The financial institutions that perform financial analysis on the securities of Grupo Televisa, S.A.B., are as follows:
Institution:
Barclays
Bradesco
BTG Pactual
BofA Securities
Credit Suisse
Evercore
Goldman Sachs
HSBC
Itaú Securities
JPMorgan
Morgan Stanley
New Street
[210000] Statement of financial position, current/non-current
|
Concept
|
Close Current Quarter
2020-06-30
|
Close Previous Exercise
2019-12-31
|
|
Statement of financial position
|
|
|
|
Assets
|
|
|
|
Current assets
|
|
|
|
Cash and cash equivalents
|
45,481,794,000
|
27,452,265,000
|
|
Trade and other current receivables
|
35,535,969,000
|
25,491,160,000
|
|
Current tax assets, current
|
4,646,233,000
|
3,800,379,000
|
|
Other current financial assets
|
1,438,662,000
|
1,715,000
|
|
Current inventories
|
1,290,760,000
|
1,151,421,000
|
|
Current biological assets
|
0
|
0
|
|
Other current non-financial assets
|
|
7,858,658,000
|
|
Total current assets other than non-current assets or disposal groups classified as held for sale or as held for distribution to owners
|
96,049,528,000
|
65,755,598,000
|
|
Non-current assets or disposal groups classified as held for sale or as held for distribution to owners
|
1,675,108,000
|
1,675,426,000
|
|
Total current assets
|
97,724,636,000
|
67,431,024,000
|
|
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
|
29,684,395,000
|
44,268,776,000
|
|
Investments accounted for using equity method
|
0
|
0
|
|
Investments in subsidiaries, joint ventures and associates
|
6,453,882,000
|
9,762,432,000
|
|
Property, plant and equipment
|
82,896,955,000
|
83,329,232,000
|
|
Investment property
|
0
|
0
|
|
Right-of-use assets that do not meet definition of investment property
|
7,165,780,000
|
7,553,052,000
|
|
Goodwill
|
14,113,626,000
|
14,113,626,000
|
|
Intangible assets other than goodwill
|
28,835,703,000
|
29,215,328,000
|
|
Deferred tax assets
|
31,840,109,000
|
24,185,148,000
|
|
Other non-current non-financial assets
|
|
10,485,274,000
|
|
Total non-current assets
|
211,916,811,000
|
222,912,868,000
|
|
Total assets
|
309,641,447,000
|
290,343,892,000
|
|
Equity and liabilities
|
|
|
|
Liabilities
|
|
|
|
Current liabilities
|
|
|
|
Trade and other current payables
|
48,798,264,000
|
33,894,040,000
|
|
Current tax liabilities, current
|
1,718,550,000
|
2,470,249,000
|
|
Other current financial liabilities
|
2,932,569,000
|
4,328,652,000
|
|
Current lease liabilities
|
1,486,288,000
|
1,257,766,000
|
|
Other current non-financial liabilities
|
0
|
0
|
|
Current provisions
|
|
|
|
Current provisions for employee benefits
|
0
|
0
|
|
Other current provisions
|
2,579,000
|
2,423,000
|
|
Total current provisions
|
2,579,000
|
2,423,000
|
|
Total current liabilities other than liabilities included in disposal groups classified as held for sale
|
54,938,250,000
|
41,953,130,000
|
|
Liabilities included in disposal groups classified as held for sale
|
374,615,000
|
432,812,000
|
|
Total current liabilities
|
55,312,865,000
|
42,385,942,000
|
|
Non-current liabilities
|
|
|
|
Trade and other non-current payables
|
2,152,337,000
|
2,459,157,000
|
|
Current tax liabilities, non-current
|
753,770,000
|
1,759,719,000
|
|
Concept
|
Close Current Quarter
2020-06-30
|
Close Previous Exercise
2019-12-31
|
|
Other non-current financial liabilities
|
154,698,342,000
|
120,791,259,000
|
|
Non-current lease liabilities
|
8,593,042,000
|
8,105,754,000
|
|
Other non-current non-financial liabilities
|
0
|
0
|
|
Non-current provisions
|
|
|
|
Non-current provisions for employee benefits
|
1,531,859,000
|
1,468,112,000
|
|
Other non-current provisions
|
949,492,000
|
917,483,000
|
|
Total non-current provisions
|
2,481,351,000
|
2,385,595,000
|
|
Deferred tax liabilities
|
2,925,947,000
|
7,052,233,000
|
|
Total non-current liabilities
|
171,604,789,000
|
142,553,717,000
|
|
Total liabilities
|
226,917,654,000
|
184,939,659,000
|
|
Equity
|
|
|
|
Issued capital
|
4,907,765,000
|
4,907,765,000
|
|
Share premium
|
15,889,819,000
|
15,889,819,000
|
|
Treasury shares
|
13,904,194,000
|
14,018,847,000
|
|
Retained earnings
|
74,600,864,000
|
82,431,278,000
|
|
Other reserves
|
(14,805,218,000)
|
1,320,451,000
|
|
Total equity attributable to owners of parent
|
66,689,036,000
|
90,530,466,000
|
|
Non-controlling interests
|
16,034,757,000
|
14,873,767,000
|
|
Total equity
|
82,723,793,000
|
105,404,233,000
|
|
Total equity and liabilities
|
309,641,447,000
|
290,343,892,000
|
[310000] Statement of comprehensive income, profit or loss, by function of expense
|
Concept
|
Accumulated Current Year
2020-01-01 - 2020-06-30
|
Accumulated Previous Year
2019-01-01 - 2019-06-30
|
Quarter Current Year
2020-04-01 - 2020-06-30
|
Quarter Previous Year
2019-04-01 - 2019-06-30
|
|
Profit or loss
|
|
|
|
|
|
Profit (loss)
|
|
|
|
|
|
Revenue
|
45,635,946,000
|
47,702,832,000
|
22,407,158,000
|
24,307,587,000
|
|
Cost of sales
|
27,679,839,000
|
27,079,432,000
|
13,941,797,000
|
13,815,417,000
|
|
Gross profit
|
17,956,107,000
|
20,623,400,000
|
8,465,361,000
|
10,492,170,000
|
|
Distribution costs
|
5,256,369,000
|
5,546,949,000
|
2,538,354,000
|
2,782,565,000
|
|
Administrative expenses
|
6,571,306,000
|
7,024,186,000
|
2,940,303,000
|
3,316,646,000
|
|
Other income
|
0
|
0
|
0
|
0
|
|
Other expense
|
8,591,000
|
471,904,000
|
293,519,000
|
282,994,000
|
|
Profit (loss) from operating activities
|
6,119,841,000
|
7,580,361,000
|
2,693,185,000
|
4,109,965,000
|
|
Finance income
|
2,867,008,000
|
1,109,483,000
|
2,803,033,000
|
674,038,000
|
|
Finance costs
|
11,663,496,000
|
5,652,049,000
|
2,891,922,000
|
2,942,514,000
|
|
Share of profit (loss) of associates and joint ventures accounted for using equity method
|
(5,211,037,000)
|
329,639,000
|
137,502,000
|
163,818,000
|
|
Profit (loss) before tax
|
(7,887,684,000)
|
3,367,434,000
|
2,741,798,000
|
2,005,307,000
|
|
Tax income (expense)
|
(973,357,000)
|
1,245,951,000
|
752,487,000
|
741,964,000
|
|
Profit (loss) from continuing operations
|
(6,914,327,000)
|
2,121,483,000
|
1,989,311,000
|
1,263,343,000
|
|
Profit (loss) from discontinued operations
|
0
|
0
|
0
|
0
|
|
Profit (loss)
|
(6,914,327,000)
|
2,121,483,000
|
1,989,311,000
|
1,263,343,000
|
|
Profit (loss), attributable to
|
|
|
|
|
|
Profit (loss), attributable to owners of parent
|
(7,912,401,000)
|
1,460,815,000
|
1,739,497,000
|
919,097,000
|
|
Profit (loss), attributable to non-controlling interests
|
998,074,000
|
660,668,000
|
249,814,000
|
344,246,000
|
|
Earnings per share
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
Basic earnings per share
|
|
|
|
|
|
Basic earnings (loss) per share from continuing operations
|
(2.78)
|
0.51
|
0.61
|
0.32
|
|
Basic earnings (loss) per share from discontinued operations
|
0
|
0
|
0
|
0
|
|
Total basic earnings (loss) per share
|
|
0.51
|
0.61
|
0.32
|
|
Diluted earnings per share
|
|
|
|
|
|
Diluted earnings (loss) per share from continuing operations
|
(2.62)
|
0.48
|
0.58
|
0.3
|
|
Diluted earnings (loss) per share from discontinued operations
|
0
|
0
|
0
|
0
|
|
Total diluted earnings (loss) per share
|
|
0.48
|
0.58
|
0.3
|
[410000] Statement of comprehensive income, OCI components presented net of tax
|
Concept
|
Accumulated Current Year
2020-01-01 - 2020-06-30
|
Accumulated Previous Year
2019-01-01 - 2019-06-30
|
Quarter Current Year
2020-04-01 - 2020-06-30
|
Quarter Previous Year
2019-04-01 - 2019-06-30
|
|
Statement of comprehensive income
|
|
|
|
|
|
Profit (loss)
|
(6,914,327,000)
|
2,121,483,000
|
1,989,311,000
|
1,263,343,000
|
|
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
|
(16,822,088,000)
|
(249,650,000)
|
(216,087,000)
|
(349,980,000)
|
|
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
|
(16,822,088,000)
|
(249,650,000)
|
(216,087,000)
|
(349,980,000)
|
|
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
|
1,384,365,000
|
(67,399,000)
|
(395,397,000)
|
(8,821,000)
|
|
Reclassification adjustments on exchange differences on translation, net of tax
|
0
|
0
|
0
|
0
|
|
Other comprehensive income, net of tax, exchange differences on translation
|
1,384,365,000
|
(67,399,000)
|
(395,397,000)
|
(8,821,000)
|
|
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
|
(428,981,000)
|
(578,572,000)
|
(688,326,000)
|
(230,980,000)
|
|
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
|
(428,981,000)
|
(578,572,000)
|
(688,326,000)
|
(230,980,000)
|
|
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
2020-01-01 - 2020-06-30
|
Accumulated Previous Year
2019-01-01 - 2019-06-30
|
Quarter Current Year
2020-04-01 - 2020-06-30
|
Quarter Previous Year
2019-04-01 - 2019-06-30
|
|
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
|
0
|
(433,000)
|
0
|
(45,000)
|
|
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
|
0
|
(433,000)
|
0
|
(45,000)
|
|
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
|
(96,049,000)
|
(117,693,000)
|
(84,600,000)
|
(61,648,000)
|
|
Total other comprehensive income that will be reclassified to profit or loss, net of tax
|
859,335,000
|
(764,097,000)
|
(1,168,323,000)
|
(301,494,000)
|
|
Total other comprehensive income
|
(15,962,753,000)
|
(1,013,747,000)
|
(1,384,410,000)
|
(651,474,000)
|
|
Total comprehensive income
|
(22,877,080,000)
|
1,107,736,000
|
604,901,000
|
611,869,000
|
|
Comprehensive income attributable to
|
|
|
|
|
|
Comprehensive income, attributable to owners of parent
|
(24,038,070,000)
|
446,871,000
|
441,432,000
|
265,908,000
|
|
Comprehensive income, attributable to non-controlling interests
|
1,160,990,000
|
660,865,000
|
163,469,000
|
345,961,000
|
[520000] Statement of cash flows, indirect method
|
Concept
|
Accumulated Current Year
2020-01-01 - 2020-06-30
|
Accumulated Previous Year
2019-01-01 - 2019-06-30
|
|
Statement of cash flows
|
|
|
|
Cash flows from (used in) operating activities
|
|
|
|
Profit (loss)
|
(6,914,327,000)
|
2,121,483,000
|
|
Adjustments to reconcile profit (loss)
|
|
|
|
+ Discontinued operations
|
0
|
0
|
|
+ Adjustments for income tax expense
|
(973,357,000)
|
1,245,951,000
|
|
+ (-) Adjustments for finance costs
|
0
|
0
|
|
+ Adjustments for depreciation and amortisation expense
|
10,385,581,000
|
10,295,173,000
|
|
+ Adjustments for impairment loss (reversal of impairment loss) recognised in profit or loss
|
13,601,000
|
33,787,000
|
|
+ Adjustments for provisions
|
686,657,000
|
702,603,000
|
|
+ (-) Adjustments for unrealised foreign exchange losses (gains)
|
8,410,534,000
|
(625,990,000)
|
|
+ Adjustments for share-based payments
|
392,237,000
|
569,011,000
|
|
+ (-) Adjustments for fair value losses (gains)
|
(2,191,298,000)
|
668,971,000
|
|
- Adjustments for undistributed profits of associates
|
0
|
0
|
|
+ (-) Adjustments for losses (gains) on disposal of non-current assets
|
(9,633,000)
|
191,003,000
|
|
+ Share of income of associates and joint ventures
|
5,211,037,000
|
(329,639,000)
|
|
+ (-) Adjustments for decrease (increase) in inventories
|
(49,579,000)
|
(432,603,000)
|
|
+ (-) Adjustments for decrease (increase) in trade accounts receivable
|
(8,074,866,000)
|
(2,193,103,000)
|
|
+ (-) Adjustments for decrease (increase) in other operating receivables
|
(2,439,564,000)
|
(2,573,332,000)
|
|
+ (-) Adjustments for increase (decrease) in trade accounts payable
|
5,478,479,000
|
1,315,508,000
|
|
+ (-) Adjustments for increase (decrease) in other operating payables
|
7,821,357,000
|
164,163,000
|
|
+ Other adjustments for non-cash items
|
0
|
0
|
|
+ Other adjustments for which cash effects are investing or financing cash flow
|
0
|
758,000
|
|
+ Straight-line rent adjustment
|
0
|
0
|
|
+ Amortization of lease fees
|
0
|
0
|
|
+ Setting property values
|
0
|
0
|
|
+ (-) Other adjustments to reconcile profit (loss)
|
207,926,000
|
221,970,000
|
|
+ (-) Total adjustments to reconcile profit (loss)
|
24,869,112,000
|
9,254,231,000
|
|
Net cash flows from (used in) operations
|
17,954,785,000
|
11,375,714,000
|
|
- Dividends paid
|
0
|
0
|
|
+ Dividends received
|
0
|
0
|
|
- Interest paid
|
(5,413,305,000)
|
(4,983,078,000)
|
|
+ Interest received
|
(46,329,000)
|
(51,725,000)
|
|
+ (-) Income taxes refund (paid)
|
5,152,775,000
|
6,003,902,000
|
|
+ (-) Other inflows (outflows) of cash
|
0
|
0
|
|
Net cash flows from (used in) operating activities
|
18,168,986,000
|
10,303,165,000
|
|
Cash flows from (used in) investing activities
|
|
|
|
+ Cash flows from losing control of subsidiaries or other businesses
|
0
|
(674,000)
|
|
- Cash flows used in obtaining control of subsidiaries or other businesses
|
0
|
(107,883,000)
|
|
+ Other cash receipts from sales of equity or debt instruments of other entities
|
0
|
0
|
|
- 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
|
0
|
|
- Other cash payments to acquire interests in joint ventures
|
0
|
0
|
|
+ Proceeds from sales of property, plant and equipment
|
499,569,000
|
1,283,386,000
|
|
- Purchase of property, plant and equipment
|
9,146,171,000
|
8,859,401,000
|
|
+ Proceeds from sales of intangible assets
|
0
|
0
|
|
- Purchase of intangible assets
|
531,399,000
|
1,441,524,000
|
|
+ Proceeds from sales of other long-term assets
|
0
|
0
|
|
- Purchase of other long-term assets
|
0
|
0
|
|
Concept
|
Accumulated Current Year
2020-01-01 - 2020-06-30
|
Accumulated Previous Year
2019-01-01 - 2019-06-30
|
|
+ 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
|
0
|
452,400,000
|
|
- Interest paid
|
0
|
0
|
|
+ Interest received
|
0
|
0
|
|
+ (-) Income taxes refund (paid)
|
0
|
0
|
|
+ (-) Other inflows (outflows) of cash
|
529,374,000
|
51,472,000
|
|
Net cash flows from (used in) investing activities
|
(8,648,627,000)
|
(8,406,458,000)
|
|
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
|
1,324,063,000
|
1,294,375,000
|
|
+ Proceeds from issuing shares
|
0
|
0
|
|
+ Proceeds from issuing other equity instruments
|
0
|
0
|
|
- Payments to acquire or redeem entity's shares
|
195,597,000
|
1,094,096,000
|
|
- Payments of other equity instruments
|
0
|
0
|
|
+ Proceeds from borrowings
|
14,770,695,000
|
14,006,712,000
|
|
- Repayments of borrowings
|
371,245,000
|
317,911,000
|
|
- Payments of finance lease liabilities
|
227,362,000
|
413,531,000
|
|
- Payments of lease liabilities
|
484,117,000
|
419,432,000
|
|
+ Proceeds from government grants
|
0
|
0
|
|
- Dividends paid
|
0
|
1,066,187,000
|
|
- Interest paid
|
4,588,589,000
|
3,591,148,000
|
|
+ (-) Income taxes refund (paid)
|
0
|
0
|
|
+ (-) Other inflows (outflows) of cash
|
697,001,000
|
(1,823,025,000)
|
|
Net cash flows from (used in) financing activities
|
8,276,723,000
|
3,987,007,000
|
|
Net increase (decrease) in cash and cash equivalents before effect of exchange rate changes
|
17,797,082,000
|
5,883,714,000
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
232,447,000
|
(33,905,000)
|
|
Net increase (decrease) in cash and cash equivalents
|
18,029,529,000
|
5,849,809,000
|
|
Cash and cash equivalents at beginning of period
|
27,452,265,000
|
32,068,291,000
|
|
Cash and cash equivalents at end of period
|
45,481,794,000
|
37,918,100,000
|
[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
|
14,018,847,000
|
82,431,278,000
|
0
|
1,280,541,000
|
(381,753,000)
|
0
|
0
|
|
Changes in equity
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
Profit (loss)
|
0
|
0
|
0
|
(7,912,401,000)
|
0
|
0
|
0
|
0
|
0
|
|
Other comprehensive income
|
0
|
0
|
0
|
0
|
0
|
1,221,449,000
|
(428,981,000)
|
0
|
0
|
|
Total comprehensive income
|
0
|
0
|
0
|
(7,912,401,000)
|
0
|
1,221,449,000
|
(428,981,000)
|
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
|
(114,653,000)
|
81,987,000
|
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
|
(114,653,000)
|
(7,830,414,000)
|
0
|
1,221,449,000
|
(428,981,000)
|
0
|
0
|
|
Equity at end of period
|
4,907,765,000
|
15,889,819,000
|
13,904,194,000
|
74,600,864,000
|
0
|
2,501,990,000
|
(810,734,000)
|
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
|
1,202,689,000
|
0
|
0
|
(705,611,000)
|
0
|
0
|
0
|
|
Changes in equity
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
Profit (loss)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Other comprehensive income
|
0
|
0
|
(16,822,088,000)
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Total comprehensive income
|
0
|
0
|
(16,822,088,000)
|
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
|
(16,822,088,000)
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Equity at end of period
|
0
|
0
|
(15,619,399,000)
|
0
|
0
|
(705,611,000)
|
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
|
(75,415,000)
|
1,320,451,000
|
90,530,466,000
|
14,873,767,000
|
105,404,233,000
|
|
Changes in equity
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
Profit (loss)
|
0
|
0
|
0
|
0
|
0
|
(7,912,401,000)
|
998,074,000
|
(6,914,327,000)
|
|
Other comprehensive income
|
0
|
0
|
0
|
(96,049,000)
|
(16,125,669,000)
|
(16,125,669,000)
|
162,916,000
|
(15,962,753,000)
|
|
Total comprehensive income
|
0
|
0
|
0
|
(96,049,000)
|
(16,125,669,000)
|
(24,038,070,000)
|
1,160,990,000
|
(22,877,080,000)
|
|
Issue of equity
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Dividends recognised as distributions to owners
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
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
|
0
|
0
|
0
|
|
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
|
196,640,000
|
0
|
196,640,000
|
|
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
|
(96,049,000)
|
(16,125,669,000)
|
(23,841,430,000)
|
1,160,990,000
|
(22,680,440,000)
|
|
Equity at end of period
|
0
|
0
|
0
|
(171,464,000)
|
(14,805,218,000)
|
66,689,036,000
|
16,034,757,000
|
82,723,793,000
|
[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
|
4,907,765,000
|
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
|
1,460,815,000
|
0
|
0
|
0
|
0
|
0
|
|
Other comprehensive income
|
0
|
0
|
0
|
0
|
0
|
(67,596,000)
|
(578,572,000)
|
0
|
0
|
|
Total comprehensive income
|
0
|
0
|
0
|
1,460,815,000
|
0
|
(67,596,000)
|
(578,572,000)
|
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
|
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
|
766,000
|
0
|
0
|
0
|
0
|
0
|
|
Increase (decrease) through share-based payment transactions, equity
|
0
|
0
|
108,150,000
|
(427,710,000)
|
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
|
108,150,000
|
(32,316,000)
|
0
|
(67,596,000)
|
(578,572,000)
|
0
|
0
|
|
Equity at end of period
|
4,907,765,000
|
15,889,819,000
|
14,327,210,000
|
78,478,593,000
|
0
|
1,393,899,000
|
105,013,000
|
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
|
(250,083,000)
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Total comprehensive income
|
0
|
0
|
(250,083,000)
|
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
|
(250,083,000)
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Equity at end of period
|
0
|
0
|
2,404,783,000
|
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
|
1,460,815,000
|
660,668,000
|
2,121,483,000
|
|
Other comprehensive income
|
0
|
0
|
0
|
(117,693,000)
|
(1,013,944,000)
|
(1,013,944,000)
|
197,000
|
(1,013,747,000)
|
|
Total comprehensive income
|
0
|
0
|
0
|
(117,693,000)
|
(1,013,944,000)
|
446,871,000
|
660,865,000
|
1,107,736,000
|
|
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
|
0
|
0
|
0
|
|
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
|
(535,860,000)
|
0
|
(535,860,000)
|
|
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
|
(117,693,000)
|
(1,013,944,000)
|
(1,154,410,000)
|
(913,523,000)
|
(2,067,933,000)
|
|
Equity at end of period
|
0
|
0
|
0
|
43,051,000
|
3,413,543,000
|
88,362,510,000
|
14,100,248,000
|
102,462,758,000
|
[700000] Informative data about the Statement of financial position
|
Concept
|
Close Current Quarter
2020-06-30
|
Close Previous Exercise
2019-12-31
|
|
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
|
1,288,225,000
|
1,369,379,000
|
|
Number of executives
|
71
|
73
|
|
Number of employees
|
43,115
|
42,875
|
|
Number of workers
|
0
|
0
|
|
Outstanding shares
|
329,940,809,211
|
337,244,259,846
|
|
Repurchased shares
|
27,366,462,591
|
20,063,011,956
|
|
Restricted cash
|
0
|
0
|
|
Guaranteed debt of associated companies
|
0
|
0
|
[700002] Informative data about the Income statement
|
Concept
|
Accumulated Current Year
2020-01-01 - 2020-06-30
|
Accumulated Previous Year
2019-01-01 - 2019-06-30
|
Quarter Current Year
2020-04-01 - 2020-06-30
|
Quarter Previous Year
2019-04-01 - 2019-06-30
|
|
Informative data of the Income Statement
|
|
|
|
|
|
Operating depreciation and amortization
|
10,385,581,000
|
10,295,173,000
|
5,234,078,000
|
5,079,222,000
|
[700003] Informative data - Income statement for 12 months
|
Concept
|
Current Year
2019-07-01 - 2020-06-30
|
Previous Year
2018-07-01 - 2019-06-30
|
|
Informative data - Income Statement for 12 months
|
|
|
|
Revenue
|
99,690,295,000
|
99,471,317,000
|
|
Profit (loss) from operating activities
|
15,544,510,000
|
15,586,413,000
|
|
Profit (loss)
|
(2,928,997,000)
|
3,981,067,000
|
|
Profit (loss), attributable to owners of parent
|
(4,747,077,000)
|
2,495,299,000
|
|
Operating depreciation and amortization
|
21,099,204,000
|
20,480,450,000
|
[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
|
120,996,000
|
120,995,000
|
731,112,000
|
|
|
|
|
|
|
|
|
|
|
HSBC 2
|
NO
|
2016-03-08
|
2023-03-08
|
7.13
|
|
|
1,250,000,000
|
1,250,000,000
|
|
|
|
|
|
|
|
|
|
SCOTIABANK INVERLAT 3
|
NO
|
2016-03-08
|
2023-03-08
|
7
|
|
375,000,000
|
1,500,000,000
|
1,125,000,000
|
|
|
|
|
|
|
|
|
|
SANTANDER LOAN 4
|
NO
|
2017-11-23
|
2022-10-21
|
TIIE+1.25
|
|
|
|
1,495,650,000
|
|
|
|
|
|
|
|
|
|
HSBC 5
|
NO
|
2017-11-23
|
2022-11-22
|
TIIE+1.30
|
|
|
|
1,994,305,000
|
|
|
|
|
|
|
|
|
|
SCOTIABANK INVERLAT 6
|
NO
|
2017-12-07
|
2023-02-03
|
TIIE+1.30
|
|
|
|
2,492,258,000
|
|
|
|
|
|
|
|
|
|
SINDICATED LOAN 7
|
NO
|
2019-06-05
|
2024-06-28
|
TIIE+1.05
|
|
|
|
|
9,915,521,000
|
|
|
|
|
|
|
|
|
REVOLVING CREDIT FACILITY 8
|
YES
|
2018-03-26
|
2022-03-26
|
TIIE+.87 o 1.125
|
|
|
14,726,045,000
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
|
|
120,996,000
|
495,995,000
|
18,207,157,000
|
8,357,213,000
|
9,915,521,000
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Other banks
|
|
|
TOTAL
|
|
|
|
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Total banks
|
|
|
TOTAL
|
|
|
|
|
120,996,000
|
495,995,000
|
18,207,157,000
|
8,357,213,000
|
9,915,521,000
|
0
|
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
|
|
|
|
|
|
4,487,734,000
|
|
|
|
|
|
|
|
SENIOR NOTES 3
|
YES
|
2013-05-14
|
2043-05-14
|
7.62
|
|
|
|
|
|
6,445,725,000
|
|
|
|
|
|
|
|
NOTES 4
|
NO
|
2017-10-09
|
2027-09-27
|
8.79
|
|
|
|
|
|
4,482,698,000
|
|
|
|
|
|
|
|
SENIOR NOTES 5
|
YES
|
2005-03-18
|
2025-03-18
|
6.97
|
|
|
|
|
|
|
|
|
|
|
|
13,638,850,000
|
|
SENIOR NOTES 6
|
YES
|
2002-03-11
|
2032-03-11
|
8.94
|
|
|
|
|
|
|
|
|
|
|
|
6,889,658,000
|
|
SENIOR NOTES 7
|
YES
|
2009-11-23
|
2040-01-16
|
6.97
|
|
|
|
|
|
|
|
|
|
|
|
13,697,151,000
|
|
SENIOR NOTES 8
|
YES
|
2014-05-13
|
2045-05-15
|
5.26
|
|
|
|
|
|
|
|
|
|
|
|
22,613,277,000
|
|
SENIOR NOTES 9
|
YES
|
2015-11-24
|
2026-01-30
|
4.86
|
|
|
|
|
|
|
|
|
|
|
|
6,883,502,000
|
|
SENIOR NOTES 10
|
YES
|
2015-11-24
|
2046-01-31
|
6.44
|
|
|
|
|
|
|
|
|
|
|
|
20,609,550,000
|
|
SENIOR NOTES 11
|
YES
|
2019-05-21
|
2049-05-24
|
5.52
|
|
|
|
|
|
|
|
|
|
|
|
16,976,638,000
|
|
TOTAL
|
|
|
|
|
0
|
0
|
0
|
0
|
0
|
15,416,157,000
|
0
|
0
|
0
|
0
|
0
|
101,308,626,000
|
|
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
|
|
|
|
|
0
|
0
|
0
|
0
|
0
|
15,416,157,000
|
0
|
0
|
0
|
0
|
0
|
|
|
Other current and non-current liabilities with cost
|
|
|
Other current and non-current liabilities with cost
|
|
|
TOTAL
|
|
|
|
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Total other current and non-current liabilities with cost
|
|
|
TOTAL
|
|
|
|
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
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
|
|
Suppliers
|
|
|
Suppliers
|
|
|
SUPPLIERS 1
|
NO
|
2020-06-20
|
2021-06-30
|
|
|
17,769,138,000
|
|
|
|
|
|
6,703,186,000
|
|
|
|
|
|
TRANSMISSION RIGHTS 2
|
NO
|
2012-05-07
|
2026-12-29
|
|
|
446,599,000
|
250,689,000
|
108,646,000
|
0
|
102,987,000
|
|
1,534,875,000
|
969,183,000
|
295,006,000
|
172,993,000
|
252,833,000
|
|
TOTAL
|
|
|
|
|
0
|
18,215,737,000
|
250,689,000
|
108,646,000
|
0
|
102,987,000
|
0
|
8,238,061,000
|
969,183,000
|
295,006,000
|
172,993,000
|
252,833,000
|
|
Total suppliers
|
|
|
TOTAL
|
|
|
|
|
0
|
18,215,737,000
|
250,689,000
|
108,646,000
|
0
|
102,987,000
|
0
|
8,238,061,000
|
969,183,000
|
295,006,000
|
172,993,000
|
252,833,000
|
|
Other current and non-current liabilities
|
|
|
Other current and non-current liabilities
|
|
|
DERIVATIVE FINANCIAL INSTRUMENTS 1
|
|
|
|
|
|
|
888,402,000
|
605,266,000
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
|
|
0
|
0
|
888,402,000
|
605,266,000
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Total other current and non-current liabilities
|
|
|
TOTAL
|
|
|
|
|
0
|
0
|
888,402,000
|
605,266,000
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Total credits
|
|
|
TOTAL
|
|
|
|
|
120,996,000
|
18,711,732,000
|
19,346,248,000
|
9,071,125,000
|
9,915,521,000
|
15,519,144,000
|
0
|
8,238,061,000
|
969,183,000
|
295,006,000
|
172,993,000
|
101,561,459,000
|
[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
|
1,267,740,000
|
29,202,011,000
|
14,388,000
|
331,423,000
|
29,533,434,000
|
|
Non-current monetary assets
|
0
|
0
|
0
|
0
|
0
|
|
Total monetary assets
|
1,267,740,000
|
29,202,011,000
|
14,388,000
|
331,423,000
|
29,533,434,000
|
|
Liabilities position
|
|
|
|
|
|
|
Current liabilities
|
540,001,000
|
12,438,761,000
|
12,421,000
|
286,114,000
|
12,724,875,000
|
|
Non-current liabilities
|
4,745,221,000
|
109,304,742,000
|
0
|
0
|
109,304,742,000
|
|
Total liabilities
|
5,285,222,000
|
121,743,503,000
|
12,421,000
|
286,114,000
|
122,029,617,000
|
|
Net monetary assets (liabilities)
|
(4,017,482,000)
|
(92,541,492,000)
|
1,967,000
|
45,309,000
|
|
[800005] Annex - Distribution of income by product
|
|
Income type
|
|
|
National income
|
Export income
|
Income of subsidiaries abroad
|
Total income
|
|
CONTENT:
|
|
|
|
|
|
CONTENT:
|
0
|
0
|
0
|
0
|
|
TELEVISA
|
|
|
|
|
|
CONTENT - ADVERTINSING
|
5,476,105,000
|
81,237,000
|
|
5,557,342,000
|
|
CONTENT - NETWORK SUBSCRIPTION REVENUE
|
2,111,160,000
|
621,611,000
|
0
|
2,732,771,000
|
|
CONTENT - LICENSING AND SYNDICATION
|
741,362,000
|
4,436,697,000
|
0
|
5,178,059,000
|
|
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
|
9,577,144,000
|
0
|
764,298,000
|
10,341,442,000
|
|
SKY - PAY PER VIEW
|
19,467,000
|
0
|
6,834,000
|
26,301,000
|
|
SKY - ADVERTISING
|
552,317,000
|
0
|
0
|
552,317,000
|
|
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
|
8,394,954,000
|
0
|
0
|
8,394,954,000
|
|
CABLE - BROADBAND SERVICES
|
7,801,343,000
|
0
|
0
|
7,801,343,000
|
|
CABLE - SERVICE INSTALLATION
|
220,551,000
|
0
|
0
|
220,551,000
|
|
CABLE - ADVERTISING
|
739,255,000
|
0
|
0
|
739,255,000
|
|
CABLE - TELEPHONY
|
2,090,941,000
|
0
|
0
|
2,090,941,000
|
|
CABLE - OTHER INCOME
|
169,109,000
|
0
|
0
|
169,109,000
|
|
BESTEL, METRORED
|
|
|
|
|
|
CABLE - ENTERPRISE OPERATIONS
|
2,556,364,000
|
0
|
160,941,000
|
2,717,305,000
|
|
OTHER BUSINESSES:
|
|
|
|
|
|
OTHER BUSINESSES:
|
0
|
0
|
0
|
0
|
|
TV Y NOVELAS, MUY INTERESANTE JUNIOR, VANIDADES, COCINA FACIL, NATIONAL GEOGRAPHIC, MUY INTERESANTE, COSMOPOLITAN,TÚ
|
|
|
|
|
|
PUBLISHING - MAGAZINE CIRCULATION
|
127,757,000
|
0
|
942,000
|
128,699,000
|
|
PUBLISHING - ADVERTISING
|
69,399,000
|
0
|
0
|
69,399,000
|
|
PUBLISHING - OTHER INCOME
|
227,000
|
0
|
0
|
227,000
|
|
VIDEOCINE, PANTELION
|
|
|
|
|
|
DISTRIBUTION, RENTALS AND SALE OF MOVIE RIGHTS
|
625,998,000
|
0
|
33,387,000
|
659,385,000
|
|
CLUB DE FÚTBOL AMÉRICA, ESTADIO AZTECA
|
|
|
|
|
|
SPECIAL EVENTS AND SHOW PROMOTION
|
589,039,000
|
91,430,000
|
0
|
680,469,000
|
|
PLAY CITY
|
|
|
|
|
|
GAMING
|
672,493,000
|
0
|
0
|
672,493,000
|
|
TELEVISA RADIO
|
|
|
|
|
|
RADIO - ADVERTISING (HELD-FOR-SALE OPERATION)
|
223,272,000
|
0
|
0
|
223,272,000
|
|
SELECCIONES,ALGARABIA, VOGUE MEXICO,CARTOON NETWORK, GUÍA DE BIENESTAR SELECCIONES, RELATOS E HISTORIAS DE MEXICO
|
|
|
|
|
|
PUBLISHING DISTRIBUTION
|
112,920,000
|
0
|
0
|
112,920,000
|
|
INTERSEGMENT ELIMINATIONS
|
|
|
|
|
|
INTERSEGMENT ELIMINATIONS
|
(3,432,608,000)
|
0
|
0
|
(3,432,608,000)
|
|
TOTAL
|
39,438,569,000
|
5,230,975,000
|
966,402,000
|
45,635,946,000
|
[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 second quarter of 2020, 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 June 30, 2020, 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 April to June 2020, 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. $147,687,500.00 (One hundred
forty seven million six hundred eighty seven thousand five hundred U.S. Dollars 00/100), expired. As a result of this hedge, a profit of MXN $491,113,708.10 (Four hundred ninety one million one hundred thirteen thousand seven hundred eight
Mexican pesos 10/100) 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.
$19,500,000.00 (Nineteen million five hundred thousand U.S. Dollars 00/100), expired. As a result of this hedge, a profit of MXN $65,878,500.00 (Sixty five million eight hundred seventy eight thousand five hundred Mexican pesos 00/100) was
incurred in the quarter.
|
|
3.
|
During the relevant quarter, interest rate swaps 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 $313,069.44 (Three hundred thirteen thousand sixty nine Mexican pesos 44/100) was incurred in the quarter.
|
|
4.
|
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.
$21,500,000.00 (Twenty one million five hundred thousand U.S. Dollars 00/100), expired. As a result of this hedge, a profit of MXN $72,960,937.50 (Seventy two million nine hundred sixty thousand nine hundred thirty seven Mexican pesos
50/100) was incurred in the quarter.
|
|
5.
|
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. $48,450,000.00 (Forty eight million four hundred and fifty thousand U.S. Dollars 00/100), expired. As a result of this hedge, a profit of MXN $175,331,962.50 (One hundred seventy five million three hundred thirty one thousand nine
hundred sixty two Mexican pesos 50/100) was incurred in the quarter.
|
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
June 30, 2020
(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
|
Ps.2,000,000
|
TIIE 28 days / 7.3275%
|
TIIE 28 days / 7.3275%
|
(128,169)
|
(73,379)
|
Monthly interest
2020-2022
|
Does not exist (7)
|
|
Interest Rate Swap (1)
|
Hedging
|
Ps.1,500,000
|
TIIE 28 days / 7.3500%
|
TIIE 28 days / 7.3500%
|
(99,935)
|
(57,005)
|
Monthly interest
2020-2022
|
Does not exist (7)
|
|
Interest Rate Swap (1)
|
Hedging
|
Ps.2,500,000
|
TIIE 28 days / 7.7485%
|
TIIE 28 days / 7.7485%
|
(206,208)
|
(127,966)
|
Monthly interest
2020-2023
|
Does not exist (7)
|
|
Interest Rate Swap (1)
|
Hedging
|
Ps.6,000,000
|
TIIE 28 days / 7.3873%
|
TIIE 28 days / 7.3873%
|
(605,266)
|
(275,800)
|
Monthly interest
2020-2024
|
Does not exist (7)
|
|
Interest Rate Swap (1)
|
Hedging
|
Ps.14,770,694
|
TIIE 28 days / 6.0738%
|
TIIE 28 days / 6.0738%
|
(417,723)
|
(96,682)
|
Monthly interest
2020-2022
|
Does not exist (7)
|
|
Forward (1)
|
Hedging
|
U.S.$218,688 / Ps.4,761,701
|
U.S.$218,688 / Ps.4,761,701
|
U.S.$131,688 / Ps.2,608,568
|
394,449
|
534,424
|
Semi-annual interest
2020-2021
|
Does not exist (7)
|
|
Forward (1)
|
Hedging
|
U.S.$280,060 / Ps.5,959,491
|
U.S.$280,060 / Ps.5,959,491
|
U.S.$242,650 / Ps.4,816,658
|
641,388
|
976,859
|
2020-2021
|
Does not exist (7)
|
|
Interest Rate Swap (2)
|
Hedging
|
Ps.142,700
|
TIIE 28 days / 5.508%
|
TIIE 28 days / 5.508%
|
(2,229)
|
755
|
Monthly Interest
2020-2022
|
Does not exist (7)
|
|
Interest Rate Swap (2)
|
Hedging
|
Ps.851,645
|
TIIE 28 days / 7.2663%
|
TIIE 28 days / 7.2663%
|
(34,138)
|
(20,245)
|
Monthly Interest
2020-2022
|
Does not exist (7)
|
|
Forward (2)
|
Hedging
|
U.S.$60,446 / Ps.1,304,340
|
U.S.$60,446 / Ps.1,304,340
|
U.S.$43,500 / Ps.864,301
|
127,568
|
171,406
|
2020-2021
|
Does not exist (7)
|
|
Forward (3)
|
Hedging
|
U.S.$62,205 / Ps.1,337,200
|
U.S.$62,205 / Ps.1,337,200
|
U.S.$48,000 / Ps.953,400
|
132,008
|
195,955
|
2020-2021
|
Does not exist (7)
|
|
Forward (4)
|
Hedging
|
U.S.$76,400 / Ps.1,613,526
|
U.S.$76,400 / Ps.1,613,526
|
U.S.$94,850 / Ps.1,888,514
|
169,024
|
378,682
|
2020-2021
|
Does not exist (7)
|
|
|
|
|
|
Total
|
(29,231)
|
1,607,004
|
|
|
|
(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 June 30, 2020, is as
follows:
|
|
Other financial assets
|
|
Ps.
|
1,438,662
|
|
|
Other non-current financial assets
|
|
|
25,775
|
|
|
Other non-current financial liabilities
|
|
|
(1,493,668
|
)
|
|
|
|
Ps.
|
(29,231
|
)
|
|
(6)
|
Information as of March 31, 2020.
|
|
(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
2020-06-30
|
Close Previous Exercise
2019-12-31
|
|
Subclassifications of assets, liabilities and equities
|
|
|
|
Cash and cash equivalents
|
|
|
|
Cash
|
|
|
|
Cash on hand
|
71,591,000
|
93,445,000
|
|
Balances with banks
|
1,788,232,000
|
1,665,084,000
|
|
Total cash
|
1,859,823,000
|
1,758,529,000
|
|
Cash equivalents
|
|
|
|
Short-term deposits, classified as cash equivalents
|
43,621,971,000
|
25,693,736,000
|
|
Short-term investments, classified as cash equivalents
|
0
|
0
|
|
Other banking arrangements, classified as cash equivalents
|
0
|
0
|
|
Total cash equivalents
|
43,621,971,000
|
25,693,736,000
|
|
Other cash and cash equivalents
|
0
|
0
|
|
Total cash and cash equivalents
|
45,481,794,000
|
27,452,265,000
|
|
Trade and other current receivables
|
|
|
|
Current trade receivables
|
22,927,121,000
|
14,486,184,000
|
|
Current receivables due from related parties
|
769,869,000
|
814,427,000
|
|
Current prepayments
|
|
|
|
Current advances to suppliers
|
0
|
0
|
|
Current prepaid expenses
|
3,082,124,000
|
2,130,521,000
|
|
Total current prepayments
|
3,082,124,000
|
2,130,521,000
|
|
Current receivables from taxes other than income tax
|
6,684,217,000
|
6,527,449,000
|
|
Current value added tax receivables
|
6,517,344,000
|
6,406,301,000
|
|
Current receivables from sale of properties
|
0
|
0
|
|
Current receivables from rental of properties
|
0
|
0
|
|
Other current receivables
|
2,072,638,000
|
1,532,579,000
|
|
Total trade and other current receivables
|
35,535,969,000
|
25,491,160,000
|
|
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
|
1,290,760,000
|
1,151,421,000
|
|
Total current inventories
|
1,290,760,000
|
1,151,421,000
|
|
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
|
1,675,108,000
|
1,675,426,000
|
|
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
|
1,675,108,000
|
1,675,426,000
|
|
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
|
|
Non-current value added tax receivables
|
0
|
0
|
|
Concept
|
Close Current Quarter
2020-06-30
|
Close Previous Exercise
2019-12-31
|
|
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
|
746,166,000
|
763,639,000
|
|
Investments in associates
|
5,707,716,000
|
8,998,793,000
|
|
Total investments in subsidiaries, joint ventures and associates
|
6,453,882,000
|
9,762,432,000
|
|
Property, plant and equipment
|
|
|
|
Land and buildings
|
|
|
|
Land
|
4,895,598,000
|
4,891,094,000
|
|
Buildings
|
4,415,815,000
|
4,546,036,000
|
|
Total land and buildings
|
9,311,413,000
|
9,437,130,000
|
|
Machinery
|
53,598,888,000
|
54,987,042,000
|
|
Vehicles
|
|
|
|
Ships
|
0
|
0
|
|
Aircraft
|
518,758,000
|
521,241,000
|
|
Motor vehicles
|
632,240,000
|
674,077,000
|
|
Total vehicles
|
1,150,998,000
|
1,195,318,000
|
|
Fixtures and fittings
|
533,267,000
|
554,786,000
|
|
Office equipment
|
2,063,879,000
|
2,316,042,000
|
|
Tangible exploration and evaluation assets
|
0
|
0
|
|
Mining assets
|
0
|
0
|
|
Oil and gas assets
|
0
|
0
|
|
Construction in progress
|
15,172,646,000
|
13,714,368,000
|
|
Construction prepayments
|
0
|
0
|
|
Other property, plant and equipment
|
1,065,864,000
|
1,124,546,000
|
|
Total property, plant and equipment
|
82,896,955,000
|
83,329,232,000
|
|
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
|
366,714,000
|
403,954,000
|
|
Intangible exploration and evaluation assets
|
0
|
0
|
|
Mastheads and publishing titles
|
0
|
0
|
|
Computer software
|
4,069,332,000
|
4,015,219,000
|
|
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
|
24,399,657,000
|
24,796,155,000
|
|
Total intangible assets other than goodwill
|
28,835,703,000
|
29,215,328,000
|
|
Goodwill
|
14,113,626,000
|
14,113,626,000
|
|
Total intangible assets and goodwill
|
42,949,329,000
|
43,328,954,000
|
|
Trade and other current payables
|
|
|
|
Current trade payables
|
26,453,798,000
|
20,909,655,000
|
|
Current payables to related parties
|
433,894,000
|
644,251,000
|
|
Concept
|
Close Current Quarter
2020-06-30
|
Close Previous Exercise
2019-12-31
|
|
Accruals and deferred income classified as current
|
|
|
|
Deferred income classified as current
|
14,047,119,000
|
5,779,758,000
|
|
Rent deferred income classified as current
|
0
|
0
|
|
Accruals classified as current
|
3,570,651,000
|
3,112,367,000
|
|
Short-term employee benefits accruals
|
1,123,635,000
|
911,935,000
|
|
Total accruals and deferred income classified as current
|
17,617,770,000
|
8,892,125,000
|
|
Current payables on social security and taxes other than income tax
|
3,647,711,000
|
3,074,736,000
|
|
Current value added tax payables
|
2,750,570,000
|
2,223,598,000
|
|
Current retention payables
|
645,091,000
|
373,273,000
|
|
Other current payables
|
0
|
0
|
|
Total trade and other current payables
|
48,798,264,000
|
33,894,040,000
|
|
Other current financial liabilities
|
|
|
|
Bank loans current
|
616,991,000
|
491,951,000
|
|
Stock market loans current
|
0
|
0
|
|
Other current liabilities at cost
|
0
|
1,324,063,000
|
|
Other current liabilities at no cost
|
0
|
568,775,000
|
|
Other current financial liabilities
|
2,315,578,000
|
1,943,863,000
|
|
Total Other current financial liabilities
|
2,932,569,000
|
4,328,652,000
|
|
Trade and other non-current payables
|
|
|
|
Non-current trade payables
|
2,152,337,000
|
2,459,157,000
|
|
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
|
2,152,337,000
|
2,459,157,000
|
|
Other non-current financial liabilities
|
|
|
|
Bank loans non-current
|
36,479,891,000
|
22,235,924,000
|
|
Stock market loans non-current
|
116,724,783,000
|
98,208,820,000
|
|
Other non-current liabilities at cost
|
0
|
0
|
|
Other non-current liabilities at no cost
|
1,493,668,000
|
346,515,000
|
|
Other non-current financial liabilities
|
0
|
0
|
|
Total Other non-current financial liabilities
|
154,698,342,000
|
120,791,259,000
|
|
Other provisions
|
|
|
|
Other non-current provisions
|
949,492,000
|
917,483,000
|
|
Other current provisions
|
2,579,000
|
2,423,000
|
|
Total other provisions
|
952,071,000
|
919,906,000
|
|
Other reserves
|
|
|
|
Revaluation surplus
|
0
|
0
|
|
Reserve of exchange differences on translation
|
2,501,990,000
|
1,280,541,000
|
|
Reserve of cash flow hedges
|
(810,734,000)
|
(381,753,000)
|
|
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
|
(15,619,399,000)
|
1,202,689,000
|
|
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
|
(705,611,000)
|
(705,611,000)
|
|
Concept
|
Close Current Quarter
2020-06-30
|
Close Previous Exercise
2019-12-31
|
|
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
|
(171,464,000)
|
(75,415,000)
|
|
Total other reserves
|
(14,805,218,000)
|
1,320,451,000
|
|
Net assets (liabilities)
|
|
|
|
Assets
|
309,641,447,000
|
290,343,892,000
|
|
Liabilities
|
226,917,654,000
|
184,939,659,000
|
|
Net assets (liabilities)
|
82,723,793,000
|
105,404,233,000
|
|
Net current assets (liabilities)
|
|
|
|
Current assets
|
97,724,636,000
|
67,431,024,000
|
|
Current liabilities
|
55,312,865,000
|
42,385,942,000
|
|
Net current assets (liabilities)
|
42,411,771,000
|
25,045,082,000
|
[800200] Notes - Analysis of income and expense
|
Concept
|
Accumulated Current Year
2020-01-01 - 2020-06-30
|
Accumulated Previous Year
2019-01-01 - 2019-06-30
|
Quarter Current Year
2020-04-01 - 2020-06-30
|
Quarter Previous Year
2019-04-01 - 2019-06-30
|
|
Analysis of income and expense
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
Revenue from rendering of services
|
33,171,050,000
|
35,539,743,000
|
16,281,981,000
|
18,096,565,000
|
|
Revenue from sale of goods
|
391,025,000
|
462,785,000
|
173,014,000
|
231,816,000
|
|
Interest income
|
0
|
0
|
0
|
0
|
|
Royalty income
|
4,739,121,000
|
4,371,814,000
|
2,241,055,000
|
2,251,134,000
|
|
Dividend income
|
0
|
0
|
0
|
0
|
|
Rental income
|
7,334,750,000
|
7,328,490,000
|
3,711,108,000
|
3,728,072,000
|
|
Revenue from construction contracts
|
0
|
0
|
0
|
0
|
|
Other revenue
|
0
|
0
|
0
|
0
|
|
Total revenue
|
45,635,946,000
|
47,702,832,000
|
22,407,158,000
|
24,307,587,000
|
|
Finance income
|
|
|
|
|
|
Interest income
|
675,710,000
|
645,445,000
|
451,860,000
|
348,962,000
|
|
Net gain on foreign exchange
|
0
|
464,038,000
|
2,351,173,000
|
325,076,000
|
|
Gains on change in fair value of derivatives
|
2,191,298,000
|
0
|
0
|
0
|
|
Gain on change in fair value of financial instruments
|
0
|
0
|
0
|
0
|
|
Other finance income
|
0
|
0
|
0
|
0
|
|
Total finance income
|
2,867,008,000
|
1,109,483,000
|
2,803,033,000
|
674,038,000
|
|
Finance costs
|
|
|
|
|
|
Interest expense
|
5,413,305,000
|
4,983,078,000
|
2,885,076,000
|
2,576,352,000
|
|
Net loss on foreign exchange
|
6,250,191,000
|
0
|
0
|
0
|
|
Losses on change in fair value of derivatives
|
0
|
668,971,000
|
6,846,000
|
366,162,000
|
|
Loss on change in fair value of financial instruments
|
0
|
0
|
0
|
0
|
|
Other finance cost
|
0
|
0
|
0
|
0
|
|
Total finance costs
|
11,663,496,000
|
5,652,049,000
|
2,891,922,000
|
2,942,514,000
|
|
Tax income (expense)
|
|
|
|
|
|
Current tax
|
3,437,645,000
|
2,218,450,000
|
1,250,771,000
|
957,181,000
|
|
Deferred tax
|
(4,411,002,000)
|
(972,499,000)
|
(498,284,000)
|
(215,217,000)
|
|
Total tax income (expense)
|
(973,357,000)
|
1,245,951,000
|
752,487,000
|
741,964,000
|
[800500] Notes - List of notes
Disclosure of notes and other explanatory information
See Notes 1 and 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 June 30,
2020 and December 31, 2019, and for the six months ended June 30, 2020 and 2019, 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, 2019 and 2018, 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 June 30, 2020. The adoption of the improvements and amendments to
current IFRSs effective on January 1, 2020 did not have a significant impact in these interim un audited condensed consolidated financial statements.
Disclosure of significant 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, 2019, and where applicable, of its interim condensed consolidated financial statements, are summarized below. These accounting policies should be read in conjunction with the audited consolidated financial statements of the Group
for the years ended December 31, 2019 and 2018, once they have been submitted to the Mexican Banking and Securities Commission (“Comisión Nacional Bancaria y de Valores” and the U.S. Securities and Exchange Commission, respectively
|
(a)
|
Basis of Presentation
|
The consolidated financial statements of the Group as of December 31, 2019 and 2018, and for the years ended December 31, 2019, 2018
and 2017, 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 13, 2020, by the Group’s Principal Financial Officer.
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 Group 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, 2019 and 2018, the main direct and indirect subsidiaries of the Company were as follows:
|
Subsidiaries
|
Company’s
Ownership
Interest (1)
|
Business
Segment (2)
|
|
|
|
|
|
Empresas Cablevisión, S.A.B. de C.V. and subsidiaries (collectively, “Empresas Cablevisión”) (3)
|
51.2%
|
Cable
|
|
Subsidiaries engaged in the Cablemás business (collectively, “Cablemás”) (4)
|
100%
|
Cable
|
|
Televisión Internacional, S.A. de C.V. and subsidiaries (collectively, “TVI”) (5)
|
100%
|
Cable
|
|
Cablestar, S.A. de C.V. and subsidiaries (collectively, “Bestel”) (6)
|
66.2%
|
Cable
|
|
Arretis, S.A.P.I. de C.V. and subsidiaries (collectively, “Cablecom”) (7)
|
100%
|
Cable
|
|
Subsidiaries engaged in the Telecable business (collectively, “Telecable”) (8)
|
100%
|
Cable
|
|
FTTH de México, S.A. de C.V. (9)
|
100%
|
Cable
|
|
Corporativo Vasco de Quiroga, S.A. de C.V. (“CVQ”) and subsidiaries (10)
|
100%
|
Cable and Sky
|
|
Innova, S. de R.L. de C.V. (“Innova”) and subsidiaries (collectively, “Sky”) (11)
|
58.7%
|
Sky
|
|
Grupo Telesistema, S.A. de C.V. (“Grupo Telesistema”) and subsidiaries
|
100%
|
Content and Other Businesses
|
|
Televisa, S.A. de C.V. (“Televisa”) (12)
|
100%
|
Content
|
|
Televisión Independiente de México, S.A. de C.V. (“TIM”) (12)
|
100%
|
Content
|
|
G.Televisa-D, S.A. de C.V. (12)
|
100%
|
Content
|
|
Multimedia Telecom, S.A. de C.V. (“Multimedia Telecom”) and subsidiary (13)
|
100%
|
Content
|
|
Ulvik, S.A. de C.V. (14)
|
100%
|
Content and Other Businesses
|
|
Controladora de Juegos y Sorteos de México, S.A. de C.V. and subsidiaries
|
100%
|
Other Businesses
|
|
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
|
|
Villacezán, S.A. de C.V. (“Villacezán”) and subsidiaries (15)
|
100%
|
Other Businesses
|
|
Sistema Radiópolis, S.A. de C.V. (“Radiópolis”) and subsidiaries (16)
|
50%
|
Held-for-sale operations
|
|
(1)
|
Percentage of equity interest directly or indirectly held by the Company.
|
|
|
|
|
(2)
|
See Note 26 for a description of each of the Group’s business segments.
|
|
|
|
|
(3)
|
Empresas Cablevisión, S.A.B. de C.V., is a direct majority-owned subsidiary of CVQ.
|
|
|
|
|
(4)
|
Some Cablemás subsidiaries are directly owned by CVQ and some other Cablemás subsidiaries are indirectly owned by CVQ.
|
|
|
|
|
(5)
|
Televisión Internacional, S.A. de C.V., is a direct subsidiary of CVQ.
|
|
|
|
|
(6)
|
Cablestar, S.A. de C.V., is an indirect majority-owned subsidiary of CVQ and Empresas Cablevisión, S.A.B. de C.V.
|
|
|
|
|
(7)
|
Arretis, S.A.P.I. de C.V.; is a direct subsidiary of CVQ.
|
|
|
|
|
(8)
|
The Telecable subsidiaries are directly owned by CVQ.
|
|
|
|
|
(9)
|
FTTH de México, S. A. de C.V., is an indirect subsidiary of CVQ.
|
|
|
|
|
(10)
|
CVQ is a direct subsidiary of the Company and the parent company of Empresas Cablevisión, Cablemás, TVI, Bestel, Cablecom, Telecable and Innova.
|
|
|
|
|
(11)
|
Innova is an indirect majority-owned subsidiary of the Company, CVQ 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.
|
|
|
|
|
(12)
|
Televisa, TIM and G.Televisa-D, S.A. de C.V., are direct subsidiaries of Grupo Telesistema.
|
|
|
|
|
(13)
|
Multimedia Telecom and its direct subsidiary, Comunicaciones Tieren, S.A. de C.V. (“Tieren”), are indirect wholly-owned subsidiaries of Grupo
Telesistema, through which the Company 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, 2019 and 2018, 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 20).
|
|
|
|
|
(14)
|
Direct subsidiary through which we conduct certain operations of our Content segment and certain operations of our Other Businesses segments.
|
|
|
|
|
(15)
|
Villacezán is an indirect subsidiary of Grupo Telesistema.
|
|
|
|
|
(16)
|
Radiópolis is a direct subsidiary of the Company through which the Group conducts the operations of its Radio business. The Company controls
Radiópolis as it has the right to appoint the majority of the members of the Board of Directors of Radiópolis. The Group has classified the assets and related liabilities of its Radio business as held-for-sale in its consolidated statement
of financial position as of December 31, 2019, and its Radio operations as held-for-sale operations in the Group’s segment information for the years ended December 31, 2019, 2018 and 2017. Through the third quarter of 2019, the Radio
business was included as part of the Group’s Other Businesses segment (see Notes 3 and 26).
|
The Group’s Cable, Sky and Content segments, as well as the Group’s Radio business, which is a held-for-sale operations (see Note 3 and 26), 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, 2019, the expiration dates of the Group’s concessions and permits were as follows:
|
Segments
|
Expiration Dates
|
|
Cable
|
Various from 2022 to 2048
|
|
Sky
|
Various from 2020 to 2028
|
|
Content (broadcasting concessions) (1)
|
In 2021 and the relevant renewals start in 2022 ending in 2042
|
|
Other Businesses:
|
|
|
Gaming
|
In 2030
|
|
Held-for-sale operations:
|
|
|
Radio (2)
|
Various from 2020 to 2039
|
|
(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
payment 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 13).
|
|
(2)
|
The amounts paid by the Group for renewal of certain Radio concessions in 2017 amounted to an aggregate of Ps.37,848. In addition, IFT granted
in 2017 two new concessions to the Group in Ensenada and Puerto Vallarta. The amount 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 13).
|
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, 2019 and 2018 (see Notes 9 and 10).
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.
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 initially converted to 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.$433.7 million (Ps.8,189,662) and U.S.$421.2 million (Ps.8,285,286) as of December 31, 2019 and 2018, 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.33,775,451 (U.S.$1,788.6 million) and Ps.4,688,202
(U.S.$248.3 million), respectively, as of December 31, 2019, and 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. 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, 14 and 18).
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, 2019 and 2018, 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 2.20% for U.S. dollar deposits and 8.09% for Mexican peso deposits in 2019, and approximately 1.77% for U.S. dollar deposits and 7.69% for
Mexican peso deposits in 2018.
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(g)
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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 recognized in income 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.
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.
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 28). 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.
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(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:
|
|
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Estimated Useful Lives
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|
Buildings
|
|
|
|
Buildings improvements
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|
5-20 years
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|
Technical equipment
|
|
3-30 years
|
|
Satellite transponders
|
|
15 years
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|
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.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Right-of-use assets are measured at cost comprising the following: the amount of the initial measurement of lease liability, any lease payments made at or before the commencement date less any lease
incentives received, any initial direct costs and restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight – line basis. If the Group is reasonably certain to exercise a purchase
option, the right-of-use asset is depreciated over the underlying asset’s useful life.
Payments associated with short-term leases of equipment and vehicles and mostly leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss. Short-term leases
are leases with a lease term of 12 months or less.
|
(l)
|
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 with finite useful lives
|
|
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. The Group has not capitalized any amounts associated with internally developed trademarks.
In 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 an acquired 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, in 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.
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 a business 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 between the 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.
|
(m)
|
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 13), 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.
|
(n)
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Trade Accounts Payable and Accrued Expenses
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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, 2019 and 2018.
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, 2019 and 2018.
Debt early redemption costs are recognized as finance expense in the consolidated statement of income.
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(p)
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Customer Deposits and Advances
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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 (s)), 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.
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.
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.
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 Cable and Sky 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, which was reported under the revenue recognition IFRS
Standard in effect in those periods (see Note 28).
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:
|
•
|
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.
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|
•
|
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.
|
|
•
|
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.
|
|
•
|
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.
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|
•
|
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.
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|
•
|
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.
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.
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.
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.
|
(w)
|
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, 2019, 2018 and 2017, certain derivative financial instruments qualified for hedge accounting (see Note 15).
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.
|
(y)
|
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. The Group recognized a share-based compensation expense of Ps.1,129,644, Ps.1,327,549 and Ps.1,489,884 for the years ended December 31, 2019, 2018 and 2017, respectively, of which Ps.1,108,094, Ps.1,305,999 and Ps.1,468,337 was credited in
consolidated stockholders’ equity for those years, respectively (see Note 17).
Through December 31, 2018:
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•
|
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.
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|
•
|
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 28). The Group does 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.
On adoption of IFRS 16, the Group recognized lease liabilities in relation to leases which had previously been classified as operating leases under the
principles of IAS 17 Leases (“IAS 17”). These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee´s
incremental borrowing rate as of January 1, 2019. The average lessee’s incremental borrowing rate applied to the lease liabilities on January 1, 2019 was 4.7% and 10.6% for U.S. dollars leases and Mexican pesos leases, respectively.
|
(aa)
|
New and Amended IFRS Standards
|
The Group adopted IFRS 16 in 2019, which became effective on January 1, 2019 (see Notes 2 (k), 2 (z) and 28). The Group adopted IFRS 15 and IFRS 9 in
2018, which became effective on January 1, 2018 (see Notes 2 (i), 2 (t) and 28). Some other amendments and improvements to certain IFRS Standards became effective on January 1, 2019 and 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, 2020.
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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 17 (2)
|
|
Insurance Contracts
|
|
January 1, 2021
|
|
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
|
|
Amendments to IFRS 9, IAS 39 and IFRS 7 (2)
|
|
Interest Rate Benchmark Reform
|
|
January 1, 2020
|
|
Amendments to IAS 1 (1)
|
|
Classification of Liabilities as Current or Non-current
|
|
January 1, 2022
|
(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 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.
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.
Amendments to IFRS 3 Definition of a Business was issued in October 2018. The amended definition emphasizes 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 recognizes 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 was issued in October 2018. 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.
Amendments to IFRS 9, IAS 39 and IFRS 7 Interest Rate Benchmark Reform were issued in September 2019. These amendments modify some specific hedge accounting
requirements to provide relief from potential effects of the uncertainty caused by interest rate benchmarks such as interbank offered rates. In addition, the amendments require companies to provide additional information to investors about their
hedging relationships which are directly affected by these uncertainties. The amendments are effective for annual reporting periods beginning on or after January 1, 2020. Earlier application is permitted.
Amendments to IAS 1 Classification of Liabilities as Current or Non-current was issued in January 2020, the amendments clarify one of the criteria in IAS 1
for classifying a liability as non-current that is, the requirement for an entity to have the right to defer settlement of the liability for at least 12 months after the reporting period. The amendments are effective for annual reporting periods
beginning on or after January 1, 2022. Earlier application is permitted.
[800600] Notes - List of accounting policies
Disclosure of significant 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, 2019, and where applicable, of its interim condensed consolidated financial statements, are summarized below. These accounting policies should be read in conjunction with the audited consolidated financial statements of the Group for
the years ended December 31, 2019 and 2018, once they have been submitted to the Mexican Banking and Securities Commission (“Comisión Nacional Bancaria y de Valores” and the U.S. Securities and Exchange Commission, respectively
|
(a)
|
Basis of Presentation
|
The consolidated financial statements of the Group as of December 31, 2019 and 2018, and for the years ended December 31, 2019, 2018
and 2017, 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 13, 2020, by the Group’s Principal Financial Officer.
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 Group 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, 2019 and 2018, the main direct and indirect subsidiaries of the Company were as follows:
|
Subsidiaries
|
Company’s
Ownership
Interest (1)
|
Business
Segment (2)
|
|
|
|
|
|
Empresas Cablevisión, S.A.B. de C.V. and subsidiaries (collectively, “Empresas Cablevisión”) (3)
|
51.2%
|
Cable
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|
Subsidiaries engaged in the Cablemás business (collectively, “Cablemás”) (4)
|
100%
|
Cable
|
|
Televisión Internacional, S.A. de C.V. and subsidiaries (collectively, “TVI”) (5)
|
100%
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Cable
|
|
Cablestar, S.A. de C.V. and subsidiaries (collectively, “Bestel”) (6)
|
66.2%
|
Cable
|
|
Arretis, S.A.P.I. de C.V. and subsidiaries (collectively, “Cablecom”) (7)
|
100%
|
Cable
|
|
Subsidiaries engaged in the Telecable business (collectively, “Telecable”) (8)
|
100%
|
Cable
|
|
FTTH de México, S.A. de C.V. (9)
|
100%
|
Cable
|
|
Corporativo Vasco de Quiroga, S.A. de C.V. (“CVQ”) and subsidiaries (10)
|
100%
|
Cable and Sky
|
|
Innova, S. de R.L. de C.V. (“Innova”) and subsidiaries (collectively, “Sky”) (11)
|
58.7%
|
Sky
|
|
Grupo Telesistema, S.A. de C.V. (“Grupo Telesistema”) and subsidiaries
|
100%
|
Content and Other Businesses
|
|
Televisa, S.A. de C.V. (“Televisa”) (12)
|
100%
|
Content
|
|
Televisión Independiente de México, S.A. de C.V. (“TIM”) (12)
|
100%
|
Content
|
|
G.Televisa-D, S.A. de C.V. (12)
|
100%
|
Content
|
|
Multimedia Telecom, S.A. de C.V. (“Multimedia Telecom”) and subsidiary (13)
|
100%
|
Content
|
|
Ulvik, S.A. de C.V. (14)
|
100%
|
Content and Other Businesses
|
|
Controladora de Juegos y Sorteos de México, S.A. de C.V. and subsidiaries
|
100%
|
Other Businesses
|
|
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
|
|
Villacezán, S.A. de C.V. (“Villacezán”) and subsidiaries (15)
|
100%
|
Other Businesses
|
|
Sistema Radiópolis, S.A. de C.V. (“Radiópolis”) and subsidiaries (16)
|
50%
|
Held-for-sale operations
|
|
(1)
|
Percentage of equity interest directly or indirectly held by the Company.
|
|
|
|
|
(2)
|
See Note 26 for a description of each of the Group’s business segments.
|
|
|
|
|
(3)
|
Empresas Cablevisión, S.A.B. de C.V., is a direct majority-owned subsidiary of CVQ.
|
|
|
|
|
(4)
|
Some Cablemás subsidiaries are directly owned by CVQ and some other Cablemás subsidiaries are indirectly owned by CVQ.
|
|
|
|
|
(5)
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Televisión Internacional, S.A. de C.V., is a direct subsidiary of CVQ.
|
|
|
|
|
(6)
|
Cablestar, S.A. de C.V., is an indirect majority-owned subsidiary of CVQ and Empresas Cablevisión, S.A.B. de C.V.
|
|
|
|
|
(7)
|
Arretis, S.A.P.I. de C.V.; is a direct subsidiary of CVQ.
|
|
|
|
|
(8)
|
The Telecable subsidiaries are directly owned by CVQ.
|
|
|
|
|
(9)
|
FTTH de México, S. A. de C.V., is an indirect subsidiary of CVQ.
|
|
|
|
|
(10)
|
CVQ is a direct subsidiary of the Company and the parent company of Empresas Cablevisión, Cablemás, TVI, Bestel, Cablecom, Telecable and Innova.
|
|
|
|
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(11)
|
Innova is an indirect majority-owned subsidiary of the Company, CVQ 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.
|
|
|
|
|
(12)
|
Televisa, TIM and G.Televisa-D, S.A. de C.V., are direct subsidiaries of Grupo Telesistema.
|
|
|
|
|
(13)
|
Multimedia Telecom and its direct subsidiary, Comunicaciones Tieren, S.A. de C.V. (“Tieren”), are indirect wholly-owned subsidiaries of Grupo
Telesistema, through which the Company 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, 2019 and 2018, 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 20).
|
|
|
|
|
(14)
|
Direct subsidiary through which we conduct certain operations of our Content segment and certain operations of our Other Businesses segments.
|
|
|
|
|
(15)
|
Villacezán is an indirect subsidiary of Grupo Telesistema.
|
|
|
|
|
(16)
|
Radiópolis is a direct subsidiary of the Company through which the Group conducts the operations of its Radio business. The Company controls
Radiópolis as it has the right to appoint the majority of the members of the Board of Directors of Radiópolis. The Group has classified the assets and related liabilities of its Radio business as held-for-sale in its consolidated statement
of financial position as of December 31, 2019, and its Radio operations as held-for-sale operations in the Group’s segment information for the years ended December 31, 2019, 2018 and 2017. Through the third quarter of 2019, the Radio
business was included as part of the Group’s Other Businesses segment (see Notes 3 and 26).
|
The Group’s Cable, Sky and Content segments, as well as the Group’s Radio business, which is a held-for-sale operations (see Note 3 and 26), 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, 2019, the expiration dates of the Group’s concessions and permits were as follows:
|
Segments
|
|
Expiration Dates
|
|
Cable
|
|
Various from 2022 to 2048
|
|
Sky
|
|
Various from 2020 to 2028
|
|
Content (broadcasting concessions) (1)
|
|
In 2021 and the relevant renewals start in 2022 ending in 2042
|
|
Other Businesses:
|
|
|
|
Gaming
|
|
In 2030
|
|
Held-for-sale operations:
|
|
|
|
Radio (2)
|
|
Various from 2020 to 2039
|
|
(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
payment 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 13).
|
|
(2)
|
The amounts paid by the Group for renewal of certain Radio concessions in 2017 amounted to an aggregate of Ps.37,848. In addition, IFT
granted in 2017 two new concessions to the Group in Ensenada and Puerto Vallarta. The amount 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 13).
|
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, 2019 and 2018 (see Notes 9 and 10).
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.
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 initially converted to 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.$433.7 million
(Ps.8,189,662) and U.S.$421.2 million (Ps.8,285,286) as of December 31, 2019 and 2018, 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.33,775,451 (U.S.$1,788.6 million) and Ps.4,688,202 (U.S.$248.3 million), respectively, as of December 31,
2019, and 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. 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, 14 and 18).
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, 2019 and 2018, 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 2.20% for U.S. dollar deposits and 8.09% for Mexican peso deposits in 2019, and approximately 1.77% for U.S. dollar deposits and 7.69% for Mexican peso deposits in 2018.
|
(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 recognized in income 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.
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.
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 28). 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
|
|
|
|
Buildings 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.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Right-of-use assets are measured at cost comprising the following: the amount of the initial measurement of lease liability, any lease payments made at or before the commencement date less any lease
incentives received, any initial direct costs and restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight – line
basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.
Payments associated with short-term leases of equipment and vehicles and mostly leases of low-value assets are recognized on a
straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
|
(l)
|
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:
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|
|
Estimated
Useful Lives
|
|
Trademarks with finite useful lives
|
|
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. The Group has not capitalized any amounts associated with internally developed trademarks.
In 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 an acquired 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, in 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.
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 a business 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 between the 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.
|
(m)
|
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
13), 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.
|
(n)
|
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, 2019 and 2018.
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, 2019 and 2018.
Debt early redemption costs are recognized as finance expense in the consolidated statement of income.
|
(p)
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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 (s)), 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.
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.
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.
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 Cable and Sky 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, which was reported under the revenue recognition IFRS Standard in effect in those periods (see Note 28).
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:
|
•
|
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.
|
|
•
|
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.
|
|
•
|
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.
|
|
•
|
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.
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.
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.
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.
|
(w)
|
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, 2019, 2018 and 2017, certain derivative financial instruments qualified for hedge accounting (see Note 15).
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.
|
(y)
|
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. The Group
recognized a share-based compensation expense of Ps.1,129,644, Ps.1,327,549 and Ps.1,489,884 for the years ended December 31, 2019, 2018 and 2017, respectively, of which Ps.1,108,094, Ps.1,305,999 and Ps.1,468,337 was credited in consolidated
stockholders’ equity for those years, respectively (see Note 17).
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
28). The Group does 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.
On adoption of IFRS 16, the Group recognized lease liabilities in relation to leases which had previously been classified as operating leases under the principles of IAS 17 Leases (“IAS 17”). These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee´s incremental borrowing rate as of January 1, 2019. The
average lessee’s incremental borrowing rate applied to the lease liabilities on January 1, 2019 was 4.7% and 10.6% for U.S. dollars leases and Mexican pesos leases, respectively.
|
(aa)
|
New and Amended IFRS Standards
|
The Group adopted IFRS 16 in 2019, which became effective on January 1, 2019 (see Notes 2 (k), 2 (z) and 28). The Group adopted IFRS 15 and IFRS 9 in 2018, which became effective on January 1, 2018 (see
Notes 2 (i), 2 (t) and 28). Some other amendments and improvements to certain IFRS Standards became effective on January 1, 2019 and 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, 2020.
|
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 17 (2)
|
|
Insurance Contracts
|
|
January 1, 2021
|
|
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
|
|
Amendments to IFRS 9, IAS 39 and IFRS 7 (2)
|
|
Interest Rate Benchmark Reform
|
|
January 1, 2020
|
|
Amendments to IAS 1 (1)
|
|
Classification of Liabilities as Current or Non-current
|
|
January 1, 2022
|
(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 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.
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.
Amendments to IFRS 3 Definition of a Business was issued in October 2018. The amended definition emphasizes 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 recognizes 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 was issued in October 2018. 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.
Amendments to IFRS 9, IAS 39 and IFRS 7 Interest Rate Benchmark Reform were issued in September 2019. These amendments modify some specific hedge accounting
requirements to provide relief from potential effects of the uncertainty caused by interest rate benchmarks such as interbank offered rates. In addition, the amendments require companies to provide additional information to investors about their
hedging relationships which are directly affected by these uncertainties. The amendments are effective for annual reporting periods beginning on or after January 1, 2020. Earlier application is permitted.
Amendments to IAS 1 Classification of Liabilities as Current or Non-current was issued in January 2020, the amendments clarify one of the criteria in IAS 1 for
classifying a liability as non-current that is, the requirement for an entity to have the right to defer settlement of the liability for at least 12 months after the reporting period. The amendments are effective for annual reporting periods
beginning on or after January 1, 2022. Earlier application is permitted.
[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 June 30, 2020 and December 31, 2019 and for the six months ended June 30, 2020 and 2019
(In thousands of Mexican Pesos, except per CPO, per share and exchange rate amounts, unless otherwise indicated)
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 70 countries through 25 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 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, 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 June 30, 2020 and December 31, 2019 and for the six months ended June 30, 2020 and
2019, 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, 2019, 2018 and 2017, 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 June 30, 2020.
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, 2019, 2018 and 2017. 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 July 3, 2020, 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, 2019.
IFRS Standard that became effective on January 1, 2019
IFRS 16
IFRS 16 Leases (“IFRS 16”) was issued in January 2016 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 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 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 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 recognized as right-of-use assets and lease liabilities in its consolidated statements of financial position as of
June 30, 2020 and December 31, 2019, long-term lease agreements that were recognized as operating leases through December 31, 2018, as follows:
|
Long-term Lease Agreements
|
|
June 30, 2020
Assets (Liabilities)
|
|
|
December 31, 2019
Assets (Liabilities)
|
|
|
Right-of-use assets, net
|
|
Ps.
|
4,310,004
|
|
|
Ps.
|
4,502,590
|
|
|
Lease liabilities 1
|
|
|
(4,695,863
|
)
|
|
|
(4,641,705
|
)
|
|
Net effect
|
|
Ps.
|
(385,859
|
)
|
|
Ps.
|
(139,115
|
)
|
|
1
|
Current portion of lease liabilities as of June 30, 2020 and December 31, 2019, amounted to Ps.618,018 and Ps.533,260, respectively.
|
Depreciation of right-of-use assets referred to in the table above and charged to income for the six months ended June 30, 2020 and 2019, amounted to
Ps.339,613 and Ps.309,315, respectively.
The Group has also classified as right-of-use assets and lease liabilities in its consolidated statements of financial position as of June 30, 2020 and December 31,
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
|
|
June 30, 2020
Assets (Liabilities)
|
|
|
December 31, 2019
Assets (Liabilities)
|
|
|
Right-of-use assets, net
|
|
Ps.
|
2,855,776
|
|
|
Ps.
|
3,050,462
|
|
|
Lease liabilities 1
|
|
|
(5,383,467
|
)
|
|
|
(4,721,815
|
)
|
|
Net effect
|
|
Ps.
|
(2,527,691
|
)
|
|
Ps.
|
(1,671,353
|
)
|
|
1
|
Current portion of lease liabilities as of June 30, 2020 and December 31, 2019, amounted to Ps.868,270 and Ps.724,506, respectively.
|
Depreciation of right-of-use assets referred to in the table above and charged to income for the six months ended June 30, 2020 and 2019, amounted to Ps.195,052 and
Ps.214,151, respectively.
In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard:
|
•
|
Applying a single discount rate to a portfolio of leases with reasonably similar characteristics
|
|
•
|
Relying on previous assessments on whether leases are onerous as an alternative to performing an impairment review – there were no onerous contracts as at January 1, 2019
|
|
•
|
Accounting for operating leases with a remaining lease term of less than 12 months as at January 1, 2019 as short-term leases
|
|
•
|
Excluding initial direct cost for the measurement of the right-of-use asset at the date of initial application, and
|
|
•
|
Using hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
|
The Group has also elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for contracts
entered into before the transition date the Group relied on its assessment made applying IAS 17 and IFRIC 4 Determining whether an Arrangement contains a Lease.
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. OCEN is (i) a direct associate of OISE Entretenimiento, S.A. de C.V. (“OISE Entretenimiento”), a
wholly-owned subsidiary of the Company; and (ii) a subsidiary of Corporación Interamericana de Entretenimiento, S.A.B. de C.V. (“CIE”). The proposed disposal of OCEN was expected to be completed by the parties in the first half of 2020, through the
sale of all of the outstanding shares of OISE Entretenimiento, which net assets are comprised primarily of the 40% equity stake in OCEN. This transaction was subject to customary closing conditions, including regulatory approvals and certain
notifications and to the closing of the sale by CIE to Live Nation of a portion of its stake in OCEN. In consideration for the sale of the shares of OISE Entretenimiento, the Company expected to receive cash proceeds in the aggregate amount of
Ps.5,206,000. As a result of this proposed transaction, beginning on July 31, 2019, the Group classified the assets of OISE Entretenimiento, including the carrying value of its investment in OCEN as current assets held for sale in itsconsolidated
statement of financial position. As of March 31, 2020, and December 31, 2019, the carrying value of current assets held for sale in connection with this proposed transaction amounted to Ps.696,178 and Ps.694,239, respectively, of which Ps.693,970 in
both periods, were related to the carrying value of the investment in OCEN. On April 16, 2020, the Mexican competence regulator (“Comisión Federal de Competencia”) approved this transaction. On May 5, 2020, Live Nation informed the Company that based
on a series of allegations, they were not obligated to close the acquisition of the Company’s equity participation in OCEN. The Company disagreed with these allegations. The parties entered into a standstill agreement to allow discussions to take
place, which expired on May 2020, without reaching an agreement among the parties. Live Nation notified the Company a unilateral termination of the stock purchase agreement (the “Termination Letter”). The Company disagreed with such Termination
Letter and reserves all of its rights in connection with Live Nation’s prior allegations and any related actions, including in connection with the Termination Letter, and will evaluate all remedies and actions available to it under the existing
contracts and at law. As a result, beginning on May 31, 2020, the Company ceased to classify the assets of OISE Entretenimiento, including the investment in OCEN, as current assets held for sale, and began to classify its investment in OCEN as an
investment in associates and joint ventures in its consolidated statement of financial position (see Notes 5 and 14).
In July 2019, the Company announced a stock purchase agreement with Corporativo Coral, S.A. de C.V. (“Coral”) and Miguel Alemán
Magnani as Obligor to dispose of its 50% equity interest in Sistema Radiópolis, S.A. de C.V. (“Radiópolis”), a direct subsidiary of the Company engaged in the Radio business, for an aggregate amount of Ps.1,248,000, as well as the payment of a
dividend by Radiópolis to the Company by the closing date of this transaction. While the sale of the Company’s equity interest in the Radio business was consummated for legal and tax purposes as of December 31, 2019, the net assets of Radiópolis in
the amount of Ps.1,300,493 and Ps.1,242,614 as of June 30, 2020 and December 31, 2019, respectively, were presented as consolidated current assets and liabilities held for sale for financial reporting purposes as of those dates, as the voting
interest of the Company in Radiópolis continued to be in place until the full payment of the purchase price was made by the acquirer. Accordingly, the Group's Radio operations were presented as held for sale in the segment information of its
consolidated statements of income for the six months ended June 30, 2020 and 2019. The Group did not classify its Radio operations as discontinued operations in its consolidated statements of income for the six months ended June 30, 2020 and 2019, as
these operations did not represent a separate major line of business for those periods, based on a materiality assessment performed by management. In March and June 2020, the Company entered into additional agreements with Coral and its Obligor to
complete this transaction by, among other things, the cash payments by the acquirer of Ps.603,395 and Ps.110,000, respectively, and the remaining amount of Ps.534,605 to be paid by the acquirer in July 2020. As of June 30, 2020, the aggregate cash
payments received by the Company under these agreements amounted to Ps.713,395. On July 2, 2020, the Company concluded the sale of its 50% equity interest in Radiópolis in the amount of $1,248,000, and received the payment of a dividend from
Radiópolis in the amount of Ps.285,669 (see Note 19).
|
4.
|
Investments in financial instruments
|
At June 30, 2020 and December 31, 2019, the Group had the following investments in financial instruments:
|
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
|
Equity instruments measured at fair value through other comprehensive income:
|
|
|
|
|
|
|
|
Warrants issued by UHI (1)
|
|
Ps.
|
19,996,535
|
|
|
Ps.
|
33,775,451
|
|
|
Open-Ended Fund (2)
|
|
|
4,411,913
|
|
|
|
4,688,202
|
|
|
Other equity instruments (3)
|
|
|
4,969,744
|
|
|
|
5,751,001
|
|
|
|
|
|
29,378,192
|
|
|
|
44,214,654
|
|
|
Other
|
|
|
280,428
|
|
|
|
51,245
|
|
|
|
|
Ps.
|
29,658,620
|
|
|
Ps.
|
44,265,899
|
|
|
(1)
|
Investment in warrants issued by UHI that 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 or other 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
June 30, 2020 and December 31, 2019, the number of warrants owned by the Group amounted to 4,590,953, which upon their exercise and together with the current investment in shares of UHI, would represent approximately 36% on a fully-diluted,
as-converted basis of the equity capital in UHI. In conjunction with the acquisition of the majority stock of Univision Holdings, Inc. (“UHI”) by a group of investors, which was announced on February 25, 2020, the Company’s management
assessed and concluded that this information did not constitute evidence of a condition that existed as of December 31, 2019, and reviewed the assumptions and inputs related to its discounted cash flow model used to determine the fair value
of its investment in warrants and shares of UHI as of March 31, 2020. Based on this assessment and review, the Company’s management recognized (i) a decline in the estimated fair value of the Group’s investment in warrants exercisable for
shares of UHI for the six months ended June 30, 2020, in the amount of Ps.21,965,698, which was accounted for in accumulated other comprehensive income or loss, net of income tax of Ps.6,589,713, in the Group’s consolidated statement of
financial position as of June 30, 2020; and (ii) an impairment loss that decreased the carrying value of the Group’s investment in shares of UHI as of March 31, 2020, in the amount of Ps.5,455,356, which was accounted for in share of income
or loss of associates and joint ventures in the consolidated statement of income for the six months ended June 30, 2020 (see Notes 5 and 10).
|
|
(2)
|
The Group 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, all of which are measured at fair value, and subtracting all of the fund liabilities and dividing the result by the total number of issued shares. In July and November 2019,
the Company redeemed a portion of its investment in Open-Ended Fund at the aggregate fair value amount of U.S.$121.6 (Ps.2,301,682) and recognized cash proceeds from this redemption for such aggregate amount.
|
|
(3)
|
Other equity instruments include publicly traded instruments, and their fair value is determined by using quoted market prices at the measurement date.
|
A roll-forward of financial assets at fair value through other comprehensive income for the six months ended June 30, 2020 and 2019, is presented as
follows:
|
|
|
Warrants Issued by UHI (1)
|
|
|
Open-Ended Fund (1)
|
|
|
Other Equity Instruments
|
|
|
Total
|
|
|
At January 1, 2020
|
|
Ps.
|
33,775,451
|
|
|
Ps.
|
4,688,202
|
|
|
Ps.
|
5,751,001
|
|
|
Ps.
|
44,214,654
|
|
|
Change in fair value in other comprehensive income
|
|
|
(13,778,916
|
)
|
|
|
(276,289
|
)
|
|
|
(781,257
|
)
|
|
|
(14,836,462
|
)
|
|
At June 30, 2020
|
|
Ps.
|
19,996,535
|
|
|
Ps.
|
4,411,913
|
|
|
Ps.
|
4,969,744
|
|
|
Ps.
|
29,378,192
|
|
|
|
|
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
|
|
|
(618,190
|
)
|
|
|
(295,798
|
)
|
|
|
(490,142
|
)
|
|
|
(618
|
)
|
|
|
(1,404,748
|
)
|
|
At June 30, 2019
|
|
Ps.
|
34,303,340
|
|
|
Ps.
|
7,366,928
|
|
|
Ps.
|
6,055,483
|
|
|
Ps.
|
71,994
|
|
|
Ps.
|
47,797,745
|
|
|
(1)
|
The foreign exchange gain for the six months ended June 30, 2020, derived from the hedged warrants issued by UHI and the investment in an Open-Ended Fund, was
hedged by foreign exchange loss from the consolidated statement of income, in the amount of Ps.8,186,792 and Ps.1,008,300. The foreign exchange loss for the six months ended June 30, 2019, derived from the hedged warrants issued by UHI and
the investment in an Open-Ended Fund, was hedged by foreign exchange gain in the consolidated statement of income, in the amount of Ps.861,278 and Ps.186,209, respectively (see Notes 9 and 16).
|
|
5.
|
Investments in Associates and Joint Ventures
|
At June 30, 2020 and December 31, 2019, the Group had the following investments in associates and joint ventures accounted for by the equity method:
|
|
|
Ownership as of June 30, 2020
|
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
|
Associates:
|
|
|
|
|
|
|
|
|
|
|
UHI (1)
|
|
|
10.0
|
%
|
|
Ps.
|
4,774,966
|
|
|
Ps.
|
8,189,662
|
|
|
OCEN (2)
|
|
|
40.0
|
%
|
|
|
814,616
|
|
|
|
693,970
|
|
|
Other
|
|
|
|
|
|
|
118,134
|
|
|
|
115,161
|
|
|
Joint ventures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grupo de Telecomunicaciones de Alta Capacidad, S.A.P.I. de C.V. and subsidiary (“GTAC”) (3)
|
|
|
33.3
|
%
|
|
|
551,069
|
|
|
|
567,165
|
|
|
Periódico Digital Sendero, S.A.P.I. de C.V.(“PDS”) (4)
|
|
|
50.0
|
%
|
|
|
195,097
|
|
|
|
196,474
|
|
|
|
|
|
|
|
|
Ps.
|
6,453,882
|
|
|
Ps.
|
9,762,432
|
|
|
(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 June 30, 2020 and
December 31, 2019, owned 1,110,382 Class “C” shares of common stock of UHI, representing approximately 10% of the outstanding total shares of UHI and 4,590,953 warrants issued by UHI that upon their exercise would represent approximately
36% of the equity capital of UHI on a fully-diluted, as-converted basis, subject to certain conditions, laws and regulations; (ii) as of June 30, 2020 and December 31, 2019, had three officers and one director of the Company designated as
members of the Board of Directors of UHI, which was composed of 19 directors, of 22 available board seats; and (iii) 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 7.5 years after the Group has voluntarily sold two-thirds of its initial investment in UHI made in December 2010. On February 25, 2020, UHI, Searchlight
Capital Partners, LP (“Searchlight”), a global private investment firm, and ForgeLight LLC (“ForgeLight”), an operating and investment company focused on the media and consumer technology sectors, announced a definitive agreement in which
Searchlight and ForgeLight will acquire a majority ownership interest in UHI from all stockholders of UHI other than the Group. Terms of the transaction were not disclosed. The Group has elected to retain its approximately 36% stake in
UHI’s equity capital on a fully-diluted, as-converted basis. Under the terms of the acquisition, Searchlight and ForgeLight will purchase the remaining 64% ownership interest from the other stockholders of UHI. The transaction, which is
subject to customary closing conditions including receipt of regulatory approvals, is expected to close later in 2020. In conjunction with this transaction and a decline in the fair value of the Group’s investment in warrants issued by UHI
that are exercisable for UHI’s common stock as of June 30, 2020, the Company’s management recognized an impairment loss in the amount of Ps.5,455,356 that decreased the carrying value of its investment in shares of UHI as of that date,
which was accounted for in share of income or loss of associates and joint ventures in the consolidated statement of income for the six months ended June 30, 2020 (see Notes 4, 9, 14 and 16).
|
|
(2)
|
In July 2019, the Group classified its 40% equity interest in OCEN as current assest held for sale. In 2019, the stockholders of OCEN approved the payment of
dividends in the aggregate amount of Ps.1,931,000, of which Ps.772,400 were paid to the Group, as well as a capital reduction in the amount of Ps.200,646, of which Ps.80,186 were paid to the Group. Beginning on May 31, 2020, the Company (i)
ceased to classify the assets of OISE Entretenimiento, including the investment in OCEN, as current assets held for sale; (ii) began to classify its equity interest in OCEN as an investment in associates and joint ventures in its
consolidated statement of financial position; (iii) recognized its share on income of OCEN, which was discontinued from August 1, 2019 through May 31, 2020, in the aggregate amount of Ps.165,909 in its consolidated statement of income for
the six and three months ended June 30, 2020; and (iv) restated for comparison purposes its previously reported statement of financial position as of Decemeber 31, 2019, which included its investment in OCEN as current assets held for
sale, to conform with the current classification of this asset as an investment in associates and joint ventures (see Notes 3 and 14).
|
|
(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 June 30, 2020 and December 31, 2019, GTAC had used a principal amount of Ps.688,183 under this credit facility. During the six months ended June 30, 2020, GTAC did not paid any amount of principal and interest to the Group in connection
with this credit facility. During the year ended December 31, 2019, GTAC paid principal and interest to the Group in connection with this credit facility in the aggregate principal amount of Ps.114,574. 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.833,667, 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 2029. During the six months ended June 30, 2020,
GTAC paid principal and interest to the Group in connection with this credit facility in the aggregate principal amount of Ps.60,689. During the year ended December 31, 2019, GTAC paid principal and interest to the Group in connection with
this credit facility in the aggregate principal amount of Ps.86,321. The net investment in GTAC as of June 30, 2020 and December 31, 2019, included amounts receivable in connection with this long-term credit facility and supplementary loans
to GTAC in the aggregate amount of Ps.870,854 and Ps.872,317, 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 June 30, 2020 and
December 31, 2019, 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 June 30, 2020 and December 31, 2019, consisted of:
|
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
|
Buildings
|
|
Ps.
|
9,451,374
|
|
|
Ps.
|
9,435,452
|
|
|
Building improvements
|
|
|
185,202
|
|
|
|
182,660
|
|
|
Technical equipment
|
|
|
148,346,750
|
|
|
|
141,966,642
|
|
|
Satellite transponders
|
|
|
6,026,094
|
|
|
|
6,026,094
|
|
|
Furniture and fixtures
|
|
|
1,193,838
|
|
|
|
1,158,745
|
|
|
Transportation equipment
|
|
|
3,065,678
|
|
|
|
3,000,322
|
|
|
Computer equipment
|
|
|
8,801,900
|
|
|
|
8,548,265
|
|
|
Leasehold improvements
|
|
|
3,505,466
|
|
|
|
3,434,374
|
|
|
|
|
|
180,576,302
|
|
|
|
173,752,554
|
|
|
Accumulated depreciation
|
|
|
(117,747,591
|
)
|
|
|
(109,028,784
|
)
|
|
|
|
|
62,828,711
|
|
|
|
64,723,770
|
|
|
Land
|
|
|
4,895,598
|
|
|
|
4,891,094
|
|
|
Construction and projects in progress
|
|
|
15,172,646
|
|
|
|
13,714,368
|
|
|
|
|
Ps.
|
82,896,955
|
|
|
Ps.
|
83,329,232
|
|
As of June 30, 2020, technical equipment includes Ps.797,176 and related accumulated depreciation of Ps.237,822 in connection with costs of
dismantling certain equipment of the cable networks in the Group’s Cable segment.
Depreciation charged to income for the six months ended June 30, 2020 and 2019, was Ps.8,678,544 and Ps.8,551,472, 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 six months ended June 30, 2020 and 2019, the Group invested Ps.9,146,172 and Ps.8,859,401, respectively, in property, plant and equipment
as capital expenditures.
|
7.
|
Right-of-use Assets, Net
|
Right-of-use assets, net as of June 30, 2020 and December 31, 2019, consisted of:
|
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
|
Buildings
|
|
Ps.
|
5,227,389
|
|
|
Ps.
|
5,085,242
|
|
|
Satellite transponders
|
|
|
4,275,619
|
|
|
|
4,275,619
|
|
|
Technical Equipment
|
|
|
1,688,829
|
|
|
|
1,688,829
|
|
|
Others
|
|
|
64,279
|
|
|
|
58,021
|
|
|
|
|
|
11,256,116
|
|
|
|
11,107,711
|
|
|
Accumulated depreciation
|
|
|
(4,090,336
|
)
|
|
|
(3,554,659
|
)
|
|
|
|
Ps.
|
7,165,780
|
|
|
Ps.
|
7,553,052
|
|
|
8.
|
Intangible Assets and Goodwill, Net
|
The balances of intangible assets and goodwill, net as of June 30, 2020 and December 31, 2019, were as follows:
|
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
|
|
|
Cost
|
|
|
Accumulated Amortization
|
|
|
Carrying Value
|
|
|
Cost
|
|
|
Accumulated Amortization
|
|
|
Carrying Value
|
|
|
Intangible assets and goodwill with indefinite useful lives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trademarks
|
|
Ps.
|
175,444
|
|
|
Ps.
|
—
|
|
|
Ps.
|
175,444
|
|
|
Ps.
|
175,444
|
|
|
Ps.
|
—
|
|
|
Ps.
|
175,444
|
|
|
Concessions
|
|
|
15,166,067
|
|
|
|
—
|
|
|
|
15,166,067
|
|
|
|
15,166,067
|
|
|
|
—
|
|
|
|
15,166,067
|
|
|
Goodwill
|
|
|
14,113,626
|
|
|
|
—
|
|
|
|
14,113,626
|
|
|
|
14,113,626
|
|
|
|
—
|
|
|
|
14,113,626
|
|
|
Intangible assets with finite useful lives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trademarks
|
|
|
2,127,697
|
|
|
|
(1,936,427
|
)
|
|
|
191,270
|
|
|
|
2,127,697
|
|
|
|
(1,899,187
|
)
|
|
|
228,510
|
|
|
Concessions
|
|
|
553,505
|
|
|
|
(387,476
|
)
|
|
|
166,029
|
|
|
|
553,505
|
|
|
|
(332,103
|
)
|
|
|
221,402
|
|
|
Licenses
|
|
|
11,766,822
|
|
|
|
(7,697,490
|
)
|
|
|
4,069,332
|
|
|
|
10,858,388
|
|
|
|
(6,843,169
|
)
|
|
|
4,015,219
|
|
|
Subscriber lists
|
|
|
8,798,804
|
|
|
|
(6,911,180
|
)
|
|
|
1,887,624
|
|
|
|
8,782,852
|
|
|
|
(6,632,419
|
)
|
|
|
2,150,433
|
|
|
Payment for renewal of concessions
|
|
|
5,821,828
|
|
|
|
—
|
|
|
|
5,821,828
|
|
|
|
5,821,828
|
|
|
|
—
|
|
|
|
5,821,828
|
|
|
Other intangible assets
|
|
|
5,335,858
|
|
|
|
(3,977,749
|
)
|
|
|
1,358,109
|
|
|
|
5,198,960
|
|
|
|
(3,762,535
|
)
|
|
|
1,436,425
|
|
|
|
|
Ps.
|
63,859,651
|
|
|
Ps.
|
(20,910,322
|
)
|
|
Ps.
|
42,949,329
|
|
|
Ps.
|
62,798,367
|
|
|
Ps.
|
(19,469,413
|
)
|
|
Ps.
|
43,328,954
|
|
Amortization charged to income for the six months ended June 30, 2020 and 2019, was Ps.1,172,372 and Ps.1,220,235, respectively. Additional
amortization charged to income for the six months ended June 30, 2020 and 2019, was Ps.207,926 and Ps.260,096, 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.
In 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.
During the second half 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 in Latin America. 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.13,601 and Ps.33,787 in other expense, net, in the consolidated statement of income for the six months ended June 30, 2020 and 2019.
As of June 30, 2020 and December 31, 2019, there was no evidence of significant impairment indicators in connection with the Group’s intangible
assets in the Cable, Sky and Content segments.
|
9.
|
Debt, Lease Liabilities and Other Notes Payable
|
As of June 30, 2020 and December 31, 2019, debt, lease liabilities and other notes payable outstanding were as follows:
|
|
|
|
|
|
|
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
|
|
|
Principal
|
|
|
Finance Costs
|
|
|
Total
|
|
|
Total
|
|
|
U.S. dollar debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.625% Senior Notes due 2025 (1)
|
|
Ps.
|
13,820,820
|
|
|
Ps.
|
(181,970
|
)
|
|
Ps.
|
13,638,850
|
|
|
Ps.
|
11,129,156
|
|
|
4.625% Senior Notes due 2026 (1)
|
|
|
6,910,410
|
|
|
|
(26,908
|
)
|
|
|
6,883,502
|
|
|
|
5,635,748
|
|
|
8.5% Senior Notes due 2032 (1)
|
|
|
6,910,410
|
|
|
|
(20,752
|
)
|
|
|
6,889,658
|
|
|
|
5,643,504
|
|
|
6.625% Senior Notes due 2040 (1)
|
|
|
13,820,820
|
|
|
|
(123,669
|
)
|
|
|
13,697,151
|
|
|
|
11,203,427
|
|
|
5% Senior Notes due 2045 (1)
|
|
|
23,034,700
|
|
|
|
(421,423
|
)
|
|
|
22,613,277
|
|
|
|
18,453,920
|
|
|
6.125% Senior Notes due 2046 (1)
|
|
|
20,731,230
|
|
|
|
(121,680
|
)
|
|
|
20,609,550
|
|
|
|
16,871,348
|
|
|
5.250% Senior Notes due 2049 (1)
|
|
|
17,276,025
|
|
|
|
(299,387
|
)
|
|
|
16,976,638
|
|
|
|
13,858,286
|
|
|
Total U.S. dollar debt
|
|
Ps.
|
102,504,415
|
|
|
Ps.
|
(1,195,789
|
)
|
|
Ps.
|
101,308,626
|
|
|
Ps.
|
82,795,389
|
|
|
Mexican peso debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.79% Notes due 2027 (2)
|
|
|
4,500,000
|
|
|
|
(17,302
|
)
|
|
|
4,482,698
|
|
|
|
4,481,519
|
|
|
8.49% Senior Notes due 2037 (1)
|
|
|
4,500,000
|
|
|
|
(12,266
|
)
|
|
|
4,487,734
|
|
|
|
4,487,372
|
|
|
7.25% Senior Notes due 2043 (1)
|
|
|
6,500,000
|
|
|
|
(54,275
|
)
|
|
|
6,445,725
|
|
|
|
6,444,540
|
|
|
Bank loans (3)
|
|
|
30,770,694
|
|
|
|
(146,915
|
)
|
|
|
30,623,779
|
|
|
|
15,883,817
|
|
|
Bank loans (Sky) (4)
|
|
|
5,500,000
|
|
|
|
—
|
|
|
|
5,500,000
|
|
|
|
5,500,000
|
|
|
Bank loans (TVI) (5)
|
|
|
974,138
|
|
|
|
(1,035
|
)
|
|
|
973,103
|
|
|
|
1,344,058
|
|
|
Total Mexican peso debt
|
|
Ps.
|
52,744,832
|
|
|
Ps.
|
(231,793
|
)
|
|
Ps.
|
52,513,039
|
|
|
Ps.
|
38,141,306
|
|
|
Total debt (6)
|
|
|
155,249,247
|
|
|
|
(1,427,582
|
)
|
|
|
153,821,665
|
|
|
|
120,936,695
|
|
|
Less: Current portion of long-term debt
|
|
|
617,489
|
|
|
|
(498
|
)
|
|
|
616,991
|
|
|
|
491,951
|
|
|
Long-term debt, net of current portion
|
|
Ps.
|
154,631,758
|
|
|
Ps.
|
(1,427,084
|
)
|
|
Ps.
|
153,204,674
|
|
|
Ps.
|
120,444,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Satellite transponder lease liabilities (7)
|
|
Ps.
|
4,657,520
|
|
|
Ps.
|
—
|
|
|
Ps.
|
4,657,520
|
|
|
Ps.
|
4,014,567
|
|
|
Leases (8)
|
|
|
5,421,810
|
|
|
|
—
|
|
|
|
5,421,810
|
|
|
|
5,348,953
|
|
|
Total lease liabilities
|
|
|
10,079,330
|
|
|
|
—
|
|
|
|
10,079,330
|
|
|
|
9,363,520
|
|
|
Less: Current portion
|
|
|
1,486,288
|
|
|
|
—
|
|
|
|
1,486,288
|
|
|
|
1,257,766
|
|
|
Lease liabilities, net of current portion
|
|
Ps.
|
8,593,042
|
|
|
Ps.
|
—
|
|
|
Ps.
|
8,593,042
|
|
|
Ps.
|
8,105,754
|
|
|
Other notes payable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other notes payable (9)
|
|
Ps.
|
—
|
|
|
Ps.
|
—
|
|
|
Ps.
|
—
|
|
|
Ps.
|
1,324,063
|
|
|
Less: Current portion
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,324,063
|
|
|
Other notes payable, net of current portion
|
|
Ps.
|
—
|
|
|
Ps.
|
—
|
|
|
Ps.
|
—
|
|
|
Ps.
|
—
|
|
|
(1)
|
The Senior Notes due between 2025 and 2049, in the aggregate outstanding principal amount of U.S.$4,450 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 or 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 y 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 2017, the Company issued Notes (“Certificados Bursátiles”) due 2027, respectively, through the BMV in the aggregate principal amount of Ps.4,500,000. 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. In October 2019, the Company prepaid all of the outstanding Notes due 2020 in the aggregate principal amount of
Ps.10,000,000. Interest rate 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, with 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. 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. During 2018, the Company executed a revolving credit facility with a syndicate of banks, for up to an amount
equivalent to U.S.$618 million payable in Mexican pesos, which funds may be used for the repayment of existing indebtedness and other general corporate purposes. This revolving credit facility remained unused as of December 31, 2019. In
March 2020, the Company drew down Ps.14,770,694 under this credit facility, with a maturity in the first quarter of 2022, and interest payable on a monthly basis at a floating rate based on a spread of 87.5 or 112.5 basis points over the
28-day TIIE rate depending on the Group’s net leverage ratio. This facility was used by the Company as a prudent and precautionary measure to increase the Group’s cash position and preserve financial flexibility in light of uncertainty in
the global and local markets resulting from the COVID-19 outbreak. The Company may prepay this facility on the last day of any interest period without penalty.
|
|
(4)
|
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 with 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.
|
|
(5)
|
As of June 30, 2020 and December 31, 2019, included outstanding balances in the aggregate principal amount of Ps.974,138 and Ps.1,345,382, respectively, in
connection with credit agreements entered into by TVI with Mexican banks, with maturities between 2019 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 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.
|
|
(6)
|
Total debt is presented net of unamortized finance costs as of June 30, 2020 and December 31, 2019, in the aggregate amount of Ps.1,427,582 and Ps.1,441,597,
respectively, and does not include related interest payable in the aggregate amount of Ps.2,315,578 and Ps.1,943,863, respectively.
|
|
(7)
|
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.$3.0 million for satellite signal reception and retransmission service from 24 KU-band transponders on satellite IS-21, which became operational in October 2012. The service term for
IS-21 will end at the earlier of: (a) the end of 15 years or; (b) the date IS-21 is taken out of service (see Note 7).
|
|
(8)
|
In 2020, includes lease liabilities recognized beginning on January 1, 2019 under IFRS 16 for an aggregate amount of Ps.4,957,564. Also, includes minimum lease
payments of property and equipment under leases that qualify as lease liabilities. As of June 30, 2020 and December 31, 2019, includes Ps.723,804 and Ps.699,066, respectively, in connection with a lease agreement entered into by a
subsidiary of the Company and GTAC, for the right to use certain capacity of a telecommunications network through 2029. This lease agreement provides for annual payments through 2029. Other finance liabilities have terms, which expire at
various dates between 2019 and 2020.
|
|
(9)
|
Notes payable issued by the Company in connection with the acquisition in 2016 of a non-controlling interest in TVI. As of December 31, 2019, cash payments to
be made in 2020 related to these notes payable amounted to an aggregate of Ps.1,330,000, including implicit interest of Ps.142,500. Accumulated accrued interest for this transaction amounted to Ps.136,563 as of December 31, 2019. In
February 2020, the Group repaid all of its outstanding other notes payable as of December 31, 2019.
|
As of June 30, 2020 and December 31, 2019, the outstanding principal amounts of Senior Notes of the Company that have been designated as hedging
instruments of the Group’s investments in UHI and the investment in Open-Ended Fund (hedged items) were as follows:
|
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
|
Hedged items
|
|
Millions of U.S. dollars
|
|
|
Thousands of Mexican Pesos
|
|
|
Millions of U.S. dollars
|
|
|
Thousands of Mexican Pesos
|
|
|
Investment in shares of UHI (net investment hedge)
|
|
U.S.$
|
207.3
|
|
|
Ps.
|
4,774,966
|
|
|
U.S.$
|
433.7
|
|
|
Ps.
|
8,189,662
|
|
|
Warrants issued by UHI (foreign currency fair value hedge)
|
|
|
868.1
|
|
|
|
19,996,535
|
|
|
|
1,788.6
|
|
|
|
33,775,451
|
|
|
Open-Ended Fund (foreign currency fair value hedge)
|
|
|
191.5
|
|
|
|
4,411,913
|
|
|
|
248.3
|
|
|
|
4,688,202
|
|
|
Total
|
|
U.S.$
|
1,266.9
|
|
|
Ps.
|
29,183,414
|
|
|
U.S.$
|
2,470.6
|
|
|
Ps.
|
46,653,315
|
|
The foreign exchange gain or loss derived from the Company’s U.S. dollar denominated long-term debt designated as a hedge, for the six months ended
June 30, 2020 and 2019, is analyzed as follows (see Notes 4 and 16):
|
Foreign Exchange Gain or Loss Derived from Senior Notes Designated as Hedging Instruments
|
|
June 30, 2020
|
|
|
June 30, 2019
|
|
|
Recognized in:
|
|
|
|
|
|
|
|
Comprehensive (loss) income
|
|
Ps.
|
(11,191,862
|
)
|
|
Ps.
|
1,251,448
|
|
|
Total foreign exchange (loss) gain derived from hedging Senior Notes
|
|
Ps.
|
(11,191,862
|
)
|
|
Ps.
|
1,251,448
|
|
|
Offset against by:
|
|
|
|
|
|
|
|
|
|
Foreign currency translation gain (loss) derived from the hedged net investment in shares of UHI
|
|
Ps.
|
1,996,770
|
|
|
Ps.
|
(203,961
|
)
|
|
Foreign exchange gain (loss) derived from hedged warrants issued by UHI
|
|
|
8,186,792
|
|
|
|
(861,278
|
)
|
|
Foreign exchange gain (loss) derived from the hedged Open-Ended Fund
|
|
|
1,008,300
|
|
|
|
(186,209
|
)
|
|
Total foreign currency translation and foreign exchange gain (loss) derived from hedged assets
|
|
Ps.
|
11,191,862
|
|
|
Ps.
|
(1,251,448
|
)
|
The table below analyzes the Group’s debt and lease liabilities into relevant maturity groupings based on the remaining period at June 30, 2020, to
the contracted maturity date:
|
|
|
Less than 12 Months
July 1, 2020 to June 30, 2021
|
|
|
12-36 Months
July 1, 2021 to June 30, 2023
|
|
|
36-60 Months
July 1, 2023 to June 30, 2025
|
|
|
Maturities Subsequent to June 30, 2025
|
|
|
Total
|
|
|
Debt (1)
|
|
Ps.
|
617,489
|
|
|
Ps.
|
26,627,343
|
|
|
Ps.
|
23,820,820
|
|
|
Ps.
|
104,183,595
|
|
|
Ps.
|
154,249,247
|
|
|
Lease liabilities
|
|
|
1,486,288
|
|
|
|
2,357,038
|
|
|
|
2,417,839
|
|
|
|
3,818,165
|
|
|
|
10,079,330
|
|
|
Total debt and lease liabilities
|
|
Ps.
|
2,103,777
|
|
|
Ps.
|
28,984,381
|
|
|
Ps.
|
26,238,659
|
|
|
Ps.
|
108,001,760
|
|
|
Ps.
|
165,328,577
|
|
|
(1)
|
The amounts of debt are disclosed on a principal amount basis.
|
|
10.
|
Financial Instruments
|
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 and equity securities, securities in the form of an open-ended fund, accounts
payable, outstanding long-term debt, lease liabilities, other notes payable, and derivative financial instruments. For cash and cash equivalents, temporary investments, accounts receivable, accounts payable, and current maturities of long-term debt
and lease liabilities, 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 9) 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 June 30, 2020 and December 31, 2019, were as follows:
|
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
|
|
|
Carrying Value
|
|
|
Fair Value
|
|
|
Carrying Value
|
|
|
Fair Value
|
|
|
Assets:
Cash and cash equivalents
|
|
Ps.
|
45,481,794
|
|
|
Ps.
|
45,481,794
|
|
|
Ps.
|
27,451,997
|
|
|
Ps.
|
27,451,997
|
|
|
Trade notes and accounts receivable, net
|
|
|
22,927,121
|
|
|
|
22,927,121
|
|
|
|
14,486,184
|
|
|
|
14,486,184
|
|
|
Warrants issued by UHI (see Note 4)
|
|
|
19,996,535
|
|
|
|
19,996,535
|
|
|
|
33,775,451
|
|
|
|
33,775,451
|
|
|
Long-term loans and interest receivable from GTAC (see Note 5)
|
|
|
870,854
|
|
|
|
873,215
|
|
|
|
872,317
|
|
|
|
875,585
|
|
|
Open-Ended Fund (see Note 4)
|
|
|
4,411,913
|
|
|
|
4,411,913
|
|
|
|
4,688,202
|
|
|
|
4,688,202
|
|
|
Other equity instruments (see Note 4)
|
|
|
4,969,744
|
|
|
|
4,969,744
|
|
|
|
5,751,001
|
|
|
|
5,751,001
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Notes due 2025, 2032 and 2040
|
|
Ps.
|
34,552,050
|
|
|
Ps.
|
44,223,929
|
|
|
Ps.
|
28,325,700
|
|
|
Ps.
|
34,954,254
|
|
|
Senior Notes due 2045
|
|
|
23,034,700
|
|
|
|
25,661,347
|
|
|
|
18,883,800
|
|
|
|
19,739,047
|
|
|
Senior Notes due 2037 and 2043
|
|
|
11,000,000
|
|
|
|
9,249,005
|
|
|
|
11,000,000
|
|
|
|
8,986,870
|
|
|
Senior Notes due 2026 and 2046
|
|
|
27,641,640
|
|
|
|
34,150,141
|
|
|
|
22,660,560
|
|
|
|
26,645,193
|
|
|
Senior Notes due 2049
|
|
|
17,276,025
|
|
|
|
20,078,196
|
|
|
|
14,162,850
|
|
|
|
15,364,426
|
|
|
Notes due 2027
|
|
|
4,500,000
|
|
|
|
4,815,855
|
|
|
|
4,500,000
|
|
|
|
4,656,375
|
|
|
Other long-term debt
|
|
|
37,244,832
|
|
|
|
37,673,184
|
|
|
|
22,845,382
|
|
|
|
23,012,707
|
|
|
Lease liabilities (1)
|
|
|
10,079,330
|
|
|
|
9,975,335
|
|
|
|
9,363,520
|
|
|
|
9,120,903
|
|
|
Other notes payable
|
|
|
-
|
|
|
|
-
|
|
|
|
1,324,063
|
|
|
|
1,295,780
|
|
(1) In 2020, includes lease agreements recognized beginning on January 1, 2019 under IFRS 16 for an aggregate amount of Ps.4,695,863.
The carrying values (based on estimated fair values), notional amounts, and maturity dates of the Group’s derivative financial instruments as of June 30, 2020 and
December 31, 2019, were as follows:
|
June 30, 2020:
Derivative Financial Instruments
|
|
Carrying Value
|
|
|
Notional Amount
(U.S. Dollars in Thousands)
|
|
Maturity Date
|
|
Assets:
|
|
|
|
|
|
|
|
|
Derivatives recorded as accounting hedges:
(cash flow hedges)
|
|
|
|
|
|
|
|
|
Forward
|
|
Ps.
|
394,449
|
|
|
U.S.$
|
218,688
|
|
July 2020 through May 2021
|
|
Derivatives not recorded as accounting hedges:
|
|
|
|
|
|
|
|
|
|
|
TVI’s forward
|
|
|
127,568
|
|
|
U.S.$
|
60,446
|
|
July 2020 through August 2021
|
|
Empresas Cablevisión´s forward
|
|
|
132,008
|
|
|
U.S.$
|
62,205
|
|
July 2020 through August 2021
|
|
Sky’s forward
|
|
|
169,024
|
|
|
U.S.$
|
76,400
|
|
July 2020 through March 2021
|
|
Forward
|
|
|
641,388
|
|
|
U.S.$
|
280,060
|
|
July 2020 through September 2021
|
|
Total assets
|
|
Ps.
|
1,464,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Derivatives recorded as accounting hedges:
(cash flow hedges)
|
|
|
|
|
|
|
|
|
|
|
TVI’s interest rate swap
|
|
Ps.
|
2,229
|
|
|
Ps.
|
142,700
|
|
May 2022
|
|
TVI’s interest rate swap
|
|
|
34,138
|
|
|
Ps.
|
851,645
|
|
April 2022
|
|
Interest rate swap
|
|
|
128,169
|
|
|
Ps.
|
2,000,000
|
|
October 2022
|
|
Interest rate swap
|
|
|
99,935
|
|
|
Ps.
|
1,500,000
|
|
October 2022
|
|
Interest rate swap
|
|
|
206,208
|
|
|
Ps.
|
2,500,000
|
|
February 2023
|
|
Interest rate swap
|
|
|
605,266
|
|
|
Ps.
|
6,000,000
|
|
June 2024
|
|
Interest rate swap
|
|
|
417,723
|
|
|
Ps.
|
14,770,694
|
|
March 2022
|
|
Total liabilities
|
|
Ps.
|
1,493,668
|
|
|
|
|
|
|
|
December 31, 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.
|
4,592
|
|
|
Ps.
|
407,200
|
|
May 2020 through May 2022
|
|
Total assets
|
|
Ps.
|
4,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Derivatives recorded as accounting hedges:
(cash flow hedges)
|
|
|
|
|
|
|
|
|
|
|
TVI’s interest rate swap
|
|
Ps.
|
8,943
|
|
|
Ps.
|
938,182
|
|
April 2022
|
|
Interest rate swap
|
|
|
38,543
|
|
|
Ps.
|
2,000,000
|
|
October 2022
|
|
Interest rate swap
|
|
|
30,702
|
|
|
Ps.
|
1,500,000
|
|
October 2022
|
|
Interest rate swap
|
|
|
83,122
|
|
|
Ps.
|
2,500,000
|
|
February 2023
|
|
Interest rate swap
|
|
|
185,205
|
|
|
Ps.
|
6,000,000
|
|
June 2024
|
|
Forward
|
|
|
144,466
|
|
|
U.S.$
|
218,688
|
|
January 2020 through September 2020
|
|
Derivatives not recorded as accounting hedges:
|
|
|
|
|
|
|
|
|
|
|
TVI’s forward
|
|
|
45,968
|
|
|
U.S.$
|
66,000
|
|
January 2020 through October 2020
|
|
Empresas Cablevisión´s forward
|
|
|
48,474
|
|
|
U.S.$
|
73,000
|
|
January 2020 through October 2020
|
|
Sky’s forward
|
|
|
87,090
|
|
|
U.S.$
|
127,850
|
|
January 2020 through September 2020
|
|
Forward
|
|
|
242,777
|
|
|
U.S.$
|
361,550
|
|
January 2020 through October 2020
|
|
Total liabilities
|
|
Ps.
|
915,290
|
|
|
|
|
|
|
UHI Warrants
In July 2015, the Group exchanged its investment in U.S.$1,125 million principal amount of Convertible Debentures due 2025 issued by UHI for 4,858,485 warrants that
are exercisable for UHI’s common stock, and exercised 267,532 of these warrants to increase its equity stake in UHI from 7.8% to 10% (see Notes 4 and 5).
The Group determined the fair value of its investment in warrants by using the income approach based on post-tax discounted cash flows. The income approach
requires management to make judgments and involves the use of significant estimates and assumptions. These estimates and assumptions include long-term growth rates and operating margins used to calculate projected future cash flows, risk-adjusted
discount rates based on weighted average cost of capital within a range of 8% to 9%, among others. The Group´s estimates for market growth were based on historical data, various internal estimates and observable external sources when available, and
are based on assumptions that are consistent with the strategic plans and estimates used to manage the underlying business. Since the described methodology is an internal model with significant unobservable inputs, the UHI warrants are classified as
Level 3. Additionally, the Group determined the fair value of its investment in warrants by using the Black-Scholes model (“BSPM”). The BSPM involves the use of significant estimates and assumptions. The assumptions used as of June 30, 2020 and
December 31, 2019, included the UHI stock´s spot price of U.S.$189 and U.S.$390 per share on a fully-diluted, as–converted basis, respectively, and the UHI stock’s expected volatility of 60% and 40%, respectively (see Notes 5 and 14).
The Company’s management applied significant judgment to determine the classification of the warrants issued by UHI that are exercisable for UHI’s
common stock. 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 issued by UHI are closer to an equity instrument in
accordance with IAS 32 Financial Instruments: Presentation (see Note 4).
|
11.
|
Capital Stock and Long-Term Retention Plan
|
At June 30, 2020, shares of capital stock and CPOs consisted of (in millions):
|
|
|
Authorized and Issued(1)
|
|
|
Repurchased by the Company (2)
|
|
|
Held by a Company´s Trust (3)
|
|
|
Outstanding
|
|
|
Series “A” Shares
|
|
|
122,179.4
|
|
|
|
(1,105.4
|
)
|
|
|
(6,935.1
|
)
|
|
|
114,138.9
|
|
|
Series “B” Shares
|
|
|
58,019.7
|
|
|
|
(972.8
|
)
|
|
|
(5,442.0
|
)
|
|
|
51,604.9
|
|
|
Series “D” Shares
|
|
|
88,554.1
|
|
|
|
(1,547.5
|
)
|
|
|
(4,908.1
|
)
|
|
|
82,098.5
|
|
|
Series “L” Shares
|
|
|
88,554.1
|
|
|
|
(1,547.5
|
)
|
|
|
(4,908.1
|
)
|
|
|
82,098.5
|
|
|
Total
|
|
|
357,307.3
|
|
|
|
(5,173.2
|
)
|
|
|
(22,193.3
|
)
|
|
|
329,940.8
|
|
|
Shares in the form of CPOs
|
|
|
296,023.0
|
|
|
|
(5,173.2
|
)
|
|
|
(16,406.9
|
)
|
|
|
274,442.9
|
|
|
Shares not in the form of CPOs
|
|
|
61,284.3
|
|
|
|
-
|
|
|
|
(5,786.4
|
)
|
|
|
55,497.9
|
|
|
Total
|
|
|
357,307.3
|
|
|
|
(5,173.2
|
)
|
|
|
(22,193.3
|
)
|
|
|
329,940.8
|
|
|
CPOs
|
|
|
2,530.1
|
|
|
|
(44.2
|
)
|
|
|
(140.2
|
)
|
|
|
2,345.7
|
|
|
(1)
|
As of June 30, 2020, the authorized and issued capital stock amounted to Ps.4,907,765 (nominal Ps.2,459,154).
|
|
(2)
|
During the six months ended June 30, 2020, the Company repurchased 616.0 million shares, in the form of 5.3 million CPOs, in the amount of Ps.195,597, in
connection with a share repurchase program that was approved by the Company’s stockholders.
|
|
(3)
|
In connection with the Company’s Long-Term Retention Plan.
|
A reconciliation of the number of shares and CPOs outstanding for the six months ended June 30, 2020 and 2019, 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, 2020
|
|
|
116,223.9
|
|
|
|
52,852.8
|
|
|
|
84,083.8
|
|
|
|
84,083.8
|
|
|
|
337,244.3
|
|
|
|
2,402.4
|
|
|
Repurchased (1)
|
|
|
(131.6
|
)
|
|
|
(115.8
|
)
|
|
|
(184.3
|
)
|
|
|
(184.3
|
)
|
|
|
(616.0
|
)
|
|
|
(5.3
|
)
|
|
Cancelled and forfeited (2)
|
|
|
(2,063.5
|
)
|
|
|
(1,229.0
|
)
|
|
|
(1,955.2
|
)
|
|
|
(1,955.2
|
)
|
|
|
(7,202.9
|
)
|
|
|
(55.8
|
)
|
|
Released
|
|
|
110.1
|
|
|
|
96.9
|
|
|
|
154.2
|
|
|
|
154.2
|
|
|
|
515.4
|
|
|
|
4.4
|
|
|
As of June 30, 2020
|
|
|
114,138.9
|
|
|
|
51,604.9
|
|
|
|
82,098.5
|
|
|
|
82,098.5
|
|
|
|
329,940.8
|
|
|
|
2,345.7
|
|
|
|
|
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)
|
|
|
(766.2
|
)
|
|
|
(674.3
|
)
|
|
|
(1,072.8
|
)
|
|
|
(1,072.8
|
)
|
|
|
(3,586.1
|
)
|
|
|
(30.6
|
)
|
|
Acquired (3)
|
|
|
(65.6
|
)
|
|
|
(57.7
|
)
|
|
|
(91.9
|
)
|
|
|
(91.9
|
)
|
|
|
(307.1
|
)
|
|
|
(2.7
|
)
|
|
Released
|
|
|
1,056.0
|
|
|
|
651.3
|
|
|
|
1,036.1
|
|
|
|
1,036.1
|
|
|
|
3,779.5
|
|
|
|
29.6
|
|
|
As of June 30, 2019
|
|
|
116,431.4
|
|
|
|
53,035.4
|
|
|
|
84,374.3
|
|
|
|
84,374.3
|
|
|
|
338,215.4
|
|
|
|
2,410.7
|
|
|
(1)
|
Repurchased by the Company in connection with a share repurchase program.
|
|
(2)
|
Cancelled and forfeited in connection with the Company’s Long-Term Retention Plan.
|
|
(3)
|
Acquired by a Company’s trust in connection with the Company’s Long-Term Retention Plan.
|
Long-Term Retention Plan
In the first half of 2020, the trust for the Long-Term Retention Plan increased the number of shares and CPOs held
for the purposes of this Plan in the amount of: (i) 5,526.3 million shares of the Company in the form of 47.2 million CPOs, and 666.9 million Series “A” Shares, not in the form of CPO units, in connection with the cancellation of these
shares in the fourth quarter of 2019, which were conditionally sold to certain Company’s officers and employees in 2015 and 2016, as described in the paragraph below; (ii) 1,009.7 million shares in the form of 8.6 million CPOs, in connection with
forfeited rights under this Plan and (iii) released 515.4 million shares in the form of 4.4 million CPOs.
In the fourth quarter of 2019, the Company agreed to (i) cancel 9,490.5 million shares that were conditionally sold to certain officers and
employees in 2015, 2016 and 2017, which conditions had not been complied with in full yet; and (ii) sell conditionally 4,745.3 million shares to the these officers and employees at a lower price and additional vesting periods of two and three
years. In connection with these events, the Company recognized an additional expense that was included as administrative expense for the year ended December 31, 2019.
In connection with 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.392,237 and Ps.558,236 for the six months ended June 30, 2020 and 2019, respectively, which amount was reflected in consolidated operating income as administrative expense.
As of June 30, 2020 and December 31, 2019, 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 unit, which was paid in cash in May 2019, in the aggregate amount of Ps.1,066,187.
In April 2020, to further maximize liquidity and as a precautionary measure, the Company’s Board of Directors did not propose the payment of a 2020 dividend for
approval of the Company’s general stockholders’ meeting held on April 28, 2020.
|
13.
|
Non-controlling Interests
|
In 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.1,570,659 were paid to
its non-controlling interests.
|
14.
|
Transactions with Related Parties
|
The balances of receivables and payables between the Group and related parties as of June 30, 2020 and December 31, 2019, were as follows:
|
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
|
Current receivables:
|
|
|
|
|
|
|
|
UHI, including Univision (1)
|
|
Ps.
|
684,420
|
|
|
Ps.
|
748,844
|
|
|
OCEN (see Notes 3 and 5)
|
|
|
24,701
|
|
|
|
3,968
|
|
|
Telemercado Alameda, S. de R.L. de C.V.
|
|
|
11,517
|
|
|
|
10,917
|
|
|
Editorial Clío, Libros y Videos, S.A. de C.V.
|
|
|
4,659
|
|
|
|
2,933
|
|
|
Other
|
|
|
44,572
|
|
|
|
47,765
|
|
|
|
|
Ps.
|
769,869
|
|
|
Ps.
|
814,427
|
|
|
|
|
|
|
|
|
|
|
|
|
Current payable:
|
|
|
|
|
|
|
|
|
|
UHI, including Univision (1)
|
|
Ps.
|
351,834
|
|
|
Ps.
|
594,254
|
|
|
AT&T/ DirecTV
|
|
|
52,525
|
|
|
|
25,447
|
|
|
Other
|
|
|
29,535
|
|
|
|
24,550
|
|
|
|
|
Ps.
|
433,894
|
|
|
Ps.
|
644,251
|
|
|
(1)
|
As of June 30, 2020 and December 31, 2019, the Group recognized a provision in the amount of Ps.351,834 and Ps.594,254, 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. As of June 30, 2020, the Group decreased this provision in the amount of Ps.386,459, in connection with the
acquisition of the majority stock of UHI by a group of investors announced on February 25, 2020, and the decline in the fair value of the Group’s investments in UHI as of June 30, 2020 (see Notes 4 and 5), and accounted for this non-cash
decrease in consolidated other income, net, for the six months ended June 30, 2020 (see Note 15). Since the existing obligations contemplate other scenarios under which payment may be required, and such scenarios still remain, the Company
has maintained this provision as of June 30, 2020. As of June 30, 2020 and December 31, 2019, receivables from UHI related primarily to the PLA amounted to Ps.684,420 and Ps.748,844, respectively.
|
In the six months ended June 30, 2020 and 2019, royalty revenue from Univision amounted to Ps.3,861,056 and Ps.3,619,183 respectively.
15. Other Expense, Net
Other (expense) income for the six months ended June 30, 2020 and 2019 is analyzed as follows:
|
|
|
June 30, 2020
|
|
|
June 30, 2019
|
|
|
Net loss on disposition of investments
|
|
Ps.
|
-
|
|
|
Ps.
|
(758
|
)
|
|
Donations
|
|
|
(4,096
|
)
|
|
|
(14,872
|
)
|
|
Legal and financial advisory professional services (1)
|
|
|
(199,616
|
)
|
|
|
(76,320
|
)
|
|
Loss on disposition of property and equipment
|
|
|
(59,204
|
)
|
|
|
(81,428
|
)
|
|
Deferred compensation
|
|
|
(63,795
|
)
|
|
|
(125,893
|
)
|
|
Dismissal severance expense (2)
|
|
|
(191,941
|
)
|
|
|
(295,982
|
)
|
|
Impairment adjustments (3)
|
|
|
(13,601
|
)
|
|
|
(33,787
|
)
|
|
Decrease in provision for UHI related party (see Note 14)
|
|
|
386,459
|
|
|
|
-
|
|
|
Income for reimbursement of Imagina (4)
|
|
|
167,619
|
|
|
|
-
|
|
|
Other, net
|
|
|
(30,416
|
)
|
|
|
157,136
|
|
|
|
|
Ps.
|
(8,591
|
)
|
|
Ps.
|
(471,904
|
)
|
|
|
(1)
|
Includes primarily legal, financial advisory and professional services in connection with certain litigation and other
matters.
|
|
|
(2)
|
Includes severance expense in connection with dismissals of personnel, as part of a cost reduction plan, and in addition to the severance expense of Ps.150,000
accrued as of December 31, 2019 and paid in the first half of 2020.
|
|
|
(3)
|
In 2019 and 2020, includes impairment adjustments in connection with trademarks in the Publishing business.
|
|
|
(4)
|
In the second quarter of 2020, the Company received a cash reimbursement in connection with a legal process favorable to Imagina Media Audiovisual, S.L.
(“Imagina”), a former associate in Spain, which interest was disposed of by the Company in 2018.
|
Finance (expense) income for the six months ended June 30, 2020 and 2019, included:
|
|
|
June 30, 2020
|
|
|
June 30, 2019
|
|
|
Interest expense (1)
|
|
Ps.
|
(5,413,305
|
)
|
|
Ps.
|
(4,983,078
|
)
|
|
Other finance expense, net (2)
|
|
|
-
|
|
|
|
(668,971
|
)
|
|
Foreign Exchange loss, net (4)
|
|
|
(6,250,191
|
)
|
|
|
-
|
|
|
Finance expense
|
|
|
(11,663,496
|
)
|
|
|
(5,652,049
|
)
|
|
Interest income (3)
|
|
|
675,710
|
|
|
|
645,445
|
|
|
Other finance income, net (2)
|
|
|
2,191,298
|
|
|
|
-
|
|
|
Foreign Exchange gain, net (4)
|
|
|
-
|
|
|
|
464,038
|
|
|
Finance income
|
|
|
2,867,008
|
|
|
|
1,109,483
|
|
|
Finance expense, net
|
|
Ps.
|
(8,796,488
|
)
|
|
Ps.
|
(4,542,566
|
)
|
|
(1)
|
In 2020 and 2019, included interest expense related to lease liabilities that were recognized beginning on January 1, 2019, for first time in connection with
initial adoption of IFRS 16 in the aggregate amount of Ps.215,343 and Ps.206,864, respectively.
|
|
(2)
|
Other finance income or expense, net, included gain or loss fair value from derivative financial instruments.
|
|
(3)
|
This line item included primarily interest income from cash equivalents.
|
|
(4)
|
Foreign exchange gain or loss, net, included (i) foreign exchange gain or loss resulted primarily from the appreciation or depreciation 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 Open-Ended Fund, during the six months ended June 30, 2020
and 2019; and (ii) foreign exchange gain or loss resulted primarily from the appreciation or depreciation of the Mexican peso against the U.S. dollar on the Group’s U.S. dollar-denominated monetary asset position during the six months ended
June 30, 2020 and 2019 (see Note 9). The exchange rate of the Mexican peso against the U.S dollar was of Ps.23.0347, Ps.18.8838, Ps.19.1878 and Ps.19.6730 as of June 30, 2020, December 31, 2019, June 30, 2019 and December 31, 2018,
respectively.
|
Income taxes in the interim periods are accrued using the income tax rate that would be applicable to expected total annual earnings. As of June 30,
2020 and 2019, the estimated effective income tax rate for the years ended December 31, 2020 and 2019, was 12% and 37%, respectively.
|
18.
|
Earnings per CPO/Share
|
At June 30, 2020 and 2019 the weighted average of outstanding total shares, CPOs and Series “A”, Series “B”, Series “D” and Series “L” Shares (not in
the form of CPO units), was as follows (in thousands):
|
|
|
June 30, 2020
|
|
|
June 30, 2019
|
|
|
Total Shares
|
|
Ps.
|
331,518,335
|
|
|
Ps.
|
339,423,254
|
|
|
CPOs
|
|
|
2,357,959
|
|
|
|
2,422,504
|
|
|
Shares not in the form of CPO units:
|
|
|
|
|
|
|
|
|
|
Series “A” Shares
|
|
|
55,636,475
|
|
|
|
55,989,602
|
|
|
Series “B” Shares
|
|
|
187
|
|
|
|
187
|
|
|
Series “D” Shares
|
|
|
239
|
|
|
|
239
|
|
|
Series “L” Shares
|
|
|
239
|
|
|
|
239
|
|
Basic earnings per CPO and per each Series “A”, Series “B”, Series “D” and Series “L” Share (not in the form of a CPO unit) for the six months ended
June 30, 2020 and 2019, are presented as follows:
|
|
|
2020
|
|
|
2019
|
|
|
|
|
Per CPO
|
|
|
Per Share (*)
|
|
|
Per CPO
|
|
|
Per Share (*)
|
|
|
Net income attributable to stockholders of the Company
|
|
Ps.
|
(2.78
|
)
|
|
Ps.
|
(0.02
|
)
|
|
Ps.
|
0.51
|
|
|
Ps.
|
0.00
|
|
(*) Series “A”, “B”, “D” and “L” Shares, not in the form of CPO units.
Diluted earnings per CPO and per Share attributable to stockholders of the Company:
|
|
|
June 30, 2020
|
|
|
June 30, 2019
|
|
|
Total Shares
|
|
Ps.
|
352,342,958
|
|
|
Ps.
|
356,837,641
|
|
|
CPOs
|
|
|
2,487,681
|
|
|
|
2,526,097
|
|
|
Shares not in the form of CPO units:
|
|
|
|
|
|
|
|
|
|
Series “A” Shares
|
|
|
58,926,613
|
|
|
|
58,926,613
|
|
|
Series “B” Shares
|
|
|
2,357,208
|
|
|
|
2,357,208
|
|
|
Series “D” Shares
|
|
|
239
|
|
|
|
239
|
|
|
Series “L” Shares
|
|
|
239
|
|
|
|
239
|
|
Diluted earnings per CPO and per each Series “A”, Series “B”, Series “D” and Series “L” Share (not in the form of a CPO unit) for the six months
ended June 30, 2020 and 2019, are presented as follows:
|
|
|
2020
|
|
|
2019
|
|
|
|
|
Per CPO
|
|
|
Per Share (*)
|
|
|
Per CPO
|
|
|
Per Share (*)
|
|
|
Net income attributable to stockholders of the Company
|
|
Ps.
|
(2.62
|
)
|
|
Ps.
|
(0.02
|
)
|
|
Ps.
|
0.48
|
|
|
Ps.
|
0.00
|
|
(*) Series “A”, “B”, “D” and “L” Shares not in the form of CPO units.
The table below presents information by segment and a reconciliation to consolidated total for the six months ended June 30, 2020 and 2019:
|
|
|
Total Revenues
|
|
|
Intersegment Revenues
|
|
|
Consolidated Revenues
|
|
|
Segment Income
|
|
|
|
2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable
|
|
Ps.
|
22,133,458
|
|
|
Ps.
|
342,547
|
|
|
Ps.
|
21,790,911
|
|
|
Ps.
|
9,146,837
|
|
|
|
Sky
|
|
|
10,920,060
|
|
|
|
289,726
|
|
|
|
10,630,334
|
|
|
|
4,555,407
|
|
|
|
Content
|
|
|
13,468,172
|
|
|
|
2,019,196
|
|
|
|
11,448,976
|
|
|
|
3,694,654
|
|
|
|
Other Businesses
|
|
|
2,323,592
|
|
|
|
781,139
|
|
|
|
1,542,453
|
|
|
|
(51,361
|
)
|
|
|
Segment total
|
|
|
48,845,282
|
|
|
|
3,432,608
|
|
|
|
45,412,674
|
|
|
|
17,345,537
|
|
|
|
Reconciliation to consolidated amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held-for-sale operations (Radio business)
|
|
|
223,272
|
|
|
|
-
|
|
|
|
223,272
|
|
|
|
(3,991
|
)
|
|
|
Eliminations and corporate expenses
|
|
|
(3,432,608
|
)
|
|
|
(3,432,608
|
)
|
|
|
-
|
|
|
|
(827,533
|
)
|
|
|
Depreciation and amortization
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,385,581
|
)
|
|
|
Consolidated total before other expense
|
|
|
45,635,946
|
|
|
|
-
|
|
|
|
45,635,946
|
|
|
|
6,128,432
|
|
|
|
Other expense, net
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(8,591
|
)
|
|
|
Consolidated total
|
|
Ps.
|
45,635,946
|
|
|
Ps.
|
-
|
|
|
Ps.
|
45,635,946
|
|
|
Ps.
|
6,119,841
|
|
|
|
|
|
Total Revenues
|
|
|
Intersegment Revenues
|
|
|
Consolidated Revenues
|
|
|
Segment Income
|
|
|
|
2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable
|
|
Ps.
|
20,113,747
|
|
|
Ps.
|
282,923
|
|
|
Ps.
|
19,830,824
|
|
|
Ps.
|
8,770,874
|
|
|
|
Sky
|
|
|
10,629,669
|
|
|
|
182,709
|
|
|
|
10,446,960
|
|
|
|
4,612,489
|
|
|
|
Content
|
|
|
15,234,909
|
|
|
|
1,681,434
|
|
|
|
13,553,475
|
|
|
|
5,195,618
|
|
|
|
Other Businesses
|
|
|
3,830,111
|
|
|
|
334,945
|
|
|
|
3,495,166
|
|
|
|
651,739
|
|
|
|
Segment total
|
|
|
49,808,436
|
|
|
|
2,482,011
|
|
|
|
47,326,425
|
|
|
|
19,230,720
|
|
|
|
Reconciliation to consolidated amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held-for-sale operations (Radio business)
|
|
|
376,696
|
|
|
|
289
|
|
|
|
376,407
|
|
|
|
103,720
|
|
|
|
Eliminations and corporate expenses
|
|
|
(2,482,300
|
)
|
|
|
(2,482,300
|
)
|
|
|
-
|
|
|
|
(987,002
|
)
|
|
|
Depreciation and amortization
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,295,173
|
)
|
|
|
Consolidated total before other expense
|
|
|
47,702,832
|
|
|
|
-
|
|
|
|
47,702,832
|
|
|
|
8,052,265
|
|
(1)
|
|
Other expense, net
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(471,904
|
)
|
|
|
Consolidated total
|
|
Ps.
|
47,702,832
|
|
|
Ps.
|
-
|
|
|
Ps.
|
47,702,832
|
|
|
Ps.
|
7,580,361
|
|
(2)
|
|
(1)
|
This amount represents operating income before other income or expense, net.
|
|
(2)
|
This amount represents consolidated operating income.
|
Disaggregation of Total Revenues
The table below present total revenues for each reportable segment disaggregated by major service/product lines and primary geographical market for
the six months ended June 30, 2020 and 2019:
|
|
|
Domestic
|
|
|
Export
|
|
|
Abroad
|
|
|
Total
|
|
|
June 30, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital TV Service
|
|
Ps.
|
8,394,954
|
|
|
Ps.
|
-
|
|
|
Ps.
|
-
|
|
|
Ps.
|
8,394,954
|
|
|
Advertising
|
|
|
739,255
|
|
|
|
-
|
|
|
|
-
|
|
|
|
739,255
|
|
|
Broadband Services
|
|
|
7,801,343
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,801,343
|
|
|
Telephony
|
|
|
2,090,941
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,090,941
|
|
|
Other Services
|
|
|
389,660
|
|
|
|
-
|
|
|
|
-
|
|
|
|
389,660
|
|
|
Enterprise Operations
|
|
|
2,556,364
|
|
|
|
-
|
|
|
|
160,941
|
|
|
|
2,717,305
|
|
|
Sky:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DTH Broadcast Satellite TV
|
|
|
9,577,144
|
|
|
|
-
|
|
|
|
764,298
|
|
|
|
10,341,442
|
|
|
Advertising
|
|
|
552,317
|
|
|
|
-
|
|
|
|
-
|
|
|
|
552,317
|
|
|
Pay-Per-View
|
|
|
19,467
|
|
|
|
-
|
|
|
|
6,834
|
|
|
|
26,301
|
|
|
Content:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
|
|
|
5,476,105
|
|
|
|
81,237
|
|
|
|
-
|
|
|
|
5,557,342
|
|
|
Network Subscription Revenue
|
|
|
2,111,160
|
|
|
|
621,611
|
|
|
|
-
|
|
|
|
2,732,771
|
|
|
Licensing and Syndication
|
|
|
741,362
|
|
|
|
4,436,697
|
|
|
|
-
|
|
|
|
5,178,059
|
|
|
Other Businesses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming
|
|
|
672,493
|
|
|
|
-
|
|
|
|
-
|
|
|
|
672,493
|
|
|
Soccer, Sports and Show Business Promotion
|
|
|
589,039
|
|
|
|
91,430
|
|
|
|
-
|
|
|
|
680,469
|
|
|
Publishing - Magazines
|
|
|
127,984
|
|
|
|
-
|
|
|
|
942
|
|
|
|
128,926
|
|
|
Publishing - Advertising
|
|
|
69,399
|
|
|
|
-
|
|
|
|
-
|
|
|
|
69,399
|
|
|
Publishing Distribution
|
|
|
112,920
|
|
|
|
-
|
|
|
|
-
|
|
|
|
112,920
|
|
|
Feature Film Production and Distribution
|
|
|
625,998
|
|
|
|
-
|
|
|
|
33,387
|
|
|
|
659,385
|
|
|
Segment total
|
|
|
42,647,905
|
|
|
|
5,230,975
|
|
|
|
966,402
|
|
|
|
48,845,282
|
|
|
Held-for-sale operations:
Radio – Advertising
|
|
|
223,272
|
|
|
|
-
|
|
|
|
-
|
|
|
|
223,272
|
|
|
Intersegment eliminations
|
|
|
(3,432,608
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,432,608
|
)
|
|
Consolidated total revenues
|
|
Ps.
|
39,438,569
|
|
|
Ps.
|
5,230,975
|
|
|
Ps.
|
966,402
|
|
|
Ps.
|
45,635,946
|
|
|
|
|
Domestic
|
|
|
Export
|
|
|
Abroad
|
|
|
Total
|
|
|
June 30, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital TV Service
|
|
Ps.
|
7,885,539
|
|
|
Ps.
|
-
|
|
|
Ps.
|
-
|
|
|
Ps.
|
7,885,539
|
|
|
Advertising
|
|
|
552,150
|
|
|
|
-
|
|
|
|
-
|
|
|
|
552,150
|
|
|
Broadband Services
|
|
|
7,125,701
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,125,701
|
|
|
Telephony
|
|
|
1,838,656
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,838,656
|
|
|
Other Services
|
|
|
371,580
|
|
|
|
-
|
|
|
|
-
|
|
|
|
371,580
|
|
|
Enterprise Operations
|
|
|
2,199,717
|
|
|
|
-
|
|
|
|
140,404
|
|
|
|
2,340,121
|
|
|
Sky:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DTH Broadcast Satellite TV
|
|
|
9,516,452
|
|
|
|
-
|
|
|
|
674,943
|
|
|
|
10,191,395
|
|
|
Advertising
|
|
|
405,478
|
|
|
|
-
|
|
|
|
-
|
|
|
|
405,478
|
|
|
Pay-Per-View
|
|
|
30,715
|
|
|
|
-
|
|
|
|
2,081
|
|
|
|
32,796
|
|
|
Content:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
|
|
|
7,951,326
|
|
|
|
100,869
|
|
|
|
-
|
|
|
|
8,052,195
|
|
|
Network Subscription Revenue
|
|
|
1,821,827
|
|
|
|
602,498
|
|
|
|
-
|
|
|
|
2,424,325
|
|
|
Licensing and Syndication
|
|
|
625,484
|
|
|
|
4,132,905
|
|
|
|
-
|
|
|
|
4,758,389
|
|
|
Other Businesses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming
|
|
|
1,496,272
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,496,272
|
|
|
Soccer, Sports and Show Business Promotion
|
|
|
761,479
|
|
|
|
448,817
|
|
|
|
|
|
|
|
1,210,296
|
|
|
Publishing - Magazines
|
|
|
197,131
|
|
|
|
-
|
|
|
|
12,494
|
|
|
|
209,625
|
|
|
Publishing - Advertising
|
|
|
127,672
|
|
|
|
-
|
|
|
|
20,508
|
|
|
|
148,180
|
|
|
Publishing Distribution
|
|
|
147,330
|
|
|
|
-
|
|
|
|
21,997
|
|
|
|
169,327
|
|
|
Feature Film Production and Distribution
|
|
|
513,121
|
|
|
|
787
|
|
|
|
82,503
|
|
|
|
596,411
|
|
|
Segment Total
|
|
|
43,567,630
|
|
|
|
5,285,876
|
|
|
|
954,930
|
|
|
|
49,808,436
|
|
|
Held-for-sale operations:
Radio – Advertising
|
|
|
376,696
|
|
|
|
-
|
|
|
|
-
|
|
|
|
376,696
|
|
|
Intersegment eliminations
|
|
|
(2,478,906
|
)
|
|
|
-
|
|
|
|
(3,394
|
)
|
|
|
(2,482,300
|
)
|
|
Consolidated total revenues
|
|
Ps.
|
41,465,420
|
|
|
Ps.
|
5,285,876
|
|
|
Ps.
|
951,536
|
|
|
Ps.
|
47,702,832
|
|
Seasonality of Operations
The Group’s results of operations are not highly seasonal. The Group typically recognizes a large percentage of its consolidated net sales
(principally advertising) in the fourth quarter in connection with the holiday shopping season. In 2019 and 2018, the Group recognized 27.8% and 26.4%, respectively, of its annual consolidated net sales in the fourth quarter of the year. The Group’s
costs, in contrast to its revenues, are more evenly incurred throughout the year and generally do not correlate to the amount of advertising sales.
On March 11, 2020, the World Health Organization declared the outbreak of Coronavirus (“Covid-19”) as pandemic. Most governments in the world are
implementing different restrictive measures to contain the spread of this pandemic. This situation is significantly affecting the global economy, including Mexico, due to the disruption or slowdown of supply chains and the increase in economic
uncertainty, as evidenced by the increase in volatility of asset prices, exchange rates and decreases in long-term interest rates. During the second quarter of 2020, the Company’s management made an assessment of potential adverse impacts of Covid-19
in its business segments, primarily in connection with impairment indicators and testing of significant long-lived assets, expected credit losses for accounts receivable, recovery of deferred income tax assets and workforce considerations. The
Company’s management will continue to assess the potential adverse impacts of Covid-19, including the monitoring of impairment indicators and testing, forecasts and budgets, fair values and/or estimated future cash flows related to the recoverability
of significant financial and non-financial assets of its business segments. The consequences derived from Covid-19 in the third quarter of 2020, are events after the reporting period not requiring an adjustment to the Group’s consolidated financial
statements for the six months ended June 30, 2020, and these consequences will be recognized as required in the Group’s consolidated financial statements for periods ending after that date in the year 2020. As of the authorization date of these
consolidated financial statements, the Company’s management cannot predict the adverse impact of Covid-19 in the Group’s consolidated financial statements for any remaining period for the year ending December 31, 2020.
The Company´s management cannot guarantee that conditions in the bank lending, capital and other financial markets will not continue to deteriorate
as a result of the pandemic, or that its access to capital and other sources of funding will not become constrained, which could adversely affect the availability and terms of future borrowings, renewals or refinancings. In addition, the
deterioration of global economic conditions as a result of the pandemic may ultimately reduce the demand of the Group´s products across its segments, as its clients and customers reduce or defer their spending.
While the pandemic has evolved and some parts of Mexico have started to resume activities partially, a significant part of the population is still
implementing social distancing and shelter-in-place policies. As a result, during the second quarter of 2020, this has affected, and is still affecting the ability of employees, suppliers and customers to conduct their functions and businesses in
their typical manner. The Mexican Government has established a plan to reactivate economic activities in accordance with color-based phases determined on a weekly basis by each state of the country. To this date, most of the country’s states are on
phase red or orange, meaning most of non-essential economic activities remain closed or, in the case of orange, open with strict limitations. Furthermore, federal and local governments have also established guidelines for businesses re-openings,
which may be burdensome or expensive to implement. Media and telecommunications are not included in the suspension as they are considered essential economic activities. The Group has continued operating its essential businesses uninterrupted to
continue benefiting the country with connectivity, entertainment and information.
As described above, the Group´s Content segment faced a significant reduction in the demand for advertising during the first half of 2020, and may
continue to be affected by the reduction in the level of economic activity in the jurisdictions in which its customers are located. The Group is partially dependent on the demand for advertising from consumer-focused companies, and the Covid-19
pandemic has caused, and could further cause, advertisers to reduce, postpone or, in a few cases, eliminate their advertisement spending on its platforms. The Group has recently re-started its production of new content following the requirements and
health guidelines imposed by the Mexican government.
In the Group´s Other Businesses segment, sporting and other entertainment events for which it has broadcast rights, or which it organizes, promotes
and/or is located in venues it owns, have been suspended for most of the second quarter of 2020, but some of them have recently started to operate again. Moreover, during the second quarter of 2020, most of its non-essential businesses, including
casinos, were closed. When local authorities start to approve the re-opening of these venues in the cities in which the Company operates, rules will be enacted which may include capacity and operating hours restrictions, these may affect the results
of its Other Businesses segment in the following months. As of this date, just one of its casinos have re-stated operations.
The magnitude of the impact on the Group’s businesses will depend on the duration and extent of the Covid-19 pandemic and the impact of federal,
state, local and foreign governmental actions, including continued or future social distancing, and consumer behavior in response to the Covid-19 pandemic and such governmental actions. Due to the evolving and uncertain nature of this situation, the
Company´s management is not able to estimate the full extent of the impact of the Covid-19 pandemic, but it may continue affecting the Group´s businesses, financial position and results of operations over the near, medium or long-term.
On March 5, 2018, a purported stockholder class action lawsuit was filed in the United States District Court for the Southern
District of New York alleging securities law violations in connection with allegedly misleading statements and/or omissions in the Company’s public disclosures. The lawsuit alleges that the Company and two of its executives failed to disclose alleged
involvement in bribery activities relating to certain executives of Fédération Internationale de Football Association (“FIFA”), and wrongfully failed to disclose weaknesses in the Company’s internal control over its financial reporting as of December
31, 2016. On May 17, 2018, the Court appointed a lead plaintiff for the putative stockholder class. On August 6, 2018, the lead plaintiff filed an amended complaint. The Company thereupon filed a motion to dismiss the amended complaint. On March 25,
2019, the court issued a decision denying the Company’s motion to dismiss, holding that plaintiff’s allegations, if true, were sufficient to support a claim. The parties have begun to exchange discovery materials, and the discovery process will
continue throughout 2020. On June 8, 2020, the court issued a decision denying class certification based on the inadequacy of the proposed class representative. On June 29, 2020, the court issued a decision granting class certification to a new
class representative. The Company plans to seek leave to appeal the ruling. The Company believes that the lawsuit, and the material allegations and claims therein, are without merit and intends to vigorously defend against the lawsuit. With regard
to plaintiff’s allegations regarding FIFA, outside counsel long previously investigated the circumstances surrounding the Company’s acquisition of the Latin American media rights for the Canada, Mexico and USA 2026 FIFA World Cup and 2030 FIFA World
Cup and uncovered no credible evidence that would form the basis for liability for the Company or for any executive, employee, agent or subsidiary thereof. In particular, the Company itself made no payment to any FIFA person and in no way knew of, or
condoned, any payment by any third party to any FIFA person. The Company also notes that no proceedings have been initiated against it by any governmental agency.
On April 27, 2017 the tax authorities, initiated a tax audit to the Company, with the purpose of verifying compliance with tax
provisions for the period from January 1st to December 31st, 2011 regarding federal taxes as direct subject of Income Tax (Impuesto Sobre la Renta or ISR), Flat Tax (Impuesto Empresarial a Tasa Única) and Value Added Tax (Impuesto al Valor Agregado).
On April 25, 2018 the authorities informed the observations determined as a result of such audit, that could entail a default on the payment of the abovementioned taxes. On May 25, 2018, by a document submitted before the authority, the Company
asserted arguments and offered evidence to undermine the authority’s observations. On June 27, 2019, the Company was notified of the outcome of the audit, in which a tax liability was determined for an amount of Ps.682 million for ISR, penalties,
surcharges and inflation adjustments. On August 22, 2019 the Company filed an administrative proceeding (recurso de revocación) against such tax liability, before the Legal area of the Tax Authorities, which is in the process of being resolved. As of
the date of this report, there are no elements to determine if the outcome would be adverse or favorable to the Company’s interests.
On June 1st, 2016 the tax authority initiated a tax audit to a Company’s indirect subsidiary that carries out operations in the Gaming
business, which is presented in the Other Businesses segment, with the purpose of verifying compliance with tax provisions for the period from January 1st to December 31st, 2014 regarding federal taxes as direct subject, as well as a withholder. On
April 24, 2017 the authorities informed the facts and omissions detected during the development of the verification process, that could entail a default on the payment of the abovementioned taxes. On May 30, 2017, by a document submitted before the
authorities, the Company’s subsidiary asserted arguments and offered evidence to undermine the facts and omissions included in the authority’s last partial record. On June 21, 2019 such entity was notified of the outcome of the audit, in which a tax
liability was determined for an amount of Ps.1,334 million, essentially related to IEPS (Impuesto Especial Sobre Producción y Servicios or Excise Tax); on August 16, 2019 an administrative proceeding (recurso de revocación) was filed before the Legal
area of the Tax Authorities, which is in the process of being resolved. As of the date of this report, there are no elements to determine if the outcome would be adverse or favorable to the Company’s interests.
The matters discussed in the three paragraphs referred to above did not require the recognition of a provision as of June 30, 2020.
There are several legal actions and claims pending against the Group, which are filed in the ordinary course of business. In the opinion of the
Company’s management, none of these actions and claims is now expected to have a material adverse effect on the Group’s financial statements as a whole; however, the Company’s management is unable to predict the outcome of any of these legal actions
and claims.
- - - - - - - - -
Description of significant events and transactions
See Notes 1 and 2 of the Disclosure of interim financial reporting.
|
Dividends paid, ordinary shares:
|
0
|
|
Dividends paid, other shares:
|
0
|
|
Dividends paid, ordinary shares per share:
|
0
|
|
Dividends paid, other shares per share:
|
0
|
Current assets – Other current non-financial assets: As of June 30, 2020 and December 31, 2019, includes transmission rights
and programming for Ps.6,259,048 thousand and Ps.6,479,258, thousands, respectively.
Non-current assets – Other non-current non-financial assets: As of June 30, 2020 and December 31, 2019, includes transmission
rights and programming for Ps.8,080,422 thousand and Ps.7,901,590 thousand, respectively.
Total basic earnings (loss) per share: This information is related to earnings per CPO. The CPO are the securities traded in the Mexican Stock
Exchange.
Total diluted earnings (loss) per share: This information is related to earnings per diluted CPO.
Breakdown of credits:
The Notes due in 2027 were contracted at a fixed rate.
The "Senior Notes" due in 2025, 2026, 2032, 2037, 2040, 2043, 2045, 2046 and 2049 were contracted at a fixed rate.
The exchange rates for the credits denominated in foreign currency were as follows:
Ps. 23.0347 pesos per US dollar
Bank loans and senior notes are presented net of unamortized finance costs in the aggregate amount of Ps.1,427,582.
For more information on debt; see Note 9 Notes to the Unaudited Condensed Consolidated Financial Statements.
Monetary foreign currency position:
|
Ps.
|
23.0347
|
|
pesos per US dollar
|
|
|
|
25.9052
|
|
pesos per euro
|
|
|
|
16.9221
|
|
pesos per canadian dollar
|
|
|
|
0.3263
|
|
pesos per argentinean peso
|
|
|
|
0.0285
|
|
pesos per chilean peso
|
|
|
|
0.0060
|
|
pesos per colombian peso
|
|
|
|
6.5399
|
|
pesos per peruvian nuevo sol
|
|
|
|
23.8809
|
|
pesos per swiss franc
|
|
|
|
4.2233
|
|
pesos per brazilian real
|
|
|
|
28.5143
|
|
pesos per pound sterling
|
|
|
|
2.4751
|
|
pesos per swedish krona
|
|
Long-term liabilities include debt in the amount of U.S.$1,266,933 thousand, which has been designated as hedging
instrument of foreign currency investments.
MEXICAN STOCK EXCHANGE
STOCK EXCHANGE CODE: TLEVISA
|
QUARTER: 02
|
YEAR: 2020
|
|
GRUPO TELEVISA, S.A.B.
|
|
|
DECLARATION OF THE REGISTRANT´S OFFICERS, RESPONSIBLE FOR THE INFORMATION.
WE HEREBY DECLARE THAT, TO
THE EXTENT OF OUR FUNCTIONS, WE PREPARED THE INFORMATION RELATED TO THE REGISTRANT CONTAINED IN THIS REPORT FOR THE SECOND QUARTER OF 2020, AND BASED ON OUR KNOWLEDGE, THIS INFORMATION FAIRLY PRESENTS THE
REGISTRANT´S CONDITION. WE ALSO DECLARE THAT WE ARE NOT AWARE OF ANY RELEVANT INFORMATION THAT HAS BEEN OMITTED OR UNTRUE IN THIS QUARTERLY REPORT, OR INFORMATION CONTAINED IN SUCH REPORT THAT MAY BE MISLEADING TO INVESTORS.
|
/s/ Alfonso De Angoitia Noriega
|
|
/s/ Bernardo Gómez Martínez
|
|
ALFONSO DE ANGOITIA NORIEGA
|
|
BERNARDO GÓMEZ MARTÍNEZ
|
|
CO-CHIEF EXECUTIVE OFFICER
|
|
CO-CHIEF EXECUTIVE OFFICER
|
|
|
|
|
|
|
|
|
|
/s/ Carlos Ferreiro Rivas
|
|
/s/ Luis Alejandro Bustos Olivares
|
|
CARLOS FERREIRO RIVAS
|
|
LUIS ALEJANDRO BUSTOS OLIVARES
|
|
VICE PRESIDENT OF FINANCE
|
|
LEGAL VICE PRESIDENT AND
|
|
|
|
GENERAL COUNSEL
|
MEXICO CITY, JULY 7, 2020
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
|
GRUPO TELEVISA, S.A.B.
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
Dated: July 13, 2020
|
By:
|
/s/ Luis Alejandro Bustos Olivares
|
|
|
Name:
|
Luis Alejandro Bustos Olivares
|
|
|
Title:
|
Legal Vice President and General Counsel
|
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