What changed in this filing

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Item 1A. Risk Factors

2025-02-19 compared with 2024-02-22 · 71 added, 55 removed, 554 unchanged (19% of the section changed)

24 unchanged sentences

As a result, our competitors have similar licenses and have and may continue to build systems and provide services in areas in which we hold licenses.

In the case of cable- and broadband-enabled services, the existence of more than one cable or fiber-to-the-home/-cabinet/-building/-node system operating in the same territory is referred to as an “overbuild.” Overbuilds increase competition or create competition where none existed previously, either of which could adversely affect our growth, financial condition and results of operations.

In the case of cable- and broadband-enabled services, the existence of more than one cable or FTTH system operating in the same territory is referred to as an “overbuild.” Overbuilds increase competition or create competition where none existed previously, either of which could adversely affect our growth, financial condition and results of operations.

In some of our markets, national and local government agencies may seek to become involved, either directly or indirectly, in the establishment of FTTH networks, DTT systems or other communications systems.

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Our ability to anticipate changes in technology and consumer tastes and to develop and introduce new and enhanced products and services on a timely basis will affect our ability to maintain, continue to grow, or increase our revenue and number of customers and remain competitive.

New products and services, once marketed, may not meet consumer expectations or demand, can be subject to delays in development and may fail to operate as intended.

New products and services, once marketed, may not meet consumer expectations or demand, can be subject to delays in development

and may fail to operate as intended.

A lack of market acceptance of new products and services that we may offer, or the development of significant competitive products or services by others, could have a material adverse impact on our results of operations and cash flows.

Our significant property and equipment additions may not generate a positive return.

Significant additions to our property and equipment are, or in the future may be, required to add customers to our networks and to upgrade or expand our mobile and broadband communications networks and upgrade customer premises equipment to

enhance our service offerings and improve the customer experience.

Additions to our property and equipment, including in connection with Network Extensions , require significant capital expenditures for equipment and associated labor costs to build out and/or upgrade our networks as well as for related customer premises equipment.

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As a result, we may not be able to obtain the equipment, software, access and services required for our businesses on a timely basis or on satisfactory terms, and this may lead us to issue credit to customers which could adversely impact our revenue and cash flows.

Any shortfall in our equipment could lead to delays in completing extensions to our networks and in connecting customers to our services and, accordingly, could adversely impact our ability to maintain or increase our RGU s, revenue and cash flows.

increase our RGU s, revenue and cash flows.

Also, if demand exceeds the suppliers’ and licensors’ capacity or if they experience financial difficulties, the ability of our businesses to provide some services may be materially adversely affected, which in turn could affect our businesses’ ability to attract and retain customers.

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Although we actively monitor the creditworthiness of our key third-party suppliers and licensors, the financial failure of a key third-party supplier or licensor could disrupt our operations and have an adverse impact on our revenue and cash flows.

We rely upon intellectual property that is owned or licensed by us to use various technologies,

conduct our operations and sell our products and services.

We rely upon intellectual property that is owned or licensed by us to use various technologies, conduct our operations and sell our products and services.

Legal challenges could be made against our use of our owned or licensed intellectual property rights (such as trademarks, patents and trade secrets) and we may be required to enter into licensing arrangements on unfavorable terms, incur monetary damages or be enjoined from use of the intellectual property rights in question.

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We cannot assure you that our systems will continue to function as expected in a cost-effective manner.

Additionally, product shipments from third-party suppliers may be delayed due to supply chain challenges that our suppliers may face.

Additionally, product shipments from third-party suppliers may be delayed or more costly due to supply chain challenges and new tariffs that our suppliers may face.

If such a disruption were to extend over a prolonged period, it could have an impact on the continuity of our supply chain and our ability to build or upgrade our networks and customer premises equipment generally.

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We may not be successful, or may be less successful than our current or new competitors, in developing technology that operates effectively across multiple devices and platforms and that is appealing to consumers, either of which would negatively impact our business and financial performance.

New developments in other areas, such as artificial intelligence, machine learning, cloud computing and software

as a service provider, could also make it easier for competition to enter our markets due to lower up-front technology costs.

New developments in other areas, such as artificial intelligence, machine learning, cloud computing and software as a service provider, could also make it easier for competition to enter our markets due to lower up-front technology costs.

In addition, we may not be able to maintain our existing systems or replace or introduce new technologies and systems as quickly as customers would like or in a cost-effective manner.

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• uncertainty regarding intellectual property rights and other legal issues.

Operational risks that we may experience in certain countries include uncertain and rapidly changing political, regulatory and economic conditions, including the possibility of disruptions of services or loss of property or equipment that are critical to overseas businesses as a result of vandalism, expropriation, nationalization, war, insurrection, terrorism or general social or political unrest.

In certain countries and territories in which we operate, political, security and economic changes may result in political and regulatory uncertainty and civil unrest.

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Although we generally seek to match the denomination of our borrowings with the functional currency of the operations that are supporting the respective borrowings, market conditions or other factors may cause us to enter into borrowing arrangements that are not denominated in the functional currency of the underlying operations (unmatched debt).

Our policy is generally to provide for an economic hedge against foreign currency exchange rate movements, whenever possible and when cost effective to do so, by using derivative instruments to synthetically convert unmatched debt into the applicable underlying currency.

Our policy is generally to provide for an economic hedge against foreign currency exchange rate movements, whenever

possible and when cost effective to do so, by using derivative instruments to synthetically convert unmatched debt into the applicable underlying currency.

In addition to the exposure that results from unmatched debt, we are exposed to foreign currency risk to the extent that we enter into transactions denominated in currencies other than our operating subsidiaries’ respective functional currencies (non-functional currency risk), such as equipment purchases and programming contracts.

Changes in exchange rates with respect to amounts recorded in our consolidated balance sheet related to these items will result in (i) unrealized foreign currency transaction gains and losses based upon period-end exchange rates or (ii) realized foreign currency transaction gains and losses upon settlement of the transactions.

Moreover, to the extent that our revenue, costs and expenses are denominated in currencies other than our respective functional currencies, we will experience fluctuations in our revenue, costs and expenses solely as a

result of changes in foreign currency exchange rates.

Generally, we will consider hedging non-functional currency risks when the risks arise from agreements with third parties that involve the future payment or receipt of cash or other monetary items to the extent that we can reasonably predict the timing and amount of such payments or receipts and the payments or receipts are not otherwise hedged.

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financial institutions to process the collection of outstanding debts and the receipt of current and future payments relating to telecommunications services provided to Compañía Anónima Nacional Teléfonos de Venezuela.

OFAC extended this license on August 17, 2023.

OFAC extended this license in 2023 and 2024 and it currently expires on August 31, 2025.

We will seek to renew this license for 2025-2026.

We believe that our activities with respect to these countries are known to OFAC.

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In particular, we are reliant on access with mutually beneficial terms to spectrum for both existing and next generation telecommunication services, entrance into interconnection agreements with other telecommunications companies and are subject to a range of decisions by regulators, including in respect of pricing, for example, for termination rates.

The provision of electronic communications

networks and services requires our licensing from, or registration with, the appropriate regulatory authorities.

The provision of electronic communications networks and services requires our licensing from, or registration with, the appropriate regulatory authorities.

It is possible that countries in which we operate may adopt laws and regulations regarding electronic commerce, which could dampen the growth of the internet services being offered and developed by these businesses.

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

• impact the amount of government funding under certain support programs such as the FCC ’s UPR Fund and the NTIA ’s MMG Program ;

• impact the amount of government funding under certain support programs, such as the FCC ’s UPR Fund and th e NTIA ’s MMG Program ;

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

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When we acquire additional communications companies, these acquisitions may require the approval of governmental authorities, which can block, impose conditions on, or delay an acquisition, thus hampering our opportunities for growth.

If conditions are imposed and we fail to meet them in a timely manner, the governmental authority may impose fines and, if in connection with an acquisition transaction, may require restorative measures, such as mandatory disposition of assets or divestiture of operations, similar to the divestiture with respect to the AT&T Acquisition .

The acquisition of C&W in May 2016 triggered regulatory approval requirements in certain jurisdictions in which C&W operates.

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Furthermore, the governments in the countries and territories in which we operate differ widely with respect to political structure, constitution, economic philosophy, stability and level of regulation.

Many of our operations depend on governmental approval and regulatory decisions, and we provide services to governmental organizations in certain markets (and in certain

cases, like Venezuela, governmental organizations are our biggest customers).

Many of our operations depend on governmental approval and regulatory decisions, and we provide services to governmental organizations in certain markets (and in certain cases, like Venezuela, governmental organizations are our biggest customers).

Moreover, in several of C&W ’s key markets, including Panama and The Bahamas, governments are C&W ’s partners and co-owners.

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Future changes to regulation or changes in political administrations or a significant deterioration in our relationship with relevant regulators in the jurisdictions in which we operate, as well as failure to acquire and retain the necessary consents and approvals or in any other way comply with regulatory requirements, or excessive costs of complying with new or more onerous regulations and restrictions could have a material adverse effect on our business, reputation, financial condition, results of operations and prospects.

Failure to comply with the FCC ’s requirements for the UPR Fund , the ACP or other funding programs in which Liberty Puerto Rico may participate may have an adverse impact on Liberty Puerto Rico ’s business and our financial position, and payments by such programs are decreasing and uncertain.

Failure to comply with the FCC ’s requirements for the UPR Fund or other funding programs in which Liberty Puerto Rico may participate may have an adverse impact on Liberty Puerto Rico ’s business and our financial position, and payments by such programs are decreasing and uncertain.

In May 2018, the FCC established the UPR Fund and the Connect USVI Fund to provide subsidies for the deployment and hardening of fixed wireline and mobile wireless communications networks in Puerto Rico and the U.S.

Virgin Islands, and in 2021, the FCC launched the ACP which provides a long-term broadband affordability benefit to low-income customers.

Virgin Islands.

Liberty Puerto Rico receives funds from the FCC through these programs.

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In April 2023, the FCC adopted an additional two-year transitional period for mobile support recipients during which transitional mobile support recipients will receive 50% of their current monthly support for both 4G LTE and 5G-NR during the first year of transitional mobile support, and then 25% of their currently monthly support in their second year of transitional support.

Thus, Liberty Puerto Rico’s annual Stage 2 mobile support was reduced from approximately $34 million to approximately $17 million in the first year of

transitional support and will be reduced to approximately $8.5 million in the second year.

In addition, continuation of the ACP, depends upon the appropriation of additional funds by Congress, which is uncertain.

Thus, Liberty Puerto Rico’s annual Stage 2 mobile support was reduced from approximately $34 million to approximately $17 million in the first year of transitional support and will be reduced to approximately $8.5 million in the second year.

Reduced funding from these programs may have an adverse impact on Liberty Puerto Rico’s business and our RGUs, revenue and cash flow.

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While these licenses, and other licenses that we possess, enable us to offer mobile data services today, as technology develops and customer needs change, it may be necessary to acquire new spectrum or other licenses in the future to provide us with additional capacity and/or offer new technologies or services.

For example, we expect to acquire additional wireless spectrum in Puerto Rico and the USVI through the Puerto Rico and USVI Spectrum Acquisition .

While we actively engage with regulators and governments to ensure that our spectrum needs are met, there can be no guarantee that future spectrum licenses will be made available in certain or all territories or that they will be made available on commercially viable terms.

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We cannot be certain that we will be successful in acquiring new businesses or integrating acquired businesses with our existing operations, or that we will achieve the expected returns on our acquisitions.

Part of our business strategy is to grow and expand our businesses, in part, through selective acquisitions, such as the Puerto Rico and USVI Spectrum Acquisition, that enable us to take advantage of existing networks, local service offerings and region-specific management expertise.

Part of our business strategy is to grow and expand our businesses, in part, through selective acquisitions, such as the transaction with Millicom in Costa Rica, that enable us to take advantage of existing networks, local service offerings and region-specific management expertise.

Our ability to acquire new businesses may be limited by many factors, including availability of financing, debt covenants, the prevalence of complex ownership structures among potential targets, government regulation, our ability to obtain regulatory approval or satisfy other conditions to completing a transaction, and competition from other potential acquirers, including private equity funds.

Even if we are successful in acquiring new businesses, the integration of these businesses, such as in the AT&T Acquisition, the Liberty Telecomunicaciones Acquisition and the Claro Panama Acquisition , may present significant costs and challenges associated with:

Even if we are successful in acquiring new businesses, the integration of these businesses, such as in the AT&T Acquisition, may present significant costs and challenges associated with:

realizing economies of scale in interconnection, programming and network operations;

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While we actively engage with the applicable governments and other regulatory bodies in advance of the expiry of our licenses, concessions and operating agreements, there can be no guarantee that when such licenses, concessions and operating agreements expire, we will be able to renew them on similar or commercially viable terms, or at all.

For instance, C&W ’s licenses in Jamaica, the Cayman Islands, The Bahamas, Antigua and the Turks and Caicos Islands are in the process of being renewed on the same terms and conditions as before.

For instance, C&W ’s license in The Bahamas is in the process of being renewed on the same or substantially similar terms and conditions as before and, in Antigua and Barbuda, the outdated mobile license is due to be renewed with an updated license.

In addition, in some of the ECTEL states, we are operating under expired licenses and have applied for renewal of such licenses.

In addition, in certain jurisdictions where spectrum licenses must be renewed, there is no guarantee that we will be able to renew those licenses on similar or commercially viable terms, or at all.

We have also begun the process to renew the mobile spectrum concession in Costa Rica that is scheduled to expire in 2026.

In certain jurisdictions where spectrum licenses must be renewed, there is no guarantee that we will be able to renew those licenses on similar or commercially viable terms, or at all.

Some of these licenses may also include clauses that allow the grantor to terminate or revoke or alter them in the event of a default or other failure by us to comply with applicable conditions of the license or to promote the public interest.

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We are subject to changing tax laws, treaties and regulations in and between countries in which we operate or otherwise have a presence.

Also, various income tax proposals in the jurisdictions in which we operate could result in changes to the existing laws on which our deferred taxes are calculated.

Also, various income tax proposals in the jurisdictions in which we operate could result in changes to the

existing laws on which our deferred taxes are calculated.

A change in these tax laws, treaties or regulations, or in the interpretation thereof, could result in a materially higher income or non-income tax expense.

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It is possible that additional jurisdictions in which we do business could react to these initiatives or their own concerns by enacting tax legislation that could adversely affect us or our shareholders through increasing our tax liabilities.

In particular, the OECD has proposed a provision to impose a minimum tax rate of 15%, among other provisions, and as of

2023 more than 140 countries have tentatively signed on to the framework.

In particular, the OECD has proposed a provision to impose a minimum tax rate of 15%, among other provisions, and as of 2024 more than 140 countries have tentatively signed on to the framework.

As this framework is subject to further negotiation and implementation by each member country, the timing and ultimate impact of any such changes on our tax obligations are uncertain.

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No assurance can be given that we will be able to complete refinancing transactions or otherwise extend our debt maturities.

In this regard, it is difficult to predict how political and economic conditions, sovereign debt concerns or any adverse regulatory developments will impact the credit and equity markets we access and our future financial position.

In this regard, it is difficult to predict how political and economic

conditions, sovereign debt concerns or any adverse regulatory developments will impact the credit and equity markets we access and our future financial position.

Our ability to service or refinance our debt and to maintain compliance with the leverage covenants in our credit agreements is dependent primarily on our ability to maintain or increase the cash flow of our operating subsidiaries and to achieve adequate returns on our property and equipment additions and acquisitions.

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In that event, if related to borrowings under a borrowing group’s (i.e., C&W , Liberty Costa Rica, and Liberty Puerto Rico) debt agreements or other instruments, other debt agreements or instruments that contain cross-default or cross-acceleration provisions with respect to other indebtedness of that particular borrowing group may become payable on demand and the affected borrowing group may not have sufficient funds to repay all of its debts.

and if related to borrowings in an amount above a certain threshold of a “significant subsidiary” (as defined in Regulation S-X under the Securities Act) of Liberty Latin America Ltd., the Convertible Notes may become payable on demand under the cross-default provision in the indenture governing the Convertible Notes.

If related to the Convertible Notes, Liberty Latin America Ltd.’s (excluding its subsidiaries) other debt agreements or instruments (if any) that contain cross-default or cross-acceleration provisions with respect to Latin America Ltd.’s other indebtedness may become payable on demand and it may not have sufficient funds to repay all of its debts.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.

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In addition, as countries seek to recover from natural disasters like hurricanes, they may seek new or increased revenue sources from businesses such as ours, including by increasing taxes and levies.

Accordingly, our results of operations and cash flows may be adversely affected if the macroeconomic environment becomes uncertain or declines or governments increase taxes or levies as a result of fiscal deficits or natural disasters.

Accordingly, our

results of operations and cash flows may be adversely affected if the macroeconomic environment becomes uncertain or declines or governments increase taxes or levies as a result of fiscal deficits or natural disasters.

We are currently unable to predict the extent of any of these potential adverse effects.

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Business solutions customers may delay purchasing decisions, delay full implementation of service offerings or reduce their use of services.

Our residential customers may similarly elect to use fewer higher margin services, switch from fixed to mobile services resulting in

the so-called traffic substitution effect, reduce their consumption of our video services or similarly choose to obtain products and services under lower cost programs offered by our competitors.

Our residential customers may similarly elect to use fewer higher margin services, switch from fixed to mobile services resulting in the so-called traffic substitution effect, reduce their consumption of our video services or similarly choose to obtain products and services under lower cost programs offered by our competitors.

In addition, adverse economic conditions may lead to a rise in the number of our customers who are not able to pay for our services.

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Due to the Caribbean’s heavy reliance on tourism, the Caribbean economy has suffered during previous periods of global recession and fluctuations in exchange rates and is likely to be adversely affected if major economies again find themselves in recession or if consumer and/or business confidence in those economies erodes in the face of trends in the global financial markets and economies.

T he current macroeconomic environment has also resulted in systemic disruption of the worldwide equity markets, and the market values of our publicly-traded equity declined significantly beginning in late February 2020 with the onset of the COVID-19 pandemic.

The duration and severity of the economic impacts stemming from the COVID-19 pandemic, competition, economic, regulatory or other factors, including macro-economic and demographic trends, are unknown and may be prolonged.

From time to time, the macroeconomic environment has also resulted in systemic disruption of the worldwide equity markets.

The duration and severity of the economic impacts stemming from competition, economic, regulatory or other factors, including macro-economic and demographic trends, are unknown and may be prolonged.

In particular, any recession, depression, inflationary pressures, or other sustained adverse market event may result in high levels of unemployment and associated loss of personal income, decreased consumer confidence, and lower discretionary spending, which could materially and adversely affect our business, results of operations, financial position and cash flows.

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While we currently have no specific concerns about the creditworthiness of any counterparty for which we have material credit risk exposures, the current economic conditions and uncertainties in global financial markets have increased the credit risk of our counterparties and we cannot rule out the possibility that one or more of our counterparties could fail or otherwise be unable to meet its obligations to us.

Any such instance could have an adverse effect on our cash flows, results of operations, financial condition and/or liquidity.

Any such instance could have an adverse effect on our cash flows, results of operations, financial

condition and/or liquidity.

In this regard, (i) the financial failure of any of our counterparties could reduce amounts available under committed credit facilities and adversely impact our ability to access cash deposited with any failed financial institution, thereby causing a default under one or more derivative contracts, and (ii) tightening of the credit markets could adversely impact our ability to access debt financing on favorable terms, or at all.

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In particular, our systems and equipment are in regions prone to hurricanes, earthquakes and other natural disasters, and they have been impacted by hurricanes and earthquakes in the recent past.

Our networks and our subsea cables could be subject to damage, cable cuts and surveillance from malicious state-sponsored actors.

Moreover, despite security measures, our servers, systems and equipment are potentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptive actions as further discussed below.

See “Cyberattacks or other network disruptions could have an adverse effect on our business.”

Our disaster recovery, security and service continuity protection measures include back-up power systems, resilient ring network systems, procuring capacity in competing networks to further strengthen our reliability profile and network monitoring.

We also are party to the Atlantic Cable Maintenance and Repair Agreement, which provides us with certain dedicated repair vessels and timely call out services with respect to our subsea cables through to the present.

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We may share information about such persons with vendors, contractors and other third-parties that assist with certain aspects of our business.

Our and our vendors’ servers, systems and equipment (including our routers and set-top boxes) are vulnerable to damage or security breach from a variety of sources, including a cut in our terrestrial network or subsea cable network, security flaws, and malicious human acts.

Moreover, our information technology and network systems may be subject to cyber ransom events that could result in the loss of critical information or operational capabilities that could materially impact our business operations.

Despite security measures, our and our vendors’ servers, systems and equipment are potentially vulnerable to physical or electronic break-ins, computer viruses, worms, phishing attacks and similar disruptive actions.

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As a result, a cyberattack or network disruption could have a material adverse effect on our business, financial condition, cash flows, and operating results.

We also face similar risks associated with security breaches affecting third parties with which we are affiliated or otherwise conduct business.

We also face similar risks associated with security breaches affecting third parties with which we are

affiliated or otherwise conduct business.

While we maintain cyber liability insurance that provides both third-party liability and first-party insurance coverage, our insurance may not be sufficient to protect against all of our losses from any future disruptions or breaches of our systems or other events as described above.

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holders of our Class B common shares are entitled to 10 votes per share;

and holders of our Class C common shares are not entitled to any votes in respect of their common shares, unless such common shares are required to carry the right to vote under applicable law, in which case holders of our Class C common shares will be entitled to 1/100 of a vote per share.

Our bye-laws prescribe that all classes of common

shares vote together as one class, meaning that those holding Class C common shares will have little to no ability to influence the outcome of a shareholder vote as they will be consistently outvoted by holders of our Class A and Class B common shares.

of our Class C common shares will be entitled to 1/100 of a vote per share.

Our bye-laws prescribe that all classes of common shares vote together as one class, meaning that those holding Class C common shares will have little to no ability to influence the outcome of a shareholder vote as they will be consistently outvoted by holders of our Class A and Class B common shares.

The division of our common shares into different classes with different relative voting rights does not affect the fiduciary duties owed by our directors.

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This general permission would cease to apply if none of our common shares were to be listed on Nasdaq or another appointed stock exchange.

Certain Searchlight parties may sell Class C common shares subject to a Registration Rights Agreement in the public market, which may cause the market price of our common shares to decrease, and therefore make it more difficult to raise equity financing or issue equity as consideration in an acquisition.

Our Registration Rights Agreement with certain Searchlight parties requires us to promptly register under the Securities Act the 9,500,000 Class C common shares subject to such agreement and held by such shareholders or their permitted transferee(s), upon their request.

The registration rights for such Searchlight parties will allow them to sell such shares without compliance with the volume and manner of sale limitations under Rule 144 promulgated under the Securities Act and will facilitate the resale of such securities into the public market.

The market value of our common shares could decline as a result of sales by such shareholders from time to time.

In particular, the sale of a substantial number of our shares by such shareholders within a short period of time, or the perception that such sale might occur, could cause our share price to decrease, make it more difficult for us to raise funds through future offerings of our common shares or acquire other businesses using our common shares as consideration.

We could be subject to changes in our tax rates, the enactment of legislation implementing changes in taxation of international business activities, the adoption of other corporate tax reform policies, or other changes in tax legislation or policies which could adversely affect our business, financial condition, and results of operations.

The taxation of our business is subject to the enactment of, or changes in, tax laws, regulations and treaties, or the interpretation thereof, tax policy initiatives and reforms under consideration and the practices of tax authorities in various jurisdictions.

Existing, new, or future changes in tax laws, regulations and treaties, or the interpretation thereof could have an adverse effect on our tax liabilities, business, results of operations and financial condition.

We are unable to predict what tax reform may be proposed or enacted in the future in jurisdictions where we have operations or what effect such changes would have on our business, but such changes could affect our future financial position and overall tax rates in the future or increase the complexity, burden and cost of tax compliance.

If our effective tax rate increases, our operating results and cash flow could be adversely affected.

Our effective income tax rate can vary significantly between periods due to a number of complex factors including, but not limited to, our possible expansion to other jurisdictions, projected levels of taxable income in each jurisdiction, tax audits conducted and settled by various tax authorities, and adjustments to income taxes upon finalization of income tax returns.

Corporate tax reform, base-erosion efforts, and tax transparency continue to be high priorities in many tax jurisdictions where we have business operations.

As a result, policies regarding corporate income and other taxes in numerous jurisdictions are under heightened scrutiny, and tax reform legislation is being proposed or enacted in a number of jurisdictions.

In October 2021, the OECD ’s Inclusive Framework reached an agreement on a “Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy” and, on December 20, 2021, the OECD’s Inclusive Framework published “Global Anti-Base Erosion,” or “GloBE” model rules, which are a key component of the Two-Pillar Solution.

The GloBE model rules would apply to multinational enterprises with revenues of at least €750,000,000 and provide for a coordinated system of taxation that imposes a “top-up” tax to ensure that a multinational enterprise pays a minimum rate of 15% tax on its net income in each country where it operates.

Countries around the world have enacted, and are continuing to enact, legislation to implement the GloBE model rules.

As the Two-Pillar Solution is subject to implementation by each member country, the timing and ultimate impact of any such changes on our tax obligations is uncertain.

Such legislative initiatives may materially and adversely affect our plans to expand internationally and may negatively impact our tax liability, financial condition, and results of operations, and could increase our administrative expenses.

These changes, as they take effect in various countries in which we do business, may also increase our taxes in these countries.

For example, Bermuda enacted the CIT Act on December 27, 2023.

Entities subject to tax under the CIT Act are the Bermuda constituent entities of multinational enterprises.

The definition of a “multi-national group” or “multinational enterprise” under the CIT Act follows the definition in the GloBE model roles i.e.

a group with entities in more than one jurisdiction with consolidated revenues of at least €750,000,000 for two out of the four previous fiscal years.

If Bermuda constituent entities of a multi-national group are subject to tax under the CIT Act, such tax is charged at a rate of 15 percent of the net taxable income of such constituent entities as determined in accordance with and subject to the adjustments set out in the CIT Act.

While we expect that we would be treated as a Bermuda Constituent Entity for the purposes of the CIT Act and therefore subject to taxation in Bermuda for its first fiscal year starting on or after January 1, 2025, we do not expect to incur material tax liabilities in Bermuda due to our status as a holding company, meaning the majority of our income is excluded from the calculation of tax under the CIT Act.

However, future developments and guidance under the GloBE model rules may impact Bermuda’s implementation of its new corporate tax regime, and any future changes to the Bermuda corporate income tax regime may negatively impact our tax liability, financial condition, and results of operations, and could increase our administrative expenses.

We have identified material weaknesses in our internal control over financial reporting, which could, if not remediated, result in material misstatements in our financial statements.

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The material weaknesses will not be considered remediated until the applicable new or enhanced controls operate for a sufficient period and management has concluded, through testing, that these controls are operating effectively.

As remediation has not yet been completed, these material weaknesses continued to exist with respect to our internal control over financial reporting as of December 31, 2023.

As remediation has not yet been completed, these material weaknesses continued to

exist with respect to our internal control over financial reporting as of December 31, 2024.

If our remedial measures are insufficient to address the material weaknesses, or if one or more additional material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain material misstatements and we could be required to restate our financial results, which could, in turn, harm our reputation or otherwise cause a decline in investor confidence and in the market price of our stock.

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

What changed 10-K

Item 1A. Risk Factors