Close

Form 6-K AMERICA MOVIL SAB DE For: Mar 28

March 28, 2022 8:33 AM EDT

News and research before you hear about it on CNBC and others. Claim your 1-week free trial to StreetInsider Premium here.

 

 

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
 

Assets

       

Current assets:

       

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:

       

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  
     

 

 

   

 

 

 

Total current assets

      Ps.  366,702,818     Ps. 360,223,237  

Non-current assets:

       

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  
     

 

 

   

 

 

 

Total assets

      Ps.  1,602,415,924     Ps. 1,625,048,227  
     

 

 

   

 

 

 

Liabilities and equity

       

Current liabilities:

       

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  
     

 

 

   

 

 

 

Total current liabilities

      Ps. 534,049,179     Ps. 507,310,678  

Non-current liabilities:

       

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  
     

 

 

   

 

 

 

Total non-current liabilities

      Ps. 746,125,733     Ps. 802,619,931  
     

 

 

   

 

 

 

Total liabilities

      Ps. 1,280,174,912     Ps. 1,309,930,609  
     

 

 

   

 

 

 

Equity:

       

Capital stock

     9      Ps. 96,336,322     Ps. 96,341,695  

Retained earnings:

       

Prior years

        268,845,591       267,865,420  

Profit for the year

        60,436,744       46,852,605  
     

 

 

   

 

 

 

Total retained earnings

        329,282,335       314,718,025  

Other comprehensive loss items

        (169,283,793     (160,580,917
     

 

 

   

 

 

 

Equity attributable to equity holders of the parent

        256,334,864       250,478,803  

Non-controlling interests

        65,906,148       64,638,815  
     

 

 

   

 

 

 

Total equity

        322,241,012       315,117,618  
     

 

 

   

 

 

 

Total liabilities and equity

      Ps. 1,602,415,924     Ps.  1,625,048,227  
     

 

 

   

 

 

 

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
September 30,

Unaudited

 
     Note      2021     2020  

Operating revenues:

       

Service revenues

      Ps.  633,737,482     Ps.  649,042,729  

Sales of equipment

        120,330,358       112,814,350  
     

 

 

   

 

 

 
      Ps. 754,067,840     Ps. 761,857,079  
     

 

 

   

 

 

 

Operating costs and expenses:

       

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  
     

 

 

   

 

 

 
      Ps. 620,971,771     Ps. 636,931,522  
     

 

 

   

 

 

 

Operating income

      Ps. 133,096,069     Ps. 124,925,557  
     

 

 

   

 

 

 

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
     

 

 

   

 

 

 

Profit before income tax

        89,470,630       11,563,120  

Income tax

     5        25,028,477       (1,695,582
     

 

 

   

 

 

 

Net profit for the periods

      Ps. 64,442,153     Ps. 13,258,702  
     

 

 

   

 

 

 

Net profit for the period attributable to:

       

Equity holders of the parent

      Ps. 60,436,744     Ps. 9,540,321  

Non-controlling interests

        4,005,409       3,718,381  
     

 

 

   

 

 

 
      Ps. 64,442,153     Ps. 13,258,702  
     

 

 

   

 

 

 

Basic and diluted earnings per share attributable to equity holders of the parent

        Ps.0.91       Ps.0.14  
     

 

 

   

 

 

 

Other comprehensive (loss) income items:

       

Net other comprehensive income that may be reclassified to (loss) or profit in subsequent periods:

       

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:

       

Unrealized gain (loss) on equity investments at fair value, net of deferred taxes

        3,350,342       (9,191,685
     

 

 

   

 

 

 

Total other comprehensive (loss) income items for the periods, net of deferred taxes

      Ps. (7,305,677)     Ps. 7,429,564  
     

 

 

   

 

 

 

Total comprehensive income for the periods

      Ps. 57,136,476     Ps. 20,688,266  
     

 

 

   

 

 

 

Comprehensive income for the period attributable to:

       

Equity holders of the parent

        54,567,225       12,763,305  

Non-controlling interests

        2,569,251       7,924,961  
     

 

 

   

 

 

 
      Ps. 57,136,476     Ps. 20,688,266  
     

 

 

   

 

 

 

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
 

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     —         —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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
 

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  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

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  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

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
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

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  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

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
periods ended September 30,

Unaudited

 
     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:

    

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
  

 

 

   

 

 

 

Net cash flows provided by operating activities

   Ps. 201,946,436     Ps. 200,397,624  
  

 

 

   

 

 

 

Investing activities

    

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
  

 

 

   

 

 

 

Net cash flows used in investing activities

   Ps. (90,949,684)     Ps.  (92,588,791)  
  

 

 

   

 

 

 

Financing activities

    

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
  

 

 

   

 

 

 

Net cash flows used in financing activities

   Ps.  (110,180,693)     Ps. (92,242,787)  
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

   Ps. 816,059     Ps. 15,566,046  
  

 

 

   

 

 

 

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  
  

 

 

   

 

 

 

Cash and cash equivalents at beginning of the period

   Ps. 35,505,293     Ps. 35,956,873  
  

 

 

   

 

 

 

Non-cash transactions related to:

    

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       —    
  

 

 

   

 

 

 

Non-cash transactions

   Ps. 111,776,561     Ps. 14,417,248  
  

 

 

   

 

 

 

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.):

                       

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     —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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  

 

22


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.

 

23


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

 

24



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings