America Movil Sab De CV 6-K, filed Mar 28, 2022
America Movil Sab De CV (AMX)
About this 6-K
America Movil Sab De CV filed this 6-K on March 28, 2022.
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant To Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of March 2022
Commission File Number: 1-16269
AMÉRICA MÓVIL, S.A.B. DE C.V.
(Exact Name of the Registrant as Specified in the Charter)
America Mobile
(Translation of Registrant’s Name into English)
Lago Zurich 245,
Plaza Carso / Edificio Telcel, Piso 16
Colonia Ampliación Granada,
Alcaldía Miguel Hidalgo,
11529, Mexico City,
México
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. (Check One)
| Form 20-F ☒ Form 40-F ☐ |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
AMÉRICA MÓVIL, S.A.B. DE C.V. AND SUBSIDIARIES
Unaudited Interim Condensed Consolidated Statements of Financial Position
(In thousands of Mexican pesos)
| Note | At September 30, 2021 Unaudited |
At December 31, 2020 Audited |
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| Assets |
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| Current assets: |
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| Cash and cash equivalents |
Ps. | 35,505,293 | Ps. | 35,917,907 | ||||||||
| Equity investments at fair value through other comprehensive income (OCI) and other short-term investments |
62,736,503 | 54,636,395 | ||||||||||
| Accounts receivable: |
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| Subscribers, distributors, recoverable taxes, contract assets and other, net |
207,911,850 | 207,977,954 | ||||||||||
| Related parties |
3 | 1,289,348 | 1,391,300 | |||||||||
| Derivative financial instruments |
10,330,434 | 20,928,335 | ||||||||||
| Inventories, net |
35,472,246 | 30,377,439 | ||||||||||
| Other current assets, net |
13,457,144 | 8,993,907 | ||||||||||
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| Total current assets |
Ps. | 366,702,818 | Ps. | 360,223,237 | ||||||||
| Non-current assets: |
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| Property, plant and equipment, net |
4 | Ps. | 707,198,905 | Ps. | 722,929,631 | |||||||
| Intangibles, net |
124,456,319 | 133,456,967 | ||||||||||
| Goodwill |
139,845,480 | 143,052,859 | ||||||||||
| Investments in associated companies |
1,747,341 | 1,829,760 | ||||||||||
| Deferred income taxes |
124,020,457 | 115,370,240 | ||||||||||
| Accounts receivable, subscriber, distributors and contract assets, net |
7,670,010 | 7,792,863 | ||||||||||
| Other assets, net |
38,679,349 | 38,415,826 | ||||||||||
| Right-of-use assets |
92,095,245 | 101,976,844 | ||||||||||
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| Total assets |
Ps. | 1,602,415,924 | Ps. | 1,625,048,227 | ||||||||
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| Liabilities and equity |
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| Current liabilities: |
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| Short-term debt and current portion of long-term debt |
6 | Ps. | 147,231,925 | Ps. | 148,083,184 | |||||||
| Short-term liability related to right-of-use of assets |
27,340,678 | 25,067,905 | ||||||||||
| Accounts payable |
197,013,372 | 186,995,472 | ||||||||||
| Accrued liabilities |
58,111,910 | 50,291,851 | ||||||||||
| Income tax |
27,616,430 | 14,644,979 | ||||||||||
| Other taxes payable |
25,007,443 | 27,969,739 | ||||||||||
| Derivative financial instruments |
10,809,490 | 14,230,249 | ||||||||||
| Related parties |
3 | 3,612,876 | 3,999,916 | |||||||||
| Deferred revenues |
37,305,055 | 36,027,383 | ||||||||||
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| Total current liabilities |
Ps. | 534,049,179 | Ps. | 507,310,678 | ||||||||
| Non-current liabilities: |
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| Long-term debt |
6 | 438,618,358 | 480,299,772 | |||||||||
| Long-term liability related to right-of-use of assets |
73,000,591 | 84,259,336 | ||||||||||
| Deferred income taxes |
49,277,520 | 49,067,163 | ||||||||||
| Deferred revenues |
2,534,605 | 2,875,467 | ||||||||||
| Asset retirement obligations |
15,843,374 | 17,887,991 | ||||||||||
| Employee benefits |
166,851,285 | 168,230,202 | ||||||||||
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| Total non-current liabilities |
Ps. | 746,125,733 | Ps. | 802,619,931 | ||||||||
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| Total liabilities |
Ps. | 1,280,174,912 | Ps. | 1,309,930,609 | ||||||||
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| Equity: |
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| Capital stock |
9 | Ps. | 96,336,322 | Ps. | 96,341,695 | |||||||
| Retained earnings: |
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| Prior years |
268,845,591 | 267,865,420 | ||||||||||
| Profit for the year |
60,436,744 | 46,852,605 | ||||||||||
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| Total retained earnings |
329,282,335 | 314,718,025 | ||||||||||
| Other comprehensive loss items |
(169,283,793 | ) | (160,580,917 | ) | ||||||||
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| Equity attributable to equity holders of the parent |
256,334,864 | 250,478,803 | ||||||||||
| Non-controlling interests |
65,906,148 | 64,638,815 | ||||||||||
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| Total equity |
322,241,012 | 315,117,618 | ||||||||||
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| Total liabilities and equity |
Ps. | 1,602,415,924 | Ps. | 1,625,048,227 | ||||||||
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The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
1
AMÉRICA MÓVIL, S.A.B. DE C.V. AND SUBSIDIARIES
Unaudited Interim Condensed Consolidated Statements of Comprehensive Income
(In thousands of Mexican pesos, except for earnings per share)
| For the nine-month periods ended Unaudited |
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| Note | 2021 | 2020 | ||||||||||
| Operating revenues: |
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| Service revenues |
Ps. | 633,737,482 | Ps. | 649,042,729 | ||||||||
| Sales of equipment |
120,330,358 | 112,814,350 | ||||||||||
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| Ps. | 754,067,840 | Ps. | 761,857,079 | |||||||||
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| Operating costs and expenses: |
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| Cost of sales and services |
347,191,254 | 349,035,434 | ||||||||||
| Commercial, administrative and general expenses |
148,829,317 | 162,796,091 | ||||||||||
| Other expenses |
3,853,418 | 3,288,826 | ||||||||||
| Depreciation and amortization |
121,097,782 | 121,811,171 | ||||||||||
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| Ps. | 620,971,771 | Ps. | 636,931,522 | |||||||||
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| Operating income |
Ps. | 133,096,069 | Ps. | 124,925,557 | ||||||||
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| Interest income |
2,789,506 | 3,731,873 | ||||||||||
| Interest expense |
(27,185,173 | ) | (30,381,903 | ) | ||||||||
| Foreign currency exchange loss, net |
(6,890,565 | ) | (101,609,915 | ) | ||||||||
| Valuation of derivatives, interest cost from labor obligations and other financial items, net |
11 | (12,457,881 | ) | 15,180,875 | ||||||||
| Equity interest in net income (loss) result of associated companies |
118,674 | (283,367 | ) | |||||||||
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| Profit before income tax |
89,470,630 | 11,563,120 | ||||||||||
| Income tax |
5 | 25,028,477 | (1,695,582 | ) | ||||||||
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| Net profit for the periods |
Ps. | 64,442,153 | Ps. | 13,258,702 | ||||||||
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| Net profit for the period attributable to: |
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| Equity holders of the parent |
Ps. | 60,436,744 | Ps. | 9,540,321 | ||||||||
| Non-controlling interests |
4,005,409 | 3,718,381 | ||||||||||
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| Ps. | 64,442,153 | Ps. | 13,258,702 | |||||||||
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| Basic and diluted earnings per share attributable to equity holders of the parent |
Ps.0.91 | Ps.0.14 | ||||||||||
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| Other comprehensive (loss) income items: |
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| Net other comprehensive income that may be reclassified to (loss) or profit in subsequent periods: |
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| Effect of translation of foreign entities and affiliates |
Ps. | (10,656,019) | Ps. | 16,621,249 | ||||||||
| Items that will not be reclassified to (loss) income in subsequent years: |
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| Unrealized gain (loss) on equity investments at fair value, net of deferred taxes |
3,350,342 | (9,191,685 | ) | |||||||||
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| Total other comprehensive (loss) income items for the periods, net of deferred taxes |
Ps. | (7,305,677) | Ps. | 7,429,564 | ||||||||
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| Total comprehensive income for the periods |
Ps. | 57,136,476 | Ps. | 20,688,266 | ||||||||
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| Comprehensive income for the period attributable to: |
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| Equity holders of the parent |
54,567,225 | 12,763,305 | ||||||||||
| Non-controlling interests |
2,569,251 | 7,924,961 | ||||||||||
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| Ps. | 57,136,476 | Ps. | 20,688,266 | |||||||||
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The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
2
AMÉRICA MÓVIL, S.A.B. DE C.V. AND SUBSIDIARIES
Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity
For the nine-period ended September 30, 2021 (unaudited)
(In thousands of Mexican pesos)
| Capital stock |
Legal reserve |
Retained earnings |
Unrealized (loss) gain on equity investment at fair value |
Re-measurement of defined benefit plans |
Cumulative Translation adjustment |
Revaluation surplus |
Total equity attributable to equity holders of the parent |
Non- controlling interests |
Total equity |
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| Balance at December 31, 2020 (audited) |
Ps. | 96,341,695 | Ps. | 358,440 | Ps. | 314,359,585 | Ps. | (10,881,990) | Ps. | (113,607,942) | Ps. | (100,926,140) | Ps. | 64,835,155 | Ps. | 250,478,803 | Ps. | 64,638,815 | Ps. |
315,117,618 |
| |||||||||||||||||||
| Net profit for the period |
— | — | 60,436,744 | — | — | — | — | 60,436,744 | 4,005,409 | 64,442,153 | ||||||||||||||||||||||||||||||
| Unrealized gain on equity investments at fair value, net of deferred taxes |
— | — | — | 3,350,342 | — | — | — | 3,350,342 | — | 3,350,342 | ||||||||||||||||||||||||||||||
| Effect of translation of foreign entities |
— | — | — | — | 1,404,840 | (8,424,700 | ) | (2,200,001 | ) | (9,219,861 | ) | (1,436,158 | ) | (10,656,019 | ) | |||||||||||||||||||||||||
| Transfer of revaluation of assets net of deferred taxes |
— | — | 2,833,357 | — | — | — | (2,833,357 | ) | — | — | — | |||||||||||||||||||||||||||||
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| Comprehensive income (loss) for the period |
— | — | 63,270,101 | 3,350,342 | 1,404,840 | (8,424,700 | ) | (5,033,358 | ) | 54,567,225 | 2,569,251 | 57,136,476 | ||||||||||||||||||||||||||||
| Dividends declared |
— | — | (26,616,504 | ) | — | — | — | — | (26,616,504 | ) | (1,987,570 | ) | (28,604,074 | ) | ||||||||||||||||||||||||||
| Repurchase of shares |
(5,373 | ) | — | (22,413,590 | ) | — | — | — | — | (22,418,963 | ) | — | (22,418,963 | ) | ||||||||||||||||||||||||||
| Other acquisitions of non-controlling interest |
— | — | 324,303 | — | — | — | — | 324,303 | 685,652 | 1,009,955 | ||||||||||||||||||||||||||||||
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| Balance at September 30, 2021 (unaudited) |
Ps. | 96,336,322 | Ps | . 358,440 | Ps. | 328,923,895 | Ps. | (7,531,648) | Ps. | (112,203,102) | Ps. | (109,350,840) | Ps. | 59,801,797 | Ps. | 256,334,864 | Ps. | 65,906,148 | Ps. | 322,241,012 | ||||||||||||||||||||
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The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
3
AMÉRICA MÓVIL, S.A.B. DE C.V. AND SUBSIDIARIES
Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity
For the nine-period ended September 30, 2020 (unaudited)
(In thousands of Mexican pesos)
| Capital stock |
Legal reserve |
Retained earnings |
Unrealized loss on equity investment at fair value |
Re-measurement of defined benefit plans |
Cumulative translation adjustment |
Total equity attributable to equity holders of the parent |
Non- controlling interests |
Total equity |
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| Balance at December 31, 2019 (audited) |
Ps. | 96,338,262 | Ps. | 358,440 | Ps. | 281,091,687 | Ps. | (8,929,576) | Ps. | (103,581,488) | Ps. | (87,367,366) | Ps. | 177,909,959 | Ps. | 48,996,906 | Ps. | 226,906,865 | ||||||||||||||||||
| Net profit for the period |
— | — | 9,540,321 | — | — | — | 9,540,321 | 3,718,381 | 13,258,702 | |||||||||||||||||||||||||||
| Unrealized loss on equity investments at fair value, net of deferred taxes |
— | — | — | (9,191,685 | ) | — | — | (9,191,685 | ) | — | (9,191,685 | ) | ||||||||||||||||||||||||
| Effect of translation of foreign entities |
— | — | — | — | (988,471 | ) | 13,403,140 | 12,414,669 | 4,206,580 | 16,621,249 | ||||||||||||||||||||||||||
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| Comprehensive (loss) income for the period |
— | — | 9,540,321 | (9,191,685 | ) | (988,471 | ) | 13,403,140 | 12,763,305 | 7,924,961 | 20,688,266 | |||||||||||||||||||||||||
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| Dividends |
— | — | (25,074,439 | ) | — | — | — | (25,074,439 | ) | (15,491 | ) | (25,089,930 | ) | |||||||||||||||||||||||
| Stock dividends |
2,157 | — | 8,288,582 | — | — | — | 8,290,739 | — | 8,290,739 | |||||||||||||||||||||||||||
| Repurchase of shares |
(517 | ) | — | (1,953,203 | ) | — | — | — | (1,953,720 | ) | — | (1,953,720 | ) | |||||||||||||||||||||||
| Other non-controlling acquisitions |
— | — | (1,962 | ) | — | — | — | (1,962 | ) | (608 | ) | (2,570 | ) | |||||||||||||||||||||||
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| Balance at September 30, 2020 (unaudited) |
Ps. | 96,339,902 | Ps. | 358,440 | Ps. | 271,890,986 | Ps. | (18,121,261) | Ps. | (104,569,959) | Ps. | (73,964,226) | Ps. | 171,933,882 | Ps. | 56,905,768 | Ps. | 228,839,650 | ||||||||||||||||||
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The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
4
AMÉRICA MÓVIL, S.A.B. DE C.V. AND SUBSIDIARIES
Unaudited Interim Condensed Consolidated Statements of Cash Flows
(In thousands of Mexican pesos)
| For the nine-month Unaudited |
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| 2021 | 2020 | |||||||
| Operating activities |
||||||||
| Profit before income tax |
Ps. | 89,470,630 | Ps. | 11,563,120 | ||||
| Items not requiring the use of cash: |
||||||||
| Depreciation property, plant and equipment and right-of-use assets |
102,380,065 | 106,398,093 | ||||||
| Amortization of intangible and other assets |
18,717,717 | 15,413,078 | ||||||
| Equity interest in net (loss) income of associated companies |
(118,674 | ) | 283,367 | |||||
| Loss on sale of property, plant and equipment |
566,035 | 29,444 | ||||||
| Net period cost of labor obligations |
14,072,122 | 13,544,191 | ||||||
| Foreign currency exchange (loss), net |
6,275,334 | 97,223,366 | ||||||
| Interest income |
(2,789,506 | ) | (3,731,873 | ) | ||||
| Interest expense |
27,185,173 | 30,381,903 | ||||||
| Employee profit sharing |
1,965,157 | 1,360,577 | ||||||
| Loss (gain) in valuation of derivative financial instruments, capitalized interest expense and other, net |
5,509,646 | (23,860,054 | ) | |||||
| Gain on net monetary positions |
(3,738,124 | ) | (2,566,507 | ) | ||||
| Working capital changes: |
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| Subscribers, distributors, recoverable taxes, contract assets and other, net |
(1,792,927 | ) | 14,274,743 | |||||
| Prepaid expenses |
(4,845,130 | ) | (1,770,913 | ) | ||||
| Related parties |
(285,088 | ) | 354,976 | |||||
| Inventories |
(5,408,936 | ) | 8,857,563 | |||||
| Other assets |
(5,333,305 | ) | (3,310,398 | ) | ||||
| Employee benefits |
(15,034,626 | ) | (11,784,695 | ) | ||||
| Accounts payable and accrued liabilities |
2,052,479 | (10,899,675 | ) | |||||
| Employee profit sharing paid |
(1,921,528 | ) | (2,435,640 | ) | ||||
| Financial instruments and other |
(1,505,930 | ) | 6,347,162 | |||||
| Deferred revenues |
1,234,931 | 1,058,046 | ||||||
| Interest received |
1,835,271 | 803,715 | ||||||
| Income taxes paid |
(26,544,350 | ) | (47,135,965 | ) | ||||
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| Net cash flows provided by operating activities |
Ps. | 201,946,436 | Ps. | 200,397,624 | ||||
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| Investing activities |
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| Purchase of property, plant and equipment |
(85,544,001 | ) | (75,755,853 | ) | ||||
| Acquisition of intangibles |
(5,991,969 | ) | (15,289,555 | ) | ||||
| Dividends received from associates and marketable securities |
2,628,600 | 2,292,689 | ||||||
| Proceeds from sale of plant, property and equipment |
171,994 | 108,190 | ||||||
| Acquisition of business, net of cash acquired |
— | (131,529 | ) | |||||
| Investment in affiliated companies |
— | (72,431 | ) | |||||
| Sale of shares of associated company |
1,147,199 | 601,509 | ||||||
| Other short-term investments |
(3,361,507 | ) | (4,341,811 | ) | ||||
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| Net cash flows used in investing activities |
Ps. | (90,949,684) | Ps. | (92,588,791) | ||||
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| Financing activities |
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| Loans obtained |
70,789,875 | 247,424,369 | ||||||
| Repayment of loans |
(103,347,911 | ) | (289,766,838 | ) | ||||
| Payment of liability related to right-of-use of assets |
(23,589,855 | ) | (23,641,040 | ) | ||||
| Interest paid |
(16,607,756 | ) | (20,287,662 | ) | ||||
| Repurchase of shares |
(22,418,965 | ) | (1,908,916 | ) | ||||
| Dividends paid |
(15,000,231 | ) | (4,060,130 | ) | ||||
| Acquisition of non-controlling interests |
(5,850 | ) | (2,570 | ) | ||||
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| Net cash flows used in financing activities |
Ps. | (110,180,693) | Ps. | (92,242,787) | ||||
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| Net increase in cash and cash equivalents |
Ps. | 816,059 | Ps. | 15,566,046 | ||||
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| Adjustment to cash flows due to exchange rate fluctuations, net |
(1,228,673 | ) | 645,171 | |||||
| Cash and cash equivalents at beginning of the year |
35,917,907 | 19,745,656 | ||||||
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| Cash and cash equivalents at beginning of the period |
Ps. | 35,505,293 | Ps. | 35,956,873 | ||||
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| Non-cash transactions related to: |
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| Acquisitions of property, plant and equipment in accounts payable at end periods |
Ps. | 11,076,339 | Ps. | 14,417,248 | ||||
| Revaluation surplus |
100,700,222 | — | ||||||
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| Non-cash transactions |
Ps. | 111,776,561 | Ps. | 14,417,248 | ||||
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The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements
5
AMÉRICA MÓVIL, S.A.B. DE C.V. AND SUBSIDIARIES
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(In thousands of Mexican pesos (Ps.) and thousands of
U.S. dollars (US$), unless otherwise indicated)
1. Description of the Business and Relevant Events
I. Corporate Information
América Móvil, S.A.B. de C.V. and subsidiaries (hereinafter, the “Company”, “América Móvil” or “AMX”) was incorporated under the laws of Mexico on September 25, 2000. As of September 30, 2021, the Company provides telecommunications services in 25 countries throughout Latin America, the United States, the Caribbean and Europe. These telecommunications services include mobile and fixed-line voice services, wireless and fixed data services, internet access and Pay TV, over the top and other related services. The Company also sells equipment, accessories and computers.
| • | Voice services provided by the Company, both wireless and fixed, mainly include the following: airtime, local, domestic and international long-distance services, and network interconnection services. |
| • | Data services include value added, corporate networks, data and Internet services. |
| • | Pay TV represents basic services, as well as pay per view and additional programming and advertising services. |
| • | AMX provides other related services to advertising in telephone directories, publishing and call center services. |
| • | The Company also provides video, audio and other media content that is delivered through the internet directly from the content provider to the end user. |
In order to provide these services, América Móvil has licenses, permits and concessions (collectively referred to herein as “licenses”) to build, install, operate and exploit public and/or private telecommunications networks and provide miscellaneous telecommunications services (mostly mobile and fixed voice and data services) and to operate frequency bands in the radio-electric spectrum for point-to-point and point-to-multipoint microwave links. The Company holds licenses in the 24 countries where it has networks, and such licenses have different dates of expiration through 2056.
Certain licenses require the payment to the respective governments of a share in sales determined as a percentage of revenues from services under concession. The percentage is set as either a fixed rate or in some cases based on certain size of the infrastructure in operation.
The corporate offices of América Móvil are located in Mexico City, Mexico, at Lago Zurich 245, Colonia Ampliación Granada, Delegación Miguel Hidalgo, 11529, Mexico City, México.
The Company’s unaudited interim condensed consolidated financial statements were approved for their issuance by the Company’s Chief Financial Officer on March 25, 2022, and subsequent events have been considered through that date.
II. Relevant Events in 2021
| • | On September 15, 2021, we announced that we entered into an agreement with Cable & Wireless Panama, S.A., an affiliate of Liberty Latin America LTD., to sell our 100% interest in our subsidiary Claro Panama, S.A. The transaction excludes (i) all telecommunication towers owned indirectly by América Móvil, S.A.B. de C.V. in Panama and (ii) the Claro trademarks. The agreed purchase price is U.S.$200 million on a cash/debt free basis. The closing of the transaction is subject to customary conditions for this type of transactions, including obtaining required governmental approvals, and we expect closing to occur during first half of 2022. |
| • | On September 29, 2021, we announced an agreement with Liberty Latin America LTD. to combine our respective Chilean operations, VTR and Claro Chile, to form a 50-50 joint venture. The proposed transaction combines the complementary operations of VTR, a leading provider of high-speed consumer fixed products, such as broadband and Pay TV services, where it connects close to 3 million subscribers |
6
| nationwide, and Claro Chile, one of Chile’s leading telecommunications service providers with over 6.5 million mobile customers. Completion of the transaction is subject to certain customary closing conditions, including obtaining required regulatory approvals, and we expect closing to occur during the second half of 2022. |
2. Basis of Preparation of the Unaudited Interim Condensed Consolidated Financial Statements and Summary of Significant Accounting Policies and Practices
a) Basis of preparation
The accompanying unaudited interim condensed consolidated financial statements for the nine months ended September 30, 2021, have been prepared in conformity with the International Accounting Standard No. 34, Interim Financial Reporting (“IAS 34”), and using the same accounting policies applied in preparing the annual financial statements, except as explained below. The Company has prepared the consolidated financial statements on the basis that it will continue to operate as a going concern.
The unaudited interim condensed consolidated financial statements do not include all the information and disclosures required in the annual consolidated financial statements and should be read in conjunction with the Company’s audited annual consolidated financial statements as of December 31, 2019 and 2020, and for the three-year period ended December 31, 2020, as included in the Company’s Annual Report on Form 20-F for the year ended December 31, 2020 (the “2020 Form 20-F”).
The preparation of these unaudited interim condensed consolidated financial statements in accordance with IAS 34 requires the use of critical estimates and assumptions that affect the amounts reported for certain assets and liabilities, as well as certain income and expenses. It also requires that management exercise judgment in the application of the Company’s accounting policies.
The Mexican peso is the functional currency of the Company’s Mexican operations and the consolidated reporting currency of the Company.
i) New standards, interpretations and amendments adopted
The accounting policies adopted in the preparation of the unaudited interim condensed consolidated financial statements are consistent with those followed in the preparation of the Company’s annual consolidated financial statements for the year ended December 31, 2020, except for the adoption of new standards effective as of January 1, 2021. The Company has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
Several amendments apply for the first time in 2021, but do not have an impact on the unaudited interim condensed consolidated financial statements of the Company.
Interest Rate Benchmark Reform – Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR).
The amendments include the following practical expedients:
| • | A practical expedient to require contractual changes, or changes to cash flows that are directly required by the reform, to be treated as changes to a floating interest rate, equivalent to a movement in a market rate of interest |
| • | Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the hedging relationship being discontinued |
| • | Provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR instrument is designated as a hedge of a risk component |
These amendments had no impact on the unaudited interim condensed consolidated financial statements of the Company. The Company intends to use the practical expedients in future periods if they become applicable.
7
3. Related Parties
a) The following is an analysis of the balances with related parties as of September 30, 2021 and December 31, 2020. All the companies were considered affiliates of América Móvil since the Company or the Company’s principal shareholders are also direct or indirect shareholders in the related parties:
| 2021 | 2020 | |||||||
| Patrimonial Inbursa, S.A. |
Ps. | 361,720 | Ps. | 327,985 | ||||
| Hubard y Bourlon, S.A. de C.V. |
117,921 | 437,231 | ||||||
| Sears Roebuck de México, S.A. de C.V. and Subsidiaries |
226,720 | 233,402 | ||||||
| Sanborns Hermanos, S.A. |
79,000 | 160,116 | ||||||
| Claroshop.com S.A.P.I. de C.V. |
67,010 | 100,075 | ||||||
| Grupo Condumex, S.A. de C.V. and Subsidiaries |
76,792 | 10,038 | ||||||
| Other |
360,185 | 122,453 | ||||||
|
|
|
|
|
|||||
| Total |
Ps. | 1,289,348 | Ps. | 1,391,300 | ||||
|
|
|
|
|
|||||
| 2021 | 2020 | |||||||
| Accounts payable: |
||||||||
| Grupo Condumex, S.A. de C.V. and Subsidiaries |
Ps. | 1,544,997 | Ps. | 1,054,526 | ||||
| Carso Infraestructura y Construcción, S.A. de C.V. and Subsidiaries |
765,457 | 2,192,405 | ||||||
| Seguros Inbursa, S.A. de C.V. |
226,239 | 92,173 | ||||||
| Grupo Financiero Inbursa, S.A.B. de C.V. |
205,026 | 234,954 | ||||||
| Claroshop.com S.A.P.I. de C.V. |
252,820 | 4,300 | ||||||
| Fianzas Guardiana Inbursa, S.A. de C.V. |
246,544 | 241,898 | ||||||
| Sociedad Financiera Inbursa. S.A. de C.V. |
110,234 | — | ||||||
| Enesa, S.A. de C.V. and Subsidiaries |
17,272 | 22,014 | ||||||
| PC Industrial, S.A. de C.V. and Subsidiaries |
28,622 | 44,198 | ||||||
| Other |
215,665 | 113,448 | ||||||
|
|
|
|
|
|||||
| Total |
Ps. | 3,612,876 | Ps. | 3,999,916 | ||||
|
|
|
|
|
|||||
b) For the nine-month periods ended September 30, 2021 and 2020, the Company conducted the following transactions with related parties:
| 2021 | 2020 | |||||||
| Investments and expenses: |
||||||||
| Construction services, purchases of materials, inventories and property, plant and equipment (i) |
Ps. | 5,471,751 | Ps. | 5,077,699 | ||||
| Insurance premiums, fees paid for administrative and operating services, brokerage services and others (ii) |
3,293,424 | 2,987,742 | ||||||
| Other services |
1,143,079 | 798,469 | ||||||
|
|
|
|
|
|||||
| Ps. | 9,908,254 | Ps. | 8,863,910 | |||||
|
|
|
|
|
|||||
| Revenues: |
||||||||
| Revenue services |
Ps. | 463,593 | Ps. | 395,957 | ||||
| Sale of equipment |
480,027 | 264,416 | ||||||
|
|
|
|
|
|||||
| Ps. | 943,620 | Ps. | 660,373 | |||||
|
|
|
|
|
|||||
| i) | In 2021, this amount includes Ps.3,827,345 (Ps.4,415,590 in 2020) for network construction services and construction materials purchased from subsidiaries of Grupo Carso, S.A.B. de C.V. (Grupo Carso). |
8
| ii) | In 2021, this amount includes Ps.121,728 (Ps.134,123 in 2020) for network maintenance services performed by Grupo Carso subsidiaries; Ps.37,960 in 2021 (Ps.12,264 in 2020 for software services provided by an associate; Ps.2,914,338 in 2021 (Ps.2,606,092 in 2020) for insurance premiums with Seguros Inbursa, S.A. and Fianzas Guardiana Inbursa, S.A., which, in turn, places most of such insurance with reinsurers. |
4. Property, Plant and Equipment, net
During the nine-month periods ended September 30, 2021 and 2020, the Company made cash payments related to investments in plant and equipment in order to increase and update its transmission network and other mobile and fixed assets for an amount of Ps.85,544,001 and Ps.75,755,853, respectively.
5. Income Taxes
As explained previously in these unaudited interim condensed consolidated financial statements, the Company is a Mexican corporation which has numerous consolidated subsidiaries operating in other countries.
| i) | Consolidated income tax matters |
The composition of income tax expense for the nine-month periods ended September 30, 2021 and 2020 is as follows:
| 2021 | 2020 | |||||||||||
| Current period income tax |
Ps. | 36,689,797 | Ps. | 22,201,055 | ||||||||
| Deferred income tax |
(11,661,320 | ) | (23,896,637 | ) | ||||||||
|
|
|
|
|
|||||||||
| Ps. | 25,028,477 | Ps. | (1,695,582 | ) | ||||||||
|
|
|
|
|
|||||||||
Deferred tax related to items recognized in OCI during the nine-month periods ended September 30, 2021 and 2020 is as follows:
| 2021 | 2020 | |||||||||||
| Equity investments at fair value |
Ps. | (88,399 | ) | Ps. | 897,286 | |||||||
|
|
|
|
|
|||||||||
| Deferred tax charged to OCI |
Ps. | (88,399 | ) | Ps. | 897,286 | |||||||
|
|
|
|
|
|||||||||
Income Tax — Our income tax expense for the first nine months of 2021 was Ps.25.0 billion, as compared to a tax credit of Ps.1.7 billion for the first nine months of 2020. This increase principally reflects higher profit before income tax due to a decrease in our net foreign currency exchange loss of Ps.94.7 billion compared to the first nine months of 2020. Our effective corporate income tax rate as a percentage of profit before income tax was 28.0% for the first nine months of 2021, as compared to (14.7)% for the first nine months of 2020. This rate differed from the Mexican statutory rate of 30.0% principally because of taxable inflationary effects, employee benefits and non-taxable items.
9
6. Debt
a) The Company’s short- and long-term debt consists of the following:
| At December 31, 2020 |
(Thousands of Mexican pesos) | |||||||||||
| Currency |
Loan |
Interest rate |
Maturity | Total | ||||||||
| Senior Notes |
||||||||||||
| U.S. dollars |
||||||||||||
| Fixed-rate Senior notes (i) | 3.125% | 2022 | Ps. | 31,917,920 | ||||||||
| Fixed-rate Senior notes (i) | 3.625% | 2029 | 19,948,700 | |||||||||
| Fixed-rate Senior notes (i) | 2.875% | 2030 | 19,948,700 | |||||||||
| Fixed-rate Senior notes (i) | 6.375% | 2035 | 19,576,258 | |||||||||
| Fixed-rate Senior notes (i) | 6.125% | 2037 | 7,365,559 | |||||||||
| Fixed-rate Senior notes (i) | 6.125% | 2040 | 39,897,400 | |||||||||
| Fixed-rate Senior notes (i) | 4.375% | 2042 | 22,941,005 | |||||||||
| Fixed-rate Senior notes (i) | 4.375% | 2049 | 24,935,875 | |||||||||
|
|
|
|||||||||||
| Subtotal U.S. dollars | Ps. | 186,531,417 | ||||||||||
|
|
|
|||||||||||
| Mexican pesos |
||||||||||||
| Fixed-rate Senior notes (i) | 6.450% | 2022 | Ps. | 22,500,000 | ||||||||
| Fixed-rate Senior notes (i) | 7.125% | 2024 | 11,000,000 | |||||||||
| Domestic Senior notes (i) | 0.000% | 2025 | 4,911,181 | |||||||||
| Fixed-rate Senior notes (i) | 8.460% | 2036 | 7,871,700 | |||||||||
| Domestic Senior notes (i) | 8.360% | 2037 | 5,000,000 | |||||||||
|
|
|
|||||||||||
| Subtotal Mexican pesos | Ps. | 51,282,881 | ||||||||||
|
|
|
|||||||||||
| Euros |
||||||||||||
| Fixed-rate Senior notes (i) | 3.000% | 2021 | Ps. | 24,369,332 | ||||||||
| Fixed-rate Senior notes (i) | 3.125% | 2021 | 18,276,999 | |||||||||
| Fixed-rate Senior notes (i) | 4.000% | 2022 | 18,276,999 | |||||||||
| Fixed-rate Senior notes (i) | 4.750% | 2022 | 18,276,999 | |||||||||
| Fixed-rate Senior notes (i) | 3.500% | 2023 | 7,310,800 | |||||||||
| Fixed-rate Senior notes (i) | 3.259% | 2023 | 18,276,999 | |||||||||
| Fixed-rate Senior notes (i) | 1.500% | 2024 | 20,713,932 | |||||||||
| Fixed-rate Senior notes (i) | 1.500% | 2026 | 18,276,999 | |||||||||
| Fixed-rate Senior notes (i) | 0.750% | 2027 | 24,369,332 | |||||||||
| Fixed-rate Senior notes (i) | 2.125% | 2028 | 15,840,066 | |||||||||
| Commercial Paper (iv) | (0.230%) -(0.310%) | 2021 | 40,940,477 | |||||||||
|
|
|
|||||||||||
| Subtotal Euros | Ps. | 224,928,934 | ||||||||||
|
|
|
|||||||||||
| Pound Sterling |
||||||||||||
| Fixed-rate Senior notes (i) | 5.000% | 2026 | Ps. | 13,634,936 | ||||||||
| Fixed-rate Senior notes (i) | 5.750% | 2030 | 17,725,417 | |||||||||
| Fixed-rate Senior notes (i) | 4.948% | 2033 | 8,180,962 | |||||||||
| Fixed-rate Senior notes (i) | 4.375% | 2041 | 20,452,405 | |||||||||
|
|
|
|||||||||||
| Subtotal Pound Sterling | Ps. | 59,993,720 | ||||||||||
|
|
|
|||||||||||
| Brazilian reais |
||||||||||||
| Debentures (i) | 104.000% of CDI | 2021 | Ps. | 4,222,597 | ||||||||
| Debentures (i) | 104.250% of CDI | 2021 | 5,815,668 | |||||||||
10
| Promissory notes (i) | CDI + 0.600% | 2021 | 1,381,941 | |||||||||
| Debentures (i) | CDI + 0.960% | 2022 | 9,596,811 | |||||||||
| Promissory notes (i) | 106.000% of CDI | 2022 | 7,677,449 | |||||||||
| Debentures (i) | 106.500% of CDI | 2022 | 3,838,725 | |||||||||
|
|
|
|||||||||||
| Subtotal Brazilian reais | Ps. | 32,533,191 | ||||||||||
|
|
|
|||||||||||
| Other currencies |
||||||||||||
| Japanese yen |
||||||||||||
| Fixed-rate Senior notes (i) | 2.950% | 2039 | Ps. | 2,511,701 | ||||||||
|
|
|
|||||||||||
| Subtotal Japanese yen | Ps. | 2,511,701 | ||||||||||
|
|
|
|||||||||||
| Chilean pesos |
||||||||||||
| Fixed-rate Senior notes (i) | 3.961% | 2035 | Ps. | 4,078,453 | ||||||||
|
|
|
|||||||||||
| Subtotal Chilean pesos | Ps. | 4,078,453 | ||||||||||
|
|
|
|||||||||||
| Subtotal other currencies | Ps. | 6,590,154 | ||||||||||
|
|
|
|||||||||||
| Hybrid Notes |
||||||||||||
| Euros |
||||||||||||
| Euro NC10 Series B Capital Securities (iii) | 6.375% | 2073 | Ps. | 13,403,133 | ||||||||
| Subtotal Euros | Ps. | 13,403,133 | ||||||||||
|
|
|
|||||||||||
| Subtotal Hybrid notes | Ps. | 13,403,133 | ||||||||||
|
|
|
|||||||||||
| Lines of Credit and others |
||||||||||||
| Mexican pesos |
||||||||||||
| Lines of credit (ii) | TIIE + 0.300% - TIIE + 1.000% | 2021 | Ps. | 27,100,000 | ||||||||
| Peruvian Soles |
||||||||||||
| Lines of credit (ii) | 1.200% - 1.450% | 2021 | Ps. | 17,094,079 | ||||||||
| Chilean pesos |
||||||||||||
| Lines of credit (ii) |
TAB + 0.350% and TAB + 0.450% |
2021 | Ps. | 8,868,181 | ||||||||
| Financial Leases |
8.700% - 8.970% |
2021 -2027 | Ps. | 57,266 | ||||||||
| Subtotal Lines of Credit and others | Ps. | 53,119,526 | ||||||||||
|
|
|
|||||||||||
| Total debt | Ps. | 628,382,956 | ||||||||||
|
|
|
|||||||||||
| Less: Short-term debt and current portion of long-term debt | Ps. | 148,083,184 | ||||||||||
|
|
|
|||||||||||
| Long-term debt | Ps. | 480,299,772 | ||||||||||
|
|
|
|||||||||||
11
| At September 30, 2021 |
(Thousands of Mexican pesos) | |||||||||||
| Currency |
Loan |
Interest rate |
Maturity | Total | ||||||||
| Senior Notes |
||||||||||||
| U.S. dollars |
||||||||||||
| Fixed-rate Senior notes (i) | 3.125% | 2022 | Ps. | 32,489,600 | ||||||||
| Fixed-rate Senior notes (i) | 3.625% | 2029 | 20,306,000 | |||||||||
| Fixed-rate Senior notes (i) | 2.875% | 2030 | 20,306,000 | |||||||||
| Fixed-rate Senior notes (i) | 6.375% | 2035 | 19,926,887 | |||||||||
| Fixed-rate Senior notes (i) | 6.125% | 2037 | 7,497,483 | |||||||||
| Fixed-rate Senior notes (i) | 6.125% | 2040 | 40,612,000 | |||||||||
| Fixed-rate Senior notes (i) | 4.375% | 2042 | 23,351,900 | |||||||||
| Fixed-rate Senior notes (i) | 4.375% | 2049 | 25,382,500 | |||||||||
|
|
|
|||||||||||
| Subtotal U.S. dollars | Ps. | 189,872,370 | ||||||||||
|
|
|
|||||||||||
| Mexican pesos |
||||||||||||
| Fixed-rate Senior notes (i) | 6.450% | 2022 | Ps. | 22,500,000 | ||||||||
| Fixed-rate Senior notes (i) | 7.125% | 2024 | 11,000,000 | |||||||||
| Domestic Senior notes (i) | 0.000% | 2025 | 5,146,689 | |||||||||
| Fixed-rate Senior notes (i) | 8.460% | 2036 | 7,871,700 | |||||||||
| Domestic Senior notes (i) | 8.360% | 2037 | 5,000,000 | |||||||||
|
|
|
|||||||||||
| Subtotal Mexican pesos | Ps. | 51,518,389 | ||||||||||
|
|
|
|||||||||||
| Euros |
||||||||||||
| Fixed-rate Senior notes (i) | 3.125% | 2021 | Ps. | 17,635,761 | ||||||||
| Fixed-rate Senior notes (i) | 4.000% | 2022 | 17,635,761 | |||||||||
| Fixed-rate Senior notes (i) | 4.750% | 2022 | 17,635,761 | |||||||||
| Fixed-rate Senior notes (i) | 3.500% | 2023 | 7,054,304 | |||||||||
| Fixed-rate Senior notes (i) | 3.259% | 2023 | 17,635,761 | |||||||||
| Fixed-rate Senior notes (i) | 1.500% | 2024 | 19,987,196 | |||||||||
| Exchangeable Bond (i) | 0.000% | 2024 | 49,309,588 | |||||||||
| Fixed-rate Senior notes (i) | 1.500% | 2026 | 17,635,761 | |||||||||
| Fixed-rate Senior notes (i) | 0.750% | 2027 | 23,514,348 | |||||||||
| Fixed-rate Senior notes (i) | 2.125% | 2028 | 15,284,326 | |||||||||
|
|
|
|||||||||||
| Subtotal Euros | Ps. | 203,328,567 | ||||||||||
|
|
|
|||||||||||
| Pound Sterling |
||||||||||||
| Fixed-rate Senior notes (i) | 5.000% | 2026 | Ps. | 13,680,152 | ||||||||
| Fixed-rate Senior notes (i) | 5.750% | 2030 | 17,784,198 | |||||||||
| Fixed-rate Senior notes (i) | 4.948% | 2033 | 8,208,092 | |||||||||
| Fixed-rate Senior notes (i) | 4.375% | 2041 | 20,520,228 | |||||||||
| Subtotal Pound Sterling | Ps. | 60,192,670 | ||||||||||
|
|
|
|||||||||||
| Brazilian reais |
||||||||||||
| Promissory notes (i) | CDI + 0.600% | 2021 | Ps. | 1,343,927 | ||||||||
| Debentures (i) | CDI + 0.960% | 2022 | 9,332,831 | |||||||||
| Promissory notes (i) | 106.000% of CDI | 2022 | 7,466,265 | |||||||||
12
| Debentures (i) |
106.500% of CDI | 2022 | 3,733,132 | |||||||||
|
|
|
|||||||||||
| Subtotal Brazilian reais |
Ps. | 21,876,155 | ||||||||||
|
|
|
|||||||||||
| Other currencies |
||||||||||||
| Japanese yen |
||||||||||||
| Fixed-rate Senior notes (i) |
2.950% | 2039 | Ps. | 2,371,983 | ||||||||
|
|
|
|||||||||||
| Subtotal Japanese yen |
Ps. | 2,371,983 | ||||||||||
|
|
|
|||||||||||
| Chilean pesos |
||||||||||||
| Fixed-rate Senior notes (i) |
3.961% | 2035 | Ps. | 3,762,621 | ||||||||
|
|
|
|||||||||||
| Subtotal Chilean pesos |
Ps. | 3,762,621 | ||||||||||
|
|
|
|||||||||||
| Subtotal other currencies |
Ps. | 6,134,604 | ||||||||||
| Hybrid Notes |
||||||||||||
| Euros |
||||||||||||
| Euro NC10 Series B Capital Securities (iii) |
6.375% | 2073 | Ps. | 12,932,891 | ||||||||
|
|
|
|||||||||||
| Subtotal Euros |
Ps. | 12,932,891 | ||||||||||
|
|
|
|||||||||||
| Subtotal Hybrid Notes |
Ps. | 12,932,891 | ||||||||||
|
|
|
|||||||||||
| Lines of Credit and others |
||||||||||||
| U.S. dollars |
||||||||||||
| Lines of credit (ii) |
0.700% | 2021 | Ps. | 514,336 | ||||||||
| Mexican pesos |
||||||||||||
| Lines of credit (ii) |
TIIE + 0.280% - TIIE + 0.400% | 2021 | Ps. | 22,280,000 | ||||||||
| Peruvian Soles |
||||||||||||
| Lines of credit (ii) |
0.976% - 1.045% | 2021 - 2022 | Ps. | 9,536,419 | ||||||||
| Chilean pesos |
||||||||||||
| Lines of credit (ii) |
TAB + 0.350% and TAB + 0.450% | 2021 - 2022 | Ps. | 7,614,951 | ||||||||
| Financial Leases |
8.700% - 8.970% | 2021 - 2027 | Ps. | 48,931 | ||||||||
|
|
|
|||||||||||
| Subtotal Lines of Credit and others |
Ps. | 39,994,637 | ||||||||||
|
|
|
|||||||||||
| Total debt |
Ps. | 585,850,283 | ||||||||||
|
|
|
|||||||||||
| Less: Short-term debt and current portion of long-term debt |
Ps. | 147,231,925 | ||||||||||
|
|
|
|||||||||||
| Long-term debt |
Ps. | 438,618,358 | ||||||||||
|
|
|
|||||||||||
13
L= LIBOR (London Interbank Offered Rate)
TIIE = Mexican Interbank Rate
CDI = Brazil Interbank Deposit Rate
TAB= Chilean weighted average funding rate
Interest rates on the Company’s debt are subject to fluctuations in international and local rates. The Company’s weighted average cost of borrowed funds as of December 31, 2020, and September 30, 2021 was approximately 3.72% and 3.80%, respectively.
Such rates do not include commissions or the reimbursements for Mexican tax withholdings (typically a tax rate of 4.9%) that the Company must pay to international lenders.
An analysis of the Company’s short-term debt maturities as of December 31, 2020, and September 30, 2021, is as follows:
| 2020 | 2021 | |||||||
| Obligations and Senior Notes |
Ps. | 95,007,014 | Ps. | 107,273,038 | ||||
| Lines of credit |
53,062,260 | 39,945,706 | ||||||
| Financial Leases |
13,910 | 13,181 | ||||||
|
|
|
|
|
|||||
| Subtotal short term debt |
Ps. | 148,083,184 | Ps. | 147,231,925 | ||||
|
|
|
|
|
|||||
| Weighted average interest rate |
2.23 | % | 3.75 | % | ||||
|
|
|
|
|
|||||
As of September 30, 2021, the Company’s long-term debt maturities are as follows:
| Years |
Amount | |||
| 2022 |
Ps. | 22,501,478 | ||
| 2023 |
24,696,304 | |||
| 2024 |
80,303,579 | |||
| 2025 and thereafter |
311,116,997 | |||
|
|
|
|||
| Total |
Ps. | 438,618,358 | ||
|
|
|
|||
14
(i) Senior Notes
The amounts outstanding under our secured and unsecured debt securities as of December 31, 2020 and September 30, 2021, are as follows:
| Currency |
2020 | 2021 | ||||||
| (In thousands of Mexican pesos) | ||||||||
| U.S. dollars |
Ps. | 186,531,417 | Ps. | 189,872,370 | ||||
| Mexican pesos |
51,282,881 | 51,518,389 | ||||||
| Euros |
183,988,456 | 203,328,567 | ||||||
| Pounds sterling |
59,993,720 | 60,192,670 | ||||||
| Brazilian reais |
32,533,191 | 21,876,155 | ||||||
| Japanese yen |
2,511,701 | 2,371,983 | ||||||
| Chilean pesos |
4,078,453 | 3,762,621 | ||||||
(ii) Lines of credit
As of December 31, 2020, and September 30, 2021, debt under lines of credit aggregated to Ps.53,062 million and Ps.39,945 million, respectively.
The Company has two revolving syndicated credit facilities, one for the Euro equivalent of U.S.$1,500 million and the other for U.S.$2,500 million maturing in 2026 and 2024, respectively. As long as the facilities are committed, a commitment fee is paid. As of September 30, 2021, these credit facilities are undrawn. Telekom Austria has an undrawn revolving syndicated credit facility in Euros for €1,000 million that matures in 2026.
(iii) Hybrid Notes
We currently have one series of Capital Securities (hybrid notes) maturing in 2073 denominated in euros for a total amount of €550 million with a coupon of 6.375%. The Capital Securities are deeply subordinated, and when they were issued the principal rating agencies stated that they would treat only half of the principal amount as indebtedness for purposes of evaluating our leverage (an analysis referred to as 50.0% equity credit). Standard & Poor’s considers 100% of the total amount of this note as debt. The Capital Securities are subject to redemption at our option at varying dates beginning in 2023.
(iv) Commercial Paper
In August 2020, we established a new Euro-Commercial Paper program for a total amount of €2,000 million. As of September 30, 2021, no amounts were outstanding under this program.
Restrictions
A portion of the Company’s debt is subject to certain restrictions with respect to maintaining certain financial ratios, as well as restrictions on selling a significant portion of groups of assets, among others. As of September 30, 2021, the Company was in compliance with all these requirements.
A portion of the debt is also subject to early maturity or repurchase at the option of the holders in the event of a change in control of the Company, as defined in each instrument.
15
Covenants
In conformity with the credit agreements, the Company is obliged to comply with certain financial and operating commitments. Such covenants limit in certain cases the ability of the Company to pledge assets, carry out certain types of mergers or sell all or substantially all of its assets, and the Company’s ability to sell control of Telcel.
Such covenants do not restrict the ability of AMX’s subsidiaries to pay dividends or other payment distributions to AMX. The more restrictive financial covenants require the Company to maintain a consolidated ratio of debt to EBITDA (defined as operating income plus depreciation and amortization) that does not exceed 4 to 1, and a consolidated ratio of EBITDA to interest paid that is not below 2.5 to 1 (in accordance with the clauses included in the credit agreements).
Several of the financing instruments of the Company may be accelerated, at the option of the relevant creditor upon the occurrence of a change in control. The definition of change in control varies from instrument to instrument; however, no change in control shall be considered to have occurred as long as its current shareholders continue to hold the majority of the Company’s voting shares.
As of September 30, 2021, the Company was in compliance with all the covenants.
7. Contingencies
Included in Note 17 on pages F-59 to F-62 of the Company’s 2020 Form 20-F is a disclosure of material contingencies outstanding as of December 31, 2020. As of September 30, 2021, there has not been any material change in the status of those contingencies.
8. Financial Assets and Liabilities
Set out below is the categorization of the financial instruments, excluding cash and cash equivalents, held by the Company as of September 30, 2021 and December 31, 2020:
| September 30, 2021 | ||||||||||||
| Loans and Receivables |
Fair value through profit or loss |
Fair value through OCI |
||||||||||
| Financial Assets: |
||||||||||||
| Equity investments at fair value through OCI and other short term investments |
Ps. | 6,736,715 | Ps. | — | Ps. | 55,999,788 | ||||||
| Accounts receivable from subscribers, distributors, contractual assets and other |
171,013,502 | — | — | |||||||||
| Related parties |
1,289,348 | — | — | |||||||||
| Derivative financial instruments |
— | 10,330,434 | — | |||||||||
|
|
|
|
|
|
|
|||||||
| Total |
Ps. | 179,039,565 | Ps. | 10,330,434 | Ps. | 55,999,788 | ||||||
|
|
|
|
|
|
|
|||||||
| Financial Liabilities: |
||||||||||||
| Debt |
Ps. | 585,850,283 | — | Ps. | — | |||||||
| Liability related to right-of-use of assets |
100,341,269 | — | — | |||||||||
| Accounts payable |
197,013,372 | — | — | |||||||||
| Related parties |
3,612,876 | — | — | |||||||||
| Derivative financial instruments |
— | 10,809,490 | — | |||||||||
|
|
|
|
|
|
|
|||||||
| Total |
Ps. | 886,817,800 | Ps. | 10,809,490 | Ps. | — | ||||||
|
|
|
|
|
|
|
|||||||
16
| December 31, 2020 | ||||||||||||
| Loans and Receivables |
Fair value through profit or loss |
Fair value through OCI |
||||||||||
| Financial Assets: |
||||||||||||
| Equity investments at fair value through OCI and other short term investments |
Ps. | 4,603,284 | Ps. | — | Ps. | 50,033,111 | ||||||
| Accounts receivable from subscribers, distributors, contractual assets and other |
171,213,415 | — | — | |||||||||
| Related parties |
1,391,300 | — | — | |||||||||
| Derivative financial instruments |
— | 20,928,335 | — | |||||||||
|
|
|
|
|
|
|
|||||||
| Total |
Ps. | 177,207,999 | Ps. | 20,928,335 | Ps. | 50,033,111 | ||||||
|
|
|
|
|
|
|
|||||||
| Financial Liabilities: |
||||||||||||
| Debt |
Ps. | 628,382,956 | Ps. | — | Ps. | — | ||||||
| Liability related to right-of-use of assets |
109,327,241 | — | — | |||||||||
| Accounts payable |
186,995,472 | — | — | |||||||||
| Related parties |
3,999,916 | — | — | |||||||||
| Derivative financial instruments |
— | 14,230,249 | — | |||||||||
|
|
|
|
|
|
|
|||||||
| Total |
Ps. | 928,705,585 | Ps. | 14,230,249 | Ps. | — | ||||||
|
|
|
|
|
|
|
|||||||
Fair value hierarchy
The Company’s valuation techniques used to determine and disclose the fair value of its financial instruments are based on the following hierarchy:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities,
Level 2: Variables other than quoted prices in Level 1 that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices); and
Level 3: Variables used for the asset or liability that are not based on any observable market data (non-observable variables).
The fair value for the financial assets (excluding cash and cash equivalents) and financial liabilities shown in the consolidated statements of financial position at September 30, 2021 and December 31, 2020 is as follows:
| Measurement of fair value at September 30, 2021 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: |
||||||||||||||||
| Equity investments at fair value through OCI and other short term investments |
Ps. | 55,999,788 | Ps. | 6,736,715 | Ps. | — | Ps. | 62,736,503 | ||||||||
| Derivative financial instruments |
— | 10,330,434 | — | 10,330,434 | ||||||||||||
| Revalued of assets |
— | — | 100,700,222 | 100,700,222 | ||||||||||||
| Pension plan assets |
174,111,251 | 22,993,990 | 21,478 | 197,126,719 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
Ps. | 230,111,039 | Ps. | 40,061,139 | Ps. | 100,721,700 | Ps. | 370,893,878 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Liabilities: |
||||||||||||||||
| Debt |
Ps. | 528,543,723 | Ps. | 119,442,955 | Ps. | — | Ps. | 647,986,678 | ||||||||
| Liability related to right-of-use of assets |
100,341,269 | — | — | 100,341,269 | ||||||||||||
| Derivative financial instruments |
— | 10,809,490 | — | 10,809,490 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
Ps. | 628,884,992 | Ps. | 130,252,445 | Ps. | — | Ps. | 759,137,437 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
17
| Measurement of fair value at December 31, 2020 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: |
||||||||||||||||
| Equity investments at fair value through OCI and other short-term investments |
Ps. | 50,033,111 | Ps. | 4,603,284 | Ps. | — | Ps. | 54,636,395 | ||||||||
| Derivative financial instruments |
— | 20,928,335 | — | 20,928,335 | ||||||||||||
| Revalued of assets |
— | — | 107,152,628 | 107,152,628 | ||||||||||||
| Pension plan assets |
168,939,091 | 22,589,392 | 21,100 | 191,549,583 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
Ps. | 218,972,202 | Ps. | 48,121,011 | Ps. | 107,173,728 | Ps. | 374,266,941 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Liabilities: |
||||||||||||||||
| Debt |
Ps. | 578,712,562 | Ps. | 135,645,912 | Ps. | — | Ps. | 714,358,474 | ||||||||
| Liability related to right-of-use of assets |
109,327,241 | — | — | 109,327,241 | ||||||||||||
| Derivative financial instruments |
— | 14,230,249 | — | 14,230,249 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
Ps. | 688,039,803 | Ps. | 149,876,161 | Ps. | — | Ps. | 837,915,964 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Fair value of derivative financial instruments is valued using valuation techniques with market observable inputs. To determine its Level 2 fair value, the Company applies different valuation techniques including forward pricing and swaps models, using present value calculations. The models incorporate various inputs including credit quality of counterparties, foreign exchange spot and forward rates and interest rate curves. Fair value of debt Level 2 has been determined using a model based on present value calculation incorporating credit quality of AMX. The Company’s investment in equity investments at fair value, specifically the investment in Koninklijke KPN N.V., is valued using the quoted prices (unadjusted) in active markets for identical assets. The net realized (loss) gain related to derivative financial instruments for the nine periods ended September 30, 2021 and 2020 was Ps.(1,505,930) and Ps.6,347,162, respectively.
The fair value of the asset revaluation was calculated using valuation techniques, using observable market data and internal information on transactions carried out with independent third parties. To determine fair value we use level 2 and 3 information, the Company used inputs such as average rents, contract term and discount rates for discounted flow modeling techniques; in the case of discount rates, we use level 2 data where the information is public and is found in recognized databases, such as country risks, inflation, etc. In the case of average rents and contract terms, we use level 3 data, where the information is mainly internal based on lease contracts entered into with independent third parties.
For the nine-month periods ended September 30, 2021, and 2020, no transfers were made between Level 1 and Level 2 fair value measurement hierarchies.
9. Shareholders’ Equity
a) Pursuant to the Company’s bylaws, the capital stock of the Company consisted as of September 30, 2021 of a minimum fixed portion of Ps.252,371 (nominal amount), represented by a total of 66,411,260,649 shares (including treasury shares available for placement in accordance with the provisions of the Ley del Mercado de Valores), of which (i) 20,554,697,460 were “AA” shares (full voting rights); (ii) 508,181,645 were “A” shares (full voting rights); and (iii) 45,348,381,544 were “L” shares (limited voting rights).
b) As of September 30, 2021 and December 31, 2020, the Company’s capital structure was represented by 65,450,000,000 outstanding shares (20,554,697,460 “AA” shares, 508,181,645 “A” shares and 44,387,120,895 “L” shares), and 66,862,560,649 shares (20,578,173,274 “AA” shares, 519,926,536 “A” shares and 45,764,460,839 “L” shares), respectively, not including treasury shares.
18
c) As of September 30, 2021 and December 31, 2020, the Company’s treasury held for placement in accordance with the provisions of the Ley del Mercado de Valores and the Disposiciones de carácter general aplicables a las emisoras de valores y a otros participantes en el Mercado de valores issued by the Comisión Nacional Bancaria y de Valores, a total amount of 961,260,649 shares, all of which were “L” shares; and 4,200,651,521 shares (4,200,629,621 “L” shares and 21,900 “A” shares) respectively, all acquired pursuant to the Company’s share repurchase program.
d) The holders of “AA” and “A” shares are entitled to full voting rights. The holders of “L” shares may only vote in limited circumstances, and they are only entitled to appoint two members of the Board of Directors and their respective alternates. The matters in which the holders of “L” shares are entitled to vote are the following: extension of the Company´s corporate life, dissolution of the Company, change of Company’s corporate purpose, change of nationality of the Company, transformation of the Company, a merger with another company, any transaction representing 20% or more of the Company’s consolidated assets, as well as the cancellation of the registration of the shares issued by the Company in the Registro Nacional de Valores and any other foreign stock exchanges where they may be registered, except for quotation systems or other markets not organized as stock exchanges. Within their respective series, all shares confer the same rights to their holders.
The Company’s bylaws contain restrictions and limitations related to the subscription and acquisition of “AA” shares by non-Mexican investors.
e) Pursuant to the Company’s bylaws, “AA” shares must at all times represent no less than 20% and no more than 51% of the Company’s capital stock, and they also must represent at all times no less than 51% of the common shares (entitled to full voting rights, represented by “AA” and “A” shares) representing said capital stock.
“A” shares, which may be freely subscribed, must not represent more than 19.6% of capital stock and must not exceed 49% of the common shares representing such capital. Common shares (entitled to full voting rights, represented by “AA” and “A” shares), must represent no more than 51% of the Company’s capital stock.
Lastly, “L” shares which have limited voting rights and may be freely subscribed, and “A” shares may not exceed 80% of the Company’s capital stock. For purposes of determining these restrictions, the percentages mentioned above refer only to the number of the Company’s shares outstanding.
Dividends
On April 26, 2021, the Company’s shareholders approved, among other resolutions, the payment of a dividend of Ps.0.40 (forty peso cents) per share to each of the shares series of its capital stock “AA”, “A” and “L”. It was approved, that such dividend would be paid in two installments of Ps.0.20 (twenty peso cents) each, on July 19 and November 08, 2021 respectively.
On April 24, 2020, the Company’s shareholders approved, among other resolutions, the payment of a dividend of Ps.0.38 (thirty-eight peso cents) per share to each of the shares series of its capital stock “AA”, “A” and L”. It was approved, that such dividend would be paid in two installments of Ps.0.19 (nineteen peso cents) each, on July 20 and November 9, 2020 respectively.
Legal Reserve
According to the Ley General de Sociedades Mercantiles, companies must allocate from the net profit of each year, at least 5% to increase the legal reserve until it reaches 20% of its capital stock. This reserve may not be distributed to shareholders during the existence of the Company, except as a stock dividend. As of December 31, 2020 and September 30, 2021, the legal reserve amounted to Ps.358,440.
Restrictions on Certain Transactions
Pursuant to the Company’s bylaws any transfer of more than 10% of the full voting shares (“A” shares and “AA” shares), effected in one or more transactions by any person or group of persons acting in concert, requires prior approval by our Board of Directors. If the Board of Directors denies such approval, however, the Company bylaws require it to designate an alternate transferee, who must pay market price for the shares as quoted on the Bolsa Mexicana de Valores, S.A.B. de C.V.
19
Payment of Dividends
Dividends, either in cash or in kind, paid with respect to the “A” Shares, “L” Shares, “A” Share ADSs or “L” Share ADSs will generally be subject to a 10% Mexican withholding tax (provided that no Mexican withholding tax will apply to distributions of net taxable profits generated before 2014). Nonresident holders could be subject to a lower tax rate, to the extent that they are eligible for benefits under an income tax treaty to which Mexico is a party.
10. Components of other comprehensive (loss) income
The movement on the components of the other comprehensive income for the nine-month periods ended September 30, 2021 and 2020 is as follows:
| 2021 | 2020 | |||||||
| Controlling interest: |
||||||||
| Unrealized gain (loss) on equity investments at fair value, net of deferred taxes |
Ps. | 3,350,342 | Ps. | (9,191,685) | ||||
| Effect of translation of foreign entities |
(9,219,861 | ) | 12,414,669 | |||||
| Non-controlling interest of the items above |
(1,436,158 | ) | 4,206,580 | |||||
|
|
|
|
|
|||||
| Other comprehensive (loss) income |
Ps. | (7,305,677) | Ps. | 7,429,564 | ||||
|
|
|
|
|
|||||
11. Valuation of derivatives, interest cost from labor obligations and other financial items, net
For the nine-month periods ended September 30, 2021 and 2020, valuation of derivatives and other financial items was as follows:
| 2021 | 2020 | |||||||
| (Loss) gain in valuation of derivatives, net |
Ps. | (7,440,295) | Ps. | 22,059,305 | ||||
| Capitalized interest expense |
962,147 | 1,281,180 | ||||||
| Commissions |
(724,190 | ) | (726,799 | ) | ||||
| Interest cost of labor obligations |
(11,034,160 | ) | (10,008,512 | ) | ||||
| Interest expense on taxes |
(210,747 | ) | (73,828 | ) | ||||
| Gain on net monetary positions |
3,738,124 | 2,566,507 | ||||||
| Received dividends |
2,628,600 | 2,292,689 | ||||||
| Other financial cost |
(377,360 | ) | (2,209,667 | ) | ||||
|
|
|
|
|
|||||
| Ps. | (12,457,881) | Ps. | 15,180,875 | |||||
|
|
|
|
|
|||||
12. Segments
América Móvil operates in different countries. As mentioned in Note 1, the Company has operations in Mexico, Guatemala, Nicaragua, Ecuador, El Salvador, Costa Rica, Brazil, Argentina, Colombia, United States, Honduras, Chile, Peru, Paraguay, Uruguay, Dominican Republic, Puerto Rico, Panama, Austria, Croatia, Bulgaria, Belarus, Macedonian, Serbia and Slovenia. The accounting policies for the segments are the same as those described in Note 2.
The Chief Executive Officer, who is the Chief Operating Decision Maker (“CODM”), analyzes the financial and operating information by operating segment. All operating segments that (i) represent more than 10% of consolidated revenues, (ii) more than the absolute amount of its reported 10% of profits before income tax or (iii) more than 10% of consolidated assets, are presented separately.
The Company presents the following reportable segments for the purposes of its unaudited interim condensed consolidated financial statements: Mexico (includes Telcel and Corporate operations and assets), Telmex (Mexico), Brazil, Southern Cone (includes Argentina, Chile, Paraguay and Uruguay) Colombia, Andean Region (Peru and Ecuador) Central America (includes Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama), U.S.A. (excludes Puerto Rico), Caribbean (includes Dominican Republic and Puerto Rico), and Europe (includes Austria, Bulgaria, Croatia, Belarus, Slovenia, Macedonia and Serbia).
20
The segment Southern Cone comprises mobile communication services in Argentina as well as Chile, Paraguay and Uruguay. Beginning in 2018, hyperinflation accounting in accordance with IAS 29 was initially applied to Argentina, which results in the restatement of non-monetary assets, liabilities and all items of the statement of comprehensive income for the change in a general price index and the translation of these items applying the period-end exchange rate.
The Company considers that the quantitative and qualitative aspects of any aggregated operating segments (that is, Central America and Caribbean reportable segments) are similar in nature for all periods presented. In evaluating the appropriateness of aggregating operating segments, the key indicators considered included but were not limited to: (i) the similarity of key financial statements measures and trends, (ii) all entities provide telecommunications services, (iii) similarities of customer base and services, (iv) the methods to distribute services are the same, based on telephone plant in both cases, wireless and fixed lines, (v) similarities of governments and regulatory entities that oversee the activities and services of telecom companies, (vi) inflation trends, and (vii) currency trends.
21
| Mexico | Telmex | Brazil | Southern Cone |
Colombia | Andean | Central America |
U.S.A. | Caribbean | Europe | Eliminations | Consolidated total |
|||||||||||||||||||||||||||||||||||||
| For the nine-month period ended at September 30, 2021 (in Ps.): |
||||||||||||||||||||||||||||||||||||||||||||||||
| External revenues |
167,068,404 | 60,027,193 | 110,905,923 | 44,681,396 | 58,682,003 | 38,927,167 | 35,751,870 | 125,850,762 | 27,802,660 | 84,370,462 | — | 754,067,840 | ||||||||||||||||||||||||||||||||||||
| Intersegment revenues |
13,318,329 | 11,413,339 | 2,927,927 | 245,897 | 267,417 | 53,754 | 74,499 | — | 1,546,011 | — | (29,847,173 | ) | — | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total revenues |
180,386,733 | 71,440,532 | 113,833,850 | 44,927,293 | 58,949,420 | 38,980,921 | 35,826,369 | 125,850,762 | 29,348,671 | 84,370,462 | (29,847,173 | ) | 754,067,840 | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization |
19,084,777 | 9,382,250 | 30,374,469 | 11,392,004 | 10,802,320 | 8,252,641 | 8,887,528 | 470,544 | 5,212,392 | 20,217,912 | (2,979,055 | ) | 121,097,782 | |||||||||||||||||||||||||||||||||||
| Operating income |
58,119,022 | 10,759,198 | 15,525,635 | 771,512 | 11,481,916 | 6,501,103 | 5,912,538 | 8,180,509 | 5,941,658 | 11,184,451 | (1,281,473 | ) | 133,096,069 | |||||||||||||||||||||||||||||||||||
| Interest income |
10,956,456 | 578,905 | 1,641,693 | 558,252 | 342,559 | 696,461 | 200,655 | 15,574 | 603,295 | 77,169 | (12,881,513 | ) | 2,789,506 | |||||||||||||||||||||||||||||||||||
| Interest expense |
18,241,534 | 956,473 | 12,811,114 | 2,272,601 | 1,191,571 | 1,051,613 | 871,122 | — | 815,658 | 1,794,498 | (12,821,011 | ) | 27,185,173 | |||||||||||||||||||||||||||||||||||
| Income (loss) tax |
13,790,776 | (165,648 | ) | (270,784 | ) | 150,863 | 2,289,695 | 1,733,786 | 2,028,494 | 2,146,773 | 1,558,000 | 1,765,305 | 1,217 | 25,028,477 | ||||||||||||||||||||||||||||||||||
| Equity interest in net (loss) income of associated companies |
94,098 | 35,617 | 3,151 | (14,192 | ) | — | — | — | — | — | — | — | 118,674 | |||||||||||||||||||||||||||||||||||
| Net (loss) profit attributable to equity holders of the parent |
38,450,431 | 324,094 | (2,731,102 | ) | (1,790,796 | ) | 5,157,191 | 3,923,364 | 3,117,131 | 6,048,191 | 3,780,469 | 8,138,326 | (3,980,555 | ) | 60,436,744 | |||||||||||||||||||||||||||||||||
| Assets by segment |
889,467,535 | 200,733,595 | 377,096,414 | 121,661,333 | 121,700,775 | 88,880,066 | 91,987,390 | 36,148,821 | 97,550,149 | 210,854,012 | (633,664,166 | ) | 1,602,415,924 | |||||||||||||||||||||||||||||||||||
| Plant, property and equipment, net |
47,453,561 | 115,830,800 | 148,038,936 | 60,133,607 | 45,589,501 | 31,846,617 | 37,578,010 | 1,955,164 | 39,907,391 | 79,164,319 | (999,223 | ) | 606,498,683 | |||||||||||||||||||||||||||||||||||
| Revalued of assets |
— | — | 33,752,770 | 6,431,351 | 11,294,298 | 8,312,475 | 9,037,022 | — | 2,570,742 | 29,301,564 | 100,700,222 | |||||||||||||||||||||||||||||||||||||
| Goodwill |
26,958,526 | 215,381 | 15,497,563 | 5,234,688 | 11,165,031 | 4,768,861 | 5,998,144 | 3,409,137 | 14,186,723 | 52,411,426 | — | 139,845,480 | ||||||||||||||||||||||||||||||||||||
| Trademarks, net |
74,280 | 157,673 | — | — | — | — | — | 242,106 | 230,144 | 2,842,993 | — | 3,547,196 | ||||||||||||||||||||||||||||||||||||
| Licenses and rights, net |
11,094,284 | 134,876 | 23,564,269 | 13,157,543 | 10,658,007 | 5,576,637 | 5,292,920 | — | 8,746,193 | 26,365,109 | — | 104,589,838 | ||||||||||||||||||||||||||||||||||||
| Investment in associated companies |
3,421,227 | 519,655 | 65,064 | (31,711 | ) | 360 | — | 25,944 | — | — | — | (2,253,198 | ) | 1,747,341 | ||||||||||||||||||||||||||||||||||
| Liabilities by segments |
695,231,230 | 189,572,148 | 257,380,892 | 66,738,174 | 54,895,325 | 39,712,005 | 35,464,159 | 35,237,943 | 51,981,989 | 134,326,237 | (280,365,190 | ) | 1,280,174,912 | |||||||||||||||||||||||||||||||||||
| For the nine-month period ended at September 30, 2020 (in Ps.): |
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| External revenues |
157,017,776 | 58,533,896 | 125,358,248 | 44,302,662 | 57,112,939 | 40,007,375 | 36,180,619 | 133,295,003 | 27,740,339 | 82,308,222 | — | 761,857,079 | ||||||||||||||||||||||||||||||||||||
| Intersegment revenues |
13,425,308 | 10,128,608 | 3,143,657 | 1,149,667 | 261,639 | 68,729 | 95,083 | — | 965,134 | — | (29,237,825 | ) | — | |||||||||||||||||||||||||||||||||||
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| Total revenues |
170,443,084 | 68,662,504 | 128,501,905 | 45,452,329 | 57,374,578 | 40,076,104 | 36,275,702 | 133,295,003 | 28,705,473 | 82,308,222 | (29,237,825 | ) | 761,857,079 | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization |
18,537,370 | 10,410,870 | 29,883,498 | 10,325,178 | 10,638,477 | 8,605,254 | 10,016,823 | 1,192,172 | 5,375,557 | 19,151,957 | (2,325,985 | ) | 121,811,171 | |||||||||||||||||||||||||||||||||||
| Operating income |
51,654,776 | 8,180,964 | 21,041,846 | 1,839,858 | 11,066,734 | 6,389,300 | 3,562,282 | 7,337,623 | 4,622,168 | 10,619,794 | (1,389,788 | ) | 124,925,557 | |||||||||||||||||||||||||||||||||||
| Interest income |
16,234,679 | 1,215,714 | 2,553,205 | 815,917 | 743,867 | 762,050 | 971,627 | 71,902 | 843,268 | 66,054 | (20,546,410 | ) | 3,731,873 | |||||||||||||||||||||||||||||||||||
| Interest expense |
24,216,507 | 972,848 | 14,452,857 | 2,920,178 | 2,053,120 | 1,766,047 | 1,249,404 | 255 | 1,258,679 | 1,914,989 | (20,422,981 | ) | 30,381,903 | |||||||||||||||||||||||||||||||||||
| Income tax |
(7,183,198 | ) | 427,964 | (5,160,653 | ) | 1,044,529 | 1,352,374 | 1,443,303 | 1,699,497 | 1,987,128 | 1,721,363 | 968,245 | 3,866 | (1,695,582 | ) | |||||||||||||||||||||||||||||||||
| Equity interest in net income (loss) of associated companies |
3,205 | 17,307 | (4,266 | ) | (10,866 | ) | — | — | — | — | — | (288,747 | ) | — | (283,367 | ) | ||||||||||||||||||||||||||||||||
| Net profit (loss) attributable to equity holders of the parent |
(14,250,135 | ) | (876,289 | ) | (80,375 | ) | 2,989,126 | 5,293,698 | 3,828,620 | 1,463,981 | 5,421,947 | 2,352,765 | 7,155,516 | (3,758,533 | ) | 9,540,321 | ||||||||||||||||||||||||||||||||
| Assets by segment |
912,236,437 | 204,519,486 | 363,932,417 | 119,509,772 | 110,119,233 | 100,756,382 | 102,040,269 | 38,421,972 | 115,717,753 | 227,114,615 | (709,999,499 | ) | 1,584,368,837 | |||||||||||||||||||||||||||||||||||
| Plant, property and equipment, net |
52,628,017 | 107,780,493 | 147,417,917 | 67,258,476 | 48,761,676 | 40,990,163 | 41,474,069 | 1,913,022 | 44,558,007 | 90,263,430 | (818,022 | ) | 642,227,248 | |||||||||||||||||||||||||||||||||||
| Goodwill |
27,489,904 | 215,381 | 22,823,834 | 5,464,178 | 12,207,007 | 4,986,840 | 5,713,732 | 3,687,576 | 14,186,723 | 53,590,700 | — | 150,365,875 | ||||||||||||||||||||||||||||||||||||
| Trademarks, net |
154,962 | 188,901 | (20,119 | ) | — | — | — | — | 337,600 | 246,216 | 3,214,708 | — | 4,122,268 | |||||||||||||||||||||||||||||||||||
| Licenses and rights, net |
12,001,759 | 430,436 | 21,389,457 | 13,608,516 | 14,614,518 | 8,096,467 | 5,764,429 | — | 9,294,305 | 29,317,549 | — | 114,517,436 | ||||||||||||||||||||||||||||||||||||
| Investment in associated companies |
49,240 | 617,870 | 65,619 | (19,178 | ) | 393 | — | 28,638 | — | — | — | 1,095,703 | 1,838,285 | |||||||||||||||||||||||||||||||||||
| Liabilities by segments |
792,677,768 | 180,755,203 | 271,174,555 | 62,901,987 | 51,842,659 | 55,533,534 | 38,942,106 | 38,860,832 | 65,893,175 | 143,606,801 | (346,659,433 | ) | 1,355,529,187 | |||||||||||||||||||||||||||||||||||
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13. Subsequent events
| a) | In July 2020, the Company announced that its Brazilian subsidiary, Claro S.A. (“Claro”), agreed to extend and amend the binding offer submitted, jointly with Telefónica Brasil S.A. (“Telefonica”) and TIM S.A. (“TIM”), for the acquisition of the mobile business owned by Oi Group, in the amount of R$16,500 million. Such joint offer contemplated, additionally, the possibility of entering into long term agreements for the use of infrastructure with Oi Group. The offer was submitted by the parties, and is subject to certain conditions, including their right to make a higher bid than another offer potentially presented by a third party (“right to top”) in the competitive process of Oi Group’s mobile business sale. Therefore, Claro believes that the joint offer with TIM and Telefonica is the one that best serves the interests of current customers of Oi, as it provides long-term experience in the Brazilian market, investment capacity and technical innovation to the sector as a whole; besides being in line with current regulation. On February 9, 2022, the Company announced that Brazil’s antitrust authority had approved the sale. |
| b) | On September 14, 2020, the Company, announced that it had entered into an agreement with Verizon Communications Inc. (“Verizon”) to sell its 100% interest in its subsidiary TracFone Wireless, Inc. (“TracFone”), the largest mobile virtual prepaid service operator in the United States, serving 21 million subscribers. On November 23, 2021, the Company announced that it had completed the sale of its 100% interest in TracFone to Verizon. |
| c) | On March 18, 2022, the Company entered into a credit agreement providing for borrowings in an amount up to Ps.20,558,500,000 with a group of lenders and BBVA México, S.A., Institución de Banca Múltiple, Grupo Financiero BBVA México, as administrative agent for the lenders (the “Sitios Credit Facility”). The full principal amount available under the Sitios Credit Facility was disbursed on March 23, 2022. Under this credit agreement, the Company is an initial co-borrower with Torres Latinoamérica, S.A. de C.V. (“Torres”). In connection with the spin-off (through an escisión) by the Company of certain of its telecommunications towers and other associated passive infrastructure outside of Mexico to a new company (the “Sitios Spin-off”) to be named Sitios Latinoamérica, S.A.B. de C.V. (“Sitios”), on the date on which Sitios is duly incorporated in accordance with Mexican law, pursuant to the resolutions approved by the shareholders of the Company in the extraordinary shareholders’ meeting dated as of September 29, 2021, the Company will be released from its obligations under the Sitios Credit Facility and all liabilities with respect thereto will be transferred to Sitios, and Sitios will assume all of our obligations thereunder. After such date, Torres will continue to be a co-borrower under the Sitios Credit Facility and Torres do Brasil S.A. will become a guarantor thereunder. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 28, 2022
| AMÉRICA MÓVIL, S.A.B. DE C.V. | ||
| By: |
/s/ Carlos José Garcia Moreno Elizondo | |
| Name: |
Carlos José Garcia Moreno Elizondo | |
| Title: |
Chief Financial Officer |
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