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Item 7. Management’s Discussion and Analysis

2022-02-23 compared with 2021-03-01 · 603 added, 600 removed, 747 unchanged (62% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

See the Glossary of defined terms at the beginning of this Annual Report on Form 10-K.

The following discussion and analysis, which should be read in conjunction with our consolidated financial statements, is intended to assist in providing an understanding of our results of operations and financial condition and is organized as follows:

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This section discusses those material accounting policies that involve uncertainties and require significant judgment in their application.

Unless otherwise indicated, convenience translations into U.S.

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

Unless otherwise indicated, operational data (including subscriber statistics) is presented as of December 31, 2021.

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

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

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

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

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

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

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

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

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

residential and B2B services in:

over 20 countries across Latin America and the Caribbean through two of our reportable segments, C&W Caribbean and Networks and C&W Panama;

Puerto Rico, through our reportable segment Liberty Puerto Rico;

Chile, through our reportable segment VTR;

Costa Rica, through Cabletica and its subsidiary, Telefónica Costa Rica;

through our Networks & LatAm business of our C&W Caribbean and Networks segment, (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 approximately 40 markets in that region.

Prior to the first quarter of 2021, VTR and Cabletica were collectively one operating segment.

As a result of organizational changes during the first quarter of 2021, these operations became separate operating segments.

Following the Telefónica Costa Rica Acquisition on August 9, 2021 (as further described in note 4), Cabletica and Telefónica Costa Rica now comprise our operating and reportable segment referred to herein as “Costa Rica.” Accordingly, as of December 31, 2021, our reportable segments are as follows:

• C&W Caribbean and Networks;

• C&W Panama;

• VTR/Cabletica;

• Liberty Puerto Rico;

• Costa Rica.

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

Effective September 29, 2021, in connection with the pending formation of the Chile JV (as further described in note 9), we began accounting for the Chile JV Entities as “held for sale.” Accordingly, the assets and liabilities of the Chile JV Entities, excluding certain cash balances, are included in assets held for sale and liabilities associated with assets held for sale, respectively, on our December 31, 2021 consolidated balance sheet.

Consistent with the applicable guidance, we have not reflected similar reclassifications to exclude Chile JV Entities from continuing operations in our consolidated statements of

operations or cash flows.

As a result, the discussion and analysis of our results of operations and cash flows set forth below continue to include the amounts associated with the Chile JV Entities.

At December 31, 2021, we (i) owned and operated fixed networks that passed 8,354,800 homes and served 6,441,000 RGUs comprising 2,850,200 broadband internet subscribers, 1,979,200 video subscribers and 1,611,600 fixed-line telephony subscribers, and (ii) served 7,540,300 mobile subscribers.

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

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

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

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

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

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

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

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

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

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

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

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

• the duration and spread of the outbreak;

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

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

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

• the impact on our customers and our sales cycles;

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

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

• the impacts on foreign currency and interest rate fluctuations;

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

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

During 2020, COVID-19 negatively impacted our operations relative to the 2019 period prior to the pandemic, particularly with respect to revenue associated with B2B and mobile operations within our C&W Caribbean and Networks, C&W Panama and VTR segments.

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

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

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

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

AT&T Acquisition

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

Virgin Islands in an all-cash transaction.

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

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

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

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

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

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

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

Rights Offering

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

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

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

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

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

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

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

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

Telefónica-Costa Rica Acquisition

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

On September 29, 2021, we entered into an agreement with América Móvil to contribute the Chile JV Entities to América Móvil’s Chilean operations, to form the Chile JV that will be owned 50:50 by Liberty Latin America and América Móvil.

América Móvil is a telecommunications service provider with over 6.5 million mobile customers .

The consummation of the transaction is subject to certain customary closing conditions, including regulatory approvals, and is expected to close in the second half of 2022.

Claro Panama Acquisition .

On September 14, 2021, we entered into a definitive agreement to acquire América Móvil’s operations in Panama in an all-cash transaction based upon an enterprise value of $200 million on a cash- and debt-free basis.

The transaction is subject to certain customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2022.

Telefónica Costa Rica Acquisition

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

On August 9, 2021, we completed the Telefónica Costa Rica Acquisition.

The total purchase price of the Telefónica Costa Rica Acquisition was $538 million, which includes the impact of certain preliminary working capital adjustments totaling $38 million.

The Telefónica Costa Rica Acquisition was financed through a combination of debt, existing cash and a $47 million equity contribution from the noncontrolling interest owner of our Cabletica entity, as further described in note 19 to the consolidated financial statements.

Strategy and Management Focus

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

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

While we seek to increase our customer base, we also seek to maximize the average revenue we receive from each household by increasing the penetration of our video, broadband internet, fixed-line telephony and mobile services with existing customers through product bundling and up-selling.

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

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

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

We are engaged in network extension and upgrade programs across Liberty Latin America.

We collectively refer to these network extension and upgrade programs as the “ Network Extensions .” The Network Extensions will be completed in phases with priority given to the most accretive expansion opportunities.

As we use the term, organic growth excludes FX and the estimated impact of acquisitions and disposals.

While we seek to increase our customer base, we also seek to maximize the average revenue we receive from each household or business by increasing the penetration of our video, broadband internet, fixed-line telephony and mobile services with existing customers through product bundling and up-selling.

We are engaged in the Network Extensions program across Liberty Latin America.

The Network Extensions will occur in phases with priority given to the most accretive expansion opportunities.

During 2021, our network extension and upgrade programs passed approximately 738,800 homes across Liberty Latin America.

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

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

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

The significant competition we are experiencing, together with macroeconomic factors, has adversely impacted our revenue, RGUs and/or ARPU in a number of C&W’s markets.

In Chile, we continue to experience significant competition with respect to VTR’s fixed-line business, as competitors continue to upgrade their networks.

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

Results of Operations

The comparability of our operating results during 2020, 2019 and 2018 is affected by acquisitions, a disposal and FX effects.

The comparability of our operating results during 2021, 2020 and 2019 is affected by acquisitions, disposals and FX effects.

As we use the term, “organic” changes exclude FX and the impacts of acquisitions and disposals, each as further discussed below.

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

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

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

We (i) acquired (a) Telefónica’s operations in Costa Rica in August 2021, (b) AT&T’s wireless and wireline operations in Puerto Rico and the U.S.

Virgin Islands in October 2020, (c) a small B2B operation in the Cayman Islands in July 2020, and (d) UTS in March 2019;

and (ii) disposed of (a) certain B2B operations in Puerto Rico in January 2021 in connection with the AT&T Acquisition, as further described in note 4 to our consolidated financial statements, and (b) our operations in the Seychelles in November 2019.

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

With respect to disposals, the prior-year operating results of disposed entities are excluded from organic changes and the calculations of our organic change percentages to the same extent that those operations are not included in the current year.

Changes in foreign currency exchange rates may have a significant impact on our operating results, as VTR, Cabletica and certain entities within C&W have functional currencies other than the U.S.

Changes in foreign currency exchange rates may have a significant impact on our operating results, as VTR, Costa Rica and certain entities within C&W have functional currencies other than the U.S.

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

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

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

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

dollar per one Chilean peso depreciated by 4% for the year ended December 31, 2021, as compared to 2020, and appreciated by 12% for the year ended December 31, 2020, as compared to 2019.

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

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As we have the ability to control certain subsidiaries 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.

In October 2018, we acquired the remaining 40.0% interest in LCPR that we did not already own.

During the third quarter of 2019, we completed the UTS NCI Acquisition, as further defined and described in note 19 to our consolidated financial statements.

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.

The noncontrolling owners’ interests in the operating results of (i) certain subsidiaries of C&W and (ii) Costa Rica are reflected in net earnings or loss attributable to noncontrolling interests in our consolidated statements of operations.

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

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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.

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

GAAP measures of income (loss).

GAAP measures of income or loss.

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

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

GAAP measure, to Adjusted OIBDA on a consolidated basis, is presented below for the periods indicated.

Year ended December 31,

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

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

C&W Caribbean and Networks C&W Panama Liberty Puerto Rico VTR Costa Rica Corporate Intersegment eliminations Consolidated

Adjusted OIBDA for the twelve months ending:

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Adjusted OIBDA Margin

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

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

Year ended December 31,

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C&W Panama 36.5 35.4

VTR/Cabletica 38.1 40.4

Liberty Puerto Rico 40.8 44.4

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

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

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

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

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

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

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

VTR 33.0 37.9

Costa Rica 31.3 39.2

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

The decreases in the Adjusted OIBDA margin presented for both Liberty Puerto Rico and Costa Rica are primarily related to the inclusion of Liberty Mobile and Telefónica-Costa Rica operations following the AT&T Acquisition and Telefónica-Costa Rica Acquisition, respectively, that each generate lower Adjusted OIBDA margins relative to the legacy operations.

In addition, the decrease in the Adjusted OIBDA margin for Liberty Puerto Rico is also impacted by an increase in roaming expense, and negative margin on handset sales that occurred during the second half of 2021.

The decreases in the Adjusted OIBDA margin for VTR are primarily related to a decline in revenue, as further discussed below.

All of our segments derive their revenue primarily from (i) residential fixed services, including video, broadband internet and fixed-line telephony, (ii) mobile services, and (iii) B2B services.

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

While not specifically discussed in the below explanations of the changes in revenue, we are experiencing significant competition in all of our markets.

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

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

The following table sets forth revenue by reportable segment:

Year ended December 31, Increase (decrease)

2020 2019 $ %

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

The following tables set forth the organic and non-organic changes in revenue by reportable segment.

Year ended December 31, Increase (decrease) Increase (decrease) from:

2021 2020 FX Acquisitions (disposition), net Organic

in millions, except percentages

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C&W Panama 547.6 500.2 47.4 — — 47.4

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

Liberty Puerto Rico 1,456.7 624.1 832.6 — 769.4 63.2

Corporate 2.7 — 2.7 N.M.

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

VTR 787.5 809.0 (21.5) 34.3 — (55.8)

Costa Rica 256.2 140.0 116.2 (8.9) 111.8 13.3

Corporate (a) 21.6 2.7 18.9 — — 18.9

Intersegment eliminations (21.8) (18.2) (3.6) — — (3.6)

Total $ 4,799.0 $ 3,764.6 $ 1,034.4 $ 0.3 $ 885.1 $ 149.0

— Not Meaningful.

Consolidated.

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

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

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

(a) Amounts relate to services we provide for mobile handset insurance following the closing of the AT&T Acquisition.

C&W Caribbean and Networks .

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(a) Revenue from inbound roaming was $25 million and $14 million, respectively.

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

The details of the changes in C&W Caribbean and Networks’s revenue during 2021, as compared to 2020, are set forth below (in millions):

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ARPU (b) (6.1)

Decrease in residential fixed non-subscription revenue (c)

Increase in residential fixed non-subscription revenue 1.9

Total increase in residential fixed revenue 16.0

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

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

Decrease in B2B service revenue (f) (38.0)

Increase in B2B subsea network revenue (g)

Total organic decrease (58.2)

Net impact of acquisitions and a disposal (14.1)

Increase in residential mobile service revenue (c) 11.7

Increase in residential mobile interconnect, inbound roaming, equipment sales and other (d) 11.4

Increase in B2B service revenue (e) 20.7

Increase in B2B subsea network revenue (f) 5.8

Total organic increase 65.6

Impact of an acquisition 3.9

Impact of FX (25.1)

Total $ (106.0)

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

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

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

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

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

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

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

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

(c) The increase is attributable to (i) higher average number of mobile subscribers, mostly due to an increase in sales initiatives, and (ii) higher ARPU from mobile services, which was mostly a result of relaxed COVID-19-related travel restrictions.

(d) The increase is primarily attributable to (i) higher inbound roaming revenue, primarily related to the relaxing of travel restrictions associated with COVID-19, and (ii) an increase related to the settlement during 2021 of a minimum commitment guarantee associated with inbound roaming.

(e) The increase is primarily due to (i) higher revenue from fixed and mobile services, partially due to the recovery of reduced or suspended service across our markets as a result of the COVID-19 lockdowns, (ii) higher non-recurring revenue, and (iii) higher wholesale call volumes.

(f) The increase is primarily attributable to the net effect of (i) an increase associated with the recognition of deferred revenue and penalties upon termination of two customer contracts, (ii) a decrease related to revenue recognized on a cash basis during 2020 for services provided to a significant customer, and (iii) an increase associated with continued demand for telecommunications capacity on our subsea network.

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

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(a) Revenue from inbound roaming was $4 million and $2 million, respectively.

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

The details of the changes in C&W Panama’s revenue during 2021, as compared to 2020, are set forth below (in millions):

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Decrease in residential fixed non-subscription revenue (c) (2.3)

Total decrease in residential fixed revenue

Total increase in residential fixed revenue —

Decrease in residential mobile service revenue (d) (4.2)

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

Decrease in B2B service revenue (f)

Total organic decrease $ (82.5)

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

Increase in residential mobile interconnect, inbound roaming, equipment sales and other revenue (e) 3.5

Increase in B2B service revenue (f) 48.1

Total organic increase $ 47.4

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

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

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

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

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

VTR/Cabletica .

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

(d) The decrease is primarily due to the net effect of (i) lower ARPU from mobile services, mainly attributable to prepaid plans as a result of the termination of certain value-added services, and (ii) higher average numbers of mobile subscribers.

(e) The increase is primarily attributable to (i) higher volumes of handset sales, as COVID-19 related lockdowns in 2020 negatively impacted customers’ ability to purchase handsets, and (ii) an increase in inbound roaming revenue, primarily related to the relaxing of travel restrictions associated with COVID-19.

(f) The increase is primarily due to (i) an increase driven by certain government-related projects, some of which were put on hold during 2020 due to the impact of COVID-19, and (ii) higher revenue from mobile services.

Liberty Puerto Rico.

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

Year ended December 31, Increase

2021 2020 $ %

in millions, except percentages

Residential fixed revenue:

Subscription revenue:

$ 156.7 $ 147.2 $ 9.5 6.5

Broadband internet

253.3 204.7 48.6 23.7

Fixed-line telephony

28.2 25.5 2.7 10.6

Total subscription revenue

438.2 377.4 60.8 16.1

Non-subscription revenue

19.3 17.7 1.6 9.0

Total residential fixed revenue

457.5 395.1 62.4 15.8

Residential mobile revenue:

Service revenue 486.9 82.9 404.0 487.3

Interconnect, inbound roaming, equipment sales and other (a) 254.4 50.6 203.8 402.8

Total residential mobile revenue 741.3 133.5 607.8 455.3

Total residential revenue 1,198.8 528.6 670.2 126.8

B2B service revenue 220.4 89.8 130.6 145.4

Other revenue (b) 37.5 5.7 31.8 557.9

$ 1,456.7 $ 624.1 $ 832.6 133.4

(a) Revenue from inbound roaming was $69 million and $11 million, respectively.

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

The details of the changes in Liberty Puerto Rico’s revenue during 2021, as compared to 2020, are set forth below (in millions):

Increase in residential fixed subscription revenue due to change in:

Average number of RGUs (a) $ 51.4

Increase in residential fixed non-subscription revenue 1.6

Total increase in residential fixed revenue 62.4

Decrease in residential mobile service revenue (1.5)

Decrease in residential mobile interconnect, inbound roaming, equipment sales and other (c) (3.4)

Increase in B2B service 2.2

Increase in other revenue (d) 3.5

Total organic increase 63.2

Impact of an acquisition and a disposition, net 769.4

Total $ 832.6

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

The higher average broadband internet RGUs are partially due to increased demand as a result of COVID-19 work-from-home mandates, which subsequently led to increased purchases of video products as a result of bundling offers.

(b) The increase is primarily due to higher ARPU from broadband internet services, and the impact resulting from credits provided to customers during 2020 in connection with the earthquakes that impacted Puerto Rico in January 2020.

(d) The increase is primarily attributable to funds received from the FCC to continue to expand and improve our fixed network in Puerto Rico.

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

Year ended December 31, Increase (decrease)

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Total $ 787.5 $ 809.0 $ (21.5) (2.7)

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

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

The details of the changes in VTR’s revenue during 2021, as compared to 2020, are set forth below (in millions):

Decrease in residential fixed subscription revenue due to change in:

Average number of RGUs (a) $ (21.1)

2 unchanged sentences

Total decrease in residential fixed revenue

Increase in residential mobile service revenue (d) 0.3

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

Increase in B2B service revenue (f) 4.2

Decrease in residential mobile service revenue (d) (9.9)

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

Increase in B2B service revenue 0.6

Total organic decrease (55.8)

1 unchanged sentence

Total $ (21.5)

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

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

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

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

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

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

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

(a) The decrease is primarily attributable to lower average broadband internet and video RGUs.

(b) The decrease is primarily due to lower ARPU from broadband internet services and video services, partially the result of continued high levels of competition.

The decline in ARPU from video services is partially offset by increases related to live soccer matches being broadcast on our premium programming that were cancelled during 2020.

(c) The decrease is primarily due to (i) lower volumes of interconnect revenue, (ii) lower installations, and (iii) lower amounts of infrastructure-related engineering projects with local governments.

(d) The decrease is due to lower average numbers of mobile subscribers and lower ARPU from mobile services.

Costa Rica’s revenue by major category is set forth below:

Year ended December 31, Increase (decrease)

1 unchanged sentence

in millions, except percentages

Residential revenue:

Residential fixed revenue:

Subscription revenue:

$ 147.2 $ 140.9 $ 6.3 4.5

Video $ 74.5 $ 79.1 $ (4.6) (5.8)

Broadband internet 59.6 51.4 8.2 16.0

204.7 175.0 29.7 17.0

Fixed-line telephony 4.4 3.7 0.7 18.9

25.5 23.4 2.1 9.0

Total subscription revenue 138.5 134.2 4.3 3.2

377.4 339.3 38.1 11.2

Non-subscription revenue 6.2 5.8 0.4 6.9

17.7 21.7 (4.0) (18.4)

Total residential fixed revenue 144.7 140.0 4.7 3.4

395.1 361.0 34.1 9.4

Residential mobile revenue:

3 unchanged sentences

Total residential revenue 242.2 140.0 102.2 73.0

B2B service revenue 89.8 51.1 38.7 75.7

Other revenue (b) 5.7 — 5.7 N.M.

$ 624.1 $ 412.1 $ 212.0 51.4

B2B service revenue 14.0 — 14.0 N.M.

Total $ 256.2 $ 140.0 $ 116.2 83.0

- Not Meaningful.

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

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

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

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

The details of the changes in Costa Rica’s revenue during 2021, as compared to 2020, are set forth below (in millions):

Increase in residential fixed subscription revenue due to change in:

Average number of RGUs (a) $ 4.7

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

Total increase in residential fixed revenue

Increase in B2B service (d)

Increase in residential fixed non-subscription revenue 0.7

Total organic increase 13.3

Impact of an acquisition 111.8

Impact of FX (8.9)

Total $ 116.2

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

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

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

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

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

(b) The increase is primarily due to higher ARPU from broadband internet.

Programming and other direct costs of services

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

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

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

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

Consolidated.

The following tables set forth the organic and non-organic changes in programming and other direct costs of services on a consolidated basis.

Increase (decrease) from:

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

Year ended December 31, Increase Acquisitions (disposition), net Organic

Programming and copyright $ 441.4 $ 389.3 $ 52.1 $ 4.2 $ 10.9 $ 37.0

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

Interconnect 329.8 257.6 72.2 (4.2) 82.6 (6.2)

Equipment and other

418.8 199.1 219.7 (0.5) 177.3 42.9

Total programming and other direct costs

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

Total programming and other direct costs of services $ 1,190.0 $ 846.0 $ 344.0 $ (0.5) $ 270.8 $ 73.7

C&W Caribbean and Networks .

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

Decrease from:

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

Year ended December 31, Increase (decrease) Increase (decrease) from:

2021 2020 FX An acquisition Organic

Programming and copyright $ 92.8 $ 88.8 $ 4.0 $ (1.5) $ — $ 5.5

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

Interconnect 151.8 163.0 (11.2) (5.5) — (5.7)

Equipment and other 74.4 59.1 15.3 (0.9) 1.8 14.4

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

Total programming and other direct costs of services $ 319.0 $ 310.9 $ 8.1 $ (7.9) $ 1.8 $ 14.2

• Programming and copyright:

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

• Interconnect and commissions:

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

The organic increase is primarily due to the negative impact of the reassessment and release of various accruals in certain of our markets during 2020.

• Interconnect:

The organic decrease is primarily due to individually insignificant decreases that were partially offset by higher wholesale call volumes.

• Equipment and other:

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

The organic increase is primarily driven by the easing of COVID-19 related restrictions in certain of our markets, which resulted in (i) higher mobile equipment sales volume, and (ii) higher B2B data revenue and equipment sales.

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

Year ended December 31, Organic decrease

Year ended December 31, Organic increase (decrease)

Programming and copyright $ 14.9 $ 13.9 $ 1.0

Interconnect and commissions 41.1 52.0 (10.9)

Interconnect 39.8 41.1 (1.3)

Equipment and other

111.6 74.0 37.6

Total programming and other direct costs

$ 129.0 $ 157.7 $ (28.7)

• Interconnect and commissions:

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

Total programming and other direct costs of services $ 166.3 $ 129.0 $ 37.3

• Equipment and other:

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

VTR/Cabletica .

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

Increase (decrease) from:

Year ended December 31, Decrease FX Organic

The organic increase is primarily due to (i) an increase driven by certain nonrecurring government-related projects, some of which were put on hold during 2020 due to the impact of COVID-19, and (ii) higher volumes of mobile handset sales, mainly due to the easing of COVID-19 related restrictions.

Liberty Puerto Rico .

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

Increase Increase (decrease) from:

Year ended December 31, Acquisition (disposition), net

2021 2020 Organic

Programming and copyright $ 109.0 $ 91.9 $ 17.1 $ 10.9 $ 6.2

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

Interconnect 104.3 21.9 82.4 73.1 9.3

Equipment and other

206.3 50.5 155.8 160.6 (4.8)

Total programming and other direct costs

$ 257.9 $ 285.4 $ (27.5) $ (27.5) $ —

Total programming and other direct costs of services $ 419.6 $ 164.3 $ 255.3 $ 244.6 $ 10.7

• Programming and copyright:

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

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

• Interconnect and commissions:

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

The organic increase is primarily attributable to higher programming rates and higher average video subscribers.

• Interconnect:

The organic increase is primarily due to higher roaming costs, including the impact from the renegotiation of a certain roaming agreement during the fourth quarter of 2021.

• Equipment and other:

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

Liberty Puerto Rico .

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

Increase from:

Year ended December 31, Increase Acquisition Organic

The organic decrease is primarily due to the net effect of (i) lower equipment costs and (ii) $1 million of equipment-related integration costs incurred in 2021.

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

Year ended December 31, Increase (decrease) Increase (decrease) from:

2021 2020 FX Organic

Programming and copyright $ 188.8 $ 163.2 $ 25.6 $ 7.9 $ 17.7

Interconnect and commissions 14.2 7.5 6.7 6.0 0.7

Interconnect 33.9 39.2 (5.3) 1.4 (6.7)

Equipment and other

11.1 16.5 (5.4) 0.7 (6.1)

Total programming and other direct costs

Total programming and other direct costs of services $ 233.8 $ 218.9 $ 14.9 $ 10.0 $ 4.9

• Programming and copyright:

The organic increase is primarily due to higher premium and basic content rates.

During 2020, programming costs were lower due to the renegotiation of a programming contract governing rates for live soccer matches, which were cancelled as a result of COVID-19.

In addition, the comparison includes a decrease of $1 million related to the foreign currency impact of programming contracts denominated in U.S.

• Interconnect:

The organic decrease is primarily due to (i) lower interconnect rates and volumes, and (ii) a decrease in MVNO charges, as we renegotiated our contract during the second quarter of 2021.

• Equipment and other:

The organic decrease is due to (i) lower volumes of handset sales, (ii) lower amounts of infrastructure-related engineering projects with local governments, and (iii) the net effect of (a) higher handset prices and (b) decreases associated with the foreign currency impact of handset contracts denominated in U.S.

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

Increase (decrease) from:

Year ended December 31, Increase FX An acquisition Organic

Programming and copyright $ 35.9 $ 31.5 $ 4.4 $ (2.2) $ — $ 6.6

Interconnect 15.4 5.8 9.6 (0.3) 9.5 0.4

Equipment and other

17.4 1.7 15.7 (0.2) 14.9 1.0

Total programming and other direct costs of services $ 68.7 $ 39.0 $ 29.7 $ (2.7) $ 24.4 $ 8.0

• Programming and copyright:

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

• Interconnect and commissions:

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

The organic increase is primarily due to (i) the negative impact associated with contract negotiations that resulted in the reassessment and release of various accruals during 2020 and (ii) an increase in certain premium content costs.

In addition, the comparison includes an increase of $2 million related to the foreign currency impact of programming contracts denominated in U.S.

Other operating costs and expenses

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

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;

2 unchanged sentences

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

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

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

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

• Share-based compensation expense that relates to (i) equity awards issued to our employees and Directors and (ii) and with respect to 2021 and 2020, bonus-related expenses that will be paid in the form of equity.

Consolidated .

1 unchanged sentence

Increase (decrease) from:

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

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

Personnel and contract labor $ 575.1 $ 483.6 $ 91.5 $ (1.2) $ 77.9 $ 14.8

8 unchanged sentences

$ 1,898.1 $ 1,531.4 $ 366.7 $ 1.3 $ 308.4 $ 57.0

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

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

For additional information regarding our share-based compensation, see Results of Operations (below Adjusted OIBDA) discussion and analysis below.

C&W Caribbean and Networks .

10 unchanged sentences

• Personnel and contract labor:

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

The organic decrease is due to the net effect of (i) lower salaries and other personnel costs, mainly associated with the benefit of certain restructuring activities, (ii) higher staff costs related to increased sales activities, and (iii) lower capitalized labor associated with fewer employees and lower capitalization rates.

• Network-related:

The organic increase is primarily due to (i) higher subsea cable repairs, (ii) higher utility costs, and (iii) rate increases on pole rentals and fiber leases.

• Commercial:

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

The organic increase is primarily due to higher marketing and sales costs, as promotional activities were reduced during 2020 due to certain adverse economic impacts caused by COVID-19.

• Facility, provision, franchise and other costs:

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

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

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

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

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

The organic decrease is primarily due to (i) lower bad debt provisions, as the impact of COVID-19 resulted in higher bad debt expense during 2020 due to (a) delays in collections, (b) higher expected credit losses associated with certain B2B customers and (c) changes in our general expectations related to our customers’ ability to pay, and (ii) lower franchise fees.

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

7 unchanged sentences

Total other operating costs and expenses $ 185.2 $ 196.7 $ (11.5)

• Personnel and contract labor:

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

• Facility, provision, franchise and other costs:

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

VTR/Cabletica .

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

The organic decrease is primarily due to lower bad debt provisions, as the impact of COVID-19 resulted in higher bad debt expense during 2020 generally due to (i) delays in collections, (ii) higher expected credit losses associated with certain B2B customers and (iii) changes in our general expectations related to our customers’ ability to pay.

Liberty Puerto Rico .

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

Increase (decrease) from:

Year ended December 31, Increase (decrease) FX Organic

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

2021 2020 Organic

Personnel and contract labor $ 142.1 $ 62.1 $ 80.0 $ 71.1 $ 8.9

6 unchanged sentences

• Personnel and contract labor:

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

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

• Network-related:

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

The organic increase is primarily due to higher salaries and other personnel costs .

• Service-related:

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

We incurred service-related integration costs associated with the AT&T Acquisition of $6 million and $7 million during 2021 and 2020, respectively.

The service-related integration costs incurred during 2021 are mostly included in the increase from an acquisition (disposition), net, in the above table and are expected to grow in future periods.

• Commercial:

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

• Facility, provision, franchise and other costs:

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

Liberty Puerto Rico .

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

The organic increase is primarily due to (i) increased marketing costs, including $2 million of rebranding commercial-related integration costs associated with the AT&T Acquisition, and (ii) higher call center volumes, partially attributable to work-from-home and remote learning mandates resulting from COVID-19.

In addition, the 2021 increase from an acquisition (disposition), net, in the above table includes $2 million of rebranding commercial-related integration costs associated with the AT&T Acquisition.

• Facilities, provision, franchise and other:

The organic increase includes an increase related to a payment made during 2021 to settle certain 2011 property tax claims.

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

Increase (decrease) from:

Year ended December 31, Increase Acquisition Organic

Year ended December 31, Increase (decrease) FX Organic

Personnel and contract labor $ 61.1 $ 61.1 $ — $ 2.6 $ (2.6)

6 unchanged sentences

• Personnel and contract labor:

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

The organic decrease is primarily due to lower salary expense as a result of a restructuring program implemented during the first half of 2021.

• Network-related:

The organic increase is primarily due to (i) higher rates associated with network access-related contract labor, and (ii) higher maintenance costs.

• Commercial:

The organic increase is primarily due to the net effect of (i) higher sales commissions, (ii) a decrease in marketing and advertising expenses, and (iii) higher call center volumes.

• Facility, provision, franchise and other costs:

The organic decrease is primarily due to (i) lower bad debt provisions, and (ii) lower operating lease expense as a result of ceasing the amortization of our right of use assets in connection with held for sale accounting of the Chile JV Entities, as further described in note 9 to our consolidated financial statements.

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

Increase (decrease) from:

Year ended December 31, Increase FX An acquisition Organic

Personnel and contract labor $ 19.9 $ 15.0 $ 4.9 $ (0.9) $ 5.5 $ 0.3

Network-related 14.9 8.6 6.3 (0.5) 6.2 0.6

Service-related 11.3 2.0 9.3 (0.2) 7.1 2.4

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

Commercial 25.1 7.0 18.1 (0.6) 16.6 2.1

Facility, provision, franchise and other 36.1 13.5 22.6 (0.8) 23.5 (0.1)

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

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

Year ended December 31, Organic increase (decrease)

Share-based compensation expense 1.1 0.7 0.4 (0.1) — 0.5

Total other operating costs and expenses $ 108.4 $ 46.8 $ 61.6 $ (3.1) $ 58.9 $ 5.8

• Service-related:

The organic increase is primarily due to higher professional services fees, including $1 million of costs associated with the Telefónica Costa Rica Acquisition, and higher costs associated with certain information technology projects that were put on hold in 2020 due to the economic uncertainty of COVID-19.

In addition, during 2021 we incurred $2 million of integration costs associated with the Telefónica Costa Rica Acquisition that are included in the increase from an acquisition.

Integration costs are expected to grow significantly during 2022.

• Commercial:

The organic increase is primarily due to higher sales commissions, as we began to recover from the adverse economic impacts caused by COVID-19.

The following table sets forth the organic and non-organic changes in other operating costs and expenses for our corporate operations.

Year ended December 31, Increase (decrease)

Personnel and contract labor $ 31.5 $ 20.3 $ 11.2

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• Personnel and contract labor:

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

The organic increase is primarily attributable to higher salaries and other personnel costs, mainly resulting from higher staffing levels in the operations center in Panama.

• Service-related:

The organic increase is primarily due to an increase in professional services related to centralization efforts.

• Facility, provision, franchise and other:

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

The organic increase is primarily attributable to higher expenses associated with a mobile handset insurance program that began during the fourth quarter of 2020 following the closing of the AT&T Acquisition.

Results of operations (below Adjusted OIBDA)—2021 compared to 2020

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

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

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

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

Share-based compensation expense increased $21 million during 2021, as compared to 2020, primarily due to additional awards granted during 2021 to our employees and Directors.

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

Depreciation and amortization

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

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

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

Our depreciation and amortization expense increased $46 million or 5% during 2021, as compared to 2020, primarily due to the net effect of (i) increases attributable to assets acquired by Liberty Puerto Rico and, to a lesser extent, Costa Rica following the closing of the AT&T Acquisition and the Telefónica Costa Rica Acquisition, respectively, (ii) a decrease associated with certain assets becoming fully depreciated, (iii) an increase in property and equipment additions, primarily associated with the installation of CPE, baseline related additions and the expansion and upgrade of our networks and other capital initiatives, and (iv) a decrease at VTR as we ceased recording depreciation expense when we began accounting for the Chile JV Entities as held for sale.

Impairment, restructuring and other operating items, net

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

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

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

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

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

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

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

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

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

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

Year ended December 31,

Impairment charges (a) $ 609.2 $ 277.7

Restructuring charges (b) 33.0 27.5

Other operating items, net (c) 22.8 70.1

Total $ 665.0 $ 375.3

(a) The 2021 amount primarily includes a goodwill impairment associated with our C&W Caribbean and Networks segment.

The 2020 amount primarily includes goodwill impairment charges of $174 million at C&W Panama and $101 million at various reporting units within the C&W Caribbean and Networks segment, mostly related to the economic impacts associated with COVID-19.

(b) Amounts include employee severance and termination costs related to certain reorganization activities and contract termination and other related charges, primarily at VTR and C&W Caribbean and Networks.

(c) The 2021 amount includes direct acquisition costs, primarily related to the Telefónica Costa Rica Acquisition and a gain of $9 million on the disposition of certain B2B operations in our Liberty Puerto Rico segment that was completed in January 2021.

The 2020 amounts primarily include direct acquisition costs related to the AT&T Acquisition.

Interest expense

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

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

Our interest expense decreased $6 million during 2021, as compared to 2020.

The decrease is primarily due to the net effect of (i) lower weighted-average interest rates and (ii) higher average outstanding debt balances.

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

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

Realized and unrealized losses on derivative instruments, net

Realized and unrealized gains or losses on derivative instruments, net

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

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

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

Year ended December 31,

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Total $ 564.1 $ (352.7)

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

(a) The gains (losses) during 2021 and 2020 are primarily attributable to the net effect of (i) changes in FX rates, predominantly due to changes in the value of the Chilean peso relative to the U.S.

dollar, and (ii) changes in interest rates.

These amounts include gains (losses) associated with changes in our credit risk valuation adjustments of ($41 million) and $47 million, respectively, which for 2021 includes a net loss of $30 million related to the Chile JV Entities, and for 2020 was primarily due to increased credit risk stemming from market reaction to the COVID-19 outbreak.

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

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

(b) The loss during 2020 is primarily attributable to the net effect of (i) changes in interest rates and (ii) changes in FX rates, predominantly due to changes in the value of the Chilean peso relative to the U.S.

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

The loss during 2019 is primarily attributable to (i) changes in interest rates and (ii) changes in FX rates, predominantly due to changes in the value of the Chilean peso relative to the U.S.

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

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

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

Qualitative and Quantitative Disclosures about Market Risk below.

Foreign currency transaction gains (losses), net

Foreign currency transaction gains or losses, net

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

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(48.4) (53.2)

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

dollar functional currency entity

Other (a) (21.9) (7.3)

Total $ (319.6) $ 1.2

Losses on debt modification and extinguishment, net

(a) Primarily includes (i) third-party receivables and payables denominated in a currency other than an entity’s functional currency, (ii) cash denominated in a currency other than an entity’s functional currency and (iii) U.S.

dollar-denominated debt issued by a CRC functional currency entity.

Gains or losses on debt modification and extinguishment, net

We recognized losses on debt modification and extinguishment, net, of $57 million and $45 million during 2021 and 2020, respectively.

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

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

The losses during 2021 are associated with (i) the payment of redemption premiums and the write-off of unamortized deferred financing costs related to the repayment of certain C&W Notes, (ii) the write-off of unamortized discounts and deferred financing costs related to the repayment of the 2026 SPV Credit Facility, (iii) the payment of breakage fees and the write-off of unamortized deferred financing costs related to the repayments of the VTR TLB-1 Facility and VTR TLB-2 Facility, (iv) the payment of redemption premiums and the write-off of unamortized deferred financing costs related to the repayment of the 2027 LPR Senior Secured Notes and (v) the payments of redemption premiums and the write-offs of unamortized deferred financing costs related to partial redemptions of the 2028 VTR Senior Secured Notes.

The losses during 2020 are associated with (i) the payment of call premiums and the write-off of unamortized deferred financing costs related to the repayment of certain senior notes then outstanding at VTR and (ii) the write-off of unamortized discounts and deferred financing costs associated with the repayment of the C&W Term Loan B-4 Facility.

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

Other income (expense), net

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

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

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

The amount during 2019 primarily relates to interest income.

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

Income tax benefit (expense)

Other income or expense, net

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

We recognized other income (expense), net, of ($42 million) and $5 million during 2021 and 2020, respectively.

The expense during 2021 primarily relates to an impairment associated with a cost method investment.

The 2020 period reflects the net effect of (i) interest income, including interest we generated on restricted cash held in escrow in advance of the closing of the AT&T Acquisition, and (ii) other individually insignificant expenses.

Income tax benefit or expense

Liberty Latin America was formed as a corporation in Bermuda and, therefore, the “statutory” or “expected” tax rate for the 2021 and 2020 tax years is 0%, as we are exempt from income taxes on ordinary income and capital gains.

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

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

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

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

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

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

We recognized income tax benefit (expense) of ($190 million) and $28 million during 2021 and 2020, respectively.

The income tax expense attributable to our earnings before income taxes during 2021 differs from the amounts computed using the statutory tax rate, primarily due to detrimental effects of (i) net increases in valuation allowances, (ii) permanent tax differences, such as non deductible goodwill impairment and other non-deductible expenses, (iii) expiration of deferred tax assets (which are entirely offset by valuation allowance);

and (iv) inclusion of withholding taxes on cross-border payments.

These negative impacts to our effective tax rate were partially offset by the beneficial effects of (i) jurisdictional rate differences, (ii) changes in enacted tax rates (but which are nearly entirely offset by valuation allowance), and (iii) permanent tax differences, such as non-taxable income.

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

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

Net earnings or loss

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

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Net non-operating expenses $ (381.8) $ (924.9)

Income tax benefit $ 29.3 $ 98.2

Income tax benefit (expense) $ (189.5) $ 27.8

Net loss $ (490.1) $ (803.9)

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

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

Net loss attributable to noncontrolling interests

Net earnings or loss attributable to noncontrolling interests

We reported net losses attributable to noncontrolling interests of $50 million and $122 million during 2021 and 2020, respectively.

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

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

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Year ended December 31,

Operating income (loss) $ 353.8 $ (23.6)

Operating income $ 93.2 $ 325.8

Share-based compensation expense 97.5 57.5

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

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

C&W Caribbean and Networks C&W Panama Liberty Puerto Rico VTR Costa Rica Corporate Intersegment eliminations Consolidated

Adjusted OIBDA for the twelve months ending:

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Other operating costs and expenses 30.3 3.4 (14.0) (7.9) (2.6) 7.9 0.5 17.6

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

Non-organic increases (decreases):

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C&W Panama 35.4 39.1

VTR/Cabletica 40.4 40.3

Liberty Puerto Rico 44.4 49.3

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

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

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

The following table sets forth revenue by reportable segment:

Year ended December 31, Increase (decrease)

2019 2018 $ %

in millions, except percentages

VTR 37.9 40.6

Costa Rica 39.2 39.1

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

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

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

The following table sets forth the changes in revenue by reportable segment.

Increase (decrease) from:

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

C&W Caribbean and Networks $ 1,706.8 $ 1,812.8 $ (106.0) $ (33.7) $ (14.1) $ (58.2)

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

VTR/Cabletica 1,073.8 1,043.7 30.1 2.9

Liberty Puerto Rico 624.1 412.1 212.0 — 174.2 37.8

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

VTR 809.0 941.1 (132.1) (103.5) — (28.6)

Costa Rica 140.0 132.7 7.3 0.2 — 7.1

Corporate (a) 2.7 — 2.7 — — 2.7

Intersegment eliminations (18.2) (14.4) (3.8) — — (3.8)

Total $ 3,764.6 $ 3,867.0 $ (102.4) $ (137.0) $ 160.1 $ (125.5)

— Not Meaningful.

Consolidated.

The increase during 2019, as compared to 2018, includes (i) a net increase of $185 million attributable to the impacts of acquisitions and a disposal and (ii) a decrease of $111 million attributable FX.

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

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

(a) Amounts relate to services we provide for mobile handset insurance following the closing of the AT&T Acquisition.

C&W Caribbean and Networks.

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

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

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

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

Increase in B2B service revenue (f) 25.5

Increase in B2B subsea network revenue 3.9

Total organic increase 9.9

Decrease in B2B service revenue (f) (38.0)

Increase in B2B subsea network revenue (g) 16.5

Total organic decrease (58.2)

Net impact of an acquisition and a disposal (14.1)

Impact of FX (33.7)

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

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

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

The decrease also includes a reduction in ARPU as a result of Hurricane Dorian in the Bahamas.

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

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

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

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

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

The increase in B2B service revenue is partially offset by an estimated $3 million decrease related to the impact of Hurricane Dorian.

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

Total $ (106.0)

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

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

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

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

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

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

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

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

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

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

Total increase in residential fixed revenue 0.1

Total decrease in residential fixed revenue (5.4)

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

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

Increase in B2B service revenue (e)

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

Decrease in B2B service revenue (f) (37.6)

Total organic decrease $ (82.5)

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

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

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

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

VTR/Cabletica .

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

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

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

Liberty Puerto Rico.

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

Year ended December 31, Increase (decrease)

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in millions, except percentages

Residential fixed revenue:

Subscription revenue:

Video $ 147.2 $ 140.9 $ 6.3 4

Broadband internet 204.7 175.0 29.7 17

Fixed-line telephony 25.5 23.4 2.1 9

Total subscription revenue 377.4 339.3 38.1 11

Non-subscription revenue 17.7 21.7 (4.0) (18)

Total residential fixed revenue 395.1 361.0 34.1 9

Residential mobile revenue:

Service revenue 82.9 — 82.9 N.M.

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

Total residential mobile revenue 133.5 — 133.5 N.M.

Total residential revenue 528.6 361.0 167.6 46

B2B service revenue 89.8 51.1 38.7 76

Other revenue (b) 5.7 — 5.7 N.M.

Total $ 624.1 $ 412.1 $ 212.0 51

— Not Meaningful.

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

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

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

Increase in residential fixed subscription revenue due to change in:

Average number of RGUs (a) $ 33.2

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

Total increase in residential fixed revenue

Increase in B2B service (d)

Total organic increase 37.8

Impact of an acquisition 174.2

Total $ 212.0

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

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

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

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

VTR’s revenue by major category is set forth below.

Year ended December 31, Increase (decrease)

2020 2019 $ %

in millions, except percentages

Residential revenue:

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Total $ 809.0 $ 941.1 $ (132.1) (14)

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

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

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

Decrease in residential fixed subscription revenue due to change in:

Average number of RGUs (a) $ (4.4)

Decrease in residential fixed non-subscription revenue (0.6)

Total increase in residential fixed revenue 7.4

Increase in residential mobile service revenue (c) 5.8

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

Increase in B2B service revenue (d) 7.2

Total organic increase 20.2

Impact of the Cabletica Acquisition 98.3

ARPU (b) (21.7)

Decrease in residential fixed non-subscription revenue (c) (4.2)

Total decrease in residential fixed revenue (30.3)

Increase in residential mobile service revenue (d) 0.3

Decrease in residential mobile interconnect, inbound roaming, equipment sales and other revenue (e) (2.8)

Increase in B2B service revenue (f) 4.2

Total organic decrease (28.6)

Impact of FX (103.5)

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

(b) The increase is due to the net effect of (i) higher ARPU from broadband internet services, (ii) an improvement in product mix and (iii) lower ARPU from video and fixed-line telephony services.

The increase in ARPU from video services is partially offset by $2 million in discounts given to customers due to content not provided as a result of civil unrest in Chile during the fourth quarter of 2019.

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

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

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

Total $ (132.1)

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

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

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

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

Costa Rica’s revenue by major category is set forth below.

Year ended December 31, Increase (decrease)

1 unchanged sentence

in millions, except percentages

Residential revenue:

Residential fixed revenue:

5 unchanged sentences

Non-subscription revenue 5.8 9.2 (3.4) (37)

Total residential fixed revenue 361.0 287.4 73.6 25.6

B2B service revenue 51.1 37.1 14.0 37.7

Other revenue — 11.1 (11.1) (100.0)

Total $ 140.0 $ 132.7 $ 7.3 6

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

Revenue during 2018 includes $11 million received from the FCC in August 2018, which is included in other revenue.

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

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

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

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

Increase in residential fixed subscription revenue due to change in:

Average number of RGUs (a) $ 9.9

Decrease in residential fixed non-subscription revenue (c) (3.4)

Total organic increase 7.1

Impact of FX 0.2

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

(b) The increase is due to higher ARPU from video services.

Programming and other direct costs of services

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

The following table sets forth the changes in programming and other direct costs of services on a consolidated basis.

Increase (decrease) from:

1 unchanged sentence

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

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

Interconnect 257.6 280.0 (22.4) (12.2) 11.1 (21.3)

Equipment and other 199.1 193.0 6.1 (2.8) 47.6 (38.7)

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

Total programming and other direct costs of services $ 846.0 $ 877.8 $ (31.8) $ (36.5) $ 57.8 $ (53.1)

C&W Caribbean and Networks.

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

Increase (decrease) from:

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

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

Decrease from:

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

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

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

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

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

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

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

• Programming and copyright:

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

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

• Interconnect and commissions:

The organic increase is primarily due to the net effect of (i) an increase in wholesale call volumes in Jamaica, (ii) the beneficial impact of the reassessment of an accrual during the second quarter of 2019 and (iii) lower rates.

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

Year ended December 31, Organic increase (decrease)

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

• Equipment and other:

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

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

Year ended December 31, Organic decrease

Programming and copyright $ 13.9 $ 14.6 $ (0.7)

Interconnect 41.1 52.0 (10.9)

Equipment and other 74.0 91.1 (17.1)

Total programming and other direct costs of services $ 129.0 $ 157.7 $ (28.7)

• Interconnect and commissions:

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

• Equipment and other:

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

Liberty Puerto Rico.

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

Increase from:

Year ended December 31,

2020 2019 Increase Acquisition Organic

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

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

• Interconnect and commissions:

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

Interconnect 21.9 7.5 14.4 13.7 0.7

Equipment and other 50.5 0.3 50.2 49.8 0.4

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

VTR/Cabletica .

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

Increase (decrease) from:

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

Total programming and other direct costs of services $ 164.3 $ 92.8 $ 71.5 $ 65.4 $ 6.1

• Programming and copyright:

• Interconnect and commissions:

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

Year ended December 31, Decrease Increase (decrease) from:

2020 2019 FX Organic

Programming and copyright $ 163.2 $ 170.9 $ (7.7) $ (20.3) $ 12.6

Interconnect 39.2 52.3 (13.1) (5.4) (7.7)

Equipment and other 16.5 24.8 (8.3) (1.9) (6.4)

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

Total programming and other direct costs of services $ 218.9 $ 248.0 $ (29.1) $ (27.6) $ (1.5)

• Programming and copyright:

The organic increase is primarily due to (i) higher costs associated with video-on-demand ( VoD ) services and catch-up television, (ii) an increase in copyright costs and (iii) an increase in certain premium and basic content costs, primarily resulting from higher rates.

The increase in certain premium and basic content costs is partially offset by $2 million in lower costs due to certain premium services that were not provided during the fourth quarter of 2019.

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

• Interconnect and commissions:

The organic decrease is primarily due to the net effect of (i) decreases in interconnect costs and MVNO charges due to lower rates and (ii) the impact of a $3 million credit received during the fourth quarter of 2018 in connection with the renegotiation of our MVNO contract.

The organic decrease is primarily due to lower rates that were partially offset by higher volumes.

• Equipment and other:

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

Liberty Puerto Rico .

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

Year ended December 31, Organic increase (decrease)

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

The following table sets forth the changes in programming and other direct costs of services for our Costa Rica segment.

Year ended December 31, Increase (decrease) Increase (decrease) from:

2020 2019 FX Organic

Programming and copyright $ 31.5 $ 29.0 $ 2.5 $ 0.1 $ 2.4

Interconnect and commissions 7.5 9.8 (2.3)

Interconnect 5.8 5.1 0.7 — 0.7

Equipment and other 1.7 3.3 (1.6) — (1.6)

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

Total programming and other direct costs of services $ 39.0 $ 37.4 $ 1.6 $ 0.1 $ 1.5

• Programming and copyright:

The organic increase is mostly attributable to (i) the impact of $11 million in credits received from programming vendors in 2018 resulting from the 2017 Hurricanes and (ii) higher programming rates.

• Interconnect and commission:

The organic decrease is primarily due to lower rates.

The organic increase is primarily due to higher sports content costs and higher subscribers of other premium and basic content.

• Equipment and other:

The organic decrease is primarily due to lower equipment sales.

Other operating costs and expenses

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

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

Increase (decrease) from:

7 unchanged sentences

Total other operating costs and expenses $ 1,531.4 $ 1,505.3 $ 26.1 $ (50.0) $ 53.5 $ 22.6

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

C&W Caribbean and Networks.

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

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

Increase (decrease) from:

8 unchanged sentences

• Personnel and contract labor:

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

• Network-related:

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

• Service-related:

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

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

• Commercial:

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

• Facility, provision, franchise and other costs:

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

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

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

◦ a decrease in insurance costs due in part to the impact of our Weather Derivative, as further described below and in notes 3 and 5 to our consolidated financial statements.

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

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

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

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

◦ bad debt expense, which remained relatively unchanged, as (i) higher bad debt provisions due to the impacts of COVID-19, which during 2020 generally resulted in (a) delays in collections, (b) higher expected credit losses associated with certain B2B customers and (c) changes in our general expectations related to our customers’ ability to pay, were offset by (ii) the beneficial impacts of (a) a provision in 2019 related to certain B2B customers and (b) a provision in 2019 related to the impact of Hurricane Dorian.

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

Year ended December 31, Organic increase (decrease)

7 unchanged sentences

• Personnel and contract labor:

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

• Network-related:

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

• Commercial:

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

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

• Facility, provision, franchise and other costs:

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

VTR/Cabletica .

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

Increase (decrease) from:

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

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

Liberty Puerto Rico.

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

Year ended December 31, Increase (decrease) from:

2020 2019 Increase Acquisition Organic

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

5 unchanged sentences

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

• Network-related:

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

• Personnel and contract labor:

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

• Service-related:

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

• Commercial:

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

• Facility, provision, franchise and other costs:

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

Liberty Puerto Rico .

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

Year ended December 31, Organic increase (decrease)

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

• Facility, provision, franchise and other:

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

The following table sets forth the changes in other operating costs and expenses for our VTR segment.

Year ended December 31, Increase (decrease) Increase (decrease) from:

2020 2019 FX Organic

Personnel and contract labor $ 61.1 $ 75.7 $ (14.6) $ (8.0) $ (6.6)

6 unchanged sentences

• Personnel and contract labor:

The organic decrease is primarily due to the net effect of (i) lower overtime-related personnel activities, as the 2018 period was impacted by the 2017 Hurricanes, and (ii) an increase resulting from a $2 million hurricane disaster relief credit received during the third quarter of 2018 from the Puerto Rico Treasury Department, representing relief for wages paid to employees during the period of time our business was inoperable as a result of the 2017 Hurricanes.

The organic decrease is primarily due to (i) a decrease in salary-related costs, which includes estimated bonus-related expense that has been recognized as share-based compensation expense, as certain 2020 bonuses were paid in the form of equity, as further discussed below under Share-based compensation expense , and (ii) higher capitalized labor costs associated with certain development-related projects.

• Network-related:

The organic increase is primarily due to (i) an increase in system power expenses, as the 2018 period was impacted by the 2017 Hurricanes and (ii) higher CPE repair costs.

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

• Service-related:

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

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

• Commercial:

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

• Facility, provision, franchise and other costs:

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

The following table sets forth the changes in other operating costs and expenses for our Costa Rica segment.

Year ended December 31, Increase (decrease) Increase (decrease) from:

2020 2019 FX Organic

Personnel and contract labor $ 15.0 $ 15.8 $ (0.8) $ 0.1 $ (0.9)

Network-related 8.6 7.9 0.7 — 0.7

Service-related 2.0 1.6 0.4 — 0.4

Commercial 7.0 3.3 3.7 — 3.7

Facility, provision, franchise and other 13.5 14.8 (1.3) — (1.3)

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

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

Share-based compensation expense 0.7 0.1 0.6 — 0.6

Total other operating costs and expenses $ 46.8 $ 43.5 $ 3.3 $ 0.1 $ 3.2

• Commercial:

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

• Facility, provision, franchise and other costs:

The organic decrease is primarily due to lower bank-related fees.

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

Year ended December 31, Organic increase (decrease)

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

Network-related 1.1 — 1.1

Service-related 14.5 13.0 1.5

3 unchanged sentences

• Personnel and contract labor:

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

• Service-related:

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

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

• Facility, provision, franchise and other:

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

1 unchanged sentence

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

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

This increase is primarily due to an increase of (i) $19 million related to estimated bonus-related expenses that was paid in the form of equity and (ii) $7 million related to the extension of the expiration period for certain Liberty Global awards held by our employees.

Depreciation and amortization

Our depreciation and amortization expense increased $29 million or 3% during 2020, as compared to 2019.

Excluding the impacts of FX and acquisitions and a disposal, depreciation and amortization expense increased $25 million or 3.0%.

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

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

Impairment, restructuring and other operating items, net

We recognized impairment, restructuring and other operating items, net, of $259 million and $641 million during 2019 and 2018, respectively.

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

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

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

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

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

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

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

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

Year ended December 31,

Impairment charges (a) $ 277.7 $ 204.8

Restructuring charges (b) 27.5 45.7

Other operating items, net (c) 70.1 17.7

Total $ 375.3 $ 268.2

(a) The 2020 amount primarily includes goodwill impairment charges of $174 million at C&W Panama and $99 million at various reporting units within the C&W Caribbean and Networks segment mostly related to the economic impacts associated with COVID-19.

The 2019 amount primarily includes (i) $185 million related to an impairment of goodwill at C&W Panama and (ii) $17 million related to charges at C&W Caribbean and Networks primarily to reduce the carrying value of property and equipment as a result of the impact of Hurricane Dorian.

The 2019 amounts primarily include direct acquisition costs and disposition costs relate to the AT&T Acquisition and, to a lesser extent, the UTS Acquisition.

Interest expense

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

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

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

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

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

Realized and unrealized gains or losses on derivative instruments, net

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

Year ended December 31,

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

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

Foreign currency forward contracts (7.8) 9.4

Weather Derivatives (b) (5.6) —

Weather Derivatives (c) (16.3) (5.6)

Total $ (352.7) $ (17.2)

(a) The loss during 2019 is primarily attributable to (i) changes in interest rates and (ii) changes in FX rates, predominantly due to changes in the value of the Chilean peso relative to the U.S.

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

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

The loss during 2019 is primarily attributable to (i) changes in interest rates and (ii) changes in FX rates, predominantly due to changes in the value of the Chilean peso relative to the U.S.

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

The gain during 2018 is primarily attributable to (i) changes in FX rates, predominantly due to changes in the value of the Chilean peso relative to the U.S.

dollar, and (ii) changes in interest rates.

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

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

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

Qualitative and Quantitative Disclosures about Market Risk below.

Foreign currency transaction losses, net

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

Foreign currency transaction gains or losses, net

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

Year ended December 31,

5 unchanged sentences

Total $ 1.2 $ (112.5)

Losses on debt modification and extinguishment, net

Gains or losses on debt modification and extinguishment, net

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

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

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

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

Other income (expense), net

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

During 2019, other income primarily relates to interest income.

The amount during 2018, primarily includes the net effect of (i) a $16 million impairment charge on our investment in TSTT, (ii) pension-related credits of $12 million and (iii) interest income of $10 million.

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

For additional information regarding the impairment of our investment in TSTT, see note 7 to our consolidated financial statements.

Income tax benefit (expense)

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

The income tax benefit attributable to our loss before income taxes during 2019 differs from the expected income tax benefit of nil (based on the Bermuda statutory income tax rate of 0%), primarily due to the beneficial effects of (i) net favorable changes in uncertain tax positions, (ii) international rate differences, (iii) basis adjustments associated with investments in Liberty Latin America entities and (iv) enacted tax rate changes, which are offset by the detrimental effects of (i) increases in valuation allowances, (ii) non-deductible goodwill impairments and (iii) net unfavorable permanent differences.

The income tax expense attributable to our loss before income taxes during 2018 differs from the expected income tax benefit of nil (based on the Bermuda statutory income tax rate of 0%), primarily due to (i) the beneficial effects of international rate differences, which are offset by (ii) the effect of non-deductible goodwill impairments, (iii) increases in valuation allowances and (iv) net unfavorable permanent differences.

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

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

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

Other income or expense, net

We recognized other income of $5 million and $14 million during 2020 and 2019, respectively.

The amount during 2020 primarily relates to the net effect of (i) interest income, including interest we generated on restricted cash held in escrow in advance of the closing of the AT&T Acquisition, and (ii) other individually insignificant expenses.

The amount during 2019 primarily relates to interest income.

Income tax benefit or expense

We recognized income tax benefit of $28 million and $100 million during 2020 and 2019, respectively.

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

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

The income tax expense attributable to our loss before income taxes during 2019 differs from the amounts computed using the statutory tax rate (based on the Bermuda statutory tax rate of 0%), primarily due to the beneficial effects of (i) net favorable changes in uncertain tax positions, (ii) international rate differences, (iii) basis adjustments associated with investments in Liberty Latin America entities and (iv) enacted tax rate changes, which are offset by the detrimental effects of (i) increases in valuation allowances, (ii) non-deductible goodwill impairments and (iii) net unfavorable permanent difference.

Net earnings or loss

The following table sets forth selected summary financial information of our net loss for the periods indicated:

Year ended December 31,

Operating income (loss) $ 353.8 $ (23.6)

Operating income $ 93.2 $ 325.8

Net non-operating expenses $ (924.9) $ (634.4)

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

Income tax benefit $ 27.8 $ 100.2

Net loss $ (803.9) $ (208.4)

Net loss attributable to noncontrolling interests

Net earnings or loss attributable to noncontrolling interests

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

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

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

Liquidity and Capital Resources

Sources and Uses of Cash

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

As of December 31, 2021, we have four primary “borrowing groups,” which include the respective restricted parent and subsidiary entities of C&W, Liberty Puerto Rico, VTR and Costa Rica.

Our borrowing groups, which typically generate cash from operating activities, held a significant portion of our consolidated cash and cash equivalents at December 31, 2021.

Our ability to access the liquidity of these and other subsidiaries 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.

For details of the restrictions on our subsidiaries to make payments to us through dividends, loans or other distributions see note 10 to our consolidated financial statements.

Cash and cash equivalents

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Liberty Puerto Rico 157.7

Cabletica 7.6

Costa Rica 24.2

Total borrowing groups 776.9

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

(d) Represents current excess cash of VTR retained by Liberty Latin America.

Cash of $110 million associated with the Chile JV Entities has been reflected in assets held for sale on our December 31, 2021 consolidated balance sheet.

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

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

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

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

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

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

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

In March 2020, our Directors approved the Share Repurchase Program.

During 2021, the aggregate value of our share repurchases was $65 million.

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

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

The liquidity of our borrowing groups generally is used to fund property and equipment additions, debt service requirements and income tax payments.

The liquidity of our borrowing groups generally is used to fund capital expenditures, debt service requirements and income tax payments.

From time to time, our borrowing groups may also require liquidity in connection with (i) acquisitions and other investment opportunities, (ii) loans to Liberty Latin America, (iii) capital distributions to Liberty Latin America and other equity owners or (iv) the satisfaction of contingent liabilities.

No assurance can be given that any external funding would be available to our borrowing groups on favorable terms, or at all.

For information regarding our borrowing groups’ commitments and contingencies, see note 20 to our consolidated financial statements.

For additional information regarding our cash flows, see the discussion under Liquidity and Capital Resources—Consolidated Statements of Cash Flows below.

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In addition, our ability to obtain additional debt financing is limited by incurrence-based leverage covenants contained in the various debt instruments of our borrowing groups.

For example, if the Covenant EBITDA of C&W were to decline, our ability to obtain additional debt could be limited.

For example, if the Covenant EBITDA of one of our borrowing groups were to decline, our ability to support or obtain additional debt in that borrowing group could be limited.

No assurance can be given that we would have sufficient sources of liquidity, or that any external funding would be available on favorable terms, or at all, to fund any such required repayment.

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We do not anticipate any instances of non-compliance with respect to the debt covenants of our borrowing groups that would have a material adverse impact on our liquidity during the next 12 months.

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

At December 31, 2021, the outstanding principal amount of our debt, together with our finance lease obligations, excluding VTR, aggregated $7,686 million, including $106 million that is classified as current in our consolidated balance sheet and $6,433 million that is not due until 2027 or thereafter.

At December 31, 2021, $7,281 million of our debt and finance lease obligations have been borrowed or incurred by our subsidiaries.

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Liberty Puerto Rico 0.40 %

Cabletica 1.24 %

Costa Rica 0.40 %

Liberty Latin America borrowing groups 0.56 %

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Operating Activities.

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

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

The increase in cash provided by operating activities is primarily due to the net impact of (i) an increase in Adjusted OIBDA, particularly in our Liberty Puerto Rico segment, and related working capital changes, (ii) an increase resulting from $73 million of cash used during 2020 for the purchase of prepaid roaming services in conjunction with the AT&T Acquisition, (iii) a decrease related to derivative payments and (iv) an increase related to a decline in cash paid for taxes.

For additional information regarding cash used for derivative activities, see note 5 to the consolidated financial statements.

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

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

For additional information regarding our non-GAAP measure of consolidated Adjusted OIBDA, including

a reconciliation to the nearest U.S.

GAAP measure, see Results of Operations—Year ended December 31, 2021 as Compared with Year Ended December 31, 2020—Adjusted OIBDA above.

Investing Activities.

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

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

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

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

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

Our cash used during 2021 primarily includes (i) $736 million related to capital expenditures and (ii) $521 million, primarily related to the Telefónica Costa Rica Acquisition.

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

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

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

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Acquisition of intangible assets

Assets acquired under finance leases — (0.2)

Changes in current liabilities related to capital expenditures (19.1) 26.0

Capital expenditures $ 736.3 $ 565.8

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

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

The increase in our property and equipment additions during the year ended December 31, 2021, as compared to 2020, is primarily due to increases related to each asset category, in particular assets related to new build and upgrades and capacity additions.

During the year ended December 31, 2021 and 2020, our property and equipment additions represented 17.8% and 16.8% of revenue, respectively.

We expect the percentage of revenue represented by our aggregate 2022 property and equipment additions to be approximately 18%.

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Financing Activities.

During the year ended December 31, 2021, we generated $427 million of cash from financing activities, primarily due to the net effect of (i) $617 million of net borrowings of debt, (ii) $75 million related to payments of financing costs and debt redemption premiums, (iii) $63 million associated with the repurchase of Liberty Latin America common shares, (iv) $48 million in payments related to distributions to noncontrolling interest owners, primarily in C&W Bahamas and C&W Panama, (v) $47 million related to the contribution from a noncontrolling interest owner, as further described in note 19 of the consolidated financial statements, and (vi) $43 million related to derivative payments.

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

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

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

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

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

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

Consolidated Statements of Cash Flows—2020 compared to 2019

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

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

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

Operating Activities.

The increase in net cash provided by our operating activities is primarily attributable to the net effect of (i) an increase from our Adjusted OIBDA, (ii) a decrease from our working capital items, including (a) the release of an uncertain tax position liability of approximately $185 million that has been reflected as a tax benefit in our consolidated statement of operations, as further described in note 15 to our consolidated financial statements, and (b) changes resulting from

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

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

During 2018, we received $51 million of advanced payments, primarily related to the 2017 Hurricanes, $30 million of which was presented in operating cash flows in our consolidated statement of operations upon settlement during the fourth quarter of 2018.

For additional information regarding our insurance receipts, see note 8 to our consolidated financial statements.

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

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

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

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

Investing Activities.

The decrease in net cash used by our investing activities is primarily attributable to the net effect of (i) a decrease in cash used for capital expenditures, as further discussed below, (ii) $161 million of cash used for the UTS Acquisition in March 2019, (iii) $78 million of net cash received in connection with the Seychelles Disposition and (iv) an increase of $13 million of cash received related to the recovery on damaged or destroyed property and equipment resulting from the 2017 Hurricanes and Hurricane Matthew.

During 2019, we received $34 million of cash, as compared with $21 million received during 2018.

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

For additional information regarding the settlement of our insurance claims associated with these hurricanes, see note 7 to our consolidated financial statements.

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

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

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

Acquisition of intangible assets 7.8 —

Assets acquired under finance leases — (0.2)

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Capital expenditures $ 565.8 $ 589.1

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

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

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

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

Financing Activities.

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

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

During 2019, we received $1,540 million in net cash from financing activities, primarily due to $1,691 million of net

borrowings of debt, which was slightly offset by $55 million related to payments of financing costs and debt premiums, $46 million of cash used related to the purchase of Capped Calls, and $38 million for the distribution to noncontrolling interest owners, primarily related to Panama operations.

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

These cash inflows were partially offset by $39 million for financing cost and debt premiums, $23 million in distributions to the noncontrolling interest owner and $21 million of cash used primarily in connection with the C&W Jamaica NCI Acquisition.

Adjusted Free Cash Flow

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

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

See footnote to the table below for additional information.

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

Adjusted free cash flow should not be understood to represent our ability to fund discretionary amounts, as we have various mandatory and contractual obligations, including debt repayments, which are not deducted to arrive at this amount.

Investors should view adjusted free cash flow as a supplement to, and not a substitute for, U.S.

GAAP measures of liquidity included in our consolidated statements of cash flows.

The following table provides the details of our adjusted free cash flow:

Year ended December 31,

2020 2019 2018

Net cash provided by operating activities

$ 640.1 $ 918.2 $ 816.8

Cash payments for direct acquisition and disposition costs

49.8 4.8 12.9

Expenses financed by an intermediary (a)

108.1 129.7 171.7

Capital expenditures

(565.8) (589.1) (776.4)

Recovery on damaged or destroyed property and equipment — 33.9 20.7

Distributions to noncontrolling interest owners

(18.8) (37.7) (22.7)

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

Pre-acquisition net interest payments (receipts) (b)

Principal payments on finance leases

(2.2) (8.7) (7.7)

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

Adjusted free cash flow $ 148.0 $ 223.1 $ 18.8

(a) For purposes of our consolidated statements of cash flows, expenses, including VAT, financed by an intermediary are treated as hypothetical operating cash outflows and hypothetical financing cash inflows when the expenses are incurred.

When we pay the financing intermediary, we record financing cash outflows in our consolidated statements of cash flows.

For purposes of our adjusted free cash flow definition, we add back the hypothetical operating cash outflow when these financed expenses are incurred and deduct the financing cash outflows when we pay the financing intermediary.

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

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

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

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

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

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

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

Off Balance Sheet Arrangements

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The following table sets forth the U.S.

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

Payments due during Total

2021 2022 2023 2024 2025 Thereafter

dollar equivalents of our debt and certain other contractual obligations and commitments as of December 31, 2021.

Due to the held-for-sale presentation of the Chile JV Entities at December 31, 2021, the contractual commitments of these entities have been shown separately in the table below.

For information regarding the held-for-sale presentation of the Chile JV Entities, see note 9 to our consolidated financial statements.

Payments due by period

Total Less than

1 year 1-3 years 3-5 years More than

Debt (excluding interest)

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Operating leases 568.1 96.4 160.8 126.3 184.6

Programming commitments

139.9 89.7 52.8 43.2 0.5 — 326.1

Network and connectivity commitments

57.5 13.7 10.0 9.1 6.3 9.5 106.1

Purchase commitments

98.2 6.5 1.4 — — — 106.1

Other commitments 9.4 1.9 1.6 1.5 1.4 8.4 24.2

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

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

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

(a) The commitments included in this table do not reflect any liabilities that are included in our December 31, 2020 consolidated balance sheet other than (i) debt and (ii) finance and operating lease obligations.

Programming minimum commitments (a) 31.0 24.9 6.0 0.1 —

Other (b) 49.4 49.1 0.3 — —

Total (c) $ 8,334.4 $ 276.6 $ 1,165.9 $ 274.6 $ 6,617.3

Projected cash interest payments on debt and finance lease obligations (d) $ 2,187.6 $ 374.0 $ 714.5 $ 628.9 $ 470.2

Chile JV Entities:

Debt (excluding interest) $ 1,522.2 $ 82.2 $ — $ — $ 1,440.0

Other contractual commitments (a) 274.2 144.3 126.2 3.7 —

Total $ 1,796.4 $ 226.5 $ 126.2 $ 3.7 $ 1,440.0

Projected cash interest payments on debt obligations (d) $ 552.9 $ 80.5 $ 161.1 $ 159.4 $ 151.9

(a) Amounts primarily represent guaranteed minimum programming fees under multi-year contracts typically based on a rate per customer or stated annual fee.

(b) Amounts primarily represent guaranteed minimum commitments associated with our customer premise equipment and mobile handset device contractual obligations.

(c) The commitments included in this table do not reflect any liabilities that are included in our December 31, 2021 consolidated balance sheet other than (i) debt and (ii) finance and operating lease obligations.

Our liability for uncertain tax positions, including accrued interest, in the various jurisdictions in which we operate ( $25 million at December 31, 2021) has been excluded from the table as the amount and timing of any related payments are not subject to reasonable estimation.

For additional information regarding our liability for uncertain tax positions, see note 15 to our consolidated financial statements.

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

These amounts are presented for illustrative purposes only and will likely differ from the actual cash payments required in future periods.

(d) Amounts are based on interest rates, interest payment dates, commitment fees and contractual maturities in effect as of December 31, 2021.

These amounts are presented for illustrative purposes only and will likely differ from the actual cash

payments required in future periods.

In addition, the amounts presented do not include the impact of our derivative contracts.

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• Impairment of property and equipment and intangible assets (including goodwill);

• Costs associated with construction and installation activities;

• Fair value measurements in acquisition accounting.

• Income tax accounting.

For additional information concerning our significant accounting policies, see note 3 to our consolidated financial statements.

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

With respect to a market-value approach, the

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

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

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

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

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

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

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

During 2021, we recorded goodwill impairments of $605 million related to C&W Caribbean and Networks.

During 2020, we recorded goodwill impairments of $174 million and $99 million, respectively, related to C&W Panama and C&W Caribbean and Networks, respectively.

During 2019, we recorded goodwill impairments of $185 million related to C&W Panama.

A hypothetical increase/(decrease) of 0.1% in the discount rate used in the goodwill impairment assessment that resulted in our 2021 goodwill impairment charges would have resulted in an increase/(decrease) of approximately $13 million in aggregate to the goodwill impairment.

For additional information regarding impairments recorded during 2021, 2020 and 2019, see notes 6 and 8 to our consolidated financial statements.

Costs Associated with Construction and Installation Activities

We capitalize 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 our operations.

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 customer locations where a drop already exists, disconnecting customer locations and repairing or maintaining drops, are expensed as incurred.

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.

Fair Value Measurements in Acquisition Accounting

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A significant portion of our long-lived assets were initially recorded through the application of acquisition accounting.

With respect to the valuation of spectrum license as part of the AT&T Acquisition, we estimate fair value using the Greenfield methodology, which is an income approach, to estimate the price at which an orderly transaction to sell the asset would take place between market participants at the measurement date under current market conditions.

The Greenfield methodology values the spectrum licenses by calculating the cash flow generating potential of a hypothetical start-up company that goes into business with no assets except the asset to be valued (in this case, spectrum licenses) and makes investments required to build an operation comparable to current use.

The value of the spectrum licenses can be considered as equal to the present value of the cash flows of this hypothetical start-up company.

We base the assumptions underlying the Greenfield methodology on a combination of market participant data and our historical results, trends and business plans.

Future cash flows in the Greenfield methodology are based on estimates and assumptions of market participant revenues and costs, network construction build-out period and costs and a long-term growth rate for a market participant.

The cash flows are discounted using a weighted average cost of capital.

The valuation approach utilized to estimate fair value of spectrum licenses require the use of assumptions and estimates, which involve a degree of uncertainty.

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

For information regarding our acquisitions and long-lived assets, see notes 4 and 8, respectively, to our consolidated financial statements.

Income Tax Accounting

We are required to estimate the amount of tax payable or refundable for the current year and the 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.

This process requires our management to make assessments regarding the timing and probability of the ultimate tax impact of such items.

Net deferred tax assets are reduced by a valuation allowance if we believe it is more-likely-than-not such net deferred tax assets will not be realized.

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

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

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

Any such factors could have a material effect on our current and deferred tax positions.

A high degree of judgment is required to assess the impact of possible future outcomes on our current and deferred tax positions.

Tax laws in jurisdictions in which we have a presence are subject to varied interpretation, and tax positions we may take could be subject to significant uncertainty regarding whether the position will be ultimately sustained after review by the relevant tax authority.

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.

The determination of whether the tax position meets the more-likely-than-not threshold requires a facts-based judgment using all information available.

In a number of cases, we have concluded that the more-likely-than-not threshold is not met and, accordingly, the amount of tax benefit recognized in our consolidated financial statements is different than the amount taken or expected to be taken in our tax returns.

As of December 31, 2020, the amount of unrecognized tax benefits for financial reporting purposes, but taken or expected to be taken in our tax returns, was $32 million, all of which would have a favorable impact on our effective income tax rate if ultimately recognized, after considering amounts that we would expect to be offset by valuation allowances.

We are required to continually assess our tax positions, and the results of tax examinations or changes in judgment can result in substantial changes to our unrecognized tax benefits.

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

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What changed 10-K

Item 7. Management’s Discussion and Analysis