[210000] Statement of financial position, current/non-current
Concept
|
Close Current Quarter
2019-09-30
|
Close Previous Exercise
2018-12-31
|
Statement of financial position
|
|
|
Assets
|
|
|
Current assets
|
|
|
Cash and cash equivalents
|
38,710,917,000
|
32,068,291,000
|
Trade and other current receivables
|
28,440,722,000
|
27,693,929,000
|
Current tax assets, current
|
3,853,309,000
|
2,188,870,000
|
Other current financial assets
|
15,263,000
|
146,671,000
|
Current inventories
|
1,354,241,000
|
1,026,428,000
|
Current biological assets
|
0
|
0
|
Other current non-financial assets
|
[1] 8,112,193,000
|
8,928,679,000
|
Total current assets other than non-current assets or disposal groups classified as held for sale or as held for distribution to owners
|
80,486,645,000
|
72,052,868,000
|
Non-current assets or disposal groups classified as held for sale or as held for distribution to owners
|
1,094,596,000
|
0
|
Total current assets
|
81,581,241,000
|
72,052,868,000
|
Non-current assets
|
|
|
Trade and other non-current receivables
|
0
|
0
|
Current tax assets, non-current
|
0
|
0
|
Non-current inventories
|
0
|
0
|
Non-current biological assets
|
0
|
0
|
Other non-current financial assets
|
47,283,359,000
|
50,123,273,000
|
Investments accounted for using equity method
|
0
|
0
|
Investments in subsidiaries, joint ventures and associates
|
9,352,183,000
|
10,546,728,000
|
Property, plant and equipment
|
83,368,358,000
|
87,342,530,000
|
Investment property
|
0
|
0
|
Right-of-use assets that do not meet definition of investment property
|
7,676,159,000
|
0
|
Goodwill
|
14,113,626,000
|
14,113,626,000
|
Intangible assets other than goodwill
|
28,806,444,000
|
28,949,890,000
|
Deferred tax assets
|
24,293,376,000
|
22,181,779,000
|
Other non-current non-financial assets
|
[2] 12,164,968,000
|
11,859,899,000
|
Total non-current assets
|
227,058,473,000
|
225,117,725,000
|
Total assets
|
308,639,714,000
|
297,170,593,000
|
Equity and liabilities
|
|
|
Liabilities
|
|
|
Current liabilities
|
|
|
Trade and other current payables
|
39,705,067,000
|
41,278,310,000
|
Current tax liabilities, current
|
2,385,698,000
|
3,054,790,000
|
Other current financial liabilities
|
14,141,701,000
|
4,196,701,000
|
Current lease liabilities
|
1,213,763,000
|
0
|
Other current non-financial liabilities
|
0
|
0
|
Current provisions
|
|
|
Current provisions for employee benefits
|
0
|
0
|
Other current provisions
|
1,673,000
|
1,642,000
|
Total current provisions
|
1,673,000
|
1,642,000
|
Total current liabilities other than liabilities included in disposal groups classified as held for sale
|
57,447,902,000
|
48,531,443,000
|
Liabilities included in disposal groups classified as held for sale
|
0
|
0
|
Total current liabilities
|
57,447,902,000
|
48,531,443,000
|
Concept
|
Close Current Quarter
2019-09-30
|
Close Previous Exercise
2018-12-31
|
Non-current liabilities
|
|
|
Trade and other non-current payables
|
3,601,877,000
|
4,621,644,000
|
Current tax liabilities, non-current
|
1,736,553,000
|
3,141,394,000
|
Other non-current financial liabilities
|
124,675,890,000
|
126,938,164,000
|
Non-current lease liabilities
|
8,442,755,000
|
0
|
Other non-current non-financial liabilities
|
0
|
0
|
Non-current provisions
|
|
|
Non-current provisions for employee benefits
|
1,051,874,000
|
962,497,000
|
Other non-current provisions
|
900,624,000
|
54,238,000
|
Total non-current provisions
|
1,952,498,000
|
1,016,735,000
|
Deferred tax liabilities
|
7,885,540,000
|
8,390,522,000
|
Total non-current liabilities
|
148,295,113,000
|
144,108,459,000
|
Total liabilities
|
205,743,015,000
|
192,639,902,000
|
Equity
|
|
|
Issued capital
|
4,907,765,000
|
4,907,765,000
|
Share premium
|
15,889,819,000
|
15,889,819,000
|
Treasury shares
|
14,618,864,000
|
14,219,060,000
|
Retained earnings
|
79,923,779,000
|
78,510,909,000
|
Other reserves
|
2,270,489,000
|
4,427,487,000
|
Total equity attributable to owners of parent
|
88,372,988,000
|
89,516,920,000
|
Non-controlling interests
|
14,523,711,000
|
15,013,771,000
|
Total equity
|
102,896,699,000
|
104,530,691,000
|
Total equity and liabilities
|
308,639,714,000
|
297,170,593,000
|
[310000] Statement of comprehensive income, profit or loss, by function of expense
Concept
|
Accumulated Current Year
2019-01-01 - 2019-09-30
|
Accumulated Previous Year
2018-01-01 - 2018-09-30
|
Quarter Current Year
2019-07-01 - 2019-09-30
|
Quarter Previous Year
2018-07-01 - 2018-09-30
|
Profit or loss
|
|
|
|
|
Profit (loss)
|
|
|
|
|
Revenue
|
73,488,981,000
|
74,547,082,000
|
25,786,149,000
|
25,033,234,000
|
Cost of sales
|
42,025,942,000
|
42,348,862,000
|
14,946,510,000
|
14,208,501,000
|
Gross profit
|
31,463,039,000
|
32,198,220,000
|
10,839,639,000
|
10,824,733,000
|
Distribution costs
|
8,344,187,000
|
8,037,409,000
|
2,797,238,000
|
2,609,679,000
|
Administrative expenses
|
10,081,472,000
|
10,223,839,000
|
3,057,286,000
|
3,440,751,000
|
Other income
|
0
|
2,651,374,000
|
0
|
0
|
Other expense
|
861,266,000
|
0
|
389,362,000
|
432,463,000
|
Profit (loss) from operating activities
|
12,176,114,000
|
16,588,346,000
|
4,595,753,000
|
4,341,840,000
|
Finance income
|
1,210,822,000
|
1,685,154,000
|
920,723,000
|
436,195,000
|
Finance costs
|
8,623,588,000
|
8,150,386,000
|
3,790,923,000
|
2,925,538,000
|
Share of profit (loss) of associates and joint ventures accounted for using equity method
|
489,556,000
|
910,893,000
|
159,917,000
|
326,609,000
|
Profit (loss) before tax
|
5,252,904,000
|
11,034,007,000
|
1,885,470,000
|
2,179,106,000
|
Tax income (expense)
|
1,972,735,000
|
3,798,702,000
|
726,784,000
|
699,487,000
|
Profit (loss) from continuing operations
|
3,280,169,000
|
7,235,305,000
|
1,158,686,000
|
1,479,619,000
|
Profit (loss) from discontinued operations
|
0
|
0
|
0
|
0
|
Profit (loss)
|
3,280,169,000
|
7,235,305,000
|
1,158,686,000
|
1,479,619,000
|
Profit (loss), attributable to
|
|
|
|
|
Profit (loss), attributable to owners of parent
|
2,216,037,000
|
5,952,941,000
|
755,222,000
|
978,011,000
|
Profit (loss), attributable to non-controlling interests
|
1,064,132,000
|
1,282,364,000
|
403,464,000
|
501,608,000
|
Earnings per share
|
|
|
|
|
Earnings per share
|
|
|
|
|
Earnings per share
|
|
|
|
|
Basic earnings per share
|
|
|
|
|
Basic earnings (loss) per share from continuing operations
|
0.77
|
2.05
|
0.26
|
0.34
|
Basic earnings (loss) per share from discontinued operations
|
0
|
0
|
0
|
0
|
Total basic earnings (loss) per share
|
[3] 0.77
|
2.05
|
0.26
|
0.34
|
Diluted earnings per share
|
|
|
|
|
Diluted earnings (loss) per share from continuing operations
|
0.73
|
1.94
|
0.25
|
0.32
|
Diluted earnings (loss) per share from discontinued operations
|
0
|
0
|
0
|
0
|
Total diluted earnings (loss) per share
|
[4] 0.73
|
1.94
|
0.25
|
0.32
|
[410000] Statement of comprehensive income, OCI components presented net of tax
Concept
|
Accumulated Current Year
2019-01-01 - 2019-09-30
|
Accumulated Previous Year
2018-01-01 - 2018-09-30
|
Quarter Current Year
2019-07-01 - 2019-09-30
|
Quarter Previous Year
2018-07-01 - 2018-09-30
|
Statement of comprehensive income
|
|
|
|
|
Profit (loss)
|
3,280,169,000
|
7,235,305,000
|
1,158,686,000
|
1,479,619,000
|
Other comprehensive income
|
|
|
|
|
Components of other comprehensive income that will not be reclassified to profit or loss, net of tax
|
|
|
|
|
Other comprehensive income, net of tax, gains (losses) from investments in equity instruments
|
(1,045,805,000)
|
576,930,000
|
(796,155,000)
|
1,040,243,000
|
Other comprehensive income, net of tax, gains (losses) on revaluation
|
0
|
0
|
0
|
0
|
Other comprehensive income, net of tax, gains (losses) on remeasurements of defined benefit plans
|
0
|
0
|
0
|
0
|
Other comprehensive income, net of tax, change in fair value of financial liability attributable to change in credit risk of liability
|
0
|
0
|
0
|
0
|
Other comprehensive income, net of tax, gains (losses) on hedging instruments that hedge investments in equity instruments
|
0
|
0
|
0
|
0
|
Share of other comprehensive income of associates and joint ventures accounted for using equity method that will not be reclassified to profit or loss,
net of tax
|
0
|
0
|
0
|
0
|
Total other comprehensive income that will not be reclassified to profit or loss, net of tax
|
(1,045,805,000)
|
576,930,000
|
(796,155,000)
|
1,040,243,000
|
Components of other comprehensive income that will be reclassified to profit or loss, net of tax
|
|
|
|
|
Exchange differences on translation
|
|
|
|
|
Gains (losses) on exchange differences on translation, net of tax
|
107,772,000
|
(1,135,041,000)
|
175,171,000
|
(479,229,000)
|
Reclassification adjustments on exchange differences on translation, net of tax
|
0
|
0
|
0
|
0
|
Other comprehensive income, net of tax, exchange differences on translation
|
107,772,000
|
(1,135,041,000)
|
175,171,000
|
(479,229,000)
|
Available-for-sale financial assets
|
|
|
|
|
Gains (losses) on remeasuring available-for-sale financial assets, net of tax
|
0
|
0
|
0
|
0
|
Reclassification adjustments on available-for-sale financial assets, net of tax
|
0
|
0
|
0
|
0
|
Other comprehensive income, net of tax, available-for-sale financial assets
|
0
|
0
|
0
|
0
|
Cash flow hedges
|
|
|
|
|
Gains (losses) on cash flow hedges, net of tax
|
(1,001,205,000)
|
(215,390,000)
|
(422,633,000)
|
(266,420,000)
|
Reclassification adjustments on cash flow hedges, net of tax
|
0
|
0
|
0
|
0
|
Amounts removed from equity and included in carrying amount of non-financial asset (liability) whose acquisition or incurrence was hedged highly probable
forecast transaction, net of tax
|
0
|
0
|
0
|
0
|
Other comprehensive income, net of tax, cash flow hedges
|
(1,001,205,000)
|
(215,390,000)
|
(422,633,000)
|
(266,420,000)
|
Hedges of net investment in foreign operations
|
|
|
|
|
Gains (losses) on hedges of net investments in foreign operations, net of tax
|
0
|
0
|
0
|
0
|
Reclassification adjustments on hedges of net investments in foreign operations, net of tax
|
0
|
0
|
0
|
0
|
Other comprehensive income, net of tax, hedges of net investments in foreign operations
|
0
|
0
|
0
|
0
|
Concept
|
Accumulated Current Year
2019-01-01 - 2019-09-30
|
Accumulated Previous Year
2018-01-01 - 2018-09-30
|
Quarter Current Year
2019-07-01 - 2019-09-30
|
Quarter Previous Year
2018-07-01 - 2018-09-30
|
Change in value of time value of options
|
|
|
|
|
Gains (losses) on change in value of time value of options, net of tax
|
0
|
0
|
0
|
0
|
Reclassification adjustments on change in value of time value of options, net of tax
|
0
|
0
|
0
|
0
|
Other comprehensive income, net of tax, change in value of time value of options
|
0
|
0
|
0
|
0
|
Change in value of forward elements of forward contracts
|
|
|
|
|
Gains (losses) on change in value of forward elements of forward contracts, net of tax
|
0
|
0
|
0
|
0
|
Reclassification adjustments on change in value of forward elements of forward contracts, net of tax
|
0
|
0
|
0
|
0
|
Other comprehensive income, net of tax, change in value of forward elements of forward contracts
|
0
|
0
|
0
|
0
|
Change in value of foreign currency basis spreads
|
|
|
|
|
Gains (losses) on change in value of foreign currency basis spreads, net of tax
|
0
|
0
|
0
|
0
|
Reclassification adjustments on change in value of foreign currency basis spreads, net of tax
|
0
|
0
|
0
|
0
|
Other comprehensive income, net of tax, change in value of foreign currency basis spreads
|
0
|
0
|
0
|
0
|
Financial assets measured at fair value through other comprehensive income
|
|
|
|
|
Gains (losses) on financial assets measured at fair value through other comprehensive income, net of tax
|
(612,000)
|
(57,000)
|
(179,000)
|
(57,000)
|
Reclassification adjustments on financial assets measured at fair value through other comprehensive income, net of tax
|
0
|
0
|
0
|
0
|
Amounts removed from equity and adjusted against fair value of financial assets on reclassification out of fair value through other comprehensive income
measurement category, net of tax
|
0
|
0
|
0
|
0
|
Other comprehensive income, net of tax, financial assets measured at fair value through other comprehensive income
|
(612,000)
|
(57,000)
|
(179,000)
|
(57,000)
|
Share of other comprehensive income of associates and joint ventures accounted for using equity method that will be reclassified to profit or loss, net
of tax
|
(196,952,000)
|
64,068,000
|
(79,259,000)
|
20,215,000
|
Total other comprehensive income that will be reclassified to profit or loss, net of tax
|
(1,090,997,000)
|
(1,286,420,000)
|
(326,900,000)
|
(725,491,000)
|
Total other comprehensive income
|
(2,136,802,000)
|
(709,490,000)
|
(1,123,055,000)
|
314,752,000
|
Total comprehensive income
|
1,143,367,000
|
6,525,815,000
|
35,631,000
|
1,794,371,000
|
Comprehensive income attributable to
|
|
|
|
|
Comprehensive income, attributable to owners of parent
|
59,039,000
|
5,287,383,000
|
(387,832,000)
|
1,396,783,000
|
Comprehensive income, attributable to non-controlling interests
|
1,084,328,000
|
1,238,432,000
|
423,463,000
|
397,588,000
|
[520000] Statement of cash flows, indirect method
Concept
|
Accumulated Current Year
2019-01-01 - 2019-09-30
|
Accumulated Previous Year
2018-01-01 - 2018-09-30
|
Statement of cash flows
|
|
|
Cash flows from (used in) operating activities
|
|
|
Profit (loss)
|
3,280,169,000
|
7,235,305,000
|
Adjustments to reconcile profit (loss)
|
|
|
+ Discontinued operations
|
0
|
0
|
+ Adjustments for income tax expense
|
1,972,735,000
|
3,798,702,000
|
+ (-) Adjustments for finance costs
|
0
|
0
|
+ Adjustments for depreciation and amortisation expense
|
15,616,424,000
|
14,686,728,000
|
+ Adjustments for impairment loss (reversal of impairment loss) recognised in profit or loss
|
50,680,000
|
34,564,000
|
+ Adjustments for provisions
|
1,261,611,000
|
1,285,309,000
|
+ (-) Adjustments for unrealised foreign exchange losses (gains)
|
569,092,000
|
(1,585,924,000)
|
+ Adjustments for share-based payments
|
820,774,000
|
1,010,302,000
|
+ (-) Adjustments for fair value losses (gains)
|
313,625,000
|
1,113,426,000
|
- Adjustments for undistributed profits of associates
|
0
|
0
|
+ (-) Adjustments for losses (gains) on disposal of non-current assets
|
120,226,000
|
676,356,000
|
Share of income
of associates and joint ventures
|
(489,556,000)
|
(910,893,000)
|
+ (-) Adjustments for decrease (increase) in inventories
|
230,961,000
|
(734,812,000)
|
+ (-) Adjustments for decrease (increase) in trade accounts receivable
|
1,444,993,000
|
8,270,566,000
|
+ (-) Adjustments for decrease (increase) in other operating receivables
|
(1,975,166,000)
|
(2,516,177,000)
|
+ (-) Adjustments for increase (decrease) in trade accounts payable
|
331,878,000
|
(248,312,000)
|
+ (-) Adjustments for increase (decrease) in other operating payables
|
(3,729,732,000)
|
(7,335,641,000)
|
+ Other adjustments for non-cash items
|
0
|
0
|
+ Other adjustments for which cash effects are investing or financing cash flow
|
(62,000)
|
(3,582,681,000)
|
+ Straight-line rent adjustment
|
0
|
0
|
+ Amortization of lease fees
|
0
|
0
|
+ Setting property values
|
0
|
0
|
+ (-) Other adjustments to reconcile profit (loss)
|
378,590,000
|
301,347,000
|
+ (-) Total adjustments to reconcile profit (loss)
|
16,917,073,000
|
14,262,860,000
|
Net cash flows from (used in) operations
|
20,197,242,000
|
21,498,165,000
|
- Dividends paid
|
0
|
0
|
|
0
|
0
|
- Interest paid
|
(7,844,528,000)
|
(7,036,960,000)
|
+ Interest received
|
(44,936,000)
|
(95,395,000)
|
+ (-) Income taxes refund (paid)
|
7,535,422,000
|
5,396,951,000
|
+ (-) Other inflows (outflows) of cash
|
0
|
0
|
Net cash flows from (used in) operating activities
|
20,461,412,000
|
23,042,779,000
|
Cash flows from (used in) investing activities
|
|
|
+ Cash flows from losing control of subsidiaries or other businesses
|
667,000
|
0
|
- Cash flows used in obtaining control of subsidiaries or other businesses
|
(107,883,000)
|
0
|
+ Other cash receipts from sales of equity or debt instruments of other entities
|
0
|
5,890,520,000
|
- Other cash payments to acquire equity or debt instruments of other entities
|
0
|
0
|
+ Other cash receipts from sales of interests in joint ventures
|
0
|
95,161,000
|
- Other cash payments to acquire interests in joint ventures
|
0
|
0
|
+ Proceeds from sales of property, plant and equipment
|
1,967,674,000
|
956,727,000
|
- Purchase of property, plant and equipment
|
13,736,986,000
|
12,740,872,000
|
+ Proceeds from sales of intangible assets
|
0
|
0
|
- Purchase of intangible assets
|
2,130,320,000
|
1,540,012,000
|
+ Proceeds from sales of other long-term assets
|
0
|
0
|
Concept
|
Accumulated Current Year
2019-01-01 - 2019-09-30
|
Accumulated Previous Year
2018-01-01 - 2018-09-30
|
- Purchase of other long-term assets
|
0
|
0
|
+ Proceeds from government grants
|
0
|
0
|
- Cash advances and loans made to other parties
|
0
|
0
|
+ Cash receipts from repayment of advances and loans made to other parties
|
0
|
0
|
- Cash payments for futures contracts, forward contracts, option contracts and swap contracts
|
0
|
0
|
+ Cash receipts from futures contracts, forward contracts, option contracts and swap contracts
|
0
|
0
|
+ Dividends received
|
452,400,000
|
0
|
- Interest paid
|
0
|
0
|
+ Interest received
|
0
|
0
|
|
0
|
0
|
+ (-) Other inflows (outflows) of cash
|
1,216,055,000
|
416,189,000
|
Net cash flows from (used in) investing activities
|
(12,122,627,000)
|
(6,922,287,000)
|
Cash flows from (used in) financing activities
|
|
|
+ Proceeds from changes in ownership interests in subsidiaries that do not result in loss of control
|
0
|
0
|
- Payments from changes in ownership interests in subsidiaries that do not result in loss of control
|
2,091,551,000
|
1,184,020,000
|
+ Proceeds from issuing shares
|
0
|
0
|
+ Proceeds from issuing other equity instruments
|
0
|
0
|
- Payments to acquire or redeem entity's shares
|
1,385,750,000
|
1,541,180,000
|
- Payments of other equity instruments
|
0
|
0
|
+ Proceeds from borrowings
|
24,006,712,000
|
0
|
- Repayments of borrowings
|
11,928,534,000
|
230,617,000
|
- Payments of finance lease liabilities
|
692,660,000
|
334,638,000
|
- Payments of lease liabilities
|
612,887,000
|
0
|
+ Proceeds from government grants
|
0
|
0
|
- Dividends paid
|
1,066,187,000
|
1,068,868,000
|
- Interest paid
|
5,991,238,000
|
7,014,365,000
|
+ (-) Income taxes refund (paid)
|
0
|
0
|
+ (-) Other inflows (outflows) of cash
|
(1,938,058,000)
|
(952,377,000)
|
Net cash flows from (used in) financing activities
|
(1,700,153,000)
|
(12,326,065,000)
|
Net increase (decrease) in cash and cash equivalents before effect of exchange rate changes
|
6,638,632,000
|
3,794,427,000
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
3,994,000
|
(102,619,000)
|
Net increase (decrease) in cash and cash equivalents
|
6,642,626,000
|
3,691,808,000
|
Cash and cash equivalents at beginning of period
|
32,068,291,000
|
38,734,949,000
|
Cash and cash equivalents at end of period
|
38,710,917,000
|
42,426,757,000
|
[610000] Statement of changes in equity - Accumulated Current
|
Components of equity
|
Sheet 1 of 3
|
Issued capital
|
Share premium
|
Treasury shares
|
Retained earnings
|
Revaluation surplus
|
Reserve of exchange differences on translation
|
Reserve of cash flow hedges
|
Reserve of gains and losses on hedging instruments that hedge investments in equity instruments
|
Reserve of change in value of time value of options
|
Statement of changes in equity
|
|
|
|
|
|
|
|
|
|
Equity at beginning of period
|
4,907,765,000
|
15,889,819,000
|
14,219,060,000
|
78,510,909,000
|
0
|
1,461,495,000
|
683,585,000
|
0
|
0
|
Changes in equity
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
Profit (loss)
|
0
|
0
|
0
|
2,216,037,000
|
0
|
0
|
0
|
0
|
0
|
Other comprehensive income
|
0
|
0
|
0
|
0
|
0
|
87,576,000
|
(1,001,205,000)
|
0
|
0
|
Total comprehensive income
|
0
|
0
|
0
|
2,216,037,000
|
0
|
87,576,000
|
(1,001,205,000)
|
0
|
0
|
Issue of equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Dividends recognised as distributions to owners
|
0
|
0
|
0
|
1,066,187,000
|
0
|
0
|
0
|
0
|
0
|
Increase through other contributions by owners, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Decrease through other distributions to owners, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through other changes, equity
|
0
|
0
|
0
|
443,589,000
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through treasury share transactions, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through changes in ownership interests in subsidiaries that do not result in loss of control, equity
|
0
|
0
|
0
|
766,000
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through share-based payment transactions, equity
|
0
|
0
|
399,804,000
|
(181,335,000)
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of cash flow hedges and included in initial cost or other carrying amount of non-financial asset (liability) or firm
commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of time value of options and included in initial cost or other carrying amount of non-financial asset
(liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of forward elements of forward contracts and included in initial cost or other carrying amount of
non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of foreign currency basis spreads and included in initial cost or other carrying amount of non-financial
asset (liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Total increase (decrease) in equity
|
0
|
0
|
399,804,000
|
1,412,870,000
|
0
|
87,576,000
|
(1,001,205,000)
|
0
|
0
|
Equity at end of period
|
4,907,765,000
|
15,889,819,000
|
14,618,864,000
|
79,923,779,000
|
0
|
1,549,071,000
|
(317,620,000)
|
0
|
0
|
|
Components of equity
|
Sheet 2 of 3
|
Reserve of change in value of forward elements of forward contracts
|
Reserve of change in value of foreign currency basis spreads
|
Reserve of gains and losses on financial assets measured at fair value through other comprehensive income
|
Reserve of gains and losses on remeasuring available-for-sale financial assets
|
Reserve of share-based payments
|
Reserve of remeasurements of defined benefit plans
|
Amount recognised in other comprehensive income and accumulated in equity relating to non-current assets or disposal groups held for sale
|
Reserve of gains and losses from investments in equity instruments
|
Reserve of change in fair value of financial liability attributable to change in credit risk of liability
|
Statement of changes in equity
|
|
|
|
|
|
|
|
|
|
Equity at beginning of period
|
0
|
0
|
2,654,866,000
|
0
|
0
|
(533,203,000)
|
0
|
0
|
0
|
Changes in equity
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
Profit (loss)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Other comprehensive income
|
0
|
0
|
(1,046,417,000)
|
0
|
0
|
0
|
0
|
0
|
0
|
Total comprehensive income
|
0
|
0
|
(1,046,417,000)
|
0
|
0
|
0
|
0
|
0
|
0
|
Issue of equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Dividends recognised as distributions to owners
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase through other contributions by owners, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Decrease through other distributions to owners, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through other changes, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through treasury share transactions, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through changes in ownership interests in subsidiaries that do not result in loss of control, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through share-based payment transactions, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of cash flow hedges and included in initial cost or other carrying amount of non-financial asset (liability) or firm
commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of time value of options and included in initial cost or other carrying amount of non-financial asset
(liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of forward elements of forward contracts and included in initial cost or other carrying amount of
non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of foreign currency basis spreads and included in initial cost or other carrying amount of non-financial
asset (liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Total increase (decrease) in equity
|
0
|
0
|
(1,046,417,000)
|
0
|
0
|
0
|
0
|
0
|
0
|
Equity at end of period
|
0
|
0
|
1,608,449,000
|
0
|
0
|
(533,203,000)
|
0
|
0
|
0
|
|
Components of equity
|
Sheet 3 of 3
|
Reserve for catastrophe
|
Reserve for equalisation
|
Reserve of discretionary participation features
|
Other comprehensive income
|
Other reserves
|
Equity attributable to owners of parent
|
Non-controlling interests
|
Equity
|
Statement of changes in equity
|
|
|
|
|
|
|
|
|
Equity at beginning of period
|
0
|
0
|
0
|
160,744,000
|
4,427,487,000
|
89,516,920,000
|
15,013,771,000
|
104,530,691,000
|
Changes in equity
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
Profit (loss)
|
0
|
0
|
0
|
0
|
0
|
2,216,037,000
|
1,064,132,000
|
3,280,169,000
|
Other comprehensive income
|
0
|
0
|
0
|
(196,952,000)
|
(2,156,998,000)
|
(2,156,998,000)
|
20,196,000
|
(2,136,802,000)
|
Total comprehensive income
|
0
|
0
|
0
|
(196,952,000)
|
(2,156,998,000)
|
59,039,000
|
1,084,328,000
|
1,143,367,000
|
Issue of equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Dividends recognised as distributions to owners
|
0
|
0
|
0
|
0
|
0
|
1,066,187,000
|
1,573,622,000
|
2,639,809,000
|
Increase through other contributions by owners, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Decrease through other distributions to owners, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through other changes, equity
|
0
|
0
|
0
|
0
|
0
|
443,589,000
|
0
|
443,589,000
|
Increase (decrease) through treasury share transactions, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through changes in ownership interests in subsidiaries that do not result in loss of control, equity
|
0
|
0
|
0
|
0
|
0
|
766,000
|
(766,000)
|
0
|
Increase (decrease) through share-based payment transactions, equity
|
0
|
0
|
0
|
0
|
0
|
(581,139,000)
|
0
|
(581,139,000)
|
Amount removed from reserve of cash flow hedges and included in initial cost or other carrying amount of non-financial asset (liability) or firm
commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of time value of options and included in initial cost or other carrying amount of non-financial asset
(liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of forward elements of forward contracts and included in initial cost or other carrying amount of
non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of foreign currency basis spreads and included in initial cost or other carrying amount of non-financial
asset (liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Total increase (decrease) in equity
|
0
|
0
|
0
|
(196,952,000)
|
(2,156,998,000)
|
(1,143,932,000)
|
(490,060,000)
|
(1,633,992,000)
|
Equity at end of period
|
0
|
0
|
0
|
(36,208,000)
|
2,270,489,000
|
88,372,988,000
|
14,523,711,000
|
102,896,699,000
|
[610000] Statement of changes in equity - Accumulated Previous
|
Components of equity
|
Sheet 1 of 3
|
Issued capital
|
Share premium
|
Treasury shares
|
Retained earnings
|
Revaluation surplus
|
Reserve of exchange differences on translation
|
Reserve of cash flow hedges
|
Reserve of gains and losses on hedging instruments that hedge investments in equity instruments
|
Reserve of change in value of time value of options
|
Statement of changes in equity
|
|
|
|
|
|
|
|
|
|
Equity at beginning of period
|
4,978,126,000
|
15,889,819,000
|
14,788,984,000
|
74,155,724,000
|
0
|
2,298,822,000
|
561,412,000
|
0
|
0
|
Changes in equity
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
Profit (loss)
|
0
|
0
|
0
|
5,952,941,000
|
0
|
0
|
0
|
0
|
0
|
Other comprehensive income
|
0
|
0
|
0
|
0
|
0
|
(1,091,109,000)
|
(215,390,000)
|
0
|
0
|
Total comprehensive income
|
0
|
0
|
0
|
5,952,941,000
|
0
|
(1,091,109,000)
|
(215,390,000)
|
0
|
0
|
Issue of equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Dividends recognised as distributions to owners
|
0
|
0
|
0
|
1,068,868,000
|
0
|
0
|
0
|
0
|
0
|
Increase through other contributions by owners, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Decrease through other distributions to owners, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through other changes, equity
|
0
|
0
|
0
|
1,480,774,000
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through treasury share transactions, equity
|
(70,361,000)
|
0
|
(2,764,562,000)
|
(2,694,201,000)
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through changes in ownership interests in subsidiaries that do not result in loss of control, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through share-based payment transactions, equity
|
0
|
0
|
931,347,000
|
384,306,000
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of cash flow hedges and included in initial cost or other carrying amount of non-financial asset (liability) or firm
commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of time value of options and included in initial cost or other carrying amount of non-financial asset
(liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of forward elements of forward contracts and included in initial cost or other carrying amount of
non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of foreign currency basis spreads and included in initial cost or other carrying amount of non-financial
asset (liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Total increase (decrease) in equity
|
(70,361,000)
|
0
|
(1,833,215,000)
|
4,054,952,000
|
0
|
(1,091,109,000)
|
(215,390,000)
|
0
|
0
|
Equity at end of period
|
4,907,765,000
|
15,889,819,000
|
12,955,769,000
|
78,210,676,000
|
0
|
1,207,713,000
|
346,022,000
|
0
|
0
|
|
Components of equity
|
Sheet 2 of 3
|
Reserve of change in value of forward elements of forward contracts
|
Reserve of change in value of foreign currency basis spreads
|
Reserve of gains and losses on financial assets measured at fair value through other comprehensive income
|
Reserve of gains and losses on remeasuring available-for-sale financial assets
|
Reserve of share-based payments
|
Reserve of remeasurements of defined benefit plans
|
Amount recognised in other comprehensive income and accumulated in equity relating to non-current assets or disposal groups held for sale
|
Reserve of gains and losses from investments in equity instruments
|
Reserve of change in fair value of financial liability attributable to change in credit risk of liability
|
Statement of changes in equity
|
|
|
|
|
|
|
|
|
|
Equity at beginning of period
|
0
|
0
|
3,024,527,000
|
0
|
0
|
(665,739,000)
|
0
|
0
|
0
|
Changes in equity
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
Profit (loss)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Other comprehensive income
|
0
|
0
|
576,873,000
|
0
|
0
|
0
|
0
|
0
|
0
|
Total comprehensive income
|
0
|
0
|
576,873,000
|
0
|
0
|
0
|
0
|
0
|
0
|
Issue of equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Dividends recognised as distributions to owners
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase through other contributions by owners, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Decrease through other distributions to owners, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through other changes, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through treasury share transactions, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through changes in ownership interests in subsidiaries that do not result in loss of control, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through share-based payment transactions, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of cash flow hedges and included in initial cost or other carrying amount of non-financial asset (liability) or firm
commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of time value of options and included in initial cost or other carrying amount of non-financial asset
(liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of forward elements of forward contracts and included in initial cost or other carrying amount of
non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of foreign currency basis spreads and included in initial cost or other carrying amount of non-financial
asset (liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Total increase (decrease) in equity
|
0
|
0
|
576,873,000
|
0
|
0
|
0
|
0
|
0
|
0
|
Equity at end of period
|
0
|
0
|
3,601,400,000
|
0
|
0
|
(665,739,000)
|
0
|
0
|
0
|
|
Components of equity
|
Sheet 3 of 3
|
Reserve for catastrophe
|
Reserve for equalisation
|
Reserve of discretionary participation features
|
Other comprehensive income
|
Other reserves
|
Equity attributable to owners of parent
|
Non-controlling interests
|
Equity
|
Statement of changes in equity
|
|
|
|
|
|
|
|
|
Equity at beginning of period
|
0
|
0
|
0
|
208,057,000
|
5,427,079,000
|
85,661,764,000
|
13,995,150,000
|
99,656,914,000
|
Changes in equity
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
Profit (loss)
|
0
|
0
|
0
|
0
|
0
|
5,952,941,000
|
1,282,364,000
|
7,235,305,000
|
Other comprehensive income
|
0
|
0
|
0
|
64,068,000
|
(665,558,000)
|
(665,558,000)
|
(43,932,000)
|
(709,490,000)
|
Total comprehensive income
|
0
|
0
|
0
|
64,068,000
|
(665,558,000)
|
5,287,383,000
|
1,238,432,000
|
6,525,815,000
|
Issue of equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Dividends recognised as distributions to owners
|
0
|
0
|
0
|
0
|
0
|
1,068,868,000
|
1,265,512,000
|
2,334,380,000
|
Increase through other contributions by owners, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Decrease through other distributions to owners, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through other changes, equity
|
0
|
0
|
0
|
0
|
0
|
1,480,774,000
|
783,832,000
|
2,264,606,000
|
Increase (decrease) through treasury share transactions, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through changes in ownership interests in subsidiaries that do not result in loss of control, equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Increase (decrease) through share-based payment transactions, equity
|
0
|
0
|
0
|
0
|
0
|
(547,041,000)
|
0
|
(547,041,000)
|
Amount removed from reserve of cash flow hedges and included in initial cost or other carrying amount of non-financial asset (liability) or firm
commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of time value of options and included in initial cost or other carrying amount of non-financial asset
(liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of forward elements of forward contracts and included in initial cost or other carrying amount of
non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Amount removed from reserve of change in value of foreign currency basis spreads and included in initial cost or other carrying amount of non-financial
asset (liability) or firm commitment for which fair value hedge accounting is applied
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Total increase (decrease) in equity
|
0
|
0
|
0
|
64,068,000
|
(665,558,000)
|
5,152,248,000
|
756,752,000
|
5,909,000,000
|
Equity at end of period
|
0
|
0
|
0
|
272,125,000
|
4,761,521,000
|
90,814,012,000
|
14,751,902,000
|
105,565,914,000
|
[700000] Informative data about the Statement of financial position
Concept
|
Close Current Quarter
2019-09-30
|
Close Previous Exercise
2018-12-31
|
Informative data of the Statement of Financial Position
|
|
|
Capital stock (nominal)
|
2,459,154,000
|
2,459,154,000
|
Restatement of capital stock
|
2,448,611,000
|
2,448,611,000
|
Plan assets for pensions and seniority premiums
|
1,374,496,000
|
1,461,902,000
|
Number of executives
|
68
|
67
|
Number of employees
|
42,009
|
39,098
|
Number of workers
|
0
|
0
|
Outstanding shares
|
337,244,259,846
|
338,329,119,531
|
Repurchased shares
|
20,063,011,956
|
18,978,152,271
|
Restricted cash
|
0
|
0
|
Guaranteed debt of associated companies
|
0
|
0
|
[700002] Informative data about the Income statement
Concept
|
Accumulated Current Year
2019-01-01 - 2019-09-30
|
Accumulated Previous Year
2018-01-01 - 2018-09-30
|
Quarter Current Year
2019-07-01 - 2019-09-30
|
Quarter Previous Year
2018-07-01 - 2018-09-30
|
Informative data of the Income Statement
|
|
|
|
|
Operating depreciation and amortization
|
15,616,424,000
|
14,686,728,000
|
5,321,251,000
|
5,037,803,000
|
[700003] Informative data - Income statement for 12 months
Concept
|
Current Year
2018-10-01 - 2019-09-30
|
Previous Year
2017-10-01 - 2018-09-30
|
Informative data - Income Statement for 12 months
|
|
|
Revenue
|
100,224,232,000
|
100,540,085,000
|
Profit (loss) from operating activities
|
15,840,326,000
|
20,218,068,000
|
Profit (loss)
|
3,660,134,000
|
8,145,381,000
|
Profit (loss), attributable to owners of parent
|
2,272,510,000
|
6,296,277,000
|
Operating depreciation and amortization
|
20,763,898,000
|
19,459,813,000
|
[800001] Breakdown of credits
Institution
|
Foreign institution (yes/no)
|
Contract signing date
|
Expiration date
|
Interest rate
|
Denomination
|
Domestic currency
|
Foreign currency
|
Time interval
|
Time interval
|
Current year
|
Until 1 year
|
Until 2 years
|
Until 3 years
|
Until 4 years
|
Until 5 years or more
|
Current year
|
Until 1 year
|
Until 2 years
|
Until 3 years
|
Until 4 years
|
Until 5 years or more
|
Banks
|
|
Foreign trade
|
|
TOTAL
|
|
|
|
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Banks - secured
|
|
TOTAL
|
|
|
|
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Commercial banks
|
|
BANORTE1
|
NO
|
2015-05-15
|
2022-04-30
|
TIIE+1.0
|
60,549,000
|
181,645,000
|
242,194,000
|
670,208,000
|
|
|
|
|
|
|
|
|
BANCO SANTANDER 2
|
NO
|
2015-03-12
|
2020-07-07
|
TIIE+1.25
|
|
249,863,000
|
|
|
|
|
|
|
|
|
|
|
HSBC 3
|
NO
|
2016-03-08
|
2023-03-08
|
7.13
|
|
|
1,875,000,000
|
|
625,000,000
|
|
|
|
|
|
|
|
SCOTIABANK INVERLAT 4
|
NO
|
2016-03-08
|
2023-03-08
|
7
|
|
|
750,000,000
|
1,500,000,000
|
750,000,000
|
|
|
|
|
|
|
|
BANCO SANTANDER 5
|
NO
|
2017-11-23
|
2022-10-21
|
TIIE+1.25
|
|
|
|
|
1,494,300,000
|
|
|
|
|
|
|
|
HSBC6
|
NO
|
2017-11-23
|
2022-11-22
|
TIIE+1.30
|
|
|
|
|
1,992,474,000
|
|
|
|
|
|
|
|
SCOTIABANK INVERLAT7
|
NO
|
2017-12-07
|
2023-02-03
|
TIIE+1.30
|
|
|
|
|
2,490,081,000
|
|
|
|
|
|
|
|
SINDICADO8
|
NO
|
2019-06-05
|
2024-06-24
|
TIIE+1.05
|
|
|
|
|
|
9,900,004,000
|
|
|
|
|
|
|
TOTAL
|
|
|
|
|
60,549,000
|
431,508,000
|
2,867,194,000
|
2,170,208,000
|
7,351,855,000
|
9,900,004,000
|
0
|
0
|
0
|
0
|
0
|
0
|
Other banks
|
|
TOTAL
|
|
|
|
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Total banks
|
|
TOTAL
|
|
|
|
|
60,549,000
|
431,508,000
|
2,867,194,000
|
2,170,208,000
|
7,351,855,000
|
9,900,004,000
|
0
|
0
|
0
|
0
|
0
|
0
|
Stock market
|
|
Listed on stock exchange - unsecured
|
|
SENIOR NOTES 1
|
YES
|
2007-05-09
|
2037-05-11
|
8.93
|
|
|
|
|
|
4,487,191,000
|
|
|
|
|
|
|
NOTES 2
|
NO
|
2010-10-14
|
2020-10-01
|
7.38
|
9,992,359,000
|
|
|
|
|
|
|
|
|
|
|
|
SENIOR NOTES 3
|
YES
|
2013-05-14
|
2043-05-14
|
7.62
|
|
|
|
|
|
6,443,948,000
|
|
|
|
|
|
|
NOTES 4
|
NO
|
2017-10-09
|
2027-10-09
|
8.79
|
|
|
|
|
|
4,480,930,000
|
|
|
|
|
|
|
SENIOR NOTES 5
|
YES
|
2005-03-18
|
2025-03-18
|
6.97
|
|
|
|
|
|
|
|
|
|
|
|
11,632,938,000
|
SENIOR NOTES 6
|
YES
|
2002-03-11
|
2032-03-11
|
8.94
|
|
|
|
|
|
|
|
|
|
|
|
5,899,742,000
|
SENIOR NOTES 7
|
YES
|
2009-11-23
|
2040-01-15
|
6.97
|
|
|
|
|
|
|
|
|
|
|
|
11,715,194,000
|
SENIOR NOTES 8
|
YES
|
2014-05-13
|
2045-05-13
|
5.26
|
|
|
|
|
|
|
|
|
|
|
|
19,305,291,000
|
SENIOR NOTES 9
|
YES
|
2015-11-24
|
2026-01-30
|
4.86
|
|
|
|
|
|
|
|
|
|
|
|
5,891,186,000
|
SENIOR NOTES 10
|
YES
|
2015-11-24
|
2046-01-31
|
6.44
|
|
|
|
|
|
|
|
|
|
|
|
17,640,192,000
|
SENIOR NOTES 11
|
YES
|
2019-05-21
|
2049-05-24
|
5.52
|
|
|
|
|
|
|
|
|
|
|
|
14,497,398,000
|
TOTAL
|
|
|
|
|
9,992,359,000
|
0
|
0
|
0
|
0
|
15,412,069,000
|
0
|
0
|
0
|
0
|
0
|
86,581,941,000
|
Listed on stock exchange - secured
|
|
TOTAL
|
|
|
|
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Private placements - unsecured
|
|
TOTAL
|
|
|
|
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Private placements - secured
|
|
TOTAL
|
|
|
|
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Total listed on stock exchanges and private placements
|
|
TOTAL
|
|
|
|
|
9,992,359,000
|
0
|
0
|
0
|
0
|
15,412,069,000
|
0
|
0
|
0
|
0
|
0
|
[5] 86,581,941,000
|
Other current and non-current liabilities with cost
|
|
Other current and non-current liabilities with cost
|
|
Institution
|
Foreign institution (yes/no)
|
Contract signing date
|
Expiration date
|
Interest rate
|
Denomination
|
Domestic currency
|
Foreign currency
|
Time interval
|
Time interval
|
Current year
|
Until 1 year
|
Until 2 years
|
Until 3 years
|
Until 4 years
|
Until 5 years or more
|
Current year
|
Until 1 year
|
Until 2 years
|
Until 3 years
|
Until 4 years
|
Until 5 years or more
|
NOTES PAYABLE TRANSFERRED TO BBVA BANCOMER BY ORIGINAL CREDITOR 1
|
NO
|
2016-03-01
|
2020-03-04
|
|
|
1,315,156,000
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
|
|
0
|
1,315,156,000
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Total other current and non-current liabilities with cost
|
|
TOTAL
|
|
|
|
|
0
|
[6] 1,315,156,000
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Suppliers
|
|
Suppliers
|
|
SUPPLIERS 1
|
NO
|
2019-09-30
|
2020-09-30
|
|
|
13,937,136,000
|
|
|
|
|
|
4,951,977,000
|
|
|
|
|
TRANSMISSION RIGHTS 1
|
NO
|
2012-05-07
|
2026-12-29
|
|
|
1,146,321,000
|
690,638,000
|
214,758,000
|
124,790,000
|
77,459,000
|
|
2,326,157,000
|
985,828,000
|
633,177,000
|
293,120,000
|
582,107,000
|
TOTAL
|
|
|
|
|
0
|
15,083,457,000
|
690,638,000
|
214,758,000
|
124,790,000
|
77,459,000
|
0
|
7,278,134,000
|
985,828,000
|
633,177,000
|
293,120,000
|
582,107,000
|
Total suppliers
|
|
TOTAL
|
|
|
|
|
0
|
15,083,457,000
|
690,638,000
|
214,758,000
|
124,790,000
|
77,459,000
|
0
|
7,278,134,000
|
985,828,000
|
633,177,000
|
293,120,000
|
582,107,000
|
Other current and non-current liabilities
|
|
Other current and non-current liabilities
|
|
DERIVATIVE FINANCIAL INSTRUMENTS 1
|
|
|
|
|
|
101,921,000
|
|
10,693,000
|
171,892,000
|
210,034,000
|
|
|
|
|
|
|
TOTAL
|
|
|
|
|
0
|
101,921,000
|
0
|
10,693,000
|
171,892,000
|
210,034,000
|
0
|
0
|
0
|
0
|
0
|
0
|
Total other current and non-current liabilities
|
|
TOTAL
|
|
|
|
|
0
|
101,921,000
|
0
|
10,693,000
|
171,892,000
|
210,034,000
|
0
|
0
|
0
|
0
|
0
|
0
|
Total credits
|
|
TOTAL
|
|
|
|
|
10,052,908,000
|
16,932,042,000
|
3,557,832,000
|
2,395,659,000
|
7,648,537,000
|
25,599,566,000
|
0
|
7,278,134,000
|
985,828,000
|
633,177,000
|
293,120,000
|
87,164,048,000
|
[800003] Annex - Monetary foreign currency position
|
Currencies
|
|
Dollars
|
Dollar equivalent in pesos
|
Other currencies equivalent in dollars
|
Other currencies equivalent in pesos
|
Total pesos
|
Foreign currency position
|
|
|
|
|
|
Monetary assets
|
|
|
|
|
|
Current monetary assets
|
1,351,058,000
|
26,669,074,000
|
59,706,000
|
1,178,561,000
|
27,847,635,000
|
Non-current monetary assets
|
0
|
0
|
0
|
0
|
0
|
Total monetary assets
|
1,351,058,000
|
26,669,074,000
|
59,706,000
|
1,178,561,000
|
27,847,635,000
|
Liabilities position
|
|
|
|
|
|
Current liabilities
|
541,606,000
|
10,690,981,000
|
21,826,000
|
430,832,000
|
11,121,813,000
|
Non-current liabilities
|
4,817,529,000
|
95,095,123,000
|
0
|
0
|
95,095,123,000
|
Total liabilities
|
5,359,135,000
|
105,786,104,000
|
21,826,000
|
430,832,000
|
106,216,936,000
|
Net monetary assets (liabilities)
|
(4,008,077,000)
|
(79,117,030,000)
|
37,880,000
|
747,729,000
|
[7] (78,369,301,000)
|
[800005] Annex - Distribution of income by product
|
Income type
|
|
National income
|
Export income
|
Income of subsidiaries abroad
|
Total income
|
TELEVISA
|
|
|
|
|
CONTENT – ADVERTISING
|
12,690,948,000
|
147,888,000
|
|
12,838,836,000
|
CONTENT - NETWORK SUBSCRIPTION REVENUE
|
2,766,069,000
|
897,115,000
|
0
|
3,663,184,000
|
CONTENT - LICENSING AND SYNDICATION
|
995,870,000
|
6,396,027,000
|
0
|
7,391,897,000
|
SKY (INCLUDES LEASING OF SET-TOP EQUIPMENT):
|
|
|
|
|
SKY (INCLUDES LEASING OF SET-TOP EQUIPMENT)
|
0
|
0
|
0
|
0
|
SKY, VETV, BLUE TO GO, BLUE TELECOMM
|
|
|
|
|
SKY - DTH BROADCAST SATELLITE TV
|
14,208,020,000
|
0
|
1,017,757,000
|
15,225,777,000
|
SKY - PAY PER VIEW
|
63,298,000
|
0
|
7,382,000
|
70,680,000
|
SKY - ADVERTISING
|
671,524,000
|
0
|
0
|
671,524,000
|
CABLE (INCLUDES LEASING OF SET-TOP EQUIPMENT):
|
|
|
|
|
CABLE (INCLUDES LEASING OF SET-TOP EQUIPMENT):
|
0
|
0
|
0
|
0
|
CABLEVISIÓN, CABLEMÁS, TVI, CABLECOM, IZZI, TELECABLE
|
|
|
|
|
CABLE - DIGITAL TV SERVICE
|
12,087,900,000
|
0
|
0
|
12,087,900,000
|
CABLE - BROADBAND SERVICES
|
10,783,739,000
|
0
|
0
|
10,783,739,000
|
CABLE - SERVICE INSTALLATION
|
309,635,000
|
0
|
0
|
309,635,000
|
CABLE - ADVERTISING
|
1,020,509,000
|
0
|
0
|
1,020,509,000
|
CABLE - TELEPHONY
|
2,697,541,000
|
0
|
0
|
2,697,541,000
|
CABLE - OTHER INCOME
|
303,481,000
|
0
|
0
|
303,481,000
|
BESTEL, METRORED
|
|
|
|
|
CABLE - ENTERPRISE OPERATIONS
|
3,288,262,000
|
0
|
194,820,000
|
3,483,082,000
|
OTHER BUSINESSES:
|
|
|
|
|
OTHER BUSINESSES:
|
0
|
0
|
0
|
0
|
TV Y NOVELAS, MUY INTERESANTE JUNIOR, VANIDADES, COCINA FACIL, NATIONAL GEOGRAPHIC, MUY INTERESANTE, TÚ, COSMOPOLITAN
|
|
|
|
|
PUBLISHING - MAGAZINE CIRCULATION
|
275,497,000
|
0
|
13,903,000
|
289,400,000
|
PUBLISHING - ADVERTISING
|
180,982,000
|
0
|
21,995,000
|
202,977,000
|
PUBLISHING - OTHER INCOME
|
4,073,000
|
0
|
0
|
4,073,000
|
VIDEOCINE, PANTELION
|
|
|
|
|
DISTRIBUTION, RENTALS AND SALE OF MOVIE RIGHTS
|
661,922,000
|
787,000
|
242,723,000
|
905,432,000
|
CLUB DE FÚTBOL AMÉRICA, ESTADIO AZTECA
|
|
|
|
|
SPECIAL EVENTS AND SHOW PROMOTION
|
1,209,933,000
|
1,180,494,000
|
0
|
2,390,427,000
|
PLAY CITY
|
|
|
|
|
GAMING
|
2,234,549,000
|
0
|
0
|
2,234,549,000
|
TELEVISA RADIO
|
|
|
|
|
RADIO - ADVERTISING
|
573,673,000
|
0
|
0
|
573,673,000
|
CARTOON NETWORK, MINI REVISTA MINA, CINE PREMIERE, SELECCIONES, GUÍA DE BIENESTAR SELECCIONES, ALGARABIA, VOGUE MEXICO
|
|
|
|
|
PUBLISHING DISTRIBUTION
|
239,413,000
|
0
|
|
239,413,000
|
INTERSEGMENT ELIMINATIONS
|
|
|
|
|
INTERSEGMENT ELIMINATIONS
|
(3,894,605,000)
|
0
|
(4,143,000)
|
(3,898,748,000)
|
TOTAL
|
63,372,233,000
|
8,622,311,000
|
1,494,437,000
|
73,488,981,000
|
[800007] Annex - Financial derivative instruments
Management discussion about the policy uses of financial derivative instruments, explaining if these policies are allowed just for coverage or for other uses like trading
EXHIBIT 1
TO THE ELECTRONIC FORM TITLED “PREPARATION, FILING, DELIVERY AND DISCLOSURE OF QUARTERLY ECONOMIC, ACCOUNTING AND ADMINISTRATIVE INFORMATION BY ISSUERS”
III. QUALITATIVE AND QUANTITATIVE INFORMATION
i. Management’s discussion of the policies concerning the use of financial derivative instruments, and explanation as to whether such policies permit the use of said instruments solely for hedging or also for trading or other
purposes. The discussion must include a general description of the objectives sought in the execution of financial derivative transactions; the relevant instruments; the hedging or trading strategies implemented in connection therewith;
the relevant trading markets; the eligible counterparties; the policies for the appointment of calculation or valuation agents; the principal terms and conditions of the relevant contracts; the policies as to margins, collateral and lines
of credit; the authorization process and levels of authorization required by type of transaction (e.g., full hedging, partial hedging, speculation), stating whether the transactions were previously approved by the committee(s) responsible
for the development of corporate and auditing practices; the internal control procedures applicable to the management of the market and liquidity risks associated with the positions; and the existence of an independent third party
responsible for the review of such procedures and, as the case may be, the observations raised or deficiencies identified by such third party. If applicable, provide information concerning the composition of the overall risk management
committee, its operating rules, and the existence of an overall risk management manual.
Management’s discussion of the policies concerning the use of financial derivative instruments, and explanation as to whether such policies permit the use of
said instruments solely for hedging or also for trading or other purposes.
In accordance with the policies and procedures implemented by the Vice President of Finance and Risk and the Vice President and Corporate
Controller, along with the Vice President of Internal Audit, the Company has entered into certain financial derivative transactions for hedging purposes in both the Mexican and international markets so as to manage its exposure to the market
risks associated with the changes in interest and foreign exchange rates and inflation. In addition, the Company’s Investments Committee has established guidelines for the investment in structured notes or deposits associated with other
derivatives, which by their nature may be considered as derivative transactions for trading purposes. It should be noted that in the third quarter of 2019, no such financial derivatives were outstanding. Pursuant to the provisions of
International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), certain financial derivative transactions originally intended to serve as a hedge and in effect as of September 30, 2019, are
not within the scope of hedge accounting as specified in such Standards and, consequently, are recognized in the accounting based on the provisions included in the aforementioned Standards.
General description of the objectives sought in the execution of financial derivative transactions; the relevant instruments; the hedging
or trading strategies implemented in connection therewith; the relevant trading markets; the eligible counterparties; the policies for the appointment of calculation or valuation agents; the principal terms and conditions of the relevant
contracts; the policies as to margins, collateral and lines of credit; the authorization process and levels of authorization required by type of transaction (e.g., full hedging, partial hedging, speculation), stating whether the transactions
were previously approved by the committee(s) responsible for the development of corporate and auditing practices; the internal control procedures applicable to the management of the market and liquidity risks associated with the positions;
and the existence of an independent third party responsible for the review of such procedures and, as the case may be, the observations raised or deficiencies identified by such third party.
The Company’s principal objective when entering into financial derivative transactions is to mitigate the effects of unforeseen changes in
interest and foreign exchange rates and inflation, so as to reduce the volatility in its results and cash flows as a result of such changes.
The Company monitors its exposure to the interest rate risk by: (i) assessing the difference between the interest rates applicable to its debt
and temporary investments, and the prevailing market rates for similar instruments; (ii) reviewing its cash flow requirements and financial ratios (interest coverage); (iii) assessing the actual and budgeted-for trends in the principal
markets; and (iv) assessing the prevailing industry practices and other similar companies. This approach enables the Company to determine the optimum mix between fixed- and variable-rate interest for its debt.
Foreign exchange risk is monitored by assessing the Company’s monetary position in U.S. dollars and its budgeted cash flow requirements for investments
anticipated to be denominated in U.S. dollars and the service of its U.S. dollar-denominated debt.
Financial derivative transactions are reported from time to time to the Audit Committee.
The Company has entered into master derivatives agreements with both domestic and foreign financial institutions, that are internationally recognized
institutions with which the Company, from time to time, has entered into financial transactions involving corporate and investment banking, as well as treasury services. The form agreement used in connection with financial derivatives
transactions with foreign financial institutions is the Master Agreement published by the International Swaps and Derivatives Association, Inc. (“ISDA”) and with local institutions is the Master Agreement published by ISDA and in some
instances, using the form agreement ISDAmex. In both cases, the main terms and conditions are standard for these types of transactions and include mechanisms for the appointment of calculation or
valuation agents.
In addition, the Company enters into standard guaranty agreements that set forth the margins, collateral and lines of credit applicable in each instance. These
agreements establish the credit limits granted by the financial institutions with whom the Company enters into master financial derivative agreements, which specify the margin implications in the case of potential negative changes in the
market value of its open financial derivative positions. Pursuant to the agreements entered into by the Company, financial institutions are entitled to make margin calls if certain thresholds are exceeded. In the event of a change in the
credit rating issued to the Company by a recognized credit rating agency, the credit limit granted by each counterparty would be modified.
As of the date hereof, the Company has never experienced a margin call with respect to its financial derivative transactions.
In compliance with its risk management objectives and hedging strategies, the Company generally utilizes the following financial derivative transactions:
|
1.
|
Cross-currency interest rate swaps (i.e., coupon swaps);
|
|
2.
|
Interest rate and inflation-indexed swaps;
|
|
3.
|
Cross-currency principal and interest rate swaps;
|
|
5.
|
Forward exchange rate contracts;
|
|
7.
|
Interest Rate Caps and Floors contracts;
|
|
8.
|
Fixed-price contracts for the acquisition of government securities (i.e., Treasury locks); and
|
The strategies for the acquisition of financial derivatives transactions are approved by the Risk Management Committee in accordance with the Policies and
Objectives for the Use of Financial Derivatives.
During the quarter from July to September 2019, there were no defaults or margin calls under the aforementioned financial derivative transactions.
The Company monitors on a weekly basis the flows generated by the fair market value of and the potential for margin calls under its open financial derivative
transactions. The calculation or valuation agent designated in the relevant Master Agreement, which is always the counterparty, issues monthly reports as to the fair market value of the Company’s open positions.
The Risk Management area is responsible for measuring, at least once a month, the Company’s exposure to the financial market risks associated with its
financings and investments, and for submitting a report with respect to the Company’s risk position and the valuation of its financial derivatives to the Finance Committee on a monthly basis, and to the Risk Management Committee on a
quarterly basis. The Company monitors the credit rating assigned to its counterparties in its outstanding financial derivative transactions on a regular basis.
The office of the Comptroller is responsible for the validation of the Company’s accounting records as related to its financial derivative transactions, based
upon the confirmations received from the relevant financial intermediaries, and for obtaining from such intermediaries, on a monthly basis, confirmations or account statements supporting the market valuation of its open financial derivative
positions.
As a part of the yearly audit on the Company, the aforementioned procedures are reviewed by the Company’s external auditors. As of the date hereof, the
Company’s auditors have not raised any observation or identified any deficiency therein.
Information concerning the composition of the overall risk management committee, its operating rules, and the existence of an overall risk
management manual.
The Company has a Risk Management Committee, which is responsible for monitoring the Company’s risk management activities and approving the
hedging strategies used to mitigate the financial market risks to which the Company is exposed. The assessment and hedging of the financial market risks are subject to the policies and procedures applicable to the Company’s Risk Management
Committee, the Finance and Risk Management areas and the Comptroller that form the Risk Management Manual of the Company. In general terms, the Risk Management Committee is comprised of members of the Corporate Management, Corporate
Comptroller, Tax Control and Advice, Information to the Stock Exchange, Finance and Risk, Legal, Administration and Finance, Financial Planning and Corporate Finance areas.
General description about valuation techniques, standing out the instruments valuated at cost or fair value, just like methods and valuation techniques
ii. General description of the valuation methods, indicating whether the instruments are valued at cost or at their fair value pursuant to the
applicable accounting principles, the relevant reference valuation methods and techniques, and the events taken into consideration. Describe the policies for and frequency of the valuation, as well as the actions taken in light of the
values obtained therefrom. Clarify whether the valuation is performed by an independent third party, and indicate if such third party is the structurer, seller or counterparty of the financial instrument. As with respect to financial
derivative transactions for hedging purposes, explain the method used to determine the effectiveness thereof and indicate the level of coverage provided thereby.
The Company values its financial derivative instruments based upon the standard models and calculators provided by recognized market makers. In addition, the
Company uses the relevant market variables available from online sources. The financial derivative instruments are valued at a reasonable value pursuant to the applicable accounting provisions.
In the majority of cases, the valuation at a reasonable value is carried out on a monthly basis based on valuations of the counterparties and the verification of
such reasonable value with internal valuations prepared by the Risk Management area of the Company. Accounting wise, the valuation of the counterparty is registered.
The Company performs its valuations without the participation of any independent third party.
The method used by the Company to determine the effectiveness of an instrument depends on the hedging strategy and on whether the relevant
transaction is intended as a fair-value hedge or a cash-flow hedge. The Company’s methods take into consideration the prospective cash flows generated by or the changes in the fair value of the financial derivative, and the cash flows generated
by or the changes in the fair value of the underlying position that it seeks to hedge to determine, in each case, the hedging ratio.
Management discussion about internal and external sources of liquidity that could be used for attending requirements related to financial derivative instruments
iii. Management’s discussion of the internal and external sources of liquidity that could be used to satisfy the Company’s requirements in connection with its financial derivatives.
As of the date hereof, the Company’s management has not discussed internal and external sources of liquidity so as to satisfy its requirements in connection with
its financial derivatives since, based upon the aggregate amount of the Company’s financial derivative transactions, management is of the opinion that the Company’s significant positions of cash, cash equivalents and temporary investments,
and the substantial cash flows generated by the Company, would enable the Company to respond adequately to any such requirements.
Changes and management explanation in principal risk exposures identified, as contingencies and events known by the administration that could affect future reports
iv. Explanation as to any change in the issuer’s exposure to the principal risks identified thereby and in their management, and any contingency or event known to or anticipated by the issuer’s management,
which could affect any future report. Description of any circumstance or event, such as any change in the value of the underlying assets or reference variables, resulting in a financial derivative being used other than as originally
intended, or substantially altering its structure, or resulting in the partial or total loss of the hedge, thereby forcing the Issuer to assume new obligations, commitments or changes in its cash flows in a manner that affects its liquidity
(e.g., margin calls). Description of the impact of such financial derivative transactions on the issuer’s results or cash flows. Description and number of financial derivatives maturing during the quarter, any closed positions and, if
applicable, number and amount of margin calls experienced during the quarter. Disclosure as to any default under the relevant contracts.
Changes in the Company’s exposure to the principal risks identified thereby and in their management, and
contingencies or events known to or anticipated by the Company’s management, which could affect any future report.
Since a significant portion of the Company’s debt and costs are denominated in U.S. dollars, while its revenues are primarily denominated in
Mexican pesos, depreciation in the value of the Mexican peso against the U.S. dollar and any future depreciation could have a negative effect on the Company’s results due to exchange rate losses. However, the significant amount of U.S. dollars
in the Company’s treasury, and the hedging strategies adopted by the Company in recent years, have enabled it to avoid significant foreign exchange losses.
Circumstances or events, such as changes in the value of the underlying assets or reference variables, resulting in a
financial derivative being used other than as originally intended, or substantially altering its structure, or resulting in the partial or total loss of the hedge, thereby forcing the Company to assume new obligations, commitments or changes in
its cash flows in a manner that affects its liquidity (e.g., margin calls). Description of the impact of such financial derivative transactions on the Company’s results or cash flows.
As of the date hereof, no circumstance or event of a financial derivative transaction, resulted in a partial or total loss of the relevant hedge
requiring that the Company assume new obligations, commitments or variations in its cash flow such that its liquidity is affected.
Description and number of financial derivatives maturing during the quarter, any closed positions and, if applicable, number and amount of margin calls experienced during the
quarter. Disclosure as to any default under the relevant contracts.
|
1.
|
During the relevant quarter, forwards through which the Company hedged against a possible Mexican Peso depreciation with a notional amount of U.S.$245,500,000.00 (Two
hundred forty-five million and five hundred thousand U.S. Dollars 00/100), expired. As a result of this hedge, a loss of MXN $ 280,392,290.63 (Two hundred eighty million three hundred ninety two thousand two hundred and ninety
Mexican pesos 63/100) was incurred in the quarter.
|
|
2.
|
During the relevant quarter, forwards through which Televisión Internacional, S.A. de C.V. hedged against a possible Mexican Peso depreciation with a notional amount of
U.S.$28,000,000.00 (Twenty-eight million U.S. Dollars 00/100), expired. As a result of this hedge, a loss of MXN$37,351,300.00 (Thirty-seven million three hundred fifty-one thousand three hundred Mexican pesos 00/100) was incurred
in the quarter.
|
|
3.
|
During the relevant quarter, IRS through which Televisión Internacional, S.A. de C.V. hedged against a possible change on the Interest Rates with a notional amount of
$250,000,000.00 (Two hundred and fifty million Mexican pesos 00/100), expired. As a result of this hedge, a profit of MXN $2,127,617.46 (Two million one hundred twenty-seven thousand six hundred seventeen Mexican pesos 46/100) was
incurred in the quarter.
|
|
4.
|
During the relevant quarter, IRS through which Televisión Internacional, S.A. de C.V. hedged against a possible change on the Interest Rates with a notional amount of
$300,000,000.00 (Three hundred million Mexican pesos 00/100), expired. As a result of this hedge, a profit of MXN$714,326.67 (Seven hundred fourteen thousand three hundred twenty-six Mexican pesos 67/100) was incurred in the
quarter.
|
|
5.
|
During the relevant quarter, forwards through which Empresas Cablevisión, S.A.B. de C.V. hedged against a possible Mexican Peso depreciation with a notional amount of
U.S.$25,000,000.00 (Twenty-five million U.S. Dollars 00/100), expired. As a result of this hedge, a loss of MXN $35,687,950.00 (Thirty-five million six hundred eighty-seven thousand nine hundred and fifty Mexican pesos 00/100) was
incurred in the quarter.
|
|
6.
|
During the relevant quarter, forwards through which Corporación Novavisión S. de R.L. de C.V. hedged against a possible Mexican Peso depreciation with a notional amount of
U.S.$22,000,000.00 (Twenty-two million U.S. Dollars 00/100), expired. As a result of this hedge, a loss of MXN $36,670,700.00 (Thirty-six million six hundred seventy thousand seven hundred Mexican pesos 00/100) was incurred in the
quarter.
|
|
7.
|
During the relevant quarter the coverage done through IRS of Grupo Televisa, S.A.B. with expiration on April 5, 2021, which protected a notional amount of MXN
$6,000,000,000.00 (Six Billion Mexican Pesos 00/100) was canceled in advance. As a result of this a profit in the quarter was obtained for MXN $152,414,888.00 (One hundred fifty-two million four hundred fourteen thousand and eight
hundred eighty-eight Mexican pesos 00/100).
|
|
8.
|
During the relevant quarter the coverage done through IRS of Grupo Televisa, S.A.B. with expiration on May 2, 2022, which protected a notional amount of MXN $5,000,000,000
(Five Billion Mexican Pesos 00/100) was canceled in advance. As a result of this a profit in the quarter was obtained for MXN $44,333,000.00 (Forty-four million three hundred thirty-three thousand Mexican pesos 00/100).
|
During the relevant quarter there were no defaults or margin calls under financial derivative transactions.
Quantitative information for disclosure
v. Quantitative Information. Attached hereto as “Table 1” is a summary of the financial derivative instruments purchased by Grupo Televisa, S.A.B, Empresas Cablevisión S.A.B. de C.V., Televisión Internacional, S.A. de C.V., and
Corporación Novavisión S. de R.L. de C.V. whose aggregate fair value represents or could represent one of the reference percentages set forth in Section III (v) of the Official Communication.
IV. SENSITIVITY ANALYSIS
Considering that the Company has entered into financial derivative transactions for hedging purposes, and given the low amount of the financial derivative
instruments that proved ineffective as a hedge, the Company has determined that such transactions are not material and, accordingly, the sensitivity analysis referred to in Section IV of the Official Communication is not applicable.
In those cases where the derivative instruments of the Company are for hedging purposes, for a material amount and where the effectiveness measures were
sufficient, the measures are justified when the standard deviation of the changes in cash flow as a result of changes in the variables of exchange rate and interest rates of the derivative instruments used jointly with the underlying position
is lower than the standard deviation of the changes in cash flow of the underlying position valued in pesos and the effective measures are defined by the correlation coefficient between both positions for the effective measures to be
sufficient.
TABLE 1
GRUPO TELEVISA, S.A.B.
Summary of Financial Derivative Instruments as of
September 30, 2019
(In thousands of Mexican pesos and/or U.S. dollars, as indicated)
Type of Derivative, Securities or Contract
|
Purpose (e.g., hedging, trading or other)
|
Notional Amount/Face Value
|
Value of the Underlying Asset / Reference Variable
|
Fair Value
|
Maturing per Year
|
Collateral/
Lines of Credit/
Securities Pledged
|
Current Quarter (5)
|
Previous Quarter (6)
|
Current Quarter Dr (Cr) (5)
|
Previous Quarter Dr (Cr) (6)
|
Interest Rate Swap (1)
|
Hedging
|
-
|
-
|
TIIE 28 days / 5.9351%
|
-
|
176,183
|
Monthly interest
2019-2021
|
Does not exist (7)
|
Interest Rate Swap (1)
|
Hedging
|
-
|
-
|
TIIE 28 days / 6.5716%
|
-
|
118,676
|
Monthly interest
2019-2022
|
Does not exist (7)
|
Interest Rate Swap (1)
|
Hedging
|
Ps.2,000,000
|
TIIE 28 days / 7.3275%
|
TIIE 28 days / 7.3275%
|
(44,306)
|
4,133
|
Monthly interest
2019-2022
|
Does not exist (7)
|
Interest Rate Swap (1)
|
Hedging
|
Ps.1,500,000
|
TIIE 28 days / 7.3500%
|
TIIE 28 days / 7.3500%
|
(35,125)
|
1,971
|
Monthly interest
2019-2022
|
Does not exist (7)
|
Interest Rate Swap (1)
|
Hedging
|
Ps.2,500,000
|
TIIE 28 days / 7.7485%
|
TIIE 28 days / 7.7485%
|
(92,461)
|
(29,018)
|
Monthly interest
2019-2023
|
Does not exist (7)
|
Interest Rate Swap (1)
|
Hedging
|
Ps.6,000,000
|
TIIE 28 days/ 7.3873%
|
TIIE 28 days/ 7.4450%
|
(210,034)
|
(14,398)
|
Monthly interest
2019-2024
|
Does not exist (7)
|
Forward (1)
|
Hedging
|
U.S.$112,000 / Ps. 2,258,108
|
U.S.$112,000 / Ps. 2,258,108
|
U.S.$199,000 / Ps.3,972,416
|
(8,348)
|
(71,297)
|
Semi-annual interest
2020
|
Does not exist (7)
|
Forward (1)
|
Hedging
|
U.S.$278,800 / Ps.5,664,318
|
U.S.$278,800 / Ps.5,664,318
|
U.S.$429,000 / Ps.8,805,593
|
(61,518)
|
(373,176)
|
2019-2020
|
Does not exist (7)
|
Interest Rate Swap (2)
|
Hedging
|
Ps. 415,900
|
TIIE 28 days / 5.508%
|
TIIE 28 days / 5.246%
|
6,197
|
16,067
|
Monthly Interest
2019-2022
|
Does not exist (7)
|
Interest Rate Swap (2)
|
Hedging
|
Ps. 990,104
|
TIIE 28 days / 7.2663%
|
TIIE 28 days / 7.2663%
|
(10,693)
|
6,672
|
Monthly Interest
2019-2022
|
Does not exist (7)
|
Forward (2)
|
Hedging
|
U.S.$62,000 / Ps. 1,259,937
|
U.S.$62,000 / Ps. 1,259,937
|
U.S.$90,000 / Ps.1,841,972
|
(15,864)
|
(71,010)
|
2019-2020
|
Does not exist (7)
|
Forward (3)
|
Hedging
|
U.S.$56,250 / Ps. 1,141,477
|
U.S.$56,250 / Ps. 1,141,477
|
U.S.$81,250 / Ps.1,661,770
|
(11,162)
|
(62,757)
|
2019-2020
|
Does not exist (7)
|
Forward (4)
|
Hedging
|
U.S.$49,500 / Ps. 1,005,692
|
U.S.$49,500 / Ps. 1,005,692
|
U.S.$71,500 / Ps.1,471,091
|
(5,029)
|
(57,719)
|
2020
|
Does not exist (7)
|
|
|
|
|
Total
|
(488,343)
|
(355,673)
|
|
|
(1)
|
Acquired by Grupo Televisa, S.A.B.
|
(2)
|
Acquired by Televisión Internacional, S.A. de C.V.
|
(3)
|
Acquired by Empresas Cablevisión, S.A.B. de C.V.
|
(4)
|
Acquired by Corporación Novavisión S. de R.L. de C.V.
|
(5)
|
The aggregate amount of the derivatives reflected in the consolidated statement of financial position of Grupo Televisa, S.A.B. as of September 30, 2019, is
as follows:
|
|
Other financial assets
|
Ps.
|
2,999
|
|
|
Other non-current financial assets
|
|
3,198
|
|
|
Other financial liabilities
|
|
(101,921)
|
|
|
Other non-current financial liabilities
|
|
(392,619)
|
|
|
|
Ps.
|
(488,343)
|
|
(6)
|
Information as of June 30, 2019.
|
(7)
|
Applies only to implicit financing in the ISDA ancillary agreements identified as “Credit Support Annex”.
|
[800100] Notes - Subclassifications of assets, liabilities and equities
Concept
|
Close Current Quarter
2019-09-30
|
Close Previous Exercise
2018-12-31
|
Subclassifications of assets, liabilities and equities
|
|
|
Cash and cash equivalents
|
|
|
Cash
|
|
|
Cash on hand
|
100,693,000
|
46,852,000
|
Balances with banks
|
1,173,755,000
|
1,914,254,000
|
Total cash
|
1,274,448,000
|
1,961,106,000
|
Cash equivalents
|
|
|
Short-term deposits, classified as cash equivalents
|
37,436,469,000
|
30,107,185,000
|
Short-term investments, classified as cash equivalents
|
0
|
0
|
Other banking arrangements, classified as cash equivalents
|
0
|
0
|
Total cash equivalents
|
37,436,469,000
|
30,107,185,000
|
Other cash and cash equivalents
|
0
|
0
|
Total cash and cash equivalents
|
38,710,917,000
|
32,068,291,000
|
Trade and other current receivables
|
|
|
Current trade receivables
|
17,204,560,000
|
19,748,850,000
|
Current receivables due from related parties
|
863,815,000
|
1,078,327,000
|
Current prepayments
|
|
|
Current advances to suppliers
|
0
|
0
|
Current prepaid expenses
|
1,983,560,000
|
1,680,905,000
|
Total current prepayments
|
1,983,560,000
|
1,680,905,000
|
Current receivables from taxes other than income tax
|
5,902,575,000
|
3,593,417,000
|
Current value added tax receivables
|
5,772,879,000
|
3,468,261,000
|
Current receivables from sale of properties
|
0
|
0
|
Current receivables from rental of properties
|
0
|
0
|
Other current receivables
|
2,486,212,000
|
1,592,430,000
|
Total trade and other current receivables
|
28,440,722,000
|
27,693,929,000
|
Classes of current inventories
|
|
|
Current raw materials and current production supplies
|
|
|
Current raw materials
|
0
|
0
|
Current production supplies
|
0
|
0
|
Total current raw materials and current production supplies
|
0
|
0
|
Current merchandise
|
0
|
0
|
Current work in progress
|
0
|
0
|
Current finished goods
|
0
|
0
|
Current spare parts
|
0
|
0
|
Property intended for sale in ordinary course of business
|
0
|
0
|
Other current inventories
|
1,354,241,000
|
1,026,428,000
|
Total current inventories
|
1,354,241,000
|
1,026,428,000
|
Non-current assets or disposal groups classified as held for sale or as held for distribution to owners
|
|
|
Non-current assets or disposal groups classified as held for sale
|
1,094,596,000
|
0
|
Non-current assets or disposal groups classified as held for distribution to owners
|
0
|
0
|
Total non-current assets or disposal groups classified as held for sale or as held for distribution to owners
|
1,094,596,000
|
0
|
Trade and other non-current receivables
|
|
|
Non-current trade receivables
|
0
|
0
|
Non-current receivables due from related parties
|
0
|
0
|
Non-current prepayments
|
0
|
0
|
Non-current lease prepayments
|
0
|
0
|
Non-current receivables from taxes other than income tax
|
0
|
0
|
Concept
|
Close Current Quarter
2019-09-30
|
Close Previous Exercise
2018-12-31
|
Non-current value added tax receivables
|
0
|
0
|
Non-current receivables from sale of properties
|
0
|
0
|
Non-current receivables from rental of properties
|
0
|
0
|
Revenue for billing
|
0
|
0
|
Other non-current receivables
|
0
|
0
|
Total trade and other non-current receivables
|
0
|
0
|
Investments in subsidiaries, joint ventures and associates
|
|
|
Investments in subsidiaries
|
0
|
0
|
Investments in joint ventures
|
741,553,000
|
764,217,000
|
Investments in associates
|
8,610,630,000
|
9,782,511,000
|
Total investments in subsidiaries, joint ventures and associates
|
9,352,183,000
|
10,546,728,000
|
Property, plant and equipment
|
|
|
Land and buildings
|
|
|
Land
|
4,983,168,000
|
4,967,965,000
|
Buildings
|
4,557,114,000
|
4,728,443,000
|
Total land and buildings
|
9,540,282,000
|
9,696,408,000
|
Machinery
|
55,468,971,000
|
60,176,873,000
|
Vehicles
|
|
|
Ships
|
0
|
0
|
Aircraft
|
523,261,000
|
529,158,000
|
Motor vehicles
|
703,515,000
|
905,936,000
|
Total vehicles
|
1,226,776,000
|
1,435,094,000
|
Fixtures and fittings
|
521,975,000
|
555,678,000
|
Office equipment
|
2,388,752,000
|
2,656,206,000
|
Tangible exploration and evaluation assets
|
0
|
0
|
Mining assets
|
0
|
0
|
Oil and gas assets
|
0
|
0
|
Construction in progress
|
13,127,915,000
|
11,683,180,000
|
Construction prepayments
|
0
|
0
|
Other property, plant and equipment
|
1,093,687,000
|
1,139,091,000
|
Total property, plant and equipment
|
83,368,358,000
|
87,342,530,000
|
Investment property
|
|
|
Investment property completed
|
0
|
0
|
Investment property under construction or development
|
0
|
0
|
Investment property prepayments
|
0
|
0
|
Total investment property
|
0
|
0
|
Intangible assets and goodwill
|
|
|
Intangible assets other than goodwill
|
|
|
Brand names
|
468,799,000
|
800,929,000
|
Intangible exploration and evaluation assets
|
0
|
0
|
Mastheads and publishing titles
|
0
|
0
|
Computer software
|
3,699,238,000
|
3,130,935,000
|
Licences and franchises
|
0
|
0
|
Copyrights, patents and other industrial property rights, service and operating rights
|
0
|
0
|
Recipes, formulae, models, designs and prototypes
|
0
|
0
|
Intangible assets under development
|
0
|
0
|
Other intangible assets
|
24,638,407,000
|
25,018,026,000
|
Total intangible assets other than goodwill
|
28,806,444,000
|
28,949,890,000
|
Goodwill
|
14,113,626,000
|
14,113,626,000
|
Total intangible assets and goodwill
|
42,920,070,000
|
43,063,516,000
|
Trade and other current payables
|
|
|
Current trade payables
|
22,361,591,000
|
22,029,548,000
|
Concept
|
Close Current Quarter
2019-09-30
|
Close Previous Exercise
2018-12-31
|
Current payables to related parties
|
649,749,000
|
714,450,000
|
Accruals and deferred income classified as current
|
|
|
Deferred income classified as current
|
10,920,812,000
|
13,637,580,000
|
Rent deferred income classified as current
|
0
|
0
|
Accruals classified as current
|
3,063,341,000
|
3,616,398,000
|
Short-term employee benefits accruals
|
869,859,000
|
1,067,245,000
|
Total accruals and deferred income classified as current
|
13,984,153,000
|
17,253,978,000
|
Current payables on social security and taxes other than income tax
|
2,387,910,000
|
675,662,000
|
Current value added tax payables
|
1,698,235,000
|
44,088,000
|
Current retention payables
|
321,664,000
|
604,672,000
|
Other current payables
|
0
|
0
|
Total trade and other current payables
|
39,705,067,000
|
41,278,310,000
|
Other current financial liabilities
|
|
|
Bank loans current
|
492,057,000
|
988,362,000
|
Stock market loans current
|
9,992,359,000
|
0
|
Other current liabilities at cost
|
1,315,156,000
|
1,940,269,000
|
Other current liabilities at no cost
|
101,921,000
|
148,061,000
|
Other current financial liabilities
|
2,240,208,000
|
1,120,009,000
|
Total Other current financial liabilities
|
14,141,701,000
|
4,196,701,000
|
Trade and other non-current payables
|
|
|
Non-current trade payables
|
3,601,877,000
|
4,621,644,000
|
Non-current payables to related parties
|
0
|
0
|
Accruals and deferred income classified as non-current
|
|
|
Deferred income classified as non-current
|
0
|
0
|
Rent deferred income classified as non-current
|
0
|
0
|
Accruals classified as non-current
|
0
|
0
|
Total accruals and deferred income classified as non-current
|
0
|
0
|
Non-current payables on social security and taxes other than income tax
|
0
|
0
|
Non-current value added tax payables
|
0
|
0
|
Non-current retention payables
|
0
|
0
|
Other non-current payables
|
0
|
0
|
Total trade and other non-current payables
|
3,601,877,000
|
4,621,644,000
|
Other non-current financial liabilities
|
|
|
Bank loans non-current
|
22,289,261,000
|
12,815,254,000
|
Stock market loans non-current
|
101,994,010,000
|
108,168,361,000
|
Other non-current liabilities at cost
|
0
|
5,954,549,000
|
Other non-current liabilities at no cost
|
392,619,000
|
0
|
Other non-current financial liabilities
|
0
|
0
|
Total Other non-current financial liabilities
|
124,675,890,000
|
126,938,164,000
|
Other provisions
|
|
|
Other non-current provisions
|
900,624,000
|
54,238,000
|
Other current provisions
|
1,673,000
|
1,642,000
|
Total other provisions
|
902,297,000
|
55,880,000
|
Other reserves
|
|
|
Revaluation surplus
|
0
|
0
|
Reserve of exchange differences on translation
|
1,549,071,000
|
1,461,495,000
|
Reserve of cash flow hedges
|
(317,620,000)
|
683,585,000
|
Reserve of gains and losses on hedging instruments that hedge investments in equity instruments
|
0
|
0
|
Reserve of change in value of time value of options
|
0
|
0
|
Reserve of change in value of forward elements of forward contracts
|
0
|
0
|
Reserve of change in value of foreign currency basis spreads
|
0
|
0
|
Reserve of gains and losses on financial assets measured at fair value through other comprehensive income
|
1,608,449,000
|
2,654,866,000
|
Concept
|
Close Current Quarter
2019-09-30
|
Close Previous Exercise
2018-12-31
|
Reserve of gains and losses on remeasuring available-for-sale financial assets
|
0
|
0
|
Reserve of share-based payments
|
0
|
0
|
Reserve of remeasurements of defined benefit plans
|
(533,203,000)
|
(533,203,000)
|
Amount recognised in other comprehensive income and accumulated in equity relating to non-current assets or disposal groups held for sale
|
0
|
0
|
Reserve of gains and losses from investments in equity instruments
|
0
|
0
|
Reserve of change in fair value of financial liability attributable to change in credit risk of liability
|
0
|
0
|
Reserve for catastrophe
|
0
|
0
|
Reserve for equalisation
|
0
|
0
|
Reserve of discretionary participation features
|
0
|
0
|
Reserve of equity component of convertible instruments
|
0
|
0
|
Capital redemption reserve
|
0
|
0
|
Merger reserve
|
0
|
0
|
Statutory reserve
|
0
|
0
|
Other comprehensive income
|
(36,208,000)
|
160,744,000
|
Total other reserves
|
2,270,489,000
|
4,427,487,000
|
Net assets (liabilities)
|
|
|
Assets
|
308,639,714,000
|
297,170,593,000
|
Liabilities
|
205,743,015,000
|
192,639,902,000
|
Net assets (liabilities)
|
102,896,699,000
|
104,530,691,000
|
Net current assets (liabilities)
|
|
|
Current assets
|
81,581,241,000
|
72,052,868,000
|
Current liabilities
|
57,447,902,000
|
48,531,443,000
|
Net current assets (liabilities)
|
24,133,339,000
|
23,521,425,000
|
[800200] Notes - Analysis of income and expense
Concept
|
Accumulated Current Year
2019-01-01 - 2019-09-30
|
Accumulated Previous Year
2018-01-01 - 2018-09-30
|
Quarter Current Year
2019-07-01 - 2019-09-30
|
Quarter Previous Year
2018-07-01 - 2018-09-30
|
Analysis of income and expense
|
|
|
|
|
Revenue
|
|
|
|
|
Revenue from rendering of services
|
54,625,059,000
|
52,578,242,000
|
19,085,316,000
|
17,719,723,000
|
Revenue from sale of goods
|
683,213,000
|
883,030,000
|
220,428,000
|
282,354,000
|
Interest income
|
0
|
0
|
0
|
0
|
Royalty income
|
7,133,417,000
|
10,012,770,000
|
2,761,603,000
|
3,374,292,000
|
Dividend income
|
0
|
0
|
0
|
0
|
Rental income
|
11,047,292,000
|
11,073,040,000
|
3,718,802,000
|
3,656,865,000
|
Revenue from construction contracts
|
0
|
0
|
0
|
0
|
Other revenue
|
0
|
0
|
0
|
0
|
Total revenue
|
73,488,981,000
|
74,547,082,000
|
25,786,149,000
|
25,033,234,000
|
Finance income
|
|
|
|
|
Interest income
|
1,210,822,000
|
1,162,044,000
|
565,377,000
|
419,214,000
|
Net gain on foreign exchange
|
0
|
523,110,000
|
0
|
16,981,000
|
Gains on change in fair value of derivatives
|
0
|
0
|
355,346,000
|
0
|
Gain on change in fair value of financial instruments
|
0
|
0
|
0
|
0
|
Other finance income
|
0
|
0
|
0
|
0
|
Total finance income
|
1,210,822,000
|
1,685,154,000
|
920,723,000
|
436,195,000
|
Finance costs
|
|
|
|
|
Interest expense
|
7,844,528,000
|
7,036,960,000
|
2,861,450,000
|
2,394,989,000
|
Net loss on foreign exchange
|
465,435,000
|
0
|
929,473,000
|
0
|
Losses on change in fair value of derivatives
|
313,625,000
|
1,113,426,000
|
0
|
530,549,000
|
Loss on change in fair value of financial instruments
|
0
|
0
|
0
|
0
|
Other finance cost
|
0
|
0
|
0
|
0
|
Total finance costs
|
8,623,588,000
|
8,150,386,000
|
3,790,923,000
|
2,925,538,000
|
Tax income (expense)
|
|
|
|
|
Current tax
|
3,806,419,000
|
5,261,316,000
|
1,587,969,000
|
1,752,466,000
|
Deferred tax
|
(1,833,684,000)
|
(1,462,614,000)
|
(861,185,000)
|
(1,052,979,000)
|
Total tax income (expense)
|
1,972,735,000
|
3,798,702,000
|
726,784,000
|
699,487,000
|
[800500] Notes - List of notes
Disclosure of notes and other explanatory information
See Notes 1 y 2 of the Disclosure of interim financial reporting.
Disclosure of general information about financial statements
Corporate Information
Grupo Televisa, S.A.B. (the “Company”) is a limited liability public stock corporation (“Sociedad Anónima Bursátil” or “S.A.B.”), incorporated under
the laws of Mexico. Pursuant to the terms of the Company’s bylaws (“Estatutos Sociales”), its corporate existence continues through 2106. The shares of the Company are listed and traded in the form of “Certificados de Participación Ordinarios”
or “CPOs” on the Mexican Stock Exchange (“Bolsa Mexicana de Valores”) under the ticker symbol TLEVISA CPO, and in the form of Global Depositary Shares or GDSs, on the New York Stock Exchange, or NYSE, under the ticker symbol TV. The Company’s
principal executive offices are located at Avenida Vasco de Quiroga 2000, Colonia Santa Fe, 01210 Ciudad de México, México.
Basis of Preparation and Accounting Policies
The interim condensed consolidated financial statements of the Group, as of September 30, 2019
and December 31, 2018, and for the nine months ended September 30, 2019 and 2018, are unaudited, and have been prepared in accordance with the guidelines provided by
the International Accounting Standard 34, Interim Financial Reporting. In the opinion of management, all adjustments necessary for a fair
presentation of the condensed consolidated financial statements have been included herein.
The interim unaudited condensed consolidated financial statements should be read in conjunction with the Group’s audited consolidated financial statements
and notes thereto for the years ended December 31, 2018 and 2017, which have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board, and include, among
other disclosures, the Group’s most significant accounting policies, which were applied on a consistent basis as of September 30, 2019, except for the guidelines provided by the IFRS 16 that became
effective beginning on January 1, 2019. The adoption of the improvements and amendments to current IFRSs effective on January 1, 2019 did not have a significant impact in these interim un audited condensed consolidated financial statements.
Disclosure of significant accounting policies
Accounting Policies
The principal accounting policies followed by the Group and used in the preparation of its annual consolidated financial statements as of December 31, 2018, and where applicable,
of its interim condensed consolidated financial statements in 2019, are summarized below.
(a) Basis of Presentation
The consolidated financial statements of the Group as of December 31, 2018 and 2017, and for the years ended December 31, 2018, 2017 and 2016, are presented in accordance with
International Financial Reporting Standards (“IFRS Standards”) as issued by the International Accounting Standards Board (“IASB”). IFRS Standards comprise: (i) IFRS Standards; (ii) International Accounting Standards (“IAS Standards”);
(iii) IFRS Interpretations Committee (“IFRIC”) Interpretations; and (iv) Standing Interpretations Committee (“SIC”) Interpretations.
The consolidated financial statements have been prepared on a historical cost basis, except for the measurement at fair value of temporary investments, derivative financial
instruments, financial assets, equity financial instruments, plan assets of post-employment benefits and share-based payments, as described below.
The preparation of consolidated financial statements in conformity with IFRS Standards requires the use of certain critical accounting estimates. It also requires management to
exercise its judgment in the process of applying the Group’s accounting policies. Changes in assumptions may have a significant impact on the consolidated financial statements in the period the assumptions changed. Management believes that the
underlying assumptions are appropriate. The areas involving a higher degree of judgment or complexity, or areas where estimates and assumptions are significant to the Group’s financial statements are disclosed in Note 5 to these consolidated
financial statements.
These consolidated financial statements were authorized for issuance on April 4, 2019, by the Group’s Principal Financial Officer.
(b) Consolidation
The financial statements of the Group are prepared on a consolidated basis and include the assets, liabilities and results of operations of all companies in which the Company has a
controlling interest (subsidiaries). All intercompany balances and transactions have been eliminated from the consolidated financial statements.
Subsidiaries
Subsidiaries are all entities over which the Company has control. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power over the entity. The existence and effects of potential voting rights that are currently exercisable or convertible are considered when assessing whether or not the
Company controls another entity. The subsidiaries are consolidated from the date on which control is obtained by the Company and cease to consolidate from the date on which said control is lost.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets
transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration
arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the
acquiree on an acquisition-by-acquisition basis at the non-controlling interest’s proportionate share of the recognized amounts of acquiree’s identifiable net assets.
Acquisition-related costs are expensed as incurred.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net identifiable assets
acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized in income or loss.
Changes in Ownership Interests in Subsidiaries without Change of Control
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions that is, as transactions with the owners in their
capacity as owners. The difference between fair value of any consideration paid and the interest acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals of non-controlling interests are
also recorded in equity.
Loss of Control of a Subsidiary
When the Company ceases to have control of a subsidiary, any retained interest in the entity is remeasured to its fair value at the date when control is lost, with the change in
carrying amount recognized in income or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts
previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This means that amounts previously recognized in other comprehensive
income are reclassified to income or loss. Except for certain equity financial instruments designated irrevocably with changes in other comprehensive income or loss.
At December 31, 2018, 2017 and 2016, the main direct and indirect subsidiaries of the Company were as follows:
Entity
|
Company’s
Ownership
Interest (1)
|
|
Business Segment (2)
|
|
|
|
|
Grupo Telesistema, S.A. de C.V. and subsidiaries
|
100%
|
|
Content and Other Businesses
|
Televisa, S.A. de C.V. (“Televisa”) (3)
|
100%
|
|
Content
|
G.Televisa-D, S.A. de C.V. (3)
|
100%
|
|
Content
|
Multimedia Telecom, S.A. de C.V. (“Multimedia Telecom”) and subsidiary (4)
|
100%
|
|
Content
|
Innova, S. de R.L. de C.V. (“Innova”) and subsidiaries (collectively, “Sky”) (5)
|
58.7%
|
|
Sky
|
Corporativo Vasco de Quiroga, S.A. de C.V. (“CVQ”) and subsidiaries (6)
|
100%
|
|
Cable and Sky
|
Empresas Cablevisión, S.A.B. de C.V. and subsidiaries (collectively, “Empresas Cablevisión”) (7)
|
51%
|
|
Cable
|
Subsidiaries engaged in the Cablemás business (collectively, “Cablemás”) (8)
|
100%
|
|
Cable
|
Televisión Internacional, S.A. de C.V. and subsidiaries (collectively, “TVI”) (9)
|
100%
|
|
Cable
|
Cablestar, S.A. de C.V. and subsidiaries (collectively, “Bestel”) (10)
|
66.1%
|
|
Cable
|
Arretis, S.A.P.I. de C.V. and subsidiaries (collectively, “Cablecom”) (11)
|
100%
|
|
Cable
|
Subsidiaries engaged in the Telecable business (collectively, “Telecable”) (12)
|
100%
|
|
Cable
|
Editorial Televisa, S.A. de C.V. and subsidiaries
|
100%
|
|
Other Businesses
|
Grupo Distribuidoras Intermex, S.A. de C.V. and subsidiaries
|
100%
|
|
Other Businesses
|
Sistema Radiópolis, S.A. de C.V. (“Radiópolis”) and subsidiaries (13)
|
50%
|
|
Other Businesses
|
Controladora de Juegos y Sorteos de México, S.A. de C.V. and subsidiaries
|
100%
|
|
Other Businesses
|
Villacezán, S.A. de C.V. (“Villacezán”) and subsidiaries (14)
|
100%
|
|
Other Businesses
|
(1)
|
Percentage of equity interest directly or indirectly held by the Company.
|
|
|
(2)
|
See Note 25 for a description of each of the Group’s business segments.
|
|
|
(3)
|
Televisa and G.Televisa-D, S.A. de C.V., are direct subsidiaries of Grupo Telesistema, S.A. de C.V.
|
|
|
(4)
|
Multimedia Telecom and its direct subsidiary, Comunicaciones Tieren, S.A. de C.V. (“Tieren”), are wholly-owned subsidiaries of the Company through which it
owns shares of the capital stock of UHI and maintains an investment in warrants that are exercisable for shares of common stock of UHI. As of December 31, 2018 and 2017, Multimedia Telecom and Tieren have investments representing
95.3% and 4.7%, respectively, of the Group’s aggregate investment in shares of common stock and share warrants issued by UHI (see Notes 9, 10 and 19).
|
|
|
(5)
|
Innova is an indirect majority-owned subsidiary of the Company and Sky DTH, S.A. de C.V. (“Sky DTH”), and a direct majority-owned subsidiary of Innova
Holdings, S. de R.L. de C.V. (“Innova Holdings”). Sky is a satellite television provider in Mexico, Central America and the Dominican Republic. Although the Company holds a majority of Innova’s equity and designates a majority of the
members of Innova’s Board of Directors, the non-controlling interest has certain governance and veto rights in Innova, including the right to block certain transactions between the companies in the Group and Sky. These veto rights are
protective in nature and do not affect decisions about relevant business activities of Innova.
|
|
|
(6)
|
CVQ is a direct subsidiary of the Company and the parent company of Empresas Cablevisión, Cablemás, TVI, Bestel, Cablecom, Telecable and Innova. In
September 2016, Factum Más Telecom, S.A. de C.V., a former direct subsidiary of the Company and the former parent company of Sky DTH, Innova Holdings and Innova, was merged into CVQ. At the consolidated level, this merger had no
effect (see Note 3).
|
|
|
(7)
|
Empresas Cablevisión, S.A.B. de C.V., is a direct majority-owned subsidiary of CVQ.
|
|
|
(8)
|
Some Cablemás subsidiaries are directly owned by CVQ and some other Cablemás subsidiaries are indirectly owned by CVQ. In June 2016, three former Cablecom
subsidiaries were merged into a Cablemás subsidiary. At the consolidated level, the mergers had no effect.
|
(9)
|
Televisión Internacional, S.A. de C.V., is a direct subsidiary of CVQ. Through February 2016, the Company had a 50% ownership interest in TVI, and
consolidated this subsidiary because it appointed the majority of the members of the Board of Directors of TVI. In March 2016, the Company acquired the remaining 50% non-controlling interest in TVI (see Note 3).
|
|
|
(10)
|
Cablestar, S.A. de C.V., is an indirect majority-owned subsidiary of CVQ and Empresas Cablevisión, S.A.B. de C.V.
|
|
|
(11)
|
Through the third quarter of 2016, Grupo Cable TV, S.A. de C.V. (“Grupo Cable TV”), was an indirect subsidiary of CVQ. In June 2016, three former
subsidiaries of Grupo Cable TV were merged into a Cablemás subsidiary. In the fourth quarter of 2016, Grupo Cable TV merged into Arretis, S.A.P.I. de C.V., a direct subsidiary of CVQ. At the consolidated level, the mergers had no
effect.
|
(12)
|
The Telecable subsidiaries are directly owned by CVQ.
|
|
|
(13)
|
Radiópolis is a direct subsidiary of the Company. The Company controls Radiópolis as it has the right to appoint the majority of the members of the Board
of Directors of Radiópolis.
|
|
|
(14)
|
Villacezán is an indirect subsidiary of Grupo Telesistema, S.A. de C.V.
|
The Group’s Content, Sky and Cable segments, as well as the Group’s Radio business, which is reported in the Other Businesses segment, require governmental concessions and
special authorizations for the provision of broadcasting and telecommunications services in Mexico. Such concessions are granted by the Mexican Institute of Telecommunications (“Instituto Federal de Telecomunicaciones” or “IFT”) for a fixed
term, subject to renewal in accordance with the Mexican Telecommunications and Broadcasting Law (“Ley Federal de Telecomunicaciones y Radiodifusión” or “LFTR”).
Renewal of concessions for the Content segment (Broadcasting) and the Radio business require, among others: (i) to request such renewal to IFT prior to the last fifth period of
the fixed term of the related concession; (ii) to be in compliance with the concession holder’s obligations under the LFTR, other applicable regulations, and the concession title; (iii) a declaration by IFT that there is no public interest
in recovering the spectrum granted under the related concession; and (iv) the acceptance by the concession holder of any new conditions for renewing the concession as set forth by IFT, including the payment of a related fee. IFT shall
resolve within the year following the presentation of the request, if there is public interest in recovering the spectrum granted under the related concession, in which case it will notify its determination and proceed with the termination
of the concession at the end of its fixed term. If IFT determines that there is no public interest in recovering the spectrum, it will grant the requested extension within 180 business days, provided that the concessionaire accepts, in
advance, the new conditions set by IFT, which will include the payment of the fee referred to above. Such fee will be determined by IFT for the relevant concessions, considering the following elements: (i) the frequency band; (ii) the
amount of spectrum; (iii) coverage of the frequency band; (iv) domestic and international benchmark regarding the market value of frequency bands; and (v) upon request of IFT, an opinion issued by the Ministry of Finance and Public Credit
of IFT´s proposal for calculation of the fee.
Renewal of concessions for the Sky and Cable segments require, among others: (i) to request its renewal to IFT prior to the last fifth period of the fixed term of the related
concession; (ii) to be in compliance with the concession holder’s obligations under the LFTR, other applicable regulations, and the concession title; and (iii) the acceptance by the concession holder of any new conditions for renewing the
concession as set forth by IFT. IFT shall resolve any request for renewal of the telecommunications concessions within 180 business days of its request. Failure to respond within such period of time shall be interpreted as if the request
for renewal has been granted.
The regulations of the broadcasting and the telecommunications concessions (including satellite pay TV) establish that at the end of the concession, the frequency bands or
spectrum attached to the services provided in the concessions shall return to the Mexican government. In addition, at the end of the concession, the Mexican government will have the preferential right to acquire infrastructure, equipment
and other goods directly used in the provision of the concession. If the Mexican government were to exercise its right to acquire infrastructure, equipment and other goods, it would be required to pay a price that is equivalent to a formula
that is similar to fair value. To the knowledge of the Company’s management, no spectrum granted for broadcasting services in Mexico has been recovered by the Mexican government in at least the past three decades for public interest
reasons. However, the Company’s management is unable to predict the outcome of any action by IFT in this regard. In addition, these assets, by themselves, would not be enough to immediately begin broadcasting or offering satellite pay TV
services or telecommunications services, as no content producing assets or other equipment necessary to operate the business would be included.
Also, the Group’s Gaming business, which is reported in the Other Businesses segment, requires a permit granted by the Mexican Federal Government for a fixed term, subject to
renewal in accordance with Mexican law. Additionally, the Group’s Sky businesses in Central America and the Dominican Republic require concessions or permits granted by local regulatory authorities for a fixed term, subject to renewal in
accordance with local laws.
The accounting guidelines provided by IFRIC 12 Service Concession Arrangements, are not applicable to the Group due primarily to the
following factors: (i) the Mexican government does not substantially control the Group’s infrastructure, what services are provided with the infrastructure and the price at which such services are offered; (ii) the Group’s broadcasting
service does not constitute a public service as per the definition in IFRIC 12; and (iii) the Group is unable to divide its infrastructure among the public (telephony and possibly Internet services) and non-public (pay TV) service
components.
At December 31, 2018, the expiration dates of the Group’s concessions and permits were as follows:
Segments
|
Expiration Dates
|
Content (broadcasting concessions) (1)
|
In 2021 and the relevant renewals start in 2022 ending in 2042
|
Sky (2)
|
Various from 2020 to 2027
|
Cable
|
Various from 2020 to 2046
|
Other Businesses:
|
|
Radio (3)
|
Various from 2019 to 2039
|
Gaming
|
In 2030
|
(1)
|
In November 2018, the IFT approved the renewal of the Group’s broadcasting concessions for all of its television stations in Mexico, for a term of 20 years
after the existing expiration date in 2021. In November 2018, the Group paid in cash for such renewal an aggregate amount of Ps.5,754,543, which includes a payment of Ps.1,194 for administrative expenses and recognized this cost as an
intangible asset in its consolidated statement of financial position. This amount will be amortized in a period of 20 years beginning on January 1, 2022, by using the straight-line method (see Note 12).
|
|
|
(2)
|
Sky made timely requests to renew its concessions in Panama and Honduras during 2018.
|
|
|
(3)
|
The costs paid by the Group for renewal of certain Radio concessions in 2017 and 2016 amounted to an aggregate of Ps.37,848 and Ps.111,636,
respectively. In addition, IFT granted in 2017 two new concessions to the Group in Ensenada and Puerto Vallarta. The cost paid by the Group for obtaining these concessions amounted to an aggregate of Ps.85,486. The Group recognized the
amounts for renewal and obtaining these concessions as intangible assets in its consolidated statement of financial position, and are amortized in a period of 20 years by using the straight-line method (see Note 12).
|
The concessions or permits held by the Group are not subject to any significant pricing regulations in the ordinary course of business.
(c) Investments in Associates and Joint Ventures
Associates are those entities over which the Group has significant influence but not control, generally those entities with a shareholding of between 20% and 50% of the voting
rights. Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. Joint ventures are those joint arrangements where the Group exercises
joint control with other stockholder or more stockholders without exercising control individually, and have rights to the net assets of the joint arrangements. Investments in associates and joint ventures are accounted for using the equity
method of accounting. Under the equity method, the investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor’s share of the net assets of the investee after the date of acquisition.
The Group’s investments in associates include an equity interest in UHI represented by approximately 10% of the outstanding total shares of UHI as of December 31, 2018 and 2017
(see Notes 3, 9 and 10).
The Group recognizes its share of losses of an associate or a joint venture up to the amount of its initial investment, subsequent capital contributions and long-term loans, or
beyond that when guaranteed commitments have been made by the Group in respect of obligations incurred by investees, but not in excess of such guarantees. If an associate or a joint venture for which the Group had recognized a share of losses
up to the amount of its guarantees generates net income in the future, the Group would not recognize its share of this net income until the Group first recognizes its share of previously unrecognized losses.
If the Group’s share of losses of an associate or a joint venture equals or exceeds its interest in the investee, the Group discontinues recognizing its share of further losses.
The interest in an associate or a joint venture is the carrying amount of the investment in the investee under the equity method together with any other long-term investment that, in substance, form part of the Group’s net investment in the
investee. After the Group’s interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the
associate or joint venture.
(d) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Group’s chief executive officers (“chief operating decision makers”) who are
responsible for allocating resources and assessing performance for each of the Group’s operating segments.
(e) Foreign Currency Translation
Functional and Presentation Currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates
(“functional currency”). The presentation and reporting currency of the Group’s consolidated financial statements is the Mexican peso, which is used for compliance with its legal and tax obligations.
Transactions and Balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or measurement where items are
remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the
statement of income as part of finance income or expense, except when deferred in other comprehensive income as qualifying cash flow hedges and qualifying net investment hedges.
Changes in the fair value of monetary securities denominated in foreign currency classified as investments in financial instruments are analyzed between exchange differences
resulting from changes in the amortized cost of the security and other changes in the carrying amount of the security. Translation differences related to changes in amortized cost are recognized in income or loss, and other changes in
carrying amount are recognized in other comprehensive income or loss.
Translation of Foreign Operations
The financial statements of the Group’s foreign entities that have a functional currency different from the presentation currency are translated into the presentation currency
as follows: (a) assets and liabilities are translated at the closing rate at the date of the statement of financial position; (b) income and expenses are translated at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and (c) all resulting translation differences are
recognized in other comprehensive income or loss.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing
rate. Translation differences arising are recognized in other comprehensive income or loss.
Assets and liabilities of non-Mexican subsidiaries that use the Mexican Peso as a functional currency are translated into Mexican Pesos by utilizing the exchange rate of the
statement of financial position date for monetary assets and liabilities, and historical exchange rates for non-monetary items, with the related adjustment included in the consolidated statement of income as finance income or expense.
A portion of the Group’s outstanding principal amount of its U.S. dollar denominated long-term debt (hedging instrument, disclosed in the line “Long-term debt, net of current
portion” of the consolidated statement of financial position) has been designated as a hedge of a net investment in a foreign operation in connection with the Group’s investment in shares of common stock of UHI (hedged item), which amounted
to U.S.$421.2 million (Ps.8,285,286) and U.S.$413.3 million (Ps.8,144,843) as of December 31, 2018 and 2017, respectively. Consequently, any foreign exchange gain or loss attributable to this designated hedging long-term debt is credited or
charged directly to other comprehensive income or loss as a cumulative result from foreign currency translation (see Note 10).
A portion of the Group’s outstanding principal amount of its U.S. dollar denominated long-term debt (hedging instrument, disclosed in the line “Long-term debt, net of current
portion” of the consolidated statement of financial position) has been designated as a fair value hedge of foreign exchange exposure related to: (i) its investment in warrants exercisable for common stock of UHI and (ii) its initial
investment in Open Ended Fund until March 31, 2018, and its entire investment in Open Ended Fund beginning in the second quarter of 2018 (hedged items), which amounted to Ps.34,921,530 (U.S.$1,775.1 million) and Ps.7,662,726 (U.S.$389.5
million), respectively, as of December 31, 2018, and Ps.36,395,183 (U.S.$1,847.0 million) and Ps.3,546,918 (U.S.$180.0 million), respectively, as of December 31, 2017. Consequently, any foreign exchange gain or loss attributable to this
designated hedging long-term debt is credited or charged directly to other comprehensive income or loss, along with the recognition in the same line item of any foreign currency gain or loss of these investments in warrants and Open Ended
Fund designated as hedged items (see Notes 9, 13 and 17).
Beginning on January 1, 2018, the Group adopted the hedge accounting requirements of IFRS 9 Financial Instruments, (“IFRS 9”) for all
of its hedging relationships. This IFRS Standard became effective on that date.
(f) Cash and Cash Equivalents and Temporary Investments
Cash and cash equivalents consist of cash on hand and all highly liquid investments with an original maturity of three months or less at the date of acquisition. Cash is stated
at nominal value and cash equivalents are measured at fair value, and the changes in the fair value are recognized in the statement of income.
Temporary investments consist of short-term investments in securities, including without limitation debt with a maturity of over three months and up to one year at the date of
acquisition, stock and other financial instruments, or a combination thereof, as well as current maturities of non-current investments in financial instruments. Temporary investments are measured at fair value with changes in fair value
recognized in finance income in the consolidated statement of income, except securities which are measured at amortized cost.
As of December 31, 2018 and 2017, cash equivalents and temporary investments primarily consisted of fixed short-term deposits and corporate fixed income securities denominated
in U.S. dollars and Mexican pesos, with an average yield of approximately 1.77% for U.S. dollar deposits and 7.69% for Mexican peso deposits in 2018, and approximately 0.87% for U.S. dollar deposits and 6.72% for Mexican peso deposits in
2017.
(g) Transmission Rights and Programming
Programming is comprised of programs, literary works, production talent advances and films.
Transmission rights and literary works are valued at the lesser of acquisition cost and net realizable value. Programs and films are valued at the lesser of production cost,
which consists of direct production costs and production overhead, and net realizable value. Payments for production talent advances are initially capitalized and subsequently included as direct or indirect costs of program production.
Transmission rights are recognized from the point of which the legally enforceable license period begins. Until the license term commences and the programming rights are available, payments made are recognized as prepayments.
The Group’s policy is to capitalize the production costs of programs which benefit more than one annual period and amortize them over the expected period of future program
revenues based on the Company’s historical revenue patterns and usage for similar productions.
Transmission rights, programs, literary works, production talent advances and films are recorded at acquisition or production cost. Cost of sales is calculated and recorded for
the month in which such transmission rights, programs, literary works, production talent advances and films are matched with related revenues.
Transmission rights are amortized over the lives of the contracts. Transmission rights in perpetuity are amortized on a straight-line basis over the period of the expected
benefit as determined by past experience, but not exceeding 25 years.
(h) Inventories
Inventories of paper, magazines, materials and supplies for maintenance of technical equipment are recorded at the lower of cost or its net realization value. The net
realization value is the estimated selling price in the normal course of business, less estimated costs to conduct the sale. Cost is determined using the average cost method.
(i) Financial Assets
Through December 31, 2017, the Group classified its financial assets in the following categories: loans and receivables, held-to-maturity investments, financial assets at fair
value through income or loss (“FVIL”) and available-for-sale financial assets. The classification depended on the purpose for which the financial assets were acquired. Management determined the classification of its financial assets at
initial recognition.
Beginning on January 1, 2018, the Group classifies its financial assets in accordance with IFRS 9 which became effective on that date. Under the guidelines of IFRS 9, the Group
classifies financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or loss (“FVOCIL”), or FVIL, based on the Company’s business model for managing the financial assets and the contractual
cash flows characteristics of the financial asset.
Financial Assets Measured at Amortized Cost
Financial assets are measured at amortized cost when the objective of holding such financial assets is to collect contractual cash flows, and the contractual terms of the
financial asset give rise on specified dates to cash flows that are only payments of principal and interest on the principal amount outstanding. These financial assets are initially recognized at fair value plus transaction costs and
subsequently carried at amortized cost using the effective interest rate method, with changes in carrying value recognized in the consolidated statement of income in the line which most appropriately reflects the nature of the item or
transaction. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period that are included in non-current assets. The Group’s financial assets measured at amortized costs are
primarily presented as “trade notes and accounts receivable”, “other accounts and notes receivable”, and “due from related parties” in the consolidated statement of financial position (see Note 7).
Financial Assets Measured at FVOCIL
Financial assets are measured at FVOCIL when the objective of holding such financial assets is both collecting contractual cash flows and selling financial assets, and the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Group’s investments in certain equity instruments have been designated to be measured at FVOCIL, as permitted by IFRS 9 (see Note 27). In connection with this designation,
any amounts presented in consolidated other comprehensive income are not subsequently transferred to consolidated income. Dividends from these equity instruments are recognized in consolidated income when the right to receive payment of the
dividend is established, and such dividend is probable to be paid to the Group.
Financial Assets at FVIL
Financial assets at FVIL are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short
term. Derivatives are also categorized as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as
non-current.
Impairment of Financial Assets
From January 1, 2018, the Group assesses on a forward looking basis the expected credit losses associated with its financial assets carried at fair value through other
comprehensive income or loss. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized from initial recognition of the
receivables, see Note 7 for further details.
Offsetting of Financial Instruments
Financial assets are offset against financial liabilities and the net amount reported in the consolidated statement of financial position if, and only when the Group:
(i) currently has a legally enforceable right to set off the recognized amounts; and (ii) intends either to settle on a net basis, or to realize the assets and settle the liability simultaneously.
(j) Property, Plant and Equipment
Property, plant and equipment are recorded at acquisition cost.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to income or loss during the
financial period in which they are incurred.
Land is not depreciated. Depreciation of property, plant and equipment is based upon the carrying value of the assets in use and is computed using the straight-line method over
the estimated useful lives of the asset, as follows:
|
|
Estimated
Useful Lives
|
Buildings
|
|
20-65 years
|
Building improvements
|
|
5-20 years
|
Technical equipment
|
|
3-30 years
|
Satellite transponders
|
|
15 years
|
Furniture and fixtures
|
|
3-10 years
|
Transportation equipment
|
|
4-8 years
|
Computer equipment
|
|
3-6 years
|
Leasehold improvements
|
|
5-30 years
|
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized within other income or expense in the consolidated statement of income.
(k) Intangible Assets and Goodwill
Intangible assets and goodwill are recognized at acquisition cost. Intangible assets and goodwill acquired through business combinations are recorded at fair value at the date
of acquisition. Intangible assets with indefinite useful lives, which include, trademarks, concessions, and goodwill, are not amortized, and subsequently recognized at cost less accumulated impairment losses. Intangible assets with finite
useful lives are amortized on a straight-line basis over their estimated useful lives, as follows:
|
|
Estimated
Useful Lives
|
Trademarks
|
|
4 years
|
Licenses
|
|
3-14 years
|
Subscriber lists
|
|
4-10 years
|
Payments for renewal of concessions
|
|
20 years
|
Other intangible assets
|
|
3-20 years
|
Trademarks
The Group determines its trademarks to have an indefinite life when they are expected to generate net cash inflows for the Group indefinitely. Additionally, the Group considers
that there are no legal, regulatory or contractual provisions that limit the useful lives of trademarks.
In the third quarter of 2015, the Company’s management evaluated trademarks in its Cable segment to determine whether events and circumstances continue to support an indefinite
useful life for these intangible assets. As a result of such evaluation, the Company identified certain businesses and locations that began migrating from a current trademark to an internally developed trademark between 2015 and 2016, in
connection with enhanced service packages offered to current and new subscribers, and estimated that this migration process will take approximately four years. Accordingly, beginning in the third quarter of 2015, the Group changed the
useful life assessment from indefinite to finite for acquired trademarks in certain businesses and locations in its Cable segment, and began to amortize on a straight line basis the related carrying value of these trademarks when the
migration to the new trademark started using an estimated useful life of four years. The Group has not capitalized any amounts associated with internally developed trademarks.
Concessions
The Group defined concessions to have an indefinite life due to the fact that the Group has a history of renewing its concessions upon expiration, has maintained the
concessions granted by the Mexican government, and has no foreseeable limit to the period over which the assets are expected to generate net cash inflows. In addition, the Group is committed to continue to invest for the long term to extend
the period over which the broadcasting and telecommunications concessions are expected to continue to provide economic benefits.
Any fees paid by the Group to regulatory authorities for concessions renewed are determined to have finite useful lives and are amortized on a straight-live basis over the
fixed term of the related concession.
Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the Group’s interest in net fair value of the identifiable
assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash generating units (“CGUs”), or groups of CGUs, that are
expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes.
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is
compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell. Any impairment of goodwill is recognized as an expense in the consolidated statement of income and is not subject to be reversed
in subsequent periods.
(l) Impairment of Long-lived Assets
The Group reviews for impairment the carrying amounts of its long-lived assets, tangible and intangible, including goodwill (see Note 12), at least once a year, or whenever
events or changes in business circumstances indicate that these carrying amounts may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs to sell and value in use. To determine whether an impairment exists, the carrying value of the reporting unit is compared with its recoverable amount. Fair value estimates are based
on quoted market values in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including discounted value of estimated future cash flows, market
multiples or third-party appraisal valuations. Any impairment of long-lived assets other than goodwill may be subsequently reversed under certain circumstances.
(m) Trade Accounts Payable and Accrued Expenses
Trade accounts payable and accrued expenses are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade
accounts payable and accrued expenses are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.
Trade accounts payable and accrued expenses are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.
Trade accounts payable and accrued expenses are presented as a single item of consolidated current liabilities in the consolidated statements of financial position as of
December 31, 2018 and 2017.
(n) Debt
Debt is recognized initially at fair value, net of transaction costs incurred. Debt is subsequently carried at amortized cost; any difference between the proceeds (net of
transaction costs) and the redemption value is recognized in the consolidated statement of income over the period on which the debt is outstanding using the effective interest method.
Fees paid on the establishment of debt facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be
drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a pre-payment for liquidity
services and amortized over the period of the facility to which it relates.
Current portion of long-term debt and interest payable are presented as a single line item of consolidated current liabilities in the consolidated statements of financial
position as of December 31, 2018 and 2017.
Debt early redemption costs are recognized as finance expense in the consolidated statement of income.
(o) Customer Deposits and Advances
Customer deposits and advance agreements for advertising services provide that customers receive prices that are fixed for the contract period for advertising time in the
Group’s platforms based on rates established by the Group. Such rates vary depending on when the advertisement is made, including the season, hour, day and type of programming.
The Group recognizes customer deposits and advance agreements for advertising services in the consolidated statement of financial position when these agreements are executed
either with a consideration in cash paid by customers or with short-term non-interest bearing notes received from customers in connection with annual (“upfront basis”) and from time to time (“scatter basis”) prepayments (see Note 7). In
connection with the initial adoption of IFRS 15 Revenues from Contracts with Customers (“IFRS 15”) in the first quarter of 2018 (see Note 2 (r)), customer deposits and advances agreements are
presented by the Group as a contract liability in the consolidated statement of financial position when a customer pays consideration, or the Group has a right to an amount of consideration that is unconditional, before the Group transfers
services to the customer. Under the guidelines of this standard, a contract liability is a Group’s obligation to transfer services or goods to a customer for which the Group has received consideration, or an amount of consideration is due,
from the customer. In addition, the Group recognizes contract asset upon the approval of non-cancellable contracts that generate an unconditional right to receive cash consideration prior to services being rendered. The Company’s management
has consistently recognized that an amount of consideration is due, for legal, finance and accounting purposes, when a short-term non-interest bearing note is received from a customer in connection with a deposit or advance agreement
entered into with the customer for advertising services to be rendered by the Group in the short term.
(p) Provisions
Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation, and
the amount has been reliably estimated. Provisions are not recognized for future operating losses.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments
of the time value of money and the risks specific to the obligation. The increase in the provisions due to passage of time is recognized as interest expense.
(q) Equity
The capital stock and other equity accounts include the effect of restatement through December 31, 1997, determined by applying the change in the Mexican National Consumer
Price Index between the dates capital was contributed or net results were generated and December 31, 1997, the date through which the Mexican economy was considered hyperinflationary under the guidelines of IFRS Standards. The restatement
represented the amount required to maintain the contributions and accumulated results in Mexican Pesos in purchasing power as of December 31, 1997.
Where any company in the Group purchases shares of the Company’s capital stock (shares repurchased), the consideration paid, including any directly attributable incremental
costs is deducted from equity attributable to stockholders of the Company until the shares are cancelled, reissued, or sold. Where such shares repurchased are subsequently reissued or sold, any consideration received, net of any directly
attributable incremental transaction costs, is included in equity attributable to stockholders of the Company.
(r) Revenue Recognition
In connection with the initial adoption of IFRS 15, in the first quarter of 2018, the Company’s management: (i) reviewed significant revenue streams and identified certain
effects on revenue recognition in the Group’s Sky and Cable segments, as discussed below; (ii) used the retrospective cumulative effect, which consists in recognizing any cumulative adjustment resulting from the new standard at the date of
initial adoption in consolidated equity; and (iii) did not restate the comparative information for the years ended December 31, 2017 and 2016, and will continue to report this information under the revenue recognition IFRS Standard in
effect in those periods (see Note 27).
Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for services provided. The Group recognizes revenue when
the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the Group’s activities, as described below. The Group bases its
estimate of return on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
The Group derives the majority of its revenues from media and entertainment-related business activities both in Mexico and internationally. Revenues are recognized when the
service is provided and collection is probable. A summary of revenue recognition policies by significant activity is as follows:
•
|
Advertising revenues, including deposits and advances from customers for future advertising, are recognized at the time the advertising services are rendered.
|
•
|
Revenues from program services for network subscription and licensed and syndicated television programs are recognized when the programs are sold and become available
for broadcast.
|
•
|
Sky program service revenues, including advances from customers for future direct-to-home (“DTH”) program services, are recognized at the time the service is provided.
Through December 31, 2017, commissions for obtaining contracts with customers in the Group’s Sky segment were accounted for as they were incurred. Beginning on January 1, 2018, in accordance with IFRS 15, certain incremental
costs for obtaining contracts with customers, primarily commissions, are recognized as assets in the Group’s consolidated statement of financial position and amortized in the expected life of contracts with customers.
|
•
|
Cable television, internet and telephone subscription, and pay-per-view and installation fees are recognized in the period in which the services are rendered. Through
December 31, 2017, commissions for obtaining contracts with customers in the Group’s Cable segment were accounted for as they were incurred. Beginning on January 1, 2018, in accordance with IFRS 15, incremental costs for
obtaining contracts with customers, primarily commissions, are recognized as assets in the Group’s consolidated statement of financial position and amortized in the expected life of contracts with customers.
|
•
|
Revenues from other telecommunications and data services are recognized in the period in which these services are provided. Other telecommunications services include
long distance and local telephony, as well as leasing and maintenance of telecommunications facilities.
|
•
|
Revenues from magazine subscriptions are initially deferred and recognized proportionately as products are delivered to subscribers. Revenues from the sales of magazines
are recognized on the date of circulation of delivered merchandise, net of a provision for estimated returns.
|
•
|
Revenues from publishing distribution are recognized upon distribution of the products.
|
•
|
Revenues from attendance to soccer games, including revenues from advance ticket sales for soccer games and other promotional events, are recognized on the date of the
relevant event.
|
•
|
Motion picture production and distribution revenues are recognized as the films are exhibited.
|
•
|
Gaming revenues consist of the net win from gaming activities, which is the difference between amounts wagered and amounts paid to winning patrons and are recognized at
the time of such net win.
|
In respect to sales of multiple products or services, the Group evaluates whether it has fair value evidence for each deliverable in the transaction. For example, the Group
sells cable television, internet and telephone subscription to subscribers in a bundled package at a rate lower than if the subscriber purchases each product on an individual basis. Subscription revenues received from such subscribers are
allocated to each product in a pro-rata manner based on the fair value of each of the respective services.
(s) Interest Income
Interest income is recognized using the effective interest method. When a loan and receivable is impaired, the Group reduces the carrying amount to its recoverable amount,
being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loan and receivables is recognized using the
original effective interest rate.
(t) Employee Benefits
Pension and Seniority Premium Obligations
Plans exist for pensions and seniority premiums (post-employment benefits), for most of the Group’s employees funded through irrevocable trusts. Increases or decreases in the
consolidated liability or asset for post-employment benefits are based upon actuarial calculations. Contributions to the trusts are determined in accordance with actuarial estimates of funding requirements. Payments of post-employment
benefits are made by the trust administrators. The defined benefit obligation is calculated annually using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated
future cash outflows using interest rates of government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation.
Remeasurement of post-employment benefit obligations related to experience adjustments and changes in actuarial assumptions of post- employment benefits are recognized in the
period in which they are incurred as part of other comprehensive income or loss in consolidated equity.
Profit Sharing
The employees’ profit sharing required to be paid under certain circumstances in Mexico, is recognized as a direct benefit to employees in the consolidated statements of income
in the period in which it is incurred.
Termination Benefits
Termination benefits, which mainly represent severance payments by law, are recorded in the consolidated statement of income. The Group recognizes termination benefits at the
earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognizes costs for a restructuring that involves the payment of termination benefits.
(u) Income Taxes
The income tax expense for the period comprises current and deferred income tax. Income tax is recognized in the consolidated statement of income, except to the extent that it
relates to items recognized in other comprehensive income or directly in equity. In this case, the income tax is recognized in other comprehensive income.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date in the countries where the
Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax
authorities.
Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying
amounts in the consolidated financial statements. However, deferred income tax liabilities are not recognized if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction (other than in a business combination) that at the time of the transaction affects neither accounting nor taxable income or loss. Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences and tax
loss carryforwards can be utilized. For this purpose, the Group takes into consideration all available positive and negative evidence, including factors such as market conditions, industry analysis, projected taxable income, carryforward
periods, current tax structure, potential changes or adjustments in tax structure, and future reversals of existing temporary differences.
Deferred income tax liabilities are provided on taxable temporary differences associated with investments in subsidiaries, joint ventures and associates, except for deferred
income tax liabilities where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets are
provided on deductible temporary differences associated with investments in subsidiaries, joint ventures and associates, to the extent that it is probable that there will be sufficient taxable income against which to utilize the benefit of
the temporary difference and it is expected to reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the
deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
(v) Derivative Financial Instruments
The Group recognizes derivative financial instruments as either assets or liabilities in the consolidated statements of financial position and measures such instruments at fair
value. The accounting for changes in the fair value of a derivative financial instrument depends on the intended use of the derivative financial instrument and the resulting designation. For a derivative financial instrument designated as a
cash flow hedge, the effective portion of such derivative’s gain or loss is initially reported as a component of other comprehensive income or loss and subsequently reclassified into income when the hedged exposure affects income. The
ineffective portion of the gain or loss is reported in income immediately. For a derivative financial instrument designated as a fair value hedge, the gain or loss is recognized in income in the period of change together with the offsetting
loss or gain on the hedged item attributed to the risk being hedged. When a hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss on the hedging instrument that has been recognized in other
comprehensive income remains in equity until the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to income or loss.
For derivative financial instruments that are not designated as accounting hedges, changes in fair value are recognized in income in the period of change. During the years ended December 31, 2018, 2017 and 2016, certain derivative financial
instruments qualified for hedge accounting (see Note 14).
(w) Comprehensive Income
Comprehensive income for the period includes the net income for the period presented in the consolidated statement of income plus other comprehensive income for the period
reflected in the consolidated statement of comprehensive income.
(x) Share-based Payment Agreements
Key officers and employees of certain subsidiaries of the Company have entered into agreements for the conditional sale of Company’s shares under the Company’s Long-Term
Retention Plan. The share-based compensation expense is measured at fair value at the date the equity benefits are conditionally sold to these officers and employees, and is recognized as a charge to consolidated income (administrative
expense) over the vesting period (see Note 16). The Group recognized a share-based compensation expense of Ps.1,327,549, Ps.1,489,884 and Ps.1,410,492 for the years ended December 31, 2018, 2017 and 2016, respectively, of which
Ps.1,305,999, Ps.1,468,337 and Ps.1,392,534 was credited in consolidated stockholders’ equity for those years, respectively.
(y) Leases
Through December 31, 2018:
•
|
The determination of whether an arrangement was, or contained, a lease was based on the substance of the arrangement and required an assessment of whether the
fulfillment of the arrangement was dependent on the use of a specific asset or assets and whether the arrangement conveyed the right to use the asset.
|
•
|
Leases of property, plant and equipment and other assets where the Group held substantially all the risks and rewards of ownership were classified as finance leases.
Finance lease assets were capitalized at the commencement of the lease term at the lower of the present value of the minimum lease payments or the fair value of the lease asset. The obligations relating to finance leases, net of
finance charges in respect of future periods, were recognized as liabilities. The interest element of the finance cost was charged to the consolidated statement of income over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases was depreciated over the shorter of the useful life of the asset and the lease
term.
|
•
|
Leases where a significant portion of the risks and rewards were held by the lessor were classified as operating leases. Rentals were charged to the consolidated
statement of income on a straight line basis over the period of the lease.
|
•
|
Leasehold improvements were depreciated at the lesser of its useful life or contract term.
|
In the first quarter of 2019, the Group adopted IFRS 16 Leases (“IFRS 16”), which became effective for annual periods beginning on
January 1, 2019 (see Note 2 (z)). The Group will not apply this new IFRS Standard to short-term leases and leases for which the underlying asset is of low value, as permitted by the guidelines of IFRS 16.
(z) New and Amended IFRS Standards
The Group adopted IFRS 15 and IFRS 9 which became effective on January 1, 2018 (see Notes 2 (i), 2 (r) and 27). Some other amendments and improvements to certain IFRS Standards
became effective on January 1, 2018, and they did not have any significant impact on the Group’s consolidated financial statements.
Below is a list of the new and amended IFRS Standards that have been issued by the IASB and are effective for annual periods starting on or after January 1, 2019.
New or Amended IFRS Standard
|
|
Title of the IFRS Standard
|
|
Effective for Annual
Periods Beginning
On or After
|
Amendments to IFRS 10 and IAS 28 (1)
|
|
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
|
|
Postponed
|
IFRS 16
|
|
Leases
|
|
January 1, 2019
|
Amendments to IFRS 4 (2)
|
|
Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts
|
|
No earlier than 2020
|
IFRS 17 (2)
|
|
Insurance Contracts
|
|
January 1, 2021
|
IFRIC 23 (1)
|
|
Uncertainty over Income Tax Treatments
|
|
January 1, 2019
|
Annual Improvements (1)
|
|
Annual Improvements to IFRS Standards 2015-2017 Cycle
|
|
January 1, 2019
|
Amendments to IAS 28 (1)
|
|
Long-term Interests in Associates and Joint Ventures
|
|
January 1, 2019
|
Amendments to IFRS 9 (1)
|
|
Prepayment Features with Negative Compensation
|
|
January 1, 2019
|
Amendments to IAS 19 (1)
|
|
Plan Amendment, Curtailment or Settlement
|
|
January 1, 2019
|
IFRS Conceptual Framework
|
|
Conceptual Framework for Financial Reporting
|
|
January 1, 2020
|
Amendments to IFRS 3 (1)
|
|
Definition of a Business
|
|
January 1, 2020
|
Amendments to IAS 1 and IAS 8 (1)
|
|
Definition of Material
|
|
January 1, 2020
|
(1)
|
This new or amended IFRS Standard is not expected to have a significant impact on the Group’s consolidated financial statements.
|
(2)
|
This new or amended IFRS Standard is not expected to be applicable to the Group’s consolidated financial statements.
|
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture, were issued in
September 2014 and address and acknowledge inconsistency between the requirements in IFRS 10 and those in IAS 28 (2011), in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main
consequence of the amendments is that a full gain or loss is recognized when a transaction involved a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognized when a transaction involved assets that do
not constitute a business, even if these assets are housed in a subsidiary. In December 2015, the IASB postponed the effective date of these amendments indefinitely pending the outcome of its research project on the equity method of
accounting.
IFRS 16 Leases was issued in January 2016, replaces IAS 17 Leases (“IAS 17”), and became
effective on January 1, 2019. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases. IFRS 16 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognizes a
right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are recognition exemptions for short-term leases and leases of low-value items. Lessor
accounting remains similar to the current standard: lessors continue to classify leases as finance or operating leases. The Company’s management expects that the initial impact of recording lease liabilities, and the corresponding
right-of-use assets in accordance with the guidelines of IFRS 16, will increase the Group’s consolidated total assets and liabilities primarily in connection with lease commitments for the use of real estate property and satellite
transponders as of December 31, 2018. IFRS 16 will also affect the presentation of certain line items of the Group’s consolidated statement of income for interim and annual periods beginning on January 1, 2019, as the Group shall recognize
a depreciation of rights-of-use assets for long-term lease agreements, and a finance expense for interest from related non-current lease liabilities, instead of affecting consolidated operating costs and expenses for lease payments, as they
were recognized through December 31, 2018, under the guidelines of the former IFRS Standard. Beginning in the first quarter of 2019, the Group adopted the guidelines of IFRS 16 by using the retrospective cumulative effect, which consists of
recognizing any cumulative adjustment due to the new IFRS Standard at the date of initial adoption in consolidated assets and liabilities. Accordingly, as a lessee, the Group recognized lease liabilities as of January 1, 2019, for leases
classified as operating leases through December 31, 2018, and measured these lease liabilities at the present value of the remaining lease payments, discounted using the incremental borrowing rate as of January 1, 2019. The carrying amounts
of leases classified as a finance leases through December 31, 2018, became the initial carrying amounts of right-of-use assets and lease liabilities under the guidelines of IFRS 16 beginning on January 1, 2019. The Company’s management will
conclude and report in April 2019, the determination of the initial impact IFRS 16 will have on the Group’s consolidated financial statements for the first quarter of 2019. While the Company’s management is not yet in a position to disclose
the full impact of the application of this new IFRS Standard, the Group expects that the initial impact of recording the required lease liabilities and the corresponding right-to-use assets will increase the Group’s consolidated total
assets and liabilities as of January1, 2019, in a range of 1.5% and 2.0%, and 2.5% and 3.0%, respectively, primarily in connection with its non-cancellable lease and payment commitments for the use of real estate property. The Company’s
management is in the process of concluding with the analysis and assessment of any changes to be made in the Group’s accounting policies for long-term lease agreements as a lessee, including the implementation of effective controls over
financial reporting in the different business segments of the Group, in connection with the measurement and disclosures required by IFRS 16. The new accounting policies and estimates are subject to change until management finalizes its
analysis.
Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts were issued in September 2016 and address
concerns arising from implementing the new financial instruments Standard, IFRS 9, before implementing the replacement Standard that the Board is developing for IFRS 4. These concerns include temporary volatility in reported results.
IFRS 17 Insurance Contracts (“IFRS 17”) was issued in May 2017 and supersedes IFRS 4 Insurance
Contracts (“IFRS 4”), which has given companies dispensation to carry on accounting for insurance contracts using national accounting standards, resulting in a multitude of different approaches. IFRS 17 establishes principles for
the recognition, measurement, presentation and disclosures of insurance contracts issued. It also requires similar principles to be applied to reinsurance contracts with discretionary participation features issued. IFRS 17 solves the
comparison problems created by IFRS 4 by requiring all insurance contracts to be accounted for in a consistent manner. Under the provisions of IFRS 17, insurance obligations will be accounted for using current values instead of historical
cost. IFRS 17 is effective on January 1, 2021, and earlier application is permitted.
IFRIC 23 Uncertainty over Income Tax Treatments (“IFRIC 23”) clarifies how to apply the recognition and measurement requirements in
IAS 12 Income Taxes when there is uncertainty over income tax treatments. When there is uncertainty over income tax treatments, IFRIC 23 addresses: (a) whether an entity considers uncertain tax
treatments separately; (b) the assumptions an entity makes about the examination of tax treatments; (c) how an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, including an
entity’s consideration of whether it is probable that a taxation authority will accept an uncertain tax treatment; and (d) how an entity considers changes in facts and circumstances.
Amendments to IFRS 3 Definition of a Business was issued in October 2018. The amended definition emphasises that the output of a
business is to provide goods and services to customers, whereas the previous definition focused on returns in the form of dividends, lower costs or other economic benefits to investors and others.
Distinguishing between a business and a group of assets is important because an acquirer recognises goodwill only when acquiring a business. Amendments to IFRS 3 is effective on January 1, 2020, and earlier application is permitted.
Amendments to IAS 1 and IAS 8 Definition of Material. The definition of material helps a company determine whether information about
an item, transaction or other event should be provided to users of financial statements. However, companies sometimes experienced difficulties using the previous definition of material when making materiality judgements in the preparation
of financial statements. Consequently, the IASB issued Definition of Material (Amendments to IAS 1 and IAS 8) in October 2018. Amendments to IAS 1 and IAS 8 is effective on January 1, 2020, and earlier application is permitted.
Annual Improvements to IFRS Standards2015-2017 Cycle were published in December 2017 and set out amendments to certain IFRS Standards.
These amendments result from proposals made during the IASB’s Annual Improvements process, which provides a vehicle for making non-urgent but necessary amendments to IFRS Standards. The IFRS Standards amended and the topics addressed by
these amendments are as follows:
Standard
|
|
Subject of Amendment
|
IFRS 3 Business Combinations
|
|
Previously held interest in a joint operation.
|
IFRS 11 Joint Arrangements
|
|
Previously held interest in a joint operation.
|
IAS 12 Income Taxes
|
|
Income tax consequences of payments on financial instruments classified as equity.
|
IAS 23 Borrowing Costs
|
|
Borrowing costs eligible for capitalization.
|
Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures were issued in October 2017. The amendments clarify that a
company applies IFRS 9 to long-term interests in an associate or joint venture that form part of the net investment in the associate or joint venture. An entity shall apply these amendments retrospectively for annual reporting periods
beginning on or after January 1, 2019, with certain exceptions. Earlier application is permitted.
Amendments to IFRS 9 Prepayment Features with Negative Compensation were issued in October 2017. These amendments enable entities to
measure at amortized cost some prepayable financial assets with so-called negative compensation. An entity shall apply these amendments retrospectively for annual reporting periods beginning on or after January 1, 2019, with certain
exceptions. Earlier application is permitted.
Amendments to IAS 19 Employee Benefits (“IAS 19”) were issued in February 2018. When a change to a defined benefit plan (amendment,
curtailment or settlement) takes place, IAS 19 requires a company to remeasure its net defined benefit liability or asset. These amendments require a company to use the updated assumptions from this remeasurement to determine current
service cost and net interest for the remainder of the reporting period after the change to the plan. Until now, IAS 19 did not specify how to determine these expenses for the period after the change to the plan. By requiring the use of
updated assumptions, the amendments are expected to provide useful information to users of financial statements. An entity shall apply these amendments to plan amendments, curtailments or settlements occurring on or after the beginning of
the first annual reporting period that begins on or after January 1, 2019. Earlier application is permitted.
Conceptual Framework for Financial Reporting (“Conceptual Framework”) was issued in March 2018, replacing the previous version of the
Conceptual Framework issued in 2010. The Conceptual Framework describes the objective of, and the concepts for, general purpose financial reporting. The purpose of the Conceptual Framework is to: (a) assist the IASB to develop IFRS
Standards that are based on consistent concepts; (b) assist preparers to develop consistent accounting policies when no Standard applies to a particular transaction or other event, or when a Standard allows a choice of accounting policy;
and (c) assist all parties to understand and interpret the IFRS Standards. The Conceptual Framework is not an IFRS Standard. Nothing in the Conceptual Framework overrides any IFRS Standard or any requirement in an IFRS Standard. The revised
Conceptual Framework is effective immediately for the IASB and the IFRIC, and has an effective date of January 1, 2020, with earlier application permitted, for companies that use the Conceptual Framework to develop accounting policies when
no IFRS Standard applies to a particular transaction.
[800600] Notes - List of accounting policies
Disclosure of significant accounting policies
Accounting Policies
The principal accounting policies followed by the Group and used in the preparation of its annual consolidated financial statements as of December 31, 2018, and
where applicable, of its interim condensed consolidated financial statements in 2019, are summarized below.
(a) Basis of Presentation
The consolidated financial statements of the Group as of December 31, 2018 and 2017, and for the years ended December 31, 2018, 2017 and 2016, are presented in
accordance with International Financial Reporting Standards (“IFRS Standards”) as issued by the International Accounting Standards Board (“IASB”). IFRS Standards comprise: (i) IFRS Standards; (ii) International Accounting Standards (“IAS
Standards”); (iii) IFRS Interpretations Committee (“IFRIC”) Interpretations; and (iv) Standing Interpretations Committee (“SIC”) Interpretations.
The consolidated financial statements have been prepared on a historical cost basis, except for the measurement at fair value of temporary investments, derivative
financial instruments, financial assets, equity financial instruments, plan assets of post-employment benefits and share-based payments, as described below.
The preparation of consolidated financial statements in conformity with IFRS Standards requires the use of certain critical accounting estimates. It also requires
management to exercise its judgment in the process of applying the Group’s accounting policies. Changes in assumptions may have a significant impact on the consolidated financial statements in the period the assumptions changed. Management
believes that the underlying assumptions are appropriate. The areas involving a higher degree of judgment or complexity, or areas where estimates and assumptions are significant to the Group’s financial statements are disclosed in Note 5 to these
consolidated financial statements.
These consolidated financial statements were authorized for issuance on April 4, 2019, by the Group’s Principal Financial Officer.
(b) Consolidation
The financial statements of the Group are prepared on a consolidated basis and include the assets, liabilities and results of operations of all companies in which the
Company has a controlling interest (subsidiaries). All intercompany balances and transactions have been eliminated from the consolidated financial statements.
Subsidiaries
Subsidiaries are all entities over which the Company has control. The Company controls an entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity. The existence and effects of potential voting rights that are currently exercisable or convertible are considered when assessing whether or
not the Company controls another entity. The subsidiaries are consolidated from the date on which control is obtained by the Company and cease to consolidate from the date on which said control is lost.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of
the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent
consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling
interest in the acquiree on an acquisition-by-acquisition basis at the non-controlling interest’s proportionate share of the recognized amounts of acquiree’s identifiable net assets.
Acquisition-related costs are expensed as incurred.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net
identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized in income or loss.
Changes in Ownership Interests in Subsidiaries without Change of Control
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions that is, as transactions with the owners in
their capacity as owners. The difference between fair value of any consideration paid and the interest acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals of non-controlling interests
are also recorded in equity.
Loss of Control of a Subsidiary
When the Company ceases to have control of a subsidiary, any retained interest in the entity is remeasured to its fair value at the date when control is lost, with
the change in carrying amount recognized in income or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any
amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This means that amounts previously recognized in other
comprehensive income are reclassified to income or loss. Except for certain equity financial instruments designated irrevocably with changes in other comprehensive income or loss.
At December 31, 2018, 2017 and 2016, the main direct and indirect subsidiaries of the Company were as follows:
Entity
|
|
Company’s
Ownership
Interest (1)
|
|
Business Segment (2)
|
|
|
|
|
|
|
|
Grupo Telesistema, S.A. de C.V. and subsidiaries
|
|
100%
|
|
Content and Other Businesses
|
|
Televisa, S.A. de C.V. (“Televisa”) (3)
|
|
100%
|
|
Content
|
|
G.Televisa-D, S.A. de C.V. (3)
|
|
100%
|
|
Content
|
|
Multimedia Telecom, S.A. de C.V. (“Multimedia Telecom”) and subsidiary (4)
|
|
100%
|
|
Content
|
|
Innova, S. de R.L. de C.V. (“Innova”) and subsidiaries (collectively, “Sky”) (5)
|
|
58.7%
|
|
Sky
|
|
Corporativo Vasco de Quiroga, S.A. de C.V. (“CVQ”) and subsidiaries (6)
|
|
100%
|
|
Cable and Sky
|
|
Empresas Cablevisión, S.A.B. de C.V. and subsidiaries (collectively, “Empresas Cablevisión”) (7)
|
|
51%
|
|
Cable
|
|
Subsidiaries engaged in the Cablemás business (collectively, “Cablemás”) (8)
|
|
100%
|
|
Cable
|
|
Televisión Internacional, S.A. de C.V. and subsidiaries (collectively, “TVI”) (9)
|
|
100%
|
|
Cable
|
|
Cablestar, S.A. de C.V. and subsidiaries (collectively, “Bestel”) (10)
|
|
66.1%
|
|
Cable
|
|
Arretis, S.A.P.I. de C.V. and subsidiaries (collectively, “Cablecom”) (11)
|
|
100%
|
|
Cable
|
|
Subsidiaries engaged in the Telecable business (collectively, “Telecable”) (12)
|
|
100%
|
|
Cable
|
|
Editorial Televisa, S.A. de C.V. and subsidiaries
|
|
100%
|
|
Other Businesses
|
|
Grupo Distribuidoras Intermex, S.A. de C.V. and subsidiaries
|
|
100%
|
|
Other Businesses
|
|
Sistema Radiópolis, S.A. de C.V. (“Radiópolis”) and subsidiaries (13)
|
|
50%
|
|
Other Businesses
|
|
Controladora de Juegos y Sorteos de México, S.A. de C.V. and subsidiaries
|
|
100%
|
|
Other Businesses
|
|
Villacezán, S.A. de C.V. (“Villacezán”) and subsidiaries (14)
|
|
100%
|
|
Other Businesses
|
|
(1)
|
Percentage of equity interest directly or indirectly held by the Company.
|
|
|
(2)
|
See Note 25 for a description of each of the Group’s business segments.
|
|
|
(3)
|
Televisa and G.Televisa-D, S.A. de C.V., are direct subsidiaries of Grupo Telesistema, S.A. de C.V.
|
|
|
(4)
|
Multimedia Telecom and its direct subsidiary, Comunicaciones Tieren, S.A. de C.V. (“Tieren”), are wholly-owned subsidiaries of the Company through which it
owns shares of the capital stock of UHI and maintains an investment in warrants that are exercisable for shares of common stock of UHI. As of December 31, 2018 and 2017, Multimedia Telecom and Tieren have investments representing 95.3%
and 4.7%, respectively, of the Group’s aggregate investment in shares of common stock and share warrants issued by UHI (see Notes 9, 10 and 19).
|
|
|
(5)
|
Innova is an indirect majority-owned subsidiary of the Company and Sky DTH, S.A. de C.V. (“Sky DTH”), and a direct majority-owned subsidiary of Innova
Holdings, S. de R.L. de C.V. (“Innova Holdings”). Sky is a satellite television provider in Mexico, Central America and the Dominican Republic. Although the Company holds a majority of Innova’s equity and designates a majority of the
members of Innova’s Board of Directors, the non-controlling interest has certain governance and veto rights in Innova, including the right to block certain transactions between the companies in the Group and Sky. These veto rights are
protective in nature and do not affect decisions about relevant business activities of Innova.
|
(6)
|
CVQ is a direct subsidiary of the Company and the parent company of Empresas Cablevisión, Cablemás, TVI, Bestel, Cablecom, Telecable and Innova. In
September 2016, Factum Más Telecom, S.A. de C.V., a former direct subsidiary of the Company and the former parent company of Sky DTH, Innova Holdings and Innova, was merged into CVQ. At the consolidated level, this merger had no effect
(see Note 3).
|
|
|
(7)
|
Empresas Cablevisión, S.A.B. de C.V., is a direct majority-owned subsidiary of CVQ.
|
|
|
(8)
|
Some Cablemás subsidiaries are directly owned by CVQ and some other Cablemás subsidiaries are indirectly owned by CVQ. In June 2016, three former Cablecom
subsidiaries were merged into a Cablemás subsidiary. At the consolidated level, the mergers had no effect.
|
|
|
(9)
|
Televisión Internacional, S.A. de C.V., is a direct subsidiary of CVQ. Through February 2016, the Company had a 50% ownership interest in TVI, and
consolidated this subsidiary because it appointed the majority of the members of the Board of Directors of TVI. In March 2016, the Company acquired the remaining 50% non-controlling interest in TVI (see Note 3).
|
|
|
(10)
|
Cablestar, S.A. de C.V., is an indirect majority-owned subsidiary of CVQ and Empresas Cablevisión, S.A.B. de C.V.
|
|
|
(11)
|
Through the third quarter of 2016, Grupo Cable TV, S.A. de C.V. (“Grupo Cable TV”), was an indirect subsidiary of CVQ. In June 2016, three former subsidiaries
of Grupo Cable TV were merged into a Cablemás subsidiary. In the fourth quarter of 2016, Grupo Cable TV merged into Arretis, S.A.P.I. de C.V., a direct subsidiary of CVQ. At the consolidated level, the mergers had no effect.
|
|
|
(12)
|
The Telecable subsidiaries are directly owned by CVQ.
|
|
|
(13)
|
Radiópolis is a direct subsidiary of the Company. The Company controls Radiópolis as it has the right to appoint the majority of the members of the Board of
Directors of Radiópolis.
|
|
|
(14)
|
Villacezán is an indirect subsidiary of Grupo Telesistema, S.A. de C.V.
|
The Group’s Content, Sky and Cable segments, as well as the Group’s Radio business, which is reported in the Other Businesses segment, require governmental
concessions and special authorizations for the provision of broadcasting and telecommunications services in Mexico. Such concessions are granted by the Mexican Institute of Telecommunications (“Instituto Federal de Telecomunicaciones” or “IFT”)
for a fixed term, subject to renewal in accordance with the Mexican Telecommunications and Broadcasting Law (“Ley Federal de Telecomunicaciones y Radiodifusión” or “LFTR”).
Renewal of concessions for the Content segment (Broadcasting) and the Radio business require, among others: (i) to request such renewal to IFT prior to the last fifth
period of the fixed term of the related concession; (ii) to be in compliance with the concession holder’s obligations under the LFTR, other applicable regulations, and the concession title; (iii) a declaration by IFT that there is no public
interest in recovering the spectrum granted under the related concession; and (iv) the acceptance by the concession holder of any new conditions for renewing the concession as set forth by IFT, including the payment of a related fee. IFT shall
resolve within the year following the presentation of the request, if there is public interest in recovering the spectrum granted under the related concession, in which case it will notify its determination and proceed with the termination of the
concession at the end of its fixed term. If IFT determines that there is no public interest in recovering the spectrum, it will grant the requested extension within 180 business days, provided that the concessionaire accepts, in advance, the new
conditions set by IFT, which will include the payment of the fee referred to above. Such fee will be determined by IFT for the relevant concessions, considering the following elements: (i) the frequency band; (ii) the amount of spectrum;
(iii) coverage of the frequency band; (iv) domestic and international benchmark regarding the market value of frequency bands; and (v) upon request of IFT, an opinion issued by the Ministry of Finance and Public Credit of IFT´s proposal for
calculation of the fee.
Renewal of concessions for the Sky and Cable segments require, among others: (i) to request its renewal to IFT prior to the last fifth period of the fixed term of the
related concession; (ii) to be in compliance with the concession holder’s obligations under the LFTR, other applicable regulations, and the concession title; and (iii) the acceptance by the concession holder of any new conditions for renewing the
concession as set forth by IFT. IFT shall resolve any request for renewal of the telecommunications concessions within 180 business days of its request. Failure to respond within such period of time shall be interpreted as if the request for
renewal has been granted.
The regulations of the broadcasting and the telecommunications concessions (including satellite pay TV) establish that at the end of the concession, the frequency
bands or spectrum attached to the services provided in the concessions shall return to the Mexican government. In addition, at the end of the concession, the Mexican government will have the preferential right to acquire infrastructure, equipment
and other goods directly used in the provision of the concession. If the Mexican government were to exercise its right to acquire infrastructure, equipment and other goods, it would be required to pay a price that is equivalent to a formula that
is similar to fair value. To the knowledge of the Company’s management, no spectrum granted for broadcasting services in Mexico has been recovered by the Mexican government in at least the past three decades for public interest reasons. However,
the Company’s management is unable to predict the outcome of any action by IFT in this regard. In addition, these assets, by themselves, would not be enough to immediately begin broadcasting or offering satellite pay TV services or
telecommunications services, as no content producing assets or other equipment necessary to operate the business would be included.
Also, the Group’s Gaming business, which is reported in the Other Businesses segment, requires a permit granted by the Mexican Federal Government for a fixed term,
subject to renewal in accordance with Mexican law. Additionally, the Group’s Sky businesses in Central America and the Dominican Republic require concessions or permits granted by local regulatory authorities for a fixed term, subject to renewal
in accordance with local laws.
The accounting guidelines provided by IFRIC 12 Service Concession Arrangements, are not applicable to the Group due
primarily to the following factors: (i) the Mexican government does not substantially control the Group’s infrastructure, what services are provided with the infrastructure and the price at which such services are offered; (ii) the Group’s
broadcasting service does not constitute a public service as per the definition in IFRIC 12; and (iii) the Group is unable to divide its infrastructure among the public (telephony and possibly Internet services) and non-public (pay TV) service
components.
At December 31, 2018, the expiration dates of the Group’s concessions and permits were as follows:
Segments
|
|
Expiration Dates
|
Content (broadcasting concessions) (1)
|
|
In 2021 and the relevant renewals start in 2022 ending in 2042
|
Sky (2)
|
|
Various from 2020 to 2027
|
Cable
|
|
Various from 2020 to 2046
|
Other Businesses:
|
|
|
Radio (3)
|
|
Various from 2019 to 2039
|
Gaming
|
|
In 2030
|
(1)
|
In November 2018, the IFT approved the renewal of the Group’s broadcasting concessions for all of its television stations in Mexico, for a term of 20 years
after the existing expiration date in 2021. In November 2018, the Group paid in cash for such renewal an aggregate amount of Ps.5,754,543, which includes a payment of Ps.1,194 for administrative expenses and recognized this cost as an
intangible asset in its consolidated statement of financial position. This amount will be amortized in a period of 20 years beginning on January 1, 2022, by using the straight-line method (see Note 12).
|
|
|
(2)
|
Sky made timely requests to renew its concessions in Panama and Honduras during 2018.
|
|
|
(3)
|
The costs paid by the Group for renewal of certain Radio concessions in 2017 and 2016 amounted to an aggregate of Ps.37,848 and Ps.111,636, respectively. In
addition, IFT granted in 2017 two new concessions to the Group in Ensenada and Puerto Vallarta. The cost paid by the Group for obtaining these concessions amounted to an aggregate of Ps.85,486. The Group recognized the amounts for renewal
and obtaining these concessions as intangible assets in its consolidated statement of financial position, and are amortized in a period of 20 years by using the straight-line method (see Note 12).
|
The concessions or permits held by the Group are not subject to any significant pricing regulations in the ordinary course of business.
(c) Investments in Associates and Joint Ventures
Associates are those entities over which the Group has significant influence but not control, generally those entities with a shareholding of between 20% and 50% of
the voting rights. Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. Joint ventures are those joint arrangements where the Group
exercises joint control with other stockholder or more stockholders without exercising control individually, and have rights to the net assets of the joint arrangements. Investments in associates and joint ventures are accounted for using the
equity method of accounting. Under the equity method, the investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor’s share of the net assets of the investee after the date of
acquisition.
The Group’s investments in associates include an equity interest in UHI represented by approximately 10% of the outstanding total shares of UHI as of December 31,
2018 and 2017 (see Notes 3, 9 and 10).
The Group recognizes its share of losses of an associate or a joint venture up to the amount of its initial investment, subsequent capital contributions and long-term
loans, or beyond that when guaranteed commitments have been made by the Group in respect of obligations incurred by investees, but not in excess of such guarantees. If an associate or a joint venture for which the Group had recognized a share of
losses up to the amount of its guarantees generates net income in the future, the Group would not recognize its share of this net income until the Group first recognizes its share of previously unrecognized losses.
If the Group’s share of losses of an associate or a joint venture equals or exceeds its interest in the investee, the Group discontinues recognizing its share of
further losses. The interest in an associate or a joint venture is the carrying amount of the investment in the investee under the equity method together with any other long-term investment that, in substance, form part of the Group’s net
investment in the investee. After the Group’s interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on
behalf of the associate or joint venture.
(d) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Group’s chief executive officers (“chief operating decision
makers”) who are responsible for allocating resources and assessing performance for each of the Group’s operating segments.
(e) Foreign Currency Translation
Functional and Presentation Currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity
operates (“functional currency”). The presentation and reporting currency of the Group’s consolidated financial statements is the Mexican peso, which is used for compliance with its legal and tax obligations.
Transactions and Balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or measurement where
items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in
the statement of income as part of finance income or expense, except when deferred in other comprehensive income as qualifying cash flow hedges and qualifying net investment hedges.
Changes in the fair value of monetary securities denominated in foreign currency classified as investments in financial instruments are analyzed between exchange
differences resulting from changes in the amortized cost of the security and other changes in the carrying amount of the security. Translation differences related to changes in amortized cost are recognized in income or loss, and other changes in
carrying amount are recognized in other comprehensive income or loss.
Translation of Foreign Operations
The financial statements of the Group’s foreign entities that have a functional currency different from the presentation currency are translated into the presentation
currency as follows: (a) assets and liabilities are translated at the closing rate at the date of the statement of financial position; (b) income and expenses are translated at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and (c) all resulting translation differences are recognized
in other comprehensive income or loss.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the
closing rate. Translation differences arising are recognized in other comprehensive income or loss.
Assets and liabilities of non-Mexican subsidiaries that use the Mexican Peso as a functional currency are translated into Mexican Pesos by utilizing the exchange rate
of the statement of financial position date for monetary assets and liabilities, and historical exchange rates for non-monetary items, with the related adjustment included in the consolidated statement of income as finance income or expense.
A portion of the Group’s outstanding principal amount of its U.S. dollar denominated long-term debt (hedging instrument, disclosed in the line “Long-term debt, net of
current portion” of the consolidated statement of financial position) has been designated as a hedge of a net investment in a foreign operation in connection with the Group’s investment in shares of common stock of UHI (hedged item), which
amounted to U.S.$421.2 million (Ps.8,285,286) and U.S.$413.3 million (Ps.8,144,843) as of December 31, 2018 and 2017, respectively. Consequently, any foreign exchange gain or loss attributable to this designated hedging long-term debt is credited
or charged directly to other comprehensive income or loss as a cumulative result from foreign currency translation (see Note 10).
A portion of the Group’s outstanding principal amount of its U.S. dollar denominated long-term debt (hedging instrument, disclosed in the line “Long-term debt, net of
current portion” of the consolidated statement of financial position) has been designated as a fair value hedge of foreign exchange exposure related to: (i) its investment in warrants exercisable for common stock of UHI and (ii) its initial
investment in Open Ended Fund until March 31, 2018, and its entire investment in Open Ended Fund beginning in the second quarter of 2018 (hedged items), which amounted to Ps.34,921,530 (U.S.$1,775.1 million) and Ps.7,662,726 (U.S.$389.5 million),
respectively, as of December 31, 2018, and Ps.36,395,183 (U.S.$1,847.0 million) and Ps.3,546,918 (U.S.$180.0 million), respectively, as of December 31, 2017. Consequently, any foreign exchange gain or loss attributable to this designated hedging
long-term debt is credited or charged directly to other comprehensive income or loss, along with the recognition in the same line item of any foreign currency gain or loss of these investments in warrants and Open Ended Fund designated as hedged
items (see Notes 9, 13 and 17).
Beginning on January 1, 2018, the Group adopted the hedge accounting requirements of IFRS 9 Financial Instruments, (“IFRS
9”) for all of its hedging relationships. This IFRS Standard became effective on that date.
(f) Cash and Cash Equivalents and Temporary Investments
Cash and cash equivalents consist of cash on hand and all highly liquid investments with an original maturity of three months or less at the date of acquisition. Cash
is stated at nominal value and cash equivalents are measured at fair value, and the changes in the fair value are recognized in the statement of income.
Temporary investments consist of short-term investments in securities, including without limitation debt with a maturity of over three months and up to one year at
the date of acquisition, stock and other financial instruments, or a combination thereof, as well as current maturities of non-current investments in financial instruments. Temporary investments are measured at fair value with changes in fair
value recognized in finance income in the consolidated statement of income, except securities which are measured at amortized cost.
As of December 31, 2018 and 2017, cash equivalents and temporary investments primarily consisted of fixed short-term deposits and corporate fixed income securities
denominated in U.S. dollars and Mexican pesos, with an average yield of approximately 1.77% for U.S. dollar deposits and 7.69% for Mexican peso deposits in 2018, and approximately 0.87% for U.S. dollar deposits and 6.72% for Mexican peso deposits
in 2017.
(g) Transmission Rights and Programming
Programming is comprised of programs, literary works, production talent advances and films.
Transmission rights and literary works are valued at the lesser of acquisition cost and net realizable value. Programs and films are valued at the lesser of
production cost, which consists of direct production costs and production overhead, and net realizable value. Payments for production talent advances are initially capitalized and subsequently included as direct or indirect costs of program
production. Transmission rights are recognized from the point of which the legally enforceable license period begins. Until the license term commences and the programming rights are available, payments made are recognized as prepayments.
The Group’s policy is to capitalize the production costs of programs which benefit more than one annual period and amortize them over the expected period of future
program revenues based on the Company’s historical revenue patterns and usage for similar productions.
Transmission rights, programs, literary works, production talent advances and films are recorded at acquisition or production cost. Cost of sales is calculated and
recorded for the month in which such transmission rights, programs, literary works, production talent advances and films are matched with related revenues.
Transmission rights are amortized over the lives of the contracts. Transmission rights in perpetuity are amortized on a straight-line basis over the period of the
expected benefit as determined by past experience, but not exceeding 25 years.
(h) Inventories
Inventories of paper, magazines, materials and supplies for maintenance of technical equipment are recorded at the lower of cost or its net realization value. The net
realization value is the estimated selling price in the normal course of business, less estimated costs to conduct the sale. Cost is determined using the average cost method.
(i) Financial Assets
Through December 31, 2017, the Group classified its financial assets in the following categories: loans and receivables, held-to-maturity investments, financial
assets at fair value through income or loss (“FVIL”) and available-for-sale financial assets. The classification depended on the purpose for which the financial assets were acquired. Management determined the classification of its financial
assets at initial recognition.
Beginning on January 1, 2018, the Group classifies its financial assets in accordance with IFRS 9 which became effective on that date. Under the guidelines of IFRS 9,
the Group classifies financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or loss (“FVOCIL”), or FVIL, based on the Company’s business model for managing the financial assets and the
contractual cash flows characteristics of the financial asset.
Financial Assets Measured at Amortized Cost
Financial assets are measured at amortized cost when the objective of holding such financial assets is to collect contractual cash flows, and the contractual terms of
the financial asset give rise on specified dates to cash flows that are only payments of principal and interest on the principal amount outstanding. These financial assets are initially recognized at fair value plus transaction costs and
subsequently carried at amortized cost using the effective interest rate method, with changes in carrying value recognized in the consolidated statement of income in the line which most appropriately reflects the nature of the item or
transaction. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period that are included in non-current assets. The Group’s financial assets measured at amortized costs are primarily
presented as “trade notes and accounts receivable”, “other accounts and notes receivable”, and “due from related parties” in the consolidated statement of financial position (see Note 7).
Financial Assets Measured at FVOCIL
Financial assets are measured at FVOCIL when the objective of holding such financial assets is both collecting contractual cash flows and selling financial assets,
and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Group’s investments in certain equity instruments have been designated to be measured at FVOCIL, as permitted by IFRS 9 (see Note 27). In connection with this
designation, any amounts presented in consolidated other comprehensive income are not subsequently transferred to consolidated income. Dividends from these equity instruments are recognized in consolidated income when the right to receive payment
of the dividend is established, and such dividend is probable to be paid to the Group.
Financial Assets at FVIL
Financial assets at FVIL are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in
the short term. Derivatives are also categorized as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as
non-current.
Impairment of Financial Assets
From January 1, 2018, the Group assesses on a forward looking basis the expected credit losses associated with its financial assets carried at fair value through
other comprehensive income or loss. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized from initial
recognition of the receivables, see Note 7 for further details.
Offsetting of Financial Instruments
Financial assets are offset against financial liabilities and the net amount reported in the consolidated statement of financial position if, and only when the Group:
(i) currently has a legally enforceable right to set off the recognized amounts; and (ii) intends either to settle on a net basis, or to realize the assets and settle the liability simultaneously.
(j) Property, Plant and Equipment
Property, plant and equipment are recorded at acquisition cost.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to income or loss during the financial
period in which they are incurred.
Land is not depreciated. Depreciation of property, plant and equipment is based upon the carrying value of the assets in use and is computed using the straight-line
method over the estimated useful lives of the asset, as follows:
|
|
Estimated
Useful Lives
|
Buildings
|
|
20-65 years
|
Building improvements
|
|
5-20 years
|
Technical equipment
|
|
3-30 years
|
Satellite transponders
|
|
15 years
|
Furniture and fixtures
|
|
3-10 years
|
Transportation equipment
|
|
4-8 years
|
Computer equipment
|
|
3-6 years
|
Leasehold improvements
|
|
5-30 years
|
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized within other income or expense in the consolidated
statement of income.
(k) Intangible Assets and Goodwill
Intangible assets and goodwill are recognized at acquisition cost. Intangible assets and goodwill acquired through business combinations are recorded at fair value at
the date of acquisition. Intangible assets with indefinite useful lives, which include, trademarks, concessions, and goodwill, are not amortized, and subsequently recognized at cost less accumulated impairment losses. Intangible assets with
finite useful lives are amortized on a straight-line basis over their estimated useful lives, as follows:
|
|
Estimated
Useful Lives
|
Trademarks
|
|
4 years
|
Licenses
|
|
3-14 years
|
Subscriber lists
|
|
4-10 years
|
Payments for renewal of concessions
|
|
20 years
|
Other intangible assets
|
|
3-20 years
|
Trademarks
The Group determines its trademarks to have an indefinite life when they are expected to generate net cash inflows for the Group indefinitely. Additionally, the Group
considers that there are no legal, regulatory or contractual provisions that limit the useful lives of trademarks.
In the third quarter of 2015, the Company’s management evaluated trademarks in its Cable segment to determine whether events and circumstances continue to support an
indefinite useful life for these intangible assets. As a result of such evaluation, the Company identified certain businesses and locations that began migrating from a current trademark to an internally developed trademark between 2015 and 2016,
in connection with enhanced service packages offered to current and new subscribers, and estimated that this migration process will take approximately four years. Accordingly, beginning in the third quarter of 2015, the Group changed the useful
life assessment from indefinite to finite for acquired trademarks in certain businesses and locations in its Cable segment, and began to amortize on a straight line basis the related carrying value of these trademarks when the migration to the
new trademark started using an estimated useful life of four years. The Group has not capitalized any amounts associated with internally developed trademarks.
Concessions
The Group defined concessions to have an indefinite life due to the fact that the Group has a history of renewing its concessions upon expiration, has maintained the
concessions granted by the Mexican government, and has no foreseeable limit to the period over which the assets are expected to generate net cash inflows. In addition, the Group is committed to continue to invest for the long term to extend the
period over which the broadcasting and telecommunications concessions are expected to continue to provide economic benefits.
Any fees paid by the Group to regulatory authorities for concessions renewed are determined to have finite useful lives and are amortized on a straight-live basis
over the fixed term of the related concession.
Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the Group’s interest in net fair value of the
identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash generating units (“CGUs”), or groups of CGUs, that
are expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes.
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of
goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell. Any impairment of goodwill is recognized as an expense in the consolidated statement of income and is not subject to be
reversed in subsequent periods.
(l) Impairment of Long-lived Assets
The Group reviews for impairment the carrying amounts of its long-lived assets, tangible and intangible, including goodwill (see Note 12), at least once a year, or
whenever events or changes in business circumstances indicate that these carrying amounts may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs to sell and value in use. To determine whether an impairment exists, the carrying value of the reporting unit is compared with its recoverable amount. Fair value estimates are based on
quoted market values in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including discounted value of estimated future cash flows, market multiples or
third-party appraisal valuations. Any impairment of long-lived assets other than goodwill may be subsequently reversed under certain circumstances.
(m) Trade Accounts Payable and Accrued Expenses
Trade accounts payable and accrued expenses are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.
Trade accounts payable and accrued expenses are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.
Trade accounts payable and accrued expenses are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.
Trade accounts payable and accrued expenses are presented as a single item of consolidated current liabilities in the consolidated statements of financial position as
of December 31, 2018 and 2017.
(n) Debt
Debt is recognized initially at fair value, net of transaction costs incurred. Debt is subsequently carried at amortized cost; any difference between the proceeds
(net of transaction costs) and the redemption value is recognized in the consolidated statement of income over the period on which the debt is outstanding using the effective interest method.
Fees paid on the establishment of debt facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility
will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a pre-payment for liquidity
services and amortized over the period of the facility to which it relates.
Current portion of long-term debt and interest payable are presented as a single line item of consolidated current liabilities in the consolidated statements of
financial position as of December 31, 2018 and 2017.
Debt early redemption costs are recognized as finance expense in the consolidated statement of income.
(o) Customer Deposits and Advances
Customer deposits and advance agreements for advertising services provide that customers receive prices that are fixed for the contract period for advertising time in
the Group’s platforms based on rates established by the Group. Such rates vary depending on when the advertisement is made, including the season, hour, day and type of programming.
The Group recognizes customer deposits and advance agreements for advertising services in the consolidated statement of financial position when these agreements are
executed either with a consideration in cash paid by customers or with short-term non-interest bearing notes received from customers in connection with annual (“upfront basis”) and from time to time (“scatter basis”) prepayments (see Note 7). In
connection with the initial adoption of IFRS 15 Revenues from Contracts with Customers (“IFRS 15”) in the first quarter of 2018 (see Note 2 (r)), customer deposits and advances agreements are presented
by the Group as a contract liability in the consolidated statement of financial position when a customer pays consideration, or the Group has a right to an amount of consideration that is unconditional, before the Group transfers services to the
customer. Under the guidelines of this standard, a contract liability is a Group’s obligation to transfer services or goods to a customer for which the Group has received consideration, or an amount of consideration is due, from the customer. In
addition, the Group recognizes contract asset upon the approval of non-cancellable contracts that generate an unconditional right to receive cash consideration prior to services being rendered. The Company’s management has consistently recognized
that an amount of consideration is due, for legal, finance and accounting purposes, when a short-term non-interest bearing note is received from a customer in connection with a deposit or advance agreement entered into with the customer for
advertising services to be rendered by the Group in the short term.
(p) Provisions
Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will
be required to settle the obligation, and the amount has been reliably estimated. Provisions are not recognized for future operating losses.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the obligation. The increase in the provisions due to passage of time is recognized as interest expense.
(q) Equity
The capital stock and other equity accounts include the effect of restatement through December 31, 1997, determined by applying the change in the Mexican National
Consumer Price Index between the dates capital was contributed or net results were generated and December 31, 1997, the date through which the Mexican economy was considered hyperinflationary under the guidelines of IFRS Standards. The
restatement represented the amount required to maintain the contributions and accumulated results in Mexican Pesos in purchasing power as of December 31, 1997.
Where any company in the Group purchases shares of the Company’s capital stock (shares repurchased), the consideration paid, including any directly attributable
incremental costs is deducted from equity attributable to stockholders of the Company until the shares are cancelled, reissued, or sold. Where such shares repurchased are subsequently reissued or sold, any consideration received, net of any
directly attributable incremental transaction costs, is included in equity attributable to stockholders of the Company.
(r) Revenue Recognition
In connection with the initial adoption of IFRS 15, in the first quarter of 2018, the Company’s management: (i) reviewed significant revenue streams and identified
certain effects on revenue recognition in the Group’s Sky and Cable segments, as discussed below; (ii) used the retrospective cumulative effect, which consists in recognizing any cumulative adjustment resulting from the new standard at the date
of initial adoption in consolidated equity; and (iii) did not restate the comparative information for the years ended December 31, 2017 and 2016, and will continue to report this information under the revenue recognition IFRS Standard in effect
in those periods (see Note 27).
Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for services provided. The Group recognizes
revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the Group’s activities, as described below. The Group
bases its estimate of return on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
The Group derives the majority of its revenues from media and entertainment-related business activities both in Mexico and internationally. Revenues are recognized
when the service is provided and collection is probable. A summary of revenue recognition policies by significant activity is as follows:
•
|
Advertising revenues, including deposits and advances from customers for future advertising, are recognized at the time the advertising services are rendered.
|
•
|
Revenues from program services for network subscription and licensed and syndicated television programs are recognized when the programs are sold and become available for
broadcast.
|
•
|
Sky program service revenues, including advances from customers for future direct-to-home (“DTH”) program services, are recognized at the time the service is provided. Through
December 31, 2017, commissions for obtaining contracts with customers in the Group’s Sky segment were accounted for as they were incurred. Beginning on January 1, 2018, in accordance with IFRS 15, certain incremental costs for
obtaining contracts with customers, primarily commissions, are recognized as assets in the Group’s consolidated statement of financial position and amortized in the expected life of contracts with customers.
|
•
|
Cable television, internet and telephone subscription, and pay-per-view and installation fees are recognized in the period in which the services are rendered. Through December
31, 2017, commissions for obtaining contracts with customers in the Group’s Cable segment were accounted for as they were incurred. Beginning on January 1, 2018, in accordance with IFRS 15, incremental costs for obtaining contracts
with customers, primarily commissions, are recognized as assets in the Group’s consolidated statement of financial position and amortized in the expected life of contracts with customers.
|
•
|
Revenues from other telecommunications and data services are recognized in the period in which these services are provided. Other telecommunications services include long
distance and local telephony, as well as leasing and maintenance of telecommunications facilities.
|
•
|
Revenues from magazine subscriptions are initially deferred and recognized proportionately as products are delivered to subscribers. Revenues from the sales of magazines are
recognized on the date of circulation of delivered merchandise, net of a provision for estimated returns.
|
•
|
Revenues from publishing distribution are recognized upon distribution of the products.
|
•
|
Revenues from attendance to soccer games, including revenues from advance ticket sales for soccer games and other promotional events, are recognized on the date of the
relevant event.
|
•
|
Motion picture production and distribution revenues are recognized as the films are exhibited.
|
•
|
Gaming revenues consist of the net win from gaming activities, which is the difference between amounts wagered and amounts paid to winning patrons and are recognized at the
time of such net win.
|
In respect to sales of multiple products or services, the Group evaluates whether it has fair value evidence for each deliverable in the transaction. For example, the
Group sells cable television, internet and telephone subscription to subscribers in a bundled package at a rate lower than if the subscriber purchases each product on an individual basis. Subscription revenues received from such subscribers are
allocated to each product in a pro-rata manner based on the fair value of each of the respective services.
(s) Interest Income
Interest income is recognized using the effective interest method. When a loan and receivable is impaired, the Group reduces the carrying amount to its recoverable
amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loan and receivables is recognized using the
original effective interest rate.
(t) Employee Benefits
Pension and Seniority Premium Obligations
Plans exist for pensions and seniority premiums (post-employment benefits), for most of the Group’s employees funded through irrevocable trusts. Increases or
decreases in the consolidated liability or asset for post-employment benefits are based upon actuarial calculations. Contributions to the trusts are determined in accordance with actuarial estimates of funding requirements. Payments of
post-employment benefits are made by the trust administrators. The defined benefit obligation is calculated annually using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the
estimated future cash outflows using interest rates of government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation.
Remeasurement of post-employment benefit obligations related to experience adjustments and changes in actuarial assumptions of post- employment benefits are
recognized in the period in which they are incurred as part of other comprehensive income or loss in consolidated equity.
Profit Sharing
The employees’ profit sharing required to be paid under certain circumstances in Mexico, is recognized as a direct benefit to employees in the consolidated statements
of income in the period in which it is incurred.
Termination Benefits
Termination benefits, which mainly represent severance payments by law, are recorded in the consolidated statement of income. The Group recognizes termination
benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognizes costs for a restructuring that involves the payment of termination benefits.
(u) Income Taxes
The income tax expense for the period comprises current and deferred income tax. Income tax is recognized in the consolidated statement of income, except to the
extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the income tax is recognized in other comprehensive income.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date in the countries
where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax
authorities.
Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts in the consolidated financial statements. However, deferred income tax liabilities are not recognized if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from
initial recognition of an asset or liability in a transaction (other than in a business combination) that at the time of the transaction affects neither accounting nor taxable income or loss. Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences
and tax loss carryforwards can be utilized. For this purpose, the Group takes into consideration all available positive and negative evidence, including factors such as market conditions, industry analysis, projected taxable income, carryforward
periods, current tax structure, potential changes or adjustments in tax structure, and future reversals of existing temporary differences.
Deferred income tax liabilities are provided on taxable temporary differences associated with investments in subsidiaries, joint ventures and associates, except for
deferred income tax liabilities where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets are
provided on deductible temporary differences associated with investments in subsidiaries, joint ventures and associates, to the extent that it is probable that there will be sufficient taxable income against which to utilize the benefit of the
temporary difference and it is expected to reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when
the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
(v) Derivative Financial Instruments
The Group recognizes derivative financial instruments as either assets or liabilities in the consolidated statements of financial position and measures such
instruments at fair value. The accounting for changes in the fair value of a derivative financial instrument depends on the intended use of the derivative financial instrument and the resulting designation. For a derivative financial instrument
designated as a cash flow hedge, the effective portion of such derivative’s gain or loss is initially reported as a component of other comprehensive income or loss and subsequently reclassified into income when the hedged exposure affects income.
The ineffective portion of the gain or loss is reported in income immediately. For a derivative financial instrument designated as a fair value hedge, the gain or loss is recognized in income in the period of change together with the offsetting
loss or gain on the hedged item attributed to the risk being hedged. When a hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss on the hedging instrument that has been recognized in other comprehensive
income remains in equity until the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to income or loss. For derivative
financial instruments that are not designated as accounting hedges, changes in fair value are recognized in income in the period of change. During the years ended December 31, 2018, 2017 and 2016, certain derivative financial instruments
qualified for hedge accounting (see Note 14).
(w) Comprehensive Income
Comprehensive income for the period includes the net income for the period presented in the consolidated statement of income plus other comprehensive income for the
period reflected in the consolidated statement of comprehensive income.
(x) Share-based Payment Agreements
Key officers and employees of certain subsidiaries of the Company have entered into agreements for the conditional sale of Company’s shares under the Company’s
Long-Term Retention Plan. The share-based compensation expense is measured at fair value at the date the equity benefits are conditionally sold to these officers and employees, and is recognized as a charge to consolidated income (administrative
expense) over the vesting period (see Note 16). The Group recognized a share-based compensation expense of Ps.1,327,549, Ps.1,489,884 and Ps.1,410,492 for the years ended December 31, 2018, 2017 and 2016, respectively, of which Ps.1,305,999,
Ps.1,468,337 and Ps.1,392,534 was credited in consolidated stockholders’ equity for those years, respectively.
(y) Leases
Through December 31, 2018:
•
|
The determination of whether an arrangement was, or contained, a lease was based on the substance of the arrangement and required an assessment of whether the fulfillment of
the arrangement was dependent on the use of a specific asset or assets and whether the arrangement conveyed the right to use the asset.
|
•
|
Leases of property, plant and equipment and other assets where the Group held substantially all the risks and rewards of ownership were classified as finance leases. Finance
lease assets were capitalized at the commencement of the lease term at the lower of the present value of the minimum lease payments or the fair value of the lease asset. The obligations relating to finance leases, net of finance
charges in respect of future periods, were recognized as liabilities. The interest element of the finance cost was charged to the consolidated statement of income over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases was depreciated over the shorter of the useful life of the asset and the lease term.
|
•
|
Leases where a significant portion of the risks and rewards were held by the lessor were classified as operating leases. Rentals were charged to the consolidated statement of
income on a straight line basis over the period of the lease.
|
•
|
Leasehold improvements were depreciated at the lesser of its useful life or contract term.
|
In the first quarter of 2019, the Group adopted IFRS 16 Leases (“IFRS 16”), which became effective for annual periods
beginning on January 1, 2019 (see Note 2 (z)). The Group will not apply this new IFRS Standard to short-term leases and leases for which the underlying asset is of low value, as permitted by the guidelines of IFRS 16.
(z) New and Amended IFRS Standards
The Group adopted IFRS 15 and IFRS 9 which became effective on January 1, 2018 (see Notes 2 (i), 2 (r) and 27). Some other amendments and improvements to certain IFRS
Standards became effective on January 1, 2018, and they did not have any significant impact on the Group’s consolidated financial statements.
Below is a list of the new and amended IFRS Standards that have been issued by the IASB and are effective for annual periods starting on or after January 1, 2019.
New or Amended IFRS Standard
|
|
Title of the IFRS Standard
|
|
Effective for Annual
Periods Beginning
On or After
|
Amendments to IFRS 10 and IAS 28 (1)
|
|
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
|
|
Postponed
|
IFRS 16
|
|
Leases
|
|
January 1, 2019
|
Amendments to IFRS 4 (2)
|
|
Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts
|
|
No earlier than 2020
|
IFRS 17 (2)
|
|
Insurance Contracts
|
|
January 1, 2021
|
IFRIC 23 (1)
|
|
Uncertainty over Income Tax Treatments
|
|
January 1, 2019
|
Annual Improvements (1)
|
|
Annual Improvements to IFRS Standards 2015-2017 Cycle
|
|
January 1, 2019
|
Amendments to IAS 28 (1)
|
|
Long-term Interests in Associates and Joint Ventures
|
|
January 1, 2019
|
Amendments to IFRS 9 (1)
|
|
Prepayment Features with Negative Compensation
|
|
January 1, 2019
|
Amendments to IAS 19 (1)
|
|
Plan Amendment, Curtailment or Settlement
|
|
January 1, 2019
|
IFRS Conceptual Framework
|
|
Conceptual Framework for Financial Reporting
|
|
January 1, 2020
|
Amendments to IFRS 3 (1)
|
|
Definition of a Business
|
|
January 1, 2020
|
Amendments to IAS 1 and IAS 8 (1)
|
|
Definition of Material
|
|
January 1, 2020
|
(1)
|
This new or amended IFRS Standard is not expected to have a significant impact on the Group’s consolidated financial statements.
|
|
|
(2)
|
This new or amended IFRS Standard is not expected to be applicable to the Group’s consolidated financial statements.
|
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture, were
issued in September 2014 and address and acknowledge inconsistency between the requirements in IFRS 10 and those in IAS 28 (2011), in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main
consequence of the amendments is that a full gain or loss is recognized when a transaction involved a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognized when a transaction involved assets that do not
constitute a business, even if these assets are housed in a subsidiary. In December 2015, the IASB postponed the effective date of these amendments indefinitely pending the outcome of its research project on the equity method of accounting.
IFRS 16 Leases was issued in January 2016, replaces IAS 17 Leases (“IAS 17”), and
became effective on January 1, 2019. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases. IFRS 16 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognizes a
right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are recognition exemptions for short-term leases and leases of low-value items. Lessor
accounting remains similar to the current standard: lessors continue to classify leases as finance or operating leases. The Company’s management expects that the initial impact of recording lease liabilities, and the corresponding right-of-use
assets in accordance with the guidelines of IFRS 16, will increase the Group’s consolidated total assets and liabilities primarily in connection with lease commitments for the use of real estate property and satellite transponders as of December
31, 2018. IFRS 16 will also affect the presentation of certain line items of the Group’s consolidated statement of income for interim and annual periods beginning on January 1, 2019, as the Group shall recognize a depreciation of rights-of-use
assets for long-term lease agreements, and a finance expense for interest from related non-current lease liabilities, instead of affecting consolidated operating costs and expenses for lease payments, as they were recognized through December 31,
2018, under the guidelines of the former IFRS Standard. Beginning in the first quarter of 2019, the Group adopted the guidelines of IFRS 16 by using the retrospective cumulative effect, which consists of recognizing any cumulative adjustment due
to the new IFRS Standard at the date of initial adoption in consolidated assets and liabilities. Accordingly, as a lessee, the Group recognized lease liabilities as of January 1, 2019, for leases classified as operating leases through December
31, 2018, and measured these lease liabilities at the present value of the remaining lease payments, discounted using the incremental borrowing rate as of January 1, 2019. The carrying amounts of leases classified as a finance leases through
December 31, 2018, became the initial carrying amounts of right-of-use assets and lease liabilities under the guidelines of IFRS 16 beginning on January 1, 2019. The Company’s management will conclude and report in April 2019, the determination
of the initial impact IFRS 16 will have on the Group’s consolidated financial statements for the first quarter of 2019. While the Company’s management is not yet in a position to disclose the full impact of the application of this new IFRS
Standard, the Group expects that the initial impact of recording the required lease liabilities and the corresponding right-to-use assets will increase the Group’s consolidated total assets and liabilities as of January1, 2019, in a range of 1.5%
and 2.0%, and 2.5% and 3.0%, respectively, primarily in connection with its non-cancellable lease and payment commitments for the use of real estate property. The Company’s management is in the process of concluding with the analysis and
assessment of any changes to be made in the Group’s accounting policies for long-term lease agreements as a lessee, including the implementation of effective controls over financial reporting in the different business segments of the Group, in
connection with the measurement and disclosures required by IFRS 16. The new accounting policies and estimates are subject to change until management finalizes its analysis.
Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts were issued in September 2016 and
address concerns arising from implementing the new financial instruments Standard, IFRS 9, before implementing the replacement Standard that the Board is developing for IFRS 4. These concerns include temporary volatility in reported results.
IFRS 17 Insurance Contracts (“IFRS 17”) was issued in May 2017 and supersedes IFRS 4 Insurance
Contracts (“IFRS 4”), which has given companies dispensation to carry on accounting for insurance contracts using national accounting standards, resulting in a multitude of different approaches. IFRS 17 establishes principles for the
recognition, measurement, presentation and disclosures of insurance contracts issued. It also requires similar principles to be applied to reinsurance contracts with discretionary participation features issued. IFRS 17 solves the comparison
problems created by IFRS 4 by requiring all insurance contracts to be accounted for in a consistent manner. Under the provisions of IFRS 17, insurance obligations will be accounted for using current values instead of historical cost. IFRS 17 is
effective on January 1, 2021, and earlier application is permitted.
IFRIC 23 Uncertainty over Income Tax Treatments (“IFRIC 23”) clarifies how to apply the recognition and measurement
requirements in IAS 12 Income Taxes when there is uncertainty over income tax treatments. When there is uncertainty over income tax treatments, IFRIC 23 addresses: (a) whether an entity considers
uncertain tax treatments separately; (b) the assumptions an entity makes about the examination of tax treatments; (c) how an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, including an
entity’s consideration of whether it is probable that a taxation authority will accept an uncertain tax treatment; and (d) how an entity considers changes in facts and circumstances.
Amendments to IFRS 3 Definition of a Business was issued in October 2018. The amended definition emphasises that the output
of a business is to provide goods and services to customers, whereas the previous definition focused on returns in the form of dividends, lower costs or other economic benefits to investors and others.
Distinguishing between a business and a group of assets is important because an acquirer recognises goodwill only when acquiring a business. Amendments to IFRS 3 is effective on January 1, 2020, and earlier application is permitted.
Amendments to IAS 1 and IAS 8 Definition of Material. The definition of material helps a company determine whether
information about an item, transaction or other event should be provided to users of financial statements. However, companies sometimes experienced difficulties using the previous definition of material when making materiality judgements in the
preparation of financial statements. Consequently, the IASB issued Definition of Material (Amendments to IAS 1 and IAS 8) in October 2018. Amendments to IAS 1 and IAS 8 is effective on January 1, 2020, and earlier application is permitted.
Annual Improvements to IFRS Standards2015-2017 Cycle were published in December 2017 and set out amendments to certain IFRS
Standards. These amendments result from proposals made during the IASB’s Annual Improvements process, which provides a vehicle for making non-urgent but necessary amendments to IFRS Standards. The IFRS Standards amended and the topics addressed
by these amendments are as follows:
Standard
|
|
Subject of Amendment
|
IFRS 3 Business Combinations
|
|
Previously held interest in a joint operation.
|
IFRS 11 Joint Arrangements
|
|
Previously held interest in a joint operation.
|
IAS 12 Income Taxes
|
|
Income tax consequences of payments on financial instruments classified as equity.
|
IAS 23 Borrowing Costs
|
|
Borrowing costs eligible for capitalization.
|
Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures were issued in October 2017. The amendments
clarify that a company applies IFRS 9 to long-term interests in an associate or joint venture that form part of the net investment in the associate or joint venture. An entity shall apply these amendments retrospectively for annual reporting
periods beginning on or after January 1, 2019, with certain exceptions. Earlier application is permitted.
Amendments to IFRS 9 Prepayment Features with Negative Compensation were issued in October 2017. These amendments enable
entities to measure at amortized cost some prepayable financial assets with so-called negative compensation. An entity shall apply these amendments retrospectively for annual reporting periods beginning on or after January 1, 2019, with certain
exceptions. Earlier application is permitted.
Amendments to IAS 19 Employee Benefits (“IAS 19”) were issued in February 2018. When a change to a defined benefit plan
(amendment, curtailment or settlement) takes place, IAS 19 requires a company to remeasure its net defined benefit liability or asset. These amendments require a company to use the updated assumptions from this remeasurement to determine current
service cost and net interest for the remainder of the reporting period after the change to the plan. Until now, IAS 19 did not specify how to determine these expenses for the period after the change to the plan. By requiring the use of updated
assumptions, the amendments are expected to provide useful information to users of financial statements. An entity shall apply these amendments to plan amendments, curtailments or settlements occurring on or after the beginning of the first
annual reporting period that begins on or after January 1, 2019. Earlier application is permitted.
Conceptual Framework for Financial Reporting (“Conceptual Framework”) was issued in March 2018, replacing the previous
version of the Conceptual Framework issued in 2010. The Conceptual Framework describes the objective of, and the concepts for, general purpose financial reporting. The purpose of the Conceptual Framework is to: (a) assist the IASB to develop IFRS
Standards that are based on consistent concepts; (b) assist preparers to develop consistent accounting policies when no Standard applies to a particular transaction or other event, or when a Standard allows a choice of accounting policy; and (c)
assist all parties to understand and interpret the IFRS Standards. The Conceptual Framework is not an IFRS Standard. Nothing in the Conceptual Framework overrides any IFRS Standard or any requirement in an IFRS Standard. The revised Conceptual
Framework is effective immediately for the IASB and the IFRIC, and has an effective date of January 1, 2020, with earlier application permitted, for companies that use the Conceptual Framework to develop accounting policies when no IFRS Standard
applies to a particular transaction.
[813000] Notes - Interim financial reporting
Disclosure of interim financial reporting
GRUPO TELEVISA, S.A.B. AND SUBSIDIARIES
Notes to Interim Unaudited Condensed Consolidated Financial Statements
As of September 30, 2019 and December 31, 2018, and for the nine months ended September 30, 2019 and 2018
(In thousands of Mexican Pesos, except per CPO, per share and exchange rate amounts, unless otherwise indicated)
|
1.
|
Corporate Information.
|
Grupo Televisa, S.A.B. (the “Company”) is a limited liability public stock corporation (“Sociedad Anónima Bursátil” or “S.A.B.”), incorporated
under the laws of Mexico. Pursuant to the terms of the Company’s bylaws (“Estatutos Sociales”) its corporate existence continues through 2106. The shares of the Company are listed and traded in the form of “Certificados de Participación
Ordinarios” or “CPOs” on the Mexican Stock Exchange (“Bolsa Mexicana de Valores” or “BMV”) under the ticker symbol TLEVISA CPO, and in the form of Global Depositary Shares or GDSs, on the New York Stock Exchange, or NYSE, under the ticker symbol
TV. The Company’s principal executive offices are located at Av. Vasco de Quiroga No. 2000, Colonia Santa Fe, 01210 Mexico City, Mexico.
Grupo Televisa, S.A.B. together with its subsidiaries (collectively, the “Group”) is a leading media company in the Spanish-speaking world, an
important cable operator in Mexico, and an operator of a leading direct-to-home satellite pay television system in Mexico. The Group distributes the content it produces through several broadcast channels in Mexico and in over 75 countries through
26 pay-tv brands, television networks, cable operators and over-the-top or “OTT” services. In the United States, the Group’s audiovisual content is distributed through Univision Communications Inc. (“Univision”), the leading media company serving
the Hispanic market. Univision broadcasts the Group’s audiovisual content through multiple platforms in exchange for a royalty payment. In addition, the Group has equity and warrants, which upon their exercise would represent approximately 36% on
a fully-diluted, as-converted basis of the equity capital in Univision Holdings, Inc. or “UHI”, the controlling company of Univision. The Group’s cable business offers integrated services, including video, high-speed data and voice services to
residential and commercial customers in Mexico as well as managed services to domestic and international carriers. The Group owns a majority interest in Sky, a leading direct-to-home satellite pay television system and broadband provider in
Mexico, operating also in the Dominican Republic and Central America. The Group also has interests in magazine publishing and distribution, radio production and broadcasting, professional sports and live entertainment, feature-film production and
distribution, and gaming.
|
2.
|
Basis of Preparation and Accounting Policies.
|
These interim condensed consolidated financial statements of the Group, as of September 30, 2019 and December 31, 2018, and for the nine months
ended September 30, 2019 and 2018, are unaudited, and have been prepared in accordance with the guidelines provided by the International Accounting Standard 34, Interim Financial Reporting. In the opinion
of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included herein.
These interim unaudited condensed consolidated financial statements should be read in conjunction with the Group’s audited consolidated
financial statements and notes thereto for the years ended December 31, 2018, 2017 and 2016, which have been prepared in accordance with International Financial Reporting Standards (“IFRS Standards”) as issued by the International Accounting
Standards Board (“IASB”), and include, among other disclosures, the Group’s most significant accounting policies, which were applied on a consistent basis as of September 30, 2019, except for the accounting change described below in connection
with the initial adoption of a new IFRS Standard, which became effective on January 1, 2019.
These interim unaudited condensed consolidated financial statements do not include all financial risk management information and disclosures
required in the annual financial statements; they should be read in conjunction with the Group’s audited consolidated financial statements for the years ended December 31, 2018, 2017 and 2016. There have been no significant changes in the
Corporate Finance Department of the Company or in any risk management policies since the year end.
These interim unaudited condensed consolidated financial statements were authorized for issuance on October 18, 2019, by the Group’s Principal
Financial Officer.
The preparation of interim unaudited condensed consolidated financial statements requires management to make judgments, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these interim unaudited condensed consolidated financial statements, the significant judgments made by management in applying the
Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the audited consolidated financial statements for the year ended December 31, 2018, except for the accounting change described below
in connection with the initial adoption of a new IFRS Standard.
IFRS Standard that became effective on January 1, 2019
IFRS 16
IFRS 16 Leases (“IFRS 16”) replaced IAS 17 Leases (“IAS
17”), and became effective on January 1, 2019. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases. IFRS 16 introduces a single, on-balance
sheet lease accounting model for lessees. A lessee recognizes a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are recognition exemptions for
short-term leases and leases of low-value items. Lessor accounting remains similar to the former IFRS Standard: lessors continue to classify leases as finance or operating leases.
Beginning in the first quarter of 2019, the Group adopted the guidelines of IFRS 16 by using the modified retrospective approach, which consists
of recognizing any cumulative adjustment due to the new IFRS Standard at the date of initial adoption in consolidated assets and liabilities. Accordingly, as a lessee, the Group recognized lease liabilities as of January 1, 2019, for leases
recognized as operating leases through December 31, 2018, and measured these lease liabilities at the present value of the remaining lease payments, discounted using the incremental borrowing rate as of January 1, 2019. The carrying amounts of
leases classified as a finance leases through December 31, 2018, became the initial carrying amounts of right-of-use assets and lease liabilities under the guidelines of IFRS 16 beginning on January 1, 2019.
The initial impact of recording lease liabilities, and the corresponding right-of-use assets in accordance with the guidelines of IFRS 16,
increased the Group’s consolidated total assets and liabilities as of January 1, 2019, as described below. Also, as a result of the adoption of IFRS 16, the Group recognizes a depreciation of rights-of-use assets for long-term lease agreements,
and a finance expense for interest from related lease liabilities, instead of affecting consolidated operating costs and expenses for lease payments made, as they were recognized through December 31, 2018, under the guidelines of the former IFRS
Standard.
The Company’s management has concluded the analysis and assessment of any changes to be made in the Group’s accounting policies for long-term
lease agreements as a lessee, including the implementation of effective controls over financial reporting in the different business segments of the Group, in connection with the measurement and disclosures required by IFRS 16.
As a result of the adoption of IFRS 16, the Group has recognized as right-of-use assets and lease liabilities in its consolidated statements of
financial position as of September 30 and January 1, 2019, long-term lease agreements that were recognized as operating leases through December 31, 2018, as follows:
Long-term Lease Agreements
|
|
September 30, 2019
Assets (Liabilities)
|
|
|
January 1, 2019
Assets (Liabilities)
|
|
Right-of-use assets, net
|
|
Ps.
|
4,606,259
|
|
|
Ps.
|
4,814,852
|
|
Lease liabilities 1
|
|
|
(4,743,244
|
)
|
|
|
(4,814,852
|
)
|
Net effect
|
|
Ps.
|
(136,985
|
)
|
|
Ps.
|
—
|
|
1 Current portion of lease liabilities as of September 30 and January 1, 2019, amounted to Ps.513,318 and Ps.528,515, respectively.
Depreciation of right-of-use assets referred to in the table above and charged to income for the nine months ended September 30,
2019, amounted to Ps.465,957.
The Group has also classified as right-of-use assets and lease liabilities in its consolidated statements of financial position as of September
30 and January 1, 2019, property and equipment and obligations under long-term lease agreements that were recognized as finance leases through December 31, 2018, as follows:
Long-term Lease Agreements
|
|
September 30, 2019
Assets (Liabilities)
|
|
|
January 1, 2019
Assets (Liabilities)
|
|
Right-of-use assets, net
|
|
Ps.
|
3,069,900
|
|
|
Ps.
|
3,402,900
|
|
Lease liabilities 1
|
|
|
(4,913,274
|
)
|
|
|
(5,317,900
|
)
|
Net effect
|
|
Ps.
|
(1,843,374
|
)
|
|
Ps.
|
(1,915,000
|
)
|
1 Current portion of lease liabilities as of September 30 and January 1, 2019, amounted to Ps.700,445 and Ps.651,800 respectively.
Depreciation of right-of-use assets referred to in the table above and charged to income for the nine months ended September 30, 2019, amounted
to Ps.317,035.
IFRS Standards that became effective on January 1, 2018
In the first quarter of 2018, the Group adopted IFRS 15 Revenue from Contracts with Customers (“IFRS
15”) and IFRS 9 Financial Instruments (“IFRS 9”), which became effective for annual periods beginning on January 1, 2018.
IFRS 15
IFRS 15 provides a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries,
across industries, and across capital markets. This standard contains principles that an entity applies to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity recognizes revenue to
depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services.
In connection with the initial adoption of IFRS 15 in the first quarter of 2018, the Company’s management (i) reviewed significant revenue
streams and identified certain effects on the Group’s revenue recognition in the Sky and Cable segments; (ii) used the retrospective cumulative effect, which consists in recognizing any cumulative adjustment resulting from the new standard at the
date of initial adoption in consolidated equity; and (iii) did not restate the comparative information for the years ended December 31, 2017 and 2016, which was reported under the financial reporting standards in effect in those periods. Based on
the Group’s existing customer contracts and relationships, the implementation of the new standard did not have a material impact on the Group’s consolidated financial statements upon adoption. The more significant effects to the Group’s revenue
recognition are described as follows:
Content
The Group recognizes customer deposits and advance agreements for advertising services in the consolidated statement of financial position when
these agreements are executed either with a consideration in cash paid by customers or with short-term non-interest bearing notes received from customers in connection with annual (“upfront basis”) and from time to time (“scatter basis”)
prepayments. In connection with the initial adoption of IFRS 15, customer deposits and advances agreements are presented by the Group as a contract liability in the consolidated statement of financial position when a customer pays consideration,
or the Group has a right to an amount of consideration that is unconditional, before the Group transfers advertising services to the customer. Under the guidelines of IFRS 15, a contract liability is a Group’s obligation to transfer services or
goods to a customer for which the Group has received consideration, or an amount of consideration is due, from the customer. The Company’s management has consistently recognized that an amount of consideration is due, for legal, finance and
accounting purposes, when a short-term non-interest bearing note is received from a customer in connection with a deposit or advance agreement entered into with the customer for advertising services to be rendered by the Group in the short term.
Accordingly, there was no effect in the recognition of a contract liability for deposits and advances agreements with customers in the Group’s consolidated statement of financial position at the adoption date of IFRS 15.
Sky
Through December 31, 2017, commissions for obtaining contracts with customers in this segment were accounted for in the consolidated statement of
income as they were incurred. Beginning on January 1, 2018, in accordance with the new standard, incremental costs of obtaining contracts with customers, primarily commissions, are recognized as assets in the Group´s consolidated statement of
financial position and amortized in the expected life of contracts with customers.
Cable
Through December 31, 2017, commissions for obtaining contracts with customers in this segment were accounted for in the consolidated statement of
income as they were incurred. Beginning on January 1, 2018, in accordance with the new standard, incremental costs of obtaining contracts with customers, primarily commissions, are recognized as assets in the Group’s consolidated statement of
financial position and amortized in the expected life of contracts with customers. In the telecommunications business of this segment, as required by the new standard, the Company’s management reviewed the terms and conditions of the most
significant contracts on an individual basis, and concluded that the effects of applying IFRS 15 were not significant at the adoption date.
The Group has recognized assets from incremental costs of obtaining a contract with customers, primarily commissions, which are classified as
current and non-current other assets in its consolidated financial statements as of September 30, 2019 and December 31, 2018, as follows:
|
|
September 30, 2019
|
|
|
December 31, 2018
|
|
Contract Costs, net:
|
|
|
|
|
|
|
Cable
|
|
Ps.
|
1,355,575
|
|
|
Ps.
|
1,133,727
|
|
Sky
|
|
|
2,221,021
|
|
|
|
2,236,932
|
|
Total Contract Costs, net
|
|
Ps.
|
3,576,596
|
|
|
Ps.
|
3,370,659
|
|
Amortization of contract costs charged to income for the nine months ended September 30, 2019 and 2018, was Ps.319,664 and Ps.361,187,
respectively.
In connection with the assets from incremental costs of obtaining a contract with customers referred to above and the initial adoption of IFRS
15, the Group recognized cumulative adjustments that increased consolidated retained earnings as of January 1, 2018, as follows:
|
|
Retained Earnings
|
|
|
Income Taxes
|
|
|
Net
|
|
Controlling interest
|
|
Ps.
|
2,272,350
|
|
|
Ps.
|
(672,898
|
)
|
|
Ps.
|
1,599,452
|
|
Non-controlling interests
|
|
|
1,112,854
|
|
|
|
(327,651
|
)
|
|
|
785,203
|
|
Effect on equity at January 1, 2018
|
|
Ps.
|
3,385,204
|
|
|
Ps.
|
(1,000,549
|
)
|
|
Ps.
|
2,384,655
|
|
IFRS 9
IFRS 9 addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 requires financial assets
to be classified into two measurement categories: those measured at amortized cost and those measured at fair value through income or loss, or through other comprehensive income or loss. The determination is made at initial recognition. The basis
of classification depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the financial assets. For financial liabilities, this standard retains most of the IAS 39 Financial Instruments: Recognition and Measurement requirements. IFRS 9 considers under a new impairment approach that is no longer necessary for a credit event to have occurred before credit losses
are recognized, instead, an entity always accounts for expected credit losses, and change in those expected losses to profit or loss; in respect to hedging activities, IFRS 9 aligns hedge accounting more closely with an entity’s risk management
through a principles-based approach, by means of which the range from 0.8 to 1.25 to declare a maintaining hedge is eliminated an in its place, an effective hedging instrument will be declared only if it supports the entity’s risk management
strategy and maintain an effective hedge, and in lieu thereof, an instrument of effective hedge could be deemed this way if it is aligned with the entity’s management risks strategy; IFRS 9 establishes that an entity making an irrevocable
election to present in other comprehensive income changes in fair value of an investment in an equity instrument that is not held for trading, should not transfer to profit or loss any amounts presented in other comprehensive income, but may
transfer the cumulative gain or loss within equity. The Company’s management used the retrospective cumulative effect, which consists in recognizing any cumulative adjustment resulting from the new standard at the date of initial adoption in
consolidated equity.
In connection with the initial adoption of IFRS 9 in the first quarter of 2018, and based on the Group’s existing financial instruments, related
contracts and hedge relationships as of December 31, 2017, the implementation of the new standard did not have a material impact on the Group’s consolidated financial statements upon adoption.
In connection with expected credit losses of trade notes and accounts receivable, in conformity with the guidelines provided by IFRS 9, the Group
recognized cumulative adjustments that decreased consolidated retained earnings as of January 1, 2018, as follows:
|
|
Accumulated Loss
|
|
|
Income Tax Benefit
|
|
|
Net Accumulated Loss
|
|
Controlling interest
|
|
Ps.
|
(234,129
|
)
|
|
Ps.
|
67,101
|
|
|
Ps.
|
(167,028
|
)
|
Non-controlling interests
|
|
|
(47,465
|
)
|
|
|
12,029
|
|
|
|
(35,436
|
)
|
Effect on equity at January 1, 2018
|
|
Ps.
|
(281,594
|
)
|
|
Ps.
|
79,130
|
|
|
Ps.
|
(202,464
|
)
|
In connection with the initial adoption of IFRS 9, which became effective on January 1, 2018, the Company classified financial assets as current
temporary investments at fair value through income or loss. Beginning on January 1, 2018, the Company classified these financial assets as non-current financial instruments at fair value through other comprehensive income, based on its business
model for managing financial assets and the contractual cash flow characteristics of these financial assets. In accordance with IFRS 9, this new classification the Group recognized cumulative adjustments in consolidated retained earnings as of
January 1, 2018, as follows:
|
|
Accumulated Loss
|
|
|
Income Tax Benefit
|
|
|
Net Accumulated Loss
|
|
Effect on equity at January 1, 2018
|
|
Ps.
|
(1,182,760
|
)
|
|
Ps.
|
354,828
|
|
|
Ps.
|
(827,932
|
)
|
|
3.
|
Disposition, Acquisition and Assets Held for Sale
|
In February 2018, the Company announced an agreement to sell its 19.9% stake in Imagina Media Audiovisual, S.L., (together with its subsidiaries,
“Imagina”), a media and telecom company in Spain, which was subject to the fulfillment of certain conditions and regulatory approvals. In June 2018, this transaction was closed and the Company sold its stake in Imagina and received proceeds in
the aggregate amount of €284.5 million (Ps.6,603,751), of which €251.3 million (Ps.5,832,360) were in cash and €33.2 million (Ps.771,391) were held in escrow and will be paid to the Company over time subject to customary terms and conditions
under escrow agreements. In the fourth quarter of 2018, a cash amount of €16.1 million (Ps.366,354) was released from escrow and an amount of €1.5 million (Ps.33,558) was used for escrow purposes. As a result of this transaction, the Group (i)
discontinued recognizing the equity method to account for its investment in Imagina; (ii) reclassified a cumulative foreign currency translation gain derived from this investment in the amount of Ps.722,023, from other comprehensive income in
consolidated equity to consolidated other income for the year ended December 31, 2018; and (iii) recognized a net pretax gain on disposition of this investment in the amount of Ps.3,513,829 as consolidated other income for the year ended December
31, 2018 (see Note 14). As of September 30, 2019 and December 31, 2018, the amount held in escrow from this transaction was €12.2 million (Ps.263,267) and €15.6 million (Ps.351,913), respectively.
On December 17, 2018, the Group acquired from Axtel, S.A.B. de C.V. (“Axtel”) its residential fiber-to-home business and related assets in
Mexico City, Zapopan, Monterrey, Aguascalientes, San Luis Potosí and Ciudad Juarez. The assets acquired comprise 553,226 revenue generating units consisting of 97,622 video, 227,802 broadband and 227,802 voice, revenue generating units. This
transaction was paid in cash by the Group in the aggregate amount of Ps.5,466,872, including value added tax. Through this acquisition, the Group continues with its strategy to consolidate a cable company with national coverage that delivers
more and better services for the benefit of end users. The following table summarizes the allocation of the total amount of cash paid by the Group in connection with the purchase of tangible and identifiable intangible assets acquired and
liabilities assumed at the acquisition date. The excess of the purchase price over those fair values was allocated to goodwill in the Cable segment. The Company’s management completed a final purchase price allocation for this acquisition in
the first half of 2019, and there was no changes with the preliminary purchase price allocation made as of December 31, 2018.
|
|
December 17, 2018
|
|
Cash and cash equivalents
|
|
Ps.
|
1,000
|
|
Trade notes and accounts receivables
|
|
|
169,036
|
|
Other accounts receivable primarily value-added tax
|
|
|
875,331
|
|
Total current assets
|
|
|
1,045,367
|
|
Property and equipment
|
|
|
2,130,108
|
|
Intangible assets and goodwill
|
|
|
2,582,713
|
|
Total assets
|
|
|
5,758,188
|
|
Other current liabilities
|
|
|
291,316
|
|
Total liabilities
|
|
|
291,316
|
|
Total net assets
|
|
Ps.
|
5,466,872
|
|
In July 2019, the Company announced an agreement with Live Nation Entertainment, Inc. (“Live Nation”), to dispose of its
40% equity interest in Ocesa Entretenimiento, S.A. de C.V. (“OCEN”), a live entertainment company with operations in Mexico, Central America and Colombia, and an indirect associate of the Company, through the sale of all of the outstanding shares
of OISE Entretenimiento, S.A. de C.V., (“OISE Entretenimiento”) a wholly-owned subsidiary of the Company, which net assets are comprised primarily of the 40% equity stake in OCEN, which investment was accounted for by the equity method through
July 31, 2019. This transaction is subject to customary closing conditions, including regulatory approvals and certain notifications and to the closing of the sale by Corporación Interamericana de Entretenimiento, S.A.B. de C.V. to Live Nation of
a portion of its stake in OCEN. In consideration for the sale of the shares of OISE Entretenimiento, the Company expects to receive cash proceeds in the aggregate amount of Ps.5,206,000. On or before closing of this transaction, the Group also
expects to receive a dividend from OCEN of approximately Ps.350,000. As of September 30, 2019, the Group has classified the assets related to OISE Entretenimiento, including primarily the carrying value of its investment of 40% equity interest in
OCEN, as current assets held for sale in the aggregate amount of Ps.1,094,596, in the consolidated statement of financial position as of that date (see Note 5 and 13).
|
4.
|
Investments in financial instruments
|
At September 30, 2019 and December 31, 2018, the Group had the following investments in financial instruments:
|
|
September 30, 2019
|
|
|
December 31, 2018
|
|
Measured at fair value through other comprehensive income:
|
|
|
|
|
|
|
Equity instruments:
|
|
|
|
|
|
|
Warrants issued by UHI (1)
|
|
Ps.
|
35,257,735
|
|
|
Ps.
|
34,921,530
|
|
Open Ended Fund (2)
|
|
|
6,041,800
|
|
|
|
7,662,726
|
|
Other equity instruments (3)
|
|
|
5,901,756
|
|
|
|
6,545,625
|
|
Other financial assets (4)
|
|
|
78,017
|
|
|
|
72,612
|
|
|
|
|
47,279,308
|
|
|
|
49,202,493
|
|
Other
|
|
|
853
|
|
|
|
937
|
|
|
|
Ps.
|
47,280,161
|
|
|
Ps.
|
49,203,430
|
|
(1)
|
The Group’s warrants are exercisable for UHI’s common stock, in whole or in part, at an exercise price of U.S.$0.01 per warrant share. The warrants do not
entitle the holder to any voting rights as a stockholder of UHI. The warrants shall expire and no longer be exercisable after the tenth anniversary of the date of issuance (the “Expiration Date”); provided, however, the Expiration Date
shall automatically be extended for nine successive ten-year periods unless the Group provides written notice to UHI of its election not to so extend the Expiration Date. The warrants do not bear interest. As of September 30, 2019 and
December 31, 2018, the number of warrants amounted to approximately 4,591 thousand, which upon their exercise would represent approximately 40% and 36%, respectively, on a fully-diluted, as-converted basis of the equity capital in UHI.
Beginning on January 1, 2018, in connection with the adoption of IFRS 9, which became effective on that date, these warrants are classified as equity instruments (financial assets) and measured at fair value through other comprehensive
income or loss in consolidated equity (see Notes 5 and 9).
|
(2)
|
The Company has an investment in an Open Ended Fund that has as a primary objective to achieve capital appreciation by using a broad range of strategies
through investments in securities, including without limitation stock, debt and other financial instruments, a principal portion of which are considered as Level 1 financial instruments in telecom, media and other sectors across global
markets, including Latin America and other emerging markets. Shares may be redeemed on a quarterly basis at the Net Asset Value (“NAV”) per share as of such redemption date. The fair value of this fund is determined by using the NAV per
share. The NAV per share is calculated by determining the value of the fund assets and subtracting all of the fund liabilities and dividing the result by the total number of issued shares. Beginning on January 1, 2018, in connection
with the adoption of IFRS 9, which became effective on that date, this Open Ended Fund is classified as an equity instrument measured at fair value through other comprehensive income or loss in consolidated equity.
|
(3)
|
Other equity instruments (publicly traded instruments) and the fair value is based on quoted market prices. In connection with these equity instruments, for
which an irrevocable election was made by the Group under the guidelines of IFRS 9 to recognize any changes at fair value through other comprehensive income or loss in consolidated equity (see Note 2).
|
(4)
|
In the fourth quarter of 2018, the Company invested in corporate fixed income securities with long-term maturities, which were classified as other financial
assets with changes in fair value in other comprehensive income or loss in consolidated equity, in accordance with the Group’s business model to manage these financial instruments and their contractual cash flows characteristics.
|
A roll forward of financial assets at fair value through other comprehensive income for the nine months ended September 30, 2019 and 2018, is
presented as follows:
|
|
Warrants Issued by UHI (1)
|
|
|
Open Ended Fund (1)
|
|
|
Other Equity Instruments
|
|
|
Other Financial Assets
|
|
|
Total
|
|
At January 1, 2019
|
|
Ps.
|
34,921,530
|
|
|
Ps.
|
7,662,726
|
|
|
Ps.
|
6,545,625
|
|
|
Ps.
|
72,612
|
|
|
Ps.
|
49,202,493
|
|
Change in fair value in other comprehensive income
|
|
|
336,205
|
|
|
|
(1,620,926
|
)
|
|
|
(643,869
|
)
|
|
|
5,405
|
|
|
|
(1,923,185
|
)
|
At September 30, 2019
|
|
Ps.
|
35,257,735
|
|
|
Ps.
|
6,041,800
|
|
|
Ps.
|
5,901,756
|
|
|
Ps.
|
78,017
|
|
|
Ps.
|
47,279,308
|
|
|
|
Warrants Issued by UHI (1)
|
|
|
Open Ended Fund (1)
|
|
|
Other Financial Assets
|
|
|
Total
|
|
At January 1, 2018
|
|
Ps.
|
36,395,183
|
|
|
Ps.
|
7,297,577
|
|
|
Ps.
|
5,942,500
|
|
|
Ps.
|
49,635,260
|
|
This year investments
|
|
|
—
|
|
|
|
—
|
|
|
|
76,245
|
|
|
|
76,245
|
|
Change in fair value in other comprehensive income
|
|
|
(2,885,038
|
)
|
|
|
501,196
|
|
|
|
1,208,323
|
|
|
|
(1,175,519
|
)
|
At September 30, 2018
|
|
Ps.
|
33,510,145
|
|
|
Ps.
|
7,798,773
|
|
|
Ps.
|
7,227,068
|
|
|
Ps.
|
48,535,986
|
|
(1)
|
The foreign exchange gain for the nine months ended on September 30, 2019 derived from the hedged warrants issued by UHI and the investment in Open Ended
Fund was hedged by foreign exchange loss in the consolidated statement of income, in the amount of Ps.124,855 and Ps.1,118, respectively. The foreign exchange loss for the nine months ended on September 30, 2018 derived from the hedged
warrants issued by UHI and the investment in Open Ended Fund was hedged by foreign exchange gain in the consolidated statement of income, in the amount of Ps.1,903,147 and Ps.96,477, respectively (see Notes 8 and 15).
|
The maximum exposure to credit risk of the investments in financial instruments as of September 30, 2019 and December 31, 2018, is the carrying
value of the financial assets mentioned above.
|
5.
|
Investments in Associates and Joint Ventures
|
At September 30, 2019 and December 31, 2018, the Group had the following investments in associates and joint ventures accounted for by the
equity method:
|
|
Ownership as of September 30, 2019
|
|
|
September 30, 2019
|
|
|
December 31, 2018
|
|
Associates:
|
|
|
|
|
|
|
|
|
|
UHI (1)
|
|
|
10.0
|
%
|
|
Ps.
|
8,496,338
|
|
|
Ps.
|
8,285,286
|
|
OCEN (2)
|
|
|
40.0
|
%
|
|
|
—
|
|
|
|
1,385,622
|
|
Other
|
|
|
—
|
|
|
|
114,292
|
|
|
|
111,603
|
|
Joint ventures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Grupo de Telecomunicaciones de Alta Capacidad, S.A.P.I. de C.V. (“GTAC”) (3)
|
|
|
33.3
|
%
|
|
|
547,679
|
|
|
|
568,327
|
|
Periódico Digital Sendero, S.A.P.I. de C.V.(“PDS”) (4)
|
|
|
50.0
|
%
|
|
|
193,874
|
|
|
|
195,890
|
|
|
|
|
|
|
|
Ps.
|
9,352,183
|
|
|
Ps.
|
10,546,728
|
|
(1)
|
The Group accounts for its investment in common stock of UHI, the parent company of Univision, under the equity method due to the Group’s ability to
exercise significant influence, as defined under IFRS Standards, over UHI’s operations. The Group has the ability to exercise significant influence over the operating and financial policies of UHI because the Group (i) as of September
30, 2019 and December 31, 2018, owned 1,110,382 Class “C” shares of common stock of UHI, representing approximately 10% of the outstanding total shares of UHI as of each of those dates; (ii) as of September 30, 2019 and December 31,
2018, held Warrants exercisable for common stock of UHI equivalent to approximately 26% equity stake of UHI on a fully-diluted, as-converted basis, subject to certain conditions, laws and regulations; (iii) as of September 30, 2019 and
December 31, 2018, had three officers and one director of the Company designated as members of the Board of Directors of UHI, which was composed of 18 directors, of 22 available board seats; and (iv) was party to a Program License
Agreement (“PLA”), as amended, with Univision, an indirect wholly-owned subsidiary of UHI, pursuant to which Univision has the right to broadcast certain Televisa content in the United States (“Program License Agreement”), and to
another program license agreement pursuant to which the Group has the right to broadcast certain Univision’s content in Mexico (“Mexican License Agreement”), in each case through the later of 2025 ( or 2030 upon consummation of a
qualified public equity offering of UHI) or 7.5 years after the Group has voluntarily sold two-thirds of its initial investment in UHI made in December 2010 (see Notes 4, 9, 13 and 15).
|
(2)
|
OCEN is a majority-owned subsidiary of Compañía Interamericana de Entretenimientos, S.A.B. de C.V., and is engaged in the live entertainment business in
Mexico, Central America and Colombia. In July 2019, the Group announced a proposed disposition of its 40% equity interest in OCEN, classified this investment as current assets held for sale as of July 31, 2019, and discontinued the use
of the equity method to account for this associate beginning on that date. As of September 30, 2019 and December 31, 2018, the investment in OCEN included goodwill of Ps.359,613 (see Notes 3 and 13).
|
(3)
|
GTAC was granted a 20-year contract for the lease of a pair of dark fiber wires held by the Mexican Federal Electricity Commission and a concession to
operate a public telecommunications network in Mexico with an expiration date in 2030. GTAC is a joint venture in which a subsidiary of the Company, a subsidiary of Grupo de Telecomunicaciones Mexicanas, S.A. de C.V., and a subsidiary
of Megacable, S.A. de C.V., have an equal equity participation of 33.3%. In June 2010, a subsidiary of the Company entered into a long-term credit facility agreement to provide financing to GTAC for up to Ps.688,217, with an annual
interest rate of the Mexican Interbank Interest Rate (“Tasa de Interés Interbancaria de Equilibrio” or “TIIE”) plus 200 basis points. Under the terms of this agreement, principal and interest are payable at dates agreed by the parties,
between 2013 and 2021. As of September 30, 2019 and December 31, 2018, GTAC had used a principal amount of Ps.688,183 under this credit facility. During the nine months ended September 30, 2019, GTAC paid principal and interest to the
Group in connection with this credit facility in the aggregate principal amount of Ps.86,739. During the year ended December 31, 2018, GTAC paid principal and interest to the Group in connection with this credit facility in the
aggregate principal amount of Ps.112,293. Also, a subsidiary of the Company entered into supplementary long-term loans to provide additional financing to GTAC for an aggregate principal amount of Ps.769,095, with an annual interest of
TIIE plus 200 basis points computed on a monthly basis and payable on an annual basis or at dates agreed by the parties. Under the terms of these supplementary loans, principal amounts can be prepaid at dates agreed by the parties
before their maturities between 2023 and 2028. During the nine months ended September 30, 2019, GTAC paid principal and interest to the Group in connection with this credit facility in the aggregate principal amount of Ps.51,912. During
the year ended December 31, 2018, GTAC paid principal and interest to the Group in connection with this credit facility in the aggregate principal amount of Ps.139,541. The net investment in GTAC as of September 30, 2019 and December
31, 2018, included amounts receivable in connection with this long-term credit facility and supplementary loans to GTAC in the aggregate amount of Ps.840,936 and Ps.817,605, respectively. These amounts receivable are in substance a part
of the Group’s net investment in this investee (see Note 9).
|
(4)
|
The Group accounts for its investment in PDS under the equity method, due to its 50% interest in this joint venture. As of September 30, 2019 and December
31, 2018, the Group’s investment in PDS included intangible assets and goodwill in the aggregate amount of Ps.113,837.
|
|
6.
|
Property, Plant and Equipment, Net
|
Property, plant and equipment as of September 30, 2019 and December 31, 2018, consisted of:
|
|
September 30, 2019
|
|
|
December 31, 2018
|
|
Buildings
|
|
Ps.
|
9,385,055
|
|
|
Ps.
|
9,387,558
|
|
Building improvements
|
|
|
280,138
|
|
|
|
280,081
|
|
Technical equipment
|
|
|
140,540,996
|
|
|
|
133,171,187
|
|
Satellite transponders
|
|
|
6,026,094
|
|
|
|
10,301,713
|
|
Furniture and fixtures
|
|
|
1,251,080
|
|
|
|
1,203,942
|
|
Transportation equipment
|
|
|
3,092,655
|
|
|
|
3,085,762
|
|
Computer equipment
|
|
|
9,043,016
|
|
|
|
8,848,455
|
|
Leasehold improvements
|
|
|
3,368,564
|
|
|
|
3,215,239
|
|
|
|
|
172,987,598
|
|
|
|
169,493,937
|
|
Accumulated depreciation
|
|
|
(107,730,323
|
)
|
|
|
(98,802,552
|
)
|
|
|
|
65,257,275
|
|
|
|
70,691,385
|
|
Land
|
|
|
4,983,168
|
|
|
|
4,967,965
|
|
Construction and projects in progress
|
|
|
13,127,915
|
|
|
|
11,683,180
|
|
|
|
Ps.
|
83,368,358
|
|
|
Ps.
|
87,342,530
|
|
As of September 30, 2019, technical equipment includes Ps.797,176 and related accumulated depreciation of Ps.118,911 in connection with costs of
dismantling certain equipment of the cable networks in the Group’s Cable segment.
Depreciation charged to income for the nine months ended September 30, 2019 and 2018, was Ps.13,014,263 and Ps.12,634,011, respectively. As of
January 1, 2019, in connection with the adoption of IFRS 16, the Group classified as right-of-use assets those obligations recognized as finance leases as of December 31, 2018 (see Note 2).
During the nine months ended September 30, 2019 and 2018, the Group invested Ps.13,736,983 and Ps.12,875,371, respectively, in property, plant
and equipment as capital expenditures.
|
7.
|
Intangible Assets and Goodwill, Net
|
The balances of intangible assets and goodwill as of September 30, 2019 and December 31, 2018, were as follows:
|
|
September 30, 2019
|
|
|
December 31, 2018
|
|
|
|
Gross Carrying Amount
|
|
|
Accumulated Amortization
|
|
|
Net Carrying Amount
|
|
|
Gross Carrying Amount
|
|
|
Accumulated Amortization
|
|
|
Net Carrying Amount
|
|
Intangible assets and goodwill with indefinite useful lives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
|
|
|
|
|
Ps.
|
14,113,626
|
|
|
|
|
|
|
|
|
Ps.
|
14,113,626
|
|
Trademarks
|
|
|
|
|
|
|
|
|
428,729
|
|
|
|
|
|
|
|
|
|
479,409
|
|
Concessions
|
|
|
|
|
|
|
|
|
15,166,067
|
|
|
|
|
|
|
|
|
|
15,166,067
|
|
Intangible assets with finite useful lives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trademarks
|
|
Ps.
|
1,891,306
|
|
|
Ps.
|
(1,851,236
|
)
|
|
|
40,070
|
|
|
Ps.
|
1,891,306
|
|
|
Ps.
|
(1,569,786
|
)
|
|
|
321,520
|
|
Concessions
|
|
|
553,505
|
|
|
|
(305,318
|
)
|
|
|
248,187
|
|
|
|
553,505
|
|
|
|
(221,402
|
)
|
|
|
332,103
|
|
Payment for renewal of concessions
|
|
|
5,993,891
|
|
|
|
(21,290
|
)
|
|
|
5,972,601
|
|
|
|
5,993,891
|
|
|
|
(15,454
|
)
|
|
|
5,978,437
|
|
Licenses and software
|
|
|
10,691,329
|
|
|
|
(6,992,091
|
)
|
|
|
3,699,238
|
|
|
|
9,065,582
|
|
|
|
(5,934,647
|
)
|
|
|
3,130,935
|
|
Subscriber lists
|
|
|
8,786,898
|
|
|
|
(6,431,017
|
)
|
|
|
2,355,881
|
|
|
|
8,785,423
|
|
|
|
(6,108,251
|
)
|
|
|
2,677,172
|
|
Other intangible assets
|
|
|
4,619,842
|
|
|
|
(3,724,171
|
)
|
|
|
895,671
|
|
|
|
4,099,750
|
|
|
|
(3,235,503
|
)
|
|
|
864,247
|
|
|
|
Ps.
|
32,536,771
|
|
|
Ps.
|
(19,325,123
|
)
|
|
Ps.
|
42,920,070
|
|
|
Ps.
|
30,389,457
|
|
|
Ps.
|
(17,085,043
|
)
|
|
Ps.
|
43,063,516
|
|
Amortization charged to income for the nine months ended September 30, 2019 and 2018, was Ps.1,819,169 and Ps.2,052,717, respectively.
Additional amortization charged to income for the nine months ended September 30, 2019 and 2018, was Ps.416,823 and Ps.301,347, respectively, primarily in connection with amortization of soccer player rights.
In November 2018, the Mexican Institute of Telecommunications (Instituto Federal de Telecomunicaciones or “IFT”) approved the renewal of the
Group’s broadcasting concessions for all of its television stations in Mexico, for a term of 20 years after the existing expiration date in 2021. In November 2018, the Group paid in cash for such renewal an aggregate amount of Ps.5,754,543, which
includes a payment of Ps.1,194 for administrative expenses and recognized this cost as an intangible asset in its consolidated statement of financial position. This amount will be amortized in a period of 20 years beginning on January 1, 2022, by
using the straight-line method.
During the fourth quarter of 2017, the Company’s management reviewed the useful life of certain Group’s television concessions accounted for as
intangible assets in conjunction with the payment made in 2018 for renewal of concessions expiring in 2021, which amount will be determined by the IFT before the renewal date. Based on such review, the Group classified these concessions as
intangible assets with a finite useful life and began to amortize the related net carrying amount of Ps.553,505 in a period ending in 2021.
In the third quarter of 2019, the Group monitored the market associated with its Publishing business, which is classified into the Other
Businesses segment, which has experienced a general slow-down. Accordingly, the Group has reduced its cash flow expectations for some of its operations. As a result of such evaluation, the Group recognized an impairment loss for trademarks with
indefinite useful lives related to its Publishing business, for an aggregate amount of Ps.50,680 and Ps.34,564 in other expense, net, in the consolidated statement of income for the nine months ended September 30, 2019 and 2018, respectively.
As of September 30, 2019 and December 31, 2018, there was no evidence of significant impairment indicators in connection with the Group’s
intangible assets in the Content, Sky and Cable segments.
|
8.
|
Debt, Lease Liabilities and Other Notes Payable
|
As of September 30, 2019 and December 31, 2018, debt, lease liabilities and other notes payable were as follows:
|
|
|
|
|
|
|
|
September 30, 2019
|
|
|
December 31, 2018
|
|
|
|
Principal
|
|
|
Finance Costs
|
|
|
Total
|
|
|
Total
|
|
U.S. dollar debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
6.625% Senior Notes due 2025 (1)
|
|
Ps.
|
11,843,640
|
|
|
Ps.
|
(210,702
|
)
|
|
Ps.
|
11,632,938
|
|
|
Ps.
|
11,564,366
|
|
4.625% Senior Notes due 2026 (1)
|
|
|
5,921,820
|
|
|
|
(30,634
|
)
|
|
|
5,891,186
|
|
|
|
5,867,541
|
|
8.5% Senior Notes due 2032 (1)
|
|
|
5,921,820
|
|
|
|
(22,078
|
)
|
|
|
5,899,742
|
|
|
|
5,878,498
|
|
6.625% Senior Notes due 2040 (1)
|
|
|
11,843,640
|
|
|
|
(128,446
|
)
|
|
|
11,715,194
|
|
|
|
11,670,577
|
|
5% Senior Notes due 2045 (1)
|
|
|
19,739,400
|
|
|
|
(434,109
|
)
|
|
|
19,305,291
|
|
|
|
19,226,206
|
|
6.125% Senior Notes due 2046 (1)
|
|
|
17,765,460
|
|
|
|
(125,268
|
)
|
|
|
17,640,192
|
|
|
|
17,576,841
|
|
5.250% Senior Notes due 2049 (1)
|
|
|
14,804,550
|
|
|
|
(307,152
|
)
|
|
|
14,497,398
|
|
|
|
—
|
|
Total U.S. dollar debt
|
|
Ps.
|
87,840,330
|
|
|
Ps.
|
(1,258,389
|
)
|
|
Ps.
|
86,581,941
|
|
|
Ps.
|
71,784,029
|
|
Mexican peso debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.38% Notes due 2020 (2)
|
|
Ps.
|
10,000,000
|
|
|
Ps.
|
(7,641
|
)
|
|
Ps.
|
9,992,359
|
|
|
Ps.
|
9,987,069
|
|
TIIE + 0.35% Notes due 2021 (2)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,995,173
|
|
TIIE + 0.35% Notes due 2022 (2)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,994,111
|
|
8.79% Notes due 2027 (2)
|
|
|
4,500,000
|
|
|
|
(19,070
|
)
|
|
|
4,480,930
|
|
|
|
4,479,160
|
|
8.49% Senior Notes due 2037 (1)
|
|
|
4,500,000
|
|
|
|
(12,809
|
)
|
|
|
4,487,191
|
|
|
|
4,486,647
|
|
7.25% Senior Notes due 2043 (1)
|
|
|
6,500,000
|
|
|
|
(56,052
|
)
|
|
|
6,443,948
|
|
|
|
6,442,172
|
|
Bank loans (3)
|
|
|
6,000,000
|
|
|
|
(23,145
|
)
|
|
|
5,976,855
|
|
|
|
5,971,497
|
|
Bank loans (4)
|
|
|
10,000,000
|
|
|
|
(99,996
|
)
|
|
|
9,900,004
|
|
|
|
—
|
|
Bank loans (Sky) (5)
|
|
|
5,500,000
|
|
|
|
—
|
|
|
|
5,500,000
|
|
|
|
5,500,000
|
|
Bank loans (TVI) (6)
|
|
|
1,406,004
|
|
|
|
(1,545
|
)
|
|
|
1,404,459
|
|
|
|
2,332,119
|
|
Total Mexican peso debt
|
|
Ps.
|
48,406,004
|
|
|
Ps.
|
(220,258
|
)
|
|
Ps.
|
48,185,746
|
|
|
Ps.
|
50,187,948
|
|
Total debt (7)
|
|
|
136,246,334
|
|
|
|
(1,478,647
|
)
|
|
|
134,767,687
|
|
|
|
121,971,977
|
|
Less: Current portion of long-term debt
|
|
|
10,492,489
|
|
|
|
(8,073
|
)
|
|
|
10,484,416
|
|
|
|
988,362
|
|
Long-term debt, net of current portion
|
|
Ps.
|
125,753,845
|
|
|
Ps.
|
(1,470,574
|
)
|
|
Ps.
|
124,283,271
|
|
|
Ps.
|
120,983,615
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Satellite transponder lease obligation (8)
|
|
Ps.
|
4,296,314
|
|
|
Ps.
|
—
|
|
|
Ps.
|
4,296,314
|
|
|
Ps.
|
4,569,773
|
|
Leases (9)
|
|
|
5,360,204
|
|
|
|
—
|
|
|
|
5,360,204
|
|
|
|
748,171
|
|
Total lease liabilities
|
|
|
9,656,518
|
|
|
|
—
|
|
|
|
9,656,518
|
|
|
|
5,317,944
|
|
Less: Current portion
|
|
|
1,213,763
|
|
|
|
—
|
|
|
|
1,213,763
|
|
|
|
651,832
|
|
Lease liabilities, net of current portion
|
|
Ps.
|
8,442,755
|
|
|
Ps.
|
—
|
|
|
Ps.
|
8,442,755
|
|
|
Ps.
|
4,666,112
|
|
Other notes payable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other notes payable (10)
|
|
Ps.
|
1,315,156
|
|
|
Ps.
|
—
|
|
|
Ps.
|
1,315,156
|
|
|
Ps.
|
2,576,874
|
|
Less: Current portion
|
|
|
1,315,156
|
|
|
|
—
|
|
|
|
1,315,156
|
|
|
|
1,288,437
|
|
Other notes payable, net of current portion
|
|
Ps.
|
—
|
|
|
Ps.
|
—
|
|
|
Ps.
|
—
|
|
|
Ps.
|
1,288,437
|
|
(1)
|
The Senior Notes due between 2025 and 2049, in the aggregate outstanding principal amount of U.S.$4,450,000 million and Ps.11,000,000, are unsecured
obligations of the Company, rank equally in right of payment with all existing and future unsecured and unsubordinated indebtedness of the Company, and are junior in right of payment to all of the existing and future liabilities of
the Company’s subsidiaries. Interest rate on the Senior Notes due 2025, 2026, 2032, 2037, 2040, 2043, 2045, 2046, and 2049 including additional amounts payable in respect of certain Mexican withholding taxes, is 6.97%, 4.86%, 8.94%,
8.93%, 6.97%, 7.62%, 5.26%, 6.44% and 5.52% per annum, respectively, and is payable semi-annually. These Senior Notes may not be redeemed prior to maturity, except (i) in the event of certain changes in law affecting the Mexican
withholding tax treatment of certain payments on the securities, in which case the securities will be redeemable, in whole but not in part, at the option of the Company; and (ii) in the event of a change of control, in which case the
Company may be required to redeem the securities at 101% of their principal amount. Also, the Company may, at its own option, redeem the Senior Notes due 2025, 2026, 2037, 2040, 2043, 2046 and 2049, in whole or in part, at any time at
a redemption price equal to the greater of the principal amount of these Senior Notes or the present value of future cash flows, at the redemption date, of principal and interest amounts of the Senior Notes discounted at a fixed rate
of comparable U.S. or Mexican sovereign bonds. The Senior Notes due 2026, 2032, 2040, 2043, 2045, 2046 and 2049 were priced at 99.385%, 99.431%, 98.319%, 99.733%, 96.534%, 99.677% and 98.588%, respectively, for a yield to maturity of
4.70%, 8.553%, 6.755%, 7.27%, 5.227%, 6.147% and 5.345%, respectively. The Senior Notes due 2025 were issued in two aggregate principal amounts of U.S.$400 million and U.S.$200 million, and were priced at 98.081% and 98.632%,
respectively, for a yield to maturity of 6.802% and 6.787%, respectively. The agreement of these Senior Notes contains covenants that limit the ability of the Company and certain restricted subsidiaries engaged in the Group’s Content
segment, to incur or assume liens, perform sale and leaseback transactions, and consummate certain mergers, consolidations and similar transactions. The Senior Notes due 2025, 2026, 2032, 2037, 2040, 2045, 2046 and 2049 are registered
with the U.S. Securities and Exchange Commission (“SEC”). The Senior Notes due 2043 are registered with both the SEC and the Mexican Banking and Securities Commission (“Comisión Nacional Bancaria y de Valores” or “CNBV”).
|
(2)
|
In 2010, 2014, 2015 and 2017, the Company issued Notes (“Certificados Bursátiles”) due 2020, 2021, 2022 and 2027, respectively, through the BMV in the
aggregate principal amount of Ps.10,000,000, Ps.6,000,000, Ps.5,000,000 and Ps.4,500,000, respectively. In July 2019, the Company prepaid all of the outstanding Notes due 2021 and 2022 in the aggregate principal amount of
Ps.11,000,000. On October 3, 2019, the Company prepaid all of the outstanding Notes due 2020 in the aggregate principal amount of Ps.10,000,000. Accordingly, the Company classified this debt as a current liability as of September 30,
2019, net of related finace costs, in the amount of Ps.9,992,359. Interest on the Notes due 2020 was 7.38% per annum and was payable semi-annually. Interest on the Notes due 2021 and 2022 was the TIIE plus 35 basis points per annum
and was payable every 28 days. Interest on the Notes due 2027 is 8.79% per annum and is payable semi-annually. The Company may, at its own option, redeem the Notes due 2027, in whole or in part, at any semi-annual interest payment
date at a redemption price equal to the greater of the principal amount of the outstanding Notes and the present value of future cash flows, at the redemption date, of principal and interest amounts of the Notes discounted at a fixed
rate of comparable Mexican sovereign bonds. The agreement of the Notes due 2027 contains covenants that limit the ability of the Company and certain restricted subsidiaries appointed by the Company’s Board of Directors, and engaged in
the Group’s Content segment, to incur or assume liens, perform sale and leaseback transactions, and consummate certain mergers, consolidations and similar transactions.
|
(3)
|
In 2017, the Company entered into long-term credit agreements with three Mexican banks, in the aggregate principal amount of Ps.6,000,000, and an annual
interest rate payable on a monthly basis of 28-day TIIE plus a range between 125 and 130 basis points, and principal maturities between 2022 and 2023. The proceeds of these loans were used primarily for the prepayment in full of the
Senior Notes due 2018. Under the terms of these loan agreements, the Company is required to (a) maintain certain financial coverage ratios related to indebtedness and interest expense; and (b) comply with the restrictive covenant on
spin-offs, mergers and similar transactions. The Company prepaid the remaining of certain credit agreement with Mexican Bank with original maturity in 2018 principal amount of this credit agreement in fourth quarter of 2017, in the
aggregate amount of Ps.629,311, which included accrued and unpaid interest.
|
(4)
|
In July 2019, the Company entered into a credit agreement for a five-year term loan with a syndicate of banks in the aggregate principal amount of
Ps.10,000,000, The funds from this loan were used for general corporate purposes, including the refinancing of the Company’s indebtedness. This loan bears interest at a floating rate based on a spread of 105 or 130 basis points over
the 28-day TIIE rate depending on the Group’s net leverage ratio. The credit agreement of this loan requires the maintenance of financial ratios related to indebtedness and interest expense.
|
(5)
|
In March 2016, Sky entered into long-term credit agreements with two Mexican banks in the aggregate principal amount of Ps.5,500,000, with maturities
between 2021 and 2023, and interest payable on a monthly basis and an annual rate in the range of 7.0% and 7.13%. Under the terms of these credit agreements, the Company is required to: (a) maintain certain financial coverage ratios
related to indebtedness and interest expense; and (b) comply with the restrictive covenant on spin-offs, mergers and similar transactions.
|
(6)
|
As of September 30, 2019 and December 31, 2018, included outstanding balances in the aggregate principal amount of Ps.1,406,004 and Ps.2,334,538,
respectively, in connection with certain credit agreements entered into by TVI with Mexican banks, with maturities between 2018 and 2022, bearing interest at an annual rate of TIIE plus a range between 100 and 125 basis points, which
is payable on a monthly basis. This TVI long- term debt indebtedness is guaranteed by the Company. Under the terms of these credit agreements, TVI is required to comply with certain restrictive covenants and financial coverage ratios.
|
(7)
|
Total debt is presented net of unamortized finance costs as of September 30, 2019 and December 31, 2018, in the aggregate amount of Ps.1,478,647 and
Ps.1,152,661, respectively, and does not include related interest payable in the aggregate amount of Ps.2,240,208 and Ps.1,120,009, respectively.
|
(8)
|
Under a capital lease agreement entered into with Intelsat Global Sales & Marketing Ltd. (“Intelsat”) in March 2010, Sky is obligated to pay at an
annual interest rate of 7.30% a monthly fee through 2027 of U.S.$3.0 million for satellite signal reception and retransmission service from 24 KU-band transponders on satellite IS-21, which became operational in October 2012. The
service term for IS-21 will end at the earlier of: (a) the end of 15 years or; (b) the date IS-21 is taken out of service (see Note 6).
|
(9)
|
In 2019, includes lease agreements recognized beginning on January 1, 2019 under IFRS 16 for an aggregate amount of Ps.4,743,244. Also, includes minimum
lease payments of property and equipment under leases that qualify as lease liabilities. In September 30, 2019 and December 31, 2018, includes Ps.603,326 and Ps.691,591, respectively, in connection with a lease agreement entered into
by a subsidiary of the Company and GTAC, for the right to use certain capacity of a telecommunications network through 2029. This lease agreement provides for annual payments through 2028. Other finance liabilities have terms, which
expire at various dates between 2018 and 2020.
|
(10)
|
Notes payable issued by the Company in connection with the acquisition in 2016 of a non-controlling interest in TVI. As of September 30, 2019 and December
31, 2018, cash payments to be made between 2018 and 2020 related to these notes payable amounted to an aggregate of Ps.1,330,000 and Ps.2,624,375, respectively, including interest of Ps.142,500 and Ps. 249,375, respectively.
Accumulated accrued interest for this transaction amounted to Ps.127,656 and Ps.201,875 as of September 30, 2019 and December 31, 2018, respectively. This was regarded as a Level 2 debt, which was fair valued using a discount cash
flow approach, which discounts the contractual cash flows using discount rates derived from observable market price of other quotes debt instruments.
|
As of September 30, 2019 and December 31, 2018, the outstanding principal amounts of Senior Notes of the Company that have been designated as
hedging instruments of the Group’s investments in UHI and Open Ended Fund (hedged items) were as follows:
|
|
September 30, 2019
|
|
|
December 31, 2018
|
|
Hedged items
|
|
Millions of U.S. dollars
|
|
|
Thousands of Mexican Pesos
|
|
|
Millions of U.S. dollars
|
|
|
Thousandsof Mexican Pesos
|
|
Investment in shares of UHI (net investment hedge)
|
|
U.S.$
|
430.4
|
|
|
Ps.
|
8,496,338
|
|
|
U.S.$
|
421.2
|
|
|
Ps.
|
8,285,286
|
|
Warrants issued by UHI (foreign currency fair value hedge)
|
|
|
1,786.2
|
|
|
|
35,257,735
|
|
|
|
1,775.1
|
|
|
|
34,921,530
|
|
Open Ended Fund (foreign currency fair value hedge) (1)
|
|
|
306.1
|
|
|
|
6,041,800
|
|
|
|
389.5
|
|
|
|
7,662,726
|
|
Total
|
|
U.S.$
|
2,522.7
|
|
|
Ps.
|
49,795,873
|
|
|
U.S.$
|
2,585.8
|
|
|
Ps.
|
50,869,542
|
|
(1)
|
Beginning in the second quarter of 2018, the Group has designated an additional portion of the outstanding principal amount of its U.S. dollar denominated
long-term debt as a fair value hedge of foreign exchange exposure related to its entire investment in Open Ended Fund. Through March 31, 2018, the designated U.S. dollar debt for this fair value hedge of foreign exchange exposure was
related to the initial investment in Open Ended Fund.
|
The foreign exchange gain or loss derived from the Company’s U.S. dollar denominated long-term debt designated as a hedge, for the nine months
ended September 30, 2019 and 2018, is analyzed as follows (see Notes 4 and 15):
Foreign Exchange Gain or Loss Derived from Senior Notes Designated as Hedging Instruments
|
|
September 30, 2019
|
|
|
September 30, 2018
|
|
Recognized in:
|
|
|
|
|
|
|
Comprehensive (loss) income
|
|
Ps.
|
(157,206
|
)
|
|
Ps.
|
2,441,199
|
|
Total foreign exchange (loss) gain derived from hedging Senior Notes
|
|
Ps.
|
(157,206
|
)
|
|
Ps.
|
2,441,199
|
|
Offset against by:
|
|
|
|
|
|
|
|
|
Foreign currency translation gain (loss) derived from the hedged net investment in shares of UHI
|
|
Ps.
|
31,233
|
|
|
Ps.
|
(441,575
|
)
|
Foreign exchange gain (loss) derived from hedged warrants issued by UHI
|
|
|
124,855
|
|
|
|
(1,903,147
|
)
|
Foreign exchange gain (loss) derived from the hedged Open Ended Fund
|
|
|
1,118
|
|
|
|
(96,477
|
)
|
Total foreign currency translation and foreign exchange gain (loss) derived from hedged assets
|
|
Ps.
|
157,206
|
|
|
Ps.
|
(2,441,199
|
)
|
The table below analyzes the Group’s debt, lease liabilities and other notes payable into relevant maturity groupings based on the remaining
period at the statement of financial position date to the contracted maturity date:
|
|
Less than 12 Months
October 1, 2019
to September 30, 2020
|
|
|
12-36
Months
October 1, 2020 to September 30, 2022
|
|
|
36-60
Months
October 1, 2022
to September 30, 2024
|
|
|
Maturities Subsequent to September 30, 2024
|
|
|
Total
|
|
Debt (1)
|
|
Ps.
|
10,492,489
|
|
|
Ps.
|
5,038,515
|
|
|
Ps.
|
17,375,000
|
|
|
Ps.
|
103,340,330
|
|
|
Ps.
|
136,246,334
|
|
Lease obligations
|
|
|
1,213,763
|
|
|
|
2,058,020
|
|
|
|
2,134,356
|
|
|
|
4,250,379
|
|
|
|
9,656,518
|
|
Other notes payable
|
|
|
1,315,156
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,315,156
|
|
Total debt, lease liabilities and other notes payable
|
|
Ps.
|
13,021,408
|
|
|
Ps.
|
7,096,535
|
|
|
Ps.
|
19,509,356
|
|
|
Ps.
|
107,590,709
|
|
|
Ps.
|
147,218,008
|
|
(1)
|
The amounts of debt are disclosed on a principal amount basis.
|
The Group’s financial instruments presented in the consolidated statements of financial position included cash and cash equivalents, temporary
investments, accounts and notes receivable, a long-term loan receivable from GTAC, warrants that are exercisable for UHI’s common stock, non-current investments in debt securities, non-current investments in debt and equity securities, and in
securities in the form of an open-ended fund, accounts payable, outstanding debt, lease liabilities, other notes payable, and derivative financial instruments. For cash and cash equivalents, temporary investments, accounts receivable, accounts
payable, and current portion of notes payable due to banks and other financial institutions, the carrying amounts approximate fair value due to the short maturity of these instruments. The fair value of the Group’s long-term debt securities is
based on quoted market prices.
The fair value of long-term loans that the Group borrowed from leading Mexican banks (see Note 8) has been estimated using the borrowing rates
currently available to the Group for bank loans with similar terms and average maturities. The fair value of non-current investments in financial instruments, and currency option and interest rate swap agreements were determined by using
valuation techniques that maximize the use of observable market data.
The carrying and estimated fair values of the Group’s non-derivative financial instruments as of September 30, 2019 and December 31, 2018, were
as follows:
|
|
September 30, 2019
|
|
|
December 31, 2018
|
|
|
|
Carrying Value
|
|
|
Fair Value
|
|
|
Carrying Value
|
|
|
Fair Value
|
|
Assets:
Cash and cash equivalents
|
|
Ps.
|
38,710,917
|
|
|
Ps.
|
38,710,917
|
|
|
Ps.
|
32,068,291
|
|
|
Ps.
|
32,068,291
|
|
Temporary investments
|
|
|
12,264
|
|
|
|
12,264
|
|
|
|
30,992
|
|
|
|
30,992
|
|
Trade notes and accounts receivable, net
|
|
|
17,204,560
|
|
|
|
17,204,560
|
|
|
|
19,748,850
|
|
|
|
19,748,850
|
|
Warrants issued by UHI (see Note 4)
|
|
|
35,257,735
|
|
|
|
35,257,735
|
|
|
|
34,921,530
|
|
|
|
34,921,530
|
|
Long-term loans and interest receivable from GTAC (see Note 5)
|
|
|
840,936
|
|
|
|
833,037
|
|
|
|
817,605
|
|
|
|
824,540
|
|
Open Ended Fund (see Note 4)
|
|
|
6,041,800
|
|
|
|
6,041,800
|
|
|
|
7,662,726
|
|
|
|
7,662,726
|
|
Other Equity Instruments (see Note 4)
|
|
|
5,901,756
|
|
|
|
5,901,756
|
|
|
|
6,545,625
|
|
|
|
6,545,625
|
|
Other Financial assets (see Note 4)
|
|
|
78,017
|
|
|
|
78,017
|
|
|
|
72,612
|
|
|
|
72,612
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Notes due 2025, 2032 and 2040
|
|
Ps.
|
29,609,100
|
|
|
Ps.
|
36,686,978
|
|
|
Ps.
|
29,509,500
|
|
|
Ps.
|
33,110,013
|
|
Senior Notes due 2045
|
|
|
19,739,400
|
|
|
|
20,985,351
|
|
|
|
19,673,000
|
|
|
|
17,317,748
|
|
Senior Notes due 2037 and 2043
|
|
|
11,000,000
|
|
|
|
8,978,780
|
|
|
|
11,000,000
|
|
|
|
7,905,625
|
|
Senior Notes due 2026 and 2046
|
|
|
23,687,280
|
|
|
|
28,020,335
|
|
|
|
23,607,600
|
|
|
|
24,051,128
|
|
Senior Notes due 2049
|
|
|
14,804,550
|
|
|
|
16,221,049
|
|
|
|
—
|
|
|
|
—
|
|
Notes due 2020
|
|
|
10,000,000
|
|
|
|
9,943,200
|
|
|
|
10,000,000
|
|
|
|
9,605,700
|
|
Notes due 2021
|
|
|
—
|
|
|
|
—
|
|
|
|
6,000,000
|
|
|
|
5,956,506
|
|
Notes due 2022
|
|
|
—
|
|
|
|
—
|
|
|
|
5,000,000
|
|
|
|
4,941,430
|
|
Notes due 2027
|
|
|
4,500,000
|
|
|
|
4,508,325
|
|
|
|
4,500,000
|
|
|
|
4,027,275
|
|
Short and long-term notes payable to Mexican banks
|
|
|
22,906,004
|
|
|
|
23,041,600
|
|
|
|
13,834,538
|
|
|
|
13,551,620
|
|
Lease liabilities (1)
|
|
|
9,656,518
|
|
|
|
9,540,240
|
|
|
|
5,317,944
|
|
|
|
5,121,534
|
|
Other notes payable
|
|
|
1,315,156
|
|
|
|
1,267,174
|
|
|
|
2,576,874
|
|
|
|
2,430,667
|
|
(1) In 2019, includes lease agreements recognized beginning on January 1, 2019 under IFRS 16 for an aggregate amount of
Ps.4,743,244.
The carrying values (based on estimated fair values), notional amounts, and maturity dates of the Group’s derivative financial instruments as of
September 30, 2019 and December 31, 2018, were as follows:
September 30, 2019:
Derivative Financial Instruments
|
|
Carrying Value
|
|
|
Notional Amount (U.S. Dollars in Thousands)
|
|
Maturity Date
|
|
Assets:
|
|
|
|
|
|
|
|
|
Derivatives recorded as accounting hedges:
(cash flow hedges)
|
|
|
|
|
|
|
|
|
TVI’s interest rate swap
|
|
Ps.
|
6,197
|
|
|
Ps.
|
415,900
|
|
May 2022
|
|
Total assets
|
|
Ps.
|
6,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Derivatives recorded as accounting hedges:
(cash flow hedges)
|
|
|
|
|
|
|
|
|
|
|
TVI’s interest rate swap
|
|
Ps.
|
10,693
|
|
|
Ps.
|
990,104
|
|
April 2022
|
|
Interest rate swap
|
|
|
44,306
|
|
|
Ps.
|
2,000,000
|
|
October 2022
|
|
Interest rate swap
|
|
|
35,125
|
|
|
Ps.
|
1,500,000
|
|
October 2022
|
|
Interest rate swap
|
|
|
92,461
|
|
|
Ps.
|
2,500,000
|
|
February 2023
|
|
Interest rate swap
|
|
|
210,034
|
|
|
Ps.
|
6,000,000
|
|
June 2024
|
|
Forward
|
|
|
8,348
|
|
|
U.S.$.
|
112,000
|
|
November 2019 through March 2020
|
|
Derivatives not recorded as accounting hedges:
|
|
|
|
|
|
|
|
|
|
|
TVI’s forward
|
|
|
15,864
|
|
|
U.S.$
|
62,000
|
|
October 2019 through April 2020
|
|
Empresas Cablevisión´s forward
|
|
|
11,162
|
|
|
U.S.$
|
56,250
|
|
October 2019 through April 2020
|
|
Sky’s forward
|
|
|
5,029
|
|
|
U.S.$
|
49,500
|
|
January 2020 through April 2020
|
|
Forward
|
|
|
61,518
|
|
|
U.S.$
|
278,800
|
|
October 2019 through May 2020
|
|
Total liabilities
|
|
Ps.
|
494,540
|
|
|
|
|
|
|
|
December 31, 2018:
Derivative Financial Instruments
|
|
Carrying Value
|
|
|
Notional Amount (U.S. Dollars in Thousands)
|
|
Maturity Date
|
|
Assets:
|
|
|
|
|
|
|
|
|
Derivatives recorded as accounting hedges:
(cash flow hedges)
|
|
|
|
|
|
|
|
|
TVI’s interest rate swap
|
|
Ps.
|
37,251
|
|
|
Ps.
|
1,188,667
|
|
April 2019 through May 2022
|
|
TVI’s interest rate swap
|
|
|
32,267
|
|
|
Ps.
|
1,145,871
|
|
April 2022
|
|
Interest rate swap
|
|
|
340,153
|
|
|
Ps.
|
6,000,000
|
|
April 2021
|
|
Interest rate swap
|
|
|
299,560
|
|
|
Ps.
|
5,000,000
|
|
May 2022
|
|
Interest rate swap
|
|
|
85,073
|
|
|
Ps.
|
2,000,000
|
|
October 2022
|
|
Interest rate swap
|
|
|
63,420
|
|
|
Ps.
|
1,500,000
|
|
October 2022
|
|
Interest rate swap
|
|
|
76,876
|
|
|
Ps.
|
2,500,000
|
|
February 2023
|
|
Forward
|
|
|
100,922
|
|
|
U.S.$
|
224,000
|
|
January 2020 through November 2019
|
|
Total assets
|
|
Ps.
|
1,035,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Derivatives not recorded as accounting hedges:
|
|
|
|
|
|
|
|
|
|
|
TVI’s forward
|
|
Ps.
|
10,255
|
|
|
U.S.$
|
75,000
|
|
January 2019 through October 2019
|
|
Empresas Cablevisión´s forward
|
|
|
10,518
|
|
|
U.S.$
|
82,000
|
|
January 2019 through October 2019
|
|
Sky’s forward
|
|
|
27,309
|
|
|
U.S.$
|
38,600
|
|
January 2019 through August 2019
|
|
Forward
|
|
|
99,979
|
|
|
U.S.$
|
491,400
|
|
January 2019 through October 2019
|
|
Total liabilities
|
|
Ps.
|
148,061
|
|
|
|
|
|
|
|
UHI Warrants
The Group determined the fair value of its investment in warrants using the Black-Scholes pricing model (“BSPM”). The BSPM involves the use of
significant estimates and assumptions. These estimates and assumptions include the UHI stock’s spot price at valuation date and the stock’s expected volatility. UHI stock’s price at valuation date was obtained by using a discounted projected cash
flow model. UHI stock’s volatility was obtained from publicly available information of comparable companies’ stock through determining an average of such companies’ annual volatility. Since the described methodology was an internal model with
significant unobservable inputs, the UHI warrants are classified as Level 3.
Unobservable inputs used as of September 30, 2019 and December 31, 2018, included UHI stock’s spot price of U.S.$389 and U.S.$387 per share,
respectively, and UHI stock’s expected volatility 40% and 36%, respectively.
The Company’s management applied significant judgment to determine the classification of the warrants issued by UHI. These warrants did not
comply with the definition of a derivative financial instrument because the initial investment that the Group paid to acquire the original instrument (Convertible Debentures) was significant and a derivative requires no initial investment or one
that is smaller than would be required for a contract with similar response to changes in market factors; therefore, the Group classified the warrants issued by UHI as equity instruments with changes in fair value recognized in other
comprehensive income or loss in consolidated equity. Significant judgment was applied by the Company’s management in assessing that the characteristics of the warrants are closer to an equity instrument in accordance with IAS 32 Financial Instruments: Presentation (see Note 4).
|
10.
|
Capital Stock and Long-term Retention Plan
|
At September 30, 2019, shares of capital stock and CPOs consisted of (in millions):
|
|
Authorized and Issued(1) (3)
|
|
|
Repurchased by the
Company (2) (3)
|
|
|
Held by a Company´s
Trust (3) (4)
|
|
|
Outstanding
|
|
Series “A” Shares
|
|
|
122,179.4
|
|
|
|
(973.7
|
)
|
|
|
(4,981.8
|
)
|
|
|
116,223.9
|
|
Series “B” Shares
|
|
|
58,019.7
|
|
|
|
(856.9
|
)
|
|
|
(4,310.0
|
)
|
|
|
52,852.8
|
|
Series “D” Shares
|
|
|
88,554.1
|
|
|
|
(1,363.3
|
)
|
|
|
(3,107.0
|
)
|
|
|
84,083.8
|
|
Series “L” Shares
|
|
|
88,554.1
|
|
|
|
(1,363.3
|
)
|
|
|
(3,107.0
|
)
|
|
|
84,083.8
|
|
Total
|
|
|
357,307.3
|
|
|
|
(4,557.2
|
)
|
|
|
(15,505.8
|
)
|
|
|
337,244.3
|
|
Shares in the form of CPOs
|
|
|
296,023.0
|
|
|
|
(4,557.2
|
)
|
|
|
(10,386.3
|
)
|
|
|
281,079.5
|
|
Shares not in the form of CPOs
|
|
|
61,284.3
|
|
|
|
—
|
|
|
|
(5,119.5
|
)
|
|
|
56,164.8
|
|
Total
|
|
|
357,307.3
|
|
|
|
(4,557.2
|
)
|
|
|
(15,505.8
|
)
|
|
|
337,244.3
|
|
CPOs
|
|
|
2,530.1
|
|
|
|
(38.9
|
)
|
|
|
(88.8
|
)
|
|
|
(2,402.4
|
)
|
(1)
|
As of September 30, 2019, the authorized and issued capital stock amounted to Ps.4,907,765 (nominal Ps.2,459,154).
|
(2)
|
During the nine months ended September 30, 2019, the Company repurchased 4,557.2 million shares, in the form of 38.9 million CPOs, in the amount of
Ps.1,385,750, in connection with a share repurchase program that was approved by the Company’s stockholders.
|
(3)
|
On April 27, 2018, the Company’s stockholders approved to cancel in May 2018, 5,122.6 million shares of the Company’s capital stock in the form of 43.8
million CPOs, which were repurchased or acquired by the Company in 2018 and 2017.
|
(4)
|
In connection with the Company’s Long-Term Retention Plan.
|
A reconciliation of the number of shares and CPOs outstanding for the nine months ended September 30, 2019 and 2018, is presented as follows (in
millions):
|
|
|
|
|
Series “A” Shares
|
|
|
Series “B” Shares
|
|
|
Series “D” Shares
|
|
|
Series “L” Shares
|
|
|
Shares Outstanding
|
|
|
CPOs Outstanding
|
|
As of January 1, 2019
|
|
|
.
|
|
|
|
116,207.2
|
|
|
|
53,116.1
|
|
|
|
84,502.9
|
|
|
|
84,502.9
|
|
|
|
338,329.1
|
|
|
|
2,414.4
|
|
Repurchased (1)
|
|
|
|
|
|
|
(973.7
|
)
|
|
|
(856.9
|
)
|
|
|
(1,363.3
|
)
|
|
|
(1,363.3
|
)
|
|
|
(4,557.2
|
)
|
|
|
(38.9
|
)
|
Acquired (2)
|
|
|
|
|
|
|
(65.6
|
)
|
|
|
(57.7
|
)
|
|
|
(91.9
|
)
|
|
|
(91.9
|
)
|
|
|
(307.1
|
)
|
|
|
(2.7
|
)
|
Released (2)
|
|
|
|
|
|
|
1,056.0
|
|
|
|
651.3
|
|
|
|
1,036.1
|
|
|
|
1,036.1
|
|
|
|
3,779.5
|
|
|
|
29.6
|
|
As of September 30, 2019
|
|
|
|
|
|
|
116,223.9
|
|
|
|
52,852.8
|
|
|
|
84,083.8
|
|
|
|
84,083.8
|
|
|
|
337,244.3
|
|
|
|
2,402.4
|
|
|
|
Series “A” Shares
|
|
|
Series “B” Shares
|
|
|
Series “D” Shares
|
|
|
Series “L” Shares
|
|
|
Shares Outstanding
|
|
|
CPOs Outstanding
|
|
As of January 1, 2018
|
|
|
116,787.7
|
|
|
|
53,935.8
|
|
|
|
85,806.8
|
|
|
|
85,806.8
|
|
|
|
342,337.1
|
|
|
|
2,451.6
|
|
Repurchased (1)
|
|
|
(636.3
|
)
|
|
|
(559.9
|
)
|
|
|
(890.7
|
)
|
|
|
(890.7
|
)
|
|
|
(2,977.6
|
)
|
|
|
(25.5
|
)
|
Acquired (2)
|
|
|
(627.9
|
)
|
|
|
(552.6
|
)
|
|
|
(879.1
|
)
|
|
|
(879.1
|
)
|
|
|
(2,938.7
|
)
|
|
|
(25.1
|
)
|
Released (2)
|
|
|
1,130.0
|
|
|
|
685.5
|
|
|
|
1,090.6
|
|
|
|
1,090.6
|
|
|
|
3,996.7
|
|
|
|
31.2
|
|
As of September 30, 2018
|
|
|
116,653.5
|
|
|
|
53,508.8
|
|
|
|
85,127.6
|
|
|
|
85,127.6
|
|
|
|
340,417.5
|
|
|
|
2,432.2
|
|
(1)
|
In connection with a share repurchase program.
|
(2)
|
By a Company’s trust in connection with the Company’s Long-Term Retention Plan.
|
Long-term Retention Plan
During the nine months ended September 30, 2019, the trust for the Long-term Retention Plan (i) acquired 307.1 million shares of the Company in
the form of 2.7 million CPOs, in the amount of Ps.100,245.9; and (ii) released 3,463.6 million shares in the form of 29.6 million CPOs, and 315.9 million Series “A” Shares, in the aggregate amount of Ps.1,089,282. In
2018, the Company made a funding for acquisition of shares in the aggregate amount of Ps.1,100,000, to the trust for the Company’s Long-Term Retention Plan.
The Group accrued in equity attributable to stockholders of the Company a share-based compensation expense of Ps.804,611 and Ps.994,139 for the
nine months ended September 30, 2019 and 2018, respectively, which amount was reflected in consolidated operating income as administrative expense.
As of September 30, 2019 and December 31, 2018, the Company’s legal reserve amounted to Ps.2,139,007, and was classified into retained earnings
in equity attributable to stockholders of the Company.
In April 2019, the Company’s stockholders approved the payment of a dividend of Ps.0.35 per CPO and Ps.0.002991452991 per share of Series “A”,
“B”, “D” and “L” Shares, not in the form of a CPO, which was paid in cash in May 2019, in the aggregate amount of Ps.1,066,187.
In April 2018, the Company’s stockholders approved the payment of a dividend of Ps.0.35 per CPO and Ps.0.002991452991 per share of Series “A”,
“B”, “D” and “L” Shares, not in the form of a CPO, which was paid in cash in May 2018, in the aggregate amount of Ps.1,068,868.
|
12.
|
Non-controlling Interests
|
In the first half of 2019, the holding companies of the Sky segment paid a dividend to its equity owners in the aggregate amount of
Ps.3,800,000, of which Ps.1,570,654 were paid to its non-controlling interests.
|
13.
|
Transactions with Related Parties
|
The balances of receivables and payables between the Group and related parties as of September 30, 2019 and December 31, 2018, were as follows:
|
|
September 30, 2019
|
|
|
December 31, 2018
|
|
Current receivables:
|
|
|
|
|
|
|
UHI, including Univision (1)
|
|
Ps.
|
786,882
|
|
|
Ps.
|
954,754
|
|
OCEN (see Notes 3 and 5)
|
|
|
17,613
|
|
|
|
35,590
|
|
Editorial Clío, Libros y Videos, S.A. de C.V.
|
|
|
3,448
|
|
|
|
6,399
|
|
Others
|
|
|
55,872
|
|
|
|
81,584
|
|
|
|
Ps.
|
863,815
|
|
|
Ps.
|
1,078,327
|
|
|
|
|
|
|
|
|
|
|
Current payable:
|
|
|
|
|
|
|
|
|
UHI, including Univision (1)
|
|
Ps.
|
620,533
|
|
|
Ps.
|
614,388
|
|
AT&T/ DirecTV
|
|
|
29,097
|
|
|
|
70,187
|
|
Others
|
|
|
119
|
|
|
|
29,875
|
|
|
|
Ps.
|
649,749
|
|
|
Ps.
|
714,450
|
|
(1)
|
As of September 30, 2019 and December 31, 2018, the Group recognized a provision in the amount of Ps.620,533 and Ps.614,388, respectively, associated with a consulting arrangement entered into by the Group, UHI and an entity
controlled by the chairman of the Board of Directors of UHI, by which upon consummation of a qualified initial public offering of the shares of UHI or an alternative exit plan for the main current investors in UHI, the Group would pay
the entity a portion of a defined appreciation in excess of certain preferred returns and performance thresholds of UHI. In March 2018, UHI announced that it has determined not to utilize the registration statement initially filed on
July 2, 2015 for an initial public offering in the United States. Since the existing obligations contemplate other scenarios under which payment may be required, and such scenarios remain probable, the Company has maintained this
payment provisioned. As of September 30, 2019 and December 31, 2018, receivables from UHI related primarily to the PLA amounted to Ps.786,882 and Ps.954,754, respectively.
|
In the nine months ended September 30, 2019 and 2018, royalty revenue from Univision amounted to Ps.5,580,730 and Ps.5,612,644 respectively.
14. Other Income or Expense, Net
Other (expense) income for the nine months ended September 30, 2019 and 2018 is analyzed as follows:
|
|
September 30, 2019
|
|
|
September 30, 2018
|
|
Net gain on disposition of investments (1)
|
|
Ps.
|
62
|
|
|
Ps.
|
3,582,681
|
|
Donations
|
|
|
(23,045
|
)
|
|
|
(46,616
|
)
|
Legal and financial advisory professional services (2)
|
|
|
(222,176
|
)
|
|
|
(85,858
|
)
|
Loss on disposition of property and equipment
|
|
|
(211,472
|
)
|
|
|
(167,826
|
)
|
Deferred compensation
|
|
|
(188,840
|
)
|
|
|
(188,840
|
)
|
Dismissal severance expense (3)
|
|
|
(475,873
|
)
|
|
|
(359,922
|
)
|
Impairment adjustments (4)
|
|
|
(50,680
|
)
|
|
|
(34,564
|
)
|
Other, net
|
|
|
310,758
|
|
|
|
(47,681
|
)
|
|
|
Ps.
|
(861,266
|
)
|
|
Ps.
|
2,651,374
|
|
(1)
|
In 2018, included a gain of Ps.3,547,387 on disposition of the Group’s equity stake in Imagina, and a gain of Ps.85,000 on disposition of the Group’s 50%
equity in Televisa CJ Grand, a joint venture for a home shopping channel in Mexico (see Note 3).
|
(2)
|
Includes primarily legal, financial advisory and professional services in connection with certain litigation and other matters.
|
(3)
|
Includes severance expense in connection with dismissals of personnel, as part of a cost reduction plan.
|
(4)
|
In 2019 and 2018, the Group recognized impairment adjustments in connection with trademarks in its Publishing business.
|
Finance (expense) income for the nine months ended September 30, 2019 and 2018, included:
|
|
September 30, 2019
|
|
|
September 30, 2018
|
|
Interest expense (1)
|
|
Ps.
|
(7,844,528
|
)
|
|
Ps.
|
(7,036,960
|
)
|
Other finance expense, net (2)
|
|
|
(313,625
|
)
|
|
|
(1,113,426
|
)
|
Foreign Exchange loss, net (4)
|
|
|
(465,435
|
)
|
|
|
—
|
|
Finance expense, net
|
|
|
(8,623,588
|
)
|
|
|
(8,150,386
|
)
|
Interest income (3)
|
|
|
1,210,822
|
|
|
|
1,162,044
|
|
Foreign Exchange gain, net (4)
|
|
|
—
|
|
|
|
523,110
|
|
Finance income, net
|
|
|
1,210,822
|
|
|
|
1,685,154
|
|
Finance expense, net
|
|
Ps.
|
(7,412,766
|
)
|
|
Ps.
|
(6,465,232
|
)
|
(1)
|
In 2019 also included interest expense related to lease liabilities that were recognized for first time in connection with initial adoption of IFRS 16 in the
aggregate amount of Ps.313,666.
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(2)
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In 2019 and 2018, other finance income or expense, net, included gain or loss from derivative financial instruments.
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(3)
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In 2019 and 2018, this line item included primarily gains from cash equivalents and instruments held for trading.
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(4)
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Foreign exchange loss or gain, net, included (i) foreign exchange gain resulted primarily from the appreciation of the Mexican peso against the U.S. dollar
on the Group’s U.S. dollar-denominated monetary liability position, excluding long-term debt designated as a hedging instrument of the Group’s investments in UHI and the Open Ended Fund, during the nine months ended September 30, 2018;
and (ii) foreign exchange loss resulted primarily from the appreciation of the Mexican peso against the U.S. dollar on the Group’s U.S. dollar-denominated monetary asset position during the nine months ended September 30, 2019 (see Note
8). The exchange rate of the Mexican peso against the U.S dollar was of Ps. 19.7394, Ps.19.6730, Ps.18.6822 and Ps.19.7051 as of September 30, 2019, December 31, 2018, September 30, 2018 and December 31, 2017, respectively.
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