the period in which we are entitled to receive the funds. Sales, Use and Other Value-Added Taxes ( VAT ). Revenue is recorded net of applicable sales, use and other value-added taxes. Share-based Compensation We recognize compensation expense associated with share-based incentive awards based on their grant-date fair values. The grant-date fair values for stock appreciation rights ( SARs ) are estimated using the Black-Scholes-Merton valuation model and the grant-date fair values for restricted stock units ( RSUs ) and performance-based restricted stock units ( PSUs ) are based upon the closing market price of our stock on the date of grant. We may also settle annual bonus-related obligations in the form of equity. We use the liability-based method of accounting in such situation, as the equity to be issued is variable. We use the legal life of the award for the expected life of SARs granted to executives. For SARs granted to non-executives, the expected life is calculated using the “simplified method.” We believe the simplified method is appropriate for these awards as we do not have historical exercise data for periods prior to our December 2017 split-off from our former parent company (the Split-Off ), Liberty Global, Plc ( Liberty Global ). The expected volatility of SARs is based on a weighted average calculation that may include (i) data from a comparable group of peer companies, (ii) Liberty Latin America’s share trading history and/or (iii) the implied volatility from traded LILA and LILAK options. We recognize the grant-date fair value of outstanding awards as a charge to operations over the requisite service period, which is generally the vesting period, and account for forfeitures as they occur. We use the straight-line method to recognize share-based compensation expense for share-based incentive awards that do not contain a performance condition and the accelerated expense attribution method for our share-based incentive awards that contain a performance condition and vest on a graded basis. For additional information regarding our share-based compensation, see note 17. Earnings (Loss) per Share Basic earnings (loss) per share ( EPS ) is computed by dividing net earnings (loss) attributable to Liberty Latin America shareholders by the weighted average number of Liberty Latin America common shares ( Liberty Latin America Shares ) during the years presented, as further described below. Diluted EPS presents the dilutive effect, if any, on a per share basis of potential shares as if they had been exercised, vested or converted at the beginning of the periods presented. The details of our weighted average shares outstanding are set forth below: Year ended December 31, 2020 2019 2018 Weighted average shares outstanding - basic and dilutive 195,535,301 184,369,078 176,001,049 We reported losses attributable to Liberty Latin America shareholders during 2020, 2019 and 2018. As a result, the potentially dilutive effect at December 31, 2020, 2019 and 2018 of the following items was not included in the computation of diluted loss per share for such periods because their inclusion would have been anti-dilutive to the computation or, in the case of certain PSUs, because such awards had not yet met the applicable performance criteria: (i) using the if-converted method, the aggregate number of shares potentially issuable under our Convertible Notes of approximately 19.5 million, 18.1 million and nil , respectively, (ii) the aggregate number of shares issuable pursuant to outstanding options, SARs and RSUs of II-82 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 approximately 19.1 million, 15.2 million and 13.1 million, respectively, and (iii) the aggregate number of shares issuable pursuant to outstanding PSUs of approximately 1.1 million, 2.0 million and 2.1 million, respectively. A portion of these amounts relate to Liberty Latin America Shares held by employees of Liberty Global. Litigation Costs Legal fees and related litigation costs are expensed as incurred . (4) Acquisitions and Disposition Pending Acquisition Telefónica. 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 Telefónica-Costa Rica Acquisition ). The transaction is subject to certain customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2021. 2020 Acquisition AT&T. On October 9, 2019, Liberty Communications and Liberty Latin America entered into a stock purchase agreement (the Acquisition Agreement ) with certain subsidiaries of AT&T Inc. ( AT&T ) to acquire AT&T’s wireless and wireline operations in Puerto Rico and the U.S. Virgin Islands (the AT&T Acquisition ) in an all-cash transaction. Pursuant to the Acquisition Agreement, we agreed to acquire directly or indirectly, all of the outstanding shares of AT&T Mobility Puerto Rico Inc., AT&T Mobility Virgin Islands Inc. and Beach Holding Corporation, collectively the " AT&T Acquired Entities ," which are also referred to as Liberty Mobile and its subsidiaries in note 1. The AT&T Acquisition closed on October 31, 2020. The operations acquired in the AT&T Acquisition provide consumer mobile and B2B services in Puerto Rico and the U.S. Virgin Islands. The AT&T Acquisition was valued at an enterprise value of $ 1,950 million on a cash- and debt-free basis, subject to certain adjustments. We financed this acquisition, including related fees and expenses, through a combination of net proceeds from the 2027 LPR Senior Secured Notes, the 2027 LPR Senior Secured Notes Add-on, the 2026 SPV Credit Facility and available liquidity. For further information about our debt and available liquidity, see note 10. As a regulatory condition to close the AT&T Acquisition, we were required by the Department of Justice (the DOJ ) to divest certain B2B operations that are a part of our existing operations in Puerto Rico. To meet the conditions of the DOJ, we entered into an agreement during the fourth quarter of 2020 to divest those B2B operations in Puerto Rico for a stated purchase price of $ 22 million. The disposal of this B2B business closed in early January 2021. AT&T will provide ongoing support to the AT&T Acquired Entities under a transition services agreement (the TSA ) for a period up to 36 months following the closing of the AT&T Acquisition. Services under the TSA include, but are not limited to, (i) network operations, (ii) customer service, (iii) finance and accounting, (iv) information technology, (v) sales and marketing and (vi) content-related services. We may terminate any services under the TSA upon sixty business days’ notice to AT&T in accordance with the terms and conditions of the TSA. The following table sets forth a reconciliation of the stated purchase price included in the Acquisition Agreement to the “ Accounting Purchase Price ” (in millions): Stated Acquisition Agreement purchase price $ 1,950.0 Less: Purchase price allocated to purchase of prepaid roaming services (a) ( 73.3 ) Working capital and other purchase price adjustments: Preliminary closing adjustments (b) ( 51.7 ) Additional working capital consideration (c) 61.0 Net cash paid for the AT&T Acquisition (d) 1,886.0 Contingent purchase price consideration (e) 44.8 Accounting Purchase Price $ 1,930.8 II-83 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 (a) Represents the portion of the stated Acquisition Agreement purchase price that has been allocated to the purchase of prepaid roaming services. 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, of which $ 11 million and $ 62 million are included in prepaid expenses and other assets, net, respectively, in our December 31, 2020 consolidated balance sheet. The total amount allocated to the purchase of prepaid roaming, $ 73 million, has been included in net cash provided by operating activities in our consolidated statement of cash flows. (b) Represents preliminary closing adjustments to the purchase price pursuant to the terms of the Acquisition Agreement for (i) closing working capital balances, (ii) outstanding indebtedness and (iii) shortfalls in equipment subsidies made by AT&T prior to the closing of the AT&T Acquisition. (c) Represents cash paid subsequent to the closing of the AT&T Acquisition related to certain liabilities of the AT&T Acquired Entities that were not assumed by us under the terms of the Acquisition Agreement. (d) The net cash paid for the AT&T Acquisition is comprised of (i) the AT&T Acquisition Restricted Cash, as defined and described in note 10, which comprised $ 1,353 million and was released upon consummation of the AT&T Acquisition, and (ii) $ 533 million of cash and cash equivalents from available liquidity. (e) Prior to the closing of the AT&T Acquisition, AT&T made prepayments to the tax authorities of Puerto Rico and the U.S. Virgin Islands. We expect that we will utilize these prepayments, which are reflected in income tax receivable on the consolidated balance sheet, against our future income tax liabilities. Pursuant to the Acquisition Agreement, if we utilize such prepayments to reduce our future income tax liabilities, we are required to pay AT&T additional purchase consideration. The fair value of this contingent purchase consideration has been included in other accrued and current liabilities in our consolidated balance sheet. We have accounted for the AT&T Acquisition as a business combination using the acquisition method of accounting, whereby the Accounting Purchase Price was allocated to the acquired identifiable net assets of the AT&T Acquired Entities based on assessments of their respective fair values, and the excess of the Accounting Purchase Price over the fair values of these identifiable net assets was allocated to goodwill. The purchase price allocation to the assets acquired and liabilities assumed, including the residual amount allocated to goodwill, is based on preliminary information. This preliminary information is subject to change as we obtain additional facts, primarily related to the acquired property and equipment, intangible assets, leases and income taxes. The information available to us to allocate consideration to acquired property and equipment and intangible assets is impacted as follows: • Property and equipment: the proximity of the acquisition date to our fiscal year-end date of December 31, 2020 and contractual restrictions set forth in the terms of the Acquisition Agreement that limit our ability to access certain historical cost information. • Spectrum intangible assets: the proximity of the acquisition date to our fiscal year-end date of December 31, 2020, which has limited our ability to obtain all necessary information regarding the assets acquired, resulting in the on-going analysis of market data to establish an estimate. As a result of these factors, we expect the valuation of property and equipment and the spectrum intangible assets, which are each currently based upon the historical values of the AT&T Acquired Entities, will require the following: • Property and equipment: the use of an indirect cost approach, which utilizes trends based on historical cost information, supplemented with a market and direct replacement cost method for certain assets. • Spectrum intangible assets: the anticipated use of either an adjusted “market” approach, which requires the calibration of observable market inputs to reflect the fair value of the assets acquired, or a combination of an adjusted market-based approach with an income-based approach, which requires a wide range of assumptions and inputs, including forecasting costs associated with building a complementary asset base. II-84 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Additionally, the valuation of the customer relationship intangible assets, which is currently based upon a preliminary multi-period excess earnings valuation method, will require updates to assumptions and inputs used, including the determination of contributory asset charges dependent on the valuation of the property and equipment and spectrum intangible assets. For additional information regarding fair value methods used in acquisition accounting, see note 6. During the measurement period, we will adjust the values attributed to our preliminary opening balance sheet, most notably acquired property and equipment, intangible assets, leases and income taxes, as additional information is obtained about facts and circumstances that existed as of the closing date of the AT&T Acquisition. A summary of the preliminary opening balance sheet of the AT&T Acquired Entities at the October 31, 2020 acquisition date is presented in the following table (in millions): Trade receivables $ 51.0 Prepaid expenses 0.1 Other current assets (a) 102.7 Goodwill (b) 352.2 Property and equipment 711.4 Intangible assets subject to amortization, net (c) 82.7 Intangible assets not subject to amortization (d) 894.4 Other assets (a) (e) 286.6 Accounts payable ( 3.0 ) Current portion of debt and finance lease obligations ( 0.2 ) Other accrued and current liabilities (e) ( 64.3 ) Long-term debt and finance lease obligations ( 10.6 ) Non-current deferred tax liabilities ( 304.9 ) Other long-term liabilities (e) ( 167.3 ) Total purchase price (f) $ 1,930.8 (a) Other current assets and other assets include $ 67 million and $ 39 million, respectively, in EIP receivables, as further described in note 3. (b) The goodwill recognized in connection with the AT&T Acquisition is primarily attributable to (i) the ability to take advantage of the AT&T Acquired Entities’ existing mobile network to gain immediate access to potential customers and (ii) synergies that are expected to be achieved through the integration of the AT&T Acquired Entities with Liberty Latin America. Due to the nature of the AT&T Acquisition, no tax deductions related to goodwill are expected. (c) Amount includes intangible assets related to customer relationships. At October 31, 2020 the weighted average useful life of the acquired customer relationship intangible assets was approximately 10 years. (d) Amount represents spectrum licenses. (e) Other assets, other accrued and current liabilities and other long-term liabilities include $ 196 million, $ 33 million and $ 163 million related to operating lease right-of-use assets, current operating lease obligations and non-current operating lease obligations, respectively. (f) Amount excludes $ 56 million of direct acquisition costs, including $ 5 million incurred during 2019. Direct acquisition costs are included in impairment, restructuring and other operating items, net, in our consolidated statements of operations. Our consolidated statement of operations for the year ended December 31, 2020 includes revenue of $ 174 million and net loss of $ 83 million attributable to the AT&T Acquired Entities. II-85 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Supplemental Pro Forma Information The following unaudited pro forma financial information is based on the historical carve-out financial statements of the AT&T Acquired Entities and is intended to provide information about how the AT&T Acquisition may have affected Liberty Latin America’s historical consolidated financial statements if it had closed as of January 1, 2019. The pro forma financial information below is based on available information and assumptions that we believe are reasonable. The pro forma financial information is for illustrative and informational purposes only and is not intended to represent or be indicative of what our results of operations would have been had the AT&T Acquisition occurred on the date indicated nor should it be considered representative of our future financial condition or results of operations. Year ended December 31, 2020 2019 in millions Revenue $ 4,501.8 $ 4,753.5 Net loss attributable to Liberty Latin America shareholders $ ( 554.8 ) $ ( 8.1 ) The pro forma information set forth in the table above includes tax-effected pro forma adjustments primarily related to: i. the impact of estimated costs associated with the TSA that replaced parent-company allocations included in the historical financial statements of the AT&T Acquired Entities; ii. the impact of new rate agreements associated with roaming, subsea and ethernet services; iii. the alignment of accounting policies; iv. interest expense related to additional borrowings in conjunction with the AT&T Acquisition; and v. the elimination of direct acquisition costs. 2019 Acquisition UTS. Effective March 31, 2019, we completed the acquisition of an 87.5 % interest in United Telecommunication Services N.V. ( UTS ) for an initial cash purchase price of $ 162 million, which was subject to certain potential post-closing adjustments, based on an enterprise value of $ 189 million (the UTS Acquisition ). As noted below, during the first quarter of 2020, the purchase price was reduced by $ 6 million due to certain post-closing working capital adjustments. During the third quarter of 2019, we increased our ownership interest in UTS from 87.5 % to 100 %. UTS provides fixed and mobile services to the island nations of Curaçao, St. Maarten, St. Martin, Bonaire, St. Barths, St. Eustatius and Saba. The UTS Acquisition was funded through a $ 170 million draw on the C&W Revolving Credit Facility, as defined in note 10. II-86 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 We have accounted for the UTS Acquisition as a business combination using the acquisition method of accounting, whereby the total purchase price was allocated to the acquired identifiable net assets of UTS based on assessments of their respective fair values, and the excess of the purchase price over the fair values of these identifiable net assets was allocated to goodwill. A summary of the purchase price and opening balance sheet of UTS at the effective March 31, 2019 acquisition date is presented in the following table. The opening balance sheet presented below reflects our final purchase price allocation (in millions): Cash $ 2.7 Trade receivables 19.0 Other current assets 6.7 Property and equipment 158.4 Goodwill (a) 17.1 Intangible assets subject to amortization 24.0 Other assets 18.2 Accounts payable ( 27.9 ) Other accrued and current liabilities ( 31.9 ) Other long-term liabilities ( 18.8 ) Noncontrolling interest (b) ( 11.6 ) Total purchase price (c) $ 155.9 (a) The goodwill recognized in connection with the UTS Acquisition is primarily attributable to (i) the ability to take advantage of UTS’s existing broadband communications and mobile networks to gain immediate access to potential customers, and (ii) synergies that are expected to be achieved through the integration of UTS with C&W’s existing business in Curacao. (b) Amount represents the estimated aggregate fair value of the noncontrolling interest in UTS as of March 31, 2019. (c) Excludes $ 3 million of direct acquisition costs, including $ 1 million incurred during 2018. Direct acquisition costs are included in impairment, restructuring and other operating items, net, in our consolidated statements of operations. Our consolidated statement of operations for the year ended December 31, 2019 includes revenue of $ 96 million and net earnings of $ 4 million attributable to UTS. Supplemental pro forma information related to the UTS Acquisition has not been included as it would not have had a significant impact on our results of operations during 2019. 2019 Disposition During the fourth quarter of 2019, we disposed of our operations in the Seychelles (the Seychelles Disposition ) at an enterprise value of $ 104 million. As a result of the Seychelles Disposition, we received $ 78 million of net cash inflows and recorded a loss on disposition of $ 3 million. 2018 Acquisition Cabletica . On February 12, 2018, we entered into a definitive agreement to acquire certain assets and liabilities related to Televisora de Costa Rica S.A.’s ( Televisora ) cable operations in Costa Rica based on an enterprise value of $ 252 million, subject to certain customary adjustments. As part of the agreement, the owners of Televisora retained a 20 % ownership interest in Cabletica. On October 1, 2018, we completed the acquisition of our 80 % interest (the Cabletica Acquisition ) for an effective purchase price of $ 226 million, after working capital adjustments and deducting the value of Televisora’s retained equity interest. The Cabletica Acquisition was financed through a combination of debt and existing cash. II-87 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 We have accounted for the Cabletica Acquisition as a business combination using the acquisition method of accounting, whereby the total purchase price was allocated to the acquired identifiable net assets of Cabletica based on assessments of their respective fair values, and the excess of the purchase price over the fair values of these identifiable net assets was allocated to goodwill. A summary of the purchase price and opening balance sheet of Cabletica at the October 1, 2018 acquisition date is presented in the following table. The opening balance sheet presented below reflects our final purchase price allocation (in millions): Other current assets $ 6.3 Property and equipment 65.8 Goodwill (a) 159.6 Intangible assets subject to amortization (b) 52.7 Other assets 0.1 Other accrued and current liabilities ( 17.7 ) Non-current deferred tax liabilities ( 14.6 ) Other long-term liabilities ( 0.7 ) Noncontrolling interest (c) ( 25.1 ) Total purchase price (d) $ 226.4 (a) The goodwill recognized in connection with the Cabletica Acquisition is primarily attributable to the ability to take advantage of Cabletica’s existing advanced broadband communications network as a base on which to expand our footprint in the region, and to gain immediate access to potential customers. (b) Amount primarily includes intangible assets related to customer relationships. As of October 1, 2018, the weighted average useful life of Cabletica’s intangible assets was approximately eleven years . (c) Amount represents the fair value of Televisora’s interest in Cabletica as of the October 1, 2018 acquisition date. (d) Excludes $ 5 million of direct acquisition costs, including $ 3 million incurred during 2018 . (5) Derivative Instruments In general, we seek to enter into derivative instruments to protect against (i) increases in the interest rates on our variable-rate debt and (ii) foreign currency movements, particularly with respect to borrowings that are denominated in a currency other than the functional currency of the borrowing entity. In this regard, through our subsidiaries, we have entered into various derivative instruments to manage interest rate exposure and foreign currency exposure with respect to the U.S. dollar ( $ ), the Chilean peso ( CLP ), the Colombian peso ( COP ) and the Jamaican dollar ( JMD ). With the exception of certain foreign currency forward contracts, we do not apply hedge accounting to our derivative instruments. Accordingly, changes in the fair values of most of our derivative instruments are recorded in realized and unrealized gains or losses on derivative instruments in our consolidated statements of operations. II-88 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 The following table provides details of the fair values of our derivative instrument assets and liabilities: December 31, 2020 December 31, 2019 Current (a) Long-term (a) Total Current (a) Long-term (a) Total in millions Assets: Cross-currency and interest rate derivative contracts (b) $ 0.7 $ 4.4 $ 5.1 $ 23.4 $ 126.9 $ 150.3 Foreign currency forward contracts — — — 9.8 — 9.8 Total $ 0.7 $ 4.4 $ 5.1 $ 33.2 $ 126.9 $ 160.1 Liabilities: Cross-currency and interest rate derivative contracts (b) $ 71.4 $ 403.0 $ 474.4 $ 34.9 $ 99.6 $ 134.5 Foreign currency forward contracts 18.8 — 18.8 0.5 — 0.5 Total $ 90.2 $ 403.0 $ 493.2 $ 35.4 $ 99.6 $ 135.0 (a) Our current derivative assets, long-term derivative assets and long-term derivative liabilities are included in other current assets, net, other assets, net, and other long-term liabilities, respectively, in our consolidated balance sheets. (b) We consider credit risk relating to our and our counterparties’ nonperformance in the fair value assessment of our derivative instruments. In all cases, the adjustments take into account offsetting liability or asset positions within each of our primary borrowing groups (see note 10). The changes in the credit risk valuation adjustments associated with our cross-currency and interest rate derivative contracts resulted in net gains (losses) of $ 47 million, $ 4 million and ($ 23 million) during 2020, 2019 and 2018, respectively. The gain during the 2020 period is primarily due to increased credit risk stemming from market reaction to the COVID-19 outbreak, as further described and defined in note 9. These amounts are included in realized and unrealized gains (losses) on derivative instruments, net, in our consolidated statements of operations. For further information regarding our fair value measurements, see note 6. The derivative assets set forth in the table above exclude our Weather Derivatives, as they are not accounted for at fair value. The details of our realized and unrealized gains (losses) on derivative instruments, net, are as follows: Year ended December 31, 2020 2019 2018 in millions Cross-currency and interest rate derivative contracts (a) $ ( 328.6 ) $ ( 21.0 ) $ 69.6 Foreign currency forward contracts ( 7.8 ) 9.4 25.2 Weather Derivatives ( 16.3 ) ( 5.6 ) — Total $ ( 352.7 ) $ ( 17.2 ) $ 94.8 (a) The losses for 2020 include 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. II-89 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 The following table sets forth the classification of the net cash inflows (outflows) of our derivative instruments: Year ended December 31, 2020 2019 2018 in millions Operating activities $ ( 50.1 ) $ 11.2 $ ( 15.9 ) Investing activities 7.4 6.5 ( 2.3 ) Financing activities (a) 182.5 ( 0.3 ) 10.0 Total $ 139.8 $ 17.4 $ ( 8.2 ) (a) The 2020 amount is primarily related to the settlement of certain cross-currency interest rate swaps at VTR. The settlement proceeds were used in part to redeem certain VTR debt in July 2020, as further described in note 10. Counterparty Credit Risk We are exposed to the risk that the counterparties to the derivative instruments of our borrowing groups will default on their obligations to us. We manage these credit risks through the evaluation and monitoring of the creditworthiness of, and concentration of risk with, the respective counterparties. In this regard, credit risk associated with our derivative instruments is spread across a relatively broad counterparty base of banks and financial institutions. Collateral has not been posted by either party under the derivative instruments of our borrowing groups. At December 31, 2020, our exposure to counterparty credit risk resulting from our net derivative position was not material. Each of our borrowing groups has entered into derivative instruments under agreements with each counterparty that contain master netting arrangements that are applicable in the event of early termination by either party to such derivative instrument. The master netting arrangements under each of these master agreements are limited to the derivative instruments governed by the relevant master agreement within each individual borrowing group and are independent of similar arrangements of our other subsidiary borrowing groups. Details of our Derivative Instruments Cross-currency Derivative Contracts As noted above, we are exposed to foreign currency exchange rate risk in situations where our debt is denominated in a currency other than the functional currency of the operations whose cash flows support our ability to service, repay or refinance such debt. Although we generally seek to match the denomination of our borrowings with the functional currency of the operations that are supporting the respective borrowings, market conditions or other factors may cause us to enter into borrowing arrangements that are not denominated in the functional currency of the underlying operations (unmatched debt). Our policy is generally to provide for an economic hedge against foreign currency exchange rate movements, whenever possible and when cost effective to do so, by using derivative instruments to synthetically convert unmatched debt into the applicable underlying currency. The following table sets forth the total notional amounts and the related weighted average remaining contractual lives of our cross-currency swap contracts at December 31, 2020: Borrowing group Notional amount due from counterparty Notional amount due to counterparty Weighted average remaining life in millions in years C&W $ 14.3 JMD 1,817.5 2.0 $ 56.3 COP 197,014.1 5.6 VTR $ 1,150.0 CLP 933,800.0 5.5 II-90 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Interest Rate Derivative Contracts Interest Rate Swaps As noted above, we enter into interest rate swaps to protect against increases in the interest rates on our variable-rate debt. Pursuant to these derivative instruments, we typically pay fixed interest rates and receive variable interest rates on specified notional amounts. The following table sets forth the total U.S. dollar equivalents of the notional amounts and the related weighted average remaining contractual lives of our interest rate swap contracts at December 31, 2020: Borrowing group Notional amount due from counterparty Weighted average remaining life in millions in years C&W (a) $ 2,250.0 6.7 VTR $ 198.0 2.1 Liberty Puerto Rico $ 1,000.0 5.6 Cabletica $ 53.5 2.5 (a) Includes forward-starting derivative instruments. Basis Swaps Basis swaps involve the exchange of attributes used to calculate our floating interest rates, including (i) the benchmark rate, (ii) the underlying currency and/or (iii) the borrowing period. We typically enter into these swaps to optimize our interest rate profile based on our current evaluations of yield curves, our risk management policies and other factors. The following table sets forth the total U.S. dollar equivalents of the notional amounts and the related weighted average remaining contractual lives of our basis swap contracts at December 31, 2020: Borrowing group Notional amount due from counterparty Weighted average remaining life in millions in years C&W $ 1,510.0 0.7 Liberty Puerto Rico $ 1,000.0 0.1 Foreign Currency Forwards Contracts We enter into foreign currency forward contracts with respect to non-functional currency exposure. At December 31, 2020, our foreign currency forward contracts had total notional amounts due from and to counterparties of $ 205 million and CLP 159 billion, respectively, with a weighted average remaining contractual life of 0.5 years. All of our foreign currency forward contracts are held by our VTR borrowing group. (6) Fair Value Measurements General We use the fair value method to account for most of our derivative instruments and the available-for-sale method to account for our investment in U.K. Government Gilts. The reported fair values of our derivative instruments as of December 31, 2020 likely will not represent the value that will be paid or received upon the ultimate settlement or disposition of these assets and liabilities, as we expect that the values realized generally will be based on market conditions at the time of II-91 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 settlement, which may occur at the maturity of the derivative instrument or at the time of the repayment or refinancing of the underlying debt instrument. U.S. GAAP provides for a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. All of our Level 2 inputs (interest rate futures, swap rates and certain of the inputs for our weighted average cost of capital calculations) and certain of our Level 3 inputs (non-interest rate curves and credit spreads) are obtained from pricing services. These inputs, or interpolations or extrapolations thereof, are used in our internal models to calculate, among other items, yield curves, forward interest and currency rates and weighted average cost of capital rates. In the normal course of business, we receive market value assessments from the counterparties to our derivative contracts. Although we compare these assessments to our internal valuations and investigate unexpected differences, we do not otherwise rely on counterparty quotes to determine the fair values of our derivative instruments. The midpoints of applicable bid and ask ranges generally are used as inputs for our internal valuations. Recurring Fair Value Measurements Derivatives In order to manage our interest rate and foreign currency exchange risk, we have entered into various derivative instruments, as further described in note 5. The recurring fair value measurements of these derivative instruments are determined using discounted cash flow models. Most of the inputs to these discounted cash flow models consist of, or are derived from, observable Level 2 data for substantially the full term of these derivative instruments. This observable data mostly includes interest rate futures and swap rates, which are retrieved or derived from available market data. Although we may extrapolate or interpolate this data, we do not otherwise alter this data in performing our valuations. We incorporate a credit risk valuation adjustment in our fair value measurements to estimate the impact of both our own nonperformance risk and the nonperformance risk of our counterparties. Our and our counterparties’ credit spreads represent our most significant Level 3 inputs, and these inputs are used to derive the credit risk valuation adjustments with respect to these instruments. Notwithstanding the impact of COVID-19 on our credit risk, we generally would not expect changes in our or our counterparties’ credit spreads to have a significant impact on the valuations of these instruments. As a result, we have determined that these valuations continue to fall under Level 2 of the fair value hierarchy. Our credit risk valuation adjustments with respect to our interest rate and cross-currency derivative contracts are quantified and further explained in note 5. Due to the lack of Level 2 inputs for the valuation of the U.S. dollar to the Jamaican dollar cross-currency swaps (the Sable Currency Swaps ) held periodically by Sable International Finance Limited ( Sable ), a wholly-owned subsidiary of C&W, we believe this valuation falls under Level 3 of the fair value hierarchy. The Sable Currency Swaps are our only Level 3 financial instruments. The fair values of the Sable Currency Swaps at December 31, 2020 and 2019 were $ 1 million and ($ 30 million), respectively, which are included in other assets, net, and long-term liabilities, respectively, in our consolidated balance sheets. The change in the fair values of the Sable Currency Swaps resulted in net gains (losses) of $ 31 million, $ 6 million and ($ 14 million) during 2020, 2019 and 2018, respectively, which are reflected in realized and unrealized gains (losses) on derivative instruments, net, in our consolidated statements of operations. Available-for-sale Investments Our investment in U.K. Government Gilts falls under Level 1 of the fair value hierarchy. At December 31, 2020 and 2019, the carrying values of our investment in U.K. Government Gilts, which are included in other assets, net, in our consolidated balance sheets, were $ 38 million and $ 37 million, respectively. Nonrecurring Fair Value Measurements Fair value measurements are also used for purposes of nonrecurring valuations performed in connection with our Convertible Notes, acquisition accounting and impairment assessments. II-92 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Conversion Option – Convertible Notes As further described and defined in note 10, our Convertible Notes include a Conversion Option that we bifurcated from the Convertible Notes and recorded at fair value upon issuance as an equity component in our 2019 consolidated statement of equity. The fair value of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature, which was established using the present value of cash flows associated with such instrument based on a 5-year tenor and an estimated yield rate of 6.7 %, which is a Level 2 input. The fair value of the equity component was determined by deducting the fair value of the liability component from the proceeds received on issuance of the Convertible Notes. Acquisition Accounting The nonrecurring valuations associated with acquisition accounting, which use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy, primarily include the valuation of property and equipment, customer relationships and spectrum licenses, as further described below: • Property and equipment . The valuation of property and equipment may use an indirect cost approach, which utilizes trends based on historical cost information, or a combination of indirect cost approach, market approach and direct replacement cost method, which considers factors such as current prices of the same or similar equipment, the age of the equipment and economic obsolescence. • Customer relationships. The valuation of customer relationships is primarily based on an excess earnings methodology, which is a form of a discounted cash flow analysis. The excess earnings methodology for customer relationship intangible assets requires us to estimate the specific cash flows expected from the acquired customer relationships, considering such factors as estimated customer life, the revenue expected to be generated over the life of the customer relationships, contributory asset charges and other factors. • Spectrum intangible assets. The valuation of spectrum intangible assets may use either an adjusted market-based approach, which requires the calibration of observable market inputs to reflect the fair value of the assets acquired, or a combination of an adjusted market-based approach with other methods, such as an income-based approach (e.g. the “greenfield” valuation method), which requires a wide range of assumptions and inputs, including forecasting costs associated with building a complementary asset base. During the fourth quarter of 2020, we performed a nonrecurring valuation related to the preliminary acquisition accounting for the AT&T Acquisition. For additional information related to the status of valuation work associated with property and equipment and intangible assets acquired in connection with the AT&T Acquisition, see note 4. In connection with the AT&T Acquisition, we performed a nonrecurring valuation related to the preliminary acquisition accounting for the assets and liabilities acquired. The weighted average discount rate used in the valuation of the customer relationships acquired was approximately 10.5 %. In March 2020, we performed a nonrecurring valuation related to the final acquisition accounting for the UTS Acquisition. The weighted average discount rate used in the valuation of the customer relationships acquired was approximately 13.5 %. During September 2019, we performed a nonrecurring valuation related to the final acquisition accounting for the Cabletica Acquisition. The weighted average discount rate used in the valuation of the customer relationships acquired was approximately 14 %. Impairment Assessments The nonrecurring valuations associated with impairment assessments, which use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy, primarily include the valuation of reporting units for the purpose of testing for goodwill impairment. Unless a reporting unit has a readily determinable fair value, we estimate the fair value of the reporting unit using either a market-based or income-based approach. II-93 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 As part of our annual goodwill impairment assessment in the fourth quarter of 2020, we first made a qualitative assessment to determine potential impairment and concluded that no events or circumstances indicated that the fair value of any of our reporting units is less than its carrying amount. During the second quarter of 2020, primarily due to the ongoing economic impacts associated with COVID-19 and organizational restructuring of certain markets within our C&W Caribbean and Networks segment, we performed goodwill impairment analyses of several reporting units within the C&W Caribbean and Networks segment and the C&W Panama segment. We used an income approach to determine the estimated fair values of these reporting units. Under this approach, we utilized a discounted cash flow model as the valuation technique to estimate the fair values of the reporting units from a market participant’s perspective. This approach uses certain inputs and assumptions that require estimates and judgments, including forecasted cash flows and appropriate discount rates. Forecasts of future cash flows are largely based on our assumptions using Level 3 inputs, which we consider to be consistent with a market participant’s approach. We used the weighted-average cost of capital for each reporting unit as the basis for the discount rate to establish the present value of the expected cash flows for the respective reporting unit. The inputs for our weighted average cost of capital calculations include Level 2 and Level 3 inputs, generally derived from third-party pricing services. We used discount rates ranging from 8.9 % to 10.3 % in the valuation of the various reporting units within our C&W Caribbean and Networks segment and 9.8 % in the valuation of our C&W Panama segment. During the third quarter of 2019, based on declines in the operating results of our C&W Panama segment, we conducted a goodwill impairment assessment of that reporting unit. We used a market-based valuation approach to determine the fair value of this reporting unit. The fair value of a reporting unit using a market-based approach is estimated based upon a market multiple typically applied to the reporting unit’s Adjusted OIBDA, as defined in note 21. We determined 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.” As part of our annual goodwill impairment assessment in the fourth quarter of 2018, we used a market-based valuation approach, as described above, to determine the fair value of certain reporting units within C&W Caribbean and Networks and our C&W Panama segment. For additional information regarding goodwill impairment charges resulting from these impairment analyses, see note 9. (7) Investments We hold a 49 % interest in TSTT. Our investment in TSTT is included in other assets, net, in our consolidated balance sheets. Pursuant to certain conditions to the regulatory approval of the acquisition of Columbus International, Inc. by C&W in 2015, we are required to dispose of our investment in TSTT, subject to certain terms and conditions. During the third quarter of 2018, we recorded an impairment charge of $ 16 million due to a decline in the estimated fair value of this investment. As of December 31, 2020 and 2019, the carrying value of our investment in TSTT was $ 77 million. We cannot predict when, or if, we will be able to dispose of this investment at an acceptable price. As such, no assurance can be given that we will be able to recover the carrying value of our investment in TSTT. (8) Insurance Recoveries The 2017 Hurricanes impacted a number of our markets in the Caribbean, resulting in varying degrees of damage to homes, businesses and infrastructure in these markets. In October 2016, our operations in the Bahamas, which is part of our C&W Caribbean and Networks segment, were significantly impacted by Hurricane Matthew. In December 2018, we settled our insurance claims for the 2017 Hurricanes and Hurricane Matthew as follows: (i) $ 109 million for the 2017 Hurricanes, after deducting $ 30 million of self-insurance, and (ii) $ 12 million for Hurricane Matthew, after deducting $ 15 million of self-insurance. II-94 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 The following table summarizes the impact of the insurance settlements to our consolidated statement of operations for the year ended December 31, 2018 (in millions): Other operating costs and expenses $ 4.6 Business interruption loss recovery (a) 59.5 Impairment, restructuring and other operating items, net (a) 35.7 Total $ 99.8 (a) Each amount includes $ 3 million attributable to Hurricane Matthew. During 2018, we received net advance payments related to the 2017 Hurricanes and Hurricane Matthew from our third-party insurance provider totaling $ 51 million, of which $ 21 million is presented as a cash inflow from investing activities on our consolidated statement of cash flows. With respect to the net advance payments, $ 45 million was provided to Liberty Puerto Rico and $ 6 million was provided to C&W Caribbean and Networks. During the first quarter of 2019, we received the then outstanding insurance settlement amount of $ 67 million, of which $ 33 million and $ 34 million have been presented as operating and investing activities, respectively, in our consolidated statement of cash flows. With respect to the cash received, $ 37 million, $ 27 million and $ 3 million was provided to C&W Caribbean and Networks, Liberty Puerto Rico and our Corporate operations, respectively. (9) Long-lived Assets Impairment Charges The following table sets forth the details of our impairment charges: C&W Caribbean and Networks C&W Panama VTR/Cabletica Liberty Puerto Rico Total in millions Year ended December 31, 2020: Goodwill $ 99.0 $ 177.0 $ — $ — $ 276.0 Property and equipment and other 3.9 — 1.7 1.5 7.1 Total impairment charges $ 102.9 $ 177.0 $ 1.7 $ 1.5 $ 283.1 Year ended December 31, 2019: Goodwill $ — $ 181.9 $ — $ — $ 181.9 Property and equipment and other 17.2 — 0.3 — 17.5 Total impairment charges $ 17.2 $ 181.9 $ 0.3 $ — $ 199.4 Year ended December 31, 2018: Goodwill $ 2.5 $ 607.5 $ — $ — $ 610.0 Property and equipment and other 5.0 — 0.3 0.4 5.7 Total impairment charges $ 7.5 $ 607.5 $ 0.3 $ 0.4 $ 615.7 We evaluate goodwill and other indefinite-lived intangible assets (primarily spectrum licenses and cable television franchise rights) for impairment at least annually on October 1 and whenever facts and circumstances indicate that their carrying amounts may not be recoverable as further outlined in note 3. Based upon our October 1, 2020 evaluation, we did not identify any impairments of such assets. However, declines in the estimated fair value of certain reporting units within our C&W Caribbean and Networks segment or our C&W Panama segment could result in the need to record goodwill impairment charges. If, among other factors, (i) our equity values were to decline significantly or (ii) the adverse impacts stemming from COVID-19 (as defined below), competition, economic, regulatory or other factors, including macro-economic and demographic trends, were to cause our results of operations or cash flows to be worse than anticipated, we could conclude in future periods II-95 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 that impairment charges are required in order to reduce the carrying values of the goodwill and, to a lesser extent, other long-lived assets of our C&W Caribbean and Networks segment or our C&W Panama segment. Any such impairment charges could be significant. COVID-19 . During the first quarter of 2020, the World Health Organization declared the outbreak of a novel strain of Coronavirus ( COVID-19 ) a “pandemic,” pointing to the sustained risk of further global spread. COVID-19 has negatively impacted our results of operations and resulted in systemic disruption of the worldwide equity markets, and the market values of our publicly-traded equity declined significantly beginning in late February 2020. As a result of the impact of COVID-19 on our results of operations, we evaluated whether the facts and circumstances and available information resulted in the need for an impairment assessment for any of our long-lived assets, including goodwill, and during the second quarter of 2020 concluded assessments were required with respect to our goodwill, which resulted in goodwill impairments in our C&W Caribbean and Networks segment and our C&W Panama segment. C&W Panama . During our 2018 annual goodwill impairment test, we concluded a $ 608 million impairment was necessary for our C&W Panama segment and during the third quarter of 2019 we concluded that an additional $ 182 million goodwill impairment charge was necessary based on further deterioration in the C&W Panama segment's operating results. These impairments primarily resulted from the impact of a significant increase in competition, particularly with respect to our prepaid mobile business. The accumulation of prepaid mobile subscriber losses, together with associated adverse impacts to average monthly subscription revenue per mobile subscriber, negatively impacted the actual results during these periods and the then expected future financial performance of the Panamanian reporting unit, resulting in the impairments during 2018 and 2019. Hurricane Dorian. In September 2019, our operations in the Bahamas, which is part of our C&W Caribbean and Networks segment, were impacted by Hurricane Dorian resulting in significant damage to homes, businesses and infrastructure. Based on our initial estimates of the impacts of the hurricane to our operations, during the third quarter of 2019, we recorded an impairment charge of $ 16 million to write-off the net carrying amount of property and equipment that was damaged beyond repair. For additional information regarding the fair value methods and related assumptions used in our impairment assessments, see note 6. Goodwill Changes in the carrying amount of our goodwill during 2020 are set forth below: January 1, 2020 Acquisitions and related adjustments Foreign currency translation adjustments and other Impairments (a) December 31, 2020 in millions C&W Caribbean and Networks $ 3,316.7 $ ( 12.0 ) $ ( 93.7 ) $ ( 99.0 ) $ 3,112.0 C&W Panama 794.1 — — ( 177.0 ) 617.1 VTR/Cabletica 517.9 — 8.6 — 526.5 Liberty Puerto Rico 277.7 352.2 — — 629.9 Total $ 4,906.4 $ 340.2 $ ( 85.1 ) $ ( 276.0 ) $ 4,885.5 (a) Amounts represent impairment charges associated with various reporting units based primarily on the economic impacts associated with COVID-19, as further described above. II-96 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Changes in the carrying amount of our goodwill during 2019 are set forth below: January 1, 2019 Acquisitions and related adjustments Disposition Foreign currency translation adjustments and other Impairments (a) December 31, 2019 in millions C&W Caribbean and Networks $ 3,349.6 $ 37.1 $ ( 33.6 ) $ ( 36.4 ) $ — $ 3,316.7 C&W Panama 976.0 — — — ( 181.9 ) 794.1 VTR/Cabletica 530.0 8.3 — ( 20.4 ) — 517.9 Liberty Puerto Rico 277.7 — — — — 277.7 Total $ 5,133.3 $ 45.4 $ ( 33.6 ) $ ( 56.8 ) $ ( 181.9 ) $ 4,906.4 (a) Amount primarily relates to an impairment charge associated with the deterioration of the C&W Panama segment’s operating results, as further described above. At December 31, 2020 and 2019, our accumulated goodwill impairments were $ 1,624 million and $ 1,348 million, respectively. Property and Equipment, Net The details of our property and equipment and the related accumulated depreciation are set forth below: Estimated useful life at December 31, 2020 December 31, 2020 2019 in millions Distribution systems 3 to 25 years $ 5,082.9 $ 4,299.6 Customer premises equipment 3 to 5 years 1,935.5 1,763.8 Support equipment, buildings and land 3 to 40 years 1,721.3 1,530.9 8,739.7 7,594.3 Accumulated depreciation ( 3,828.3 ) ( 3,293.2 ) Net carrying amount $ 4,911.4 $ 4,301.1 Depreciation expense related to our property and equipment was $ 731 million, $ 697 million and $ 641 million during 2020, 2019 and 2018, respectively. We recorded non-cash increases to our property and equipment related to vendor financing arrangements of $ 99 million, $ 96 million and $ 54 million during 2020, 2019 and 2018, respectively. II-97 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Intangible Assets Subject to Amortization, Net The details of our intangible assets subject to amortization, which had estimated useful lives ranging from four to 15 years at December 31, 2020, are set forth below: December 31, 2020 2019 in millions Gross carrying amount: Customer relationships $ 1,554.8 $ 1,482.9 Licenses and other 159.4 170.1 Total gross carrying amount 1,714.2 1,653.0 Accumulated amortization: Customer relationships ( 813.0 ) ( 645.5 ) Licenses and other ( 42.3 ) ( 38.3 ) Total accumulated amortization ( 855.3 ) ( 683.8 ) Net carrying amount $ 858.9 $ 969.2 Amortization expense related to intangible assets with finite useful lives was $ 184 million, $ 174 million and $ 189 million during 2020, 2019 and 2018, respectively. Based on our amortizable intangible asset balance at December 31, 2020, we expect that amortization expense will be as follows for the next five years and thereafter (in millions): 2021 $ 184.6 2022 164.3 2023 143.9 2024 108.9 2025 65.2 Thereafter 192.0 Total $ 858.9 Intangible Assets Not Subject to Amortization The details of our intangible assets not subject to amortization are set forth below: December 31, 2020 2019 in millions Spectrum licenses (a) $ 909.7 $ 8.4 Cable television franchise rights (b) 540.0 540.0 Other 15.9 12.4 Total intangible assets not subject to amortization $ 1,465.6 $ 560.8 (a) The 2020 amount includes an estimated $ 894 million attributable to the AT&T Acquisition. For additional information regarding the assets acquired as part of the AT&T Acquisition, see note 4. (b) Cable television franchise rights are held by Liberty Puerto Rico. II-98 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 (10) Debt and Finance Lease Obligations The U.S. dollar equivalents of the components of our debt are as follows: December 31, 2020 Estimated fair value (c) Principal amount Weighted average interest rate (a) Unused borrowing capacity (b) Borrowing currency US $ equivalent December 31, December 31, 2020 2019 2020 2019 in millions Convertible Notes (d) 2.00 % $ — $ — $ 381.8 $ 430.1 $ 402.5 $ 402.5 C&W Notes 6.74 % — — 2,435.8 2,270.9 2,270.0 2,120.0 C&W Credit Facilities 2.81 % (e) 769.7 1,834.7 2,017.1 1,856.2 2,006.1 VTR Notes 5.72 % — — 1,239.7 1,290.9 1,150.0 1,260.0 VTR Credit Facilities 4.78 % (f) 263.2 243.8 229.7 244.5 231.4 LPR Senior Secured Notes 6.75 % — — 1,389.4 1,278.3 1,290.0 1,200.0 LPR Credit Facilities 5.14 % $ 125.0 125.0 1,002.5 1,012.1 1,000.0 1,000.0 Cabletica Credit Facilities (g) 8.39 % $ 15.0 15.0 119.3 123.8 119.6 124.8 Vendor financing (h) 2.50 % — — 168.1 167.7 168.1 167.7 Total debt before premiums, discounts and deferred financing costs 5.22 % $ 1,172.9 $ 8,815.1 $ 8,820.6 $ 8,500.9 $ 8,512.5 The following table provides a reconciliation of total debt before premiums, discounts and deferred financing costs to total debt and finance lease obligations: December 31, 2020 2019 in millions Total debt before premiums, discounts and deferred financing costs $ 8,500.9 $ 8,512.5 Premiums, discounts and deferred financing costs, net (d) ( 157.1 ) ( 146.1 ) Total carrying amount of debt 8,343.8 8,366.4 Finance lease obligations 13.4 3.6 Total debt and finance lease obligations 8,357.2 8,370.0 Less: Current maturities of debt and finance lease obligations ( 161.9 ) ( 180.2 ) Long-term debt and finance lease obligations $ 8,195.3 $ 8,189.8 (a) Represents the weighted average interest rate in effect at December 31, 2020 for all borrowings outstanding pursuant to each debt instrument, including any applicable margin. The interest rates presented represent stated rates and do not include the impact of derivative instruments, deferred financing costs, original issue premiums or discounts and commitment fees, all of which affect our overall cost of borrowing. (b) Unused borrowing capacity represents the maximum availability under the applicable facility at December 31, 2020 without regard to covenant compliance calculations or other conditions precedent to borrowing. At December 31, 2020, the full amount of unused borrowing capacity was available to be borrowed under each of the respective subsidiary facilities, both before and after completion of the December 31, 2020 compliance reporting requirements, except for available capacity under the VTR Revolving Credit Facilities that is currently limited to $ 185 million. At December 31, 2020, and except as may be limited by tax and legal considerations, the presence of noncontrolling interests, foreign currency exchange restrictions with respect to certain C&W subsidiaries and other factors, there were no restrictions on II-99 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 the respective subsidiary’s ability to upstream cash from this availability to Liberty Latin America or its subsidiaries or other equity holders. (c) The estimated fair values of our debt instruments are determined using the average of applicable bid and ask prices (mostly Level 1 of the fair value hierarchy) or, when quoted market prices are unavailable or not considered indicative of fair value, discounted cash flow models (mostly Level 2 of the fair value hierarchy). The discount rates used in the cash flow models are based on the market interest rates and estimated credit spreads of the applicable entity, to the extent available, and other relevant factors. For additional information regarding fair value hierarchies, see note 6. (d) The interest rate reflects the stated rate of the Convertible Notes. The effective interest rate of the Convertible Notes is 6.7 %, which considers the impact of the discount recorded in connection with the Conversion Option, as further described below. (e) The C&W Credit Facilities unused borrowing capacity comprise certain U.S. dollar and Trinidad & Tobago dollar revolving credit facilities. For further information, see C&W Credit Facilities below. (f) The VTR Credit Facilities comprise certain CLP term loans and U.S. dollar and CLP revolving credit facilities, including unused borrowing capacity. For further information, see VTR Credit Facilities below. (g) The Cabletica Credit Facilities comprise certain Costa Rican colón ( CRC ) and U.S. dollar term loans and a U.S. dollar revolving credit facility. For further information, see Cabletica Credit Facilities below. (h) Represents amounts owed pursuant to interest-bearing vendor financing arrangements that are used to finance certain of our operating expenses and property and equipment additions. These obligations are generally due within one year and include VAT that was paid on our behalf by the vendor. Our operating expenses include $ 108 million, $ 130 million and $ 172 million for the years ended December 31, 2020, 2019 and 2018, respectively, that were financed by an intermediary and are reflected on the borrowing date as a hypothetical cash outflow within net cash provided by operating activities and a hypothetical cash inflow within net cash provided by financing activities in our consolidated statements of cash flows. Repayments of vendor financing obligations are included in payments of principal amounts of debt and finance lease obligations in our consolidated statements of cash flows. General Information At December 31, 2020, except for our Convertible Notes (as defined and described below), all of our outstanding debt had been incurred by one of our four primary “borrowing groups”: C&W, VTR, Liberty Puerto Rico and Cabletica. Credit Facilities. Each of our borrowing groups has entered into one or more credit facility agreements with certain financial institutions. Each of these credit facilities contain certain covenants, the more notable of which are as follows: • Our credit facilities contain certain net leverage ratios, as specified in the relevant credit facility, which are required to be complied with on an incurrence and/or maintenance basis; • Our credit facilities contain certain restrictions which, among other things, restrict the ability of the entities of the relevant borrowing group to (i) incur or guarantee certain financial indebtedness, (ii) make certain disposals and acquisitions, (iii) create certain security interests over their assets, in each case, subject to certain customary and agreed exceptions, and (iv) make certain restricted payments to their direct and/or indirect parent companies through dividends, loans or other distributions, subject to compliance with applicable covenants; • Our credit facilities require that certain entities of the relevant borrowing group guarantee the payment of all sums payable under the relevant credit facility and such entities are required to have first-ranking security granted over their shares and, in certain borrowing groups, over substantially all of their assets to secure the payment of all sums payable thereunder; • In addition to certain mandatory prepayment events, the instructing group of lenders under the relevant credit facility may cancel the commitments thereunder and declare the loans thereunder due and payable after the applicable notice period following the occurrence of a change of control (as specified in the relevant credit facility); II-100 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 • Our credit facilities contain certain customary events of default, the occurrence of which, subject to certain exceptions and materiality qualifications, would allow the instructing group of lenders to (i) cancel the total commitments, (ii) accelerate all outstanding loans and terminate their commitments thereunder and/or (iii) declare that all or part of the loans be payable on demand; • Our credit facilities require entities of the relevant borrowing group to observe certain affirmative and negative undertakings and covenants, which are subject to certain materiality qualifications and other customary and agreed exceptions; and • In addition to customary default provisions, our credit facilities generally include certain cross-default and cross-acceleration provisions with respect to other indebtedness of entities of the relevant borrowing group, subject to agreed minimum thresholds and other customary and agreed exceptions. Senior and Senior Secured Notes. Our C&W, VTR and Liberty Puerto Rico borrowing groups have issued senior and/or senior secured notes. In general, our senior and senior secured notes (i) are senior obligations of each respective issuer within the relevant borrowing group that rank equally with all of the existing and future debt of such issuer and, in the case of our senior secured notes, are senior to all existing and future subordinated debt of each respective issuer within the relevant borrowing group, (ii) contain, in most instances, guarantees from other entities of the relevant borrowing group (as specified in the applicable indenture) and (iii) are secured by pledges over the shares of certain entities of the relevant borrowing group and, in certain instances, over substantially all of the assets of those entities. In addition, the indentures governing our senior and senior secured notes contain certain covenants, the more notable of which are as follows: • Our notes contain certain customary incurrence-based covenants. In addition, our notes provide that any failure to pay principal prior to expiration of any applicable grace period, or any acceleration with respect to other indebtedness of the issuer or certain other members of the relevant borrowing group, over agreed minimum thresholds (as specified under the applicable indenture), is an event of default under the respective notes; • Our notes contain certain restrictions that, among other things, restrict the ability of the entities of the relevant borrowing group to (i) incur or guarantee certain financial indebtedness, (ii) make certain disposals and acquisitions, (iii) create certain security interests over their assets, in each case, subject to certain customary and agreed exceptions and (iv) make certain restricted payments to its direct and/or indirect parent companies through dividends, loans or other distributions, subject to compliance with applicable covenants; and • If the relevant issuer or certain of its subsidiaries (as specified in the applicable indenture) sell certain assets, such issuer must offer to repurchase the applicable notes at par, or if a change of control (as specified in the applicable indenture) occurs, such issuer must offer to repurchase all of the relevant notes at a redemption price of 101 %. Liberty Latin America – Convertible Notes In June 2019, Liberty Latin America issued $ 403 million principal amount of 2.0 % convertible senior notes (the Convertible Notes ) due July 15, 2024. Interest on the Convertible Notes is payable semi-annually on January 15 and July 15. The Convertible Notes are general unsecured obligations of the Company and are structurally subordinated to all the debt and other liabilities of our subsidiaries. Conversion Rights. Subject to certain conditions, and adjustments if certain events occur (as specified in the indenture governing the Convertible Notes), including the Rights Offering (as discussed further below), as of December 31, 2020, the Convertible Notes may be converted at a conversion rate equal to 48.4315 Class C common shares per $1,000 principal amount of the Convertible Notes (equivalent to a conversion price of approximately $ 20.65 per Class C common share), the “ Conversion Option ”. Any conversions of the Convertible Notes may be settled, at the election of the Company, in cash, Class C common shares or a combination thereof. In September 2020, we completed a Rights Offering, as defined and further described in note 19, whereby we issued 49,049,073 of our Class C common shares. In connection with the Rights Offering, subject to certain anti-dilution provisions in the indenture governing the Convertible Notes, the conversion rate for the Convertible Notes was adjusted from 44.9767 to 48.4315 Class C common shares per $1,000 principal amount of the Convertible Notes. II-101 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 The Convertible Notes may be converted at the option of the holders at any time prior to the close of business on January 12, 2024, only under the following circumstances: • during any calendar quarter (and only during such calendar quarter), if the last reported sale price of our Class C common shares for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on and including the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the applicable conversion price of the Convertible Notes on each applicable trading day; • during the five consecutive business day period immediately after any five consecutive trading day period (the “measurement period”), in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of that measurement period was less than 98 % of the product of the last reported sale price of our Class C common shares and the conversion rate on each such trading day; • if we give notice of redemption, as described below; or • upon the occurrence of specified corporate transactions. On and after January 15, 2024 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the Convertible Notes may convert their notes at any time, regardless of the foregoing circumstances. We determined the Conversion Option should be bifurcated from the debt host instrument (the Convertible Notes) and accounted for as a separate financial instrument that qualifies for equity classification. Accordingly, we bifurcated the Conversion Option from the Convertible Notes and initially recorded the estimated fair value of $ 78 million as additional paid-in capital and debt discount. The debt discount will be accreted through interest expense, using the effective interest method, through maturity of the Convertible Notes or when the Conversion Option no longer qualifies for equity classification, if ever. At December 31, 2020, the carrying value of the Convertible Notes was $ 342 million and the unamortized debt discount on the Convertible Notes was $ 58 million. Redemption Rights. Other than a redemption for a change in certain tax laws, we may not redeem the Convertible Notes prior to July 19, 2022. On or after July 19, 2022 but prior to the 85 th scheduled trading day immediately preceding July 15, 2024, we may redeem all or a portion of the notes for cash, if the last reported sale price of our Class C common shares has been at least 130 % of the conversion price then in effect on (i) each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption and (ii) the trading day immediately preceding the date we provide such notice . Other. If a fundamental change (as defined in the indenture) occurs, holders of the Convertible Notes may require the Company to repurchase all or a portion of their notes for cash at a price equal to 100 % of the principal amount of the notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, following certain corporate transactions that occur prior to the maturity date of the Convertible Notes or the delivery of a notice of redemption, we will increase the applicable conversion rate for a holder who elects to convert in connection with such corporate transactions or notice of redemption in certain circumstances by a number of additional Class C common shares, as described in the related indenture. We used the net proceeds from the issuance of the Convertible Notes to (i) fund the cost of the Capped Calls, as defined and further described in note 19, and (ii) for other general corporate purposes, including funding a portion of the AT&T Acquisition. II-102 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 C&W Notes The details of the outstanding C&W Notes as of December 31, 2020 are summarized in the following table: Outstanding principal amount C&W Notes Maturity Interest rate Borrowing currency U.S. $ equivalent Carrying value (a) in millions Senior Secured Notes: 2027 C&W Senior Secured Notes September 7, 2027 5.750 % $ 550.0 $ 550.0 $ 548.8 Senior Notes: 2026 C&W Senior Notes October 15, 2026 7.500 % $ 500.0 500.0 494.8 2027 C&W Senior Notes September 15, 2027 6.875 % $ 1,220.0 1,220.0 1,217.1 Total $ 2,270.0 $ 2,260.7 (a) Amounts are inclusive or net of original issue premiums, discounts and deferred financing costs, as applicable . Financing and Refinancing Transactions C&W Borrowing Group Refinancing Transactions . In January 2020, C&W completed a series of transactions contemplated by and permitted under its existing debt agreements (the C&W Borrowing Group Refinancing Transactions ) that ultimately resulted in the 2026 C&W Senior Notes and the 2027 C&W Senior Notes (previously issued by C&W Senior Financing Designated Activity Company) instead being directly issued by a wholly-owned subsidiary of C&W, C&W Senior Finance Limited ( C&W Senior Finance ). In connection with the C&W Borrowing Group Refinancing Transactions, the loans previously made by C&W Senior Financing Designated Activity Company are no longer outstanding. The terms and conditions applicable to the 2026 C&W Senior Notes and the 2027 C&W Senior Notes otherwise remain substantively unchanged. 2027 C&W Senior Secured Notes . In April 2019, Sable issued $ 400 million principal amount of 5.750 % senior secured notes, at 99.195 % of par, due September 7, 2027 (the 2027 C&W Senior Secured Notes ). Interest on the 2027 C&W Senior Secured Notes is payable semi-annually on January 7 and July 7. The net proceeds from the 2027 C&W Senior Secured Notes were primarily used to (i) redeem $ 150 million of aggregate principal amount under the 2022 C&W Senior Notes, as further described below, according to the redemption terms of the indenture, comprising (a) the 105.156 % redemption price and (b) accrued and unpaid interest on the redeemed notes, and (ii) repay $ 235 million of aggregate principal amount under the C&W Term Loan B-4 Facility. In connection with this transaction, we recognized a net loss on debt modification and extinguishment of $ 6 million, which primarily includes the net effect of redemption premiums paid and the write-off of unamortized premiums and discounts. 2027 C&W Senior Secured Notes Add-on . In January 2020, Sable issued an additional $ 150 million aggregate principal amount, at 106.0 % of par, under the existing 2027 C&W Senior Secured Notes indenture (the 2027 C&W Senior Secured Notes Add-on ). The terms and conditions of the 2027 C&W Senior Secured Notes Add-on are consistent with the original indenture. The net proceeds from the C&W Term Loan B-5 Facility (as defined and described below) and the 2027 C&W Senior Secured Notes Add-on were primarily used to repay in full the $ 1,640 million outstanding principal amount under the C&W Term Loan B-4 Facility (as defined and described below), including accrued and unpaid interest. In connection with these transactions, we recognized a loss on debt modification and extinguishment of $ 3 million, which primarily includes the write-off of unamortized discounts and deferred financing costs. 2026 C&W Senior Notes. In October 2018, the 2026 C&W Senior Notes were issued. Interest on the 2026 C&W Senior Notes is payable semi-annually on April 15 and October 15. The net proceeds from the 2026 C&W Senior Notes were partially used to (i) repurchase £ 63 million ($ 80 million, at the applicable rate) of outstanding principal under the 2019 C&W Senior Notes, as further described below, and (ii) redeem $ 275 million of outstanding principal under the 2022 C&W Senior Notes. In connection with these transactions, we recognized a net II-103 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 loss on debt modification and extinguishment of $ 13 million, which primarily includes the net effect of redemption premiums paid, the write-off of unamortized premiums, discounts and deferred financing costs and the payment of third-party costs. 2027 C&W Senior Notes Add-on A. In April 2019, an additional $ 300 million aggregate principal amount was issued, at 99.205 % of par, under the existing 2027 C&W Senior Notes indenture (the 2027 C&W Senior Notes Add-on A ). The net proceeds from the 2027 C&W Senior Notes Add-on A were primarily used to (i) repay in full the $ 170 million outstanding principal amount under the C&W Revolving Credit Facility and (ii) redeem $ 115 million of aggregate principal amount of the 2022 C&W Senior Notes according to the redemption terms of the related indenture, comprising (a) a 105.156 % redemption price and (b) accrued and unpaid interest on the redeemed notes. In connection with this transaction, we recognized a net loss on debt modification and extinguishment of $ 4 million, which includes the net effect of redemption premiums paid and the write-off of unamortized premiums. 2027 C&W Senior Notes Add-on B. In July 2019, an additional $ 220 million aggregate principal amount was issued, at 103.625 % of par, under the existing 2027 C&W Senior Notes indenture (the 2027 C&W Senior Notes Add-on B ). The net proceeds from the 2027 C&W Senior Notes Add-on B were primarily used to redeem the remaining aggregate principal amount of the 2022 C&W Senior Notes of $ 210 million according to the redemption terms of the related indenture, comprising (a) a 103.438 % redemption price and (b) accrued and unpaid interest on the redeemed notes. In connection with this transaction, we recognized a net loss on debt modification and extinguishment of $ 4 million, which primarily includes the net effect of redemption premiums paid and the write-off of unamortized premiums. Redemption Rights. Subject to the circumstances described below: • The 2026 C&W Senior Notes, 2027 C&W Senior Notes and 2027 C&W Senior Secured Notes are non-callable until October 15, 2021, September 15, 2022 and September 7, 2022, respectively. • At any time prior to (i) October 15, 2021 in the case of the 2026 C&W Senior Notes, (ii) September 15, 2022 in the case of the 2027 C&W Senior Notes and (iii) September 7, 2022 in the case of the 2027 C&W Senior Secured Notes, Sable and C&W Senior Finance (as applicable) may redeem some or all of the applicable notes by paying a price equal to 100 % of the principal amount of the applicable notes redeemed plus accrued and unpaid interest and a “make-whole” premium, which is generally the present value of all remaining scheduled interest payments to October 15, 2021, September 15, 2022 or September 7, 2022 (as applicable) using the discount rate (as specified in the indenture) as of the redemption date plus 50 basis points. • At any time prior to (i) October 15, 2021 in the case of the 2026 C&W Senior Notes, (ii) September 15, 2022 in the case of the 2027 C&W Senior Notes and (iii) September 7, 2022 in the case of the 2027 C&W Senior Secured Notes, subject to certain restrictions (as specified in the applicable indenture), up to 40 % of each of the 2026 C&W Senior Notes, 2027 C&W Senior Notes and 2027 C&W Senior Secured Notes may be redeemed with the net proceeds of one or more specified equity offerings at a redemption price equal to 107.500 %, 106.875 % and 105.750 %, respectively, of the principal amount redeemed, plus accrued and unpaid interest and additional amounts (as specified in the applicable indenture), if any, to the applicable redemption date. • Prior to September 7, 2022, during each 12-month period commencing on April 5, 2019, up to 10 % of the principal amount of the 2027 C&W Senior Secured Notes may be redeemed at a redemption price equal to 103 % of the principal amount redeemed plus accrued and unpaid interest to the redemption date. II-104 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Sable and C&W Senior Finance (as applicable) may redeem some or all of the 2026 C&W Senior Notes, 2027 C&W Senior Notes and 2027 C&W Senior Secured Notes, respectively, at the following redemption prices (expressed as a percentage of the principal amount) plus accrued and unpaid interest and additional amounts (as specified in the indenture), if any, to the applicable redemption date, as set forth below: Redemption Price 2026 C&W Senior Notes 2027 C&W Senior Notes 2027 C&W Senior Secured Notes 12-month period commencing: October 15 September 15 September 7 2021 103.750 % N.A. N.A. 2022 101.875 % 103.438 % 102.875 % 2023 100.000 % 101.719 % 101.438 % 2024 100.000 % 100.859 % 100.000 % 2025 and thereafter 100.000 % 100.000 % 100.000 % 2022 C&W Senior Notes. In November 2018, C&W completed the redemption of $ 275 million of aggregate principal amount of the 6.875 % secured notes due August 1, 2022 (the 2022 C&W Senior Notes ) for total consideration of $ 294 million, including (i) the 105.156 % redemption price and (ii) accrued and unpaid interest on the redeemed notes. In connection with this transaction, we recognized a net loss on debt modification and extinguishment of $ 11 million, which primarily includes the net effect of redemption premiums paid and the write-off of unamortized premiums. 2019 C&W Senior Notes . In October 2018, C&W launched a tender offer to repurchase, for cash, any and all of its outstanding 2019 C&W Senior Notes (the Tender Offer ). The price of the Tender Offer was 103 % of the principal amount of the bonds tendered, plus accrued and unpaid interest up to, but not including, the payment date. Pursuant to the Tender Offer, which was completed on October 31, 2018, we paid total consideration of £ 68 million ($ 87 million at the transaction date), including accrued interest of £ 3 million ($ 4 million at the transaction date), for 43.0 % of the outstanding 2019 C&W Senior Notes and cancelled the 2019 C&W Senior Notes that were tendered. In March 2019, C&W repaid in full the outstanding principal amount under the 2019 C&W Senior Notes for total consideration of £ 91 million ($ 120 million at the transaction date), including accrued interest of £ 7 million ($ 9 million at the transaction date). C&W Credit Facilities The C&W Credit Facilities are the senior secured credit facilities of certain subsidiaries of C&W. The details of our borrowings under the C&W Credit Facilities as of December 31, 2020 are summarized in the following table: Unused borrowing capacity Outstanding principal amount C&W Credit Facilities Maturity Interest rate Borrowing currency US $ equivalent Borrowing currency US $ equivalent Carrying value (a) in millions C&W Revolving Credit Facility (b) January 30, 2026 LIBOR (c) + 3.25 % $ 625.0 $ 625.0 $ — $ — $ — C&W Term Loan B-5 Facility January 31, 2028 LIBOR + 2.25 % $ — — $ 1,510.0 1,510.0 1,492.2 C&W Regional Facilities (d) various dates ranging from 2021 to 2038 4.60 % (e) (f) 144.7 (g) 346.2 345.1 Total $ 769.7 $ 1,856.2 $ 1,837.3 (a) Amounts are net of discounts and deferred financing costs, as applicable. II-105 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 (b) Includes $ 50 million that matures on June 30, 2023. The C&W Revolving Credit Facility has a fee on unused commitments of 0.5 % per year. (c) London Interbank Offered Rate. (d) Primarily represents credit facilities at CWP, C&W Jamaica and Columbus Communications Trinidad Limited (collectively, the C&W Regional Facilities ). (e) Represents a weighted average rate for all C&W Regional Facilities. (f) The unused borrowing capacity on the C&W Regional Facilities comprise certain U.S. dollar and Trinidad & Tobago dollar denominated revolving credit facilities. (g) The outstanding principal amount on the C&W Regional Facilities comprise certain U.S. dollar, JMD and East Caribbean dollar denominated credit facilities . Financing and Refinancing Transactions C&W Term Loan B-5 Facility . In January 2020, Coral-US Co-Borrower LLC, a wholly-owned subsidiary of C&W, entered into a LIBOR plus 2.25 % $ 1,510 million principal amount term loan facility (the C&W Term Loan B-5 Facility ), issued at par, due January 31, 2028. Interest is payable monthly beginning on February 28, 2020. As further described above, the net proceeds from the C&W Term Loan B-5 Facility and the 2027 C&W Senior Secured Notes Add-on were primarily used to repay in full the $ 1,640 million outstanding principal amount under the C&W Term Loan B-4 Facility, including accrued and unpaid interest. C&W Term Loan B-4 Facility. In February 2018, C&W entered into a $ 1,875 million principal amount term loan facility (the C&W Term Loan B-4 Facility ). The net proceeds of the C&W Term Loan B-4 Facility were used to repay in full the $ 1,825 million then outstanding principal amount of the C&W Term Loan B-3 Facility and repay $ 40 million drawn under the C&W Revolving Credit Facility. The exchange in principal amounts of $ 1,825 million was treated as a non-cash transaction in our consolidated statement of cash flows. In connection with this transaction, we recognized a loss on debt modification and extinguishment of $ 13 million, which includes the write-off of unamortized discounts and deferred financing costs. C&W Revolving Credit Facility . In January 2020, the maturity date associated with $ 575 million of the existing $ 625 million C&W Revolving Credit Facility was extended to January 30, 2026. All other terms and conditions of the revolving credit facility remain unchanged. In March 2020, we borrowed $ 313 million under the C&W Revolving Credit Facility. This drawdown was fully repaid in 2020. In connection with the UTS Acquisition during the first quarter of 2019, C&W borrowed $ 170 million under the C&W Revolving Credit Facility. The outstanding principal amount of the C&W Revolving Credit Facility, including accrued interest, was repaid in full in 2019. In March 2018, we amended and restated the credit agreement originally dated May 16, 2016, as amended and restated as of May 26, 2017, providing for the additional C&W Term Loan B-4 Facility and a $ 625 million revolving credit facility. C&W Regional Facilities. In January 2018, CWP entered into a $ 100 million principal amount term loan facility that bears interest at 4.35 % per annum, payable on a quarterly basis, and matures in January 2023. The proceeds from the term loan were primarily used to repay existing CWP debt. In June 2020, CWP refinanced this term loan facility to extend the maturity to March 17, 2025. All other terms and conditions of this facility remain unchanged. II-106 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 VTR Notes The details of our outstanding VTR Notes as of December 31, 2020 are summarized in the following table: Maturity Interest Rate Outstanding principal amount Carrying value (a) in millions 2028 VTR Senior Secured Notes January 15, 2028 5.125 % $ 600.0 $ 596.6 2028 VTR Senior Notes July 15, 2028 6.375 % 550.0 533.7 $ 1,150.0 $ 1,130.3 (a) Amounts are net of deferred financing costs. Financing and Refinancing Transactions 2028 VTR Senior Secured Notes. In July 2020, VTR Comunicaciones SpA, a wholly-owned subsidiary of VTR, issued $ 600 million aggregate principal amount, at par, of 5.125 % senior secured notes (the 2028 VTR Senior Secured Notes ) due January 15, 2028. Interest on the 2028 VTR Senior Secured Notes is payable semi-annually on January 15 and July 15, commencing on January 15, 2021. The net proceeds of $ 1,133 million from the 2028 VTR Senior Secured Notes and the 2028 VTR Senior Notes (as defined and described further below), together with $ 187 million of proceeds from the unwinding of certain derivative instruments, were used to redeem $ 1,260 million of outstanding principal amount under the then outstanding VTR Finance Senior Notes (as defined and discussed further below), including accrued and unpaid interest and a $ 29 million redemption premium. In connection with these transactions, (i) $ 550 million was treated as a non-cash transaction in our consolidated statement of cash flows and (ii) we recognized a loss on debt modification and extinguishment of $ 42 million, which primarily includes the payment of the aforementioned redemption premium and the write-off of unamortized deferred financing costs. Redemption Rights. The 2028 VTR Senior Secured Notes may be redeemed, in whole or in part, at any time prior to July 15, 2023 at a price equal to 100 % of the principal amount of the notes redeemed, plus accrued and unpaid interest to (but excluding) the redemption date, and a “make whole” premium, as described in the 2028 VTR Senior Secured Notes indenture. The 2028 VTR Senior Secured Notes may be redeemed, in whole or in part, at any time on or after July 15, 2023 at the following redemption prices (expressed as a percentage of the principal amount), plus accrued and unpaid interest and additional amounts, if any, to the applicable redemption date, as set forth below: Redemption Price 12-month period commencing July 15: 2023 102.563 % 2024 101.281 % 2025 and thereafter 100.000 % In addition, at any time prior to July 15, 2023, subject to certain conditions specified in the 2028 VTR Senior Secured Notes indenture, we may redeem up to 40 % of the aggregate principal amount of the 2028 VTR Senior Secured Notes with the net proceeds of one or more specified equity offerings at a redemption price equal to 105.125 % of the principal amount of the notes redeemed, plus accrued and unpaid interest and additional amounts, if any, to the applicable redemption date. Prior to July 15, 2023, during each 12-month period commencing on the July 1, 2020, we may redeem up to 10 % of the aggregate principal amount of the 2028 VTR Senior Secured Notes at a redemption price equal to 103 % of the principal amount of the notes redeemed, plus accrued and unpaid interest to (but excluding) the redemption date. The 2028 VTR Senior Secured Notes are guaranteed by VTR.com SpA ( VTR.com ), a wholly-owned subsidiary of VTR, and are the senior obligations of VTR Comunicaciones SpA and VTR.com. The 2028 VTR Senior Secured Notes are secured by first-ranking pledges over (i) all of the capital stock of the VTR Comunicaciones SpA and VTR.com and (ii) certain subordinated shareholder loans. II-107 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 2028 VTR Senior Notes. In July 2020, VTR Finance N.V. issued $ 550 million aggregate principal amount, at par, of 6.375 % senior notes (the 2028 VTR Senior Notes ) due July 15, 2028. Interest on the 2028 VTR Senior Notes is payable semi-annually on January 15 and July 15, commencing on January 15, 2021. Redemption Rights. The 2028 VTR Senior Notes may be redeemed, in whole or in part, at any time prior to July 15, 2023 at a price equal to 100 % of the principal amount of the notes redeemed, plus accrued and unpaid interest to (but excluding) the redemption date, and a “make whole” premium, as described in the 2028 VTR Senior Notes indenture. The 2028 VTR Senior Notes may be redeemed, in whole or in part, at any time on or after July 15, 2023 at the following redemption prices (expressed as a percentage of the principal amount), plus accrued and unpaid interest and additional amounts, if any, to the applicable redemption date, as set forth below: Redemption Price 12-month period commencing July 15: 2023 103.188 % 2024 101.594 % 2025 and thereafter 100.000 % In addition, at any time prior to July 15, 2023, subject to certain conditions specified in the 2028 VTR Senior Notes indenture, we may redeem up to 40 % of the aggregate principal amount of the 2028 VTR Senior Notes with the net proceeds of one or more specified equity offerings at a redemption price equal to 106.375 % of the principal amount of the notes redeemed, plus accrued and unpaid interest and additional amounts, if any, to the applicable redemption date. The 2028 VTR Senior Notes are the senior obligations of VTR and are secured by a pledge over all the shares of VTR. VTR Finance Senior Notes. In January 2014, VTR issued $ 1.4 billion principal amount of senior notes (the VTR Finance Senior Notes ), due January 15, 2024. In October 2018, VTR redeemed $ 140 million of aggregate principal amount of the VTR Finance Senior Notes for total consideration of $ 147 million, including (i) the 103 % redemption price and (ii) accrued and unpaid interest on the redeemed notes. In connection with this transaction, VTR recognized a loss on debt modification and extinguishment of $ 6 million, which includes the net effect of redemption premiums paid and the write-off of deferred financing costs. In July 2020, as further described above, VTR redeemed the remaining $ 1,260 million principal amount of the VTR Finance Senior Notes. VTR Credit Facilities In May 2018, VTR.com entered into (i) the VTR TLB-1 Facility and the VTR TLB-2 Facility (collectively, the VTR Term Loan Facilities ) and (ii) new U.S. dollar and CLP revolving credit facilities (collectively, the VTR Revolving Credit Facilities and together with the VTR Term Loan Facilities, the VTR Credit Facilities ). Upon closing of the VTR Credit Facilities, the previously existing credit facility at VTR.com was cancelled. II-108 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 The details of our borrowings under the VTR Credit Facilities as of December 31, 2020 are summarized in the following table: Unused borrowing capacity Outstanding principal amount VTR Credit Facilities Maturity Interest rate Borrowing currency US $ equivalent Borrowing currency US $ equivalent Carrying value (a) in millions VTR TLB-1 Facility (b) ICP (c) + 3.80 % CLP — $ — CLP 140,900.0 $ 198.0 $ 195.5 VTR TLB-2 Facility May 23, 2023 7.00 % CLP — — CLP 33,100.0 46.5 45.9 VTR RCF–A (d) May 23, 2023 TAB (e) + 3.35 % CLP 45,000.0 63.2 CLP — — — VTR RCF–B (f) June 15, 2026 LIBOR + 2.75 % $ 200.0 200.0 $ — — — Total $ 263.2 $ 244.5 $ 241.4 (a) Amounts are net of deferred financing costs. (b) Under the terms of the credit agreement, VTR.com is obligated to repay 50 % of the outstanding aggregate principal amount of the VTR TLB-1 Facility on November 23, 2022, with the remaining principal amount due on May 23, 2023, which represents the ultimate maturity date of the facility. (c) Índice de Cámara Promedio rate. (d) The VTR RCF – A has a fee on unused commitments of 1.34 % per year. (e) Tasa Activa Bancaria rate. (f) Includes a $ 1 million credit facility that matures on May 23, 2023. The VTR RCF – B has a fee on unused commitments of 1.10 % per year. Financing and Refinancing Transactions VTR RCF – A . In March 2019, the commitment under the VTR RCF – A was increased to CLP 45 billion ($ 63 million). VTR RCF – B . In March 2020, we borrowed $ 92 million under the VTR RCF – B. In June 2020, (i) the drawdown was fully repaid and (ii) the commitment under the VTR RCF – B was increased to $ 200 million and the term was extended to June 15, 2026. LPR Senior Secured Notes In October 2019, LCPR Senior Secured Financing Designated Activity Company ( LCPR Senior Secured Financing ) issued $ 1.2 billion principal amount, at par, of 6.75 % senior secured notes, due October 15, 2027 (the 2027 LPR Senior Secured Notes ). Interest is payable semi-annually on April 15 and October 15. LCPR Senior Secured Financing is a special purpose financing entity, created for the primary purpose of facilitating the issuance of certain debt offerings. Liberty Mobile is required to consolidate LCPR Senior Secured Financing as a result of certain variable interests in LCPR Senior Secured Financing, of which Liberty Mobile is considered the primary beneficiary. Subject to the circumstances described below: • The 2027 LPR Senior Secured Notes are non-callable until October 15, 2022. • At any time prior to October 15, 2022, LCPR Senior Secured Financing may redeem some or all of the 2027 LPR Senior Secured Notes by paying a price equal to 100 % of the principal amount of the 2027 LPR Senior Secured Notes redeemed plus accrued and unpaid interest and a “make-whole” premium, which is generally the present value of all II-109 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 remaining scheduled interest payments to October 15, 2022 using the discount rate (as specified in the indenture) as of the redemption date plus 50 basis points. • At any time prior to October 15, 2022, subject to certain restrictions (as specified in the indenture), up to 40 % of the 2027 LPR Senior Secured Notes may be redeemed with the net proceeds of one or more specified equity offerings at a redemption price equal to 106.750 % of the principal amount redeemed, plus accrued and unpaid interest and additional amounts (as specified in the indenture), if any, to the redemption date. • Prior to October 15, 2022, during each 12-month period commencing on October 9, 2019, up to 10 % of the principal amount of the 2027 LPR Senior Secured Notes may be redeemed at a redemption price equal to 103 % of the principal amount redeemed, plus accrued and unpaid interest and additional amounts (as specified in the indenture), if any, to the redemption date. On and after October 15, 2022, LCPR Senior Secured Financing may redeem some or all of the 2027 LPR Senior Secured Notes at the following redemption prices (expressed as a percentage of principal amount) plus accrued and unpaid interest and additional amounts (as specified in the indenture), if any, to the applicable redemption date: Redemption Price 12-month period commencing October 15: 2022 103.375 % 2023 101.688 % 2024 and thereafter 100.000 % The net proceeds from the 2027 LPR Senior Secured Notes, the 2027 LPR Senior Secured Notes Add-on (as defined and described below) and the SPV Escrowed Proceeds (as defined and described below) were deposited into escrow (collectively, the “ AT&T Acquisition Restricted Cash ”), subsequently released upon consummation of the AT&T Acquisition and used to fund one or more loans to a wholly-owned subsidiary of Liberty Puerto Rico. The payment of all obligations under such loans are guaranteed by LCPR and certain of its affiliates and their respective significant subsidiaries, and all the issued capital stock or share capital of LCPR and each guarantor, and substantially all assets of LCPR and each guarantor is pledged to secure the payment of such obligations. Such loans and a capital contribution from Liberty Latin America were used to finance the AT&T Acquisition and to pay related fees and expenses. At December 31, 2019, the AT&T Acquisition Restricted Cash was included in restricted cash in our consolidated balance sheet. At December 31, 2020, the carrying value of the 2027 LPR Senior Secured Notes was $ 1,265 million. Financing Transactions 2027 LPR Senior Secured Notes Add-on . In May 2020, LCPR Senior Secured Financing Designated Activity Company ( LCPR Senior Secured Financing ) issued an additional $ 90 million aggregate principal amount, at 102.5 % of par, under the existing 2027 LPR Senior Secured Notes indenture (the 2027 LPR Senior Secured Notes Add-on ). The terms and conditions of the 2027 LPR Senior Secured Notes Add-on are consistent with the original indenture. As further described above, the net proceeds from the 2027 LPR Senior Secured Notes Add-on were deposited into escrow and subsequently released upon consummation of the AT&T Acquisition. II-110 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 LPR Credit Facilities The LPR Credit Facilities are the senior secured credit facilities of Liberty Puerto Rico. The details of our borrowings under the LPR Credit Facilities as of December 31, 2020 are summarized in the following table: LPR Credit Facilities Maturity Interest rate Facility amount (in borrowing currency) Unused borrowing capacity Outstanding principal amount Carrying value (a) in millions LPR Revolving Credit Facility (b) October 15, 2025 LIBOR + 3.50 % $ 125.0 $ 125.0 $ — $ — 2026 SPV Credit Facility October 15, 2026 LIBOR + 5.0 % $ 1,000.0 — 1,000.0 985.5 Total $ 125.0 $ 1,000.0 $ 985.5 (a) Amounts are net of discounts and deferred financing costs. (b) The LPR Revolving Credit Facility has a fee on unused commitments of 0.5 % per year. Financing Transactions 2026 SPV Credit Facility. In October 2019, LCPR Loan Financing LLC ( LCPR Loan Financing ) entered into a LIBOR plus 5.0 % $ 1.0 billion principal amount term loan facility, issued at 99.0 % of par, due October 15, 2026 (the 2026 SPV Credit Facility ). Interest on the 2026 SPV Credit Facility is currently payable monthly. LCPR Loan Financing is a special purpose financing entity, created for the primary purpose of facilitating the issuance of certain term loan debt. LCPR is required to consolidate LCPR Loan Financing as a result of certain variable interests in LCPR Loan Financing, for which LCPR is considered the primary beneficiary. LCPR Loan Financing used the proceeds from the 2026 SPV Credit Facility to (i) fund a new $ 947 million term loan (the LPR Financing Loan ) to LCPR and (ii) deposit $ 53 million into escrow (the SPV Escrowed Proceeds ), which was ultimately used to fund a portion of the AT&T Acquisition. The terms and conditions, including maturity and applicable interest rate, for the LPR Financing Loan are the same as those for the 2026 SPV Credit Facility. LCPR Loan Financing’s obligations under the 2026 SPV Credit Facility are secured by interests over various assets, as further described in the 2026 SPV Credit Facility agreement. The net proceeds from the LPR Financing Loan were used to redeem, in full, the $ 923 million then outstanding principal amount of the LPR Bank Facility. This borrowing and repayment activity was treated as a non-cash transaction in our consolidated statement of cash flows. In connection with this transaction, we recognized a loss on debt modification and extinguishment of $ 7 million, which includes the write-off of unamortized discounts and deferred financing costs. LPR Revolving Credit Facility. In October 2019, LCPR entered into a LIBOR plus 3.5 %, 6 -year senior secured credit facility agreement providing for $ 125 million of revolving commitments (the LPR Revolving Credit Facility ). Upon closing of the LPR Revolving Credit Facility, the previously existing revolving credit facility at LCPR was cancelled. In March 2020, we borrowed $ 63 million under the LPR Revolving Credit Facility. This drawdown was fully repaid in 2020. II-111 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Cabletica Credit Facilities In October 2018, in connection with the completion of the Cabletica Acquisition, Cabletica entered into certain senior secured credit facilities (the Cabletica Credit Facilities ). The details of our borrowings under the Cabletica Credit Facilities as of December 31, 2020 are summarized in the following table: Unused borrowing capacity Outstanding principal Cabletica Credit Facilities Maturity Interest rate Borrowing currency U.S. $ equivalent Borrowing currency U.S. $ equivalent Carrying value (a) in millions Cabletica Term Loan B-1 Facility (b) LIBOR + 5.50 % (c) $ — $ — $ 49.2 $ 49.2 $ 44.4 Cabletica Term Loan B-2 Facility (b) TBP (d) + 6.75 % CRC — — CRC 43,177.4 70.4 68.7 Cabletica Revolving Credit Facility (e) August 1, 2024 LIBOR + 4.25 % $ 15.0 15.0 $ — — — $ 15.0 $ 119.6 $ 113.1 (a) Amounts are net of deferred financing costs. (b) Under the terms of the credit agreement, Cabletica is obligated to repay 50 % of the outstanding aggregate principal amounts of the Cabletica Term Loan B-1 Facility and the Cabletica Term Loan B-2 Facility on February 1, 2024, with the remaining respective principal amounts due on August 1, 2024, which represents the ultimate maturity date of each facility. (c) Subject to a LIBOR floor of 75 basis points. (d) Tasa Básica Pasiva rate. (e) The Cabletica Revolving Credit Facility has a fee on unused commitments of 1.70 % per year. Financing and Refinancing Transactions In November 2020, we amended and restated the Cabletica Credit Facilities credit agreement, which included (i) an upsize of the Cabletica Term Loan B-1 Facility by $ 228 million, (ii) an upsize of the Cabletica Term Loan B-2 Facility by $ 59 million, which is expected to be converted to the CRC denominated facility upon close of the Telefónica-Costa Rica Acquisition, and (iii) replacing the existing Cabletica Revolving Credit Facility with a new $ 15 million revolving credit facility. The upsize commitments under the Cabletica Term Loan B-1 Facility and Cabletica Term Loan B-2 Facility remain undrawn at December 31, 2020 and are contingent upon closing of the Telefónica-Costa Rica Acquisition. These undrawn amounts are also subject to ticking fees, currently estimated to be approximately 2 % per year through the closing date of the Telefónica-Costa Rica Acquisition. II-112 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Maturities of Debt Maturities of our debt as of December 31, 2020 are presented below. Amounts presented below represent U.S. dollar equivalents based on December 31, 2020 exchange rates. C&W VTR Liberty Puerto Rico Cabletica Liberty Latin America (a) Consolidated in millions Years ending December 31: 2021 $ 59.9 $ 99.6 $ — $ — $ 0.5 $ 160.0 2022 17.6 99.0 — — 0.6 117.2 2023 124.3 145.5 — — 0.8 270.6 2024 62.2 — — 119.6 403.0 584.8 2025 146.0 — — — — 146.0 Thereafter 3,782.3 1,150.0 2,290.0 — — 7,222.3 Total debt maturities 4,192.3 1,494.1 2,290.0 119.6 404.9 8,500.9 Premiums, discounts and deferred financing costs, net ( 28.2 ) ( 22.8 ) ( 39.1 ) ( 6.5 ) ( 60.5 ) ( 157.1 ) Total debt $ 4,164.1 $ 1,471.3 $ 2,250.9 $ 113.1 $ 344.4 $ 8,343.8 Current portion $ 59.9 $ 99.6 $ — $ — $ 0.5 $ 160.0 Noncurrent portion $ 4,104.2 $ 1,371.7 $ 2,250.9 $ 113.1 $ 343.9 $ 8,183.8 (a) Represents the amount held by Liberty Latin America on a standalone basis plus the aggregate amount held by subsidiaries of Liberty Latin America that are outside our borrowing groups. (11) Leases The following table provides details of our operating lease expense: Year ended December 31, 2020 2019 2018 (a) in millions Operating lease expense: Operating lease cost $ 52.8 $ 45.7 $ 48.2 Short-term lease cost 13.5 10.4 — Total operating lease expense $ 66.3 $ 56.1 $ 48.2 (a) Amounts reflect operating lease expense recorded under ASC 840, Leases , prior to adoption of ASU 2016-02 on January 1, 2019. Accordingly, amounts are not comparable. II-113 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Certain other details of our operating leases are set forth below: December 31, 2020 2019 in millions Operating lease right-of-use assets $ 328.6 $ 150.9 Operating lease liabilities: Current $ 63.2 $ 31.5 Noncurrent 269.7 119.2 Total operating lease liabilities $ 332.9 $ 150.7 Weighted-average remaining lease term 7.2 years 6.4 years Weighted-average discount rate 5.6 % 6.6 % Year ended December 31, 2020 2019 in millions Operating cash flows from operating leases $ 47.0 $ 46.2 Right-of-use assets obtained in exchange for new operating lease liabilities (a) $ 230.5 $ 48.0 (a) Represents non-cash transactions associated with operating leases entered into during the year, including $ 196 million acquired in connection with the AT&T Acquisition. Maturities of Operating Leases Maturities of our operating lease liabilities as of December 31, 2020 are presented below. Amounts presented below represent U.S. dollar equivalents (in millions) based on December 31, 2020 exchange rates. Years ending December 31: 2021 $ 78.7 2022 62.7 2023 51.4 2024 44.4 2025 34.6 Thereafter 136.9 Total operating lease liabilities on an undiscounted basis 408.7 Amount representing interest ( 75.8 ) Present value of operating lease liabilities $ 332.9 II-114 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 (12) Restructuring Liabilities A summary of changes in our restructuring liabilities during 2020 is set forth in the table below: Employee severance and termination Contract termination and other Total in millions Restructuring liability as of January 1, 2020 $ 19.0 $ 13.3 $ 32.3 Restructuring charges 13.2 11.6 24.8 UTS liabilities at acquisition date (a) 2.1 — 2.1 Cash paid ( 25.7 ) ( 10.4 ) ( 36.1 ) Foreign currency translation adjustments ( 5.0 ) 2.1 ( 2.9 ) Restructuring liability as of December 31, 2020 $ 3.6 $ 16.6 $ 20.2 Current portion $ 3.6 $ 14.3 $ 17.9 Noncurrent portion — 2.3 2.3 Total $ 3.6 $ 16.6 $ 20.2 (a) Represents an adjustment related to the completion of our purchase price accounting for the UTS Acquisition, as further discussed in note 4. Our restructuring charges during 2020 primarily relate to reorganization programs at C&W Panama, C&W Caribbean and Networks and VTR. Current and noncurrent restructuring liabilities are included in other accrued and current liabilities and other long-term liabilities, respectively, in our consolidated balance sheets. A summary of changes in our restructuring liabilities during 2019 is set forth in the table below: Employee severance and termination Contract termination and other Total in millions Restructuring liability as of January 1, 2019 $ 7.6 $ 18.0 $ 25.6 Restructuring charges 30.9 9.3 40.2 UTS liabilities at acquisition date 8.3 — 8.3 Cash paid ( 27.6 ) ( 13.0 ) ( 40.6 ) Foreign currency translation adjustments ( 0.2 ) ( 1.0 ) ( 1.2 ) Restructuring liability as of December 31, 2019 $ 19.0 $ 13.3 $ 32.3 Current portion $ 13.1 $ 10.5 $ 23.6 Noncurrent portion 5.9 2.8 8.7 Total $ 19.0 $ 13.3 $ 32.3 Our restructuring charges during 2019 primarily relate to employee severance and termination costs associated with reorganization programs at VTR, C&W Caribbean and Networks and C&W Panama. II-115 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 A summary of changes in our restructuring liabilities during 2018 is set forth in the table below: Employee severance and termination Contract termination and other Total in millions Restructuring liability as of January 1, 2018 $ 6.2 $ 25.4 $ 31.6 Restructuring charges 25.6 8.8 34.4 Cash paid ( 24.3 ) ( 13.5 ) ( 37.8 ) Foreign currency translation adjustments 0.1 ( 2.7 ) ( 2.6 ) Restructuring liability as of December 31, 2018 $ 7.6 $ 18.0 $ 25.6 Our restructuring charges during 2018 primarily relate to employee severance and termination costs associated with reorganization programs at C&W Caribbean and Networks, VTR and C&W Panama. In addition to the restructuring charges set forth in the tables above, we also incurred $ 3 million, $ 5 million and $ 9 million during 2020, 2019 and 2018, respectively, in restructuring charges related to employee severance and termination costs at C&W Caribbean and Networks, which impacted our net pension liability. For additional information, see note 16. ( 13 ) 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. Our programming and other direct costs of services by major category are set forth below. Year ended December 31, 2020 2019 2018 in millions Programming and copyright $ 389.3 $ 404.8 $ 401.1 Interconnect and commissions 249.9 280.0 298.7 Equipment and other 206.8 193.0 177.4 Total programming and other direct costs $ 846.0 $ 877.8 $ 877.2 (14) Other Operating Costs and Expenses Other operating costs and expenses set forth in the table 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; II-116 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 • 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; and • Share-based compensation costs that relate to (i) SARs, RSUs and PSUs (each as defined in note 3) issued to our employees and Directors (as defined in note 17) and (ii) bonus-related expenses that will be paid in the form of equity (as further described in note 17). Our other operating costs and expenses by major category are set forth below. Year ended December 31, 2020 2019 2018 in millions Personnel and contract labor $ 483.6 $ 500.4 $ 475.3 Network-related 261.4 264.4 266.6 Service-related 161.7 149.9 144.5 Commercial 168.1 172.6 166.7 Facility, provision, franchise and other 359.1 360.5 348.4 Share-based compensation expense 97.5 57.5 39.8 Total other operating costs and expenses $ 1,531.4 $ 1,505.3 $ 1,441.3 (15) Income Taxes On July 11, 2017, Liberty Latin America was formed as a corporation in Bermuda where a Tax Assurance Certificate has been granted to guarantee that any imposition of income or other taxes will not be applicable to Liberty Latin America through March 31, 2035. Accordingly, Liberty Latin America does not file a primary corporate income tax return in Bermuda, although various subsidiaries in other jurisdictions are taxable operations and file income tax returns in their respective jurisdictions. The income taxes of Liberty Latin America are presented on a standalone basis, and each tax paying entity or group within Liberty Latin America is presented on a separate return basis, unless a combined or consolidated tax return regime is permitted. We maintain a tax sharing agreement with Liberty Global (the Tax Sharing Agreement ) that became effective upon consummation of the Split-Off. The Tax Sharing Agreement governs the parties’ respective rights, responsibilities and obligations with respect to taxes and tax benefits, the filing of tax returns, the control of audits and other tax matters. Pursuant to the Tax Sharing Agreement, tax liabilities and benefits relating to taxable periods before and after the Split-Off will be computed and apportioned between Liberty Latin America and Liberty Global, and responsibility for payment of those tax liabilities (including any taxes attributable to the Split-Off and related internal restructurings) and use of those tax benefits, will be allocated between Liberty Latin America and Liberty Global. Furthermore, the Tax Sharing Agreement sets forth the rights of Liberty Latin America and Liberty Global with respect to the preparation and filing of tax returns, the handling of audits or other tax proceedings and assistance and cooperation and other matters, in each case, for taxable periods ending on or before or that otherwise include the date of the Split-Off. The components of our loss before income taxes are as follows: Year ended December 31, 2020 2019 2018 in millions Domestic (a) $ ( 67.3 ) $ ( 46.0 ) $ ( 32.5 ) Foreign (b) (c) ( 770.9 ) ( 234.6 ) ( 552.2 ) Total $ ( 838.2 ) $ ( 280.6 ) $ ( 584.7 ) (a) Liberty Latin America is considered a stand-alone Bermuda entity. II-117 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 (b) Amounts for the year ended December 31, 2020, include impairment charges of $ 177 million and $ 99 million at our C&W Panama and C&W Caribbean and Networks reporting units, respectively. Amounts for the years ended December 31, 2019 and 2018 include impairment charges at our Panamanian reporting unit of $ 182 million and $ 608 million, respectively. For additional information regarding asset impairments, see note 9. (c) For the year ended December 31, 2020, material jurisdictions that comprise the “foreign” component of our loss before income taxes include Bahamas, Barbados, Chile, Costa Rica, Jamaica, the Netherlands, Panama, Puerto Rico, Trinidad, the U.K. and the U.S. For the year ended December 31, 2019, material jurisdictions that comprise the “foreign” component of our loss before income taxes include Bahamas, Barbados, Chile, Costa Rica, Jamaica, the Netherlands, Panama, Puerto Rico, Trinidad, the U.K. and the U.S. For the year ended December 31, 2018, material jurisdictions that comprise the “foreign” component of our loss before income taxes include Barbados, Chile, the Netherlands, Panama, Puerto Rico and the U.K. Income tax benefit (expense) consists of: Current Deferred Total in millions Year ended December 31, 2020: Domestic $ — $ — $ — Foreign ( 35.8 ) 65.1 29.3 Total $ ( 35.8 ) $ 65.1 $ 29.3 Year ended December 31, 2019: Domestic $ — $ — $ — Foreign 65.5 32.7 98.2 Total $ 65.5 $ 32.7 $ 98.2 Year ended December 31, 2018: Domestic $ — $ — $ — Foreign ( 84.0 ) 32.9 ( 51.1 ) Total $ ( 84.0 ) $ 32.9 $ ( 51.1 ) Income tax benefit (expense) attributable to our earnings (loss) before income taxes differs from the amounts computed by using the applicable tax rate as a result of the following: Year ended December 31, 2020 2019 2018 in millions Computed expected tax benefit (a) $ — $ — $ — Permanent differences (b) ( 17.7 ) ( 13.9 ) ( 23.3 ) Basis and other differences in the treatment of items associated with investments in Liberty Latin America entities 0.5 19.9 0.4 Increases in valuation allowances ( 223.0 ) ( 60.9 ) ( 23.8 ) International rate differences (a) (c) 180.7 56.0 130.3 Changes in uncertain tax positions 33.4 161.7 8.9 Enacted tax law and rate changes (d) (e) (f) (g) 149.4 11.3 1.5 Effect of non-deductible goodwill impairments ( 70.3 ) ( 43.8 ) ( 157.0 ) Withholding Tax ( 40.0 ) ( 15.8 ) ( 13.2 ) Other, net 16.3 ( 16.3 ) 25.1 Total income tax benefit (expense) $ 29.3 $ 98.2 $ ( 51.1 ) II-118 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 (a) On July 11, 2017, Liberty Latin America was formed as a corporation in Bermuda where the company is exempt from income taxes on ordinary income and capital gains, and therefore has a “statutory” or “expected” tax rate of 0% in 2020, 2019, and 2018. The majority of our subsidiaries operate in jurisdictions where income tax is imposed at local applicable rates, resulting in “international rate differences,” as shown in the table above that reflect the computed tax benefit (expense) of pre-tax book income (loss) in the respective taxable jurisdiction. (b) Permanent differences primarily relate to various non-taxable income or non-deductible expenses, such as CARICOM treaty income, limitations on deductible management fees, or executive compensation, among others. (c) The 2020 corporate tax rates applicable to our primary tax jurisdictions are as follows: Chile, 27%; Costa Rica, 30%; Jamaica, 33.33%; the Netherlands, 25%; Panama, 25%; Puerto Rico, 37.5%; the U.K., 19%; and the U.S., 21%. (d) In March 2020, the United Kingdom enacted budget confirmed that its corporate tax rate would maintain at 19% as opposed to a previously announced reduction to 17% which was to be effective from April 1, 2020. While deferred tax assets were re-valued, there is a net nil tax impact of this on total tax result due to a full valuation allowance on all deferred tax items in the U.K. (e) During 2018, legislation was enacted that changed the income tax rate in Barbados from 25.0% to 30.0% on Regular Barbados Companies. Substantially all of the impact of this rate change on our deferred tax balances was recorded during the fourth quarter of 2018 when the change in law was enacted. During 2019, legislation was enacted that changed the income tax rate in Barbados from 30.0% on Regular Business Companies to a regressive tax rate ranging from 5.5% to 1% applicable to all Barbados companies, dependent upon taxable income levels. Substantially all of the impact of this rate change on our deferred tax balances was recorded during the first quarter of 2019 when the change in law was enacted. (f) On December 27, 2019, legislation was enacted in Colombia that replaces tax reform which had previously been enacted in 2018 but had been declared unconstitutional due to procedural flaws. The legislation confirms provisions from the original 2018 reform, including a phasing down of the corporate tax rates through 2022, whereby the rate will be 30% going forward. Substantially all of the impact of this rate change on our deferred tax balances was recorded during the fourth quarter of 2019 when the change in law was enacted. (g) On December 10, 2018, legislation was enacted that changed the total corporate income tax rate in Puerto Rico from 39.0% to 37.5% for tax years beginning after December 31, 2018. Substantially all of the impact of this rate change on our deferred balances was recorded during the fourth quarter of 2018 when the change in law was enacted. Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. The components of our deferred tax assets (liabilities) are as follows: December 31, 2020 2019 in millions Deferred tax assets $ 41.9 $ 55.7 Deferred tax liabilities ( 619.9 ) ( 401.8 ) Net deferred tax liability $ ( 578.0 ) $ ( 346.1 ) II-119 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below: December 31, 2020 2019 in millions Deferred tax assets: Net operating losses, credits and other carryforwards $ 2,085.8 $ 1,520.2 Deferred revenue 16.8 — Unrealized gains and losses 24.8 64.9 Accrued expenses 15.5 23.7 Other future deductible amounts 2.4 2.3 Deferred tax assets 2,145.3 1,611.1 Valuation allowance ( 1,630.9 ) ( 1,402.8 ) Deferred tax assets, net of valuation allowance 514.4 208.3 Deferred tax liabilities: Investments ( 205.7 ) ( 224.1 ) Intangible assets ( 618.0 ) ( 168.6 ) Property and equipment, net ( 266.3 ) ( 158.1 ) Un-remitted foreign earnings ( 2.4 ) ( 3.1 ) Other future taxable amounts — ( 0.5 ) Deferred tax liabilities ( 1,092.4 ) ( 554.4 ) Net deferred tax liability $ ( 578.0 ) $ ( 346.1 ) The changes in our valuation allowances are summarized below: Year ended December 31, 2020 2019 2018 in millions Balance at beginning of period $ 1,402.8 $ 1,308.9 $ 1,282.2 Net tax expense related to operations 223.0 60.9 23.8 Translation adjustments 0.3 8.8 2.9 Business acquisitions and other 4.8 24.2 — Balance at end of period $ 1,630.9 $ 1,402.8 $ 1,308.9 II-120 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Deferred tax assets related to net operating losses may be used to offset future taxable income. The significant components of our tax loss carryforwards at December 31, 2020 are as follows: Country Tax loss carryforward Related tax asset Expiration date in millions U.K.: Amount attributable to capital losses $ 5,031.5 $ 956.0 Indefinite Amount attributable to net operating losses 1,414.1 267.7 Indefinite Barbados 1,086.2 29.1 2021 - 2027 Jamaica 443.0 146.9 Indefinite Curacao 213.0 48.5 2021 - 2030 Chile 146.4 39.5 Indefinite Puerto Rico 135.8 50.9 2024 - 2037 U.S. 135.6 34.0 2029 - 2037 Netherlands 110.8 27.7 2024 - 2026 Other 105.4 28.4 Various Total $ 8,821.8 $ 1,628.7 As of December 31, 2020, a valuation allowance of $ 1,489 million has been recorded on the net operating loss carryforwards where we do not expect to generate future taxable income, or where certain losses may be limited in use due to change in control or same-business tests. Our tax loss carryforwards within each jurisdiction combine all companies’ tax losses (both capital and ordinary losses) in that jurisdiction; however, certain tax jurisdictions limit the ability to offset taxable income of a separate company or different tax group with the tax losses associated with another separate company or group. Further, tax jurisdictions restrict the type of taxable income that the above losses are able to offset. In 2020 and 2019, we have foreign tax credit carryforwards of $ 24 million and $ 25 million, respectively, which are available in the U.S. Substantially all credits not utilized will expire at the end of 2027. Other credit carry forwards at the end of 2020 and 2019, in the amounts of $ 50 million and $ 17 million, respectively, predominantly represent alternative minimum tax credits attributable to our operations in Puerto Rico for which the current tax law provides no period of expiration. Through our consolidated subsidiaries, we maintain a presence in many countries. Many of these countries maintain highly complex tax regimes. We have accounted for the effect of these taxes based on what we believe is reasonably expected to apply to us and our consolidated subsidiaries based on tax laws currently in effect and reasonable interpretations of these laws. Because some jurisdictions do not have systems of taxation that are as well established as the system of income taxation used in other major industrialized countries, it may be difficult to anticipate how other jurisdictions will tax our and our consolidated subsidiaries’ current and future operations. Although we intend to take reasonable tax planning measures to limit our tax exposures, no assurance can be given that we will be able to do so. We file income tax returns in various jurisdictions. In the normal course of business, our income tax filings are subject to review by various taxing authorities. In connection with such reviews, disputes could arise with the taxing authorities over the interpretation or application of certain income tax rules related to our business in that tax jurisdiction. Such disputes may result in future tax and interest and penalty assessments by these taxing authorities. The ultimate resolution of tax contingencies will take place upon the earlier of (i) the settlement date with the applicable taxing authorities in either cash or agreement of income tax positions or (ii) the date when the tax authorities are statutorily prohibited from adjusting the company’s tax computations. In general, tax returns filed by, or that include, entities comprising Liberty Latin America for years prior to 2009 are no longer subject to examination by tax authorities. We are currently undergoing income tax audits in Chile, Panama, Trinidad and II-121 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Tobago and certain other jurisdictions within the Caribbean and Latin America. Except as noted below, any adjustments that might arise from the foregoing examinations are not expected to have a material impact on our consolidated financial position or results of operations. The changes in our unrecognized tax benefits are summarized below: Year ended December 31, 2020 2019 2018 in millions Balance at January 1 $ 64.1 $ 249.0 $ 264.5 Additions for tax positions of prior years 2.6 20.3 26.2 Effects of business acquisitions — 3.1 — Additions based on tax positions related to the current year 1.6 1.0 29.6 Lapse of statute of limitations ( 16.7 ) ( 2.7 ) ( 10.7 ) Foreign currency translation ( 0.8 ) ( 11.5 ) ( 29.9 ) Decrease for settlement with tax authorities — ( 42.0 ) — Reductions for tax positions of prior years ( 18.8 ) ( 153.1 ) ( 30.7 ) Balance at December 31 $ 32.0 $ 64.1 $ 249.0 No assurance can be given that any of these unrecognized tax benefits will be recognized or realized. As of December 31, 2020, all of our unrecognized tax benefits would have a favorable impact on our effective income tax rate if ultimately recognized. During 2021, it is reasonably possible that the resolution of ongoing examinations by tax authorities as well as expiration of statutes of limitation could result in reductions to our unrecognized tax benefits related to tax positions taken as of December 31, 2020. Other than the potential impacts of ongoing examinations and the expected expiration of certain statutes of limitation, we do not expect any material changes to our unrecognized tax benefits during 2021. No assurance can be given as to the nature or impact of any changes in our unrecognized tax positions during 2021. During 2020, 2019 and 2018, our income tax benefit (expense) includes interest releases of $ 2 million and $ 33 million and interest expense of $ 8 million, respectively, representing the net accrual of interest and penalties incurred during the respective period. Our other long-term liabilities include accrued interest and penalties of $ 13 million and $ 15 million at December 31, 2020 and 2019, respectively. II-122 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 (16) Pension Plans Defined Benefit Plans C&W maintains various funded defined benefit plans for its employees, including (i) the Cable & Wireless Superannuation Fund ( CWSF ), which is C&W’s largest defined benefit plan, and (ii) plans in the Bahamas, Jamaica, Barbados and Curacao. A significant portion of these defined benefit plans are closed to new entrants, and existing participants do not accrue any additional benefits. C&W also operates unfunded defined benefit arrangements in the U.K., which are governed by individual trust deeds (the U.K. unfunded plans ). One arrangement incorporates a covenant requiring C&W to hold security against the value of the liabilities. The security is in the form of U.K. Government Gilts, which are included in other assets, net, in our consolidated balance sheets. At December 31, 2020 and 2019, the carrying value of our investment in the U.K. Government Gilts was $ 38 million and $ 37 million, respectively. Prior to the UTS Acquisition, UTS had unfunded defined benefit liabilities for certain of its employees. In connection with the UTS Acquisition, an insurance policy was purchased for 64 million Netherlands Antillean Guilders ( ANG ) ($ 36 million). The payments from this policy effectively match the corresponding obligations to the UTS employees. Annual service cost for these employee benefit plans is determined using the projected unit credit actuarial method. The C&W subsidiaries that maintain funded plans have established investment policies for plan assets. The investment strategies are long-term in nature and generally designed to meet the following objectives: • ensure that funds are available to pay benefits as they become due; • maximize the total returns on plan assets subject to prudent risk taking; and • preserve or improve the funded status of the trusts over time. The weighted average assumptions used in determining our benefit obligations and net periodic pension cost are as follows: December 31, 2020 2019 Expected rate of salary increase 1.0 % 0.8 % Discount rate 2.4 % 3.0 % Return on plan assets 2.4 % 3.0 % Retail price index inflation rate 2.9 % 3.0 % Consumer price index inflation rate 2.1 % 2.1 % II-123 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 The present value of the CWSF vested benefit obligations has been calculated and, together with the U.K. unfunded plans, represents 77 % of the overall projected benefit obligation as of December 31, 2020. Assumptions used are best estimates from a range of possible actuarial assumptions, which may not necessarily be borne out in practice. The assumptions related to mortality rates for the CWSF and the U.K. unfunded plans are based upon the third series of Self-Administered Pension Scheme and the actual experience of the plan participants and dependents. In addition, allowance was made for future mortality improvements in line with the 2019 Continuous Mortality Investigation core projections with a long-term rate of improvement of 1.25 % per annum. Based on these assumptions, the life expectancies of participants aged 60 at the following dates are as follows: December 31, 2020 2030 2040 years Male participants and dependents 27 28 29 Female participants 28 28 29 Female dependents 28 29 30 Risk Through our defined benefit pension plans, we are exposed to a number of risks, the most significant of which are detailed below. The net pension liability can be significantly influenced by short-term market factors. The calculation of the net surplus or deficit of the respective plans depends on factors that are beyond our control, principally (i) the value at the balance sheet date of equity securities in which the respective plan has invested and (ii) long-term interest rates, which are used to discount future liabilities. Generally, the long-term interest rates are based on applicable AA corporate bond yields over the period for which the pension obligations are expected to be settled. The funding of the respective plans is based on long-term trends and assumptions relating to market growth, as advised by qualified actuaries and investment advisors, including: • Investment returns: Our net pension assets (liabilities) and contribution requirements are heavily dependent upon the return on the invested assets; • Longevity: The cost to the company of the pensions promised to members is dependent upon the expected term of these payments. To the extent that members live longer than expected this will increase the cost of these arrangements; and • Inflation rate risk: In the U.K., pension obligations are impacted by inflation and, as such, higher inflation will lead to higher pension liabilities. At December 31, 2020, the above risks have been mitigated for approximately 66 % of the CWSF’s liabilities, 68 % of the Jamaican plan’s liabilities and 100 % of the UTS liabilities through the purchase of insurance policies, the payments from which match the corresponding obligations to employees. The remaining investment risks in the plans have also been mitigated to a reasonable extent by a combination of matching assets and diversification of the return-seeking assets. II-124 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Sensitivity analysis The following table summarizes (i) the impact a 1.0% increase or decrease in the applicable actuarial assumed rate would have on the valuation of our pension plans, (ii) the impact a 1.0% increase or decrease in the assumed inflation rate would have on the valuation of the CWSF and the U.K. unfunded plans and (iii) the impact of plan participants living, on average, one year longer or one year less than assumed would have on the valuation of our pension plans. The sensitivity analysis is based on a standalone change in each assumption while holding all other assumptions constant. Increase Decrease in millions CWSF and U.K. unfunded arrangements Discount rate: Effect on defined benefit obligation $ ( 233 ) $ 290 Effect on defined benefit obligation, net of annuity insurance policies $ ( 102 ) $ 133 Inflation (and related increases): Effect on defined benefit obligation $ 168 $ ( 154 ) Effect on defined benefit obligation, net of annuity insurance policies $ 79 $ ( 70 ) Life expectancy: Effect on defined benefit obligation $ 102 $ ( 99 ) Effect on defined benefit obligation, net of annuity insurance policies $ 24 $ ( 24 ) Other plans Effect on defined benefit obligation: Discount rate $ ( 53 ) $ 65 Life expectancy $ 12 $ ( 12 ) Using the projected unit credit method for the valuation of liabilities, the current service cost is expected to increase when expressed as a percentage of pensionable payroll as the members of the plans approach retirement. II-125 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 The following tables summarize the activities of the C&W pension plans for 2020, 2019 and 2018, as applicable. The following is a summary of the funded status of our defined benefit plans: December 31, 2020 2019 in millions Projected benefit obligation at beginning of period $ 2,313.4 $ 2,096.7 UTS acquisition (a) — 36.0 Service cost 4.3 4.6 Prior service cost 2.8 — Contributions by plan participants 1.3 1.2 Interest cost 63.9 73.5 Actuarial loss 163.1 148.3 Benefits paid ( 116.1 ) ( 114.4 ) Other 2.4 3.6 Effect of changes in foreign currency exchange rates 45.4 63.9 Projected benefit obligation at end of period $ 2,480.5 $ 2,313.4 Accumulated benefit obligation at end of period $ 2,470.2 $ 2,302.5 Fair value of plan assets at beginning of period $ 2,263.4 $ 2,068.1 UTS acquisition (a) — 36.0 Actual return on plan assets 214.4 197.0 Contributions by employer 6.5 6.9 Contributions by plan participants 1.3 1.2 Benefits paid ( 116.1 ) ( 114.4 ) Other 0.6 0.6 Effect of changes in foreign currency exchange rates 48.4 68.0 Fair value of plan assets at end of period $ 2,418.5 $ 2,263.4 Net pension liability $ ( 62.0 ) $ ( 50.0 ) (a) 2019 amounts represent the initial projected benefit obligation of the UTS unfunded defined benefit plan at the UTS Acquisition date and a corresponding plan asset associated with the expected cash flows from the insurance policy covering the projected benefit obligation. During 2018, C&W Bahamas recognized a net pension liability that is largely indemnified by the Commonwealth of The Bahamas. At December 31, 2020 and 2019, the indemnification asset balance was $ 182 million and $ 155 million, respectively, which is included in other assets, net, in our consolidated balance sheets. Defined benefit plan amounts included in our consolidated balance sheets are as follows: December 31, 2020 2019 in millions Other assets, net $ 210.2 $ 184.9 Other long-term liabilities ( 272.2 ) ( 234.9 ) Net pension liability $ ( 62.0 ) $ ( 50.0 ) II-126 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 The asset allocation by asset category, asset mix and fair value hierarchy level (as further described in note 6) of our defined benefit plan assets are as follows: Asset mix (a) December 31, 2020 Total Level 1 Level 2 Level 3 % in millions Equity securities 8.9 $ 212.0 $ 155.0 $ 57.0 $ — Bonds (b) 32.4 784.1 771.6 12.5 — Insurance annuity contracts (c) 56.2 1,360.0 — 141.2 1,218.8 Real estate 1.1 27.3 12.1 1.1 14.1 Private equity 0.2 4.9 — — 4.9 Cash 1.2 30.2 30.2 — — Total 100.0 $ 2,418.5 $ 968.9 $ 211.8 $ 1,237.8 Asset mix (a) December 31, 2019 Total Level 1 Level 2 Level 3 % in millions Equity securities 11.5 $ 259.1 $ 157.0 $ 102.1 $ — Bonds (b) 28.6 646.9 633.9 13.0 — Insurance annuity contracts (c) 56.8 1,285.5 — 142.0 1,143.5 Real estate 1.2 28.0 12.5 1.6 13.9 Private equity 0.4 9.9 — — 9.9 Cash 1.5 34.0 34.0 — — Total 100.0 $ 2,263.4 $ 837.4 $ 258.7 $ 1,167.3 (a) We review the asset allocations within the respective portfolios on a regular basis. Generally, the plans do not have explicit asset mix targets other than for the equity securities and bond portfolios within the CWSF on a consolidated basis. The asset mix is primarily subject to, among other considerations, a de-risking plan related to the CWSF. (b) Amounts primarily include (i) fixed-interest and index-linked U.K. Government Gilts held by the CWSF and (ii) bonds held by the Bahamas and Jamaica plans. (c) The trustees of the CWSF, Jamaica plan and UTS unfunded liabilities have each purchased annuity policies pursuant to which the insurer assumed responsibility for the benefits payable to certain participants of the CWSF, Jamaica plan and UTS liabilities. The liabilities in the CWSF, Jamaica plan and at UTS are matched by related annuity policy assets, which reduces our funding risk for these plans, as follows: December 31, 2020 2019 CWSF 66 % 67 % Jamaica plan 68 % 66 % UTS 100 % 100 % II-127 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 A reconciliation of the beginning and ending balances of our plan assets measured at fair value using Level 3 inputs is as follows: December 31, 2020 2019 in millions Balance at beginning of year $ 1,167.3 $ 1,052.9 Gains relating to assets still held at year-end 97.6 94.9 Purchases, sales and settlements of investments, net ( 62.2 ) ( 24.9 ) Foreign currency translation adjustments 35.1 44.4 Balance at end of year $ 1,237.8 $ 1,167.3 The components of net periodic pension expense (benefit) recorded in our consolidated statements of operations are as follows: Year ended December 31, 2020 2019 2018 in millions Included in operating income – service costs $ 2.9 $ 3.4 $ 3.7 Other income (expense), net: Interest costs 48.3 57.6 64.5 Expected return on plan assets ( 49.5 ) ( 59.6 ) ( 74.8 ) Other 1.1 — ( 1.9 ) ( 0.1 ) ( 2.0 ) ( 12.2 ) Total net periodic pension expense (benefit) $ 2.8 $ 1.4 $ ( 8.5 ) In addition to the net periodic pension expense in 2020, 2019 and 2018, we incurred (i) administrative expenses of $ 2 million each year associated with certain of our defined benefit plans and (ii) $ 3 million, $ 5 million and $ 9 million, respectively, in restructuring charges related to employee severance and termination costs at C&W, which impacted our net pension liability. For information on our restructuring charges, see note 12. The net actuarial gain (loss) recognized in accumulated other comprehensive loss during each period and not yet recognized as a component of net period benefit cost at each period end is as follows: Year ended December 31, 2020 2019 2018 in millions Balance at beginning of year $ 8.6 $ 10.7 $ ( 19.8 ) Actuarial gain (loss) on projected benefit obligation ( 148.3 ) ( 134.5 ) 81.9 Actuarial gain (loss) on plan assets (a) 158.7 131.9 ( 51.1 ) Prior service costs and other 1.0 0.5 ( 0.3 ) Balance at end of year $ 20.0 $ 8.6 $ 10.7 (a) Represents the actual less expected return on plan assets. II-128 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Based on December 31, 2020 exchange rates, the benefits that we currently expect to pay during the next five years and in the aggregate for the five years thereafter with respect to our defined benefit plans are as follows (in millions): Year ending December 31: 2021 $ 116.9 2022 118.9 2023 123.1 2024 124.6 2025 130.4 2026 – 2030 701.8 2021 Expected Contributions Based on December 31, 2020 foreign exchange rates, we expect to make contributions of $ 9 million in aggregate to our defined benefit plans in 2021. Defined Contribution Plans We have established various defined contribution benefit plans for our employees. Our aggregate expense for matching contributions under the various defined contribution employee benefit plans was $ 14 million, $ 13 million and $ 10 million during 2020, 2019 and 2018, respectively. (17) Share-based Compensation Our share-based compensation expense includes amounts related to share-based incentive awards held by our employees and employees of our subsidiaries. The following table summarizes certain information related to the share-based incentive awards granted and exercised: Year ended December 31, Assumptions used to estimate fair value of SARs granted: 2020 2019 2018 Risk-free interest rate 0.18 - 0.88 % 1.69 - 2.41 % 2.24 - 3.05 % Expected life 4.5 - 7.0 years 4.6 - 7.0 years 4.6 - 7.0 years Expected volatility 48.1 - 90.6 % 33.1 - 36.4 % 29.8 - 38.2 % Expected dividend yield none none none Weighted average grant-date fair value per share of awards granted: SARs $ 5.39 $ 6.86 $ 7.05 RSUs $ 10.07 $ 19.75 $ 18.41 PSUs $ — $ 16.95 $ 19.49 Income tax benefit related to share-based compensation (in millions) $ 4.9 $ 3.8 $ 6.2 As of December 31, 2020, we have $ 58 million of total unrecognized compensation expense related to awards held by our employees that is expected to be recognized as a future expense over a weighted-average period of approximately 2.0 years. Equity Incentive Plans In 2017, we adopted the Liberty Latin America Ltd. 2018 Incentive Plan (the Employee Incentive Plan ) and the Liberty Latin America Ltd. 2018 Nonemployee Director Incentive Plan (the Nonemployee Director Incentive Plan ). Options, SARs, RSUs, cash awards, performance awards or any combination of the foregoing may be granted under the Employee Incentive Plan and the Nonemployee Director Incentive Plan. The maximum number of Liberty Latin America common shares that may be issued under the Employee Incentive Plan and the Nonemployee Director Incentive Plan is 25 million (of which no more II-129 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 than 10 million shares may consist of Class B shares) and 5 million, respectively, in each case subject to anti-dilution and other adjustment provisions in the respective plans. Liberty Latin America common shares issuable pursuant to awards will be made available from either authorized but unissued shares or shares that have been issued but reacquired by Liberty Latin America. Prior to 2020, RSUs and SARs granted under the Employee Incentive Plan generally vested 12.5 % on the seven-month anniversary of the grant date and then vested at a rate of 6.25 % each quarter thereafter over a four year term. Awards granted in 2020 vest 33.3 % on the anniversary of the grant date over a three year vesting term. All SARs granted under the Employee Incentive Plan expire seven years after the grant date and may be granted with an exercise price at or above the fair market value of the shares on the date of grant in any class of common shares. RSUs issued under the Nonemployee Director Incentive Plan vest on the first anniversary of the grant date. Liberty Latin America Ltd. Transitional Share Conversion Plan Prior to the Split-Off, share-based incentive awards were granted in respect to Liberty Global's “LiLAC Shares.” Liberty Global's LiLAC Shares were tracking shares, which were intended to reflect or "track" the economic performance of Liberty Global's "LiLAC Group" rather than the economic performance of Liberty Global as a whole. The LiLAC Group comprised the same entities as Liberty Latin America at the time of the aforementioned Split-Off. In connection with the Split-Off on December 29, 2017, share-based incentive awards in respect to LiLAC Shares were cancelled and replaced with corresponding share-based incentive awards in respect to shares of Liberty Latin America pursuant to the Liberty Latin America Ltd. Transitional Share Conversion Plan (the Transition Plan ). Specifically, each option, SAR, RSU and PSU outstanding as of December 29, 2017 was cancelled and replaced with the same number of corresponding Liberty Latin America awards. The PSUs granted in connection with the Transition Plan covered a three-year performance period ending December 31, 2018 and included a performance target metric based on the achievement of specified compound annual growth rates ( CAGR ) in a consolidated Adjusted OIBDA metric. Participants earned 80% of their targeted awards under the Transition Plan PSUs, which vested 50 % on each of April 1 and October 1 of 2019. Performance Awards The following is a summary of the material terms and conditions with respect to our performance-based awards for certain executive officers and key employees. Equity awards are granted to executive officers and key employees based on a target annual equity value for each executive and key employee, of which approximately two-thirds would be delivered in the form of PSUs and approximately one-third in the form of an annual award of SARs. Each currently-outstanding PSU represents the right to receive one Liberty Latin America Class A or Class C common share, as applicable, subject to performance and vesting. PSUs are granted to executive officers and key employees, generally annually, pursuant to performance plans that are based on the achievement of specified CAGRs of our Adjusted OIBDA (as defined in note 21) during a 2 -year period ( Adjusted OIBDA CAGR ). The performance targets will be adjusted for events such as acquisitions, dispositions and changes in foreign currency exchange rates that affect comparability. These PSUs require delivery of a specified Adjusted OIBDA during the applicable two-year performance periods, with adjustments to the payout should the Adjusted OIBDA exceed or fail to meet the target, as applicable. A performance range of 50 % to 125 % or more of the applicable target Adjusted OIBDA CAGR generally results in award recipients earning 50 % to 150 % of their target PSU subject to reduction or forfeiture based on individual performance. The earned PSUs generally vest 50 % on each of April 1, and October 1, of the year following the end of the performance period. Liability-Based Awards Our share-based compensation expense during 2020 includes estimated bonus-related expenses for the 2020 year 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 are being accounted for using the liability-based method. Modification Prior to the Split-Off, certain of our employees received share-based incentive awards in shares of Liberty Global that had a legal life of seven years . During 2020, the expiration period for certain of these awards related to Liberty Global shares held by our employees was extended from 7 years to 10 years, which resulted in incremental expense of $ 7 million. II-130 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Share-based Incentive Awards The following tables summarize the share-based incentive award activity during 2020 with respect to Liberty Latin America awards held by our employees and our board of directors ( Directors ). Number of shares Weighted average base price Weighted average remaining contractual term Aggregate intrinsic value SARs – Class A shares in years in millions Outstanding at January 1, 2020 3,427,663 $ 21.80 Granted 2,110,072 $ 10.42 Forfeited ( 280,226 ) $ 22.38 Exercised ( 1,443 ) $ 18.63 Outstanding at December 31, 2020 5,256,066 $ 17.20 5.0 $ 1.5 Exercisable at December 31, 2020 1,986,355 $ 22.68 3.9 $ — Number of shares Weighted average base price Weighted average remaining contractual term Aggregate intrinsic value SARs – Class C shares in years in millions Outstanding at January 1, 2020 6,904,412 $ 21.87 Granted 4,244,786 $ 10.47 Forfeited ( 638,593 ) $ 22.76 Exercised ( 873 ) $ 18.24 Outstanding at December 31, 2020 10,509,732 $ 17.22 5.0 $ 2.5 Exercisable at December 31, 2020 3,970,651 $ 22.70 3.9 $ — Number of shares Weighted average grant-date fair value per share Weighted average remaining contractual term RSUs – Class A shares in years Outstanding at January 1, 2020 245,826 $ 20.23 Granted 666,067 $ 10.42 Forfeited ( 27,241 ) $ 15.75 Released from restrictions ( 429,400 ) $ 13.14 Outstanding at December 31, 2020 455,252 $ 12.83 1.8 II-131 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Number of shares Weighted average grant-date fair value per share Weighted average remaining contractual term RSUs – Class C shares in years Outstanding at January 1, 2020 491,325 $ 20.25 Granted 1,825,771 $ 10.00 Forfeited ( 51,914 ) $ 15.99 Released from restrictions ( 1,354,931 ) $ 11.56 Outstanding at December 31, 2020 910,251 $ 12.87 1.8 Number of shares Weighted average grant-date fair value per share Weighted average remaining contractual term PSUs – Class A shares in years Outstanding at January 1, 2020 678,848 $ 18.08 Granted — $ — Forfeited ( 22,941 ) $ 17.00 Released from restrictions ( 311,479 ) $ 19.39 Outstanding at December 31, 2020 344,428 $ 16.97 0.8 Number of shares Weighted average grant-date fair value per share Weighted average remaining contractual term PSUs – Class C shares in years Outstanding at January 1, 2020 1,357,696 $ 18.19 Granted (a) 30,365 $ — Forfeited ( 56,509 ) $ 19.09 Released from restrictions ( 612,715 ) $ 19.53 Outstanding at December 31, 2020 718,837 $ 16.21 0.8 (a) Due to the dilutive impact of the Rights Offering (as defined and further described in note 19), holders of outstanding Class C PSU awards received additional awards following completion of the Rights Offering. As the number of additional awards issued reflects the dilution impact of the Rights Offering, there is a zero grant-date fair value for these issued awards. II-132 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 (18) Accumulated Other Comprehensive Loss Accumulated other comprehensive loss included in our consolidated balance sheets and statements of equity reflect the aggregate impact of foreign currency translation adjustments and pension-related adjustments and other. The changes in the components of accumulated other comprehensive loss, net of taxes, are summarized as follows: Liberty Latin America shareholders Foreign currency translation adjustments Pension- related adjustments and other Accumulated other comprehensive loss Non-controlling interests Total accumulated other comprehensive loss in millions Balance at January 1, 2018 $ ( 42.4 ) $ ( 21.8 ) $ ( 64.2 ) $ — $ ( 64.2 ) Other comprehensive earnings 5.6 35.1 40.7 ( 1.3 ) 39.4 Impact of the C&W Jamaica NCI Acquisition 7.0 0.2 7.2 ( 7.2 ) — Balance at December 31, 2018 ( 29.8 ) 13.5 ( 16.3 ) ( 8.5 ) ( 24.8 ) Other comprehensive earnings 4.3 ( 2.8 ) 1.5 ( 0.3 ) 1.2 Balance at December 31, 2019 ( 25.5 ) 10.7 ( 14.8 ) ( 8.8 ) ( 23.6 ) Other comprehensive loss ( 117.7 ) 6.9 ( 110.8 ) ( 0.8 ) ( 111.6 ) Balance at December 31, 2020 $ ( 143.2 ) $ 17.6 $ ( 125.6 ) $ ( 9.6 ) $ ( 135.2 ) II-133 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 The components of other comprehensive earnings (loss), net of taxes, are reflected in our consolidated statements of comprehensive loss. The following table summarizes the tax effects related to each component of other comprehensive earnings (loss), net of amounts reclassified to our consolidated statements of operations: Pre-tax amount Tax benefit (expense) Net-of-tax amount in millions Year ended December 31, 2020: Foreign currency translation adjustments $ ( 118.5 ) $ — $ ( 118.5 ) Pension-related adjustments and other 4.9 2.0 6.9 Other comprehensive loss ( 113.6 ) 2.0 ( 111.6 ) Other comprehensive loss attributable to noncontrolling interests (a) 0.8 — 0.8 Other comprehensive loss attributable to Liberty Latin America shareholders $ ( 112.8 ) $ 2.0 $ ( 110.8 ) Year ended December 31, 2019: Foreign currency translation adjustments $ 1.8 $ — $ 1.8 Pension-related adjustments and other ( 1.5 ) 0.9 ( 0.6 ) Other comprehensive earnings 0.3 0.9 1.2 Other comprehensive loss attributable to noncontrolling interests (a) 0.3 — 0.3 Other comprehensive earnings attributable to Liberty Latin America shareholders $ 0.6 $ 0.9 $ 1.5 Year ended December 31, 2018: Foreign currency translation adjustments $ 2.7 $ — $ 2.7 Pension-related adjustments and other 37.9 ( 1.2 ) 36.7 Other comprehensive earnings 40.6 ( 1.2 ) 39.4 Other comprehensive loss attributable to noncontrolling interests (a) 1.3 — 1.3 Other comprehensive earnings attributable to Liberty Latin America shareholders $ 41.9 $ ( 1.2 ) $ 40.7 (a) Amounts represent the noncontrolling interest owners’ share of our foreign currency translation adjustments and pension-related adjustments. II-134 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 (19) Equity Share Capital A summary of the changes in our share capital during 2020, 2019 and 2018 is set forth in the table below: Class A Class B Class C Balance at January 1, 2018 48,428,841 1,940,193 120,843,539 LPR NCI Acquisition — — 9,500,000 Issued in connection with share-based compensation plans 68,718 — 153,629 Issued in connection with 401(k) company match — — 28,990 Conversion of Class B to Class A 4,244 ( 4,244 ) — Balance at December 31, 2018 48,501,803 1,935,949 130,526,158 Balance at January 1, 2019 48,501,803 1,935,949 130,526,158 Issued in connection with share-based compensation plans 292,486 — 596,153 Issued in connection with 401(k) company match — — 59,060 Conversion of Class B to Class A 1,263 ( 1,263 ) — Balance at December 31, 2019 48,795,552 1,934,686 131,181,371 Balance at January 1, 2020 48,795,552 1,934,686 131,181,371 Issued in connection with the Rights Offering — — 49,049,074 Repurchase of Liberty Latin America common shares ( 293,816 ) — ( 673,158 ) Issued in connection with share-based compensation plans 505,549 — 1,460,334 Issued in connection with 401(k) company match — — 96,145 Conversion of Class B to Class A 2,300 ( 2,300 ) — Balance at December 31, 2020 49,009,585 1,932,386 181,113,766 Voting rights. Holders of Class A common shares and Class B common shares vote together as a single class on all matters submitted to a vote of Liberty Latin America’s shareholders. The holders of Class A common shares have one vote per share; the holders of Class B common shares have 10 votes per share; and the holders of Class C common shares generally have no votes per share. In the event a right to vote is required under applicable law, holders of Class C common shares will vote as a single class with the holders of Class A common shares and Class B common shares and will be entitled to 1/100 of a vote on such matter for each Class C common share. Each Class B common share is convertible at the option of the holder for one Class A common share. Share Repurchase Program On March 16, 2020, our Directors approved a share repurchase program (the Share Repurchase Program ), which authorizes us to repurchase from time to time up to $ 100 million of our Class A common shares and/or Class C common shares through March 2022, subject to certain limitations and conditions. The Share Repurchase Program does not obligate us to repurchase any of our Class A or C common shares. Under the Share Repurchase Program, we may repurchase our common shares from time to time in open market purchases at prevailing market prices, in privately negotiated transactions, in block trades, derivative transactions and/or through other legally permissible means. At December 31, 2020, the remaining amount authorized for share repurchases was $ 91 million. Rights Offering On August 5, 2020, our Directors authorized the distribution (the Rights Distribution ) of pro rata subscription rights to holders of our Class A, Class B and Class C common shares (the " Class C Rights ") to acquire Class C common shares II-135 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 (" LILAK " or “ Class C ”), in a rights offering (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 our recently announced Telefónica-Costa Rica Acquisition, and for other general corporate purposes. Capped Calls In connection with the issuance of our Convertible Notes, Liberty Latin America entered into capped call option contracts (the Capped Calls ). The Capped Calls are used as an economic hedge to reduce or offset potential dilution to our Class C common shares upon any conversion of the Convertible Notes and/or offset any cash payments we are required to make in excess of the principal amount of such converted notes, as the case may be, with such reduction and/or offset subject to a cap. Collectively, the Capped Calls cover the number of the Company’s Class C common shares underlying the Convertible Notes, or 19.5 million of Class C common shares, as adjusted for the impact of the Rights Offering as described below. The Capped Calls had an initial strike price of $ 22.2337 per Class C common share and an initial cap price of $ 31.7625 per Class C common share, subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Convertible Notes, and expire on July 15, 2024. Following the completion of the Rights Offering, the strike price of the Capped Calls is $ 20.65 per Class C common share and the cap price per Class C common share ranges from $ 28.00 to $ 29.50 . The Capped Calls are not considered a derivative instrument under ASC 815, Derivatives and Hedging , as the contracts are indexed to our Class C common shares and therefore classified within shareholders’ equity. The aggregate premiums paid for the Capped Calls of $ 46 million are included in additional paid-in capital in our consolidated statement of equity for the three and nine months ended September 30, 2019. Conversion Option – Convertible Notes In connection with the issuance of the Convertible Notes, we recorded $ 77 million in additional paid-in capital in our consolidated statement of equity for the Conversion Option, which represents the fair value of the Conversion Option at issuance less $ 1 million of allocated transaction fees and costs. For additional information, see notes 6 and 10. Noncontrolling interests During 2019, we increased our ownership interest in UTS from 87.5 % to 100.0 % (the UTS NCI Acquisition ). We paid $ 5 million in 2019 and $ 6 million in 2020, respectively, related to the UTS NCI Acquisition. During 2018, we increased our ownership in C&W Jamaica from 82.0 % to 92.3 % by acquiring 1,727,047,174 of the issued and outstanding ordinary stock units of C&W Jamaica that we did not already own (the C&W Jamaica NCI Acquisition ) for JMD 1.45 per share or JMD 2,504 million ($ 20 million at the transaction dates) of paid consideration. On October 17, 2018, we acquired the remaining 40.0 % partnership interests in LCPR from Searchlight Capital Partners, L.P. ( Searchlight ) in exchange for 9,500,000 unregistered Liberty Latin America Class C common shares (the LPR NCI Acquisition ). In connection with the LPR NCI Acquisition (i) we entered into a registration rights agreement with Searchlight related to the Class C common shares and (ii) Searchlight is subject to certain restrictions regarding the transfer of the shares issued in the transaction for a period of up to two years, which expired in October 2020. Liberty Puerto Rico Equity Commitment In December 2017, and in connection with challenging circumstances that Liberty Puerto Rico experienced as a result of the damage caused by the 2017 Hurricanes, the LPR Credit Agreements were amended to provide for, among other things, a commitment from Liberty Puerto Rico’s shareholders through December 31, 2018 to fund potential liquidity shortfalls. During 2018, prior to the LPR NCI Acquisition, capital contributions aggregating $ 45 million were provided to Liberty Puerto Rico II-136 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 consisting of $ 27 million from us and $ 18 million from investment funds affiliated with Searchlight. The capital contributions from Searchlight are included in our consolidated statement of equity as an increase to noncontrolling interests. (20) Commitments and Contingencies Commitments In the normal course of business, we have entered into agreements that commit our company to make cash payments in future periods with respect to programming contracts, network and connectivity commitments, purchases of customer premises and other equipment and services, and other items. The following table sets forth the U.S. dollar equivalents of such commitments as of December 31, 2020: Payments due during: 2021 2022 2023 2024 2025 Thereafter Total in millions 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) $ 305.0 $ 111.8 $ 65.8 $ 53.8 $ 8.2 $ 17.9 $ 562.5 (a) The commitments included in this table do not reflect any liabilities that are included in our December 31, 2020 consolidated balance sheet. Programming commitments consist of obligations associated with certain contracts including channels, programming, and sports rights contracts with a wide range of providers that are enforceable and legally binding on us, as we have agreed to pay minimum fees without regard to (i) the actual number of subscribers to the programming services, (ii) whether we terminate service to a portion of our subscribers or dispose of a portion of our distribution systems or (iii) whether we discontinue our premium sports services. In addition, programming commitments do not include increases in future periods associated with contractual inflation or other price adjustments that are not fixed. Accordingly, the amounts reflected in the above table with respect to these contracts are significantly less than the amounts we expect to pay in these periods under these contracts. Historically, payments to programming vendors have represented a significant portion of our operating costs, and we expect that this will continue to be the case in future periods. Network and connectivity commitments include (i) domestic network service agreements with certain other telecommunications companies and (ii) VTR’s mobile virtual network operator ( MVNO ) agreement. The amounts reflected in the above table with respect to our MVNO commitment represent fixed minimum amounts payable under this agreement and, therefore, may be significantly less than the actual amounts VTR ultimately pays in these periods. Purchase commitments include unconditional and legally-binding obligations related to (i) the purchase of customer premises and other equipment and (ii) certain service-related commitments, including call center, information technology and maintenance services. 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. For information regarding our derivative instruments, including the net cash paid or received in connection with these instruments during 2020, 2019 and 2018, see note 5. For information concerning our defined benefit plans, see note 16. Guarantees and Other Credit Enhancements In the ordinary course of business, we may provide (i) indemnifications to our lenders, our vendors and certain other parties and (ii) performance and/or financial guarantees to local municipalities, our customers and vendors. 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. II-137 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Legal and Regulatory Proceedings and Other Contingencies VTR Class Action. On August 25, 2020, VTR was notified that the Chilean National Consumer Authority (“ SERNAC ”, the Spanish acronym for Servicio Nacional del Consumidor) had filed a class action complaint against VTR in the 14th Civil Court of Santiago. The complaint relates to consumer complaints regarding VTR’s broadband service and capacity during the pandemic and raises claims regarding, among other things, VTR’s disclosure of its broadband speeds and aggregate capacity availability and VTR’s response to address the causes of service instability during the pandemic. VTR was also notified in August about two additional class action complaints filed by two Chilean consumer associations (ODECU and AGRECU) making similar claims and allegations. The class action complaint of ODECU was filed in the 21st Civil Court of Santiago, and the class action complaint of AGRECU was filed in the 26th Civil Court of Santiago. The complaint of SERNAC and ODECU seeks (i) the Court declare that VTR has infringed the rules of the Consumer Protection Law; (ii) the responsibility of VTR for such infractions and, if so, establish the corresponding fines; and (iii) compensatory damages. In the case of AGRECU, the complaint only seeks compensatory damages. On October 22, 2020, VTR was notified of a fourth class action complaint filed by Conadecus in the 16 th Civil Court of Santiago alleging that VTR did not adhere to certain call center, technical visit and service level requirements under applicable law. We believe that the allegations contained in the complaints are without merit, in particular as it relates to VTR’s service and response during the pandemic and intend to defend the complaints vigorously. We cannot predict at this point the length of time that these actions will be ongoing. Additionally, a liability, if any, or a reasonable range of loss is not currently determinable based upon the current facts and circumstances of these claims. Regulatory Issues. Video distribution, broadband internet, fixed-line telephony and mobile businesses are regulated in each of the countries in which we operate. The scope of regulation varies from country to country. Adverse regulatory developments could subject our businesses to a number of risks. Regulation, including conditions imposed on us by competition or other authorities as a requirement to close acquisitions or dispositions, could limit growth, revenue and the number and types of services offered and could lead to increased operating costs and property and equipment additions. In addition, regulation may restrict our operations and subject them to further competitive pressure, including pricing restrictions, interconnect and other access obligations, and restrictions or controls on content, including content provided by third parties. Failure to comply with current or future regulation could expose our businesses to various penalties. In addition to the foregoing items, we have contingent liabilities related to matters arising in the ordinary course of business, including (i) legal proceedings, (ii) issues involving wage, property, withholding and other tax issues and (iii) disputes over interconnection, programming and copyright fees. While we generally expect that the amounts required to satisfy these contingencies will not materially differ from any estimated amounts we have accrued, no assurance can be given that the resolution of one or more of these contingencies will not result in a material impact on our results of operations, cash flows or financial position in any given period. Due, in general, to the complexity of the issues involved and, in certain cases, the lack of a clear basis for predicting outcomes, we cannot provide a meaningful range of potential losses or cash outflows that might result from any unfavorable outcomes. (21) Segment Reporting Our reportable segments derive their revenue primarily from residential and B2B services, including video, broadband internet and fixed-line telephony services and mobile services. Our corporate category includes our corporate operations. We generally identify our reportable segments as those operating segments that represent 10% or more of our revenue, Adjusted OIBDA (as defined below) or total assets. 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 President and 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; and • Liberty Puerto Rico. II-138 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 For each of the respective years in the tables set forth below, the amounts presented exclude the pre-acquisition revenue, Adjusted OIBDA, property and equipment additions and long-lived assets of Cabletica, UTS and the AT&T Acquired Entities, which were acquired on October 1, 2018, March 31, 2019 and October 31, 2020, respectively. For more information regarding our acquisitions, see note 4. Performance Measures of our Reportable Segments We evaluate performance and make decisions about allocating resources to our reportable segments based on financial measures such as revenue and Adjusted OIBDA. In addition, we review non-financial measures such as subscriber growth. 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. A reconciliation of total Adjusted OIBDA to operating income (loss) and to loss before income taxes is presented below. The amounts presented below represent 100 % of the revenue and Adjusted OIBDA of each of our reportable segments and our corporate operations. As further described in note 1, as we have the ability to control Cabletica and certain subsidiaries of C&W that are not wholly owned, we include 100 % of the revenue and expenses of these entities in our consolidated statements of operations despite the fact that third parties own significant interests in these entities. On October 17, 2018, we acquired the remaining 40.0 % interest in LCPR that we did not already own. 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. Revenue Year ended December 31, 2020 2019 2018 in millions C&W Caribbean and Networks $ 1,706.8 $ 1,812.8 $ 1,738.7 C&W Panama 500.2 582.7 600.9 VTR/Cabletica 949.0 1,073.8 1,043.7 Liberty Puerto Rico 624.1 412.1 335.6 Corporate 2.7 — — Intersegment eliminations ( 18.2 ) ( 14.4 ) ( 13.2 ) Total $ 3,764.6 $ 3,867.0 $ 3,705.7 II-139 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Adjusted OIBDA Year ended December 31, 2020 2019 2018 in millions C&W Caribbean and Networks $ 713.2 $ 732.1 $ 664.3 C&W Panama 177.2 227.6 251.4 VTR/Cabletica 361.9 433.6 421.1 Liberty Puerto Rico 276.9 203.2 195.8 Corporate ( 44.5 ) ( 55.1 ) ( 46.1 ) Total $ 1,484.7 $ 1,541.4 $ 1,486.5 The following table provides a reconciliation of total Adjusted OIBDA to operating income (loss) and to loss before income taxes: Year ended December 31, 2020 2019 2018 in millions Total Adjusted OIBDA $ 1,484.7 $ 1,541.4 $ 1,486.5 Share-based compensation expense ( 97.5 ) ( 57.5 ) ( 39.8 ) Depreciation and amortization ( 914.6 ) ( 871.0 ) ( 829.8 ) Impairment, restructuring and other operating items, net ( 380.9 ) ( 259.1 ) ( 640.5 ) Operating income (loss) 91.7 353.8 ( 23.6 ) Interest expense ( 533.4 ) ( 499.2 ) ( 443.7 ) Realized and unrealized gains (losses) on derivative instruments, net ( 352.7 ) ( 17.2 ) 94.8 Foreign currency transaction gains (losses), net 1.2 ( 112.5 ) ( 180.0 ) Losses on debt modification and extinguishment, net ( 45.1 ) ( 19.8 ) ( 32.1 ) Other income (expense), net 0.1 14.3 ( 0.1 ) Loss before income taxes $ ( 838.2 ) $ ( 280.6 ) $ ( 584.7 ) II-140 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Property and Equipment Additions of our Reportable Segments The property and equipment additions of our reportable segments and corporate operations (including capital additions financed under vendor financing or finance lease arrangements) are presented below and reconciled to the capital expenditure amounts included in our consolidated statements of cash flows. For additional information concerning capital additions financed under vendor financing, see note 9. Year ended December 31, 2020 2019 2018 in millions C&W Caribbean and Networks $ 246.8 $ 305.8 $ 302.0 C&W Panama 70.4 89.7 76.7 VTR/Cabletica 196.4 222.7 214.7 Liberty Puerto Rico 97.3 88.0 161.9 Corporate 20.2 15.3 16.1 Total property and equipment additions 631.1 721.5 771.4 Assets acquired under capital-related vendor financing arrangements ( 99.1 ) ( 96.1 ) ( 53.9 ) Acquisition of intangible assets (a) 7.8 — — Assets acquired under finance leases — ( 0.2 ) ( 3.9 ) Changes in current liabilities related to capital expenditures 26.0 ( 36.1 ) 62.8 Total capital expenditures $ 565.8 $ 589.1 $ 776.4 (a) Represents cash paid for the acquisition of spectrum license intangible assets. Balance Sheet Data of our Reportable Segments We do not present the balance sheet data of our reportable segments, as this information is not a primary measure used by our chief operating decision maker to evaluate segment operating performance, determine the allocation of resources to segments, or assess the effectiveness of our management for purposes of annual or other incentive compensation plans. Revenue by Major Category Our revenue by major category for our reportable segments, set forth in the tables below, includes the following categories: • residential fixed subscription and residential mobile services revenue include amounts received from subscribers for ongoing fixed and airtime services, respectively; • residential fixed non-subscription revenue primarily includes interconnect and advertising revenue; • B2B service revenue primarily includes broadband internet, video, fixed-line telephony, mobile and managed services (including equipment installation contracts) offered to small (including small or home office), medium and large enterprises and, on a wholesale basis, other telecommunication operators; and • B2B subsea network revenue includes long-term capacity contracts with customers where the customer either pays a fee over time or prepays for the capacity upfront and pays a portion related to operating and maintenance of the network over time. II-141 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Year ended December 31, 2020 C&W Caribbean and Networks C&W Panama VTR/Cabletica Liberty Puerto Rico Corporate (a) Intersegment Eliminations Total in millions Residential revenue: Residential fixed revenue: Subscription revenue: Video $ 142.4 $ 27.8 $ 370.6 $ 147.2 $ — $ — $ 688.0 Broadband internet 250.0 39.0 382.7 204.7 — — 876.4 Fixed-line telephony 74.6 18.8 77.2 25.5 — — 196.1 Total subscription revenue 467.0 85.6 830.5 377.4 — — 1,760.5 Non-subscription revenue 42.2 11.8 24.3 17.7 — — 96.0 Total residential fixed revenue 509.2 97.4 854.8 395.1 — — 1,856.5 Residential mobile revenue: Service revenue 294.1 160.1 55.7 82.9 — — 592.8 Interconnect, inbound roaming, equipment sales and other (b) 44.4 41.0 8.2 50.6 2.7 — 146.9 Total residential mobile revenue 338.5 201.1 63.9 133.5 2.7 — 739.7 Total residential revenue 847.7 298.5 918.7 528.6 2.7 — 2,596.2 B2B revenue: Service revenue (c) 600.4 201.7 30.3 89.8 — ( 4.1 ) 918.1 Subsea network revenue 258.7 — — — — ( 14.1 ) 244.6 Total B2B revenue 859.1 201.7 30.3 89.8 — ( 18.2 ) 1,162.7 Other revenue (d) — — — 5.7 — — 5.7 Total $ 1,706.8 $ 500.2 $ 949.0 $ 624.1 $ 2.7 $ ( 18.2 ) $ 3,764.6 (a) Amount relates to services we now provide, following the AT&T Acquisition, for mobile handset insurance. (b) During 2020, we changed our presentation of inbound roaming revenue whereby we no longer include it in “mobile services revenue” and now present it within “mobile interconnect, inbound roaming, equipment sales and other” to better align with how management evaluates the business. The total amount includes $ 27 million of inbound roaming revenue. The total amount also includes $ 68 million of revenue from sales of mobile handsets and other devices. (c) The total amount includes $ 18 million of revenue from sales of mobiles handsets and other devices to B2B mobile customers. (d) Amount relates to revenue received from the FCC related to Liberty Mobile following the closing of the AT&T Acquisition. II-142 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Year ended December 31, 2019 C&W Caribbean and Networks C&W Panama VTR/Cabletica Liberty Puerto Rico Intersegment Eliminations Total in millions Residential revenue: Residential fixed revenue: Subscription revenue: Video $ 150.1 $ 31.0 $ 422.1 $ 140.9 $ — $ 744.1 Broadband internet 225.1 34.9 412.0 175.0 — 847.0 Fixed-line telephony 79.5 22.4 100.7 23.4 — 226.0 Total subscription revenue 454.7 88.3 934.8 339.3 — 1,817.1 Non-subscription revenue 47.5 14.5 34.3 21.7 — 118.0 Total residential fixed revenue 502.2 102.8 969.1 361.0 — 1,935.1 Residential mobile revenue: Service revenue 339.1 183.8 62.7 — — 585.6 Interconnect, inbound roaming, equipment sales and other (a) 65.3 56.8 12.0 — — 134.1 Total residential mobile revenue 404.4 240.6 74.7 — — 719.7 Total residential revenue 906.6 343.4 1,043.8 361.0 — 2,654.8 B2B revenue: Service revenue (b) 659.3 239.3 30.0 51.1 ( 4.2 ) 975.5 Subsea network revenue 246.9 — — — ( 10.2 ) 236.7 Total B2B revenue 906.2 239.3 30.0 51.1 ( 14.4 ) 1,212.2 Total $ 1,812.8 ` $ 582.7 $ 1,073.8 $ 412.1 $ ( 14.4 ) $ 3,867.0 (a) During 2020, we reclassified $ 37 million of inbound roaming revenue from “mobile services revenue” to “interconnect, inbound roaming, equipment sales and other.” The total amount also includes $ 43 million of revenue from sales of mobile handsets and other devices. (b) The total amount includes $ 26 million of revenue from sales of mobiles handsets and other devices. II-143 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Year ended December 31, 2018 C&W Caribbean and Networks C&W Panama VTR/Cabletica Liberty Puerto Rico Intersegment Eliminations Total in millions Residential revenue: Residential fixed revenue: Subscription revenue: Video $ 143.0 $ 29.0 $ 401.4 $ 118.9 $ — $ 692.3 Broadband internet 194.3 31.0 386.5 132.5 — 744.3 Fixed-line telephony 76.6 24.4 123.8 18.6 — 243.4 Total subscription revenue 413.9 84.4 911.7 270.0 — 1,680.0 Non-subscription revenue 50.0 18.3 30.2 17.4 — 115.9 Total residential fixed revenue 463.9 102.7 941.9 287.4 — 1,795.9 Residential mobile revenue: Service revenue 344.5 211.3 62.9 — — 618.7 Interconnect, inbound roaming, equipment sales and other (a) 71.8 56.2 13.2 — — 141.2 Total residential mobile revenue 416.3 267.5 76.1 — — 759.9 Total residential revenue 880.2 370.2 1,018.0 287.4 — 2,555.8 B2B revenue: Service revenue (b) 610.5 230.7 25.7 37.1 ( 5.4 ) 898.6 Subsea network revenue 248.0 — — — ( 7.8 ) 240.2 Total B2B revenue 858.5 230.7 25.7 37.1 ( 13.2 ) 1,138.8 Other revenue (c) — — — 11.1 — 11.1 Total $ 1,738.7 $ 600.9 $ 1,043.7 $ 335.6 $ ( 13.2 ) $ 3,705.7 (a) During 2020, we reclassified $ 38 million of inbound roaming revenue from “mobile services revenue” to “interconnect, inbound roaming, equipment sales and other.” The total amount also includes $ 47 million of revenue from sales of mobile handsets and other devices. (b) The total amount includes $ 23 million of revenue from sales of mobiles handsets and other devices. (c) Represents funds received by Liberty Puerto Rico from the FCC, which were granted to help restore and improve coverage and service quality from damages caused by the 2017 Hurricanes. II-144 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 Geographic Markets The revenue from third-party customers for our geographic markets is set forth in the table below. Year ended December 31, 2020 2019 2018 in millions Panama $ 497.8 $ 580.4 $ 597.4 Networks & LatAm (a) 353.6 351.0 356.2 Jamaica 375.5 383.3 361.6 The Bahamas 181.1 207.3 229.2 Barbados 139.2 150.2 151.3 Trinidad and Tobago 160.6 161.3 157.4 Curacao 139.7 120.0 22.8 Chile 809.0 941.1 1,011.1 Costa Rica 139.9 132.7 32.6 Puerto Rico 611.0 410.5 333.8 Other (b) 357.2 429.2 452.3 Total $ 3,764.6 $ 3,867.0 $ 3,705.7 (a) The amounts represent managed services and wholesale revenue from various jurisdictions across Latin America and the Caribbean, primarily related to the sale and lease of telecommunications capacity on C&W’s subsea and terrestrial fiber optic cable networks. (b) The amounts primarily relate to a number of countries in which we have less significant operations, all of which are located in the Caribbean, and to a lesser extent, in Latin America. II-145 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 The long-lived assets of our geographic markets are set forth below: December 31, 2020 2019 in millions Panama $ 354.8 $ 391.6 Networks & LatAm (a) 721.7 751.0 Jamaica 360.5 374.6 The Bahamas 342.4 359.4 Barbados 185.2 193.7 Trinidad and Tobago 214.5 216.0 Curacao 161.5 169.6 Chile 755.0 710.8 Costa Rica 67.4 67.6 Puerto Rico 1,217.9 524.2 Other (b) 530.5 542.6 Total $ 4,911.4 $ 4,301.1 (a) Represents long-lived assets related to C&W’s subsea and terrestrial fiber optic cable networks that connect over 40 markets in Latin America and the Caribbean. (b) The amounts primarily include long-lived assets of C&W’s other operations, which are primarily located in the Caribbean, and to a lesser extent, in Latin America. (22) Quarterly Financial Information (Unaudited) 2020 1 st quarter 2 nd quarter 3 rd quarter 4 th quarter in millions, except per share amounts Revenue (a) $ 931.0 $ 848.9 $ 887.5 $ 1,097.2 Operating income (loss) $ 107.8 $ ( 206.0 ) $ 86.6 $ 103.3 Net loss attributable to Liberty Latin America shareholders $ ( 180.7 ) $ ( 393.0 ) $ ( 84.6 ) $ ( 28.9 ) Basic and diluted net loss per share attributable to Liberty Latin America shareholders (b) $ ( 0.98 ) $ ( 2.12 ) $ ( 0.46 ) $ ( 0.12 ) 2019 1 st quarter 2 nd quarter 3 rd quarter 4 th quarter in millions, except per share amounts Revenue (c) $ 942.7 $ 982.9 $ 966.8 $ 974.6 Operating income (loss) $ 113.3 $ 143.5 $ ( 69.7 ) $ 166.7 Net earnings (loss) attributable to Liberty Latin America shareholders $ ( 41.7 ) $ ( 116.0 ) $ 35.3 $ 42.3 Basic and diluted net earnings (loss) per share attributable to Liberty Latin America shareholders (d) $ ( 0.23 ) $ ( 0.63 ) $ 0.19 $ 0.23 (a) As discussed in note 4, we completed the AT&T Acquisition in October 2020. (b) The basic net loss per share attributable to Liberty Latin America shareholders amounts are calculated based on a weighted average number of Liberty Latin America Shares outstanding of 184,950,252 , 185,424,779 , 185,380,797 and 232,014,448 , respectively. II-146 Liberty Latin America Ltd. Notes to Consolidated Financial Statements – (Continued) December 31, 2020, 2019 and 2018 (c) As discussed in note 4, we completed the UTS Acquisition in March 2019. (d) The basic net earnings (loss) per share attributable to Liberty Latin America shareholders amounts are calculated based on a weighted average number of Liberty Latin America Shares outstanding of 183,891,922 , 184,366,504 , 184,452,387 and 184,755,090 , respectively. The dilutive net earnings per share attributable to Liberty Latin America shareholders amounts for the third and fourth quarters of 2019 are calculated based on a weighted average number of Liberty Latin America Shares outstanding of 184,807,225 and 184,820,386 , respectively. II-147 PART III The following required information is incorporated by reference to our definitive proxy statement for our 2021 Annual General Meeting of Shareholders, which we intend to hold during the second quarter of 2021. Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Item 11. EXECUTIVE COMPENSATION Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES We intend to file our definitive proxy statement for our 2021 Annual General Meeting of Shareholders with the Securities and Exchange Commission on or before April 30, 2021. III-1 PART IV Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) (1) FINANCIAL STATEMENTS The financial statements required under this Item begin on page II-57 of this Annual Report on Form 10-K. (a) (2) FINANCIAL STATEMENT SCHEDULES The financial statement schedule required under this Item is as follows: Schedule I - Condensed Financial Information of Registrant (Parent Company Information): Liberty Latin America Ltd. Condensed Balance Sheets as of December 31, 2020 and 2019 (Parent Company Only) IV- 7 Liberty Latin America Ltd. Condensed Statements of Operations for the years ended December 31, 2020, 2019 and 2018 (Parent Company Only) IV- 8 Liberty Latin America Ltd. Condensed Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018 (Parent Company Only) IV- 9 (a) (3) EXHIBITS Listed below are the exhibits filed as part of this Annual Report on Form 10-K (according to the number assigned to them in Item 601 of Regulation S-K): 2.1 Stock Purchase Agreement, dated October 9, 2019, by and among AT&T Corp, AT&T International Holdings, LLC, SBC Telecom, Inc., Leo Cable LP and, for the limited purpose specified therein, Liberty Latin America (incorporated by reference to Exhibit 99.1 to Liberty Latin America’s Current Report on Form 8-K filed on October 15, 2019 (File No. 001-38335)).*** 3.1 Memorandum of Association of Liberty Latin America (incorporated by reference to Exhibit 3.1 to Liberty Latin America’s Registration Statement on Form S-1 filed on November 16, 2017 (File No. 333-221608) (the S-1 Registration Statement)). 3.2 Memorandum of Increase of Share Capital of Liberty Latin America (incorporated by reference to Exhibit 3.1 to Liberty Latin America’s Current Report on Form 8-K filed on January 5, 2018 (File No. 001-38335) (the January 2018 8-K)). 3.3 Bye-laws of Liberty Latin America (incorporated by reference to Exhibit 3.2 to the January 2018 8-K). 4.1 Specimen Certificate for shares of Class A common shares, par value $.01 per share, of Liberty Latin America (incorporated by reference to Exhibit 4.1 to the S-1 Registration Statement). 4.2 Specimen Certificate for shares of Class B common shares, par value $.01 per share, of Liberty Latin America (incorporated by reference to Exhibit 4.2 to the S-1 Registration Statement). 4.3 Specimen Certificate for shares of Class C common shares, par value $.01 per share, of Liberty Latin America (incorporated by reference to Exhibit 4.3 to the S-1 Registration Statement). 4.4 Indenture dated January 24, 2014, between VTR Finance B.V. (VTR Finance), The Bank of New York Mellon, London Branch, as Trustee and Security Agent, and The Bank of New York Mellon as Paying Agent, Registrar and Transfer Agent, relating to VTR Finance’s 6.875% senior secured notes due 2024 (incorporated by reference to Exhibit 4.1 to Liberty Global’s Current Report on Form 8-K filed January 24, 2014 (File No. 001-35961)). 4.5 Registration Rights Agreement dated October 17, 2018, by and between Liberty Latin America, SCPV LEO,L.P., SC LEO, L.P., SC AIV LEO, L.P., Searchlight/SIP Holdco SPV II (TRI), L.P. and Searchlight LEO Co-Invest Partners, LP (incorporated by reference to Exhibit 4.8 to Liberty Latin America’s Annual Report on Form 10-K for the year ended December 31, 2018 filed on February 21, 2019 (File No. 001-38335)). 4.6 Indenture, dated June 28, 2019, between Liberty Latin America and The Bank of New York Mellon relating to Liberty Latin America’s 2.00% Convertible Senior Notes due 2024 (incorporated by reference to Exhibit 4.1 to Liberty Latin America’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed on August 6, 2019 (File No. 001-38335) (the August 2019 10-Q)). IV-1 4.7 Indenture, dated October 25, 2019, between LCPR Senior Secured Financing Designated Activity Company, as issuer, LCPR Loan Financing LLC, as guarantor, BNY Mellon Corporate Trustee Services Limited, as trustee and The Bank of Nova Scotia, as security trustee (incorporated by reference to Exhibit 4.7 to Liberty Latin America’s Annual Report on Form 10-K for the year ended December 31, 2019 filed on February 19, 2020 (File No. 001-38335) (the 2019 10-K)).*** 4.8 Indenture, dated July 1, 2020, by and between VTR Finance N.V. (VTR Finance) and BNY Mellon Corporate Trustee Services Limited, as Trustee, The Bank of New York Mellon, London Branch, as Security Agent, and The Bank of New York Mellon as Paying Agent, Registrar and Transfer Agent, relating to VTR Finance’s 6.375% senior notes due 2028 (incorporated by reference to Exhibit 4.1 to Liberty Latin America’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 filed on August 5, 2020 (File No. 001-38335) (the August 2020 10-Q)). 4.9 Indenture, dated July 1, 2020, between VTR Comunicaciones SpA (VTR) and The Bank of New York Mellon, London Branch, as Trustee, and The Bank of New York Mellon as Paying Agent, Registrar and Transfer Agent, relating to VTR’s 5.125% senior secured notes due 2028 (incorporated by reference to Exhibit 4.2 to the August 2020 10-Q). 4.10 Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.8 to the 2019 10-K). The Registrant undertakes to furnish to the Securities and Exchange Commission, upon request, a copy of all instruments with respect to long-term debt not filed herewith. 10.1 Additional Facility Joinder Agreement dated July 24, 2017 and entered into between, among others, Sable, Coral-US Co-Borrower LLC and The Bank of Nova Scotia, relating to the Credit Agreement dated May 16, 2016 as amended and restated on May 26, 2017 (incorporated by reference to Exhibit 4.1 to Liberty Global’s Current Report on Form 8-K filed July 28, 2017 (File No. 001-35961)). 10.2 Additional Facility Joinder Agreement dated February 7, 2018 and entered into between, among others, Sable, Coral-US Co-Borrower LLC and The Bank of Nova Scotia (incorporated by reference to Exhibit 4.1 to Liberty Latin America’s Current Report on Form 8-K filed on February 12, 2018 (File. No. 001-38335)). 10.3 Tax Sharing Agreement, dated as of December 29, 2017, between Liberty Global and Liberty Latin America (incorporated by reference to Exhibit 10.1 to the January 2018 8-K). 10.4 Sublease Agreement, dated as of December 29, 2017, between Liberty Global, Inc. and LiLAC Communications Inc. (incorporated by reference to Exhibit 10.3 to the January 2018 8-K). 10.5 Facilities Sharing Agreement, dated as of December 29, 2017, between Liberty Global, Inc. and LiLAC Communications Inc. (incorporated by reference to Exhibit 10.4 to the January 2018 8-K). 10.6 Employment Agreement, dated as of November 1, 2017, by and among Liberty Latin America, LiLAC Communications Inc. and Balan Nair (incorporated by reference to Exhibit 10.8 to the S-1 Registration Statement). 10.7 Form of Indemnification Agreement by and between Liberty Latin America and its executive officers/directors (incorporated by reference to Exhibit 10.9 to Amendment No. 1 to Liberty Latin America’s Registration Statement on Form S-1 filed on December 8, 2017 (File No. 333-221608)). 10.8 Liberty Latin America 2018 Incentive Plan (incorporated by reference to Exhibit 99.1 to Liberty Latin America’s Registration Statement on Form S-8 filed on January 11, 2018 (File No. 333-222515) (the S-8 Registration Statement). 10.9 Liberty Latin America 2018 Nonemployee Director Incentive Plan (incorporated by reference to Exhibit 99.2 to the S-8 Registration Statement). 10.10 Liberty Latin America Transitional Share Conversion Plan (incorporated by reference to Exhibit 99.3 to the S-8 Registration Statement). 10.11 Form of Share Appreciation Rights Agreement under the Liberty Latin America 2018 Incentive Plan (incorporated by reference to Exhibit 10.3 to the May 2018 10-Q). 10.12 Deferred Compensation Plan effective May 1, 2018 (adopted effective March 23, 2018) (incorporated by reference to Exhibit 10.4 to the May 2018 10-Q). 10.13 Form of Share Appreciation Rights Agreement between Liberty Latin America and its Chief Executive Officer under the Liberty Latin America 2018 Incentive Plan (incorporated by reference to Exhibit 10.5 to the May 2018 10-Q). 10.14 Personal Usage of Aircraft Policy, adopted April 1, 2018 (incorporated by reference to Exhibit 10.1 to Liberty Latin America’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 filed on August 8, 2018 (File No. 001-38335) (the August 2018 10-Q)). IV-2 10.15 Form of Aircraft Time Sharing Agreement (incorporated by reference to Exhibit 10.2 to the August 2018 10-Q ). 10.16 Form of Restricted Share Units Agreement under the Nonemployee Director Incentive Plan (incorporated by reference to Exhibit 10.3 to the August 2018 10-Q). 10.17 Form of Performance Share Units Agreement between Liberty Latin America and its Chief Executive Officer under the Liberty Latin America 2018 Incentive Plan (incorporated by reference to Exhibit 10.1 to Liberty Latin America’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 filed on November 7, 2018 (File No. 001-38335) (the November 2018 10-Q)). 10.18 Form of Performance Share Units Agreement under the Liberty Latin America 2018 Incentive Plan (incorporated by reference to Exhibit 10.2 to the November 2018 10-Q). 10.19 Form of Restricted Share Units Agreement under the Liberty Latin America 2018 Incentive Plan (incorporated by reference to Exhibit 10.1 to the August 2019 10-Q). 10.20 Form of Employment Agreement, approved as of July 17, 2019, by and among Liberty Latin America, LiLAC Communications Inc. and certain executive officers (incorporated by reference to Exhibit 10.1 to Liberty Latin America’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 filed on November 5, 2019 (File No. 001-38335)). 10.21 Credit Agreement, dated October 25, 2019, between LCPR Loan Financing LLC, as borrower, LCPR Senior Secured Financing Designated Activity Company, as guarantor, The Bank of Nova Scotia, as administrative agent, The Bank o f Nova Scotia, as security agent, and the lenders party ther eto (incorporated by reference to Exhibit 10.21 to the 2019 10-K).*** 10.22 Credit Agreement, dated October 25, 2019, between Liberty Cablevision of Puerto Rico LLC, as borrower, Puerto Rico Cable Acquisition Company, as guarantor, The Bank of Nova Scotia, as administrative agent, The Bank of Nova Scotia, as security agent, and the lenders party thereto (incorporated by reference to Exhibit 10.22 of the 2019 10-K).*** 10.23 Additional Facility Joinder Agreement dated January 24, 2020 and entered into between, among others, Sable International Finance Limited, Coral-US Co-Borrower LLC and The Bank of Nova Scotia (incorporated by reference to Exhibit 10.1 to Liberty Latin America’s Current Report on Form 8-K filed on January 30, 2020 (File No. 001-38335) (the January 2020 8-K)). 10.24 Extension Amendment dated January 24, 2020 and entered into between, among others, Sable International Finance Limited, Coral-US Co-Borrower LLC and The Bank of Nova Scotia (incorporated by reference to Exhibit 10.2 to the January 2020 8-K).*** 10.25 Liberty Latin America Ltd. Nonemployee Director Deferred Compensation Plan (incorporated by reference to Exhibit 10.3 to Liberty Latin America’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 filed on May 5, 2020 (File No. 001-38335)). 21 List of Subsidiaries.* 23.1 Consent of KPMG LLP (U.S.).* 31.1 Certification of President and Chief Executive Officer.* 31.2 Certification of Senior Vice President and Chief Financial Officer (Principal Financial Officer).* 32 Section 1350 Certifications.** 101.INS XBRL Inline Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH XBRL Inline Taxonomy Extension Schema Document.* 101.CAL XBRL Inline Taxonomy Extension Calculation Linkbase Document.* 101.DEF XBRL Inline Taxonomy Extension Definition Linkbase.* 101.LAB XBRL Inline Taxonomy Extension Label Linkbase Document.* 101.PRE XBRL Inline Taxonomy Extension Presentation Linkbase Document.* 104 Cover Page Interactive Data File.* (formatted as Inline XBRL and contained in Exhibit 101) * Filed herewith ** Furnished herewith *** Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Liberty Latin America hereby undertakes to furnish supplemental copies of any of the omitted schedules and exhibits upon request by the IV-3 SEC; provided, however, that the Company may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any schedule or exhibit so furnished. Item 16. FORM 10-K SUMMARY None. IV-4 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. LIBERTY LATIN AMERICA LTD. Dated: March 1, 2021 /s/ JOHN M. WINTER John M. Winter Senior Vice President, Chief Legal Officer and Secretary Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated. Signature Title Date /s/ MICHAEL T. FRIES Executive Chairman of the Board March 1, 2021 Michael T. Fries /s/ BALAN NAIR President, Chief Executive Officer and Director March 1, 2021 Balan Nair (Principal Executive Officer) /s/ ALFONSO DE ANGOITIA NORIEGA Director March 1, 2021 Alfonso de Angoitia Noriega /s/ CHARLES H.R. BRACKEN Director March 1, 2021 Charles H.R. Bracken /s/ MIRANDA CURTIS Director March 1, 2021 Miranda Curtis /s/ PAUL A. GOULD Director March 1, 2021 Paul A. Gould /s/ BRENDAN PADDICK Director March 1, 2021 Brendan Paddick /s/ DANIEL SANCHEZ Director March 1, 2021 Daniel Sanchez /s/ ERIC L. ZINTERHOFER Director March 1, 2021 Eric L. Zinterhofer /s/ CHRISTOPHER NOYES Senior Vice President and Chief Financial Officer March 1, 2021 Christopher Noyes (Principal Financial Officer) /s/ BRIAN ZOOK Chief Accounting Officer March 1, 2021 Brian Zook (Principal Accounting Officer) IV-5 [THIS PAGE INTENTIONALLY LEFT BLANK] IV-6 LIBERTY LATIN AMERICA LTD. SCHEDULE I (Parent Company Information – See Notes to Consolidated Financial Statements) CONDENSED BALANCE SHEETS (Parent Company Only) December 31, 2020 2019 in millions ASSETS Current assets: Cash and cash equivalents $ 193.3 $ 524.6 Other receivables – related-party 122.1 60.7 Prepaid expenses 0.7 — Other current assets 3.4 0.8 Total current assets 319.5 586.1 Long-term notes receivable – related-party 46.7 45.7 Investments in consolidated subsidiaries 2,757.5 3,072.0 Other assets, net 0.2 0.2 Total assets $ 3,123.9 $ 3,704.0 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Related-party loan payable $ 29.8 $ 245.8 Related-party liabilities 25.9 16.0 Accrued liabilities and other 11.5 5.2 Total current liabilities 67.2 267.0 Long-term debt and finance lease obligations, net 342.0 327.2 Total liabilities 409.2 594.2 Shareholders’ equity: Class A, $ 0.01 value; 500,000,000 shares authorized; 49,303,401 and 49,009,585 shares issued and outstanding, respectively, at December 31, 2020 and 48,795,552 shares issued and outstanding at December 31, 2019 0.5 0.5 Class B, $ 0.01 par value; 50,000,000 shares authorized; 1,932,386 shares issued and outstanding at December 31, 2020 and 1,934,686 shares issued and outstanding at December 31, 2019 — — Class C, $ 0.01 par value; 500,000,000 shares authorized; 181,786,924 and 181,113,766 shares issued and outstanding, respectively, at December 31, 2020 and 131,181,371 shares issued and outstanding at December 31, 2019 1.8 1.3 Treasury shares, at cost; 966,974 and nil shares, respectively ( 9.5 ) — Additional paid-in capital 4,982.0 4,569.9 Accumulated deficit ( 2,134.5 ) ( 1,447.1 ) Accumulated other comprehensive loss, net of taxes ( 125.6 ) ( 14.80 ) Total shareholders’ equity 2,714.7 3,109.80 Total liabilities and shareholders’ equity $ 3,123.9 $ 3,704.0 IV-7 LIBERTY LATIN AMERICA LTD. SCHEDULE I (Parent Company Information - See Notes to Consolidated Financial Statements) CONDENSED STATEMENTS OF OPERATIONS (Parent Company Only) Year ended December 31, 2020 2019 2018 in millions Operating costs and expenses: Other operating costs and expenses $ 11.9 $ 11.8 $ 8.7 Depreciation and amortization — — 0.8 Impairment, restructuring and other operating items, net 33.1 23.8 24.5 Operating loss ( 45.0 ) ( 35.6 ) ( 34.0 ) Non-operating income: Interest expense – third-party ( 22.0 ) ( 10.9 ) — Interest income – third-party — 4.6 — Interest income – related-party 3.0 1.0 0.7 Other income (loss), net ( 1.3 ) ( 0.4 ) 1.1 ( 20.3 ) ( 5.7 ) 1.8 Loss before equity in losses of consolidated subsidiaries and income taxes ( 65.3 ) ( 41.3 ) ( 32.2 ) Equity in losses of consolidated subsidiaries, net ( 621.9 ) ( 38.8 ) ( 313.0 ) Net loss $ ( 687.2 ) $ ( 80.1 ) $ ( 345.2 ) IV-8 LIBERTY LATIN AMERICA LTD. SCHEDULE I (Parent Company Information - See Notes to Consolidated Financial Statements) CONDENSED STATEMENTS OF CASH FLOWS (Parent Company Only) Year ended December 31, 2020 2019 2018 in millions Cash flows from operating activities: Net loss $ ( 687.2 ) $ ( 80.1 ) $ ( 345.2 ) Adjustments to reconcile net loss to net cash used by operating activities: Equity in losses of consolidated subsidiaries, net 621.9 38.8 313.0 Share-based compensation expense 2.7 1.3 0.2 Depreciation and amortization — — 0.8 Amortization of debt financing costs 14.8 7.2 — Changes in operating assets and liabilities ( 8.2 ) 38.2 25.1 Net cash provided by (used) by operating activities ( 56.0 ) 5.4 ( 6.1 ) Cash flows from investing activities: Capital expenditures — ( 5.1 ) ( 4.4 ) Investments in and advances to consolidated subsidiaries ( 511.7 ) ( 5.1 ) ( 45.0 ) Net cash used by investing activities ( 511.7 ) ( 10.2 ) ( 49.4 ) Cash flows from financing activities: Borrowings of third-party debt — 402.5 — Repayments of related-party debt ( 101.1 ) — Capped calls — ( 45.6 ) — Repurchase of Liberty Latin America Shares ( 9.5 ) — — Issuance of Liberty Latin America common shares, net 347.0 — — Borrowings of related-party debt — 123.4 — Other financing activities, net — ( 0.8 ) 0.1 Net cash provided by financing activities 236.4 479.5 0.1 Net increase (decrease) in cash, cash equivalents and restricted cash ( 331.3 ) 474.7 ( 55.4 ) Cash, cash equivalents and restricted cash: Beginning of year 524.6 49.9 105.3 End of year $ 193.3 $ 524.6 $ 49.9 IV-9