ITEM 9. THE OFFER AND LISTING

A. Offer and Listing Details

The principal trading market of MIC S.A.’s shares is currently NASDAQ Stockholm, where MIC S.A.’s shares are listed and trade in the form of SDRs. Each SDR represents one share. MIC S.A. does not intend to list its SDRs on any national securities exchange in the United States.

Since January 9, 2019, MIC S.A.’s common shares have been listed on the Nasdaq Stock Market’s Global Select Market (the “Nasdaq Global Select Market”) in the United States. MIC S.A.’s common shares had previously been listed on the Nasdaq Global Select Market until May 27, 2011.

B. Plan of Distribution

Not applicable to Annual Report filing.

C. Markets

The SDRs are listed on the main market of NASDAQ Stockholm under the symbol “MIC_SDB.” NASDAQ Stockholm is a regulated market in accordance with the Swedish Securities Market Act and is subject to regulation and supervision by the Swedish Financial Supervisory Authority. The Swedish Securities Market Act provides for the regulation and supervision of the Swedish securities markets and market participants, and the Swedish Financial Supervisory Authority implements such regulation and supervision.

MIC S.A.’s common shares are listed on the Nasdaq Global Select Market in the United States under the symbol “TIGO.”

D. Selling Shareholders

Not applicable to Annual Report filing.

E. Dilution

Not applicable to Annual Report filing.

F. Expenses of the Issue

Not applicable to Annual Report filing.

ITEM 10. ADDITIONAL INFORMATION

A. Share Capital

Not applicable to Annual Report filing.

B. Memorandum and Articles of Association

Articles of Association

Registration and Object

Millicom International Cellular S.A. is a public limited liability company (société anonyme) governed by the Luxembourg law of August 10, 1915 on Commercial Companies (as amended), incorporated on June 16, 1992, and registered with the Luxembourg Trade and Companies’ Register (Registre du Commerce et des Sociétés de Luxembourg) under number B 40.630.

The articles of association of MIC S.A. define its purpose inter alia as follows: “... to engage in all transactions pertaining directly or indirectly to the acquisition and holding of participating interests, in any form whatsoever, in any Luxembourg or foreign business enterprise, including but not limited to, the administration, management, control and development of any such enterprise”. At the extraordinary general meeting of shareholders held on January 7, 2019, the shareholders adopted the Amended and Restated Articles of Association, filed herewith as Exhibit 1.1.

Directors

Restrictions on Voting

If a director has a personal material interest in a proposal, arrangement or contract to be decided by MIC S.A., the amended and restated articles of association provide that the validity of the decision of MIC S.A. is not affected by a conflict of interest existing with respect to a director. However, any such personal interest must be disclosed to the Board of Directors ahead of the vote and the relevant director shall abstain from considering and voting on the relevant issue. Such conflict of interest must be reported to the next general meeting of shareholders.

Compensation and Nomination

The decision on annual remuneration of directors (“tantièmes”) is reserved by the amended and restated articles of association to the general meeting of shareholders. Directors are therefore prevented from voting on their own compensation. However, directors may vote on the number of shares they own, including the shares allotted under any share based compensation scheme.

The ~~Nominations~~Nomination Committee makes recommendations for the election of directors to the AGM. At the AGM, shareholders may vote for or against the directors proposed or may abstain. The ~~Nominations~~Nomination Committee reviews and recommends the directors’ fees which are approved by the shareholders at the AGM.

In proposing persons to be elected as directors at the AGM, the Company must comply with the nomination committee rules of the Swedish Code of Corporate Governance, so long as such compliance does not conflict with applicable mandatory law or regulation or the mandatory rules of any stock exchange on which the Company's shares are listed. In the event that the Company does not comply with the nomination committee rules of the Swedish Code of Corporate Governance and a committee of the Board is established to propose persons to be elected as directors at the AGM, any Shareholder holding at least 20% of the issued and outstanding shares of the Company, excluding treasury shares, has the right to designate: (1) one of the then-serving directors to be a member of such committee, so long as such designation and the director so designated meet the requirements of any applicable mandatory law or regulation or the mandatory rules of any stock exchange on which the Company's shares are listed, and (2) one person, who may or may not be a director, to attend any meeting of such committee as an observer, without the right to vote at such meeting, so long as such attendance does not conflict with applicable mandatory law or regulation or the mandatory rules of any stock exchange on which the Company's shares are listed. Any designation made pursuant to this provision lapses upon such designating Shareholder holding less than 20% of the issued and outstanding shares of the Company, excluding treasury shares.

Borrowing Powers

The directors generally have unrestricted borrowing powers on behalf of and for the benefit of MIC S.A.

Age Limit

There is no age limit for being a director of MIC S.A. Directors could be elected for a maximum period of six years, but the Company has followed the practice of electing them annually at the AGM.

Share Ownership Requirements

Directors need not be shareholders in MIC S.A.

Rights Attached to the Shares

MIC S.A. has only one class of shares, common shares, and each share entitles its holder to:

one vote at the general meeting of shareholders,

receive dividends when such distributions are decided, and

share in any surplus left after the payment of all the creditors in the event of liquidation. There is a preferential subscription right pursuant to Luxembourg corporate law under any share or rights issue for cash, unless the Board of Directors, within the limits specified in the amended and restated articles of association, or an extraordinary general meeting of shareholders, as the case may be, restricts the exercise thereof.

Redemption of Shares

The amended and restated articles of association provide for the possibility and set out the terms for the repurchase by MIC S.A. of its own shares, which repurchase must be approved in accordance with applicable law and the rules of any exchange on which MIC S.A.’s shares are listed. A share repurchase plan was approved at our ~~2018~~2019 AGM authorizing the

Board of Directors, at any time between May 2, 2019 and the date of the 2020 AGM, provided the required levels of distributable reserves are met by MIC S.A. at that time, either directly or through a subsidiary or a third party, to engage in a share repurchase plan of MIC S.A.’s common shares to be carried out for all purposes allowed or which would become authorized by the laws and regulations in force, and in particular the Luxembourg law of 10 August 1915 on commercial companies, as amended (the “Share Repurchase Plan”) by using its available cash reserves, in an amount not exceeding the lower of (i) 5%five per cent (5%) of MIC S.A.’s outstanding share capital as of the date of the AGM ~~(approximately~~(i.e., approximating a maximum of 5,086,960 shares corresponding to $7,630,440 in nominal value) or (ii) the then available amount of MIC S.A.’s distributable reserves on a parent company basis, ~~in the open market~~ on the Nasdaq ~~Global Select~~Stock Market ~~US,~~in the United States, Nasdaq Stockholm or any other recognized alternative trading platform, ~~and subject to certain restrictions on permissible~~at an acquisition price ~~including that the acquisition price~~which may not be less than SEK 50 per share (or the U.S. dollar equivalent) nor exceed the higher of (x) the published bid that is the highest current independent published bid on a given date or (y) the last independent transaction price quoted or reported in the consolidated system on the same date, regardless of the market or exchange ~~involved.~~involved, provided, however, that when common shares are repurchased, the price shall be within the registered interval for the share price prevailing at any time (the so called spread), that is, the interval between the highest buying rate and the lowest selling rate.

Sinking Funds

MIC S.A. shares are not subject to any sinking fund.

Liability for Further Capital Calls

All of the issued shares in MIC S.A.’s capital are fully paid up. Accordingly, none of MIC S.A.’s shareholders are liable for further capital calls.

Principal Shareholder Restrictions

There are no provisions in the amended and restated articles of association that discriminate against any existing or prospective holder of MIC S.A.’s shares as a result of such shareholder owning a substantial number of shares.

Changes to Shareholder’s Rights

In order to change the rights attached to the shares of MIC S.A., an extraordinary general meeting of shareholders must be duly convened and held before a Luxembourg notary, as under Luxembourg law such change requires an amendment of the articles of association. A quorum of presence of at least 50% of the shares present or represented is required at a meeting held after the first convening notice, whereas there is no quorum of presence

requirement at a meeting held after the second convening notice. Any decision must be taken by a majority of two thirds of the shares present or represented at the general meeting. Any change to the obligations attached to shares may be adopted only with the unanimous consent of all shareholders.

Shareholders’ Meetings

General meetings of shareholders are convened by convening notice published in the Luxembourg Official Gazette (Journal des Publications, Recueil Electronique des Sociétés et Associations), in a Luxembourg newspaper, in short version in the Swedish newspaper SvD, as a press release and on the Millicom website. According to article 18 of the amended and restated articles of association of MIC S.A., the Board of Directors determines in the convening notice the formalities to be observed by each shareholder for admission to the AGM. An AGM must be convened every year within six months of the end of the financial year, at the registered office of the Company or any other place in Luxembourg as may be specified in the convening notice. Other meetings can be convened as necessary.

Limitation on Securities Ownership

There are no limitations imposed under Luxembourg law or the amended and restated articles of association on the rights of non-resident or foreign entities to own shares of the Company or to hold or exercise voting rights on shares of the Company.

Change of Control

There are no provisions in the amended and restated articles of association of the Company that would have the effect of delaying, deferring or preventing a change in control of MIC S.A. and that would operate only with respect to a merger, acquisition or corporate restructuring involving the Company, or any of its subsidiaries.

Luxembourg laws impose the mandatory disclosure of an important participation in Millicom and any change in such participation.

Disclosure of Shareholder Ownership

As required by the Luxembourg law on transparency obligations of January 11, 2008, as amended (the “Transparency Law”), a shareholder who acquires or disposes of shares, including depositary receipts representing shares in the Company’s capital must notify the Company’s Board of Directors of the proportion of shares held by the relevant person as a result of the acquisition or disposal, where that proportion reaches, exceeds or falls below the thresholds referred to in the Transparency Law. As per the Transparency Law, the above also applies to the mere entitlement to acquire or to dispose of, or to exercise, voting rights in any of the cases referred to in the Transparency Law.

C. Material Contracts

6%6.0% Senior Notes

On March ~~11,~~17, 2015, MIC S.A. issued a $500 million 6%6.000% fixed interest rate bond that matures on March ~~15,~~10, 2025. The bond ~~was issued pursuant to~~is governed by the Amended and Restated Indenture ~~for the $500,000,000 6.0% Senior Notes due 2025~~ between Millicom International Cellular S.A., Citibank, N.A., London Branch and Citigroup Global Markets Deutschland AG dated May 30, 2018, included as Exhibit 4.1 to this Annual Report.

On April 8, 2019, MIC S.A. and Citibank, N.A., London Branch, as trustee, entered into the first supplemental indenture to the amended and restated indenture, dated as of May 30, 2018, governing MIC S.A.’s $500 million 6.000% Senior Notes due 2025, included as Exhibit 4.7 to this Annual Report. The purpose of the first supplemental indenture was primarily to generally conform certain terms in the amended and restated indenture to those in the indentures governing all of MIC S.A.’s other outstanding notes.

Revolving Credit Facility

On January 27, 2017, MIC S.A. entered into a $600 million muti-currency revolving credit facility with variable interest rates, which matures on January 27, 2022. The facility was arranged by The Bank Of Nova Scotia, BNP Paribas, Citigroup Global Markets Limited and DNB Markets, a part of DNB Bank ASA, Sweden Branch and is included as Exhibit 4.3 to this Annual Report.

5.125% Senior Notes

On September 20, 2017, MIC S.A. issued a $500 million 5.125% fixed interest rate bond that matures on January 15, 2028. The bond was issued pursuant to the Amended and Restated Indenture for the ~~$500,000,000~~$500 million 5.125% Senior Notes due 2028 between Millicom International Cellular S.A., Citibank, N.A., London Branch and Citigroup Global Markets Deutschland AG dated May 30, 2018, included as Exhibit 4.2 to this Annual Report.

~~Revolving Credit Facility~~

MIC S.A. has a $600 million revolving credit facility that matures on January 27, 2022. The facility is governed by the multicurrency revolving facility agreement for Millicom International Cellular S.A. arranged by The Bank Of Nova Scotia, BNP Paribas, Citigroup Global Markets Limited and DNB Markets, a part of DNB Bank ASA, Sweden Branch dated January 27, 2017, included as Exhibit 4.3 to this Annual Report.

~~Stock Purchase Agreement for Cable Onda~~

On October 7, 2018, MIC LIH, MIC S.A. (solely for the purposes of Section 9.18), Medcom and Telecarrier entered into a stock purchase agreement, which was amended and restated on December 12, 2018 by MIC LIH, MIC S.A. (solely for the purposes of Section 9.18) and the Sellers, with an effective date of October 7, 2018, pursuant to which, subject to the terms and conditions contained therein, Millicom purchased 80% of the shares of Cable Onda S.A., a company incorporated under the laws of Panama (“Cable Onda”), from Sellers for $956 million in cash on December 13, 2018, subject to customary purchase price adjustments. The amended and restated stock purchase agreement is included as Exhibit 4.4 to this Annual Report.

~~Cable Onda Bridge Facility~~

MIC S.A. has a $1,000,000,000 bridge term loan facility that matures on October 7, 2019 (unless extended for a period not exceeding six months), which was established in connection with the Cable Onda Acquisition (the "Cable Onda Bridge Facility"). The facility is governed by the bridge term facility agreement for Millicom International Cellular S.A. arranged by BNP Paribas Fortis SA/NV, Goldman Sachs Bank USA, J.P. Morgan Securities PLC and The Bank Of Nova Scotia dated October 7, 2018, included as Exhibit 4.5 to this Annual Report. Out of this facility, US$750,000,000 were canceled in December 2018.

6.625% Senior Notes

On October 16, 2018, to help finance the Cable Onda Acquisition, MIC S.A. issued $500 million aggregate principal amount of its 6.625% fixed interest rate notes that mature on October 15, 2026. The notes were issued pursuant to the Indenture for the ~~$500,000,000~~$500 million 6.625% Senior Notes due 2026 between Millicom International Cellular S.A., Citibank, N.A., London Branch and Citigroup Global Markets Europe AG dated October 16, 2018, included as Exhibit 4.5 to this Annual Report.

Stock Purchase Agreements for Telefonica CAM

On February 20, 2019, MIC S.A., Telefonica Centroamerica Inversiones, S.L. (“Telefonica Centroamerica”) and Telefonica S.A. (“Telefonica”) entered into a stock purchase agreement pursuant to which, subject to the terms and conditions contained therein, MIC S.A. agreed to purchase 100% of the shares of Telefonica Moviles Panama, S.A., from Telefonica Centroamerica (the “Panama Acquisition”).

On February 20, 2019, MIC S.A., Telefonica Centroamerica and Telefonica entered into a stock purchase agreement pursuant to which, subject to the terms and conditions contained therein, Millicom agreed to purchase 100% of the shares of Telefonia Celular de Nicaragua, S.A., a company incorporated under the laws of Nicaragua, from Telefonica Centroamerica (the “Nicaragua Acquisition,” and together with the Panama Acquisition and the Costa Rica Acquisition, the “Telefonica CAM Acquisitions”).

Camelia US$1.65 billion Bridge Loan

On February 20, 2019, MIC S.A. closed USD 1.65 billion term loan facility agreement by and between Goldman Sachs, JPMorgan and Morgan Stanley, and further syndicated available to be drawn to (i) pay the purchase price for the Telefonica CAM Acquisitions , (ii) refinance the debts of any member of the Telefonica group and/or (iii) pay any costs, fees, interests or other expenses in connection with the Telefonica CAM Acquisitions or the facility. As of December 19, 2019, the Bridge Facility had been canceled in its entirety and was never drawn on.

US$750 million 6.250% Senior Notes due 2029 issued by MIC S.A.

On March 25, 2019, to help finance the Telefonica CAM Acquisitions, MIC S.A. issued $750 million aggregate principal amount of its 6.250% senior notes due 2029. The notes were issued pursuant to the Indenture for the $750 million 6.250% Senior Notes due 2029 between Millicom International Cellular S.A., Citibank, N.A., London Branch and Citigroup Global Markets Europe AG dated March 25, 2019, included as Exhibit 4.6 to this Annual Report.

US$300 million Term Facility Agreement

On April 24, 2019, MIC S.A. executed a $300 million Term Facility Agreement arranged by DNB Bank ASA, Sweden Branch and Nordea Bank Abp, Filial i Sverige, included as Exhibit 4.8 to this Annual Report. This facility was fully drawn on as of December 31, 2019.

SEK 2 Billion Floating-Rate Senior Unsecured Sustainability Bond due 2024 issued by MIC S.A.

On May 15, 2019, MIC S.A. completed its offering of a SEK 2 billion (approximately $210 million) floating-rate senior unsecured sustainability bond due 2024, included as Exhibit 4.9 to this Annual Report.

D. Exchange Controls

There are no governmental laws, decrees, regulations or other legislation of Luxembourg that may affect:

the import or export of capital including the availability of cash and cash equivalents for use by the Millicom Group, or

the remittance of dividends, interests or other payments to non-resident holders of MIC S.A.’s securities other than those deriving from the U.S.-Luxembourg double taxation treaty.

E. Taxation

Luxembourg Tax Considerations

The following information is of a general nature only on certain tax considerations effective in Luxembourg in relation to holders of shares in respect of the ownership and disposition of shares in MIC S.A., and does not purport to be a comprehensive description of all of the tax considerations that might be relevant to an investment decision in such company. It is included herein solely for preliminary information purposes and is not intended to be, nor should it be construed to be, legal or tax advice. The information contained herein is based on the laws presently in force in Luxembourg on the date hereof, and thus subject to any change in law that may take effect after such date. Shareholders in MIC S.A. should therefore consult their own professional advisers as to the effects of state, local or foreign laws, including Luxembourg tax law, to which they may be subject.

Please be aware that the residence concept used under the respective headings below applies for Luxembourg income tax assessment purposes only. Any reference in the present section to a tax, duty, levy, impost or other charge

or withholding of a similar nature, or to any other concepts, refers to Luxembourg tax law or concepts only. Further, any reference to a resident corporate shareholder/taxpayer includes non-resident corporate shareholders/taxpayers carrying out business activities through a permanent establishment, a permanent representative or a fixed place of business in Luxembourg to which assets would be attributable. Also, please note that a reference to Luxembourg income tax encompasses corporate income tax (impôt sur le revenu des collectivités), municipal business tax (impôt commercial communal), a solidarity surcharge (contribution au fonds pour l’emploi), as well as personal income tax (impôt sur le revenu) generally. Corporate shareholders may further be subject to net wealth tax (impôts sur la fortune), as well as other duties, levies or taxes. Corporate income tax, municipal business tax, as well as the solidarity surcharge invariably apply to most corporate taxpayers resident in Luxembourg for tax purposes. Individual taxpayers are generally subject to personal income tax and the solidarity surcharge. Under certain circumstances, where an individual taxpayer acts in the course of the management of a professional or business undertaking, municipal business tax may apply as well.

(a) Luxembourg withholding tax on dividends paid on MIC S.A. shares

Dividends distributed by MIC S.A. will in principle be subject to Luxembourg withholding tax at the rate of 15%.

Luxembourg resident corporate holders

No dividend withholding should apply on dividends paid by MIC S.A. to a Luxembourg resident company if the conditions of Article 147 of the Luxembourg income tax law (“LITL”) are met, meaning that the Luxembourg residence corporate holder should be a collective entity covered by article 2 of the EU Parent Subsidiary (Council Directive 2011/96/EU of 30 November 2011), a fully taxable ~~entity within~~(capital) company not listed in the ~~meaning~~appendix to article 166 LITL, paragraph 10, the Luxembourg State, a Luxembourg commune or a Luxembourg syndicate of ~~article 159 LITL~~communes or an undertaking of a Luxembourg public body, holding shares which meets the qualifying participation test (10% of the share capital or acquisition price of the shares of at least € 1.2 million held or committed to be held for a minimum of 12 months).

Luxembourg resident individual holders

Luxembourg withholding tax on dividends paid by MIC S.A. to a Luxembourg resident individual holder may entitle such holder to a tax credit for the tax withheld.

Non-Luxembourg resident holders

Non-Luxembourg resident shareholders of MIC S.A. should benefit from a withholding tax exemption if the conditions of Article 147 LITL are met, meaning 10% shareholding or share acquisition price of € 1.2 million, 12 months holding period and that the non-Luxembourg resident should either be (i) an entity which fall within the scope of Article 2 of the European Council Directive 2011/96/EU, as amended (the “Parent-Subsidiary Directive”) and which are not excluded to benefit from this directive under its mandatory general anti-avoidance rule as implemented in Luxembourg, or (ii) corporate holder subject to a tax comparable to Luxembourg corporate income tax and which are resident in a country having concluded a double tax treaty with Luxembourg (such as the United States), or (iii) corporate holder subject to a tax comparable to Luxembourg corporate income tax resident in a State member of the European Economic Area other than a Member State of the EU of (iv) corporate holder resident in Switzerland subject to corporate income tax in Switzerland without benefiting from a tax exemption.

Non-Luxembourg resident holders which do not fall within the scope of Article 147 LITL withholding tax exemption but resident in a State with which Luxembourg has concluded a double tax treaty may claim ~~for~~ a ~~reduce~~reduced withholding tax under the conditions set forth in the relevant double tax treaty.

In the case the non-Luxembourg resident holder fulfills the requirements to benefit from a withholding tax exemption or is entitled to a reduced withholding tax under an applicable double tax treaty but has been subject to this 15% withholding tax it may claim a refund from the Luxembourg tax administration.

(b) Luxembourg income tax on dividends and capital gains received from MIC S.A. shares

Fully taxable resident corporate shareholders

For resident corporate taxpayers, dividends (and other payments) derived from shares held in a company and capital gains realized on the sale of shares in a company are, in principle, fully taxable and thus subject to a combined corporate income tax rate of ~~26.01%~~24.49% (for resident corporate taxpayers established in Luxembourg City), except that, as described in further detail below, (i) dividends can benefit either from a full exemption if the conditions of article 166 LITL are met or from a 50% exemption if the conditions of Article 115 (15a) LITL are met, and (ii) capital gains realized by resident corporate shareholders are fully exempt if the conditions of the Grand Ducal Decree of December 21, 2002, (as amended) are fulfilled.

Under the Luxembourg participation exemption on dividends as implemented by Article 166 LITL, dividends derived from shares may be exempt from income tax at the level of the resident corporate shareholder if cumulatively, (i) the shareholder is either (a) a fully taxable resident collective entity taking one of the forms listed in the appendix to paragraph 10 of Article 166 LITL, (b) a fully taxable resident corporation not listed in the appendix to paragraph 10 of Article 166 LITL, (c) a permanent establishment of a collective entity referred to in Article 2 of the Parent-Subsidiary Directive, (d) a permanent establishment of a corporation resident in a State with which the Grand Duchy of Luxembourg has signed an agreement in an attempt to avoid double taxation, or (e) a permanent establishment of a corporation or a cooperative society resident in a State party to the European Economic Area Agreement other than a Member State of the European Union, (ii) the subsidiary is either (a) a collective entity referred to in Article 2 of the Parent-Subsidiary Directive, (b) a fully taxable resident corporation not listed in the appendix to paragraph (10) of Article 166 LITL, or (c) a non-resident corporation fully subject to a tax corresponding to the Luxembourg corporate income tax, and (iii) the shareholder has held or commits itself to hold, for an uninterrupted period of at least 12 months ~~in both comparison periods,~~, a participation representing at least 10% in the share capital of the subsidiary or an acquisition price of at least €1.2 million. Liquidation proceeds are deemed to be a received dividend and may be exempt under the same conditions. The participation through an entity that is transparent for Luxembourg income tax purposes is to be considered as direct participation in proportion to the amount held in the net assets invested in that tax transparent entity.

The Luxembourg participation exemption regime may be denied if the income is (i) deductible in the other EU Member State paying such income or (ii) paid as part of an arrangement or a series of arrangements that, having been put into place with the main purpose or one of the main purposes of obtaining a tax advantage that defeats the object or purpose of the Parent-Subsidiary Directive, is not genuine having regard to all relevant facts and circumstances. For the purposes of this anti-avoidance rule, an arrangement, which may comprise several steps or parts, or a series of arrangements, is considered as not genuine to the extent that it is not put into place for valid commercial reasons that reflect economic reality.

Expenses, including interest expenses and impairments, in direct economic relation with the shareholding held by a resident corporate shareholder should not be deductible for income tax purposes up to the amount of any exempt dividend derived during the same financial year. Expenses exceeding the amount of the exempt dividend received from such shareholding during the same financial year should remain deductible for income tax purposes.

If the conditions of the Luxembourg participation exemption, as described above, are not met, 50% of the gross amount of dividends may however be exempt from corporate income tax in accordance with Article 115 (15a) LITL if such dividends are received from (i) a fully taxable corporation resident in Luxembourg, (ii) a corporation (a) resident in a State with which the Grand Duchy of Luxembourg has signed an agreement in an attempt to avoid double taxation, and (b) fully subject to a tax corresponding to the Luxembourg corporate income tax, or (iii) a company resident in a Member State of the European Union and referred to in Article 2 of the Parent-Subsidiary Directive.

Capital gains realized on shares by resident corporate shareholders may be exempt from corporate income tax if the conditions mentioned above under the Luxembourg participation exemption on dividends are met, except that the acquisition price must be of at least €6 million instead of €1.2 million. The participation through an entity that is transparent for Luxembourg income tax purposes is to be considered as direct participation in proportion to the amount held in the net assets invested in that tax transparent entity. Taxable gains are determined as being the difference between the price for which the shares have been disposed of and the lower of their cost or book value.

Capital gains realized upon the disposal of shares should remain taxable for an amount corresponding to the sum of the expenses related to the shareholding and impairments recorded on the shareholding that reduced the taxable basis of the resident corporate shareholder in the year of disposal or in previous financial years.

Resident corporate shareholders with a special tax regime

A resident corporate shareholder that is governed by the law of May 11, 2007, on Family Estate Management Companies (as amended) or by the Law of February 13, 2007, on Specialized Investment Funds (as amended) or by the Law of December 17, 2010, on Undertakings for Collective Investment (as amended) or by the law of July 23, 2016, on Reserved Alternative Investment Funds not having the exclusive purpose of investing in risk capital, is not subject to Luxembourg income tax; thus, neither dividends (and other payments) derived from shares held in a company nor capital gains realized on the sale or disposal, in any form whatsoever, of shares in a company, are taxable at the level of such resident corporate shareholders.

Resident individual shareholders

For resident individual shareholders, dividends derived from shares and capital gains realized on the sale of shares are, in principle, subject to income tax at the progressive ordinary rate (with a current effective marginal rate of up to 42%). Such income tax rate is increased by 7% for income not exceeding €150,000 for single taxpayers and €300,000 for couples taxed jointly, and by 9% for income above these amounts. In addition, a 1.4% dependence insurance contribution is due.

50% of the gross amount of dividends derived from shares may however be exempt from income tax, if the conditions laid down under Article 115 (15a) LITL, as described above, are complied with. In addition, a total lump-sum of €1,500 (which is doubled for taxpayers who are jointly taxable) is deductible from the total of dividends received during the tax year.

Capital gains realized on the disposal of the shares by resident individual shareholders who act in the course of the management of their private wealth, will in principle only be taxable if said capital gains qualify either as speculative gains or as gains on a substantial participation. A disposal may include a sale, an exchange, a contribution or any other kind of alienation of shares. Capital gains are deemed to be speculative if the shares are disposed within six months after their acquisition or if their disposal precedes their acquisition. Speculative gains realized during the year that are equal to, or are greater than, €500 are subject to income tax at ordinary rates. A participation is deemed to be substantial where a resident individual shareholder holds, either alone or together with his spouse, his partner or minor children, directly or indirectly, at any time within the 5 years preceding the disposal, more than 10% of share capital of a collective entity. A shareholder is also deemed to alienate a substantial participation if such participation (i) has been acquired free of charge, within the 5 years preceding the transfer, and (ii) was constituting a substantial participation in the hands of the alienator (or the alienators in case of successive transfers free of charge within the same 5-year period). Capital gains realized on a substantial participation more than six months after the acquisition thereof may benefit from an allowance of up to €50,000 granted for a ten-year period (which is doubled for taxpayers who are jointly taxable). They are subject to income tax according to the half- global rate method, (i.e., the average rate applicable to the total income is calculated according to progressive income tax rates and half of the average rate is applied to the capital gains realized on the substantial participation).

Capital gains realized on the disposal of the Company’s shares by resident individual shareholders, who act in the course of their professional or business activity, are subject to income tax at ordinary rates. Taxable gains are determined as being the difference between the price for which the shares have been disposed of and the lower of their cost or book value.

Non-resident shareholders

Non resident shareholders (either individual or corporate) owning a non-substantial shareholding are exempt from capital gains taxes. Non resident shareholders owning a substantial shareholding (more than 10% of share capital of a collective entity) are taxable in Luxembourg on a capital gain realized upon the disposal if at the date of the disposal the shareholding has been owned for not more than six months, unless the non resident shareholder is resident in a treaty country and the treaty allocates the taxation right for the capital gain to the country of residence. In this latter case, no capital gains tax will be due by non resident shareholder. Capital gains realized on the disposal of shares by non resident shareholders that have been owned for more than 6 months are exempt from Luxembourg income tax.

Net wealth tax

Whilst non-resident corporate taxpayers may only be subject to net wealth tax on their on the net assets attributable to a permanent establishment located in Luxembourg ~~wealth,~~or on real estate assets located in Luxembourg, resident corporate taxpayers are in principle subject to net wealth tax at the rate of 0.5% for net wealth up to €500 million and at 0.05% for net wealth exceeding this threshold, unless a double tax treaty provides for an exemption or the asset may benefit from the Luxembourg participation exemption regime. Net worth is referred to as the unitary value (valeur unitaire), as determined at January 1 of each year. The unitary value is basically calculated as the difference between (a) assets estimated at their fair market value and (b) liabilities vis-à-vis third parties, unless one of the exceptions mentioned below are satisfied.

A resident corporate shareholder will be subject to net wealth tax on shares, except if (i) the shareholder is a securitization company governed by the Law of March 22, 2004, on Securitization (as amended) or an investment company in risk capital governed by the Law of June 15, 2004, on Venture Capital Vehicles (as amended) or a specialized investment fund governed by the Law of February 13, 2007, on Specialized Investment Funds (as amended) or a family wealth management company governed by the Law of May 11, 2007, on Family Estate Management Companies (as amended) or an undertaking for collective investment governed by the Law of December 17, 2010, on Undertakings for Collective Investment (as amended) or a pension-saving company as well as a pension-saving association, both governed by the Law of July 13, 2005, (as amended) or a reserved alternative investment fund governed by the law of July 23, 2016, or (ii) if the conditions mentioned above for the participation exemption regime on dividend income are met at the end of the previous year (except that no minimum holding period is required).

A resident corporate shareholder may further be subject to either a minimum net wealth tax of €4,815 or to a progressive minimum net wealth tax from €535 to €32,100, which depends on the total assets on their balance sheet. The minimum net wealth tax of €4,815 will be applicable for a resident corporate shareholder, which has a minimum of 90% of fixed financial assets, transferable securities and cash at bank on its balance sheet, except if its accumulated fixed financial assets do in addition not exceed €350,000, in which case it may benefit from a minimum net wealth tax of €535. Items (e.g., real estate properties or assets allocated to a permanent establishment) located in a treaty country, where the latter has the exclusive tax right, are not considered for the calculation of the 90% threshold.

Despite the above mentioned exceptions, the minimum net wealth tax also applies if the resident corporate shareholder is a securitization company governed by the Law of March 22, 2004, on Securitization (as amended) or an investment company in risk capital governed by the Law of June 15, 2004, on Venture Capital Vehicles (as amended) or a pension-saving company as well as a pension-saving association, both governed by the Law of July 13, 2005, (as amended) or a reserved alternative investment fund having the exclusive purpose of investing in risk capital governed by the law of July 23, 2016.

The net wealth tax charge for a given year can be avoided or reduced if a specific reserve, equal to five times the net wealth tax to save, is created before the end of the subsequent tax year and maintained during the five following tax years. The net wealth tax reduction corresponds to one fifth of the reserve created, except that the maximum net wealth tax to be saved is limited to the corporate income tax amount due for the same tax year, including the employment fund surcharge, but before imputation of available tax credits.

Inheritance tax

Where a shareholder is a resident of Luxembourg for tax purposes at the time of his/her death, shares are included in his/her taxable estate for inheritance tax assessment purposes.

Gift tax

Gift tax may be due on a gift or donation of shares if recorded in a Luxembourg notarial deed or otherwise recorded in Luxembourg.

Registration taxes and stamp duties

In principle, neither the issuance of shares nor the disposal of shares is subject to Luxembourg registration tax or stamp duty.

However, a registration duty may be due in the case where (i) the deed acknowledging the issuance/disposal of shares is either attached (annexé) to a deed subject to a mandatory registration in Luxembourg (e.g., public deed) or lodged with a notary’s records (deposé au rang des minutes d’un notaire), or (ii) in case of a registration of such deed on a voluntary basis.

Material U.S. Federal Income Tax Considerations

The following is a description of material U.S. federal income tax consequences to the U.S. Holders described below of owning and disposing our common shares. It does not describe all tax considerations that may be relevant to a particular person’s decision to hold common shares. This discussion applies only to a U.S. Holder that holds common shares as capital assets for U.S. federal income tax purposes. In addition, it does not describe all of the U.S. federal income tax consequences that may be relevant in light of the U.S. Holder’s particular circumstances, including alternative minimum tax consequences, the potential application of the provisions of the Internal Revenue Code of 1986, as amended (the “Code”) known as the Medicare contribution tax and tax consequences applicable to U.S. Holders subject to special rules, such as:

certain financial institutions;

dealers or traders in securities ~~who~~that use a mark-to-market method of tax accounting;

persons holding common shares as part of a hedging transaction, straddle, wash sale, conversion transaction or other integrated transaction or persons entering into a constructive sale with respect to the common shares;

persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;

entities classified as partnerships for U.S. federal income tax purposes;

tax-exempt entities, “individual retirement account” or “Roth IRA”;

persons that own or are deemed to own ten percent or more of our shares, by vote or value;

persons who acquired our common shares pursuant to the exercise of an employee stock option or otherwise as compensation; or

persons holding common shares in connection with a trade or business conducted outside of the United States.

If an entity that is classified as a partnership for U.S. federal income tax purposes owns common shares, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships owning common shares and partners in such partnerships should consult their tax advisers as to the particular U.S. federal income tax consequences of owning and disposing of the common shares.

This discussion is based on the Code, administrative pronouncements, judicial decisions, final, temporary and proposed Treasury regulations, and the income tax treaty between Luxembourg and the United States (the “Treaty”) all as of the date hereof, any of which is subject to change or differing interpretations, possibly with retroactive effect.

A “U.S. Holder” is a person who, for U.S. federal income tax purposes, is a beneficial owner of our common shares and is:

an individual who is a citizen or resident of the United States;

a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia; or

an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.

U.S. Holders should consult their tax advisers concerning the U.S. federal, state, local and non-U.S. tax consequences of owning and disposing of our common shares in their particular circumstances.

Except as described below, this discussion assumes that we are not, and will not become, a passive foreign investment company (a “PFIC”) for any taxable year.

Taxation of Distributions

Distributions paid on common shares, other than certain pro rata distributions of common shares, will generally be treated as dividends to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Because we do not maintain calculations of our earnings and profits under U.S. federal income tax principles, we expect that distributions generally will be reported to U.S. Holders as dividends. Subject to applicable limitations, dividends paid to certain non-corporate U.S. Holders may be taxable at the favorable tax rate applicable to “qualified dividend income.” U.S. Holders should consult their tax advisers regarding the availability of the favorable tax rate on dividends in their particular circumstances.

Dividends will not be eligible for the dividends-received deduction generally available to U.S. corporations under the Code. Dividends will be included in a U.S. Holder’s income on the date of receipt. The amount of any dividend income paid in euros will be the U.S. dollar amount calculated by reference to the exchange rate in effect on the date of actual or constructive receipt, regardless of whether the payment is in fact converted into U.S. dollars at that time. If the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder should not be required to recognize foreign currency gain or loss in respect of the dividend income. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt.

Dividends will be foreign-source and will include any amount withheld by us in respect of Luxembourg income taxes. Subject to applicable limitations, some of which vary depending upon the U.S. Holder’s particular circumstances, non-refundable Luxembourg income taxes withheld from dividends at a rate not exceeding any applicable rate provided by the Treaty will be creditable against the U.S. Holder’s U.S. federal income tax liability. The rules governing foreign tax credits are complex and U.S. Holders should consult their tax advisers regarding the creditability of foreign taxes in their particular circumstances. In lieu of claiming a foreign tax credit, U.S. Holders may, at their election, deduct foreign taxes, including any Luxembourg income tax, in computing their taxable income, subject to generally applicable limitations under U.S. law. An election to deduct foreign taxes instead of claiming foreign tax credits applies to all foreign taxes paid or accrued in the taxable year.

Sale or Other Disposition of Common Shares

For U.S. federal income tax purposes, gain or loss realized on the sale or other disposition of common shares will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder held the common shares for more than one year. The amount of the gain or loss will equal the difference between the U.S. Holder’s tax basis in the common shares disposed of and the amount realized on the disposition, in each case as determined in U.S. dollars. This gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes. The deductibility of capital losses is subject to limitations.

Passive Foreign Investment Company Rules

We believe that we were not a “passive foreign investment company” (a “PFIC”) for U.S. federal income tax purposes for our taxable year ending December 31, ~~2018.~~2019. However, because PFIC status depends on the composition of a company’s income and assets and the market value of its assets from time to time, there can be no assurance that the Company will not be a PFIC for any taxable year. If we are a PFIC for any year during which a U.S. Holder holds common shares, we generally will continue to be treated as a PFIC with respect to that U.S. Holder for all succeeding years during which the U.S. Holder holds common shares, even if we cease to meet the threshold requirements for PFIC status.

If we are a PFIC for any taxable year during which a U.S. Holder holds common shares, gain recognized by a U.S. Holder on a sale or other disposition (including certain pledges) of the common shares will be allocated ratably

over the U.S. Holder’s holding period for the common shares. The amounts allocated to the taxable year of the sale or other disposition and to any year before we became a PFIC will be taxed as ordinary income. The amount allocated to each other taxable year will be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and an interest charge will be imposed on the resulting tax liability for each such year. Further, to the extent that any distribution received by a U.S. Holder on its common shares exceeds 125% of the average of the annual distributions on the common shares received during the preceding three years or the U.S. Holder’s holding period, whichever is shorter, that distribution will be subject to taxation in the same manner. If we were a PFIC, certain elections (such as mark-to-market election) may be available that would result in alternative tax consequences of owning and disposing the common shares.

In addition, if we are a PFIC or, with respect to particular U.S. Holder, are treated as a PFIC for the taxable year in which we pay a dividend or for the prior taxable year, the preferential dividend rate discussed above with respect to dividends paid to certain non-corporate U.S. Holders will not apply.

If a U.S. Holder owns common shares during any year in which we are a PFIC, the U.S. Holder generally must file annual reports on an IRS Form 8621 (or any successor form) with respect to us, generally with the U.S. Holder’s federal income tax return for that year.

U.S. Holders should consult their tax advisers concerning the potential application of the PFIC rules.

Information Reporting and Backup Withholding

Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding.

The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the holder’s U.S. federal income tax liability and may entitle it to a refund, provided that the required information is timely furnished to the IRS.

Certain U.S. Holders who are individuals or specified entities may be required to report information on their U.S. federal income tax returns relating to their ownership of our common shares, subject to certain exceptions (including an

exception for common shares held in a financial account, in which case the account may be reportable if maintained by a non-U.S. financial institution).

U.S. Holders should consult their tax advisers regarding their reporting obligations with respect to their ownership and disposition of common shares.

F. Dividends and Paying Agents

Not applicable to Annual Report filing.

G. Statement by Experts

Not applicable to Annual Report filing.

H. Documents on Display

Upon the effectiveness of this Annual Report, we will become subject to the information requirements of the Exchange Act, except that as a foreign issuer, we will not be subject to the proxy rules or the short-swing profit disclosure rules of the Exchange Act. In accordance with these statutory requirements, we will file or furnish reports and other information with the SEC, which you may inspect and copy at the Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet website that contains reports and

other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.

I. Subsidiary Information

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT RISK

Financial risk management

Millicom regularly performs risk management assessments and reviews to identify its major risks and to take the necessary steps to mitigate such risks. The principal market risks to which we are exposed are interest rate risk, foreign currency exchange risk and non-repatriation. Each year Millicom Group Treasury revisits and presents to the Audit Committee updated Treasury and Financial Risks Management policies. The Millicom Group analyzes each of these financial risks individually as well as on an interconnected basis and defines and implements strategies to manage the economic impact on the Millicom Group’s performance in line with its Financial Risk Management policy. These policies were last reviewed in late 2018.

As part of the annual review of the above mentioned risks, the Millicom Group targets a strategy with respect to the use of derivatives and natural hedging instruments ranging from raising debt in local currency (where the Company targets to reach 40% of debt in local currency over the medium term) to maintaining a ~~70/30%~~75/25% mix between fixed and floating rate debt or agreeing to cover up to six months forward of operating costs and capex denominated in non-functional currencies through a rolling and layering strategy. Millicom’s risk management strategies may include the use of derivatives to the extent a market would exist in the jurisdictions where the Millicom Group operates. Millicom’s policy prohibits the use of such derivatives in the context of speculative trading.

On December 31, ~~2018~~2019 and ~~2017,~~2018, the fair value of derivatives held by the Millicom Group may be summarized as follows:


	2018	2017		2019		2018
	(US$ millions)			(US$ millions)

Derivatives
Cash flow hedge derivatives	—	(56	)	(17	)	—
Net derivative asset (liability)	—	(56	)	(17	)	—

Interest rate risk

Debt and financing issued at floating interest rates expose the Millicom Group to cash flow interest rate risk. Debt and financing issued at fixed rates expose the Millicom Group to fair value interest rate risk. The Millicom Group’s exposure to risk of changes in market interest rates relate to both of the above. To manage this risk, the Millicom Group’s policy is to maintain a combination of fixed and floating rate debt with target ~~for~~that more than 75% of the debt to be ~~distributed between~~at fixed ~~(up to 70%) and variable (up to 30%)~~ rates. The Millicom Group actively monitors borrowings against this target. The target mix between fixed and floating rate debt is reviewed periodically. The purpose of Millicom’s policy is to achieve an optimal balance between cost of funding and volatility of financial results, while taking into account market conditions as well as our overall business strategy. At December 31, ~~2018,~~2019, approximately ~~68%~~76% of the Millicom Group’s borrowings are at a fixed rate of interest or for which variable rates have been swapped for fixed rates with interest rate swaps ~~(2017: 65%~~(2018: 68%).

The table below summarizes, as at December 31, 2019, our fixed rate debt and floating rate debt:



	Amounts due within
	1 year		1–2 years		2–3 years		3–4 years		4–5 years		>5 years		Total
	(US$ millions)
Financing at December 31, 2019
Fixed rate financing	118		117		118		332		431		3,428		4,543
Weighted average nominal interest rate	6.32	%	5.46	%	5.01	%	7.24	%	5.44	%	5.81	%	5.86	%
Floating rate financing	68		38		27		185		654		457		1,429
Weighted average nominal interest rate	2.97	%	1.77	%	1.41	%	3.25	%	4.26	%	0.96	%	1.52	%
Total	186		155		145		517		1,085		3,884		5,972
Weighted average nominal interest rate	5.10	%	4.55	%	4.34	%	5.81	%	4.73	%	5.24	%	4.82	%

The table below summarizes, as at December 31, 2018, our fixed rate debt and floating rate debt:


	Amounts due within														Amounts due within
	1 year		1–2 years		2–3 years		3–4 years		4–5 years		>5 years		Total		1 year		1–2 years		2–3 years		3–4 years		4–5 years		>5 years		Total
	(US$ millions)														(US$ millions)
Financing at December 31, 2018
Fixed rate financing	140		162		137		436		204		2,036		3,115		140		162		137		436		204		2,036		3,116
Weighted average nominal interest rate	6.35	%	6.59	%	6.64	%	6.61	%	4.10	%	6.47	%	6.34	%	6.35	%	6.59	%	6.64	%	6.61	%	4.10	%	6.47	%	6.34	%
Floating rate financing	319		175		266		133		263		309		1,465		318		175		266		133		263		309		1,465
Weighted average nominal interest rate	10.28	%	5.89	%	2.73	%	0.49	%	4.41	%	1.13	%	1.98	%	10.28	%	5.89	%	2.73	%	0.49	%	4.41	%	1.13	%	1.98	%
Total	458		337		403		569		468		2,345		4,580		458		337		403		570		468		2,345		4,580
Weighted average nominal interest rate	9.08	%	6.23	%	4.06	%	5.18	%	4.28	%	5.76	%	4.95	%	9.08	%	6.23	%	4.06	%	5.18	%	4.28	%	5.76	%	4.95	%

Accounting for share-based compensation in particular estimates of forfeitures and future performance criteria (see notes B.4.1., B.4.2.).

F- 22



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

A. The Millicom Group

The Group comprises a number of holding companies, operating subsidiaries and joint ventures with various combinations of mobile, fixed-line telephony, cable and wireless Pay TV, Internet and Mobile Financial Services (MFS) businesses. The Group also holds other small minority investments in ~~a tower holding company investing in Africa and in online~~other businesses ~~in Latam and Africa.~~such as micro-insurance (Milvik).

A.1. Subsidiaries

Subsidiaries are all entities which Millicom controls. Millicom controls an entity when it is exposed to, or has rights to variable returns from its investment in the entity, and has the ability to affect those returns through its power over the subsidiary. Millicom has power over an entity when it has existing rights that give it the current ability to direct the relevant activities, i.e. the activities that significantly affect the entity’s returns. Generally, control accompanies a shareholding of more than half of the voting rights although certain other factors (including contractual arrangements with other shareholders, voting and potential voting rights) are considered when assessing whether Millicom controls an entity. For example, although Millicom holds less than ~~50%~~50 % of the shares in its Colombian businesses, it holds more than ~~50%~~50 % of shares with voting rights. The contrary may also be true (e.g. Guatemala and Honduras). In respect of the joint ventures in Guatemala and Honduras, shareholders’ agreements

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

require unanimous consents for decisions over the relevant activities of these entities (see also note ~~A.2.2)~~A.2.2.). Therefore, the Group has joint control over these entities and accounts for them under the equity method.

Our main subsidiaries are as follows:

Entity Country Activity December 31, 2018
% holding December 31, 2017
% holding December 31, 2016
% holding
Latin America
Telemovil El Salvador S.A. de C.V. El Salvador Mobile, MFS, Cable, DTH, PayTV 100 100 100
Navega.com SA, Sucursal El Salvador El Salvador Cable, DTH 100 100 100
Cable Costa Rica S.A. Costa Rica Cable, DTH 100 100 100
Telefonica Celular de Bolivia S.A. Bolivia Mobile, DTH, MFS, Cable, PayTV 100 100 100
Telefonica Celular del Paraguay S.A. Paraguay Mobile, MFS, Cable, PayTV 100 100 100
Cable Onda S.A (i). Panama Cable, PayTV, Internet, DTH, Fixed-line 80 — —
Colombia Móvil S.A. E.S.P.(ii) Colombia Mobile 50-1 share 50-1 share 50-1 share
UNE EPM Telecomunicaciones S.A.(ii) Colombia Fixed-line, Internet, PayTV, Mobile 50-1 share 50-1 share 50-1 share
Edatel S.A. E.S.P.(ii) Colombia Fixed-line, Internet, PayTV, Cable 50-1 share 50-1 share 50-1 share
Africa

Millicom Ghana Company Limited(iii) Ghana Mobile, MFS — — 100
Sentel GSM S.A.(iv) Senegal Mobile, MFS — 100 100
MIC Tanzania Public Limited Company Tanzania Mobile, MFS 100 100 100
Millicom Tchad S.A. Chad Mobile, MFS 100 100 100
Millicom Rwanda Limited(iv) Rwanda Mobile, MFS — 100 100
Zanzibar Telecom Limited Tanzania Mobile, MFS 85 85 85
Unallocated

Millicom International Operations S.A. Luxembourg Holding Company 100 100 100
Millicom International Operations B.V. Netherlands Holding Company 100 100 100
Millicom LIH S.A. Luxembourg Holding Company 100 100 100
MIC Latin America B.V. Netherlands Holding Company 100 100 100
Millicom Africa B.V. Netherlands Holding Company 100 100 100
Millicom Holding B.V. Netherlands Holding Company 100 100 100
Millicom Spain S.L. Spain Holding Company 100 100 100



Entity	Country	Activity	December 31, 2019	December 31, 2018	December 31, 2017
Latin America			In %	In %	In %
Telemovil El Salvador S.A. de C.V.	El Salvador	Mobile, MFS, Cable, DTH	100	100	100
Millicom Cable Costa Rica S.A.	Costa Rica	Cable, DTH	100	100	100
Telefonica Celular de Bolivia S.A.	Bolivia	Mobile, DTH, MFS, Cable	100	100	100
Telefonica Celular del Paraguay S.A.	Paraguay	Mobile, MFS, Cable, PayTV	100	100	100
Cable Onda S.A (i).	Panama	Cable, PayTV, Internet, DTH, Fixed-line	80	80	—
Telefonica Moviles Panama (ii)	Panama	Mobile	80	—	—
Telefonia Cellular de Nicaragua sa (ii)	Nicaragua	Mobile	100	—	—
Colombia Móvil S.A. E.S.P. (iii)	Colombia	Mobile	50-1 share	50-1 share	50-1 share
UNE EPM Telecomunicaciones S.A.(iii)	Colombia	Fixed-line, Internet, PayTV, Mobile	50-1 share	50-1 share	50-1 share
Edatel S.A. E.S.P. (iii)	Colombia	Fixed-line, Internet, PayTV, Cable	50-1 share	50-1 share	50-1 share
Africa
Sentel GSM S.A.(v)	Senegal	Mobile, MFS	—	—	100
MIC Tanzania Public Limited Company (vi)	Tanzania	Mobile, MFS	98.5	100	100
Millicom Tchad S.A. (v)	Chad	Mobile, MFS	—	100	100
Millicom Rwanda Limited (v)	Rwanda	Mobile, MFS	—	—	100
Zanzibar Telecom Limited (vi)	Tanzania	Mobile, MFS	98.5	85	85
Unallocated
Millicom International Operations S.A.	Luxembourg	Holding Company	100	100	100
Millicom International Operations B.V.	Netherlands	Holding Company	100	100	100
Millicom LIH S.A.	Luxembourg	Holding Company	100	100	100
MIC Latin America B.V.	Netherlands	Holding Company	100	100	100
Millicom Africa B.V.	Netherlands	Holding Company	100	100	100
Millicom Holding B.V.	Netherlands	Holding Company	100	100	100
Millicom International Services LLC	USA	Services Company	100	100	100
Millicom Services UK Ltd (vii)	UK	Services Company	100	100	100
Millicom Spain S.L.	Spain	Holding Company	100	100	100

F- 23



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)


(i)	Acquisition completed on December 13, 2018. Cable Onda S.A. is fully consolidated as Millicom has the majority of voting shares to direct the relevant activities. See note A.1.2..


(ii)	Companies acquired during the year. See note A.1.2.


(iii)	Fully consolidated as Millicom has the majority of voting shares to direct the relevant activities.

~~(iii)~~

~~Merged with Airtel Ghana in October 2017 and classified as discontinued operations for the year then ended (see note E.3.2.~~

(iv) Merged with Airtel Ghana in October 2017 and classified as discontinued operations for the year then ended (see note E.4.2.). Merged entity is accounted for as a joint venture as from merger date (see note A.2.2.).


(v)	Companies disposed of in 2018 or 2019. See note A.1.3.


~~(iv)~~(vi)	Change in ownership percentages as a result of the in-country restructuring . See note ~~A.1.3.~~A.1.2.

(vii) Millicom ~~International Cellular S.A.~~

~~Notes~~Services UK Ltd with registered number 08330497 will take advantage of an audit exemption to ~~the consolidated~~prepare stand alone financial statements
for the ~~years~~year ended December 31, ~~2018, 2017 and 2016 – continued~~2019 as set out within section 479A of the Companies Act 2006.

A.1.1. Accounting for subsidiaries and non-controlling interests

Subsidiaries are fully consolidated from the date on which control is transferred to Millicom. If facts and circumstances indicate that there are changes to one or more of the elements of control, a reassessment is performed to determine if control still exists. Subsidiaries are de-consolidated from the date that control ceases. Transactions with non-controlling interests are accounted for as transactions with equity owners of the Group. Gains or losses on disposals of non-controlling interests are recorded in equity. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is also recorded in equity.

A.1.2. Acquisition of subsidiaries and ~~increases~~changes in non-controlling interests in subsidiaries

Scope changes 2019

1. Telefonica CAM Acquisitions

On February 20, 2019, MIC S.A., Telefonica Centroamerica and Telefonica S.A. entered into 3 separate share purchase agreements (the “Telefonica CAM Acquisitions”) pursuant to which, subject to the terms and conditions contained therein, Millicom agreed to purchase 100% of the shares of Telefonica Moviles Panama, S.A., a company incorporated under the laws of Panama, from Telefonica Centroamerica (the “Panama Acquisition”), 100% of the shares of Telefonica de Costa Rica TC, S.A., a company incorporated under the laws of Costa Rica, from Telefonica (the “Costa Rica Acquisition”) and 100% of the shares of Telefonia Celular de Nicaragua, S.A., a company incorporated under the laws of Nicaragua, from Telefonica Centroamerica (the “Nicaragua Acquisition”). The Telefonica CAM Acquisitions Share Purchase Agreements contain customary representations and warranties and termination provisions. The consummation of the Costa Rica Acquisition is still subject to regulatory approvals and is expected to close in H1 2020.

Acquisition related costs for Nicaragua and Panama acquisitions included in the statement of income under operating expenses were approximately $16 million for the year.

The aggregate purchase price for the Telefonica CAM Acquisitions is $1.65 billion, subject to potential purchase price adjustments.

a) Nicaragua Acquisition

This transaction closed on May 16, 2019 after receipt of the necessary approvals and, since that date, Millicom holds all voting rights into Telefonia Celular de Nicaragua ("Nicaragua") and controls it. On the same day, Millicom paid an original cash consideration of $437 million, provisionally adjusted to $430 million as of December 31, 2019 and still subject to final price adjustment expected in Q1 2020. The purchase consideration also includes potential indemnifications from the sellers (including potential tax contingencies and litigations). For the purchase accounting, Millicom determined the provisional fair values of Nicaragua's identifiable assets and liabilities based on transaction and relative fair values. The purchase accounting is still provisional at December 31, 2019, particularly in respect of the final price adjustment and the evaluation of the right-of-use assets and lease liabilities. Management expects to finalize the purchase accounting in Q1 2020.

F- 24



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The provisional purchase accounting as at December 31, 2019 is as follows



	Provisional Fair values (100%)
	(US$ millions)
Intangible assets (excluding goodwill) (i)	131
Property, plant and equipment (ii)	149
Right of use assets (iii)	131
Other non-current assets	2
Current assets (excluding cash) (iv)	23
Trade receivables (v)	17
Cash and cash equivalents	7
Total assets acquired	459
Lease liabilities (iii)	131
Other liabilities (vi)	118
Total liabilities assumed	249
Fair value of assets acquired and liabilities assumed, net	210
Acquisition price	430
Provisional Goodwill	220


(i)	Intangible assets not previously recognized at the date of acquisition, are mainly customer lists for an amount of $81 million, with estimated useful lives ranging from 4 to 10 years. In addition, a fair value step-up of $39 million on the spectrum held by Nicaragua has been recognized, with a remaining useful life of 14 years.


(ii)	A fair value step-up of $39 million has been recognized on property, plant and equipment, mainly on the core network ($25 million) and owned land and buildings ($8 million). The expected remaining useful lives were estimated at 6-7 years on average.


(iii)	The Group measured the lease liability at the present value of the remaining lease payments (as defined in IFRS 16) as if the acquired lease were a new lease at the acquisition date. The right-of-use assets have been adjusted by $7 million to be measured at the same amount as the lease liabilities.


(iv)	Current assets include indemnification assets for tax contingencies at fair value for an amount of $11 million - see (v) below.


(v)	The fair value of trade receivables acquired was $17 million.


(vi)	Other liabilities include the fair value of certain possible tax contingent liabilities for $1 million and a deferred tax liability of $50 million resulting from the above adjustments

The goodwill is currently not expected to be tax deductible, and is attributable to expected synergies and convergence with our legacy fixed business in the country, as well as to the fair value of the assembled work force. For convenience purposes, the acquisition date was set on May 1, 2019 as there were no material transactions from this date to May 16, 2019. From May 1, 2019 to December 31, 2019, Nicaragua contributed $144 million of revenue and a net profit of $5 million to the Group. If the acquisition had occurred on January 1, 2019 incremental revenue for the year ended December 31, 2019 for the Group would have been $219 million and incremental net loss for that period would have been $16 million, including amortization of assets not previously recognized of $12 million (net of tax).

Key assumptions used in fixed assets valuation

The following valuation methods and key estimates were used for the valuation of the main classes of fixed assets:

F- 25



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)



Major class of assets	Valuation method	Key assumption 1	Key assumption 2	Key assumption 3
Spectrum	Market approach - Market comparable transactions	Discount rate : 14%	Terminal growth rate: 2.5%	Estimated duration: 14 years
Customer lists	Income approach - Multi-Period Excess Earnings Method	Discount rate: 14-15%	Monthly Churn rate: From 1.2% for B2B to 2.9% for B2C	EBITDA margin: ~ 36% to 41%
Land and buildings	Market approach	Economic useful life (range): 10-30 years	Price per square meter: from $2 to $57	N/A
Core network	Cost approach	Economic useful life (range): 5-27 years	Remaining useful life (minimum) : 1.7 years	N/A

b) Panama Acquisition

This transaction closed on August 29, 2019 after receipt of the necessary approvals and, since that date, Cable Onda, which is 80% owned by Millicom, holds all voting rights in Telefonica Moviles Panama, S.A. ("Panama") and controls it. On the same day, Cable Onda paid an original cash consideration of $594 million to acquire 100% of the shares of Panama, subject to a final price adjustment expected in Q1 2020. The purchase consideration also includes potential indemnifications from the sellers (including potential tax contingencies and litigations). For the purchase accounting, Millicom determined the fair value of Panama's identifiable assets and liabilities based on transaction and relative fair values. The purchase accounting is still provisional at December 31, 2019, particularly in respect of the evaluation of property, plant and equipment, right-of-use assets and lease liabilities, final price adjustment and their resulting impact on the current valuation of intangible assets. Management expects to finalize the purchase accounting during the first half of 2020. No non-controlling interests are recognized at acquisition date as Cable Onda acquired 100% of the shares of Panama. Though, non-controlling interests are recognized in Panama's results from the date of acquisition.

F- 26



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The provisional purchase accounting as at December 31, 2019 is as follows:



	Provisional Fair values (100%)
	(US$ millions)
Intangible assets (excluding goodwill) (i)	169
Property, plant and equipment	110
Right of use assets	57
Other non-current assets	3
Current assets (excluding cash)	23
Trade receivables (ii)	21
Cash and cash equivalents	10
Total assets acquired	391
Lease liabilities	48
Other debt and financing	74
Other liabilities (iii)	101
Total liabilities assumed	224
Fair value of assets acquired and liabilities assumed, net	167
Acquisition price	594
Provisional Goodwill	426


(i)	Intangible assets not previously recognized at the date of acquisition, are mainly customer lists for an amount of $58 million, with estimated useful lives ranging from 3 to 17 years. In addition, a fair value step-up of $3 million on the spectrum held by Panama has been recognized, with a remaining useful life of 17 years.


(ii)	The fair value of trade receivables acquired was $21 million.


(iii)	Other liabilities include a deferred tax liability of $15 million resulting from the above adjustments

The goodwill is currently not expected to be tax deductible and is attributable to expected synergies and convergence with Cable Onda, as well as to the fair value of the assembled work force. For convenience purposes, the acquisition date was set on September 1, 2019. From September 1, 2019 to December 31, 2019, Panama contributed $80 million of revenue and a net profit of $6 million to the Group. If Panama had been acquired on January 1, 2019 incremental revenue for the twelve-month period ended December 31, 2019 for the Group would have been $158 million and incremental net profit for that period would have been $1 million, including amortization of assets not previously recognized of $3 million (net of tax).

Key assumptions used in fixed assets valuation

The following valuation methods and key estimates were used for the valuation of the main classes of fixed assets:



Major class of assets	Valuation method	Key assumption 1	Key assumption 2	Key assumption 3
Spectrum	Market approach - Market comparable transactions	Discount rate: 9.8%	Terminal growth rate: 2.9%	Estimated duration: 17 years
Customer lists	Income approach - Multi-Period Excess Earnings Method	Discount rate: 9.8-11%	Monthly Churn rate: From 0.4% for B2C postpaid to 3.9% for B2C prepaid	EBITDA margin: ~ 35% to 39%

2. Tanzania restructuring

In October 2019, with the view of listing the shares of MIC Tanzania Public Limited Company ('MIC Tanzania') on the local stock exchange (see note H), Millicom completed the restructuring of its investments in different operations in the country. Mainly, MIC Tanzania acquired all the shares of Zantel, which was partially held by the Government of Zanzibar (15%). In exchange of the contribution of its 15% shares in Zantel to MIC Tanzania, the Government of Zanzibar received 1.5% of newly issued shares in MIC Tanzania. This restructuring did not result in the Group losing control in Zantel nor MIC Tanzania, and has therefore been recognized as an equity transaction. As a consequence, the Group owners’ equity decreased by a net amount of $18 million as a result of the derecognition of the 15% non-controlling interests in Zantel and the recognition of 1.5% non-controlling interests in MIC Tanzania.

F- 27



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

3. Others

During the year ended December 31, 2019, the Group also completed minor additional acquisitions.

Scope changes 2018

1. Cable Onda acquisition

On October 7, 2018, the Company ~~entered into~~signed an agreement to acquire a controlling 80% stake in Cable Onda, the largest cable and fixed telecommunications services provider in Panama. ~~The transaction valued 100% of Cable Onda at an enterprise value of $1,460 million.~~ The selling shareholders retained a 20% equity stake in the company. The transaction closed on December 13, 2018 after receipt of necessary approvals, for afinal cash consideration of $956 million. In addition, Millicom assumed Cable Onda’s debt obligations. The Group funded the purchase price for this acquisition by incurring additional indebtedness, including $250 million under the Bridge Facility and $500 million aggregate principal amount of the 6.625% Notes (see note C.3.1) and with available resources. A final price adjustment, per the terms of the agreement, is expected to occur in Q1 2019.

Millicom concluded that it controls Cable Onda since closing date and therefore fully consolidates it in its financial statements with a 20% non-controlling interest. The deal also includes certain liquidity rights such as call and put ~~options.~~options that have been amended as a result of the acquisition of Telefonica Moviles Panama, S.A.. See note ~~C.6.3.~~C.7.4. for further details on the accounting treatment of these options. ~~The purchase consideration also includes certain amounts under escrow in respect of final price adjustment and potential indemnifications from the sellers (potential tax and litigations).~~

For the purchase accounting, Millicom determined the fair value of Cable Onda identifiable assets and liabilities based on transaction and relative values. The non-controlling interest was measured based on the proportionate share of the fair value of the net assets of Cable Onda. The ~~purchase accounting is still~~exercise has been finalized in December 2019. The main adjustments compared to the provisional ~~at December 31, 2018, particularly in respect~~fair values relate to the final valuation of the ~~evaluation~~property, plant and equipment for a net increase of ~~certain tangible~~$30 million, as well as its related impact on the customer list fair value (a decrease of $20 million) and deferred tax liabilities (net increase of $3 million). The remaining adjustments are linked to reassessment of contingent liabilities and corresponding indemnification assets. As a result, goodwill decreased by $8 million as follows:



	~~Provisional Fair values (100%)~~
	~~(US$ millions)~~
~~Intangible assets (excluding goodwill), net (i)~~	~~673~~
~~Property, plant and equipment, net~~	~~348~~
~~Current assets (excluding cash) (ii) (iii)~~	54
~~Cash and cash equivalents~~	12
~~Total assets acquired~~	~~1,088~~
~~Non-current liabilities (iv)~~	~~422~~
~~Current liabilities (v)~~	~~141~~
~~Total liabilities assumed~~	~~563~~
~~Fair value of assets acquired and liabilities assumed, net~~	~~525~~
~~Transaction costs assumed by Cable Onda (vi)~~	30
~~Fair value of non-controlling interest in Cable Onda (20%)~~	~~111~~
~~Millicom’s interest in the fair value of Cable Onda (80%)~~	~~444~~
~~Acquisition price~~	~~956~~
~~Provisional Goodwill~~	~~512~~

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~



	Provisional Fair values (100%)	Final Fair values (100%)	Changes
	(US$ millions)	(US$ millions)	(US$ millions)
Intangible assets (excluding goodwill) (i)	673	653	(20	)
Property, plant and equipment (ii)	348	378	30
Current assets (excluding cash)(iii)	54	50	(4	)
Cash and cash equivalents	12	12	—
Total assets acquired	1,088	1,094	6
Non-current liabilities(iv)	422	425	3
Current liabilities	141	134	(7	)
Total liabilities assumed	563	559	(4	)
Fair value of assets acquired and liabilities assumed, net	525	535	10
Transaction costs assumed by Cable Onda (v)	30	30	—
Fair value of non-controlling interest in Cable Onda (20%)	111	113	2
Millicom’s interest in the fair value of Cable Onda (80%)	444	452	8
Acquisition price	956	956	0
Final Goodwill	512	504	(8	)


(i)	Intangible assets not previously recognized (or partially recognized as a result of previous acquisitions) are trademarks for an amount of $280 million, with estimated useful lives of 3 years, a customer list for an amount of ~~$370~~$350 million, with estimated useful life of 20 years and favorable content contracts for $19 million, with a useful life of 10 years.


(ii)	~~Current assets include indemnification assets for tax contingencies at~~A net fair value ~~for an amount~~step-up of $4$30 million ~~- see below.~~has been recognized on property, plant and equipment, mainly on the core network ($11 million). The expected remaining useful lives were estimated at 5 years on average.


(iii)	~~The~~Current assets include trade receivables amounting to a fair value of ~~trade receivables acquired was~~ $34 million.


(iv)	Non-current liabilities include the deferred tax liability of ~~$158~~$161 million resulting from the above adjustments.


(v)	~~Current liabilities include the fair value of certain tax contingent liabilities of $5 million. These are partly covered by the indemnification assets described in (ii) above.~~

~~(vi)~~

Transaction costs of $30 million have been assumed and paid by Cable Onda before the acquisition or by Millicom on the closing date. Because of their relationship with the acquisition, these costs have been accounted for as post-acquisition costs in the Millicom Group statement of income. These, together with acquisition-related costs of $11 million, have been recorded under operating expenses in the statement of income of the year.

The completion of the purchase price allocation did not result in any material impact on the statement of income for the years ended December 31, 2018 and December 31, 2019, respectively, in respect of values previously recorded in the provisional purchase accounting.

F- 28



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The goodwill, which is not expected to be tax deductible, is attributable to Cable Onda’s strong market position and profitability, as well as to the fair value of the assembled work force. From December 13, 2018 to December 31, 2018, Cable Onda contributed $17 million of revenue and a net loss of $7 million to the Group. If Cable Onda had been acquired on 1 January 2018 incremental revenue for the 2018 year would have been $403 million and incremental net loss for that period of $59 million, including amortization of assets not previously recognized of $85 million (net of tax).

~~During the year ended December 31, 2018, the Group also completed minor additional acquisitions for $9 million.~~

During the year ended December 31, 2017, Tigo Paraguay completed the acquisition of TV Cable Parana for a total consideration of approximately $18 million, net of cash acquired. The purchase accounting was finalizedKey assumptions used in ~~March 2017. The purchase price has been mainly allocated to a customer list ($14 million) and to other tangible and intangible~~ fixed assets ~~($3 million). As a result,~~valuation

The following valuation methods and key estimates were used for the ~~final goodwill amounted to $1 million.~~valuation of the main classes of fixed assets:



Major class of assets	Valuation method	Key assumption 1	Key assumption 2	Key assumption 3
Brands	Income approach - Relief-from-Royalty approach	Discount rate: 10%	Royalty rate: 4.5%	Tax rate: 25%
Customer lists	Income approach - Multi-Period Excess Earnings Method	Discount rate: 10%	Yearly Churn rate: 5.8% in average	EBITDA margin: ~ 48%
Property, plant & equipment	Cost approach	Economic useful life (range): 5-15 years	Remaining useful life (minimum): 2-8 years	N/A

F- 29



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

A.1.3. Disposal of subsidiaries and decreases in non-controlling interests of subsidiaries

Chad

On June 26, 2019, the Group completed the disposal of its operations in Chad for a final cash consideration of $110 million. In accordance with Group practices, the Chad operation has been classified as assets held for sale and discontinued operations as from June 5, 2019 and prior periods restated. On June 26, 2019, Chad was deconsolidated and a gain on disposal of $77 million was recognized (see also note E.4.).

Rwanda

On December 19, 2017, Millicom announced that it has signed an agreement for the sale of its Rwanda operations to subsidiaries of Bharti Airtel ~~Limited.~~Limited for a final cash consideration of $51 million, including a deferred cash payment due in January 2020 for an amount of $18 million. The transaction also included earn-outs for $7 million that were not recognized by the Group as management does not believe these will be triggered. The sale was ~~subsequently~~ completed on January 31, 2018. In accordance with Group practices, Rwanda operations’ assets and liabilities were classified as held for sale on January 23, 2018. Rwanda’s operations also represented a separate geographical area and did qualify for discontinued operations ~~presentation. As a result, the Group statements of income for the years ended December 31, 2016 and 2017 have been restated accordingly to show the~~presentation; results were therefore shown on a single line in the statements of income (‘Profit (loss) for the year from discontinued operations, net of tax’). On January 31, 2018, the Group's operations in Rwanda were deconsolidated and no material loss on disposal was recognized (its carrying value was aligned to its fair value less costs of disposal as of December 31, 2017). However, a loss of $32 million was recognized in 2018 corresponding to the recycling of foreign currency exchange losses accumulated in equity since the creation of the Company. This loss was recognized under ‘Profit (loss) for the year from discontinued operations, net of tax’. The final sale consideration is still subject to adjustment under the terms of the sale and purchase agreement with Airtel. Management does not expect any material deviation from the initial consideration. (see also note ~~E.3.~~E.4.).

Senegal

On July 28, 2017, Millicom announced that it had agreed to sell its Senegal business to a consortium consisting of NJJ, Sofima (managed by the Axian Group) and Teylium ~~Group, subject to customary closing conditions and regulatory approvals.~~Group. In accordance with Group practices, Senegal operations’ assets and liabilities were classified as held for sale on February 2, 2017. Senegal’s operations also represented a separate geographical area and did qualify for discontinued operations. ~~On April 19, 2018, the President of Senegal issued an approval decree in respect of the proposed sale by Millicom of its Tigo operation in Senegal to a consortium consisting of NJJ, Sofima (a~~

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

~~telecom investment vehicle managed by the Axian Group) and Teylium Group.~~ The sale was completed on April 27, ~~2018.~~2018 in exchange of a cash consideration of $151 million. (see also note ~~E.3.~~E.4.)

Ghana merger

On March 3, 2017, Millicom and Bharti Airtel Limited (Airtel) announced that they had entered into an agreement for Tigo Ghana Limited and Airtel Ghana Limited to combine their operations in Ghana. In accordance with Group practices, Ghana operations’ assets and liabilities were classified as held for sale on September 30, 2017. Ghana’s operations also represented a separate geographical area and did qualify for discontinued operations. As a result, the Group statement of income for the year ended December 31, 2016 was restated accordingly to show the results on a single line in the statements of income (‘Profit (loss) for the year from discontinued operations, net of tax’). The transaction was completed on October 12, 2017 (see also note ~~E.3.~~E.4.).

~~DRC~~

On February 8, 2016, Millicom announced that it had signed an agreement for the sale of its businesses in the Democratic Republic of Congo (DRC) to Orange S.A. (see note E.3.). In accordance with Group practices, DRC operations’ assets and liabilities were classified as held for sale on February 8, 2016. DRC’s operations also represented a separate geographical area and did qualify for discontinued operations. The sale was completed on April 20, 2016.

Other disposals

For the years ended December 31, 2019, 2018 ~~2017~~ and ~~2016,~~2017, Millicom did not dispose of any other significant investments.

A.1.4. Summarized financial information relating to significant subsidiaries with non-controlling interests

At December 31, ~~2018~~2019 and ~~2017,~~2018, Millicom’s subsidiaries with material non-controlling interests were the Group’s operations in Colombia and ~~Panama (2018 only).~~Panama.

Balance sheet – non-controlling interests


	December 31,				December 31,
	2018		2017		2019	2018(i)
	(US$ millions)				(US$ millions)
Colombia	161		197		170	161
Panama	103		—		99	105
Others	(16	)	(11	)	2	(16	)
Total	249		185		271	251

(i) Restated as a result of the finalization of Cable Onda purchase accounting, see note A.1.2.

F- 30



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Profit (loss) attributable to non-controlling interests


	2018		2017		2016		2019		2018		2017
	(US$ millions)						(US$ millions)
Colombia	(5	)	(13	)	(55	)	11		(5	)	(13	)
Panama	(8	)	—		—		(6	)	(8	)	—
Others	(3	)	(4	)	(3	)	—		(3	)	(4	)
Total	(16	)	(17	)	(58	)	5		(16	)	(17	)

The summarized financial information for material non-controlling interests in our operations in Colombia and Panama is provided below. This information is based on amounts before inter-company eliminations. ~~Detailed information on Cable Onda has been voluntarily omitted here as all details are already disclosed in note A.1.2.~~

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

Colombia


	2018		2017		2016		2019		2018		2017
	(US$ millions)						(US$ millions)
Revenue	1,661		1,739		1,717		1,532		1,661		1,739
Total operating expenses	(667	)	(647	)	(660	)	(543	)	(667	)	(647	)
Operating profit	147		106		40		164		147		106
Net (loss) for the year	(10	)	(25	)	(110	)	23		(10	)	(25	)
50% non-controlling interest in net (loss)	(5	)	(13	)	(55	)	11		(5	)	(13	)
Total assets (excluding goodwill)	1,966		2,193		2,221		2,256		1,966		2,193
Total liabilities	1,620		1,771		1,776		1,891		1,620		1,771
Net assets	346		422		445		365		346		422
50% non-controlling interest in net assets	173		211		223		183		173		211
Consolidation adjustments	(12	)	(14	)	(16	)	(13	)	(12	)	(15	)
Total non-controlling interest	161		197		207		170		161		197
Dividends and advances paid to non-controlling interest	(2	)	—		(67	)	(12	)	(2	)	0
Net cash from operating activities	348		331		366		363		348		331
Net cash from (used in) investing activities	(270	)	(209	)	(340	)	(260	)	(270	)	(209	)
Net cash from (used in) financing activities	(75	)	(46	)	(24	)	(67	)	(75	)	(46	)
Exchange impact on cash and cash equivalents, net	(18	)	3		1		—		(18	)	3
Net increase in cash and cash equivalents	(15	)	80		3		36		(15	)	80

F- 31



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Panama



	2019 (ii)		2018 (i)
	(US$ millions)
Revenue	475		17
Total operating expenses	(148	)	(8	)
Operating profit	(15	)	(39	)
Net (loss) for the year	(31	)	(39	)
20% non-controlling interest in net (loss)	(6	)	(8	)
Total assets (excluding Millicom's goodwill in Cable Onda)	1,866		1,082
Total liabilities	1,372		556
Net assets	494		526
20% non-controlling interest in net assets	99		105
Consolidation adjustments	—		—
Total non-controlling interest	99		105
Dividends and advances paid to non-controlling interest	—		—
Net cash from operating activities	167		(2	)
Net cash from (used in) investing activities (iii)	(693	)	12
Net cash from (used in) financing activities (iii)	580		(3	)
Exchange impact on cash and cash equivalents, net	—		—
Net increase in cash and cash equivalents	54		7


(i)	Cable Onda was acquired on December 13, 2018 and 2018 figures therefore only include results and cash flows from the date of acquisition.


(ii)	2019 figures include the full year results and cash flows of Cable Onda, as well as 4 months of Telefonica Panama which was consolidated from September 1, 2019.


(iii)	In 2019, Cable Onda acquired Telefonica Panama for $594 million(note A.1.2.), financed by issuing a $600 million Senior Notes due 2030 (note C.3.1.)

F- 32



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

A.2. Joint ventures

Joint ventures are businesses over which Millicom exercises joint control as decisions over the relevant activities of each require unanimous consent of shareholders. Millicom determines the existence of joint control by reference to joint venture agreements, articles of association, structures and voting protocols of the board of directors of those ventures.

At December 31, ~~2018,~~2019, the equity accounted net assets of our joint ventures in Guatemala, Honduras and Ghana totaled ~~$3,405~~$3,346 million (December 31, ~~2017: $3,457~~2018: $3,405 million for Guatemala and Honduras only). These net assets do not necessarily represent statutory reserves available for distribution as these include consolidation adjustments (such as goodwill and identified assets and assumed liabilities recognized as part of the purchase accounting). Out of these reserves, ~~$133~~$142 million (December 31, ~~2017: $123~~2018: $133 million) represent statutory reserves that are unavailable to be distributed to ~~owners of~~ the ~~Company.~~Group. During the year ended December 31, ~~2018,~~2019, Millicom’s joint ventures paid ~~$243~~$237 million (December 31, ~~2017: $203~~2018: $243 million) as dividends or dividend advances to the Company.

Our main joint ventures are as follows:

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

Entity

Country

Activity

December 31, 2018 % holding

December 31, 2017 % holding

Country

Activity

December 31, 2019 % holding

December 31, 2018 % holding

Comunicaciones Celulares S.A(i).

Guatemala

Mobile, MFS

Guatemala

Mobile, MFS

Navega.com S.A.(i)

Guatemala

Cable, DTH

Guatemala

Cable, DTH

Telefonica Celular S.A(i).

Honduras

Mobile, MFS

66.7

Honduras

Mobile, MFS

66.7

Navega S.A. de CV(i)

Honduras

Cable

66.7

Honduras

Cable

66.7

Bharti Airtel Ghana Holdings B.V.

Netherlands

Mobile, MFS

Ghana

Mobile, MFS

(i)

Millicom owns more than 50% of the shares in these entities and has the right to nominate a majority of the directors of each of these entities. However, key decisions over the relevant activities must be taken by a supermajority vote. This effectively gives either shareholder the ability to veto any decision and therefore neither shareholder has sole control over the entity. Therefore, the operations of these joint ventures are accounted for under the equity method.

The carrying values of Millicom’s investments in joint ventures were as follows:

Carrying value of investments in joint ventures at December 31

% 2018 2017
(US$ millions)
Honduras operations(i) 66.7 730
726
Guatemala operations(i) 55 2,104
2,145
AirtelTigo Ghana operations 50 32
96
Total
2,867
2,966



	%	2019	2018
		(US$ millions)
Honduras operations(i)	66.7	708	730
Guatemala operations(i)	55	2,089	2,104
AirtelTigo Ghana operations	50	—	32
Total		2,797	2,867


(i)	Includes all the companies under the Honduras and Guatemala groups.

The table below summarizes the movements for the year in respect of the Group’s joint ventures carrying values:

Guatemala(i) Honduras (i) Ghana(ii)
(US$ millions)
Opening balance at January 1, 2017 2,179
766
—
Change in scope —
—
102
Results for the year 2017 126
15
(6 )
Dividends declared during the year (168 ) (46 ) —
Currency exchange differences 7
(9 ) —
Closing balance at December 31, 2017 2,145
726
96
Adjustment on adoption of IFRS 15 and IFRS 9 (net of tax) 18
5
—
Capital increase —
3
—
Results for the year 2018 131
23
(68 )
Dividends declared during the year (177 ) —
—
Currency exchange differences (14 ) (26 ) 3
Closing balance at December 31, 2018 2,104
730
32

F- 33



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)



	Guatemala(i)		Honduras (i)		Ghana(ii)
	(US$ millions)
Opening balance at January 1, 2018	2,145		726		96
Adjustments on adoption of IFRS 15 and IFRS 9 (net of tax)	18		5		0
Change in scope	—		—		0
Results for the year	131		23		(68	)
Capital increase	—		3		—
Dividends declared during the year	(177	)	—		—
Currency exchange differences	(14	)	(26	)	3
Closing balance at December 31, 2018	2,104		730		32
Accounting policy changes	—		—		—
Capital increase	—		—		5
Results for the year	152		27		(40	)
Utilization of past recognized losses	—		—		(5	)
Dividends declared during the year	(170	)	(37	)	—
Currency exchange differences	2		(12	)	8
Closing balance at December 31, 2019	2,089		708		—


(i)	Share of profit (loss) is recognized under ‘Share of profit in the joint ventures in Guatemala and Honduras’ in the statement of income.


(ii)	Share of profit (loss) is recognized under ‘Income (loss) from other joint ventures and associates, net’ in the statement of income.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

At December 31, ~~2018~~2019 and ~~2017~~2018 the Group had not incurred obligations, nor made payments on behalf of the Guatemala, Honduras or Ghana operations.

A.2.1. Accounting for joint ventures

Joint ventures are accounted for using the equity method of accounting and are initially recognized at cost (calculated at fair value if it was a subsidiary of the Group before becoming a joint venture). The Group’s investments in joint ventures include goodwill (net of any accumulated impairment loss) on acquisition.

The Group’s share of post-acquisition profits or losses of joint ventures is recognized in the consolidated statement of income and its share of post-acquisition movements in reserves is recognized in reserves. Cumulative post-acquisition movements are adjusted against the carrying amount of the investments. When the Group’s share of losses in a joint venture equals or exceeds its interest in the joint venture, including any other unsecured receivables, the Group does not recognize further losses, unless the Group has incurred obligations or made payments on behalf of the joint ventures.

Gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in the joint ventures. Losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of joint ventures have been changed where necessary to ensure consistency with the policies adopted by the Group. Dilution gains and losses arising in investments in joint ventures are recognized in the statement of income.

After application of the equity method, including recognizing the joint ventures’ losses, the Group applies ~~IAS 39~~IFRS 9 to determine whether it is necessary to recognize any additional impairment loss with respect to its net investment in the joint venture.

A.2.2. Material joint ventures – Guatemala, Honduras and Ghana operations

Summarized financial information for the years ended December 31, 2019, 2018 ~~2017~~ and ~~2016~~2017 of the Guatemala and Honduras operations is as follows. This information is based on amounts before inter-company eliminations.

F- 34

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

~~Guatemala~~

2018 2017 2016
(US$ millions)
Revenue
1,373
1,328
1,284
Depreciation and amortization (283 ) (295 ) (281 )
Operating profit(i)
387
352
330
Financial income (expenses), net (56 ) (60 ) (73 )
Profit before taxes
309
305
261
Charge for taxes, net (69 ) (74 ) (67 )
Profit for the year
240
230
194
Net profit for the year attributable to Millicom
131
126
106
Dividends and advances paid to Millicom 211
162
77
Total non-current assets (excluding goodwill) 2,280
2,406
2,297
Total non-current liabilities 981
1,052
1,039
Total current assets 718
756
909
Total current liabilities 221
220
211
Cash and cash equivalents 217
303
289
Debt and financing – non-current 927
995
987
Net cash from operating activities 545
498
438
Net cash from (used in) investing activities (173 ) (171 ) (174 )
Net cash from (used in) financing activities (455 ) (315 ) (127 )
Exchange impact on cash and cash equivalents, net (3 ) 2
(3 )
Net (decrease) increase in cash and cash equivalents
(86 ) 14
134



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

~~(i)~~ Guatemala



	2019		2018		2017
	(US$ millions)
Revenue	1,434		1,373		1,328
Depreciation and amortization	(313	)	(283	)	(295	)
Operating profit(i)	429		387		352
Financial income (expenses), net	(66	)	(56	)	(60	)
Profit before taxes	356		309		305
Charge for taxes, net	(79	)	(69	)	(74	)
Profit for the year	277		240		230
Net profit for the year attributable to Millicom	152		131		126
Dividends and advances paid to Millicom	209		211		162
Total non-current assets (excluding goodwill)	2,517		2,280		2,406
Total non-current liabilities	1,216		981		1,052
Total current assets	717		718		756
Total current liabilities	251		221		220
Total net assets	1,767		1,796		1,890
Group's share in %	55	%	55	%	55	%
Group's share in USD millions	972		988		1,040
Goodwill and consolidation adjustments	1,117		1,116		1,106
Carrying value of investment in joint venture	2,089		2,104		2,145

Cash and cash equivalents	189		217		303
Debt and financing – non-current	1,152		928		995
Debt and financing – current	21		—		—
Net cash from operating activities	588		545		498
Net cash from (used in) investing activities	(205	)	(173	)	(171	)
Net cash from (used in) financing activities	(412	)	(455	)	(315	)
Exchange impact on cash and cash equivalents, net	1		(3	)	2
Net increase in cash and cash equivalents	(28	)	(86	)	14


(i)	In 2017, operating profit included a provision for impairment of $10 million on the fixed assets related to video surveillance contracts with the Civil National Police.

Guatemala financing

In ~~2016, operating profit included~~2014, Intertrust SPV (Cayman) Limited, acting as trustee of the Comcel Trust, a ~~provision~~trust established and consolidated by Comcel for ~~impairment~~the purposes of ~~$24~~the transaction, issued $800 million ~~related~~6.875% Senior Notes to ~~amounts receivable from video surveillance contracts with~~refinance existing local and MIC S.A. corporate debt. The bond was issued at 98.233% of the ~~Civil National Police. In 2017, it also includes~~principal and has an ~~additional impairment~~effective interest rate of ~~$10 million (2016: $18 million)~~7.168%. The bond is guaranteed by Comcel and listed on the ~~fixed assets related to the same contracts.~~

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~Luxembourg Stock Exchange.

F- 35



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Honduras


	2018		2017		2016		2019		2018		2017
	(US$ millions)						(US$ millions)
Revenue	586		585		609		594		586		585
Depreciation and amortization	(133	)	(156	)	(160	)	(132	)	(133	)	(156	)
Operating profit	91		70		54		102		91		70
Financial income (expenses), net	(29	)	(27	)	(27	)	(37	)	(29	)	(27	)
Profit before taxes	52		41		13		60		52		41
Charge for taxes, net	(19	)	(18	)	—		(21	)	(18	)	(18	)
Profit for the year	34		24		13		39		34		23
Net profit for the year attributable to Millicom	23		15		9		27		23		15
Dividends and advances paid to Millicom	32		40		66		28		32		40
Total non-current assets (excluding goodwill)	506		576		645		516		506		576
Total non-current liabilities	386		407		454		469		386		407
Total current assets	304		208		259		312		304		208
Total current liabilities	226		282		237		183		226		282
Total net assets							176		198		95
Group's share in %							66.7	%	66.7	%	66.7	%
Group's share in USD millions							117		132		63
Goodwill and consolidation adjustments							591		598		663
Carrying value of investment in joint venture							708		730		726

Cash and cash equivalents	25		16		13		40		25		16
Debt and financing – non-current	298		308		339		384		298		308
Debt and financing – current	85		80		63		39		85		80
Net cash from operating activities	147		152		85		169		147		152
Net cash from (used in) investing activities	(87	)	(74	)	(17	)	(77	)	(87	)	(74	)
Net cash from (used in) financing activities	(50	)	(74	)	(69	)	(77	)	(50	)	(74	)
Net (decrease) increase in cash and cash equivalents	9		3		(1	)	15		9		3

Honduras financing

On September 19, 2019, Telefónica Celular, S.A. de C.V. entered into a new credit agreement with Banco Industrial S.A. and Banco Pais S.A for an amount up to $185 million, in tranches of $100 million, $60 million and $25 million. The Loan Agreement has a 10-year maturity and an interest rate of LIBOR plus 3.80% per annum, subject to a floor of minimum 5.25%. The new credit agreement has been used to consolidate the portion of a syndicated $250 million facility with Scotiabank dated March 27, 2015, and $90 million credit agreement with Banco Industrial S.A. dated March 20, 2018.

On September 19, 2019, Navega S.A. de C.V., entered into new facility agreement with Banco Industrial S.A. for an amount of $20 million and a duration of 10 years. The new agreement bears an annual interest of LIBOR plus 3.80% , subject to a floor of 5.25%. and will be used to refinance the portion corresponding to it as borrower under the $250 million facility with Scotiabank dated March 27, 2015.

Ghana

As mentioned in note A.1.3., in 2017 Millicom and Airtel signed a Combination Agreement, whereby both investors decided to combine their respective subsidiaries in Ghana, namely Tigo Ghana Limited and Airtel Ghana Limited under an existing company – Bharti Airtel Ghana Holdings B.V. (the ‘JV’ or ‘AirtelTigo Ghana’) both Millicom and Airtel each owning 50%. As part of the transaction, the government of Ghana retained an option to acquire a 25% stake in the newly combined entity for a period of two years. ~~In the event the government exercises its~~This option ~~Millicom’s stake may reduce to 37.5% or,~~has never been material and expired unexercised in ~~certain circumstances, be maintained at 50%.~~September 2019.

On October 12, 2017, both parties announced the completion of the transaction. As consideration received, each party owns 50% of the equity capital and voting rights of the JV, and Millicom holds a $40 million loan against Tigo Ghana (the “Millicom

F- 36



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Note”), which shall rank in priority to all other obligations of the joint venture owed to its shareholders. The Millicom Note bears interest and is classified under ‘other non-current assets’ in the statement of financial position.

Decisions about the relevant activities require the unanimous consent of the parties sharing control. Therefore, based on IFRS 11, this agreement results in Millicom and Airtel having joint control over the combined entity, which is a joint venture. Millicom therefore uses the equity method to account for its investment in the combined entity since October 12, 2017.

On the same date, each investor agreed and committed to fund the operations of the JV in accordance with the approved business plan on an equal basis and on the same terms. In this regard, both parties have agreed to provide, on an equal basis, a committed credit facility in the total aggregate amount of $50 million, with Millicom providing a commitment of $25 million and Airtel providing the same. The credit facility remains undrawn as of December 31, 2018 and 2017 and would bear interest and would be subordinated to the Millicom Note.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

As a consequence, on October 12, 2017, Millicom deconsolidated its investments in Ghana operations and accounted for its investment in the combined entity under the equity method, initially at fair value of $102 million, resulting in a net gain on the deconsolidation of these operations amounting to $36 million, including recycling of foreign currency exchange losses accumulated in equity of $79 million. The net gain has been recognized under ‘Profit (loss) for the year from discontinued operations, net of tax’. As of December 31, 2017, the purchase accounting was still provisional and was completed in the first six months of 2018. Newly identified assets have been recognized by the joint venture resulting in an additional depreciation of $3 million for the period from the merger date to December 31, 2017. Comparative figures have not been restated for this depreciation charge given it was immaterial for the Group. As a result, this charge was recorded in the 2018 statement of income.

Fair value has been determined using valuation techniques such as discounted cash flows and comparable transaction multiples. As of December 31, 2018 and 2017 Millicom determined the fair value of the option granted to the government to be immaterial.

AirtelTigo Ghana


	2018		2017 (i)		2019		2018		2017
	(US$ millions)		(US$ millions)		(US$ millions)
Revenue	187		58		142		187		58
Depreciation and amortization	(110	)	(11	)	(69	)	(110	)	(11	)
Operating loss	(100	)	(1	)	(72	)	(100	)	(1	)
Financial income (expenses), net	(42	)	(10	)	(77	)	(42	)	(10	)
Loss before taxes	(135	)	(12	)	(123	)	(135	)	(12	)
Charge for taxes, net	—		—		—		—		—
Loss for the period	(135	)	(12	)	(123	)	(135	)	(12	)
Net loss for the period attributable to Millicom	(68	)	(6	)	(40	)	(68	)	(6	)
Dividends and advances paid to Millicom	—		—		—		—		—
Total non-current assets (excluding goodwill)	277		184		168		277		184
Total non-current liabilities	277		214		245		277		214
Total current assets	71		60		42		71		60
Total current liabilities	134		106		187		134		106
Total net assets					(223	)	(63	)	(76	)
Group's share in %					50	%	50	%	50	%
Group's share in USD millions					(111	)	(31	)	(38	)
Goodwill and consolidation adjustments					90		63		134
Unrecognised losses					(22	)	0		0
Carrying value of investment in joint venture					—		32		96

Cash and cash equivalents	19		15		5		19		15
Debt and financing – non-current	276		145		245		276		145
Debt and financing – current	17		—		27		17		—

Net cash from operating activities	(19	)	13		(5	)	(19	)	13
Net cash from (used in) investing activities	(8	)	—		—		(8	)	—
Net cash from (used in) financing activities	42		(3	)	(6	)	42		(3	)
Net increase in cash and cash equivalents	15		10		(11	)	15		10


~~(i)~~	~~From the date of merger (October 12, 2017) to December 31, 2017, for statement of income and cash flow metrics.~~

A.2.3. Impairment of investment in joint ventures

While no impairment triggers were identified for the Group’s investments in joint ventures in ~~2018,~~2019, according to its policy, management have completed an impairment test for its joint ventures in Guatemala, Honduras and ~~Ghana.~~Ghana (up to 2018 for Ghana as investment is nil as of December 31, 2019).

The Group’s investments in Guatemala ~~Honduras~~ and ~~Ghana~~Honduras operations were tested for impairment by assessing their recoverable amount (using a value in use model based on discounted cash flows) against their carrying amounts. The cash flow projections

F- 37



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

used were extracted from financial budgets approved by management

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

and the Board covering a period of five years. In respect of Guatemala and Honduras, cash flows beyond this period have been extrapolated using a perpetual growth rate of 1.1%–1.2% (2018: 3.2%–3.0% ~~(2017: 3.1%–3.2%~~). Discount rates used in determining recoverable amounts were 9.5% and 9.7%, respectively (2018: 11.0% and 10.3%~~, respectively (2017: 9.3% and 10.2%~~). For Ghana, in 2018, management used a perpetual growth rate of 3.8% and a discount rate of 14.4%.

For the year ended December 31, 2019 and 2018, and as a result of the impairment testing described above, management concluded that none of the Group’s investments in joint ventures should be impaired.

Sensitivity analysis was performed on key assumptions within the impairment tests. The sensitivity analysis determined that sufficient ~~margin~~headroom exists from realistic changes to the assumptions that would not impact the overall results of the testing.

F- 38



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

A.3. Investments in associates

Millicom’s investments in ~~associates mainly represent its shareholding in~~ Helios Towers Africa Ltd (HTA) and ~~its investments~~ in the African online business (AIH) became listed companies during 2019, and Millicom resigned from its board of directors' positions in both companies, having as an effect the loss of its significant influence. Both investments are now accounted for as equity instruments (see note C.7.3.). Millicom has significant influence over ~~these companies through its voting rights but not control or joint control.~~other immaterial associates as shown below.

The Group’s ~~main~~ associates are as follows:

December 31, 2018

December 31, 2017

December 31, 2019

December 31, 2018

Entity

Country

Activity(ies)

% holding

Country

Activity(ies)

% holding

Africa

Helios Towers Africa Ltd (HTA)(i)

Mauritius

Holding of Tower infrastructure company

22.83

Mauritius

Holding of Tower infrastructure company

—

22.83

Africa Internet Holding GmbH (AIH)(i)

Germany

Online marketplace, retail and services

10.15

Germany

Online marketplace, retail and services

—

10.15

West Indian Ocean Cable Company Limited (WIOCC)

Republic of Mauritius

Telecommunication carriers’ carrier

9.1

Republic of Mauritius

Telecommunication carriers’ carrier

9.1

Latin America

MKC Brilliant Holding GmbH (LIH)

Germany

Online marketplace, retail and services

35.0

Germany

Online marketplace, retail and services

35.0

Unallocated

Milvik AB

Sweden

Other

12.3

Sweden

Other

11.4

12.3

(i) See note C.7.3..

At December 31, ~~2018~~2019 and ~~2017,~~2018, the carrying value of Millicom’s main associates was as follows:

Carrying value of investments in associates at December 31

2018 2017
(US$ millions)
MKC Brilliant Holding GmbH (LIH) —
—
African Internet Holding GmbH (AIH) 38
61
Helios Tower Africa Ltd (HTA) 105
149
Milvik AB 13
16
West Indian Ocean Cable Company Limited (WIOCC) 14
14
Total 169
241

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~



	2019	2018
	(US$ millions)
African Internet Holding GmbH (AIH)	—	38
Helios Tower Africa Ltd (HTA)	—	105
Milvik AB	11	13
West Indian Ocean Cable Company Limited (WIOCC)	14	14
Total	25	169

The summarized financial information for the Group’s main material associates ~~(i.e. HTA and AIH)~~ is provided below.

Summary of statement of financial position of associates at December 31,

2018 2017
(US$ millions)
Total current assets 473
409
Total non-current assets 717
766
Total assets 1,190
1,176
Total current liabilities 343
268
Total non-current liabilities 627
602
Total liabilities 969
870
Total net assets 221
306
Millicom’s carrying value of its investment in HTA and AIH 142
211
Millicom’s carrying value of its investment in other associates 27
30
Millicom’s carrying value of its investment in associates 169
241



	2018 (i)

Total current assets	473
Total non-current assets	717
Total assets	1,190
Total current liabilities	343
Total non-current liabilities	627
Total liabilities	969
Total net assets	221
Millicom’s carrying value of its investment in HTA and AIH	142
Millicom’s carrying value of its investment in other associates	27
Millicom’s carrying value of its investment in associates	169

F- 39



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

(i) The summarized financial information in 2018 includes HTA and AIH. For 2019, Millicom does not disclose such information as its remaining associates are immaterial to the Group.

Profit (loss) from other joint ventures and associates

In 2019, the loss shown under this caption in the statement of income mainly relates to the net losses recognised by our joint venture in Ghana. For further details refer to note A.2..


	2018		2017		2016		2018 (i)		2017 (i)
	(US$ millions)
Revenue	511		449		378		511		449
Operating expenses	(459	)	(321	)	(302	)	(459	)	(321	)
Operating profit (loss)	(214	)	(148	)	(167	)	(214	)	(148	)
Net loss for the year	(327	)	(220	)	(228	)	(327	)	(220	)
Millicom’s share of results from HTA and AIH	(66	)	(34	)	(39	)	(66	)	(34	)
Millicom’s share of results from other associates	(2	)	(45	)	(10	)	(2	)	(45	)
Millicom’s share of results from other joint ventures (Ghana)	(68	)	(6	)	—		(68	)	(6	)
Millicom’s share of results from other joint ventures and associates	(136	)	(85	)	(49	)	(136	)	(85	)

(i) The summarized financial information in 2018 and 2017 includes HTA and AIH. For 2019, Millicom does not disclose such information as its remaining associates are immaterial to the Group.

A.3.1. Accounting for investments in associates

The Group accounts for associates in the same way as it accounts for joint ventures.

A.3.2. Acquisitions and disposals of interests in associates

~~Africa Internet Holding GmbH (AIH)~~

~~AIH indirectly owns a number of companies that provide online services and online marketplaces in certain countries in Africa mainly under the brand name of Jumia.~~

Early January 2019, Millicom has been further diluted in the capital of AIH following the entry of a new investor. This triggered the recognition of a net dilution gain of $7 million in January 2019. In addition, on January 31, 2019, some changes in the company's governance became effective and Millicom relinquished its seat on the board of directors, which resulted in the loss of the Group's significant influence over AIH. As a result, as from January 31, 2019, Millicom will stop equity accounting for its investment in AIH and start measuring it at fair value. This change in accounting is expected to trigger the recognition of a gain at initial measurement.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

Other various shareholder funding rounds were signed in 2016 whereby Millicom's interest was diluted. At that time, Millicom’s shareholding in AIH was reduced to 10%. This triggered the recognition of a net dilution gain of $43 million in the 2016 Group statement of income under 'Income (loss) from associates, net'.

~~Millicom investment in African towers company, Helios Towers Africa~~

Helios Towers Africa owns and operates telecommunications towers and passive infrastructure in four African markets. The company's principal business lies in building, acquiring and operating telecommunications towers that are capable of accommodating and powering the needs of multiple tenants.

During 2016, Millicom’s shareholding was diluted from 28.2% to 22.8% as a result of previous committed cash calls and new investors’ funding. This resulted in Millicom recognizing a gain on dilution of $16 million. The gain was recorded in the 2016 Group statement of income under 'Income (loss) from other joint ventures and associates, net'.

~~MKC Brilliant Holding GmbH (LIH)~~

~~During 2016, Millicom’s 35% investment in LIH had been impaired by $40 million mainly as a result of the decrease in fair value of LIH’s investment in the Global Fashion Group.~~

In April 2017, LIH completed the disposal of its shareholding in Easy Taxi to Cabify. As a result, and ultimately, LIH received cash and shares in Cabify. The transaction resulted in Millicom recognizing a loss of $11 million (Millicom’s share). Additionally, as a result of the annual impairment test conducted in 2017, Management fully impaired the remaining carrying value of its investment in LIH for $48 million. The impairment test performed in 2018 confirmed this conclusion. These losses were recorded under the caption 'Income (loss) from other joint ventures and associates, net' in the year ended December 31, 2017.

Milvik AB (BIMA)

On December 19, 2017, Millicom announced that it had sold a portion of its ownership stake in BIMA - a leading emerging market insurance player - (from 20.4% to 12.0% – on a fully diluted basis) to Kinnevik and a new investor, with the latter contributing $97 million in the micro-insurance business. As a result of the transaction, Millicom received $24 million in cash and recognized a gain on disposal of $21 million. In addition, and as a consequence of the subsequent capital increase made by the new investor, the Group recognized a gain on dilution of $11 million. Both gains have been recorded under the caption "Income (loss) from other joint ventures and associates, net", in the statement of ~~income.~~income for the year ended December 31, 2017. Both transactions were carried out at the same fair value on an arm’s length basis.

MKC Brilliant Holding GmbH (LIH)

Millicom’s 35.0% investment in LIH has been fully impaired in two stages (by $40 million in 2016 and $48 million in 2017) mainly as a result of the decrease in fair value of LIH’s investment in the Global Fashion Group and the results the annual impairment test conducted in 2017. The impairment test performed in 2019 confirms this conclusion. These losses were recorded under the caption 'Income (loss) from other joint ventures and associates, net' in the year ended December 31, 2017.

A.4. Discontinued operations

A.4.1. Classification of discontinued operations

Discontinued operations are those which have identifiable operations and cash flows (for both operating and management purposes) and represent a major line of business or geographic area which has been disposed of, or are held for sale. Revenue and expenses associated with discontinued operations are presented retrospectively in a separate line in the consolidated statement of income. Millicom determined that the loss of path to control of operations by the termination of a contractual arrangement (e.g. termination without exercise of an unconditional call option agreement giving path to control, as occurred with the Guatemala and Honduras operations) does not require presentation as a discontinued operation.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

A.4.2. Millicom’s discontinued operations

In accordance with IFRS 5, the Group’s businesses in Chad, Senegal, Tigo Ghana and Tigo Rwanda have been classified as assets held for sale (respectively on June 5, 2019, February 2, 2017, September 28, 2017 and January 23, 2018) and their results were

F- 40



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

showed as discontinued operations for all years presented in these financial statements. The statement of income comparative figures presented in the notes to these consolidated financial statements have therefore been restated accordingly and when necessary. For further details, refer to note ~~E.3.~~E.4.

B. Performance

B.1. Revenue

Millicom’s revenue comprises sale of services from its mobile business (including Mobile Financial Services - MFS) and its cable and other fixed services, as well as related devices and equipment. Recurring revenue consists of monthly subscription fees, airtime and data usage fees, interconnection fees, roaming fees, TV services, B2B contracts, MFS commissions and fees from other telecommunications services such as data services, short message services and other value added services.

Revenue from continuing operations by category


	2018	2017	2016	2019	2018	2017
	(US$ millions)			(US$ millions)
Mobile	2,248	2,281	2,343	2,150	2,126	2,147
Cable and other fixed services	1,568	1,553	1,437	1,928	1,565	1,551
Other	46	41	39	52	43	38
Service revenue	3,861	3,876	3,820	4,130	3,734	3,737
Telephone and equipment and other	213	200	223	206	212	199
Total revenue	4,074	4,076	4,043	4,336	3,946	3,936

Revenue from continuing operations by country or operation (i)


	2018	2017	2016	2019	2018	2017
	(US$ millions)			(US$ millions)
Colombia	1,661	1,739	1,717	1,532	1,661	1,739
Paraguay	679	662	623	609	679	662
Bolivia	614	555	542	639	614	555
El Salvador	405	422	425	386	405	422
Tanzania (excluding Zantel)	356	348	347
Chad	128	140	166
Tanzania				382	399	384
Nicaragua				157	13	13
Costa Rica	155	153	152	153	155	153
Panama	17	—	—	475	17	—
Other operations	60	57	71	2	5	7
Total	4,074	4,076	4,043	4,336	3,946	3,936

(i) The revenue figures above are shown after intercompany eliminations.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

B.1.1. Accounting for revenue

Revenue recognition

Revenue is recognized at an amount that reflects the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer.

The Group applies the following practical expedients foreseen in IFRS 15:

No adjustment to the transaction price for the means of a financing component whenever the period between the transfer of a promised good or service to a customer and the associated payment is one year or less; when the period is more than one year the financing component is adjusted, if material.

F- 41



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Disclosure in the Group Financial Statements the transaction price allocated to unsatisfied performance obligations only for contracts that have an original expected duration of more than one year (e.g. unsatisfied performance obligations for contracts that have an original duration of one year or less are not disclosed).

Application of the practical expedient not to disclose the price allocated to unsatisfied performance obligations, if the consideration from a customer corresponds to the value of the entity’s performance obligation to the customer (i.e, if billing corresponds to accounting revenue).

Application of the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that otherwise would have been recognized is one year or less.

Post-paid connection fees are derived from the payment of a non-refundable / one-time fee charged to customer to connect to the network (e.g. connection / installation fee). Usually, it does not represent a distinct good or service, and therefore does not give rise to a separate performance obligation and revenue is recognized over the minimum contract duration. However, if the fee is paid by a customer to get the right to receive goods or services without having to pay this fee again over his tenure with the Group (e.g. the customer can readily extend his contract without having to pay the same fee again), it is accounted for as a material right and revenue should be recognized over the customer retention period.

Post-paid mobile / cable subscription fees are recognized over the relevant enforceable/subscribed service period (recurring monthly access fees that do not vary based on usage). The service provision is usually considered as a series of distinct services that have the same pattern of transfer to the customer. Remaining unrecognized subscription fees, which are not refunded to the customers, are fully recognized once the customer has been disconnected.

Prepaid scratch / SIM cards are services where customers purchase a specified amount of airtime or other credit in advance. Revenue is recognized as the credit is used. Unused credit is carried in the statement of financial position as a contract liability. Upon expiration of the validity period, the portion of the contract liability relating to the expiring credit is recognized as revenue, since there is no longer an obligation to provide those services.

Telephone and equipment sales are recognized as revenue once the customer obtains control of the good. That criteria is fulfilled when the customer has the ability to direct the use and obtain substantially all of the remaining benefits from that good.

Revenue from provision of Mobile Financial Services (MFS) is recognized once the primary service has been provided to the customer.

Customer premise equipment (CPE) are provided to customers as a prerequisite to receive the subscribed Home services and shall be returned at the end of the contract duration. Since CPEs provided over the contract term do not provide benefit to the customer on their own, they do not give rise to separate performance obligations and therefore are accounted for as part of the service provided to the customers.

Bundled offers are considered arrangements with multiple deliverables or elements, which can lead to the identification of separate performance obligations. Revenue is recognized in accordance with the transfer of goods or services to customers in an amount that reflects the relative standalone selling price of the performance obligation (e.g. sale of telecom services, revenue over time + sale of handset, revenue at a point in time).

Principal-Agent, some arrangements involve two or more unrelated parties that contribute to providing a specified good or service to a customer. In these instances, the Group determines whether it has promised to provide the specified good or service itself (as a principal) or to arrange for those specified goods or services to be provided by another party (as an agent). For example, performance obligations relating to services provided by third-party content providers (i.e., mobile Value Added Services or “VAS”) or service providers (i.e., wholesale international traffic) where the Group neither controls a right to the provider’s service nor controls the underlying service itself are presented net because the Group is acting as an agent. The Group generally acts as a principal for other types of services where the Group is the primary obligor of the arrangement. In cases the Group determines that it acts as a principal, revenue is recognized in the gross amount, whereas in cases the Group acts as an agent revenue is recognized in the net amount.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

Revenue from the sale of cables, fiber, wavelength or capacity contracts, when part of the ordinary activities of the operation, is recognized as recurring revenue. Revenue is recognized when the cable, fiber, wavelength or capacity has been delivered to the customer, based on the amount expected to be received from the customer.

Revenue from operating lease of tower space is recognized over the period of the underlying lease contracts. Finance leases revenue is apportioned between lease of tower space and interest income.

Significant judgments

The determination of the standalone selling price for contracts that involve more than one performance obligation may require significant judgment, such as when the selling price of a good or service is not readily observable.

F- 42



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The Group determines the standalone selling price of each performance obligation in the contract in accordance to the prices that the Group would apply when selling the same services and/or telephone and equipment included in the obligation to a similar customer on a standalone basis. When standalone selling price of services and/or telephone and equipment are not directly observable, the Group maximizes the use of external input and uses the expected cost plus margin approach to estimate the standalone selling price.

B.2. Expenses

The cost of sales and operating expenses incurred by the Group can be summarized as follows:

Cost of sales


	2018		2017		2016		2019		2018		2017
	(US$ millions)						(US$ millions)
Direct costs of services sold	(829	)	(913	)	(857	)	(878	)	(799	)	(881	)
Cost of telephone, equipment and other accessories	(230	)	(219	)	(254	)	(230	)	(229	)	(217	)
Bad debt and obsolescence costs	(87	)	(72	)	(63	)	(93	)	(90	)	(71	)
Cost of sales	(1,146	)	(1,205	)	(1,175	)	(1,201	)	(1,117	)	(1,169	)

Operating expenses, net


	2018		2017		2016		2019		2018		2017
	(US$ millions)						(US$ millions)
Marketing expenses	(404	)	(463	)	(442	)	(402	)	(391	)	(448	)
Site and network maintenance costs	(209	)	(176	)	(160	)	(245	)	(192	)	(178	)
Employee related costs (B.4.)	(514	)	(451	)	(451	)	(496	)	(500	)	(434	)
External and other services	(185	)	(152	)	(218	)	(204	)	(181	)	(163	)
Rentals and operating leases	(155	)	(155	)	(159	)
Rentals and (operating) leases (i)							(1	)	(152	)	(151	)
Other operating expenses	(207	)	(197	)	(196	)	(257	)	(201	)	(156	)
Operating expenses, net	(1,674	)	(1,593	)	(1,627	)	(1,604	)	(1,616	)	(1,531	)


(i)	Decrease is due to IFRS 16 application - see further explanations above in "New and amended IFRS accounting standards" section

The other operating income and expenses incurred by the Group can be summarized as follows:

Other operating income (expenses), net


	Notes	2018		2017		2016		Notes	2019		2018		2017
		(US$ millions)							(US$ millions)
Income from tower deal transactions	C.3.4.	65		63		—		C.3.4.	5		61		63
Impairment of intangible assets and property, plant and equipment	E.1., E.2.	(6	)	(12	)	(6	)	E.1., E.2.	(8	)	(6	)	(12	)
Gain (loss) on disposals of intangible assets and property, plant and equipment		8		1		(8	)		—		7		1
Loss on disposal of equity investments								C.7.3.	(32	)	—		—
Other income (expenses)		9		16		—			1		13		17
Other operating income (expenses), net		76		68		(14	)		(34	)	75		69

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

B.2.1. Accounting for cost of sales and operating expenses

Cost of sales

Cost of sales is recorded on an accrual basis.

~~Customer acquisition~~

F- 43



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Incremental costs of obtaining a contract

~~Specific customer acquisition~~Incremental costs of obtaining a contract, including dealer commissions, are capitalized as Contract Costs in the statement of financial position and ~~handset subsidies, are charged to marketing~~amortized in operating expenses ~~when~~over the expected benefit period, which is based on the average duration of contracts with customer ~~is activated.~~

~~Operating leases~~(see practical expedient in note B.1.1.).

Operating leases ~~are~~- until 2018 year-end

Operating leases were all leases that dodid not qualify as finance leases. Operating lease payments ~~are~~were recognized as expenses in the consolidated statement of income on a straight-line basis over the lease term.

B.3. Segmental information

Management determines operating and reportable segments based on information used by the chief operating decision maker (CODM) to make strategic and operational decisions from both a business and geographic perspective. The Group’s risks and rates of return are predominantly affected by operating in different geographical regions. The Group has businesses in two main regions: Latin America ("Latam") and Africa. The Latam figures below include Honduras and Guatemala as if they are fully consolidated by the Group, as this reflects the way management reviews and uses internally reported information to make decisions. Honduras and Guatemala are shown under the Latam segment. The joint venture in Ghana is not reported as if fully consolidated. As from January 1, 2018, segment EBITDA includes inter-company management fees and incentive compensation paid to local management teams. These items, were previously included in unallocated corporate costs. This change in presentation has no impact on Group EBITDA. Accordingly, 2017 and 2016 have been represented. Revenue, operating profit (loss), EBITDA and other segment information for the years ended December 31, 2019, 2018 ~~2017~~ and ~~2016,~~2017, were as follows:

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~



	Latin America		Africa		Unallocated		Guatemala and Honduras(vii)		Eliminations and Transfers		Total
	(US$ millions)
Year ended December 31, 2019
Mobile revenue	3,258		372		—		(1,480	)	—		2,150
Cable and other fixed services revenue	2,197		9		—		(277	)	—		1,928
Other revenue	60		1		—		(8	)	—		52
Service revenue (i)	5,514		382		—		(1,766	)	—		4,130
Telephone and equipment and other revenue (i)	449		—		—		(243	)	—		206
Revenue	5,964		382		—		(2,009	)	—		4,336
Operating profit (loss)	1,006		24		(94	)	(540	)	179		575
Add back:
Depreciation and amortization	1,435		99		9		(444	)	—		1,100
Share of profit in joint ventures in Guatemala and Honduras	—		—		—		—		(179	)	(179	)
Other operating income (expenses), net	2		(2	)	42		(8	)	—		34
EBITDA (ii)	2,443		122		(43	)	(992	)	—		1,530
EBITDA from discontinued operations	—		(3	)	—		—		—		(3	)
EBITDA incl discontinued operations	2,443		119		(43	)	(992	)	—		1,527
Capital expenditure (iii)	(1,040	)	(58	)	(9	)	261		—		(846	)
Changes in working capital and others (iv)	(86	)	14		(52	)	(18	)	—		(143	)
Taxes paid	(225	)	(10	)	(8	)	129		—		(114	)
Operating free cash flow (v)	1,093		64		(112	)	(619	)	—		425
Total Assets (vi)	13,821		936		3,715		(5,465	)	(151	)	12,856
Total Liabilities	8,374		909		3,977		(2,119	)	(965	)	10,176

F- 44



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Latin America Africa (vii) Unallocated Guatemala and Honduras(vii) Eliminations and
Transfers Total
(US$ millions)
Year ended December 31, 2018

Mobile revenue 3,214
510
—
(1,475 ) —
2,248
Cable and other fixed services revenue 1,808
12
—
(253 ) —
1,568
Other revenue 48
3
—
(6 ) —
46
Service revenue (i) 5,069
526
—
(1,734 ) —
3,861
Telephone and equipment and other revenue 415
1
—
(203 ) —
213
Revenue 5,485
526
—
(1,937 ) —
4,074
Operating profit (loss) 995
40
(47 ) (488 ) 154
655
Add back:

Depreciation and amortization 1,133
107
5
(416 )

830
Share of profit in joint ventures in Guatemala and Honduras —
—
—
—
(154 ) (154 )
Other operating income (expenses), net (51 ) (3 ) (2 ) (19 ) —
(76 )
EBITDA(ii) 2,077
143
(44 ) (922 ) —
1,254
EBITDA from discontinued operations —
3
—
—
—
3
EBITDA incl. discontinued operations 2,077
146
(44 ) (922 ) —
1,257
Capex(iii) (872 ) (59 ) (2 ) 225
—
(708 )
Changes in working capital and others(iv) (42 ) 28
13
(12 ) —
(13 )
Taxes paid (264 ) (24 ) (6 ) 142
—
(153 )
Operating Free Cash Flow(v) 899
91
(39 ) (568 ) —
383
Total Assets(vi) 11,754
839
2,752
(5,219 ) 190
10,316
Total Liabilities 6,132
905
2,953
(1,814 ) (650 ) 7,526

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~



	Latin America		Africa		Unallocated		Guatemala and Honduras(vii)		Eliminations and Transfers		Total
	(US$ millions)
Year ended December 31, 2018 (viii)
Mobile revenue	3,214		388		—		(1,475	)	—		2,126
Cable and other fixed services revenue	1,808		10		—		(253	)	—		1,565
Other revenue	48		1		—		(6	)	—		43
Service revenue (i)	5,069		398		—		(1,734	)	—		3,734
Telephone and equipment revenue (i)	415		—		—		(203	)	—		212
Revenue	5,485		399		—		(1,937	)	—		3,946
Operating profit (loss)	995		25		(47	)	(488	)	154		640
Add back:
Depreciation and amortization	1,133		80		5		(416	)	—		803
Share of profit in joint ventures in Guatemala and Honduras	—		—		—		—		(154	)	(154	)
Other operating income (expenses), net	(51	)	(3	)	(2	)	(19	)	—		(75	)
EBITDA (ii)	2,077		102		(44	)	(922	)	—		1,213
EBITDA from discontinued operations	—		44		—		—		—		44
EBITDA incl discontinued operations	2,077		146		(44	)	(922	)	—		1,257
Capital expenditure (iii)	(872	)	(59	)	(2	)	225		—		(708	)
Changes in working capital and others (iv)	(42	)	28		13		(12	)	—		(13	)
Taxes paid	(264	)	(24	)	(6	)	142		—		(153	)
Operating free cash flow (v)	899		91		(39	)	(568	)	—		383
Total Assets (vi)	11,751		839		2,752		(5,219	)	190		10,313
Total Liabilities	6,127		905		2,953		(1,814	)	(650	)	7,521

F- 45



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Latin America Africa (vii) Unallocated Guatemala and Honduras(vii) Eliminations and
Transfers Total
(US$ millions)
Year ended December 31, 2017 (viii)
Mobile revenue 3,283
509
—
(1,510 ) —
2,281
Cable and other fixed services revenue 1,755
12
—
(213 ) —
1,553
Other revenue 40
5
—
(4 ) —
41
Service revenue (i) 5,078
524
—
(1,727 ) —
3,876
Telephone and equipment and other revenue 363
2
—
(165 ) —
200
Revenue 5,441
526
—
(1,892 ) —
4,076
Operating profit (loss) 899
41
(5 ) (431 ) 140
645
Add back:
Depreciation and amortization 1,174
110
6
(450 ) —
841
Share of profit in joint ventures in Guatemala and Honduras —
—
—
—
(140 ) (140 )
Other operating income (expenses), net (49 ) (11 ) 10
(18 ) —
(68 )
EBITDA(ii) 2,024
140
11
(899 ) —
1,278
EBITDA from discontinued operations —
73
—
—
—
73
EBITDA incl. discontinued operations 2,024
213
11
(899 ) —
1,351
Capex(iii) (855 ) (99 ) (1 ) 237
—
(718 )
Changes in working capital and others(iv) (53 ) (6 ) (10 ) 27
—
(42 )
Taxes paid (239 ) (18 ) 1
124
—
(132 )
Operating Free Cash Flow(v) 877
90
1
(511 ) —
459
Total Assets(vi) 10,411
1,482
598
(5,420 ) 2,393
9,464
Total liabilities 5,484
1,673
1,465
(1,961 ) (478 ) 6,183

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~


	Latin America		Africa		Unallocated		Guatemala and Honduras(vii)		Eliminations and Transfers		Total		Latin America		Africa		Unallocated		Guatemala and Honduras(vii)		Eliminations and Transfers		Total
	(US$ millions)												(US$ millions)
Year ended December 31, 2016 (viii)
Year ended December 31, 2017 (viii)
Mobile revenue	3,318		541		—		(1,514	)	—		2,343		3,283		374		—		(1,510	)	—		2,147
Cable and other fixed services revenue	1,611		15		—		(191	)	—		1,437		1,755		9		—		(213	)	—		1,551
Other revenue	37		6		—		(4	)	—		39		40		2		—		(4	)	—		38
Service revenue (i)	4,966		562		—		(1,709	)	—		3,820		5,078		385		—		(1,727	)	—		3,737
Telephone and equipment and other revenue	386		2		—		(165	)	—		223
Revenue	5,352		565		—		(1,875	)	—		4,043
Telephone and equipment revenue (i)													363		1		—		(165	)	—		199
Total Revenue													5,441		386		—		(1,892	)	—		3,936
Operating profit (loss)	721		43		4		(394	)	(115	)	490		899		28		(5	)	(431	)	140		632
Add back:
Depreciation and amortization	1,173		113		7		(441	)	—		853		1,174		81		6		(450	)	—		812
Share of profit in joint ventures in Guatemala and Honduras	—		—		—		—		(115	)	(115	)	—		—		—		—		(140	)	(140	)
Other operating income (expenses), net	42		2		(6	)	(24	)	—		14		(49	)	(11	)	10		(18	)	—		(69	)
EBITDA(ii)	1,935		158		5		(859	)	—		1,241
EBITDA (ii)													2,024		97		12		(898	)	—		1,236
EBITDA from discontinued operations	—		77		—		—		—		77		—		115		—		—		—		115
EBITDA incl. discontinued operations	1,935		235		5		(859	)	—		1,319
Capex(iii)	(886	)	(161	)	(6	)	242		—		(811	)
Changes in working capital and others(iv)	37		(2	)	(33	)	24		—		26
EBITDA incl discontinued operations													2,024		212		12		(898	)	—		1,351
Capital expenditure (iii)													(855	)	(99	)	(1	)	237		—		(718	)
Changes in working capital and others (iv)													(53	)	(6	)	(10	)	27		—		(43	)
Taxes paid	(233	)	(33	)	(9	)	145		—		(130	)	(239	)	(18	)	1		124		—		(132	)
Operating Free Cash Flow(v)	853		39		(43	)	(448	)	—		404
Total Assets(vi)	10,386		1,406		1,357		(5,589	)	2,067		9,627
Total liabilities	5,229		1,852		1,997		(1,942	)	(877	)	6,258
Operating free cash flow (v)													877		89		2		(511	)	1		459
Total Assets (vi)													10,411		1,482		598		(5,420	)	2,393		9,464
Total Liabilities													5,484		1,673		1,465		(1,961	)	(478	)	6,183

(i)

Service revenue is Group revenue related to the provision of ongoing services such as monthly subscription fees, airtime and data usage fees, interconnection fees, roaming fees, mobile finance service commissions and fees from other telecommunications services such as data services, SMS and other value-added services excluding telephone and equipment sales. Revenues from other sources comprises rental, sub-lease rental income and other non ~~recurrent~~recurring revenues. The Group derives revenue from the transfer of goods and services over time and at a point in time. Refer to the table below.

(ii)

EBITDA is operating profit excluding impairment losses, depreciation and amortization and gains/losses on the disposal of fixed assets. EBITDA is used by the management to monitor the segmental performance and for capital management.For the year ended December 31, 2019, the application of IFRS 16 had a positive impact on EBITDA as compared to what our results would have been if we had continued to follow the IAS 17 standard.

~~(iii) Cash spent for capex excluding spectrum and licenses of $61 million (2017: $53 million; 2016: $39~~


(iii)	Cash spent for capex excluding spectrum and licenses of $59 million (2018: $61 million; 2017: $53 million) and cash received on tower deals of $22 million (2018: $141 million; 2017: $161 million) ~~and cash received on tower deals of $141 million (2017: $167 million; 2016: nil)~~.


(iv)	Changes in working capital and others include changes in working capital as stated in the cash flow statement, as well as share-based payments expense and non-cash bonuses.


(v)	Operating Free Cash Flow is EBITDA less cash capex (excluding spectrum and license costs) less change in working capital, other non-cash items (share-based payment expense and non-cash bonuses) and taxes paid.


(vi)	Segment assets include goodwill and other intangible assets.


(vii)	Including eliminations for Guatemala and Honduras as reported in the Latam segment.


(viii)	Restated as a result of classification of certain of our African operations as discontinued operations (see notes A.4. and ~~E.3.~~E.4.).

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

F- 46



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Revenue from contracts with customers from continuing operations:


Year ended December 31, 2018
						Twelve months ended December 31, 2019			Twelve months ended December 31, 2018
$ millions	Timing of revenue recognition	Latin America	Africa	Total Group	Timing of revenue recognition	Latin America	Africa	Total Group	Latin America	Africa	Total Group
Mobile	Over time	1,701	401	2,102	Over time	1,747	261	2,007	1,701	280	1,981
Mobile Financial Services	Point in time	37	109	147	Point in time	31	112	143	37	108	145
Cable and other fixed services	Over time	1,556	12	1,568	Over time	1,919	9	1,928	1,556	10	1,565
Other	Over time	42	3	46	Over time	51	1	52	42	1	43
Service Revenue		3,336	526	3,861		3,748	382	4,130	3,336	398	3,734
Telephone and equipment	Point in time	212	1	213	Point in time	206	—	206	212	—	212
Revenue from contracts with customers		3,548	526	4,074		3,954	382	4,336	3,548	399	3,946

B.4. People

Number of permanent employees


	2018	2017	2016	2019	2018	2017
Continuing operations(i)	16,987	14,404	13,211	17,687	16,725	14,134
Joint ventures (Guatemala, Honduras and Ghana – for 2018 and 2017)	4,416	4,326	4,023
Joint ventures (Guatemala, Honduras and Ghana)				4,688	4,416	4,326
Discontinued operations	—	397	751	—	262	667
Total	21,403	19,127	17,985	22,375	21,403	19,127


(i)	Emtelco headcount are excluded from this ~~report~~disclosure and any internal reporting because their costs are classified as direct costs and not employee related ~~costs~~. costs.


	Notes	2018		2017		2016		Notes	2019		2018		2017
		(US$ millions)							(US$ millions)
Wages and salaries		(356	)	(320	)	(290	)		(358	)	(346	)	(308	)
Social security		(61	)	(57	)	(67	)		(68	)	(60	)	(56	)
Share based compensation	B.4.1.	(21	)	(22	)	(14	)	B.4.1.	(27	)	(21	)	(22	)
Pension and other long-term benefit costs	B.4.2.	(7	)	(8	)	(6	)	B.4.2.	(4	)	(7	)	(8	)
Other employee related costs		(70	)	(45	)	(74	)
Other employees related costs									(39	)	(67	)	(41	)
Total		(514	)	(451	)	(451	)		(496	)	(500	)	(434	)

B.4.1. Share-based compensation

Millicom shares granted to management and key employees includes share-based compensation in the form of long-term share incentive plans. Up until 2015, Millicom had two types of annual plan, a future performance plan and a deferred share plan. In 2015, Millicom issued four different types of plans; a deferred share plan, a performance share plan, an executive share plan and the sign-on CEO share plan (a one-off plan). Since 2016, Millicom has two types of annual plans, a performance share plan and a deferred share plan. The different plans are further detailed below.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~F- 47



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Cost of share based compensation


	2018		2017		2016		2019		2018		2017
	(US$ millions)						(US$ millions)
2014 incentive plans	—		—		(1	)
2015 incentive plans	—		(3	)	(3	)
2016 incentive plans	(4	)	(6	)	(10	)	—		(4	)	(6	)
2017 incentive plans	(8	)	(12	)	—		(7	)	(8	)	(12	)
2018 incentive plans	(11	)	—		—		(8	)	(11	)	—
Total share-based compensation	(21	)	(22	)	(14	)
2019 incentive plans							(14	)	—		—
Total share based compensation							(27	)	(21	)	(22	)

Deferred share plan (unchanged since ~~2014)~~2014, except for vesting schedule)

~~For the~~Until 2018 deferred awards plan, participants ~~are~~were granted shares based on past performance, with 16.5% of the shares vesting on January 1 of each of year one and two, and the remaining 67% on 1 January of year three. Beginning with the 2019 plan, while all other guidelines remain the same, shares vest with 30% on January 1 of each of year one and two, and the remaining 40% on 1 January of year three. Vesting is conditional upon the participant remaining employed with Millicom at each vesting date. The cost of this long-term incentive plan, which is not conditional on performance conditions, is calculated as follows:

Fair value (share price) of Millicom’s shares at grant date x number of shares expected to vest.

~~Sign-on CEO share plan (issued in 2015 – one off)~~

As part of his employment contract Millicom CEO (from April 1, 2015) received a sign-on grant of 77,344 shares. Vesting is conditional, among other conditions, on the CEO not being dismissed for cause. The cost of this long-term incentive plan, which is not conditional on market conditions, is calculated in the same way as the deferred share plan above. The expense for this plan has been taken in full during 2015.

Performance share plan (issued in 2015)

Under this plan, shares granted did vest in full in ~~2018,~~2019, subject to performance conditions, 62.5% based on Absolute Total Shareholder Return (TSR) and 37.5% based on actual vs budgeted EBITDA minus CAPEX minus Change in Working Capital (Free Cash Flow). As the TSR measure is a market condition, the fair value of the shares in the performance share plan requires consideration of potential adjustments for future market-based conditions at grant date.

For this, a specific valuation had been performed at grant date based on the probability of the TSR conditions being met (and to which extent) and the expected payout based upon leaving conditions.

The Free Cash Flows (FCF) condition is a non-market measure which had been considered together with the leaving estimate and based initially on a 100% fulfillment expectation. The reference share price for 2015 performance share plan is the same share price as the share price for the deferred share plan.

~~Executive share plan (issued in 2015 – one off)~~

Under this plan, shares were granted to the CEO and CFO based on an allocated holding of 3,333 (CEO) and 2,000 (CFO) shares for which vesting occurs based on three components at multipliers based on market conditions (a TSR for component A and B) and performance conditions (on actual vs budgeted FCF for component C). The maximum number of shares that could vest under the plan was 26,664 (CEO) and 14,000 (CFO). The plan vested in 2018 at the end of a three-year period.

Similarly to the performance share plan, a specific valuation had been performed based on the probability of the TSR conditions being met (and to which extent) and the expected payout based upon leaving conditions. The FCF condition being a non-market measure, it had been considered together with the leaving estimate and based initially

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

~~on a 100% fulfillment expectation. Therefore, the reference share price is the share price on the date that the CEO and the CFO agreed to the executive share plan.~~

Performance share plan (for plans issued in 2016 and 2017)

Shares granted under this performance share plan vest at the end of the three-year period, subject to performance conditions, 25% based on Positive Absolute Total Shareholder Return (Absolute TSR), 25% based on Relative Total Shareholder Return (Relative TSR) and 50% based on budgeted Earnings Before Interest Tax Depreciation and Amortization (EBITDA) minus Capital Expenditure (Capex) minus Change in Working Capital (CWC) (Free Cash Flow).

~~This performance share plan is measured similarly to~~As the TSRs measures are market conditions, the fair value of the shares in the performance share plan ~~issued in 2015, see~~requires consideration of potential adjustments for future market-based conditions at grant date.

For this, a specific valuation had been performed at grant date based on the probability of the TSR conditions being met (and to which extent) and the expected payout based upon leaving conditions.

The Free Cash Flows (FCF) condition is a non-market measure which had been considered together with the leaving estimate and based initially on a 100% fulfillment expectation. The reference share price for this condition is the same share price as the share price for the deferred share plan above.

Performance share plan (for ~~plan~~plans issued infrom 2018)

Shares granted under this performance share plan vest at the end of the three-year period, subject to performance conditions, 25% based on Relative Total Shareholder Return (“Relative TSR”), 25% based on the achievement of the Service Revenue target measured on a 3-year CAGRs from ~~years 2018~~year one to ~~2020~~year three of the plan (“Service Revenue”) and 50% based on the achievement of the Operating Free Cash Flow (“Operating Free Cash Flow”) target measured on a 3-year CAGRs from ~~years 2018~~year one to ~~2020.~~year three of the plan.

For the performance share plans, ~~and the executive share plan,~~ and in order to calculate the fair value of the TSR portion of those plans, it is necessary to make a number of assumptions which are set out below. The assumptions have been set based on an analysis of historical data as at grant date.

F- 48



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Assumptions and fair value of the shares under the TSR ~~portion~~portion(s)


	Risk-free rate %		Dividend yield %	Share price volatility(i) %	Award term (years)	Share fair value (in US$)	Risk-free rate %		Dividend yield %	Share price volatility(i) %	Award term (years)	Share fair value (in US$)
Performance share plan 2019 (Relative TSR)							(0.24	)	3.01	26.58	2.93	49.79
Performance share plan 2018 (Relative TSR)	(0.39	)	3.21	30.27	2.93	57.70	(0.39	)	3.21	30.27	2.93	57.70
Performance share plan 2017 (Relative TSR)	(0.40	)	3.80	22.50	2.92	27.06	(0.40	)	3.80	22.50	2.92	27.06
Performance share plan 2017 (Absolute TSR)	(0.40	)	3.80	22.50	2.92	29.16	(0.40	)	3.80	22.50	2.92	29.16
Performance share plan 2016 (Relative TSR)	(0.65	)	3.49	30.00	2.61	43.35	(0.65	)	3.49	30.00	2.61	43.35
Performance share plan 2016 (Absolute TSR)	(0.65	)	3.49	30.00	2.61	45.94	(0.65	)	3.49	30.00	2.61	45.94
Performance share plan 2015 (Absolute TSR)	(0.32	)	2.78	23.00	2.57	32.87	(0.32	)	2.78	23.00	2.57	32.87
Executive share plan 2015 – Component A	(0.32	)	N/A	23.00	2.57	53.74	(0.32	)	N/A	23.00	2.57	53.74
Executive share plan 2015 – Component B	(0.32	)	N/A	23.00	2.57	29.53	(0.32	)	N/A	23.00	2.57	29.53


(i)	Historical volatility retained was determined on the basis of a three-year historic average.

The cost of the long-term incentive plans which are conditional on market conditions is calculated as follows:

Fair value (market value) of shares at grant date (as calculated above) x number of shares expected to vest.

The cost of these plans is recognized, together with a corresponding increase in equity (share compensation reserve), over the period in which the performance and/or employment conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award. Adjustments are made to the expense recorded for forfeitures, mainly due to management and employees leaving Millicom. Non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of equity instruments that will ultimately vest.

No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition. These are treated as vested, regardless of whether or not the market conditions aresatisfied, provided that all other performance conditions are satisfied. Where the terms of an equity-settled award are

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

modified, as a minimum an expense is recognized as if the terms had not been modified. In addition, an expense is recognized for any modification that increases the total fair value of the share based payment arrangement, or is otherwise beneficial to the employee as measured at the date of modification.

Plan awards and shares expected to vest


	2018 plans				2017 plans				2016 plans				2015 plans								2019 plans				2018 plans				2017 plans				2016 plans
	Performance plan		Deferred plan		Performance plan		Deferred plan		Performance plan		Deferred plan		Performance plan		Executive plan		CEO plan		Deferred plan		Performance plan		Deferred plan		Performance plan		Deferred plan		Performance plan		Deferred plan		Performance plan		Deferred plan
					(number of shares)																				(number of shares)
Initial shares granted	237,196		262,317		279,807		438,505		200,617		287,316		98,137		40,664		77,344		237,620		257,601		320,840		237,196		262,317		279,807		438,505		200,617		287,316
Additional shares granted(i)	—		3,290		2,868		29,406		—		—		—		—		3,537		—		—		20,131		—		3,290		2,868		29,406		—		—
Revision for forfeitures	(13,531	)	(18,086	)	(34,556	)	(74,325	)	(49,164	)	(77,924	)	(37,452	)	—		—		(68,121	)	(17,182	)	(9,198	)	(27,494	)	(26,860	)	(40,946	)	(88,437	)	(49,164	)	(78,253	)
Revision for cancellations	(4,728	)	—		—		—		—		—		—		—		—		—		—		—		(4,728	)	—		—		—		—		—
Total before issuances	218,927		247,521		248,119		393,586		151,453		209,392		60,685		40,664		80,881		169,499		240,419		331,773		204,974		238,747		241,729		379,474		151,453		209,063
Shares issued in 2016	—		—		—		—		(1,214	)	(1,733	)	(771	)	—		(25,781	)	(38,745	)
Shares issued in 2017	—		—		—		(2,686	)	(752	)	(43,579	)	(357	)	—		(28,139	)	(30,124	)	—		—		—		—		—		(2,686	)	(1,214	)	(1,733	)
Shares issued in 2018	(97	)	(18,747	)	(2,724	)	(99,399	)	(2,050	)	(46,039	)	(27,619	)	(19,022	)	(26,961	)	(100,630	)	—		—		(97	)	(18,747	)	(2,724	)	(99,399	)	(752	)	(43,579	)
Performance conditions	—		—		—		—		—		—		(31,938	)	(21,642	)	—		—
Shares issued in 2019																					(150	)	(24,294	)	(3,109	)	(54,971	)	(19,143	)	(82,486	)	(149,487	)	(163,751	)
Shares still expected to vest	218,830		228,774		245,395		291,501		147,437		118,041		—		—		—		—		240,269		307,479		201,768		165,029		219,862		194,903		—		—
Estimated cost over the vesting period (US$ millions)	12		14		9		20		8		12		4		2		6		12		11		18		12		14		10		20		8		12


(i)	Additional shares granted represent grants made for new joiners and/or as per CEO contractual arrangements.

F- 49



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

B.4.2.Pension and other long-term employee benefit plans

Pension plans

The pension plans apply to employees who meet certain criteria (including years of service, age and participation in collective agreements).

Pension and other similar employee related obligations can result from either defined contribution plans or defined benefit plans. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. No further payment obligations exist once the contributions have been paid. The contributions are recognized as employee benefit expenses when they are due. Prepaid contributions are recognized as assets to the extent that a cash refund or a reduction in future payments is available.

Defined benefit pension plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The liability recognized in the statement of financial position in respect of the defined benefit pension plan is the present value of the defined benefit obligation at the statement of financial position date less the fair value of plan assets, together with adjustments for unrecognized actuarial gains or losses and past service costs. The defined benefit obligation is calculated annually by independent actuaries. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows, using an appropriate discount rate based on maturities of the related pension liability.

Re-measurement of net defined benefit liabilities are recognized in other comprehensive income and not reclassified to the statement of income in subsequent years.

Past service costs are recognized in the statement of income on the earlier of the date of the plan amendment or curtailment, and the date that the Group recognizes related restructuring costs.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

Net interest is calculated by applying the discount rate to the net defined benefit asset/liability.

Long-service plans

Long-service plans apply for Colombian subsidiary UNE employees with more than five years of service whereby additional bonuses are paid to employees that reach each incremental length of service milestone (from five to 40 years).

Termination plans

In addition, UNE has a number of employee defined benefit plans. The level of benefits provided under the plans depends on collective employment agreements and Colombian labor regulations. There are no defined assets related to the plans, and UNE make payments to settle obligations under the plans out of available cash balances.

At December 31, ~~2018,~~2019, the defined benefit obligation liability amounted to ~~$60~~$59 million ~~(2017: $66~~(2018: $60 million) and payments expected in the plans in future years totals ~~$111~~$106 million ~~(2017: $87~~(2018: $111 million). The average duration of the defined benefit obligation at December 31, ~~2018~~2019 is 76 years ~~(2017:~~(2018: 7 years). The termination plans apply to employees that joined UNE prior to December 30, 1996. The level of payments depends on the number of years in which the employee has worked before retirement or termination of their contract with UNE.

Except for the UNE pension plan described above, there are no other significant defined benefits plans in the Group.

B.4.3. Directors and executive management

The remuneration of the members of the Board of Directors comprises an annual fee and shares. Director remuneration is proposed by the Nomination Committee and approved by the shareholders at their Annual General Meeting (AGM).

Remuneration charge for the Board (gross of withholding tax)

2018 2017 2016
(US$ ’000)
Chairperson 169
233
243
Other members of the Board 774
889
900
Total (i) 943
1,122
1,143



	2019	2018	2017
	(US$ ’000)
Chairperson	366	169	233
Other members of the Board	1,557	774	889
Total (i)	1,923	943	1,122

(i)

Cash compensation converted from SEK to USD at exchange rates on payment dates ~~each year.~~for 2017 and 2018, in 2019 cash compensation was denominated in USD. Share based compensation based on the market value of Millicom shares on the corresponding AGM date ~~(2018:~~(2019: in total 19,483 shares; 2018: in total 6,591 shares; 2017: in total 8,731 ~~shares; 2016: in total 8,002~~ shares). Net remuneration comprised 73% in shares and 27% in cash (SEK) (2018: 51% in shares and 49% in ~~cash (SEK) (2017:~~cash; 2017: 52% in shares and 48% in ~~cash; 2016: 50% in shares and 50% in~~ cash).

F- 50



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Shares beneficially owned by the Directors


	2018	2017	2019	2018
	(number of shares)		(number of shares)
Chairperson	8,554	7,000	5,814	8,554
Other members of the Board	15,333	20,067	32,279	15,333
Total(i)	23,887	27,067	38,093	23,887

The remuneration of executive management of Millicom comprises an annual base salary, an annual bonus, share based compensation, social security contributions, pension contributions and other benefits. Bonus and share based compensation plans (see note B.4.1.) are based on actual and future performance. Share based compensation is granted once a year by the Compensation Committee of the Board.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

If the employment of Millicom’s senior executives is terminated, severance of up to 12 months’ salary is potentially payable.

The annual base salary and other benefits of the Chief Executive Officer (CEO) and the Executive Vice Presidents (Executive team) are proposed by the Compensation Committee and approved by the Board.

Remuneration charge for the Executive Team


	CEO	CFO	Executive Team (9 members)(iii)	CEO	CFO	Executive Team (8 members)(iii)
	(US$ ’000)			(US$ ’000)
2018
2019
Base salary	1,112	673	3,930	1,167	654	3,498
Bonus	1,492	557	2,445	1,428	626	2,098
Pension	247	101	962	279	98	798
Other benefits	66	63	805	50	260	1,521
Termination benefits	—	—	301	—	—	863
Total before share based compensation	2,918	1,393	8,444	2,924	1,639	8,779
Share based compensation(i)(ii) in respect of 2018 LTIP	5,027	1,567	4,957
Share based compensation(i)(ii) in respect of 2019 LTIP				5,625	1,576	5,965
Total	7,945	2,960	13,401	8,549	3,215	14,743

Remuneration charge for the Executive Team

CEO CFO Executive Team (9 members)
(US$ ’000)
2017
Base salary 1,000
648
3,822
Bonus 707
455
1,590
Pension 150
97
629
Other benefits 64
15
1,193
Total before share based compensation 1,921
1,215
7,233
Share based compensation(i)(ii) in respect of 2017 LTIP 2,783
1,492
5,202
Total 4,704
2,707
12,435



	CEO	CFO	Executive Team (9 members)
	(US$ ’000)
2018
Base salary	1,112	673	3,930
Bonus	1,492	557	2,445
Pension	247	101	962
Other benefits	66	63	805
Termination benefits	—	—	301
Total before share based compensation	2,918	1,393	8,444
Share based compensation(i)(ii) in respect of 2018 LTIP	5,027	1,567	4,957
Total	7,945	2,960	13,401

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~F- 51



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Remuneration charge for the Executive team

CEO CFO Executive team
(9 members)
(US$ ’000)
2016
Base salary 1,000
599
3,797
Bonus 660
450
1,411
Pension 150
82
513
Other benefits 48
18
720
Total before share based compensation 1,858
1,149
6,441
Share based compensation(i)(ii) in respect of 2016 LTIP 2,660
1,481
4,031
Total 4,518
2,630
10,472



	CEO	CFO	Executive team (9 members)
	(US$ ’000)
2017
Base salary	1,000	648	3,822
Bonus	707	455	1,590
Pension	150	97	628.5
Other benefits	64	15	1,192.5
Total before share based compensation	1,921	1,215	7,233
Share based compensation(i)(ii) in respect of 2017 LTIP	2,783	1,492	5,202
Total	4,704	2,707	12,435


(i)	See note B.4.1.


(ii)	Share awards of ~~80,264~~102,122 and ~~112,472~~135,480 were granted in ~~2018~~2019 under the ~~2018~~2019 LTIPs to the CEO, and Executive Team ~~(2017:~~(2018: 80,264 and 112,472, respectively; 2017: 61,724 and 167,371, ~~respectively; 2016: 49,171 and 104,573,~~ respectively).


(iii)	Other Executives’ compensation includes Daniel Loria, former CHRO and Rodrigo Diehl, EVP Strategy.

Share ownership and unvested share awards granted from Company equity plans to the Executive team


	CEO	Executive team	Total	CEO	Executive team	Total
	(number of shares)			(number of shares)
2019
Share ownership (vested from equity plans and otherwise acquired)				190,577	136,306	326,883
Share awards not vested				236,211	334,193	570,404
2018
Share ownership (vested from equity plans and otherwise acquired)	122,310	84,782	207,092	122,310	84,782	207,092
Share awards not vested	172,485	339,726	512,211	172,485	339,726	512,211
2017
Share ownership (vested from equity plans and otherwise acquired)	80,159	55,888	136,047
Share awards not vested	148,324	299,067	447,391

B.5.Other non-operating (expenses) income, net

Non-operating items mainly comprise changes in fair value of derivatives and the impact of foreign exchange fluctuations on the results of the Group.


	Year ended December 31,						Year ended December 31,
	2018		2017		2016		2019		2018		2017
	(US$ millions)						(US$ millions)
Change in fair value of derivatives (see note D.1.2.)	(1	)	(22	)	3
Exchange gain (loss), net	(41	)	18		25
Change in fair value of derivatives (see note C.7.2.)							—		(1	)	(22	)
Change in fair value in investment in Jumia (C.7.3.)							(38	)	—		—
Change in fair value in investment in HT (C.7.3.)							312		—		—
Change in value of put option liability (C.7.4.)							(25	)	—		—
Exchange gains (losses), net							(32	)	(40	)	21
Other non-operating income (expenses), net	2		0		(9	)	10		2		—
Total	(40	)	(4	)	20		227		(39	)	(2	)

Foreign exchange gains and losses

Transactions denominated in a currency other than the functional currency are translated into the functional currency using exchange rates prevailing at the transaction dates. Foreign exchange gains and losses resulting from the settlement of such transactions, and on translation of monetary assets and liabilities denominated in currencies

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

other than the functional currency at

F- 52



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

year-end exchange rates, are recognized in the consolidated statement of income, except when deferred in equity as qualifying cash flow hedges.

B.6.Taxation

B.6.1.Income tax expense

Tax mainly comprises income taxes of subsidiaries and withholding taxes on intragroup dividends and royalties for use of Millicom trademarks and brands. Millicom operations are in jurisdictions with income tax rates of 10% to ~~40%~~ 35%levied on either revenue or profit before income tax ~~(2017:~~(2018: 10% to ~~40%~~37%; ~~2016:~~2017: 10% to 40%). Income tax relating to items recognized directly in equity is recognized in equity and not in the consolidated statement of income.

Income tax charge

2018 2017 2016
(US$ millions)
Income tax (charge) credit
Withholding tax (64 ) (74 ) (44 )
Other income tax relating to the current year (86 ) (85 ) (74 )
(150 ) (159 ) (118 )
Adjustments in respect of prior years 1
(12 ) (26 )
(149 ) (171 ) (144 )
Deferred tax (charge) credit

Origination and reversal of temporary differences 32
15
45
Effect of change in tax rates (10 ) 19
1
Tax income (expense) before valuation allowances 22
34
46
Effect of valuation allowances (8 ) (30 ) (88 )
14
4
(42 )
Adjustments in respect of prior years 19
9
7
33
13
(35 )
Tax (charge) credit on continuing operations (116 ) (158 ) (179 )
Tax (charge) credit on discontinuing operations —
—
6
Total tax (charge) credit (116 ) (158 ) (173 )



	2019		2018		2017
	(US$ millions)
Income tax (charge) credit
Withholding tax	(56	)	(64	)	(74	)
Other income tax relating to the current year	(88	)	(82	)	(81	)
Adjustments in respect of prior years	(7	)	1		(21	)
Total	(151	)	(145	)	(176	)
Deferred tax (charge) credit
Origination and reversal of temporary differences	58		32		15
Effect of change in tax rates	(8	)	(10	)	19
Tax income (expense) before valuation allowances	50		22		34
Effect of valuation allowances	(9	)	(8	)	(28	)
Total	41		14		6
Adjustments in respect of prior years	(10	)	19		8
	31		33		14
Tax (charge) credit on continuing operations	(120	)	(112	)	(162	)
Tax (charge) credit on discontinuing operations	(2	)	(4	)	4
Total tax (charge) credit	(122	)	(116	)	(158	)

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~F- 53



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Reconciliation between the tax expense and tax at the weighted average statutory tax rate is as follows:

Income tax calculation


	2018						2017						2016						2019						2018						2017
	Continuing operations		Discontinued operations		Total		Continuing operations		Discontinued operations		Total		Continuing operations		Discontinued operations		Total		Continuing operations		Discontinued operations		Total		Continuing operations		Discontinued operations		Total		Continuing operations		Discontinued operations		Total
	(US $ millions)																		(US$ millions)
Profit before tax	129		(39	)	90		176		51		227		109		(26	)	83		218		59		277		119		(29	)	90		171		56		227
Tax at the weighted average statutory rate	(5	)	4		(1	)	(12	)	(10	)	(22	)	9		6		15		(37	)	(11	)	(48	)	(1	)	—		(1	)	(10	)	(12	)	(22	)
Effect of:
Items taxed at a different rate	7		—		7		(11	)	0		(11	)	13		0		13		(1	)	—		(1	)	7		—		7		(11	)	—		(11	)
Change in tax rates on deferred tax balances	(10	)	—		(10	)	19		0		19		1		0		1		(8	)	—		(8	)	(10	)	—		(10	)	19		—		19
Expenditure not deductible and income not taxable	(59	)	(2	)	(61	)	(66	)	7		(59	)	(65	)	8		(57	)	(37	)	9		(28	)	(59	)	(2	)	(61	)	(64	)	5		(59	)
Unrelieved withholding tax	(64	)	—		(64	)	(73	)	0		(73	)	(43	)	0		(43	)	(56	)	—		(56	)	(64	)	—		(64	)	(73	)	—		(73	)
Accounting for associates and joint ventures	5		—		5		17		0		17		29		0		29		36		—		36		5		—		5		17		—		17
Movement in deferred tax on unremitted earnings	(2	)	—		(2	)	1		0		1		(16	)	0		(16	)	9		—		9		(2	)	—		(2	)	1		—		1
Unrecognized deferred tax assets	(8	)	(2	)	(10	)	(31	)	(10	)	(41	)	(105	)	(15	)	(120	)	(20	)	—		(20	)	(8	)	(2	)	(10	)	(29	)	(12	)	(41	)
Recognition of previously unrecognized deferred tax assets	—		—		—		1		13		14		17		0		17		11		—		11		—		—		—		1		13		14
Adjustments in respect of prior years	20		—		20		(3	)	0		(3	)	(19	)	7		(12	)	(17	)	—		(17	)	20		—		20		(13	)	10		(3	)
Total tax (charge) credit	(116	)	—		(116	)	(158	)	0		(158	)	(179	)	6		(173	)	(120	)	(2	)	(122	)	(112	)	(4	)	(116	)	(162	)	4		(158	)
Weighted average statutory tax rate	3.9	%			1.1	%	6.82	%			9.69	%	(8.26	)%			(17.90	)%	17.0	%			17.3	%	0.8	%			1.1	%	5.8	%			9.7	%
Effective tax rate	89.9	%			128.9	%	89.77	%			69.60	%	164.22	%			207.10	%	55.0	%			44.0	%	94.1	%			128.9	%	94.7	%			69.6	%

B.6.2.Current tax assets and liabilities

Current tax assets and liabilities for current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rate and tax laws used to compute the amount are those enacted or substantively enacted by the statement of financial position date.

B.6.3.Deferred tax

Deferred tax is calculated using the liability method on temporary differences at the statement of financial position date between the tax base of assets and liabilities and their carrying amount for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting, nor taxable profit or loss.

Deferred tax assets are recognized for all temporary differences including unused tax credits and tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilized, except where the deferred tax assets relate to deductible temporary differences from initial recognition of an asset or liability in a transaction that

F- 54



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

is not a business combination, and, at the time of the transaction, affects neither accounting, nor taxable profit or loss. It is probable that taxable profit will be available

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

when there are sufficient taxable temporary differences relating to the same tax authority and the same taxable entity which are expected to reverse in the same period as the expected reversal of the deductible temporary difference.

The carrying amount of deferred tax assets is reviewed at each statement of financial position date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to utilize them. Unrecognized deferred tax assets are reassessed at each statement of financial position date and are recognized to the extent it is probable that future taxable profit will enable the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rate expected to apply in the year when the assets are realized or liabilities settled, based on tax rates and tax laws that have been enacted or substantively enacted at the statement of financial position date. Deferred tax assets and deferred tax liabilities are offset where legally enforceable set off rights exist and the deferred taxes relate to the same taxable entity and the same taxation authority.

Deferred tax


	Fixed assets		Unused tax losses		Unremitted earnings		Other		Offset		Total		Fixed assets		Unused tax losses		Unremitted earnings		Other		Offset		Total
	(US$ millions)												(US$ millions)
Balance at December 31, 2016	(23	)	113		(32	)	51		—		109
(Charge)/credit to statement of income	53		(61	)	1		20		—		13
Exchange differences	2		—		(1	)	1		—		2
Balance at December 31, 2017	32		52		(32	)	72		—		124		32		52		(32	)	72		—		124
Deferred tax assets	88		52		—		79		(39	)	180
Deferred tax liabilities	(56	)	—		(32	)	(7	)	39		(56	)
Balance at December 31, 2017	32		52		(32	)	72		—		124
(Charge)/credit to statement of income	(18	)	(3	)	(2	)	56		—		33
(Charge)/credit to income statement													(18	)	(3	)	(2	)	56		—		33
Change in scope	(190	)	—		—		9		—		(181	)	(192	)	—		—		8		—		(184	)
Accounting policy changes	—		—		—		4		—		4		—		—		—		4		—		4
Exchange differences	—		(5	)	—		(6	)	—		(11	)	—		(5	)	—		(6	)	—		(11	)
Balance at December 31, 2018	(176	)	44		(34	)	135		—		(31	)	(178	)	44		(34	)	134		—		(34	)
Deferred tax assets	76		44		—		134		(52	)	202		76		44		—		134		(52	)	202
Deferred tax liabilities	(252	)	—		(34	)	1		52		(233	)	(254	)	—		(34	)	—		52		(236	)
Balance at December 31, 2018	(176	)	44		(34	)	135		—		(31	)	(178	)	44		(34	)	134		—		(34	)
(Charge)/credit to income statement													41		(15	)	8		(3	)	—		31
Change in scope													(82	)	5		—		4		—		(73	)
Transfers to assets held for sale													—		—		—		(3	)	—		(3	)
Exchange differences													2		—		—		(2	)	—		—
Balance at December 31, 2019													(217	)	34		(26	)	130		—		(79	)
Deferred tax assets													84		34		—		134		(52	)	200
Deferred tax liabilities													(301	)	—		(26	)	(4	)	52		(279	)
Balance at December 31, 2019													(217	)	34		(26	)	130		—		(79	)

Deferred tax assets have not been recognized in respect of the following deductible temporary differences:

~~Deductible temporary differences~~

Fixed assets Unused tax losses Other Total
(US$ millions)
At December 31, 2018 92
4,886
134
5,112
At December 31, 2017 68
4,844
162
5,074

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~



	Fixed assets	Unused tax losses	Other	Total
	(US$ millions)
At December 31, 2019	92	4,705	126	4,923
At December 31, 2018	92	4,886	134	5,112

~~Unrecognized loss carryforwards expire as follows:~~F- 55



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Unrecognized tax losses carryforward related to continuing operations expire as follows:


	2018	2017	2016	2019	2018	2017
	(US$ millions)			(US$ millions)
Expiry:
Within one year	—	39	27	1	0	39
Within one to five years	3	494	493	2	3	494
After five years	493	—	—	493	493	—
No expiry	4,390	4,311	3,981	4,209	4,390	4,311
Total	4,886	4,844	4,501	4,705	4,886	4,844

With effect from 2017, Luxembourg tax losses incurred may be carried forward for a maximum of 17 years. Losses incurred before 2017 may be carried forward without limitation of time.

At December 31, ~~2018,~~2019, Millicom had ~~$584~~$697 million of unremitted earnings of Millicom operating subsidiaries for which no deferred tax liabilities were recognized ~~(2017:~~(2018: $584 million; 2017: $842 ~~million; 2016: $873~~ million). Except for intragroup dividends to be paid out of ~~2018~~2019 profits in ~~2019~~2020 for which deferred tax of $26 million (2018: $34 ~~million (2017: $32~~ million; ~~2016~~2017 $32 million) has been provided, it is anticipated that intragroup dividends paid in future periods will be made out of profits of future periods.

B.7. Earnings per share

Basic earnings (loss) per share are calculated by dividing net profit for the year attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings (loss) per share are calculated by dividing the net profit for the year attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the year, plus the weighted average number of dilutive potential shares.

Net profit/(loss) used in the earnings (loss) per share computation

2018 2017 2016
(US$ millions)
Basic and diluted:

Net profit/(loss) attributable to equity holders from continuing operations 29
36
(12 )
Net profit/(loss) attributable to equity holders from discontinued operations (39 ) 51
(20 )
Net profit/(loss) attributable to all equity holders to determine the basic earnings (loss) per share (10 ) 86
(32 )

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~



	2019	2018		2017
	(US$ millions)
Basic and Diluted
Net profit (loss) attributable to equity holders from continuing operations	93	23		28
Net profit (loss) attributable to equity holders from discontinuing operations	57	(33	)	59
Net profit attributable to all equity holders to determine the basic earnings (loss) per share	149	(10	)	87

Weighted average number of shares in the earnings (loss) per share computation


	2018	2017	2016	2019	2018	2017
	(thousands of shares)			(thousands of shares)
Weighted average number of ordinary shares (excluding treasury shares) for basic earnings (loss) per share	100,793	100,384	100,337	101,144	100,793	100,384
Potential incremental shares as a result of share options	—	—	—		—	—
Weighted average number of ordinary shares (excluding treasury shares) adjusted for the effect of dilution	100,793	100,384	100,337	101,144	100,793	100,384

C.Capital structure and financing

C.1.Share capital, share premium and reserves

Common shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds.

Where any Group company purchases the Company’s share capital, the consideration paid, including any directly attributable incremental costs, is shown under Treasury shares and deducted from equity attributable to the Company’s equity holders until

F- 56



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

the shares are canceled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental costs and the related income tax effects is included in equity attributable to the Company’s equity holders.

Share capital, share premium

2018 2017
Authorized and registered share capital (number of shares) 133,333,200

133,333,200
Subscribed and fully paid up share capital (number of shares) 101,739,217
101,739,217
Par value per share 1.50
1.50
Share capital (US$ millions) 153
153
Share premium (US$ millions) 482
484
Total (US$ millions) 635
637

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~



	2019	2018
Authorized and registered share capital (number of shares)	133,333,200	133,333,200
Subscribed and fully paid up share capital (number of shares)	101,739,217	101,739,217
Par value per share	1.50	1.50
Share capital (US$ millions)	153	153
Share premium (US$ millions)	480	482
Total (US$ millions)	633	635

Other equity reserves


	Legal reserve	Equity settled transaction reserve		Hedge reserve		Currency translation reserve		Pension obligation reserve		Total		Legal reserve	Equity settled transaction reserve		Hedge reserve		Currency translation reserve		Pension obligation reserve		Total
	(US$ millions)											(US$ millions)
As of January 1, 2016	16	46		(1	)	(593	)	1		(531	)
Share based compensation	—	14		—		—		—		14
Issuance of shares – 2013, 2014, 2015 LTIPs	—	(17	)	—		—		—		(17	)
Remeasurements of post-employment benefit obligations	—	—		—		—		(2	)	(2	)
Cash flow hedge reserve movement	—	—		(3	)	—		—		(3	)
Currency translation movement	—	—		—		(23	)	—		(23	)
As of December 31, 2016	16	43		(4	)	(616	)	(1	)	(562	)
As of January 1, 2017												16	43		(4	)	(616	)	(1	)	(562	)
Share based compensation	—	22		—		—		—		22		—	22		—		—		—		22
Issuance of shares – 2014, 2015, 2016 LTIPs	—	(18	)	—		—		—		(18	)	—	(18	)	—		—		—		(18	)
Remeasurements of post-employment benefit obligations	—	—		—		—		(2	)	(2	)	—	—		—		—		(2	)	(2	)
Cash flow hedge reserve movement	—	—		4		—		—		4		—	—		4		—		—		4
Currency translation movement	—	—		—		85		—		85		—	—		—		85		—		85
As of December 31, 2017	16	47		—		(531	)	(3	)	(472	)	16	46		—		(531	)	(3	)	(472	)
Share based compensation	—	22		—		—		—		22		—	22		—		—		—		22
Issuance of shares –2015, 2016, 2017 LTIPs	—	(22	)	—		—		—		(22	)	—	(22	)	—		—		—		(22	)
Cash flow hedge reserve movement												—	—		(1	)	—		—		1
Currency translation reserved recycled to statement of income												—	—		—		—		—		—
Currency translation movement	—	—		—		(68	)	—		(68	)	—	—		—		(68	)	—		(67	)
As of December 31, 2018	16	47		—		(599	)	(3	)	(538	)	16	47		(1	)	(599	)	(3	)	(538	)
Share based compensation												—	29		—		—		—		29
Issuance of shares –2016, 2017, 2018, 2019 LTIPs												—	(25	)	—		—		—		(25	)
Cash flow hedge reserve movement												—	—		(16	)	—		—		(16	)
Currency translation movement												—	—		—		(2	)	—		(2	)
Effect of restructuring in Tanzania												—	—		—		9		—		9
As of December 31, 2019												16	52		(18	)	(593	)	(2	)	(544	)

F- 57



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

C.1.1.Legal reserve

If Millicom International Cellular S.A. reports an annual net profit on a non-consolidated basis, Luxembourg law requires appropriation of an amount equal to at least 5% of the annual net profit to a legal reserve until such reserve equals 10% of the issued share capital. This reserve is not available for dividend distribution. No appropriation was required in ~~2017~~2018 or ~~2018~~2019 as the 10% minimum level was reached in 2011 and maintained each subsequent year.

C.1.2.Equity settled transaction reserve

The cost of LTIPs is recognized as an increase in the equity-settled transaction reserve over the period in which the performance and/or service conditions are rendered. When shares under the LTIPs vest and are issued the corresponding reserve is transferred to share premium.

C.1.3.Hedge reserve

The effective portions of changes in value of cash flow hedges are recorded in the hedge reserve (see note C.1.). ).

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

C.1.4.Currency translation reserve

In the financial statements, the relevant captions in the statements of financial position of subsidiaries without US dollar functional currencies are translated to US dollars using the closing exchange rate. Statements of income or statement of income captions (including those of joint ventures and associates) are translated to US dollars at monthly average exchange rates during the year. The currency translation reserve includes foreign exchange gains and losses arising from these translations. When the Group disposes of or loses control or significant influence over a foreign operation, exchange differences that were recorded in equity are recognized in the consolidated statement of income as part of gain or loss on sale or loss of control and/or significant influence.

C.2. Dividend distributions

On May ~~17,~~2, 2019, a dividend distribution of $2.64 per share from Millicom’s retained profits at December 31, 2018, was approved by the shareholders at the AGM and paid in equal portions in May and November 2019.

On May 4, 2018, a dividend distribution of $2.64 per share from Millicom’s retained profits at December 31, 2017, was approved by the shareholders at the AGM and paid in equal portions in May and November 2018.

On May 4, 2017, a dividend distribution of $2.64 per share from Millicom’s retained profits at December 31, 2016, was approved by the shareholders at the AGM and distributed in May 2017.

~~On May 17, 2016, a dividend distribution of $2.64 per share from Millicom’s retained profits at December 31, 2015, was approved by the shareholders at the AGM and distributed in May 2016.~~

The ability of the Company to make dividend payments is subject to, among other things, the terms of indebtedness, legal restrictions and the ability to repatriate funds from Millicom’s various operations. At December 31, ~~2018, $324~~2019, $306 million (December 31, ~~2017: $345~~2018: $324 million; December 31, ~~2016: $321~~2017: $345 million) of Millicom’s retained profits represent statutory reserves that are unavailable to be distributed to owners of the Company.

F- 58



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

C.3. Debt and financing

Debt and financing by type (i)

Note 2018 2017
(US$ millions)
Debt and financing due after more than one year

Bonds C.3.1. 2,501
2,147
Banks C.3.2. 1,324
1,158
Finance leases C.3.4. 353
362
Other financing(ii)

113
74
Total non-current financing
4,291
3,742
Less: portion payable within one year
(168 ) (142 )
Total non-current financing due after more than one year
4,123
3,600
Debt and financing due within one year

Bonds C.3.1. —
—
Banks C.3.2. 289
40
Finance leases C.3.4. —
3
Other financing
—
—
Total current debt and financing
289
43
Add: portion of non-current debt payable within one year
168
142
Total
458
185
Total debt and financing
4,580
3,785



	Note	2019		2018
		(US$ millions)
Debt and financing due after more than one year
Bonds	C.3.1.	4,067		2,501
Banks	C.3.2.	1,805		1,324
Finance leases (ii)	C.3.4.	—		353
Other financing (iii)		43		113
Total non-current financing		5,915		4,291
Less: portion payable within one year		(129	)	(168	)
Total non-current financing due after more than one year		5,786		4,123
Debt and financing due within one year
Bonds	C.3.1.	46		—
Banks	C.3.2.	11		289
Total current debt and financing		57		289
Add: portion of non-current debt payable within one year		129		168
Total		186		458
Total debt and financing		5,972		4,580


(i)	See note D.1.1 for further details on maturity profile of the Group debt and financing.

~~Millicom International Cellular S.A.~~

~~Notes~~(ii) Finance lease liabilities were included in Debt and Financing until 31 December 2018, but were reclassified to lease liabilities on January 1, 2019 when adopting the ~~consolidated financial statements~~
new leasing standard. See above in the "New and amended IFRS accounting standards" and below in notes C.4. and E.4. for further information about the ~~years ended December 31, 2018, 2017 and 2016 – continued~~

change in accounting policy for leases.


~~(ii)~~(iii)	In July 2018, the Company issued a COP144,054.5 million /$50 million bilateral facility with IIC (Inter-American Development Bank) for a USD indexed to COP Note. The note bears interest at ~~9.45%~~9.450% p.a.. This COP Note is used as net investment hedge of the net assets of our operations in Colombia.

Debt and financing by location

2018 2017
(US$ millions)
Millicom International Cellular S.A. (Luxembourg) 1,770
1,255
Colombia 1,016
1,130
Paraguay 504
488
Bolivia 317
352
Panama 261
—
Tanzania 201
217
Rwanda —
50
Chad 64
70
Costa Rica 148
76
El Salvador 299
147
Total debt and financing 4,580
3,785



	2019	2018
	(US$ millions)
Millicom International Cellular S.A. (Luxembourg)	2,773	1,770
Colombia	827	1,016
Paraguay	502	504
Bolivia	350	317
Panama	918	261
Tanzania	186	201
Chad	—	64
Costa Rica	148	148
El Salvador	268	299
Total debt and financing	5,972	4,580

Debt and financings are initially recognized at fair value, net of directly attributable transaction costs. They are subsequently measured at amortized cost using the effective interest rate method or at fair value. Amortized cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the effective interest rate. Any difference between the initial amount and the maturity amount is recognized in the consolidated statement of income over the period of the borrowing. Borrowings are classified as current liabilities, unless the Group has an unconditional right to defer settlement of the liability for at least 12 months from the statement of financial position date.

F- 59



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

C.3.1.Bond financing

Bond financing

Note Country Final Maturity Interest Rate % 2018 2017
(US$ millions)
SEK Senior Unsecured Variable Rate Notes 1 Luxembourg 2019 STIBOR +3.3(i) —
243
USD 6.625% Senior Notes 2 Luxembourg 2026 6.625 495
—
USD 6% Senior Notes 3 Luxembourg 2025 6 491
496
USD 6.625% Senior Notes 4 Luxembourg 2021 6.625 —
—
USD 5.125% Senior Notes 5 Luxembourg 2028 5.125 493
494
USD 6.75% Senior Notes 6 Paraguay 2022 6.75 297
296
BOB 4.75% Notes 7 Bolivia 2020 4.75 59
86
BOB 4.05% Notes 7 Bolivia 2020 4.05 7
11
BOB 4.85% Notes 7 Bolivia 2023 4.85 71
85
BOB 3.95% Notes 7 Bolivia 2024 3.95 43
50
BOB 4.30% Notes 7 Bolivia 2029 4.3 23
25
BOB 4.30% Notes 7 Bolivia 2022 4.3 30
30
BOB 4.70% Notes 7 Bolivia 2024 4.7 35
35
BOB 5.30% Notes 7 Bolivia 2026 5.3 13
13
UNE Bond 1 (tranches A and B) 8 Colombia 2020 CPI + 5.10 46
50
UNE Bond 2 (tranches A and B) 8 Colombia 2023 CPI + 4.76 46
50
UNE Bond 3 (tranche A) 8 Colombia 2024 9.35 49
54
UNE Bond 3 (tranche B) 8 Colombia 2026 CPI+4.15 78
85
UNE Bond 3 (tranche C) 8 Colombia 2036 CPI+4.89 39
43
Cable Onda Bonds 9 Panama 2025 5.75 184
—
Total bond financing 2,501
2,147



	Note	Country	Maturity	Interest Rate %		2019	2018
						(US$ millions)
SEK Variable Rate Notes	1	Luxembourg	2024	STIBOR (i) + 2.350%		211	—
USD 6.625% Senior Notes	2	Luxembourg	2026	6.625	%	495	495
USD 6.000% Senior Notes	3	Luxembourg	2025	6.000	%	492	491
USD 6.250% Senior Notes	4	Luxembourg	2029	6.250	%	742	—
USD 5.125% Senior Notes	5	Luxembourg	2028	5.125	%	492	493
USD 6.750% Senior Notes	6	Paraguay	2022	6.750	%	—	297
USD 5.875% Senior Notes	6	Paraguay	2027	5.875	%	296	—
PYG 9.250% Notes	6	Paraguay	2026	9.250	%	2	—
PYG 8.750% Notes (tranche A)	6	Paraguay	2024	8.750	%	18	—
PYG 9.250% Notes (tranche B)	6	Paraguay	2026	9.250	%	8	—
PYG 10.000% Notes (tranche C)	6	Paraguay	2029	10.000	%	10	—
PYG 10.000% Notes	6	Paraguay	2029	10.000	%	4	—
BOB 4.750% Notes	7	Bolivia	2020	4.750	%	30	59
BOB 4.050% Notes	7	Bolivia	2020	4.050	%	4	7
BOB 4.850% Notes	7	Bolivia	2023	4.850	%	57	71
BOB 3.950% Notes	7	Bolivia	2024	3.950	%	36	43
BOB 4.300% Notes	7	Bolivia	2029	4.300	%	21	23
BOB 4.300% Notes	7	Bolivia	2022	4.300	%	26	30
BOB 4.700% Notes	7	Bolivia	2024	4.700	%	32	35
BOB 5.300% Notes	7	Bolivia	2026	5.300	%	13	13
BOB 5.000% Notes	7	Bolivia	2026	5.000	%	61	0
BOB 4.600% Notes	7	Bolivia	2024	4.600	%	40	0
UNE Bond 1 (tranches A and B)	8	Colombia	2020	CPI + 5.10%		46	46
UNE Bond 2 (tranches A and B)	8	Colombia	2023	CPI + 4.76%		46	46
UNE Bond 3 (tranche A)	8	Colombia	2024	9.350	%	49	49
UNE Bond 3 (tranche B)	8	Colombia	2026	CPI+4.15%		78	78
UNE Bond 3 (tranche C)	8	Colombia	2036	CPI+4.89%		38	39
USD 4.500% Senior Notes	9	Panama	2030	4.500	%	584	—
Cable Onda Bonds 5.750%	9	Panama	2025	5.750	%	184	184
Total bond financing						4,113	2,501


(i)	STIBOR – Swedish Interbank Offered Rate.


(1)	SEK Notes

~~(1)~~On May 15, 2019, MIC S.A. completed its offering of a SEK ~~Senior Unsecured Notes~~

~~In August 2018,~~2 billion floating rate senior unsecured sustainability bond due 2024. The bond carries a floating coupon of 3-month Stibor+235bps which we swapped with various banks to hedge its interest rate exposure, pursuant to which it will effectively pay fixed-rate coupons in US dollars between 4.990% and 4.880% (see D.1.2.). The bond has been listed and commenced trading on the ~~Company redeemed all~~Nasdaq Stockholm sustainable bond list on June 12, 2019. Millicom is using the net proceeds of the ~~aggregate principal amount~~bond in accordance with the Sustainability Bond Framework which includes both environmental and social investments such as in energy efficiencies, and the expansion of its fixed and mobile networks. Cost of issuance of $2.4 million is amortized over the five year life of the ~~outstanding SEK Senior Unsecured Notes due 2019 ($227 million). The early redemption fees amounting to $3 million and $1 million of related unamortized costs have been expensed in August 2018 under~~bond (the effective interest ~~and other financial expenses. As of September 30, 2018, the notes have been fully redeemed.~~rate is 0.200%)

~~(2) USD 6.625% Senior Notes~~


(2)	USD 6.625% Senior Notes

On October 16, 2018, the ~~Company~~MIC S.A. issued $500 million aggregate principal amount of 6.625% Senior Notes due 2026. The Notes bear interest at 6.625% p.a., payable semiannually in arrears on each interest payment date. Proceeds were used to finance Cable

F- 60



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Onda’s acquisition (Note A.1.2.). Costs of issuance of $6 million ~~are~~is amortized over the eight-year life of the notes (the effective interest rate is ~~6.75%~~6.750%).


(3)	USD 6.000% Senior Notes

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

~~(3) USD 6% Senior Notes~~

On March ~~11,~~17, 2015, ~~Millicom~~MIC S.A. issued a $500 million 6%6.000% fixed interest rate ~~bond~~notes repayable in ten years, to repay the El Salvador ~~8% Senior Notes~~8.000% senior notes and for general corporate purposes. The ~~bond was issued at 100% of the principal and has~~notes have an effective interest rate of 6.132%. A total amount of $8.6 million of withheld and upfront costs are being amortized over the ten-year life of the bond.

~~(4) USD 6.625% Senior Notes~~

~~In December 2016,~~On April 8, 2019, the ~~Company confirmed that it had accepted for purchase $142~~Group obtained consents from the holders of its $500 million 6.000% notes to amend certain provisions of the indenture governing the notes. MIC S.A. paid a cash payment of $1 million (equal to $2.50 per $1,000 principal amount of Notes to holders of the Notes).


(4)	USD 6.250% Senior Notes

On March 25, 2019, MIC S.A. issued $750 million of ~~principal~~6.250% notes due 2029. The notes bear interest at 6.250% p.a., payable semi-annually in arrears on March 25 and September 25 of ~~its 6.625% Senior Notes due 2021.~~each year, starting on September 25, 2019. The ~~early redemption fees amounting~~net proceeds were used to $8finance, in part, the completed Telefonica CAM Acquisitions (see note A.1.2.). Costs of issuance of $8.2 million ~~and $2 million of related unamortized costs had been expensed in December 2016 under interest and other financial expenses.~~

~~On September 11, 2017,~~are amortized over the ~~Group made a tender offer for the outstanding 6.625% Senior Notes. On September 20, 2017, MIC S.A. repurchased $186 million in principal amount in the tender offer using the proceeds~~ten-year life of the issue of the 5.125% Notes – see below. Also on September 11, 2017, the Group delivered a redemption notice for the 6.625% Senior Notes. MIC S.A. redeemed the remaining $473 million in principal amount on October 15, 2017. The total early redemption fees amounting to $22 million and $6 million of related unamortized costs have been expensed in September 2017 undernotes (the effective interest ~~and other financial expenses. At December 31, 2017, there are no 2021 Notes outstanding.~~rate is 6.360%).

~~(5) USD 5.125% Senior Notes~~


(5)	USD 5.125% Senior Notes

On September 20, 2017, MIC S.A. issued a $500 million, ten-year bond due January 2028, with an interest rate of 5.125% ~~at an issue price of 100% (the 5.125% Notes) and will mature in 2028.~~. Costs of issuance of $7 million are amortized over the ~~seven-year~~ten year life of the notes (effective interest rate is ~~5.24%~~5.240%).


(6)	PYG Notes

~~(6) USD 6.75% Senior Notes~~

~~On December 7, 2012,~~In April 2019, Telefónica ~~Cellular~~Celular del ~~Paraguay S.A., Millicom’s fully owned subsidiary in Paraguay~~Paragua S.A.E. issued $300 million of5.875% senior notes due 2027. The notes bear interest at 100% of the aggregate principal amount. Distribution and other transaction fees of $7 million reduced the total proceeds from issuance to $293 million. The 6.75% Senior Notes have a 6.75% per annum coupon with interest5.875% p.a., payable semi-annually in arrears on ~~June 13~~April 15 and ~~13 December.~~October 15 of each year, starting on October 15, 2019. The net proceeds were used to finance the purchase of the Telecel 6.750% 2022 notes. Costs of issuance of $4 million are amortized over the eight-year life of the notes (the effective interest rate is ~~7.12%~~6.000%).

~~The 6.75% Senior Notes are general unsecured obligations of~~In June, 2019, Telefónica Celular del Paraguay ~~S.A.~~S.A.E. issued notes in three series under its PYG 300 billion program as follows: Series A for PYG 115 billion (approximately $18 million), with a fixed annual interest rate of 8.750%, maturing in June 2024, series B for PYG 50 billion (approximately $8 million) with a fixed annual interest rate of 9.250%, maturing in May 2026 and ~~rank equal~~series C for PYG 65 billion (approximately $10 million) with a fixed annual interest rate of 10.000%, maturing in ~~right~~May 2029. On December 27, 2019, under the same program, they issued PYG. 35 billion (Approximately $5.4 million) in two tranches: (i) PYG 10 billion (approximately $1.5 million) which bears a fixed annual interest rate of ~~payment with all future unsecured~~9.250% and ~~unsubordinated obligations~~matures on December 30, 2026; and (ii) PYG 25 billion (approximately $3.9 million) which bears a fixed annual interest rate of ~~Telefónica Celular del Paraguay S.A. The 6.75% Senior Notes are unguaranteed.~~10.000% and matures on December 24, 2029.

~~(7) BOB Notes~~


(7)	BOB Notes

In May 2012, ~~Telecel~~Telefónica Celular de Bolivia S.A. issued ~~Boliviano (BOB)~~BOB 1.36 billion of notes repayable in installments until April 2, 2020. Distribution and other transaction fees of BOB5 million reduced the total proceeds from issuance to BOB 1.32 billion ($191 million). The bond has a ~~4.75%~~4.750% per annum coupon with interest payable semi-annually in arrears in May and November each year. The effective interest rate is ~~4.79%~~4.790%. These bonds are listed on the Bolivia Stock Exchange.

In November 2015, ~~Telecel Bolivia~~they issued BOB696 million (approximately $100 million) of notes in two series, series A for BOB104.4 million (approximately $15 million), with a fixed annual interest rate of ~~4.05%~~4.050%, maturing in August 2020 and series B for BOB591.6 million (approximately $85 million) with a fixed annual interest rate of ~~4.85%~~4.850%, maturing in August 2023. The bond has coupon with interest payable semi-annually in arrears in March and September during the first two years, thereafter each February and August. The effective interest rate is ~~4.84%~~4.840%. InThese bonds are listed on the ~~placement, the final interest rate was reduced as Telecel~~ Bolivia took advantage of strong demand for the bonds resulting in a reduction of the average interest rate to 4.55%. Telecel Bolivia received BOB4.59 million in excess of the BOB696 million issued (upfront premium).Stock Exchange.

On August 11, 2016, ~~the operation in~~Telefónica Celular de Bolivia S.A.. issued a new bond for a total amount of BOB522 million consisting of two tranches (approximately $50 million and $25 million, respectively). Tranche A and B bear fixed interest at ~~3.95%~~3.950% and ~~4.30%~~4.300%, and will mature in June 2024 and June 2029, respectively.

~~Millicom International Cellular S.A.~~

~~Notes to~~ These bonds are listed on the ~~consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

Bolivia Stock Exchange.

On October 12, 2017, ~~Tigo Bolivia~~they placed approximately $80 million of local currency ~~debt~~bonds in three tranches, which will mature in 2022, 2024 and 2026 with a 4.300% , 4.700% and ~~bear an average interest rate of 4.66%.~~5.300% respectively. These bonds are listed on the Bolivia Stock Exchange.

~~(8) UNE Bonds~~On July 3, 2019 they issued two bonds one for BOB 420 million (approximately $61 million) with a 5.000% coupon maturing on August 2026 and another one for BOB 280 million (approximately $40 million) with a 4.600% coupon maturing on August 2024. Interest payments is semiannual and both bonds are listed on the Bolivia Stock Exchange.


(8)	UNE Bonds

In March 2010, UNE issued a COP300 billion (approximately $126 million) bond consisting of two tranches with five and ten-year maturities. Interest rates are either fixed or variable depending on the tranche. Tranche A bears variable interest, based on CPI, in Colombian peso and paid in Colombian peso. Tranche B bears variable interest, based on fixed term deposits, in Colombian peso

F- 61



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

and paid in Colombian peso. UNE applied the proceeds to finance its investment plan. Tranche A matured in March 2015 and tranche B will mature in March 2020.

In May 2011, UNE issued a COP300 billion (approximately $126 million) bond consisting of two equal tranches with five and twelve-year maturities. Interest rates are variable and depend on the tranche. Tranche A ~~bears~~had variable interest, based on CPI, in Colombian peso and paid in Colombian peso. Tranche B bears variable interest, based on ~~fixed term deposits,~~CPI, in Colombian peso and paid in Colombian peso. UNE applied the proceeds to finance its investment plan. Tranche A matured in October 2016 and tranche B will mature in October 2023.

In May 2016, UNE issued a COP540 billion bond (approximately $176 million) consisting of three tranches (approximately $52 million, $83 million and $41 million respectively). Interest rates are either fixed or variable depending on the tranche. Tranche A bears fixed interest at ~~9.35%~~9.350%, while tranche B and C bear variable interest, based on CPI, (respective margins of CPI + ~~4.15%~~4.150% and CPI + ~~4.89%~~4.890%), in Colombian peso. UNE applied the proceeds to finance its investment plan and repay one bond (COP150 billion tranche). Tranches A, B and C will mature in May 2024, May 2026 and May 2036, respectively.

(9) Cable Onda Bonds

On August 4, 2015, Cable Onda issued ~~public~~local bonds in Panama for a total amount of $185 million. These bonds are listed on the Panama Stock Exchange and bear a fixed annual interest of ~~5.75%~~5.750% and are due on August 4, 2025. The bonds ~~have been~~were assumed by Millicom as part of the acquisition of ~~the company.~~Cable Onda. See note A.1.2. for further details on the acquisition.

On November 1, 2019, Cable Onda issued $600 million aggregate principal amount of 4.500% senior notes due 2030 payable in U.S. dollars, registered with the Superintendencia del Mercado de Valores de Panamá and listed on the Luxembourg Stock Exchange and on the Panamá Stock Exchange. The Notes bear interest from November 1, 2019 at a rate of 4.500% per annum, payable on January 30, 2020 for the first payment and thereafter semiannually in arrears on each interest payment date. The proceeds were used to fund the Panama Acquisition and to refinance certain local financing. Costs of issuance of $16 million, which include an original issue discount (OID) is amortized over the ten-year life of the notes (the effective interest rate is 4.690%).

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

C.3.2.Bank and Development Financial Institution financing


	Note	Country	Maturity	Interest rate %	2018	2017	Note	Country	Maturity range	Interest rate	2019	2018
					(US$ millions)						(US$ millions)
Fixed rate loans
PYG Long-term loan		Paraguay	2020/2023/2025	9.00	90	106
PYG Long-term loan	1	Paraguay	2022	10.10	61	65
PYG Long-term loan		Paraguay	2023	10.25	9	—
PYG Long-term loan		Paraguay	2025	8.90	19	—
PYG Long-term loans							1	Paraguay	2020-2026	Fixed	166	180
USD - Long-term loans		Panama	2019	4.00	15	—	2	Panama	2024	Fixed	150	24
USD - Long-term loans		Panama	2019	3.80	9	—
BOB Long-term loans		Bolivia	2025	4.30	10	—
BOB Long-term loans		Bolivia	2025	4.30	10	—	3	Bolivia	2023-2025	Fixed	31	20
Variable rate loans
USD Long-term loans	2	Costa Rica	2021	3.5 variable	148	76	4	Costa Rica	2023	Variable	148	148
USD Long-term loans		Chad	2019	4 variable	1	3		Chad	2019	Variable	—	1
USD Long-term loans	3	Rwanda	2019	2.9 variable	—	40	5	Tanzania	2020-2025	Variable	171	90
TZS Long-term loans							5	Tanzania	2025	Variable	14	—
USD Short-term loans							8	Luxembourg	2019	Variable	—	250
USD Long-term loans		Tanzania (Zantel)	2020	3.75 variable	90	96	8	Luxembourg	2024	Libor + 3.00%	298	—
USD Short-term loans	4	Luxembourg	2019	Libor + 1.50	250	—
COP Long-term loans	5	Colombia (UNE)	2025/2030	4.1+IBR variable(i)	277	363	6	Colombia	2025-2030	Variable	274	277
USD Long-term loans	5	Colombia (Tigo)	2021/2022	LIBOR + 2.5	298	297	6	Colombia	2024	Variable	295	298
USD Senior Unsecured Term Loan Facility	6	El Salvador	2021	LIBOR + 3.0	50	50
USD Credit Facility	6	El Salvador	2021	LIBOR + 2.25	24	29
USD Credit Facility		El Salvador	2022	LIBOR + 3.15	50	50
USD Credit Facility	6	El Salvador	2023	LIBOR + 2.55	100	—
USD Credit Facility	6	El Salvador	2023	LIBOR + 3	50	—
USD Credit Facility / Senior Unsecured Term Loan Facility							7	El Salvador	2021-2023	Variable	268	274
Other Long-term loans		Various		Various	51	25		Various		Various	—	51
Total Bank and Development Financial Institution financing					1,613	1,198					1,817	1,613


~~(i)~~1.	~~IBR – Colombia Interbank Rate.~~Paraguay

1.In October 2015, Telefónica Celular del Paraguay S.A.E. entered into a five -year loan facility with Banco Itau for PGY 257,700 million (approximately $40 million) which bears a fixed annual interest rate. The final maturity of the loan is on September 10, 2020.

On July 4, 2017, ~~the Paraguayan subsidiary signed~~Telefónica Celular del Paraguay S.A.E executed a five-year loan agreement with the IPS (~~Instituto~~(Instituto de Prevision ~~Social~~)Social) and the Inter-American Development Bank, who acts as a guarantor, for a total amount of PYG $367,000 million ~~(approximately~~

F- 62



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

(approximately $66 million). The loan, denominated in ~~local currency carries a 10.10% interest rate per annum and start amortizing~~PYG with the final maturity in ~~Q4 2019. This~~2022. The guarantee under this facility is ~~guaranteed~~counter-guaranteed by ~~the Company.~~MICSA.

In July 2018, Telefónica Celular del Paraguay S.A.E. executed a seven-year loan with Regional Bank for PYG 115,000 million (approximately $18 million with a final maturity in 2025.

On January 2, 2019, Telefónica Celular del Paraguay S.A.E. obtained a seven-year loan from BBVA Bank for PYG 177,000 million which is due on November, 26, 2025.

2.On September 25, 2019, Telefónica Celular del Paraguay S.A.E. executed an amended and restated agreement with Banco Continental S.A.E.C.A., to consolidate three existing loans, for a PYG 370,000 million~~Costa Rica~~(approximately $57 million). The new loan has a maturity of 7 years.


2.	Panama

On August 27, 2019, Cable Onda S.A entered into two credit agreements, one with Banco Nacional de Panama S.A , for $75 million which bears a fixed interest and has a 5 year duration and another one with the Bank of Nova Scotia (Sucursal Panama) for $75 million with a fixed interest and a five year duration to finance and refinance working capital and capital expenditures.


3.	Bolivia

In June 2018, Telefónica Celular de Bolivia S.A.. entered into a two tranche loan agreement with Banco BISA S.A for BOB 69.6 million (approximately $10 million) each, with a fixed interest rate. The loans have a term of 7 years.

In November 19, they executed a new loan with Banco de Crédito de Bolivia S.A for Bs. 78,000,000 (approximately$11 million), with semiannual payments and a fixed interest rate. The loan has a term of 4 years.


4.	Costa Rica

In April 2018, Millicom Cable Costa Rica S.A. entered into a $150 million variable rate syndicated loan with Citibank as agent. ~~Simultaneously, the outstanding loan balance of $72 million was repaid in full with the proceeds from this loan.~~

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

In June 2018, Millicom Cable Costa Rica S.A. entered into a cross currency swap to hedge part of the principal of the loan against interest rate and currency risks. Interest rate and currency swap agreements had been made on $35 million of the principal amount and interest rate swaps for an additional $35 million.


5.	Tanzania

3.~~Rwanda~~

~~In January 2018, the Group repaid the remaining $40 million loan due by Rwanda to different banks.~~

4.~~Luxembourg~~

On June 4, 2019, MIC ~~S.A. Bridge Facility~~

~~In October 2018, the~~Tanzania Public Limited Company entered into a ~~$1 billion term~~syndicated loan facility agreement with the Standard Bank of South Africa acting as an agent and a consortium of banks acting as the original lenders, for $174.75 million (tranche A) and TZS103,000 million (tranche B - approximately $45 million) which bears variable interests: for Tranche A Libor plus a margin and for Trance B T-Bill rate plus a margin. The facility agreement has an all asset debenture securing the whole amount, as well as a pledge over the shares of the immediate holding company of the borrower. The Facility was amended and restated on December 12, 2019 and has a maturity of 66 months. It is a stand-alone facility with an all asset debenture and a pledge on the shares of the immediate holding company of the borrower. .Margin and balance between USD and TSZ tranches may vary depending on the syndication demands.

6. Colombia

In December 20, 2019, our operation in Colombia executed an amendment to the $300 million loan between Colombia Móvil S.A. E.S.P. as borrower and UNE EPM Telecomunicaciones S.A., as guarantor with a consortium of banks ~~(the “Bridge Facility”), subsequently reduced~~ to ~~$250 million in~~extend the maturity for 5 years (now due on December ~~2018. The Bridge Facility matures in October 2019 (unless extended for a period not exceeding six months). Interest on amounts drawn under~~20, 2024) and lower the ~~Bridge Facility is payable at LIBOR plus a variable~~applicable margin. ~~At December 31, 2018, $250 million have been drawn under this facility to finance Cable Onda’s acquisition (note 3).~~

~~MIC S.A. revolving credit facility~~

On January 30, 2017, the Company announced the closing of a new $600 million, five years revolving credit facility (RCF) and notified the lenders in the 2014 RCF of the formal cancellation of the commitments outstanding under the 2014 RCF (none of which were drawn at such date).

Interest on amounts drawn under the revolving credit facility is payable at LIBOR or EURIBOR, as applicable, plus an initial margin of 1.5%. As of December 31, 2018, the committed facility was fully undrawn.

~~MIC S.A. term loan facility~~

In July 2016, MIC S.A. entered into a $50 million term loan facility agreement, of which half was repaid in 2017 and in January 2018 the remaining outstanding amount was fully repaid. The facility bears variable interest rate at six-month LIBOR + 2.25% per annum.

5.~~Colombia~~

In June 2017, Colombia Movil completed a $300 million syndicated loan. The loan, denominated in US dollars, which carries an interest rate of LIBOR + 2.50% will be repaid in three tranches of $100 million in June and December 2021 for the two first tranches, and in June 2022 for the last tranche. Proceeds have been used to repay an inter-company loan from Millicom, which used the funds to reduce holding company debt (see note C.3.1.) and for general corporate purposes.

~~In March 2018, TigoUne prepaid $34 million equivalent in COP on bank financing debt.~~

6.El7. EL Salvador

On April 15, 2016, Telemovil El Salvador, S.A. de C.V. ~~entered into~~executed a ~~Senior Unsecured Term Loan Facility~~senior unsecured term loan facility up to $50 million maturing in April 2021 and bearing variable interest ~~at LIBOR + 3.0%~~ per annum, which was restated and amended as of May 30, 2017, for a second tranche of $50 ~~million and bearing an interest rate at LIBOR + 3% per annum.~~million. This facility is guaranteed by ~~the Company.~~

~~On June 6, 2016, Telemovil El Salvador, S.A. de C.V. entered into a $30 million Credit Facility for general corporate purposes maturing~~MICSA.. Later on, in ~~June 2021 and bearing variable interest rate at LIBOR + 2.25% per annum. The facility is guaranteed by the Company.~~

In January 2018, Telemovil El Salvador entered into ana second amended and restated ~~the 2017~~ agreement with Scotiabank for a third tranche of $50 million with variable rate ~~loan,~~and with a 5-year bullet ~~repayment.~~repayment, also guaranteed by MICSA.

In March 2018, Telemovil El Salvador entered into a $100 million variable rate facility with DNB and Nordea with a 5-year bullet repayment. The remaining $50 million of the facility was disbursed during 2018. In addition,

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

~~Telemovil El Salvador entered into~~ they executed an interest rate swap with Scotiabank to fix interest rates for up to $100 million of the outstanding debt.

On June 3, 2016, Telemovil El Salvador, S.A. de C.V. executed a $30 million credit facility with Citibank N.A., for general corporate purposes maturing in June 2021 and bearing variable interest rate per annum. The facility is guaranteed by MICSA..

In March 2018, Telemovil El Salvador executed a $100 million credit facility with DNB at a variable rate facility with DNB and Nordea with a 5-year bullet repayment.The facility is guaranteed by MICSA..

F- 63



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

8. Luxembourg

On April 24, 2019, MICSA. entered into a $300 million term facility agreement arranged by DNB Bank ASA, Sweden Branch and Nordea Bank Abp, Filial i Sverige. This facility has a variable interest rate and is fully drawn as at December 31, 2019 and is due on April 2024.

Right of set-off and derecognition

Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

A financial asset (or a part of a financial asset or part of a group of similar financial assets) is derecognized when:

Rights to receive cash flows from the asset have expired; or

Rights to receive cash flows from the asset or obligations to pay the received cash flows in full without material delay have been transferred to a third party under a “pass-through” arrangement; and the Group has either transferred substantially all the risks and rewards of the asset or the control of the asset.

When rights to receive cash flows from an asset have been transferred or a pass-through arrangement concluded, an evaluation is made if and to what extent the risks and rewards of ownership have been retained. When the Group has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the asset is recognized to the extent of the Group’s continuing involvement in the asset. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

A financial liability is derecognized when the obligation under the liability is discharged or canceled, or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of income.

C.3.3.Interest and other financial expenses

The Group’s interest and other financial expenses comprised the following:


	Year ended December 31,
	2018		2017		2016		Year ended December 31,
	(US$ millions)						2019		2018		2017
							(US$ millions)
Interest expense on bonds and bank financing	(234	)	(246	)	(262	)	(348	)	(234	)	(246	)
Interest expense on finance leases	(92	)	(65	)	(48	)
Interest expense on (finance) leases							(157	)	(91	)	(65	)
Early redemption charges	(4	)	(43	)	(25	)	(10	)	(4	)	(43	)
Others	(41	)	(41	)	(36	)	(47	)	(37	)	(35	)
Total interest and other financial expenses	(371	)	(396	)	(372	)	(564	)	(367	)	(389	)

C.3.4.Finance leases - until December 31, 2018

As at December 31, 2018, Millicom’s finance leases mainly ~~consist~~consisted of long-term lease of tower space from tower companies or competitors on which Millicom locates its network equipment.

Finance lease liabilities

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended~~ were included in Debt and Financing until December 31, 2018, ~~2017~~but were reclassified to lease liabilities on January 1, 2019 in the process of adopting the new lease standard: IFRS 16. See above in the "New and ~~2016 – continued~~amended IFRS accounting standards" and notes C.4. and E.4. for further information.

Finance lease liabilities

~~Leases~~Under IAS 17, leases which ~~transfer~~transferred substantially all risks and benefits incidental to ownership of the leased item to the lessee ~~are~~were capitalized at the inception of the lease. The amount capitalized iswas the lower of the fair value of the asset or the present value of the minimum lease payments.

F- 64



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Lease payments ~~are~~were allocated between finance charges (interest) and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges ~~are~~were recorded as interest expenses in the statement of income.

The sale and leaseback of towers and related site operating leases and service contracts ~~are~~were accounted for in accordance with the underlying characteristics of the assets, and the terms and conditions of the lease agreements. When sale and leaseback agreements ~~are~~were concluded, the portions of assets that will not be leased back by Millicom ~~are~~were classified as assets held for sale as completion of their sale iswas highly probable. Asset retirement obligations related to the towers ~~are~~were classified as liabilities directly associated with assets held for sale. On transfer to the tower companies, the portion of the towers leased back ~~are~~were accounted for as operating leases or finance leases according to the criteria set out above. The portion of towers being leased back ~~represents~~represented the dedicated part of each tower on which Millicom’s equipment iswas located and was derived from the average technical capacity of the towers. Rights to use the land on which the towers ~~are~~were located ~~are~~were accounted for as operating leases, and costs of services for the towers ~~are~~were recorded as operating expenses. The gain on disposal iswas recognized upfront for the portion of towers that is not leased back, and iswas deferred and recognized over the term of the lease for the portion leased back.

Finance lease liabilities at December 31, 2018


	Country	Maturity	2018	2017	Country	Maturity	2018
			(US$ millions)				(US$ millions)
Lease of tower space	Tanzania	2029/2030	112	121	Tanzania	2029/2030	112
Lease of tower space	Colombia Movil	2032	83	87	Colombia Movil	2032	83
Lease of poles	Colombia (UNE)	2032	99	100	Colombia (UNE)	2032	99
Lease of tower space	Paraguay	2030	27	21	Paraguay	2030	27
Lease of tower space	El Salvador	2026	26	20	El Salvador	2026	26
Other finance lease liabilities	various	various	6	17	various		6
Total finance lease liabilities			353	365			353

Tower Sale and Leaseback

In 2017 and2018, the Group announced agreements to sell and leaseback wireless communications towers in Paraguay, Colombia and El Salvador. ~~The table below summarizes the main aspects of~~Total gain on sale recognized in 2019 was $5 million (2018: $61 million, 2017: $63 million) and cash received from these ~~deals~~sales were $22 million, $141 million and ~~impacts on the Group financial statements:~~

Paraguay Colombia El Salvador
Agreement date April 26, 2017
July 18, 2017
February 6, 2018
Total number of towers expected to be sold 1,410 1,207 811
Total number of towers transferred as of December 31, 2018 1,276 902 496
Expected total cash proceeds ($ millions) 125
147
145
Cash proceeds received in 2017 ($ millions) 75
86
—
Cash proceeds received in 2018 ($ millions) 41
26
73
Upfront gain on sale recognized in 2017 ($ millions) (Note B.2) 26
37
—
Upfront gain on sale recognized in 2018 ($ millions) (Note B.2) 19
13
33

$161 million, respectively.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

C.3.5.Guarantees and pledged assets

Guarantees

Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount recognized, less cumulative amortization.

Liabilities to which guarantees are related are recorded in the consolidated statement of financial position under Debt and financing, and liabilities covered by supplier guarantees are recorded under Trade payables or Debt and financing, depending on the underlying terms and conditions.

~~Maturity of guarantees~~

At December 31, 2018 At December 31, 2017
Term Outstanding exposure(i) Maximum exposure(ii) Outstanding exposure(i) Maximum exposure(ii)
(US$ millions)
0–1 year 133
133
159
159
1–3 years 281
281
368
368
3–5 years 212
212
144
144
Total guarantees 626
626
671
671

F- 65



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

~~(i) The outstanding exposure represents the carrying amount~~Maturity of ~~the related liability at December 31.~~guarantees



	At December 31, 2019		At December 31, 2018
Terms	Outstanding exposure(i)	Maximum exposure(ii)	Outstanding exposure(i)	Maximum exposure(ii)
	(US$ millions)
0-1 year	29	29	133	133
1-3 years	134	134	281	281
3-5 years	300	300	212	212
Total	464	464	626	626


(i)	The outstanding exposure represents the carrying amount of the related liability at December 31.


(ii)	The maximum exposure represents the total amount of the Guarantee at December 31.

Pledged assets

~~The~~As at December 31, 2019, the Group’s share of total debt and financing secured by either pledged assets, pledged deposits issued to cover letters of credit, or guarantees issued ~~by the Company at December~~was $464 million (December 31, ~~2018, was~~2018: $626 ~~million (2017: $671~~ million)~~, out of this, assets~~. Assets pledged by the Group over ~~this debt~~these debts and ~~financing at the same date~~financings amounted to $2$1 million ~~(2017: $1~~at December 31, 2019 (December 31, 2018: $2 million). The remainder represented primarily guarantees issued by Millicom S.A. to guarantee financings raised by other Group operating entities.

In addition to the above, on June 4, 2019, MIC Tanzania Public Limited Company entered into a loan facility agreement which was further amended and restated in December 12, 2019, with the Standard Bank of South Africa acting as an agent and a consortium of banks acting as the original lenders. The facility agreement, maturing in 2025, has an all asset debenture securing the whole amount, as well as a pledge over the shares of the immediate holding company of the borrower.

C.3.6.Covenants

Millicom’s financing facilities are subject to a number of covenants including net leverage ratio, debt service coverage ratios, or debt to earnings ratios, ~~and cash levels.~~among others. In addition, certain of its financings contain restrictions on sale of businesses or significant assets within the businesses. At December 31, ~~2018,~~2019, there were no breaches inof financial covenants.

C.4.~~Cash~~ Lease liability

As a result of the adoption of IFRS 16 'Leases', and ~~deposits~~as of December 31, 2019 (see above in the "New and amended IFRS accounting standards") lease liabilities are presented in the statement of financial position as follows:



	December 31, 2019
	(US$ millions)
Current	97
Non Current	967
Total Lease liability	1,063

As permitted under IFRS 16, Millicom has elected not to recognize a lease liability for short term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are rather recognized on a straight-line basis as an expense in the statement of income. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office furniture. In addition, certain variable lease payments are not permitted to be recognized as lease liabilities and are expensed as incurred.

The expenses relating to payments not included in the measurement of the lease liability are disclosed in operating expenses (note B.3.) and are as follows:



	2019 (US$ millions)
Expense relating to short-term leases (included in cost of sales and operating expenses)	(5	)

F- 66



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The total cash outflow for leases in 2019 was $236 million. Lease liabilities split by maturity and future cash outflows are disclosed in note D.5..

At December 31, 2019, the Group has not committed to any material leases which had not yet commenced and has no material lease contracts with variable lease payments.

The Group's leasing activities and how these are accounted for

The Group leases various lands, sites, towers (including those related to towers sold and leased back), offices, warehouses, retail stores, equipment and cars. Rental contracts are typically made for fixed periods but may have extension options as described below. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes.

Through December 31, 2018, leases of property, plant and equipment were classified as either finance or operating leases. See note C.3.4. for further details on existing finance leases as of December 31, 2018. Payments made under operating leases (net of any incentives received from the lessor) were charged to the statement of income on a straight-line basis over the period of the lease.

From January 1, 2019, leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the reduction of the liability and finance cost. The finance cost is charged to the statement of income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

fixed payments (including in-substance fixed payments), less any lease incentives receivable

variable lease payment that are based on an index or a rate

amounts expected to be payable by the lessee under residual value guarantees

the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and

payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The lease payments are discounted using the interest rate implicit in the lease. As it is generally impracticable to determine that rate, the Group uses the lessee’s incremental borrowing rate, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. The incremental borrowing rate applied can have a significant impact on the net present value of the lease liability recognized under IFRS 16.

The Group determines the incremental borrowing rate by country and by considering the risk-free rate, the country risk, the industry risk, the credit risk and the currency risk, as well as the lease and payment terms and dates.

The Group is also exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is adjusted against the right-of-use asset by discounting the revised lease payments using either the initial discount rate or a revised discount rate. The initial discount rate is used if future lease payments are reflecting market or index rates or if they are in substance fixed. The discount rate is revised, if a change in floating interest rates occurs. The Group reassess the variable payment only when there is a change in cash flows resulting from a change in the reference index or rate and not at each reporting date.

According to IFRS 16, lease term is defined as the non-cancellable period for which a lessee has the right to use an underlying asset, together with both: (a) periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option; and (b) periods covered by an option to terminate if the lessee is reasonably certain not to exercise that option. The assessment of such options is performed at the commencement of a lease. As part of the assessment, Millicom introduced the 'time horizon concept': the reasonable term under which the company expects to use a leased asset considering economic incentives, management decisions, business plans and the fast-paced industry Millicom operates in. The assessment must be focused on the economic incentives for Millicom to exercise (or not) an option to early terminate/extend a contract. The Group has decided to work on the basis the lessor will generally accept a renewal/not early terminate a contract, as there is an economic incentive to maintain the contractual relationship.

Millicom considered the specialized nature of most of its assets under lease, the low likelihood the lessor can find a third party to substitute Millicom as a lessee and past practice to conclude that, the lease term can go beyond the notice period when there is more than an insignificant penalty for the lessor not to renew the lease. This analysis requires judgment and has a significant impact on the lease liability recognized under IFRS 16.

F- 67



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Under IFRS 16, the accounting for sale and leaseback transactions has changed as the underlying sale transaction needs to be first analyzed using the guidance of IFRS 15. The seller/lessee recognizes a right-of-use asset in the amount of the proportional original carrying amount that relates to the right of use retained. Accordingly, only the proportional amount of gain or loss from the sale must be recognized. The impact from sale and leaseback transactions was not material for Millicom Group as of the date of initial application.

Finally, the Group has taken the additional following decisions when adopting the standard:

Non-lease components are capitalized (IFRS16.15)

Intangible assets are out of IFRS 16 scope (IFRS16.4)

~~C.4.1.~~C.5. Cash and deposits

C.5.1. Cash and cash equivalents

2018 2017
(US$ millions)
Cash and cash equivalents in USD 229
302
Cash and cash equivalents in other currencies 299
317
Total cash and cash equivalents 528
619

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~



	2019	2018
	(US$ millions)
Cash and cash equivalents in USD	834	229
Cash and cash equivalents in other currencies	330	299
Total cash and cash equivalents	1,164	528

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.

Cash deposits with bank with maturities of more than three months that generally earn interest at market rates are classified as time deposits.

~~C.4.2.~~C.5.2. Restricted cash


	2018	2017	2019	2018
	(US$ millions)		(US$ millions)
Mobile Financial Services	155	143	150	155
Others	3	2	5	3
Restricted cash	158	145	155	158

Cash held with banks related to MFS which is restricted in use due to local regulations is denoted as restricted cash.

F- 68

~~C.4.3.~~



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

C.5.3. Pledged deposits

Pledged deposits represent contracted cash deposits with banks that are held as security for debts at corporate or operational entity level. Millicom is unable to access these funds until either the relevant debt is repaid or alternative security is arranged with the lender.

At December 31, ~~2018,~~2019, there were no non-current pledged deposits ~~(2017: $nil)~~(2018: nil).

At December 31, ~~2018,~~2019, current pledged deposits amounted to $2$1 million ~~(2017: $1~~(2018: $2 million).

~~C.5.~~C.6. Net ~~debt~~financial obligations

Net ~~debt~~financial obligations (i)


	2018		2017		2019		2018
	(US$ millions)				(US$ millions)
Total debt and financing(i)	4,580		3,785		5,972		4,580
Lease liabilities (i)					1,063		—
Gross financial obligations					7,036		4,580
Less:
Cash and cash equivalents	(528	)	(619	)	(1,164	)	(528	)
Pledged deposits	(2	)	(1	)	(1	)	(2	)
Time deposits related to bank borrowings	—		—		(1	)	—
Net debt at the end of the year	4,051		3,164
Add (less) derivatives related to debt (SEK currency swap)	—		56
Net debt including derivatives related to debt	4,051		3,220
Net financial obligations at the end of the year					5,870		4,051
Add (less) derivatives related to debt (note D.1.2.)					(17	)	—
Net financial obligations including derivatives related to debt					5,853		4,051


(i)	As at December 31, 2018, Debt and financing included finance lease liabilities of $353 million. As at December 31, 2019, and as a result of the application of IFRS 16, these are now shown in a separate line under Lease liabilities.



	Assets			Liabilities from financing activities
	Cash and cash equivalents		Other	Bond and bank debt and financing		Finance lease liabilities(i)		Lease liabilities(i)		Total
Net financial obligations as at January 1, 2018	619		2	3,420		365		—		3,164
Cash flows	(72	)	—	621		(17	)	—		676
Scope Changes	7		—	267		—		—		260
Additions/ acquisitions	—		—	—		44		—		44
Interest accretion	—		—	11		—		—		11
Foreign exchange movements	(33	)	—	(84	)	(21	)	—		(72	)
Transfers to/from assets held for sale	6		—	9		(8	)	—		(4	)
Transfers	—		—	3		(11	)	—		(9	)
Other non-cash movements	—		—	(19	)	—		—		(19	)
Net financial obligations as at December 31, 2018	528		2	4,227		353		—		4,051
Cash flows	638		—	1,743		—		(107	)	998
Scope changes	16		—	74		—		178		236
Recognition / Remeasurement	—		—	—		—		109		109
Change in accounting policy	—		—	—		—		545		545
Interest accretion	—		—	8		—		—		8
Foreign exchange movements	(8	)	—	(16	)	—		(6	)	(14	)
Transfers to/from assets held for sale	(9	)	—	(53	)	—		(8	)	(52	)
Transfers	—		—	3		(353	)	353		3
Other non-cash movements	—		—	(14	)	—		—		(14	)
Net financial obligations as at December 31, 2019	1,164		2	5,972		—		1,063		5,870

(i) As from ~~2018, the Group has excluded 'restricted cash' from its definition of Net debt. 2017 figures have been represented accordingly. The effect~~January 1, 2019 and as a result of the ~~change is a $145 million increase in 2017 net debt.~~

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

application of IFRS 16, finance leases are now shown under lease liabilities.

F- 69

Assets Liabilities from financing activities
Cash and cash equivalents Other Bond and bank debt and financing Finance lease liabilities Total
Net debt as at January 1, 2017 646
4
3,606
295
3,250
Cash flows 10
(1 ) (177 ) (22 ) (209 )
Additions / acquisitions (22 ) —
3
195
220
Interest accretion —
—
8
(1 ) 7
Foreign exchange movements 4
—
34
(2 ) 28
Transfers (to)/from assets held for sale (19 ) (2 ) (49 ) (13 ) (42 )
Transfers —
—
10
—
9
Other non-cash movements —
—
(14 ) (86 ) (101 )
Net debt as at December 31, 2017 619
2
3,420
365
3,164
Cash flows (72 ) —
621
(17 ) 676
Additions —
—
—
44
44
Scope changes 7
—

267

—

260
Interest accretion —
—
11
—
11
Foreign exchange movements (33 ) —
(84 ) (21 ) (72 )
Transfers (to)/from assets held for sale 6
—
9
(8 ) (4 )
Transfers —
—
3
(11 ) (9 )
Other non-cash movements —
—
(19 ) —
(19 )
Net debt as at December 31, 2018 528
2
4,227
353
4,051



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

~~C.6.~~C.7. Financial instruments

i) Equity and debt instruments

Classification

From January 1, 2018, and the application of IFRS 9, the Group classifies its financial assets in the following measurement categories:

those to be measured subsequently at fair value either through Other Comprehensive Income (OCI), or through profit or loss, and

those to be measured at amortized cost.

The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).

The Group reclassifies debt investments when and only when its business model for managing those assets changes.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Debt instruments

Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the group classifies its debt instruments:

Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in profit or loss and presented in other gains / (losses), together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the consolidated statement of income.

FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in ‘Other non-operating (expenses) income, net’. Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses and impairment expenses are presented as ‘Other non-operating (expenses) income, net’ in the consolidated statement of income.

FVPL: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognized in profit or loss and presented net within ‘Other non-operating (expenses) income, net’ in the period in which it arises.

Equity instruments

The Group subsequently measures all equity investments at fair value. The Group does not hold ~~Equity~~equity instruments for trading. Where the Group’s management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognized in profit or loss as other income when the Group’s right to receive payments is established.

Otherwise, changes in the fair value of financial assets at FVPL are recognized in ‘Other non-operating (expenses) income, net’ in the consolidated statement of income as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

F- 70



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Impairment

From January 1, 2018, the Group assesses on a forward looking basis the expected credit losses associated with its financial assets carried at amortized cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized from initial recognition of the trade receivables.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

The provision is recognized in the consolidated statement of income within Cost of sales.

~~ii) Derivative financial instruments and hedging activities~~


ii)	Derivative financial instruments and hedging activities

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at fair value at each subsequent closing date. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged. The Group designates certain derivatives as either:

~~a) Hedges of the fair value of recognized assets or liabilities or a firm commitment (fair value hedge); or~~

~~b) Hedges of a particular risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge).~~


a)	Hedges of the fair value of recognized assets or liabilities or a firm commitment (fair value hedge); or


b)	Hedges of a particular risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge).

For transactions designated and qualifying for hedge accounting, at the inception of the transaction, the Group documents the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. This is done in reference to the Group Financial Risk Management Policy as last updated and approved by the Audit Committee in late 2018. The Group also documents its assessment, both at hedge inception and on an ongoing basis (quarterly), of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

The full fair value of a hedging instrument is classified as a non-current asset or liability when the period to maturity of the hedged item is more than 12 months and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability when the remaining period to maturity of the hedged item is less than 12 months.

The change in fair value of hedging instruments that are designed and qualify as fair value hedges is recognized in the statement of income as finance costs or income. The change in fair value of the hedged item attributable to the risk hedged is recorded as part of the carrying value of the hedged item and is also recognized in the statement of income as finance costs or income.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. Gains or loss relating to any ineffective portion is recognized immediately in the statement of income within Other non-operating (expenses) income, net. Amounts accumulated in equity are reclassified to the statement of income in the periods when the hedged item affects profit or loss.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time is recycled to the statement of income within Other non-operating (expenses) income, net.

When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the statement of income within Other non-operating (expenses) income, net.

~~C.6.1.~~C.7.1. Fair value measurement hierarchy

Millicom uses the following fair value measurement hierarchy:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

Level 3 – Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

The Group enters into derivative financial instruments with various counterparties, principally financial institutions with investment grade ratings. Interest rate swaps and foreign exchange forward contracts are valued

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

using valuation techniques, which employ the use of markets observable data. The most frequently applied valuation techniques include forward pricing and swap models using present value calculations. The models incorporate various inputs including the credit quality of

F- 71



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

counterparties, foreign exchange spot and forward rates, yield curves of the respective currencies, interest rate curves and forward curves.

~~C.6.2.~~C.7.2. Fair value of financial instruments

The fair value of Millicom’s financial instruments are shown at amounts at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The fair value of all financial assets and all financial liabilities, except debt and financing approximate their carrying value largely due to the short-term maturities of these instruments. The fair values of all debt and financing have been estimated by the Group, based on discounted future cash flows at market interest rates.

Fair values of financial instruments at December 31,

Carrying value Fair value(i)
Note 2018 2017 2018 2017
(US$ millions)
Financial assets

Derivative financial instruments
—
—
—
—
Other non-current assets
87
73
87
73
Trade receivables, net
343
386
343
386
Amounts due from non-controlling interests, associates and joint venture partners G.5. 73
77
73
77
Prepayments and accrued income
129
145
129
145
Supplier advances for capital expenditures
25
18
25
18
Other current assets
127
90
127
90
Restricted cash C.4.2. 158
145
158
145
Cash and cash equivalents C.4.1. 528
619
528
619
Total financial assets
1,470
1,553
1,470
1,553
Current
1,344
1,440
1,344
1,440
Non-current
126
113
126
113
Financial liabilities

Debt and financing(i) C.3. 4,580
3,785
4,418
3,971
Trade payables
282
288
282
288
Payables and accruals for capital expenditure
335
304
335
304
Derivative financial instruments
—
56
—
56
Put option liability C.6.3. 239
—
239
—
Amounts due to non-controlling interests, associates and joint venture partners G.5. 483
420
483
420
Accrued interest and other expenses
383
353
383
353
Other liabilities
402
371
402
371
Total financial liabilities
6,704
5,577
6,542
5,763
Current
2,335
1,753
2,335
1,753
Non-current
4,370
3,824
4,207
4,010



		Carrying value		Fair value(i)
	Note	2019	2018 (ii) (iii)	2019	2018 (ii) (iii)
		(US$ millions)
Financial assets
Derivative financial instruments		—	—	—	—
Other non-current assets		66	87	66	87
Trade receivables, net		371	343	371	343
Amounts due from non-controlling interests, associates and joint venture partners	G.5.	68	73	68	73
Prepayments and accrued income		156	129	156	129
Supplier advances for capital expenditures		22	25	22	25
Equity Investment		371	—	371	—
Other current assets		181	124	181	124
Restricted cash	C.5.2.	155	158	155	158
Cash and cash equivalents	C.5.1.	1,164	528	1,164	528
Total financial assets		2,554	1,467	2,554	1,467
Current		2,449	1,341	2,449	1,341
Non-current		104	126	104	126
Financial liabilities
Debt and financing(i)	C.3.	5,972	4,580	6,229	4,418
Lease liabilities		1,063	—	1,063	—
Trade payables		289	282	289	282
Payables and accruals for capital expenditure		348	335	348	335
Derivative financial instruments		17	—	17	(1	)
Put option liability	C.7.4.	264	239	264	239
Amounts due to non-controlling interests, associates and joint venture partners	G.5.	498	483	498	483
Accrued interest and other expenses		432	381	432	381
Other liabilities		399	399	399	399
Total financial liabilities		9,282	6,698	9,538	6,536
Current		2,045	2,330	2,045	2,329
Non-current		7,237	4,370	7,493	4,208


(i)	Fair values are measured with reference to Level 1 (for listed bonds) or 2.

(ii) As at December 31, 2018, Debt and financing included finance lease liabilities of $353 million. As at December 31, 2019, and as a result of the application of IFRS 16, these are now shown in a separate line under Lease liabilities.

(iii) The consolidated statement of financial position at December 31, 2018 has been restated after finalization of the Cable Onda purchase accounting (note A.1.2.).

F- 72



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

C.7.3. Equity investments

As atDecember 31, 2019, Millicom ~~International Cellular S.A.~~has the following investments in equity instruments:

~~Notes to~~



	2019	2018
	(US$ millions)
Investment in Jumia	32	—
Investment in HT	338	—
Equity investment - total	371	—

Jumia Technologies AG (“Jumia”)

Jumia indirectly owns a number of companies that provide online services and online marketplaces in certain countries in Africa.

In January 2019, Millicom was diluted in the ~~consolidated~~capital of the company following the entry of a new investor. This triggered the recognition of a net dilution gain of $7 million in January 2019. In addition, during Q1 2019, in preparation of Jumia's IPO, Millicom relinquished its seat on the board of directors, which resulted in the loss of the Group's significant influence over Jumia. As a result, Millicom derecognized its investment in associate in Jumia and recognized it as a financial ~~statements~~
asset (equity instrument) at fair value under IFRS 9. On April 11, 2019, Jumia completed its IPO at the offer price per share of $14.5 and shares started trading on the NYSE on April 12, 2019.

As a result, as of March 31, 2019, a net gain of $30 million had been recognized and reported under ‘Income (loss) from associates, net’. Post IPO, Millicom holds 6.31% of the outstanding shares of Jumia.

At December 31, 2019, the closing price of a Jumia share was $6.73, which values Millicom's investment at $32 million (level 1). The changes in fair value of $(38) million for the ~~years~~year ended December 31, ~~2018, 2017~~2019 is shown under 'Other non-operating (expenses) income, net' (see note B.5).

Helios Towers plc (“HT”)

In October 2019, Helios Towers plc (a company inserted as the holding company of HTA just prior to IPO) completed its IPO on the London Stock Exchange at a price of GBP 1.15 per share valuing the company at enterprise value of approximately $2.0 billion and ~~2016 – continued~~a market capitalization of $1.45 billion.

As part of the listing process, on October 17, 2019, Millicom first was diluted as HT management exercised their IPO option rights (~4%). This event triggered the recognition of a non-cash dilution loss of $3 million recorded under ‘Income/(loss) from other joint ventures and associates’.

On the same day, Millicom resigned from its board of directors seats, which resulted in the loss of the Group's significant influence over HT. As a result, as from that date, Millicom derecognized its investment in associate in HT and recognized it as a financial asset at fair value under IFRS 9. The derecognition of the investment in associate and recognition of the equity investment in HT at a fair value of $292 million triggered the recognition of a net non-cash P&L gain of $208 million recorded under ‘Other non-operating income (expense), net’. Fair value was determined using the IPO reference share price of GBP1.15.

As a result of the IPO and the subsequent exercise of the overallotment option, Millicom disposed of a portion of its ownership (in total ~20%) yielding $57 million in gross proceeds and $25 million in net proceeds after fees and Millicom's share in tax escrow of $30 million which has been deducted in full from the gain given the high level of uncertainties used in assessing the potential tax liability. These disposals did trigger a loss of $32 million, as a result of the tax escrow and transaction fees, and are recorded under ‘Other operating income (expenses), net’.

Post-IPO and overallotment option exercise, Millicom holds a 16.2% stake which, as at December 31, 2019, is valued at $338 million (level 1) using a closing share price of GBP 1.58. The gain on derecognition and changes in fair value of $312 million for the year ended December 31, 2019 is shown under 'Other non-operating (expenses) income, net' (see note B.5).

~~C.6.3.~~

F- 73



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

C.7.4. Call and put options

Cable Onda ~~put~~call and ~~call~~put options

As part of the acquisition of Cable Onda, shareholders agreed on certain put and call ~~options.~~options as follows:

The put option to acquire the remaining 20% non-controlling interest in Cable Onda ~~becomes~~became exercisable 42 months after the closing date (December 13, 2018) or earlier upon the occurrence of certain events. In that respect, Millicom determined that, as the put option could be exercised under certain change of control events which could be outside the control of Millicom, the option meets the criteria under IAS 32 for recognition as a liability and corresponding equity decrease. The put option liability iswas payable in Millicom's shares or in cash at the discretion of the partner. Therefore, Millicom ~~has~~ recorded a liability for the put option at acquisition completion date of $239 million representing the present value of the redemption amount. As of December 31, 2018, the redemption price has been valued as being 20% of the equity value implied by the transaction. Any future change in the redemption price will be recorded in the Group's statement of income.

Millicom also received an unconditional call option which ~~becomes~~became exercisable either 42 months after December 13, 2018 closing date or if Millicom's partners’ shareholdings fall below 10%. The call option exercise price iswas at fair market value. Finally, Millicom received an unconditional call option exercisable until December 13, 2019, at a price equal to the purchase price in the transaction, plus interest at 10% per annum. The fair values of both call options ~~have been~~were assessed as not material at December 31, 2018.

As a consequence of the Telefonica Panama acquisition, on August 29, 2019 the shareholders agreed to amend the call and put options in respect of the remaining 20% non-controlling interest that were set as part of the acquisition of Cable Onda.

First, the parties agreed to new unconditional call and put options to acquire the remaining 20% non-controlling interest in Cable Onda becoming exercisable at any time from July 2022, both, at fair market value.

Second, they also agreed on 'Transaction Price' call and put options conditional to the occurrence of certain events, such as change of control of Millicom or at any time if Millicom's non-controlling partners’ shareholdings fall below 10%, and becoming exercisable on the date of the Telefonica Panama closing (August 29, 2019) and extending until July 2022. The put and call options are exercisable at the purchase price in the Cable Onda transaction (enterprise value of $1.46 billion), plus interest at 5% per annum (put) and at 10% per annum (call), respectively.

Millicom determined that, both the new unconditional put option and 'Transaction Price' put option could be exercised under events which are outside the control of Millicom. The options are payable in Millicom's shares or in cash at the discretion of the partner and therefore also meet the criteria under IAS 32 for recognition as a liability and a corresponding equity decrease - which is the same conclusion as for previous put option for which a liability had already been recognized at acquisition date in 2018. The put option liability is now valued at the higher of fair market value and Transaction Price plus interest at 5% per annum and is payable in Millicom's shares or in cash at the discretion of the partner.

As of December 31, 2019, the value of the 'Transaction Price' put option is lower than fair market value, and therefore the Group recognized the put option liability at the higher of both valuations at $264 million (see note B.5). The Group is required to re-value the liability each reporting date and any further change in the value of the put option liability will be recorded in the Group's statement of income. Both call options are currently not exercisable and therefore no value at December 31, 2019.

D.Financial risk management

Exposure to interest rate, foreign currency, non-repatriation, liquidity, capital management and credit risks arise in the normal course of Millicom’s business. Each year Group Treasury revisits and presents to the Audit committee updated Treasury and Financial Risks Management policies. The Group analyzes each of these financial risks individually as well as on an interconnected basis and defines and implements strategies to manage the economic impact on the Group’s performance in line with its Financial Risk Management policy. These policies were last reviewed in late 2018. As part of the annual review of the above mentioned risks, the Group agrees to a strategy over the use of derivatives and natural hedging instruments ranging from raising debt in local currency (where the Company targets to reach 40% of debt in local currency over the medium term) to maintain a ~~70/30%~~combination of up to 75/25% mix between fixed and floating rate debt or agreeing to cover up to six months forward of operating costs and capex denominated in non-functional currencies through a rolling and layering strategy. Millicom’s risk management strategies may include the use of derivatives to the extent a market would exist in the jurisdictions where the Group operates. Millicom’s policy prohibits the use of such derivatives in the context of speculative trading.

Accounting policies for derivatives is further detailed in note ~~C.6.~~C.7. On December 31, ~~2018~~2019 and ~~2017~~2018 fair value of derivatives held by the Group can be summarized as follows:

F- 74



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)


	2018	2017		2019		2018
	(US$ millions)			(US$ millions)
Derivatives
Cash flow hedge derivatives	—	(56	)	(17	)	—
Net derivative asset (liability)	—	(56	)	(17	)	—

D.1.Interest rate risk

Debt and financing issued at floating interest rates expose the Group to cash flow interest rate risk. Debt and financing issued at fixed rates expose the Group to fair value interest rate risk. The Group’s exposure to risk of changes in market interest rates relate to both of the above. To manage this risk, the Group’s policy is to maintain a combination of fixed and floating rate debt with target ~~for~~that more than 75%of the debt to be ~~distributed between~~at fixed ~~(up to 70%) and variable (up to 30%) rates.~~rate. The Group actively monitors borrowings against this target. The target mix between fixed and floating rate debt is reviewed periodically. The purpose of Millicom’s policy is to achieve an optimal balance

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

between cost of funding and volatility of financial results, while taking into account market conditions as well as our overall business strategy. At December 31, ~~2018,~~2019, approximately ~~68%~~76% of the Group’s borrowings are at a fixed rate of interest or for which variable rates have been swapped for fixed rates with interest rate swaps ~~(2017: 65%~~(2018: 68%).

D.1.1.Fixed and floating rate debt

~~Financing at December 31, 2018~~

Amounts due within:
1 year 1–2 years 2–3 years 3–4 years 4–5 years >5 years Total
(US$ millions)
Fixed rate financing 140
162
137
436
204
2,036
3,115
Weighted average nominal interest rate 6.35 % 6.59 % 6.64 % 6.61 % 4.10 % 6.47 % 6.34 %
Floating rate financing 319
175
266
133
263
309
1,465
Weighted average nominal interest rate 10.28 % 5.89 % 2.73 % 0.49 % 4.41 % 1.13 % 1.98 %
Total 458
337
403
569
468
2,345
4,580
Weighted average nominal interest rate 9.08 % 6.23 % 4.06 % 5.18 % 4.28 % 5.76 % 4.95 %

Financing at December 31, ~~2017~~2019


	Amounts due within:														Amounts due within:
	1 year		1-2 years		2-3 years		3-4 years		4-5 years		>5 years		Total		1 year		1–2 years		2–3 years		3–4 years		4–5 years		>5 years		Total
	(US$ millions)														(US$ millions)
Fixed rate financing	87		365		141		104		396		1,369		2,462		118		117		118		332		431		3,428		4,543
Weighted average nominal interest rate	7.17	%	5.52	%	8.28	%	9.92	%	7.73	%	7.68	%	7.48	%	6.32	%	5.46	%	5.01	%	7.24	%	5.44	%	5.81	%	5.86	%
Floating rate financing	98		134		206		327		188		370		1,323		68		38		27		185		654		457		1,429
Weighted average nominal interest rate	4.24	%	2.37	%	8.40	%	12.20	%	1.98	%	2.25	%	3.06	%	2.97	%	1.77	%	1.41	%	3.25	%	4.26	%	0.96	%	1.52	%
Total	185		500		347		431		584		1,738		3,785		186		155		145		517		1,085		3,884		5,972
Weighted average nominal interest rate	5.61	%	4.68	%	8.35	%	11.65	%	5.88	%	6.52	%	5.94	%	5.10	%	4.55	%	4.34	%	5.81	%	4.73	%	5.24	%	4.82	%

Financing at December 31, 2018



	Amounts due within:
	1 year		1–2 years		2–3 years		3–4 years		4–5 years		>5 years		Total
	(US$ millions)
Fixed rate financing	140		162		137		436		204		2,036		3,116
Weighted average nominal interest rate	6.35	%	6.59	%	6.64	%	6.61	%	4.10	%	6.47	%	6.34	%
Floating rate financing	318		175		266		133		263		309		1,465
Weighted average nominal interest rate	10.28	%	5.89	%	2.73	%	0.49	%	4.41	%	1.13	%	1.98	%
Total	458		337		403		570		468		2,345		4,580
Weighted average nominal interest rate	9.08	%	6.23	%	4.06	%	5.18	%	4.28	%	5.76	%	4.95	%

A 100 basis point fall or rise in market interest rates for all currencies in which the Group had borrowings at December 31, ~~2018~~2019 would increase or reduce profit before tax from continuing operations for the year by approximately ~~$15~~$14 million ~~(2017: $13~~(2018: $15 million).

F- 75



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

D.1.2. Interest rate swap contracts

From time to time, Millicom enters into currency and interest rate swap contracts to manage its exposure to fluctuations in interest rates and currency fluctuations in accordance with its Financial Risk Management policy. Details of these arrangements are provided below.

Currency and interest rate swap contracts

MIC S.A. entered into swap contracts in order to hedge the foreign currency and interest rate risks in relation to the SEK 2 billion (~$211 million) senior unsecured sustainability bond issued in May 2019 (note C.3.1.). These swaps are accounted for as cash flow hedges as the timing and amounts of the cash flows under the swap agreements match the cash flows under the SEK bond. Their maturity date is May 2024. The hedging relationship is highly effective and related fluctuations are recorded through other comprehensive income. At December 31, 2019, the fair values of the swaps amount to a liability of $0.2 million.

Our operations in El Salvador and Costa Rica also entered into several swap agreements in order to hedge foreign currency and interest rate risks on certain long term debts. These swaps are accounted for as cash flow hedges and related fair value changes are recorded through other comprehensive income. At December 31, 2019, the fair values of these swaps amount to liabilities of $17 million.

Interest rate and currency swaps ~~on SEK denominated debt~~

~~These swaps matured in April 2018 and were settled against a cash payment of $63 million. Interest rate and currency swaps on SEK denominated debt were~~are measured with reference to Level 2 of the fair value ~~hierarchy.~~hierarchy

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

~~Interest rate and currency swaps on Euro-denominated debt~~

In June 2013, Millicom entered into interest rate and currency swaps whereby Millicom will sell Euros and receive USD to hedge against exchange rate fluctuations on an intercompany seven-year Euro 134 million principal and related interest financing of its operation in Senegal. The outstanding 2020 Notes were repaid in August 2017 and as a result these swaps have been settled. The year-to-date 2017 revaluation of the swap resulted in a $22 million loss. The Millicom Group finally received $10 million in cash on settlement date.

~~The above hedge was considered ineffective, with fluctuations in the fair value of the hedge recorded through the statement of income.~~

NoThere are no other derivative financial instruments ~~have~~with a significant fair value at December 31, ~~2018 and 2017.~~2019.

F- 76



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

D.2.Foreign currency risks

The Group is exposed to foreign exchange risk arising from various currency exposures in the countries in which it operates. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations.

Millicom seeks to reduce its foreign currency exposure through a policy of matching, as far as possible, assets and liabilities denominated in foreign currencies, or entering into agreements that limit the risk of exposure to currency fluctuations against the US dollar reporting currency. In some cases, Millicom may also borrow in US dollars where it is either commercially more advantageous for joint ventures and subsidiaries to incur debt obligations in US dollars or where US dollar denominated borrowing is the only funding source available to a joint venture or subsidiary. In these circumstances, Millicom accepts the remaining currency risk associated with financing its joint ventures and subsidiaries, principally because of the relatively high cost of forward cover, when available, in the currencies in which the Group operates.

D.2.1. Debt denominated in US dollars and other currencies

Debt denomination at December 31


	2018	2017	2019	2018
	(US$ millions)		(US$ millions)
Debt denominated in US dollars	3,132	1,983	3,535	2,572
Debt denominated in currencies of the following countries:
Debt denominated in currencies of the following countries
Colombia	718	834	531	718
Chad	62	61	—	62
Tanzania	112	121	14	112
Bolivia	306	337	350	306
Paraguay	207	191	206	207
Luxembourg (SEK denominated)	43	243
Other	—	15
El Salvador(i)			268	299
Panama(i)			918	261
Luxembourg (COP denominated)			43	43
Costa Rica			107	—
Total debt denominated in other currencies	1,448	1,802	2,437	2,008
Total debt	4,580	3,785	5,972	4,580

(i) El Salvador's official unit of currency is the U.S. dollar, while Panama uses the U.S. dollar as legal tender. Our local debt in both countries is therefore denominated in U.S. dollars but presented as local currency (LCY).

At December 31, ~~2018,~~2019, if the US dollar had weakened/strengthened by 10% against the other functional currencies of our operations and all other variables held constant, then profit before tax from continuing operations would have increased/decreased by $17 million (2018: $53 million ~~and $(53) million respectively (2017: $104 million and $(104) million respectively)~~). This increase/decrease in profit before tax would have mainly been as a result of the conversion of the USD-denominated net debts in our operations with functional currencies other than the US dollar.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

D.2.2. Foreign currency swaps

See note D.1.2. Interest rate swap contracts.

D.3.Non-repatriation risk

Most of Millicom’s operating subsidiaries and joint ventures generate most of the revenue of the Group and in the currency of the countries in which they operate. Millicom is therefore dependent on the ability of its subsidiaries and joint venture operations to transfer funds to the Company.

Although foreign exchange controls exist in some of the countries in which Millicom Group companies operate, none of these controls currently significantly restrict the ability of these operations to pay interest, dividends, technical service fees, royalties or repay loans by exporting cash, instruments of credit or securities in foreign currencies. However, existing foreign exchange controls may be strengthened in countries where the Group operates, or foreign exchange controls may be introduced in countries where the Group operates that do not currently impose such restrictions. If such events were to occur, the Company’s ability to receive funds from the operations could be subsequently restricted, which would impact the Company’s ability to make payments on its interest and loans and, or pay dividends to its shareholders. As a policy, all operations which do not face restrictions to

F- 77



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

deposit funds offshore and in hard currencies should do so for the surplus cash generated on a weekly basis. The Company and its subsidiaries make use of notional and physical cash pooling arrangements in hard currencies to the extent permitted.

In addition, in some countries it may be difficult to convert large amounts of local currency into foreign currency because of limited foreign exchange markets. The practical effects of this may be time delays in accumulating significant amounts of foreign currency and exchange risk, which could have an adverse effect on the Group. This is a relatively rare case for the countries in which the Group operates.

Lastly, repatriation most often gives raise to taxation, which is evidenced in the amount of taxes paid by the Group relative to the Corporate Income Tax reported in its statement of income.

D.4.Credit and counterparty risk

Financial instruments that subject the Group to credit risk include cash and cash equivalents, pledged deposits, letters of credit, trade receivables, amounts due from joint venture partners and associates, supplier advances and other current assets and derivatives. Counterparties to agreements relating to the Group’s cash and cash equivalents, pledged deposits and letters of credit are significant financial institutions with investment grade ratings. Management does not believe there are significant risks of non-performance by these counterparties and maintain a diversified portfolio of banking partners. Allocation of deposits across banks are managed such that the Group’s counterparty risk with a given bank stays within limits which have been set, based on each bank’s credit rating.

A large portion of revenue of the Group is comprised of prepaid products and services. For postpaid customers, the Group follows risk control procedures to assess the credit quality of the customer, taking into account its financial position, past experience and other factors. Accounts receivable also comprise balances due from other telecom operators. Credit risk of other telecom operators is limited due to the regulatory nature of the telecom industry, in which licenses are normally only issued to credit-worthy companies. The Group maintains a provision for expected credit losses of trade receivables based on its historical credit loss experience.

As the Group has a large number of internationally dispersed customers, there is generally no significant concentration of credit risk with respect to trade receivables, except for certain B2B customers (mainly governments). See note F.1.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

D.5.Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Group has significant indebtedness but also has significant cash balances. Millicom evaluates its ability to meet its obligations on an ongoing basis using a recurring liquidity planning tool. This tool considers the operating net cash flows generated from its operations and the future cash needs for borrowing, interest payments, dividend payments and capital and operating expenditures required in maintaining and developing its operating businesses.

The Group manages its liquidity risk through use of bank overdrafts, bank loans, bonds, vendor financing, Export Credit Agencies and Development Finance Institutions (DFI) loans. Millicom believes that there is sufficient liquidity available in the markets to meet ongoing liquidity needs. Additionally, Millicom is able to arrange offshore funding. Millicom has a diversified financing portfolio with commercial banks representing about ~~34%~~26% of its gross financing ~~(2017: 30%~~(2018: 34%), bonds 58% (2018: 54% ~~(2017: 57%~~), Development Finance Institutions 1% (2018: 4% ~~(2017: 3%~~) and ~~finance~~ leases 15% (2018: 8% ~~(2017: 10%~~).

F- 78



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Maturity profile of net financial liabilities at December 31, ~~2018 (i)~~2019

Less than 1 year 1 to 5 years > 5 years Total
(US$ millions)
Total debt and financing (458 ) (1,778 ) (2,345 ) (4,580 )
Cash and cash equivalents 528
—
—
528
Pledged deposits (related to bank borrowings) 2
—
—
2
Derivative financial instruments (SEK currency swap) —
—
—
—
Net cash (debt) including derivatives related to debt 72
(1,778 ) (2,345 ) (4,051 )
Future interest commitments (248 ) (786 ) (77 ) (1,111 )
Trade payables (excluding accruals) (478 ) —
—
(478 )
Other financial liabilities (including accruals) (1,217 ) (135 ) —
(1,352 )
Put Option liability (239 )
—

—

(239 )
Trade receivables 343
—
—
343
Other financial assets 184
126
—
310
Net financial liabilities (1,583 ) (2,573 ) (2,422 ) (6,578 )

~~(i) As from 2018, the Group has excluded 'restricted cash' from its definition of Net debt. 2017 figures have been re-presented accordingly.~~

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~



	Less than 1 year		1 to 5 years		>5yrs		Total
	(US$ millions)
Total debt and financing	(186	)	(1,902	)	(3,884	)	(5,972	)
Lease liability	(97	)	(490	)	(476	)	(1,063	)
Cash and equivalents	1,164		—		—		1,164
Pledged deposits (related to back borrowings)	1		—		—		1
Refundable deposit	—		—		—		—
Derivative financial instruments	(17	)	—		—		(17	)
Net cash (debt) including derivatives related to debt	865		(2,392	)	(4,361	)	(5,888	)
Future interest commitments related to debt and financing	(308	)	(1,088	)	(106	)	(1,502	)
Future interest commitments related to leases	(157	)	(476	)	(295	)	(928	)
Trade payables (excluding accruals)	(510	)	—		—		(510	)
Other financial liabilities (including accruals)	(1,052	)	(337	)	—		(1,388	)
Derivative instruments	(17	)	—		—		(17	)
Put option liability	(264	)	—		—		(264	)
Trade receivables	371		—		—		371
Other financial assets	602		104		—		707
Net financial liabilities	(469	)	(4,189	)	(4,762	)	(9,420	)

Maturity profile of net financial liabilities at December 31, ~~2017~~2018


	Less than 1 year		1 to 5 years		> 5 years		Total		Less than 1 year		1 to 5 years		>5yrs		Total
	(US$ millions)								(US$ millions)
Total debt and financing(i)	(185	)	(1,862	)	(1,738	)	(3,785	)	(458	)	(1,778	)	(2,345	)	(4,580	)
Cash and cash equivalents	619		—		—		619
Pledged deposits (related to bank borrowings)	1		—		—		1
Derivative financial instruments (SEK currency swap)	(56	)	—		—		(56	)
Cash and equivalents									528		—		—		528
Pledged deposits (related to back borrowings)									2		—		—		2
Net cash (debt) including derivatives related to debt	380		(1,862	)	(1,738	)	(3,220	)	72		(1,778	)	(2,345	)	(4,051	)
Future interest commitments	(255	)	(785	)	(68	)	(1,108	)
Future interest commitments related to debt and financing									(248	)	(786	)	(77	)	(1,111	)
Trade payables (excluding accruals)	(427	)	—		—		(427	)	(478	)	—		—		(478	)
Other financial liabilities (including accruals)	(1,094	)	(124	)	—		(1,218	)	(1,212	)	(135	)	—		(1,347	)
Put option liability									(239	)	—		—		(239	)
Trade receivables	386		—		—		386		343		—		—		343
Other financial assets	144		113		—		257		181		126		—		306
Net financial liabilities	(866	)	(2,658	)	(1,806	)	(5,330	)	(1,582	)	(2,573	)	(2,422	)	(6,577	)


(i)	As at December 31, 2018, Debt and financing included finance lease liabilities of $353 million. As at December 31, 2019, and as a result of the application of IFRS 16, these are now shown in a separate line under Lease liabilities.

D.6. Capital management

The primary objective of the Group’s capital management is to ensure a strong credit rating and solid capital ratios in order to support its business and maximize shareholder value.

The Group manages its capital structure with reference to local economic conditions and imposed restrictions such as debt covenants. To maintain or adjust its capital structure, the Group may make dividend payments to shareholders, return capital to shareholders through share repurchases or issue new shares. At December 31, ~~2018,~~2019, Millicom is rated at one notch below investment grade by the independent rating agencies Moody’s (Ba1 negative) and Fitch (BB+ stable). The Group primarily monitors capital using net ~~debt~~financial obligations to EBITDA.

F- 79



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The Group reviews its gearing ratio (net ~~debt~~financial obligations divided by total capital plus net ~~debt)~~financial obligations) periodically. Net ~~debt~~financial obligations includes interest bearing ~~loans~~debt and ~~borrowings,~~lease liabilities, less cash and cash equivalents (included restricted cash) and pledged and time deposits related to bank borrowings. Capital represents equity attributable to the equity holders of the parent.

Net ~~debt~~financial obligations to EBITDA

Note 2018 2017
(US$ millions)
Net debt C.5. 4,051
3,164
EBITDA B.3. 1,254
1,278
Net debt to EBITDA (i)
3.23
2.48



	Note	2019	2018
	(US$ millions)
Net financial obligations (i)	C.6.	5,870	4,051
EBITDA	B.3.	1,530	1,213
Net financial obligations to EBITDA (ii)		3.84	3.34


(i)	As at December 31, 2018, Net financial obligations included finance lease liabilities of $353 million. As at December 31, 2019, Net financial obligations also include Lease liabilities recognized under IFRS 16.

~~(i)~~(ii) Ratio is above 3x on an IFRS basis. However, covenants are calculated on proportionate net ~~debt/~~financial obligations/EBITDA, including Guatemala and Honduras, which show results below 3x.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

Gearing ratio


	Note	2018	2017	Note	2019	2018
	(US$ millions)			(US$ millions)
Net debt	C.5.	4,051	3,164
Net financial obligations (i)				C.6.	5,870	4,051
Equity	C.1.	2,542	3,096	C.1.	2,410	2,542
Net debt and equity		6,593	6,260
Net financial obligations and equity					8,280	6,593
Gearing ratio		0.61	0.51		0.71	0.61


(i)
Same comment as (i) in the table above.

E.Long-term assets

E.1.Intangible assets

Millicom’s intangible assets mainly consist of goodwill arising from acquisitions, customer lists acquired through acquisitions, licenses and rights to operate and use spectrum.

E.1.1.Accounting for intangible assets

Intangible assets acquired in business acquisitions are initially measured at fair value at the date of acquisition, and those which are acquired separately are measured at cost. Internally generated intangible assets, excluding capitalized development costs, are not capitalized but expensed to the statement of income in the expense category consistent with the function of the intangible assets. Subsequently intangible assets are carried at cost, less any accumulated amortization and any accumulated impairment losses.

Intangible assets with finite useful lives are amortized over their estimated useful economic lives using the straight-line method and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for intangible assets with finite useful lives are reviewed at least at each financial year end. Changes in expected useful lives or the expected beneficial use of the assets are accounted for by changing the amortization period or method, as appropriate, and treated as changes in accounting estimates.

Amortization expense on intangible assets with finite lives is recognized in the consolidated statement of income in the expense category consistent with the function of the intangible assets.

Goodwill

Goodwill represents the excess of cost of an acquisition over the Group’s share in the fair value of identifiable assets less liabilities and contingent liabilities of the acquired subsidiary, at the date of the acquisition. If the fair value or the cost of the acquisition can only be determined provisionally, then goodwill is initially accounted for using provisional values. Within 12 months of the acquisition date, any adjustments to the provisional values are recognized. This is done when the fair values and the cost of the acquisition have been finally determined. Adjustments to provisional fair values are made as if the adjusted fair

F- 80



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

values had been recognized from the acquisition date. Goodwill on acquisition of subsidiaries is included in intangible assets, net. Goodwill on acquisition of joint ventures or associates is included in investments in joint ventures and associates. Following initial recognition, goodwill is measured at cost, less any accumulated impairment losses. Gains or losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Where goodwill forms part of a cash-generating unit (or group of cash-generating units) and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed of in this manner is measured, based on the relative values of the operation disposed and the portion of the cash-generating unit retained.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

Licenses

Licenses are recorded at either historical cost or, if acquired in a business combination, at fair value at the date of acquisition. Cost includes cost of acquisition and other costs directly related to acquisition and retention of licenses over the license period. These costs may include estimates related to fulfillment of terms and conditions related to the licenses such as service or coverage obligations, and may include up-front and deferred payments.

Licenses have a finite useful life and are carried at cost less accumulated amortization and any accumulated impairment losses. Amortization is calculated using the straight-line method to allocate the cost of the licenses over their estimated useful lives.

The terms of licenses, which have been awarded for various periods, are subject to periodic review for, among other things, rate setting, frequency allocation and technical standards. Licenses are initially measured at cost and are amortized from the date the network is available for use on a straight-line basis over the license period. Licenses held, subject to certain conditions, are usually renewable and generally non-exclusive. When estimating useful lives of licenses, renewal periods are included only if there is evidence to support renewal by the Group without significant cost.

Trademarks and customer lists

Trademarks and customer ~~bases~~lists are recognized as intangible assets only when acquired or gained in a business combination. Their cost represents fair value at the date of acquisition. Trademarks and customer ~~bases~~lists have indefinite or finite useful lives. Indefinite useful life trademarks are tested for impairment annually. Finite useful life trademarks are carried at cost, less accumulated amortization. Amortization is calculated using the straight-line method to allocate the cost of the trademarks and customer ~~bases~~lists over their estimated useful lives. The estimated useful lives for trademarks and customer ~~bases~~lists are based on specific characteristics of the market in which they exist. Trademarks and customer ~~bases~~lists are included in Intangible assets, net.

Estimated useful lives are:



	Years
Estimated useful lives
Trademarks	1 to 15
Customer lists	4 to 20

Programming and content rights

Programming and content master rights which are purchased or acquired in business combinations which meet certain criteria are recorded at cost as intangible assets. The rights must be exclusive, related to specific assets which are sufficiently developed, and probable to bring future economic benefits and have validity for more than one year. Cost includes consideration paid or payable and other costs directly related to the acquisition of the rights, and are recognized at the earlier of payment or commencement of the broadcasting period to which the rights relate.

Programming and content rights capitalized as intangible assets have a finite useful life and are carried at cost, less accumulated amortization and any accumulated impairment losses. Amortization is calculated using the straight-line method to allocate the cost of the rights over their estimated useful lives.

Non-exclusive and programming and content rights for periods less than one year are expensed over the period of the rights.

Indefeasible rights of use

There is no universally-accepted definition of an indefeasible rights of use (IRU). These agreements come in many forms. However, the key characteristics of a typical arrangement include:

The right to use specified network infrastructure or capacity;

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

For a specified term (often the majority of the useful life of the relevant assets);

Legal title is not transferred;

F- 81



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

A number of associated service agreements including operations and maintenance (O&M) and co-location agreements. These are typically for the same term as the IRU; and

Any payments are usually made in advance.

IRUs are accounted for either as a lease, or service contract based on the substance of the underlying agreement.

IRU arrangements will qualify as a lease if, and when:

The purchaser has an exclusive right for a specified period and has the ability to resell (or sublet) the capacity; and

The capacity is physically limited and defined; and

The purchaser bears all costs related to the capacity (directly or not) including costs of operation, administration and maintenance; and

The purchaser bears the risk of obsolescence during the contract term.

If all of these criteria are not met, the IRU is treated as a service contract.

~~If an IRU is determined to be a lease, the following indicators need to be present in order for the capitalization of an IRU as a finance lease to be considered:~~

The Group will be consuming the major part of the useful economic life of the asset (generally considered to be 75% of the total remaining useful economic life of the asset). The Group assumes that the useful economic life of a new fiber cable is 15 years;

Substantially, all of the risks and rewards of ownership are transferred to the Group (e.g. Millicom can sublease excess capacity on the cables to other operators; Millicom is responsible for maintaining the cables during the contract period);

~~Neither party has the right to terminate the contract early (other than for “force majeure”);~~

~~The contract price is not subject to renegotiation or change (other than for inflationary increases);~~

~~The minimum contractual payments are for substantially all of the fair value of the asset (generally considered to be greater or equal to 90% of the fair value of the leased asset);~~

~~The Group can determine the fair value of the leased asset;~~

~~The Group has physical access rights to the cable.~~

~~Otherwise the IRU will be considered as an operating lease.~~

~~A finance lease of an~~An IRU of network infrastructure (cables or fiber) is accounted for as a ~~tangible asset. A finance lease~~right of ause asset (see E.3.), while capacity IRU (wavelength) is accounted for as an intangible asset.

~~Estimated useful lives of finance leases of capacity IRUs are between 12 and 15 years, or shorter if the estimated useful life of the underlying cable is shorter.~~

~~The costs of an IRU recognized as operating lease is recognized as prepayment and amortized in the statement of income on a straight-line basis over the lease term.~~

The costs of an IRU recognized as service contract is recognized as prepayment and amortized in the statement of income as incurred over the duration of the contract.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

E.1.2.Impairment of non-financial assets

At each reporting date Millicom assesses whether there is an indication that a non-financial asset may be impaired. If any such indication exists, or when annual impairment testing for a non-financial asset is required, an estimate of the asset’s recoverable amount is made. The recoverable amount is determined based on the higher of its fair value less cost to sell, and its value in use, for individual assets, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.

Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Where no comparable market information is available, the fair value, less cost to sell, is determined based on the estimated future cash flows discounted to their present value using a discount rate that reflects current market conditions for the time value of money and risks specific to the asset. The foregoing analysis also evaluates the appropriateness of the expected useful lives of the assets. Impairment losses related to assets of continuing operations are recognized in the consolidated statement of income in expense categories consistent with the function of the impaired asset.

At each reporting date an assessment is made as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. Other than for goodwill, a previously recognized impairment loss is reversed if there has been a change in the estimate used to determine the asset’s recoverable amount since the last impairment loss was recognized. If so, the carrying amount of the asset is increased to its recoverable amount. The increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in profit or loss.

After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

E.1.3. Movements in intangible assets

On May 20, 2019 the Group renewed 10MHz of the 1900 MHz spectrum in Colombia for a period of 10 years for an amount of $47 million (payable in five installments from June 2019 to February 2023) and an obligation to build 45 sites during the 20-month period following the renewal (approximately $20 million cost, that will be capitalized once the sites are built). In December 2019, the company substituted its coverage obligation by agreeing to pay the corresponding amount of $20 million in cash in 6 installments between January to June 2020. As a result, Management recognized an addition to spectrum assets and a liability for $20 million.

On July 9, 2019, the Tanzania Communications Regulatory Authority ('TCRA') issued a notice to cancel the license of Telesis, a subsidiary of Millicom in Tanzania that shared its 4G spectrum with Tigo and Zantel operations in the country. The net carrying value of the Telesis' license amounting to $8 million has therefore been impaired during Q3 2019. As a consequence and in order to continue providing 4G services in the country, our operation in Tanzania had to purchase spectrum in the 800MHz band from the TCRA for a period of 15 years and for an amount of $12 million.

F- 82



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

In December 2019,Millicom's wholly-owned subsidiary Telemovil El Salvador S.A. de C.V. ('Telemovil') acquired spectrum in 50Mhz AWS band and paid an advance of $14 million. On January 8, 2020, Telemovil made a final payment of $20 million and started operating the spectrum.

In December 2019, Tigo Colombia participated in an auction launched by the Ministerio de Tecnologias de la Informacion y las Comunicaciones (MINTIC), and acquired licenses granting the right to use a total of 40 MHz in the 700 MHz band. The 20-year license will expire in 2040. As a result of this auction,Tigo Colombia has strengthened its spectrum position, which also includes 55 MHz in the 1900 band and 30 MHz of AWS. Tigo Colombia agreed to a total notional consideration of COP$2.45 billion (equivalent to approximately US$736 million), of which approximately 45% is to be met by coverage obligations implemented by 2025.

The remaining 55% is payable in cash with an initial payment of approximately US$39 million to be made in Q1 2020, with the remainder payable in 12 annual installments beginning in 2026 and ending in 2037. The final permission to operate in 700 MHz will be given in February 2020.

Movements in intangible assets in 2019



	Goodwill		Licenses		Customer Lists		IRUs		Trademark		Other (i)		Total
	(US$ millions)
Opening balance, net	1,069		318		371		89		282		218		2,346
Change in scope	650		139		141		10		—		20		959
Additions	—		101		—		—		—		101		202
Amortization charge	—		(55	)	(37	)	(14	)	(99	)	(67	)	(272	)
Impairment	—		(8	)	—		—		—		—		(8	)
Disposals, net	—		—		—		—		—		—		—
Transfers	—		(5	)	—		23		—		15		33
Transfer to/from held for sale (see note E.3)	—		(18	)	—		—		—		(3	)	(21	)
Exchange rate movements	(7	)	(8	)	(1	)	—		—		(4	)	(21	)
Closing balance, net	1,711		465		473		107		183		279		3,219
Cost or valuation	1,711		922		691		214		325		806		4,670
Accumulated amortization and impairment	—		(458	)	(218	)	(107	)	(142	)	(527	)	(1,451	)
Net	1,711		465		473		107		183		279		3,219

Movements in intangible assets in 2018


	Goodwill		Licenses		Customer lists		IRUs		Trademarks		Other(i)		Total		Goodwill		Licenses		Customer Lists		IRUs		Trademark		Other (i)		Total
	(US$ millions)														(US$ millions)
Opening balance, net	599		324		33		105		10		194		1,265		599		324		33		105		10		194		1,265
Change in scope (ii)	512		—		370		—		280		23		1,185
Change in scope															504		—		350		—		280		23		1,157
Additions	—		66		—		2		—		91		158		—		66		—		2		—		91		158
Amortization charge	—		(48	)	(11	)	(14	)	(8	)	(65	)	(144	)	—		(48	)	(11	)	(14	)	(8	)	(65	)	(145	)
Impairment	(6	)	—		—		—		—		—		(6	)	(6	)	—		—		—		—		—		(6	)
Disposals, net	—		—		—		—		—		—		—		—		—		—		—		—		—		—
Transfers	—		—		—		—		—		(16	)	(16	)	—		—		—		1		—		(16	)	(15	)
Transfers to/from assets held for sale (see note E.3.)	—		(12	)	—		—		—		—		(12	)
Transfer to/from held for sale (iii)															—		(12	)	—		—		—		—		(12	)
Exchange rate movements	(28	)	(12	)	(1	)	(5	)	—		(9	)	(55	)	(28	)	(12	)	(1	)	(5	)	—		(9	)	(55	)
Closing balance, net	1,077		318		391		89		282		218		2,374		1,069		318		371		89		282		218		2,346
Cost or valuation	1,077		646		581		176		325		646		3,451		1,069		646		561		176		325		646		3,423
Accumulated amortization and impairment	—		(328	)	(190	)	(87	)	(43	)	(428	)	(1,077	)	—		(328	)	(190	)	(87	)	(43	)	(428	)	(1,077	)
Net	1,077		318		391		89		282		218		2,374		1,069		318		371		89		282		218		2,346

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~


(i)	Other includes mainly software costs

~~Movements in intangible assets in 2017~~

F- 83

Goodwill Licenses Customer lists IRUs Trademarks Other(i) Total
(US$ millions)
Opening balance, net 615
380
32
114
18
200
1,359
Change in scope (ii) 3
—
15
—
—
1
20
Additions —
40
—
(2 ) —
92
130
Amortization charge —
(49 ) (15 ) (14 ) (8 ) (67 ) (153 )
Impairment (7 ) (8 ) —
—
—
—
(15 )
Disposals, net —
—
—
—
—
(1 ) (1 )
Transfers (2 ) 3
—
8
—
(28 ) (19 )
Transfers to/from assets held for sale (see note E.3.) (8 ) (50 ) (1 ) —
—
(5 ) (64 )
Exchange rate movements (1 ) 7
1
—
—
2
9
Closing balance, net 599
324
33
105
10
194
1,265
Cost or valuation 599
650
225
181
49
584
2,288
Accumulated amortization and impairment —
(327 ) (192 ) (76 ) (39 ) (389 ) (1,022 )
Net 599
324
33
105
10
194
1,265



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

~~(i)Other includes mainly software costs~~

~~(ii)See note A.1.2.~~

E.1.4. Cash used for the purchase of intangible assets

Cash used for intangible asset additions


	2018		2017	2019		2018		2017
	(US$ millions)			(US$ millions)
Additions	158		130	202		158		130
Change in accruals and payables for intangibles	(10	)	3	(32	)	(10	)	3
Cash used for additions	148		133	171		148		133

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

E.1.5. Goodwill

Allocation of Goodwill to cash generating units (CGUs), net of exchange rate movements and after impairment


	2018	2017	2019	2018
	(US$ millions)		(US$ millions)
Panama (see note A.1.2.)(i)	512	—	930	504
El Salvador	194	194	194	194
Costa Rica	116	123	123	116
Paraguay	54	57	50	54
Colombia	183	199	181	183
Tanzania (Zantel) (see note E.1.6.)	4	10
Tanzania (see note E.1.6.)			12	12
Nicaragua (see note A.1.2)			217	4
Other	15	16	3	3
Total	1,077	599	1,711	1,069

(i) Restated as a result of the finalization of the Cable Onda purchase accounting. (note A.1.2.).

E.1.6. Impairment testing of goodwill

Goodwill from CGUs is tested for impairment at least each year and more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment losses on goodwill are not reversed.

Goodwill arising on business combinations is allocated to each of the Group’s CGUs or groups of CGUs that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units. Each unit or group of units to which the goodwill is allocated:

Represents the lowest level within the Group at which the goodwill is monitored for internal management purposes; and

Is not larger than an operating segment.

Impairment is determined by assessing the value-in-use and, if appropriate, the fair value less costs to sell of the CGU (or group of CGUs), to which goodwill relates.

Impairment testing at December 31, ~~2018~~2019

Goodwill was tested for impairment by assessing the recoverable amount against the carrying amount of the CGU based on discounted cash flows. The recoverable amounts are based on value-in-use. The value-in-use is determined based on the method of discounted cash flows. The cash flow projections used ~~(adjusted operating~~(operating profit margins, income tax, working capital, capex and license renewal cost) are extracted from ~~financial budgets~~business plans approved by management and presented to the Board, usually covering a period of five years. This planning horizon reflects industry practice in the countries where the Group operates and stage of development or redevelopment of the business in those countries. Cash flows beyond this period are extrapolated using a perpetual growth ~~rate of 1.6%–4.6% (2017: 1.1%–3.8%).~~rate. When value-in-use ~~model resulted in~~results are lower than the carrying values of the CGUs, ~~being higher than their~~management determines the recoverable amount ~~management has determined~~by using the fair value less cost of disposal (FVLCD) of the CGUs. ~~Fair value less cost of disposal has been~~FVLCD is usually determined by using recent offers received from third parties (Level 1).

For the year ended December 31, ~~2018, and as a result of~~2019, management concluded no impairment should be recorded in the ~~annual impairment~~Group consolidated financial statements.

F- 84



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Impairment testing at December 31, 2018

For the year ended December 31, 2018, management concluded that ~~the~~our previously independent Zantel CGU, part of the Africa segment, should be impaired. Hence, in accordance with IAS 36, an impairment loss of $6 million has been allocated to the amount of goodwill allocated to ~~Zantel~~the CGU to reduce the carrying amount of ~~our operations in Zantel~~this operation to its value in use. The impairment has been classified within the caption "Other operating income (expenses), net", in the Group’s statement of income.

~~For~~Key assumptions used in value in use calculations

The process of preparing the ~~year ended December 31, 2017,~~cash flow projections considers the current market condition of each CGU, analyzing the macroeconomic, competitive, regulatory and technological environments, as ~~a result~~well as the growth opportunities of the ~~annual~~CGUs. Therefore, a growth target is defined for each CGU, based on the appropriate allocation of operating resources and the capital investments required to achieve the target. The foregoing forecasts could differ from the results obtained through time; however, the Company prepares its estimates based on the current situation of each of the CGUs. Relevance of budgets used for the impairment ~~testing the Group recognised an~~test is also reviewed annually, management performing regressive analysis between actual figures and budget/5YP used for previous year impairment ~~loss of $15 million related mainly to our operations in Rwanda and on an investment in Guatemala.~~test.

~~Millicom International Cellular S.A.~~

~~Notes~~The cash flow projections for all CGUs is most sensitive to the ~~consolidated financial statements~~
following key assumptions:

EBITDA margin is determined by dividing EBITDA by total revenues.

CAPEX intensity is determined by dividing CAPEX by total revenues.

Gross Domestic Product (“GDP”) less inflation rates are used as perpetual growth rate.

Weighted average cost of capital (“WACC”) is used to discount the projected cash flows.

The most significant estimates used for the ~~years ended December 31,~~2019 and 2018 ~~2017 and 2016 – continued~~impairment test are shown below:



CGU	Average EBITDA margin (%) (i)		Average CAPEX intensity (%) (i)		Perpetual growth rate (%)		WACC rate after tax (%)
	2019	2018	2019	2018	2019	2018	2019	2018
Bolivia	42.0	43.1	18.4	17.0	1.5	3.0	10.7	10.2
Chad (see note A.1.3)	n/a	26.7	n/a	15.9	n/a	2.6	n/a	14.8
Colombia	34.1	32.1	17.7	19.3	1.9	2.9	8.6	8.9
Costa Rica	36.3	41.2	23.3	19.9	1.9	3.1	10.1	10.2
El Salvador	33.4	42.2	15.2	15.7	0.8	1.6	10.7	11.7
Nicaragua (see note A.1.2)	33.7	41.0	16.2	49.6	2.0	3.6	10.9	10.1
Panamá (see note A.1.2)	42.6	n/a	14.8	n/a	1.5	n/a	8.3	n/a
Paraguay	46.9	50.4	16.0	17.3	1.6	3.0	9.0	9.8
Tanzania	31.2	37.1	12.2	18.5	1.5	4.6	14.4	14.4

(i) Average is computed over the period covered by the plan (5 years)

Given the recent acquisition date, the goodwill recognized for Cable Onda has not been tested for impairment in 2018. In addition, no triggering event have occurred that would make us believe that the goodwill should be tested for impairment.

Sensitivity analysis ~~was~~to changes in assumptions

Management performed a sensitivity analysis on key assumptions within the ~~impairment tests.~~ test. The following maximum increases or decreases, expressed in percentage points, were considered for all CGUs:



Reasonable changes in key assumptions (%)
Financial variables
WACC rates	+/-1
Perpetual growth rates	+/-1
Operating variables
EBITDA margin	+/-2
CAPEX intensity	+/-1

F- 85



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The sensitivity analysis ~~determined that sufficient margin exists from realistic~~shows a comfortable headroom between the recoverable amounts and the carrying values for all CGUs at December 31, 2019, except of our Nicaragua CGU.

In respect of Nicaragua CGU, taken individually, the below changes in key assumptions would trigger a potential impairment, which would mainly be due to the ~~assumptions that would not impact~~under-performance of our legacy fixed business in the ~~overall results of~~country as well as the ~~testing.~~

~~Discount rates used in determining recoverable amount~~current political and economic turmoil:

Discount rate after tax (%)
2018 2017
Bolivia 10.2 11.2
Chad 14.8 15.8
Colombia 8.9 9.9
Costa Rica 10.2 11.9
El Salvador 11.7 13.2
Paraguay 9.8 10.2
Rwanda (See note A.1.3.) n/a 14.7
Tanzania 14.4 14.6



Sensitivity analysis		Potential impairment
	In %	US$ millions
Financial variables
WACC rate	+1	32
Perpetual growth rate	-1	18
Operating variables
EBITDA margin	-2	1
Combining changes in variables
WACC rate and Perpetual growth rate	+1 and -1	63

E.2.Property, plant and equipment

E.2.1.Accounting for property, plant and equipment

Items of property, plant and equipment are stated at either historical cost, or the lower of fair value and present value of the future minimum lease payments for assets under finance leases, less accumulated depreciation and accumulated impairment. Historical cost includes expenditure that is directly attributable to acquisition of items. The carrying amount of replaced parts is derecognized.

Depreciation is calculated using the straight-line method over the shorter of the estimated useful life of the asset and the remaining life of the license associated with the assets, unless the renewal of the license is contractually possible.



Estimated useful lives		Duration
Buildings		40 years or lease period, if shorter
Networks (including civil works)		5 to 15 years or lease period, if shorter
Other		2 to 7 years

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The assets’ residual value and useful life is reviewed, and adjusted if appropriate, at each statement of financial position date. An asset’s carrying amount is written down immediately to its recoverable amount if its carrying amount is greater than its estimated recoverable amount.

Construction in progress consists of the cost of assets, labor and other direct costs associated with property, plant and equipment being constructed by the Group, or purchased assets which have yet to be deployed. When the assets become operational, the related costs are transferred from construction in progress to the appropriate asset category and depreciation commences.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Ongoing routine repairs and maintenance are charged to the statement of income in the financial period in which they are incurred.

Costs of major inspections and overhauls are added to the carrying value of property, plant and equipment and the carrying amount of previous major inspections and overhauls is derecognized.

Equipment installed on customer premises which is not sold to customers is capitalized and amortized over the customer contract period.

A liability for the present value of the cost to remove an asset on both owned and leased sites (for example cell towers) and for assets installed on customer premises (for example set-top boxes), is recognized when a present obligation for the removal exists.

F- 86



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

The corresponding cost of the obligation is included in the cost of the asset and depreciated over the useful life of the asset, or lease period if shorter.

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalized as part of the cost of that asset when it is probable that such costs will contribute to future economic benefits for the Group and the costs can be measured reliably.

E.2.2. Movements in tangible assets

Movements in tangible assets in ~~2018~~2019

Network equipment(ii) Land and buildings Construction in progress Other(i) Total
(US$ millions)
Opening balance, net 2,399
147
206
128
2,880
Change in scope (see note A.1.2.) 276
46
32
—
354
Additions 63
1
626
7
698
Impairments/reversal of impairment,net 1
—
—
—
1
Disposals, net (24 ) (2 ) (2 ) —
(29 )
Depreciation charge (631 ) (11 ) —
(43 ) (685 )
Asset retirement obligations 14
1
—
—
15
Transfers 551
9
(568 ) 14
6
Transfers from/(to) assets held for sale
(see note E.3.) (45 ) (3 ) (2 ) (2 ) (52 )
Exchange rate movements (124 ) (8 ) (8 ) (7 ) (147 )
Closing balance, net 2,480
181
284
97
3,041
Cost or valuation 6,802
252
284
409
7,747
Accumulated amortization and impairment (4,322 ) (71 ) —
(312 ) (4,706 )
Net at December 31, 2018 2,480
181
284
97
3,041

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~



	Network Equipment (ii)		Land and Buildings		Construction in Progress		Other(i)		Total
	(US$ millions)
Opening balance, net	2,455		175		284		156		3,071
Change in scope	190		44		14		7		255
Change in accounting policy	(307	)	—		—		(1	)	(307	)
Additions	87		4		612		16		719
Impairments/reversal of impairment, net	—		—		—		1		1
Disposals, net	(8	)	(1	)	(6	)	(3	)	(19	)
Depreciation charge	(588	)	(13	)	—		(110	)	(711	)
Asset retirement obligations	14		5		—		—		19
Transfers	444		4		(537	)	64		(24	)
Transfer from/(to) assets held for sale (see note E.4)	(61	)	(14	)	(7	)	(5	)	(88	)
Exchange rate movements	(25	)	(2	)	(5	)	(1	)	(34	)
Closing balance, net	2,201		202		355		125		2,883
Cost or valuation	6,644		360		355		476		7,834
Accumulated amortization and impairment	(4,443	)	(158	)	—		(351	)	(4,952	)
Net at December 31, 2019	2,201		202		355		125		2,883

Movements in tangible assets in ~~2017~~2018

Network equipment(ii) Land and buildings Construction in progress Other(i) Total
(US$ millions)
Opening balance, net 2,525
147
250
135
3,057
Change in scope 2
1
—
—
3
Additions 201
—
616
7
824
Impairments/reversal of impairment,net (6 ) —
1
(2 ) (8 )
Disposals, net (115 ) —
3
(1 ) (114 )
Depreciation charge (663 ) (9 ) —
(53 ) (725 )
Asset retirement obligations 18
2
—
—
20
Transfers 613
7
(650 ) 48
19
Transfers from/(to) assets held for sale
(see note E.3.) (184 ) (3 ) (16 ) (8 ) (211 )
Exchange rate movements 9
2
3
1
15
Closing balance, net 2,399
147
206
128
2,880
Cost or valuation 6,164
191
206
477
7,038
Accumulated amortization and impairment (3,764 ) (44 ) —
(349 ) (4,158 )
Net at December 31, 2017 2,399
147
206
128
2,880



	Network equipment(ii)		Land and buildings		Construction in progress		Other(i)		Total
	(US$ millions)
Opening balance, net	2,399		147		206		128		2,880
Change in Scope (iii)	253		41		32		60		386
Additions	62		1		626		7		696
Impairments/reversal of impairment, net	1		—		—		—		1
Disposals, net	(24	)	(2	)	(2	)	—		(29	)
Depreciation charge	(631	)	(11	)	—		(43	)	(685	)
Asset retirement obligations	14		1		—		—		15
Transfers	551		9		(568	)	14		6
Transfers from/(to) assets held for sale (see note E.4.)(iv)	(45	)	(3	)	(2	)	(2	)	(52	)
Exchange rate movements	(124	)	(8	)	(8	)	(7	)	(147	)
Closing balance, net	2,455		175		284		156		3,071
Cost or valuation	6,663		270		284		573		7,790
Accumulated amortization and impairment	(4,207	)	(95	)	—		(417	)	(4,719	)
Net at December 31, 2018	2,455		175		284		156		3,071


(i)	Other mainly includes office equipment and motor vehicles.

F- 87



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)


(ii)	As a result of the application of IFRS 16 finance leases were reclassified to lease liabilities on January 1, 2019. See above in the "New and amended IFRS accounting standards" and notes C.4. and E.4. for further information. The net carrying amount of network equipment under finance leases at December 31, 2018 ~~was~~were $307 ~~million (2017: $329 million).~~million.

(iii) Restated after finalization of the Cable Onda purchase accounting. See note A.1.2.

Borrowing costs capitalized for the years ended December 31, 2019, 2018 ~~2017~~ and ~~2016~~2017 were not significant.

E.2.3. Cash used for the purchase of tangible assets

Cash used for property, plant and equipment additions


	2018		2017		2016		2019		2018		2017
	(US$ millions)						(US$ millions)
Additions	698		824		683		719		698		824
Change in advances to suppliers	2		(8	)	(16	)	1		2		(8	)
Change in accruals and payables for property, plant and equipment	(25	)	26		51		17		(25	)	26
Finance leases(i)	(43	)	(192	)	1		(1	)	(43	)	(192	)
Cash used for additions	632		650		719		736		632		650


(i)	As a result of the application of IFRS 16 finance leases were reclassified to lease liabilities on January 1, 2019. See above in the "New and amended IFRS accounting standards" and notes C.4. and E.4. for further information.

E.3. Right of use assets (as from January 1, 2019 after the application of IFRS 16)

Right-of-use assets are measured at cost comprising the following:

the amount of the initial measurement of lease liability

any lease payments made at or before the commencement date less any lease incentives received

any initial direct costs, and

restoration costs

Refer to note C.4. for further details on lease accounting policies.

~~E.3.~~Movements in right of use assets in 2019

F- 88



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)



Right-of-use assets	Land and buildings		Sites rental		Tower rental		Other network equipment		Capacity		Other		Total
	(US$ millions)
Opening balance, net	154		67		623		9		—		4		856
Change in scope	—		43		121		1		12		—		177
Additions	25		4		67		1		2		1		102
Modifications	6		(2	)	7		—		—		—		11
Impairments	(1	)	—		—		—		—		—		(1	)
Disposals	(4	)	(4	)	(1	)	—		—		—		(10	)
Depreciation	(35	)	(16	)	(86	)	(2	)	—		(2	)	(141	)
Transfers	—		—		1		—		—		—		1
Transfers to/from assets held for sale	(1	)	(5	)	(3	)	—		—		—		(9	)
Exchange rate movements	—		(2	)	(7	)	—		—		—		(10	)
Closing balance, net	145		87		720		8		14		3		977
Cost of valuation	177		103		900		11		16		8		1,216
Accumulated depreciation and impairment	(32	)	(16	)	(180	)	(3	)	(2	)	(5	)	(238	)
Net at December 31, 2019	145		87		720		8		14		3		977

F- 89



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

E.4. Assets held for sale

If Millicom decides to sell subsidiaries, investments in joint ventures or associates, or specific non-current assets in its businesses, these items qualify as assets held for sale if certain conditions are met.

~~E.3.1.~~E.4.1. Classification of assets held for sale

Non-current assets (or disposal groups) are classified as assets held for sale and stated at the lower of carrying amount and fair value less costs to sell if their carrying amount is expected to be recovered principally through sale, not through continuing use. Liabilities of disposal groups are classified as Liabilities directly associated with assets held for sale.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

~~E.3.2.~~E.4.2. Millicom’s assets held for sale

The following table summarizes the nature of the assets and liabilities reported under assets held for sale and liabilities directly associated with assets held for sale as at December 31, ~~2018~~2019 and ~~2017:~~2018:

As at December 31,
2018 2017
(US$ millions)
Assets and liabilities reclassified as held for sale
Senegal operations —
223
Towers Paraguay (see note C.3.4.) 2
7
Towers Colombia (see note C.3.4.) —
1
Towers El Salvador (see note C.3.4.) 1
—
Other —
2
Total assets of held for sale 3
233
Senegal operations —
77
Towers Paraguay —
2
Total liabilities directly associated with assets held for sale —
79
Net assets held for sale / book value 3
154



	As at December 31,
	2019	2018
	(US$ millions)
Assets and liabilities reclassified as held for sale ($ millions)
Towers Paraguay (see note E.4.1.)	—	2
Towers Colombia (see note E.4.1.)	2	—
Towers El Salvador (see note E.4.1.)	1	1
Towers Zantel	1	—
Other	—	—
Total assets of held for sale	5	3
Towers Paraguay	—	—
Total liabilities directly associated with assets held for sale	—	—
Net assets held for sale / book value	5	3

~~Ghana merger~~Chad

As mentioned in note ~~A.2.2.~~A.1.3., on ~~March 3, 2017, Millicom and Bharti Airtel Limited (Airtel) announced that they have entered into an agreement for Tigo Ghana Limited and Airtel Ghana Limited to combine their~~June 26, 2019, the Group completed the disposal of its operations in ~~Ghana. As per~~Chad for a cash consideration of $110 million. On the ~~agreement, Millicom~~same date, Chad was deconsolidated and ~~Airtel~~a gain on disposal of $77 million, net of costs of disposal of $4 million, was recognized. Foreign currency exchange losses accumulated in equity of $8 million have ~~equal ownership and governance rights~~also been recycled in the ~~combined entity. Necessary regulatory approvals were received in~~statement of income accordingly. The resulting net gain of $70 million has been recognized under ‘Profit (loss) for the ~~course of September 2017. As a result, Millicom's operations in Ghana have been classified as assets held for sale and~~period from discontinued operations, asnet of tax’. The operating net loss of the operation for the period from ~~September 28, 2017. The merger~~January 1, 2019 to June 26, 2019 was ~~completed on October 12, 2017.~~$5 million.

The assets and liabilities deconsolidated ~~as a result~~on the date of the ~~Ghana merger~~disposal were as follows:

~~Assets and liabilities reclassified as held for sale – Ghana~~



Assets and liabilities held for sale ($ millions)	~~October 12, 2017~~
	~~(US$ millions)~~June 26, 2019
Intangible assets, net	12	18
Property, plant and equipment, net	7789
Right of use assets	9
Other non-current assets	8
Current assets	29	34
Cash and cash equivalents	8	9
Total assets of disposal group held for sale	~~126~~	168
Non-current financial liabilities	51	8
Current liabilities	50	131
Total liabilities of disposal group held for sale	~~102~~	140
Net assets /held for sale at book value	24	28

~~For further details on the effect of the deconsolidation of the operations in Ghana, refer to note A.2.3.~~

F- 90



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Senegal

As mentioned in note A.1.3. Millicom announced that it had agreed to sell its Senegal business to a consortium consisting of NJJ, Sofima (managed by the Axian Group) and Teylium ~~Group, subject to customary closing conditions and regulatory approvals.~~Group. The sale was completed on April 27, 2018 ~~and the~~in exchange of a final cash consideration of $151 million. The operations in Senegal ~~have~~

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

~~been~~were deconsolidated from that date resulting in a net gain on disposal of $6 million, including the recycling of foreign currency exchange losses accumulated in equity since the creation of the local operations. This gain has been recognized under ‘Profit (loss) for the year from discontinued operations, net of tax’.

The assets and liabilities were transferred to assets held for sale in relation to our operations in Senegal as at February 7, 2017 and therefore classified as held for sale as at December 31, 2017.

The table below shows the assets and liabilities deconsolidated at the date of the disposal:

~~Assets and liabilities disposed of in respect of our operations in Senegal~~



	April 27, 2018
Assets and liabilities held for sale	(US$ millions)
Intangible assets, net	40
Property, plant and equipment, net	126
Other non-current assets	2
Current assets	56
Cash and cash equivalents	3
Total assets of disposal group held for sale	227
Non-current financial liabilities	8
Current liabilities	73
Total liabilities of disposal group held for sale	81
Net assets ~~held for sale~~ / book value	146

Rwanda

As mentioned in note A.1.3. on December 19, 2017, Millicom announced that it has signed an agreement for the sale of its Rwanda operations to subsidiaries of Bharti Airtel ~~Limited. The total~~Limited.for a final cash consideration of $51 million, including a deferred cash payment due in January 2020 for an amount of $18 million. The transaction also included earn-outs for $7 million that were not recognized by the ~~transaction is approximately 6x 2017 adjusted EBITDA of the Rwandan operation, payable over two years, consisting of a mix of cash, vendor loan note and earn out.~~

Group. The ~~Group received regulatory approvals on January 23, 2018 and the~~ sale was ~~subsequently~~ completed on January 31, 2018. On ~~January 31, 2018,~~that day, Millicom's operations in Rwanda have been deconsolidated and no material loss on disposal was recognized (its carrying value was aligned to its fair value less costs of disposal as of December 31, 2017). However, a loss of $32 million ~~has been~~was recognized in 2018 corresponding to the recycling of foreign currency exchange losses accumulated in equity since the creation of the local operation. This loss has been recognized under ‘Profit (loss) for the year from discontinued operations, net of tax’. The final sale consideration is still subject to adjustment under the terms of the sale and purchase agreement with Airtel. Management does not expect any material deviation from the initial consideration.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

The table below shows the assets and liabilities deconsolidated at the date of the disposal:

~~Assets and liabilities disposed of in respect of our operations in Rwanda~~



	January 31, 2018
Assets and liabilities reclassified as held for sale	(US$ millions)
Intangible assets, net	12
Property, plant and equipment, net	53
Other non-current assets	4
Current assets	14
Cash and cash equivalents	2
Total assets of disposal group held for sale	85
Non-current financial liabilities	11
Current liabilities	28
Total liabilities of disposal group held for sale	40
Net assets ~~held for sale~~ / book value	46

F- 91



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

In accordance with IFRS 5, the Group’s businesses in Chad(Q2 2018), Rwanda (Q1 2018), Ghana (Q3 2017) and Senegal (Q1 2017) had been classified as assets held for sale and their results were classified as discontinued operations. Comparative figures of the statement of income have therefore been represented accordingly. Financial information relating to the discontinued operations for the year ended December 31, 2019, 2018 ~~2017~~ and ~~2016~~2017 is set out below. Figures shown below are after intercompany eliminations.

Results from discontinued operations


	Year ended December 31,						Year ended December 31,
	2018		2017		2016		2019		2018		2017
	(US$ millions)						(US$ millions)
Revenue	62		299		371		50		189		440
Cost of sales	(23	)	(95	)	(119	)	(14	)	(51	)	(130	)
Operating expenses	(26	)	(131	)	(174	)	(29	)	(83	)	(188	)
Other expenses linked to the disposal of discontinued operations							(10	)	(10	)	(7	)
Depreciation and amortization	—		(37	)	(79	)	(11	)	(27	)	(67	)
Other operating income (expenses), net	(10	)	(4	)	(6	)	—		(9	)	(4	)
Gain on disposal of discontinued operations	(29	)	39		32
Other expenses linked to the disposal of discontinued operations	(10	)	(7	)	(19	)
Gain/(loss) on disposal of discontinued operations							74		(29	)	38
Operating profit (loss)	(36	)	64		6		61		(21	)	81
Interest income (expense), net	(3	)	(20	)	(23	)	(2	)	(6	)	(28	)
Other non-operating (expenses) income, net	—		6		(10	)	—		(2	)	4
Profit (loss) before taxes	(39	)	51		(26	)	59		(29	)	56
Credit (charge) for taxes, net	—		—		6		(2	)	(4	)	4
Net profit (loss) from discontinued operations	(39	)	51		(20	)
Net Profit/(loss) from discontinuing operations							57		(33	)	60

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

Cash flows from discontinued operations

Year ended December 31,
2018 2017 2016
(US$ millions)
Cash from (used in) operating activities, net (4 ) 26
10
Cash from (used in) investing activities, net (6 ) (33 ) (53 )
Cash from (used in) financing activities, net —
(22 ) 18

~~4G spectrum (UNE)~~

A depreciation catch-up has been recorded in 2016 for $11 million on the 4G spectrum in Colombia. In October 2016, the date on which UNE stopped rendering 4G services, the 4G spectrum was fully depreciated.



	Year ended December 31,
	2019		2018		2017
	(US$ millions)
Cash from (used in) operating activities, net	(8	)	(38	)	(1	)
Cash from (used in) investing activities, net	5		8		(25	)
Cash from (used in) financing activities, net	7		11		8

F.Other assets and liabilities

F.1.Trade receivables

Millicom’s trade receivables mainly comprise interconnect receivables from other operators, postpaid mobile and residential cable subscribers, as well as B2B customers. The nominal value of receivables adjusted for impairment approximates the fair value of trade receivables.


	2018		2017		2019		2018
	(US$ millions)				(US$ millions)
Gross trade receivables	592		597		636		592
Less: provisions for expected credit losses	(249	)	(211	)	(265	)	(249	)
Trade receivables, net	343		386		371		343

F- 92



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Aging of trade receivables


	Neither past due nor impaired	Past due (net of impairments)			Neither past due nor impaired	Past due (net of impairments)
	Neither past due nor impaired	30–90 days	>90 days	Total	Neither past due nor impaired	30–90 days	>90 days	Total
	(US$ millions)				(US$ millions)
2019:
Telecom operators					23	9	8	40
Own customers					177	63	29	270
Others					40	15	5	60
Total					241	88	43	371
2018:
Telecom operators	17	9	14	39	17	9	14	39
Own customers	158	69	19	246	158	69	19	246
Others	36	17	5	58	36	17	5	58
Total	210	95	37	343	210	95	37	343
2017:
Telecom operators	29	16	4	49
Own customers	186	52	34	273
Others	43	16	5	64
Total	259	83	43	386

Trade receivables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less provision for expected credit losses. The Group recognizes an allowance for expected credit losses (ECLs) applying a simplified approach in calculating the ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime of ECLs at each reporting date. The

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The provision for expected credit losses is recognized in the consolidated statement of income within Cost of sales.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those maturing more than 12 months after the end of the reporting period. These are classified within non-current assets. Loans and receivables are carried at amortized cost using the effective interest method. Gains and losses are recognized in the statement of income when the loans and receivables are derecognized or impaired, as well as through the amortization process.

F.2.Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out method. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

Inventories


	2018	2017	2019	2018
	(US$ millions)		(US$ millions)
Telephone and equipment	26	28	18	26
SIM cards	4	6	3	4
IRUs	3	3	3	3
Other	6	9	9	6
Inventory at December 31,	39	45	32	39

F.3.Trade payables

Trade payables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method where the effect of the passage of time is material.

From time to time, the Group enters into agreements to extend payment terms with various suppliers, and with factoring companies when such payments are discounted. The corresponding amount pending payment as of December 31, ~~2018,~~2019, is recognized in Trade payables for an amount of ~~$26~~$40 million ~~(2017: $25~~(2018: $26 million).

F- 93



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

F.4.Current and non-current provisions and other liabilities

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, if it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain.

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

The expense relating to any provision is presented in the statement of income net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, risks specific to the liability. Where discounting is used, increases in the provision due to the passage of time are recognized as interest expenses.

F.4.1.Current provisions and other liabilities

Current


	2018	2017	2019	2018
	(US$ millions)		(US$ millions)
Deferred revenue~~(i)~~	85	86	77	85
Customer deposits	15	13	14	15
Current legal provisions	27	24	36	27
Tax payables	68	57	74	68
Customer and MFS distributor cash balances	147	144	141	147
Withholding tax on payments to third parties	17	17	15	17
Other provisions	7	1	3	7
Other current liabilities(ii)	128	83
Other current liabilities(i)			113	126
Total	494	425	474	492


~~(i)~~	~~Deferred revenue has partly been reclassified to Contract Liabilities as a result of the adoption of IFRS 15. See the 'Accounting Policy Changes' note.~~


~~(ii)~~	~~In the caption "Other current liabilities", for 2018 $38 million of provision for tax risk not related to income tax is included.~~

(i) Includes 36 million (2018: 36 million) of tax risk liabilities not related to income tax.

F.4.2. Non-current provisions and other liabilities

Non-current


	2018	2017	2019	2018
	(US$ millions)		(US$ millions)
Non-current legal provisions	8	15	18	8
Long-term portion of asset retirement obligations	77	69	96	77
Long-term portion of deferred income on tower sale and leasebacks	85	73
Long-term portion of deferred income on tower sale and leasebacks recognized under IAS 17			68	85
Long-term employment obligations	68	76	71	68
Accruals and payables in respect of spectrum and license acquisitions	41	31	61	41
Other non-current liabilities	71	70	68	71
Total	351	335	383	351

F- 94



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

F.5.Assets and liabilities related to contract with customers

Contract assets, net



	~~2018~~
	~~(US$ millions)~~
~~Long-term portion~~	3
~~Short-term portion~~	35
~~Less: provisions for expected credit losses~~	(1	)
~~Total~~	37



	2019		2018
	(US$ millions)
Long-term portion	6		3
Short-term portion	37		35
Less: provisions for expected credit losses	(2	)	(1	)
Total	41		37

Contract liabilities

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~



	2019	2018
	(US$ millions)
Long-term portion	1	1
Short-term portion	81	86
Total	82	87



	~~2018~~
	~~(US$ millions)~~
~~Long-term portion~~	1
~~Short-term portion~~	86
~~Total~~	87

The Group ~~recognised~~recognized revenue for ~~$45~~$87 million in ~~2018~~2019 (2018: $45 million) that was included in the contract liability balance at the beginning of the year.

The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as at December 31, ~~2018~~2019 is ~~$42~~$61 million ($4160 million is expected to be recognized as revenue in the 2020 financial year and the remaining $1 million in the 2021 financial year or later) (i).


~~(i)~~	This amount does not consider contracts that have an original expected duration of one year or less, neither contracts in which consideration from a customer corresponds to the value of the entity’s performance obligation to the customer (i.e. billing corresponds to accounting revenue).

(i) This amount does not consider contracts that have an original expected duration of one year or less, neither contracts in which consideration from a customer corresponds to the value of the entity’s performance obligation to the customer (i.e. billing corresponds to accounting revenue).

Contract costs, net (i)



	~~2018~~
	~~(US$ millions)~~
~~Net at January 1~~	4
~~Contract costs capitalized~~	4
~~Amortization of contract costs~~	(4	)
~~Net at December 31~~	4



	2019		2018
	(US$ millions)
Net at January 1	4		4
Contract costs capitalized	7		4
Amortisation of contract costs	(6	)	(4	)
Net at December 31	5		4


(i)	Incremental costs of obtaining a contract are expensed when incurred if the amortization period of the asset that Millicom otherwise would have recognized is one year or less.

G.Additional disclosure items

~~G.1~~G.1. Fees to auditors


	2018	2017	2016	2019	2018	2017
	(US$ millions)			(US$ millions)
Audit fees	6.7	4.7	4.3	6.8	6.7	4.7
Audit related fees	0.4	0.3	0.3	1.3	0.4	0.3
Tax fees	0.2	0.2	0.2	0.1	0.2	0.2
Other fees	0.6	0.7	1.8	0.6	0.6	0.7
Total	7.7	5.9	6.6	8.8	7.7	5.9

F- 95



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

G.2.Capital and operational commitments

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

Millicom has a number of capital and operational commitments to suppliers and service providers in the normal course of its business. These commitments are mainly contracts for acquiring network and other equipment, and leases for towers and other operational equipment.

G.2.1.Capital commitments

At December 31, ~~2018,~~2019, the Company and its subsidiaries ~~and joint ventures~~ had fixed commitments to purchase network equipment, land and buildings, other fixed assets and intangible assets of ~~$154~~$122 million of which ~~$126~~$102 million are due within one year (December 31, ~~2017: $194~~2018: $88 million of which ~~$182~~$71 million were due within one year). ~~Out~~The Group’s share of ~~these~~ commitments from the joint ventures is, respectively ~~$66~~$52 million and ~~$56 million related to Millicom’s share in joint ventures.~~$51 million. (December 31, ~~2017: $25~~2018: $66 million of which ~~$23~~$56 million were due within one year).

~~G.2.2~~G.2.2. Lease commitments

~~Leases~~ - until December 31, 2018

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement and involves an assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets and whether or not the arrangement conveys a right to use the asset. The sale and leaseback of towers and related site operating leases and service contracts are accounted for in accordance with the underlying characteristics of the assets, and the terms and conditions of the lease agreements. On transfer to the tower companies, the portion of the towers leased back are accounted for as operating leases or finance leases according to the criteria set out above. The portion of towers being leased back represents the dedicated part of each tower on which Millicom’s equipment is located and was derived from the average technical capacity of the towers. Rights to use the land on which the towers are located are accounted for as operating leases, and costs of services for the towers are recorded as operating expenses.

From January 1, 2019, the Group has recognized right of use assets for these leases, except for short term or low value leases. See above in the "New and amended IFRS accounting standards", note C.4.and E.3. for further information.

Operating leases

Operating leases are all other leases that are not finance leases. Operating lease payments are recognized as expenses in the consolidated statement of income on a straight-line basis over the lease term.

Operating leases mainly comprise land in which cell towers are located (including those related to towers sold and leased back) and buildings. Total operating lease expense from continuing operations for the year ended ~~December 31,~~ 2018 was ~~$155 million (2017: $155 million; 2016: $159 million –~~ $152 million–see note B.2.).

Annual operating lease commitments from continuing operations

2018 (i) 2017 (i)
(US$ millions)
Within one year 127
130
Between one and five years 412
372
After five years 262
258
Total 800
759


	2018 (i)
~~The Group’s share in joint ventures operating lease commitments amount to~~	(US$~~312 million (2017: US$194 million; 2016: US$210 million)~~ millions)
Within one year	127
Between one and ~~are excluded from the table above.~~five years	412
After five years	262
Total	801

(i) The Group’s share in joint ventures operating lease commitments in 2018 amount to $312 million and are excluded from the table above.

Finance leases

Finance leases, which transfer substantially all risks and benefits incidental to ownership of the leased item to the lessee, are capitalized at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. Where a finance lease results from a sale and leaseback transaction, any

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

excess of sales proceeds over the carrying amount of the assets is deferred and amortized over the lease term. Capitalized leased assets are depreciated over the shorter of the estimated useful lives of the assets, or the lease term if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.

Finance leases mainly comprise lease of tower space in El Salvador, Paraguay, Tanzania and Colombia (see note C.3.4.), lease of poles in Colombia and tower sharing in other countries. Other financial leases mainly consist of lease agreements relating to vehicles and IT equipment.

F- 96



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

Annual minimum finance lease commitments from continuing operations

2018 (i) 2017 (i)
(US$ millions)
Within one year 99
97
Between one and five years 400
404
After five years 415
477
Total 914
978



	2018 (i)
	(US$ millions)
Within one year	99
Between one and five years	400
After five years	415
Total	914


(i)	The Group’s share in joint ventures finance lease commitments ~~amount~~in 2018 amounted to $1 million ~~(2017: $5 million)~~ and are excluded from the table above.

The corresponding finance lease liabilities at December 31, 2018, were $353 ~~million (2017: $365 million).~~million. Interest expense on finance lease liabilities amounted to ~~$92~~$91 million for the year ~~2018 (2017: $65 million).~~2018.

G.3. Contingent liabilities

G.3.1.Litigation and legal risks

The Company and its operations are contingently liable with respect to lawsuits, legal, regulatory, commercial and other legal risks that arise in the normal course of business. As of December 31, ~~2018,~~2019, the total ~~amount of~~exposure for claims and litigation risks against Millicom and its ~~operations was $687~~subsidiaries is $204 million (December 31, 2018: $683 million). The decrease is mainly due to Colombia where some significant cases were closed or became time barred during the year. The Group's share of ~~which $5 million related to its share in~~the comparable exposure for joint ventures is $4 million (December 31, ~~2017: $438 million, of which~~2018: $5 ~~million related to its share in joint ventures)~~million).

As at December 31, ~~2018, $26~~2019, $30 million has been provided by its subsidiaries for these risks in the consolidated statement of financial position (December 31, ~~2017: $29~~2018: $22 million). The Group’s share of provisions made by the joint ventures was $4$3 million (December 31, ~~2017: $2~~2018: $4 million). While it is not possible to ascertain the ultimate legal and financial liability with respect to these claims and risks, the ultimate outcome is not anticipated to have a material effect on the Group’s financial position and operations.

~~Improper filling of shareholding in MIC Tanzania Public Limited Company~~

In June 2016, Millicom was served with claims by a third party seeking to exert rights as a shareholder of MIC Tanzania Public Limited Company. In June 2015, Millicom identified that an incorrect filing related to MIC Tanzania Public Limited Company had been made in the commercial register, causing the register to incorrectly indicate that shares in the local subsidiary were owned by this third party. On July 26, 2018, the Court of Appeal of Tanzania, the country’s highest court, reaffirmed in a ruling that MIC Tanzania Public Limited Company remains owned and controlled by Millicom. Late 2018, the opposite party has filed a review of the ruling by the same Court of Appeals, which already ruled in Millicom's favor. Millicom considers the success of this review as remote and therefore continues to control and fully consolidate MIC Tanzania Public Limited Company.

Ongoing investigation by the International Commission Against Impunity in Guatemala (CICIG)

~~On July 14,~~Between 2017 and 2019, the CICIG ~~disclosed an ongoing investigation into alleged illegal campaign financing~~and Guatemalan prosecutors have pursued investigations that ~~includes a competitor of~~have included the country’s telecommunications sector and Comcel, our Guatemalan joint venture. ~~The CICIG further indicated that~~On September 3, 2019, the ~~investigation~~

~~Millicom International Cellular S.A.~~

~~Notes to~~CICIG’s activities in Guatemala were discontinued, after the ~~consolidated financial statements~~
~~for~~Guatemalan government did not renew the ~~years ended December 31, 2018, 2017~~CICIG’s mandate, and ~~2016 – continued~~

~~would include Comcel. On November 23 and 24, 2017, Guatemala's attorney general and CICIG executed search warrants on~~it is unclear whether the ~~offices of Comcel.~~investigations will continue. As at December 31, ~~2018, the matter~~2019, Management is ~~still under investigation, and Management has~~ not ~~been~~ able to assess the potential impact on these consolidated financial statements of any remedial actions that may need to be taken as a result of the investigations, or penalties that may be imposed by law enforcement authorities. Accordingly, no provision has been recorded as of December 31, ~~2018.~~2019.

Other

At December 31, ~~2018,~~2019, Millicom has various other less significant claims which are not disclosed separately in these consolidated financial statements because they are either not material or the related risk is remote.

F- 97



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

G.3.2.Tax related risks and uncertain tax position

The Group operates in developing countries where the tax systems, regulations and enforcement processes have varying stages of development creating uncertainty regarding the application of the tax law and interpretation of tax treatments. The Group is also subject to regular tax audits in the countries where it operates. When there is uncertainty over whether the taxation authority will accept a specific tax treatment under the local tax law, that tax treatment is therefore uncertain. The resolution of tax positions taken by the Group, through negotiations with relevant tax authorities or through litigation, can take several years to complete and, in some cases, it is difficult to predict the ultimate outcome. Therefore, judgment is required to determine provisions for taxes.

In assessing whether and how an uncertain tax treatment affects the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, the Group assumes that a taxation authority with the right to examine amounts reported to it will examine those amounts and have full knowledge of all relevant information when making those examinations.

The Group has a process in place, ~~to identify its uncertain~~and applies significant judgment, in identifying uncertainties over income tax ~~positions.~~treatments. Management ~~then~~ considers whether or not it is probable that a taxation authority will accept an uncertain tax treatment. On that basis, the identified risks are split into three categories (i) remote risks (risk of outflow of tax payments are up to 20%), (ii) possible risks (risk of outflow of tax payments assessed from 21% to 49%) and probable risks (risk of outflow is more than 50%). The process is repeated every quarter by the Group.

If the Group concludes that it is probable or certain that the taxation authority will accept the tax treatment, the risks are categorized either as possible or remote, and it determines the taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates consistently with the tax treatment used or planned to be used in its income tax filings. The risks considered as possible are not provisioned but disclosed as tax contingencies in the Group consolidated financial statements while remote risks are neither provisioned nor disclosed.

If the Group concludes that it is probable that the taxation authority will not accept the Group’s interpretation of the uncertain tax treatment, the risks are categorized as probable, and are presented to reflect the effect of uncertainty in determining the related taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates by generally using the most likely amount method – the single most likely amount in a range of possible outcomes.

If an uncertain tax treatment affects both deferred tax and current tax, the Group makes consistent estimates and judgments for both. For example, an uncertain tax treatment may affect both taxable profits used to determine the current tax and tax bases used to determine deferred tax.

If facts and circumstances change, the Group reassesses the judgments and estimates regarding the uncertain tax position taken.

At December 31, ~~2018, potential~~2019, the tax risks exposure of the Group's subsidiaries is estimated ~~by the Group amount to $254~~at $300 million, offor which provisions of ~~$47~~$50 million have been recorded in tax liabilities; representing the probable amount of eventual claims and required payments related to those risks ~~(2017: $313~~(2018: $226 million of which provisions of ~~$53~~$44 million were recorded). ~~Out~~The Groups' share of ~~these potential claims~~comparable tax exposure and provisions ~~respectively~~in its joint ventures amounts to $49 million (2018: $29 ~~million (2017: $38~~ million) and $2$4 million ~~(2017:~~(2018: $2 million) ~~related to Millicom’s share in these joint ventures.~~

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~, respectively.

G.4. Non-cash investing and financing activities

Non-cash investing and financing activities from continuing operations

Note 2018 2017 2016
(US$ millions)
Investing activities
Acquisition of property, plant and equipment, including finance leases E.2.2. (66 ) (174 ) 34
Asset retirement obligations E.2.2. 15
(20 ) (17 )
Acquisition of subsidiaries, joint ventures and associates, net of cash acquired A.1.2. 30

—

—
Financing activities

Finance leases G.2.2. (43 ) 192
1
Share based compensation B.4.1. 22
22
14



	Note	2019	2018		2017
		(US$ millions)
Investing activities
Acquisition of property, plant and equipment, including (finance) leases	E.2.2.	17	(65	)	(174	)
Asset retirement obligations	E.2.2.	19	15		(20	)
Acquisition of subsidiaries, joint ventures and associates, net of cash acquired	A.1.2.	—	30		—
Financing activities
(Finance) Leases	C.3.4.	1	(43	)	192
Share based compensation	B.4.1.	27	21		22

F- 98



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

G.5. Related party balances and transactions

The Group’s significant related parties are:

Kinnevik AB (Kinnevik) and subsidiaries, Millicom’s previous principal ~~shareholder;~~

shareholder - until November 14, 2019, date on which Millicom SDRs were paid out to the shareholders of Kinnevik (see 'Introduction' note);

Helios Towers Africa Ltd (HTA), in which Millicom ~~holds~~held a direct or indirect equity interest - until October 15, 2019, date on which Millicom lost significant influence on HTA and started accounting for its investments at fair value under IFRS 9 (see note ~~A.3.2.);~~

A.3.1.and C.7.3.

EPM and subsidiaries (EPM), the non-controlling shareholder in our Colombian operations (see note A.1.4.);

Miffin Associates Corp and subsidiaries (Miffin), our joint venture partner in Guatemala.

Cable Onda partners and subsidiaries,, the non-controlling shareholders in our Panama operations (see note A.1.2.).

Kinnevik

~~Millicom’s~~Until November 14, 2019, Kinnevik was Millicom's principal shareholder, ~~is Kinnevik.~~owning approximately 37% of Millicom (December 31, 2018: 37%). Kinnevik is a Swedish holding company with interests in the telecommunications, media, publishing, paper and financial services industries. ~~At December 31,~~During 2019, 2018 ~~Kinnevik owned approximately 37% of Millicom (2017: 37%). During 2018,~~and 2017, ~~and 2016,~~ Kinnevik did not purchase any Millicom shares. There ~~are~~were no significant loans made by Millicom to or for the benefit of Kinnevik or Kinnevik controlled entities.

During 2019, 2018 ~~2017~~ and ~~2016,~~2017, the Company purchased services from Kinnevik subsidiaries including fraud detection, procurement and professional services. Transactions and balances with Kinnevik Group companies are disclosed under ~~Other~~'Other' in the tables below. ~~Also refer to note A.3. for further details with respect to the disposal of one portion of our investment in Milvik AB.~~

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

Helios Towers

Millicom sold its tower assets and leased back a portion of space on the towers in several African countries and contracted for related operation and management services with HTA. The Group has future lease commitments in respect of the tower companies (see note ~~G.2.2.~~E.4.). As mentioned above, Helios Towers ceased to be a related party to the Group from October 15, 2019.

Empresas Públicas de Medellín (EPM)

EPM is a state-owned, industrial and commercial enterprise, owned by the municipality of Medellin, and provides electricity, gas, water, sanitation, and telecommunications. EPM owns 50% of our operations in Colombia.

Miffin Associates Corp (Miffin)

The Group purchases and sells products and services from and to the Miffin Group. Transactions with Miffin represent recurring commercial operations such as purchase of handsets, and sale of airtime.

Cable Onda Partners

Our partners in Panama are the non-controlling shareholders of Cable Onda and own 20% of the ~~company.~~company, and indirectly 20% of Telefonica Moviles Panama, S.A., which has been acquired by Cable Onda in August 2019. Additionally, they also hold interests in several entities which have purchasing and selling recurring commercial operations with Cable Onda (such as the sale of content costs, delivery of broadband services, etc.). Transactions and balances with Cable Onda Partners companies are disclosed under 'Other' in the tables below.


Expenses from transactions with related parties	2018		2017		2016		2019		2018		2017
	(US$ millions)						(US$ millions)
Purchases of goods and services from Miffin	(173	)	(181	)	(167	)	(209	)	(173	)	(181	)
Purchases of goods and services from EPM	(40	)	(36	)	(22	)	(42	)	(40	)	(36	)
Lease of towers and related services from HTA(i)	(28	)	(28	)	(35	)	(146	)	(28	)	(28	)
Other expenses	(3	)	(4	)	(9	)	(15	)	(3	)	(4	)
Total	(244	)	(250	)	(233	)	(412	)	(244	)	(250	)

(i) HTA ceased to be a related party on October 15, 2019. See note C.7.3. for further details.

F- 99



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)


Income and gains from transactions with related parties	2018	2017	2016	2019	2018	2017
	(US$ millions)			(US$ millions)
Sale of goods and services to Miffin				306	284	277
Sale of goods and services to EPM	17	18	18	13	17	18
Sale of goods and services to Miffin	284	277	261
Other revenue	2	1	10	3	2	1
Total	303	295	289	322	303	295

As at December 31, the Company had the following balances with related parties:

Year ended December 31,
2018 2017
(US$ millions)
Non-current and current liabilities
Payables to Guatemala joint venture(i) 315
273
Payables to Honduras joint venture(ii) 143
135
Payables to EPM 14
3
Other accounts payable 9
10
Sub-total 482
421
Finance lease liabilities to tower companies(iii) 99
108
Total 580
529

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~



	Year ended December 31
	2019	2018
	(US$ millions)
Non-current and current liabilities
Payables to Guatemala joint venture(i)	361	315
Payables to Honduras joint venture(ii)	133	143
Payables to EPM	37	14
Other accounts payable	—	9
Sub-total	531	482
(Finance) Lease liabilities to HTA (iii)	—	99
Total	531	580


(i)	Shareholder loans bearing interest. Out of the amount above, ~~$135~~$337 million are due over more than one year.


(ii)	Amount payable mainly consist of dividend advances for which dividends are expected to be declared later in ~~2019~~2020 and/or shareholder loans.


(iii)	~~Disclosed under Debt and other financing in the statement of financial position.~~HTA ceased to be a related party on October 15, 2019. See note C.7.3. for further details.

Year ended December 31,
2018 2017
(US$ millions)
Non-current and current assets
Receivables from EPM 5
3
Receivables from Guatemala and Honduras joint ventures 20
25
Advance payments to Helios Towers Tanzania 6
8
Receivable from AirtelTigo Ghana(i) 41
40
Other accounts receivable 1
1
Total 73
77
.



	Year ended December 31
	2019	2018
	(US$ millions)
Non-current and current assets
Receivables from EPM	3	5
Receivables from Guatemala and Honduras joint ventures	23	20
Advance payments to Helios Towers Tanzania(ii)	—	6
Receivables from Panama	—	—
Receivable from AirtelTigo Ghana (i)	43	41
Other accounts receivable	4	1
Total	73	73


(i)	Disclosed under Other non-current assets in the statement of financial position. See note A.2.2.

(ii) Helios Towers ceased to be to be a related party on October 15, 2019.

H.IPO – Millicom’s operations in Tanzania

In June 2016, an amendment to the Electronic and Postal Communications Act (“EPOCA”) in the Finance Act 2016 required all Tanzanian licensed telecom operators to sell 25% of the authorised share capital in a public offering on the Dar Es Salaam Stock Exchange. ~~Early 2017, Tigo Tanzania, Zantel and Telesis each received from~~In December 2019, the ~~Tanzanian Communications Regulatory Authority (TCRA) a notice of material breach of~~Group filed the ~~license giving thirty-days to comply. Millicom has signaled its intention for its subsidiaries to comply~~draft prospectus with the ~~law~~Tanzania Capital Market and list its businesses but did not complete the public offerings by such time until the incorrect filing related to Tigo Tanzania made in the commercial register was corrected (see note G.3.1.). Accordingly, Millicom’s businesses in Tanzania may face sanctions from the regulator or other government bodies, which could include financial penalties, or even suspension or cancellation of its license although to-date there has been no notification from the TCRA of any indication or intention to proceed with sanctions. Management is currently not able to assess the financial impact on its consolidated financial statements (although the Company deems the suspension or cancellation of the license to be unlikely) and therefore, no provision has been recorded as of December 31, 2018.

~~This said, the Group is currently working on the preliminary steps (e.g., converting Tigo Tanzania into a public limited company)~~Securities Authority with the view ofto initiate the listing process in ~~the first half of 2019.~~H1 2020.

F- 100



Notes to the Consolidated Financial Statements For the years ended December 31, 2019, 2018 and 2017 (continued)

I.Subsequent events

~~Nasdaq~~

~~On January 9, 2019, Millicom shares began trading on the Nasdaq Stock Exchange~~Pivot in ~~the U.S. under ticker symbol TIGO.~~

~~Dividend~~shareholder remuneration

On February ~~7, 2019,~~24, 2020, Millicom’s Board ~~decided to propose~~approved to the ~~AGM~~Annual General Meeting of the shareholders a share buyback program to repurchase at least $500 million over the next three years. The current shareholder authorization, which expires on May 5, 2020, allows for the repurchase of up to 5% of the outstanding share capital. In addition, the Board approved to the Annual General Meeting of the shareholders a dividend distribution of ~~US$2.64~~$1.00 per share to be paid in ~~two equal installments in May and November 2019, out of Millicom profits for the year ended December 31, 2018~~.2020. The ~~AGM~~Annual General Meeting to vote ~~this matter~~on these matters is scheduled for May ~~2, 2019.~~5, 2020.

~~Telefónica acquisition~~

~~Millicom International Cellular S.A.~~

~~Notes to the consolidated financial statements~~
~~for the years ended December 31, 2018, 2017 and 2016 – continued~~

On February ~~20, 2019,~~25, 2020, Millicom announced a three year $500 million share repurchase plan and on February 28, 2020 it initiated the ~~Group announced it has entered into agreements with Telefónica S.A.~~first phase of this program comprising the purchase of not more than 350,000 shares and ~~certain~~not more than a maximum total amount of ~~its affiliates (Telefónica),~~SEK 107 million (approximately $11 million). The purpose of the repurchase program is to ~~acquire the entire~~reduce Millicom's share capital, ~~of Telefónica Móviles Panamá, S.A., Telefónica de Costa Rica TC, S.A. (and its wholly owned~~or to use the repurchased shares for meeting obligations arising under Millicom´s employee share based incentive programs. The repurchase program may take place during the period between February 28, 2020 and May 5, 2020. Payment for the shares will be made in cash.

Paraguay bond

On January 28, 2020, Millicom’s wholly-owned subsidiary Telefónica ~~Gestión de Infraestructura y Sistemas de Costa Rica, S.A.~~Celular del Paraguay S.A.E ("Telecel") ~~and Telefoní~~, closed a ~~Celular de Nicaragua, S.A. (together, Telefonica CAM) for a combined enterprise value of $1,650~~$250 million ~~(the Transaction) payable in cash.~~re-tap to its senior unsecured notes due 2027, representing an additional issuance of Telecel's outstanding $300 million 5.875% senior notes due 2027 issued on April 5, 2019. The Transaction is subject to customary closing conditions, including regulatory approval in each market, and closings are expected during H2 2019. Millicom has secured bridge funding commitments to finance the acquisition, and the bridgenew notes will be ~~refinanced predominantly~~treated as a single class with the ~~issuance~~initial notes, and they were priced at 106.375 for an implied yield to maturity of ~~new debt by Millicom and its operating subsidiaries.~~4.817%.

F- 97101



Title of each class	Name of each exchange on which registered
Common Stock, par value $1.50 per share	The Nasdaq Stock Market LLC



	PAGE
Presentation of Financial and other Information	56
Forward-Looking Statements	56
PART I	7
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	7
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE	7
ITEM 3. KEY INFORMATION	78
A. Selected Financial Data	78
B. Capitalization and Indebtedness	1011
C. Reasons for the Offer and Use of Proceeds	1011
D. Risk Factors	1011
ITEM 4. INFORMATION ON THE COMPANY	3632
A. History and Development of the Company	3632
B. Business Overview	3633
C. Organizational Structure	4943
D. Property, Plant and Equipment	5044
Item 4A. Unresolved Staff Comments	5246
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS	5246
A. Operating Results	5246
B. Liquidity and Capital Resources	6661
C. Research and Development, Patents and Licenses, etc	7066
D. Trend Information	7066
E. Off-Balance Sheet Arrangements	7066
F. Tabular Disclosure of Contractual Obligations	7066
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	7166
A. Directors and Senior Management	7167
B. Compensation	7470
C. Board Practices	8076
D. Employees	8378
E. Share Ownership	8378
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	8479
A. Major Shareholders	8479
B. Related Party Transactions	8579
C. Interests of Experts and Counsel	8782
ITEM 8. FINANCIAL INFORMATION	8782
A. Consolidated Statements and Other Financial Information	8782
B. Significant Changes	8983
ITEM 9. THE OFFER AND LISTING	8984
A. Offer and Listing Details	89
~~B. Plan of Distribution~~	8984



B. Plan of Distribution	84
C. Markets	8984
D. Selling Shareholders	9084
E. Dilution	9084
F. Expenses of the Issue	9084
ITEM 10. ADDITIONAL INFORMATION	9084
A. Share Capital	9084
B. Memorandum and Articles of Association	9084
C. Material Contracts	9287
D. Exchange Controls	9388
E. Taxation	9389
F. Dividends and Paying Agents	~~100~~95
G. Statement by Experts	~~100~~95
H. Documents on Display	~~100~~95
I. Subsidiary Information	~~101~~95
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT RISK	~~101~~95
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	~~104~~98
A. Debt Securities	~~104~~98
B. Warrants and Rights	~~105~~99
C. Other Securities	~~105~~99
D. American Depositary Shares	~~105~~99
PART II	~~105~~99
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	~~105~~99
A. Defaults	~~105~~99
B. Arrears and Delinquencies	~~105~~99
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	~~105~~99
ITEM 15. CONTROLS AND PROCEDURES	~~105~~99
A. Disclosure Controls and Procedures	~~105~~99
B. Management's Annual Report on Internal Control over Financial Reporting	~~105~~99
C. Attestation Report of Independent Registered Public Accounting Firm	~~105~~99
D. Changes in Internal Control over Financial Reporting	~~105~~99
ITEM 16. [RESERVED]	~~105~~99
Item 16A. Audit Committee Financial Expert	~~106~~102
Item 16B. Code of Ethics	~~106~~102
Item 16C. Principal Accountant Fees and Services	~~106~~102
Item 16D. Exemptions from the Listing Standards for Audit Committees	~~107~~103
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers	~~107~~103
Item 16F. Change in Registrant's Certifying Accountant	~~107~~103
Item 16G. Corporate Governance	~~107~~103
Item 16H. Mine Safety Disclosure	~~107~~103
PART III	~~107~~103
ITEM 17. FINANCIAL STATEMENTS	~~107~~103



ITEM 18. FINANCIAL STATEMENTS	~~107~~103
ITEM 19. EXHIBITS	~~108~~104



Country	Spectrum	Blocks	Expiration date
Bolivia	700MHz	2x12MHz	2028
Bolivia	850MHz	2x12.5MHz	2030
~~Bolivia~~	~~700MHz~~	~~2x12MHz~~	~~2028~~
Bolivia	AWS	2x15MHz	2028
Bolivia	1900MHz	2x10MHz	2028
Colombia*	700MHz	2x20MHz	2040
Colombia	~~1900MHz~~AWS	~~2x5MHz~~2x15MHz	~~2026~~2023
Colombia	1900MHz	2x5MHz	~~2019~~2029
Colombia	1900MHz	2x2.5MHz	2021
Colombia	~~AWS~~1900MHz	2x20MHz	2023
El Salvador	850MHz	2x12.5MHz	2038
El Salvador	AWS	2x25MHz	2040
El Salvador	1900MHz	2x5MHz	2041
El Salvador	1900MHz	2x5MHz	2028
Guatemala	850MHz	2x24MHz	2032
Guatemala	2600MHz	2x10MHz	2032
Guatemala	2600MHz	1x25 MHz	2033
Guatemala	2600MHz	1x3.3 MHz	2034
Honduras	850MHz	~~2x24MHz~~2x25MHz	2028
Honduras	AWS	2x20MHz	2028
Nicaragua	700MHz	2x20MHz	2023
Nicaragua	850MHz	2x12.5MHz	2023
Nicaragua	1900MHz	2x30MHz	2023
Nicaragua	AWS	2x20MHz	2023
Panama	700MHz	2x10MHz	2036
Panama	850MHz	2x12.5MHz	2036
Panama	1900MHz	2x10MHz	2036
Paraguay	850MHz	2x12.5MHz	2021
Paraguay	~~1900MHz~~700MHz	2x15MHz	~~2022~~2023
Paraguay	AWS	2x15Mz	2021
Paraguay	~~700MHz~~1900MHz	~~2x12.5MHz~~2x15MHz	~~2023~~2022


☐	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934


x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	As of and for the year ended December 31,
	2018		2017	2016		2015
Share capital	153		153	153		153
Number of shares (in thousands)	101,739		101,739	101,739		101,739
Dividend declared per share (over the period)	2.64		2.64	2.64		2.64
Diluted net income (loss) per share (over the period) attributable to the owners of the Company	(0.10	)	0.85	(0.32	)	(5.59	)


(i)	IFRS 16 was adopted as of January 1, 2019, using the modified retrospective method; previous periods were therefore not restated and might not be directly comparable. See "Introduction - New and amended IFRS accounting standards" in the notes to our audited consolidated financial statements included elsewhere in this Annual Report for additional details regarding the impact of the adoptions.


	Year ended December 31,				Year ended December 31,
	2018	2017	2016	2015	2019(i)	2018(ii) (iii)	2017(ii) (iii)	2016(ii) (iii)	2015(ii)(iii)
Consolidated:
Mobile revenue	2,248	2,281	2,343	4,094	2,150	2,126	2,147	2,182	3,946
Cable and other fixed services revenue	1,568	1,553	1,437	1,626	1,928	1,565	1,551	1,437	1,626
Other revenue	46	41	39	39	52	43	38	36	37
Total service revenue	3,861	3,876	3,820	5,759	4,130	3,734	3,737	3,655	5,609
Telephone and equipment	213	200	223	505	206	212	199	221	502
Total Consolidated Revenue	4,074	4,076	4,043	6,264	4,336	3,946	3,936	3,876	6,112

Latin America segment:
Mobile revenue	3,214	3,283	3,318	3,580	3,258	3,214	3,283	3,318	3,580
Cable and other fixed services revenue	1,808	1,755	1,611	1,621	2,197	1,808	1,755	1,611	1,621
Other revenue	48	40	37	37	60	48	40	37	37
Total service revenue	5,069	5,078	4,966	5,237	5,514	5,069	5,078	4,966	5,237
Telephone and equipment	415	363	386	502	449	415	363	386	502
Latin America Segment Revenue	5,485	5,441	5,352	5,740	5,964	5,485	5,441	5,352	5,740

Africa segment:
Mobile revenue	510	509	541	514	372	388	374	380	366
Cable and other fixed services revenue	12	12	15	6	9	10	9	15	3
Other revenue	3	5	6	3	1	1	2	3	—
Total service revenue	526	524	562	522	382	398	385	398	369
Telephone and equipment	1	2	2	2	—	—	1	—	—
Africa Segment Revenue	526	526	565	525	382	399	386	398	369


1.	Risks related to the telecommunication and cable industries


2.	Risks related to Millicom’s businesses in the markets in which it operates


3.	Risks related to Millicom’s size, structure and leadership


d.	Quality and resilience of networks and service


e.	Regulation


g.	Competition


4.	Risks related to share ownership and registration with the Securities and Exchange Commission


2.	Risks related to Millicom’s business in the markets in which we operate


4.	Risks related to share ownership, governance practices and registration with the SEC


(i)	the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;


(ii)	the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and


(iii)	the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events.


(i)	the foreign court awarding the international judgment has jurisdiction to adjudicate the respective matter under applicable foreign rules of the forum, and such jurisdiction is recognized by Luxembourg private international law;


(ii)	the foreign judgment is enforceable in the foreign jurisdiction;


(iv)	the foreign court has acted in accordance with its own procedural laws;


(v)	the judgment was granted following proceedings where the counterparty had the opportunity to appear, and if appeared, to present a defense; and


(vi)	the foreign judgment does not contravene international public policy (ordre public international) as understood under the laws of Luxembourg.


(2)	Reflects our pending acquisition of Telefonica Costa Rica and America Movil’s pending acquisition in El Salvador.


	As of December 31,						As of December 31,
	2018		2017		2016		2019		2018		2017
	(in thousands, except where noted)						(in thousands, except where noted)
Latin America	32,419		31,911		30,882		39,846		33,691		33,141
of which are B2C Mobile data subscribers	16,731		15,093		13,085
of which are 4G customers	10,081		6,902		3,432		15,398		10,487		7,230
B2C Mobile customer ARPU (in U.S. dollars)	$	7.5	$	7.7	$	7.9
Mobile customer ARPU (in U.S. dollars)							$	7.3	$	7.9	$	8.2
Africa	15,911		14,631		14,737		12,686		12,724		11,430
of which are B2C Mobile data subscribers	4,515		4,473		4,258
of which are 4G customers	457		258		—		865		456		261
B2C Mobile customer ARPU (in U.S. dollars)	$	2.7	$	2.8	$	2.9
Mobile customer ARPU (in U.S. dollars)							$	2.5	$	2.6	$	2.7


	Year ended December 31,				Percentage Change		Year ended December 31,				Percentage Change
	2018 (i)		2017				2019 (i)		2018 (ii)
	(U.S. dollars in millions, except percentages)						(U.S. dollars in millions, except percentages)
Revenue	4,074		4,076		—	%	4,336		3,946		9.9	%
Cost of sales	(1,146	)	(1,205	)	(4.9	)%	(1,201	)	(1,117	)	7.5	%
Gross profit	2,928		2,871		2.0	%	3,135		2,829		10.8	%
Operating expenses	(1,674	)	(1,593	)	5.1	%	(1,604	)	(1,616	)	(0.8	)%
Depreciation	(685	)	(695	)	(1.3	)%	(825	)	(662	)	24.5	%
Amortization	(144	)	(146	)	(1.3	)%	(275	)	(140	)	95.9	%
Share of profit in our joint ventures in Guatemala and Honduras	154		140		9.8	%	179		154		16.0	%
Other operating income (expenses), net	76		68		12.5	%	(34	)	75		NM
Operating profit	655		645		1.5	%	575		640		(10.1	)%
Interest and other financial expenses	(371	)	(396	)	(6.3	)%	(564	)	(367	)	53.7	%
Interest and other financial income	21		16		31.6	%	20		21		(4.6	)%
Other non-operating (expenses) income, net	(40	)	(4	)	893.9	%	227		(39	)	NM
Loss from other joint ventures and associates, net	(136	)	(85	)	59.1	%	(40	)	(136	)	(70.3	)%
Profit before taxes from continuing operations	129		176		(26.5	)%	218		119		82.6	%
Charge for taxes, net	(116	)	(158	)	(26.1	)%	(120	)	(112	)	7.2	%
Profit for the year from continuing operations	13		18		(29.6	)%	97		7		NM
Profit (loss) for the year from discontinued operations, net of tax	(39	)	51		(176.6	)%	57		(33	)	NM
Net profit (loss) for the year	(26	)	69		(137.4	)%	154		(26	)	NM



	Year ended December 31,		Percentage Change
	2019	2018	Percentage Change
	(U.S. dollars in millions, except percentages)
Colombia	1,532	1,661	(7.8	)%
Guatemala	1,434	1,373	4.5	%
Panama	475	17	nm
Paraguay	610	679	(10.2	)%
Honduras	594	586	1.4	%
Bolivia	639	614	4.2	%
El Salvador	387	405	(4.5	)%


(i)	The revenue figures above are shown before intercompany eliminations.



	Year ended December 31,				Percentage Change
	2018 (i) (ii)		2017 (i) (ii)		Percentage Change
	(U.S. dollars in millions, except percentages)
Revenue	3,946		3,936		0.3	%
Cost of sales	(1,117	)	(1,169	)	(4.4	)%
Gross profit	2,829		2,767		2.3	%
Operating expenses	(1,616	)	(1,531	)	5.6	%
Depreciation	(662	)	(670	)	(1.1	)%
Amortization	(140	)	(142	)	(1.2	)%
Share of profit in the joint ventures in Guatemala and Honduras	154		140		9.8	%
Other operating income (expenses), net	75		69		9.2	%
Operating profit	640		632		1.2	%
Interest and other financial expenses	(367	)	(389	)	(5.8	)%
Interest and other financial income	21		16		31.6	%
Other non operation income/expenses	(39	)	(2	)	NM
Profit (loss) from other joint ventures and associates, net	(136	)	(85	)	59.1	%
Profit (loss) before taxes from continuing operations	119		172		(30.5	)%
Charge for taxes, net	(112	)	(162	)	(30.6	)%
Profit (loss) for the year from continuing operations	7		10		(28.7	)%
Profit (loss) from discontinued operations, net of tax	(33	)	60		NM
Net profit (loss) for the year	(26	)	69		NM


~~(1)~~(i)	Operations were classified as assets held for sale from 2017 and subsequently disposed of or merged.



	Total	Less than 1 year	1–5 years	After 5 years
		(US$ millions)
Debt (after unamortized financing fees)	4,580	458	1,778	2,345
Future interest commitments(1)	1,111	248	786	77
Finance leases	914	99	400	415
Operating leases	800	127	412	262
Capital expenditure	154	126	28	—
Total	7,559	1,058	3,404	3,099


(1)	Future interest commitments on our floating rate debt are calculated using the rates in effect for the floating rate debt as of December 31, ~~2018.~~2019.