Company: LILA
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001712184-25-000031
Chunk: 169

Company: Liberty Latin America Ltd.
Filing Date: 2025-02-19
Form: 10-K
Item: Item 9C
Chunk 169
---
 available market data. Although we may extrapolate or interpolate this data, we do not otherwise alter this data in performing our valuations. We incorporate a credit risk valuation adjustment in our fair value measurements to estimate the impact of both our own nonperformance risk and the nonperformance risk of our counterparties. Our and our counterparties’ credit spreads represent our most significant Level 3 inputs, and these inputs are used to derive the credit risk valuation adjustments with respect to these instruments. As we would not expect changes in our or our counterparties’ credit spreads to have a significant impact on the valuations of these instruments, we have determined that these valuations fall under Level 2 of the fair value hierarchy. Our credit risk valuation adjustments with respect to our interest rate derivative contracts are further explained in note 7.Non-recurring Fair Value MeasurementsFair value measurements may also be used for purposes of non-recurring valuations performed in connection with our acquisition accounting and impairment assessments.Acquisition AccountingDuring 2024, we performed certain non-recurring valuations related to the acquisition accounting for the LPR Acquisition. During 2023, we finalized our acquisition accounting for the Claro Panama Acquisition, which did not result in any material changes to the associated opening balance sheet. For information related to (i) the final opening balance sheet associated with  the LPR Acquisition and (ii) the final opening balance sheet associated with the Claro Panama Acquisition, see note 5. Non-recurring valuations associated with acquisition accounting use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy. The non-recurring valuations associated with the LPR Acquisition and Claro Panama Acquisition primarily include the valuation of customer relationships and spectrum intangible assets. The Claro Panama Acquisition also includes the valuation of property and equipment. These valuations are further described below:•Customer relationships. The valuation of customer relationships is primarily based on an excess earnings methodology, which is a form of a discounted cash flow analysis. The excess earnings methodology for customer relationship intangible assets requires us to estimate the specific cash flows expected from the acquired customer relationships, considering such factors as estimated customer life, the revenue expected to be generated over the life of the customer relationships, contributory asset charges and other factors.•Spectrum intangible assets. The valuation of spectrum intangible assets may use either an adjusted market-based approach, which requires the calibration of observable market inputs to reflect the fair value of the assets acquired, or a combination of an adjusted market-based approach with other methods, such as an income