Company: LILA
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001712184-25-000031
Chunk: 39

Company: Liberty Latin America Ltd.
Filing Date: 2025-02-19
Form: 10-K
Item: Item 7
Chunk 39
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 judgment is used to estimate the fair value of reporting units and underlying long-lived and indefinite-lived assets. We typically determine fair value using a discounted cash flow analysis under the income approach to valuation. Our discounted cash flow analysis used is based on assumptions in our long-range business plans, and the timing and amount of future cash flows under these business plans require estimates of, among other items, subscriber growth and retention rates, rates charged per product, expected gross margins and Adjusted OIBDA margins and expected property and equipment additions. Our determination of the discount rate is based on a weighted average cost of capital approach, which uses a market participant’s cost of equity and after-tax cost of debt and reflects certain risks inherent in the future cash flows. The development of these cash flows and the discount rate applied to the cash flows are subject to inherent uncertainties, and actual results could vary significantly from such estimates. 

We recorded goodwill impairments of (i) $516 million related to Liberty Puerto Rico during 2024, (ii) nil during 2023, and (iii) $555 million related to C&W Caribbean during 2022. For additional information regarding certain impairments recorded during 2024, 2023 and 2022, see notes 4 and 8 to our consolidated financial statements.

II-28

Fair Value Measurements in Acquisition Accounting

The application of acquisition accounting requires that we make fair value determinations as of the applicable valuation date. In making these determinations, we are required to make estimates and assumptions that affect the recorded amounts, including, but not limited to, expected future cash flows, market comparables and discount rates, remaining useful lives of long-lived assets, replacement or reproduction costs of property and equipment and the amounts to be recovered in future periods from acquired net operating losses and other deferred tax assets. To assist us in making these fair value determinations, we may engage third-party valuation specialists. Our estimates in this area impact, among other items, the measurement of goodwill as well as future amounts of depreciation and amortization and income tax expense or benefit that we report. Our estimates of fair value are based upon assumptions we believe to be reasonable, but which are inherently uncertain. A significant portion of our long-lived assets were initially recorded through the application of acquisition accounting.

For additional information, including the specific weighted average discount rates we used to complete certain non-recurring valuations, see note 4 to our consolidated financial statements. For information regarding our acquisitions and long-lived assets, see notes 5 and 8, respectively,