UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q



þ☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended ~~March 31, 2018~~	June 30, 2019



¨ ☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission file ~~number~~ number: 001-38335

Liberty Latin America Ltd.

(Exact name of Registrant as specified in its charter)



Bermuda		98-1386359
(State or ~~other jurisdiction~~Other Jurisdiction of ~~incorporation~~Incorporation or ~~organization)~~Organization)		(I.R.S. Employer Identification No.)

2 Church Street,
Hamilton		HM 11
(Address of ~~principal executive offices)~~Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: ~~(441)~~ (441) 295-5950 or (303) 925-6000

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Trading Symbols	Name of Each Exchange on Which Registered
Class A Shares, par value $0.01 per share	LILA	The NASDAQ Stock Market LLC
Class C Shares, par value $0.01 per share	LILAK	The NASDAQ Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the Registrant has submitted electronically ~~and posted on its corporate website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit ~~and post~~ such files). Yes þ No ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~Check one:~~



Large Accelerated Filer¨	☑	Accelerated Filer ¨	☐	Non-Accelerated Filerþ ~~(Do not check if a smaller reporting company)~~	☐
Smaller Reporting Company¨	☐	Emerging Growth Company¨	☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨

~~Indicate by check mark whether the Registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes~~ ¨ No þ



Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).	Yes	☐	No þ

The number of outstanding common shares of Liberty Latin America Ltd. as of ~~April 30, 2018~~July 31, 2019 was: ~~48,441,023~~48,685,739 Class A; ~~1,936,035~~1,935,226 Class B; and ~~120,859,778~~130,948,890 Class C.

LIBERTY LATIN AMERICA LTD.

TABLE OF CONTENTS



		Page Number
	PART I - FINANCIAL INFORMATION
Item 1.	FINANCIAL STATEMENTS
	Condensed Consolidated Balance Sheets as of ~~March 31, 2018~~June 30, 2019 and December 31, ~~2017~~2018 (unaudited)	1
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended ~~March 31,~~June 30, 2019 and 2018 ~~and 2017~~ (unaudited)	3
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended ~~March 31,~~June, 30, 2019 and 2018 ~~and 2017~~ (unaudited)	4
	Condensed Consolidated ~~Statement~~Statements of Equity for the Three and Six Months Ended ~~March 31,~~June 30, 2019 and 2018 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the ~~Three~~Six Months Ended ~~March 31,~~June 30, 2019 and 2018 ~~and 2017~~ (unaudited)	67
	Notes to Condensed Consolidated Financial Statements (unaudited)	78
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3340
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	5463
Item 4.	CONTROLS AND PROCEDURES	5665
	PART II - OTHER INFORMATION
Item 6.	EXHIBITS	5766

LIBERTY LATIN AMERICA LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

March 31,
2018 December 31,
2017

in millions
ASSETS
Current assets:
Cash and cash equivalents $ 510.6
$ 529.9
Trade receivables, net of allowances of $142.4 million and $142.2 million, respectively 581.2
556.5
Prepaid expenses 64.8
65.5
Other current assets 245.7
222.9
Total current assets 1,402.3
1,374.8

Goodwill 5,663.6
5,673.6
Property and equipment, net 4,236.2
4,169.2
Intangible assets subject to amortization, net 1,251.6
1,316.2
Intangible assets not subject to amortization 565.9
565.4
Other assets, net 579.4
517.7
Total assets $ 13,699.0
$ 13,616.9



	June 30, 2019		December 31, 2018
	June 30, 2019		December 31, 2018
	in millions
ASSETS
Current assets:
Cash and cash equivalents	$	957.4	$	631.0
Trade receivables, net of allowances of $141.4 million and $144.4 million, respectively	699.8		607.3
Prepaid expenses	65.0		73.2
Other current assets, net	257.0		333.3
Total current assets	1,979.2		1,644.8

Goodwill	5,182.8		5,133.3
Property and equipment, net	4,361.6		4,236.9
Intangible assets subject to amortization, net	1,068.4		1,165.7
Intangible assets not subject to amortization	563.0		562.5
Other assets, net	752.0		703.4
Total assets	$	13,907.0	$	13,446.6

LIBERTY LATIN AMERICA LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS – (Continued)

(unaudited)

March 31,
2018 December 31, 2017

in millions
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 276.7
$ 286.8
Deferred revenue 159.3
143.4
Current portion of debt and capital lease obligations 212.3
263.3
Accrued capital expenditures 108.3
128.6
Accrued interest 58.8
115.6
Accrued income taxes 88.7
91.5
Other accrued and current liabilities 691.2
557.7
Total current liabilities 1,595.3
1,586.9
Long-term debt and capital lease obligations 6,207.1
6,108.2
Deferred tax liabilities 516.6
533.4
Other long-term liabilities 783.1
697.8
Total liabilities 9,102.1
8,926.3

Commitments and contingencies

Equity:
Liberty Latin America shareholders:
Class A, $0.01 par value; 500,000,000 shares authorized; 48,438,433 and 48,428,841 shares issued and outstanding, respectively 0.5
0.5
Class B, $0.01 par value; 50,000,000 shares authorized; 1,938,625 and 1,940,193 shares issued and outstanding, respectively —
—
Class C, $0.01 par value; 500,000,000 shares authorized; 120,859,778 and 120,843,539 shares issued and outstanding, respectively 1.2
1.2
Undesignated preference shares, $0.01 par value; 50,000,000 shares authorized; nil shares issued and outstanding at each period —
—
Additional paid-in capital 4,397.5
4,402.8
Accumulated deficit (1,066.3 ) (1,010.7 )
Accumulated other comprehensive loss, net of taxes (86.2 ) (64.2 )
Total Liberty Latin America shareholders 3,246.7
3,329.6
Noncontrolling interests 1,350.2
1,361.0
Total equity 4,596.9
4,690.6
Total liabilities and equity $ 13,699.0
$ 13,616.9



	June 30, 2019			December 31, 2018
	June 30, 2019			December 31, 2018
	in millions
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	352.1		$	297.4
Current portion of deferred revenue	169.1			161.7
Current portion of debt and finance lease obligations	172.4			302.5
Accrued capital expenditures	57.1			75.0
Accrued interest	108.1			118.7
Accrued income taxes	12.9			29.8
Other accrued and current liabilities	753.6			623.6
Total current liabilities	1,625.3			1,608.7
Long-term debt and finance lease obligations	6,860.6			6,379.6
Deferred tax liabilities	440.4			543.0
Deferred revenue	226.0			239.0
Other long-term liabilities	750.8			552.9
Total liabilities	9,903.1			9,323.2

Commitments and contingencies

Equity:
Liberty Latin America shareholders:
Class A, $0.01 par value; 500,000,000 shares authorized; 48,683,914 and 48,501,803 shares issued and outstanding, respectively	0.5			0.5
Class B, $0.01 par value; 50,000,000 shares authorized; 1,935,226 and 1,935,949 shares issued and outstanding, respectively	—			—
Class C, $0.01 par value; 500,000,000 shares authorized; 130,930,642 and 130,526,158 shares issued and outstanding, respectively	1.3			1.3
Undesignated preference shares, $0.01 par value; 50,000,000 shares authorized; nil shares issued and outstanding at each period	—			—
Additional paid-in capital	4,549.3			4,494.1
Accumulated deficit	(1,524.7		)	(1,367.0		)
Accumulated other comprehensive loss, net of taxes	(47.2		)	(16.3		)
Total Liberty Latin America shareholders	2,979.2			3,112.6
Noncontrolling interests	1,024.7			1,010.8
Total equity	4,003.9			4,123.4
Total liabilities and equity	$	13,907.0		$	13,446.6

LIBERTY LATIN AMERICA LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


	Three months ended March 31,						Three months ended June 30,						Six months ended June 30,
	2018			2017			2019			2018			2019			2018
	in millions						in millions, except per share amounts

Revenue	$	909.9		$	910.9		$	982.9		$	922.1		$	1,925.6		$	1,832.0
Operating costs and expenses (exclusive of depreciation and amortization, shown separately below):
Programming and other direct costs of services	215.8			221.9			226.4			218.4			454.2			434.2
Other operating	166.5			170.5			175.5			168.7			341.9			337.0
Selling, general and administrative (SG&A)	193.3			176.4			209.0			190.3			406.4			381.8
Depreciation and amortization	202.3			193.9			222.0			207.6			439.3			409.9
Impairment, restructuring and other operating items, net	33.7			13.4			6.5			12.9			27.0			46.6
	811.6			776.1			839.4			797.9			1,668.8			1,609.5
Operating income	98.3			134.8			143.5			124.2			256.8			222.5
Non-operating income (expense):
Interest expense	(102.5		)	(94.3		)	(119.8		)	(109.4		)	(235.5		)	(211.9		)
Realized and unrealized losses on derivative instruments, net	(41.5		)	(27.3		)
Foreign currency transaction gains, net	15.9			14.5
Loss on debt modification and extinguishment	(13.0		)	—
Realized and unrealized gains (losses) on derivative instruments, net							(79.0		)	115.1			(148.0		)	73.6
Foreign currency transaction gains (losses), net							(19.5		)	(120.6		)	12.7			(104.7		)
Losses on debt modification and extinguishment							(9.5		)	—			(9.5		)	(13.0		)
Other income, net	5.3			6.0			2.6			4.8			5.0			10.1
	(135.8		)	(101.1		)	(225.2		)	(110.1		)	(375.3		)	(245.9		)
Earnings (loss) before income taxes	(37.5		)	33.7			(81.7		)	14.1			(118.5		)	(23.4		)
Income tax expense	(16.8		)	(23.1		)	(29.5		)	(41.6		)	(33.9		)	(58.4		)
Net earnings (loss)	(54.3		)	10.6
Net loss (earnings) attributable to noncontrolling interests	9.8			(16.4		)
Net loss							(111.2		)	(27.5		)	(152.4		)	(81.8		)
Net earnings attributable to noncontrolling interests							(4.8		)	(14.7		)	(5.3		)	(4.9		)
Net loss attributable to Liberty Latin America shareholders	$	(44.5	)	$	(5.8	)	$	(116.0	)	$	(42.2	)	$	(157.7	)	$	(86.7	)

Basic and diluted net loss per share attributable to Liberty Latin America shareholders	$	(0.26	)	$	(0.03	)	$	(0.64	)	$	(0.25	)	$	(0.87	)	$	(0.51	)

LIBERTY LATIN AMERICA LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited)


	Three months ended March 31,						Three months ended June 30,						Six months ended June 30,
	2018			2017			2019			2018			2019			2018
	in millions						in millions

Net earnings (loss)	$	(54.3	)	$	10.6
Net loss							$	(111.2	)	$	(27.5	)	$	(152.4	)	$	(81.8	)
Other comprehensive loss, net of taxes:
Foreign currency translation adjustments	(31.8		)	(10.6		)	(38.0		)	(12.0		)	(25.7		)	(43.8		)
Reclassification adjustments included in net earnings (loss)	1.6			1.0
Reclassification adjustments included in net loss							(2.2		)	1.1			(3.5		)	2.7
Pension-related adjustments and other, net	0.9			(3.5		)	(0.9		)	7.5			(1.9		)	8.4
Other comprehensive loss	(29.3		)	(13.1		)	(41.1		)	(3.4		)	(31.1		)	(32.7		)
Comprehensive loss	(83.6		)	(2.5		)	(152.3		)	(30.9		)	(183.5		)	(114.5		)
Comprehensive loss (earnings) attributable to noncontrolling interests	10.3			(15.9		)
Comprehensive earnings attributable to noncontrolling interests							(4.3		)	(13.3		)	(5.1		)	(3.0		)
Comprehensive loss attributable to Liberty Latin America shareholders	$	(73.3	)	$	(18.4	)	$	(156.6	)	$	(44.2	)	$	(188.6	)	$	(117.5	)

LIBERTY LATIN AMERICA LTD.

CONDENSED CONSOLIDATED ~~STATEMENT~~STATEMENTS OF EQUITY

(unaudited)


	Liberty Latin America shareholders																		Non-controlling interests			Total equity			Liberty Latin America shareholders																		Non-controlling interests			Total equity
	Common shares						Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive loss, net of taxes			Total Liberty Latin America shareholders									Common shares						Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive loss, net of taxes			Total Liberty Latin America shareholders
	Class A		Class B		Class C																				Class A		Class B		Class C
	in millions																								in millions

Balance at April 1, 2018																									$	0.5	$	—	$	1.2	$	4,397.5		$	(1,066.3	)	$	(86.2	)	$	3,246.7		$	1,350.2		$	4,596.9
Net loss																									—		—		—		—			(42.2		)	—			(42.2		)	14.7			(27.5		)
Other comprehensive loss																									—		—		—		—			—			(2.0		)	(2.0		)	(1.4		)	(3.4		)
C&W Jamaica NCI Acquisition																									—		—		—		(1.7		)	—			0.4			(1.3		)	(0.2		)	(1.5		)
Capital contribution from noncontrolling interest owner																									—		—		—		—			—			—			—			8.0			8.0
Distribution to noncontrolling interest owners																									—		—		—		—			—			—			—			(19.8		)	(19.8		)
Shared-based compensation																									—		—		—		5.6			—			—			5.6			1.1			6.7
Other																									—		—		—		2.8			—			—			2.8			(0.8		)	2.0
Balance at June 30, 2018																									$	0.5	$	—	$	1.2	$	4,404.2		$	(1,108.5	)	$	(87.8	)	$	3,209.6		$	1,351.8		$	4,561.4

Balance at January 1, 2018, before effect of accounting change	$	0.5	$	—	$	1.2	$	4,402.8		$	(1,010.7	)	$	(64.2	)	$	3,329.6		$	1,361.0		$	4,690.6		$	0.5	$	—	$	1.2	$	4,402.8		$	(1,010.7	)	$	(64.2	)	$	3,329.6		$	1,361.0		$	4,690.6
Accounting change (note 2)	—		—		—		—			(11.1		)	—			(11.1		)	3.6			(7.5		)
Accounting change																									—		—		—		—			(11.1		)	—			(11.1		)	3.6			(7.5		)
Balance at January 1, 2018, as adjusted for accounting change	0.5		—		1.2		4,402.8			(1,021.8		)	(64.2		)	3,318.5			1,364.6			4,683.1			0.5		—		1.2		4,402.8			(1,021.8		)	(64.2		)	3,318.5			1,364.6			4,683.1
Net loss	—		—		—		—			(44.5		)	—			(44.5		)	(9.8		)	(54.3		)	—		—		—		—			(86.7		)	—			(86.7		)	4.9			(81.8		)
Other comprehensive loss	—		—		—		—			—			(28.8		)	(28.8		)	(0.5		)	(29.3		)	—		—		—		—			—			(30.8		)	(30.8		)	(1.9		)	(32.7		)
C&W Jamaica NCI Acquisition	—		—		—		(12.0		)	—			6.8			(5.2		)	(14.9		)	(20.1		)	—		—		—		(13.7		)	—			7.2			(6.5		)	(15.1		)	(21.6		)
Capital contribution from noncontrolling interest owner	—		—		—		—			—			—			—			10.0			10.0			—		—		—		—			—			—			—			18.0			18.0
Distribution to noncontrolling interest owners																									—		—		—		—			—			—			—			(19.8		)	(19.8		)
Shared-based compensation	—		—		—		7.4			—			—			7.4			—			7.4			—		—		—		13.0			—			—			13.0			1.1			14.1
Other	—		—		—		(0.7		)	—			—			(0.7		)	0.8			0.1			—		—		—		2.1			—			—			2.1			—			2.1
Balance at March 31, 2018	$	0.5	$	—	$	1.2	$	4,397.5		$	(1,066.3	)	$	(86.2	)	$	3,246.7		$	1,350.2		$	4,596.9
Balance at June 30, 2018																									$	0.5	$	—	$	1.2	$	4,404.2		$	(1,108.5	)	$	(87.8	)	$	3,209.6		$	1,351.8		$	4,561.4

LIBERTY LATIN AMERICA LTD.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY – (Continued)

(unaudited)



	Liberty Latin America shareholders																		Non-controlling interests			Total equity
	Common shares						Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive loss, net of taxes			Total Liberty Latin America shareholders
	Class A		Class B		Class C		Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive loss, net of taxes			Total Liberty Latin America shareholders
	in millions

Balance at April 1, 2019	$	0.5	$	—	$	1.3	$	4,508.6		$	(1,408.7	)	$	(6.6	)	$	3,095.1		$	1,023.2		$	4,118.3
Net loss	—		—		—		—			(116.0		)	—			(116.0		)	4.8			(111.2		)
Other comprehensive loss	—		—		—		—			—			(40.6		)	(40.6		)	(0.5		)	(41.1		)
Distributions to noncontrolling interest owners	—		—		—		—			—			—			—			(2.5		)	(2.5		)
Conversion Option, net	—		—		—		77.3			—			—			77.3			—			77.3
Capped Calls	—		—		—		(45.6		)	—			—			(45.6		)	—			(45.6		)
Share-based compensation	—		—		—		9.7			—			—			9.7			—			9.7
Other	—		—		—		(0.7		)	—			—			(0.7		)	(0.3		)	(1.0		)
Balance at June 30, 2019	$	0.5	$	—	$	1.3	$	4,549.3		$	(1,524.7	)	$	(47.2	)	$	2,979.2		$	1,024.7		$	4,003.9

Balance at January 1, 2019	$	0.5	$	—	$	1.3	$	4,494.1		$	(1,367.0	)	$	(16.3	)	$	3,112.6		$	1,010.8		$	4,123.4
Net loss	—		—		—		—			(157.7		)	—			(157.7		)	5.3			(152.4		)
Other comprehensive loss	—		—		—		—			—			(30.9		)	(30.9		)	(0.2		)	(31.1		)
Impact of the UTS Acquisition	—		—		—		—			—			—			—			11.6			11.6
Distributions to noncontrolling interest owners	—		—		—		—			—			—			—			(2.5		)	(2.5		)
Conversion Option, net	—		—		—		77.3			—			—			77.3			—			77.3
Capped Calls	—		—		—		(45.6		)	—			—			(45.6		)	—			(45.6		)
Share-based compensation	—		—		—		24.2			—			—			24.2			—			24.2
Other	—		—		—		(0.7		)	—			—			(0.7		)	(0.3		)	(1.0		)
Balance at June 30, 2019	$	0.5	$	—	$	1.3	$	4,549.3		$	(1,524.7	)	$	(47.2	)	$	2,979.2		$	1,024.7		$	4,003.9

LIBERTY LATIN AMERICA LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Three months ended March 31,						Six months ended June 30,
	2018			2017			2019			2018
	in millions						in millions
Cash flows from operating activities:
Net earnings (loss)	$	(54.3	)	$	10.6
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Net loss							$	(152.4	)	$	(81.8	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Share-based compensation expense	6.5			5.6			30.1			15.2
Depreciation and amortization	202.3			193.9			439.3			409.9
Impairment, restructuring and other operating items, net	33.7			13.4
Impairment							0.1			5.3
Amortization of debt financing costs, premiums and discounts, net	(0.5		)	(3.8		)	2.0			(1.1		)
Realized and unrealized losses on derivative instruments, net	41.5			27.3
Foreign currency transaction gains, net	(15.9		)	(14.5		)
Loss on debt modification and extinguishment	13.0			—
Realized and unrealized losses (gains) on derivative instruments, net							148.0			(73.6		)
Foreign currency transaction losses (gains), net							(12.7		)	104.7
Losses on debt modification and extinguishment							9.5			13.0
Deferred income tax benefit	(7.5		)	(17.3		)	(24.9		)	(29.5		)
Changes in operating assets and liabilities, net of the effect of an acquisition	(55.6		)	(140.2		)	(7.6		)	35.9
Net cash provided by operating activities	163.2			75.0			431.4			398.0

Cash flows from investing activities:
Capital expenditures	(188.2		)	(124.4		)	(295.4		)	(425.1		)
Cash paid in connection with an acquisition, net of cash acquired							(160.4		)	—
Recovery on damaged or destroyed property and equipment							33.9			—
Other investing activities, net	0.4			(2.6		)	0.5			0.6
Net cash used by investing activities	(187.8		)	(127.0		)	(421.4		)	(424.5		)

Cash flows from financing activities:
Borrowings of debt	190.0			136.5			1,321.2			525.7
Repayments of debt and capital lease obligations	(190.4		)	(73.9		)
Repayments of debt and finance lease obligations							(926.0		)	(273.2		)
Capped Calls							(45.6		)	—
Payment of financing costs and debt premiums							(25.0		)	(8.0		)
Distributions to noncontrolling interest owners	—			(14.6		)	(2.5		)	(19.8		)
Capital contribution from noncontrolling interest owner	10.0			—			—			18.0
Distributions to Liberty Global	—			(18.8		)
Cash payment related to the C&W Jamaica NCI Acquisition	(18.6		)	—			—			(19.7		)
Other financing activities, net	(2.8		)	5.3			(1.7		)	0.3
Net cash provided (used) by financing activities	(11.8		)	34.5
Net cash provided by financing activities							320.4			223.3

Effect of exchange rate changes on cash, cash equivalents and restricted cash	0.1			(0.5		)	2.5			(15.3		)

Net decrease in cash, cash equivalents and restricted cash	(36.3		)	(18.0		)
Net increase in cash, cash equivalents and restricted cash							332.9			181.5

Cash, cash equivalents and restricted cash:
Beginning of period	568.2			580.8			642.0			568.2
End of period	$	531.9		$	562.8		$	974.9		$	749.7

Cash paid for interest	$	156.3		$	168.2		$	232.6		$	202.5
Net cash paid for taxes	$	29.1		$	34.6		$	59.6		$	83.8

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements

~~March 31, 2018~~June 30, 2019

(unaudited)


(1)	Basis of Presentation

General

Liberty Latin America Ltd. (Liberty Latin America) is a registered company in Bermuda that primarily includes (i) Cable & Wireless Communications Limited ~~and its subsidiaries~~ (C&W), and its subsidiaries, (ii) VTR Finance B.V. (VTR Finance) and its subsidiaries, which ~~includes~~include VTR.com SpA (VTR), ~~and~~ (iii) LiLAC Communications ~~Inc.~~ and its subsidiaries, which ~~includes~~include Liberty Cablevision of Puerto Rico LLC (Liberty Puerto Rico), an entity that, effective October 2018, is a wholly-owned subsidiary, and (iv) LBT CT Communications, S.A. (an 80.0%-owned entity) and its subsidiary, Cabletica (as defined in ~~which Liberty Latin America owns a 60.0% interest.~~ note 4).

C&W owns less than 100% of certain of its consolidated subsidiaries, including The Bahamas Telecommunications Company Limited (a 49.0%-owned entity that owns all of our operations in the Bahamas), Cable & Wireless Jamaica Limited (C&W Jamaica) (a 92.3%-owned entity that owns the majority of our operations in Jamaica), Cable & Wireless Panama, SAS.A. (C&W Panama) (a 49.0%-owned entity that owns most of our operations in Panama), ~~The Bahamas~~and United Telecommunications ~~Company Limited (a 49.0%~~Services N.V. (UTS) (an 87.5%-owned entity, ~~that owns all~~as further described in note 4).

We are an international provider of ~~our operations in the Bahamas)~~fixed, mobile and ~~Cable & Wireless Jamaica Limited~~subsea telecommunications services. We provide residential and business-to-business (~~C&W Jamaica~~B2B) ~~(a 91.7%-owned entity~~services in (i) 24 countries, primarily in Latin America and the Caribbean, through C&W, (ii) Chile and Costa Rica, through VTR/Cabletica, and (iii) Puerto Rico, through Liberty Puerto Rico. C&W also provides (i) B2B services in certain other countries in Latin America and the Caribbean and (ii) wholesale communication services over its subsea and terrestrial fiber optic cable networks that ~~owns~~connect over 40 markets in that region.

In these notes, the ~~majority~~terms “we,” “our,” “our company” and “us” may refer, as the context requires, to Liberty Latin America or collectively to Liberty Latin America and its subsidiaries. Unless otherwise indicated, ownership percentages and convenience translations into United States (U.S.) dollars are calculated as of ~~our operations in Jamaica).~~June 30, 2019.

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) and with the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these financial statements do not include all of the information required by U.S. GAAP or Securities and Exchange Commission rules and regulations for complete financial statements. In the opinion of management, these financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results of operations for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year. These condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our ~~2017~~2018 Annual Report on Form 10-K ((the ~~2017~~2018 Form 10-K).

~~These condensed consolidated~~The preparation of financial statements ~~include~~in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the ~~historical financial information~~reported amounts of ~~(i) Liberty Latin America~~assets and ~~its consolidated subsidiaries for~~liabilities at the ~~period following~~date of the ~~Split-Off, as defined below, and (ii) certain former subsidiaries of Liberty Global plc (Liberty Global) for periods prior to the Split-Off. Although Liberty Latin America was reported on a combined basis prior to the Split-Off, these~~ financial statements ~~present all prior periods as consolidated. In these notes, the terms “~~we~~,” “our,” “our company” and “~~us” may refer, as the context requires, to Liberty Latin America or collectively to Liberty Latin America and its subsidiaries. Unless otherwise indicated, ownership percentages and convenience translations into United States (~~U.S.) dollars are calculated as of March 31, 2018.~~

~~We are an international provider of video, broadband internet, fixed-line telephony and mobile services. We provide residential and business-to-business (B2B) services in (i) 18 countries, primarily in Latin America~~ and the ~~Caribbean, through C&W, (ii) Chile through VTR~~reported amounts of revenue and ~~(iii) Puerto Rico through Liberty Puerto Rico. C&W also provides (i) B2B communication services~~expenses during the reporting period. Estimates and assumptions are used in accounting for, among other things, the valuation of acquisition-related assets and liabilities, allowances for uncollectible accounts, programming and copyright expenses, deferred income taxes and related valuation allowances, loss contingencies, fair value measurements, impairment assessments, capitalization of internal costs associated with construction and installation activities, useful lives of long-lived assets and actuarial liabilities associated with certain ~~other countries in Latin America and the Caribbean and (ii) wholesale communication services over its sub-sea and terrestrial fiber optic cable networks that connect over 40 markets in that region.~~benefit plans. Actual results could differ from those estimates.

~~Reclassifications~~

Certain prior period amounts have been reclassified to conform to the current period presentation.

~~Split-off of Liberty Latin America from Liberty Global~~

~~On December 29, 2017, Liberty Global completed the split-off (the~~ ~~Split-Off~~) of our company, which at such time was one of Liberty Global's wholly-owned subsidiaries. In the Split-Off, 48,428,841 Class A common shares, 1,940,193 Class B common shares and 120,843,539 Class C common shares of Liberty Latin America (collectively ~~Liberty Latin America Shares~~) were issued. As a result of the Split-Off, Liberty Latin America became an independent, publicly traded company, and its assets and liabilities as of the time of the Split-Off consisted of the businesses, assets and liabilities that were formerly attributed to Liberty Global’s “LiLAC Group.” The Split-Off was accounted for at historical cost due to the pro rata distribution of Liberty Latin America Shares to holders of Liberty Global’s LiLAC Shares, as defined below.

~~Several agreements were entered into in connection with the Split-Off (the~~ ~~Split-Off Agreements~~) between Liberty Latin America, Liberty Global and/or certain of their respective subsidiaries, including the Tax Sharing Agreement, the Reorganization Agreement, the Services Agreement, the Sublease Agreement and the Facilities Sharing Agreement, each as defined and described in note 11.

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

~~March 31, 2018~~June 30, 2019

(unaudited)

~~LiLAC Transaction~~

~~On July 1, 2015, Liberty Global completed the “LiLAC Transaction,” pursuant to which each holder of Class A, Class B and Class C Liberty Global ordinary shares (Liberty Global Shares) received one share of the corresponding class of Liberty Global’s LiLAC ordinary shares (LiLAC Shares) for each 20 Liberty Global Shares held as of the record date for such distribution.~~


(2)	Accounting Changes and Recent Accounting Pronouncements

Accounting Changes

ASU ~~2014-09~~2016-02

In ~~May 2014,~~February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. ~~2014-09,~~2016-02, ~~Revenue from Contracts with Customers~~ Leases(ASU ~~2014-09~~2016-02), as amended by ASU No. 2018-11, Targeted Improvements, which ~~requires~~provides an ~~entity~~option to ~~recognize~~use one of two modified retrospective approaches in the ~~amount~~adoption of ~~revenue to which it expects to be entitled~~ASU 2016-02. ASU 2016-02, for most leases, results in lessees recognizing right-of-use assets and lease liabilities on the ~~transfer of promised goods or services to customers.~~balance sheet and additional disclosures. We adopted ASU ~~2014-09~~2016-02 effective January 1, ~~2018 by recording~~2019 using the ~~cumulative effect to~~effective date transition method. A number of optional practical expedients were applied in transition, as further described below.

The main impact of the ~~opening~~adoption of this standard was the recognition of right-of-use assets and lease liabilities in our condensed consolidated balance ~~of our accumulated deficit. We applied the new standard to contracts that were not complete~~sheet as of January 1, ~~2018. The comparative information has~~2019 for those leases classified as operating leases under ASU 2016-02. We did not ~~been restated and continues~~recognize right-of-use assets or lease liabilities for leases with a term of 12 months or less, as permitted by the short-term lease practical expedient in the standard. In transition, we applied the practical expedients that permit us not to ~~be reported~~reassess (i) whether expired or existing contracts are or contain a lease under the ~~accounting standards~~new standard, (ii) the lease classification for expired or existing leases, (iii) whether previously-capitalized initial direct costs would qualify for capitalization under the new standard and (iv) whether existing or expired land easements that were not previously accounted for as leases are or contain a lease. We also applied the practical expedient that permits us to account for customer service revenue contracts that include both non-lease and lease components as a single component in ~~effect for those periods.~~

The most significant impacts of ASU 2014-09 on our revenue recognition policies relate to our accounting for (i) long-term capacity contracts, (ii) subsidized handset plans and (iii) certain installation and other upfront fees, each as set forth below:

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

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

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

ASU 2014-09 also impacted our accounting for certain upfront costs directly associated with obtaining and fulfilling customer contracts. Under our previous policy, these costs were expensed as incurred unless the costs were in the scope of other accounting standards that allowed for capitalization. Under ASU 2014-09, the upfront costs associated with contracts that have substantive termination penalties and a term of longer than one year are recognized as assets and amortized to other operating expenses over the applicable period benefited.

transition.

We implemented internal controls to ensure we adequately ~~evaluated~~evaluate our contracts and properly assessed the impact of ASU ~~2014-09~~2016-02 on our condensed consolidated financial statements. We do not believe such ~~new~~ controls represent significant changes to our internal control over financial reporting.

~~Liberty Latin America Ltd.~~

~~Notes to Condensed Consolidated Financial Statements – (Continued)~~

~~March 31, 2018~~

~~(unaudited)~~

For information regarding changes to our accounting policies following the adoption of ASU ~~2014-09 and our contract assets and deferred revenue balances,~~2016-02, see note 3.

The cumulative effect of the changes made to our condensed consolidated balance sheet as of January 1, ~~2018~~2019 is as follows:

Balance at December 31, 2017 Cumulative catch up adjustments upon adoption Balance at January 1, 2018
in millions
Assets:
Other current assets $ 222.9
$ 15.8
$ 238.7
Other assets, net $ 517.7
$ 15.6
$ 533.3

Liabilities:
Deferred revenue $ 143.4
$ 13.3
$ 156.7
Other long-term liabilities $ 697.8
$ 25.6
$ 723.4

Equity:
Accumulated deficit $ (1,010.7 ) $ (11.1 ) $ (1,021.8 )
Noncontrolling interests $ 1,361.0
$ 3.6
$ 1,364.6

~~The impact of our adoption of ASU 2014-09 to our condensed consolidated statement of operations for the three months ended March 31, 2018 is as follows:~~

Before adoption of ASU 2014-09
Impact of ASU 2014-09
Increase (decrease)
As reported
in millions

Revenue $ 909.0
$ 0.9
$ 909.9

Operating costs and expenses – selling, general and administrative $ 193.6
$ (0.3 ) $ 193.3

Non-operating expense – interest expense $ 98.3
$ 4.2
$ 102.5

Income tax expense $ 17.3
$ (0.5 ) $ 16.8

Net loss $ 51.8
$ 2.5
$ 54.3



	Balance at December 31, 2018		Cumulative catch up adjustments upon adoption		Balance at January 1, 2019
	in millions
Assets:
Other assets, net	$	703.4	$	141.6	$	845.0

Liabilities:
Other accrued and current liabilities	$	623.6	$	33.9	$	657.5
Other long-term liabilities	$	552.9	$	107.7	$	660.6

ASU ~~2016-18~~2018-13

In ~~November 2016,~~August 2018, the FASB issued ASU ~~2016-18,~~No. 2018-13, ~~Statement of Cash Flows-Restricted Cash~~Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (ASU ~~2016-18~~2018-13)~~, which addresses~~. ASU 2018-13 modifies certain disclosure requirements on fair value measurements, including (i) clarifying narrative disclosure regarding measurement uncertainty from the ~~presentation~~use of ~~restricted cash~~unobservable inputs, if those inputs reasonably could have been different as of the reporting date, (ii) adding certain quantitative disclosures, including (a) changes in unrealized gains and losses for the ~~statement~~period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of ~~cash flows. This~~the reporting period and (b) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and (iii) removing certain fair value measurement disclosure requirements, including (a) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, (b) the policy for timing of transfers between levels of the fair value hierarchy and (c) the valuation processes for Level 3 fair value measurements. The amendments in ASU ~~requires that the statement of cash flows explain the change in the beginning-of-period~~2018-13 are effective for all entities for fiscal years, and ~~end-of-period totals of cash, cash equivalents~~interim periods within those fiscal years, beginning after December 15, 2019. We are permitted to early adopt any removed or modified disclosures and restricted cash balances. We adopted ASU 2016-18 on January 1, 2018, which resulted in an increase (decrease) to our operating, financing and investing cash flows of ($1 million), $3 million, and $6 million, respectively, during the three months ended March 31, 2017. At March 31, 2018 and December 31, 2017, the balance of our restricted cash was $21 million and $38 million, respectively.delay

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

~~March 31, 2018~~June 30, 2019

(unaudited)

adoption of the additional disclosures until their effective date. As of December 31, 2018, we early adopted the portion of ASU ~~2017-07~~2018-13 that allows for the removal of certain fair value measurement disclosures from our consolidated financial statements. We do not expect the remaining disclosure requirements of ASU 2018-13 will have a material effect on our consolidated financial statements.

Recent Accounting Pronouncements

ASU 2018-14

In ~~March 2017,~~August 2018, the FASB issued ASU No. ~~2017-07,~~2018-14, ~~Compensation -~~Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans ~~Retirement Benefits—Improving the Presentation of the Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~(ASU ~~2017-07~~2018-14), which ~~includes changes~~removes and modifies certain existing disclosure requirements and adds new disclosure requirements related to ~~the presentation of periodic~~employer sponsored defined benefit ~~cost components. Under~~pension or other postretirement plans. ASU 2017-07, we will continue to present the service component of our net benefit cost as a component of operating income but present the other components of our net benefit cost computation, which can include credits, within non-operating income (expense) in our consolidated statements of operations. We adopted ASU 2017-07 on January 1, 2018. The change in presentation to our condensed consolidated statements of operations from ASU 2017-07 was applied on a retrospective basis. As a result of the adoption of ASU 2017-07, we have presented $3 million of pension-related credits in other income, net~~in our condensed consolidated statements of operations for each of the three months ended March 31, 2018 and 2017.~~

~~Recent Accounting Pronouncements~~

~~ASU 2016-02~~

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases~~ (~~ASU 2016-02~~), which, for most leases, will result in lessees recognizing lease assets and lease liabilities on the balance sheet with additional disclosures about leasing arrangements. ASU 2016-02 requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach and additional guidance provided by ASU 2018-01, ~~Leases (Topic 842)—Land Easement Practical Expedient for Transition to Topic 842, includes a number of optional practical expedients an entity may elect to apply. ASU 2016-02~~2018-14 is effective for annual reporting periods ~~beginning~~ after December 15, ~~2018,~~2020, including interim periods within those fiscal years, with early adoption permitted. We ~~will adopt ASU 2016-02 on January 1, 2019. Although we~~ are currently evaluating the effect that ASU ~~2016-02~~2018-14 will have on our disclosures.

ASU 2018-15

In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software—Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (ASU 2018-15). ASU 2018-15 provides additional guidance on ASU No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software—Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which was issued to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The guidance (i) provides criteria for determining which implementation costs to capitalize as an asset related to the service contract and which costs to expense, (ii) requires an entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement and (iii) clarifies the presentation requirements for reporting such costs in the entity’s financial statements. ASU 2018-15 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. ASU 2018-15 should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We expect to apply ASU 2018-15 prospectively and are currently evaluating the effect that ASU 2018-15 will have on our consolidated financial statements ~~the main impact of the adoption of this standard will be the recognition of lease assets~~ and lease liabilities in our consolidated balance sheets for those leases classified as operating leases under previous U.S. GAAP. ASU 2016-02 will not have significant impacts on our consolidated statements of operations or cash flows.related disclosures.

~~(3)~~ ~~Summary of Changes in Significant Accounting Policies~~


(3)	Summary of Significant Accounting Policies

The following accounting ~~policies reflect updates~~policy reflects an update to ~~our~~the Summary of Significant Accounting Policies included in our ~~2017~~2018 Form 10-K ~~as a result of~~resulting from the adoption of ASU ~~2014-09.~~2016-02. For additional information regarding the adoption of ASU ~~2014-09,~~2016-02, see note 2.2.

~~Contract Assets~~Leases

~~When we transfer goods or services~~We classify leases with a term of greater than 12 months where substantially all risks and rewards incidental to ~~a customer but do not have an unconditional right to payment, we~~ownership are retained by the third-party lessors as operating leases. We record a ~~contract asset. Contract assets are reclassified to trade receivables, net in our consolidated balance sheet~~right-of-use asset and an operating lease liability at inception of the lease at the ~~point~~present value of the lease payments plus certain other payments, including variable lease payments and amounts probable of being owed by us under residual value guarantees. Payments made under operating leases, net of any incentives received from the lessors, are recognized to expense on a straight-line basis over the term of the lease. Initial direct costs incurred in ~~time we have the unconditional right~~negotiating and arranging operating leases are recognized to ~~payment.~~expense when incurred. Contingent rental payments are recognized to expense when incurred. Our contract assets were $12 million and $13 million as of March 31, 2018 and January 1, 2018, respectively. The change in our contract assets during the three months ended March 31, 2018 were not material. The current and long-term portion of contractright-of-use assets are included in other assets, net, in our condensed consolidated balance sheet. Our current ~~assets~~and non-current operating lease liabilities are included in other accrued and current liabilities and other ~~assets, net,~~long-term liabilities, respectively, in our condensed consolidated balance sheet.

~~Deferred Contract Costs~~

Incremental costs to obtain a contract with a customer, such as incremental sales commissions, are recognized as an asset and amortized to SG&A expenses over the applicable period benefited, which is the longer of the contract life or the economic life of the commission. If, however, the amortization period is one year or less, we expense such costs in the period incurred. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained are recognized as an expense when incurred. Our deferred contract costs were$10 million and $9 million as of March 31, 2018 and January 1, 2018, respectively. The change in our contract assets during the three months ended March 31, 2018 were not material. The current and long-term portion of deferred contract costs are included in other current assets and other assets, net, respectively, in our condensed consolidated balance sheet.

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

~~March 31, 2018~~June 30, 2019

(unaudited)

~~Deferred Revenue~~Our operating leases primarily consist of (i) property leases for mobile tower locations that generally have initial terms of five to ten years with one or more renewal options and (ii) lease commitments for (a) retail stores, offices and facilities, (b) other network assets and (c) other equipment. It is expected that in the normal course of business, operating leases that expire generally will be renewed or replaced by similar leases.

The following table provides details of our operating lease expense:



	Three months ended June 30,				Six months ended June 30,
	2019		2018 (a)		2019		2018 (a)
	in millions

Operating lease expense:
Operating lease cost	$	10.5	$	11.7	$	21.2	$	23.8
Short-term lease cost	1.9		—		4.0		—
Total operating lease expense	$	12.4	$	11.7	$	25.2	$	23.8


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

For information regarding certain related-party lease arrangements, see note 13.

~~We record deferred revenue when we have received payment prior~~The following table provides certain other details of our operating leases at June 30, 2019:



For the six months ended June 30, 2019 (in millions):
Operating cash flows from operating leases	$	22.9
Right-of-use assets obtained in exchange for new operating lease liabilities (a)	$	9.1

Weighted-average remaining lease term (in years)	5.9 years

Weighted-average discount rate (b)	6.7		%


(a)	Represents non-cash transactions associated with operating leases entered into during six months ended June 30, 2019.

(b)

We use a credit-adjusted discount rate to measure our operating lease liabilities. We derive the discount rates associated with each of our borrowing groups starting with a risk free rate, generally the U.S. Treasury Bill rate. To determine credit risk, we create an industry benchmark credit default swap (CDS) curve from an observable high-yield debt index using comparable telecommunication companies as a proxy. We then determine the maximum curve shift against this CDS curve derived from our own tradable debt within each borrowing group, and make adjustments to correct for the collateralized interest rate spread by comparing unsecured debt to asset-backed securities (secured debt) trades, which is based on the spread between the BB- and B+ industrial curves. We determine the discount factor from this adjusted curve for each borrowing group.

Liberty Latin America Ltd.

Notes to ~~transferring goods or services to a customer. Deferred revenue primarily relates to (i) advanced payments~~Condensed Consolidated Financial Statements – (Continued)

June 30, 2019

(unaudited)

Maturities of Operating Leases

Maturities of our operating lease liabilities on ~~fixed subscription services and mobile airtime services and (ii) deferred installation and other upfront fees. Our aggregate~~an undiscounted basis as of June 30, 2019 are presented below along with the current and ~~long-term deferred revenue~~noncurrent operating lease liabilities on a discounted basis. Such amounts represent U.S. dollar equivalents (in millions) based on June 30, 2019 exchange rates.



Years ending December 31:
2019 (remainder of year)	$	20.2
2020	35.3
2021	28.3
2022	23.0
2023	18.4
2024	15.5
Thereafter	27.4
Total operating lease liabilities on an undiscounted basis	168.1
Amount representing interest	(31.7		)
Present value of operating lease liabilities	$	136.4

Current portion	$	31.3

Noncurrent portion	$	105.1

The following table sets forth the U.S. dollar equivalents (in millions) of our operating lease commitments under ASC 840 as of ~~March~~December 31, 2018, ~~and December 31, 2017, was $417 million and$397 million, respectively. Long-term deferred revenue~~which is included in other long-term liabilities in our condensed consolidated balance sheets. We recorded an aggregate of $19 million of current and long-term deferred revenue on January 1, 2018 upon the adoption ofrequired pursuant to ASU ~~2014-09. The remaining change in the current portion and long-term deferred revenue balances during the three months ended March 31, 2018 were not material.~~

~~Revenue Recognition~~

~~General~~.Most of our fixed and mobile residential contracts are not enforceable or do not contain substantive early termination penalties. Accordingly, revenue relating to these customers is recognized on a basis consistent with these customers that are not subject to contracts.

~~Subscription Revenue – Fixed Networks.~~ We recognize revenue from video, broadband internet and fixed-line telephony services over our fixed networks to customers in the period the related subscription services are provided. Installation or other upfront fees related to services provided over our fixed networks are generally deferred and recognized as subscription revenue over the contractual period, or longer if the upfront fee results in a material renewal right.

We may also sell video, broadband internet and fixed-line telephony services to our customers in bundled packages at a rate lower than if the customer purchased each product on a standalone basis. Arrangement consideration from bundled packages generally is allocated proportionally to the individual service based on the relative standalone price for each respective product or service.

~~Mobile Revenue – General.~~ ~~Consideration from mobile contracts is allocated to airtime services and handset sales based on the relative standalone prices of each performance obligation.~~

~~Mobile Revenue – Airtime Services.~~ We recognize revenue from mobile services in the period the related services are provided. Payments received from prepay customers are recorded as deferred revenue prior to the commencement of services and are recognized as revenue as the services are rendered or usage rights expire.

~~Mobile Revenue – Handset Revenue.~~ ~~Arrangement consideration allocated to handsets is recognized as revenue~~2016-02 when ~~the goods have been transferred to the customer.~~

~~B2B Revenue – Installation Revenue.~~ We defer upfront installation and certain nonrecurring fees received on B2B contracts where we maintain ownership of the installed equipment. The deferred fees are amortized into revenue on a straight-line basis over the term of the arrangement or the expected period of performance.

~~Sub-sea Network Revenue – Long-term Capacity Contracts.~~ We enter into certain long-term capacity contracts with customers where the customer either pays a fixed fee over time or prepays for the capacity upfront and pays a portion related to operating and maintenance of the network over time. We assess whether prepaid capacity contracts contain a significant financing component. If the financing component is significant, interest expense is accreted over the life of the contract using the effective ~~interest~~date transition method. ~~The revenue associated with prepaid capacity contracts is deferred and recognized on a straight-line basis over the life of the contract.~~



Years ending December 31:
2019	$	40.4
2020	34.5
2021	27.8
2022	22.7
2023	17.2
Thereafter	34.5
Total	$	177.1

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

June 30, 2019

(unaudited)


(4)	Acquisitions

~~Pending~~2019 Acquisition

UTS. Effective March 31, 2019, we completed the acquisition of an 87.5% interest in UTS for a cash purchase price of $161 million, subject to certain potential post-closing adjustments, based on an enterprise value of $189 million (the UTS Acquisition). UTS provides fixed and mobile services to the island nations of Curaçao, St. Maarten, St. Martin, Bonaire, St. Barths, St. Eustatius and Saba. The UTS Acquisition was funded through a $170 million draw on the C&W Revolving Credit Facility. For further information on the draw of the C&W Revolving Credit Facility, see note 9.

We have accounted for the UTS Acquisition as a business combination using the acquisition method of accounting, whereby the total purchase price was allocated to the acquired identifiable net assets of UTS based on assessments of their respective fair values, and the excess of the purchase price over the fair values of these identifiable net assets was allocated to goodwill. The preliminary opening balance sheet is subject to adjustment based on our final assessment of the fair values of the acquired identifiable assets and liabilities. The valuation process remains open and our opening balance sheet will change as we finalize our valuation. The items with the highest likelihood to change upon finalization of the valuation process include property and equipment, goodwill, intangible assets and income taxes.A summary of the purchase price and preliminary opening balance sheet of UTS at the effective March 31, 2019 acquisition date is presented in the following table (in millions):



Cash	$	0.9
Trade receivables	11.1
Other current assets	3.2
Property and equipment	148.8
Goodwill	50.4
Long-term deferred tax assets	31.3
Other assets	2.6
Accounts payable	(28.2		)
Other accrued and current liabilities	(33.0		)
Other long-term liabilities	(14.2		)
Noncontrolling interest (a)	(11.6		)
Total purchase price (b)	$	161.3


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


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

Our condensed consolidated statements of operations for each of the three and six months ended June 30,2019 include revenue of $33 million and net earnings of $3 million attributable to UTS.

2018 Acquisition

Cabletica. On February 12, 2018, we entered into a definitive agreement to acquire ~~80% of Costa Rican cable operator, “Cabletica,” which is part of~~certain assets and liabilities related to Televisora de Costa Rica S.A.’s (Televisora) cable operations in ~~an all cash transaction. In the transaction,~~ Costa Rica (“Cabletica ~~was valued at~~”) based on an enterprise value of $252 million, subject to certain customary adjustments. As part of the agreement, the owners of Televisora retained a 20% ownership interest in ~~Costa Rican Colon (CRC) of CRC 143 billion ($252 million). We intend to finance~~Cabletica. On October 1, 2018, we completed the acquisition of our 80% interest (the Cabletica Acquisition) for an effective purchase price of $226 million, after working capital adjustments and deducting the ~~80%~~value of Televisora’s retained equity ~~stake in~~interest. The Cabletica Acquisition was financed through a combination of ~~incremental~~ debt and existing ~~liquidity. The current owners~~cash.

We have accounted for the Cabletica Acquisition as a business combination using the acquisition method of accounting, whereby the total purchase price was allocated to the acquired identifiable net assets of Cabletica ~~will retain~~based on assessments of their respective fair values, and the ~~remaining 20% interest. The transaction is subject~~excess of the purchase price over the fair values of these identifiable net assets was allocated to ~~customary closing adjustments and conditions, including regulatory approvals, and is expected to close during the second half of 2018.~~

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

~~March 31, 2018~~June 30, 2019

(unaudited)

~~2017 Acquisition~~

~~Carve-out Entities.~~ ~~On May 16, 2016, Liberty Global acquired C&W (the~~ ~~C&W Acquisition), which was contributed~~goodwill. The preliminary opening balance sheet is subject to adjustment based on our ~~company as part~~final assessment of the ~~Split-Off. In connection~~fair values of the acquired identifiable assets and liabilities. Although most items in the valuation process remain open, the items with the ~~C&W Acquisition and C&W’s acquisition of Columbus International Inc. and its subsidiaries in 2015 (the~~ ~~Columbus Acquisition), certain entities (the~~ ~~Carve-out Entities) that hold licenses granted by the U.S. Federal Communications Commission (the~~ ~~FCC) were transferred~~highest likelihood to ~~entities not controlled by C&W (collectively,~~ ~~New Cayman).The arrangements with respect to the Carve-out Entities, which were executed in connection with the Columbus Acquisition and the C&W Acquisition, contemplated that~~change upon ~~receipt of regulatory approval, we would acquire the Carve-out Entities. On March 8, 2017, the FCC granted its approval for Liberty Global’s acquisition~~finalization of the ~~Carve-out Entities. Accordingly, on April 1, 2017, subsidiaries~~valuation process include property and equipment, goodwill, intangible assets and income taxes. A summary of ~~C&W acquired~~ the ~~Carve-out Entities (the~~ ~~C&W Carve-out Acquisition) for an aggregate~~ purchase price and preliminary opening balance sheet of ~~$86 million, which represents~~Cabletica at the ~~amount due under notes receivable that were exchanged for~~October 1, 2018 acquisition date is presented in the ~~equity of the Carve-out Entities.~~following table (in millions):



Other current assets	$	6.3
Property and equipment	63.8
Goodwill (a)	152.5
Intangible assets subject to amortization (b)	61.9
Other assets	0.1
Other accrued and current liabilities	(13.8		)
Non-current deferred tax liabilities	(18.6		)
Other long-term liabilities	(0.7		)
Noncontrolling interest (c)	(25.1		)
Total purchase price (d)	$	226.4


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


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


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


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


(5)	Derivative Instruments

In general, we seek to enter into derivative instruments to protect against (i) increases in the interest rates on our variable-rate debt and (ii) foreign currency movements, particularly with respect to borrowings that are denominated in a currency other than the functional currency of the borrowing entity. In this regard, through our subsidiaries, we have entered into various derivative instruments to manage interest rate exposure and foreign currency exposure with respect to the U.S. dollar ($), the ~~British pound sterling (~~£~~), the~~ Chilean peso (CLP), the Colombian peso (COP) and the Jamaican dollar (JMD~~) and the Colombian peso (COP~~). With the exception of certain foreign currency forward contracts, we do not apply hedge accounting to our derivative instruments. Accordingly, changes in the fair values of most of our derivative instruments are recorded in realized and unrealized gains or losses on derivative instruments in our condensed consolidated statements of operations.

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

June 30, 2019

(unaudited)

The following table provides details of the fair values of our derivative instrument assets and liabilities:

March 31, 2018 December 31, 2017
Current (a) Long-term (a) Total Current (a) Long-term (a) Total
in millions
Assets:
Cross-currency and interest rate derivative contracts (b) $ 16.5
$ 100.6
$ 117.1
$ 2.9
$ 38.4
$ 41.3
Foreign currency forward contracts —
0.4
0.4
—
—
—
Total $ 16.5
$ 101.0
$ 117.5
$ 2.9
$ 38.4
$ 41.3

Liabilities:
Cross-currency and interest rate derivative contracts (b) $ 62.1
$ 125.2
$ 187.3
$ 29.4
$ 51.9
$ 81.3
Foreign currency forward contracts 13.4
—
13.4
12.8
—
12.8
Total $ 75.5
$ 125.2
$ 200.7
$ 42.2
$ 51.9
$ 94.1



	June 30, 2019						December 31, 2018
	Current (a)		Long-term (a)		Total		Current (a)		Long-term (a)		Total
	in millions
Assets:
Cross-currency and interest rate derivative contracts (b)	$	6.8	$	12.1	$	18.9	$	30.7	$	82.1	$	112.8
Foreign currency forward contracts and other	11.2		—		11.2		14.1		—		14.1
Total	$	18.0	$	12.1	$	30.1	$	44.8	$	82.1	$	126.9

Liabilities:
Cross-currency and interest rate derivative contracts (b)	$	32.3	$	94.7	$	127.0	$	23.9	$	41.4	$	65.3
Foreign currency forward contracts	0.4		—		0.4		—		—		—
Total	$	32.7	$	94.7	$	127.4	$	23.9	$	41.4	$	65.3


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

(b)

We consider credit risk relating to our and our counterparties’ nonperformance in the fair value assessment of our derivative instruments. In all cases, the adjustments take into account offsetting liability or asset positions within each of our primary borrowing groups (see note 8)9). The changes in the credit risk valuation adjustments associated with our cross-currency and interest rate derivative contracts resulted in a net ~~gain (loss)~~gains (losses) of ~~($12 million)~~$4 million and ~~$7 million~~($9 million) during the three months ended ~~March 31,~~June 30, 2019 and 2018, respectively, and ~~2017,~~$6 million and ($21 million) during the six months ended June 30, 2019 and 2018, respectively. These amounts are included in realized and unrealized ~~losses~~gains (losses) on derivative instruments, net, in our condensed consolidated statements of operations. For further information regarding our fair value measurements, see note 6.

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



	Three months ended June 30,					Six months ended June 30,
	2019			2018		2019			2018
	in millions

Cross-currency and interest rate derivative contracts	$	(75.8	)	$	94.2	$	(145.8	)	$	55.3
Foreign currency forward contracts and other	(3.2		)	20.9		(2.2		)	18.3
Total	$	(79.0	)	$	115.1	$	(148.0	)	$	73.6

The following table sets forth the classification of the net cash inflows (outflows)of our derivative instruments:



	Six months ended June 30,
	2019			2018
	in millions

Operating activities	$	17.1		$	(17.0	)
Investing activities	3.8			(3.1		)
Financing activities	(0.3		)	—
Total	$	20.6		$	(20.1	)

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

~~March 31, 2018~~June 30, 2019

(unaudited)

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

Three months ended March 31,
2018 2017
in millions

Cross-currency and interest rate derivative contracts $ (38.9 ) $ (25.5 )
Foreign currency forward contracts (2.6 ) (1.8 )
Total $ (41.5 ) $ (27.3 )

~~The following table sets forth the classification of the net cash outflowsof our derivative instruments:~~

Three months ended March 31,
2018 2017
in millions

Operating activities $ (11.7 ) $ (10.7 )
Investing activities (1.7 ) (1.2 )
Total $ (13.4 ) $ (11.9 )

Counterparty Credit Risk

We are exposed to the risk that the counterparties to the derivative instruments of our borrowing groups will default on their obligations to us. We manage these credit risks through the evaluation and monitoring of the creditworthiness of, and concentration of risk with, the respective counterparties. In this regard, credit risk associated with our derivative instruments is spread across a relatively broad counterparty base of banks and financial institutions. Collateral has not been posted by either party under the derivative instruments of our borrowing groups. At ~~March 31, 2018,~~June 30, 2019, our exposure to counterparty credit risk included derivative assets with an aggregate fair value of $549 million.

Each of our borrowing groups has entered into derivative instruments under agreements with each counterparty that contain master netting arrangements that are applicable in the event of early termination by either party to such derivative instrument. The master netting arrangements under each of these master agreements are limited to the derivative instruments governed by the relevant master agreement within each individual borrowing group and are independent of similar arrangements of our other subsidiary borrowing groups.

~~Liberty Latin America Ltd.~~

~~Notes to Condensed Consolidated Financial Statements – (Continued)~~

~~March 31, 2018~~

~~(unaudited)~~

Details of our Derivative Instruments

Cross-currency Derivative Contracts

As noted above, we are exposed to foreign currency exchange rate risk in situations where our debt is denominated in a currency other than the functional currency of the operations whose cash flows support our ability to service, repay or refinance such debt. Although we generally seek to match the denomination of our ~~subsidiaries’~~ borrowings with the functional currency of the operations that are supporting the respective borrowings, market conditions or other factors may cause us to enter into borrowing arrangements that are not denominated in the functional currency of the underlying operations (unmatched debt). Our policy is generally to provide for an economic hedge against foreign currency exchange rate movements, whenever possible and when cost effective to do so, by using derivative instruments to synthetically convert unmatched debt into the applicable underlying currency. The following table sets forth the total notional amounts and the related weighted average remaining contractual lives of our cross-currency swap contracts at ~~March 31, 2018:~~June 30, 2019:


Borrowing group		Notional amount due from counterparty		Notional amount due to counterparty		Weighted average remaining life		Notional amount due from counterparty		Notional amount due to counterparty		Weighted average remaining life
		in millions				in years		in millions				in years

C&W	C&W	$	108.3	JMD	13,817.5	4.8	C&W	$	108.3	JMD	13,817.5	7.6
		$	35.4	COP	106,000.0	4.3		$	56.3	COP	180,000.0	7.1
		£	146.7	$	194.3	1.0

VTR Finance	VTR Finance	$	1,400.0	CLP	951,390.0	4.2	VTR Finance	$	1,260.0	CLP	854,020.0	3.0

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

June 30, 2019

(unaudited)

Interest Rate Derivative Contracts

Interest Rate Swaps

As noted above, we enter into interest rate swaps to protect against increases in the interest rates on our variable-rate debt. Pursuant to these derivative instruments, we typically pay fixed interest rates and receive variable interest rates on specified notional amounts. The following table sets forth the total U.S. dollar equivalents of the notional amounts and the related weighted average remaining contractual lives of our interest rate swap contracts at ~~March 31, 2018:~~June 30, 2019:

Borrowing group Notional amount due from counterparty Weighted average remaining life
in millions in years

C&W (a) $ 2,975.0
6.1

Liberty Puerto Rico $ 675.0
3.0



Borrowing group	Notional amount due from counterparty		Weighted average remaining life
	in millions		in years

C&W (a)	$	2,555.0	4.8

VTR Finance	$	207.6	3.6

Liberty Puerto Rico	$	850.0	7.0

Cabletica	$	53.5	4.0


(a)	Includes forward-starting derivative instruments.

Basis Swaps

Basis swaps involve the exchange of attributes used to calculate our floating interest rates, including (i) the benchmark rate, (ii) the underlying currency and/or (iii) the borrowing period. We typically enter into these swaps to optimize our interest rate profile based on our current evaluations of yield curves, our risk management policies and other factors. ~~At March 31, 2018,~~The following table sets forth the total U.S. dollar ~~equivalent~~equivalents of the notional amounts ~~of these derivative instruments was $3,750 million~~ and the related weighted average remaining contractual ~~life~~lives of our basis swap contracts ~~was 1.2 years. At March 31, 2018, our basis swaps were all held by subsidiaries of our C&W borrowing group.~~

at June 30, 2019:

~~Liberty Latin America Ltd.~~

~~Notes to Condensed Consolidated Financial Statements – (Continued)~~

~~March 31, 2018~~

~~(unaudited)~~



Borrowing group	Notional amount due from counterparty		Weighted average remaining life
	in millions		in years

C&W	$	1,640.0	0.5

Liberty Puerto Rico	$	922.5	0.5

Interest Rate Caps

We enter into interest rate cap agreements that lock in a maximum interest rate if variable rates rise, but also allow ~~our company~~us to benefit from declines in market rates. At ~~March 31, 2018,~~June 30, 2019, the total U.S. dollar notional ~~amounts~~amount of our interest rate ~~caps~~cap was ~~$436~~$73 million ~~all~~and the related weighted average remaining contractual life of ~~which are~~our interest rate cap was 4.0 years. Our interest rate cap is held by our Liberty Puerto ~~Rico.~~Rico borrowing group.

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

June 30, 2019

(unaudited)

Impact of Derivative Instruments on Borrowing Costs

The weighted average impact of the derivative instruments, excluding forward-starting derivative instruments, on our borrowing costs at ~~March 31, 2018~~June 30, 2019 was as follows:



Borrowing group	Increase (decrease) to borrowing costs

C&W	~~0.43~~(0.03	)%
VTR Finance	(~~0.52~~0.09	)%
Liberty Puerto Rico	~~0.44~~(0.21	)%
Cabletica	0.17	%
Liberty Latin America borrowing groups	~~0.22~~(0.06	)%

Foreign Currency Forwards Contracts

We enter into foreign currency forward contracts with respect to non-functional currency exposure. ~~As of March 31, 2018,~~At June 30, 2019, the total U.S. dollar equivalent of the notional ~~amount~~amounts of our foreign currency forward contracts was $~~228~~164 million ~~all~~and the related weighted average remaining contractual life of ~~which~~our foreign currency forward contracts was 0.5 years. All of our our foreign currency forward contracts are held by ~~subsidiaries of~~ our VTR Finance borrowing group.


(6)	Fair Value Measurements

General

We use the fair value method to account for our derivative instruments and the available-for-sale method to account for our investment in ~~the~~ United Kingdom (U.K.) Government Gilts. The reported fair values of our derivative instruments as of ~~March 31, 2018~~June 30, 2019 likely will not represent the value that will be paid or received upon the ultimate settlement or disposition of these assets and liabilities, as we expect that the values realized generally will be based on market conditions at the time of settlement, which may occur at the maturity of the derivative instrument or at the time of the repayment or refinancing of the underlying debt instrument.

U.S. GAAP provides for a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. We record transfers of assets or liabilities into or out of Levels 1, 2 or 3 at the beginning of the quarter during which the transfer occurred. During the three months ended March 31, 2018, no such transfers were made.

Recurring Fair Value Measurements

Derivatives

In order to manage our interest rate and foreign currency exchange risk, we have entered into various derivative instruments, as further described in note 5. The recurring fair value measurements of these derivative instruments are determined using discounted cash flow models. Most of the inputs to these discounted cash flow models consist of, or are derived from, observable Level 2 data for substantially the full term of these derivative instruments. This observable data mostly includes interest rate futures and swap rates, which are retrieved or derived from available market data. Although we may extrapolate or interpolate this data, we do not otherwise alter this data in performing our valuations. We incorporate a credit risk valuation adjustment in our fair value measurements to estimate the impact of both our own nonperformance risk and the nonperformance risk of our counterparties. Our and our counterparties’ credit spreads represent our most significant Level 3 inputs, and these inputs are used to derive the credit risk valuation adjustments with respect to these instruments. As we would not expect changes in our or our counterparties’ credit spreads to have a significant impact on the valuations of these instruments, we have determined that these valuations fall under Level 2 of the fair value hierarchy. Our credit risk valuation adjustments with respect to our cross-currency and interest rate derivative contracts are quantified and further explained in note 5. Due to the lack of Level 2 inputs for the valuation of the U.S dollar to the Jamaican dollar cross-currency swaps (the Sable Currency Swaps) held by Sable International Finance Limited (Sable), a wholly-owned subsidiary of C&W, we believe this valuation falls under Level 3 of the fair value hierarchy. The Sable

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

June 30, 2019

(unaudited)

Currency Swaps are our only Level 3 financial instruments. The fair values of the Sable Currency Swaps at ~~March 31, 2018~~June 30, 2019 and December 31, ~~2017~~2018 were ~~$27~~$31 millionand ~~$22~~$36 million, respectively, which are included in other

~~Liberty Latin America Ltd.~~

~~Notes to Condensed Consolidated Financial Statements – (Continued)~~

~~March 31, 2018~~

~~(unaudited)~~

long-term liabilitiesin our condensed consolidated balance sheets. The change in the fair values of the Sable Currency Swaps resulted in net ~~losses~~gains (losses) of $5$4 million and ~~$4 million~~($7 million) during the three months ended ~~March 31,~~June 30, 2019 and 2018, respectively, and ~~2017,~~$5 million and ($12 million) during the six months ended June 30, 2019 and 2018, respectively, which are reflected in realized and unrealized ~~losses~~gains (losses) on derivative instruments, net, in our condensed consolidated statements of operations. ~~Our credit risk valuation adjustments with respect to our cross-currency and interest rate swaps are quantified and further explained in note 5.~~

Available-for-sale Investments

Our investment in ~~the~~ U.K. Government Gilts falls under Level 1 of the fair value hierarchy. At ~~March 31, 2018~~June 30, 2019 and December 31, ~~2017,~~2018, the carrying values of our investment in ~~the~~ U.K. Government Gilts, which are included in other assets, net, in our condensed consolidated balance sheets, ~~was $33~~were $36 million and ~~$37~~$35 million, respectively.

Nonrecurring Fair Value Measurements

Conversion Option – Convertible Notes

As further described and defined in note 9, our Convertible Notes include a Conversion Option that we bifurcated from the Convertible Notes and recorded at fair value upon issuance as an equity component in our condensed consolidated statement of equity. The fair value of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature, which was established using the present value of cash flows associated with such instrument based on a 5-year tenor and an estimated yield rate of 6.7%, which is a Level 2 input. The fair value of the equity component was determined by deducting the fair value of the liability component from the proceeds received on issuance of the Convertible Notes.

Other

Fair value measurements are also used for purposes of nonrecurring valuations performed in connection with acquisitions and impairment assessments. We did not perform any significant nonrecurring fair value measurements related to these assessments during the six months ended June 30, 2019.


(7)	Insurance Recoveries

In September 2017, Hurricanes Irma and Maria (the Hurricanes) impacted a number of our markets in the Caribbean, resulting in varying degrees of damage to homes, businesses and infrastructure in these markets. In October 2016, our operations in the Bahamas, which is part of our C&W segment, were significantly impacted by Hurricane Matthew.

In December 2018, we settled our insurance claims for Hurricanes Irma, Maria and Matthew, as follows: (i) $109 million for Hurricanes Maria and Irma, after deducting $30 million of self-insurance, and (ii) $12 million for Hurricane Matthew, after deducting $15 million of self-insurance.

During the first quarter of 2019, we received the remaining outstanding insurance settlement amount of $67 million, of which $33 million and $34 million have been presented as operating and investing activities, respectively, in our condensed consolidated statement of cash flows. With respect to the cash received, $37 million, $27 million and $3 million was provided to C&W, Liberty Puerto Rico and our Corporate operations, respectively.

Prior to 2019, we received net advance payments of $54 million associated with the initial insurance claim filed in connection with the Hurricanes, of which $30 million was received during the first half of 2018 and was provided to Liberty Puerto Rico. The net advance received during the first half of 2018 was included in operating activities in our condensed consolidated statement of cash flows.

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

June 30, 2019

(unaudited)


(8)	Long-lived Assets

Goodwill

Changes in the carrying amount of our goodwill ~~during the three months ended March 31, 2018~~ are set forth below:



	January 1, 2019		Acquisitions and related adjustments		Foreign currency translation adjustments			June 30, 2019
	in millions

C&W	$	4,325.6	$	50.4	$	(16.8	)	$	4,359.2
VTR/Cabletica	530.0		1.2		14.7			545.9
Liberty Puerto Rico	277.7		—		—			277.7
Total	$	5,133.3	$	51.6	$	(2.1	)	$	5,182.8

January 1,
2018
Foreign
currency
translation
adjustments
March 31,
2018
in millions

C&W $ 4,962.5
$ (18.3 ) $ 4,944.2
VTR 433.4
8.3
441.7
Liberty Puerto Rico 277.7
—
277.7
Total $ 5,673.6
$ (10.0 ) $ 5,663.6

Based on the results of our October 1, ~~2017~~2018 goodwill impairment test, ~~a hypothetical decline of 20% or more~~declines in the estimated fair value of certain C&W reporting units, ~~that carry~~particularly with respect to our Panamanian reporting unit, which had a goodwill balance ~~or the Liberty Puerto Rico reporting unit~~of $976 million at June 30, 2019, could result in the need to record additional goodwill impairment charges. If, among other factors, (i) our equity values were to decline significantly or (ii) the adverse impacts of competition, economic, ~~competitive,~~ regulatory or other factors, including macro-economic and demographic trends, were to cause ~~C&W’s or Liberty Puerto Rico’s~~our results of operations or cash flows to be worse than anticipated, we could conclude in future periods that ~~additional~~ impairment charges are required in order to reduce the carrying values of the goodwill ~~cable television franchise rights~~ and, to a lesser extent, other long-lived assets of ~~these entities.~~

C&W. Any such impairment charges could be significant.

Property and Equipment, Net

The details of our property and equipment and the related accumulated depreciation are set forth below:


	March 31, 2018			December 31, 2017			June 30, 2019			December 31, 2018
	in millions						in millions

Distribution systems	$	4,047.2		$	3,878.4		$	4,345.8		$	4,115.0
Customer premises equipment	1,438.8			1,382.8
Customer premises equipment (CPE)							1,790.4			1,606.0
Support equipment, buildings and land	1,338.6			1,306.3			1,461.3			1,398.8
	6,824.6			6,567.5			7,597.5			7,119.8
Accumulated depreciation	(2,588.4		)	(2,398.3		)	(3,235.9		)	(2,882.9		)
Total	$	4,236.2		$	4,169.2		$	4,361.6		$	4,236.9

During the ~~three~~six months ended ~~March 31,~~June 30, 2019 and 2018, ~~and 2017,~~ we recorded non-cash increases to our property and equipment related to vendor financing arrangements aggregating ~~$21~~$26 million and ~~$14~~$35 million, respectively.

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

~~March 31, 2018~~June 30, 2019

(unaudited)

Intangible Assets Subject to Amortization, Net

The details of our intangible assets subject to amortization are set forth below:


	March 31, 2018			December 31, 2017			June 30, 2019			December 31, 2018
	in millions						in millions
Gross carrying amount:
Customer relationships	$	1,459.3		$	1,415.1		$	1,510.5		$	1,509.7
Licenses and other	184.2			199.8			186.5			186.8
Total gross carrying amount	1,643.5			1,614.9			1,697.0			1,696.5
Accumulated amortization:
Customer relationships	(374.6		)	(284.2		)	(596.6		)	(504.7		)
Licenses and other	(17.3		)	(14.5		)	(32.0		)	(26.1		)
Total accumulated amortization	(391.9		)	(298.7		)	(628.6		)	(530.8		)
Net carrying amount	$	1,251.6		$	1,316.2		$	1,068.4		$	1,165.7


~~(8)~~(9)	Debt and ~~Capital~~Finance Lease Obligations

The U.S. dollar equivalents of the components of our debt are as follows:


	March 31, 2018								Estimated fair value (c)					Principal Amount						June 30, 2019								Estimated fair value (c)				Principal Amount
	Weighted average interest rate (a)		Unused borrowing capacity (b)																	Weighted average interest rate (a)			Unused borrowing capacity (b)
			Borrowing currency				US $ equivalent		March 31, 2018		December 31, 2017			March 31, 2018			December 31, 2017						Borrowing currency			US $ equivalent		June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018

						in millions																				in millions

Convertible Notes (d)																				2.00	%		—			$	—	$	403.9	$	—	$	402.5	$	—
C&W Credit Facilities	4.95	%		$	746.5		$	746.5	$	2,243.7		$	2,216.4		$	2,235.9		$	2,212.2		5.40	%		$	750.0		750.0		1,946.8		2,135.6		1,943.6		2,193.6
C&W Notes	7.09	%		—			—		1,712.3		1,749.7			1,655.9			1,648.4			6.81	%		—			—		2,176.5		1,724.7		2,110.0		1,781.6
VTR Finance Senior Secured Notes	6.88	%		—			—		1,452.3		1,479.6			1,400.0			1,400.0
VTR Credit Facility	—	%		(d)			232.9		—		—			—			—
VTR Finance Senior Notes																				6.88	%		—			—		1,303.2		1,265.0		1,260.0		1,260.0
VTR Credit Facilities																				6.64	%		(e)			251.3		253.8		245.7		256.4		250.7
LPR Bank Facility	5.52	%		—			—		951.1		951.8			982.5			982.5			6.15	%		40.0			40.0		918.2		905.4		922.5		942.5
Vendor financing (e)	4.43	%		—			—		149.1		137.4			149.1			137.4
Cabletica Credit Facilities																				10.47	%		(f)			15.0		126.4		122.2		127.7		124.7
Vendor financing (g)																				4.98	%		—			—		140.2		157.6		140.2		157.6
Total debt before premiums, discounts and deferred financing costs	6.00	%					$	979.4	$	6,508.5	$	6,534.9		$	6,423.4		$	6,380.5		6.11	%					$	1,056.3	$	7,269.0	$	6,556.2	$	7,162.9	$	6,710.7

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

~~March 31, 2018~~June 30, 2019

(unaudited)

The following table provides a reconciliation of total debt before premiums, discounts and deferred financing costs to total debt and ~~capital~~finance lease obligations:

March 31, 2018 December 31, 2017

in millions

Total debt before premiums, discounts and deferred financing costs $ 6,423.4
$ 6,380.5
Premiums, discounts and deferred financing costs, net (20.8 ) (26.5 )
Total carrying amount of debt 6,402.6
6,354.0
Capital lease obligations 16.8
17.5
Total debt and capital lease obligations 6,419.4
6,371.5
Less: Current maturities of debt and capital lease obligations (212.3 ) (263.3 )
Long-term debt and capital lease obligations $ 6,207.1
$ 6,108.2



	June 30, 2019			December 31, 2018
	in millions

Total debt before premiums, discounts and deferred financing costs	$	7,162.9		$	6,710.7
Premiums, discounts and deferred financing costs, net (d)	(140.5		)	(41.5		)
Total carrying amount of debt	7,022.4			6,669.2
Finance lease obligations	10.6			12.9
Total debt and finance lease obligations	7,033.0			6,682.1
Less: Current maturities of debt and finance lease obligations	(172.4		)	(302.5		)
Long-term debt and finance lease obligations	$	6,860.6		$	6,379.6

(a)

Represents the weighted average interest rate in effect at ~~March 31, 2018~~June 30, 2019 for all borrowings outstanding pursuant to each debt instrument, including any applicable margin. The interest rates presented represent stated rates and do not include the impact of derivative instruments, deferred financing costs, original issue premiums or discounts and commitment fees, all of which affect our overall cost of borrowing. Including the effects of derivative instruments, original issue premiums or discounts, including the discount on the Convertible Notes associated with the Conversion Option, and commitment fees, but excluding the impact of financing costs, the weighted average interest rate on our indebtedness was ~~6.30%~~6.4% at ~~March 31, 2018.~~June 30, 2019; excluding the discount on the Convertible Notes associated with the Conversion Option, the weighted average interest rate was 6.1%. For information regarding our derivative instruments, see note 5.

(b)

Unused borrowing capacity represents the maximum availability under the applicable facility at ~~March 31, 2018~~June 30, 2019 without regard to covenant compliance calculations or other conditions precedent to borrowing. At ~~March 31, 2018,~~June 30, 2019, the full amount of unused borrowing capacity was available to be borrowed under each of the respective subsidiary facilities, both before and after ~~consideration of the~~ completion of the ~~March 31, 2018~~June 30, 2019 compliance reporting ~~requirements, which include leverage-based payment tests and leverage covenants.~~requirements. At ~~March 31, 2018,~~June 30, 2019, there were no restrictions on the respective subsidiary’s ability to make loans or distributions from this availability to Liberty Latin America or its subsidiaries or other equity holders.

(c)

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

(d)

The ~~VTR Credit Facility~~interest rate reflects the stated rate of the Convertible Notes. The effective interest rate of the Convertible Notes is 6.7%, which considers the ~~senior secured credit facility~~impact of ~~VTR and certain~~the $78 million discount recorded during the second quarter of ~~its subsidiaries and comprises a $160 million facility (the~~ ~~VTR Dollar Credit Facility) and a CLP 44 billion ($73 million) facility (the~~ ~~VTR Peso Credit Facility), each of which were undrawn at March 31, 2018.~~

2019 in connection with the Conversion Option, as further described below.


(e)	The VTR Credit Facilities comprise certain CLP term loans and U.S. dollar and CLP revolving credit facilities, including unused borrowing capacity. In March 2019, the commitment under the existing CLP revolving credit facility was increased to CLP 45 billion ($66 million).


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

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

June 30, 2019

(unaudited)

(g)

Represents amounts owed pursuant to interest-bearing vendor financing arrangements that are used to finance certain of our operating expenses and property and equipment ~~additions and, to a lesser extent, certain of our operating expenses.~~additions. These obligations are generally due within one year and include value-added taxes (VAT) that were paid on our behalf by the vendor. Our operating expenses include $57 million and $95 million for the ~~three~~six months ended ~~March 31,~~June 30, 2019 and 2018, ~~and 2017 include $32 million and $10 million,~~ respectively, that were financed by an intermediary and are reflected on the borrowing date as a hypothetical cash outflow within net cash provided by operating activities and a hypothetical cash inflow within net cash provided by financing activities in our condensed consolidated statements of cash flows. Repayments of vendor financing obligations are included in repayments of debt and ~~capital~~finance lease obligations in our condensed consolidated statements of cash flows.

~~2018~~2019 Financing Transactions

Liberty Latin America – Convertible Notes

In June 2019, Liberty Latin America issued $403 million principal amount of 2.0% convertible senior notes (the Convertible Notes) due July 15, 2024. Interest on the Convertible Notes is payable semi-annually on January 15 and July 15, beginning on January 15, 2020. The Convertible Notes are general unsecured obligations of the Company, are subordinated to all of our other debt and structurally subordinated to all liabilities of our subsidiaries.

Conversion Rights. Subject to certain conditions, and adjustments if certain events occur (as specified in the indenture governing the Convertible Notes), the Convertible Notes may be converted at a conversion rate initially equal to 44.9767 Class C common shares per $1,000 principal amount of the Convertible Notes (equivalent to an initial conversion price of approximately $22.23 per Class C common share), the “Conversion Option”. Any conversions of the Convertible Notes may be settled, at the election of the Company, in cash, Class C common shares or a combination thereof.

The Convertible Notes may be converted at the option of the holders at any time prior to the close of business on January 12, 2024, only under the following circumstances:

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

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

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

upon the occurrence of specified corporate transactions.

On and after January ~~6, 2018, C&W Panama issued $100 million~~15, 2024 until the close of ~~subordinated debt. The term loan bears interest~~business on the second scheduled trading day immediately preceding the maturity date, holders of the Convertible Notes may convert their notes at ~~4.35%, payable on a quarterly basis, and matures in January 2023. The proceeds~~any time, regardless of the foregoing circumstances.

As of June 30, 2019, we determined the Conversion Option should be bifurcated from the ~~term loan were primarily used~~debt host instrument (the Convertible Notes) and accounted for as a separate financial instrument that qualifies for equity classification. Accordingly, we bifurcated the Conversion Option from the Convertible Notes and initially recorded the estimated fair value of $78 million as additional paid-in capital and debt discount. The debt discount will be accreted through interest expense, using the effective interest method, through maturity of the Convertible Notes or when the Conversion Option no longer qualifies for equity classification, if ever.

Redemption Rights. Other than a redemption for a change in certain tax laws, we may not redeem the Convertible Notes prior to ~~repay existing~~July 19, 2022. On or after July 19, 2022 but prior to the 85^th scheduled trading day immediately preceding July 15, 2024, we may redeem all or a portion of the notes for cash, if the last reported sale price of our Class C~~&W Panama debt.~~ common shares has been at least 130% of the conversion price then in effect on (i) each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption and (ii) the trading day immediately preceding the date we provide such notice.

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

~~March 31, 2018~~June 30, 2019

(unaudited)

~~On February 7, 2018, C&W entered into~~Other. If a ~~$1,875 million~~fundamental change (as defined in the indenture) occurs, holders of the Convertible Notes may require the Companyto repurchase all or a portion of their notes for cash at a price equal to 100% of the principal amount ~~term loan facility (the~~ ~~C&W Term Loan B-4 Facility) at~~of the ~~London Interbank Offered Rate (LIBOR~~)notes to be repurchased, plus ~~3.25%, subject~~any accrued and unpaid interest to, ~~a LIBOR floor of 0.0%. The C&W Term Loan B-4 Facility was issued at 99.875% of par with a~~but excluding, the fundamental change repurchase date. In addition, following certain corporate transactions that occur prior to the maturity date of ~~January 31, 2026. General terms associated~~the Convertible Notes or the delivery of a notice of redemption, we will increase the applicable conversion rate for a holder who elects to convert in connection with such corporate transactions or notice of redemption in certain circumstances by a number of additional Class C common shares, as described in the ~~C&W Term Loan B-4 Facility are substantially~~related indenture.

We used a portion of the ~~same~~net proceeds from the issuance of the Convertible Notes to fund the cost of the Capped Calls, as ~~those included in “General Information~~”defined and further described in note 912, and expect to ~~our 2017 Form 10-K. The net proceeds of~~use the remaining funds for other general corporate purposes.

C&W

2019 C&W ~~Term Loan B-4 Facility were used to repay~~Senior Notes. On March 25, 2019, we repaid in full the ~~$1,825~~outstanding principal amount under the 2019 C&W Senior Notes for total consideration of £91 million ($120 million at the transaction date), including accrued interest of £7 million ($9 million at the transaction date).

C&W Revolving Credit Facility. In connection with the UTS Acquisition during the first quarter of 2019, we borrowed $170 million on the C&W Revolving Credit Facility. As further described below, the outstanding principal amount of the C&W ~~Term Loan B-3~~Revolving Credit Facility, including accrued interest, was repaid in full during the second quarter of 2019.

2027 C&W Senior Notes Add-on A. In April 2019, C&W issued an additional $300 million aggregate principal amount, at 99.205% of par, under the existing 2027 C&W Senior Notes indenture dated August 16, 2017 (the 2027 C&W Senior Notes Add-on A). The terms and conditions of the 2027 C&W Senior Notes Add-on A are consistent with the original indenture.

The net proceeds from the 2027 C&W Senior Notes Add-on A were primarily used to (i) repay ~~$40~~in full the $170 million ~~drawn~~outstanding principal amount under the C&W Revolving Credit ~~Facility. The exchange~~Facility and (ii) redeem $115 million of aggregate principal amount of the 2022 C&W Senior Notes according to the redemption terms of the related indenture, comprising (a) a 105.156% redemption price and (b) accrued and unpaid interest on the redeemed notes.

2027 C&W Senior Secured Notes. In April 2019, Sable issued $400 million principal amount, at 99.195% of par, of 5.750% senior secured notes, due September 7, 2027 (the 2027 C&W Senior Secured Notes). Interest on the 2027 C&W Senior Secured Notes is payable semi-annually on January 7 and July 7.

Subject to the circumstances described below, the 2027 C&W Senior Secured Notes are non-callable until September 7, 2022. At any time prior to September 7, 2022, Sable may redeem some or all of the 2027 C&W Senior Secured Notes by paying a price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest and a “make-whole” premium, which is generally the present value of all remaining scheduled interest payments to September 7, 2022 using the discount rate (as specified in the indenture) as of the redemption date plus 50 basis points. In addition, at any time prior to September 7, 2022, subject to certain restrictions (as specified in the indenture), up to 40% of the 2027 C&W Senior Secured Notes may be redeemed with the net proceeds of one or more specified equity offerings at a redemption price equal to 105.750% of the principal amount redeemed, plus accrued and unpaid interest and additional amounts (as specified in the indenture), if any, to the redemption date. Also, prior to September 7, 2022, during each 12-month period commencing on April 5, 2019, up to 10% of ~~$1,825 million was treated~~the principal amount of the 2027 C&W Senior Secured Notes may be redeemed at a redemption price equal to 103% of the principal amount redeemed plus accrued and unpaid interest to the redemption date.

Sable may redeem some or all of the 2027 C&W Senior Secured Notes at the following redemption prices (expressed as a ~~non-cash transaction in our condensed consolidated statement~~percentage of ~~cash flows. In connection with this transaction, C&W recognized a loss on debt modification~~principal amount) plus accrued and ~~extinguishment of $13 million, which represents the write-off of unamortized discounts~~unpaid interest and ~~deferred financing costs.~~

~~On March 7, 2018, we amended and restated the credit agreement originally dated May 16, 2016, as amended and restated as of May 26, 2017, providing for the~~ additional ~~C&W Term Loan B-4 Facility and a $625 million revolving credit facility (the~~ ~~C&W Revolving Credit Facility~~).

~~The details of our borrowings under the C&W Credit Facilities as of March 31, 2018 are summarized~~amounts (as specified in the ~~following table:~~indenture), if any, to the applicable redemption date:

C&W Credit Facilities Maturity Interest rate
Facility amount
(in borrowing
currency)
Outstanding principal amount
Unused
borrowing
capacity

Carrying
value (a)
in millions

C&W Term Loan B-4 Facility January 31, 2026 LIBOR + 3.25% $ 1,875.0
$ 1,875.0
$ —
$ 1,869.2
C&W Revolving Credit Facility June 30, 2023 LIBOR + 3.25% $ 625.0
10.0
615.0
10.0
C&W Regional Facilities various dates ranging from 2018 to 2038 4.00% (b) $ 482.4
350.9
131.5
349.9
Total $ 2,235.9
$ 746.5
$ 2,229.1


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


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

~~Liberty Latin America Ltd.~~

~~Notes to Condensed Consolidated Financial Statements – (Continued)~~

~~March 31, 2018~~

~~(unaudited)~~

~~Maturities of Debt and Capital Lease Obligations~~

~~Maturities of our debt and capital lease obligations as of March 31, 2018 are presented below. Amounts presented below represent U.S. dollar equivalents based on March 31, 2018 exchange rates:~~

~~Debt:~~

C&W VTR Liberty Puerto Rico Consolidated
in millions
Years ending December 31:
2018 (remainder of year) $ 94.6
$ 78.6
$ —
$ 173.2
2019 234.9
22.9
—
257.8
2020 24.9
—
40.0
64.9
2021 125.0
—
—
125.0
2022 765.2
—
850.0
1,615.2
2023 113.8
—
92.5
206.3
Thereafter 2,581.0
1,400.0
—
3,981.0
Total debt maturities 3,939.4
1,501.5
982.5
6,423.4
Premiums, discounts and deferred financing costs, net 11.2
(21.3 ) (10.7 ) (20.8 )
Total debt $ 3,950.6
$ 1,480.2
$ 971.8
$ 6,402.6
Current portion $ 98.6
$ 101.6
$ —
$ 200.2
Noncurrent portion $ 3,852.0
$ 1,378.6
$ 971.8
$ 6,202.4



	Redemption price
12-month period commencing September 7:
2022	102.875%
2023	101.438%
2024 and thereafter	100.000%

~~Capital lease obligations:~~

C&W VTR Liberty Puerto Rico Consolidated
in millions
Year ending December 31:
2018 (remainder of year) $ 12.1
$ 0.2
$ —
$ 12.3
2019 3.1
0.4
—
3.5
2020 1.4
0.1
—
1.5
2021 0.1
—
—
0.1
Total principal and interest payments 16.7
0.7
—
17.4
Amounts representing interest (0.6 ) —
—
(0.6 )
Present value of net minimum lease payments $ 16.1
$ 0.7
$ —
$ 16.8
Current portion $ 11.8
$ 0.3
$ —
$ 12.1
Noncurrent portion $ 4.3
$ 0.4
$ —
$ 4.7

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

~~March 31, 2018~~June 30, 2019

(unaudited)

The net proceeds from the 2027 C&W Senior Secured Notes were primarily used to (i) redeem $150 million of aggregate principal amount under the 2022 C&W Senior Notes according to the redemption terms of the indenture, comprising (a) the 105.156% redemption price and (b) accrued and unpaid interest on the redeemed notes, and (ii) repay $235 million of aggregate principal amount under the C&W Term Loan B-4 Facility.

The details of our outstanding C&W Notes as of June 30, 2019 are summarized in the following table:



				Outstanding principal amount
C&W Notes	Maturity	Interest rate		Borrowing currency		U.S. $ equivalent		Estimated fair value		Carrying value (a)
				in millions
Senior Secured Notes:
2027 C&W Senior Secured Notes	September 7, 2027	5.750	%	$	400.0	$	400.0	$	403.5	$	391.4
Senior Notes:
2022 C&W Senior Notes (b) (c)	August 1, 2022	6.875	%	$	210.0	210.0		217.7		213.4
2026 C&W Senior Notes	October 15, 2026	7.500	%	$	500.0	500.0		523.4		493.5
2027 C&W Senior Notes	September 15, 2027	6.875	%	$	1,000.0	1,000.0		1,031.9		990.1
Total						$	2,110.0	$	2,176.5	$	2,088.4


~~(9)~~(a)	Amounts are inclusive or net of original issue premiums and deferred financing costs, as applicable.


(b)	Carrying values of the 2022 C&W Senior Notes (previously known as the Sable Senior Notes) include the impact of premiums recorded in connection with the acquisition accounting for the C&W Acquisition.


(c)	Subsequent to June 30, 2019, the remaining aggregate principal amount of the 2022 C&W Senior Notes were called for redemption and will be fully repaid in August 2019.

Subsequent Event – 2027 C&W Senior Notes Add-on B. In July 2019, C&W issued an additional $220 million aggregate principal amount, at 103.625% of par, under the existing 2027 C&W Senior Notes indenture dated August 16, 2017 (the 2027 C&W Senior Notes Add-on B). The terms and conditions of the 2027 C&W Senior Notes Add-on B are consistent with the original indenture.

The net proceeds from the 2027 C&W Senior Notes Add-on B will be primarily used to redeem the remaining aggregate principal amount of the 2022 C&W Senior Notes of $210 million, which were called for redemption in July 2019 according to the redemption terms of the related indenture, comprising (a) a 103.438% redemption price and (b) accrued and unpaid interest on the redeemed notes.

Liberty Puerto Rico

LPR Second Lien Term Loan. During the second quarter of 2019, Liberty Puerto Rico repaid $20 million of the principal outstanding under the LPR Second Lien Term Loan.

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

June 30, 2019

(unaudited)

Maturities of Debt

Maturities of our debt as of June 30, 2019 are presented below. Amounts presented below represent U.S. dollar equivalents based on June 30, 2019 exchange rates:



	C&W			VTR Finance			Liberty Puerto Rico			Cabletica			Liberty Latin America			Consolidated
	in millions
Years ending December 31:
2019 (remainder of year)	$	42.4		$	59.2		$	—		$	—		$	—		$	101.6
2020	33.3			40.2			—			—			—			73.5
2021	124.2			—			—			—			—			124.2
2022	224.3			103.8			850.0			—			—			1,178.1
2023	123.1			152.6			72.5			127.7			—			475.9
2024	3.0			1,260.0			—			—			402.5			1,665.5
Thereafter	3,544.1			—			—			—			—			3,544.1
Total debt maturities	4,094.4			1,615.8			922.5			127.7			402.5			7,162.9
Premiums, discounts and deferred financing costs, net	(26.2		)	(21.0		)	(7.5		)	(3.6		)	(82.2		)	(140.5		)
Total debt	$	4,068.2		$	1,594.8		$	915.0		$	124.1		$	320.3		$	7,022.4
Current portion	$	64.9		$	99.4		$	—		$	—		$	—		$	164.3
Noncurrent portion	$	4,003.3		$	1,495.4		$	915.0		$	124.1		$	320.3		$	6,858.1


(10)	Unfulfilled Performance Obligations

We enter into certain long-term capacity contracts with customers where the customer either pays a fixed fee over time or prepays for the capacity upfront and pays a portion related to operating and maintenance of the network over time. We assess whether prepaid capacity contracts contain a significant financing component. If the financing component is significant, interest expense is accreted over the life of the contract using the effective interest method. The revenue associated with prepaid capacity contracts is deferred and generally recognized on a straight-line basis over the life of the contract. As of June 30, 2019, we haveapproximately $475 million of unfulfilled performance obligations relating to our long-term capacity contracts, primarily subsea contracts, that generally will be recognized as revenue over an average remaining life of seven years.


(11)	Income Taxes

We evaluate and update our estimated annual effective income tax rate on a quarterly basis based on current and forecasted operating results and tax laws. For interim tax reporting, we estimate an annual effective tax rate which is applied to year-to-date ordinary income or loss. The tax effect of significant unusual or infrequently occurring items are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur.

Our interim estimate of our annual effective tax rate and our interim tax provision are subject to volatility due to factors such as jurisdictions in which our deferred taxes and/or tax attributes are subject to a full valuation allowance, relative changes in unrecognized tax benefits and changes in tax laws. Based upon the mix and timing of our actual annual earnings or loss compared to annual projections, as well as changes in the factors noted above, our effective tax rate may vary quarterly and may make quarterly comparisons not meaningful.

Income tax expense was ~~approximately $17~~$30 million and ~~$23~~$42 million during the three months ended ~~March 31,~~June 30, 2019 and 2018, respectively, and ~~2017,~~$34 million and $58 million during the six months ended June 30, 2019 and 2018, respectively. This represents an effective income tax rate of ~~(44.8)%~~36.1% and~~68.5%~~ (295.0%) for the three months ended ~~March 31,~~June 30, 2019 and 2018, respectively, and ~~2017,~~28.6% and 249.6% for the six months ended June 30, 2019 and 2018, respectively, including items treated discretely.

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

June 30, 2019

(unaudited)

For the three and six months ended ~~March 31, 2018,~~June 30, 2019, the income tax expense attributable to our ~~loss~~earnings (loss) before income taxes differs from the ~~amount~~amounts computed using the statutory tax rate, primarily due to the detrimental effects of international rate differences, increases in ~~the~~ valuation ~~allowance,~~allowances, changes in uncertain tax positions, and negative effects of permanent items, such as non-deductible expenses. These negative impacts to our effective tax rate were partially offset by the beneficial effects of permanent items, such as non-taxable ~~income~~income. Additionally for the six months ended June 30, 2019, our effective tax rate reflects the beneficial effects of a change in the Barbados and ~~price level restatements.~~ Grenada statutory tax rates.

For the three and six months ended ~~March 31, 2017,~~June 30, 2018 the income tax expense attributable to our earnings (loss) before income taxes differs from the ~~amount~~amounts computed using the statutory tax rate, primarily due to the detrimental effects of international rate differences, ~~non-deductible expenses and changes~~increases in valuation allowances and negative effects of non-deductible expenses. These negative impacts to our effective tax rates were partially offset by the beneficial effects of ~~enacted~~changes in uncertain tax ~~law~~positions and ~~rate changes.~~non-taxable income.

Subsequent to June 30, 2019, we closed certain tax assessments, and as a result, expect to reduce our uncertain tax positions by approximately $240 million during the third quarter of 2019.


~~(10)~~(12)	Equity

Capped Calls

In ~~December 2017, in~~ connection with ~~challenging circumstances that~~the issuance of our Convertible Notes, Liberty Puerto Rico experienced as a result of the damage caused by hurricanes during September 2017, in particular Hurricane Maria, the LPR Credit Agreements were amended to provide for, among other things, an equity commitment of up to $60 millionLatin America entered into capped call option contracts (the ~~LCPR Equity Commitment~~) from Liberty Puerto Rico’s shareholders through December 31, 2018 to fund potential liquidity shortfalls. Based on our 60% ownership in Liberty Puerto Rico, we are obligated for up to $36 million of the LCPR Equity Commitment. During the first quarter of 2018, a $25 million capital contribution was provided to Liberty Puerto Rico consisting of $15 million from us~~and $10 million from investment funds affiliated with Searchlight Capital Partners, L.P. (Searchlight~~Capped Calls). The Capped Calls are used as an economic hedge to reduce or offset potential dilution to our Class C common shares upon any conversion of the Convertible Notes and/or offset any cash payments we are required to make in excess of the principal amount of such converted notes, as the case may be, with such reduction and/or offset subject to a cap. Collectively, the Capped Calls cover, initially, the number of the Company’s Class C common shares underlying the Convertible Notes of 18.1 million. The Capped Calls have an initial strike price of $22.2337 per Class C common share and an initial cap price of $31.7625 per Class C common share, subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Convertible Notes, and expire on July 15, 2024. The Capped Calls are not considered a derivative instrument under ASC 815, Derivatives and Hedging, as the contracts are indexed to our Class C common shares and therefore classified within shareholders’ equity. The aggregate premiums paid for the Capped Calls of $46 million are included in additional paid-in capital ~~contribution from Searchlight is included~~in our condensed consolidated statement of equity.

Conversion Option – Convertible Notes

In connection with the issuance of the Convertible Notes, we recorded $77 million in additional paid-in capital in our condensed consolidated statement of equity ~~as an increase to noncontrolling interests. Subsequent to March 31, 2018, an~~for the Conversion Option, which represents the fair value of the Conversion Option at issuance less $1 million of allocated transaction fees and costs. For additional ~~$20 million was contributed to Liberty Puerto Rico, consisting of $12 million from us~~information see notes 6 and ~~$8 million from Searchlight. Accordingly, Liberty Puerto Rico has up to an additional $15 million available under the LCPR Equity Commitment, of which we are obligated for up to $9 million.~~9.

Noncontrolling interests

During the first quarter of 2018, we increased our ownership in C&W Jamaica from 82.0% to 91.7% by acquiring 1,629,734,373 of the then issued and outstanding ordinary stock units of C&W Jamaica that we did not already own (the C&W Jamaica NCI Acquisition) for JMD $1.45 per share or JMD $2,363 million ($19 ~~million)~~million at the transaction dates) of paid consideration. ~~In connection with~~During the second quarter of 2018, we acquired an additional 97,312,801 of the then issued and outstanding ordinary stock units of C&W Jamaica ~~NCI Acquisition,~~that we ~~incurred approximately $1~~did not already own for JMD $141 million in($1 million at the transaction ~~fees.~~dates), which increased our ownership interest to 92.3%.


(13)	Related-party Transactions

We have certain agreements with Liberty Global plc (Liberty Global), collectively the “LG Agreements,” as further described below. During the three and six months ended June 30, 2019, we incurred expenses of $3 million and $6 million, respectively, associated with the LG Agreements. During the three and six months ended June 30, 2018, we incurred expenses of $2 million and $4 million, respectively. In addition, we acquired capital assets associated with the LG Agreements of $6 million and $7 million during the six months ended June 30, 2019 and 2018, respectively. These expenses and capital asset acquisitions are cash settled. The following summarizes the primary terms of the LG Agreements:


•	a services agreement (the Services Agreement) for a period through December 29, 2019 with the option to renew for a one-year period, pursuant to which Liberty Global will provide Liberty Latin America with specified services, including certain technical and information technology services (including software development services associated with the

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

~~March 31, 2018~~June 30, 2019

(unaudited)


~~(11)~~	~~Related-party Transactions~~

~~Prior~~Connect Box and the Horizon platform, management information systems, hardware, data storage, and network and telecommunications services), access to ~~the consummation~~Liberty Global’s procurement team and tools to leverage scale and take advantage of ~~the Split-Off,~~joint purchasing opportunities, certain ~~Liberty Global subsidiaries charged fees~~management services, and ~~allocated costs and expenses~~other services to our company, as further described below. Upon completion of the Split-Off, certain fees and allocated costs and expenses have been replaced by fees pursuant to the Split-Off Agreements, as further described below.

~~The following table provides details of our significant related-party balances:~~

March 31, 2018 December 31, 2017
in millions
Assets:
Current assets – related-party receivables (a) $ 3.8
$ 4.2
Income tax receivable (b) 3.8
—
Total assets $ 7.6
$ 4.2

Liabilities – accounts payable and other accrued and current liabilities (c) $ 5.3
$ 1.4


~~(a)~~	~~Represents non-interest bearing receivables due from certain Liberty Global subsidiaries.~~


~~(b)~~	This amount represents the benefit of related-party tax allocations, which arise from the estimated utilization of certain net operating losses of Liberty Latin America that are included in Liberty Global’s U.S. consolidated income tax filing for the period preceding the Split-Off.


~~(c)~~	~~Represents non-interest bearing payables to certain Liberty Global subsidiaries.~~

~~Split-Off Agreements~~

~~In connection with the Split-Off,~~support Liberty Latin ~~America, Liberty Global and/or certain of their respective subsidiaries entered into the Split-Off Agreements.~~ ~~For the three months ended March 31, 2018, we incurred $2 million of charges associated with these agreements.The following summarizes the material agreements:~~America’s legal, tax, accounting and finance departments;


•	~~a reorganization agreement, (the~~ ~~Reorganization Agreement~~), which provides for, among other things, the principal corporate transactions (including the internal restructuring) required to effect the Split-Off, certain conditions to the Split-Off and provisions governing the relationship between Liberty Global and Liberty Latin America with respect to and resulting from the Split-Off;

•

~~a services agreement (the~~ ~~Services Agreement~~), pursuant to which, for up to two years following the Split-Off with the option to renew for a one-year period, Liberty Global will provide Liberty Latin America with specified services, including access to Liberty Global’s procurement team and tools to leverage scale and take advantage of joint purchasing opportunities, certain management services, other services to support Liberty Latin America’s legal, tax, accounting and finance departments, and certain technical and information technology services (including software development services associated with the Horizon platform, management information systems, computer, data storage, and network and telecommunications services);


•	a sublease agreement (the Sublease Agreement), pursuant to which Liberty Latin America will sublease office space from Liberty Global in Denver, Colorado until May 31, 2031, subject to customary termination and notice provisions; and


•	a facilities sharing agreement (the Facilities Sharing Agreement), pursuant to which, for as long as the Sublease Agreement remains in effect, Liberty Latin America will pay a fee for the usage of certain facilities at the office space in Denver, ~~Colorado; and~~Colorado.

The following table provides details of our significant related-party balances with Liberty Global:



	June 30, 2019		December 31, 2018
	in millions
Assets:
Other current assets	$	3.8	$	3.2

Current liabilities:
Accounts payable	$	3.9	$	7.0
Other accrued and current liabilities	7.8		3.5
Total current liabilities	$	11.7	$	10.5


•(14)	~~a tax sharing agreement (the~~ ~~Tax Sharing Agreement), which governs the parties’ respective rights, responsibilities and obligations with respect to taxes and tax benefits, the filing of tax returns, the control of audits and other tax matters.~~ Restructuring Liabilities

A summary of changes in our restructuring liability is set forth in the table below:

~~Liberty Latin America Ltd.~~

~~Notes to Condensed Consolidated Financial Statements – (Continued)~~

~~March 31, 2018~~

~~(unaudited)~~

~~Related-Party Charges Prior to the Split-Off~~

~~Our related-party transactions prior to the Split-Off for the three months ended March 31, 2017 are as follows (in millions):~~

Revenue $ 4.0
Allocated share-based compensation expense (3.3 )
Charges from Liberty Global (3.0 )
Included in operating income (2.3 )
Interest income 1.5
Allocated tax expense (1.8 )
Included in net loss $ (2.6 )



	Employee severance and termination			Contract termination and other			Total
	in millions

Restructuring liability as of January 1, 2019	$	7.6		$	18.0		$	25.6
Restructuring charges	15.7			5.8			21.5
Cash paid	(17.3		)	(7.9		)	(25.2		)
Foreign currency translation adjustments	(0.2		)	0.4			0.2
Restructuring liability as of June 30, 2019	$	5.8		$	16.3		$	22.1

Current portion	$	5.8		$	10.6		$	16.4
Noncurrent portion	—			5.7			5.7
Total	$	5.8		$	16.3		$	22.1

~~Revenue.~~ ~~Amount~~Our restructuring charges during the six months ended June 30, 2019, primarily ~~represents revenue from the Carve-out Entities for (i) management services~~relate to employee severance and termination costs associated with reorganization programs at C&W ~~provided to the Carve-out Entities to operate~~ and manage their business under a management services agreement and (ii) products and services that C&W provided to the Carve-out Entities in the normal course of business. The services that we provided to the Carve-out Entities were provided at the direction of, and subject to the ultimate control and oversight of, the Carve-out Entities. As discussed in note 4, C&W acquired the Carve-out Entities on April 1, 2017.

~~Allocated share-based compensation expense~~VTR. ~~Amount represents share-based compensation that Liberty Global allocated to us with respect to share-based incentive awards held by our employees.~~

~~Charges from Liberty Global.~~ Following the LiLAC Transaction, Liberty Global began to allocate a portion of the costs of their corporate functions, excluding share-based compensation expense, to us based primarily on the estimated percentage of time spent by corporate personnel providing services to us. Effective January 1, 2017, the annual allocation was $12 million. The allocated costs, which were cash settled, are included in SG&A expenses in our condensed consolidated statement of operations. Although we believe the allocated costs are reasonable, no assurance can be given that such costs are reflective of the costs we would have incurred as a standalone company. Upon consummation of the Split-Off, Liberty Global no longer allocates costs to us and instead we prospectively incur certain charges under certain of the Split-Off Agreements described above.

~~Interest income.~~ Amount includes interest income on C&W’s related-party loans receivable from New Cayman, which bore interest at 8.0% per annum. On April 1, 2017, subsidiaries of C&W acquired the Carve-out Entities, at which time these loans receivable were settled in exchange for the equity of the Carve-out Entities. Related-party interest income is included in other income, net, in our condensed consolidated statement of operations. For additional information regarding the Carve-out Entities, see note 4.

~~Tax allocations.~~ ~~Amount represents related-party income tax allocations recognized prior to the Split-Off. See abovefor additional information regarding the Tax Sharing Agreement with Liberty Global that became effective upon the consummation of the Split-Off.~~

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

~~March 31, 2018~~June 30, 2019

(unaudited)


~~(12)~~(15)	~~Restructuring Liabilities~~Share-based Compensation

~~A summary of changes in our restructuring liabilities during the three months ended March 31, 2018 is set forth in the table below:~~

Employee severance and termination Contract termination and other Total
in millions

Restructuring liability as of January 1, 2018 $ 6.2
$ 25.4
$ 31.6
Restructuring charges 24.1
1.6
25.7
Cash paid (5.5 ) (1.3 ) (6.8 )
Foreign currency translation adjustments —
0.4
0.4
Restructuring liability as of March 31, 2018 $ 24.8
$ 26.1
$ 50.9

Current portion $ 24.3
$ 12.4
$ 36.7
Noncurrent portion 0.5
13.7
14.2
Total $ 24.8
$ 26.1
$ 50.9

~~Our restructuring charges during the three months ended March 31, 2018 primarily relate to employee severance and termination costs associated with reorganization programs at C&W.~~

~~(13)~~ ~~Share-based Compensation~~

The following table summarizes our share-based compensation expense:


	Three months ended March 31,				Three months ended June 30,				Six months ended June 30,
	2018		2017		2019		2018		2019		2018
	in millions				in millions
Included in:
Other operating expense	$	0.1	$	0.5	$	0.3	$	0.1	$	0.5	$	0.2
SG&A expense	6.4		5.1		15.1		8.6		29.6		15.0
Total	$	6.5	$	5.6	$	15.4	$	8.7	$	30.1	$	15.2

Share-based Incentive Awards

The following tables summarize the share-based incentive awards related to Liberty Latin America Class A and C common shares held by our employees and our board of directors as of ~~March 31, 2018:~~June 30, 2019:


	Number of shares	Weighted average base price		Weighted average remaining contractual term	Number of shares	Weighted average exercise price		Weighted average remaining contractual term
Share-based incentive award type				in years				in years
Stock appreciation rights (SARs):
Class A common shares:
Outstanding	1,274,964	$	26.50	5.7	3,451,651	$	21.92	5.6
Exercisable	336,956	$	30.95	4.5	984,659	$	25.54	4.5
Class C common shares:
Outstanding	2,603,506	$	26.84	5.6	6,956,267	$	21.99	5.6
Exercisable	737,051	$	31.17	4.3	2,022,511	$	25.78	4.4



	Number of shares	Weighted average remaining contractual term
Share-based incentive award type		in years
Restricted stock units (RSUs) outstanding:
Class A common shares	321,604	2.7
Class C common shares	643,017	2.7
Performance-based restricted stock units (PSUs) outstanding:
Class A common shares	335,293	1.2
Class C common shares	670,588	1.2

During the six months ended June 30, 2019, we granted SARs with respect to 1,056,100 Class A common shares and 2,112,200 Class C common shares, which have weighted average exercise prices of $19.91 and$20.03, respectively, and weighted average grant-date fair values of $6.91 and $7.04, respectively. We also granted RSUs during the six months ended June 30, 2019 with respect to 220,837 Class A common shares and441,674Class C common shares, which have weighted average grant-date fair values of $19.94 and$20.03, respectively.

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

~~March 31, 2018~~June 30, 2019

(unaudited)

Number of
shares Weighted average remaining contractual term
Share-based incentive award type in years
Restricted stock units (RSUs) outstanding:

Class A common shares 139,657
2.4
Class C common shares 288,522
2.3
Performance-based restricted stock units (PSUs) outstanding :

Class A common shares 173,849
1.5
Class C common shares 340,291
1.5

During the three months ended March 31, 2018, we granted SARs with respect to 594,267 Class A common shares and 1,188,533 Class C common shares, which have base prices of $21.58 and $21.39, respectively.


(1416)	~~Earnings (Loss)~~Loss per Share

Basic earnings (loss) per share (EPS) is computed by dividing net earnings (loss) attributable to Liberty Latin America shareholders by the weighted average number of Class A, Class B and Class C common shares of Liberty Latin America (collectively, Liberty Latin America Shares ~~or LiLAC Shares~~) outstanding during the periods presented, as further described below. Diluted EPS presents the dilutive effect, if any, on a per share basis of potential shares (e.g., SARs and RSUs), as if they had been exercised or vested at the beginning of the periods presented.



	Three months ended June 30,		Six months ended June 30,
	2019	2018	2019	2018

Weighted average shares outstanding - basic and dilutive	181,504,385	171,278,819	181,271,878	171,254,577

Three months ended March 31,
2018 (a) 2017 (b)

Weighted average shares outstanding - basic and dilutive 171,231,111
172,743,854


~~(a)~~	~~Represents the weighted average number of Liberty Latin America shares outstanding during the period, as this period occurred after the Split-Off.~~


~~(b)~~	Represents the weighted average number of LiLAC Shares, as defined in note 1, outstanding during the period, as this period occurred prior to the Split-Off. Amount was used for both basic and dilutive EPS as no Company equity awards were outstanding prior to the Split-Off.

We reported ~~a loss~~losses attributable to Liberty Latin America shareholders during the three and six months ended ~~March 31, 2018 . Therefore,~~June 30, 2019 and 2018. As a result, the potentially dilutive effect at ~~March 31,~~June 30, 2019 and 2018 of the following items was not included in the computation of diluted loss per share because their inclusion would have been anti-dilutive to the computation or, in the case of certain PSUs, because such awards had not yet met the applicable performance criteria: (i) using the if-converted method, the aggregate number of shares potentially issuable under our Convertible Notes of approximately 18.1 million and nil, respectively, (ii) the aggregate number of shares issuable pursuant to outstanding options, SARs and RSUs of approximately ~~10.5~~15.8 million and ~~(ii)~~14.3 million, respectively, and (iii) the aggregate number of shares issuable pursuant to outstanding PSUs of approximately 1.3 million and 1.2 ~~million.~~

million, respectively. A portion of these amounts relate to Liberty Latin America ~~Ltd.~~Shares held by employees of Liberty Global.

~~Notes to Condensed Consolidated Financial Statements – (Continued)~~

~~March 31, 2018~~

~~(unaudited)~~


~~(15)~~(17)	Commitments and Contingencies

Commitments

In the normal course of business, we have entered into agreements that commit our company to make cash payments in future periods with respect to programming contracts, network and connectivity commitments, purchases of customer premises and other equipment and services ~~non-cancellable operating leases~~ and other ~~items.~~commitments. The following table sets forth the U.S. dollar equivalents of such commitments as of ~~March 31, 2018:~~June 30, 2019:


	Payments due during:																Payments due during:
	Remainder of 2018																Remainder of 2019
	Remainder of 2018		2019		2020		2021		2022		2023		Thereafter		Total		Remainder of 2019		2020		2021		2022		2023		2024		Thereafter		Total
	in millions																in millions

Programming commitments	$	120.3	$	58.3	$	24.4	$	18.0	$	2.2	$	1.5	$	0.7	$	225.4	$	62.7	$	61.3	$	24.8	$	2.2	$	1.4	$	0.9	$	—	$	153.3
Network and connectivity commitments	82.2		74.2		25.9		18.5		14.6		13.9		24.3		253.6		52.4		49.3		39.4		13.1		12.7		12.1		13.4		192.4
Purchase commitments	110.7		27.6		9.6		1.1		1.1		0.6		—		150.7		146.5		44.2		17.5		1.1		0.6		—		—		209.9
Operating leases (a)	22.5		20.6		16.9		13.4		11.4		9.1		17.3		111.2
Other commitments (a)	8.9		2.8		1.6		1.4		1.3		1.3		10.0		27.3		14.9		5.4		3.3		2.4		2.0		2.9		9.4		40.3
Total (b)	$	344.6	$	183.5	$	78.4	$	52.4	$	30.6	$	26.4	$	52.3	$	768.2	$	276.5	$	160.2	$	85.0	$	18.8	$	16.7	$	15.9	$	22.8	$	595.9


(a)	Amounts include certain commitments under the ~~Sublease~~Services Agreement and the Facilities Sharing Agreement, as further described in note ~~11.~~13.


(b)	The commitments included in this table do not reflect any liabilities that are included in our ~~March 31, 2018~~June 30, 2019 condensed consolidated balance sheet.

Programming commitments consist of obligations associated with certain programming, studio output and sports rights contracts that are enforceable and legally binding on us, as we have agreed to pay minimum fees without regard to (i) the actual number of subscribers to the programming services, (ii) whether we terminate service to a portion of our subscribers or dispose of a portion of our distribution systems or (iii) whether we discontinue our premium sports services. In addition, programming commitments do not include increases in future periods associated with contractual inflation or other price adjustments that are not fixed. Accordingly, the amounts reflected in the above table with respect to these contracts are significantly less than the

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

June 30, 2019

(unaudited)

amounts we expect to pay in these periods under these contracts. Historically, payments to programming vendors have represented a significant portion of our operating costs, and we expect that this will continue to be the case in future periods. In this regard, our total programming and copyright costs aggregated ~~$96~~$217 million and ~~$102~~$197 million during the ~~three~~six months ended ~~March 31,~~June 30, 2019 and 2018, ~~and 2017,~~ respectively.

Network and connectivity commitments ~~relate largely to~~include (i) ~~VTR’s~~ domestic network service agreements with certain other telecommunications companies and (ii) VTR’s mobile virtual network operator (MVNO) agreement. The amounts reflected in the above table with respect to ~~certain of~~ our MVNO ~~commitments~~commitment represent fixed minimum amounts payable under ~~these agreements~~this agreement and, therefore, may be significantly less than the actual amounts VTR ultimately pays in these periods.

Purchase commitments include unconditional and legally-binding obligations related to (i) the purchase of customer premises and other equipment and (ii) certain service-related commitments, including call center, information technology and maintenance services.

~~Liberty Latin America Ltd.~~

~~Notes to Condensed Consolidated Financial Statements – (Continued)~~

~~March 31, 2018~~

~~(unaudited)~~

Guarantees and Other Credit Enhancements

In the ordinary course of business, we may provide (i) indemnifications to our lenders, our vendors and certain other parties and (ii) performance and/or financial guarantees to local municipalities, our customers and vendors. Historically, these arrangements have not resulted in our company making any material payments and we do not believe that they will result in material payments in the future. In addition, C&W has provided indemnifications of (i) up to $300 million with respect to any potential tax-related claims related to the disposal in April 2013 of C&W’s interests in certain businesses and (ii) an unlimited amount of qualifying claims associated with the disposal of another business in May 2014. The first indemnification expires in April 2020 and the second expires in May 2020. We do not expect that either of these arrangements will require us to make material payments to the indemnified parties.

Legal and Regulatory Proceedings and Other Contingencies

Regulatory Issues. Video distribution, broadband internet, fixed-line telephony and mobile businesses are regulated in each of the countries in which we operate. The scope of regulation varies from country to country. Adverse regulatory developments could subject our businesses to a number of risks. Regulation, including conditions imposed on us by competition or other authorities as a requirement to close acquisitions or dispositions, could limit growth, revenue and the number and types of services offered and could lead to increased operating costs and property and equipment additions. In addition, regulation may restrict our operations and subject them to further competitive pressure, including pricing restrictions, interconnect and other access obligations, and restrictions or controls on content, including content provided by third parties. Failure to comply with current or future regulation could expose our businesses to various penalties.

In addition to the foregoing items, we have contingent liabilities related to matters arising in the ordinary course of business, including (i) legal proceedings, (ii) issues involving wage, property, withholding and other tax issues and (iii) disputes over interconnection, programming and copyright fees. While we generally expect that the amounts required to satisfy these contingencies will not materially differ from any estimated amounts we have accrued, no assurance can be given that the resolution of one or more of these contingencies will not result in a material impact on our results of operations, cash flows or financial position in any given period. Due, in general, to the complexity of the issues involved and, in certain cases, the lack of a clear basis for predicting outcomes, we cannot provide a meaningful range of potential losses or cash outflows that might result from any unfavorable outcomes.


~~(16)~~(18)	Segment Reporting

We generally identify our reportable segments as those operating segments that represent 10% or more of our revenue, Adjusted OIBDA (as defined below) or total assets. We evaluate performance and make decisions about allocating resources to our reportable segments based on financial measures such as revenue and Adjusted OIBDA. In addition, we review non-financial measures such as subscriber ~~growth, as appropriate.~~growth.

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

June 30, 2019

(unaudited)

Adjusted OIBDA, a non-GAAP measure, is the primary measure used by our chief operating decision maker to evaluate segment operating performance. Adjusted OIBDA is also a key factor that is used by our internal decision makers to (i) determine how to allocate resources to segments and (ii) evaluate the effectiveness of our management for purposes of ~~annual and other~~ incentive compensation plans. As we use the term, “Adjusted OIBDA” is defined as operating income or loss before depreciation and amortization, share-based compensation, 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. As further described in note 2, effective January 1, 2018, we adopted ASU 2017-07, which resulted in the reclassification of certain pension-related credits from SG&A to non-operating income (expense) in our condensed consolidated statements of operations. As a result of the adoption, we have presented $3 million of pension-related credits in other income, net in our condensed consolidated statement of operations during each of the three months ended March 31, 2018 and 2017. Effective December 31, 2017, we include certain charges previously allocated to us by Liberty Global in the calculation of Adjusted OIBDA. These charges represent fees for certain services provided to us and totaled $3 million for the three months ended March 31, 2017. We believe changing the definition of Adjusted OIBDA to include these charges is meaningful

~~Liberty Latin America Ltd.~~

~~Notes to Condensed Consolidated Financial Statements – (Continued)~~

~~March 31, 2018~~

~~(unaudited)~~

~~given they represent operating costs we will continue to incur subsequent to the Split-Off as a standalone public company. This change has been given effect for all periods presented.~~ A reconciliation of total Adjusted OIBDA to ~~our earnings (loss) before~~operating income ~~taxes~~ is presented below.

As of ~~March 31, 2018,~~June 30, 2019, our reportable segments are as follows:

•C&W

•~~VTR~~VTR/Cabletica

•Liberty Puerto Rico

Our reportable segments derive their revenue primarily from residential and B2B services, including video, broadband internet and fixed-line telephony services and, with the exception of Liberty Puerto Rico, mobile services. We provide residential and B2B services in (i) 1824 countries, primarily in Latin America and the Caribbean, through C&W, (ii) Chile and Costa Rica, through ~~VTR~~VTR/Cabletica, and (iii) Puerto Rico, through Liberty Puerto Rico. C&W also provides (i) B2B ~~communication~~ services in certain other countries in Latin America and the Caribbean and (ii) wholesale ~~communication~~ services over its ~~sub-sea~~subsea and terrestrial ~~fiber optic cable~~ networks that connect over 40 markets in that region. Our corporate category includes our corporate operations.

Performance Measures of our Reportable Segments

The amounts presented below represent 100% of each of our reportable segment’s revenue and Adjusted OIBDA. As we have the ability to control ~~Liberty Puerto Rico~~Cabletica and certain subsidiaries of C&W that are not wholly-owned, we include 100% of the revenue and expenses of these entities in our condensed consolidated statements of operations despite the fact that third parties own significant interests in these entities. On October 17, 2018, we acquired the remaining 40.0% interest in Liberty Puerto Rico that we did not already own. The noncontrolling owners’ interests in the operating results of ~~Liberty Puerto Rico and~~ certain subsidiaries of C&W, and prior to October 17, 2018, Liberty Puerto Rico, are reflected in net earnings or loss attributable to noncontrolling interests in our condensed consolidated statements of operations.


	Revenue						Adjusted OIBDA						Revenue
	Three months ended March 31,						Three months ended March 31,						Three months ended June 30,						Six months ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
	in millions												in millions

C&W(a)	$	585.5		$	575.6		$	229.1		$	209.9		$	606.6		$	583.7		$	1,176.4		$	1,169.2
VTR	263.8			229.3			105.0			91.6
VTR/Cabletica (b)													274.5			260.2			551.0			524.0
Liberty Puerto Rico	61.8			106.7			18.0			51.3			103.8			80.3			202.4			142.1
Corporate	—			—			(11.3		)	(5.1		)
Intersegment eliminations	(1.2		)	(0.7		)	—			—			(2.0		)	(2.1		)	(4.2		)	(3.3		)
Total	$	909.9		$	910.9		$	340.8		$	347.7		$	982.9		$	922.1		$	1,925.6		$	1,832.0


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


(b)	The amounts presented for the 2018 periods exclude the revenue of Cabletica, which was acquired on October 1, 2018.

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

June 30, 2019

(unaudited)



	Adjusted OIBDA
	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
	in millions

C&W (a)	$	235.4		$	223.6		$	457.9		$	452.7
VTR/Cabletica (b)	112.3			105.1			219.2			210.1
Liberty Puerto Rico	51.6			35.7			99.5			53.7
Corporate	(11.9		)	(11.0		)	(23.4		)	(22.3		)
Total	$	387.4		$	353.4		$	753.2		$	694.2


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


(b)	The amounts presented for the 2018 periods exclude the Adjusted OIBDA of Cabletica, which was acquired on October 1, 2018.

The following table provides a reconciliation of total Adjusted OIBDA to operating income and to earnings (loss) before income taxes:



	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
	in millions

Total Adjusted OIBDA	$	387.4		$	353.4		$	753.2		$	694.2
Share-based compensation expense	(15.4		)	(8.7		)	(30.1		)	(15.2		)
Depreciation and amortization	(222.0		)	(207.6		)	(439.3		)	(409.9		)
Impairment, restructuring and other operating items, net	(6.5		)	(12.9		)	(27.0		)	(46.6		)
Operating income	143.5			124.2			256.8			222.5
Interest expense	(119.8		)	(109.4		)	(235.5		)	(211.9		)
Realized and unrealized gains (losses) on derivative instruments, net	(79.0		)	115.1			(148.0		)	73.6
Foreign currency transaction gains (losses), net	(19.5		)	(120.6		)	12.7			(104.7		)
Losses on debt modification and extinguishment	(9.5		)	—			(9.5		)	(13.0		)
Other income, net	2.6			4.8			5.0			10.1
Earnings (loss) before income taxes	$	(81.7	)	$	14.1		$	(118.5	)	$	(23.4	)

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

~~March 31, 2018~~June 30, 2019

(unaudited)

~~The following table provides a reconciliation of total Adjusted OIBDA to earnings (loss) before income taxes:~~

Three months ended March 31,
2018 2017
in millions

Total Adjusted OIBDA $ 340.8
$ 347.7
Share-based compensation (6.5 ) (5.6 )
Depreciation and amortization (202.3 ) (193.9 )
Impairment, restructuring and other operating items, net (33.7 ) (13.4 )
Operating income 98.3
134.8
Interest expense (102.5 ) (94.3 )
Realized and unrealized losses on derivative instruments, net (41.5 ) (27.3 )
Foreign currency transaction gains, net 15.9
14.5
Loss on debt modification and extinguishment (13.0 ) —
Other income, net 5.3
6.0
Earnings (loss) before income taxes $ (37.5 ) $ 33.7

Property and Equipment Additions of our Reportable Segments

The property and equipment additions of our reportable segments (including capital additions financed under vendor financing or ~~capital~~finance lease arrangements) are presented below and reconciled to the capital expenditure amounts included in our condensed consolidated statements of cash flows. For additional information concerning capital additions financed under vendor financing, see note 8.



	Six months ended June 30,
	2019			2018
	in millions

C&W (a)	$	145.7		$	169.2
VTR/Cabletica (b)	117.1			116.0
Liberty Puerto Rico	39.1			115.0
Corporate	3.3			11.4
Total property and equipment additions	305.2			411.6
Assets acquired under capital-related vendor financing arrangements	(26.0		)	(35.0		)
Assets acquired under finance leases	(0.2		)	(0.9		)
Changes in current liabilities related to capital expenditures	16.4			49.4
Total capital expenditures	$	295.4		$	425.1


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


(b)	The amount presented for the 2018 period excludes the property and equipment additions of Cabletica, which was acquired on October 1, 2018.

Three months ended March 31,
2018 2017
in millions

C&W $ 67.2
$ 60.5
VTR 57.0
55.4
Liberty Puerto Rico 69.8
23.3
Total property and equipment additions 194.0
139.2
Assets acquired under capital-related vendor financing arrangements (20.7 ) (14.1 )
Assets acquired under capital leases (0.6 ) (0.9 )
Changes in current liabilities related to capital expenditures 15.5
0.2
Total capital expenditures $ 188.2
$ 124.4

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

~~March 31, 2018~~June 30, 2019

(unaudited)

Revenue by Major Category

Our revenue by major category for our reportable segments is set forth in the tables below. As further described in note 2, we adopted ASU 2014-09 effective January 1, 2018 using the cumulative effect transition method. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The adoption of ASU 2014-09 did not have a material impact on our revenue by category.

Three months ended March 31, 2018
C&W VTR Liberty Puerto Rico Intersegment Eliminations Total
in millions
Residential revenue:
Residential fixed revenue:
Subscription revenue (a):
Video $ 42.7
$ 99.7
$ 23.3
$ —
$ 165.7
Broadband internet 53.7
96.6
25.3
—
175.6
Fixed-line telephony 26.9
34.6
3.5
—
65.0
Total subscription revenue 123.3
230.9
52.1
—
406.3
Non-subscription revenue (b) 21.5
7.5
1.7
—
30.7
Total residential fixed revenue 144.8
238.4
53.8
—
437.0
Residential mobile revenue:
Subscription revenue (a) 155.1
16.3
—
—
171.4
Non-subscription revenue (c) 22.1
3.2
—
—
25.3
Total residential mobile revenue 177.2
19.5
—
—
196.7
Total residential revenue 322.0
257.9
53.8
—
633.7
B2B revenue:
Subscription revenue —
5.6
4.3
—
9.9
Non-subscription revenue (d) 203.9
0.3
3.0
(1.2 ) 206.0
Sub-sea network revenue (e) 59.6
—
—
—
59.6
Total B2B revenue 263.5
5.9
7.3
(1.2 ) 275.5
Other revenue —
—
0.7
—
0.7
Total $ 585.5
$ 263.8
$ 61.8
$ (1.2 ) $ 909.9



	Three months ended June 30, 2019
	C&W		VTR/Cabletica		Liberty Puerto Rico		Intersegment Eliminations (a)			Total
	in millions
Residential revenue:
Residential fixed revenue:
Subscription revenue (b):
Video	$	46.8	$	108.3	$	35.3	$	—		$	190.4
Broadband internet	65.5		105.3		43.6		—			214.4
Fixed-line telephony	26.7		25.9		5.9		—			58.5
Total subscription revenue	139.0		239.5		84.8		—			463.3
Non-subscription revenue (c)	14.9		8.3		5.6		—			28.8
Total residential fixed revenue	153.9		247.8		90.4		—			492.1
Residential mobile revenue:
Service revenue (b)	142.1		15.9		—		—			158.0
Interconnect, equipment sales and other (d)	22.2		3.5		—		—			25.7
Total residential mobile revenue	164.3		19.4		—		—			183.7
Total residential revenue	318.2		267.2		90.4		—			675.8
B2B revenue:
Service revenue (e)	226.8		7.3		13.4		(0.4		)	247.1
Subsea network revenue (f)	61.6		—		—		(1.6		)	60.0
Total B2B revenue	288.4		7.3		13.4		(2.0		)	307.1
Total	$	606.6	$	274.5	$	103.8	$	(2.0	)	$	982.9


(a)	~~Residential fixed~~Represents intersegment transactions between C&W and ~~mobile subscription revenue includes amounts received from subscribers for ongoing services.~~Liberty Puerto Rico.


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


(c)	Residential fixed non-subscription revenue primarily includes ~~among other items,~~ interconnect and advertising revenue.


~~(c)~~(d)	~~Residential mobile non-subscription revenue includes, among other items, interconnect revenue and~~These amounts include $13 million of revenue from sales of mobile handsets and other devices.

~~(d)~~(e)

B2B ~~non-subscription~~service revenue primarily includes ~~business~~ broadband internet, video, fixed-line telephony, mobile and ~~data~~managed services (including equipment installation contracts) offered to small (including small or home office (SOHO)), medium toand large enterprises and, on a wholesale basis, to other telecommunication operators. These amounts also include $9 million of revenue from sales of mobile handsets and other devices.


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

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

~~March 31, 2018~~June 30, 2019

(unaudited)


	Three months ended March 31, 2017											Three months ended June 30, 2018
	C&W		VTR		Liberty Puerto Rico		Intersegment Eliminations			Total		C&W		VTR/Cabletica (a)		Liberty Puerto Rico		Intersegment Eliminations (b)			Total
	in millions											in millions
Residential revenue:
Residential fixed revenue:
Subscription revenue:
Video	$	40.5	$	87.4	$	42.7	$	—		$	170.6	$	43.2	$	99.7	$	29.8	$	—		$	172.7
Broadband internet	52.8		82.3		40.4		—			175.5		56.4		96.2		32.4		—			185.0
Fixed-line telephony	29.3		34.3		6.4		—			70.0		25.9		32.1		4.6		—			62.6
Total subscription revenue	122.6		204.0		89.5		—			416.1		125.5		228.0		66.8		—			420.3
Non-subscription revenue	23.5		7.4		5.9		—			36.8		16.9		6.3		4.4		—			27.6
Total residential fixed revenue	146.1		211.4		95.4		—			452.9		142.4		234.3		71.2		—			447.9
Residential mobile revenue:
Subscription revenue	161.8		12.6		—		—			174.4
Non-subscription revenue	19.9		2.3		—		—			22.2
Service revenue												151.1		16.0		—		—			167.1
Interconnect, equipment sales and other (c)												21.6		3.7		—		—			25.3
Total residential mobile revenue	181.7		14.9		—		—			196.6		172.7		19.7		—		—			192.4
Total residential revenue	327.8		226.3		95.4		—			649.5		315.1		254.0		71.2		—			640.3
B2B revenue:
Subscription revenue	—		2.7		6.7		—			9.4
Non-subscription revenue	201.4		0.3		3.3		(0.7		)	204.3
Sub-sea network revenue	46.4		—		—		—			46.4
Service revenue (d)												204.2		6.2		9.1		(0.5		)	219.0
Subsea network revenue												64.4		—		—		(1.6		)	62.8
Total B2B revenue	247.8		3.0		10.0		(0.7		)	260.1		268.6		6.2		9.1		(2.1		)	281.8
Other revenue	—		—		1.3		—			1.3
Total	$	575.6	$	229.3	$	106.7	$	(0.7	)	$	910.9	$	583.7	$	260.2	$	80.3	$	(2.1	)	$	922.1


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


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


(c)	These amounts include $11 million of revenue from sales of mobile handsets and other devices.


(d)	These amounts include $9 million of revenue from sales of mobile handsets and other devices.

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

June 30, 2019

(unaudited)



	Six months ended June 30, 2019
	C&W (a)		VTR/Cabletica		Liberty Puerto Rico		Intersegment Eliminations (b)			Total
	in millions
Residential revenue:
Residential fixed revenue:
Subscription revenue:
Video	$	90.7	$	217.1	$	70.3	$	—		$	378.1
Broadband internet	125.7		210.2		85.4		—			421.3
Fixed-line telephony	51.0		53.4		11.6		—			116.0
Total subscription revenue	267.4		480.7		167.3		—			915.4
Non-subscription revenue	29.9		17.0		10.9		—			57.8
Total residential fixed revenue	297.3		497.7		178.2		—			973.2
Residential mobile revenue:
Service revenue	277.1		31.6		—		—			308.7
Interconnect, equipment sales and other (c)	41.2		6.9		—		—			48.1
Total residential mobile revenue	318.3		38.5		—		—			356.8
Total residential revenue	615.6		536.2		178.2		—			1,330.0
B2B revenue:
Service revenue (d)	439.3		14.8		24.2		(1.0		)	477.3
Subsea network revenue	121.5		—		—		(3.2		)	118.3
Total B2B revenue	560.8		14.8		24.2		(4.2		)	595.6
Total	$	1,176.4	$	551.0	$	202.4	$	(4.2	)	$	1,925.6


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


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


(c)	These amounts include $20 million of revenue from sales of mobile handsets and other devices.


(d)	These amounts include $13 million of revenue from sales of mobile handsets and other devices.

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

June 30, 2019

(unaudited)



	Six months ended June 30, 2018
	C&W		VTR/Cabletica (a)		Liberty Puerto Rico		Intersegment Eliminations (b)			Total
	in millions
Residential revenue:
Residential fixed revenue:
Subscription revenue:
Video	$	85.9	$	199.4	$	53.1	$	—		$	338.4
Broadband internet	110.1		192.8		57.7		—			360.6
Fixed-line telephony	52.8		66.7		8.1		—			127.6
Total subscription revenue	248.8		458.9		118.9		—			826.6
Non-subscription revenue	32.4		13.8		6.8		—			53.0
Total residential fixed revenue	281.2		472.7		125.7		—			879.6
Residential mobile revenue:
Service revenue	306.2		32.3		—		—			338.5
Interconnect, equipment sales and other (c)	43.7		6.9		—		—			50.6
Total residential mobile revenue	349.9		39.2		—		—			389.1
Total residential revenue	631.1		511.9		125.7		—			1,268.7
B2B revenue:
Service revenue (d)	414.1		12.1		16.4		(0.7		)	441.9
Subsea network revenue	124.0		—		—		(2.6		)	121.4
Total B2B revenue	538.1		12.1		16.4		(3.3		)	563.3
Total	$	1,169.2	$	524.0	$	142.1	$	(3.3	)	$	1,832.0


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


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


(c)	These amounts include $23 million of revenue from sales of mobile handsets and other devices.


(d)	These amounts include $15 million of revenue from sales of mobile handsets and other devices.

Liberty Latin America Ltd.

Notes to Condensed Consolidated Financial Statements – (Continued)

~~March 31, 2018~~June 30, 2019

(unaudited)

Geographic ~~Segments~~Markets

The revenue offrom third-party customers for our geographic ~~segments~~markets is set forth ~~below:~~in the table below. Except as otherwise noted, the amounts presented include revenue from residential and B2B operations.


	Three months ended March 31,						Three months ended June 30,				Six months ended June 30,
	2018			2017			2019		2018 (a)		2019		2018 (a)
	in millions						in millions
C&W (a):

Panama	$	149.2		$	153.7		$	142.6	$	151.8	$	282.9	$	300.1
Networks & LatAm (b)							85.0		89.3		173.7		175.8
Jamaica	92.5			83.6			99.3		86.3		192.3		174.8
Networks & LatAm (b)	94.1			76.9
The Bahamas	64.1			72.0			52.5		56.7		106.1		119.7
Barbados	39.4			40.2			37.4		37.4		74.9		75.9
Trinidad and Tobago	40.7			42.8			40.5		38.6		80.1		77.3
Other (c)	105.5			106.4
Total C&W	585.5			575.6
Chile	263.8			229.3			241.9		260.2		485.9		524.0
Costa Rica (c)							32.5		—		65.0		—
Puerto Rico	61.8			106.7			103.4		79.8		201.4		141.4
Intersegment eliminations	(1.2		)	(0.7		)
Other (d)							147.8		122.0		263.3		243.0
Total	$	909.9		$	910.9		$	982.9	$	922.1	$	1,925.6	$	1,832.0


(a)	~~Except as otherwise noted, the amounts presented~~Amounts for 2018 have been reclassified to exclude intercompany revenue within each ~~C&W jurisdiction include revenue from residential and B2B operations.~~geographic region, which conforms with current period presentation.


(b)	The amounts represent wholesale and managed services revenue from various jurisdictions across the Caribbean and Latin America, primarily related to the sale and lease of ~~telecom~~telecommunications capacity on C&W’s ~~sub-sea~~subsea and terrestrial networks.


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


(d)	The amounts relate to a number of countries in which C&W has less significant operations, all but one of which are located in Latin America and the Caribbean. ~~In addition, these~~Additionally, the amounts ~~include C&W intercompany eliminations.~~presented exclude the pre-acquisition revenue of UTS, which was acquired effective March 31, 2019.


Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis, which should be read in conjunction with our ~~condensed~~ consolidated financial statements and the discussion and analysis included in our ~~2017~~2018 Form 10-K, is intended to assist in providing an understanding of our financial condition, changes in financial condition and results of operations and is organized as follows:


•	Forward-looking Statements. This section provides a description of certain factors that could cause actual results or events to differ materially from anticipated results or events.


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


•	Material Changes in Results of Operations. This section provides an analysis of our results of operations for the three and six months ended ~~March 31, 2018~~June 30, 2019 and ~~2017.~~2018.


•	Material Changes in Financial Condition. This section provides an analysis of our corporate and subsidiary liquidity, condensed consolidated statements of cash flows and contractual commitments.

The capitalized terms used below have been defined in the notes to our condensed consolidated financial statements. In the following text, the terms “we,” “our,” “our company” and “us” may refer, as the context requires, to Liberty Latin America or collectively to Liberty Latin America and its subsidiaries.

Unless otherwise indicated, convenience translations into U.S. dollars are calculated as of ~~March 31, 2018.~~June 30, 2019.

Forward-looking Statements

Certain statements in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. To the extent that statements in this Quarterly Report on Form 10-Q are not recitations of historical fact, such statements constitute forward-looking statements, which, by definition, involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. In particular, statements under Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, ~~and~~ Item 3. Quantitative and Qualitative Disclosures About Market Riskand Item 4. Controls and Procedures may contain forward-looking statements, including statements regarding: our business, product, foreign currency and finance ~~strategies in 2018; the anticipated rate and cost of our recovery in certain markets from the impact of Hurricanes Maria and Irma; our property and equipment additions in 2018;~~strategies; subscriber growth and retention rates; changes in competitive, regulatory and economic factors; ~~the timing and impacts of proposed transactions;~~ anticipated changes in our revenue, ~~costs~~expenses, or growth rates; debt levels; our ~~liquidity;~~liquidity and our ability to access the liquidity of our subsidiaries; credit risks; internal control over financial reporting; foreign currency risks; ~~target leverage levels;~~compliance with debt, financial and other covenants; our future projected contractual commitments and cash flows; and other information and statements that are not historical fact. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. In ~~evaluating these statements, you should consider~~addition to the ~~risks and uncertainties discussed~~risk factors described in our ~~2017~~2018 Form 10-K, ~~as well as~~ the following ~~list of~~are some but not all of the factors that could cause actual results or events to differ materially from anticipated results or events:

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

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

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

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

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

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

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

our ability to manage rapid technological changes;

the impact of 5G and wireless technologies on broadband internet;

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

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

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

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

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

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

our ability to obtain regulatory approval and satisfy other conditions necessary to close acquisitions and dispositions, and the impact of conditions imposed by competition and other regulatory authorities in connection with acquisitions;

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

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

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

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

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

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

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

the availability of capital for the acquisition and/or development of telecommunications networks and ~~services;~~

~~certain factors outside of our control that may impact the timing~~services, including property and ~~extent of the restoration of our networks and services in Puerto Rico and certain of our C&W markets following Hurricanes Irma and Maria;~~equipment additions;

problems we may discover post-closing with the operations, including the internal controls and financial reporting process, of businesses we acquire;

cybersecurity threats or other security breaches, including the leakage of sensitive customer ~~data;~~data, which could harm our business or reputation;

the outcome of any pending or threatened litigation;

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

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

our equity capital structure;

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

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

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

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

The broadband distribution and mobile service industries are changing rapidly and, therefore, the forward-looking statements of expectations, plans and intent in this Quarterly Report on Form 10-Q are subject to a significant degree of risk. These forward-looking statements and the above described risks, uncertainties and other factors speak only as of the date of this Quarterly Report on Form 10-Q,, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events,

conditions or circumstances on which any such statement is based. Readers are cautioned not to place undue reliance on any forward-looking statement.

Overview

General

We are an international provider of ~~video, broadband internet, fixed-line telephony~~fixed, mobile and ~~mobile~~subsea telecommunications services. We provide residential and B2B communications services in (i) 1824 countries, primarily in Latin America and the Caribbean, through C&W, (ii) Chile and Costa Rica, through ~~VTR~~VTR/Cabletica, and (iii) Puerto Rico, through Liberty Puerto Rico. C&W also provides (i) B2B ~~communication~~ services in certain other countries in Latin America and the Caribbean and (ii) wholesale communication services over its ~~sub-sea~~subsea and terrestrial fiber optic cable networks that connect over 40 markets in ~~that region.~~those regions.

Operations

As described below, Hurricanes Irma and Maria caused significant damage to our operations in the Impacted Markets, as defined below, resulting in disruptions to our telecommunications services. As we are still in the process of assessing the operational impacts of the hurricanes in the Impacted Markets, we are unable to accurately estimate our homes passed and subscriber numbers as of March 31, 2018. Accordingly, the March 31, 2018 subscriber numbers for the Impacted Markets reflect subscriber amounts as of August 31, 2017 as adjusted through March 31, 2018 for (i) net voluntary disconnects and (ii) disconnects related to customers whose accounts are delinquent. The Liberty Puerto Rico homes passed reflect the August 31, 2017 levels adjusted for approximately 30,000 homes in geographic areas we may not rebuild.

At ~~March 31, 2018,~~June 30, 2019, we (i) owned and operated fixed networks that passed ~~6,457,900~~7,335,900 homes and served ~~5,231,000~~5,926,500 revenue generating units (~~RGU~~RGUss)), comprising ~~2,146,800~~2,529,900 broadband internet subscribers, ~~1,691,700~~1,956,500 video subscribers and ~~1,392,500~~1,440,100 fixed-line telephony subscribers and (ii) served ~~3,620,400~~3,669,600 mobile subscribers.

~~Hurricane Impact Update~~

In September 2017, Hurricanes Irma and Maria impacted a number of our markets in the Caribbean, resulting in varying degrees of damage to homes, businesses and infrastructure in these markets. The most extensive damage occurred in Puerto Rico and certain markets within our C&W reportable segment (collectively, the ~~Impacted Markets). We continue to remain uncertain as to the extent and ultimate completion of our restoration and reconnection efforts in the Impacted Markets.~~

We maintain an integrated group property and business interruption insurance program covering all Impacted Markets up to a limit of $75 million per occurrence, which is generally subject to $15 million per occurrence of self-insurance. Although we are continuing to assess the alternatives under our insurance policy, we currently believe that the hurricanes will result in at least two occurrences. This policy is subject to the normal terms and conditions applicable to this type of insurance. We expect that the insurance recovery will only cover a portion of the incurred losses of each of our impacted businesses.

During the three months ended March 31, 2018, we received a net advance payment from our third-party insurance provider of $30 million associated with the initial insurance claims filed in connection with damages sustained from the hurricanes. Until such claims are legally settled, the advance is included in other accrued and current liabilities in our condensed consolidated balance sheet.

~~Liberty Puerto Rico~~. In Puerto Rico, the damage caused by Hurricane Maria and, to a lesser extent Hurricane Irma, was extensive and widespread. Individuals and businesses across Puerto Rico continue to deal with significant challenges caused by the severe damage to essential infrastructure, including damage to Puerto Rico’s power supply and transmission system. Similarly, Liberty Puerto Rico’s broadband communications network suffered extensive damage. As of March 31, 2018, we have been able to restore service to approximately 560,000 RGUs of our total estimated 723,100 RGUs at Liberty Puerto Rico. Additionally, we estimate that approximately $130 millionof property and equipment additions will be required to restore nearly all of Liberty Puerto Rico’s broadband communications network, of which approximately $112 million has been incurred following the hurricanes~~through March 31, 2018.~~

While the negative impacts from the hurricanes are declining as the network is restored and customers are reconnected, we expect that the adverse impacts of the hurricanes on Liberty Puerto Rico’s revenue and Adjusted OIBDA will continue through 2018~~and beyond. The severity of the hurricanes’ impact on Liberty Puerto Rico’s future revenue and Adjusted OIBDA will be influenced in part by the following uncertainties:~~

~~the length of time that it will take to restore Puerto Rico’s power and transmission system and to fully restore our network;~~

~~the number of people that will choose to leave Puerto Rico for an extended period or permanently; and~~

~~the ability of the Puerto Rico and U.S. governments to effectively oversee the recovery process in Puerto Rico.~~

In terms of liquidity for Liberty Puerto Rico, the cash provided by its operations was a significant source of pre-hurricane liquidity. As a result of the hurricane impacts, we do not expect Liberty Puerto Rico will generate positive cash from operations, inclusive of capital expenditures, until at least the latter half of 2018. In this regard, Liberty Puerto Rico’s liquidity needs are being funded by the up to $60 million LCPR Equity Commitment from Liberty Latin America and Searchlight, $45 million of which has been provided during 2018, including $20 million subsequent to March 31, 2018, and an insurance advance of $35 million ($30 million through a third-party insurance provider and the remainder through a captive insurance subsidiary). Future liquidity sources are expected to include further insurance proceeds, the remaining portion of the LCPR Equity Commitment, as applicable, through December 31, 2018 of up to $15 million and, cash from operations. For additional information regarding the LCPR Equity Commitment, see ~~Material Changes in Financial Condition~~ below. While there are still uncertainties with respect to Liberty Puerto Rico’s recovery from the hurricanes, and no assurance can be given as to the ultimate amount or timing of liquidity to be received from cash from operations or insurance proceeds, we expect these existing and potential sources of liquidity will be sufficient to satisfy Liberty Puerto Rico’s liquidity requirements over the next twelve months.

~~C&W.~~ C&W offers services over fixed and mobile networks, and portions of these networks in C&W’s Impacted Markets were significantly damaged as a result of the hurricanes. The most notable markets that continue to be impacted are the British Virgin Islands and Dominica. Services to most of our fixed-line customers in these markets have not yet been restored. While mobile services have been largely restored in C&W’s Impacted Markets, we are still in the process of completing the restoration of our mobile network infrastructure. In addition to network damage, these markets are also dealing with extensive damage to homes, businesses and essential infrastructure.

~~We currently estimate that approximately $50 million of property and equipment additions will be required to restorenearly all of the damaged networks in C&W’s Impacted Markets, of which approximately $21 millionhas been incurred following the hurricanes~~through March 31, 2018. The negative impacts of the hurricanes are declining as the networks are restored and customers are reconnected, and we do not expect there to be a material impact from hurricanes on C&W’s revenue and Adjusted OIBDA during 2018.

Material Changes in Results of Operations

In the following discussion, we quantify the estimated impact of acquisitions (the Acquisition Impact) on our operating results. The Acquisition Impact represents our estimate of the difference between the operating results of the periods under comparison that is attributable to an acquisition. Accordingly, in the following discussion, (i) organic ~~increases~~changes exclude the operating results of an acquired entity during the first 12 months following the date of acquisition, and (ii) the calculation of our organic change percentages exclude the Acquisition Impact of such entity.

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. dollar. Our primary exposure to foreign currency translation effects (FX) risk during ~~2018~~the three months ended June 30, 2019 was to the Chilean peso as ~~29.0%~~24.6% of our revenue during the ~~three months ended March 31, 2018~~period was derived from ~~VTR, whose functional currency is the Chilean peso. In addition, our operating results are impacted by changes in the exchange rates for other local currencies inLatin America and the Caribbean.~~VTR. The impacts to the various components of our results of operations that are attributable to changes in FX are highlighted below. For information concerning our foreign currency risks and applicable foreign currency exchange rates, see Item 3. Quantitative and Qualitative Disclosures About Market Risk—Foreign Currency Exchange Rates below.

The amounts presented and discussed below represent 100% of the revenue and ~~Adjusted OIBDA~~expenses of each ~~reportable~~ segment and our corporate ~~operations, as further discussed in note 16 to our condensed consolidated financial statements.~~operations. As we have the ability to control ~~Liberty Puerto Rico~~Cabletica and certain subsidiaries of C&W that are not wholly-owned, we include 100% of the revenue and expenses of these entities in our condensed 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 Liberty Puerto Rico that we did not already own. The noncontrolling owners’ interests in the operating results of ~~Liberty Puerto Rico and~~ certain subsidiaries of C&W and, prior to October 2018, Liberty Puerto Rico, are reflected in net earnings or loss attributable to noncontrolling interests in our condensed consolidated statements of operations.

~~Prior~~Effective October 1, 2018, following the Cabletica Acquisition, the VTR segment became the VTR/Cabletica segment. In the discussion and analysis of the three and six months ended June 30, 2019 as compared the corresponding periods in 2018, we refer to the ~~Split-Off, Liberty Global allocated a portion~~segment as VTR/Cabletica. For additional information regarding the composition of their corporate function costs to us, based primarily on the estimated percentage of time spent by corporate personnel providing services to us. Such costs were not intended to reflect the costs of operating as a standalone public company. Accordingly, our corporate-related SG&A costs have increased significantly during 2018, as compared with 2017, as a result of operating as a standalone company and incurring certain public company-related costs. These costs include executive employee and board of directors expenses; insurance; costs related to the compliance with federal securities laws (including compliance with the Sarbanes-Oxley Act of 2002); and costs for financial reporting, tax administration, human resources functions and centralization of certain other corporate functions~~. These increases in costs are inclusive of costs~~

~~that Liberty Global charges us in connection with certain of the Split-Off Agreements, as further described in~~segments, see note 1118 to our condensed consolidated financial statements. For additional information regarding the Cabletica Acquisition, see note 4 to our condensed consolidated financial statements.

On April 1, 2019, certain B2B operations in Puerto Rico were transferred from our C&W segment to our Liberty Puerto Rico segment. This did not have a significant impact on the financial results of our C&W or Liberty Puerto Rico segments.

We are subject to inflationary pressures with respect to certain costs and foreign currency exchange risk with respect to costs and expenses that are denominated in currencies other than the respective functional currencies of our reportable segments. Any cost increases that we are not able to pass on to our subscribers would result in increased pressure on our operating margins.

Revenue

All of our ~~reportable~~ segments derive their revenue primarily from (i) residential ~~broadband communications~~fixed services, including video, broadband internet and ~~fixed-line~~ telephony, ~~services,~~ (ii) with the exception of Liberty Puerto Rico, residential mobile services, and (iii) B2B ~~communications~~ services. ~~For detailed information regarding the composition of our reportable segments, see note 16 to our condensed consolidated financial statements.~~C&W 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 ~~the~~ revenue, ~~of our reportable segments,~~ we are experiencing significant competition in all of our markets. This competition has an adverse impact on our ability to increase or maintain our RGUs and/or average monthly subscription revenue per average fixed RGU or mobile subscriber, as applicable, (ARPU).

Variances in the subscription revenue that we receive from our customers are a function of (i) changes in the number of RGUs or mobile subscribers during the period and (ii) changes in ARPU. Changes in ARPU can be attributable to (i) changes in prices, (ii) changes in bundling or promotional discounts, (iii) changes in the tier of services selected, (iv) variances in subscriber usage patterns, and (v) the overall mix of fixed and mobile products ~~within a segment~~ during the period. 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. AtHurricanes Maria and Irma in 2017 significantly impacted variances in revenue at Liberty Puerto Rico ~~variances in revenue during~~for the ~~three months ended March 31, 2018,~~comparative period, as ~~compared to the corresponding period in 2017, were significantly impacted by Hurricanes Maria and Irma.~~further discussed below.

The following table sets forth revenue by reportable segment:


	Three months ended March 31,						Increase (decrease)					Three months ended June 30,						Increase
	2018			2017			$			%		2019			2018			$		%
	in millions, except percentages											in millions, except percentages

C&W	$	585.5		$	575.6		$	9.9		1.7		$	606.6		$	583.7		$	22.9	3.9
VTR	263.8			229.3			34.5			15.0
VTR/Cabletica												274.5			260.2			14.3		5.5
Liberty Puerto Rico	61.8			106.7			(44.9		)	(42.1	)	103.8			80.3			23.5		29.3
Intersegment eliminations	(1.2		)	(0.7		)	(0.5		)	N.M.		(2.0		)	(2.1		)	0.1		N.M.
Total	$	909.9		$	910.9		$	(1.0	)	(0.1	)	$	982.9		$	922.1		$	60.8	6.6



	Six months ended June 30,						Increase (decrease)
	2019			2018			$			%
	in millions, except percentages

C&W	$	1,176.4		$	1,169.2		$	7.2		0.6
VTR/Cabletica	551.0			524.0			27.0			5.2
Liberty Puerto Rico	202.4			142.1			60.3			42.4
Intersegment eliminations	(4.2		)	(3.3		)	(0.9		)	N.M.
Total	$	1,925.6		$	1,832.0		$	93.6		5.1

N.M. — Not Meaningful.

Consolidated. The ~~decrease~~increases during the three and six months ended ~~March 31, 2018,~~June 30, 2019, as compared to the corresponding ~~period~~periods in ~~2017, includes a decrease~~2018, include (i) increases of ~~$45~~$24 million and $60 million, respectively, at Liberty Puerto Rico, primarily attributable to recovery following the ~~hurricanes, and~~Hurricanes, (ii) increasesof ~~$10~~$66 million and ~~$23~~$98 million, respectively, attributable to the ~~impacts~~impact of acquisitions and (iii) decreases of $31 million and $63 million, respectively, attributable to the ~~C&W Carve-out Acquisition and FX, respectively.~~impact of FX. Excluding the effects of ~~the C&W Carve-out Acquisition~~acquisitions and FX, revenue ~~decreased $34~~increased $26 million or ~~3.7%.~~2.8% and $59 million or 3.2%, respectively. The organic ~~decrease includes declines~~increasesprimarily include (i) decreases of ~~$45~~$3 million and $1$13 million, respectively, at C&W, (ii) increases of $6 million and $13 million, respectively, at VTR/Cabletica and (iii) increases of $24 million and $60 million, respectively, at Liberty Puerto Rico, ~~and C&W, respectively, and an increase of $13 million at VTR,~~ as further discussed below.

As further described in notes 2 and 3 to our condensed consolidated financial statements, we adopted ASU 2014-09 effective January 1, 2018 using the cumulative effect transition method. The impact to revenue during three months ended March 31, 2018 was not material.

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



	Three months ended June 30,				Increase (decrease)
	2019		2018		$			%
	in millions, except percentages
Residential revenue:
Residential fixed revenue:
Subscription revenue:
Video	$	46.8	$	43.2	$	3.6		8.3
Broadband internet	65.5		56.4		9.1			16.1
Fixed-line telephony	26.7		25.9		0.8			3.1
Total subscription revenue	139.0		125.5		13.5			10.8
Non-subscription revenue	14.9		16.9		(2.0		)	(11.8	)
Total residential fixed revenue	153.9		142.4		11.5			8.1
Residential mobile revenue:
Service revenue	142.1		151.1		(9.0		)	(6.0	)
Interconnect, equipment sales and other	22.2		21.6		0.6			2.8
Total residential mobile revenue	164.3		172.7		(8.4		)	(4.9	)
Total residential revenue	318.2		315.1		3.1			1.0
B2B revenue:
Service revenue	226.8		204.2		22.6			11.1
Subsea network revenue	61.6		64.4		(2.8		)	(4.3	)
Total B2B revenue	288.4		268.6		19.8			7.4
Total	$	606.6	$	583.7	$	22.9		3.9

Three months ended March 31, Increase (decrease)
2018 2017 $ %
in millions, except percentages
Residential revenue:
Residential fixed revenue:
Subscription revenue:
Video $ 42.7
$ 40.5
$ 2.2
5.4
Broadband internet 53.7
52.8
0.9
1.7
Fixed-line telephony 26.9
29.3
(2.4 ) (8.2 )
Total subscription revenue 123.3
122.6
0.7
0.6
Non-subscription revenue 21.5
23.5
(2.0 ) (8.5 )
Total residential fixed revenue 144.8
146.1
(1.3 ) (0.9 )
Residential mobile revenue:
Subscription revenue 155.1
161.8
(6.7 ) (4.1 )
Non-subscription revenue 22.1
19.9
2.2
11.1
Total residential mobile revenue 177.2
181.7
(4.5 ) (2.5 )
Total residential revenue 322.0
327.8
(5.8 ) (1.8 )
B2B revenue:
Non-subscription revenue 203.9
201.4
2.5
1.2
Sub-sea network revenue 59.6
46.4
13.2
28.4
Total B2B revenue 263.5
247.8
15.7
6.3
Total $ 585.5
$ 575.6
$ 9.9
1.7



	Six months ended June 30,				Increase (decrease)
	2019		2018		$			%
	in millions, except percentages
Residential revenue:
Residential fixed revenue:
Subscription revenue:
Video	$	90.7	$	85.9	$	4.8		5.6
Broadband internet	125.7		110.1		15.6			14.2
Fixed-line telephony	51.0		52.8		(1.8		)	(3.4	)
Total subscription revenue	267.4		248.8		18.6			7.5
Non-subscription revenue	29.9		32.4		(2.5		)	(7.7	)
Total residential fixed revenue	297.3		281.2		16.1			5.7
Residential mobile revenue:
Service revenue	277.1		306.2		(29.1		)	(9.5	)
Interconnect, equipment sales and other	41.2		43.7		(2.5		)	(5.7	)
Total residential mobile revenue	318.3		349.9		(31.6		)	(9.0	)
Total residential revenue	615.6		631.1		(15.5		)	(2.5	)
B2B revenue:
Service revenue	439.3		414.1		25.2			6.1
Subsea network revenue	121.5		124.0		(2.5		)	(2.0	)
Total B2B revenue	560.8		538.1		22.7			4.2
Total	$	1,176.4	$	1,169.2	$	7.2		0.6

The details of the changes in C&W’s revenue during the three and six months ended ~~March 31, 2018,~~June 30, 2019, as compared to the corresponding ~~period~~periods in ~~2017,~~2018, are set forth ~~below:~~below (in millions):


	Subscription revenue			Non-subscription revenue			Total
	in millions									Three-month period			Six-month period
Increase (decrease) in residential fixed subscription revenue due to change in:
Average number of RGUs (a)	$	4.0		$	—		$	4.0		$	8.0		$	15.8
ARPU (b)	(3.7		)	—			(3.7		)	(3.4		)	(4.9		)
Decrease in residential fixed non-subscription revenue (c)	—			(2.0		)	(2.0		)	(2.5		)	(2.8		)
Total increase (decrease) in residential fixed revenue	0.3			(2.0		)	(1.7		)
Increase (decrease) in residential mobile revenue (d)	(7.1		)	2.2			(4.9		)
Increase in B2B revenue (e)	—			0.1			0.1
Increase in B2B sub-sea network revenue (f)	—			5.1			5.1
Total organic increase (decrease)	(6.8		)	5.4			(1.4		)
Impact of the C&W Carve-out Acquisition	—			9.5			9.5
Total increase in residential fixed revenue										2.1			8.1
Decrease in residential mobile service revenue (d)										(16.0		)	(35.2		)
Decrease in residential mobile interconnect, equipment sales and other (e)										(0.9		)	(4.0		)
Increase in B2B service revenue (f)										12.4			17.6
Increase (decrease) in B2B subsea network revenue										(0.9		)	0.4
Total organic decrease										(3.3		)	(13.1		)
Impact of the UTS Acquisition										32.9			32.9
Impact of FX	0.8			1.0			1.8			(6.7		)	(12.6		)
Total	$	(6.0	)	$	15.9		$	9.9		$	22.9		$	7.2


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


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


(c)	The ~~decrease is~~decreases are primarily attributable to lower ~~advertising~~interconnect revenue, mainly due to lower (i) mobile termination rates on our fixed network in various C&W markets and ~~late fees.~~(ii) volumes in Panama.

(d)

The ~~decrease in mobile subscription revenue is~~decreases are primarily attributable to ~~the net effect of~~ (i) lower ~~revenue~~ARPU in ~~(a)~~Panama, other C&W markets, and the Bahamas,associated with a decrease in the average number of subscribers and lower ARPU, primarily driven by the commercial launch of mobile services by a competitor during the fourth quarter of 2016, and (b) Panama due primarily to a decrease in the average number of subscribers and (ii) ~~higher revenue~~lower average subscribers in ~~Jamaica mostly due to higher ARPU. The increase in mobile non-subscription revenue is primarily attributable to an increase in revenue from handset sales.~~

Panama, the Bahamas and other C&W markets.

(e)

The ~~increase~~decrease during the six-month comparison is primarily attributable to ~~(i) project-related revenue~~decreased volumes of handset sales, primarily in ~~managed services, driven by increases in Jamaica that were partially offset by decreases in Panama~~our Cayman Islands operations, the Bahamas and ~~(ii) individually insignificant changes across the markets of~~other C~~&W.~~&W markets.

(f)

The ~~increase is~~increases are primarily due to the net effect of (i) higher managed services revenue, largely driven by Panama, Jamaica and Networks & LatAm, and (ii) increased ~~capacity sales on~~interconnect revenue, primarily associated withhigher volumes in Jamaica. In addition, the three and six-month comparisons also include an increase(decrease) of $1 million and ($4 million), respectively, associated with a change in the timing of revenue for directory services recognized within the year. These amounts also include decreases related to the transfer of certain B2B operations in Puerto Rico from our C~~&W’s sub-sea network~~&W segment to ~~new and existing customers.~~our Liberty Puerto Rico segment.

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


	Three months ended March 31,				Increase			Three months ended June 30,				Increase (decrease)
	2018		2017		$		%	2019		2018		$			%
	in millions, except percentages							in millions, except percentages
Residential revenue:
Residential fixed revenue:
Subscription revenue:
Video	$	99.7	$	87.4	$	12.3	14.1	$	108.3	$	99.7	$	8.6		8.6
Broadband internet	96.6		82.3		14.3		17.4	105.3		96.2		9.1			9.5
Fixed-line telephony	34.6		34.3		0.3		0.9	25.9		32.1		(6.2		)	(19.3	)
Total subscription revenue	230.9		204.0		26.9		13.2	239.5		228.0		11.5			5.0
Non-subscription revenue	7.5		7.4		0.1		1.4	8.3		6.3		2.0			31.7
Total residential fixed revenue	238.4		211.4		27.0		12.8	247.8		234.3		13.5			5.8
Residential mobile revenue:
Subscription revenue	16.3		12.6		3.7		29.4
Non-subscription revenue	3.2		2.3		0.9		39.1
Service revenue								15.9		16.0		(0.1		)	(0.6	)
Interconnect, equipment sales and other								3.5		3.7		(0.2		)	(5.4	)
Total residential mobile revenue	19.5		14.9		4.6		30.9	19.4		19.7		(0.3		)	(1.5	)
Total residential revenue	257.9		226.3		31.6		14.0	267.2		254.0		13.2			5.2
B2B revenue:
Subscription revenue	5.6		2.7		2.9		107.4
Non-subscription revenue	0.3		0.3		—		—
Total B2B revenue	5.9		3.0		2.9		96.7
B2B service revenue								7.3		6.2		1.1			17.7
Total	$	263.8	$	229.3	$	34.5	15.0	$	274.5	$	260.2	$	14.3		5.5



	Six months ended June 30,				Increase (decrease)
	2019		2018		$			%
	in millions, except percentages
Residential revenue:
Residential fixed revenue:
Subscription revenue:
Video	$	217.1	$	199.4	$	17.7		8.9
Broadband internet	210.2		192.8		17.4			9.0
Fixed-line telephony	53.4		66.7		(13.3		)	(19.9	)
Total subscription revenue	480.7		458.9		21.8			4.8
Non-subscription revenue	17.0		13.8		3.2			23.2
Total residential fixed revenue	497.7		472.7		25.0			5.3
Residential mobile revenue:
Service revenue	31.6		32.3		(0.7		)	(2.2	)
Interconnect, equipment sales and other	6.9		6.9		—			—
Total residential mobile revenue	38.5		39.2		(0.7		)	(1.8	)
Total residential revenue	536.2		511.9		24.3			4.7
B2B service revenue	14.8		12.1		2.7			22.3
Total	$	551.0	$	524.0	$	27.0		5.2

The details of the changes in ~~VTR’s~~VTR/Cabletica’s revenue during the three and six months ended ~~March 31, 2018,~~June 30, 2019, as compared to the corresponding ~~period~~periods in ~~2017,~~2018, are set forth ~~below:~~below (in millions):

Subscription
revenue

Non-subscription
revenue
Total
in millions
Increase in residential fixed subscription revenue due to change in:
Average number of RGUs (a) $ 4.1
$ —
$ 4.1
ARPU (b) 4.1
—
4.1
Decrease in residential fixed non-subscription revenue —
(0.5 ) (0.5 )
Total increase (decrease) in residential fixed revenue 8.2
(0.5 ) 7.7
Increase in residential mobile revenue (c) 2.4
0.6
3.0
Increase in B2B revenue (d) 2.4
0.1
2.5
Total organic increase 13.0
0.2
13.2
Impact of FX 20.5
0.8
21.3
Total $ 33.5
$ 1.0
$ 34.5



	Three-month period			Six-month period
Increase (decrease) in residential fixed subscription revenue due to change in:
Average number of RGUs (a)	$	1.4		$	3.7
ARPU (b)	0.8			2.0
Increase (decrease) in residential fixed non-subscription revenue	0.2			(0.8		)
Total increase in residential fixed revenue	2.4			4.9
Increase in residential mobile service revenue (c)	1.5			2.6
Increase in residential mobile interconnect, equipment sales and other	0.2			0.7
Increase in B2B service revenue (d)	1.8			4.3
Total organic increase	5.9			12.5
Impact of the Cabletica Acquisition	32.6			65.1
Impact of FX	(24.2		)	(50.6		)
Total	$	14.3		$	27.0


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


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


(c)	The ~~increase in mobile subscription revenue is~~increases are primarily due to athe net effect of (i) higher average ~~number~~numbers of mobile ~~subscribers.~~subscribers and (ii) lower ARPU from mobile services.


(d)	The ~~increase in B2B subscription revenue is~~increases are primarily attributable to higher average numbers of broadband internet, video and fixed-line telephony ~~SOHO~~ RGUs. ~~A portion of this increase is attributable to the conversion of certain residential subscribers to SOHO customers.~~

Liberty Puerto Rico. Due to the significant impact of the ~~hurricanes~~Hurricanes on the operations of our Liberty Puerto Rico segment during the 2018 periods, we have provided supplementary sequential information in order to provide a meaningful analysis of Liberty Puerto Rico’s business, including recovery after the ~~hurricanes.~~Hurricanes. Accordingly, Liberty Puerto Rico’s revenue by major category during each of the (i) three months ended June 30, 2019, March 31, 2019 and June 30, 2018 ~~December 31, 2017~~ and ~~March 31, 2017~~(ii) six months ended June 30, 2019 and 2018 is set forth below:


	Three months ended						Three months ended						Six months ended
	March 31, 2018		December 31, 2017		March 31, 2017		June 30, 2019		March 31, 2019		June 30, 2018		June 30, 2019		June 30, 2018
	in millions						in millions
Residential fixed revenue:
Subscription revenue:
Video	$	23.3	$	5.3	$	42.7	$	35.3	$	35.0	$	29.8	$	70.3	$	53.1
Broadband internet	25.3		7.8		40.4		43.6		41.8		32.4		85.4		57.7
Fixed-line telephony	3.5		1.2		6.4		5.9		5.7		4.6		11.6		8.1
Total subscription revenue	52.1		14.3		89.5		84.8		82.5		66.8		167.3		118.9
Non-subscription revenue	1.7		0.5		5.9		5.6		5.3		4.4		10.9		6.8
Total residential fixed revenue	53.8		14.8		95.4		90.4		87.8		71.2		178.2		125.7
B2B revenue:
Subscription revenue	4.3		1.3		6.7
Non-subscription revenue	3.0		0.7		3.3
Total B2B revenue	7.3		2.0		10.0
Other revenue	0.7		0.1		1.3
B2B service revenue							13.4		10.8		9.1		24.2		16.4
Total	$	61.8	$	16.9	$	106.7	$	103.8	$	98.6	$	80.3	$	202.4	$	142.1

The ~~decrease~~increases in Liberty Puerto Rico’s revenue during the three and six months ended ~~March 31, 2018,~~June 30, 2019, as compared to the ~~three months ended March 31, 2017, is~~corresponding periods in 2018, are primarily attributable to ~~Hurricanes Maria and Irma.~~recovery following the Hurricanes.

The table below presents changes in (i) residential fixed subscription revenue due to changes in the average number of RGUs and ARPU, (ii) residential fixed non-subscription revenue, and (iii) B2B ~~revenue and (iv) other~~service revenue, each reflective of changes during the three months ended ~~March 31, 2018,~~June 30, 2019, as compared to the three months ended ~~December~~March 31, ~~2017.~~2019 (in millions).

Subscription
revenue

Non-subscription
revenue
Total
in millions
Increase in residential fixed subscription revenue due to change in:
Average number of RGUs (a) $ 35.5
$ —
$ 35.5
ARPU (b) 2.3
—
2.3
Increase in residential fixed non-subscription revenue (c) —
1.2
1.2
Total increase in residential fixed revenue 37.8
1.2
39.0
Increase in B2B revenue (d) 3.0
2.3
5.3
Increase in other revenue —
0.6
0.6
Total $ 40.8
$ 4.1
$ 44.9



Increase in residential fixed subscription revenue due to change in:
Average number of RGUs (a)	$	1.4
ARPU (b)	0.9
Increase in residential fixed non-subscription revenue	0.3
Total increase in residential fixed revenue	2.6
Increase in B2B service revenue (c)	2.6
Total	$	5.2


(a)	The increase is primarily attributable to ~~increases~~an increase in broadband internet ~~video and fixed-line telephony RGUs, primarily due to the reconnection of subscribers associated with the recovery in Puerto Rico following the hurricanes.~~RGUs.


(b)	The increase is primarily attributable to ~~reconnecting~~ higher ARPU ~~customers during the first quarter of 2018.~~from broadband internet services.


(c)	The increase is primarily ~~due to higher late fees, advertising revenue and reconnect fees resulting from Liberty Puerto Rico’s ongoing recovery from the hurricanes.~~

~~(d)~~

~~The increase in subscription revenue is primarily attributable to increases in broadband internet, fixed-line telephony and video SOHO RGUs, primarily due~~relates to the ~~reconnection~~transfer of ~~subscribers associated with the recovery~~certain B2B operations in Puerto Rico ~~following the hurricanes. The increase in non-subscription revenue is primarily attributable~~from our C&W segment to ~~higher revenue from broadband internet services, resulting from the restoration of fiber circuits to~~our Liberty Puerto ~~Rico’s B2B customers.~~Rico segment.

Programming and ~~Other Direct Costs~~other direct costs of ~~Services~~services

General. Programming and other direct costs of services include programming and copyright costs, ~~mobile~~interconnect and access ~~and interconnect~~ costs, costs of mobile handsets and other devices, and other direct costs related to our operations. ~~Notwithstanding the impact of the hurricanes, programming~~Programming and copyright costs, which represent a significant portion of our operating costs, ~~are expected to rise~~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 ~~and~~or (iii) growth in the number of our enhanced video subscribers.

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


	Three months ended March 31,						Increase (decrease)					Three months ended June 30,						Increase (decrease)
	2018			2017			$			%		2019			2018			$			%
	in millions, except percentages											in millions, except percentages

C&W	$	130.2		$	133.4		$	(3.2	)	(2.4	)	$	132.6		$	130.2		$	2.4		1.8
VTR	70.5			61.6			8.9			14.4
VTR/Cabletica												72.3			70.4			1.9			2.7
Liberty Puerto Rico	16.5			27.6			(11.1		)	(40.2	)	23.5			19.7			3.8			19.3
Intersegment eliminations	(1.4		)	(0.7		)	(0.7		)	N.M.		(2.0		)	(1.9		)	(0.1		)	N.M.
Total	$	215.8		$	221.9		$	(6.1	)	(2.7	)	$	226.4		$	218.4		$	8.0		3.7



	Six months ended June 30,						Increase (decrease)
	2019			2018			$			%
	in millions, except percentages

C&W	$	264.1		$	260.4		$	3.7		1.4
VTR/Cabletica	147.9			140.9			7.0			5.0
Liberty Puerto Rico	46.4			36.2			10.2			28.2
Intersegment eliminations	(4.2		)	(3.3		)	(0.9		)	N.M.
Total	$	454.2		$	434.2		$	20.0		4.6

N.M. — Not Meaningful.

Consolidated. The ~~decrease~~increases in programming and other direct costs of services during the three and six months ended ~~March 31, 2018,~~June 30, 2019, as compared to the corresponding ~~period~~periods in ~~2017, includes a decrease~~2018, include increases of ~~$11~~$13 million and $24 million, respectively, attributable to the impact of acquisitions and decreases of $8 million and $17 million, respectively, due to FX. Excluding the effects of acquisitions and FX, our programming and other direct costs of services increased $3 million or 1.3% and $13 million or 3.0%, respectively. The organic increases primarily include (i) an increase for the six-month comparison of $3 million at C&W, (ii) an increase (decrease) of ($1 million) and $1 million, respectively, at VTR/Cabletica and (iii) increases of $4 million and $10 million, respectively, at Liberty Puerto Rico, ~~primarily attributable~~as further discussed below.

C&W. The increases in C&W’s programming and other direct costs of services during the three and six months ended June 30, 2019, as compared to the ~~hurricanes,~~corresponding periods in 2018, include an increase of $4 million attributable to the impact of the ~~C&W Carve-out~~UTS Acquisitionand ~~an increase~~decreases of $6$2 million and $4 million, respectively, due to FX. Excluding the effects of the C&W Carve-out Acquisition and FX, our programming and other direct costs of services decreased $17 million or 7.5%. The organic decrease includes declines of $8 million and $11 million at C&W and Liberty Puerto Rico, respectively, and an increase of $3 million at VTR, as further discussed below.

~~C&W.~~ The decrease in C&W’s programming and other direct costs of services includes an increase of $4 million attributable to the impact of the C&W Carve-out Acquisition and an increase of $1 million due to FX. Excluding the effects of the C&W Carve-outUTS Acquisition and FX, C&W’s programming and other direct costs of services ~~decreased $8~~remained relatively flat for the three-month comparison and increased $3 million or ~~6.0%. This decrease includes~~1.3% for the six-month comparison. These changes include the following factors:

~~A decrease~~Higher costs related to B2B managed services projects in ~~mobile handset costs of $5 million or 20.7%, primarily due to lower mobile handset sales;~~

~~A decrease in mobile access~~Panama and ~~interconnect costs of $1 million or 2.0%, primarily due to lower call volumes; and~~

~~A net decrease resulting from other individually insignificant changes in other direct cost categories.~~

~~VTR.~~ ~~The increase in VTR’s programming and other direct costs of servicesincludes an increase of $6 milliondue to FX. Excluding the effect of FX, VTR’s programming and other direct costs of services increased $3 million or 5.2%. This increase includes the following factors:~~Jamaica;

An increase in ~~programming~~interconnect and ~~copyright~~access costs of $1$2 million or ~~3.5%,~~3.3% for the three-month comparison, primarily due to the net effect of (i) an increase in ~~certain premium and basic content costs due to rate increases,~~wholesale call volumes in Jamaica, (ii) ~~a decrease in~~ the ~~foreign currency~~beneficial impact of ~~programming contracts denominated in U.S. dollars~~the reassessment of an accrual during 2019 and ~~(ii) higher costs associated with video-on-demand;~~

~~An increase in mobile access and interconnect costs of $1 million or 8.2%, primarily due to (i) higher MVNO charges and (ii) a net increase in interconnect costs from higher call volumes and~~(iii) lower ~~interconnect rates.~~rates; and


•	A decrease in programming and copyright costs of$1 millionor3.9% for the three-month comparison, primarily due to the net effect of (i) lower content costs, including the beneficial impact of the reassessment of content accruals across several markets in 2019, and (ii) higher costs associated with an increase in subscribers during 2019.

~~Liberty Puerto Rico.~~VTR/Cabletica. The ~~decrease~~increases in ~~Liberty Puerto Rico’s~~VTR/Cabletica’s programming and other direct costs of services isduring the three and six months ended June 30, 2019, as compared to the corresponding periods in 2018, include increases of $10 million and $20 million, respectively, attributable to the Cabletica Acquisition and decreases of $6 million and $13 million, respectively, attributable to FX. Excluding the effects of the Cabletica Acquisition and FX, VTR/Cabletica’s programming and other direct costs of services increased (decreased) ($1 million) or (1.8%) and $1 million or 0.4%, respectively. These changes include the following factors:

Decreases in interconnect and access costs of $4 million or 19.8% and $3 million and 9.4%, respectively, primarily due to ~~a decline~~(i) net decreases in interconnect costs resulting from lower rates, and (ii) decreases in MVNO charges due to lower rates, which resulted from the renegotiation of our contract during the fourth quarter of 2018; and

•

Increases in programming and copyright costs of $2 million or 3.7% and $3 million or 3.2%, respectively, primarily due to the net effect of (i) increases in certain premium and basic content costs, primarily resulting from higher rates, (ii) net decreases in the foreign currency impact of programming contracts denominated in U.S. dollars,driven by the impact of hedge accounting, and (iii) higher costs associated with video-on-demand (VoD) services and catch-up television.

Liberty Puerto Rico. Programing and other direct costs of services for Liberty Puerto Rico increased during the three and six months ended June 30, 2019, as compared to the corresponding periods in 2018, primarily due to increases in programming and copyright costs of ~~$10~~$4 million or ~~42.7%~~21.1% and $11 million or 35.7%, respectively, mostly attributable to ~~(i) $7 million of~~ credits received from programming vendors ~~stemming from Hurricanes Irma and Maria and (ii) lower costs of $4 million~~in 2018 resulting from ~~disconnects~~the Hurricanes of ~~enhanced video subscribers due to the impact of the hurricanes.~~$3 million and $10 million, respectively.

Other ~~Operating Expenses~~operating expenses

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

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


	Three months ended March 31,						Increase (decrease)					Three months ended June 30,				Increase (decrease)
	2018			2017			$			%		2019		2018		$		%
	in millions, except percentages											in millions, except percentages

C&W	$	109.0		$	117.8		$	(8.8	)	(7.5	)	$	119.1	$	118.1	$	1.0	0.8
VTR	42.9			36.9			6.0			16.3
VTR/Cabletica												41.5		37.8		3.7		9.8
Liberty Puerto Rico	14.6			15.4			(0.8		)	(5.2	)	14.6		12.7		1.9		15.0
Intersegment eliminations	(0.1		)	(0.1		)	—			N.M.
Total other operating expenses excluding share-based compensation expense	166.4			170.0			(3.6		)	(2.1	)	175.2		168.6		6.6		3.9
Share-based compensation expense	0.1			0.5			(0.4		)	(80.0	)	0.3		0.1		0.2		200.0
Total	$	166.5		$	170.5		$	(4.0	)	(2.3	)	$	175.5	$	168.7	$	6.8	4.0



	Six months ended June 30,					Increase (decrease)
	2019		2018			$			%
	in millions, except percentages

C&W	$	227.0	$	232.7		$	(5.7	)	(2.4	)
VTR/Cabletica	85.5		77.5			8.0			10.3
Liberty Puerto Rico	28.9		26.7			2.2			8.2
Intersegment eliminations	—		(0.1		)	0.1			N.M.
Total other operating expenses excluding share-based compensation expense	341.4		336.8			4.6			1.4
Share-based compensation expense	0.5		0.2			0.3			150.0
Total	$	341.9	$	337.0		$	4.9		1.5

N.M. — Not Meaningful.

Consolidated. The ~~decrease~~increases in other operating expenses during the three and six months ended ~~March 31, 2018,~~June 30, 2019, as compared to the corresponding ~~period~~periods in ~~2017, includes~~2018, include increases of $3$15 million and $4$23 million, respectively, attributable to the impact of ~~the C&W Carve-out Acquisition~~acquisitions and ~~FX, respectively. Our other operating expenses include share-based compensation expense. For additional information, see the discussion under~~ ~~Share-based compensation expense (included in other operating~~decreases of $5 million and ~~SG&A expenses)~~ ~~below.~~$10 million, respectively, attributable to FX. Excluding the effects of ~~the C&W Carve-out Acquisition,~~acquisitions, FX and share-based compensation expense, our other operating expenses decreased ~~$10~~$3 million or ~~5.8%.~~2.0% and $8 million or 2.3%, respectively. The organic ~~decrease includes declines~~decreases primarily include (i) decreases of $7 million and $12 million, ~~and $1 million~~respectively, at C&W, ~~and Liberty Puerto Rico, respectively, and~~(ii) an increase of $3$2 million for each of the three and six-month comparisons at ~~VTR,~~VTR/Cabletica and (iii) an increase of $2 million for each of the three and six-month comparisons at Liberty Puerto Rico, as further discussed below.

C&W. The ~~decrease~~changes in C&W’s other operating expenses ~~includes~~during the three and six months ended June 30, 2019, as compared to the corresponding periods in 2018, primarily include an increase of $3$9 million attributable to the impact of the ~~C&W Carve-out Acquisition.~~UTS Acquisition and decreases of $2 million and $3 million due to FX, respectively. Excluding the ~~effect~~effects of the ~~C&W Carve-out~~UTS Acquisition and FX, C&W’s other operating expenses (exclusive of share-based compensation expense) decreased $7 million or 5.8% and $12 million or ~~9.8%. This decrease includes~~5.2%, respectively. These decreases primarily include the following factors:


•	Decreases in network-related expenses of $2 million or 5.0%and$4 million or5.1%, respectively, primarily due to (i) lower maintenance costs and (ii) hurricane restoration costs in the prior year;

~~A decrease~~Decreases in bad debt and collection expenses of $7$4 million or ~~50.5%~~29.1% and $3 million or 16.9%, respectively, primarily due to the net effect of (i) ~~better than expected~~improved collections ~~in 2018, including~~during the first half of 2019 and (ii) a $3 million recovery in the first quarter of 2018 related to provisions established following the impacts of Hurricanes Irma and ~~Maria,~~Maria; and ~~(ii) a decrease resulting from provisions recorded~~

Decreases of $1 million and $3 million, respectively, in revenue-based franchise fees in certain of our markets.

VTR/Cabletica. The increases in VTR/Cabletica’s other operating expenses during the ~~first quarter~~three and six months ended June 30, 2019, as compared to the corresponding periods in 2018, include increases of ~~2017~~$6 million and $13 million, respectively, attributable to the Cabletica Acquisitionand decreases of $4 million and $8 million, respectively, due to FX. Excluding the effects of the Cabletica Acquisition and FX, VTR/Cabletica’s other operating expenses (exclusive of share-based compensation expense) increased $2 million or 4.0% and $2 million or 3.0%, respectively. These increases include the following factors:

Increases in ~~connection with Hurricane Matthew;~~outsourced labor and professional services of $1 million or 29.6% and $2 million or 18.9%, respectively, primarily due to increased call center volume;


•	AFor the six-month comparison, a decrease in network-related expenses of$6 $1 million or ~~14.0%~~3.0%, primarily due to the net effect of (i) lower contracted labor for network ~~restoration~~access-related services,and (ii) higher costs ~~incurred in the first quarter of 2017 associated with sustained damages from Hurricane Matthew.~~related to CPE materials and refurbishment activity; and

~~VTR.~~ ~~The increase in VTR’s other operating expenses includes an~~An increase of $4$1 million ~~due~~for each comparison driven by charges incurred during 2019 for certain technical and information technology services provided to ~~FX. Excluding~~us by Liberty Global under the ~~effect of FX, VTR’s other operating expenses (exclusive of share-based compensation expenses) increased $3 million or 6.8%. This change is primarily the result of an increase~~Services Agreement, as further described in ~~network-related expenses of $3 million or 21.1% due~~note 13 to ~~higher maintenance costs.~~our condensed consolidated financial statements.

Liberty Puerto Rico. The ~~decrease~~increases in Liberty Puerto Rico’s other operating expenses isduring the three and six months ended June 30, 2019, as compared to the corresponding periods in 2018, include the following factors:

Increases in network related expenses of $1 million or 53.9% and $2 million of 52.3%, respectively, primarily due to (i) higher CPE repair costs, and (ii) increases in system power expenses, as the 2018 periods were impacted by the Hurricanes;

An increase (decrease) in personnel costs of $1 million and ($1 million), respectively, driven by the net effect of (i) lower ~~various indirect expenses~~overtime-related personnel activities, as the 2018 periods were impacted by the Hurricanes, and (ii) a $1 million hurricane disaster relief credit, which was recognized in the second quarter of ~~approximately $2 million, predominantly related~~2018 and subsequently received in the third quarter of 2018, from the Puerto Rico treasury department, representing relief for wages paid to ~~bad debt and franchise fees that decreased~~employees during the period of time our business was inoperable as a result of the ~~hurricanes. This decrease was partially offset~~Hurricanes; and

Higher various other operating expenses, as the 2018 periods were impacted by ~~higher personnel costs of $1 million resulting from hurricane recovery efforts.~~the Hurricanes.

SG&A Expenses

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

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


	Three months ended March 31,				Increase			Three months ended June 30,					Increase
	2018		2017		$		%	2019		2018			$		%
	in millions, except percentages							in millions, except percentages

C&W	$	117.2	$	114.5	$	2.7	2.4	$	119.5	$	111.8		$	7.7	6.9
VTR	45.4		39.2		6.2		15.8
VTR/Cabletica								48.4		46.9			1.5		3.2
Liberty Puerto Rico	12.7		12.4		0.3		2.4	14.1		12.2			1.9		15.6
Corporate	11.3		5.1		6.2		121.6	11.9		11.0			0.9		8.2
Intersegment eliminations	0.3		0.1		0.2		N.M.	—		(0.2		)	0.2		N.M.
Total SG&A expenses excluding share-based compensation expense	186.9		171.3		15.6		9.1	193.9		181.7			12.2		6.7
Share-based compensation expense	6.4		5.1		1.3		25.5	15.1		8.6			6.5		75.6
Total	$	193.3	$	176.4	$	16.9	9.6	$	209.0	$	190.3		$	18.7	9.8



	Six months ended June 30,				Increase (decrease)
	2019		2018		$			%
	in millions, except percentages

C&W	$	227.4	$	223.4	$	4.0		1.8
VTR/Cabletica	98.4		95.5		2.9			3.0
Liberty Puerto Rico	27.6		25.5		2.1			8.2
Corporate	23.4		22.3		1.1			4.9
Intersegment eliminations	—		0.1		(0.1		)	N.M.
Total SG&A expenses excluding share-based compensation expense	376.8		366.8		10.0			2.7
Share-based compensation expense	29.6		15.0		14.6			97.3
Total	$	406.4	$	381.8	$	24.6		6.4

N.M. — Not Meaningful.

Consolidated. The ~~increase~~increases in SG&A expenses during the three and six months ended ~~March 31, 2018,~~June 30, 2019, as compared to the corresponding ~~period~~periods in ~~2017, includes~~2018, include increases of $1$16 million and $4$19 million, respectively, attributable to the ~~impacts~~impact of ~~the C&W Carve-out Acquisition~~acquisitions and ~~FX, respectively. Our SG&A expenses include share-based compensation expense. For additional information, see the discussion under~~ ~~Share-based compensation expense (included in other operating~~decreases of $5 million and ~~SG&A expenses)~~ ~~below.~~$12 million, respectively, due to FX. Excluding the effects of ~~the C&W Carve-out Acquisition,~~acquisitions, FX and

share-based compensation expense, our SG&A expenses increased ~~$11~~

$2 million or ~~6.2%.~~0.9% and $3 million or 0.8%, respectively. The organic ~~increase~~ increasesprimarily ~~includes~~include (i) decreases of $2 million and $5 million, respectively, at C&W, (ii) increases of ~~$6 million, $3~~$1 million and $1$5 million, respectively, at ~~Corporate, VTR~~VTR/Cabletica and ~~C&W, respectively,~~(iii) an increase of $2 million for each of the three and six-month comparisons at Liberty Puerto Rico, as further discussed below.

C&W. The ~~increase~~increases in C&W’s SG&A expenses ~~includes~~during the three and six months ended June 30, 2019, as compared to the corresponding periods in 2018, include an increase of $1$11 million attributable to the impact of the ~~C&W Carve-out Acquisition.~~UTS Acquisition and decreases of $1 million and $2 million, respectively, due to FX. Excluding the ~~effect~~effects of the ~~C&W Carve-out~~UTS Acquisition and FX, C&W’s SG&A expenses (exclusive of share-based compensation expense) decreased $2 million or 1.8% and $5 million or 2.1%, respectively.These decreases include the following factors:

Decreases in personnel costs of $3 million or 4.7% and $3 million or 3.1%, respectively, primarily due to lower staffing levels largely stemming from various restructuring activities, as further described below;

Increases in insurance expense of $2 million and $3 million, respectively, related to higher premiums;

A decrease in marketing and advertising expenses of $2 million or 7.3% for the six-month comparison, primarily due to timing of marketing campaigns; and

Net decreases resulting from other individually insignificant changes in SG&A expense categories.

VTR/Cabletica. The increases in VTR/Cabletica’s SG&A expenses during the three and six months ended June 30, 2019, as compared to the corresponding periods in 2018, include increases of $5 million and $8 million, respectively, attributable to the Cabletica Acquisition and decreases of $4 million and $10 million, respectively, due to FX. Excluding the effects of the Cabletica Acquisition and FX , VTR/Cabletica’s SG&A expenses (exclusive of share-based compensation expense) increased $1 million or ~~1.2%. This increase includes~~1.5% and $5 million or 4.9%, respectively. These increases include the following factors:

~~A decrease~~Increases in ~~outsourced labor~~professional services of $2 million or 41.6% and ~~professional fees of~~ $3 million or ~~28.6%~~41.4%, respectively, primarily due to ~~higher contract~~increased information technology costs ~~in 2017;~~associated with the implementation of a business support system;

~~An increase in personnel costs of $3 million or 5.0%, primarily due to higher incentive compensation costs; and~~

~~A net increase resulting from other individually insignificant changes in other SG&A expense categories.~~

~~VTR.~~ ~~The increase in VTR’s SG&A expenses includes an increase of $4 million due to FX. Excluding~~For the ~~effect of FX, VTR’s SG&A expenses (exclusive of share-based compensation expense) increased $3 million or 6.4%. This change is primarily the result of~~six-month comparison, an increase in sales, marketing and advertising expenses of $3$2 million or ~~19.3%~~5.0%, primarily due to the net effect of (i) higher ~~(i)~~ sales commissions to third-party dealers, and (ii) lower costs associated with advertising ~~campaigns.~~campaigns;

For this six-month comparison, a decrease in facilities-related expenses of $1 million or 6.7%, primarily due to lower lease costs; and


•	For the three-month comparison, a decrease in personnel costs of $1 million or 3.4%, primarily due to the net effect of (i) lower bonus accruals as a result of a restructuring program implemented in 2019, and (ii) annual wage increases.

Liberty Puerto ~~Rico.~~ Rico. The increases in Liberty Puerto Rico’s SG&A expenses ~~(exclusive of share-based compensation expense) remained relatively unchanged~~ during the three and six months ended ~~March 31, 2018,~~June 30, 2019, as compared to the corresponding periods in 2018, are primarily attributable to higher personnel costs of $1 million or 32.4% and $2 million or 17.3%, respectively, mostly driven by a $1 million hurricane disaster relief credit, which was recognized in the second quarter of 2018 and subsequently received in the third quarter of 2018, from the Puerto Rico treasury department, representing relief for wages paid to employees during the period ~~in 2017.~~of time our business was inoperable as a result of the Hurricanes.

Corporate. The ~~increase is~~increases in Corporate’s SG&A expenses during the three and six months ended June 30, 2019, as compared to the corresponding periods in 2018, are primarily attributable to ~~added costs associated with being a separate public company, including increases in~~higher personnel costs and professional services. The increase in costs is inclusive of costs that Liberty Global charges us in connection with certain of the Split-Off Agreements, as further described in note 11 to our condensed consolidated financial statements.costs.

Adjusted OIBDA

Adjusted OIBDA, a non-GAAP measure, is the primary measure used by our chief operating decision maker to evaluate segment operating performance. For the definition of this performance measure and for a reconciliation of total Adjusted OIBDA to our ~~earnings (loss)~~loss before income taxes, see note 1618 to our condensed consolidated financial statements.

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


	Three months ended March 31,						Increase (decrease)					Three months ended June 30,						Increase (decrease)
	2018			2017			$			%		2019			2018			$			%
	in millions, except percentages											in millions, except percentages

C&W	$	229.1		$	209.9		$	19.2		9.1		$	235.4		$	223.6		$	11.8		5.3
VTR	105.0			91.6			13.4			14.6
VTR/Cabletica												112.3			105.1			7.2			6.9
Liberty Puerto Rico	18.0			51.3			(33.3		)	(64.9	)	51.6			35.7			15.9			44.5
Corporate	(11.3		)	(5.1		)	(6.2		)	121.6		(11.9		)	(11.0		)	(0.9		)	8.2
Total	$	340.8		$	347.7		$	(6.9	)	(2.0	)	$	387.4		$	353.4		$	34.0		9.6



	Six months ended June 30,						Increase (decrease)
	2019			2018			$			%
	in millions, except percentages

C&W	$	457.9		$	452.7		$	5.2		1.1
VTR/Cabletica	219.2			210.1			9.1			4.3
Liberty Puerto Rico	99.5			53.7			45.8			85.3
Corporate	(23.4		)	(22.3		)	(1.1		)	4.9
Total	$	753.2		$	694.2		$	59.0		8.5

Adjusted OIBDA Margin

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


	Three months ended March 31,		Three months ended June 30,		Six months ended June 30,
	2018	2017	2019	2018	2019	2018
	%		%

C&W	39.1	36.5	38.8	38.3	38.9	38.7
VTR	39.8	39.9
VTR/Cabletica			40.9	40.4	39.8	40.1
Liberty Puerto Rico	29.1	48.1	49.7	44.5	49.2	37.8

Adjusted OIBDA margin is impacted by organic changes in revenue, programming and other direct costs of services, other operating expenses and SG&A expenses, as further discussed above. During the three and six months ended ~~March 31,~~June 30, 2018, the Adjusted OIBDA of Liberty Puerto Rico was adversely impacted by ~~Hurricanes Irma and Maria, as more fully described~~the Hurricanes. Accordingly, the increases in ~~Overview~~ ~~above. With regards to~~Liberty Puerto ~~Rico,~~Rico’s Adjusted OIBDA margin ~~during the first quarter of 2018 improved significantly from (71.6)% during~~in the three and six months ended ~~December 31, 2017 as we recover~~June 30, 2019 are primarily the result of the recovery from ~~Hurricanes Maria and Irma.~~the Hurricanes.

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

~~We recognized share-based~~Share-based compensation expense ofincreased $7 million and $6$15 million during the three and six months ended ~~March 31, 2018 and 2017, respectively.~~June 30, 2019, respectively, as compared to the corresponding periods in 2018. These increases are primarily due to ~~This increase is primarily due to equity~~share-based incentive awards granted during 2019 and 2018.

For additional information regarding our share-based compensation, see note 1315 to our condensed consolidated financial statements.

Depreciation and amortization expense

Our depreciation and amortization expense increased $14 million or 6.9% and $29 million or 7.2% during the three and six months ended June 30, 2019, respectively, as compared to the corresponding periods in 2018. Excluding the impacts of FX and acquisitions, depreciation and amortization expense increased $8 million or ~~4.3% during the three months ended March 31, 2018, as compared to the corresponding period in 2017. Excluding the effect of FX, depreciation~~3.7% and ~~amortization expense increased $6~~$23 million or ~~3.0% during the three months ended March 31, 2018, as compared to the corresponding period in 2017. This increase is~~5.5%, respectively. The organic increases are primarily due to the net effect of (i) ~~an increase associated with~~increases in property and equipment additions, ~~related to the installation of customer premises equipment,~~primarily associated with the expansion and upgrade of our networks and other capital initiatives, the installation of customer premises equipment, and baseline and product and enablers-related additions, and (ii) ~~a decrease~~decreases associated with certain assets becoming fully ~~depreciated, primarily at VTR and Liberty Puerto Rico.~~depreciated.

Impairment, restructuring and other operating items, net

We recognized impairment, restructuring and other operating items, net, of ~~$34~~$7 million and $13 million during the three months ended ~~March 31,~~June 30, 2019 and 2018, respectively, and ~~2017,~~$27 million and $47 million during the six months ended June 30, 2019 and 2018, respectively.

During the three months ended June 30, 2019 and 2018, we incurred ~~$26~~$4 million and $6 million, respectively, of restructuring charges. During the 2019 period, restructuring charges primarily comprise contract termination costs mainly at VTR and C&W. During the 2018 period, restructuring charges primarily comprise employee severance and termination costs related to certain reorganization activities, primarily at VTR and C&W. Additionally, we incurred $1 million and $4 million, respectively, of direct acquisition and disposition costs.

During the six months ended June 30, 2019 and 2018, we incurred $22 million and $32 million, respectively, of restructuring charges, which include ~~$24~~$16 million and $29 million, respectively, of employee severance and termination costs related to certain reorganization activities, primarily at VTR and C&W. ~~During 2017,~~Additionally, we incurred $4 million and $11 million, respectively, of ~~restructuring charges, which include $9 million of employee severance~~direct acquisition and ~~termination costs related to certain reorganization activities, primarily at C&W.~~disposition costs.

For additional information regarding our restructuring charges, see note 1214 to our condensed consolidated financial statements.

Interest expense

Our interest expense increased $8$10 million and $24 million during ~~2018,~~the three and six months ended June 30, 2019, respectively, as compared to ~~2017. This increase is~~the corresponding periods in 2018, primarily ~~attributable~~due to ~~the net effect of (i) an increase resulting from the adoption of ASU 2014-09, as further described in notes 2~~higher average outstanding debt balances and ~~3 to our condensed consolidated financial statements, and (ii) a net decrease of accretion expense associated with premiums and discounts.~~higher weighted-average interest rates.

For additional information regarding our outstanding indebtedness, see note 89 to our condensed consolidated financial statements.

It is possible that the interest rates on (i) any new borrowings could be higher than the current interest rates on our existing indebtedness and (ii) our variable-rate indebtedness could increase in future periods. As further discussed in note 5 to our condensed consolidated financial statements, we use derivative instruments to manage our interest rate risks.

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

Our realized and unrealized gains or losses on derivative instruments 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~~gains (losses) on derivative instruments, net, are as follows:


	Three months ended March 31,						Three months ended June 30,					Six months ended June 30,
	2018			2017			2019			2018		2019			2018
	in millions						in millions

Cross-currency and interest rate derivative contracts (a)	$	(38.9	)	$	(25.5	)	$	(75.8	)	$	94.2	$	(145.8	)	$	55.3
Foreign currency forward contracts	(2.6		)	(1.8		)
Foreign currency forward contracts and other							(3.2		)	20.9		(2.2		)	18.3
Total	$	(41.5	)	$	(27.3	)	$	(79.0	)	$	115.1	$	(148.0	)	$	73.6

(a)

The ~~loss~~gains (losses) during the three and six months ended June 30, 2019 and 2018 is attributable to the net effect of (i) losses from changes in FX rates, primarily resulting from an increase in the value of the Chilean peso relative to the U.S. dollar, and (ii) gains resulting from changes in interest rates. In addition, the loss during 2018 includes a net loss of $12 million resulting from changes in our credit risk valuation adjustments. The loss during 2017 isare primarily attributable to ~~the net effect of~~ (i) ~~gains resulting from~~ changes in interest rates and (ii) ~~losses from~~ changes in FX rates, ~~primarily resulting from an increase~~predominantly due to changes in the value of the Chilean peso relative to the U.S. dollar. In addition, the ~~loss~~losses during ~~2017 includes a~~the 2019 periods include net ~~gain~~gains of $7$4 million ~~resulting from changes in our credit risk valuation adjustments.~~and $6 million, respectively, and

the gains during the 2018 periods include net losses of $9 million and $21 million, respectively, resulting from changes in our credit risk valuation adjustments.

For additional information concerning our derivative instruments, see notes 5 and 6 to our condensed consolidated financial statements and Item 3. ~~Qualitative~~Quantitative and ~~Quantitative~~Qualitative Disclosures about Market Risk below.

Foreign currency transaction gains (losses), net

Our foreign currency transaction gains or losses primarily result from the remeasurement of monetary assets and liabilities that are denominated in currencies other than the underlying functional currency of the applicable entity. Unrealized foreign currency transaction gains or losses are computed based on period-end exchange rates and are non-cash in nature until such time as the amounts are settled. The details of our foreign currency transaction gains (losses), net, are as follows:


	Three months ended March 31,						Three months ended June 30,						Six months ended June 30,
	2018			2017			2019			2018			2019			2018
	in millions						in millions

U.S. dollar-denominated debt issued by a Chilean peso functional currency entity	$	26.8		$	20.5		$	2.1		$	(112.8	)	$	28.4		$	(86.0	)
Intercompany payables and receivables denominated in a currency other than the entity’s functional currency							(23.4		)	(11.8		)	(8.7		)	(12.3		)
British pound sterling-denominated debt issued by a U.S. dollar functional currency entity	(10.5		)	(3.7		)	—			15.2			(3.7		)	4.7
Other	(0.4		)	(2.3		)	1.8			(11.2		)	(3.3		)	(11.1		)
Total	$	15.9		$	14.5		$	(19.5	)	$	(120.6	)	$	12.7		$	(104.7	)

~~Loss~~Losses on debt modification and extinguishment

We recognized ~~a loss~~losses on debt modification and extinguishment of $10 million during each of the three and six months ended June 30, 2019, respectively, and nil and $13 million ~~and nil~~ during the three and six months ended ~~March 31,~~June 30, 2018, ~~and 2017,~~ respectively. The ~~2018 amount represents~~2019 loss primarily relates to the ~~write-off~~redemptions of ~~unamortized discounts and deferred financing costs associated with the repayment of the~~our 2022 C&W ~~Term Loan B-3 Facility.~~Senior Notes.

For additional information concerning our ~~loss~~losses on debt modification and extinguishment, see note 89 to our condensed consolidated financial statements.

Other income, net

We recognized other income, net, of $3 million and $5 million during the three and six months ended June 30, 2019, respectively, and $5 million and $6$10 million during the three and six months ended June 30, 2018, respectively. The amounts for the 2019 periods primarily relate to interest income. The amounts for the 2018 periods primarily relate to pension-related credits and interest income.

Income tax expense

Income tax expense was $30 million and $42 million during the three months ended ~~March 31,~~June 30, 2019 and 2018, respectively, and ~~2017,~~$34 million and $58 million during the six months ended June 30, 2019 and 2018, respectively. ~~The amount for each period includes $3 million of interest and dividend income and $3 million in pension-related credits following the adoption of ASU 2017-07.~~

For ~~additional information regarding~~ the ~~adoption of ASU 2017-07, see note 2~~three and six months ended June 30, 2019, the income tax expense attributable to our ~~condensed consolidated financial statements.~~

~~Income tax expense~~

~~We recognized~~loss before income taxes differs from the expected income tax expense of ~~$17 million~~nil (based on the Bermuda statutory income tax rate of 0%), primarily due to the detrimental effects of international rate differences, increases in valuation allowances, changes in uncertain tax positions, and ~~$23 million during~~negative effects of permanent items such as non-deductible expenses. These negative impacts to our effective tax rate were partially offset by the ~~three~~beneficial effects of permanent items, such as non-taxable income. Additionally for the six months ended ~~March 31, 2018~~June 30, 2019, our effective tax rate reflects the beneficial effects of a change in the Barbados and ~~2017, respectively.~~ Grenada statutory tax rates.

For the three and six months ended ~~March 31,~~June 30, 2018, the income tax expense attributable to our loss before income taxes differs from the ~~amount computed using~~expected income taxexpense of nil (based on the Bermuda statutory income tax rate of 0%), primarily due to the detrimental effects of international rate differences, increases in ~~the~~ valuation ~~allowance,~~allowances, and negative effects of non-deductible expenses. These negative impacts to our effective tax rate were partially offset by the beneficial effects of non-taxable income and price level restatements. For the three months ended March 31, 2017, the income tax expense attributable to our earnings before income taxes differs from the amount computed using the statutory tax rate primarily due to the detrimental effects of international rate differences, non-deductible expenses and changes in ~~valuation allowances, partially offset by the beneficial effects of enacted~~uncertain tax ~~law~~positions and ~~rate changes.~~non-taxable income.

For additional information regarding our income taxes, see note 911 to our condensed consolidated financial statements.

~~Net earnings (loss)~~

~~During the three months ended March 31, 2018 and 2017, we reported~~Net loss

The following table sets forth selected summary financial information of our net earnings (loss) of ($54 million) and $11 million, respectively, including (i) operating income of $98 million and $135 million, respectively, (ii) net non-operating expenses of $136 million and $101 million, respectively, and (iii) income tax~~expense of $17 million and $23 million, respectively.~~loss:



	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
	in millions

Operating income	$	143.5		$	124.2		$	256.8		$	222.5
Net non-operating expenses	$	(225.2	)	$	(110.1	)	$	(375.3	)	$	(245.9	)
Income tax expense	$	(29.5	)	$	(41.6	)	$	(33.9	)	$	(58.4	)
Net loss	$	(111.2	)	$	(27.5	)	$	(152.4	)	$	(81.8	)

Gains or losses associated with (i) changes in the fair values of derivative instruments and (ii) movements in foreign currency exchange rates are subject to a high degree of volatility and, as such, any gains from these sources do not represent a reliable source of income. In the absence of significant gains in the future from these sources or from other non-operating items, our ability to achieve earnings is largely dependent on our ability to increase our aggregate Adjusted OIBDA to a level that more than offsets the aggregate amount of our (i) share-based compensation expense, (ii) depreciation and amortization, (iii) impairment, restructuring and other operating items, (iv) interest expense, (v) other non-operating expenses and (vi) income tax expenses.

Due largely to the fact that we seek to maintain our debt at levels that provide for attractive equity returns, as discussed under Material Changes in Financial Condition—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 earnings ~~(loss)~~ attributable to noncontrolling interests

~~During the three months ended March 31, 2018 and 2017, we~~We reported net earnings ~~(loss)~~ attributable to noncontrolling interests of ~~($10 million)~~$5 million during each of the three and ~~$16~~six months ended June 30, 2019 and $15 million and $5 million during the three and six months ended June 30, 2018, respectively.The ~~2018~~decrease during the 2019 three-month period, ~~primarily includes losses attributable to our noncontrolling interests in certain C&W entities,~~ as compared to ~~the 2017~~corresponding 2018 period, ~~which primarily comprises earnings~~is mostly attributable to ~~noncontrolling interests~~net decreases in ~~certain~~earnings of our less-than-wholly-owned subsidiaries at C&W, ~~entities.~~primarily in Panama.

~~During the first quarter of 2018, we~~For information regarding increased ~~our~~ ownership in C&W Jamaica, ~~from 82.0% to 91.7%. For additional information,~~ see note 1012 to our condensed consolidated financial statements.

Material Changes in Financial Condition

Sources and Uses of Cash

~~Each~~As of ~~our reportable segments is separately financed within one of our three~~June 30, 2019, we have four primary “borrowing ~~groups.~~groups,” ~~These borrowing groups~~which include the respective restricted parent and subsidiary entities ~~within~~of C&W, VTR Finance, ~~and~~ Liberty Puerto ~~Rico.~~Rico and Cabletica. Our borrowing groups, which typically generate cash from operating activities, ~~accounted for~~held a significant portion of our consolidated cash and cash equivalents at ~~March 31, 2018.~~June 30, 2019. 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.

Cash and cash equivalents

The details of the U.S. dollar equivalent balances of our cash and cash equivalents at ~~March 31, 2018~~June 30, 2019 are set forth in the following table (in millions):


Cash and cash equivalents held by:
Liberty Latin America and unrestricted subsidiaries:
Liberty Latin America (a)	$	70.6	$	395.6
Unrestricted subsidiaries (b)	38.9		11.7
Total Liberty Latin America and unrestricted subsidiaries	109.5		407.3
Borrowing groups (c):
C&W ~~(d)~~	291.6		389.3
VTR Finance	69.0		121.0
Liberty Puerto Rico	40.5		22.3
Cabletica			17.5
Total borrowing groups	401.1		550.1
Total cash and cash equivalents	$	510.6	$	957.4


(a)	Represents the amount held by Liberty Latin America on a standalone ~~basis.~~basis, which includes the proceeds resulting from the offering of the Convertible Notes, net of issue costs and payments for the Capped Calls.


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


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


~~(d)~~	C&W’s subsidiaries hold the majority of C&W’s consolidated cash. Due to the restrictions as noted above, a significant portion of the cash held by C&W subsidiaries is not considered to be an immediate source of corporate liquidity for C&W.

Liquidity of Liberty Latin America and its unrestricted subsidiaries

Our current sources of corporate liquidity include (i) cash and cash equivalents held by Liberty Latin America and, subject to certain tax and legal considerations, Liberty Latin America’s unrestricted subsidiaries and (ii) interest and dividend income received on our and, subject to certain tax and legal considerations, our unrestricted subsidiaries’ cash and cash equivalents and investments. From time to time, Liberty Latin America and its unrestricted subsidiaries may also receive (i) proceeds in the form of distributions or loan repayments from Liberty Latin America’s borrowing groups ~~or affiliates,~~ upon (a) the completion of recapitalizations, refinancings, asset sales or similar transactions by these entities or (b) the accumulation of excess cash from operations or other means, (ii) proceeds upon the disposition of investments and other assets of Liberty Latin America and its unrestricted subsidiaries and (iii) proceeds in connection with the incurrence of debt by Liberty Latin America or its unrestricted subsidiaries or the issuance of equity securities by Liberty Latin America. No assurance can be given that any external funding would be available to Liberty Latin America or its unrestricted subsidiaries on favorable terms, or at all. As noted above, various factors may limit our ability to access the cash of our borrowing groups.

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, including our commitment to fund our portion of any potential liquidity shortfalls of Liberty Puerto Rico through December 31, 2018, as further described below.~~subsidiaries.

Liquidity of borrowing groups

The cash and cash equivalents of our borrowing groups are detailed in the table above. In addition to cash and cash equivalents, the primary sources of liquidity of our borrowing groups are cash provided by operations and borrowing availability under their respective debt ~~instruments and, with respect to Liberty Puerto Rico, the remaining portion of the LCPR Equity Commitment (as described below) and insurance proceeds.~~instruments. For the details of the borrowing availability of such subsidiaries at ~~March 31, 2018,~~June 30, 2019, see note 89 to our condensed consolidated financial statements. The aforementioned sources of liquidity may be supplemented in certain cases by contributions and/or loans from Liberty Latin America and its unrestricted subsidiaries. The liquidity of our borrowing groups generally is used to fund property and equipment additions, 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 1517 to our condensed consolidated financial statements.

On December 20, 2017, in connection with challenging circumstances that Liberty Puerto Rico continues to experience as a result of the damage caused by Hurricanes Irma and Maria, the LPR Credit Agreements were amended to (i) provide Liberty Puerto Rico with relief from complying with leverage covenants through December 31, 2018, (ii) increase the consolidated first lien net leverage ratio covenant from 4.5:1 to 5.0:1 beginning with the March 31, 2019 quarterly test date, (iii) restrict Liberty Puerto Rico’s ability to make certain types of payments to its shareholders through December 31, 2018 and (iv) include an equity commitment of up to $60 million from Liberty Puerto Rico’s shareholders through December 31, 2018 to fund any potential liquidity shortfalls. Based on our 60% ownership in Liberty Puerto Rico, we are obligated for up to $36 million of the LCPR Equity Commitment. During the first quarter of 2018, a $25 million capital contribution was provided to Liberty Puerto Rico consisting of $15 million from us and $10 million from Searchlight. Subsequent to March 31, 2018, an additional $20 million was contributed to Liberty Puerto Rico, consisting of $12 million from us and $8 million from Searchlight. Accordingly, Liberty Puerto Rico has up to an additional $15 million available under the LCPR Equity Commitment, of which we are obligated for up to $9 million.

~~Hurricanes Irma and Maria are expected to continue to have an adverse impact on Liberty Puerto Rico’s cash flows and liquidity. For additional information, see the discussion under~~ ~~Overview~~ ~~above.~~

For additional information regarding our cash flows, see the discussion under Condensed Consolidated Statements of Cash Flows below.

Capitalization

We seek to maintain our debt at levels that provide for attractive equity returns without assuming undue risk. In this regard, we generally seek to cause our operating subsidiaries to maintain their debt at levels that result in a debt balance (measured using subsidiary debt figures at swapped foreign currency exchange rates, consistent with the covenant calculation requirements of our subsidiary debt agreements) that is typically between four and five times our consolidated Adjusted OIBDA, although the timing of our acquisitions and financing transactions and the interplay of foreign currency average and spot rates may impact this ratio. The ratio of our ~~March 31, 2018~~June 30, 2019 consolidated debt (total principal amount of debt and finance lease obligations outstanding, net of projected derivative principal-related cash payments (receipts)) to our annualized consolidated Adjusted OIBDA for the quarter ended ~~March 31, 2018~~June 30, 2019 was 4.8x. In addition, the ratio of our ~~March 31, 2018~~June 30, 2019 consolidated net debt (debt ~~as defined above,~~ less cash and cash equivalents) to our annualized consolidated Adjusted OIBDA for the quarter ended ~~March 31, 2018~~June 30, 2019 was ~~4.5x. Beginning in~~4.1x. These ratios, which were calculated on a latest two quarters annualized basis, include the ~~fourth quarter~~impact of ~~2017, these ratios increased due~~0.3x and nil, respectively, related to the adverse impacts of the hurricanes on our Adjusted OIBDA. However, assuming our debt levels remain relatively consistent, we expect these ratios to decrease in future periods as we continue to recover from the adverse impacts of the hurricanes.Convertible Notes.

When it is cost effective, we generally seek to match the denomination of the borrowings of our subsidiaries with the functional currency of the operations that support the respective borrowings. As further discussed under Item 3. Quantitative and Qualitative Disclosures about Market Risk and in note 5 to our condensed consolidated financial statements, we also use derivative instruments to mitigate foreign currency and interest rate risks associated with our debt instruments.

Our ability to service or refinance our debt and to maintain compliance with the leverage covenants in the credit agreements and indentures of our borrowing groups is dependent primarily on our ability to maintain ~~or increase~~ covenant EBITDA of our operating subsidiaries, as specified by our subsidiaries’ debt agreements (Covenant EBITDA), and to achieve adequate returns on our property and equipment additions and acquisitions. 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. 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. At ~~March 31, 2018,~~June 30, 2019, each of our borrowing groups was in compliance with its debt covenants. 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 ~~March 31, 2018,~~June 30, 2019, the outstanding principal amount of our debt, together with our ~~capital~~finance lease obligations, aggregated ~~$6,440~~$7,174 million, including ~~$212~~$172 million that is classified as current in our condensed consolidated balance sheet and ~~$5,803~~$6,865 million that is not due until 2022 or thereafter. ~~All~~At June 30, 2019, $6,770 million of our debt and ~~capital~~finance lease obligations have been borrowed or incurred by our ~~subsidiaries at March 31, 2018.~~subsidiaries. For additional information concerning our debt, ~~and capital lease obligations,~~ including our debt maturities and certain refinancing transactions subsequent to June 30, 2019, see note 89 to our condensed consolidated financial statements.

~~Notwithstanding our negative working capital position at~~ ~~March 31, 2018, w~~We believe that we have sufficient resources to repay or refinance the current portion of our debt and ~~capital~~finance lease obligations and to fund our foreseeable liquidity requirements during the next 12 months. However, as our debt maturities grow in later years, we anticipate that we will seek to refinance or otherwise extend our debt maturities. 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. Our ability to access debt financing on favorable terms, or at all, could be adversely impacted by (i) the financial failure of any of our counterparties, which could (a) reduce amounts available under committed credit facilities and (b) adversely impact our ability to access cash deposited with any failed financial institution, and (ii) tightening of the credit markets and (iii) in the case of Liberty Puerto Rico, by the adverse impacts of the hurricanes on its operations. For additional information regarding the impacts of the hurricanes, see the related discussion under ~~Overview~~ ~~above.~~markets. In addition, any weakness in the equity markets could make it less attractive to use our shares to satisfy contingent or other obligations, and sustained or increased competition, particularly in combination with adverse economic or regulatory developments, could have an unfavorable impact on our cash flows and liquidity.

Condensed Consolidated Statements of Cash Flows

General. Our cash flows are subject to variations due to FX.

Summary. Our condensed consolidated statements of cash flows for the ~~three~~six months ended ~~March 31,~~June 30, 2019 and 2018 ~~and 2017~~ are summarized as follows:


	Three months ended March 31,									Six months ended June 30,
	2018			2017			Change			2019			2018			Change
	in millions									in millions

Net cash provided by operating activities	$	163.2		$	75.0		$	88.2		$	431.4		$	398.0		$	33.4
Net cash used by investing activities	(187.8		)	(127.0		)	(60.8		)	(421.4		)	(424.5		)	3.1
Net cash provided (used) by financing activities	(11.8		)	34.5			(46.3		)
Net cash provided by financing activities										320.4			223.3			97.1
Effect of exchange rate changes on cash, cash equivalents and restricted cash	0.1			(0.5		)	0.6			2.5			(15.3		)	17.8
Net decrease in cash, cash equivalents and restricted cash	$	(36.3	)	$	(18.0	)	$	(18.3	)
Net increase in cash, cash equivalents and restricted cash										$	332.9		$	181.5		$	151.4

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 and related working capital items, ~~inclusive~~including changes resulting from insurance receipts as discussed below, (ii) an increase in cash related to derivative instruments, as we received $17 million during the 2019 period and made net payments of a$17 million during the 2018 period, (iii) increased interest payments and (iv) lower payments of taxes. During the first half of 2019, $33 million of the cash received associated with the final insurance settlement for the Hurricanes was reflected as an operating cash inflow. During the first half of 2018, we received $30 million of net advance ~~payment received~~payments from our third-party insurance provider ~~of $30 million~~ associated with the ~~initial~~then outstanding insurance settlement claims ~~filed in connection with damages sustained~~resulting from the ~~hurricanes, and (ii) lower interest payments.~~Hurricanes.

Investing Activities. The ~~increase~~decrease in net cash used by our investing activities is primarily attributable ~~to higher~~$160 million of cash used for the UTS Acquisition in March 2019, which was more than offset by a decrease in cash used capital expenditures, as further discussed ~~below.~~below, and $34 million of cash 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 7 to our condensed consolidated financial statements.

The capital expenditures that we report in our condensed consolidated statements of cash flows do not include amounts that are financed under capital-related vendor financing or ~~capital~~finance lease arrangements. Instead, these amounts are reflected as non-cash additions to our property and equipment when the underlying assets are delivered and as repayments of debt when the principal is repaid. In this discussion, we refer to (i) our capital expenditures, as reported in our condensed consolidated statements of cash flows, ~~which exclude amounts financed under capital-related vendor financing or capital lease arrangements,~~ and (ii) our total property and equipment additions, which include our capital expenditures on an accrual basis and amounts financed under capital-related vendor financing or ~~capital~~finance lease arrangements. For further details regarding our property and equipment additions, see note 1618 to our condensed consolidated financial statements.

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


	Three months ended March 31,						Six months ended June 30,
	2018			2017			2019			2018
	in millions						in millions

Property and equipment additions	$	194.0		$	139.2		$	305.2		$	411.6
Assets acquired under capital-related vendor financing arrangements	(20.7		)	(14.1		)	(26.0		)	(35.0		)
Assets acquired under capital leases	(0.6		)	(0.9		)
Assets acquired under finance leases							(0.2		)	(0.9		)
Changes in current liabilities related to capital expenditures	15.5			0.2			16.4			49.4
Capital expenditures	$	188.2		$	124.4		$	295.4		$	425.1

~~Our~~The decrease in our property and equipment additions ~~increased~~ during the ~~three~~six months ended ~~March 31, 2018,~~June 30, 2019, as compared to the corresponding period in ~~2017, largely~~2018, is primarily due to the net effect of (i) ~~an increase~~a decreaseof $92 million and $20 million in expenditures by Liberty Puerto Rico and C&W, ~~primarily related to $62 million~~respectively, and ~~$8 million, respectively, in connection with network~~(ii) excluding the impact of hurricane restoration activities, ~~following Hurricanes Irma~~an increase in the expansion and ~~Maria,~~upgrade of our networks and ~~(ii) a decrease due to FX.~~ other capital initiatives.During the ~~three~~six months ended ~~March 31,~~June 30, 2019 and 2018, ~~and 2017,~~ our

property and equipment additions represented ~~21.3%~~15.8% and ~~15.3%~~22.5% of revenue, respectively. ~~This increase in~~Our property and equipment additions as a percentage of revenue isdecreased primarily ~~a function of the significant increase~~due to declines in property and equipment additions ~~during the first quarter of 2018 as a result of the restoration activities~~ at Liberty Puerto Rico ~~and, to a lesser extent~~together with an increase in revenue at ~~C&W,~~Liberty Puerto Rico following the ~~hurricanes.~~

recovery from the Hurricanes.

Financing Activities. During the ~~three~~six months ended ~~March 31, 2018,~~June 30, 2019, we ~~used $12~~received $320 million in net cash from financing activities, primarily ~~relating~~due to ~~$19~~$395 million of net borrowings of debt, which was slightly offset by $46 million of cash used related to the purchase of the Capped Calls and $25 million related to payments of financing costs and debt premiums. The net borrowings of debt primarily relate to the issuance of the Convertible Notes, as further described in note 9 to our condensed consolidated financial statements. During the six months ended June 30, 2018, we received $223 million in net cash from financing activities, due in part to $253 million in net borrowings of debt, primarily at VTR, and $18 million in capital contributions from funds affiliated with Searchlight Capital Partners, L.P.. These cash inflows were partially offset by $20 million in distributions to C&W Panama, a noncontrolling interest owner, and $20 million of cash used in connection with the C&W Jamaica NCI Acquisition, which was partially offset by a $10 million capital contribution from Searchlight indirectly to Liberty Puerto Rico for purposes of funding liquidity shortfalls following the impact of the hurricanes. For additional information see note 10 to our condensed consolidated financial statements. During the three months ended March 31, 2017, we received $35 million in net cash from financing activities, which includes $63 million in net borrowings of debt, partially offset by distributions to Liberty Global and noncontrolling interest owners of $19 million and $15 million, respectively.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, ~~and~~ (ii) expenses financed by an intermediary and (iii) insurance recoveries related to damaged and destroyed property and equipment, 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 ~~capital~~finance leases. We changed the way we define adjusted free cash flow effective December 31, 2017 to deduct distributions to noncontrolling interest owners. This change was given effect for all periods presented. Additionally, on January 1, 2018, we retroactively adopted ASU 2016-18, which resulted in an immaterial decrease in cash from operating activities for the three months ended March 31, 2017. For additional information regarding the impact of adopting ASU 2016-18, see note 2 to our condensed consolidated financial statements. 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 condensed consolidated statements of cash flows.

The following table provides the details of our adjusted free cash flow:


	Three months ended March 31,						Six months ended June 30,
	2018			2017			2019			2018
	in millions						in millions

Net cash provided by operating activities	$	163.2		$	75.0		$	431.4		$	398.0
Cash payments for direct acquisition and disposition costs	0.1			0.9			0.6			1.3
Expenses financed by an intermediary (a)	32.3			10.3			56.8			94.9
Capital expenditures	(188.2		)	(124.4		)	(295.4		)	(425.1		)
Distribution to noncontrolling interest owners	—			(14.6		)
Recovery on damaged or destroyed property and equipment							33.9			—
Distributions to noncontrolling interest owners							(2.5		)	(19.8		)
Principal payments on amounts financed by vendors and intermediaries	(51.1		)	(18.8		)	(105.9		)	(105.0		)
Principal payments on capital leases	(2.0		)	(1.9		)
Principal payments on finance leases							(2.5		)	(3.8		)
Adjusted free cash flow	$	(45.7	)	$	(73.5	)	$	116.4		$	(59.5	)

(a)

For purposes of our condensed consolidated statements of cash flows, expenses, including VAT, financed by an intermediary are treated as hypothetical operating cash outflows and hypothetical financing cash ~~inflows.~~inflows when the expenses are incurred. When we pay the financing intermediary, we record financing cash outflows in our condensed 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.

Off Balance Sheet Arrangements

Contractual Commitments

The following table sets forth the U.S. dollar equivalents of our commitments as of ~~March 31, 2018:~~June 30, 2019:


	Payments due during														Total		Payments due during														Total
	Remainder of 2018		2019		2020		2021		2022		2023		Thereafter		Total		Remainder of 2019		2020		2021		2022		2023		2024		Thereafter		Total
	in millions																in millions

Debt (excluding interest)	$	173.2	$	257.8	$	64.9	$	125.0	$	1,615.2	$	206.3	$	3,981.0	$	6,423.4	$	101.6	$	73.5	$	124.2	$	1,178.1	$	475.9	$	1,665.5	$	3,544.1	$	7,162.9
Capital leases (excluding interest)	11.9		3.3		1.5		0.1		—		—		—		16.8
Finance leases (excluding interest)																	7.2		1.9		0.5		0.2		0.2		0.2		0.4		10.6
Operating leases																	20.2		35.3		28.3		23.0		18.4		15.5		27.4		168.1
Programming commitments	120.3		58.3		24.4		18.0		2.2		1.5		0.7		225.4		62.7		61.3		24.8		2.2		1.4		0.9		—		153.3
Network and connectivity commitments	82.2		74.2		25.9		18.5		14.6		13.9		24.3		253.6		52.4		49.3		39.4		13.1		12.7		12.1		13.4		192.4
Purchase commitments	110.7		27.6		9.6		1.1		1.1		0.6		—		150.7		146.5		44.2		17.5		1.1		0.6		—		—		209.9
Operating leases	22.5		20.6		16.9		13.4		11.4		9.1		17.3		111.2
Other commitments	8.9		2.8		1.6		1.4		1.3		1.3		10.0		27.3		14.9		5.4		3.3		2.4		2.0		2.9		9.4		40.3
Total (a)	$	529.7	$	444.6	$	144.8	$	177.5	$	1,645.8	$	232.7	$	4,033.3	$	7,208.4	$	405.5	$	270.9	$	238.0	$	1,220.1	$	511.2	$	1,697.1	$	3,594.7	$	7,937.5
Projected cash interest payments on debt and capital lease obligations (b)	$	218.9	$	373.7	$	352.8	$	349.1	$	300.0	$	237.6	$	411.7	$	2,243.8
Projected cash interest payments on debt and finance lease obligations (b)																	$	210.6	$	440.3	$	436.6	$	386.0	$	341.7	$	275.0	$	465.2	$	2,555.4

(a)

The commitments included in this table do not reflect any liabilities that are included in our ~~March 31, 2018~~June 30, 2019 condensed consolidated balance sheet other than (i) debt and (ii) capital and operating lease obligations. Our liability for uncertain tax positions, including accrued interest, in the various jurisdictions in which we operate ($~~318~~314 million at ~~March 31, 2018)~~June 30, 2019) has been excluded from the table as the amount and timing of any related payments are not subject to reasonable estimation. For additional information regarding our liability for uncertain tax positions, see note 11 to our condensed consolidated financial statements.


(b)	Amounts are based on interest rates, interest payment dates, commitment fees and contractual maturities in effect as of ~~March 31, 2018.~~June 30, 2019. These amounts are presented for illustrative purposes only and will likely differ from the actual cash payments required in future periods. In addition, the amounts presented do not include the impact of our derivative contracts.

For information concerning our debt, ~~and capital~~see note 9 to our condensed consolidated financial statements. For information concerning our operating lease obligations, see note 83 to our condensed consolidated financial statements. For information concerning our commitments, see note 1517 to our condensed consolidated financial statements.

In addition to the commitments set forth in the table above, we have commitments under (i) derivative instruments and (ii) defined benefit plans and similar agreements, pursuant to which we expect to make payments in future periods. For information regarding projected cash flows associated with our derivative instruments, see Item 3. Quantitative and Qualitative Disclosures About Market Risk—Projected Cash Flows Associated with Derivative Instruments below. For information regarding our derivative instruments, including the net cash paid or received in connection with these instruments during the ~~three~~six months ended ~~March 31,~~June 30, 2019 and 2018, ~~and 2017,~~ see note 5 to our condensed consolidated financial statements.


Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information in this section should be read in conjunction with the more complete discussion that appears under Quantitative and Qualitative Disclosures About Market Risk in our ~~2017~~2018 Form 10-K. The following discussion updates selected numerical information to ~~March 31, 2018.~~June 30, 2019.

We are exposed to market risk in the normal course of our business operations due to our investments in various countries and ongoing investing and financing activities. Market risk refers to the risk of loss arising from adverse changes in foreign currency exchange rates, interest rates and stock prices. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings. As further described below, we have established policies, procedures and processes governing our management of market risks and the use of derivative instruments to manage our exposure to such risks.

Cash and Investments

We invest our cash in highly liquid instruments that meet high credit quality standards. We are exposed to exchange rate risk to the extent that the denominations of our cash and cash equivalent balances, revolving lines of credit and other short-term sources of liquidity do not correspond to the denominations of Liberty Latin America’s short-term liquidity requirements. In order to mitigate this risk, we actively manage the denominations of our cash balances in consideration of Liberty Latin America’s forecasted liquidity requirements. At ~~March 31, 2018, a significant proportion~~June 30, 2019, $120 million or 12.6% of our cash balance was denominated in ~~U.S. dollars or denominated in a currency that is indexed to the U.S. dollar.~~Chilean pesos.

Foreign Currency Exchange Rates

The relationship between (i) ~~the British pound sterling,~~ the Chilean peso and the Jamaican dollar and (ii) the U.S. dollar, which is our reporting currency, is shown below, per one U.S. dollar:


	March 31, 2018	December 31, 2017	June 30, 2019	December 31, 2018
Spot rates:
British pound sterling	0.71	0.74
Chilean peso	603.90	615.40	678.72	694.00
Jamaican dollar	126.22	124.58	130.72	128.59


	Three months ended March 31,		Three months ended June 30,		Six months ended June 30,
	2018	2017	2019	2018	2019	2018
Average rates:
British pound sterling	0.72	0.81
Chilean peso	602.37	655.13	683.88	621.77	675.87	612.15
Jamaican dollar	125.80	128.58	132.14	127.25	131.44	126.51

Interest Rate Risks

In general, we seek to enter into derivative instruments to protect against increases in the interest rates on our variable-rate debt. Accordingly, we have entered into various derivative transactions to reduce exposure to increases in interest rates. We use interest rate derivative contracts to exchange, at specified intervals, the difference between fixed and variable interest rates calculated by reference to an agreed-upon notional principal amount. We also use interest rate cap agreements that lock in a maximum interest rate if variable rates rise, but also allow our company to benefit from declines in market rates. At ~~March 31, 2018,~~June 30, 2019, we ~~effectively~~ paid a fixed rate of interest ~~rate~~ on 97% of our total ~~debt.~~debt, which includes the impact of our interest rate cap agreements. The final maturity dates of our various portfolios of interest rate derivative instruments generally fall short of the respective maturities of the underlying variable-rate debt. In this regard, we use judgment to determine the appropriate maturity dates of our portfolios of interest rate derivative instruments, taking into account the relative costs and benefits of different maturity profiles in light of current and expected future market conditions, liquidity issues and other factors. For additional information concerning the impacts of these interest rate derivative instruments, see note 5 to our condensed consolidated financial statements.

Sensitivity Information

Information concerning the sensitivity of the fair value of certain of our more significant derivative instruments to changes in market conditions is set forth below. The potential changes in fair value set forth below do not include any amounts associated with the remeasurement of the derivative asset or liability into the applicable functional currency. For additional information, see notes 5 and 6 to our condensed consolidated financial statements.

VTR Finance Cross-currency and Interest Rate Derivative Contracts

Holding all other factors constant, at ~~March 31, 2018,~~ June 30, 2019:

an instantaneous increase (decrease) of 10% in the value of the Chilean peso ~~relative to the U.S. dollar would have decreased (increased) the aggregate fair value of the VTR cross-currency derivative contracts by approximately CLP 107.5 billion ($178 million).~~

~~C&W Cross-currency and Interest Rate Derivative Contracts~~

~~Holding all other factors constant, at March 31, 2018:~~


i.	an instantaneous increase (decrease) in the relevant base rate of 50 basis points (0.50%) would have increased (decreased) the aggregate fair value of the C&W cross-currency and interest rate derivative contracts by approximately $58 million; and


~~ii.~~	~~an instantaneous increase (decrease) of 10% in the value of the British pound sterling~~ relative to the U.S. dollar would have decreased (increased) the aggregate fair value of the ~~C&W~~VTR Finance cross-currency derivative contracts by approximately CLP 101 billion or$148 million; and


ii.	an instantaneous increase (decrease) in the relevant base rate of 100 basis points (1.0%) would have increased (decreased) the aggregate fair value of the VTR Finance cross-currency and interest rate derivative contracts by approximately ~~£16 million ($22 million).~~CLP 11 billion or $16 million.

C&W Cross-currency and Interest Rate Derivative Contracts

Holding all other factors constant, at June 30, 2019, an instantaneous increase (decrease) in the relevant base rate of 100 basis points (1.0%) would have increased (decreased) the aggregate fair value of the C&W cross-currency and interest rate derivative contracts by approximately $94 million.

Liberty Puerto Rico Interest Rate Derivative Contracts

Holding all other factors constant, at June 30, 2019, an instantaneous increase (decrease) in the relevant base rate of 100 basis points (1.0%) would have increased (decreased) the aggregate fair value of the Liberty Puerto Rico interest rate derivative contracts by approximately $50 million.

Projected Cash Flows Associated with Derivative Instruments

The following table provides information regarding the projected cash flows associated with our derivative instruments. The U.S. dollar equivalents presented below are based on interest rates and exchange rates that were in effect as of ~~March 31, 2018.~~June 30, 2019. These amounts are presented for illustrative purposes only and will likely differ from the actual cash payments required in future periods. For additional information regarding our derivative instruments, including our counterparty credit risk, see note 5 to our condensed consolidated financial statements.


	Payments (receipts) due during:															Total		Payments (receipts) due during:																		Total
	Remainder of 2018																	Remainder of 2019
	Remainder of 2018		2019			2020		2021		2022		2023		Thereafter				Remainder of 2019			2020			2021		2022		2023		2024			Thereafter
			in millions															in millions
Projected derivative cash payments, net:
Projected derivative cash payments (receipts), net:
Interest-related (a)	$	20.4	$	16.2		$	9.3	$	9.3	$	11.9	$	13.5	$	7.5	$	88.1	$	5.1		$	11.1		$	2.1	$	8.0	$	19.4	$	13.8		$	23.1		$	82.6
Principal-related (b)	—		(11.6		)	—		—		150.9		—		28.5		167.8		—			—			—		5.6		—		(7.7		)	(2.6		)	(4.7		)
Other (c)	13.4		—			—		—		—		—		—		13.4		(1.3		)	(1.1		)	—		—		—		—			—			(2.4		)
Total	$	33.8	$	4.6		$	9.3	$	9.3	$	162.8	$	13.5	$	36.0	$	269.3	$	3.8		$	10.0		$	2.1	$	13.6	$	19.4	$	6.1		$	20.5		$	75.5


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


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


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


Item 4.	CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our ~~Principle~~Principal Executive Officer and our Principal Financial Officer (the Executives), as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, the Executives recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply judgment in evaluating the cost-benefit relationship of possible controls and objectives.

As disclosed in our Annual Report on Form 10-K for our fiscal year ended December 31, 2018, we identified material weaknesses in our internal control over financial reporting. The material weaknesses will not be considered remediated until the applicable new or enhanced controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. Our management, with the participation of the Executives, evaluated the effectiveness of our disclosure controls and procedures as of ~~March 31, 2018. Based on that evaluation,~~June 30, 2019. As remediation has not yet been completed, the Executives concluded that our disclosure controls and procedures ~~are effective at the reasonable assurance level~~continued to be ineffective as of ~~March~~June 30, 2019.

Notwithstanding such material weaknesses in internal control over financial reporting, our management concluded that our unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q present fairly, in all material respects, the company’s financial position, results of operations and cash flows as of the dates, and for the periods presented, in conformity with U.S. GAAP.

Management’s Remediation Plans

Management is continuing to implement the remediation plans as disclosed in our Annual Report on Form 10-K for our fiscal year ended December 31, 2018. We believe that these actions and the improvements we expect to achieve, when fully implemented, will strengthen our internal control over financial reporting and remediate the material weaknesses identified.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION


Item 6.	EXHIBITS

Listed below are the exhibits filed as part of this Quarterly Report on Form 10-Q (according to the number assigned to them in Item 601 of Regulation S-K):



~~10.1~~	4.1	~~Additional Facility Joinder Agreement~~Indenture, dated ~~February 7, 2018 and entered into~~June 28, 2019, between ~~among others, Sable International Finance Limited, Coral-US Co-Borrower LLC~~Liberty Latin America Ltd. and The Bank of ~~Nova Scotia (incorporated by reference to Exhibit 4.1~~New York Mellon relating to Liberty Latin ~~America’s Current Report on Form 8-K filed on February 12, 2018 (File No. 001-38335)).~~
~~10.2~~		~~Amended and Restated Credit Agreement, dated March 7, 2018, and entered into between, among others, Sable International Finance Limited, Coral-US Co-Borrower LLC and The Bank of Nova Scotia.~~America Ltd.’s 2.00% Convertible Senior Notes due 2024.*
~~10.3~~	10.1	Form of Restricted Share ~~Appreciation Rights~~Units Agreement under the Liberty Latin America 2018 Incentive Plan*
~~10.4~~		~~Deferred Compensation Plan effective May 1, 2018 (adopted effective March 23, 2018)~~Plan.*
~~10.5~~		Form of Share Appreciation Rights Agreement between the Registrant and our Chief Executive Officer under the Liberty Latin America 2018 Incentive Plan*
31.1		Certification of President and Chief Executive Officer.*
31.2		Certification of Senior Vice President and Chief Financial Officer (Principal Financial Officer).*
32.1		Section 1350 Certifications.**

~~101.INS~~	101.SCH	XBRL Instance Document.*
~~101.SCH~~		~~XBRL~~Inline Taxonomy Extension Schema Document.*
101.CAL		XBRL Inline Taxonomy Extension Calculation Linkbase Document.*
101.DEF		XBRL Inline Taxonomy Extension Definition Linkbase.*
101.LAB		XBRL Inline Taxonomy Extension Label Linkbase Document.*
101.PRE		XBRL Inline Taxonomy Extension Presentation Linkbase Document.*
104	Cover Page Interactive Data File.* (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith

** Furnished herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		LIBERTY LATIN AMERICA LTD.

Dated:	~~May 8, 2018~~August 6, 2019	/s/ BALAN NAIR
		Balan Nair President and Chief Executive Officer

Dated:	~~May 8, 2018~~August 6, 2019	/s/ CHRISTOPHER NOYES
		Christopher Noyes Senior Vice President and Chief Financial Officer

5867



	Balance at December 31, 2017			Cumulative catch up adjustments upon adoption			Balance at January 1, 2018
	in millions
Assets:
Other current assets	$	222.9		$	15.8		$	238.7
Other assets, net	$	517.7		$	15.6		$	533.3

Liabilities:
Deferred revenue	$	143.4		$	13.3		$	156.7
Other long-term liabilities	$	697.8		$	25.6		$	723.4

Equity:
Accumulated deficit	$	(1,010.7	)	$	(11.1	)	$	(1,021.8	)
Noncontrolling interests	$	1,361.0		$	3.6		$	1,364.6



	Before adoption of ASU 2014-09		Impact of ASU 2014-09 Increase (decrease)			As reported
	in millions

Revenue	$	909.0	$	0.9		$	909.9

Operating costs and expenses – selling, general and administrative	$	193.6	$	(0.3	)	$	193.3

Non-operating expense – interest expense	$	98.3	$	4.2		$	102.5

Income tax expense	$	17.3	$	(0.5	)	$	16.8

Net loss	$	51.8	$	2.5		$	54.3



	January 1, 2018		Foreign currency translation adjustments			March 31, 2018
	in millions

C&W	$	4,962.5	$	(18.3	)	$	4,944.2
VTR	433.4		8.3			441.7
Liberty Puerto Rico	277.7		—			277.7
Total	$	5,673.6	$	(10.0	)	$	5,663.6



C&W Credit Facilities	Maturity	Interest rate	Facility amount (in borrowing currency)		Outstanding principal amount		Unused borrowing capacity		Carrying value (a)
			in millions

C&W Term Loan B-4 Facility	January 31, 2026	LIBOR + 3.25%	$	1,875.0	$	1,875.0	$	—	$	1,869.2
C&W Revolving Credit Facility	June 30, 2023	LIBOR + 3.25%	$	625.0	10.0		615.0		10.0
C&W Regional Facilities	various dates ranging from 2018 to 2038	4.00% (b)	$	482.4	350.9		131.5		349.9
Total					$	2,235.9	$	746.5	$	2,229.1



Revenue	$	4.0
Allocated share-based compensation expense	(3.3		)
Charges from Liberty Global	(3.0		)
Included in operating income	(2.3		)
Interest income	1.5
Allocated tax expense	(1.8		)
Included in net loss	$	(2.6	)



	Three months ended March 31,
	2018 (a)	2017 (b)

Weighted average shares outstanding - basic and dilutive	171,231,111	172,743,854



	Three months ended March 31, 2018
	C&W		VTR		Liberty Puerto Rico		Intersegment Eliminations			Total
	in millions
Residential revenue:
Residential fixed revenue:
Subscription revenue (a):
Video	$	42.7	$	99.7	$	23.3	$	—		$	165.7
Broadband internet	53.7		96.6		25.3		—			175.6
Fixed-line telephony	26.9		34.6		3.5		—			65.0
Total subscription revenue	123.3		230.9		52.1		—			406.3
Non-subscription revenue (b)	21.5		7.5		1.7		—			30.7
Total residential fixed revenue	144.8		238.4		53.8		—			437.0
Residential mobile revenue:
Subscription revenue (a)	155.1		16.3		—		—			171.4
Non-subscription revenue (c)	22.1		3.2		—		—			25.3
Total residential mobile revenue	177.2		19.5		—		—			196.7
Total residential revenue	322.0		257.9		53.8		—			633.7
B2B revenue:
Subscription revenue	—		5.6		4.3		—			9.9
Non-subscription revenue (d)	203.9		0.3		3.0		(1.2		)	206.0
Sub-sea network revenue (e)	59.6		—		—		—			59.6
Total B2B revenue	263.5		5.9		7.3		(1.2		)	275.5
Other revenue	—		—		0.7		—			0.7
Total	$	585.5	$	263.8	$	61.8	$	(1.2	)	$	909.9