Table of Contents

As filed with the Securities and Exchange Commission on
April 28, 2021

2

9
, 2022
UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM
20-F

Annual Report Pursuant to Section

☐
 REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
or
☒
ANNUAL REPORT PURSUANT TO SECTION 13 orOR 15(d) of the Securities

Exchange Act ofOF THE SECURITIES EXCHANGE ACT OF 1934

for

For the fiscal year
ended December 31, 2020

2021

or
☐
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
or
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report______________
For the transition period from _______________ to ________________
Commission file number:
1-16269

AMÉRICA MÓVIL, S.A.B. DE C.V.

(exact name of registrant as specified in its charter)

America Mobile

(translation of registrant’s name into English)

United Mexican States

(jurisdiction of incorporation)

Lago Zurich 245, Plaza Carso / Edificio Telcel, Colonia Ampliación Granada, Miguel Hidalgo, 11529, Mexico City, Mexico

(address of principal executive offices)

Daniela Lecuona Torras

Lago Zurich 245
,
Plaza Carso
/ Edificio Telcel, Piso 16, Colonia Ampliación Granada, Miguel Hidalgo 11529 Mexico City,

Telephone: (5255) 2581-3700 / Facsimile: (5255) 2581-4422

E-mail:
daniela.lecuona@americamovil.com

(name, telephone,
e-mail
and/or facsimile number and address of company contact person)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

  

Trading symbol

  

Name of each exchange on which registered:

registered

A Shares, without par value

  

AMOV

  

New York Stock Exchange

L Shares, without par value

  

AMX

  

New York Stock Exchange

3.125% Senior Notes Due 2022

AMX22

New York Stock Exchange

3.625% Senior Notes Due 2029

  

AMX29

  

New York Stock Exchange

2.875% Senior Notes Due 2030

  

AMX30

  

New York Stock Exchange

6.375% Notes Due 2035

  

AMX35

  

New York Stock Exchange

6.125% Notes Due 2037

  

AMX37

  

New York Stock Exchange

6.125% Senior Notes Due 2040

  

AMX40

  

New York Stock Exchange

4.375% Senior Notes Due 2042

  

AMX42

  

New York Stock Exchange

4.375% Senior Notes Due 2049

  

AMX49

  

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

The number of outstanding shares of each of the registrant’s classes of capital or common stock as of December 31, 2020:

2021:

20,578

20,555 million

  

AA Shares

520

502 million

  

A Shares

45,764

45,582 million

  

L Shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. 

 Yes 

 

X     

✓
 

  No  

 

  
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. 

 Yes 

   

No

 

X     

✓     
     
  
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject
to such filing requirements for the past 90 days.		 

Yes 

 

X     

     ✓
 

No

 
     
     
  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§
(§ 232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).		 

 Yes 

 

X     

    ✓
 

No

 
     
     

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule
12b-2
of the Exchange Act.

Act
 ✓    Large accelerated filer  Accelerated filer
  Non-accelerated
filer		  Emerging growth company
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report.
 Yes 
✓
No
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements
included
in this filing
 X      Large accelerated filer    Accelerated filer  Non-accelerated filer    Emerging growth company

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

           U.S. GAAP          X     ✓        International Financial Reporting Standards as issued by the International Accounting Standards Board           Other    

If “other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17             Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act).		 

 Yes 

 

 

  No  

 

X     

 ✓

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Table of Contents

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Table of Contents

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Table of Contents
Table of Contents
TABLE OF CONTENTS
(See Form
20-F
Cross Reference Guide on page 89)

Selected Financial Data 
6
  
SELECTED FINANCIAL DATA
9
PART I: INFORMATION ON THE COMPANY
 9
10
  
About América Móvil
 10
16
  
Our Networks
 
17
  
Our Competitors
 
18
  
Acquisitions, Other InvestementsInvestments and Divestitures
 19
20
  
Marketing, Sales and Distribution, Customer Services
 20
22
  
PART II: OPERATING AND FINANCIAL REVIEW AND PROSPECTS
 
23
Overview  
Overview
24 
25
Results of Operations
 26
31
  
Liquidity and Capital Resources
 32
36
  
PART III: RISK FACTORS
 37
48
  
PART IV: SHARE OWNERSHIP AND TRADING
 
49
  
Major Shareholders
 
50
  
Related Party Transactions
 51
Dividends
50
  
Dividends
51 
51
Trading Markets
 52
Bylaws
51
  
Bylaws
52 
52
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
 
53
  
Taxation of Shares and ADSs
 54
58
  
PART V: CORPORATE GOVERNANCE
 
59
Management  
Management
60 
63
Corporate Governance
 64
65
  
Controls and Procedures
 66
67
  
Corporate Sustainability Report
 
68
  
Code of Ethics
 69
70
  
PART VI: REGULATION
 71
85
  
PART VII: ADDITIONAL INFORMATION
 87
Employees
86
  
Employees
88 
86
Legal Proceedings
 88
87
  
Principal Accountant Fees and Services
 89
87
  
Additional Information
 89
88
  
Forward-Looking Statements
 90
89
  
Form 20-F Cross Reference Guide
 
91
Signatures  
Signatures
93 
93
PART VIII: CONSOLIDATED FINANCIAL STATEMENTS
5
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SELECTED FINANCIAL DATA
We prepared our audited consolidated financial statements included in this annual report in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). The selected financial information should be read in conjunction with, and is qualified in its entirety by reference to, our audited consolidated financial statements.
We present our consolidated financial statements in Mexican pesos. This annual report contains translations of various peso amounts into U.S. dollars at specified rates solely for your convenience. You should not construe these translations as representations that the peso amounts actually represent the U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. Unless otherwise indicated, we have translated U.S. dollar amounts from pesos at the exchange rate of Ps.19.9487Ps.20.5835 to U.S.$1.00, which was the rate reported by Banco de México on December 30, 2020,2021, as published in the Official Gazette of the Federation (
Diario Oficial de la Federación
, or “Official Gazette”).

On November 23, 2021, we completed the sale of our U.S. operations to Verizon Communications Inc. (“Verizon”), as previously disclosed in our press release furnished on a report on Form
6-K
on November 23, 2021. As a result, in accordance with IFRS 5, TracFone Wireless Inc.’s (“TracFone”) operations are classified as discontinued operations for all years presented in the consolidated financial information included in this report. Accordingly, results are presented in a single amount as profit after tax from discontinued operations in the consolidated financial information included in this annual report. Operating and financial information presented herein therefore excludes TracFone, including for periods prior to the sale.
We have not included earnings or dividends on a per American Depositary Share (“ADS”) basis. Each L Share ADS represents 20 L Shares and each A Share ADS represents 20 A Shares.

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   FOR THE YEAR ENDED DECEMBER 31, 
   2016   2017   2018   2019   2020   2020 
   (in millions of Mexican pesos, except share and per share amounts)   (in millions of
U.S. dollars,
except share
and per share
amounts)		 

STATEMENT OF COMPREHENSIVE INCOME DATA:

 

Operating revenues

  

 

Ps.

 

  

 

975,412

 

  

 

Ps.

 

  

 

1,021,634

 

  

 

Ps.

 

  

 

1,038,208

 

  

 

Ps.

 

  

 

1,007,348

 

  

 

Ps.

 

  

 

1,016,887

 

  

 

U.S.

 

  

 

50,975

 

Operating costs and expenses

    

 

865,802

 

    

 

921,490

 

    

 

898,651

 

    

 

852,507

 

    

 

851,532

 

    

 

42,686

 

Depreciation and amortization

    

 

148,526

 

    

 

160,175

 

    

 

155,713

 

    

 

158,915

 

    

 

164,244

 

    

 

8,233

 

Operating income

    

 

109,610

 

    

 

100,144

 

    

 

139,557

 

    

 

154,841

 

    

 

165,355

 

    

 

8,289

 

Net profit for the year

  

 

Ps.

 

  

 

12,079

 

  

 

Ps.

 

  

 

32,155

 

  

 

Ps.

 

  

 

54,517

 

  

 

Ps.

 

  

 

70,313

 

  

 

Ps.

 

  

 

51,027

 

  

 

U.S.

 

  

 

2,559

 

NET PROFIT ATTRIBUTABLE FOR THE YEAR TO:

 

Equity holders of the parent

  

 

Ps.

 

  

 

8,650

 

  

 

Ps.

 

  

 

29,326

 

  

 

Ps.

 

  

 

52,566

 

  

 

Ps.

 

  

 

67,731

 

  

 

Ps.

 

  

 

46,853

 

  

 

U.S.

 

  

 

2,349

 

Non-controlling interests

    

 

3,429

 

    

 

2,829

 

    

 

1,951

 

    

 

2,582

 

    

 

4,174

 

    

 

210

 

Net profit for the year

  

 

Ps.

 

  

 

12,079

 

  

 

Ps.

 

  

 

32,155

 

  

 

Ps.

 

  

 

54,517

 

  

 

Ps.

 

  

 

70,313

 

  

 

Ps.

 

  

 

51,027

 

  

 

U.S.

 

  

 

2,559

 

EARNINGS PER SHARE:

 

Basic

  

 

Ps.

 

  

 

0.13

 

  

 

Ps.

 

  

 

0.44

 

  

 

Ps.

 

  

 

0.79

 

  

 

Ps.

 

  

 

1.03

 

    

 

0.71

 

    

 

0.04

 

Diluted

  

 

Ps.

 

  

 

0.13

 

  

 

Ps.

 

  

 

0.44

 

  

 

Ps.

 

  

 

0.79

 

  

 

Ps.

 

  

 

1.03

 

    

 

0.71

 

    

 

0.04

 

Dividends declared per share (1)

  

 

Ps.

 

  

 

0.28

 

  

 

Ps.

 

  

 

0.30

 

  

 

Ps.

 

  

 

0.32

 

  

 

Ps.

 

  

 

0.35

 

  

 

Ps.

 

  

 

0.38

 

  

 

U.S.

 

  

 

0.02

 

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING (MILLIONS):

 

Basic

    

 

65,693

 

    

 

65,909

 

    

 

66,055

 

    

 

66,016

 

    

 

66,265

 

    

 

-

 

Diluted

    

 

65,693

 

    

 

65,909

 

    

 

66,055

 

    

 

66,016

 

    

 

66,265

 

    

 

-

 

   AS OF DECEMBER 31, 
   2016   2017   2018   2019   2020   2020 
   (in millions of Mexican pesos, except share and per share amounts)   (in millions of
U.S. dollars,
except share
and per share
amounts)		 

BALANCE SHEET DATA:

 

Property, plant and equipment, net

  

 

Ps.

 

  

 

701,190

 

  

 

Ps.

 

  

 

676,343

 

  

 

Ps.

 

  

 

640,001

 

  

 

Ps.

 

  

 

639,343

 

  

 

Ps.

 

  

 

722,930

 

  

 

U.S.

 

  

 

36,239

 

Right of use assets

    

 

-

 

    

 

-

 

    

 

-

 

    

 

118,003

 

    

 

101,977

 

    

 

5,112

 

Total assets

    

 

1,515,042

 

    

 

1,486,212

 

    

 

1,429,223

 

    

 

1,531,934

 

    

 

1,625,048

 

    

 

81,463

 

Short-term debt and current portion of long-term debt

    

 

82,607

 

    

 

51,746

 

    

 

96,230

 

    

 

129,172

 

    

 

148,083

 

    

 

7,423

 

Short-term lease debt

                

 

25,895

 

    

 

25,068

 

    

 

1,257

 

Long-term debt

    

 

625,194

 

    

 

646,139

 

    

 

542,692

 

    

 

495,082

 

    

 

480,300

 

    

 

24,077

 

Long-term lease debt

                

 

94,702

 

    

 

84,259

 

    

 

4,224

 

Capital stock

    

 

96,338

 

    

 

96,339

 

    

 

96,338

 

    

 

96,338

 

    

 

96,342

 

    

 

4,829

 

Total equity

    

 

271,024

 

    

 

260,634

 

    

 

245,872

 

    

 

226,907

 

  

 

Ps.

 

  

 

315,118

 

  

 

U.S.

 

  

 

15,797

 

NUMBER OF OUTSTANDING SHARES (MILLIONS):

 

AA Shares

    

 

20,635

 

    

 

20,602

 

    

 

20,602

 

    

 

20,602

 

    

 

20,578

 

    

 

-

 

A Shares

    

 

592

 

    

 

567

 

    

 

546

 

    

 

531

 

    

 

520

 

    

 

-

 

L Shares

    

 

44,571

 

    

 

44,901

 

    

 

44,887

 

    

 

44,872

 

    

 

45,764

 

    

 

-

 

  
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FOR THE YEAR ENDED DECEMBER 31,
     
       
2019            
       
2020            
       
2021            
       
2021            
 
   (in millions of Mexican pesos, except share and per share amounts)    

 
(in millions of U.S. dollars, 
except share and per
share amounts)
 

 
 
 
 
    STATEMENT OF COMPREHENSIVE INCOME DATA:
 
Operating revenues
  
 
Ps.
 
  
 
851,483
 
  
 
Ps.
 
  
 
839,707
 
  
 
Ps.
 
  
 
855,535
 
  
 
        U.S.
 
  
 
        41,564
 
Operating costs and expenses
    
 
707,685
 
    
 
694,204
 
    
 
689,402
 
    
 
33,494
 
Depreciation and amortization
    
 
157,519
 
    
 
162,682
 
    
 
162,627
 
    
 
7,901
 
Operating income
    
 
143,798
 
    
 
145,503
 
    
 
166,133
 
    
 
8,070
 
Net profit for the year continued
  
 
Ps.
 
  
 
60,468
 
  
 
Ps.
 
  
 
34,034
 
  
 
Ps.
 
  
 
74,615
 
  
 
U.S.
 
  
 
3,625
 
Net profit for the year discontinued
    
 
9,845
 
    
 
16,993
 
    
 
121,711
 
    
 
5,913
 
Net profit for the year
  
 
Ps.
 
  
 
70,313
 
  
 
Ps.
 
  
 
51,027
 
  
 
Ps.
 
  
 
196,326
 
  
 
U.S.
 
  
 
9,538
 
Net profit attributable for the year to:
                
Equity holders of the parent continued
  
 
Ps.
 
  
 
57,886
 
  
 
Ps.
 
  
 
29,860
 
  
 
Ps.
 
  
 
70,712
 
  
 
U.S.
 
  
 
3,435
 
Equity holders of the parent discontinued
    
 
9,845
 
    
 
16,993
 
    
 
121,711
 
    
 
5,913
 
Equity holders of the parent
  
 
Ps.
 
  
 
67,731
 
  
 
Ps.
 
  
 
46,853
 
  
 
Ps.
 
  
 
192,423
 
  
 
U.S.
 
  
 
9,348
 
Non-controlling
interests
    
 
2,582
 
    
 
4,174
 
    
 
3,903
 
    
 
190
 
Net profit for the year
  
 
Ps.
 
  
 
70,313
 
  
 
Ps.
 
  
 
51,027
 
  
 
Ps.
 
  
 
196,326
 
  
 
U.S.
 
  
 
9,538
 
Earnings per share:
                
Basic diluted continued
  
 
Ps.
 
  
 
0.88
 
  
 
Ps.
 
  
 
0.45
 
  
 
Ps.
 
  
 
1.07
 
  
 
U.S.
 
  
 
0.05
 
Basic diluted discontinued
  
 
Ps.
 
  
 
0.15
 
  
 
Ps.
 
  
 
0.26
 
  
 
Ps.
 
  
 
1.85
 
  
 
U.S.
 
  
 
0.09
 
Dividends declared per share
(1)
  
 
Ps.
 
  
 
0.35
 
  
 
Ps.
 
  
 
0.38
 
  
 
Ps.
 
  
 
0.40
 
  
 
U.S.
 
  
 
0.02
 
Weighted average number of shares outstanding (millions):
 
        
Basic
    
 
66,016
 
    
 
66,265
 
    
 
65,967
 
  
 
-
 
  
Diluted
    
 
66,016
 
    
 
66,265
 
    
 
65,967
 
  
 
-
 
  
 
    BALANCE SHEET DATA:
 
Property, plant and equipment, net
  
 
Ps.
 
  
 
639,343
 
  
 
Ps.
 
  
 
722,930
 
  
 
Ps.
 
  
 
731,197
 
  
 
U.S.
 
  
 
35,523
 
Right of use assets
    
 
118,003
 
    
 
101,977
 
    
 
90,372
 
    
 
4,391
 
Total assets
    
 
1,531,934
 
    
 
1,625,048
 
    
 
1,689,650
 
    
 
82,086
 
Short-term debt and current portion of long-term
debt
    
 
129,172
 
    
 
148,083
 
    
 
145,223
 
    
 
7,055
 
Short-term lease debt
    
 
25,895
 
    
 
25,068
 
    
 
27,632
 
    
 
1,342
 
Long-term debt
    
 
495,082
 
    
 
480,300
 
    
 
418,807
 
    
 
20,347
 
Long-term lease debt
    
 
94,702
 
    
 
84,259
 
    
 
71,022
 
    
 
3,450
 
Capital stock
    
 
96,338
 
    
 
96,342
 
    
 
96,333
 
    
 
4,680
 
Total equity
  
 
Ps.
 
  
 
226,907
 
  
 
Ps.
 
  
 
315,118
 
  
 
Ps.
 
  
 
454,042
 
  
 
U.S.
 
  
 
22,057
 
 
    
NUMBER OF OUTSTANDING SHARES (MILLIONS):
 
AA Shares
    
 
20,607
 
    
 
20,578
 
    
 
20,555
 
    
 
-
 
A Shares
    
 
531
 
    
 
520
 
    
 
502
 
    
 
-
 
L Shares
    
 
44,872
 
    
 
45,764
 
    
 
43,633
 
    
 
-
 
                
(1)

Figures for each year provided represent the annual dividend declared at the general shareholders’ meeting that year. For information on dividends paid per share translated into U.S. dollars, see “Share Ownership and Trading—Dividends” under Part IV of this annual report.

(2)
For the years 2019 to 2020 the financial statements were modified for the sale of TracFone. See Note 2 Ac to our audited consolidated financial statements included in this annual report.
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HISTORY AND CORPORATE INFORMATION

América Móvil, S.A.B. de C.V. (“América Móvil,” “we” or the “Company”) is a Sociedad Anónima Bursátil de Capital Variable organized under the lawsTable of Mexico.

We were established in September 2000 when Teléfonos de México, S.A.B. de C.V. (“Telmex”), a fixed-line Mexican telecommunications operator privatized in 1990, spun off to us its wireless operations in Mexico and other countries. We have made significant acquisitions throughout Latin America, the United States, the Caribbean and Europe, and we have also expanded our businesses organically.

Our principal executive offices are located at Lago Zurich 245, Plaza Carso / Edificio Telcel, Colonia Ampliación Granada, Miguel Hidalgo, 11529, Mexico City, Mexico. Our telephone number at this location is (5255) 2581-3700.

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BUSINESS OVERVIEW

We provide telecommunications services in 2524 countries. We are a leading telecommunications services provider in Latin America, ranking first in wireless, fixed-line, broadband and Pay TV services based on the number of revenue generating units (“RGUs”).

Our largest operations are in Mexico and Brazil, which together account for over half of our total RGUs and where we have the largest market share based on RGUs. We also have operations in 1615 other countries in the Americas and seven countries in Central and Eastern Europe as of December 31, 2020.2021. For a list of our principal subsidiaries, see Note 2 a(ii) to our audited consolidated financial statements and “Additional Information—Exhibit 8.1” under Part VII of this annual report.

We intend to build on our position as leadersa leader in integrated telecommunications services in Latin America and the Caribbean, and to grow in other parts of the world by continuing to expand our subscriber base through the development of our existing businesses and strategic acquisitions when opportunities arise. We have developed world-class integrated telecommunications platforms to offer our customers new services and enhanced communications solutions with higher data speed transmissions at lower prices. We continue investing in our networks to increase coverage and implement new technologies to optimize our network capabilities. See “Operating and Financial Review and Prospects—Overview” under Part II of this annual report for a discussion on the seasonality of our business.

On November 23, 2021, we completed the sale of our U.S. operations to Verizon, as previously disclosed in our press release furnished on a report on Form 6-K on November 23, 2021. As a result, in accordance with IFRS 5, TracFone’s operations are classified as discontinued operations for all years presented in the consolidated financial information included in this report. Accordingly, results are presented in a single amount as profit after tax from discontinued operations in the consolidated financial information included in this annual report. Operating and financial information presented herein therefore excludes Tracfone, including for periods prior to the sale.
The following map illustrates the geographic diversity of our operations and certain key performance indicators (“KPIs”) as of December 31, 2021.
HISTORY AND CORPORATE INFORMATION
América Móvil, S.A.B. de C.V. (“América Móvil,” “we” or the “Company”) is a
Sociedad Anónima Bursátil de Capital Variable
organized under the laws of Mexico.
We were established in 2000 when Teléfonos de México, S.A.B. de C.V. (“Telmex”), a fixed-line Mexican telecommunications operator privatized in 1990, spun off to us its wireless operations in Mexico and other countries. We have made significant acquisitions throughout Latin America, the United States, the Caribbean and Europe, and we have also expanded our businesses organically.
Our principal executive offices are located at Lago Zurich 245, Plaza Carso / Edificio Telcel, Colonia Ampliación Granada, Miguel Hidalgo, 11529, Mexico City, Mexico. Our telephone number at this location is (5255) 2581-3700.
 

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KEY PERFORMANCE INDICATORS

We have identified RGUs as a key performance indicator (“KPI”)KPI that helps measure the performance of our operations. The table below includes the number of our wireless subscribers and our fixed RGUs, which together make up the total RGUs, in the countries where we operate. Wireless subscribers consist of the number of prepaid and postpaid subscribers to our wireless services. Fixed RGUs consist of fixed voice, fixed data and Pay TV units (which include customers of our Pay TV services and, separately, of certain other digital services). The figures below reflect total wireless subscribers and fixed RGUs of all our consolidated subsidiaries, without adjustments to reflect our equity interest, in the following reportable segments:

Mexico Wireless;
Mexico Fixed;
Brazil;
Colombia;
Southern Cone (Argentina, Chile, Paraguay and Uruguay);
Andean Region (Ecuador and Peru);
Central America (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama);
the Caribbean (the Dominican Republic and Puerto Rico); and
the United States; and
Europe (Austria, Belarus, Bulgaria, Croatia, Macedonia, Serbia and Slovenia).

   

 

AS OF DECEMBER 31,

 
   

 

2018

   

 

2019

   

 

2020

 
       

(in thousands)

     

WIRELESS SUBSCRIBERS

 

    

Mexico Wireless

  

 

75,448

 

  

 

76,918

 

  

 

77,789

 

Brazil

  

 

56,416

 

  

 

54,488

 

  

 

63,140

 

Colombia

  

 

29,681

 

  

 

31,104

 

  

 

33,009

 

Southern Cone

  

 

30,971

 

  

 

31,507

 

  

 

30,669

 

Andean Region

  

 

20,344

 

  

 

20,104

 

  

 

18,877

 

Central America

  

 

14,364

 

  

 

15,488

 

  

 

15,044

 

Caribbean

  

 

5,887

 

  

 

6,244

 

  

 

6,422

 

United States

  

 

21,688

 

  

 

20,876

 

  

 

20,682

 

Europe

  

 

21,029

 

  

 

21,296

 

  

 

21,864

 

Total Wireless Subscribers

  

 

275,828

 

  

 

278,025

 

  

 

287,497

 

FIXED RGUS:

      

Mexico Fixed

  

 

22,337

 

  

 

21,992

 

  

 

21,925

 

Brazil

  

 

35,285

 

  

 

34,048

 

  

 

32,648

 

Colombia

  

 

7,171

 

  

 

7,613

 

  

 

8,318

 

Southern Cone

  

 

2,199

 

  

 

2,514

 

  

 

2,836

 

Andean Region

  

 

1,856

 

  

 

2,049

 

  

 

2,158

 

Central America

  

 

6,465

 

  

 

4,409

 

  

 

4,247

 

Caribbean

  

 

2,546

 

  

 

2,528

 

  

 

2,558

 

Europe

  

 

6,203

 

  

 

6,143

 

  

 

6,050

 

Total Fixed RGUs

  

 

84,062

 

  

 

81,296

 

  

 

80,740

 

Total RGUs

  

 

359,890

 

  

 

359,323

 

  

 

368,237

 

   
AS OF DECEMBER 31,
 
   
2019
   
2020
   
2021
 
       
(in thousands)
     
WIRELESS SUBSCRIBERS
 
    
Mexico
  
 
76,918
 
  
 
77,789
 
  
 
80,539
 
Brazil
  
 
54,488
 
  
 
63,140
 
  
 
70,541
 
Colombia
  
 
31,104
 
  
 
33,009
 
  
 
35,062
 
Southern Cone
  
 
31,507
 
  
 
30,669
 
  
 
33,322
 
Andean Region
  
 
20,104
 
  
 
18,877
 
  
 
20,774
 
Central America
  
 
15,488
 
  
 
15,044
 
  
 
16,508
 
Caribbean
  
 
6,244
 
  
 
6,422
 
  
 
7,020
 
Europe
  
 
21,296
 
  
 
21,864
 
  
 
22,766
 
Total Wireless Subscribers
  
 
257,149
 
  
 
266,814
 
  
 
286,532
 
FIXED RGUS:
      
Mexico
  
 
21,992
 
  
 
21,925
 
  
 
21,408
 
Brazil
  
 
34,048
 
  
 
32,648
 
  
 
31,287
 
Colombia
  
 
7,613
 
  
 
8,318
 
  
 
8,876
 
Southern Cone
  
 
2,514
 
  
 
2,836
 
  
 
3,349
 
Andean Region
  
 
2,049
 
  
 
2,158
 
  
 
2,444
 
Central America
  
 
4,409
 
  
 
4,247
 
  
 
4,412
 
Caribbean
  
 
2,528
 
  
 
2,558
 
  
 
2,608
 
Europe
  
 
6,143
 
  
 
6,050
 
  
 
6,082
 
Total Fixed RGUs
  
 
81,296
 
  
 
80,740
 
  
 
80,466
 
Total RGUs
  
 
338,445
 
  
 
347,554
 
  
 
366,998
 
PRINCIPAL BRANDS

We operate in all of our geographic segments under the Claro brand name, except in Mexico the United States and Europe, where we principally do business under the brand names listed below.

  COUNTRY

PRINCIPAL

BRANDS

SERVICES AND

PRODUCTS

  Mexico

Telcel

Wireless voice

Wireless data

  COUNTRY
  

Telmex Infinitum

PRINCIPAL BRANDS
  

Fixed

SERVICES AND PRODUCTS
Mexico
TelcelWireless voice

  

Fixed data

  United States(1)

  

TracFone

Wireless voice

Wireless data

  

Straight Talk

Telmex Infinitum		  

WirelessFixed voice

Wireless data

  Europe

A1

Wireless voice

    

WirelessFixed data

Europe
A1Wireless voice
    

Fixed voice

Wireless data
    

Fixed data

voice
    

Fixed data

Pay TV

(1) We entered into an agreement to sell our United States operations to Verizon Communications Inc. as described under “Acquisitions, Other Investments and Divestitures.” We expect the closing to occur during 2021.

SERVICES AND PRODUCTS

We offer a wide range of services and products that vary by market, including wireless voice, wireless data and value-added services, fixed voice, fixed data, broadband and IT services, Pay TV and
over-the-top
(“OTT”) services.

Wireless Operations

In 2020,2021, our wireless voice and data operations generated revenues of Ps.561.5Ps.549.7 billion, representing 55.5%54.5% of our consolidated revenues. As of December 31, 2020,2021, our wireless operations represented approximately 78.1% of our total RGUs.

RGUs, the same as of December 31, 2020.

VOICE AND DATA.
Our wireless subsidiaries provide voice communication services across the countries in which they operate. We offer international roaming services to our wireless subscribers through a network of cellular service providers with which our wireless subsidiaries have entered into international roaming agreements around the world, and who provide GSM, 3G and
4G-LTE
roaming services.

The voice and data plans are either “postpaid,” where the customer is billed monthly for the previous month, or “prepaid,” where the customer pays in advance for a specified volume of use over a specified period. Postpaid plans increased as a percentage of the wireless base from 32.0%34.0% in December 20192020 to 34.0%37.6% as of December 31, 2020,2021, while prepaid plans represented 66.0%62.4% as of December 31, 2020.

2021.

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Our wireless voice services are offered under a variety of plans to meet the needs of different market segments. In addition, we often bundle wireless data communications services together with wireless voice services. Our wireless subsidiaries had approximately 287286.5 million wireless voice and data subscribers as of December 31, 2020.

2021.

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Prepaid customers typically generate lower levels of usage and are often unwilling or financially ineligible to purchase postpaid plans. Our prepaid plans have been instrumental to increase wireless penetration in Latin America and Eastern Europe to levels similar to those of developed markets. Additionally, prepaid plans entail little to no risk of
non-payment,
as well as lower customer acquisition costs and billing expenses, compared to the average postpaid plan.

In general, our average rates per minute of wireless voice are very competitive for both prepaid and postpaid plans. On average, rates per minute of wireless voice used in 20202021 decreased by approximately 27.1%1.1% at constant exchange rates relative to 2019. 2020.
In addition, the plans we offer our retail customers include selective discounts and promotions that reduce the rates our customers pay.

VALUE-ADDED SERVICES.
As part of our wireless data business, our subsidiaries offer value-added services that include Internet access, messaging and other wireless entertainment and corporate services through GSM/EDGE, 3G and 4G LTE networks.

Internet services include roaming capability and wireless Internet connectivity for feature phones, smartphones, tablets and laptops, including data transmission,
e-mail
services, instant messaging, content streaming and interactive applications. For example, in Mexico, our website for our wireless services (www.telcel.com) through Radiomóvil Dipsa, S.A. de C.V (“Telcel”(”Telcel“), offers a wide range of services and content such as video, music, games and other applications, which our subscribers can access from mobile devices. In addition, we offer other wireless services, including wireless security services, mobile payment solutions,
machine-to-machine
services, mobile banking, virtual private network (“VPN”(”VPN“) services, video calls and personal communications services (“PCS”(”PCS“).

Fixed Operations

In 2020,2021, our fixed voice, data, broadband and IT solutions had revenues of Ps.284.6Ps.272.3 billion, representing 28.1%27.0% of our consolidated revenues. As of December 31, 2020,2021, our fixed operations represented approximately 21.9% of our total RGUs, compared to 22.6%the same as of December 31, 2019.

2020.

VOICE.
Our fixed voice services include local, domestic and international long-distance, under a variety of plans to meet the needs of different market segments, specifically tailored to our residential and corporate clients.

DATA.
We offer data services, including data centers, data administration and hosting services to our residential and corporate clients under a variety of plans.

BROADBAND.
We provide residential broadband access through hybrid
fiber-coaxial (“HFC”
(”HFC“) or
fiber-optic
cable. These services are typically bundled with voice services and are competitively priced as a function of the desired or available speed. As a complement to these services, we offer a number of products such as home networking and smart home services.

IT SOLUTIONS.
Our subsidiaries provide a number of different IT solutions for small businesses and large corporations. We also provide specific solutions to the industrial, financial, government and tourism sectors, among others.

PAY TV.

Pay TV
We offer Pay TV through cable and satellite TV subscriptions to both retail and corporate customers under a variety of plans. As of December 31, 2020,2021, we had approximately 20.119.8 million Pay TV RGUs, a decrease of approximately 796309 thousand Pay TV RGUs from the prior year.

EQUIPMENT, ACCESSORIES AND COMPUTER SALES.

Equipment, accessories and computer sales
Equipment, accessories and computer sales primarily include the sale of handsets, accessories and other equipment.

OTHER SERVICES.

Other Services
Other services include other businesses such as telephone directories, call center services, wireless security services, advertising, media and software development services.

OTT SERVICES.Services
We sell video, audio and other media content that is delivered through the internet directly from the content provider to the viewer or end user. Our most important service is ClaroVideo, an
on-demand
internet streaming video provider with more than 18,50020,900 content titles sold across all the Latin American and Caribbean markets in which we operate. We offer bundled packages of ClaroVideo, which may include:

Subscription video on demand, providing unlimited access to a catalogue of over 18,50020,900 titles for a fixed monthly subscription fee;

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Transactional video on demand and electronic sell-through, offering the option to rent or buy new content releases; and

Add-on
services such as subscription and other OTT services through a platform payment system, including access to FOX, HBO, Noggin and Paramount+, among others.

We also offer an advertised and unlimited music streaming and downloading service in 16 countries in Latin America and Europe through ClaroMúsica, with access to approximately 50 million titles across all music genres.

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Table of Contents
Services and Products by Country

The following table is a summary of our principal services rendered and products produced as of December 31, 20202021 in the countries in which we operate.

                                                                                                                                                                                                                
   

WIRELESS VOICE, DATA AND


VALUE ADDED SERVICES

(1)

  

FIXED VOICE, BROADBAND,


DATA AND IT SERVICES

(2)

  

PAY TV

  

OTT SERVICES
(3)

Argentina

  

🌑

  

🌑

  

🌑

  

🌑

Austria

  

🌑

  

🌑

  

🌑

  

🌑

Belarus

  

🌑

  

🌑

  

🌑

  

🌑

Brazil

  

🌑

  

🌑

  

🌑

  

🌑

Bulgaria

  

🌑

  

🌑

  

🌑

  

🌑

Chile

  

🌑

  

🌑

  

🌑

  

🌑

Colombia

  

🌑

  

🌑

  

🌑

  

🌑

Costa Rica

  

🌑

  

🌑

  

🌑

  

🌑

Croatia

  

🌑

  

🌑

  

🌑

  

🌑

Dominican Republic

  

🌑

  

🌑

  

🌑

  

🌑

Ecuador

  

🌑

  

🌑

  

🌑

  

🌑

El Salvador

  

🌑

  

🌑

  

🌑

  

🌑

Guatemala

  

🌑

  

🌑

  

🌑

  

🌑

Honduras

  

🌑

  

🌑

  

🌑

  

🌑

Macedonia

  

🌑

  

🌑

  

🌑

  

🌑

Mexico

  

🌑

  

🌑

    
🌑
(4)
 

Nicaragua

  

🌑

  

🌑

  

🌑

  

🌑

Panama

  

🌑

  

🌑

  

🌑

  

🌑

Paraguay

  

🌑

  

🌑

  

🌑

  

🌑

Peru

  

🌑

  

🌑

  

🌑

  

🌑

Puerto Rico

  

🌑

  

🌑

  

🌑

  

🌑

Serbia

  

🌑

      

🌑

Slovenia

  

🌑

  

🌑

  

🌑

  

🌑

Uruguay

  

🌑

      

🌑

United States (5)

🌑

(1)

Includes voice communication and international roaming services, interconnection and termination services, SMS, MMS,

e-mail,
mobile browsing, entertainment and gaming applications.

(2)

Includes local calls, national and international long distance.

(3)

Includes ClaroVideo and ClaroMúsica.

(4)

Services provided by

non-concessionaire
subsidiaries.

(5)

We entered into an agreement to sell our United States operations to Verizon Communications Inc. as described under “Acquisitions, Other Investments and Divestitures.” We expect the closing to occur during 2021.

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Our networks are one of our main competitive advantages. Today, we own and operate one of the largest integrated platforms based on our covered population across 17 countries in Latin America, and we are expanding our network in Europe.

INFRASTRUCTURE

For the year ended December 31, 2020,2021, our capital expenditures totaled Ps.129.6Ps.158.1 billion, which allowed us to increase our network, to expand our capacity and to upgrade our systems to operate with the latest technologies. With fully convergent platforms, we are able to deliver high-quality voice, video and data products.

As of December 31, 2020,2021, the main components of our infrastructure were comprised of:

Cell sites:
102,818 sites with 2G, 3G and 4G technologies across Latin America and Europe. Tower space for our cell sites is a combination of towers we own and tower spaces leased from third parties. Additionally, we have been expanding our coverage and improving quality and speed with a number of street cells and indoor solutions. Our Board of Directors and Stockholders’ Meeting have approved a
spin-off
of our towers and related passive infrastructure in Latin America outside of Mexico. See “Acquisitions, Other Investments and Divestitures.”
Fiber-optic network:
More than 1,035 km. Our network passed approximately 88 million homes.
Submarine cable systems:
Capacity in more than 197 thousand km of submarine cables, including the
AMX-1
submarine cable that extends 18,300 km and connects the United States to Central and South America with 13 landing points and also the South Pacific Submarine Cable that extends 7,300 km along the Latin American Pacific coast, connecting Guatemala, Ecuador, Peru and Chile with 5 landing points. Both systems provide international connectivity to all of our subsidiaries in these geographic areas.
Satellites:
Five. Star One S.A. (“Star One”) has the most extensive satellite system in Latin America, with a fleet that covers the United States, Mexico, Central America and South America. We use these satellites to supply capacity for DTH services for Claro TV throughout Brazil and in other DTH Operations, as well as cellular backhaul, video broadcast and corporate data networks.
Data centers:
32. We use our data centers to manage a number of cloud solutions, such as Infrastructure as a
• Cell sites : 100,122 sites with 2G, 3G and 4G technologies across Latin America and Europe. Tower space for our cell sites is a combination of towers we own and tower spaces leased from third parties. Additionally, we have been expanding our coverage and improving quality and speed with a number of street cells and indoor solutions. Our Board of Directors has approved a plan to spin off our towers and related passive infrastructure in Latin America into an independent Company. See “Acquisitions, Other Investments and Divestitures.”

•Fiber-optic network: More than 1,081 thousand km. Our network passed approximately 81 million homes.

•Submarine cable system: Capacity of more than 189 thousand km in submarine cable, including the AM-1 submarine cable that extends 17,500 km and connects the United States to Central and South America with 11 landing points and provides international connectivity to all of our subsidiaries in these geographic areas.

•Satellites: Six. Star One S.A. (“Star One”) has the most extensive satellite system in Latin America, with a fleet that covers the United States, Mexico, Central America and South America. We use these satellites to supply capacity for DTH services for Claro TV throughout Brazil and in other DTH Operations, as well as cellular backhaul, video broadcast and corporate data networks. In 2015 and 2016, we launched the Star One D1 and the Star One C4 to replace two limited capacity satellites.

•Data centers: 31. We use our data centers to manage a number of cloud solutions, such as Infrastructure as a
Service (“IAAS”), Software as a Service (“SAAS”), security solutions and unified communications.

In the United States, we do not own any wireless telecommunications facilities or hold any wireless spectrum licenses. Instead, we purchase airtime through agreements with wireless service providers and resell airtime to customers. Through these agreements, we have a nationwide “virtual” network, covering almost all areas in which wireless services are available.

TECHNOLOGY

Our primary wireless networks use GSM/EDGE, 3G and 4G LTE technologies, which we offer in most of the countries where we operate. We aim to increase the speed of transmission of our data services and have been expanding our 3G and 4G LTE coverage. We have begun our 5G rollout in some countries.

In February 2022, we launched 5G through Telcel, which is the largest data infrastructure deployment in Latin America. At launch, we cover 18 cities in the country and by end of the year we will cover 120 cities.

We transmit wireless calls and data through radio frequencies that we use under spectrum licenses. Spectrum is a limited resource, and, as a result, we may face spectrum and capacity constraints on our wireless network. We continue to invest significant capital in expanding our network capacity and reach and to address spectrum and capacity constraints on a
market-by-market
basis.

The table below presents a summary of the population covered by our network, by country, as of December 31, 2020.

GENERATION TECHNOLOGY*

         
   

GSM

  

UMTS

  

LTE

   

(% of covered population)

Argentina

  

 

99

%   

  

 

99

%     

  

 

98

%   

Austria

  

 

100

% 

  

 

97

% 

  

 

98

% 

Belarus

  

 

100

% 

  

 

100

% 

  

 

-

 

Brazil

  

 

94

% 

  

 

95

% 

  

 

87

% 

Bulgaria

  

 

100

% 

  

 

100

% 

  

 

99

% 

Chile

  

 

97

% 

  

 

97

% 

  

 

98

% 

Colombia

  

 

91

% 

  

 

80

% 

  

 

72

% 

Costa Rica

  

 

85

% 

  

 

79

% 

  

 

75

% 

Croatia

  

 

99

% 

  

 

99

% 

  

 

99

% 

Dominican Republic

  

 

100

% 

  

 

99

% 

  

 

97

% 

Ecuador

  

 

96

% 

  

 

80

% 

  

 

76

% 

El Salvador

  

 

91

% 

  

 

81

% 

  

 

66

% 

Guatemala

  

 

89

% 

  

 

88

% 

  

 

82

% 

Honduras

  

 

89

% 

  

 

82

% 

  

 

58

% 

Macedonia

  

 

100

% 

  

 

100

% 

  

 

99

% 

Mexico

  

 

94

% 

  

 

95

% 

  

 

91

% 

Nicaragua

  

 

76

% 

  

 

72

% 

  

 

55

% 

Panama

  

 

82

% 

  

 

88

% 

  

 

82

% 

Paraguay

  

 

76

% 

  

 

74

% 

  

 

70

% 

Peru

  

 

88

% 

  

 

84

% 

  

 

83

% 

Puerto Rico

  

 

82

% 

  

 

97

% 

  

 

98

% 

Serbia

  

 

99

% 

  

 

98

% 

  

 

98

% 

Slovenia

  

 

100

% 

  

 

100

% 

  

 

99

% 

Uruguay

  

 

96

% 

  

 

91

% 

  

 

82

% 

*

As of December 31, 2020, our 5G network covered the following percentages of popula- tion in the places indicated: 22.7% in Austria, 16.4% in Brazil and 10% in Puerto Rico.

2021.
 

17

GENERATION TECHNOLOGY
 
   
GSM
  
UMTS
  
LTE
  
5G
   
(% of covered population)
   
Argentina
   99%    98%    97%    - 
Austria
   100%    96%    99%    62% 
Belarus
   100%    100%    0%    - 
Brazil
   94%    95%    87%    17% 
Bulgaria
   100%    100%    99%    52% 
Chile
   97%    97%    98%    - 
Colombia
   91%    80%    73%    - 
Costa Rica
   85%    86%    96%    - 
Croatia
   99%    99%    99%    13% 
Dominican Republic
   100%    99%    97%    6% 
Ecuador
   96%    80%    78%    - 
El Salvador
   91%    88%    87%    - 
Guatemala
   89%    89%    88%    - 
Honduras
   81%    82%    72%    - 
Macedonia
   100%    100%    99%    - 
Mexico
   94%    95%    93%    - 
Nicaragua
   72%    72%    50%    - 
Panama
   82%    90%    86%    - 
Paraguay
   77%    80%    83%    - 
Peru
   88%    83%    83%    18% 
Puerto Rico
   82%    94%    99%    49% 
Serbia
   99%    98%    98%    - 
Slovenia
   100%    100%    99%    19% 
Uruguay
   100%    99%    98%    - 

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We operate in an intensely competitive industry. Competitive factors within our industry include pricing, brand recognition, service and product offerings, customer experience, network coverage and quality, development and deployment of technologies, availability of additional spectrum licenses and regulatory developments.

Our principal competitors differ, depending on the geographical market and the types of service we offer. We compete against other providers of wireless, broadband and Pay TV that operate on a multi-national level, such as AT&T Inc., Teléfonica and Millicom, as well as various providers that operate on a nationwide level, such as Telecom Argentina in Argentina and Telecom Italia in Brazil.
Competition remains intense as a result of saturation in the fixed and wireless market, increased network investment by our competitors, the development and deployment of new technologies, the introduction of new products and services, new market entrants, the availability of additional spectrum, both licensed and unlicensed, and regulatory changes.

The effects of competition on our subsidiaries depend, in part, on the size, service offerings, financial strength and business strategies of their competitors, regulatory developments and the general economic and business climate in the countries in which they operate, including demand growth, interest rates, inflation and exchange rates. The effects could include loss of market share and pressure to reduce rates. See “Regulation” under Part VI and “Risk Factors” under Part III of this annual report.

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Geographic diversification has been a key to our financial success, as it has provided for greater stability in our cash flow and profitability and has contributed to our strong credit ratings. In recent years, we have been evaluating the expansion of our operations to regions outside of Latin America. We believe that Europe and other areas beyond Latin America present opportunities for investment in the telecommunications sector that could benefit us and our shareholders over the long term.

We continue to seek ways to optimize our portfolio, including by finding investment opportunities in telecommunications and related companies worldwide, including in markets where we are already present, and we often have several possible acquisitions under consideration. We may pursue opportunities in Latin America or in other areas in the world. Some of the assets that we acquire may require significant funding for capital expenditures. We can give no assurance as to the extent, timing or cost of such investments. We also periodically evaluate opportunities for dispositions, in particular for businesses and in geographies that we no longer consider strategic. RecentThe following are recent developments relatedrelating to acquisitions, other investments and divestitures include:

divestitures:
On September 13, 2020, we entered into an agreement to sell our wholly-owned subsidiary TracFone Wireless, Inc. to Verizon Communications Inc. TheVerizon. On November 23, 2021, we completed the sale of TracFone to Verizon. We received the closing consideration for the transaction will includeof U.S.$3,1253,625.7 million in cash, which included U.S.$500.7 million of customary adjustment for TracFone’s cash and U.S.$3,125 million in Verizonworking capital and 57,596,544 shares of Verizon’s common stock, (determined based onpar value U.S.$0.10 per share. Verizon has asserted post-closing claims under the pre-closing trading priceadjustments and other provisions of Verizon common stock, but subjectthis agreement, which may result in payments by us. Subject to a collar on the number of shares, whereby the number of shares constituting the stock considerationTracFone continuing to achieve certain operating metrics
(earn-out),
Verizon will be no less than 47,124,445 and no greater than 57,596,545), subject to customary adjustments, at closing. The agreement also includesrequired pay up to an additional $650U.S.$650 million in futureof cash consideration related to the achievement of certain performance measures and other commercial arrangements. The closing of the transaction is subject to customary conditions, including obtaining regulatory approval. Approvalswithin two years from the Federal Communications Commission and California Public Utilities Commission are still pending. We expect the closing to occur during the second half ofNovember 23, 2021.

In September 2020, we terminated our January 24, 2019 agreement to purchase 99.3% of Telefónica Móviles El Salvador, S.A. de C.V. after careful consideration of the conditions to obtaining regulatory approval.
In December 2020, our Brazilian subsidiary, Claro S.A. (“Claro”Claro Brasil”), together with two other offerors, won a competitive bid to acquire the mobile business owned by Oi Group in Brazil. Pursuant to the transaction, Claro Brasil will pay R$3.6 billion for 32% of Oi Group’s mobile business and approximately 4.7 thousand mobile access sites (representing 32% of Oi Group’s mobile business access sites). Claro Brasil also committed to enter into long term agreements with Oi Group for the supply of data transmission capacity. The closing of the transaction is subject to customary conditions, including obtaining regulatory approval, and we expect the closing to occur during 2021.

agreements with Oi Group for the supply of data transmission capacity. This transaction closed on April 20, 2022.
In February 2021, our Board of Directors approved a plan to spin off our telecommunications towers and other related passive infrastructure in Latin America. America outside of Mexico. The
spin-off
was approved by our shareholders in an extraordinary shareholders’ meeting on September 29, 2021. In the
spin-off
and the associated corporate restructuring, we will contribute to Sitios a portion of our capital stock, assets and liabilities, mainly consisting of the shares of our subsidiaries holding telecommunications towers and other associated infrastructure in Latin America outside of Mexico, other than Colombia and our telecommunications towers existing in Peru prior to the
spin-off.
This operation willis intended to maximize the infrastructure’s value, as the resulting entitiesentity, to be named Sitios Latinoamérica, S.A.B. de C.V. (“Sitios”), will be independentseparate from the Company, with theirAmérica Móvil and will have its own management and personnel, who will be exclusively focused on developing, building and sharingleasing telecommunications towers for wireless services. We expect to enter into leasewill have master services agreements with the new entitiessubsidiaries of Sitios under which we will continue usinghave access to and use of the tower space to provide wireless services. The executionCompletion of the reorganization plan will
spin-off
is subject to the fulfillment of conditions that are typical in these type of transactions, as well as the implementation of several previous steps in several of the countries involved in the transaction, including receipt of confirmation from the Mexican Tax Administration Service (
Servicio de Administración Tributaria
) that the
spin-off
and the transactions contemplated thereby, among other things, comply with applicableall requirements under Mexican tax law and regulations so that the
spin-off
and the lawscorporate reorganization arising from it are considered neutral for Mexican tax purposes, and the receipt of eachall necessary approvals in the applicable jurisdiction,countries and will bethe expiration of all legal or statutory waiting periods for its effectiveness in all applicable countries, all of which are outside of our control.
On September 15, 2021, we announced that we entered into an agreement with Cable & Wireless Panama, S.A., an affiliate of Liberty Latin America LTD., to sell 100% of our interest in our subsidiary Claro Panama, S.A. The transaction excludes (i) all telecommunication towers owned indirectly by América Móvil in Panama and (ii) the Claro trademarks. The agreed purchase price is U.S.$200 million on a cash/ debt free basis. The closing of the transaction is subject to customary conditions for this type of transactions, including obtaining required governmental approvals, and we expect closing to occur during the first half of 2022.
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On September 29, 2021, we announced an agreement with Liberty Latin America LTD. to combine our respective Chilean operations, VTR Communicaciones SpA (“VTR”) and Claro Chile, to form a
50-
50 joint venture. The proposed transaction combines the complementary operations of VTR, a leading provider of high-speed consumer fixed products, such as broadband and Pay TV services, where it connects close to 3 million subscribers nationwide, and Claro Chile, one of Chile’s leading telecommunications service providers with over 6.5 million mobile customers. Completion of the transaction is subject to certain customary closing conditions, including obtaining required regulatory approvals. See note 25approvals, and we expect closing to our audited consolidated financial statements.occur during the second half of 2022.

For additional information on our acquisitions and investments, see noteNote 12 to our audited consolidated financial statements included in this annual report.

 

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MARKETING

We advertise our services and products through different channels with consistent and distinct branding and targeted marketing. We advertise via print, radio, television, digital media, sports event sponsorships and other outdoor advertising campaigns. In 2020,2021, our efforts were mainly focused on promoting our 4.5G LTE services, leveraging the speed and quality of our networks and our fixed bundled offers, which compete on broadband speed and premium content.

We build on the strength of our well-recognized brand names to increase consumer awareness and customer loyalty. Building brand recognition is crucial for our business, and we have managed to position our brands as those of a premium carrier in most countries where we operate. According to the 20202021 Brand Finance Telecom 150 report, Claro and Telcel isrank among the top tenfifty strongest brands in the telecom sector which evaluates marketing investment, customer perception, staff satisfaction and corporate reputation.worldwide. Also, in the Brand Finance Latin America report Claro was named the most valuable telecom brand in the Latin America region. BrandZ’s Top 50 Most Valuable Latin American Brands 2020 rankedregion and Telcel amongone of the top five brands in Latin America. In the same year, BrandZ also named Telcel and Claro as two of the highest-ranked telecom brands in Latin America.ten strongest brands. In addition, a
year-end 2020
2021 study by Austrian Brand Monitor found that A1, the brand name behind Telekom Austria AG (“Telekom Austria” or “TKA”), ranked number one in the Austrian telecommunications market for brand awareness, as well as for brand perception as a premium brand.

preference.

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SALES AND DISTRIBUTION

Our extensive sales and distribution channels help us attract new customers and develop new business opportunities. We primarily sell our services and products through a network of retailers and service centers for retail customers and a dedicated sales force for corporate customers, with more than 490,000402,000 points of sale and more than 2,9003,300 customer service centers. Our subsidiaries also sell their services and products online.

CUSTOMER SERVICE

We give priority to providing our customers with quality customer care and support. We focus our efforts on constantly improving our customers’ experience by leveraging our commercial offerings and our sales and distribution networks. Customers may make inquiries by calling a toll-free telephone number, accessing our subsidiaries’ web sites and social media accounts or visiting one of the customer sales and service centers located throughout the countries we serve.

 

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INTRODUCTION

Effects of the
COVID-19
Pandemic

The unprecedented health crisis arising from the spread of the
COVID-19
pandemic has resulted in a severe global economic downturn and has caused significant volatility, uncertainty, and disruption. We are closely monitoringcontinue to monitor the evolution of the
COVID-19
pandemic in the countries where we operate to take preventive measures to ensure the continuity of operations and safeguard the health and safety of our personnel and customers. Based on the information available as of the date of this annual report, below is a summary of the main effects of the COVID-19 pandemic on our business and results of operations:

During most of the year, practically all our region of operations was subject to lockdown2021, there were lockdowns and other measures implemented to control the spread ofCOVID-19. These restrictions disrupted commercial activities, resulted
COVID-19
in our region of operations, resulting in the closure of shops and customer-care centers, and imposedthe imposition of constraints on the mobility of our clients. They also disruptedclients and the disruption of our supply chain for handsets and other equipment. DuringIn order to mitigate the second quartereffects of the year,supply-chain disruption and handset scarcity, we disconnected five million wireless clients, including 4.6 million prepaid clients, thatbegan ordering excess quantities of handsets in each country in which we operate in October, November and December of 2021. Most major smartphone manufacturers were unableable to recharge their accounts, and we were unablerespond to disconnect service for a significant amount of other customers as a result of governmental restrictions prohibiting disconnection dueour increased handset orders.
Our investments in capital expenditures are expected to non-payment during the pandemic. As a result, our uncollectible accounts increased temporarily before stabilizing again at return to
pre-pandemic levels. The impact on prepaid revenues was stronger
levels in countries where prepaid services are more prevalent, including Mexico and the Dominican Republic. The impact of COVID-19 was more limited on our fixed-line platform.2022.

During the second half of the year, the economy recovered throughout most of our regions of operations, with confidence levels increasing in November following the U.S. presidential election and, shortly thereafter, the announcements of the approval of COVID-19 vaccines. Latin American currencies, which had depreciated sharply against the U.S. dollar as the pandemic spread, strengthened notably, with the Mexican, Colombian and Chilean pesos appreciating versus the dollar during the fourth quarter. Other currencies also did well during the fourth quarter, including the euro and the Brazilian real.
Segments

Segments

We have operations in 2524 countries, which are aggregated for financial reporting purposes into ten reportable segments. Our operations in Mexico are presented in two segments—Mexico Wireless and Mexico Fixed, which consist principally of Telcel and Telmex, respectively. Our headquarters operations are allocated to the Mexico Wireless segment. Financial information about our segments is presented in

Note 23 to our audited consolidated financial statements included in this annual report.

The factors that drive our financial performance differ in the various countries where we operate, including subscriber acquisition costs, the competitive landscape, the regulatory environment, economic factors and interconnection rates, among others. Accordingly, our results of operations in each period reflect a combination of these effects on our different segments.

Constant Currency Presentation

Our financial statements are presented in Mexican pesos, but our operations outside Mexico account for a significant portion of our revenues. Currency variations between the Mexican peso and the currencies of our
non-Mexican
subsidiaries, especially the Euro, U.S. dollar, Brazilian real, Colombian and Argentine peso, affect our results of operations as reported in Mexican pesos. In the following discussion regarding our operating results, we include a
discussion of the change in the different components of our revenues between periods at constant exchange rates, i.e., using the same exchange rate to translate the local-currency results of our
non-Mexican
operations for both periods. We believe that this additional information helps investors better understand the performance of our
non-Mexican
operations and their contribution to our consolidated results.

Effects of Exchange Rates

Our results of operations are affected by changes in currency exchange rates. In 20202021 compared to 2019,2020, the Mexican peso was weakerstronger against some of our operating currencies, including the U.S. Dollar and the Euro.

Since most of our debt is issued by América Móvil out of Mexico, to the extent that our functional currency, the Mexican peso, appreciates or depreciates against the currencies in which our indebtedness is denominated, we may incur foreign exchange gains or losses that are recorded as other comprehensive income in our consolidated statements of financial position.

Changes in exchange rates also affect the fair value of derivative financial instruments that we use to manage our currency-risk exposure, which are generally not accounted for as hedging instruments. In 2021, the Mexican peso strengthened against the currencies in which most of our indebtedness is denominated, and we recorded net foreign exchange losses of Ps.17.0 and net fair value losses on derivatives of Ps.6.8. In 2020, the Mexican peso weakened against the currencies in which most of our indebtedness is denominated, and we recorded net foreign exchange losses of Ps.65.4 billion and net fair value gains on derivatives of Ps.12.4 billion. In 2019, the Mexican peso strengthened against the currencies in which most of our indebtedness is denominated, and we recorded net foreign exchange gains of Ps.5.2 billion and net fair value gains on derivatives of Ps.4.4 billion. See Note 7 to our audited consolidated financial statements included in this annual report.

Effects of Regulation

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EFFECTS OF REGULATION

We operate in a regulated industry. Our results of operations and financial condition have been, and will continue to be, affected by regulatory actions and changes. Significant regulatory developments are presented in more detail in “Regulation” under Part VI and “Risk Factors” under Part III of this annual report.

Comparison of Results of Operations Between 20192020 and 2018

2019

Discussions of year-over-year comparisons between 20192020 and 20182019 that are not included in this report can be found in under Part II, Operating and Financial Review and Prospects of our Form
20-F
for the fiscal year ended December 31, 2019.

COMPOSITION OF OPERATING REVENUES

2020 as filed on April 29, 2021.

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Composition of Operating Revenues
In 2020,2021, our total operating revenues were Ps.1,017 billion.

Ps.855.5.

Revenues from wireless and fixed voice services primarily include charges from monthly subscriptions, usage charges billed to customers and usage charges billed to other service providers for calls completed on our network. The primary drivers of revenues from monthly subscription charges are the number of total RGUs and the prices of our service packages. The primary driver of revenues from usage charges (airtime, international and long-distancelong- distance calls and interconnection costs) is traffic, which is represented by the number of total RGUs and their average usage.

Revenues from wireless and fixed data services primarily include charges for data, cloud, internet, and
machine-to-machine,
OTT services and the usage from our data centers.center services. In addition, revenues from value-added services and IT solutions, including revenues from dedicated links and VPN services to our corporate clients, also contribute to our results for wireless and fixed data services, respectively. Revenues from IT solutions to our corporate clients mainly consist of revenues from installing and leasing dedicated links and revenues from VPN services.

Pay TV revenues consist primarily of charges from subscription services, additional programming, including
on-demand
programming and advertising.

Equipment, accessories and computer sales revenues primarily include revenues from the sale of handsets, accessories and other equipment such as office equipment, household appliances and electronics.smart devices. Most of our sales in handsets are driven by the number of new customers and contract renewals.

Other services primarily include revenues from other businesses, such as advertisingsoftware and system development, call center services, entertainment content and news, companies, entertainment content distribution, telephone directories, call

advertising, cybersecurity services, mobile banking and corporate IT solutions.

center services, wireless security services, network infrastructure services and a software development company.

Seasonality of our Business

Our business is subject to a certain degree of seasonality, characterized by a higher number of new customers during the fourth quarter of each year. We believe this seasonality is mainly driven by the Christmas shopping season. Revenue also tends to decrease during the months of August and September, when family expenses shift towards school supplies in many of the countries in which we operate, mainly Mexico.

General Trends Affecting Operating Results

Our results of operations in 20202021 reflected several continuing long-term trends, including:

intense competition, with growing costs for marketing and subscriber acquisition and retention, as well as declining customer prices;

developments in the telecommunications regulatory environment;

growing demand for data services over fixed and wireless networks, as well as for smartphones and devices with data service capabilities;

declining demand for voice services; and

growing
increasing capital expenditures in line with our historical capital expenditure levels after a decrease in capital expenditures in 2020 due to pressures from the
COVID-19
pandemic;
our continued strategic focus on controlling operating costs reflecting, among other things, higherin view of pressures from costs for Pay TV,of customer care, servicesthe growing size and managing largercomplexity of our infrastructure and more complex networks.general price inflation; and

instability in economic conditions caused by political uncertainty, inflation and volatility in financial markets and exchange rates.
These trends are broadly characteristic of our businesses in all regions in recent years, and they have affected comparable telecommunications providers as well. Our performance in recent years has also been affected by ongoing regulatory changes in Mexico.

 

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CONSOLIDATED RESULTS OF OPERATIONS FOR 20202021 AND 2019

2020

Operating Revenues

Total operating revenues for 20202021 increased by 0.9%1.9%, or Ps.9.5Ps.15.8 billion, over 2019.2020. At constant exchange rates, total operating revenues for 2020 decreased2021 increased by 0.4%7.8% over 2019.2020. This decreaseincrease principally reflects a decreasean increase in
one-off
items including the impact of the sale of towers by our subsidiary Telmex and an increase in equipment sales and handset financing revenues, as well aspartially offset by a decrease in Pay TV servicesservice revenues.

SERVICE REVENUES.Revenues services
Service revenues for 20202021 increased by 2.8%0.8%, or Ps.23.5Ps.5.8 billion, over 2019.2020. At constant exchange rates, service revenues services for 20202021 increased by 1.7%6.8% over 2019.2020. This increase principally reflects increases in revenues from our postpaid mobile services, (both prepaid and postpaid), fixed broadband and corporate networks, which were partially offset by a decrease in revenues from our Pay TV services in Brazil.

services.

SALES OF EQUIPMENT, ACCESSORIES AND COMPUTERS.EQUIPMENT.
Sales of equipment accessories and computer sales revenues for 2020 decreased2021 increased by 8.1%7.7%, or Ps.14.0Ps.10.1 billion, over 2019.2020. At constant exchange rates, revenues from sales of equipment accessories and computer salesrevenues for 2020 decreased2021 increased by 10.7%12.8% over 2019.2020. This decreaseincrease principally reflects lowerhigher sales of smartphones, data-enabled devices and accessories.

Operating Costs and Expenses

TOTAL OPERATING COSTS AND EXPENSES.
Total operating costs and expenses for 2021 decreased by 0.9%, or Ps.4.8 billion, over 2020. At constant exchange rates, total operating costs and expenses for 2021 increased by 4.9% over 2020. This increase in operating costs and expenses at constant exchange rates principally reflects increased network maintenance, infrastructure, lease space and electric energy costs and certain
one-off
items, including a
write-off
of certain uncollectible accounts.
COST OF SALES.SALES AND SERVICES.
Cost of sales was Ps.167.5 for 2020, a decrease of 4.0% from Ps.174.5and services increased by 1.8%, or Ps.6.2 billion, in 2019.over 2020. At constant exchange rates, cost of sales and services for 2020 decreased2021 increased by 8.0%7.3% over 2019.2020. This decreaseincrease principally reflects loweran increase in sales of
higher-end
smartphones and handset financing plans.

COST OF SERVICES. Cost of servicesplans as well as increased network maintenance, infrastructure, lease space and electricity costs. This increase, which was Ps.302.9 for 2020, an increase of 1.9% from 297.2 billion in 2019. At constant exchange rates, cost of services for 2020 decreasedalso due to inflationary pressures, was partially offset by 0.1% over 2019. We were able to maintain low cost of services in significant part because of the success of our continued cost savings program.

COMMERCIAL, ADMINISTRATIVE AND GENERAL EXPENSES.
Commercial, administrative and general expenses for 20202021 decreased by 1.8%5.8%, or Ps.3.9Ps.11.1 billion, over 2019.2020. As a percentage of operating revenues, commercial, administrative and general expenses were 20.9%21.1% for 2020,2021, as compared to 21.4%
22.9% for 2019.2020. At constant exchange rates, commercial, administrative and general expenses for 2020 decreased2021 increased by 2.7%0.7% over 2019.2020. This decreaseincrease principally reflects the success one-off items, including a
write-off
of certain uncollectible accounts, which decreased our corporate cost savings program and better allocationbalance of marketing, advertising, and sales resources, and an increase in the proportion of online sales as compared to sales in physical stores due to COVID-19 restrictions.

expenditures.

OTHER EXPENSES.
Other expenses for 2020 decreased2021 increased by Ps.1.1Ps.0.1 billion over 2019.

2020.

DEPRECIATION AND AMORTIZATION.
Depreciation and amortization for 2020 increased2021 decreased by 3.4%0.03%, or Ps.5.3Ps.0.1 billion, over 2019.2020. As a percentage of operating revenues, depreciation and amortization was 16.2%were 19.0% for 2020,2021, as compared to 15.8%19.4% for 2019.2020. At constant exchange rates, depreciation and amortization for 20202021 increased by 2.1%8.5% over 2019.2020. This increase principally reflects depreciation and amortization expenses resulting from the revaluation of Nextel Telecomunicações Ltda. And its subsidiaries (“Nextel Brazil”) in 2020,the passive infrastructure of the telecommunications towers, which were not incurred in 2019 before our acquisitionbecame effective as of Nextel Brazil.

December 31, 2020.

Operating Income

Operating income for 20202021 increased by 6.8%14.2%, or Ps.10.5Ps.20.6 billion, over 2019.2020. Operating margin (operating income as a percentage of operating revenues) was 16.3%19.4% for 2020,2021, as compared to 15.4%17.3% for 2019.

2020.

Non-Operating
Items

NET INTEREST EXPENSE.
Net interest expense (interest expense less interest income) for 2020 increased2021 decreased by 6.2%4.2%, or Ps.2.0Ps.1.4 billion, over 2019.2020. This increasedecrease principally reflects an increasea decrease in interest expense on lease liabilities and a decrease in interest income in Brazil.

on debt.

FOREIGN CURRENCY EXCHANGE LOSSES,
NET.We recorded a net foreign currency exchange lossesloss of Ps.65.4Ps.17.0 billion for 2020,2021, compared to our net foreign currency exchange gainloss of Ps.5.2Ps.65.4 billion for 2019.2020. The loss principally reflects the appreciation of some of the currencies in which our indebtedness is denominated, particularly the Euroeuro and the Dollar.

U.S. dollar.

VALUATION OF DERIVATIVES, INTEREST COST FROM LABOR OBLIGATIONS AND OTHER FINANCIAL ITEMS, NET.NET.
We recorded a net gainloss of Ps.1.3Ps.14.3 billion for 20202021 on the valuation of derivatives, interest cost from labor obligations and other financial items, net, compared to a net lossgain of Ps.7.1Ps.1.3 billion for 2019.2020. The change in 20202021 principally reflects a gainloss on hedging instruments as a result of the appreciationdepreciation of some of the currencies in which our indedebtednessindebtedness is denominated. See Note 22 to our audited consolidated financial statements included in this annual report.

INCOME TAX.
Our income tax expense related to continuing operations for 2020 decreased2021 increased by 67.9%108.3%, or Ps.34.7Ps.14.6 billion, over 2019.2020. This decreaseincrease principally reflects lowerhigher profit before income tax due to a decrease in our net foreign currency exchange loss of Ps.48.3 billion compared to 2020.
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Our income tax expense related to discontinued operations for 2021 resulted from the sale of 100% of our ownership in 2020.

TracFone as described above.

Our effective corporate income tax rate as a percentage of profit before income tax was 22.5% for 2021, compared to 24.3% for 2020, compared to 42.1% for 2019.2020. This rate differed from the Mexican statutory rate of 30%30.0% and changed year over year principally as a

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resultdue to our discontinued operations, local tax inflation effects and registry of the reversal of certainbenefits related to tax expenseslosses credits in Brazil and Chile and impairment related to subsidiaries in Europe, which lowered our income tax expense and our effective corporate income tax for 2020.

2021.

Net Profit

We recorded a net profit of our continuing operations of Ps.74.6 billion for 2021, an increase of 119.2%, or Ps.40.6 billion over 2020.
The net profit obtained through both the operation of TracFone until its sale on November 23, 2021 and the sale itself is classified as net profit for the period discontinued, which totaled Ps.121.7 billion in 2021. Together with the net income of our continuing operations, in 2021, we recorded a net profit of Ps.196.3 billion, compared to Ps.51.0 billion for 2020, a decrease of 27.4%, or Ps.19.3 billion, over 2019.

in 2020.

SEGMENT RESULTS OF OPERATIONS

We discuss below the operating results of each reportable segment. Notes 2. z) and 23 to our audited consolidated financial statements describe how we translate the financial statements of our
non-Mexican
subsidiaries. Exchange rate changes between the Mexican peso and the currencies in which our subsidiaries operate affect our reported results in Mexican pesos and the comparability of reported results between periods.

The following table sets forth the exchange rates used to translate the results of our significant non-Mexicannon Mexican operations, as expressed in Mexican pesos per foreign currency unit, and the change from the rate used in the prior period indicated. The U.S. dollar is our functional currency in several of the countries or territories in which we operate, in addition to the United States, including Ecuador, Puerto Rico, Panama and El Salvador.

  MEXICAN PESOS PER FOREIGN CURRENCY

  UNIT (AVERAGE FOR THE PERIOD)

 

 

  

2019

  

2019/2020
% CHANGE

  

2020

  Brazilian real

  

4.8907

  

(14.4)

  

4.1850

  Colombian peso

  

0.0059

  

0.00

  

0.0058

  Argentine peso

  

0.4110

  

(25.3)

  

0.3070

  U.S. dollar

  

19.2641

  

11.5

  

21.4859

  Euro

  

21.5642

  

13.7

  

24.5080

  MEXICAN PESOS PER FOREIGN CURRENCY UNIT (AVERAGE FOR THE
  PERIOD) FOR THE YEARS ENDED DECEMBER 31,
 
   
2020
   
2021
   
% CHANGE
 
  Brazilian real
   4.1850    3.7625    (10.1) 
  Colombian peso
   0.0058    0.0054    (7.1) 
  Argentine peso
   0.3070    0.2137    (30.4) 
  U.S. dollar
   21.4859    20.2768    (5.6) 
  Euro
   24.5080    23.9834    (2.1) 
The tables below set forth operating revenues and operating income for each of our segments for the years indicated.

 

 

 

YEAR ENDED DECEMBER 31, 2020               

 
 

 

 

OPERATING REVENUES

  

OPERATING INCOME

 
 

 

 

(in millions of
Mexican pesos)

  

(as a% of to-
tal operating
revenues)

  

(in millions of
Mexican pesos)

  

(as a% of
total operat-
ing income)

 

Mexico Wireless

 Ps.232,242   22.8%  Ps.70,852     42.8% 

Mexico Fixed

 

 

91,589

 

 

 

9.0

 

 

 

11,204  

 

 

 

6.8

 

Brazil

 

 

168,073

 

 

 

16.5

 

 

 

25,204  

 

 

 

15.2

 

Colombia

 

 

77,635

 

 

 

7.6

 

 

 

15,112  

 

 

 

9.1

 

Southern Cone

 

 

56,705

 

 

 

5.6

 

 

 

1,877  

 

 

 

1.1

 

Andean Region

 

 

53,935

 

 

 

5.3

 

 

 

8,699  

 

 

 

5.3

 

Central America

  48,195   4.7   4,005     2.4 

United States

 

 

177,179

 

 

 

17.4

 

 

 

10,579  

 

 

 

6.4

 

Caribbean

 

 

38,624

 

 

 

3.8

 

 

 

6,701  

 

 

 

4.1

 

Europe

 

 

111,472

 

 

 

11.0

 

 

 

13,160  

 

 

 

8.0

 

Eliminations

 

Ps.

(38,762)

 

 

 

(3.7)

 

 

 

(2,038)  

 

 

 

(1.1)

 

Total

 

Ps.

 1,016,887

 

 

 

100%

 

 

Ps.

  165,355  

 

 

 

100%

 

 

 

 

YEAR ENDED DECEMBER 31, 2019               

 
 

 

 

OPERATING REVENUES

  

OPERATING INCOME

 
 

 

 

(in millions of
Mexican pesos)

  

(as a% of to-
tal operating
revenues)

  

(in millions of
Mexican pesos)

  

(as a% of
total operat-
ing income)

 

Mexico Wireless

 Ps.237,840   23.6%  Ps.67,694     43.7% 

Mexico Fixed

 

 

96,037

 

 

 

9.5

 

 

 

9,732  

 

 

 

6.3

 

Brazil

 

 

181,778

 

 

 

18.0

 

 

 

28,847  

 

 

 

18.6

 

Colombia

 

 

74,636

 

 

 

7.4

 

 

 

15,325  

 

 

 

9.9

 

Southern Cone

 

 

65,272

 

 

 

6.5

 

 

 

4,008  

 

 

 

2.6

 

Andean Region

 

 

55,533

 

 

 

5.5

 

 

 

8,023  

 

 

 

5.2

 

Central America

  46,734   4.6   5,712     3.7 

United States

 

 

155,864

 

 

 

15.5

 

 

 

2,968  

 

 

 

1.9

 

Caribbean

 

 

35,718

 

 

 

3.5

 

 

 

5,741  

 

 

 

3.7

 

Europe

 

 

98,420

 

 

 

9.8

 

 

 

8,688  

 

 

 

5.6

 

Eliminations

 

 

(40,484)

 

 

 

(3.9)

 

 

 

(1,897)  

 

 

 

(1.2)

 

Total

 

Ps.

 1,007,348

 

 

 

100%

 

 

Ps.

  154,841  

 

 

 

100%

 

 

27

 
 
 
YEAR ENDED DECEMBER 31, 2021               
 
 
 
 
OPERATING REVENUES
  
OPERATING INCOME  
 
  (in millions of
Mexican pesos)		  
(as a% of to-
tal operating
revenues)
  (in millions of
Mexican pesos)  		  (as a% of
total operat-
ing income)		 
Mexico Wireless
 Ps.243,261   28.4%  Ps.77,784     46.8% 
Mexico Fixed
  102,427   12.0   21,100     12.7 
Brazil
  152,774   17.9   21,867     13.2 
Colombia
  79,673   9.3   15,165     9.1 
Southern Cone
  62,359   7.3   2,145     1.3 
Andean Region
  52,962   6.2   7,458     4.5 
Central America
  48,567   5.7   8,217     4.9 
Caribbean
  39,929   4.7   8,661     5.2 
Europe
  113,838   13.3   13,421     8.1 
Eliminations
  (40,255)   (4.7)   (9,685)     (5.8) 
Total
 
Ps.
   855,535
 
 
 
100.0%
 
 
Ps.
    166,133  
 
 
 
100.0%
 

 
 
 
YEAR ENDED DECEMBER 31, 2020               
 
 
 
 
OPERATING REVENUES
  
OPERATING INCOME  
 
  (in millions of
Mexican pesos)		  
(as a% of to-
tal operating
revenues)
  (in millions of
Mexican pesos)		  (as a% of
total operat-
ing income)		 
Mexico Wireless
 Ps.    232,242   27.7%  Ps.  70,852     48.7% 
Mexico Fixed
  91,589   10.9   11,204     7.7 
Brazil
  168,073   20.0   25,204     17.3 
Colombia
  77,635   9.2   15,112     10.4 
Southern Cone
  56,705   6.8   1,877     1.3 
Andean Region
  53,935   6.4   8,699     6.0 
Central America
  48,195   5.7   4,005     2.8 
Caribbean
  38,624   4.6   6,701     4.6 
Europe
  111,472   13.3   13,160     9.0 
Eliminations
  (38,763)   (4.6)   (11,311)     (7.8) 
Total
 
Ps.
    839,707
 
 
 
100%
 
 
Ps.
  145,503  
 
 
 
100%
 
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INTERPERIOD SEGMENT COMPARISONS

Interperiod Segment Comparaions
The following discussion addresses the financial performance of each of our reportable segments by comparing results for 20202021 and 2019.2020. In the
year-to-year
comparisons for each segment, we include percentage changes in operating revenues, percentage changes in operating income and operating margin (operating income as a percentage of operating revenues), in each case calculated based on the segment financial information presented in Note 23 to our audited consolidated financial statements, which is prepared in accordance with IFRS.

Each reportable segment includes all income, cost and expense eliminations that occurred between subsidiaries within the reportable segment. The Mexico Wireless segment also includes corporate income, costs and expenses.

Comparisons in the following discussion are calculated using figures in Mexican pesos. We also include percentage changes in adjusted segment operating revenues, adjusted segment operating income and adjusted operating margin (adjusted operating income as a percentage of adjusted operating revenues). The adjustments eliminate (i) certain intersegment transactions, (ii) for our non-Mexicannon Mexican segments, the effects of exchange rate changes and (iii) for the Mexican Wireless segment only, revenues and costs of group corporate activities and other businesses that are allocated to the Mexico Wireless segment.

Discussions of year-over-year comparisons between 20192020 and 20182019 that are not included in this report can be found under Part II, Operating and Financial Review and Prospects of our Form
20-F
for the fiscal year ended December 31, 2019.

2020 COMPARED TO 2019

as filed on April 29, 2021.

2021 Compared to 2020
Mexico Wireless

The number of prepaid wireless subscribers for 20202021 increased by 1.1%4.3% over 2019,2020, and the number of postpaid wireless subscribers increased by 1.3%0.1%, resulting in an increase in the total number of wireless subscribers in Mexico of 1.1%3.5%, or 871 thousand,2.7 million, to approximately 77.880.5 million as of December 31, 2020.

2021.

Segment operating revenues for 2020 decreased2021 increased by 2.4%4.7% over 2019.2020. Adjusted segment operating revenues for 2020 decreased2021 increased by 2.4%5.0% over 2019.2020. This decreaseincrease in segment operating revenues principally reflects a decreasean increase in prepaid, postpaid and equipment sales and handset financing plans.

Segment operating income for 20202021 increased by 4.7%9.8% over 2019.2020. Adjusted segment operating income for 2020 increased by 1.8%11.9% over 2019.

2020.

Segment operating margin was 30.5%32.0% in 2020,2021, as compared to 28.5%30.5% in 2019.2020. Adjusted segment operating margin for this segment was 36.7%39.1% in 2020,2021, as compared to 35.1%36.7% in 2019.2020. This increase in segment operating margin for 20202021 principally reflects the success of our corporate cost savings program in operations, and loweroptimization in networks and maintenance costs, which we successfully continue to implement without affecting the quality of our services and coverage.

Mexico Fixed

The number of fixed voice RGUs in Mexico for 20202021 decreased by 3.1%4.6% over 2019,2020, and the number of broadband RGUs in Mexico increased by 3.3%0.3%, resulting in a decrease in total fixed RGUs in Mexico of 0.3%2.4% over 2019,2020, or 67517 thousand, to approximately 21.921.4 million as of December 31, 2020.

2021.

Segment operating revenues for 2020 decreased2021 increased by 4.6%11.8% over 2019.2020. Adjusted segment operating revenues for 2020 decreased2021 increased by 7.4%11.9% over 2019.2020. This decreaseincrease in segment operating revenues principally reflects an increase in corporate networks services by 2.8% and broadband by 3.2%, which was partially offset by a decrease in fixed voice revenues of 4.9% and corporate networks services by 0.6%, which was partially offset by higher revenues from broadband.

2.6%.

Segment operating income for 20202021 increased by 15.1%88.3% over 2019.2020. Adjusted segment operating income for 2020 decreased2021 increased by 33.6%298.2% over 2019.2020. This decreaseincrease principally reflects a decreasean increase in services provided and
one-off
revenue due to the sale of towers, partially set off by increases in the contractual salary of our employees and higher information technology and customer service costs.

Segment operating margin was 12.2%20.6% in 2020,2021, as compared to 10.1%12.2% in 2019.2020. Adjusted segment operating margin was 1.8%10.6% in 2020,2021, as compared to 2.5%3.0% in 2019.2020. The decreaseincrease in segment operating margin for 20202021 principally reflects reductionsan increase in equipment sales and lower revenues from voice services, partially offset by a decrease in segment depreciation expenses.

Brazil

The number of prepaid wireless subscribers for 20202021 increased by 1.9%6.0% over 2019,2020, and the number of postpaid wireless subscribers increased by 29.6%16.2%, resulting in an increase in the total number of wireless subscribers in Brazil of 15.9%11.7%, or 8.67.4 million, to approximately 6370.5 million as of December 31, 2020.2021. The increase in the number of postpaid wireless subscribers is due primarily to commercial efforts aimed at converting prepaid subscribers to postpaid subscribers and additional subscribers as a result of the Nextel Brazil’s acquisition.subscribers. The number of fixed voice RGUs for 20202021 decreased by 8.4%5.7% over 2019,2020, the number of broadband RGUs increaseddecreased by 2.8%1.2%, and the number of Pay TV RGUs decreased by 5.6%5.3%, resulting in a decrease in total fixed RGUs in Brazil of 4.1%4.2%, or 1.4 million, to approximately 32.631.3 million as of December 31, 2020.

2021.
 

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Segment operating revenues for 20202021 decreased by 7.5%9.1% over 2019.2020. Adjusted segment operating revenues for 20202021 increased by 1.6%0.9% over 2019.2020. This increase in adjusted segment operating revenues principally reflects higher mobile data and fixed data revenues in 20202021 over 2019.2020. The increase in mobile data revenues in 20202021 principally reflects the increased usage of social networking platforms, cloud services and other content, and fixed data revenues increased principally due to an increase in broadband RGUs,revenues, which were, in each case, partially offset by a decrease in Pay TV revenues.

Segment operating income for 20202021 decreased by 12.6%13.2% over 2019.2020. Adjusted segment operating income for 2020 decreased2021 increased by 0.5%4.5% over 2019.

2020.

Segment operating margin was 15.0%14.3% in 2020,2021, as compared to 15.9%15.0% in 2019.2020. Adjusted segment operating margin was 14.1%14.6% in 2020,2021, as compared to 15.1%14.1% in 2019.2020. This decreaseincrease in adjusted segment operating margin for 20202021 principally reflects a higher amortizationan increase in doubtful accounts allowances and depreciation expense as a resultoptimization of changes to the useful life of certain assets in Brazil, partially offset by improved cost managementcall centers, mainly as a result of our cost savings program.

Colombia

The number of prepaid wireless subscribers for 20202021 increased by 6.3%4.2% over 2019,2020, and the number of postpaid wireless subscribers increased by 5.6%12.7%, resulting in an increase in the total number of wireless subscribers in Colombia of 6.1%6.2%, or 1.92.0 million, to approximately 33.035.1 million as of December 31, 2020.2021. The number of fixed voice RGUs for 20202021 increased by 7.9%8.5% over 2019,2020, the number of broadband RGUs increased by 14.3%6.4% and the number of Pay TV RGUs increased by 5.2%5.5%, resulting in an increase in total fixed RGUs in Colombia of 9.3%6.7%, or 705558 thousand, to approximately 8.38.9 million as of December 31, 2020.

2021.

Segment operating revenues for 20202021 increased by 4.0%2.6% over 2019.2020. Adjusted segment operating revenues for 20202021 increased by 5.1%10.0% over 2019.2020. This increase in segment operating revenues principally reflects increases in fixed data revenues, mobile data revenues, both in prepaid and postpaid mobile data, and Pay TV revenues. The increase in segment operating revenues was partially offset by a decrease in long distance revenues.

Segment operating income for 2020 decreased2021 increased by 1.4%0.4% over 2019.2020. Adjusted segment operating income for 20202021 increased by 1.4%16.2% over 2019.

2020.

Segment operating margin was 19.5%19.0% in 2020,2021, as compared to 20.5%19.5% in 2019.2020. Adjusted segment operating margin was 24.7%26.1% in 2020,2021, as compared to 25.6%24.7% in 2019.2020. This decrease

increase is due to an increase in amortization expenses caused by increased investments in spectrum and submarine cables.

Southern Cone - Argentina, Chile, Paraguay and Uruguay

The number of prepaid wireless subscribers for 2020 decreased2021 increased by 5.1%9.0% over 2019,2020, and the number of postpaid wireless subscribers increased by 1.6%8.1%, resulting in a decreasean increase in the total number of wireless subscribers in our Southern Cone segment of 2.7%8.7%, or 838 thousand,2.7 million, to approximately 30.633.3 million as of December 31, 2020.2021. The number of fixed voice RGUs for 20202021 increased by 17.4%22.7% over 2019,2020, the number of broadband RGUs increased by 29.8%23.4%, and the number of Pay TV RGUs decreasedincreased by 6.3%6.6%, resulting in an increase in total fixed RGUs in our Southern Cone segment of 12.8%18.1%, or 322513 thousand, to approximately 2.83.3 million as of December 31, 2020.

2021.

Segment operating revenues for 2020 decreased2021 increased by 13.1%10.0% over 2019.2020. Adjusted segment operating revenues for 20202021 decreased by 8.3%1.6% over 2019.2020. This decrease principally reflects a decrease in adjusted operating revenues in Argentina Paraguay and Uruguay.Paraguay. In Argentina, we experienced a decrease in revenues from prepaid and postpaid wireless voice and corporate networks, and fixed voice, which were attributable to adverse economic conditions and which were partially offset by an increase in broadband.broadband, fixed voice and Pay TV. In Chile, we experienced a declinean increase in wireless service revenues due to competitive pressures.postpaid and Pay TV revenues. For this segment, we analyze results in Argentina, Paraguay and Uruguay in terms of the Argentine peso, because Argentina accounts for the major portion of the operations in these three countries.

Segment operating income for 2020 decreased2021 increased by 53.2%14.3% over 2019.2020. Adjusted segment operating income for 2020 decreased2021 increased by 16.8%1.3% over 2019.

2020.

Segment operating margin was 3.3%3.4% in 2020,2021, as compared to 6.1%3.3% in 2019.2020. Adjusted segment operating margin was 17.4% in 2021, as compared to 15.7% in 2020, which decreased in comparison to 18.5% in 2019.2020. This decreaseincrease in the segment operating margin for 20202021 principally reflects a decrease in revenues, as described above, coupled with an increasea decrease in costs and expenses, including as a result of inflation or exchange rates.

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Andean Region - Ecuador and Peru

The number of prepaid wireless subscribers for 2020 decreased2021 increased by 4.7%7.3% over 2019,2020, and the number of postpaid wireless subscribers decreasedincreased by 8.9%15.7%, resulting in a decreasean increase in the total number of wireless subscribers in our Andean Region segment of 6.1%10.0%, or 1.21.9 million, to approximately 18.921.0 million as of December 31, 2020.2021. The number of fixed voice RGUs for 2020 decreased2021 increased by 4.4%13.6% over 2019,2020, the number of broadband RGUs increased by 21.9%

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15.6% and the number of Pay TV RGUs decreasedincreased by 13.6 %,4.0%, resulting in an increase in total fixed RGUs in our Andean Region segment of 5.3%13.2%, or 109286 thousand, to approximately 2.12.5 million as of December 31, 2020.

2021.

Segment operating revenues for 20202021 decreased by 2.9%1.8% over 2019.2020. Adjusted segment operating revenues for 2020 decreased2021 increased by 9.8%11.0% over 2019.2020. This decreaseincrease principally reflects an increase in revenues in Peru, partially offset by a decrease in Ecuador. The increase in revenues in Ecuador, partially offset byPeru reflects an increase in Peru.revenues from prepaid and postpaid wireless, broadband, corporate networks, fixed voice and Pay TV services. The decrease in revenues in Ecuador reflects a decrease in revenues from prepaid and postpaid wireless and Pay TV services, partially offset by a slight increase in revenues from fixed voice services. In Peru, fixed service revenues increased, and they were partially offset by lower revenues on postpaid mobile services.

mobile.

Segment operating income for 2020 increased2021 decreased by 8.4%14.3% over 2019.2020. Adjusted segment operating income for 2020 decreased2021 increased by 2.9%17.1% over 2019.2020. This decreaseincrease principally reflects an operating income increase of 40.0%55.9% in Peru andpartially offset by a decrease of 21.0%10.2% in Ecuador.

Segment operating margin was 16.1%14.1% in 2020,2021, as compared to 14.4%16.1% in 2019.2020. Adjusted segment operating margin was 18.4%19.6% in 2020,2021, as compared to 17.1%18.4% in 2019.2020. This increase in the segment operating margin for 20202021 principally reflects a recovery in Peru, and reduced costs as a result of our cost savings program, partially offset by a decrease in operating income in Ecuador.

Central America—America - Guatemala, El Salvador, Honduras, Nicaragua, Panama and Costa Rica

The number of prepaid wireless subscribers for 2020 decreased2021 increase by 1.5%10.7% over 2019,2020, and the number of postpaid wireless subscribers decreasedincreased by 9.7%4.4%, resulting in a decreasean increase in the total number of wireless subscribers in our Central America segment of 2.9%9.7%, or 444 thousand,1.5 million, to approximately 1516.5 million as of December 31, 2020.2021. The number of fixed voice RGUs for 20202021 decreased by 8.0%2.1% over 2019,2020, the number of broadband RGUs increased by 5.3%7.1%, and the number of Pay TV RGUs decreasedincreased by 5.1%10.6%, resulting in a decreasean increase in total fixed RGUs in our Central America segment of 3.7%3.9%, or 162165 thousand, to approximately 4.24.4 million as of December 31, 2020.

2021.

Segment operating revenues for 20202021 increased by 3.1%0.8% over 2019.2020. Adjusted segment operating revenues for 2020 decreased2021 increased by 7.8%6.5% over 2019.

2020.

Segment operating income for 2020 decreased2021 increased by 29.9%105.2% over 2019.2020. Adjusted segment operating income for 2020 decreased2021 increased by 32.7%102.2% over 2019.

2020. This increase in segment operating income for 2021 principally reflects a decrease in depreciation expenses as a result of the exhaustion of the useful life of certain assets in Guatemala in 2021 and the recognition of asset impairment in Panama and Honduras in the prior year, which was not recognized in 2021.

Segment operating margin was 8.3%16.9% in 2020,2021, as compared to 12.2%8.3% in 2019.2020. Adjusted segment operating margin was 10.1%19.1% in 2020,2021, as compared to 13.7%10.1% in 2019.2020. This decreaseincrease in segment operating margin for 20202021 principally reflects a decreasean increase in income, particularly in Panama, partially offset by the cost savings program that continues to be implemented in the operating segment.

El Salvador, Honduras, Guatemala, Nicaragua and Costa Rica.

Caribbean - The Dominican Republic & Puerto Rico

The number of prepaid wireless subscribers for 20202021 increased by 3.3%12.1% over 2019,2020, and the number of postpaid wireless subscribers increased by 1.8%3.3%, resulting in an increase in the total number of wireless subscribers in our Caribbean segment of 2.9%9.3%, or 178600 thousand, to approximately 6.47.0 million as of December 31, 2020.2021. The number of fixed voice RGUs for 20202021 decreased by 2.5%1.2% over 2019,2020, the number of broadband RGUs increased by 6.1%4.6% and the number of Pay TV RGUs increased by 2.4%5.3%, resulting in an increase in total fixed RGUs in our Caribbean segment of 1.2%1.9%, or 3050 thousand, to approximately 2.52.6 million as of December 31, 2020.

2021.

Segment operating revenues for 20202021 increased by 8.1%3.4% over 2019.2020. Adjusted segment operating revenues for 2020 decreased2021 increased by 3.3%7.5% over 2019.2020. This decreaseincrease in segment operating revenues principally reflects exchange rate losses in the Dominican Republic, partially offset by an increase in operating revenues in Puerto Rico.Rico and the Dominican Republic. We analyze segment results in U.S. dollars because it is the functional currency of our operations in Puerto Rico.

Segment operating income for 20202021 increased by 16.7%29.2% over 2019.2020. Adjusted segment operating income for 20202021 increased by 2.8%32.4% over 2019.2020. This increase principally reflects an increase of 29.7%34.3% in Puerto Rico and an increase of 6.2%22.4% in the Dominican Republic.

Segment operating margin was 17.3%21.7% in 2020,2021, as compared to 16.1%17.3% in 2019.2020. Adjusted segment operating margin was 14.9%18.4% in 2020,2021, as compared to 14.1%14.9% in 2019.2020. This increase in segment operating margin for 20202021 principally reflects an increase in service revenues in Puerto Rico all revenuesin postpaid and Pay TV and in the Dominican Republic, in broadband and fixed data services, and the effects of the cost savings program, partially offset by the depreciation of the Dominican Peso.

United States

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Europe
The number of prepaid wireless subscribers for 20202021 decreased by 0.9%4.1% over 2019, or 194 thousand, to approximately 20.6 million total wireless subscribers in the United States as of December 31, 2020.

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Segment operating revenues for 2020, increased by 13.7% over 2019. Adjusted segment operating revenues for 2020 increased by 1.9% over 2019. This increase in segment operating revenues principally reflects higher mobile voice and data usage as the mix of clients continues to shift towards to our high-usage Tracfone brands.

Segment operating income for 2020 increased by 256.4% over 2019. Adjusted segment operating income for 2020 increased by 58.6% over 2019.

Segment operating margin was 6.0% in 2020, as compared to 1.9% in 2019. Adjusted segment operating margin was 11.0% in 2020, as compared to 7.1% in 2019. This increase in segment operating margin for 2020 principally reflects better controls over commercial, operational and administrative costs.

Europe

The number of prepaid wireless subscribers for 2020 decreased by 6.7% over 2019, and the number of postpaid wireless subscribers increased by 5.1%6.0%, resulting in an increase in the total number of wireless subscribers in our Europe segment of 2.7%4.1%, or 568901 thousand, to approximately 21.922.8 million as of December 31, 2020.2021. The number of fixed voice RGUs for 20202021 decreased by 5.4%1.7% over 2019,2020, the number of broadband RGUs increased by 0.4%1.8% and the number of Pay TV RGUs almost remained the same,increased by 1.1%, resulting in a decreasean increase in total fixed RGUs in our Europe segment of 1.5%0.5%, or 9331 thousand, to approximately 6.06.1 million as of December 31, 2020.

2021.

Segment operating revenues for 20202021 increased by 13.3%2.1% over 2019.2020. Adjusted segment operating revenues for 2020 decreased2021 increased by 0.3%4.4% over 2019.2020. This decreaseincrease in segment operating revenues principally reflects a decrease in mobile voice, partially offset by an increase in fixedmobile services.

Segment operating income for 20202021 increased by 51.5%2.0% over 2019.2020. Adjusted segment operating income for 20202021 increased by 32.2%21.5% over 2019.2020. Segment operating margin was 11.8% in 2020,2021, the same as compared to 8.8% in 2019.2020. Adjusted segment operating margin was 11.7%13.6% in 2020,2021, as compared to 8.8%11.7% in 2019.2020. This increase in adjusted segment operating margin for 20202021 principally reflects our corporate cost savings program in all countries and improved performance in some countries.

all the countries in our Europe segment.

 

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FUNDING REQUIREMENTS

We generate substantial cash flows from our operations. On a consolidated basis, our cash flows from operating activities were Ps.258.2 billion in 2021, compared to Ps.280.8 billion in 2020, compared to Ps.234.3 billion in 2019.2020. Our cash and cash equivalents amounted to Ps.38.7 billion at December 31, 2021, compared to Ps.35.9 billion at December 31, 2020, compared to Ps.19.7 billion at December 31, 2019.2020. We believe our working capital is sufficient for our present requirements, and we anticipate generating sufficient cash to satisfy our long-term liquidity needs.
We use the cash that we generate from our operations and from borrowings principally for the following purposes:

•Capital expenditures -We make substantial capital expenditures to continue expanding and improving our networks in each country in which we operate. Our capital expenditures on plant, property and equipment and acquisition or renewal of licenses were Ps.129.6 billion in 2020, Ps.151.8 billion in 2019 and Ps.151.8 billion in 2018. The amount of capital expenditures can vary significantly from year to year, depending on acquisition opportunities, concession renewal schedules and the need for more spectrum. We have budgeted capital expenditures for 2021 of approximately U.S.$7.5 billion (Ps.152.1 billion), which will be primarily funded by our operating activities. That amount is subject to change as we continue to evaluate our capital expenditure needs and opportunities in light of the ongoing COVID-19 outbreak.

•Acquisitions -In December 2020, we entered into an agreement to acquire 32% of Oi Group’s Brazilian mobile business for R$3.6 billion. The completion of the acquisition is subject to certain customary conditions, including regulatory approval.

•Short-term debt and contractual obligations -We must pay interest on our indebtedness and repay principal when due. As of December 31, 2020, we had approximately Ps.247.6 billion in debt and contractual obligations due in 2021, including approximately Ps.148.1 billion of principal and amortization, Ps.25.1 billion in short-term lease debt, and Ps.74.4 billion in purchase obligations.

Capital expenditures -
We make substantial capital expenditures to continue expanding and improving our networks in each country in which we operate. Our capital expenditures on plant, property and equipment and acquisition or renewal of licenses were Ps.158.1 billion in 2021, Ps.129.6 billion in 2020 and Ps.151.8 billion in 2019. The amount of capital expenditures can vary significantly from year to year, depending on acquisition opportunities, concession renewal schedules and the need for more spectrum. We have budgeted capital expenditures for 2022 of approximately U.S.$8.7 billion (Ps.180.8 billion), which will be primarily funded by our operating activities. We reduced our capital expenditures in 2020 principally due to difficulties in obtaining certain supplies, services and equipment during the
COVID-19
outbreak. Our capital expenditures for 2021 and our budgeted capital expenditures for 2022 are in line with our historical capital expenditure levels.
Acquisitions -
In December 2021, we entered into an agreement to acquire approximately 32% of Oi Group’s Brazilian mobile subscribers for R$3.6 billion. This transaction closed on April 20, 2022.
Short-term debt and contractual obligations -
We must pay interest on our indebtedness and repay principal when due. As of December 31, 2021, we had approximately Ps.180.6 billion in debt and contractual obligations due in 2022, including approximately Ps.145.2 billion of principal and amortization, Ps.27.6 billion in short-term lease debt, and Ps.7.8 billion in purchase obligations.
Long-term debt and contractual obligations -
As of December 31, 2020,2021, we had approximately Ps.267.1Ps.165.3 billion in debt and contractual obligations due between 20222023 and 2024,2025, including approximately Ps.169.4Ps.109.9 billion of principal and amortization, Ps.58.1Ps.46.4 billion in long-term lease debt,
 

and Ps.39.6Ps.9.0 billion in purchase obligations. On the same date, we had approximately Ps.350.6Ps.73.5 billion in debt and contractual obligations due between 20252026 and 2026,2027, including approximately Ps.310.9Ps.54.9 billion of principal and amortization, Ps.26.1Ps.13.0 billion in long-term lease debt, and Ps.13.6Ps.5.5 billion in purchase obligations.

•Dividends -We pay regular dividends. We paid Ps.9.6 On the same date, we had approximately Ps.277.2 billion in dividends in 2020debt and Ps.24.2contractual obligations due after 2027, including approximately Ps.254 billion of principal and amortization, Ps.11.6 billion in 2019. Our shareholders approved on April [26], 2021 the payment of a Ps.0.40 ordinary dividend per sharelong-term lease debt, and Ps.11.7 billion in two installments in 2021.purchase obligations.
Dividends -
We pay regular dividends. We paid Ps.27.8 billion in dividends in 2021 and Ps.9.6 billion in 2020. Our shareholders approved on April 20, 2022 the payment of a Ps. 0.44 ordinary dividend per share in one installment in 2022. See “Share Ownership and Trading—Dividends” under Part IV in this annual report.

•Share repurchases -We regularly repurchase our own shares. We spent Ps.5,241.3 million repurchasing our own shares in the open market in 2020 and Ps.429.8 million in 2019. Our shareholders have authorized additional amounts to repurchase, and as of March 31, 2021, we have spent Ps.4,538.8 million repurchasing our shares in the open market in 2021, but whether we will continue to do so will depend on our operating cash flow and on various other considerations, including market prices and our other capital requirements.

Other than the amounts described above, we had no other outstanding material purchase commitments as of December 31, 2020. We enter into a number of supply, advertising and other contracts in the ordinary course of business, but those contracts are not material to our liquidity. The obligations described above do not include accounts payable, pension liabilities, interest payments or payments under derivatives contracts. See notes 14, 15 and 17 to our audited consolidated financial statements included in this annual report.

Share repurchases -
We regularly repurchase our own shares. We spent Ps.36.8 billion repurchasing our own shares in the open market in 2021 and Ps.5.2 billion in 2020. Our shareholders have authorized additional amounts to repurchase, and as of March 31, 2022, we have spent Ps.9.2 billion repurchasing our shares in the open market in 2022, but whether we will continue to do so will depend on our operating cash flow and on various other considerations, including market prices and our other capital requirements.
BORROWINGS

In addition to cash flows generated from operations, we rely on a combination of borrowings from a range of different sources, including the international capital markets, capital markets in Mexico and other countries where we operate, international and local banks, equipment suppliers and export credit agencies. We seek to maintain access to diverse sources of funding. In managing our funding, we generally seek to keep our leverage, as measured by the ratio of net debt to EBITDA, at a level that is consistent with maintaining the ratings given to our debt by the principal credit rating agencies. Our total consolidated indebtedness as of December 31, 20202021 was Ps.628.4Ps.564.0 billion, of which Ps.148.1Ps.145.2 billion was short-term debt (including the current portion of long-term debt), compared to Ps.624.3Ps.628.4 billion as of December 31, 2019.

2020.

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Management defines net debt as total debt minus cash and cash equivalents, minus marketable securities (including Koninklijke KPN N.V. (“KPN”) shares)shares and Verizon shares), other short-term investments.short term investments and fixed-income securities with a tenor of more than one year. Verizon shares are factored into calculations of net debt for information as of December 31, 2021, but are not factored into calculations of net debt for information as of December 31, 2020. As of December 31, 2020,2021, we had net debt of Ps.537.8Ps.400.8 billion, compared to Ps.556.8Ps.537.8 billion as of December 31, 2019. 2020.

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Without taking into account the effects of derivative financial instruments that we use to manage our interest rate and currency risk, approximately 87.5%84.8% of our indebtedness at December 31, 20202021 was denominated in currencies other than Mexican pesos (approximately 33.9%36.4% of such
non-Mexican
peso debt was in U.S. dollars and 66.1%63.6% in other currencies), and approximately 10.9%13.5% of our consolidated debt obligations bore interest at floating rates. After the effects of derivative transactions and excluding the debt of Telekom Austria, approximately 44.9%46.3% of our net debt as of December 31, 20202021 was denominated in Mexican pesos.

The weighted average cost of all our third-party debt at December 31, 20202021 (excluding commissions and reimbursement of certain lenders for Mexican taxes withheld) was approximately 3.72%3.78% per annum.

Our major categories of indebtedness at December 31, 20202021 are summarized in the table below. See also Note 14 to our audited consolidated financial statements included in this annual report.

  DEBT
   

 
  (millions of Mexican pesos)

  SENIOR NOTES

  DENOMINATED IN U.S. DOLLARS

  América Móvil 3.125% Senior Notes due 2022

   31,918 

  SENIOR NOTES
  DENOMINATED IN U.S. DOLLARS
  América Móvil 3.625% Senior Notes due 2029

   19,949
20,584
 

  América Móvil 2.875% Senior Notes due 2030

   19,949
20,584
 

  América Móvil 6.375% Senior Notes due 2035

   19,576
20,199
 

  América Móvil 6.125% Senior Notes due 2037

   7,365
7,600
 

  América Móvil 6.125% Senior Notes due 2040

   39,897
41,167
 

  América Móvil 4.375% Senior Notes due 2042

   22,941
23,671
 

  América Móvil 4.375% Senior Notes due 2049

   24,936
25,729
 

Total

   186,531
159,534
 

  DENOMINATED IN MEXICAN PESOS

  

  América Móvil 6.450% Senior Notes due 2022

   
22,500
 

  América Móvil 7.125% Senior Notes due 2024

   
11,000
 

  América Móvil 0.000% Domestic Senior Notes due 2025

   4,911
5,285
 

  América Móvil 8.460% Senior Notes due 2036

   
7,872
 

  Telmex 8.360% Domestic Senior Notes due 2037

   
5,000
 

Total

   51,283
51,657
 

  DENOMINATED IN EURO

  América Móvil 3.000% Senior Notes due 2021

   24,369 

  TKA 3.125% Senior Notes due 2021

18,277 

  TKA 4.000% Senior Notes due 2022

   18,277
17,566
  TKA 3.500% Senior Notes due 2023
7,027
  América Móvil 3.259% Senior Notes due 2023
17,566
  América Móvil 1.500% Senior Notes due 2024
19,909
  Exchangeable Bond 0.00% due 2024
49,116
  TKA 1.500% Senior Notes due 2026
17,566
  América Móvil 0.750% Senior Notes due 2027
23,422
  América Móvil 2.125% Senior Notes due 2028
15,224
Total
167,396
 

  América Móvil 4.750% Senior Notes due 2022

  DEBT
  (millions of Mexican pesos)
   18,277 
  TKA 3.500% Senior Notes due 2023
  DENOMINATED IN POUND STERLING
   7,311 
  América Móvil 3.259% Senior Notes due 202318,277 
  América Móvil 1.500% Senior Notes due 202420,714
  TKA 1.500% Senior Notes due 202618,277
  América Móvil 0.750% Senior Notes due 202724,369
  América Móvil 2.125% Senior Notes due 202815,840

América Móvil B.V. -0.230% to -0.310% Commercial Paper due 2021

40,941

  Total

224,929

  DENOMINATED IN POUND STERLING

  América Móvil 5.000% Senior Notes due 2026

   13,635
13,925
 

  América Móvil 5.750% Senior Notes due 2030

   17,726
18,102
 

  América Móvil 4.948% Senior Notes due 2033

   8,181
8,355
 

  América Móvil 4.375% Senior Notes due 2041

   20,452
20,887
 

Total

   59,994
61,269
 

  DENOMINATED IN JAPANESE YEN

  

  América Móvil 2.950% Senior Notes due 2039

   2,512
2,326
 

Total

   2,512
2,326
 

  DENOMINATED IN CHILEAN PESOS

  

  América Móvil 3.961% Senior Notes due 2035

   4,078
3,776
 

Total

   4,078
3,776
 

  DENOMINATED IN BRAZILIAN REAIS

  Claro Brasil 104.000% of CDI Domestic Senior Notes due 2021

   4,222 

  Claro Brasil 104.250% of CDI Domestic Senior Notes due 2021

5,816 

  Claro Brasil CDI + 0.600% Domestic Senior Notes due 2021

1,382

  Claro Brasil CDI + 0.960% Domestic Senior Notes due 2022

   9,597
9,221
 

  Claro Brasil 106.000% of CDI Domestic Senior Notes due 2022

   7,677
7,377
 

  Claro Brasil 106.500% of CDI Domestic Senior Notes due 2022

   3,839
3,688
 

Total

   32,533
20,286
 

  HYBRID NOTES

  

  DENOMINATED IN EURO

  

  América Móvil NC10 (Series B) Capital Securities due 2073

   13,403
12,882
 

Total

   13,403
12,882
 

  BANK DEBT AND OTHER

  

  DENOMINATED IN US DOLLARS
14,724
  DENOMINATED IN EUROS
18,738
  DENOMINATED IN MEXICAN PESOS

   27,10034,080 

  DENOMINATED IN CHILEAN PESOS

   8,9267,467 

  DENOMINATED IN PERUVIAN SOLES

   17,0949,815 

  Total

  DENOMINATED IN OTHER CURRENCIES
   53,12080 

Total Debt

   628,383
84,904
 
Total Debt
564,030

  Less short-term debt and current portion of long-term debt

   148,083145,223 

Total Long-term Debt

   480,300
418,807
 

  EQUITY

  

  Capital stock

   96,34296,333 

Total retained earnings

   314,718
447,690
 

  Other comprehensive income (loss) items

   (151,669)(154,389) 

  Non-controlling
interest

   74,23564,407 

Total Equity

   333,626
454,041
 

Total Capitalization (total long-term debt plus equity)

   813,926
872,848
 
 

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Additional information about certain categories of our indebtedness is provided below:

Mexican peso-denominated international notes.
Our 8.46% senior notes due 2036 are denominated in Mexican pesos, but all amounts in respect of the notes are payable in U.S. dollars, unless a holder of notes elects to receive payment in Mexican pesos in accordance with specified procedures.

Mexican peso-denominated domestic notes.
Our domestic senior notes (
certificados bursátiles
) sold in the Mexican capital markets have varying maturities, ranging from 2025 through 2037, and bear interest at fixed rates.

Global peso notes program.
The global peso notes program was established in November 2012. Since its establishment, we have issued peso-denominated notes that can be distributed and traded on a seamless basis in Mexico and internationally. The notes are registered with the SEC in the United States and with the CNBV in Mexico.

International notes.
We have outstanding debt securities in the international markets denominated in U.S. dollars, pounds sterling and euros. We have also issued debt securities in the local market in Japan. On March 31, 2021,
In April 2022, we redeemed in full our 3.000% senior notes due 2021 with anissued a total of U.S.$1 billion aggregate principal outstanding amount of EUR 1 billion.

5.375% senior notes. On the date on which Sitios is duly incorporated in accordance with Mexican law and the resolutions approved by our shareholders in the extraordinary shareholders’ meeting dated as of September 29, 2021 (the

“Spin-off
Effective Date”), Sitios will assume all of our obligations under the aforementioned notes and the associated indenture, and we will be released from all of our obligations under such notes and indenture.
Hybrid notes.
We have outstanding one series of Capital Securities maturing in 2073, denominated in euros totaling
€
550 million. The Capital Securities are subject to redemption at our option at varying dates beginning in 2023. Our hybrid notes are deeply subordinated, and when they were issued, the principal rating agencies stated that they would treat half of the principal amount as indebtedness for purposes of evaluating our leverage (an analysis referred to as 50% equity credit). Standard & Poor’s now treats 100% of the principal amount under the hybrid notes as indebtedness.

Bank loans.
At December 31, 2020,2021, we had approximately Ps.53.1Ps.84.9 billion outstanding under a number of bank facilities bearing interest at fixed and variable rates. We also have two revolving syndicated credit facilities—one for U.S.$2.5 billion expiring in August 2024 and one for the Euro equivalent of U.S.$2.01.5 billion expiring in May 2021. We are currently negotiating with the lenders under the Euro credit facility for2026, which contains a5-year extension and a reduction to the Euro equivalent of U.S.$1.5 billion.
sustainability-linked framework. As long as the facilities are committed, a commitment fee is paid. As of December 31, 2020,2021, these credit facilities were not drawn. Both facilities include covenants that limit our ability to incur secured debt, to effect a merger in which the surviving entity would not be América Móvil or to sell substantially all of our assets. In addition, both facilities require us to maintain a consolidated ratio of debt to EBITDA not greater than 4.0 to 1.0 and a consolidated ratio of

EBITDA to interest expense not less than 2.5 to 1.0. As of the date of this annual report, we are in compliance with these covenants.

Telekom Austria has an undrawn revolving syndicated credit facility for
€
1.0 billion (the “TKA Facility”) expiring in July 2026. The TKA Facility includes covenants that limit Telekom Austria’s ability to incur secured debt, effect certain mergers or sell substantially all of its assets and our ability to transfer control over, or reduce our share ownership in, Telekom Austria. For more information, see Note 14 to our audited consolidated financial statements included in this annual report.

In addition to the bank loans summarized in the table above, in March 2022, we entered into a credit agreement providing for borrowings in an amount up to Ps.20,558,500,000 (the “Sitios Credit Facility”) with a group of lenders that includes affiliates and BBVA México, S.A., Institución de Banca Múltiple, Grupo Financiero BBVA México, as administrative agent for the lenders. The full principal amount available under this facility was disbursed on March 23, 2022. On the

Spin-off
Effective Date, we will be released from our obligations under the Sitios Credit Facility and all liabilities with respect thereto will be transferred to Sitios, and Sitios will assume all of our obligations thereunder. Additionally, on April 14, 2022, Claro Brasil entered into an uncommitted term loan facility agreement for borrowings in an amount up to R$1.7 billion with BNP Paribas S.A. as lender. This facility will mature in 2023.
Options involving TKA shares.
The Company has entered into the sale of a cash-settled put option related to TKA shares that will expire in August 2023. See Note 7 to our audited consolidated financial statements included in this annual report.

Bonds exchangeable for KPN shares.
On March 2, 2021, our wholly-owned Dutch subsidiary, América Móvil B.V., issued approximately EUR 2.1 billion principal amount of senior unsecured bonds. The bonds will mature in 3 years, will not bear interest and were issued at an issue price of 104.75% of their principal amount. The Bonds will be exchangeable into ordinary shares of KPN and the initial exchange price is EUR 3.1185.

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Euro-denominated commercial paper program.At December 31, 2020, debt
From time to time we have issued commercial paper under our euro-denominated commercial paper program aggregated to Ps.$40.9 billion.

program. At December 31, 2021, there were no amounts outstanding under such program.

As of December 31, 2020,2021, we had, on an unconsolidated basis, unsecured and unsubordinated indebtedness of approximately Ps.455.6Ps.391.3 billion (U.S.$22.819.0 billion), excluding guarantees of subsidiaries’ indebtedness. As of December 31, 2020,2021, our subsidiaries had indebtedness (excluding guarantees of indebtedness of us and our other subsidiaries) of approximately Ps.172.7 billion (U.S.$8.78.3 billion), and a substantial portion of our subsidiaries’ indebtedness is owed by Telekom Austria.

As of December 31, 2020, we had no off-balance sheet arrangements that require disclosure under applicable SEC regulations.

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GUARANTOR FINANCIAL INFORMATION

In March 2020, the SEC amended Rule 3-10 of Regulation S-X and adopted Rule 13-01 to simplify disclosure requirements related to certain registered securities, which we have adopted effective immediately.

Some of the public securities issued by América Móvil in international and Mexican capital markets are guaranteed by Telcel, a wholly-owned subsidiary. As of December 31, 2020,2021, the aggregate principal amount of debt guaranteed by Telcel was Ps.122,215Ps.106,327 million. The guarantees provide that, in case of the failure of the Company to punctually make payment of any principal, premium, interest, additional amounts or any other amounts that may become payable by the Company in respect of the notes, Telcel agrees to immediately pay the amount that is due and required to be paid.

The following table presentstables present summarized unconsolidated financial information for the Company and Telcel after eliminating transactions and balances between them.

 

 

   

 

 DECEMBER 31, 2020 
 

 

  PARENT   GUARANTOR 

Current Assets

  Ps.  45,320,066   Ps.  45,909,283 

Total Assets

  

 

  80,095,274   

 

  145,711,133 

Current Liabilities

  

 

  93,871,633   

 

  41,939,310 

Total Liabilities

  

 

  504,150,282   

 

  75,949,203 

Total revenues

  Ps.  72,124,718   Ps.  132,393,542 

Operating Income

  

 

  18,559,695   

 

  3,304,582 

Net profit for the year

  

 

  (37,332,145)   

 

  50,569,556 

 
 
  
AS OF DECEMBER 31, 2021
 
   
 
 
  
PARENT
   
GUARANTOR
 
     
Current assets
  Ps.          25,288   Ps.          48,552 
     
Total assets
  
 
  56,794   
 
  221,510 
     
Current liabilities
  
 
  80,566   
 
  177,133 
     
Total liabilities
  
 
  420,630   
 
  190,518 
     
 
  
 
 
 
 
 
  
 
 
 
 
 
     
Total revenues
  Ps.          -   Ps.          169,203 
     
Operating Income
  
 
  (27,424)   
 
  99,246 
     
Net profit for the year
  
 
  (66,596)   
 
  100,072 
RISK MANAGEMENT

We regularly assess our interest rate and currency exchange exposures in order to determine how to manage the risk associated with these exposures. We have indebtedness denominated in currencies other than the currency of our operating environments, and we have expenses for operations and for capital expenditures in a variety of currencies. We use derivatives to adjustmanage the resulting exchange rate and interest rate exposures. We do not use derivatives to hedge the exchange rate exposures that arise from having operations in different countries.

For additional information on market risk, see Note 2 v(ii) to our audited consolidated financial statements included in this annual report.

Our practices vary from time to time depending on our judgment of the level of risk, expectations as to exchange rate or interest rate movements and the costs of using derivative financial instruments. We may stop using derivative financial instruments or modify our practices at any time.

As of December 31, 2020, we had derivatives positions with an aggregate2021, the net fair value of our derivatives and other financial items was a net asset of Ps.6.7Ps.0.1 billion, which are described in Note 7 to our audited consolidated financial statements. For additional information, see Note 2 v)v to our audited consolidated financial statements included in this annual report.

 

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RISKS RELATING TO OUR OPERATIONS

Competition in the telecommunications industry is intense and could adversely affect the revenues and profitability of our operations

Our businesses face substantial competition. We expect that competition will intensify in the future as a result of the entry of new competitors, the development of new technologies, products and services and convergence. We also expect consolidation in the telecommunications industry, as companies respond to the need for cost reduction and additional spectrum. This trend may result in larger competitors with greater financial, technical, promotional and other resources to compete with our businesses.

Among other things, our competitors could:

provide higher handset subsidies;

offer higher commissions to retailers;

provide free airtime or other services (such as internet access);

offer services at lower costs through double, triple and quadruple play packages or other pricing strategies;

expand their networks faster; or

develop and deploy improved technologies faster, such as 5G LTE technology.

Competition can lead us to increase advertising and promotional spending and to reduce prices for services and handsets. These developments may lead to lower operating margins, greater choices for customers and increasing movement of customers among competitors, which may make it difficult for us to retain or add new customers. The cost of adding new customers may also continue to increase, reducing profitability even if customer growth continues.

Our ability to compete successfully will depend on our coverage, the quality of our network and service, our rates, customer service, effective marketing, our success in selling double, triple and quadruple play packages and our ability to anticipate and respond to various competitive factors affecting the telecommunications industry, including new services and technologies, changes in consumer preferences, demographic trends, economic conditions and discount pricing strategies by competitors.

If we are unable to respond to competition and compensate for declining prices by adding new customers, increasing usage and offering new services, our revenues and profitability could decline.

Governmental or regulatory actions could adversely affect our operations

Our operations are subject to extensive government regulation and can be adversely affected by changes in law, regulation or regulatory policy. The licensing, construction,
operation, sale, resale and interconnection arrangements of telecommunications systems in Latin America and elsewhere are regulated to varying degrees by government or regulatory authorities. Any of these authorities having jurisdiction over our businesses could adopt or change regulations or take other actions that could adversely affect our operations. In particular, the regulation of prices that operators may charge for their services and environmental matters, including renewable energy and climate change regulation, could have a material adverse effect by reducing our profit margins. See “Regulation” under Part VI for a discussion on the functional separation of Telmex and Telnor wholesale services, “Legal Proceedings” under Part VIVII and Note 17 to our audited consolidated financial statements included in this annual report.

In addition, changes in political administrations could lead to new regulation and the adoption of policies that could adversely affect our operations, including those concerning competition and taxation of communications services. For example, since 2013, Mexico has implemented reforms to the telecommunications sector that aim to promote more competition and investment by imposing asymmetric regulation upon economic agents deemed “preponderant or dominant.” The asymmetric regulations that are applicable to us, which have adversely affected the results of our Mexican operations, may be reviewed every two years. We are unable to anticipate the effect of an amendment on existing asymmetric regulations, or the imposition of new ones, on our results or operations in Mexico. In other countries, we could also face policies such as preferences for local over foreign ownership of communications licenses and assets or for government over private ownership, which could make it more cumbersome or impossible for us to continue to develop our businesses. Restrictions such as those described above could result in lower revenues and require capital investments, all of which could materially adversely affect our businesses and results of operations.

Our failure to meet or maintain quality of service goals and standards could result in fines and other adverse consequences

The terms of the concessions under which our subsidiaries operate require them to meet certain service quality goals, including, for example, minimum call completion rates, maximum busy circuits rates, operator availability and responsiveness to repair requests. Failure to meet service quality obligations in the past has resulted in the imposition

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of material fines by regulatory entities. We are also subject to and may be subject to additional claims by customers, including class actions, seeking remedies for service problems. Our ability to comply with these obligations in the future may be affected by factors beyond our control and,

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accordingly, we cannot assure that we will be able to comply with them.

Dominant carrier related regulations could adversely affect our business by limiting our ability to pursue competitive and profitable strategies

Our regulators are authorized to impose specific requirements as to rates (including termination rates), quality of service, access to active or passive infrastructure and information, among other matters, on operators that are determined to have substantial market power in a specific market. We cannot predict what steps regulatory authorities might take in response to determinations regarding substantial market power in the countries in which we operate. However, adverse determinations against our subsidiaries could result in material restrictions on our operations. We may also face additional regulatory restrictions and scrutiny as a result of our provision of combined services.

If dominant carrier regulations are imposed on our business in the future, they could likely reduce our flexibility to adopt competitive market policies and impose specific tariff requirements or other special regulations on us, such as additional requirements regarding disclosure of information or quality of service. Any such new regulation could have a material adverse effect on our operations.

We must continue to acquire additional radio spectrum capacity and upgrade our networks in order to expand our customer base and maintain the quality of our wireless services

Licensed radio spectrum is essential to our growth and the quality of our wireless services and for the operation and deployment of our networks, including new generation networks such as 5G LTE technology, to offer improved data and value-added services. We obtain most of our radio spectrum through auctions conducted by governments of the countries in which we operate. Participation in spectrum auctions in most of these countries requires prior government authorization, and we may be subject to caps on our ability to acquire additional spectrum. Our inability to acquire additional radio spectrum capacity could affect our ability to compete successfully because it could result in, among other things, a decrease in the quality of our network and service and in our ability to meet the demands of our customers.

In the event we are unable to acquire additional radio spectrum capacity, we can increase the density of our network by building more cell and switch sites, but such measures are costly and may be subject to local restrictions and regulatory approvals, and they would not meet our needs as effectively.

We have concessions and licenses for fixed terms, and the government may revoke or terminate them as well as reacquire the assets under our concession under various circumstances, some of which are beyond our control

Our concessions and licenses have specified terms, ranging typically from five to 20 years, and are generally subject to renewal upon payment of a fee, but renewal is not assured. The loss of, or failure to renew, any one concession could have a material adverse effect on our business and results of operations. Our ability to renew concessions and the terms of renewal are subject to a number of factors beyond our control, including the prevalent regulatory and political environment at the time of renewal. Fees are typically established at the time of renewal. As a condition for renewal, we may be required to agree to new and stricter terms and service requirements. In some of the jurisdictions where we operate and under certain circumstances, mainly in connection with fixed services, we may be required to transfer certain assets covered by some of our concessions to the government pursuant to valuation methodologies that vary in each jurisdiction. It is uncertain whether reversion would ever be applied in many of the jurisdictions where we operate and how reversion provisions would be interpreted in practice. For further information, see “Regulation” under Part VI of this annual report and Note 17 to our audited consolidated financial statements included in this annual report.

In addition, the regulatory authorities in the jurisdictions in which we operate can revoke our concessions under certain circumstances. In Mexico, for example, the Federal Law on Telecommunications and Broadcasting gives the government the right to temporarily seize our concessions or to take over the management of our networks, facilities and personnel in cases of failures to meet obligations under our concession agreements, imminent danger to national security, internal peace or the national economy, natural disasters and public unrest. See “Regulation” under Part VI of this annual report.

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We continue to look for acquisition opportunities, and any future acquisitions and related financing could have a material effect on our business, results of operations and financial condition

We continue to look for investment opportunities in telecommunications and related companies worldwide, including in markets where we are already present, and we often have several possible acquisitions under consideration. Any future acquisitions, and related financing and acquired indebtedness, could have a material effect on our business, results of operations and financial condition, but we cannot provide assurances that we will complete any of them. In addition, we may incur significant costs and expenses as we
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integrate these companies in our systems, controls and networks.

We are subject to significant litigation

Some of our subsidiaries are subject to significant litigation that, if determined adversely to our interests, may have a material adverse effect on our business, results of operations, financial condition or prospects. Our significant litigation is described in “Regulation” under Part VI and in Note 17 to our audited consolidated financial statements included in this annual report.

We are contesting significant tax assessments

We and some of our subsidiaries have been notified of tax assessments for significant amounts by the tax authorities of the countries in which we operate, especially in Brazil, Mexico and Ecuador.Colombia. The tax assessments relate to, among other things, alleged improper deductions and underpayments. We are contesting these tax assessments in several administrative and legal proceedings, and our challenges are at various stages. The amounts claimed by the tax authorities in these matters are significant. In many cases, we have not established a provision in our audited financial statements for these matters, or the amount claimed may be significantly in excess of any reserve established. We evaluate income tax contingencies applying IAS 12 and IFRIC 23. For other tax contingencies we consider the applicable IFRS guidance. Our significant tax assessments are described in Note 17 to our audited consolidated financial statements included in this annual report. If determined adversely to us, these proceedings may have a material adverse effect on our business, results of operations, financial condition or prospects. In addition, in some jurisdictions, challenges to tax assessments require the posting of a bond or security for the contested amount, which may reduce our flexibility in operating our business. Our significant tax assessments are described in Note 17 to our audited consolidated financial statements included in this annual report.

Failure to comply with anti-corruption, anti-briberyanti- bribery and anti-money laundering laws could harm our reputation, subject us to substantial fines and adversely affect our business

We operate in multiple jurisdictions and are subject to complex regulatory frameworks with increased enforcement activities worldwide. Our governance and compliance

processes may not prevent future breaches of legal, accounting or governance standards and regulations. We may be subject to breaches of our code of ethics, anti-corruption policies and business conduct protocols and to instances of fraudulent behavior, corrupt practices and dishonesty by our employees, contractors or other agents. Our failure to comply with applicable laws and other regulatory requirements could harm our reputation, subject us to substantial fines, sanctions or penalties and adversely affect our business and ability to access financial markets.

A system failure could cause delays or interruptions of service, which could have an adverse effect on our operations

We need to continue to provide our subscribers with a reliable service over our network. Some of the risks to our network and infrastructure include the following:

physical damage to access lines and fixed networks;
power surges or outages;
natural disasters;
climate change;
malicious actions, such as theft or misuse of customer data;
limitations on the use of our radio bases;
software defects;
human error; and
other disruptions beyond our control, including as a result of civil unrest in the regions where we operate.

In Brazil, for example, our satellite operations may be affected if we experience a delay in launching new satellites to replace those currently in use when they reach the end of their operational lives.
Such delay may occur because of, among other reasons, construction delays, unavailability of launch vehicles and/or launch failures. In addition, our operations have been disrupted by natural disturbances such as hurricanes and earthquakes.

We have instituted measures to reduce these risks. However, there is no assurance that any measures we implement will be effective in preventing system failures under all circumstances. System failures may cause interruptions in services or reduced capacity for our customers, either of which may have an adverse effect on our operations due to, for example, increased expenses, potential legal liability, loss of existing and potential subscribers, reduced user traffic, decreased revenues and reputational harm.

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Our financial condition and results of operations may be adversely affected by the occurrence of severe weather, natural or
man-made
disasters and other catastrophic events, including war, terrorism and other acts of violence, and disease

Our operations can be disrupted by unforeseen events, including war, terrorism, and other international, regional, or local instability or conflicts (including labor issues), embargos, public health issues (including tainted food, food-borne illnesses, food tampering, tampering with or failure of water supply or widespread or pandemic illness such as coronavirus (“COVID-19”), Ebola, the avian or H1N1 flu, MERS), and natural disasters such as earthquakes, tsunamis, hurricanes, or other adverse weather and climate conditions in the countries in which we operate. These events could
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disrupt or prevent our ability to perform functions and otherwise impede our ability to continue business operations in a continuous manner, which in turn may materially and adversely impact our business and operating results.

The COVID-19 pandemic has had a material impact on the global economy

Effects of climate change may impose risk of damage to our infrastructure and our business

The COVID-19 pandemic has had,ability to provide services, all of which may result in potential adverse impact to our financial results

Extreme weather events precipitated by long-term climate change have the potential to directly damage network facilities or disrupt our ability to build and continuesmaintain portions of our network and could potentially disrupt suppliers’ ability to provide products and services required to provide reliable network coverage. Any such disruption could delay network deployment plans, interrupt service for our customers, increase our costs and have a material impactnegative effect on businessesour operating results. The potential physical effects of climate change, such as increased frequency and severity of storms, floods, fires, freezing conditions,
sea-level
rise, and other climate-related events, could adversely affect our operations, infrastructure, and financial results. Operational impacts resulting from the potential physical effects of climate change, such as damage to our network infrastructure, could result in increased costs and loss of revenue. We could incur significant costs to improve the climate resiliency of our infrastructure and otherwise prepare for, respond to, and mitigate such physical effects of climate change. We are not able to accurately predict the materiality of any potential losses or costs associated with the physical effects of climate change.
Public health crises, including the
COVID-19
pandemic, could materially adversely affect our business, financial condition and results of operations
We are subject to risks related to public health crises, such as the
COVID-19
pandemic, which had an adverse effect on our operating results in 2020. Our business is based on our ability to provide products and services to customers throughout Mexico and around the world and the economic environments in which they operate. Governments in jurisdictions where we operate have taken aggressive measuresability of those customers to slow the spread of COVID-19, including quarantinesuse and lock-downs, restrictions on travel,pay for those products and closing of businesses and public and private institutions. In addition, governments have imposed a wide variety of consumer protection measures that limit how certain businesses, including telecommunications companies, can operateservices for their businesses and interact within their customers. The virus continues to spread globallydaily lives. As a result, our business, financial condition and cause significant socialresults of operations could be materially adversely affected by a crisis, like the
COVID-19
pandemic, that significantly impacts the way customers use and market disruption.

There are a number of consequences of the pandemic and its impact on global economies that could have a material adverse effect on our business.

In 2020, the economic slowdown had an adverse impact on our customers’ abilityable to pay for our services.

We have been requiredproducts and services, the way our employees are able to change or restrict many provide services to our customers, and the ways that our partners and suppliers are able to provide products and services to us. For example, public and private sector policies and initiatives to reduce the transmission of
COVID-19,
including the initiatives we took in response to the health crisis to promote the health and safety
of our operations, including customer support, servicingemployees and repairs, network maintenance, retail operationsprovide critical infrastructure and investment projects. We have also experienced supply chain disruptionsconnectivity to our customers, along with the related global slowdown in economic activity, contributed to decreased net profit for handsetsthe year and other equipment. Thislower earnings per share during 2020.
In addition, such a crisis could have an impact on our costs.
We have implemented policies, including work-from-home policies and social distancing policies, that could limitsignificantly increase the efficiency and effectiveness of our operations and our reporting and internal controls.

The extentprobability or consequences of the impactrisks our business faces in ordinary circumstances, such as risks associated with our supplier and vendor relationships, risks of an economic slowdown, regulatory risks, and the COVID-19 oncosts and availability of financing. Because the Company’s operationalseverity, magnitude and financial performance will depend on future developments, including the duration and spread of the

COVID-19
pandemic and the availability and effectiveness of vaccines, all of whichits economic consequences are highly uncertain and cannot be predicted. If the COVID-19 pandemic continues to spread,rapidly changing, the impact on our operations, our clients, our suppliers and financial markets could materially adversely affect ourbusiness, financial condition orand results of operations. See “Operating And Financial Review And Prospects—Effectsoperations in 2022 and beyond remains uncertain and difficult to predict. In addition, the ultimate impact of the
COVID-19 Pandemic.”

Increases

pandemic on our business, financial condition and results of operations depends on many factors, including those discussed above, that are not within our control.
Many of our employees are unionized and increases in labor and employee benefit costs may reduce our profitability, increase our funding requirements and could have an adverse impact on our operations

Many of our employees are members of labor unions with which we conduct collective negotiations on wages, benefits and working conditions. We use actuarial methodologies and assumptions such as discount rate, salary increase and mortality, among others, for the determination and valuation of our employee benefits, including retirement benefits. We evaluate from time to time, with the support of specialists, our actuarial methodologies and assumptions, as well as the valuation of the assets related to these benefits.

Our labor costs and the costs of maintaining employee benefits are substantial, and could be affected by several factors, including legislative and regulatory changes, work stoppages, subsequent negotiations, increases in healthcare costs, minimum wages, decreases in investment returns on the assets held in funds to support the payment of certain employee benefits and changes in the discount rate and mortality assumptions. An increase in labor and employee benefit costs could reduce our profitability, increase our funding requirements and have an adverse impact on our operations.

Inflationary pressures on costs may impact our network construction, financial condition and results of operations
As a provider of telecommunications and technology services, we sell handsets, wireless data cards, wireless computing devices and customer premises equipment manufactured by various suppliers. We depend on suppliers to provide us,
 

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directly or through other suppliers, with items such as network equipment, customer premises equipment, and wireless-related equipment such as mobile hotspots, handsets, wirelessly enabled computers, wireless data cards and other connected devices for our customers. In 2021 and 2022 year to date, the costs of these inputs and the costs of labor necessary to develop and maintain our networks and our products and services have rapidly increased. In addition, many of these inputs are subject to price fluctuations from a number of factors, including, but not limited to, market conditions, demand and volatility in the prices for raw materials used in the production of these devices and network components, weather, climate change, energy costs (including as a result of the ongoing conflict in Ukraine, which has resulted in historically high energy market prices), currency fluctuations, supplier capacities, governmental actions, import and export requirements (including tariffs), and other factors beyond our control. Although we are unable to predict the impact on our ability to source materials in the future, we expect these supply pressures to continue into 2022. We also expect the pressures of input cost inflation to continue into 2022.
Our attempts to offset these cost pressures, such as through increases in the selling prices of some of our products and services, may not be successful. Higher product prices may result in reductions in sales volume. Consumers may be less willing to pay a price differential for our products and may increasingly purchase lower-priced offerings, or may forego some purchases altogether, during an economic downturn. To the extent that price increases are not sufficient to offset these increased costs adequately or in a timely manner, and/or if they result in significant decreases in sales volume, our business, financial condition or operating results may be adversely affected. Furthermore, we may not be able to offset any cost increases through productivity and cost-saving initiatives.
We rely on highly skilled personnel throughout all levels of our business. Our business could be harmed if we are unable to retain or motivate key personnel, hire qualified personnel or maintain our corporate culture.

culture

The market for highly skilled workers and leaders in our industry is extremely competitive. We believe that our future success depends in substantial part on our ability to recruit, hire, motivate, develop, and retain talented personnel for all areas of our organization, including our CEO and the other members of our senior leadership team. Our inability to retain these employees or to replace them with qualified and capable successors could hinder our strategic planning and execution. If key employees depart, our business could be negatively impacted. We may incur significant costs in identifying, hiring and replacing departing employees and
may lose significant expertise and talent. As a result, we may not be able to meet our business plan and our revenue growth and profitability may be materially adversely affected.

Cybersecurity incidents and other breaches of network or information technology security could have an adverse effect on our business and our reputation

Cybersecurity incidents, and other tactics designed to gain access to and exploit sensitive information by breaching critical systems of large companies, are evolving and have been increasing in both sophistication and occurrence in recent years. While we employ a number of measures to prevent, detect and mitigate such incidents, there is no guarantee that we will be able to adequately anticipate or prevent one. Cybercrime, including attempts to overload our servers with
denial-of-service
attacks, theft, social engineering, phishing, ransomware or similar disruptions from unauthorized access or attempted unauthorized access to our systems could result in the destruction, misuse or release of personal information or other sensitive data. However, it is difficult to detect or prevent evolving forms of cybersecurity incidents, and our systems, and those of our third-party service providers and of our customers, are vulnerable to cybersecurity incidents.

In the event that our systems are breached or damaged for any reason, we may suffer loss or unavailability of data and interruptions to our business operations. If such an event occurs, the unauthorized disclosure, loss or unavailability of data and the disruption to our fixed-line or wireless networks may have a material adverse effect on our business and results of operations. The costs associated with a cybersecurity incident could include increased expenditures on information and cybersecurity measures, damage to our reputation, loss of existing customers and business partners

and lead to financial losses from remedial actions and potential liability, including possible litigation and sanctions. Any of these occurrences may result in a material adverse effect on our results of operations and financial condition.

Failure to achieve proper data governance could lead to data mismanagement

We process large amounts of personally identifiable information of customers and employees and are subject to various compliance, security, privacy, data quality and regulatory requirements. Failure to achieve proper data governance could lead to data mismanagement which in turn could result in data loss, regulatory investigations or sanctions, and cybersecurity risk. We are subject to data privacy regulations in the countries where we operate. Complying with such regulations may expose us to increased costs and limit our ability to transfer data between certain jurisdictions, which may adversely affect our operations.

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If our churn rate increases, our business could be negatively affected

The cost of acquiring a new subscriber is much higher than the cost of maintaining an existing subscriber. Accordingly, subscriber deactivations, or “churn,” could have a material negative impact on our operating income, even if we are able to obtain one new subscriber for each lost subscriber. A substantial majority of our subscribers are prepaid, and we do not have long-term contracts with them. Our average churn rate on a consolidated basis was 3.3% for the year ended December 31, 2021 and 3.8% for the year ended December 31, 2020 and 4.1% for the year ended December 31, 2019.2020. If we experience an increase in our churn rate, our ability to achieve revenue growth could be materially impacted. In addition, a decline in general economic conditions could lead to an increase in churn, particularly among our prepaid subscribers.

We rely on key suppliers to provide equipment that we need to operate our business

We rely upon various key suppliers to provide us with handsets, network equipment or services, which we need to expand and operate our business. Our key suppliers include Huawei, Ericsson and Alcatel. If these suppliers fail to provide equipment or service to us on a timely basis, we could experience disruptions, which could have an adverse effect on our revenues and results of operations. In addition, we might be unable to satisfy requirements under our concessions.

Government or regulatory actions with respect to certain suppliers may impact us. For example, the government of the United States and Canada, among others, are currently conducting a regulatory review of certain international suppliers of network equipment and technologies to evaluate

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potential risks. We are currently unable to predict the outcome of such reviews, including any possible restrictions placed on our key suppliers, and as a result we cannot determine their potential impact on our business.

Our ability to pay dividends and repay debt depends on our subsidiaries’ ability to pay dividends and make other transfers to us

We are a holding company with no significant assets, other than the shares of our subsidiaries and our holdings of cash and cash equivalents. Our ability to pay dividends and repay debt depends on the continued transfer to us of dividends and other income from our subsidiaries. The ability of our subsidiaries to pay dividends and make other transfers to us may be limited by various regulatory, contractual and legal constraints that affect them.

We may fail to realize the benefits anticipated from acquisitions, divestments and significant investments we make from time to time

The business growth opportunities, revenue benefits, cost savings and other benefits we anticipated to result from our acquisitions, divestments and significant investments may not be achieved as expected, or may be delayed. Our divestments may also adversely affect our prospects. For example, we may be unable to fully implement our business plans and strategies for the combined businesses due to regulatory limitations, and we may face regulatory restrictions in our provision of combined services in some of the countries in which we operate. To the extent that we incur higher integration costs or achieve lower revenue benefits or fewer cost savings than expected, or if we are required to recognize impairments of acquired assets, investments or goodwill, our results of operations and financial condition may suffer.

A downgrade of Mexico’s credit rating could affect us

Credit rating agencies regularly evaluate Mexico and its sovereign rating based on various factors including macroeconomic trends, tax and budgetary conditions and indebtedness metrics. If Mexico’s sovereign credit rating is downgraded by credit rating agencies, the rating of our securities may also be downgraded, which could negatively affect our financing costs and the market price of our securities.

Changing expectations from stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks

Influential investors and other stakeholders are increasingly focused on the environmental, social and governance (“ESG”) practices of companies across all industries. If we do not adapt to or comply with evolving expectations, or if we are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, we may suffer from reputational damage, and our business, financial condition or stock price could be materially and adversely affected. If we do not meet our stakeholders’ expectations or we are not effective in addressing ESG matters or achieve relevant sustainability goals, trust in our brand may suffer and our business or our ability to access capital could be harmed.

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RISKS RELATING TO THE TELECOMMUNICATIONS INDUSTRY GENERALLY

Changes in the telecommunications industry could affect our future financial performance

The telecommunications industry continues to experience significant changes as new technologies are developed that offer subscribers an array of choices for their communications needs. These changes include, among others, regulatory changes, evolving industry standards, ongoing improvements in the capacity and quality of digital technology, shorter development cycles for new products, evolving renewable energy and clean technologies, and changes in
end-user
needs and preferences. There is uncertainty as to the pace and extent of growth in subscriber demand, and as to the extent to which prices for airtime, broadband access, Pay TV and fixed-line rental may continue to decline. Our ability to compete in the delivery of high-quality internet and broadband services is particularly important, given the increasing contribution of revenues from data services to our overall growth. If we are unable to meet future advances in competing technologies on a timely basis or at an acceptable cost, we could lose subscribers to our competitors. In general, the development of new services in our industry requires us to anticipate and respond to the varied and continually changing demands of our subscribers. It also requires significant capital expenditure, including investment in the continual maintenance and upgrading of our networks, in order to expand coverage, increase our capacity to absorb higher bandwidth usage and adapt to new technologies. We may not be able to accurately predict technological trends or the success of new services in the market. In addition, there could be legal or regulatory restraints to our introduction of new

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services. If these services fail to gain acceptance in the marketplace, or if costs associated with implementation and completion of the introduction of these services materially increase, our ability to retain and attract subscribers could be adversely affected. This is true across many of the services we provide, including wireless and cable technology.

The intellectual property used by us, our suppliers or service providers may infringe on intellectual property rights owned by others

Some of our products and services use intellectual property that we own or license from others. We also provide content we receive from content producers and distributors, such as ringtones, text games, video games, video, including TV programs and movies, wallpapers or screensavers, and we outsource services to service providers, including billing and customer care functions, that incorporate or utilize intellectual property. We and some of our suppliers, content
distributors and service providers have received, and may receive in the future, assertions and claims from third parties that the content, products or software utilized by us or our suppliers, content producers and distributors and service providers infringe on the patents or other intellectual property rights of these third parties. These claims could require us or an infringing supplier, content distributor or service provider to cease engaging in certain activities, including selling, offering and providing the relevant products and services. Such claims and assertions also could subject us to costly litigation and significant liabilities for damages or royalty payments, or require us to cease certain activities or prevent us from selling certain products or services.

Concerns about health risks relating to the use of wireless handsets and base stations may adversely affect our business

Portable communications devices have been alleged to pose health risks, including cancer, due to radio frequency emissions. Lawsuits have been filed in the United States against certain participants in the wireless industry alleging various adverse health consequences as a result of wireless phone usage, and our subsidiaries may be subject to similar litigation in the future.
Government authorities could increase regulation on electromagnetic emissions of mobile handsets and base stations, which could have an adverse effect on our business, financial condition and results of operations. Research and studies are ongoing, and there can be no assurance that further research and studies will not demonstrate a link between radio frequency emissions and health concerns. Any negative findings in these studies could adversely affect the use of wireless technology and, as a result, our future financial performance.

Developments in the telecommunications sector have resulted, and may result, in substantial write-downs of the carrying value of certain of our assets

Where the circumstances require, we review the carrying value of each of our assets, subsidiaries and investments in associates to assess whether those carrying values can be supported by the future discounted cash flows expected to be derived from such assets.
Whenever we consider that due to changes in the economic, regulatory, business or political environment, our goodwill, investments in associates, intangible assets or fixed assets may be impaired, we consider the necessity of performing certain valuation tests, which may result in impairment charges. The recognition of impairments of tangible, intangible and financial assets could adversely affect our results of operations.

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RISKS RELATING TO OUR CONTROLLING SHAREHOLDERS, CAPITAL STRUCTURE AND TRANSACTIONS WITH AFFILIATES

Members of one family may be deemed to control us and may exercise their control in a manner that may differ from the interest of other shareholders

Based on reports of beneficial ownership of our shares filed with the SEC, Carlos Slim Helú, together with his sons, daughters and grandchildren (together, the “Slim Family”) may be deemed to control us. The Slim Family may be able to elect a majority of the members of our Board of Directors and to determine the outcome of other actions requiring a vote of our shareholders. The interests of the Slim Family may diverge from the interests of our other investors.

We have significant transactions with affiliates

We engage in various transactions with Telesites, S.A.B. de C.V. (“Telesites”) and certain subsidiaries of Grupo Carso, S.A.B. de C.V. (“Grupo Carso”) and Grupo Financiero Inbursa, S.A.B. de C.V. (“Grupo Financiero Inbursa”), all which may be deemed for certain purposes to be under common control with América Móvil.

These transactions occur in the ordinary course of business. Transactions with affiliates may create the potential for conflicts of interest.

We also make investments together with related parties, sell investments to related parties and buy investments from related parties. For more information about our transactions with affiliates, see “Related Party Transactions” under Part IV of this annual report.

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Our bylaws restrict transfers of shares in some circumstances

Our bylaws provide that any acquisition or transfer of 10.0% or more of our capital stock by any person or group of persons acting together requires the approval of our Board of Directors. You may not acquire or transfer more than 10.0% of our capital stock without the approval of our Board of Directors.

The protections afforded to minority shareholders in Mexico are different from those in the United States

Under Mexican law, the protections afforded to minority shareholders are different from those in the United States. In particular, the law concerning fiduciary duties of directors is not as fully developed as in other jurisdictions, the procedure for class actions is different, and there are different procedural requirements for bringing shareholder lawsuits. As a result, in practice it may be more difficult for minority shareholders of América Móvil to seek remedies against us
or our directors or controlling shareholders than it would be for shareholders of a company incorporated in another jurisdiction, such as Delaware.

Holders of L Shares and L Share ADSs have limited voting rights

Our bylaws provide that holders of L Shares are not permitted to vote, except on such limited matters as, among others, the transformation or merger of América Móvil or the cancellation of registration of the L Shares with the Mexican Securities Registry (Registro(
Registro Nacional de Valores
, or “RNV”) maintained by the CNBV or any stock exchange on which they are listed. If you hold L Shares or L Share ADSs, you will not be able to vote on most matters, including the declaration of dividends, which are subject to a shareholder vote in accordance with our bylaws.

Holders of ADSs are not entitled to attend shareholders’ meetings, and they may only vote through the depositary

Under our bylaws, a shareholder is required to deposit its shares with a custodian in order to attend a shareholders’ meeting. A holder of ADSs will not be able to meet this requirement and, accordingly, is not entitled to attend shareholders’ meetings. A holder of ADSs is entitled to instruct the depositary as to how to vote the shares represented by ADSs, in accordance with procedures provided for in the deposit agreements, but a holder of ADSs will not be able to vote its shares directly at a shareholders’ meeting or to appoint a proxy to do so.

Our bylaws may only be enforced in Mexico

Our bylaws provide that legal actions relating to the execution, interpretation or performance of the bylaws may be brought only in Mexican courts. As a result, it may be difficult for
non-Mexican
shareholders to enforce their shareholder rights pursuant to the bylaws.

It may be difficult to enforce civil liabilities against us or our directors, officers and controlling persons

América Móvil is organized under the laws of Mexico, with its principal place of business in Mexico City, and most of our directors, officers and controlling persons reside outside the United States. In addition, all or a substantial portion of our assets and their assets are located outside of the United States. As a result, it may be difficult for investors to effect service of process within the United States on such persons or to enforce judgments against them, including in any action based on civil liabilities under U.S. federal securities laws.
There is doubt as to the enforceability against such persons in Mexico, whether in original actions or in actions to judgments of U.S. courts, of liabilities based solely on U.S. federal securities laws.

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You may not be entitled to participate in future preemptive rights offerings

Under Mexican law, if we issue new shares for cash as part of certain capital increases, we must grant our shareholders the right to purchase a sufficient number of shares to maintain their existing ownership percentage in América Móvil. Rights to purchase shares in these circumstances are known as preemptive rights. Our shareholders do not have preemptive rights in certain circumstances such as mergers, convertible debentures, public offers and placement of repurchased shares. We may not be legally permitted to allow holders of ADSs or holders of L Shares or A Shares in the United States to exercise any preemptive rights in any future capital increase unless we file a registration statement with the U.S. Securities and Exchange Commission (the “SEC”) with respect to that future issuance of shares. At the time of any future capital increase, we will evaluate the costs and potential liabilities associated with filing a registration statement with the SEC and any other factors that we consider important to determine whether we will file such a registration statement.

We cannot assure you that we will file a registration statement with the SEC to allow holders of ADSs or U.S. holders of L Shares or A Shares to participate in a preemptive rights offering. As a result, the equity interest of such holders in América Móvil may be diluted proportionately. In addition, under current Mexican law, it is not practicable for the depositary to sell preemptive rights and distribute the proceeds from such sales to ADS holders.

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RISKS RELATING TO DEVELOPMENTS IN MEXICO AND OTHER COUNTRIES

Economic, political and social conditions in Latin America, the United States, the Caribbean and Europe may adversely affect our business

Our financial performance may be significantly affected by general economic, political and social conditions in the markets where we operate. Many countries in Latin America and the Caribbean, including Mexico, Brazil and Argentina, have undergone significant economic, political and social crises in the past, and these events may occur again in the future. We cannot predict whether changes in political administrations will result in changes in governmental policy and whether such changes will affect our business. Factors related to economic, political and social conditions that could affect our performance include:

significant governmental influence over local economies;
substantial fluctuations in economic growth;
high levels of inflation, including hyperinflation;
changes in currency values;
exchange controls or restrictions on expatriation of earnings;
high domestic interest rates;
price controls;
changes in governmental economic, tax, labor or other policies;
imposition of trade barriers;
changes in law or regulation; and
overall political, social and economic instability and civil unrest.

Adverse economic, political and social conditions in Latin America, the United States, the Caribbean or in Europe may inhibit demand for telecommunication services and create uncertainty regarding our operating environment or may affect our ability to renew our licenses and concessions, to maintain or increase our market share or profitability and may have an adverse impact on future acquisitions, which could have a material adverse effect on our company. In addition, the perception of risk in the countries in which we operate may have a negative effect on the trading price of our shares and ADSs and may restrict our access to international financial markets.

In various countries where we operate, for example, elections took place during 2018, which could lead to economic, political and social changes over which we have no control.

Our business may also be especially affected by conditions in Mexico and Brazil, two of our largest markets. For example, Mexican elections in July 2018 and July 2021 resulted in a new president and in a new Congress in which the political party with a majority ofmore members in both houses

representing is a different political party from the parties that have been in power in the past. We cannot predict what changes in policy the Mexican administration may adopt, or their impact on our operations. Additionally, in Mexico, economic conditions are strongly impacted by those of the United States. There is continuing uncertainty regarding U.S. policies with respect to matters of importance to Mexico and its economy, particularly with respect to trade and migration.

Possible

The phase out of the London Interbank Offered Rate (LIBOR), or the replacement of the LIBOR benchmark interestwith a different reference rate, may have an impact on our business

On July 27, 2017,adversely affect interest rates

In March 2021, the U.K.ICE Benchmark Administration (the Financial Conduct Authority (the authority that regulatesAuthority-regulated and authorized administrator of LIBOR) announced that it would phase out LIBOR as a benchmark bycease the end of 2021. The discontinuation date for submission and publication of rates for certainthe
one-week
and
two-month
U.S. dollar LIBOR after December 31, 2021, and the publication of all remaining U.S. dollar LIBOR tenors of USD LIBOR (1-month, 3-month, 6-month and 12-month) has been extended by the ICE Benchmark Administration (the administrator of LIBOR) untilafter June 30, 2023. It
The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee (the “ARRC”), a steering committee comprised of large U.S. financial institutions, has proposed a new index calculated by short term repurchase agreements, backed by U.S. Treasury securities, called the Secured Overnight Financing Rate (“SOFR”) as an alternative
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to LIBOR for use in contracts that are currently indexed to U.S. dollar LIBOR and has proposed a paced market transition plan to SOFR. On July 29, 2021, the ARRC formally recommended SOFR as its preferred alternative replacement rate for U.S. dollar LIBOR.
Although many of our LIBOR-based obligations provide for alternative methods of calculating the interest rate payable if LIBOR is unclear whether newnot reported, the extent and manner of any future changes with respect to methods of calculating LIBOR will be established such that it continues to exist after 2021. Similarly, it is not possibleor replacing LIBOR with another benchmark are unknown and impossible to predict whether LIBOR will continue to be viewedat this time and, as an acceptable market benchmark, what rate orsuch, may result in interest rates may become acceptable alternatives to LIBOR, or what effect these changes in views or alternatives may have on financial markets for LIBOR-linked financial instruments. Potential changes, or uncertainty related to such potential changes maythat are materially higher than current interest rates. This could materially and adversely affect the market for loans with LIBOR-indexed interest rates. When LIBOR ceases to exist, we may need to amend the credit and loan agreements with our lenders that utilize LIBOR as a factor in determining the interest rate based on a new standard that is established, if any. There is no guarantee that a transition from LIBOR to an alternative will not result in financial market disruptions, significant increases in benchmark rates, or borrowing costs to borrowers, any of which could have an adverse effect on our business, results of operations, cash flows and financial condition.

liquidity.

Changes in exchange rates could adversely affect our financial condition and results of operations

We are affected by fluctuations in the value of the currencies in which we conduct operations compared to the currencies in which our indebtedness is denominated. Such changes result in exchange losses or gains on our net indebtedness and accounts payable. In 2020,2021, we reported net foreign exchange losses of Ps.65.4Ps.17.0 billion.

In addition, currency fluctuations between the Mexican peso and the currencies of our
non-Mexican
subsidiaries affect our results as reported in Mexican pesos. Currency fluctuations are expected to continue to affect our financial income and expense.

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Major depreciation of the currencies in which we conduct operations could cause governments to impose exchange controls that would limit our ability to transfer funds between us and our subsidiaries

Major depreciation of the currencies in which we conduct operations may result in disruption of the international foreign exchange markets and may limit our ability to transfer or to convert such currencies into U.S. dollars and other currencies for the purpose of making timely payments of interest and principal on our indebtedness. The government of Argentina has adopted exchange controls and restrictions on the movement of capital and has taken other measures in response to capital flight and the significant depreciation of the Argentine peso. In addition, although the Mexican government does not currently restrict, and for many years has not restricted, the right or ability of Mexican or foreign persons or entities to convert Mexican pesos into U.S. dollars or to transfer other currencies out of Mexico, it could institute restrictive exchange rate policies in the future. Similarly, the Brazilian government may impose temporary restrictions on the conversion of Brazilian reais into foreign currencies and on the remittance to foreign investors of proceeds from investments in Brazil whenever there is a

serious imbalance in Brazil’s balance of payments or a reason to foresee a serious imbalance.

Developments in other countries may affect the market price of our securities and adversely affect our ability to raise additional financing

The market value of securities of Mexican companies is, to varying degrees, affected by economic and market conditions in other countries, including the United States, the European Union (the “EU”) and emerging market countries. Although economic conditions in such countries may differ significantly from economic conditions in Mexico, investors’ reactions to developments in any of these other countries may have an adverse effect on the market value of securities of Mexican issuers. Crises in the United States, the EU and emerging market countries may diminish investor interest in securities of Mexican issuers. For example, in response to the ongoing military conflict involving Russia and Ukraine, the United States, other North Atlantic Treaty Organization member states, as well as
non-member
states, have announced targeted economic sanctions on Russia, certain Russian citizens and enterprises. The continuation of the conflict may trigger a series of additional economic and other sanctions enacted by the United States, other North Atlantic Treaty Organization member states, and other countries. This could materially and adversely affect economic conditions, the market price of our securities and our operations in Belarus, and could also make it more difficult for us to access the capital markets and finance our operations in the future on acceptable terms or at all.

 

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The following table sets forth our capital structure as of March 31, 2021.

  SERIES  NUMBER OF
SHARES
(MILLIONS)		   

PERCENT OF
COMBINED

CAPITAL

  A SHARES AND
AA SHARES(1)		 

  L Shares

   45,448    68.3%       – 

  (no par value)

  AA Shares

   20,578    30.9%   97.6% 

  (no par value)

  A Shares

   515    0.8%   2.4% 

  (no par value)

  Total(2)

   66,541    100%   100% 
(1)

The AA Shares and A Shares of América Móvil, together, are entitled to elect a majority of our directors. Holders of L Shares are entitled to limited voting rights under our bylaws. See “Bylaws—Voting Rights” under this Part IV.

(2)

Figures in the table may not recalculate exactly due to rounding.

2022.

  SERIES
  
NUMBER OF
SHARES
(MILLIONS)
   
PERCENT OF
COMBINED
CAPITAL
  
A SHARES AND
AA SHARES
(1)
 
    
  L Shares
   43,164    67.2%   —   
  (no par value)
    
  AA Shares
   20,555    32.0%   97.6% 
  (no par value)
    
  A Shares
   498    0.8%   2.4% 
  (no par value)
    
  Total
(2)
  
 
64,217
 
  
 
100
% 
 
 
100
% 
 
(1)
  The AA Shares and A Shares of América Móvil, together, are entitled to elect a majority of our directors. Holders of L Shares are entitled to limited voting rights under our bylaws. See “Bylaws—Voting Rights” under this Part IV.
(2)
  Figures in the table may not recalculate exactly due to rounding.
   
   
According to reports of beneficial ownership of our shares filed with the SEC, the Slim Family may be deemed to control us through their interests in a Mexican trust that holds AA Shares and L Shares for their benefit (the “Family Trust”), their interest in Inversora Carso, S.A. de C.V., including its subsidiary Control Empresarial de Capitales, S.A. de C.V. (“Control Empresarial de Capitales”) (formerly known as Inversora Carso, S.A. de C.V.), and their direct ownership of our shares. See “Management—Directors” and “Management—Executive Committee” under Part V and “Related Party Transactions” under this Part IV of this annual report.

The following table identifies owners of more than 5.0% of any series of our shares as of March 31, 2021.2022. Except as described in the table below and the accompanying notes, we are not aware of any holder of more than 5.0% of any series of our shares. Figures below do not include L Shares that would be held by each shareholder upon conversion of AA Shares or A Shares, as provided for under our bylaws. See “Management—Share Ownership of Directors and Senior Management” under Part V of this annual report.

  SHAREHOLDER

   SHARES
OWNED
(MILLIONS)		   PERCENT OF
CLASS(1)		 

  AA SHARES:

  

 

 

 

  

 

 

 

  

 

 

 

  Family Trust(2)

                                   10,894            52.9%       

  Inversora Carso(3)

  

 

 

 

   4,381              21.3%       

  Carlos Slim Helú

  

 

 

 

   1,879              9.1%         

  L SHARES:

  

 

 

 

  

 

 

 

  

 

 

 

  Inversora Carso(3)

  

 

 

 

   6,020              13.2%       

  Family Trust(2)

  

 

 

 

   5,998              13.2%       

  Carlos Slim Helú

  

 

 

 

   3,072              6.8%         

  BlackRock, Inc.(4)

  

 

 

 

   2,466              5.4%         
(1)

Percentage figures are based on the number of shares outstanding as of March 31, 2021.

(2)

The Family Trust is a Mexican trust that holds AA Shares and L Shares for the benefit of members of the Slim Family. In addition to shares held by the Family Trust, members of the Slim Family, including Carlos Slim Helú, directly own an aggregate of 3,558 million AA Shares and 9,570 million L Shares representing 17.3% and 21.1%, respectively, of each series. According to beneficial reports filed with the SEC, none of these members of the Slim Family, other than Carlos Slim Helú, individually directly own more than 5.0% of any class of our shares.

(3)

Includes shares owned by subsidiaries of Inversora Carso. Based on beneficial ownership reports filed with the SEC, Inversora Carso is a Mexican sociedad anón- ima de capital variable and may be deemed to be controlled by the Slim Family.

(4)

Based on beneficial ownership reports filed with the SEC.

SHAREHOLDER
   
SHARES
OWNED
(MILLIONS)
   
PERCENT
OF
CLASS
(1)
 
    
AA SHARES:
  
 
 
 
  
 
 
 
  
 
 
 
    
Family Trust
(2)
                                   10,894    53.0% 
    
Control Empresarial de
  
 
 
 
  
 
 
 
  
 
 
 
    
Capitales
(3)
  
 
 
 
   4,381    21.3% 
    
Carlos Slim Helú
  
 
 
 
   1,879    9.1% 
    
L SHARES:
  
 
 
 
  
 
 
 
  
 
 
 
    
Control Empresarial de Capitales
(3)
  
 
 
 
   6,318    14.6% 
    
Family Trust
(2)
  
 
 
 
   6,849    15.9% 
    
Carlos Slim Helú
  
 
 
 
   3,322    7.7% 
    
Blackrock
(4)
  
 
 
 
   2,164    5.0% 
 
(1)
  Percentage figures are based on the number of shares outstanding as of March 31, 2022.
(2)
  The Family Trust is a Mexican trust that holds AA Shares and L Shares for the benefit of members of the Slim Family. In addition to shares held by the Family Trust, members of the Slim Family, including Carlos Slim Helú, directly own an aggregate of 3,558 million AA Shares and 10,227 million L Shares representing 17.3% and 23.7%, respectively, of each series. According to beneficial reports filed with the SEC, none of these members of the Slim Family, other than Carlos Slim Helú, individually directly own more than 5.0% of any class of our shares.
(3)
  Includes shares owned by subsidiaries of Control Empresarial de Capitales, formerly known as Inversora Carso. Based on beneficial ownership reports filed with the SEC, Control Empresarial de Capitales is a Mexican sociedad anónima de capital variable and may be deemed to be controlled by the Slim Family.
(4)
  Based on beneficial ownership reports filed with the SEC.
   
   
   
   
As of March 31, 2021, 15.7%2022, 12.2% of the outstanding L Shares were represented by L Share ADSs, each representing the right to receive 20 L Shares, and 99.98%99.9% of the L Share ADSs were held by 6,5326,246 registered holders with addresses in the United States. As of such date, 37.2%23.8% of the A Shares were held in the form of A Share ADSs, each representing the right to receive 20 A Shares, and 99.9%99.84% of the A Share ADSs were held by 3,2153,113 registered holders with addresses in the United States. Each A Share may be exchanged at the option of the holder for one L Share.

We have no information concerning the number of holdings or holders with registered addresses in the United States that hold:

AA Shares;

A Shares not represented by ADSs; or

L Shares not represented by ADSs.
 

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LOGO


Our subsidiaries purchase materials or services from a variety of companies that may be deemed for certain purposes to be under common control with us, including Telesites, Grupo Carso, and Grupo Financiero Inbursa and their respective subsidiaries.

These services include insurance and banking services provided by Grupo Financiero Inbursa and its subsidiaries. In addition, we sell products in Mexico through the Sanborns and Sears Operadora México, S.A. de C.V. store chains. Some of our subsidiaries also purchase network construction services and materials from subsidiaries of Grupo Carso. Our subsidiaries purchase these materials and services on terms

no less favorable than they could obtain from unaffiliated parties, and would have access to other sources if our related parties ceased to provide them on competitive terms.

We and Telesites have entered into an agreement providing for site usage fees, annual price escalations and fixed annual charges that permit us to install a
pre-determined
amount of equipment at the Telesite towers and provide for incremental
fee payments if capacity use is exceeded. The principal economic terms of the agreement conform to the reference terms published by Telesites and approved by IFT.

the Federal Telecommunications Institute (

Instituto Federal de Telecomunicaciones
, or “IFT”).
We enter into a number of transactions with related parties in the ordinary course of our business. We believe that these transactions are on terms comparable to those that could be obtained in arm’s length negotiations with unaffiliated third parties. Note 6 and Note 15 to our audited consolidated financial statements included in this annual report provides additionalset forth information about ouron related party transactions.

transactions for the three year period set forth therein. We do not regard any of these transactions as material to us.
In accordance with Mexican law, an independent audit committee must provide an opinion to the Board of Directors regarding any transaction with a related party that requires approval by the Board of Directors. Pursuant to Mexican law, related party transactions that are
non-material,

LOGO

are within the ordinary course of business, or are on an

arm’s-length

basis, do not require specific board approval, if consistent with the guidelines approved by the Board of Directors.
We regularly pay cash dividends on our shares. The table below sets forth the nominal amount of dividends paid per share on each date indicated, in Mexican pesos and translated into U.S. dollars at the exchange rate reported by Banco de México, as published in the Official Gazette, for each of the respective payment dates.

  PAYMENT DATE  PESOS PER SHARE     DOLLARS PER SHARE 

  November 9, 2020

   Ps.    0.19     U.S.$     0.0092 

  July 20, 2020

   Ps.    0.19     U.S.$     0.0085 

  November 11, 2019

   Ps.    0.17     U.S.$     0.0090 

  July 15, 2019

   Ps.    0.18     U.S.$     0.0095 

  November 12, 2018

   Ps.    0.16     U.S.$     0.0080 

  July 16, 2018

   Ps.    0.16     U.S.$     0.0085 

  November 13, 2017

   Ps.    0.15     U.S.$     0.0079 

  July 17, 2017

   Ps.    0.15     U.S.$     0.0085 

  November 14, 2016

   Ps.    0.14     U.S.$     0.0068 

  July 15, 2016

   Ps.    0.14     U.S.$     0.0076 

  PAYMENT DATE
PESOS PER SHARE
DOLLARS PER SHARE
  November 8, 2021
Ps.0.20U.S.$ 0.0097
  July 19, 2021
Ps.0.20U.S.$ 0.0100
  November 9, 2020
Ps.0.19U.S.$ 0.0092
  July 20, 2020
Ps.0.19U.S.$ 0.0085
  November 11, 2019
Ps.0.17U.S.$ 0.0090
  July 15, 2019
Ps.0.18U.S.$ 0.0095
  November 12, 2018
Ps.0.16U.S.$ 0.0080
  July 16, 2018
Ps.0.16U.S.$ 0.0085
  November 13, 2017
Ps.0.15U.S.$ 0.0079
  July 17, 2017
Ps.0.15U.S.$ 0.0085
On April 26, 202120, 2022 our shareholders approved a cash dividend of Ps.0.40Ps.0.44 per share, of which Ps.0.20 per share is payable in one installment on July 19, 2021 and Ps.0.20 is payable on November 8, 2021.

August 29, 2022.

The declaration, amount and payment of dividends by América Móvil is determined by majority vote of the holders of AA Shares and A Shares, generally on the recommendation of the Board of Directors, and depends on our results of operations, financial condition, cash requirements, future prospects and other factors considered relevant by the holders of AA Shares and A Shares.

Our bylaws provide that holders of AA Shares, A Shares and L Shares participate equally on a
per-share
basis in dividend payments and other distributions, subject to certain
non-material
preferential dividend rights of holders of L Shares.

 

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Our shares and ADSs are listed on the following markets:

  SECURITY
  
STOCK EXCHANGE
  
TICKER SYMBOL

  L Shares

  Mexican Stock Exchange—Mexico City  AMXL

  L Share ADSs

  New York Stock Exchange—New York  AMX

  A Shares

  Mexican Stock Exchange—Mexico City  AMXA

  A Share ADSs

  New York Stock Exchange—New York  AMOV

LOGO

We are a
Sociedad Anónima Bursátil de Capital Variable
organized under Mexican law. For a description of our AA Shares, A Shares and L Shares, and a brief summary of certain significant provisions in our current bylaws and Mexican law, see “Description of Securities Registered Under Section 12 of the Exchange Act,” filed as Exhibit 2.1 with this annual report. For a description of our Board of Directors, Executive and Audit and Corporate Practices Committees and External Auditor, see “Management” under Part V of this annual report.

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We periodically repurchase at our discretion our L Shares and A Shares on the open market pursuant to guidelines approved by our Board of Directors, using funds up to an amount authorized by our shareholders specifically for the repurchase of L Shares and A Shares. Our shareholders authorized the allocation of up to Ps.6 billion in February 2021, Ps.25 billion in April 2021 and Ps.26 billion in November 2021, in each case to repurchase L Shares and A Shares. In our 20212022 annual ordinary shareholders’ meeting, our shareholders authorized increase to the buyback program fund by an allocation of Ps.25amount equal to Ps.26 billion, which after the increase amounts to Ps.36.539 billion to repurchase L Shares and A Shares from April 20212022 to April 2022.

2023.

The following tables settable sets out information concerning purchases of our L Shares by us and our affiliated purchasers in 2020.2021. We did not repurchase our L Shares other than through the share repurchase program, and we did not repurchase any A Shares.

  PERIODTOTAL NUMBER OF
SHARES  PURCHASED(1)		AVERAGE PRICE
PER SHARE		TOTAL NUMBER OF SHARES
PURCHASED AS PART OF
PUBLICLY ANNOUNCED
PLANS OR PROGRAMS		APPROXIMATE MEXICAN PESO
VALUE OF SHARES THAT MAY
YET BE PURCHASED UNDER
THE PLANS OR PROGRAMS(2)

January 2020

 5,650,000 Ps. 15.34 5,650,000 Ps. 2,664,468,912

February 2020

 2,200,000 16.06 2,200,000 2,629,333,277

March 2020

 - - - 2,629,333,277

April 2020

 11,000,000 13.64 11,000,000 5,930,090,256

May 2020

 19,975,000 14.99 19,975,000 5,632,443,872

June 2020

 22,000,000 15.26 22,000,000 5,298,718,225

July 2020

 22,500,000 14.64 22,500,000 4,971,126,848

August 2020

 21,000,000 14.14 21,000,000 4,675,982,377

September 2020

 32,000,000 13.49 32,000,000 4,246,872,865

October 2020

 43,000,000 13.60 43,000,000 3,665,445,685

November 2020

 80,000,000 14.40 80,000,000 2,519,753,255

December 2020

 106,282,651 14.48 106,282,651 989,494,709

Total L Shares

 365,607,651

 

 

 

 365,607,651

 

 

 

(1)

This includes purchases by us and our affiliated purchasers in 2020.

(2)

This is the approximate peso amount available at the end of the period for purchases of both L Shares and A Shares pursuant to our share repurchase program.

53

PERIOD
  
TOTAL NUMBER OF
SHARES PURCHASED
(1)
     
AVERAGE PRICE
PER SHARE
     
TOTAL NUMBER OF SHARES
PURCHASED AS PART OF
PUBLICLY ANNOUNCED PLANS
OR PROGRAMS
     
APPROXIMATE MEXICAN PESO
VALUE OF SHARES THAT MAY YET
BE PURCHASED UNDER THE PLANS
OR PROGRAMS
(2)
 
     
January 2021
   58,300,000     Ps.    14.70      58,300,000     Ps.137,547,600.71 
     
February 2021
   83,000,000      13.76      83,000,000      5,002,342,621.26 
     
March 2021
   180,000,000      14.11      180,000,000      2,476,906,037.20 
     
April 2021
   169,345,689      14.42      169,345,689      24,433,023,601.16 
     
May 2021
   132,896,900      14.86      132,896,900      22,469,536,093.00 
     
June 2021
   141,528,312      15.63      141,528,312      20,270,462,806.00 
     
July 2021
   184,489,748      15.81      184,489,748      17,370,881,547.05 
     
August 2021
 �� 214,000,000      17.87      214,000,000      13,568,848,403.30 
     
September 2021
   249,000,000      18.64      249,000,000      8,954,740,926.13 
     
October 2021
   273,600,000      18.14      273,600,000      4,020,009,413.98 
     
November 2021
   285,400,000      18.70      285,400,000      24,714,680,611.87 
     
December 2021
   201,259,367      20.50      201,259,367      20,612,674,146.83 
     
Total L Shares
  
 
2,172,820,016
 
    
 
 
 
    
 
2,172,820,016
 
    
 
 
 
 
(1)
  This includes purchases by us and our affiliated purchasers in 2021.
(2)
  This is the approximate peso amount available at the end of the period for purchases of both L Shares and A Shares pursuant to our share repurchase program.
   
   
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Table of ContentsLOGO

The following summary contains a description of certain Mexican federal and U.S. federal income tax consequences of the acquisition, ownership and disposition of L Shares, A Shares, L Share ADSs or A Share ADSs, but it does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a decision to purchase, hold or sell shares or ADSs.

This discussion does not constitute, and should not be considered as, legal or tax advice to holders. The discussion is for general information purposes only and is based upon the federal tax laws of Mexico (including the Mexican Income Tax Law (
Ley del Impuesto sobre la Renta
) and the United States in effect on the date of this annual report, including the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion and the protocols thereto between the United States and Mexico currently in force (together, the “Tax Treaty”"Tax Treaty") and the agreement between the United States and Mexico concerning the exchange of information with respect to tax matters. The Tax Treaty is subject to change, and such changes may have retroactive effects. Holders of shares or ADSs should consult their own tax advisors as to the Mexican, U.S. or other tax consequences of the purchase, ownership and disposition of shares or ADSs, including, in particular, the effect of any foreign, state or local tax laws.

MEXICAN TAX CONSIDERATIONS

The following is a general summary of the principal consequences under the Mexican Income Tax Law and the rules and regulations thereunder, as currently in effect, of an investment in shares or ADSs by a holder that is not a resident of Mexico and that will not hold shares or ADSs or a beneficial interest therein in connection with the conduct of a trade or business through a permanent establishment in Mexico (a “nonresident holder”"nonresident holder").

For purposes of Mexican taxation, the definition of residence is highly technical and residence arises in several situations. Generally, an individual is a resident of Mexico if he or she has established his or her home or center of vital interests in Mexico, and a corporation is considered a resident if it has its place of effective management in Mexico. However, any determination of residence should take into account the particular situation of each person or legal entity.

If a legal entity or an individual is deemed to have a permanent establishment in Mexico for Mexican tax purposes, all income attributable to that permanent establishment will be subject to Mexican income taxes, in accordance with applicable tax laws.

This summary does not purport to be a comprehensive description of all the Mexican tax considerations that may be relevant to a decision to purchase, own or dispose of the shares. In particular, this summary (i) does not describe any tax consequences arising under the laws of any state, locality, municipality or taxing jurisdiction other than certain federal laws of Mexico and (ii) does not address all of the Mexican tax consequences that may be applicable to specific holders of the shares, including a holder:

•whose shares were not acquired through the Mexican Stock Exchange or other markets authorized by the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público) or the Mexican Federal Tax Code;

whose shares were not acquired through the Mexican Stock Exchange or other markets authorized by the Ministry of Finance and Public Credit (
Secretaría de Hacienda y Crédito Público
) or the Mexican Federal Tax Code;
of shares or ADSs that control us;

that holds 10.0% or more of our shares;

that is part of a group of persons for purposes of Mexican law that controls us (or holds 10.0% or more of our shares); or

that is a resident of Mexico or is a corporation resident in a tax haven (as defined by the Mexican Income Tax Law).

Tax Treaties

Provisions of the Tax Treaty that may affect the taxation of certain U.S. holders (as defined below) are summarized below.

The Mexican Income Tax Law has established procedural requirements for a nonresident holder to be entitled to benefits under any of the tax treaties to which Mexico is a party, including on dispositions and dividends. These procedural requirements include, among others, the obligation to (i) prove tax treaty residence, (ii) file tax calculations made by an authorized certified public accountant or an informational tax statement, as the case may be, and (iii) appoint representatives in Mexico for taxation purposes. Parties related to the issuer may be subject to additional procedural requirements.

Payment of Dividends

Dividends, either in cash or in kind, paid with respect to L Shares, A Shares, L Share ADSs or A Share ADSs will generally be subject to a 10.0% Mexican withholding tax (provided that no Mexican withholding tax will apply to distributions of net taxable profits generated before 2014).

 

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Table of Contents

Taxation of Dispositions

The tax rate on income realized by a nonresident holder from a disposition of shares through the Mexican Stock Exchange is generally 10.0%, which is applied to the net gain realized on the disposition. This tax is payable through withholding made by intermediaries. However, such withholding does not apply to a nonresident holder who certifies that the holder is resident in a country with which Mexico has entered into an income tax treaty.

The sale or other transfer or disposition of shares not carried out through the Mexican Stock Exchange and not held in the form of ADSs will be subject to a 25% tax rate in Mexico, which is applicable to the gross proceeds realized from the sale.
Alternatively, a nonresident holder may, subject to certain requirements, elect to pay taxes on the net gain realized from the sale of shares at a rate of 35%.

The sale or disposition of ADSs through securities exchanges or markets recognized under the Mexican federal tax code (which includes the NYSE) by nonresidents who are residents of a country with which Mexico has entered into an income tax treaty is not subject to income tax in Mexico under the current tax rules. The tax treatment of such transfer of ADSs by nonresidents who are also not residents of a country with which Mexico has entered into an income tax treaty is not clear under the current Mexican tax rules.

Pursuant to the Tax Treaty, gains realized by a U.S. resident that is eligible to receive benefits pursuant to the Tax Treaty from the sale or other disposition of shares or ADSs, even if the sale or disposition is not carried out under the circumstances described in the preceding paragraphs, will not be subject to Mexican income tax, provided that the gains are not attributable to a permanent establishment or a fixed base in Mexico, and further provided that such U.S. holder owned less than 25% of the shares representing our capital stock (including ADSs), directly or indirectly, during the
12-month
period preceding such disposition. U.S. residents should consult their own tax advisors as to their possible eligibility under the Tax Treaty.

Gains and gross proceeds realized by other nonresident holders that are eligible to receive benefits pursuant to other income tax treaties to which Mexico is a party may be exempt from Mexican income tax, in whole or in part.
Non-U.S.
holders should consult their own tax advisors as to their possible eligibility under such treaties.

Other Mexican Taxes

A nonresident holder generally will not be liable for estate, inheritance or similar taxes with respect to its holdings of shares or ADSs; provided, however, that gratuitous transfers of shares or ADSs may, in certain circumstances, result in the imposition of a Mexican tax upon the recipient.

There are no Mexican stamp, issue registration or similar taxes payable by a nonresident holder with respect to shares or ADSs.

U.S. FEDERAL INCOME TAX

CONSIDERATIONS

The following is a summary of certain U.S. federal income tax consequences to U.S. holders (as defined below) of the acquisition, ownership and disposition of shares or ADSs. The summary does not purport to be a comprehensive description of all of the tax consequences of the acquisition, ownership or disposition of shares or ADSs. The summary applies only to U.S. holders that will hold their shares or ADSs as capital assets and does not apply to special classes of U.S. holders, such as dealers in securities or currencies, holders with a functional currency other than the U.S. dollar, holders of 10.0% or more of our shares measured by vote or value (whether held directly or through ADSs or both),
tax-exempt
organizations, banks, insurance companies or other financial institutions, holders liable for the alternative minimum tax, securities traders electing to account for their investment in their shares or ADSs on a
mark-to-market
basis, entities that are treated for U.S. federal income tax purposes as partnerships or other pass-through entities or equity holders therein and persons holding their shares or ADSs in a hedging transaction or as part of a straddle or conversion transaction.

For purposes of this discussion, a “U.S. holder”"U.S. holder" is a holder of shares or ADSs that is:

a citizen or resident of the United States of America,

a corporation (or other entity taxable as a corporation) organized under the laws of the United States of America or any state thereof or

otherwise subject to U.S. federal income taxation on a net income basis with respect to the shares or ADSs.

Each U.S. holder should consult such holder’s own tax advisor concerning the overall tax consequences to it of the ownership or disposition of shares or ADSs that may arise under foreign, state and local laws.

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Treatment of ADSs

In general, a U.S. holder of ADSs will be treated as the owner of the shares represented by those ADSs for U.S. federal income tax purposes. Deposits or withdrawals of shares by U.S. holders in exchange for ADSs will not result in the realization of gain or loss for U.S. federal income tax purposes. U.S. holders that withdraw any shares should consult their own tax advisors regarding the treatment of any foreign currency gain or loss on any pesos received in respect of such shares.

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LOGO

Taxation of Distributions

In general, a U.S. holder will treat the gross amount of distributions we pay, without reduction for Mexican withholding tax, as dividend income for U.S. federal income tax purposes to the extent of our current and accumulated earnings and profits. Because we do not expect to maintain calculations of our earnings and profits under U.S. federal income tax principles, it is expected that distributions paid to U.S. holders generally will be reported as dividends. In general, the gross amount of any dividends will be includible in the gross income of a U.S. holder as ordinary income on the day on which the dividends are received by the U.S. holder, in the case of shares, or by the depositary, in the case of ADSs.

Dividends will be paid in pesos and will be includible in the income of a U.S. holder in a U.S. dollar amount calculated by reference to the exchange rate in effect on the date that they are received by the U.S. holder, in the case of shares, or by the depositary, in the case of ADSs (regardless of whether such pesos are in fact converted into U.S. dollars on such date). If such dividends are converted into U.S. dollars on the date of such receipt, a U.S. holder generally should not be required to recognize foreign currency gain or loss in respect of the dividends. U.S. holders should consult their own tax advisors regarding the treatment of foreign currency gain or loss, if any, on any pesos received by a U.S. holder or depositary that are converted into U.S. dollars on a date subsequent to receipt. Dividends paid by us will not be eligible for the dividends-received deduction allowed to corporations under the U.S. Internal Revenue Code of 1986, as amended (the “Code”"Code").

The amount of Mexican tax withheld generally will give rise to a foreign tax credit or deduction for U.S. federal income tax purposes. Dividends generally will constitute “passive"passive category income”income" for purposes of the foreign tax credit. The foreign tax credit rules are complex. U.S. holders should consult their own tax advisors with respect to the implications of those rules for their investments in our shares or ADSs.

Subject to certain exceptions for short-term and hedged positions, the U.S. dollar amount of dividends received by an individual with respect to the shares or ADSs will be subject
to taxation at reduced rates if the dividends are “qualified"qualified dividends.”" Dividends paid on the shares or ADSs will be treated as qualified dividends if (i) (A) the shares or ADSs are readily tradable on an established securities market in the United States or (B) we are eligible for the benefits of a comprehensive tax treaty with the United States which the U.S. Treasury determines is satisfactory for purposes of this provision and which includes an exchange of information program, and (ii) we were not, in the year prior to the year in

which the dividend was paid, and are not, in the year in which the dividend is paid, a passive foreign investment company (“PFIC”("PFIC"). The ADSs are listed on the NYSE, and will qualify as readily tradable on an established securities market in the United States so long as they are so listed. In addition, the U.S. Treasury has determined that the Tax Treaty meets the requirements for reduced rates of taxation, and we believe we are eligible for the benefits of the Tax Treaty. Based on our audited consolidated financial statements and relevant market data, we believe that we were not treated as a PFIC for U.S. federal income tax purposes with respect to the 20192020 and 20202021 taxable years. In addition, based on our audited consolidated financial statements and our current expectations regarding the value and nature of our assets, the sources and nature of our income and relevant market data, we do not anticipate becoming a PFIC for the 20212022 taxable year. Holders of shares or ADSs should consult their own tax advisors regarding the availability of the reduced dividend tax rate in the light of their own particular circumstances.

Distributions of additional shares or ADSs to U.S. holders with respect to their shares or ADSs that are made as part of a pro rata distribution to all of our shareholders generally will not be subject to U.S. federal income tax.

Taxation of Dispositions

A U.S. holder generally will recognize capital gain or loss on the sale or other disposition of the shares or ADSs in an amount equal to the difference between the U.S. holder’s basis in such shares or ADSs (in U.S. dollars) and the amount realized on the disposition (in U.S. dollars, determined at the spot rate on the date of disposition if the amount realized is denominated in a foreign currency). Gain or loss recognized by a U.S. holder on such sale or other disposition generally will be long-term capital gain or loss if, at the time of disposition, the shares or ADSs have been held for more than one year. Long-term capital gain recognized by a U.S. holder that is an individual is taxable at reduced rates. The deductibility of a capital loss is subject to limitations.

Gain, if any, realized by a U.S. holder on the sale or other disposition of the shares or ADSs generally will be treated as U.S. source income for U.S. foreign tax credit purposes. Consequently, if a Mexican withholding tax is imposed on the sale or disposition of the shares, a U.S. holder that does not
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receive significant foreign source income from other sources may not be able to derive effective U.S. foreign tax credit benefits in respect of such Mexican taxes. In addition, as a result of recent changes to the foreign tax credit rules, for taxable years beginning after December 28, 2021, any Mexican tax imposed on the sale or other disposition of the shares or ADSs is unlikely to be treated as creditable, unless the U.S. Holder is eligible for and elects the benefits of the Tax Treaty. U.S. holders should consult their own tax advisors regarding the application of the foreign tax credit rules to their investment in, and disposition of, the shares or ADSs.

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Information Reporting and Backup Withholding

Dividends on, and proceeds from the sale or other disposition of, the shares or ADSs paid to a U.S. holder generally may be subject to the information reporting requirements of the Code and may be subject to backup withholding unless the holder:

establishes that it is an exempt recipient, if required, or

provides an accurate taxpayer identification number on a properly completed Internal Revenue Service Form
W-9
and certifies that no loss of exemption from backup withholding has occurred.

The amount of any backup withholding from a payment to a holder will be allowed as a credit against the U.S. holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the Internal Revenue Service.

U.S. Tax Consequences for
Non-U.S.
holders

DISTRIBUTIONS.A holder of shares or ADSs that is, with respect to the United States, a foreign corporation or a nonresident alien individual (a
“non-U.S.
holder”) will generally not be subject to U.S. federal income or withholding tax on dividends received on shares or ADSs, unless such income is effectively connected with the conduct by the holder of a U.S. trade or business.

DISPOSITIONS.A
non-U.S.
holder of shares or ADSs will not be subject to U.S. federal income or withholding tax on gain realized on the sale of shares or ADSs, unless:

gain is effectively connected with the conduct by the holder of a U.S. trade or business or

in the case of gain realized by an individual holder, the holder is present in the United States for 183 days or more in the taxable year of the sale and certain other conditions are met.

INFORMATION REPORTING AND BACKUP WITHHOLDING. Although
non-U.S.
holders generally are exempt from backup withholding, a
non-U.S.
holder may be required to comply with certification and identification procedures in order to establish its exemption from information reporting and backup withholding.

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DIRECTORS

Our Board of Directors has broad authority to manage our company. Our bylaws provide for the Board of Directors to consist of between five5 and 21 directors and allow for the election of an equal number of alternate directors. Directors need not be shareholders. A majority of our directors and a majority of the alternate directors must be Mexican citizens and elected by Mexican shareholders.

A majority of the holders of the AA Shares and A Shares voting together elect a majority of the directors and alternate directors, provided that any holder or group of holders of at least 10.0% of the total AA Shares and A Shares is entitled to name one director and one alternate director. Two directors and two alternate directors, if any, are elected by a majority vote of the holders of L Shares. Each alternate director may attend meetings of the Board of Directors and vote in the absence of the corresponding director. Directors and alternate directors are elected or reelected at each annual general meeting of shareholders and each annual ordinary special meeting of holders of L Shares. In accordance with the Mexican Securities Market Law (
Ley del Mercado de Valores
), the determination as to the independence of our directors is made by our shareholders, though the CNBV may challenge this determination. Pursuant to our bylaws and the Mexican Securities Market Law, at least 25.0% of our directors must be independent. In order to have a quorum for a meeting of the Board of Directors, a majority of those present must be Mexican nationals.

At a shareholders’ meeting held on November 22, 2021, Claudia Jañez Sanchez and Gisselle Morán Jiménez were designated as independent members of our Board of Directors. At the annual ordinary shareholders’ meetingsmeeting held on April [26], 2021,20, 2022, except for Mr. Elías Ayub, the current members of the Board of Directors, the Executive Committee and the Audit and Corporate Practices Committee were reelected, and the Corporate Secretary and the Corporate Pro Secretary were reappointed, with 1112 directors elected by the AA Shares and A Shares voting together and two2 directors elected by the L Shares. 54%64% of the members of the Board of Directors are independent and 8%21% are women.

Our bylaws provide that the members of the Board of Directors are elected for a term of one year. Pursuant to Mexican law, members of the Board continue in their positions after the expiration of their terms for up to an additional
30-day
period if new members are not elected. Furthermore, in certain circumstances provided under the Mexican Securities Market Law, the Board of Directors may

elect temporary directors who then may be elected or replaced at the shareholders’ meetings.

The names and positions of the members of the Board reelected or elected for the first time at the 20212022 annual general shareholders’ meeting, their year of birth, and information
concerning their committee membership and principal business activities outside América Móvil are set forth below:

Directors elected by holders of Series AA and Series A Shares:

CARLOS SLIM DOMIT

Chairman of the Board and the Executive Committee

Born:

  1967

First elected:

  2011

Term expires:

  20222023

Principal occupation:

  Chairman of the Board of América Móvil

Other directorships:

  Chairman of the Board of Grupo Carso and its affiliates

Business experience:

  Business administration; Chief Executive Officer of Sanborn Hermanos

PATRICK SLIM DOMIT

Vice Chairman and Member of the Executive Committee

Born:

  1969

First elected:

  2004

Term expires:

  20222023

Principal occupation:

  Vice Chairman of our Board of Directors

Other directorships:

  Director of Grupo Carso and its affiliates

Business experience:

  Business administration; Chief Executive Officer of Grupo Carso and Vice President of Commercial Markets of Telmex

DANIEL HAJJ ABOUMRAD

Director and Member of the Executive Committee

Born:

  1966

First elected:

  2000

Term expires:

  20222023

Principal occupation:

  Chief Executive Officer of América Móvil

Other directorships:

  Director of Grupo Carso and Telmex

Business experience:

  Business administration; Chief Executive Officer of Compañía Hulera Euzkadi
 

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LUIS ALEJANDRO SOBERÓN KURI

Director

Born:

  1960

First elected:

  2000

Term expires:

  20222023

Principal occupation:

  Chief Executive Officer and Chairman of the Board of Serinem México (a subsidiary of Corporación Interamericana de EntretenimientoEntretenimiento)

Other directorships:

  Director of CIE; Director of Grupo Financiero Citibanamex

Business experience:

  Business administration; Various positions at CIE

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FRANCISCO JOSÉ MEDINA CHÁVEZ

Director

Born:

  1956

First elected:

  2018

Term expires:

  20222023

Principal occupation:

  Chief Executive Officer and Chairman of Grupo Fame, and Chairman of Grupo Altozano

Other directorships:

  Director of Banamex CitigroupBanco Nacional de México and Grupo Chedraui

Business experience:

  Real estate; Director of AeromexicoAeroméxico and Mitsui Mexico

ERNESTO VEGA VELASCO

Director, Chairman of the Audit and Corporate Practices Committee

Born:

  1937

First elected:

  2007

Term expires:

  20222023

Principal occupation:

  Retired. Member of the boardBoard of directorsDirectors and audit and corporate practices, planning and finance and evaluation and compensation committees of certain companies.

Other directorships:

  Director of Kuo and its affiliates, Inmuebles Carso and its affiliates, and Industrias Peñoles

Business experience:

  Accounting and business administration; Various positions in Desc Group, including Corporate Vice-PresidentVice- President

RAFAEL MOISÉS KALACH MIZRAHI

Director and Member of the Audit and Corporate Practices Committee

Born:

  1946

First elected:

  2012

Term expires:

  20222023

Principal occupation:

  Chairman and Chief Executive Officer of Grupo Kaltex

Other directorships:

  Director of Grupo Carso and its affiliates

Business experience:

  Accounting and business administration; Variousvarious positions in Grupo Kaltex

ANTONIO COSÍO PANDO

Director

Born:

  1968

First elected:

  2015

Term expires:

  20222023

Principal occupation:

  Vice President of Grupo Hotelero las Brisas, Compañía Industrial Tepeji del Río, and Bodegas de Santo Tomás

Other directorships:

  Director of Grupo Carso and its affiliates, Corporación Actinver, and Grupo Aeromexico

Business experience:

  Engineer; Variousvarious positions in Grupo Brisas and Compañía Industrial Tepeji del Río S.A. de C.V.

ARTURO ELÍAS AYUB

OSCAR VON HAUSKE SOLÍS

Director

Born:

  19661957

First elected:

  2011

Term expires:

  20222023

Principal occupation:

Head of Strategic Alliances, Communications and Institutional Relations of Telmex; Chief Executive Officer of Fundación Telmex

Other directorships:

Director of Grupo Carso and its affiliates, Dine and its affiliates, Grupo México Transportes and Grupo Gigante

Business experience:

Business administration; Chief Executive Officer of Sociedad Comercial Cadena, President of Pastelería Francesa (El Globo) and President of Club Universidad Nacional, A.C.

OSCAR VON HAUSKE SOLÍS

Director

Born:

1957

First elected:

2011

Term expires:

2022

Principal occupation:

  Chief Fixed-line Operations Officer of América Móvil

Other directorships:

  Member of Telekom Austria’s Supervisory Board

Business experience:

  Accounting and business administration; Chief Executive Officer of Telmex Internacional, Chief Systems and Telecommunications Operators Officer of Telmex and member of KPN’s supervisory board

VANESSA HAJJ SLIM

Director

Born:

  1997

First elected:

  2018

Term expires:

  20222023
 

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Directors elected by holders of Series L Shares:

  PABLO ROBERTO GONZÁLEZ GUAJARDO
  Director and Member of the Audit and Corporate Practices Committee

  Born

1967

  First elected:

2007

  Term expires:

2022

  Principal occupation:

Chief Executive Officer of Kimberly Clark de México

  Other directorships:

Director of Kimberly Clark de México, Grupo Sanborns and Grupo Lala

  Business experience:

Law and business administration; Various positions in the Kimberly Clark Corporation and Kimberly Clark de México

DAVID IBARRA MUÑOZ
 Director
Director

Born:

  1930

First elected:

  2000

Term expires:

  20222023

Principal occupation:

  Retired

Other directorships:

  Director of Grupo Carso and its affiliates, and Grupo Mexicano de Desarrollo

Business experience:

  Economist; Chief Executive Officer of Nacional Financiera S.N.C., and served as ministerSecretary of Finance and Public Credit of Mexico

GISSELLE MORÁN JIMÉNEZ
Director
Born:
1974
First elected:
2021
Term expires:
2023
Principal occupation:
Chief Executive Officer of Real Estate, Market and Lifestyle
Other directorships:
Director of Alignmex Real Estate Capital
Business experience:
Commercial Manager of Grupo Mundo Ejecutivo
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Directors elected by holders of Series L Shares:
PABLO ROBERTO GONZÁLEZ GUAJARDO
Director and Member of the Audit and Corporate Practices Committee
Born:
1967
First elected:
2007
Term expires:
2023
Principal occupation:
Chief Executive Officer of Kimberly Clark de México
Other directorships:
Director of Kimberly Clark de México, Grupo Sanborns and Grupo Lala
Business experience:
Various positions in the Kimberly Clark Corporation and Kimberly Clark de México
CLAUDIA JAÑEZ SÁNCHEZ
Director
Born:
1971
First elected:
2021
Term expires:
2023
Principal occupation:
Independent Director
Other directorships:
Director of Bolsa Mexicana de Valores and Board Member of Grupo Industrial Saltillo, HSBC Mexico and Impulsora de Desarollo y de Empleo en América Latina
Business experience:
Chairman of DuPont Latin America and Chairman of the Executive Council of Global Companies
Our 20212022 annual ordinary general shareholders’ meeting determined that the following directors are independent: Messrs.Claudia Jañez Sanchez, Gisselle Morán Jiménez, Ernesto Vega Velasco, Pablo Roberto González Guajardo, David Ibarra Muñoz, Antonio Cosío Pando, Rafael Moisés Kalach Mizrahi, Luis Alejandro Soberón Kuri and Francisco José Medina Chávez.

Alejandro Cantú Jiménez, our General Counsel, serves as Corporate Secretary and Rafael Robles Miaja as Corporate
Pro-Secretary.

Patrick Slim Domit and Carlos Slim Domit are brothers. Daniel Hajj Aboumrad and Arturo Elías Ayub are brothers- in-lawis
brother-in-law
of Patrick Slim Domit and Carlos Slim Domit. Vanessa Hajj Slim is the daughter of Daniel Hajj Aboumrad.

EXECUTIVE COMMITTEE

Our bylaws provide that the Executive Committee may generally exercise the powers of the Board of Directors, with certain exceptions. In addition, the Board of Directors is required to consult the Executive Committee before deciding on certain matters set forth in the bylaws, and the Executive Committee must provide its views following a request from
the Board of Directors, the Chief Executive Officer or the

Chairman of the Board of Directors. If the Executive Committee is unable to make a recommendation within ten calendar days, or if a majority of the Board of Directors or any other corporate body duly acting within its mandate determines in good faith that action cannot be deferred until the Executive Committee makes a recommendation, the Board of Directors is authorized to act without such recommendation. The Executive Committee may not delegate its powers to special delegates or

attorneys-in-fact.

The Executive Committee is elected from among the directors and alternate directors by a majority vote of the holders of common shares (AA Shares and A Shares). The majority of its members must be Mexican citizens and elected by Mexican shareholders. The current members of the Executive Committee are Messrs. Carlos Slim Domit, Patrick Slim Domit and Daniel Hajj Aboumrad. See “Major Shareholders” under Part IV of this annual report.

AUDIT AND CORPORATE PRACTICES COMMITTEE

Our Audit and Corporate Practices Committee is comprised of independent members of the Board of Directors, as determined by our shareholders pursuant to the Mexican Securities Market Law and as defined under Rule
10A-3
under the Exchange. The Audit and Corporate Practices Committee consists of Messrs. Ernesto Vega Velasco (Chairman), Rafael Moisés Kalach Mizrahi and Pablo Roberto González Guajardo. The mandate of the Audit and Corporate Practices Committee is to assist our Board of Directors in overseeing our operations and establish and monitor procedures and controls in order to ensure that the financial information we distribute is useful, appropriate and reliable and accurately reflects our financial position. In particular, the Audit and Corporate Practices Committee is required to, among other things, (i) call shareholders’ meetings and recommend items to be included on the agenda, (ii) advise the Board of Directors on internal control procedures, related party transactions that are outside the ordinary course of our business, succession plans and compensation structures of our key executives, (iii) select and monitor our auditors, (iv) discuss with our auditors the procedures for the preparation of the annual financial statements and the accounting principles to the annual and the interim financial statements and (v) obtain from our auditors a report that includes a discussion of the critical accounting policies used by us, any alternative accounting treatments for material items that have been discussed by management with our auditors and any other written communications between our auditors and management.

 

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The Company is required to make public disclosure of any Board action that is inconsistent with the opinion of the Audit and Corporate Practices Committee. In addition, pursuant to our bylaws, the Audit and Corporate Practices Committee is in charge of our corporate governance functions under the Mexican securities laws and regulations and is required to submit an annual report to the Board of Directors with respect to our corporate and audit practices. The Audit and Corporate Practices Committee must request the opinions of our executive officers for purposes of preparing this annual report.

SENIOR MANAGEMENT

The names, responsibilities and prior business experience of our seniorexecutive officers are as follows:

DANIEL HAJJ ABOUMRAD
 
Chief Executive Officer

Appointed:

  2000

Business

experience:

  

Director of Telmex; Chief Executive Officer of Compañía Hulera Euzkadi S.A. de C.V.

CARLOS JOSÉ GARCÍA MORENO ELIZONDO
 
Chief Financial Officer

Appointed:

  2001

Business

experience:

  

General Director of Public Credit at the Ministry of Finance and Public Credit; Managing Director of UBS Warburg; Associate Director of Financing at Petróleos Mexicanos (Pemex); Member of Telekom Austria’s Supervisory Board; Member of KPN Supervisory Board

ALEJANDRO CANTÚ JIMÉNEZ
 General Counsel
General Counsel

Appointed:

  2001

Business

experience:

  

Member of Telekom Austria’s Supervisory Board; Attorney at Mijares, Angoitia, Cortés y Fuentes, S.C.

Board

OSCAR VON HAUSKE SOLÍS
 
Chief Fixed-line Operations Officer

Appointed:

  2010

Business

experience:

  

Chief Executive Officer of Telmex Internacional; Chief Systems and Telecommunications Officer of Telmex; Head of Finance at Grupo Condumex; Director of Telmex, Telmex Internacional, Empresa Brasileira de Telecomunicaçőes S.A. (“Embratel”), and Net Serviços de Comunicaçăo S.A. (“Net Serviços”); Member of Telekom Austria’s Supervisory Board

  ANGEL ALIJA GUERRERO
RAFAEL COUTTOLENC URREA
 
Chief Wireless Operations Officer

Appointed:

  20122021

Business

experience:

  

Various positions in América Móvil

AUDIT COMMITTEE FINANCIAL EXPERT

Our Board of Directors has determined that Ernesto Vega Velasco qualifies as an “audit committee financial expert,” and Mr. Vega Velasco is independent under the definition of independence applicable to us under the rules of the NYSE.

COMPENSATION OF DIRECTORS AND SENIOR MANAGEMENT

The aggregate compensation paid to our directors (including compensation paid to members of our Audit and Corporate Practices Committee) and senior management in 20202021 was approximately Ps.6.3Ps.5.8 million and Ps.79.6Ps.85 million, respectively. None of our directors is a party to any contract with us or any of our subsidiaries that provides for benefits upon termination of employment. We do not provide pension, retirement or similar benefits to our directors in their capacity as directors. Our executive officers are eligible for retirement and severance benefits required by Mexican law on the same terms as all other employees, and we do not separately set aside, accrue or determine the amount of our costs that is attributable to executive officers.

officers because they are included in the overall accrual for all employees subject to such benefits.

SHARE OWNERSHIP OF DIRECTORS AND SENIOR MANAGEMENT

Carlos Slim Domit, Chairman of our Board of Directors, holds 647 million (or as of March 31, 2022, 3.1%) of our AA Shares and 1,5671,679 million (or 3.4%as of March 31, 2022, 3.9%) of our L Shares directly. Patrick Slim Domit, Vice Chairman of our Board of Directors, holds 323 million (or as of March 31, 2022, 1.6%) of our AA Shares and 859919 million (or 1.9%as of March 31, 2022, 2.1%) of our L Shares directly. In addition, according to beneficial ownership reports filed with the SEC, Patrick Slim Domit and Carlos Slim Domit are beneficiaries of a trust that owns shares of the Company. See “Major Shareholders” under Part IV of this annual report. Except as described above, according to the information provided to us by our directors and members of senior management, none of our directors or executive officers is the beneficial owner of more than 1.0% of any class of our capital stock.

 

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Our corporate governance practices are governed by our bylaws, the Mexican Securities Market Law and the regulations issued by the CNBV. We also comply with the Mexican Code of Best Corporate Practices (
Código de Mejores Prácticas Corporativas
). On an annual basis, we file a report with the Mexican Banking and securities Commission and the Mexican Stock Exchange regarding our compliance with the Mexican Code of Best Corporate Practices.

The table below discloses the significant differences between our corporate governance practices and those required for U.S. companies under the NYSE listing standards.

NYSE STANDARDS

 

OUR CORPORATE GOVERNANCE PRACTICES

DIRECTOR INDEPENDENCE

Majority of boardBoard of directorsDirectors must be independent. §303A.01. “Controlled companies” are exempt from this requirement. A controlled company is one in which more than 50.0% of the voting power is held by an individual, group or another company, rather than the public. §303A.00. As a controlled company, we would be exempt from this requirement if we were a U.S. issuer.

 

Pursuant to the Mexican Securities Market Law, our shareholders are required to appointelect a boardBoard of directorsDirectors of no more than 21 members, 25% of whom must be independent. Certain persons are per se
non-independent,
including insiders, control persons, major suppliers and any relatives of such persons. In accordance withUnder the Mexican Securities Market Law, our shareholders’ meeting is required to make a determination as to the independence of our directors, though such determination may be challenged by the CNBV. There is no exemption from the independence requirement for controlled companies.

Currently, thea majority of our Board of Directors is independent.

 

EXECUTIVE SESSIONS

Non-management
directors must meet at regularly scheduled executive sessions without management. Independent directors should meet alone in an executive session at least once a year. §303A.03.

 Our
non-management
directors have not held executive sessions without management in the past, and they are not required to do so.
 

NOMINATING/CORPORATE GOVERNANCE COMMITTEE

Nominating/corporate governance committee composed entirely of independent directors is required. The committee must have a charter specifying the purpose, duties and evaluation procedures of the committee. §303A.04.

“Controlled companies” are exempt from these requirements. §303A.00. As a controlled company, we would be exempt from this requirement if we were a U.S. issuer.

 

Mexican law requires us to have one or more committees that oversee certain corporate practices, including the appointment of directors and executives. Under the Mexican Securities Market Law, committees overseeing certain corporate practices must be composed of independent directors. However, in the case of controlled companies, such as ours, only a majority of the committee members must be independent.

“Controlled companies” are exempt from these requirements. §303A.00. As a controlled company, we would be exempt from this requirement if we were a U.S. issuer.
Currently, we do not have a nominating committee, and we are not required to have one. Our Audit and Corporate Practices Committee, which is composed of independent directors, oversees our corporate practices, including the compensation and appointment of directors and executives.

 

COMPENSATION COMMITTEE

Compensation committee composed entirely of independent directors is required, which must evaluate and approve executive officer compensation. The committee must have a charter specifying the purpose, duties and evaluation procedures of the committee. §303A.02(a)(ii) and §303A.05. “Controlled companies” are exempt from this requirement. §303A.00.

 We currently do not have a compensation committee, and we are not required to have one. Our Audit and Corporate Practices Committee, which is comprised solely of independent directors, evaluates and approves the compensation of management (including our CEO) and directors.
 

AUDIT COMMITTEE

Audit committee satisfying the independence and other requirements of Rule
10A-3
under the Ex- changeExchange Act and the additional requirements under the NYSE standards is required. §§303A.06 and 303A.07.

 We have an auditAudit and corporate practices committeeCorporate Practices Committee of three members. Each member of the Audit and Corporate Practices Committee is independent, as independence is defined under the Mexican Securities Market Law, and also meets the independence requirements of Rule
10A-3
under the U.S. Securities Exchange Act of 1934, as amended. Our Audit and Corporate Practices Committee operates primarily pursuant to (1) a written charter adopted by our Board of Directors, which assigns to the Committee responsibility over those matters required by Rule10A-3, (2)
10A-3(2)
our bylaws and (3) Mexican law. For a more detailed description of the duties of our Audit and Corporate Practices Committee, see “Management” under Part V of this annual report.

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NYSE STANDARDS

 

OUR CORPORATE GOVERNANCE PRACTICES

EQUITY COMPENSATION PLANS

Equity compensation plans and all material revisions thereto require shareholder approval, subject to limited exemptions. §§303A.08 and 312.03.

 Shareholder approval is expressly required under Mexican law for the adoption or amendment of an equity compensation plan. Such plans must provide for similar treatment of executives in comparable positions.
 

SHAREHOLDER APPROVAL FOR ISSUANCE OF SECURITIES

Issuances of securities (1) that will result in a change of control of the issuer, (2) that are to a related party or someone closely related to a related party, (3) that have voting power equal to at least 20.0% of the outstanding common stock voting power before such issuance or (4) that will increase the number of shares of common stock by at least 20.0% of the number of outstanding shares before such issuance requires shareholder approval. §§312.03(b)-(d).

 Mexican law requires us to obtain shareholder approval for any issuance of equity securities. Under certain circumstances, however, we may sell treasury stock subject to the approval of our Board of Directors.
 

CODE OF BUSINESS CONDUCT AND ETHICS

Corporate governance guidelines and a code of business conduct and ethics are required, with disclosure of any waiver for directors or executive officers. The code must contain compliance standards and procedures that will facilitate the effective operation of the code. §303A.10.

 We have adopted a code of ethics, which applies to all of our directors and executive officers and other personnel. For more information, see “Corporate Governance—Code of Ethics” under Part V of this annual report.
 

CONFLICTS OF INTEREST

Determination

A company’s audit committee or another independent body of how tothe board of directors shall conduct a reasonable prior review and overseeoversight of related party transactions is leftrequired by Item 7.B of Form
20-F
for potential conflicts of interest and will prohibit such transaction if it determines it to be inconsistent with the listed company. The audit committee or comparable body, however, could be consideredinterests of the forum for such reviewcompany and oversight.its shareholders. §314.00. Certain issuances of common stock to a related party require shareholder approval. §312.03(b).

 In accordance with Mexican law, an independent audit committee must provide an opinion to the board of directors regarding any transaction with a related party, that is outside of the ordinary course of business, which must be approved by the board of directors. Pursuant to the Mexican Securities Market Law, our Board of Directors may establish certain guidelines regardingnon-material related party transactions, thator transactions with certain related parties within the ordinary course of business or on arms-length basis, do not require specific board approval.approval, if consistent with guidelines approved by the Board of Directors.
 

SOLICITATION OF PROXIES

Solicitation of proxies and provision of proxy materials is required for all meetings of shareholders. Copies of such proxy solicitations are to be provided to NYSE. §§402.01 and 402.04.

 We are not required to solicit proxies from our shareholders. In accordance with Mexican law and our bylaws, we inform shareholders of all meetings by public notice, which states the requirements for admission to the meeting and we make materials available to be discussed at each shareholders’ meeting. Under the deposit agreement relating to our ADSs, holders of our ADSs receive notices of shareholders’ meetings and, where applicable, instructions on how to instruct the depositary to vote at the meeting. Under the deposit agreement relating to our ADS, we may direct the voting of any ADS as to which no voting instructions are received by the depositary, except with respect to any matter where substantial opposition exists or that materially and adversely affects the rights of holders.

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A) DISCLOSURE CONTROLS AND PROCEDURES

We carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of December 31, 2020.2021. Based upon our evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

B) MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules
13a-15(f)
and
15d-15(f)
under the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer, Chief Financial Officer and other personnel, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Because of the inherent limitations in all control systems, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Based on our evaluation under the framework in Internal Control—Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2020.

2021.

Mancera, S.C. (“Mancera”), a member practice of Ernst & Young Global Limited, an independent registered public accounting firm, our independent auditor, issued an attestation report on our internal control over financial reporting on
April 28, 2021.

29

, 2022.
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C) ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of América Móvil, S.A.B. de C.V.

Opinion on Internal Control Overover Financial Reporting

We have audited América Móvil, S.A.B. de C.V. and subsidiaries’ internal control over financial reporting as of December 31, 2020,2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, América Móvil, S.A.B. de C.V. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020,2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Company as of December 31, 20202021 and 2019,2020, the related consolidated statements of comprehensive income, changes in shareholders’ equity and cash flows for each of three years in the period ended December 31, 2020,2021, and the related notes, and our report dated April 28, 202129, 2022 expressed an unqualified opinion thereon.

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Basis for Opinion

The Company’sCompany´s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company´s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definitions and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future

periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ MANCERA, S.C.

Mexico City, Mexico

April 28, 2021

29, 2022

D) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There has been no change in our internal control over financial reporting during 20202021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

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Our

Chaired by our CEO, the Corporate Sustainability Executive Committee defines and oversees the implementation of our overall strategy to improve our performance on sustainability matters.

By incorporating sustainability in our daily decision-making, we seek to foster greater efficiencies and operate with the highest sense of social responsibility and environmental care, strengthening our market leadership while contributing to economic, social, and cultural development in the communities where we operate.

Our corporate sustainability reports are available on our website at www.americamovil.com.

This URL is intended to be an inactive textual reference only. It is not intended to be an active hyperlink to our website. The information on our website, which might be accessible through a hyperlink resulting from this URL, is not incorporated into this annual report.

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Our

We have developed an Integrity and Compliance Program (ICP), which has as its foundation our Code of EthicsEthics. The ICP codifies the ethical principles that govern our business and promotes, among other things, things:
honest and ethical conduct, conduct;
full, fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submit to, the SEC and other authorities;
compliance with applicable governmental laws, rules and regulations,regulations; the prompt internal reporting of violations of the Code of Ethics and the ICP;
accountability for adherence to the Code of Ethics. Our
Both the ICP and our Code of Ethics appliesapply to all of our officers, senior management, directors, and employees.

employees, the Company’s supply chain and/or other business relationships.

In 2021, we updated our Code of Ethics to include references to various ICP policies as well as to the whistleblower portal, which permits reporting of any conduct that infringes our Code of Ethics, any applicable law or regulation or any of our policies or procedures. The full text of our Code of Ethics and associated ICP policies may be found on our website at www.americamovil.com.

América Móvil—Corporate Governance (americamovil.com). This URL is intended to be an inactive textual reference only. It is not intended to be an active hyperlink to our website. The information on our website, which might be accessible through a hyperlink resulting from this URL, is not incorporated into this annual report.

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MEXICO

Legal Framework

The legal framework for the regulation of telecommunications and broadcasting services is based on constitutional amendments passed in June 2013, the Federal Law on Telecommunications and Broadcasting (
Ley Federal de Telecomunicaciones y Radiodifusión
) enacted in July 2014 as amended and the Federal Law on Economic Competition (
Ley Federal de Competencia Económica
) enacted in May 2014 as amended.

Under the framework, the IFT may determine whether there is a “preponderant economic agent” in the telecommunications sector, based on number of customers, traffic or network capacity. In 2014, the IFT determined that an “economic interest group” consisting of us and our Mexican operating subsidiaries (Telcel, Telmex and Telnor) as well as Grupo Carso and Grupo Financiero Inbursa, constitutes the “preponderant economic agent” in the telecommunications sector, based on a finding that we serve more than half of the customers in Mexico, as measured by the IFT on a national basis.

The IFT has authority to impose on any preponderant economic agent a special regulatory regime. The special regime is referred to as “asymmetric” regulation because it applies to one sector participant and not to the others. Pursuant to the IFT’s determination that we are part of a group constituting a preponderant economic agent, we are subject to extensive asymmetric regulations in the telecom sector, which impacts our Mexican
fixed-line
and wireless businesses. See “—“ — Asymmetric Regulation of the Preponderant Economic Agent” and “—Functional Separation“ — Creation of TelmexRed Nacional Última Milla and Telnor Wholesale Services”Red Última Milla Del Noroeste” under this Part VI. This legal framework has had a substantial impact on our business and operations in Mexico.

Principal Regulatory Authorities

The IFT is an autonomous authority that regulates telecommunications and broadcasting. It is headed by seven commissioners appointed by the President, and ratified by the Senate, from among candidates nominated by an evaluation committee. The IFT has authority over the application of legislation specific to the telecommunications and broadcasting sectors, and also over competition legislation as it applies to those sectors. The Mexican Ministry of Communications and Transportation (
Secretaría de Comunicaciones y Transportes
) retains regulatory authority over a few specific public policy matters.

The Mexican government has certain powers in its relations with concessionaires, including the right to take over the management of an operator’s networks, facilities and
personnel in cases of imminent danger to national security, public order or the national economy, natural disasters and public unrest, as well as to ensure continuity of public services.

Telecommunications operators are also subject to regulation by the Federal Consumer Bureau (

Procuraduría Federal del Consumidor)
Consumido
r) under the Federal Consumer Protection Law (
Ley Federal de Protección al Consumidor
), which regulates publicity, quality of services and information required to be provided to consumers.

Asymmetric Regulation of the Preponderant Economic Agent

We are currently subject to extensive specific asymmetric measures based on the IFT’s determination that we our Mexican operating subsidiaries (Telcel, Telmex and Telnor) and certain affiliates constitute the preponderant economic agent in the telecommunications sector, and along with Telesites, Red Nacional Ultima Milla S.A.P.I. de C.V. and Red Ultima Milla Del Noroeste S.A.P.I. de C.V. are compelled to comply with such asymmetric regulation.sector. Below is a summary of what we believe are the most important measures applicable to us.

•Interconnection Rates. The Federal Law on Telecommunications and Broadcasting provides that we are not permitted to charge other carriers for the termination services we provide in our networks. These provisions were declared unconstitutional by the Mexican Supreme Court (Suprema Corte de Justicia de la Nación) in August 2017 with respect to wireless services and in April 2018 with respect to fixed services. As a result, the IFT ruled that, as of January 1, 2018, in the case of Telcel, and as of January 1, 2019, in the case of Telmex, we are able to charge other carriers for terminating calls to our networks at asymmetric rates established by the IFT. We continue to pay such carriers for their interconnection services in accordance with the fixed and mobile rates set by the IFT.

•Sharing Of Wireless Infrastructure and Services. We must provide other carriers access to (i) passive infrastructure, including towers, sites, ducts and rights of way, (ii) elements of our network that allow other carriers and mobile virtual network operators (“MVNOs”) to use our network or resell those services we provide to our customers and (iii) domestic roaming services; in each case, pursuant to IFT pre-approved reference terms (ofertas públicas de referencia). If we cannot reach an agreement with other carriers or MVNOs, our rates may be determined by the IFT using a long-run average incremental costs methodology or, in the case of MVNOs, a “retail-minus” methodology.

Interconnection Rates.
The Federal Law on Telecommunications and Broadcasting provides that we are not permitted to charge other carriers for the termination services we provide in our networks. These provisions were declared unconstitutional by the Mexican Supreme Court (
Suprema Corte de Justicia de la Nación
) in August 2017 with respect to wireless services and in April 2018 with respect to fixed services. As a result, the IFT ruled that, as of January 1, 2018, in the case of Telcel, and as of January 1, 2019, in the case of Telmex, we are able to charge other carriers for terminating calls to our networks at asymmetric rates established by the IFT. We continue to pay such carriers for their interconnection services in accordance with the fixed and mobile rates set by the IFT.
Sharing Of Wireless Infrastructure and Services.
We must provide other carriers access to (i) passive infrastructure, including towers, sites, ducts and rights of way, (ii) elements of our network that allow other carriers and mobile virtual network operators (“MVNOs”) to use our network or resell those services we provide to our customers and (iii) domestic roaming services; in each case, pursuant to IFT
pre-approved
reference terms (
ofertas públicas de referencia
). If we cannot reach an agreement with other carriers or MVNOs, our rates may be determined by the IFT using a
long-run
average incremental costs methodology or, in the case of MVNOs, a “retail-minus” methodology.
For mobile services,
the IFT has the right to verify, through a replicability test, that carriers using our regulated wholesale services can match our end user rates.

•

Sharing of Fixed Infrastructure and Services. We must provide other carriers access to (i) passive infrastructure, including towers, sites, telephone poles, ducts, manholes and rights of way, (ii) elements of our network that allow

 

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other carriers to use our network or resell those services we provide to our customers and (iii) our dedicated links (either local or long distance). Rates for this access are determined by the IFT using a long-run average incremental cost methodology.

Sharing of Fixed Infrastructure and Services.
We must provide other carriers access to (i) passive infrastructure, including towers, sites, telephone poles, ducts, manholes and rights of way, (ii) elements of our network that allow other carriers to use our network or resell those services we provide to our customers and (iii) our dedicated links (either local or long distance). Rates for this access are determined by the IFT using a
long-run
average incremental cost methodology.
For fixed services, the IFT has the right to verify, through a replicability test, that carriers using our regulated wholesale services can match our end user rates.

•Local Loop Unbundling. We must offer other carriers access to elements of our local loop network separately on terms and conditions (including rates) pre-approved by the IFT. The IFT has also ordered the legal and functional separation of the provision of wholesale regulated fixed services related to local loop unbundling, local dedicated links and shared access/use of passive infrastructure related with the local loop network. See “Functional Separation of Telmex and Telnor Wholesale Services” under this Part VI.

•Certain Obligations Relating to Retail Services. Rates for the provision of telecommunications services to our customers are subject to the IFT’s prior authorization.

Local Loop Unbundling.
We must offer other carriers access to elements of our local loop network separately on terms and conditions (including rates)
pre-approved
by the IFT. The IFT has also ordered the legal and functional separation of the provision of wholesale regulated fixed services related to local loop unbundling, local dedicated links and shared access/use of passive infrastructure related with the local loop network. See “ — Creation of Red Nacional Última Milla and Red Última Milla Del Noroeste” under this Part VI.
Certain Obligations Relating to Retail Services.
Rates for the provision of telecommunications services to our customers are subject to the IFT’s prior authorization.
We are also subject to certain obligations and restrictions relating to the sale of our services and products; one such obligation includes unlocking mobile devices for our customers and regulations on the sale end financing at mobile devices.

•Content. We are subject to specific limitations on acquisitions of exclusive transmission rights to “relevant” content (contenidos audiovisuales relevantes), as determined from time to time by the IFT, including the Mexican national team soccer matches, the opening and closing ceremonies and certain matches of the FIFA World Cup, the semifinal and final matches of the Liga MX soccer tournament and the Super Bowl.

•Reference Terms. Every year we must submit, for IFT’s approval, a proposal of the reference terms for all wholesale services that are subject to asymmetric regulation for the following year. Once approved, we must publish and offer the regulated wholesale services, in the terms approved by IFT.

Content.
We are subject to specific limitations on acquisitions of exclusive transmission rights to “relevant” content (
contenidos audiovisuales relevantes
), as determined from time to time by the IFT, including the Mexican national team soccer matches, the opening and closing ceremonies and certain matches of the FIFA World Cup, the semifinal and final matches of the Liga MX soccer tournament and the Super Bowl.
Reference Terms.
Every year we must submit, for IFT’s approval, a proposal of the reference terms for all wholesale services that are subject to asymmetric regulation for the following year. Once approved, we must publish and offer the regulated wholesale services, in the terms approved by IFT.
IFT’s Biannual Review of Asymmetric Regulation

The next IFT reviewed the measuresbiannual review is scheduled to begin in 2020 and determined, among other things, to modify and add new asymmetrical regulations for mobile and fixed services.

2022. The measures are transitory and may be amended by the IFT, or terminated if the IFT determines effective competition conditions exist in the telecommunications sector or if we cease to be considered a preponderant economic agent. The IFT reviews the impact of the asymmetrical measures every

two years and may modify or eliminate measures or set forth new measures. In March 2017,The IFT reviewed the IFT issued a resolution that modifiedmeasures in 2020 and addeddetermined, among other things, to modify and add new asymmetrical regulations for mobile and fixed services, including the legalservices. See “ — Creation of Red Nacional Última Milla and functional separationRed Última Milla Del Noroeste” under this Part VI.
Creation of TelmexRed Nacional Última Milla and Telnor wholesale services, among other measures.

We have challenged the determination that we are a preponderant economic agent and the asymmetric regulationsRed Última Milla Del Noroeste

In 2018, in court. These challenges were denied. We have also challenged further resolutions by IFT concerning the review of certain asymmetrical regulations. However, IFT’s determinations are not suspended while legal challenges against them are resolved.

Functional Separation of Telmex and Telnor Wholesale Services

In March 2018, we received notice ofresponse to an IFT resolution, directedwe began to the Company setting forth the terms under which we are required to separate out the provision of wholesale regulated fixed services by Telmex and Telnor (the “Separation Plan”). As of the date of this annual report, we have complied with all milestones ofPursuant to the Separation Plan, Telmex and Telnor established new subsidiaries, Red Nacional Última Milla, S.A.P.I. de C.V. and Red Última Milla Del Noroeste, S.A.P.I. de C.V. (the “New Companies”), to provide local wholesale services related to the elements of the access network, including local access dedicated links, as well as those services related to passive infrastructure associated with the following:

•New Companies. Telmex and Telnor established new subsidiaries, Red Nacional Ultima Mila and Red Ultima Mila Del Noroeste (the “New Companies”), to provide local wholesale services related to the elements of the access network, including local access dedicated links, as well as those services related to passive infrastructure associated with the access network, such as ducts, poles and rights ofway. The main features of the New Companies are as follows:

•Price of Services. The prices and terms of the services provided by the New Companies are subject to IFT regulation, which could affect the viability and financial requirements of the New Companies.

•Corporate Governance. The New Companies have their own corporate governance, including: (i) a board of directors with at least seven members, of which a majority (including the Chairman) is independent; (ii) a Chief Executive Officer and senior officers appointed by the boards of directors, different and independent from those of our Mexican concessionaire subsidiaries; (iii) an independent external auditor; (iv) an Audit Committee chaired by an independent member of the board of directors; and (v) a Regulatory Compliance Committee entirely composed of independent members. The bylaws of the New Companies were approved by the IFT. Independence for these purposes is used as defined under Mexican Securities Market Law.
access network, such as ducts, poles and rights of way.
The prices and terms of the services provided by the New Companies are subject to IFT regulation, which could affect the viability and financial requirements of the New Companies. The practices of the New Companies may be subject to regulatory challenges by other market participants. In August 2021, the New Companies received a resolution issued by IFT lifting price regulation on access to certain local loop access services (
servicios de desagregación indirecta del bucle local

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•Personnel. Subject to the discussion under “Services Through Union Employees” below, the New Companies have personnel necessary to provide wholesale services required by the Separation Plan.

•Assets. The New Companies have the resources necessary to comply with their obligations and provide services.

•Systems and Procedures. The New Companies have their own procedures, operating and management systems that are independent from those of Telmex and Telnor.

•Branding. The New Companies have their own branding distinct from América Móvil’s concessionaire subsidiaries. The brands must be dissociated from those of Telmex and Telnor by March 2022.

•Principal Offices. The New Companies have their own principal offices distinct from those of América Móvil’s concessionaire subsidiaries.

•Services Through Union Employees. Certain employees that are members of a labor union provide services to the New Companies. These employees are functionally independent from Telmex and Telnor, and are under the operational control of the New Companies, however, their labor contracts remain with Telmex and Telnor.

•Wholesale Unit. Telmex and Telnor established a business unit to provide the remaining wholesale services to other concessionaires, including interconnection, co-location for interconnection, inter-city and international long-distance dedicated links, resale of telephone lines, broadband and bundles, as well as certain passive infrastructure services, including shared use of towers.

The implementation of the Separation Plan has been complex, and some features (including those related with the recent IFT revision of Asymmetrical Regulation resolutions) remain uncertain and may require further development. As a result, we are not yet able to identify all the possible consequences, but some of the consequences could have a material adverse impact on us.

We have challenged the resolution in the Mexican courts. However, legal challenges will not suspend the implementation of the Separation Plan and final determinations are pending.

Substantial Market Power Investigations

In 2007,

When IFT was established, it succeeded to several major proceedings begun by predecessor agencies. These legacy proceedings have never been finally resolved, but the Federal Antitrust Commission (Comisión Federal de CompetenciaEconómica,substance of the investigations and the potential relief have been largely superseded by the asymmetric regulation and other subsequent actions of IFT.
Our competitors have submitted multiple requests to IFT alleging anti-competitive practices or “Cofeco”) initiated two substantial market power investigations against Telcel and determined that Telcel had substantial market power in
non-compliance
with regulations on the mobile terminationpart of the separate subsidiaries we established to provide wholesale services market and inunder the nationwide

wireless voice and data services market. Telcel filed challenges against both decisions, and a final resolution

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Separation Plan. We expect IFT to investigate these allegations, and it is possible that some of them could lead IFT to make findings adverse to us or to impose additional requirements as to rates, quality of service and information, among other matters. The Preponderance regime has regulated all of these matters.

In 2007, Cofeco initiated various investigations to evaluate whether Telmex and its subsidiary Telnor have substantial power in the markets for termination, origination, transit and wholesale dedicated-link circuits. Cofeco issued final resolutions concluding that Telmex and Telnor have substantial power in all four markets, which were challenged by Telmex and Telnor. The challenges related to each one of these markets have been denied, effectively upholding Cofeco’s findings. Consequently, the IFT may impose specific tariff requirementsfines or other special regulations with respect to the matters for which the challenges were denied, such as additional requirements regarding disclosure of information or quality of service. The Preponderance regime has regulated all of these matters.

In the case of the market for wholesale dedicated-link leasing, the IFT’s predecessor, Cofetel, published an agreement in the Official Gazette, establishing requirements regarding tariffs, quality of service and information for dedicated-link circuits. Telmex and Telnor have filed petitions for relief against such resolutions, which are still pending. The regulation that could arise from these investigations has been already implemented by the IFT through the special regulatory regime for preponderant agents. However, given the uncertainty of the IFT’s actions, we are not able to identify all possible consequences and as a result an adverse resolution could have an impact on the Company’s future revenues in this market.

penalties.

Concessions

Under the current legal framework, a carrier of public telecommunications networks, such as Telcel or Telmex, must operate under a concession. The IFT is an autonomous federal agency that grants new or extends existing concessions, which may only be granted to a Mexican citizen or corporation that has agreed to the concession terms and may not be transferred or assigned without the approval of the IFT. There are three types of concessions:

•NETWORK CONCESSIONS. Telcel, Telmex and its subsidiary Telnor hold network concessions, granted under the previous regulatory framework, to provide specified types of services. Their ability to migrate to the new regime of unified concessions and, consequently, to provide any and all telecommunications and broadcasting services, is subject to conditions, as described under “Migration of Concessions and Additional Services” below.
Network Concessions.

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Telcel, Telmex and its subsidiary Telnor hold network concessions, granted under the previous regulatory framework, to provide specified types of services. Their ability to migrate to the new regime of unified concessions and, consequently, to provide any and all telecommunications and broadcasting services, is subject to conditions, as described under “Migration of Concessions and Additional Services” below.
•SPECTRUM CONCESSIONS. Telcel holds multiple concessions, granted under both the previous and current regulatory frameworks, to provide wireless services that utilize frequencies of radio-electric spectrum. These concessions have terms of 15 to 20 years and may be extended for an additional term of equal length.

•UNIFIED CONCESSION. Each of the New Companies holds a unified concession granted to provide only wholesale telecommunications services. These concessions were issued in March 2020 and have a term of 30 years and may be extended for an additional term of equal length.

Spectrum Concessions.
Telcel holds multiple concessions, granted under both the previous and current regulatory frameworks, to provide wireless services that utilize frequencies of radio-electric spectrum. These concessions have terms of 15 to 20 years and may be extended for an additional term of equal length.
Unified Concession.
Each of the New Companies holds a unified concession granted to provide only wholesale telecommunications services. These concessions were issued in March 2020 and have a term of 30 years and may be extended for an additional term of equal length.
Termination of Concessions

Mexican legislation provides that under certain circumstances, some assets of a concessionaire may be acquired by the federal government upon termination of these concessions.

There is no specific guidance or precedent for applying these provisions, so the scope of assets covered, the compensation to the concessionaire and the procedures to be followed would depend on the type of concession, the type of assets and the interpretation of applicable legislation by the competent authorities at the time.

Migration of Concessions and Additional Services

The new legislative framework established the unified concession (
concesión única
), which allows the holder to provide all types of telecommunications and broadcasting services, and a regime under which an existing concession can be migrated to
the new unified concession at the end of its term or upon request by the concession holder. A unified concession has a term of up to 30 years, extendable for up to an equal term. Also, under this new framework a current concession may be modified to add services not previously contemplated therein.

However, as a result of our preponderant economic agent status, Telcel, Telmex and Telnor are subject to additional conditions for the migration to a unified concession or the addition of a service, such as Pay TV, to a current concession, including in certain cases (i) payment of any new concession fee to be determined by the IFT, (ii) compliance with current requirements under the network concession, the 2013 constitutional amendments, the 2014 legislation and any additional measures imposed by the IFT on the preponderant economic agent and (iii) such other requirements, terms and conditions as the IFT may establish in the concession itself. We expect the process of migration or additional services to be lengthy and complex. Consequently, Telcel, Telmex and Telnor may not be able to provide certain additional services, such as Pay TV and broadcasting, in the near term.

Telcel’s Concessions

Telcel operates under several different network and spectrum concessions covering particular frequencies and regions, holding an average of 280.96289.26 MHz of capacity in Mexico’s nine regions in the 850 MHz, 1900 MHz,1.7/2.1 GHz, 2.5 GHz and 3.5 GHz bands. The following table summarizes Telcel’s concessions.

FREQUENCY

 
COVERAGE
AREA
 
INITIAL
DATE
 
TERMINATION
DATE

Band A (1900 MHz)

 Nationwide Sep. 1999 Oct. 2039

Band D (1900 MHz)

 Nationwide Oct. 1998 Oct. 2038

Band B (850 MHz)

 Regions 1, 2, 3 Aug. 2011 Aug. 2026

Band B (850 MHz)

 Regions 4, 5 Aug. 2010 Aug. 2025
(1)

Band B (850 MHz)

 Regions 6, 7, 8 Oct. 2011 Oct. 2026

Band B (850 MHz)

 Region 9 Oct. 2015 Oct. 2030

Band F (1900 MHz)

 Nationwide Apr. 2005 Apr. 2025
(1)

Bands A and B

(1.7/ (1.7/2.1 GHz)

 Nationwide Oct. 2010 Oct. 2030

Bands H, I and J

(1.7/ (1.7/2.1 GHz)

 Nationwide May 2016 Oct. 2030

Band 7 (2.5 GHz)

 

88%98.94% of the

population

(2)
 Jul. 2017 

Sep. 2020

(1)

– Nov. 2028

– Oct. 2040 –

May 2041,

Nov. 2041

Band 3.5 GHz(2)

(3)
 Nationwide Oct. 2020(3)2020(4) 

Oct. 2038 and

2040

(1)

A request for extension has already been filed with the IFT.

(2)

   Except 7 municipalities in the state of Jalisco and 34 municipalities in the state of Zacatecas.

(3)
On December 18, 2020, Telcel filed a formal request with the IFT to include mobile service in these concessions.

(3)

(4)
The term of this concession is currently in force and was extended by IFT in favor of Telmex until 2040 and afterwards it was assigned by Telmex to Telcel as of March 11, 2020. Concessions acquired from Axtel were extended by the IFT until 2038.

On August 21, 2020, Claro TV, S.A. de C.V. filed before the IFT a notice

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Table of merger with Claro Sat, S.A. de C.V. Likewise, on December 18, 2020, Duono, S.A de C.V., filed before the IFT a notice of merger with Integración de Servicios Empresariales y Corporativos, S.A. de C.V. (ISEC). As result of both the Claro TV, S.A. de C.V. and Duono, S.A de C.V. mergers, these corporations will be the license holders.

Contents

Concession Fees

All of Telcel’s concessions granted or renewed on or after January 1, 2003 are required to pay annual fees for the use and exploitation of radio spectrum bands. The amounts payable are set forth by the annual Federal Fees Law (
Ley Federal de Derechos
) and vary depending on the relevant region and radio spectrum band.

Telmex’s Concessions

Telmex’s concession was granted in 1976 and is currently set to expire in 2026. In December 2016, the IFT granted Telmex a
30-year
extension of this concession, which will become effective in 2026 and will be valid until 2056. The new terms of this concession will be issued in early 2023.

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Telmex’s subsidiary, Telnor, holds a separate concession, which covers one state and two municipalities in northwestern Mexico and will expire in 2026. The IFT also granted Telnor a

30-year
extension of its concession, which will be effective in 2026 and will be valid until 2056. The material terms of Telnor’s concession are similar to those of Telmex’s concession.

In addition, Telmex currently holds concessions for the use of frequencies to provide
point-to-point
and
point-to-multipoint
transmission in 10.5, 15 and 23 GHz bands.

In 2018, Telmex was notified of a resolution issued by the IFT, through which the IFT imposed a fine of Ps.2.5 billion derived from an alleged breach in 2013 and 2014 of certain minimum quality of service goals for dedicated link services. Telmex has exercised all legal remedies challenging such resolution and a final resolution is pending.

Rates for Wireless Service

Wireless services concessionaires are generally free to establish the prices they charge customers for telecommunications services. Wireless rates are not subject to a price cap or any other form of price regulation. The interconnection rates concessionaires charge other operators are also generally established by agreement between the parties and, if the parties cannot agree, may be imposed by the IFT, subject to certain guidelines, cost models and criteria. The IFT publishes at the end of the year the rates they would impose in the event of a dispute, eliminating all incentives for a negotiation among the parties. The establishment of interconnection rates has resulted, and may in the future result, in disputes between carriers and with the IFT.

As a result of the preponderance determination, Telcel’s retail prices are subject to
pre-approval
by the IFT before they can take effect.

The IFT is also authorized to impose specific rate requirements on any carrier that is determined by the IFT to have substantial market power under the Federal Antitrust
Law (
Ley Federal de Competencia Económica
) and the 2014 legislation. For more information on litigation related to the Federal Antitrust Law and the 2014 legislation, see “—“–Substantial Market Power Investigations” under this Part VI.

Rates for Fixed Service

Telmex’s concessions subject its rates for basic retail telephone services in any period, including installation, monthly rent, measured local-service and long-distance service, to a ceiling on the price of a “basket” of such services, weighted to reflect the volume of each service provided by Telmex during the preceding period. Telmex is required to file a survey with the IFT every four years with its projections of

units of operation for basic services, costs and prices. Telmex is free to determine the structure of its own rates, with the exception of domestic long-distance rates, which were eliminated in 2015, under the 2014 legislation, and of the residential

fixed-line
rates, which have a cap based on the
long-run
average incremental cost. As a result of the preponderance determination, Telmex’s retail prices are subject to
pre-approval
by the IFT before they can take effect.

The price ceiling varies directly with the Mexican National Consumer Price Index (
Indice Nacional de Precios al Consumidor
), allowing Telmex to raise nominal rates to keep pace with inflation (minus a productivity factor set for the telecommunications industry), subject to consultation with the IFT. Telmex has not raised its nominal rates for many years. Under Telmex’s concession, the price ceiling is also adjusted downward periodically to pass on the benefits of Telmex’s increased productivity to its customers. The IFT sets a periodic adjustment for every four-year period to permit Telmex to maintain an internal rate of return equal to its weighted average cost of capital.

In addition, basic retail telephone services, as well as broadband services and “calling party pays” charges, are subject to a separate price ceiling structure based on productivity indicators. In each case, Telmex is required to submit a survey on productivity indicators to the IFT every two years, including a total factor productivity. The IFT establishes the productivity factor that will apply over the next two years, and, based on this, the IFT will approve the customer prices before they can take effect.

Prices for Telmex’s wholesale services are established by the IFT based on the
long-run
average incremental cost model methodology.

BRAZIL

Legal Framework and Principal Regulatory Authorities

The Brazilian Telecommunications Law (
Lei Geral
das Telecomunicações Brasileiras
) provides the framework for
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telecommunications regulation. The primary telecommunications regulator in Brazil is the Telecommunications Agency (
Agência Nacional de Telecomunicações
, or “Anatel”), which has the authority to grant concessions and licenses in connection with telecommunications services and the use of orbits, except broadcasting, and to adopt regulations that are legally binding on telecommunications services providers.

The Brazilian Congress has approved an updated legislation to modernize the current concession-based model to an authorization-basedauthorization- based model. The updated law brings the possibility of allowing
fixed-line
concessionaires, such as

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Claro Brasil, to provide services under an authorization rather than a concession, as long as certain investment-related obligations are met. Under the new legislation, it is possible to extend the current concessions, as well as radio frequency licenses and orbital positions, for more than one period. The legislation also permits the possibility of a secondary market for trading cellphone frequencies. The legislation will be implemented by regulations promulgated by Anatel. We are currently evaluating the potential impact of this legislation on our operations.

Licenses

In 2014, we simplified our corporate structure, and our subsidiaries Embratel, Embratel Participações S.A. (“Embrapar”) and Net Serviços were merged into Claro Brasil, with all licenses previously granted to our subsidiaries transferred to Claro Brasil.

In 2018, subsidiary Star One merged into Claro Brasil. As a result, all Brazilian satellite operation rights previously granted to Star One were transferred under the same terms and conditions to Claro Brasil. The satellite operation rights
(AMC-12)
covering regions outside of Brazil were relinquished by Star One before the merger. In 2020, the satellite operation rights were transferred to Embratel Tysat Telecomunicações S.A. (“Claro TV”), after approval by Anatel.

In

On December 18, 2019, AMXwe announced the acquisition of 100% of the shares of Nextel Brazil (currently known as Claro NXT Telecomunicações S.A.) and Sunbird Telecomunicações Ltda. (“Sundbird”), as well as its correspondent subsidiaries and parent companies in Brazil. Nextel Brazil had authorizations to provide personal mobile services, specialized mobile services, multimedia communication services, paid fixed telephony services (national and international long-distance) and radiofrequency services in Brazil that were granted by Anatel. Sunbird had authorizations to provide specialized mobile services and radiofrequency services. Derived from theour acquisition of Nextel Brazil and Sunbird, by AMX, Anatel provided AMXus with: (i) a term of 18 months to consolidate and cancel the overlapped
authorizations granted in favor of Nextel Brazil and Sunbird; and (ii) a term of 2 months to adjust the radiofrequency thresholds. In 2020, the authorizations and radiofrequencies granted in favor of Nextel Brazil and Sunbird for specialized mobile services were waived. Also in 2020, Nextel’s PS licenses were transferred to Claro.

Claro Brasil. Moreover, to comply with the obligation mentioned on item “(i)” above, on February 5, 2021, all of Nextel Brazil’s mobile services assets and licenses were transferred to Claro Brasil by means of a corporate restructuring.

In 2019, the subsidiary Primesys was merged into Claro Brasil. As a result, service authorizations granted to Primesys were transferred under the same terms and conditions to Claro Brasil.

Our Brazilian subsidiaries hold licenses for the telecommunications services listed below and expect to continue acquiring spectrum if Anatel conducts additional

public auctions, although Claro Brazil,Brasil, like all of its peer competitors, is subject to a cap on the additional spectrum it may acquire per frequency band.

SUBSIDIARY

 
LICENSE
  

TERMINATION


DATE

Claro Brasil

 Fixed Local Voice Services  Indefinite

 

Domestic and International


Long-Distance

  2025

 Voice Services  Indefinite

 Personal Communication Services  Indefinite

 Data Services  Indefinite

 Cable TV ServicesIndefinite

 Mobile Maritime Services  Indefinite

 Global Mobile Satellite Services  Indefinite

Claro TV

 DTH TV Services  Indefinite

 Data Services  Indefinite

Americel S.A.

 Data Services  Indefinite

Telmex do Brasil

Americel S.A.
 Data Services  Indefinite

Nextel Brazil

 Personal Communication
Telmex do Brasil
Data Services  Indefinite

 

Domestic and International

Long-Distance

Nextel Brazil
Cable TV Services  Indefinite

Domestic and International
Long-Distance		Indefinite

 Data Services  Indefinite

In addition, Claro TV has various orbital position authorizations for our satellite operations, which are set to expire between 2022 and 2033. Requests for extensions for 15 more years have been requested from Anatel. Claro TV also has radio frequency licenses to provide PCS, which are set to expire between 2022 and 2032. These grants were transferred from Claro Brasil to Claro TV in 2020, subsequent to Anatel’s approval.

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Nextel Brazil has radio frequency licenses to provide PCS, which were transferred to Claro Brasil on February 2021 and will expire between 2026 and 2031.

On June 30, 2021, all of Claro Brasil’s cable TV (SeAC) assets and its license were transferred to Nextel Brazil by means of a corporate restructuring.
On November 4 and 5 of 2021, during a 5G auction, Claro Brasil won 100 MHz of the 3.5 GHz frequency band. This band has national reach and is committed to taking 5G to municipalities with more than 30,000 inhabitants. In the same auction, the company also won the 2.3 GHz frequencies in the North, South, Midwest, São Paulo and Triângulo Mineiro regions and two blocks of 200 MHz National frequencies of 26 GHz. These licenses are valid until 2041 and are renewable.
Concessions

Claro Brasil holds two
fixed-line
concessions to provide domestic and international long-distance telephone services. The remaining telecommunications services provided by Claro Brasil are governed by a system of licenses instead of concession arrangements.

Concession Fees

Claro Brasil is required to pay a biennial fee after the first 15 year term of its PCS authorizations equal to 2.0% of net revenues from wireless services, except for the final year of the 15 year term of its PCS authorizations, in which the fee equals 1.0% of net revenues from wireless services.

Claro Brasil is also required to pay a biennial fee during the term of its domestic and international long-distance concessions equal to 2.0% of the revenues from long- distance telephone services, net of taxes and social contributions, for the year preceding the payment.

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Termination of Concessions

Our domestic and international long-distance
fixed-line
concessions provide that certain of our assets deemed “indispensable” for the provision of these services will revert to the Brazilian state upon termination of these concessions. Compensation for those assets would be their depreciated cost. See Note 17 to our audited consolidated financial statements included in this annual report.

Regulation of Rates

Anatel regulates rates (tariffs and prices) for all telecommunications services, except for
fixed-line
broadband services, Pay TV and satellite capacity rates, which are not regulated. In general, PCS license holders and fixed local voice services license-holders are authorized to increase basic plan rates annually. Domestic long-distance concession-holders may adjust rates annually only for inflation, provided that they give Anatel and the public advanced notice of such adjustments. Claro Brasil may set domestic long-distance and international long-distance and mobile rates freely, provided that it gives Anatel and the public advance notice.

Regulation of Wholesale Market Competition

In November 2012, Anatel approved the General Competition Plan (
Plano Geral de Metas da Competição
, or “PGMC”), a comprehensive regulatory framework aimed at increasing competition in the telecommunications sector. The PGMC imposes asymmetric measures upon economic groups determined by Anatel to have significant market power in any of the five wholesale markets in the telecommunications sector, on the basis of several criteria, including having over 20.0% of market share in the applicable market.

In 2012, Claro Brasil and three of its primary competitors were determined to have significant market power in the mobile wireless termination and national roaming markets. As a result, Claro Brasil was required to reduce mobile termination rates to 75.0% of the 2013 rates by February 2014, and to 50.0% of the 2013 rates by February 2015. In July 2014, Anatel established termination rates for mobile services applicable to operators with significant market power through 2019, based on a cost model, and in December 2018, Anatel established termination rates for mobile services applicable to operators with significant market power from 2020 to 2023. These termination rates were revised by Anatel in February 2020. Claro Brasil is also required to publish its reference roaming prices for voice, data and SMS on an annual basis, among other measures. These prices must be related to the Anatel reference values and need to be approved by Anatel before they can take effect. The approval of new prices by Anatel took place in January 2021.

In 2018, Anatel approved Claro Brasil’s most recent wholesale reference offers with respect to national roaming, telecommunications duct infrastructure, long-distance leased lines, high capacity transport above 34 Mbps, wireless networks interconnection, fixed network interconnection, internet network interconnection and internet links, which are reviewed and approved by Anatel on an annual basis. Anatel also reviews its determination of which operators have significant market power on a quadrennial basis. Anatel began its first review of all telecom operators in 2014 and published the most recent list of operators with significant market power for each of the relevant markets in 2018. In addition to the review, in 2018 Anatel changed some of the asymmetric measures applicable under the PGMC and added two new wholesale markets covering high capacity transport and fixed network interconnection. Anatel has determined that Claro Brasil has significant market power in eight wholesale markets.

Network Usage Fees and Fixed-Line Interconnection Rates

In July 2014, Anatel approved a resolution establishing the reference terms for fees charged by operators in connection with the use of their mobile network and leased lines and set
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a price cap on fees charged for fixed network usage by operators deemed to have significant market power. Such fees, based on costs of allocation services (
coubicación
), have been applicable since February 2016.

In December 2018, Anatel published reference values for fees network that are applicable from 2020 to 2023.

Fixed-line operators determined by Anatel to have significant market power in the local
fixed-line
market may freely negotiate interconnection rates, subject to a price cap established by Anatel.

Other Obligations

Under applicable law and our concessions, Claro Brasil has an obligation to (i) comply with certain coverage obligations to ensure universal access to its
fixed-line
voice services, (ii) contribute to the funding of the country’s transition from analogue to digital TV (due to the acquisition of the 700 MHz frequency), (iii) meet
quality-of-service
targets and (iv) comply with applicable telecommunications services consumer rights.

In addition to the associated coverage obligations for the 3.5 GHz band, the winners will have to create an entity (EAF) to clear the spectrum (migration of the parabolic TV signal), build a private communication network for the federal government of Brazil and install an optic fiber network in the North of Brazil. There are no coverage obligations for the 26 GHz band, but the winners will have to create an entity (EACE) which will be responsible for meeting public schools’ connection needs as defined by Anatel, the Ministry of Communications and the Ministry of Education.
CADE Anti-Competition Proceeding

On March 9 2021, the General Superintendence at the Administrative Council for Economic Defense (“CADE”) issued a
non-binding
opinion recommending fines against Claro Brasil, Oi Móvel S.A. (“Oi”) and Telefônica Brasil S.A. (“Telefônica”, together Claro Brasil and Oi, the “Defendants”). The potential fines relate to a complaint filed by British

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Telecom do Brasil (“BT”) against the Defendants alleging, among other things, that, in connection with a public bid, the Defendants (i) colluded to prevent competition between the leading players in the broadband internet services market in Brazil, which caused anti-competitive effects in the telecommunications sector and (ii) made it difficult for BT to participate in the bid through price discrimination tactics and by refusing to supply communication circuits (specifically, MPLS links) that were required for BT to participate in the bid. The case will be reviewed by CADE’s tribunal for a final ruling and CADE’s final decision may be challenged in judicial courts. We intend to challenge the final decision if it is not in our favor. The amount of monetary penalty recommended by

the General Superintendence at CADE could be substantial, but we cannot reasonably estimate the range of possible loss related to the proceeding.

COLOMBIA

Legal Framework and Principal Regulatory Authorities

The Information and Communications Ministry (
Ministerio de Tecnologías de la Información y las Comunicaciones
, or “ICT Ministry”) and the Communications Regulatory Commission

(

Comisión de Regulación de Comunicaciones
, or “CRC”) are responsible for overseeing and regulating the telecommunications sector. The main audiovisual regulatory authorities in Colombia with respect to Pay TV services are the CRC, the ICT Ministry and the Industry and Commerce Superintendence (Superintendencia(Superintendencia de Industria y Comercio, or “SIC”). Claro is also subject to supervision by other government entities responsible for enforcing other regulations, such as antitrust rules or those protecting consumer rights.

Concessions

Comunicación Celular S.A. (“Comcel”) is qualified to provide fixed and mobile services and was included in the registry of networks and services administered by the ICT Ministry. Such general authorization superseded all of Comcel’s former concession contracts, and, consequently, such former concessions were terminated.

As a result of the termination of Comcel’s former concessions, the ICT Ministry and Comcel began discussions with respect to the liquidation of the agreements governing those concessions. In light of the decision of the Colombian Constitutional Court (
Corte Constitucional de Colombia
) holding that certain laws limiting the reversion of assets of telecommunications providers did not apply to concessions granted prior to 1998 and, consequently, that reversion of assets under those earlier concessions would be governed by their contractual terms, the ICT Ministry obtained a domestic award ordering Comcel to revert assets under its earlier

concessions to the Colombian government. Comcel challenged such award and the Company filed an international arbitration claim against Colombia arising from Colombia’s measures.

The international arbitration court overseeing this claim upheld the decision to grant the aforementioned domestic award.

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Licenses and Permits

Comcel holds licenses to provide mobile services in the spectrum frequency bands shown in the table below.

FREQUENCY

  
BANDWIDTH
  
TERMINATION DATE

850 MHz

  25 MHz  Mar. 2024

1900 MHz

  10 MHz  Dec. 2039

  5 MHz  Sept. 2021Oct. 2041

  15 MHz  Apr.Mar. 2024

2.5 GHz

  30 MHz  Aug. 2023

 10 MHzFeb. 2021(1)

  10 MHz  Mar. 2040

  10 MHz  Mar. 2040

  10 MHz  Mar. 2040

700 MHz

  20 MHz  May 2040
(1)

Refers to a temporary license, which we renew on an annual basis.

In 2013, Telmex Colombia S.A. obtained permission to provide Pay TV services under any available technology, pursuant to the ICT Ministry’s unified licensing system. On May 31, 2019, Telmex Colombia, S.A. merged into Comcel. The permission to provide Pay TV services granted in favor of Telmex Colombia, S.A. was simultaneously transferred to Comcel without modifications in connection with the merger. On July 30, 2019, Comcel’s permission to provide Pay TV was incorporated under Comcel’s general power to provide Pay TV granted to it under Law 1978 of 2019.

In 2017, the ICT Ministry issued a decree approving a higher cap on spectrum acquisitions by operators in low and high frequency bands. This new cap allows Comcel to participate in future spectrum auctions. The ICT Ministry has released its plan to conduct spectrum auctions in the 700 MHz, 1900 MHz and 2.5 GHz bands. The final resolution containing the auctions’ terms and conditions was published by the ICT Ministry during the fourth quarter of 2019. The auction took place on December 20, 2019. A subsidiary of Novator Partners LLP, a London-based private equity firm (the “Novator Subsidiary”), participated in the auction as a new competitor in the market. The Novator Subsidiary was granted a 20MHz license to operate in the 700MHz frequency band and three blocks of 10MHz for the 2,500MHz frequency band. Colombia Telecomunicaciones (Movistar) and Colombia Movil (Tigo) also participated in the auction. Tigo was granted a 40MHz license to operate in the 700MHz frequency band. Colombia Telecomunicaciones was not granted any licenses in the auction.

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Subsequently, the Novator Subsidiary resigned and refused to exercise its rights under the license to operate one block of 10MHz for the 2,500MHz frequency band. As a consequence, on February 11, 2020, the ICT Ministry initiated an administrative proceeding to evaluate and decide on the effects caused by such resignation. Comcel was notified by the ICT Ministry and was considered an interested third party

in the administrative proceeding. The ICT Ministry imposed a sanction of 42 billion Colombian Pesos, approximately U.S. $12.3 million against Partners as a result of the aforementioned administrative proceeding.

Asymmetric Charges

In January 2017, the Colombian government approved symmetrical access charges among established operators like Comcel, Movistar and Tigo. However, under current regulation, new market entrants continue to receive a higher interconnection rate than incumbent operators and pay lower national roaming fees, in both cases, for a limited period.

In 2017, the CRC issued a resolution updating the list of relevant telecommunication markets by adding the mobile services market (including bundled mobile voice and data services) and by also including the mobile service market in the list of relevant markets subject to
ex-ante
regulation. In connection with the mobile services market, on January 28, 2021, the CRC determined that COMCEL has a dominant position in the relevant mobile services market, but did not impose particular measures. COMCEL considers that the CRC did not take into account important elements in its determination, which COMCEL has challenged. A resolutionchallenged before the administrative courts of competent jurisdiction. The proceeding is pending.

currently at a mandatory conciliation stage.

SOUTHERN CONE

ARGENTINA

The National Communications Agency (
Ente Nacional de Comunicaciones
, or “Enacom”) is the main telecommunications regulatory authority in Argentina and became operational in 2016.

Fixed and mobile services providers are prohibited from providing DTH technology, which is currently the fastest way to provide Pay TV services. In 2017, the Argentine government issued a decree allowing telecommunications providers, including AMX Argentina S.A. (“AMX Argentina”), to provide Pay TV services via cable within a limited number of territories as of January 2018 and to the rest of the country as of January 2019. AMX Argentina has obtained the permissions necessary to provide Pay TV services via cable in accordance with the decree.

AMX Argentina holds licenses in the 700 MHz, 900 MHz, 1700/2100 MHz (AWS), 1900 MHz and 2600 MHz frequency bands, some of which expire in 15 years and some of which

have no expiration date. Each license also contains certain coverage parameters, reporting and service requirements and provides Enacom a revocation right upon a material breach of the license terms.

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All telecommunications providers in Argentina must contribute approximately 1.0% of their monthly revenues to finance the provision of telecommunications services in underserved areas and to underserved persons. All providers must also meet certain
quality-of-service
requirements.

In 2020, the government of Argentina issued a decree 690/20 by which it declared information and communications technology (ICT)(“ICT”) services and access to telecommunications networks, for and between licensees of ICT services, as essential and strategic public services in competition. It also established that Enacom is the competent authority to approve prices for ICT services and to establish regulations to that effect.

In 2021, in accordance with the provisions of decree 690/20, Enacom established the conditions of a “compulsory universal basic benefit” (“PBU”), which must be provided under conditions of equality. This PBU covers pay TV, internet, fixed and mobile telephony services, and consists of basic plans for each of these services at affordable prices. It is aimed at a special segment of beneficiaries.”
CHILE

The General Telecommunications Law (
Ley General de Telecomunicaciones
) establishes the legal framework for telecommunications services in Chile, including the regulation of concessions, permits, rates and interconnection. The main regulatory agency of the telecommunications sector is the Chilean Transportation and Communications Ministry (
Ministerio de Transportes y Telecomunicaciones
), which acts primarily through the Undersecretary of Telecommunications (
Subsecretaría de Telecomunicaciones
, or “SUBTEL”).

Claro Chile S.A. (“Claro Chile”) holds concessions to provide mobile and
fixed-line
services in the 700MHz, 850 MHz, 1900 MHz, 2.6 GHz, 3.4 GHz and 5.8 GHz frequency bands. Except for the concession to provide services in the 850 MHz frequency, which has an indefinite termination date, the concessions to provide services in the 700 MHz, 1900 MHz, 2.6 GHz, 3.4 GHz and 5.8 GHz frequencies have termination dates that vary from 2027 to 2045. In 2020, Claro Chile received a 10 MHz license from Movistar to operate in the 1900 MHz frequency band.

In February 2021, as part of a public tender, Claro Chile S.A. was granted a concession of 400 MHz block, in the 26 GHz Band. Later, in May 2021, Claro Chile acquired a concession of 30 MHz spectrum block in the 3.5 GHz Band

(3.425-3.440MHz
y
3.525-3-525-3.540
MHz) from ENTEL.
Claro Chile also holds a license to provide DTH technology services until 2024 and a license with an indefinite term to provide Pay TV services. In 2018, the Chilean Supreme Court (Corte Suprema de Justicia) issued a ruling requiring Claro to return 20 MHz of spectrum acquired through a band auction because Claro supposedly exceeded the limit of spectrum any given operator is permitted to hold. The return of such spectrum is currently being implemented before the Competition Court (Tribunal de Defensa de la Libre Competencia, or the “TDLC”). In addition, pursuant to the ruling, and in order to increase the maximum limit, SUBTEL initiated a review of such limit of spectrum through a regulatory proceeding. In 2020, the Chilean Supreme Court defined a higher cap for spectrum acquisitions by operators in low, medium low, medium and high frequency bands. This

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new cap allows Claro Chile to participate in the current spectrum auctions.

Some of Claro Chile’s concessions impose additional requirements, such as coverage, reporting

and service quality requirements. The Chilean Transportation and Communications Ministry is authorized to terminate any concession in the event of specified breaches under the terms of such concessions. Additionally, Claro Chile’s concession in the 700 MHz band imposes certain obligations to expand mobile and data services in rural areas. In 2017, the Undersecretary of Telecommunication approved Claro Chile’s expansion project in connection with its obligations under its concession in the 700 MHz band.

In September 2021, Claro Chile S.A. and VTR, a subsidiary of Liberty Latin America Ltd., announced the beginning of a process to form an independent and permanent economic agent (Joint Venture) with the purpose of merging their telecommunications industry operations in Chile. In November 2021, the parties notified The National Economic Prosecutor’s Office (“FNE”) about this merger, which requires prior authorization of the FNE. The merger is currently in the first phase of investigation and analysis by the FNE.
PARAGUAY

The National Telecommunications Commission of Paraguay (
Comisión Nacional de Telecomunicaciones de Paraguay
) is in charge of supervising the telecommunications industry in Paraguay. It is authorized to cancel licenses in the event of specified breaches of the terms of a license.

AMX Paraguay, S.A. (“AMX Paraguay”) holds licenses to operate in the 1900 MHz and the 1700/2100 MHz bands.

The 1700/2100 MHz band is in the process of being renewed and is expected to bewas renewed in FebruaryAugust 2021. AMX Paraguay also holds a nationwide internet access and data transmission license. In addition, AMX Paraguay holds licenses to provide DTH services and cable TV services. The DTH License is in the process of beingwas renewed for another 5 years (until 2025). Additionally, in January 2018, AMX Paraguay participated in a spectrum auction and was awarded a license to provide telecommunications services in the 700 MHz band. In November 2018, the Telecommunications Commission of Paraguay granted the renewal of spectrum license in the 1900 MHz band. These licenses are renewable, subject to regulatory approval, and contain coverage, reporting and service requirements.

In November 2019, the Telecommunications Commission of Paraguay granted AMX Paraguay a license to provide internet access and data transmission services in the 3,500 MHz frequency band, effective until January 12, 2024

2024.

URUGUAY

The Regulatory Unit of Communications Services (
Unidad Reguladora de Servicios de Comunicaciones
, or “URSEC”) is in charge of the regulation of the telecommunications industry in Uruguay.

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AM Wireless Uruguay, S.A. (“AM Wireless Uruguay”) holds licenses to operate in the 1900 MHz, 1700/2100 MHz and 700 MHz frequency bands that expire in 2024, 2033, 2037, 2039 and 2045. Additionally, AM Wireless Uruguay S.A. holds an authorization to do a trial for 5G in the 26, 50 GHz – 26, 85 GHz frequency band that expires on July 2021. In 2021, AM Wireless Uruguay obtained a “Class C” license, which enables it to provide internet services using fixed or wireless connections to authorized telecommunications companies. Telstar S.A. holds licenses to provide

international long-distance communications and international and national data services that have no expiration date.

The license initially granted to Flimay S.A. (“Flimay”) to provide DTH technology services in Uruguay has been contested by the government since 2012. In 2017, the executive branch of Uruguay held under a new ruling that Flimay does not have a valid license to provide DTH services in the country. Flimay requested this ruling be voided, but in February 2018, the executive branch of Uruguay, with support from the Administrative Court (TCA)(“TCA”), requested the process be closed. As of the date of this annual report, a decision on Flimay’s appeal is pending.

In July 2020, the Consideration Law (
Ley de Urgente Consideración
) No. 19,889 was enacted, and pursuant to articles 471 through 476, established a number portability regime for mobile services. In January 2021 Decree No. 26 approved the regulation of the portability system.
In November 2021, the Accountability Law (
Ley de Rendición de Cuentas
) was enacted, whereby URSEC´s antitrust practices competencies were transferred to the Antitrust Commission (
Comisión de Promoción y Defensa de la Competencia
).
Notwithstanding the foregoing, URSEC remains competent to hold hearings on and authorize mergers and acquisitions of telecommunications licenses.
ANDEAN REGION

ECUADOR

The primary regulatory authorities for our mobile and
fixed-line
operations are the National Telecommunications, Regulation and Control Agency (
Agencia de Regulación y Control de las Telecomunicaciones
, or “Arcotel”) and the Telecommunications and Information Society Ministry (
Ministerio de Telecomunicaciones y Sociedad de la Información
, or “Mintel”). Arcotel is responsible for the licensing and oversight of radio-electric spectrum use and telecommunications services provisions. Mintel is responsible for the promotion of equal access to telecommunications services.

The Telecommunications Law (
Ley Orgánica de Telecomunicaciones
), adopted in 2015, serves as the legal framework for telecommunications services. It established regulations for operators with significant market power and penalties based on their gross incomes as well as additional fees also based on an operator’s gross income, but that can vary depending on the size of their market share. Consorcio Ecuatoriano de Telecomunicaciones, S.A. (“Conecel”) has been deemed to havea significant market powerpercentage of users in the advanced wireless services market, and as a result, suchtherefore is obliged to make fee payments are made on a quarterly basis onits income pursuant to the dates established by Arcotel.

Telecommunications Law.

Conecel paid to the Ecuadorian government U.S. $26.1$17.6 million, which corresponds to 3.0% of its wireless servicesservice revenues generated in the 2020.2021. An arbitration proceeding to partially void the payment by Conecel of such fees was conducted and a decision in favor of the government was reached. Conecel has appealed this decision and, as of the date of this annual report, a decision of the Constitutional Court is pending.

However, the Law for Economic Development and Sustainability after the

COVID-19
Pandemic (
Ley Orgánica para el Desarrollo Económico y Sostenibilidad Fiscal tras la Pandemia
COVID-19
) issued on November 29, 2021 eliminates the regulation (Article 34) of the Telecommunications Law that required Conecel to make quarterly payments on its income. This elimination will become effective as of January 1, 2023.
Conecel holds concessions to operate in the 850MHz, 1900 MHz and AWS bands, which include concessions for PCS that expire in 2023. The PCS concession contains quality- of-service
quality-of-service
requirements for successful call completions, SMS delivery times, customer service, geographic coverage and other service conditions.

The renewal of the PCS concession is in the process of negotiation with the Ecuadorian government.

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Conecel also holds licenses to provide internet value-added services, Pay TV Services (through DTH technology), bearer services, and bearerinternet services, expiring in 2021, 2023, 2032 and 2032,2036, respectively.

Conecel following the acquisition of Ecuador Telecom, S.A. in 2016, also holds a concession to offer
fixed-line
voice public telephone and domestic and international long-distance wholesale services, as well as a license to provide Pay TV (through HFC technology) that expires in 2032 and 2031, respectively.

On March 15, 2021, the Superintendence of Companies (
Superintendencia de Compañías
), approved the division of CONECEL, which was duly registered on April 8, 2021. This division resulted in the creation of a new company named Sites Ecuador
(Ecu-Sites)
S.A.S. The new company is now the owner of most of the towers which used to belong to CONECEL, and its core business is to provide tower services to other companies. Most of these towers services are provided to CONECEL.
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On May 18, 2021 the Telecommunications Authority dictated a resolution that grants CONECEL a concession to provide submarine cable services for a period of 20 years.
Recalculation of Concession Fees

Arcotel initiated several proceedings to recalculate the variable portion of the concession fees payable under Conecel’s concessions, which, as of the date of this annual report, is equivalent to 2.93% of Conecel’s annual subscriber base revenues, in addition to its contribution for Universal Service (
Servicio Universal 1%
)., both for the periods from 2017 to 2019. These recalculation proceedings with Arcotel remain ongoing.

In 2018, in addition to the variable portion of the concession, Conecel paid to Arcotel U.S.$11.9 million based on its annual revenues for the 2015 period and was required to pay U.S.$13 million based on its annual revenues for the 2016 period.

For its Universal Service contribution, Conecel was required to pay U.S.$5 million for the 2015 period and U.S.$6 million for the 2016 period. Conocel obtained a judicial order that suspended the collection process for the 2015 and 2016 periods.

These

The recalculation proceedings mentioned in this section were disputed with Arcotel in arbitration. On April 17, 2020, the arbitration court issued its resolution which was favorable for Conecel. Arcotel was ordered to pay Conecel U.S.$32.4 million plus interests.

interest for the periods between 2009 and 2015.

On January 15, 2021, the Provincial Court of Justice accepted theArcotel´s request to nullify the resolution issued by the arbitration court, thereby declaring it null. However, the annulment of the resolution has not ended the dispute with Arcotel. A new arbitration court must issue a new resolution. At the same time Conecel will enforceenforced its rights by presenting an Extraordinary Action for Protection before the Constitutional Court for the violation of its rights.

For its Universal Service contribution, Conecel was required to pay U.S.$5 million for the 2015 period and U.S.$6 million for the 2016 period. On December 17, 2021, Conocel obtained a final judicial order that suspended definitely the collection process for the 2015 and 2016 periods. This is a final and
non-appealable
decision.
PERU

The Supervisory Agency for Private Investment in Telecommunication (
Organismo Supervisor de la Inversión Privada en Telecomunicaciones
, or “OSIPTEL”) is in charge of the regulation of the telecommunications industry in Peru. The Ministry of Transport and Communications (
Ministerio de Transportes y Comunicaciones
, or “MTC”) grants concessions, permits and licenses. The Telecommunications Law (
Decreto Supremo N° N
°
013-93-TCC
Ley de Telecomunicaciones
), adopted in 1993, serves as the legal framework for telecommunications services.

América Móvil Perú, S.A.C. (“Claro Perú”) holds nationwide concessions to provide wireless, PCS,
fixed-line,
local wholesale, domestic and international long-distance, Pay TV services (through DTH and HFC technologies), public telephone and value-added services (including internet access). The concessions allow Claro Perú to operate on the 450 MHz, 700 MHz, 850 MHz, 1900 MHz, 3.5 GHz and 10.5 GHz bands. As part of Claro Perú’s acquisition of Olo del Perú S.A.C., TVS Wireless S.A.C. and their respective subsidiaries in 2016, Claro Perú has a resale agreement with such companies to operate in certain regions on the 2.5 GHz band.

Spectrum reframing is the process conducted by the MTC to properly order the assignment of a frequency band in order to have continuous coverage nationwide and adequate bandwidth. The MTC issued the final decision on the spectrum reframing for the 2.5 Ghz band, granting 80 Mhz to TVS Wireless, S.A.C. (Lima and Callao) and Olo del Peru, S.A.C. (rest of the country).

Each of the concessions was awarded by the MTC and covers a
20-year
period. The concessions contain coverage, reporting, service requirement and spectral efficiency goals. The MTC is authorized to cancel any of the concessions in the case of specified breaches of its terms.

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EUROPE AND OTHER JURISDICTIONS

European Legal Framework and Principal Regulatory Authorities

The telecommunications regulatory framework in the EU is based on the European Electronic Communications Code (EECC)(“EECC”) that is currently in the process of being transposed into national laws for all EU member states. Austria, Bulgaria, Croatia and Slovenia are EU member states. Macedonia and Serbia, candidates for accession to the EU, are expected to gradually harmonize their regulatory frameworks with the EU’s framework.

In each European country in which we operate, we are also subject to a domestic telecommunications regulatory framework and to oversight by one or more local regulators.

Licenses

COUNTRY

  
FREQUENCY
  
TERMINATION DATE

AUSTRIA

  800 MHz  Dec. 2029

  900 MHz  Dec. 2034

  1500 MhzMHz  Dec. 2044

  1800 MHz  Dec. 2034

  2100 MHz  Dec. 2044

  2600 MHz  Dec. 2026

  3500 MHz  Dec 2039

BELARUS

900 MHzNot applicable

1800 MHzNot applicable

2100 MHzNot applicable

BULGARIA

900 MHzJune 2024

1800 MHzJune 2024

2100 MHzApr. 2025

CROATIA

800 MHzOct. 2024

900 MHzOct. 2024

1800 MHzOct. 2024

2100 MHzOct. 2024

MACEDONIA

800 MHzDec. 2033

900 MHzSept. 2023

1800 MHzDec. 2033

2100 MHzFeb. 2028

SERBIA

800 MHzJan. 2026

900 MHzNov. 2026

1800 MHzNov. 2026

2100 MHzNov. 2026

SLOVENIA

800 MHzMay 2029

900 MHzJan. 2031

1800 MHzJan. 2031

2100 MHzSept. 2021

2600 MHzMay 2029
 

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OTHER JURISDICTIONS

Table of Contents

COUNTRY

  PRINCIPAL REGULATORY AUTHORITIES
FREQUENCY
  CONCESSION AND LICENSES
TERMINATION DATE
BELARUS
900 MHzNot applicable
1800 MHzNot applicable
2100 MHzNot applicable
BULGARIA
900 MHz2024
1800 MHz2024
2100 MHz2025
3500 MHz2041
CROATIA
700 MHz2036
800 MHz2024
900 MHz2024
1800 MHz2024
2100 MHz2024
3500 MHz2036
26000 MHz2036
NORTH MACEDONIA
800 MHz2033
900 MHz2023
1800 MHz2033
2100 MHz2028

COUNTRY
FREQUENCY
TERMINATION DATE
SERBIA
800 MHz2026
900 MHz2026
1800 MHz2026
2100 MHz2026
SLOVENIA
700 MHz2036
800 MHz2029
900 MHz2031
1500 MHz2036
1800 MHz2031
2100 MHz2021
2600 MHz2029
3500 MHz2036
26000 MHz2029
OTHER JURISDICTIONS
COUNTRY
PRINCIPAL REGULATORY AUTHORITIES
CONCESSION AND LICENSES
COSTA RICA

 Superintendency of Telecommunications
(Superintendencia de Telecomunicaciones) Telecomunicaciones)
Ministry of Science, Innovation, Technology and Tele-communicationsTelecommunications (
Ministerio de Ciencia,
Innovación, Tecnología y Telecomunicaciones
)		  

•  Concessions in the AWS and 1800 MHz bands that expire in 2032

•  Concessions in the 2100 MHz band that expire in 2026

•  License to operate Pay TV services using DTH technology that will expire in 2026

EL SALVADOR

 Electricity and Telecommunications Super- intendencySuperintendency (
Superintendencia General de
Electricidad y Telecomunicaciones
)		  

•  Concession of 50 MHz in the 1900 MHz band of which 30 MHz that expire in 2038, 10 MHz that expire in 2041 and 10 MHz that expire in 2028

•  Concession to provide public telephone service that expires in 2027

•  Licenses to provide Pay TV Services through HFC and DTH technologies have an indefinite term

•  Concession of 40 MHz in 1700/2100 MHz bands (AWS) that will expire in 2040

2040.

GUATEMALA

 Guatemalan Telecommunications Agency (
Superintendencia de Telecomunicaciones
)		  

•  Licenses (Frequencies Usufruct Rights) to use 12 MHz in the 900 MHz band, and 120 MHz in the 1900 MHz band that all expire in 2033

•  Concession ofand 175 MHz in the 3.5 GHz band that willall expire in 2033

and were granted for the provision of any type of telecommunications service.

NICARAGUA

 Nicaraguan Telecommunications and Mailing Institute (
Instituto Nicaragüense de Teleco-municaciones
Telecomunicaciones y Correos
)		  

•  Concessions in the 700 MHz, 850 MHz, 1900 MHz and 1700/2100 MHz bands that all expire in 2042

•  Concession of 50 MHz in the 3.5 GHz band that will expire in 2042

•  Licenses to provide DTH technology that will expire in January 2028 and Pay TV services that has an indefinite term

HONDURAS

 Honduran National Telecommunications Commission (
Comisión Nacional de Teleco-municaciones
Telecomunicaciones
)		  

•  Concessions to use 80 MHz in the 1900 MHz PCS band and 40 MHz in the
LTE-4G
1700/2100 MHz band that all expire in 2033

•  Licenses to operate Pay TV services through (i) HFC technology that will expire in 2027 and (ii) DTH technology that will expire in 2030

PANAMA

 National Authority of Public Services (Auto-ridad
Autoridad
Nacional de los Servicios Públicos
)		  

•  License to use 40 MHz in the 1900 MHz and 20 MHz in the 700 MHz bands that all expire in 2028

•  Licenses to provide fixed local and long-distance services that expire in 2030

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Table of Contents
COUNTRY
PRINCIPAL REGULATORY AUTHORITIES
CONCESSION AND LICENSES
•  License to provide internet service that expires in 2033

•  Licenses to provide international long-distance, value-added services, interactive television, and Pay TV service through DTH and IPTV technologies, which expire in 2028, 2030, 2037 and 2034, respectively

•  License to provide Pay TV service through optical fiber that expires in 2037

2037.

•  License for data transportation, Service No. 200, which expires in 2023

UNITED STATES

 The FCC

•  International Section 214 Authorization (Claro Enterprise Solutions)

DOMINICAN REPUBLIC

 Dominican Institute of Telecommunications (
Instituto Dominicano de las Telecomunica-cionesTelecomunicaciones
)		  

•  Concession to provide fixed and wireless services, internet and pay TV services through DTH and IPTV technologies that expire in 2030

•  Licenses to use 25 MHz in the 800 MHz band, 30 MHz in the 1900 MHz band, 80 MHz in the 2.5/2.7 GHz band, 30 MHz in the 3.5 GHz band and 40 MHz in the 1.7/2.1 GHz (AWS) band that expire in 2030

PUERTO RICO

 Federal Communications Commission (FCC) and the Telecommunications Bureau of Puerto Rico  

•  Concessions to use the 700 MHz, 1900 MHz and the 28 GHz bands that expire in 2021 (currently pending renewal application extending to 2031), 2027 and 2029, respectively

•  Concessions to use the 800 MHz bands that expire in 2021, 2026, 2028, 2030 and 2030

2031.

•  Concessions to use the
AWS-1
and
AWS-3
bands (1.7/2.1 GHz) that expire in 2026 and 2028, respectivel.

respectively.

•  Concessions to use the 3.5 GHz band that expires in 2030

2030.

•  Long-term transfer lease concessions to use 35.6 MHz of the 2.5 GHz band that expire in 2022, 2023, 2025, 2026 and 2030

2030.

•  Franchise to operate Pay TV services using IPTV technology that expires in 2030

2030.

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Many of our employees are members of labor unions with which we conduct collective negotiations on wages, benefits and working conditions. We believe that we have good current relations with our workforce.

The following table sets forth the total number of employees and a breakdown of employees by main category of activity and geographic location, as of the enddates indicated.
 
 
     
 
     
DECEMBER 31,
   ��  
 
 
    
 
 
    
2019
     
2020
     
2021
 
    
NUMBER OF EMPLOYEES
     190,664      185,948      181,205 
    
CATEGORY OF ACTIVITY:
    
 
 
 
    
 
 
 
    
 
 
 
    
Wireless
     82,232      72,501      72,098 
    
Fixed
     87,034      91,460      86,788 
    
Other businesses
     21,398      21,987      22,319 
    
GEOGRAPHIC LOCATION:
    
 
 
 
    
 
 
 
    
 
 
 
    
Mexico
     89,539      88,172      87,233 
    
South America
     61,058      59,244      56,147 
    
Central America
     10,372      9,936      9,713 
    
Caribbean
     11,351      10,647      10,256 
    
Europe
     18,344      17,949      17,856 
In each of the countries in which we operate, we are party to various legal proceedings in the ordinary course of business.
These proceedings include tax, labor, antitrust, contractual matters and administrative and judicial proceedings concerning regulatory matters such as interconnection and tariffs. We are party to a number of proceedings regarding our compliance with administrative rules and regulations and concession standards.
Our material legal proceedings are described in Note 17 to our audited consolidated financial statements included in this annual report and in “Regulation” under Part VI of this annual report.
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Table of each year in the three-year period ended December 31, 2020.

 

 

     

 

     DECEMBER 31,      

 

 
 

 

    2018     2019     2020 

NUMBER OF EMPLOYEES

     189,448      191,523      186,851 

CATEGORY OF ACTIVITY:

    

 

 

 

    

 

 

 

    

 

 

 

Wireless

     77,845      83,091      73,404 

Fixed

     92,429      87,034      91,460 

Other businesses

     19,174      21,398      21,987 

GEOGRAPHIC LOCATION:

    

 

 

 

    

 

 

 

    

 

 

 

Mexico

     88,613      89,539      88,172 

South America

     62,500      61,058      59,304 

Central America

     9,586      10,372      9,936 

United States

     848      859      843 

Caribbean

     9,195      11,351      10,647 

Europe

     18,706      18,344      17,949 

ContentsLOGO

In each of the countries in which we operate, we are party to various legal proceedings in the ordinary course of business.

These proceedings include tax, labor, antitrust, contractual matters and administrative and judicial proceedings concerning regulatory matters such as interconnection and tariffs. We are party to a number of proceedings regarding our compliance with administrative rules and regulations and concession standards.

Our material legal proceedings are described in Note 17 to our audited consolidated financial statements included in this annual report and in “Regulation” under Part VI of this annual report.

 

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AUDIT AND
NON-AUDIT
FEES

The following table sets forth the fees billed to us and our subsidiaries by our independent registered public accounting firm, Mancera, during the fiscal years ended December 31, 20192020 and 2020:

 

 

  YEAR ENDED DECEMBER 31, 
 

 

  2019   2020 
 

 

  (in millions of Mexican pesos) 

Audit fees(1)

  Ps.    250   Ps.    250 

Audit-related fees(2)

   17    10 

Tax fees(3)

   34    19 

Total fees

  Ps.    301   Ps.    279 
(1)

Audit fees represent the aggregate fees billed by Mancera and its Ernst & Young Global affiliated firms in connection with the audit of our annual financial statements and statutory and regulatory audits.

(2)

Audit-related fees represent the aggregate fees billed by Mancera and its Ernst & Young Global affiliated firms for the review of reports on our operations submitted to IFT and attestation services that are not required by statute or regulation.

(3)

Tax fees represent fees billed by Mancera and its Ernst & Young Global affiliated firms for tax compliance services, tax planning services and tax advice services.

2021:

 
 
  
YEAR ENDED DECEMBER 31,
 
   
 
 
  
2020
   
2021
 
  
 
 
  (in millions of Mexican pesos) 
   
Audit fees
(1)
   Ps.     250    Ps.     267 
   
Audit-related fees
(2)
   10    23 
   
Tax fees
(3)
   19    13 
   
Total fees
  
 
Ps.     279
 
  
 
Ps.     303
 
(1)   
Audit fees represent the aggregate fees billed by Mancera and its Ernst & Young Global affiliated firms in connection with the audit of our annual financial statements and statutory and regulatory audits.
(2)
   Audit-related fees represent the aggregate fees billed by Mancera and its Ernst & Young Global affiliated firms for the review of reports on our operations submitted to IFT and attestation services that are not required by statute or regulation.
(3)
   Tax fees represent fees billed by Mancera and its Ernst & Young Global affiliated firms for tax compliance services, tax planning services and tax advice services.
   
 
    
    
AUDIT AND CORPORATE PRACTICES COMMITTEE APPROVAL POLICIES AND PROCEDURES

Our audit and corporate practices committee has established policies and procedures for the engagement of our independent auditors for services.

Our audit and corporate practices committee expressly approves any engagement of our independent auditors for audit or
non-audit
services provided to us or our subsidiaries. Prior to providing any service that requires specific
pre-approval,
our independent auditor and our Chief Financial Officer present to the audit committee a request for approval of services in which they confirm that the request complies with the applicable rules.

 

LOGO

We file reports, including annual reports on Form
20-F,
and other information with the SEC pursuant to the rules and regulations of the SEC that apply to foreign private issuers.

Any fillings we make electronically will be available to the public over the internet at the SEC’s web site at www.sec.gov and at our website at www.americamovil.com. This URL is intended to be an inactive textual reference only. It is not intended to be an active hyperlink to our website. The information on our website, which might be accessible through a hyperlink resulting from this URL, is not incorporated into this annual report.

The following documents have been filed with the SEC as exhibits to this annual report:

1.1
 Amended and Restated Bylaws (estatutos sociales)(estatutos sociales) of América Móvil, S.A.B. de C.V., dated as of April 16, 201826, 2021 (together with an English translation) (incorporated by reference to Exhibit 1.1 of our annual report on Form 20-F File No. 001-16269, filed on April  26, 2018).
2.1
 Description of RightsSecurities Registered Under Section 12 of Each Class of Securitiesthe Exchange Act.
4.1
 Stock Purchase Agreement by and among Verizon, Communications Inc., América Móvil, S.A.B. de C.V., AMX USA Holding, S.A. de C.V. and TracfoneTracFone Wireless, Inc. dated as of September 13, 2020.2020 (incorporated by reference to Exhibit 4.1 of our annual report on Form 20-F File No. 001-16269, filed on April 29, 2021)
8.1
 
List of certain subsidiaries of América Móvil, S.A.B. de C.V.
12.1
 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
12.2
 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
13.1
 Certification pursuant to Section 906 of the Sarbanes-OxleySarbanes- Oxley Act of 2002.
15.1
 Code of Ethics (incorporated by reference to Exhibit 14.1 of our annual report on Form 20-F, File No. 001-16269, filed on April 26, 2018).Ethics.
15.2
 Consent of independent registered public accounting firm.
17.1
 Subsidiary Guarantors
101.INS
 Inline XBRL Instance Document.
101.SCH
 Inline XBRL Taxonomy Extension Schema Document.
101.CAL
 Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB
 Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE
 Inline XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF
 Inline XBRL Taxonomy Extension Definition Document.
104
Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document).

Omitted from the exhibits filed with this annual report are certain instruments and agreements with respect to long-term debt of América Móvil, none of which, individually, authorizes securities in a total amount that exceeds 10% of the total assets of América Móvil. We hereby agree to furnish to the SEC copies of any such omitted instruments or agreements as the ComissionCommission requests.

 

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Some of the information contained or incorporated by reference in this annual report constitutes “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Although we have based these forward-looking statements on our expectations and projections about future events, it is possible that actual events may differ materially from our expectations. In many cases, we include, together with the forward-looking statements themselves, a discussion of factors that may cause actual events to differ from our forward-looking statements.

Examples of forward-looking statements include the following:

projections of our commercial, operating or financial performance, our financing, our capital structure or our other financial items or ratios;

statements of our plans, objectives or goals, including those relating to acquisitions, competition and rates;

statements concerning regulation or regulatory developments;

the impact of COVID-19;

statements about our future economic performance or that of Mexico or other countries in which we operate;

competitive developments in the telecommunications sector;

other factors and trends affecting the telecommunications industry generally and our financial condition in particular; and

statements of assumptions underlying the foregoing statements.

We use words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “should” and other similar expressions to identify forward-lookingforward- looking statements, but they are not the only way we identify such statements.

Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-lookingforward- looking statements. These factors, some of which are discussed under “Risk Factors,” include the impact of the COVID-19 pandemic, economic and political conditions and government policies in Mexico, Brazil, Colombia, Europe and elsewhere, inflation rates, exchange rates, regulatory developments, technological improvements, customer demand and competition. We caution you that the foregoing list of factors is not exclusive and that other risks and uncertainties may cause actual results to differ materially from those in forward-looking statements. You should evaluate any statements made by us in light of these important factors.

Forward-looking statements speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason.

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  ITEM  
  
FORM
20-F
CAPTION
  
LOCATION IN THIS REPORT
    
    PAGE    
1
  
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
  Not applicable    -—
2
  
OFFER STATISTICS AND EXPECTED TIMETABLE
  Not applicable    -—
3
  
KEY INFORMATION
  

    

  3A Selected financial data  Selected financial data    6

  3B Capitalization and indebtedness  Not applicable    -—

  3C Reasons for the offer and use of proceeds  Not applicable    -—

  3D Risk factors  Risk factors    3736
4
  
INFORMATION ON THE COMPANY
  

    

  4A History and development of the Company  Information on the Company    9

  

  Note 10—Property, Plant and Equipment, Netnet    F-38F-44

  

  Liquidity and capital resources    3231

  

  Additional Information    8785

  4B Business overview  Information on the Company    9

  

  Regulation    7170

  4C Organizational structure  Exhibit 8.1    -—

  4D Property, plant and equipment  Information on the Company    9

  

  Note 10—Property Plant and Equipment, Netnet    F-38F-44

  

  Liquidity and capital resources    3231

  

  Regulation    7170
4A
  4A Unresolved staff comments  None    -—
5*
5
  
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
  

    

  5A Operating results  Overview    2423

  

  Results of operations    2625

  

  Regulation    7170

Liquidity and capital resources31
  5B Liquidity and capital resources  Liquidity and capital resourcesNote 14—Debt    32F-56

Note 14—DebtF-51

  5C Research and development, patents and licenses, etc.  Not applicable    -—

  5D Trend information  Overview    2423

  

  Results of operations    2625

  5E Critical Accounting Estimates  Not applicable    -—
6
  
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
  

    

  6A Directors and senior management  Management    6059

  6B Compensation  Management    6059

  6C Board practices  Management    6059

  

  Management    6059

  6D Employees  Employees    8886

  6E Share ownership  Major shareholders49
Management59
7
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7A Major shareholdersMajor shareholders49
7B Related party transactionsRelated party transactions    50

Management60
7MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7A Major shareholdersMajor shareholders50

7B Related party transactionsRelated party transactions51

  7C Interests of experts and counsel  Not applicable    -—
8
  
FINANCIAL INFORMATION
  

    

  8A Consolidated statements and other financial information  Consolidated Financial Statements    F-193

  

  Dividends    5150

  

  Note 17—Commitments and Contingencies    

F-59

F-64

  8B Significant changes  Not applicable    -—

*América Móvil has elected to apply the SEC rules issued on November 19, 2020 which became effective on February 10, 2021, with respect to Item 5


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Table of this Form 20-F. Registrants, including América Móvil, are required to comply with the amended rules for their first fiscal year ending on or after April 9, 2021.

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  ITEM  
  
FORM
20-F
CAPTION
  
LOCATION IN THIS REPORT
    
    PAGE    
9
  
THE OFFER AND LISTING
  
 
    
 
 
  
9A Offer and listing details
  Trading markets    51
 
  9B Plan of distribution  Not applicable    —
 
  9C Markets  Trading markets    51
 
  9D Selling shareholders  Not applicable    —
 
  9E Dilution  Not applicable    —
 
  9F Expenses of the issue  Not applicable    —
10
  
ADDITIONAL INFORMATION
  
 
    
 
 
  10A Share Capital  Not applicable    —
 
  10B Memorandum and articles of association  Bylaws    51
 
  10C Material contracts  Information on the Company    9
 
  
 
  Results of operations    25
 
  
 
  Related party transactions    50
 
  
 
  Regulation    70
 
  10D Exchange controls  Additional information    85
 
  10E Taxation  Taxation of shares and ADSs    53
 
  10F Dividends and paying agents  Not applicable    —
 
  10G Statement by experts  Not applicable    —
 
  10H Documents on display  Additional information    85
 
  10I Subsidiary information  Not applicable    —
11
  
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Risk management    34
 
  
 
  Note 2 a)—Basis of Preparation of the Consolidated Financial Statements and Summary of Significant Accounting Policies and Practices    F-11
12
  
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
  
 
    
 
 
  12A Debt securities  Not applicable    —
 
  12B Warrants and rights  Not applicable    —
 
  12C Other securities  Not applicable    —
 
  12D American Depositary Shares  Bylaws    51
13
  
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
  Not applicable    —
14
  
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
  Not applicable    —
15
  
CONTROLS AND PROCEDURES
  Controls and procedures    65
16A
  
AUDIT COMMITTEE FINANCIAL EXPERT
  Management    59
16B
  
CODE OF ETHICS
  Code of ethics    68
16C
  
PRINCIPAL ACCOUNTANT FEES AND SERVICES
  Principal accountant fees and services    87
16D
  
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
  Not applicable    —
16E
  
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PUR- CHASERS
  Purchases of equity securities by the issuer and affiliated purchasers    52
16F
  
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
  Not applicable    —
16G
  
CORPORATE GOVERNANCE
  Corporate governance    63
16H
  
MINE SAFETY DISCLOSURE
  Not applicable    —
16I
  
DISCLOSURE REGARDING FOREIGN JURISDICATIONS THAT PREVENT IN- SPECTIONS
  Not applicable    —
17
  
FINANCIAL STATEMENTS
  Not applicable    —
18
  
FINANCIAL STATEMENTS
  Consolidated Financial statements    93
19
  
EXHIBITS
  Additional Information    85
19
  
EXHIBITS
  Additional Information    

90

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  ITEM    FORM 20-F CAPTION  LOCATION IN THIS REPORT        PAGE    
9  THE OFFER AND LISTING  

 

    

 

 

  9A Offer and listing details  Trading markets    52

 

  9B Plan of distribution  Not applicable    -

 

  9C Markets  Trading markets    52

 

  9D Selling shareholders  Not applicable    -

 

  9E Dilution  Not applicable    -

 

  9F Expenses of the issue  Not applicable    -
10  ADDITIONAL INFORMATION  

 

    

 

 

  10A Shareholders’ equity  Bylaws    52

 

  10B Memorandum and articles of association  Bylaws    52

 

  10C Material contracts  Information on the Company    9

 

  

 

  Results of operations    26

 

  

 

  Related party transactions    51

 

  

 

  Regulation    71

 

  10D Exchange controls  Additional information    87

 

  10E Taxation  Taxation of shares and ADSs    54

 

  10F Dividends and paying agents  Not applicable    -

 

  10G Statement by experts  Not applicable    -

 

  10H Documents on display  Additional information    87

 

  10I Subsidiary information  Not applicable    -
11  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Risk management    35

 

  

 

  Note 2 a)—Basis of Preparation of the Consolidated Financial Statements and Summary of Significant Accounting Policies and Practices    F-8
12  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES  

 

    

 

 

  12A Debt securities  Not applicable    -

 

  12B Warrants and rights  Not applicable    -

 

  12C Other securities  Not applicable    -

 

  12D American Depositary Shares  Bylaws    52
13  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES  Not applicable    -
14  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS  Not applicable    -
15  CONTROLS AND PROCEDURES  Controls and procedures    66
16A  AUDIT COMMITTEE FINANCIAL EXPERT  Management    60
16B  CODE OF ETHICS  Code of ethics    69
16C  PRINCIPAL ACCOUNTANT FEES AND SERVICES  Principal accountant fees and services    87
16D  EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES  Not applicable    -
16E  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS  Purchases of equity securities by the issuer and affiliated purchasers    53
16F  CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT  Not applicable    -
16G  CORPORATE GOVERNANCE  Corporate governance    64
16H  MINE SAFETY DISCLOSURE  Not applicable    -
17  FINANCIAL STATEMENTS  Not applicable    -
18  FINANCIAL STATEMENTS  Consolidated Financial statements    F-1
19  EXHIBITS  Additional Information    87

92

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LOGO

The registrant hereby certifies that it meets all of the requirements for filing on Form
20-F
and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Dated: April 28, 2021

29, 2022

AMÉRICA MÓVIL, S.A.B. DE C.V.

  By:
 
/s/ Carlos José García Moreno Elizondo
 
Name:
 
Carlos José García Moreno Elizondo
 
Title:
 
Chief Financial Officer
  By:
 
 By:
/s/ Alejandro Cantú Jiménez
 
Name:
 
Alejandro Cantú Jiménez
 
Title:
 
General Counsel

93

91

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Table of Contents


92

Table of ContentsLOGO


Table of Contents

AMÉRICA MÓVIL, S.A.B. DE C.V. AND SUBSIDIARIES

Consolidated Financial Statements

Years Ended December 31, 2018, 2019, 2020 and 2020

2021

with Report of Independent Registered Public Accounting Firm

Table of Contents

AMÉRICA MÓVIL, S.A.B. DE C.V. AND SUBSIDIARIES

Consolidated Financial Statements

Years Ended
December 
31, 2018,
2019
, 2020 and 2020

2021

Contents:

Report of Independent Registered Public Accounting Firm (PCAOB ID: 1284)

   F-2 

Audited Consolidated Financial Statements:

  

Consolidated Statements of Financial Position

F-6
Consolidated Statements of Comprehensive Income
   F-7 

Consolidated Statements of Comprehensive IncomeChanges in Shareholders’ Equity

   F-8 

Consolidated Statements of Changes in Shareholders’ EquityCash Flows

   F-9 

Consolidated Statements of Cash Flows

F-11

Notes to Consolidated Financial Statements

   F-12F-10 

AMX Audit Opinion 2020

F-1

Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of

América Móvil, S.A.B. de C.V.

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of América Móvil, S.A.B. de C.V. and its subsidiaries (the Company) as of December 31, 20202021 and 2019,2020, the related consolidated statements of comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2020,2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 20202021 and 2019,2020, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2020,2021, in conformity with International Financial Reporting Standards, as issued by the International Accounting Standards Board.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020,2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated April 28, 2021
2
9
, 2022 expressed an unqualified opinion thereon.

Change in accounting policy for certain class of assets (Towers)

As discussed in Note 2, item a), i) to the consolidated financial statements, effective December 31, 2020, the Company changed prospectively its method of accounting for its towers using the revaluation model permitted by IAS 16 “Property, Plant and Equipment”. As explained below, auditing this change in accounting policy was a Critical Audit Matter.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

F-2
Table of Contents
  
Deferred tax assets, realizability of Net Operating Loss Carryforwards
Description of the Matter
  

As discussed in Note 13 to the consolidated financial statements, as of December 31, 2020,2021, the net balance of deferred tax assets was Ps.66,303,077Ps.77,822,839 thousand. The Company has recognized deferred tax assets arising from net operating loss carryforwards (NOLs) of approximately Ps.25,121,933Ps.24,449,622 thousand. The NOLs were generated primarily by its subsidiary in Brazil.

Auditing management’s assessment of the realizability of the deferred tax assets arising from Brazilian NOLs involved complex auditor judgement because management´s estimate of realizability was based on assessing the probability, timing and sufficiency of expected reversals of taxable temporary differences, future taxable profits and available tax planning opportunities. These projections are sensitive because they can be affected by future operating results and future market and economic conditions.

How We Addressed the Matter in Our Audit
  

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement related to the realizability of the deferred tax assets. We tested controls over management’s analyses of future reversal of existing taxable temporary differences, their projections of future taxable income and related assumptions used in developing the projected financial information and their identification of available tax planning opportunities. Our audit also included the evaluationtesting of controls that address the completeness and accuracy of the data utilized in the valuation models.

analysis.

To test the realizability of the deferred tax assets arising from NOLs our audit procedures included, among other things, the review of management´s estimates of future taxable income in Brazil, the methodology used, the significant assumptions and the underlying data used by the Company in developing the projected financial information, such as the weighted average cost of capital, customer attrition rates, growth rates, and other key assumptions by comparing them with historical, economic and industry trends and evaluating whether changes to the Company´s business model and other factors would significantly affect the projected financial information. We also involved our internalvaluation specialists to evaluate the methodologiesanalysis and assumptions used, and to test the calculations used by the Company.

In addition, with the assistance of our tax professionals, we assessed the application of relevant tax laws, including assessing the Company’s future tax planning opportunities and tested the Company´s scheduling of the timing and amounts of expected reversals of taxable temporary differences.

We also assessed the adequacy of the related financial statement disclosures.

  
Impairment of goodwill
Description of the Matter
  

As discussed in Note 2 item iii) i) and in Note 11 to the consolidated financial statements, as of December 31, 2020,2021, the Company’s goodwill balance was Ps.143,052,859Ps.136,578,194 thousand. The Company tests goodwill at least annually at the Cash Generating Unit (CGU) level. Impairment exists when the carrying value of a CGU exceeds its recoverable amount, which is the higher of its fair value less cost to sell and its
value-in-use.

The company has estimated the recoverable amount of the CGU by calculating the CGU value in use to test for impairment.
Auditing management´s annual assessment of impairment of goodwill involved complex auditor judgement because the estimations required to determine the fair value and
value-in-use
of the CGUs, including revenue growth rates, operating margins and weighted average cost of capital, are sensitive to, and affected by, expected economic factors, technological changes and market conditions, among other factors.

F-3
Table of Contents
How We Addressed the Matter in Our Audit
  

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement related to the determination of the impairment of goodwill, including controls over management’s review of the significant assumptions described above, projected financial information and the valuation model used to develop such estimates.

To test the impairment of goodwill our audit procedures included, among others, evaluating the methodology used, testing the significant assumptions mentioned above and the underlying data used by the Company. We assessed the historical accuracy of management’s estimates and projections by comparing them to actual results and obtaining appropriate explanations for the variances; examined management’s support for the current estimates and projections by comparing them to industry and economic trends, including market participant data; evaluated management’s methodology on the estimation of the weighted average cost of capital reflecting the economic conditions for each CGU; tested the completeness and accuracy of the underlying data, and evaluated other factors that would significantly affect the projected financial information and thus the fair value and
value-in-use
of the CGUs.

In addition, we involved our valuation specialist to evaluate the methodologies and assumptions used and to test the calculations made by the Company.

We also assessed the adequacy of the related financial statement disclosures.

  
Discount ratesrate used in determining defined benefit pension and postretirement benefit obligations in Mexico
Description of the Matter
  

As discussed in Note 2, item iii), q) and in Note 18 to the consolidated financial statements, as of December 31, 2020,2021, the defined benefit pension obligation balance was Ps.168,230,202Ps.142,850,465 thousand. The Company assessed and updated its estimates and assumptions used to actuarially measure and value the defined benefit pension obligation as of December 31, 2020,2021, using the assistance of independent actuarial specialists.

Auditing the defined benefit pension obligation which the majority of it arises from one of its subsidiaries in Mexico and for which this matter is related, involved complex auditor judgement and required the involvement of our actuarial and valuation specialists because of the highly judgmental nature of the actuarial assumptions, primarily the discount rate used in the Company’s measurement process. This assumption was complex because it required a valuation of the credit quality of the corporate bonds used to develop the discount rate and the correlation of those bonds’ cash inflows to the timing and amount of future expected benefit payments.

How We Addressed the Matter in Our Audit
  

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement relating to the determination of the discount rate used in the defined benefit pension and postretirement benefit obligations calculations. We tested controls over management’s determination and review of the discount rate provided to the independent actuaries.

To test the determination of the discount rate of the defined benefit pension obligation we involved our valuation and actuarial specialists to assist us in evaluating the methodology used to select the yield curve applied on the calculation, assessing the credit quality of the corporate bonds that comprise the yield curve, the timing and amount of cash flows at maturity with the expected amounts and duration of the related benefit payments. In addition, we compared the Company’s current projections to historical projected defined benefit pension and postretirement benefit obligations cash flows and compared the current-year benefits paid to the prior-year projected cash flows.

F-4
Table of Contents
  

We also evaluated the objectivity and competence of the independent actuaries used by management and management´s qualified persons responsible for overseeing the preparation of the discount rate by the independent actuaries specialists through the consideration of their professional qualifications, experience and their use of accepted methodology.

We also assessed the adequacy of the related financial statement disclosures.

Revaluation of towers due to a change in accounting policy
Description of the Matter

As discussed in Note 2, item a), i) and in Note 10 to the consolidated financial statements, as of December 31, 2020, the balance of the network in operation and equipment was Ps.1,057,592,243 thousand. This includes a revaluation adjustment of Ps.107,152,628 due to a change in the accounting policy adopted by the Company on December 31, 2020 for certain class of assets (towers) from the cost model to the revaluation model.

Auditing management´s revaluation model of towers involved complex auditor judgement because the estimation of the fair value of the towers required the assessment of the valuation technique and the assumptions used, as the future lease income, tenancy ratios, earnings before interest, taxes, depreciation and amortization (EBITDA) and weighted average cost of capital (WACC) that are sensitive to, and affected by, expected economic factors, technological changes and market conditions, among others.

How We Addressed the
Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement related to the determination of tower’s fair value, including controls over management’s review of the significant assumptions described above, the valuation model used to develop such values and the completeness and accuracy of the data utilized in the valuation model.

Our audit procedures included, among others, the evaluation of the tower´s measurement change from cost to the revaluation model, considering the nature of the asset and industry. To test the revaluation model of the towers, we evaluated the methodology used and tested the significant assumptions included in the model and the underlying data used by management. In particular, we assessed the historical accuracy of significant assumptions such as, EBITDA and tenancy ratios by comparing them to actual and expected results, the industry and economic trends, including market participant data, and obtained appropriate explanations for the variances; we evaluated the future lease income by comparing it with actual lease agreements’ terms and conditions with external third party companies by geography and assessed management’s methodology for determining the WACC used in the model for each country. We involved our valuation specialists to evaluate the methodology and some assumptions, including EBITDA and WACC used in the fair value estimation and tested the calculations.

In addition, we evaluated the objectivity and competence of the external valuation specialists used by management and management´s qualified persons responsible for overseeing the preparation of the determination of the fair value of the towers by the external valuation specialists through the consideration of their professional qualifications, experience and their use of accepted methodology.

Furthermore, we assessed the adequacy of the related financial statement disclosures.

/s/ Mancera, S.C.

We have served as the Company’s auditor since 1993.

Mexico City, Mexico

April 28, 2021

2
9

,

2022
F-5
Table of Contents
AMÉRICA MÓVIL, S.A.B. DE C.V. AND SUBSIDIARIES

Consolidated Statements of Financial Position

(In thousands of Mexican pesos)

     At December 31, 
  Note  2019  2020  2020
Millions
of U.S. dollars		 

Assets

    

Current assets:

    

Cash and cash equivalents

  3  Ps.19,745,656  Ps.35,917,907  US$1,801 

Equity investments at fair value through other comprehensive income (OCI) and other short-term investments

  4   47,718,025   54,636,395   2,739 

Accounts receivable:

    

Subscribers, distributors, recoverable taxes, contract assets and other, net

  5   204,706,296   207,977,954   10,426 

Related parties

  6   1,273,140   1,391,300   70 

Derivative financial instruments

  7   6,825,760   20,928,335   1,049 

Inventories, net

  8   41,102,012   30,377,439   1,523 

Other current assets, net

  9   9,473,434   8,993,907   451 
  

 

 

  

 

 

  

 

 

 

Total current assets

  Ps.330,844,323  Ps.360,223,237  US$18,059 

Non-current assets:

    

Property, plant and equipment, net

  10  Ps.639,343,370  Ps.722,929,631  US$36,239 

Intangibles, net

  11   125,169,389   133,456,967   6,690 

Goodwill

  11   152,899,801   143,052,859   7,171 

Investments in associated companies

   2,474,193   1,829,760   92 

Deferred income taxes

  13   106,167,897   115,370,240   5,783 

Accounts receivable, subscriber, distributors and contract assets, net

  5   15,139,442   7,792,863   391 

Other assets, net

  9   41,892,019   38,415,826   1,926 

Right-of-use assets

  15   118,003,223   101,976,844   5,112 
  

 

 

  

 

 

  

 

 

 

Total assets

  Ps.1,531,933,657  Ps.1,625,048,227  US$81,463 
  

 

 

  

 

 

  

 

 

 

Liabilities and equity

    

Current liabilities:

    

Short-term debt and current portion of long-term debt

  14  Ps.129,172,033  Ps.148,083,184  US$7,423 

Short-term liability related to right-of-use of assets

  15   25,894,711   25,067,905   1,257 

Accounts payable

  16a   216,112,824   186,995,472   9,374 

Accrued liabilities

  16b   52,371,252   50,291,851   2,521 

Income tax

  13   33,026,606   14,644,979   734 

Other taxes payable

   24,373,400   27,969,739   1,402 

Derivative financial instruments

  7   9,596,751   14,230,249   713 

Related parties

  6   3,460,419   3,999,916   201 

Deferred revenues

   31,391,749   36,027,383   1,806 
  

 

 

  

 

 

  

 

 

 

Total current liabilities

  Ps.525,399,745  Ps.507,310,678  US$25,431 

Non-current liabilities:

    

Long-term debt

  14  Ps.495,082,444  Ps.480,299,772  US$24,077 

Long-term liability related to right-of-use of assets

  15   94,702,022   84,259,336   4,224 

Deferred income taxes

  13   18,093,041   49,067,163   2,460 

Deferred revenues

   3,425,738   2,875,467   144 

Asset retirement obligations

  16c   15,816,744   17,887,991   897 

Employee benefits

  18   152,507,058   168,230,202   8,433 
  

 

 

  

 

 

  

 

 

 

Total non-current liabilities

  Ps.779,627,047  Ps.802,619,931  US$40,235 
  

 

 

  

 

 

  

 

 

 

Total liabilities

  Ps.1,305,026,792  Ps.1,309,930,609  US$65,666 
  

 

 

  

 

 

  

 

 

 

Equity:

    

Capital stock

  20  Ps.96,338,262  Ps.96,341,695  US$4,829 

Retained earnings:

    

Prior years

   213,719,236   267,865,420   13,428 

Profit for the year

   67,730,891   46,852,605   2,349 
  

 

 

  

 

 

  

 

 

 

Total retained earnings

   281,450,127   314,718,025   15,777 

Other comprehensive loss items

   (199,878,430)   (160,580,917)   (8,049) 
  

 

 

  

 

 

  

 

 

 

Equity attributable to equity holders of the parent

   177,909,959   250,478,803   12,557 

Non-controlling interests

   48,996,906   64,638,815   3,240 
  

 

 

  

 

 

  

 

 

 

Total equity

   226,906,865   315,117,618   15,797 
  

 

 

  

 

 

  

 

 

 

Total liabilities and equity

  Ps.1,531,933,657  Ps.1,625,048,227  US$81,463 
  

 

 

  

 

 

  

 

 

 

  Note 
At December 31,
 
 2020  
2021
  
2021
Millions

of U.S. dollars
 
Assets
              
Current assets:
              
Cash and cash equivalents
 3 Ps.35,917,907  
Ps.
38,679,891
 
 
US$
1,879
 
Equity investments at fair value through other comprehensive income (OCI) and other short-term investments
 4  50,096,051  
 
117,703,202
 
 
 
5,718
 
Accounts receivable:
              
Subscribers, distributors, recoverable taxes, contract assets and other, net
 5  207,977,954  
 
202,846,597
 
 
 
9,855
 
Related parties
 6  1,391,300  
 
1,158,611
 
 
 
56
 
Derivative financial instruments
 7  20,928,335  
 
10,130,806
 
 
 
492
 
Inventories, net
 8  30,377,439  
 
24,185,310
 
 
 
1,175
 
Other current assets, net
 9  8,993,907  
 
9,452,252
 
 
 
459
 
    
 
 
  
 
 
  
 
 
 
Total current assets
   Ps.355,682,893  
Ps.
404,156,669
 
 
US$
19,634
 
Non-current assets:
              
Property, plant and equipment, net
 10 Ps.722,929,631  
Ps.
731,196,679
 
 
US$
35,523
 
Intangibles, net
 11  133,456,967  
 
143,225,764
 
 
 
6,958
 
Goodwill
 11  143,052,859  
 
136,578,194
 
 
 
6,635
 
Investments in associated companies
    1,829,760  
 
3,052,481
 
 
 
148
 
Deferred income taxes
 13  115,370,240  
 
127,287,934
 
 
 
6,184
 
Accounts receivable, subscriber, distributors and contract assets, net
 5  7,792,863  
 
6,928,888
 
 
 
337
 
Other assets, net
 9  38,415,826  
 
39,956,090
 
 
 
1,941
 
Debt instruments
 at fair value through other comprehensive income (OCI)
 4  4,540,344  
 
6,894,757
 
 
 
335
 
Right-of-use assets
 15  101,976,844  
 
90,372,393
 
 
 
4,391
 
    
 
 
  
 
 
  
 
 
 
Total assets
   Ps.1,625,048,227  
Ps.
1,689,649,849
 
 
US$
82,086
 
    
 
 
  
 
 
  
 
 
 
Liabilities and equity
              
Current liabilities:
              
Short-term debt and current portion of long-term debt
 14 Ps.148,083,184  
Ps.
145,222,672
 
 
US$
7,055
 
Short-term liability related to right-of-use of assets
 15  25,067,905  
 
27,632,357
 
 
 
1,342
 
Accounts payable
 16a  186,995,472  
 
206,487,681
 
 
 
10,032
 
Accrued liabilities
 16b  50,291,851  
 
54,391,464
 
 
 
2,642
 
Income tax
 13  14,644,979  
 
33,247,318
 
 
 
1,615
 
Other taxes payable
    27,969,739  
 
26,278,007
 
 
 
1,277
 
Derivative financial instruments
 7  14,230,249  
 
10,034,508
 
 
 
488
 
Related parties
 6  3,999,916  
 
4,216,882
 
 
 
205
 
Deferred revenues
    36,027,383  
 
26,501,877
 
 
 
1,288
 
    
 
 
  
 
 
  
 
 
 
Total current liabilities
   Ps.507,310,678  
Ps.
534,012,766
 
 
US$
25,944
 
Non-current liabilities:
              
Long-term debt
 14 Ps.480,299,772  
Ps.
418,807,430
 
 
US$
20,347
 
Long-term liability related to right-of-use of assets
 15  84,259,336  
 
71,021,868
 
 
 
3,450
 
Deferred income taxes
 13  49,067,163  
 
49,465,095
 
 
 
2,403
 
Deferred revenues
    2,875,467  
 
2,698,276
 
 
 
131
 
Asset retirement obligations
 16c  17,887,991  
 
16,752,223
 
 
 
814
 
Employee benefits
 18  168,230,202  
 
142,850,465
 
 
 
6,940
 
    
 
 
  
 
 
  
 
 
 
Total non-current liabilities
   Ps.802,619,931  
Ps.
701,595,357
 
 
US$
34,085
 
    
 
 
  
 
 
  
 
 
 
Total liabilities
   Ps.1,309,930,609  
Ps.
1,235,608,123
 
 
US$
60,029
 
    
 
 
  
 
 
  
 
 
 
Equity:
              
Capital stock
 20 Ps.96,341,695  
Ps.
96,333,432
 
 
US$
4,680
 
Retained earnings:
              
Prior years
    267,865,420  
 
255,267,259
 
 
 
12,402
 
Profit for the year
    46,852,605  
 
192,423,167
 
 
 
9,348
 
    
 
 
  
 
 
  
 
 
 
Total retained earnings
    314,718,025  
 
447,690,426
 
 
 
21,750
 
Other comprehensive loss items
    (160,580,917)  
 
(154,388,931
) 
 
 
(7,502
) 
    
 
 
  
 
 
  
 
 
 
Equity attributable to equity holders of the parent
    250,478,803  
 
389,634,927
 
 
 
18,928
 
Non-controlling interests
    64,638,815  
 
64,406,799
 
 
 
3,129
 
    
 
 
  
 
 
  
 
 
 
Total equity
    315,117,618  
 
454,041,726
 
 
 
22,057
 
    
 
 
  
 
 
  
 
 
 
Total liabilities and equity
   Ps.1,625,048,227  
Ps.
1,689,649,849
 
 
US$
82,086
 
    
 
 
  
 
 
  
 
 
 
The accompanying notes are an integral part of these consolidated financial statements.

F-
6
Table of Contents
AMÉRICA MÓVIL, S.A.B. DE C.V. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(In thousands of Mexican pesos, except for earnings per share)

     For the years ended December 31 
  Note  2018  2019  2020  2020
Millions of U.S.
dollars, except
for earnings
per share		 

Operating revenues:

     

Service revenues

  Ps.863,647,642  Ps.834,365,232  Ps.857,860,234  US$43,003 

Sales of equipment

   174,560,039   172,982,637   159,026,296   7,972 
  

 

 

  

 

 

  

 

 

  

 

 

 
  Ps.1,038,207,681  Ps.1,007,347,869  Ps.1,016,886,530  US$50,975 
  

 

 

  

 

 

  

 

 

  

 

 

 

Operating costs and expenses:

     

Cost of sales and services

   508,822,430   471,736,157   470,427,476   23,582 

Commercial, administrative and general expenses

   227,192,478   215,993,865   212,135,830   10,634 

Other expenses

   6,923,022   5,862,102   4,724,630   237 

Depreciation and amortization

  
9,10,11 and
15		 
 		  155,712,580   158,915,210   164,243,683   8,233 
  

 

 

  

 

 

  

 

 

  

 

 

 
  Ps.898,650,510  Ps.852,507,334  Ps.851,531,619  US$42,686 
  

 

 

  

 

 

  

 

 

  

 

 

 

Operating income

  Ps.139,557,171  Ps.154,840,535  Ps.165,354,911  US$8,289 
  

 

 

  

 

 

  

 

 

  

 

 

 

Interest income

   10,646,169   6,284,672   5,062,036   254 

Interest expense

   (31,771,433)   (37,911,339)   (38,661,740)   (1,938) 

Foreign currency exchange (loss) gain, net

   (7,261,956)   5,226,071   (65,366,200)   (3,277) 

Valuation of derivatives, interest cost from labor obligations and other financial items, net

  22   (10,176,316)   (7,075,342)   1,291,108   65 

Equity interest in net result of associated companies

   267   (17,609)   (287,006)   (14) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Profit before income tax

   100,993,902   121,346,988   67,393,109   3,379 

Income tax

  13   46,477,079   51,033,533   16,366,152   820 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net profit for the year

  Ps.54,516,823  Ps.70,313,455  Ps.51,026,957  US$2,559 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net profit for the year attributable to:

     

Equity holders of the parent

  Ps.52,566,197  Ps.67,730,891  Ps.46,852,605  US$2,349 

Non-controlling interests

   1,950,626   2,582,564   4,174,352   210 
  

 

 

  

 

 

  

 

 

  

 

 

 
  Ps.54,516,823  Ps.70,313,455  Ps.51,026,957  US$2,559 
  

 

 

  

 

 

  

 

 

  

 

 

 

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

  Ps.0.79  Ps.1.03  Ps.0.71  US$0.04 
  

 

 

  

 

 

  

 

 

  

 

 

 

Other comprehensive income (loss) items:

     

Net other comprehensive loss that may be reclassified to profit or loss in subsequent years:

     

Effect of translation of foreign entities

  Ps.(64,314,032)  Ps.(35,536,252)  Ps.(11,515,297)  US$(579) 

Items that will not be reclassified to (loss) or profit in subsequent years:

     

Re-measurement of defined benefit plan, net of deferred taxes

   757,278   (29,535,672)   (10,299,558)   (516) 

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

   (3,765,688)   883,408   (1,952,414)   (98) 

Revaluation surplus, net of deferred taxes

   —     —     77,230,031   3,871 
  

 

 

  

 

 

  

 

 

  

 

 

 

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

  21   (67,322,442)   (64,188,516)   53,462,762   2,678 
  

 

 

  

 

 

  

 

 

  

 

 

 

Total comprehensive (loss) income for the year

  Ps.(12,805,619)  Ps.6,124,939  Ps.104,489,719  US$5,237 
  

 

 

  

 

 

  

 

 

  

 

 

 

Comprehensive (loss) income for the year attributable to:

     

Equity holders of the parent

  Ps.(11,770,227)  Ps.5,450,679  Ps.86,150,118  US$4,319 

Non-controlling interests

   (1,035,392)   674,260   18,339,601   918 
  

 

 

  

 

 

  

 

 

  

 

 

 
  Ps.(12,805,619)  Ps.6,124,939  Ps.104,489,719  US$5,237 
  

 

 

  

 

 

  

 

 

  

 

 

 

  Note 
For the years ended December 31
 
 
2019
(1)
  
2020
(1)
  
2021
  
2021
Millions of U.S.
dollars, except
for earnings
per share
 
Operating revenues:
     
Service revenues
   
Ps
.		702,961,964  
Ps
.		708,483,701  
Ps
.
714,244,392
 
 
US$
34,700
 
Sales of equipment
    148,521,512   131,223,459  
 
141,290,479
 
 
 
6,864
 
    
 
 
  
 
 
  
 
 
  
 
 
 
    
Ps
.		851,483,476  Ps.839,707,160  
Ps
.
855,534,871
 
 
US$
41,564
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Operating costs and expenses:
                  
Cost of sales and services
    348,776,249   334,881,859  
 
341,059,662
 
 
 
16,570
 
Commercial, administrative and general expenses
    195,507,880   191,901,898  
 
180,838,412
 
 
 
8,786
 
Other expenses
    5,882,276   4,737,626  
 
4,877,290
 
 
 
237
 
Depreciation and amortization
 9,10,11 and
15		  157,518,787   162,682,398  
 
162,626,866
 
 
 
7,901
 
    
 
 
  
 
 
  
 
 
  
 
 
 
    
Ps
.		707,685,192  
Ps
.		694,203,781  
Ps
.
689,402,230
 
 
US$
33,494
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Operating income
   
Ps
.		143,798,284  
Ps
.		145,503,379  
Ps.
166,132,641
 
 
US$
8,070
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Interest income
    6,284,672   5,062,036  
 
3,834,827
 
 
 
186
 
Interest expense
    (37,910,954
) 
  (38,661,485
) 
 
 
(36,025,312
) 
 
 
(1,750
) 
Foreign currency exchange gain (loss), net
    5,226,071   (65,366,200
) 
 
 
(17,045,843
) 
 
 
(828
) 
Valuation of derivatives, interest cost from labor obligations and other financial items, net
 22  (6,997,844
) 
  1,292,878  
 
(14,250,066
) 
 
 
(692
) 
Equity interest in net result of associated companies
    (17,609
) 
  (287,006
) 
 
 
113,918
 
 
 
6
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Profit before income tax
    110,382,620   47,543,602  
 
102,760,165
 
 
 
4,992
 
Income tax
 13  49,914,055   13,509,270  
 
28,144,769
 
 
 
1,367
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Net profit for the year from continuing operations
   Ps.60,468,565  Ps.34,034,332  
Ps.
74,615,396
 
 
US$
3,625
 
Profit after tax for the year from discontinued operations
    9,844,889   16,992,625  
 
121,710,718
 
 
 
5,913
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Net profit for the year
   Ps.70,313,454  Ps.51,026,957  
Ps.
196,326,114
 
 
US$
9,538
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Net profit for the year attributable to:
                  
Equity holders of the parent from continuing operations
   Ps.57,886,001  Ps.29,859,980  
Ps.
70,712,449
 
 
US$
3,435
 
Equity holders of the parent from discontinued operations
 2, Ac  9,844,889   16,992,625  
 
121,710,718
 
 
 
5,913
 
Non-controlling interests
    2,582,564   4,174,352  
 
3,902,947
 
 
 
190
 
    
 
 
  
 
 
  
 
 
  
 
 
 
    Ps.70,313,454  Ps.51,026,957  
Ps.
196,326,114
 
 
US$
9,538
 
Basic and diluted earnings per share attributable to equity holders of the parent from continuing operations
 20 Ps.0.88  Ps.0.45  
Ps.
1.07
 
 
US$
0.05
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Basic and diluted earnings per share attributable to equity holders of the parent from discontinued operations
 20 Ps.0.15  Ps.0.26  
Ps.
1.85
 
 
US$
0.09
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Other comprehensive income (loss) items:
                  
Net other comprehensive loss that may be reclassified to profit or loss in subsequent years:
                  
Effect of translation of foreign entities from continuing operations
   Ps.(35,536,252
) 
 Ps.(11,515,297)  
Ps.
(7,134,153
) 
 
US$
(347
) 
Effect of translation of foreign entities from discontinued operations
    —     —    
 
(829,163
) 
 
 
(40
) 
Items that will not be reclassified to (loss) or profit in subsequent years:
                  
Re-measurement of defined benefit plan, net of deferred taxes
    (29,535,672
) 
  (10,299,558
) 
 
 
11,261,896
 
 
 
547
 
Unrealized (loss) gain on equity investments at fair value, net of deferred taxes
    883,409   (1,952,414
) 
 
 
4,560,869
 
 
 
222
 
Revaluation surplus, net of deferred taxes
    —     77,230,031  
 
0
  
 
 
 
0
  
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Total other comprehensive (loss) income items for the year, net of deferred taxes
 21  (64,188,515)   53,462,762  
 
7,859,449
 
 
 
382
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Total comprehensive income for the year
   Ps.6,124,939  Ps.104,489,719  
Ps.
204,185,563
 
 
US$
9,920
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Comprehensive income for the year attributable to:
                  
Equity holders of the parent from continuing operations
   Ps.5,450,679  Ps.86,150,118  
Ps.
202,418,502
 
 
US$
9,834
 
Non-controlling interests
    674,260   18,339,601  
 
1,767,061
 
 
 
86
 
    
 
 
  
 
 
  
 
 
  
 
 
 
    Ps.6,124,939  Ps.104,489,719  
Ps.
204,185,563
 
 
US$
9,920
 
Comprehensive income for the period:
                  
Net comprehensive (loss) income from continuing operations
   Ps.(3,719,950
) 
 Ps.87,497,094  
Ps.
82,474,845
 
 
US$
4,007
 
Net comprehensive income from discontinued operations
 2, Ac  9,844,889   16,992,625  
 
121,710,718
 
 
 
5,913
 
    
 
 
  
 
 
  
 
 
  
 
 
 
    Ps.6,124,939  Ps.104,489,719  
Ps.
204,185,563
 
 
US$
9,920
 
    
 
 
  
 
 
  
 
 
  
 
 
 
(1)
Restated for discontinued operations.
The accompanying notes are an integral part of these consolidated financial statements.

F-7
Table of Contents
AMÉRICA MÓVIL, S.A.B. DE C.V. AND SUBSIDIARIES

Consolidated Statements of Changes in Shareholders’ Equity

For the years ended December 31, 2018, 2019, 2020 and 2020

2021

(In thousands of Mexican pesos)

  Capital
stock		  Legal
reserve		  Retained
earnings		  Unrealized
(loss) gain on
equity
investment at
fair value		  Re-measurement
of defined
benefit plans		  Cumulative
translation
adjustment		  Revaluation
surplus		  Total equity
attributable to
equity holders
of the parent		  Non-
controlling
interests		  Total
equity		 

As of January 1, 2018

 Ps.96,338,508  Ps.358,440  Ps.170,729,158  Ps.(6,047,296)  Ps.(75,080,656)  Ps.7,866,158  Ps.—    Ps.194,164,312  Ps.66,469,205  Ps.260,633,517 

Effect of adoption of new accounting standards

  —     —     19,598,349   —     —     —     —     19,598,349   518,440   20,116,789 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

As of January 1, 2018 (restated)

 Ps.96,338,508  Ps.358,440  Ps.190,327,507  Ps.(6,047,296)  Ps.(75,080,656)  Ps.7,866,158  Ps.—    Ps.213,762,661  Ps.66,987,645  Ps.280,750,306 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net profit for the year

  —     —     52,566,197   —     —     —     —     52,566,197   1,950,626   54,516,823 

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

  —     —     —     (3,765,688)   —     —     —     (3,765,688)   —     (3,765,688) 

Remeasurement of defined benefit plan, net of deferred taxes

  —     —     —     —     652,722   —     —     652,722   104,556   757,278 

Effect of translation of foreign entities

  —     —     —     —     —     (61,223,458)   —     (61,223,458)   (3,090,574)   (64,314,032) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Comprehensive income (loss) for the year

  —     —     52,566,197   (3,765,688)   652,722   (61,223,458)   —     (11,770,227)   (1,035,392)   (12,805,619) 

Dividends declared

  —     —     (21,134,520)   —     —     —     —     (21,134,520)   (1,850,462)   (22,984,982) 

Hyperinflation adjustment

  —     —     15,826,934   —     —     —     —     15,826,934   —     15,826,934 

Repurchase of shares

  (130)   —     (518,633)   —     —     —     —     (518,763)   —     (518,763) 

Redemption of hybrid bond

  —     —     —     —     —     —     —     —     (13,440,120)   (13,440,120) 

Other acquisitions of non-controlling interests

  —     —     (170,440)   —     —     —     —     (170,440)   (784,894)   (955,334) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance at December 31, 2018

 Ps.96,338,378  Ps.358,440  Ps.236,897,045  Ps.(9,812,984)  Ps.(74,427,934)  Ps.(53,357,300)  Ps.—    Ps.195,995,645  Ps.49,876,777  Ps.245,872,422 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

  Capital
stock		  Legal
reserve		  Retained
earnings		  Unrealized
(loss) gain on
equity
investment at
fair value		  Re-measurement
of defined
benefit plans		  Cumulative
translation
adjustment		  Revaluation
surplus		  Total equity
attributable to
equity holders
of the parent		  Non-
controlling
interests		  Total
equity		 

Net profit for the year

  —     —     67,730,891   —     —     —     —     67,730,891   2,582,564   70,313,455 

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

  —     —     —     883,408   —     —     —     883,408   —     883,408 

Remeasurement of defined benefit plan, net of deferred taxes

  —     —     —     —     (29,153,554)   —     —     (29,153,554)   (382,118)   (29,535,672) 

Effect of translation of foreign entities

  —     —     —     —     —     (34,010,066)   —     (34,010,066)   (1,526,186)   (35,536,252) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Comprehensive income (loss) for the year

  —     —     67,730,891   883,408   (29,153,554)   (34,010,066)   —     5,450,679   674,260   6,124,939 

Dividends declared

  —     —     (23,106,823)   —     —     —     —     (23,106,823)   (1,473,290)   (24,580,113) 

Repurchase of shares

  (116)   —     (427,212)   —     —     —     —     (427,328)   —     (427,328) 

Other acquisitions of non-controlling interests

  —     —     (2,214)   —     —     —     —     (2,214)   (80,841)   (83,055) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance at December 31, 2019

 Ps.96,338,262  Ps.358,440  Ps.281,091,687  Ps.(8,929,576)  Ps.(103,581,488)  Ps.(87,367,366)  Ps.—     Ps.177,909,959  Ps.48,996,906  Ps.226,906,865 

Net profit for the year

  —     —     46,852,605   —     —     —     —     46,852,605   4,174,352   51,026,957 

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

  —     —     —     (1,952,414)   —     —     —     (1,952,414)   —     (1,952,414) 

Remeasurement of defined benefit plan, net of deferred taxes

  —     —     —     —     (10,026,454)   —     —     (10,026,454)   (273,104)   (10,299,558) 

Effect of translation of foreign entities

  —     —     —     —     —     (13,558,774)   —     (13,558,774)   2,043,477   (11,515,297) 

Revaluation surplus, net of deferred taxes

  —     —     —     —     —     —     64,835,155   64,835,155   12,394,876   77,230,031 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Comprehensive income (loss) for the year

  —     —     46,852,605   (1,952,414)   (10,026,454)   (13,558,774)   64,835,155   86,150,118   18,339,601   104,489,719 

Dividends declared

  —     —     (25,161,564)   —     —     —     —     (25,161,564)   (1,860,300)   (27,021,864) 

Stock dividend

  4,650   —     17,054,007   —     —     —     —     17,058,657   —     17,058,657 

Repurchase of shares

  (1,217)   —     (5,209,880)   —     —     —     —     (5,211,097)   —     (5,211,097) 

Other acquisitions of non-controlling interests

  —     —     (267,270)   —     —     —     —     (267,270)   (837,392)   (1,104,662) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance at December 31, 2020

 Ps.96,341,695  Ps.358,440  Ps.314,359,585  Ps.(10,881,990)  Ps.(113,607,942)  Ps.(100,926,140)  Ps.64,835,155  Ps.250,478,803  Ps.64,638,815  Ps.315,117,618 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

  
Capital
stock
  
Legal
reserve
  
Retained
earnings
  
Unrealized
(loss) gain on
equity
investment at
fair value
  
Re-measurement
of defined
benefit plans
  
Cumulative
translation
adjustment
  
Revaluation
surplus
  
Total equity
attributable to
equity holders
of the parent
  
Non-
controlling
interests
  
Total
equity
 
As of January 31, 2019
 Ps.96,338,378  Ps.358,440  Ps.236,897,045  Ps.(9,812,984)  Ps.(74,427,934)  Ps.(53,357,300)  Ps.—    Ps.195,995,645  Ps.49,876,777  Ps.245,872,422 
Net profit for the year
  —     
—  
   67,730,890   —     —     —     —     67,730,890   2,582,564   70,313,454 
Unrealized gain on equity
investments at fair value, net of
deferred taxes
  —     
—  
   —     883,409   —     —     —     883,409   —     883,409 
Remeasurement of defined benefit
plan, net of deferred taxes
  —     
—  
   —     —     (29,153,554)   —     —     (29,153,554)   (382,118)   (29,535,672) 
Effect of translation of foreign entities
  —     
—  
   —     —     —     (34,010,066)   —     (34,010,066)   (1,526,186)   (35,536,252) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Comprehensive income (loss) for the
year
  —     
—  
   67,730,890   883,409   (29,153,554)   (34,010,066)   
—  
   5,450,679   674,260   6,124,939 
Dividends declared
  —     
—  
   (23,106,823)   —     —     —     
—  
   (23,106,823)   (1,473,290)   (24,580,113) 
Repurchase of shares
  (116)   
—  
   (427,212)   —     —     —     
—  
   (427,328)   —     (427,328) 
Other acquisitions of non-controlling
interests
  —     
—  
   (2,214)   —     —     —     
—  
   (2,214)   (80,841)   (83,055) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance at December 31, 2019
 Ps.96,338,262  Ps.358,440  Ps.281,091,686  Ps.(8,929,575)  Ps.(103,581,488)  Ps.(87,367,366)  Ps.—    Ps.177,909,959  Ps.48,996,906  Ps.226,906,865 
Net profit for the year
  —     
—  
   46,852,605   —     —     —     —     46,852,605   4,174,352   51,026,957 
Unrealized loss on equity investments
at fair value, net of deferred taxes
  —     
—  
   —     (1,952,414)   —     —         (1,952,414)   —     (1,952,414) 
Remeasurement of defined benefit plan, net of deferred taxes
  —     
—  
   —     —     (10,026,454)   —     —     (10,026,454)   (273,104)   (10,299,558) 
Effect of translation of foreign entities
  —     —     —     —     —     (13,558,774)   —     (13,558,774)   2,043,477   (11,515,297) 
Revaluation surplus, net of deferred
taxes
  —     
—  
   —     —     —     —     64,835,155   64,835,155   12,394,876   77,230,031 
 
 
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Comprehensive income (loss) for the
year
  —     
—  
   46,852,605   (1,952,414)   (10,026,454)   (13,558,774)   64,835,155   86,150,118   18,339,601   104,489,719 
Dividends declared
  —     
—  
   (25,161,564)   —     —     —     —     (25,161,564)   (1,860,300)   (27,021,864) 
Stock dividend
  4,650   —     17,054,007   —     —     —     —     17,058,657   —     17,058,657 
Repurchase of shares
  (1,217)   
—  
   (5,209,880)   —     —     —     —     (5,211,097)   —     (5,211,097) 
Other acquisitions of non-controlling interests
  —     
—  
   (267,270)   —     —     —     —     (267,270)   (837,392)   (1,104,662) 
 
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance at December 31, 2020
 
Ps.
96,341,695
 
 
Ps.
358,440
 
 
Ps.
314,359,584
 
 
Ps.
(10,881,989
) 
 
Ps.
(113,607,942
) 
 
Ps.
(100,926,140
) 
 
Ps.
64,835,155
  
Ps.
250,478,803
 
 
Ps.
64,638,815
 
 
Ps.
315,117,618
 
Net profit for the year
 
 
—  
 
 
 
—  
 
 
 
192,423,167
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
192,423,167
 
 
 
3,902,947
 
 
 
196,326,114
 
Unrealized gain on equity and debt investments at fair value, net of deferred taxes
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
4,560,869
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
4,560,869
 
 
 
—  
 
 
 
4,560,869
 
Remeasurement of defined benefit plan, net of deferred taxes
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
11,100,835
 
 
 
—  
 
 
 
—  
 
 
 
11,100,835
 
 
 
161,061
 
 
 
11,261,896
 
Effect of translation of foreign entities
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
(2,514,992
) 
 
 
(2,322,214
) 
 
 
(4,837,206
) 
 
 
(2,296,947
) 
 
 
(7,134,153
) 
Discontinued operations
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
(829,163
) 
 
 
—  
 
 
 
(829,163
) 
 
 
—�� 
 
 
 
(829,163
) 
Transfer of revaluation surplus
 
 
—  
 
 
 
—  
 
 
 
3,803,349
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
(3,803,349
) 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Comprehensive income (loss) for the year
 
 
—  
 
 
 
—  
 
 
 
196,226,516
 
 
 
4,560,869
 
 
 
11,100,835
 
 
 
(3,344,155
) 
 
 
(6,125,563
) 
 
 
202,418,502
 
 
 
1,767,061
 
 
 
204,185,563
 
Dividends declared
 
 
—  
 
 
 
—  
 
 
 
(26,640,797
) 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
(26,640,797
) 
 
 
(1,919,674
) 
 
 
(28,560,471
) 
Repurchase of shares
 
 
(8,263
) 
 
 
—  
 
 
 
(36,752,766
) 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
(36,761,029
) 
 
 
—  
 
 
 
(36,761,029
) 
Other acquisitions of non-controlling interests
 
 
—  
 
 
 
—  
 
 
 
139,448
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
139,448
 
 
 
(79,403
) 
 
 
60,045
 
 
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance at December 31, 2021
 
Ps.
96,333,432
 
 
Ps.
358,440
 
 
Ps.
447,331,985
 
 
Ps.
(6,321,120
) 
 
Ps.
(102,507,107
) 
 
Ps.
(104,270,295
) 
 
Ps.
58,709,592
 
 
Ps.
389,634,927
 
 
Ps.
64,406,799
 
 
Ps.
454,041,726
 
 
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
The accompanying notes are an integral part of these consolidated financial statements.


F-
8
Table of Contents
AMÉRICA MÓVIL, S.A.B. DE C.V. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In thousands of Mexican pesos)

     For the years ended December 31 
  Note  2018  2019  2020  2020
Millions of
U.S. dollars		 

Operating activities

  

Profit before income tax

  Ps.100,993,902  Ps.121,346,988  Ps.67,393,109  US$3,379 

Items not requiring the use of cash:

  

Depreciation property, plant and equipment and right-of-use assets

  10 and 15   129,115,727   138,386,952   143,691,770   7,203 

Amortization of intangible and other assets

  9 and 11   26,596,853   20,528,258   20,551,913   1,030 

Equity interest in net (loss) income of associated companies

   (267)   17,609   287,006   14 

Loss on sale of property, plant and equipment

   664,777   119,272   257,330   13 

Net period cost of labor obligations

  18   13,989,100   16,609,565   18,085,954   907 

Foreign currency exchange loss (income), net

   6,148,612   (7,250,635)   59,923,928   3,005 

Interest income

   (10,646,169)   (6,284,672)   (5,062,036)   (254) 

Interest expense

   31,771,433   37,911,339   38,661,740   1,938 

Employee profit sharing

   1,500,342   1,618,695   2,066,066   105 

Loss in valuation of derivative financial instruments, capitalized interest expense and other, net

   (7,518,445)   (9,202,167)   (13,678,083)   (686) 

Gain on net monetary positions

  22   (4,429,145)   (4,267,194)   (3,262,512)   (164) 

Working capital changes:

  

Subscribers, distributors, recoverable taxes, contract assets and other, net

   (15,420,291)   6,800,942   3,129,237   157 

Prepaid expenses

   3,264,685   9,079,931   20,925   1 

Related parties

   38,426   476,671   421,337   21 

Inventories

   (3,232,136)   (2,095,622)   11,618,280   582 

Other assets

   (6,081,740)   (6,597,262)   (2,613,460)   (131) 

Employee benefits

   (14,235,549)   (20,224,276)   (18,795,532)   (942) 

Accounts payable and accrued liabilities

   23,997,632   (16,811,135)   11,531,391   578 

Employee profit sharing paid

   (1,013,799)   (2,187,316)   (2,436,223)   (122) 

Financial instruments and other

   5,286,290   (1,774,932)   2,606,938   131 

Deferred revenues

   38,243   (636,221)   3,198,018   160 

Interest received

   1,215,800   1,008,076   3,946,110   198 

Income taxes paid

   (33,713,753)   (42,294,398)   (60,715,663)   (3,044) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net cash flows provided by operating activities

  Ps.248,330,528  Ps.234,278,468  Ps.280,827,543  US$14,079 
  

 

 

  

 

 

  

 

 

  

 

 

 

Investing activities

  

Purchase of property, plant and equipment

   (143,888,033)   (132,884,335)   (108,907,418)   (5,459) 

Acquisition of intangibles

   (7,933,647)   (18,962,856)   (20,647,571)   (1,035) 

Dividends received

  22   2,622,237   1,773,336   2,122,826   106 

Proceeds from sale of plant, property and equipment

   178,532   344,924   162,060   8 

Acquisition of businesses, net of cash acquired

  12   (310,604)   (13,330,651)   (152,896)   (8) 

Partial sale of shares of associated company

   548,484   36,478   601,509   30 

Investments in associate companies

   —     (56,985)   (64,341)   (3) 

Short-term disinvestments

   —     —     (8,671,662)   (435) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net cash flows used in investing activities

  Ps.(148,783,031)  Ps.(163,080,089)  Ps.(135,557,493)  US$(6,796) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Financing activities

  

Loans obtained

   155,263,221   118,082,256   277,515,598   13,911 

Repayment of loans

   (189,314,144)   (109,808,816)   (330,607,399)   (16,573) 

Payment of liability related to right-of-use of assets

  15   —     (26,765,075)   (29,623,565)   (1,485) 

Interest paid

   (30,869,017)   (28,046,695)   (28,421,734)   (1,425) 

Repurchase of shares

   (511,421)   (435,713)   (5,076,119)   (254) 

Dividends paid

   (22,369,793)   (24,248,145)   (9,592,253)   (481) 

Redemption of hybrid bond

   (13,440,120)   —     —     —   

Acquisition of non-controlling interests

   (115,821)   (83,055)   (1,104,662)   (55) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net cash flows used in financing activities

  Ps.(101,357,095)  Ps.(71,305,243)  Ps.(126,910,134)  US$(6,362) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in cash and cash equivalents

  Ps.(1,809,598)  Ps.(106,864)  Ps.18,359,916  US$921 
  

 

 

  

 

 

  

 

 

  

 

 

 

Adjustment to cash flows due to exchange rate fluctuations, net

   (800,913)   (1,807,442)   (2,187,665)   (110) 

Cash and cash equivalents at beginning of the year

   24,270,473   21,659,962   19,745,656   990 
  

 

 

  

 

 

  

 

 

  

 

 

 

Cash and cash equivalents at end of the year

  Ps.21,659,962  Ps.19,745,656  Ps.35,917,907  US$1,801 
  

 

 

  

 

 

  

 

 

  

 

 

 

Non-cash transactions related to:

  

Acquisitions of property, plant and equipment in accounts payable at end year

  Ps.19,099,066  Ps.19,673,706  Ps.3,063,081  US$154 

Redemption of exchangeable bond

   16,446,262   —     —     —   

Revaluation surplus

   —     —     107,152,628   5,371 
  

 

 

  

 

 

  

 

 

  

 

 

 

Non-cash transactions

  Ps.35,545,328  Ps.19,673,706  Ps.110,215,709  US$5,525 
  

 

 

  

 

 

  

 

 

  

 

 

 

    
For the years ended December 31
 
  Note 
2019
(1)
  
2020
(1)
  
2021
  
2021
Millions of
U.S. dollars
 
Operating activities
     
Profit before income tax from continuing operations
   Ps.110,382,620  Ps.47,543,602  
Ps.
102,760,165
 
 
US$
4,992
 
Profit before income tax from discontinued operations
 2, Ac  10,964,368   19,849,507  
 
150,576,681
 
 
 
7,316
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Profit before income tax
    121,346,988   67,393,109  
 
253,336,846
 
 
 
12,308
 
Items not requiring the use of cash:
      
Depreciation property, plant and equipment and right-of-use assets
 10 and 15  137,867,698   143,108,182  
 
139,211,403
 
 
 
6,763
 
Amortization of intangible and other assets
 9 and 11  19,651,089   19,574,216  
 
23,415,463
 
 
 
1,138
 
Equity interest in net (loss) income of associated companies
    17,609   287,006  
 
(113,918
) 
 
 
(6
) 
(Gain) Loss on sale of property, plant and equipment
    119,272   257,330  
 
(6,849,699
) 
 
 
(333
) 
Net period cost of labor obligations
 18  16,609,565   18,085,954  
 
18,688,374
 
 
 
908
 
Foreign currency exchange loss (income), net
    (7,250,635)   59,923,928  
 
14,523,412
 
 
 
706
 
Interest income
    (6,284,672)   (5,062,036)  
 
(3,834,827
) 
 
 
(186
) 
Interest expense
    37,910,954   38,661,485  
 
36,025,312
 
 
 
1,750
 
Employee profit sharing
    1,618,695   2,066,066  
 
3,130,722
 
 
 
152
 
Gain
 
(Loss)
 
in
 
valuation
 
of
 
derivative
 
financial
 
instruments,
 
capitalized
 
interest
expense and other, net
    (9,202,167)   (13,678,083)  
 
5,246,476
 
 
 
255
 
Gain on net monetary positions
 22  (4,267,194)   (3,262,512)  
 
(4,876,842
) 
 
 
(237
) 
Gain on sale of subsidiary
 2, Ac  —     —    
 
(132,821,709
) 
 
 
(6,453
) 
Working capital changes:
      
Subscribers, distributors, recoverable taxes, contract assets and other, net
    7,422,351   3,189,136  
 
6,883,270
 
 
 
334
 
Prepaid expenses
    8,860,172   (160,082)  
 
(890,729
) 
 
 
(43
) 
Related parties
    476,671   421,337  
 
449,655
 
 
 
22
 
Inventories
    (463,461)   10,402,117  
 
5,756,325
 
 
 
280
 
Other assets
    (6,560,640)   (2,650,867)  
 
(9,802,727
) 
 
 
(476
) 
Employee benefits
    (20,224,276)   (18,795,532)  
 
(27,223,091
) 
 
 
(1,323
) 
Accounts payable and accrued liabilities
    (15,730,804)   11,247,681  
 
9,946,257
 
 
 
483
 
Employee profit sharing paid
    (2,187,316)   (2,436,223)  
 
(1,922,029
) 
 
 
(93
) 
Financial instruments and other
    (1,774,932)   2,606,938  
 
(1,664,465
) 
 
 
(81
) 
Deferred revenues
    1,237,894   1,958,553  
 
(9,257,456
) 
 
 
(450
) 
Interest received
    1,008,076   3,946,110  
 
2,665,854
 
 
 
130
 
In
come
 taxes paid
    (41,418,114)   (61,366,231)  
 
(60,535,903
) 
 
 
(2,942
) 
Cash flows from discontinued operating
    (4,504,355)   5,109,961  
 
(1,304,336
) 
 
 
(63
) 
    
 
 
  
 
 
  
 
 
  
 
 
 
Net cash flows provided by continuing operating activities
   Ps.234,278,468  Ps.280,827,543  
Ps.
258,181,638
 
 
US$
12,543
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Investing activities
      
Purchase of property, plant and equipment
    (132,834,246)   (108,866,816)  
 
(145,279,359
) 
 
 
(7,058
) 
Acquisition of intangibles
    (18,962,856)   (20,647,571)  
 
(12,791,580
) 
 
 
(621
) 
Dividends received
 22  1,773,336   2,122,826  
 
2,628,600
 
 
 
128
 
Proceeds from sale of plant, property and equipment
    344,924   162,060  
 
7,215,177
 
 
 
351
 
Acquisition of businesses, net of cash acquired
 12  (13,330,651)   (152,896)  
 
0  
  
 
0  
 
Partial sale of shares of associated company
    36,478   601,509  
 
199,158
 
 
 
10
 
Investments in associate companies
    (56,985)   (64,341)  
 
—  
  
 
—  
 
Sale of shares
    —     —    
 
75,518,886
 
 
 
3,669
 
Short-term investments
    —     (8,671,662)  
 
(3,361,507
) 
 
 
(163
) 
Cash flows from discontinued investing
 2, Ac  (50,089)   (40,602)  
 
(650,319
) 
 
 
(32
) 
    
 
 
  
 
 
  
 
 
  
 
 
 
Net cash flows used in investing continuing activities
   Ps.(163,080,089)  Ps.(135,557,493)  
Ps.
(76,520,944
) 
 
US$
(3,716
) 
    
 
 
  
 
 
  
 
 
  
 
 
 
Financing activities
      
Loans obtained
    118,082,256   277,515,598  
 
93,675,127
 
 
 
4,551
 
Repayment of loans
    (109,808,816)   (330,607,399)  
 
(152,029,408
) 
 
 
(7,388
) 
Payment of liability related to right-of-use of assets
 15  (26,765,075)   (29,623,565)  
 
(30,544,750
) 
 
 
(1,484
) 
Interest paid
    (28,046,695)   (28,421,734)  
 
(23,884,410
) 
 
 
(1,160
) 
Repurchase of shares
    (435,713)   (5,076,119)  
 
(36,745,743
) 
 
 
(1,785
) 
Dividends paid
    (24,248,145)   (9,592,253)  
 
(27,829,345
) 
 
 
(1,352
) 
Acquisition of non-controlling interests
 12  (83,055)   (1,104,662)  
 
(7,720
) 
 
 
—  
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Net cash flows used in financing activities
   Ps.(71,305,243)  Ps.(126,910,134)  
Ps.
(177,366,249
) 
 
US$
(8,618
) 
    
 
 
  
 
 
  
 
 
  
 
 
 
Net (decrease) gain in cash and cash equivalents
   Ps.(106,864)  Ps.18,359,916  
Ps.
4,294,445
 
 
US$
209
 
Adjustment to cash flows due to exchange rate fluctuations, net
    (1,807,442)   (2,187,665)  
 
(1,532,461
) 
 
 
(74
) 
Cash and cash equivalents at beginning of the year
    21,659,962   19,745,656  
 
35,917,907
 
 
 
1,744
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Cash and cash equivalents at end of the year
   Ps.19,745,656  Ps.35,917,907  
Ps.
38,679,891
 
 
US$
1,879
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Non-cash transactions related to:
      
Acquisitions of property, plant and equipment in accounts payable at end year
   Ps.19,673,706  Ps.3,063,081  
Ps.
18,385,498
 
 
US$
893
 
Revaluation surplus
    —     107,152,628  
 
—  
 
 
 
—  
 
    
 
 
  
 
 
  
 
 
  
 
 
 
Non-cash transactions
   Ps.19,673,706  Ps.110,215,709  
Ps.
18,385,498
 
 
US$
893
 
    
 
 
  
 
 
  
 
 
  
 
 
 
(1)
Restated for discontinued operations.
The accompanying notes are an integral part of these consolidated financial statements.

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AMÉRICA MÓVIL, S.A.B. DE C.V. AND SUBSIDIARIES


Notes to Consolidated Financial Statements

Years ended December 31, 2018, 2019, 2020 and 2020

2021

(In thousands of Mexican pesos [Ps.]Ps. and thousands of

U.S. dollars [US$]US$, unless otherwise indicated)

1. Description of the Business and Relevant Events

I. Corporate Information

América Móvil, S.A.B. de C.V. and subsidiaries (hereinafter, the “Company”, “América Móvil” or “AMX”) was incorporated under laws of Mexico on September 25, 2000. The Company provides telecommunications services in 2524 countries throughout Latin America, the United States, the Caribbean and Europe. These telecommunications services include mobile and fixed-line voice services, wireless and fixed data services, internet access and Pay TV, over the top and other related services. The Company also sells equipment, accessories and computers.

Voice services provided by the Company, both wireless and fixed, mainly include the following: airtime, local, domestic and international long-distance services, and network interconnection services.

Data services include value added, corporate networks, data and Internet services.

Pay TV represents basic services, as well as pay per view and additional programming and advertising services.

AMX provides other related services to advertising in telephone directories, publishing and call center services.

The Company also provides video, audio and other media content that is delivered through the internet directly from the content provider to the end user.

In order to provide these services, América Móvil has licenses, permits and concessions (collectively referred to herein as “licenses”) to build, install, operate and exploit public and/or private telecommunications networks and provide miscellaneous telecommunications services (mostly mobile and fixed voice and data services) and to operate frequency bands in the radio-electric spectrum for point-to-point and point-to-multipoint microwave links. The Company holds licenses in the 24 countries where it has networks, and such licenses have different dates of expiration through 2056.

Certain licenses require the payment to the respective governments of a share in sales determined as a percentage of revenues from services under concession. The percentage is set as either a fixed rate or in some cases based on certain size of the infrastructure in operation.

The corporate offices of América Móvil are located in Mexico City, Mexico, at Lago Zurich 245, Colonia Ampliación Granada, Delegación Miguel Hidalgo, 11529, Mexico City, Mexico.

The accompanying consolidated financial statements were approved for their issuance by the Company’s Chief Financial Officer on April 26, 2021,20, 2022, and subsequent events have been considered through that date.


II. Relevant events in 2020

2021

a) The Covid-19 is an infectious disease caused by a new virus, was declared a world-wide pandemic by the World Heald Organization (“WHO”) on March 11, 2020. The measures to slow the spread of Covid-19 have had

a significant impact on the global economy. Given the evolving nature of Covid-19 and the limited recent experience of the economic and financial impacts of such a pandemic, Companies around the world have had to assess the changes and effects in their financial information. These changes and effects have not presented significant challenges forIn September 2021, the Company in the valuation, presentation and disclosure of its financial statement consolidated as of December 31, 2020, considering that the telecommunications industry has been one of the least affected by the pandemic. As part of the actions taken, the Company has evaluated the impact, mainly on the estimates related to the measurement assets and liabilities that may arise in the future, without identifying significant changes in the assumptions used.

b) During the COVID-19 crisis, the Mexican peso fell in value against the U.S dollar, Euro and Great Britain Pound (GBP) by 5.8%, 15.3% and 9.2%, respectively. Given that a significant portion of the Company’s debt is denominated in Dollars, Euros and in GBPs, the currency depreciation adversely affected the results of the Company as part of the foreign currency exchange loss, net recognized in the period, which amounted to Ps.65,366,200.

c) In September 2020 the Company announcedentered into an agreement with Verizon Communications Inc.Cable & Wireless Panama, S.A. an affiliate of Liberty Latin America LTD., to sell theour 100% interest in TracFone Wireless, Inc., the largest mobile virtual prepaid service operator in the United States, serving 21 million subscribers.Claro Panama, S.A. The agreed purchase price payment at the closing is US$6,250Us$200 million of which one-half will be in cash and the other in Verizon stock. In addition, following the closing, Verizon shall pay to AMX: (i) up to US$500 million as an earn-out if Tracfone continues to achieve certain performance measures during the 24 months following the closing, calculated and paid in 4 consecutive 6-month periods, and (ii) US$150 million deferred commercial consideration payable within two years following the closing. AMX continued to benefit from EBITDA generated by Tracfone during fiscal year 2020 and until the closing date of the transaction.on a cash/debt free basis. The closing of the transaction is subject to customary conditions for this type of transactions, including obtaining required governmental approvals.

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b) In September 2021, the Company announced that shareholders representing approximately 98% of our capital stock approved the spin-off of approximately 36,000
telecommunications towers and other associated passive infrastructure deployed in 14 countries in Latin America. The spin-off is subject to customary conditions and adjustments for corporate reorganizations and shall comply with applicable requirements under the laws of Mexico and the jurisdictions where the telecommunications towers are located.
c) In September 2021, Liberty Latin America and América Móvil announced an agreement to combine their respective Chilean operations, VTR and Claro Chile, to form a 50:50 joint venture. The proposed transaction combines the complementary operations of VTR, a leading provider of high-speed consumer fixed products, such as broadband and Pay TV services, where it connects close to 3 million subscribers nationwide, and Claro Chile, one of Chile’s leading telecommunications service providers with over 6.5 million mobile customers, to create a business with greater scale, product diversification, and a capital structure that will enable significant investment for fixed fiber footprint expansion and to be at the forefront of 5G mobile delivery. Completion of the transaction is subject to certain customary closing conditions, including regulatory approvals, and is expected to close in the second half of 2022.
d) On November 23, 2021, the Company completed the sale of TracFone Wireless to Verizon Communications. The Company received US$3,625.7 million in cash and 57,596,544 shares of Verizon stock which had a closing price on that date of 51.54 dollars per share.
Verizon has asserted post-closing claims under the adjustments and other provisions of this agreement, which may result in additional payments by us
.
Subject to TracFone continuing to achieve certain operating metrics (earn-out), Verizon shall pay
up to
an additional US$650
million in future cash consideration within two years from that date. See Note 2Ac.
Effects of the COVID-19 Pandemic
:
The unprecedented health crisis arising from the COVID-19 pandemic has resulted in a severe global economic downturn and has caused significant volatility, uncertainty, and disruption.
The Company continues to closely
monitor
the evolution of the COVID-19 pandemic in the countries where
it operates
to take preventive measures to ensure the continuity of operations and safeguard the health and safety of personnel and customers.
During 2021, there were lockdowns and other measures implemented to control the spread of COVID-19 in
the
region of operations, resulting in the closure of shops and customer-care centers, the imposition of constraints on the mobility of
the
clients and the disruption of
the
supply chain for handsets and other equipment. In order to mitigate the effects of supply-chain disruption and handset scarcity, 
the Company
began ordering excess quantities of handsets in each country in which operate in October, November and December of 2021. Most major smartphone
manufacturers
were able to respond to increased handset orders.
The
investments in capital expenditures are expected to increase
to pre-pandemic levels in 2022.
2. Basis of Preparation of the Consolidated Financial Statements and Summary of Significant Accounting Policies and Practices

a) Basis of preparation

The accompanying consolidated financial statements have been prepared in conformity with International Financial Reporting Standards, as issued by the International Accounting Standards Board (“IASB”) (hereafter referred to as IFRS).

The consolidated financial statements have been prepared on the historical cost basis, except for the derivative financial instruments, the mobile telecommunications towers, the trust assets of post-employment and other employee benefit plans and the investments in equity at fair value through other comprehensive income (OCI), which are presented at their market value.

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Effective July 1, 2018, the Argentinian economy has been considered to be hyperinflationary in accordance with the criteria in IAS 29 “Financial Reporting in Hyperinflationary Economies” (“IAS 29”). Accordingly, for the Argentinian subsidiaries, we have included adjustments for hyperinflation and reclassifications as is required by the standard for purposes of presentation of IFRS in the consolidated financial statements.

The preparation of these consolidated financial statements under IFRS requires the use of critical estimates and assumptions that affect the amounts reported for certain assets, liabilities, income and expenses, including the main impact generated by the COVID-19 pandemic and the potential effect on the amounts disclosed in the consolidated financial statements.
It also requires that management exercise judgment in the application of the Company’s accounting policies. Actual results could differ from these estimates and assumptions.

The Mexican peso is the functional currency of the Company’s Mexican operations and the consolidated reporting currency of the Company.

i) Changes in Accounting Policies and Disclosures

Amendments to IFRS 16 Covid-19 Related Rent Concessions

On 28 May 2020, the IASB issued Covid-19-Related Rent Concessions - amendment to IFRS 16 Leases. The amendments provide relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the Covid-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a Covid-19 related rent concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from the Covid-19 related rent concession the same way it would account for the change under IFRS 16, if the change were not a lease modification.

The amendment applies to annual reporting periods beginning on or after 1 June 2020. Earlier application is permitted. This amendment had no significant impact on the consolidated financial statements of the Company (See Note 15).

Revaluation of telecommunications towers (plant, property and equipment)

As of December 31, 2020, the company changed its accounting policy to record the value of the passive infrastructure (towers) of its subsidiaries. With the change, this passive infrastructure was no longer recognized at historical cost and it began to be recognized under the revaluation model (market value). The company considers that the revaluation model represents the actual conditions of the industry of this class of assets and improves its financial position, this allows its shareholders and stakeholders to have the necessary financial information associated with market expectations about this class of assets. The incremental effect on passive infrastructure is Ps.107,152,628.

The first time application of an asset revaluation policy is a change in accounting policy that must be treated as a revaluation in accordance with IAS 16, this implies that it is not necessary to restructure the book value of previous periods, therefore, the adoption of this method will be carried out prospectively.

ii) Basis of consolidation

The consolidated financial statements include the accounts of América Móvil, S.A.B. de C.V. and those subsidiaries over which the Company exercises control. The consolidated financial statements for the subsidiaries were prepared for the same period as the Company´s and applying consistent accounting policies. All of the subsidiary companies operate in the telecommunications sector or related.

Subsidiaries are entities over which the Company has control. Control is achieved when the Company has power over the investee, when it is exposed to, or has rights to, variable returns from its involvement with the investee, and has the ability to use its power over the investee to affect the amount of the investor’s returns. Subsidiaries are consolidated on a line by lineline-by-line basis from the date which control is achieved by the Company. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the elements of control.

On March 6, 2020, in accordance with a resolution of the Federal Telecommunications Institute (Instituto Federal de Telecomunicaciones or IFT), the subsidiaries Teléfonos de México, S.A.B. de C.V. and Teléfonos del Noroeste, S.A. de C.V. created separate companies related to the wholesale services named Red Nacional Última Milla S.A.P.I. de C.V., Servicios de Telecomunicaciones Ultima Milla, S.A. de C.V. and Red Última Milla del Noroeste S.A.P.I. de C.V. The restructuring of Telmex has no impact in
o
n the consolidated financial information of the Company.

Changes in the Company’s ownership interests in a subsidiary that do not result in the Company losing control over the subsidiary are accounted for as equity transactions. The carrying amounts of the equity attributable to

owners of the parent and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the carrying amount of the non-controlling interests and the fair value of the consideration paid or received in the transaction is recognized directly in the equity attributable to the owners.

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Subsidiaries are deconsolidated from the date which control ceases. When the Company ceases to have control over a subsidiary, it derecognizes the assets (including any goodwill) and liabilities of the subsidiary at their carrying amounts, derecognizes the carrying amount of non-controlling interests in the former subsidiary and recognizes the fair value of any consideration received from the transaction. Any retained interest in the former subsidiary is then remeasured to its fair value.

All intra-Company balances and transactions, and any unrealized gains and losses arising from intra-Company transactions, are eliminated in preparing the consolidated financial statements.

Non-controlling interests represent the portion of profits or losses and net assets not held by the Company. Non-controlling interests are presented separately in the consolidated statements of comprehensive income and in equity in the consolidated statements of financial position separately from Company’s own equity.

Associates:

An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but does not have control or joint control over those decisions.

The Company’s investment in associates includes goodwill identified on acquisition, net of any accumulated impairment losses.

The investments in associated companies in which the Company exercises significant influence are accounted for using the equity method, whereby Company recognizes its share in the net profit (losses) and equity of the associate.

The results of operations of the subsidiaries and associates are included in the Company’s consolidated financial statements beginning as of the month following their acquisition and its share of other comprehensive income after acquisition is recognized directly in other comprehensive income.

The Company assesses at each reporting date whether there is objective evidence that investment in associates is impaired. If so, the Company calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value.

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The equity interest in the most significant subsidiaries at December 31, 20192020 and 20202021 is as follows:

Company name

  Country   Equity
interest at
December 31		 
  2019  2020 

Subsidiaries:

     

América Móvil B.V. a)

   Netherlands    100.0%   100.0% 

Compañía Dominicana de Teléfonos, S.A. (“Codetel”) b)

   Dominican Republic    100.0%   100.0% 

Sercotel, S.A. de C.V. a)

   Mexico    100.0%   100.0% 

Radiomóvil Dipsa, S.A. de C.V. and subsidiaries (“Telcel”) b)

   Mexico    100.0%   100.0% 

Puerto Rico Telephone Company, Inc. b)

   Puerto Rico    100.0%   100.0% 

Servicios de Comunicaciones de Honduras, S.A. de C.V. (“Sercom Honduras”) b)

   Honduras    100.0%   100.0% 

TracFone Wireless, Inc. (“TracFone”) b)

   USA    100.0%   100.0% 

Claro S.A. (Claro Brasil) b)

   Brazil    98.2%   98.2% 

NII Brazil Holding S.A.R.L a)

   Luxembourg    100.0%   100.0% 

Nextel Telecomunicações Ltda b)

   Brazil    100.0%   100.0% 

Telecomunicaciones de Guatemala, S.A. (“Telgua”) b)

   Guatemala    99.3%   99.3% 

Claro Guatemala, S.A. b)

   Guatemala    100.0%   100.0% 

Empresa Nicaragüense de Telecomunicaciones, S.A. (“Enitel”) b)

   Nicaragua    99.6%   99.6% 

Compañía de Telecomunicaciones de El Salvador, S.A. de C.V.
(“CTE”) b)

   El Salvador    95.8%   95.8% 

Comunicación Celular, S.A. (“Comcel”) b)

   Colombia    99.4%   99.4% 

Consorcio Ecuatoriano de Telecomunicaciones, S.A. (“Conecel”) b)

   Ecuador    100.0%   100.0% 

AMX Argentina, S.A. b)

   Argentina    100.0%   100.0% 

AMX Paraguay, S.A. b)

   Paraguay    100.0%   100.0% 

AM Wireless Uruguay, S.A. b)

   Uruguay    100.0%   100.0% 

Claro Chile, S.A. b)

   Chile    100.0%   100.0% 

América Móvil Perú, S.A.C b)

   Peru    100.0%   100.0% 

Claro Panamá, S.A. b)

   Panamá    100.0%   100.0% 

Teléfonos de México, S.A.B. de C.V. b)

   Mexico    98.8%   98.8% 

Telekom Austria AG b)

   Austria    51.0%   51.0% 

Company name
  
Country
   
Equity
interest at
December 31
 
  
2020
  
2021
 
Subsidiaries:
              
América Móvil B.V.
a)
   Netherlands    100.0%   100.0% 
Compañía Dominicana de Teléfonos, S.A. (“Codetel”)
b)
   Dominican Republic    100.0%   100.0% 
Sercotel, S.A. de C.V.
a)
   Mexico    100.0%   100.0% 
Radiomóvil Dipsa, S.A. de C.V. and subsidiaries (“Telcel”)
b)
   Mexico    100.0%   100.0% 
Puerto Rico Telephone Company, Inc.
b)
   Puerto Rico    100.0%   100.0% 
Servicios de Comunicaciones de Honduras, S.A. de C.V. (“Sercom Honduras”)
b)
   Honduras    100.0%   100.0% 
TracFone Wireless, Inc. (“TracFone”)
b) c)
   USA    100.0%   0   
Claro S.A. (Claro Brasil)
b)
   Brazil    98.2%   98.2% 
NII Brazil Holding S.A.R.L
a)
   Luxembourg    100.0%   100.0% 
Nextel Telecomunicações Ltda
b)
   Brazil    100.0%   100.0% 
Telecomunicaciones de Guatemala, S.A. (“Telgua”)
b)
   Guatemala    99.3%   99.3% 
Claro Guatemala, S.A.
b)
   Guatemala    100.0%   100.0% 
Empresa Nicaragüense de Telecomunicaciones, S.A. (“Enitel”) 
b)
   Nicaragua    99.6%   99.6% 
Compañía de Telecomunicaciones de El Salvador, S.A. de C.V. (“CTE”)
b)
   El Salvador    95.8%   95.8% 
Comunicación Celular, S.A. (“Comcel”)
b)
   Colombia    99.4%   99.4% 
Consorcio Ecuatoriano de Telecomunicaciones, S.A. (“Conecel”) 
b)
   Ecuador    100.0%   100.0% 
AMX Argentina, S.A.
b)
   Argentina    100.0%   100.0% 
AMX Paraguay, S.A.
b)
   Paraguay    100.0%   100.0% 
AM Wireless Uruguay, S.A.
b)
   Uruguay    100.0%   100.0% 
Claro Chile, S.A.
b)
   Chile    100.0%   100.0% 
América Móvil Perú, S.A.C
b)
   Peru    100.0%   100.0% 
Claro Panamá, S.A.
b)
   Panamá    100.0%   100.0% 
Teléfonos de México, S.A.B. de C.V.
b)
   Mexico    98.8%   98.8% 
Telekom Austria AG
b)
   Austria    51.0%   51.0% 
a)

Holding companies

b)

Operating companies of mobile and fixed services

c)
On November 23, 2021, this entity was discontinued operations. See Note 2Ac. 
iii) Basis of translation of financial statements of foreign subsidiaries and associated companies

The operating revenues of foreign subsidiaries jointly represent approximately 73%65%, 71%66% and 72%64% of consolidated operating revenues for the years ended December 31, 2018, 2019, 2020 and 2020,2021, respectively, and their total assets jointly represent approximately 73%75% and 75%70% of consolidated total assets at December 31, 20192020 and 2020,2021, respectively.

The financial statements of foreign subsidiaries have been prepared under or converted to IFRS in the respective local currency (which is their functional currency) and then translated into the Company’sCompany´s reporting currency as follows:

all monetary assets and liabilities were translated at the closing exchange rate of the period;

all non-monetary assets and liabilities at the closing exchange rate of the period;

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equity accounts are translated at the exchange rate at the time the capital contributions were made and the profits were generated;

revenues, costs and expenses are translated at the average exchange rate of the period, except for the operations of the subsidiaries in Argentina, whose economy is considered hyperinflationary since 2018;

the consolidated statements of cash flows presented using the indirect method were translated using the weighted-average exchange rate for the applicable period (except for Argentina), and the resulting difference is shown in the consolidated statements of cash flows under the heading “Adjustment to cash flows due to exchange rate fluctuations, net”.

The basis of translation for the operations of the subsidiaries in Argentina are described:

In recent years, the Argentina economy has shown high rates of inflation. Although inflation data has not been consistent in recent years and several indexes have coexisted, inflation in Argentina indicates that the three-year cumulative inflation rate exceeded 100% in 2018, which is one of the quantitative references established by IAS 29. As a result, Argentina was considered a hyperinflationary economy in 2018 and the Company applies hyperinflation accounting to its subsidiary whose functional currency is the Argentine peso for financial information for periods ending on or after July 1, 2018, however the calculation of the cumulative impact was measured as of January 1, 2018.

In order to restate for hyperinflation its financial statements, the subsidiary used the series of indices defined by resolution JG No. 539/18 issued by the “Federación Argentina de Consejos Profesionales de Ciencias Económicas” (“FACPCE”), based on the National Consumer Price Index (IPC) published by the Instituto Nacional de Estadística y Censos (INDEC) of the Argentine Republic and the Wholesale Internal Price Index (IPIM) published by FACPCE. The cumulative index at December 31, 20202021 is 385.8826,582.4575, while on an annual inflation for 20202021 is 36.1%50.9%.

The main implications are as follows:

Adjustment of the historical cost of non-monetary assets and liabilities and equity items from their date of acquisition, or the date of inclusion in the consolidated statements of financial position, to the end of the year, in order to reflect changes in the currency’s purchasing power caused by inflation.

•

The gain on the net monetary position caused by the impact of inflation in the year is included in the consolidated statements of comprehensive income as part of the caption “Valuation of derivatives, interest cost from labor obligations and other financial items, net”. Items in the statement of comprehensive income and in the statements of cash flows are adjusted by the inflation index since their origination, with a balancing entry, and a reconciling item in the statements of cash flows, respectively.

The gain on the net monetary position caused by the impact of inflation in the year is included in the consolidated statements of comprehensive income as part of the caption “
Valuation of derivatives, interest cost from labor obligations and other financial items, net
”
. Items in the statement of comprehensive income and in the statements of cash flows are adjusted by the inflation index since their origination, with a balancing entry, and a reconciling item in the statements of cash flows, respectively.
All items in the financial statements of the Argentine company are translated at the closing exchange rate, which at December 31, 20192020 and 20202021 were 0.31470.2371 and 0.2371,0.2004, respectively, per argentine peso per Mexican peso.

The difference resulting from the translation process is recognized in equity in the caption “Effect of translation of foreign entities”. At December 31, 20192020 and 2020,2021, the cumulative translation adjustment was Ps.(87,367,366) (100,926,140) and Ps.(100,926,140) (104,270,295), respectively.

b) Revenue recognition

The Company revenues are derived principally from providing the following telecommunications services and products: wireless voice, wireless data and value-added services, fixed voice, fixed data, broadband and IT services, Pay TV and over-the-top (“OTT”) services.

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The Company provides fixed and mobile services. These services are offered independently in contracts with customers or together with the sale of handsets (mobile) under the postpaid model. In accordance with IFRS 15
“Revenues from contracts with customers”customers”
, the transaction price should be assigned to the different performance obligations based on their relative standalone selling price.

The Company with respect to the provided services, it has market observable information, to determine the standalone selling price of the services. On the other hand, in the case of the sale of bundled mobile phones sold (including service and handset) by the Company, the allocation of the sales is done based on their relative standalone selling price of each individual component related to the total bundled price. The result is that more equipment revenue is recognized at the moment of a sale and, therefore, less service revenue from the monthly fee areis being recognized under IFRS 15.

The services provided by the Company are satisfied over the time of the contract period, given that the customer simultaneously receives and consumes the benefits provided by the Company.

Such service bundles, voice and data, accomplish the criteria mentioned in IFRS 15 of being substantially similar and of having the same transfer pattern which is why the Company concluded that the revenue from these different services offered to its customers are considered as a single performance obligation with revenue being recognized over time, except for sales of equipment.

Under IFRS 15, for those contracts with customers in which generally the sale of equipment and other electronic equipment is a single performance obligation, the Company recognizes the revenue at the moment when it transfers control to the customer which generally occurs when such goods are delivered.

The commissions are considered incremental contract acquisition costs that are capitalized and are amortized over the expected period of benefit, during the average duration of customer contracts.

Some subsidiaries have loyalty programs where the Company awards credits customer credit awards referred as “points”. The customer can redeem accrued “points” for awards such as devices, accessories or airtime. The Company provides all awards. The consideration allocated to the award credits is identified as a separate performance obligation; the corresponding liability of the award credits is measured at its fair value. The consideration allocated to award credits amount is recognized as a contract liability until the points are redeemed. Revenue is recognized upon redemption of products by the customer.

c) Cost of sales

The cost of mobile equipment and computers is recognized at the time the client and distributor receive the device which is when the control is are transferred to the customer.

d) Cost of services

The cost of services represents the costs incurred to properly deliver the services to the customers, it includes the network operating costs and licenses related costs and is accounted at the moment in which such services are provided.

e) Commissions to distributors

The Company pays commissions to its distributors different than those that acquire customers. Such commissions are recognized in
“commercial, administrative and general expenses”
in the consolidated statements of comprehensive income at the time in which the distributor either reports an activation or reaches certain number of lines activated or obtained at a certain point of time.

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f) Cash and cash equivalents

Cash and cash equivalents represent bank deposits and liquid investments with maturities of less than three months. These amounts are stated at cost plus accrued interest, which is similar to their market value.

The Company also maintains restricted cash held as collateral to meet certain contractual obligations. Restricted cash is presented as part of “Other assets” within other non-current financial assets given that the restrictions are long-term in nature (Seenature. See Note 9).

9. 

g) Equity investments at fair value through OCI and other short-termshort/long-term investments

Equity investments at fair value through OCI and other short-term investments are primarily composed of equity investments and other short-term financial investments. Amounts are initially recorded at their estimated fair value. Fair value adjustments for equity investments are recorded through other comprehensive income, and other short-term investment.

h) Inventories

Inventories are initially recognized at historical cost and are valued using the average cost method without exceeding their net realizable value.

The estimate of the realizable value of inventories on-hand is based on their age and turnover.

i) Business combinations and goodwill

Business combinations are accounted for using the acquisition method, which in accordance with IFRS 3, “
Business acquisitions
”, consists in general terms as follows:

(i)

Identify the acquirer

(ii)

Determine the acquisition date

(iii)

Value the acquired identifiable assets and assumed liabilities

(iv)

Recognize the goodwill or a bargain purchase gain

For acquired subsidiaries, goodwill represents the difference between the purchase price and the fair value of the net assets acquired at the acquisition date. The investment in acquired associates includes goodwill identified on acquisition, net of any impairment loss.

Goodwill is reviewed annually to determine its recoverability or more often if circumstances indicate that the carrying value of the goodwill might not be fully recoverable.

The possible loss of value in goodwill is determined by analyzing the recovery value of the cash generating unit (or the group thereof) to which the goodwill is associated at the time it was originated. If this recoverable amount is lower than the carrying value, an impairment loss is charged to the results of operations. The recoverable amount is determined based on the higher of fair value less cost of disposal or value in use.

For the years ended December 31, 2018, 2019, 2020 and 2020, no2021, 0 impairment losses were recognized for goodwill.

j) Property, plant and equipment

i) Property, plant and equipment are recorded at acquisition cost, net of accumulated depreciation; except for the passive infrastructure of telecommunications towers, which are recognized under the revaluation model as of December 31, 2020. Depreciation is computed on the cost of assets using the straight line method, based on the estimated useful lives of the related assets, beginning the month after they become available for use.

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Borrowing costs that are incurred for general financing for construction in progress for periods exceeding six months are capitalized as part of the cost of the asset. During the years ended December 31, 2018, 2019, 2020 and 2020,2021, borrowing costs that were capitalized amounted to Ps.2,020,288, Ps.2,233,358Ps. 2,233,358, Ps. 1,771,613 and Ps.1,771,613,Ps.1,527,259 respectively.

In addition to the purchase price and costs directly attributable to preparing an asset in terms of its physical location and condition for operating as intended by management, when required, the cost also includes the estimated costs of dismantling and removal of the asset and for restoration of the site where it is located (Seelocated. See Note 16c).

16c.

The passive infrastructure of telecommunications towers will be recorded at revalued value, which is its fair value at the time of revaluation less accumulated depreciation; if there is any loss or impairment, it must also be

considered within its value. The revaluations will be calculated with sufficient regularity to ensure that the book value, every time, does not differ significantly from that which could be determined using the fair value at the end of the reporting period.

The increase resulting from a revaluation is recorded in other comprehensive income (OCI) and is accumulated in equity as a revaluation surplus. To the extent that there is a decrease in revaluation, it will be recognized in profit or loss, except to the extent that it compensates for an existing surplus on the same asset.

An annual transfer of the asset revaluation surplus and accumulated earnings is made to the extent that the asset is used, therefore, the surplus is equal to the difference between the depreciation calculated on the revalued value and the one calculated according to its original cost. These transfers do not record in the results for the period. A total transfer of the surplus may be made when the entity disposes of the asset.

ii) The net book value of property, plant and equipment is removed from the consolidated statements of financial position at the time the asset is sold or when no future economic benefits are expected from its use or sale. Any gains or losses on the sale of property, plant and equipment represent the difference between net proceeds of the sale and the net book value of the item at the time of sale. These gains or losses are recognized as either other operating income or other operating expenses upon sale.

iii) The Company periodically assesses the residual values, useful lives and depreciation methods associated with its property, plant and equipment. If necessary, the effects of any changes in accounting estimates is recognized prospectively, at the closing of each period, in accordance with IAS 8, “
Accounting Policies, Changes in Accounting Estimates and Errors
”.

For property, plant and equipment made up of several components with different useful lives, the major individual components are depreciated over their individual useful lives. Maintenance costs and repairs are expensed as incurred.

Annual depreciation rates are as follows:

Network infrastructure

   5%-33% 

Buildings and leasehold improvement

   2%-33% 

Other assets

   10%-50% 

iv) The carrying value of property, plant and equipment is reviewed if there are indicators of impairment in such assets. If an asset’s recovery value is less than the asset’s net carrying value, the difference is recognized as an impairment loss.

During the years ended December 31, 2018, 2019, 2020 and 2020, no2021, 0 impairment losses were recognized.

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v) Spare parts for network operation are recognized at cost.

The valuation of inventory for network considered obsolete, defective or slow-moving, is reduced to their estimated net realizable value. The estimate of the recovery value of inventories is based on their age and turnover.

k) Intangibles

i) Licenses

Licenses to operate wireless telecommunications networks granted by the governments of the countries in which the Company operates are recorded at acquisition cost or at fair value at their acquisition date, net of accumulated amortization. Certain licenses require payments to the governments, such payments are recognized in the cost of service and equipment.

The licenses that in accordance with government requirements are categorized as automatically renewable, for a nominal cost and with substantially consistent terms, are considered by the Company as intangible assets with an

indefinite useful life. Accordingly, they are not amortized. Licenses are amortized when the Company does not have a basis to conclude that they are indefinite lived. Licenses are amortized using the straight-line method over a period ranging from 3 to 30 years, which represents the usage period of the assets.

The Company has conducted an internal analysis on the applicability of the International Financial Reporting Interpretation Committee (“IFRIC”) No. 12 (Service Concession Agreements) and has concluded that its concessions are outside the scope of IFRIC 12. To determine the applicability of IFRIC 12, the Company analyzes each concession or group of similar concessions in a given jurisdiction. As a threshold matter, the Company identifies those government concessions that provide for the development, financing, operation or maintenance of infrastructure used to render a public service, and that set out performance standards, mechanisms for adjusting prices and arrangements for arbitrating disputes.

With respect to those services, the Company evaluates whether the grantor controls or regulates (i) what services the operator must provide, (ii) to whom it must provide them and (iii) the applicable price (the “Services Criterion”). In evaluating whether the applicable government, as grantor, controls the price at which the Company provides its services, the Company looks at the terms of the concession agreement according to all applicable regulations. If the Company determines that the concession under analysis meets the Services Criterion, then the Company evaluates whether the grantor would hold a significant residual interest in the concession’s infrastructure at the end of the term of the arrangement.

ii) Trademarks

Trademarks acquired are measured on initial recognition at cost. The cost of trademarks acquired in a business combination is their fair value at the date of acquisition. The useful lives of trademarks are assessed as either definite or indefinite. Trademarks with finite useful lives are amortized using the straight-line method over a period ranging from 1 to 10 years. Trademarks with indefinite useful lives are not amortized but are tested for impairment annually at the cash generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable, if not, the change in useful life from indefinite to definite is made on a prospective basis.

iii) Irrevocable rights of use

Irrevocable rights of use are recognized according to the amount paid for the right and are amortized over the period in which they are granted.

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The carrying values of the Company’s licenses and trademarks are reviewed annually and whenever there are indicators of impairment in the value of such assets. When an asset’s recoverable amount, which is the higher of the asset’s fair value, less disposal costs and its value in use (the present value of future cash flows), is less than the asset’s carrying value, the difference is recognized as an impairment loss.

iv) Customer relationships

The value of customer relations is determined and valued at the time that a new subsidiary is acquired, as determined by the Company with the assistance of independent appraisers and is amortized over a 5-year period.

During the years ended December 31, 2018, 2019, 2020 and 2020, no2021, 0 significant impairment losses were recognized for licenses, trademarks, irrevocable rights of use or customer relationships.

l) Impairment in the value of long-lived assets

The Company assesses the existence of indicators of impairment in the carrying value of long-lived assets, investments in associates, goodwill and intangible assets according to IAS 36 “
Impairment of assets
”. When

there are such indicators, or in the case of assets whose nature requires an annual impairment analysis (goodwill and intangible assets with indefinite useful lives), the Company estimates the recoverable amount of the asset, which is the higher of its fair value, less disposal costs, and its value in use. Value in use is determined by discounting estimated future cash flows, applying a pre-tax discount rate that reflects the time value of money and taking into consideration the specific risks associated with the asset. When the recoverable amount of an asset is below its carrying value, impairment is considered to exist. In this case, the carrying value of the asset is reduced to the asset’s recoverable amount, recognizing the loss in results of operations for the respective period. Depreciation and/or amortization expense of future periods is adjusted based on the new carrying value determined for the asset over the asset’s remaining useful life. Impairment is computed individually for each asset. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets.

In the estimation of impairments, the Company uses the strategic plans established for the separate cash-generating units to which the assets are assigned. Such strategic plans generally cover a period from 3 to 5 years. For longer periods, beginning in the fifth year, projections are based on such strategic plans while applying a constant or declining expected perpetual growth rate.

Key assumptions used in value in use calculations

The forecasts are made in real terms (net of inflation) and in the functional currency of the subsidiary as of December 31, 2020.2021. Financial forecasts, premises and assumptions are similar to what any other market participant in similar conditions would consider
, including impacts fromthe impact of the COVID-19 pandemic.

Local synergies, that any other market participant would not have taken into consideration to prepare similar forecasted financial information, have not been included.

The assumptions used to develop the financial forecasts were validated for each of the cash generating units (“CGUs”), typically identified by country and by service (in the case of Mexico) taking into consideration the following:

Current subscribers and expected growth.

Type of subscribers (prepaid, postpaid, fixed line, multiple services)

Market environment and penetration expectations

New products and services

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Economic environment of each country

Expenses for maintaining the current assets

Investments in technology for expanding the current assets

Market consolidation and synergies

The foregoing forecasts could differ from the results obtained through time; however, the Company prepares its estimates based on the current situation of each of the CGUs.

The recoverable amounts are based on value in use. The value in use is determined based on the method of discounted cash flows. The key assumptions used in projecting cash flows are:

Margin on EBITDA is determined by dividing EBITDA (operating income plus depreciation and amortization) by total revenues.

Margin on CAPEX is determined by dividing capital expenditures (“CAPEX”) by total revenues.

Pre-tax weighted average cost of capital (“WACC”) is used to discount the projected cash flows.

As discount rate, the Company uses the WACC which was determined for each of the cash generating units and is described in the following paragraphs.

The estimated discount rates to perform the IAS 36 “
Impairment of assets
”, impairment test for each CGU consider market participants assumptions. Market participants were selected taking into consideration size, operations and characteristics of the business that were similar to those of Company.
These discount rates do not include inflation.

The discount rates represent the current market assessment of the risks specific to each CGU, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Company and its operating segments. The WACC takes into account both debt and equity costs. The cost of equity is derived from the expected return on investment for each GCU. The cost of debt is based on the interest-bearing borrowings the Company is obliged to service. Segment-specific risk is incorporated by applying individual beta factors.

The beta factors are evaluated annually based on publicly available market data.

Market participant assumptions are important because, not only do they include industry data for growth rates, but also management assesses how the CGU’s position, relative to its competitors, might change over the forecasted period.

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The most significant forward-looking estimates used for the 20192020 and 20202021 impairment evaluations are shown below:

   Average margin on
EBIDTA		  Average margin on
CAPEX		  Average pre-tax
discount rate
(WACC)		 

2019:

    

Europe (7 countries)

   29.40% - 44.50%   10.90% - 19.30%   5.77% - 14.96% 

Brazil (fixed line, wireless and TV)

   40.43%   23.50%   11.00% 

Puerto Rico

   21.94%   17.94%   4.39% 

Dominican Republic

   47.23%   16.17%   13.84% 

Mexico (fixed line and wireless)

   38.81%   9.84%   6.94% 

Ecuador

   44.98%   11.65%   19.85% 

Peru

   32.51%   18.51%   8.86% 

El Salvador

   44.04%   25.03%   16.05% 

Chile

   26.85%   18.00%   4.16% 

Colombia

   45.58%   19.25%   17.27% 

Other countries

   7.40% - 52.40%   0.57% - 31.0%   6.41% - 34.75% 

2020:

    

Europe (7 countries)

   32.20% - 40.76%   7.04% - 19.39%   3.88% - 12.02% 

Brazil (fixed line, wireless and TV)

   40.67%   25.36%   9.50% 

Puerto Rico

   23.06%   14.57%   3.53% 

Dominican Republic

   47.57%   13.71%   8.27% 

Mexico (fixed line and wireless)

   32.69%   11.01%   6.03% 

Ecuador

   49.23%   11.14%   17.50% 

Peru

   38.72%   15.43%   4.76% 

El Salvador

   45.92%   21.19%   14.63% 

Chile

   26.34%   13.18%   3.37% 

Colombia

   43.45%   18.19%   6.44% 

Other countries

   10.07% - 47.23%   0.48% - 31.67%   3.42% - 21.85% 

   
Average margin on
EBIDTA
  
Average margin on
CAPEX
  
Average pre-tax
discount rate
(WACC)
 
2020:
             
Europe (7 countries)
   32.20% - 40.76%   7.04% - 19.39%   3.88% - 12.02% 
Brazil (fixed line, wireless and TV)
   40.67%   25.36%   9.50% 
Puerto Rico
   23.06%   14.57%   3.53% 
Dominican Republic
   47.57%   13.71%   8.27% 
Mexico (fixed line and wireless)
   32.69%   11.01%   6.03% 
Ecuador
   49.23%   11.14%   17.50% 
Peru
   38.72%   15.43%   4.76% 
El Salvador
   45.92%   21.19%   14.63% 
Chile
   26.34%   13.18%   3.37% 
Colombia
   43.45%   18.19%   6.44% 
Other countries
   10.07% - 47.23%   0.48% - 31.67%   3.42% - 21.85% 
2021:
             
Europe (7 countries)
  
 
31.60% - 45.32%
 
 
 
7.48% - 24.37%
 
 
 
2.91% - 9.83%
 
Brazil (fixed line, wireless and TV)
  
 
41.37%
 
 
 
22.98%
 
 
 
4.62%
 
Puerto Rico
  
 
21.54%
 
 
 
14.36%
 
 
 
3.00%
 
Dominican Republic
  
 
52.02%
 
 
 
13.86%
 
 
 
5.84%
 
Mexico (fixed line and wireless)
  
 
36.21%
 
 
 
15.89%
 
 
 
6.24%
 
Ecuador
  
 
44.76%
 
 
 
12.48%
 
 
 
14.48%
 
Peru
  
 
36.63%
 
 
 
17.19%
 
 
 
3.99%
 
El Salvador
  
 
44.82%
 
 
 
24.25%
 
 
 
10.78%
 
Chile
  
 
27.36%
 
 
 
17.98%
 
 
 
2.81%
 
Colombia
  
 
43.36%
 
 
 
23.18%
 
 
 
7.18%
 
Other countries
  
 
30.55% - 48.52%
 
 
 
4.91% - 30.03%
 
 
 
4.64% - 14.39%
 
Sensitivity to changes in assumptions:

The implications of the key assumptions for the recoverable amount are discussed below:

Margin on CAPEX- The Company performed a sensitivity analysis by increasing its CAPEX by 5% and maintaining all other assumptions the same. The sensitivity analysis would require the Company to adjust the amount of its long-lived assets in its CGUs with potential impairment of approximately Ps.62,548.

same

,
 results without impairment.
WACC- Additionally, should the Company increase by 50 base points in WACC per CGU and maintain all other assumptions the same, results without impairment.

m)

m
)
Right-of-use assets

The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognizes lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

i)

Right-of-use assets

The Company recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or
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before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:

Assets  Useful life

Towers and sites

  5 to 12 years

Property

  10 to 25 years

Other equipment

  5 to 15 years

The right-of-use assets are also subject to impairment test.

ii)

Lease liabilities.

At the commencement date of the lease, the Company recognizes the lease liabilities measured at the present value of the lease payments to be made over the lease term. Lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or rate, and amounts expected to be paid under residual value guarantees. The lease payments also include payments of penalties for early termination of the lease, if the term of the lease reflects that the Company exercises the option to terminate early. The variable lease payments that do not depend on an index or a rate are recognized as an expense in the period on which the event or condition that triggers the payment occurs.

In calculating the present value of the lease payments, the Company uses an incremental borrowing rate at the lease commencement date, if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of the lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed payments or change in the assessment to purchase the underlying asset.

iii)

Short-term leases and leases of low value assets.

The Company applies the short-term lease recognition exemption for its leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a

purchase option). It also applies the recognition exemption lease of low-value assets (that is, below US$5,000). Short-term lease payments and leases of low-value assets are recognized as expenses on straight-line basis over the lease term.

n) Financial assets and liabilities

Financial assets

Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income (OCI), and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing them, with the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

Financial assets at amortized cost (debt instruments)

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Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)

Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)

Financial assets at fair value through profit or loss

Financial assets at amortized cost (debt instruments)

The Company measures financial assets at amortized cost if both of the following conditions are met:

The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows, 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

Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired.

The Company’s financial assets at amortized cost includes cash equivalents, loans and receivables.

Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)

The Company measures debt instruments at fair value through OCI if both of the following conditions are met:

The financial asset is held within a business model with the objective of both holding to collect contractual cash flows and selling, 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

For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment losses or reversals are recognized in the statements of profit or loss and computed in the same manner as for financial assets measured at amortized cost. The remaining fair value changes are recognized in OCI. Upon derecognition, the cumulative fair value change recognized in OCI is recycled to profit or loss.

Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)

Upon initial recognition, the Company can elect to classify irrevocably its equity investments as equity instruments designated at fair value through OCI when they meet the definition of equity under IAS 32 Financial Instruments: Presentation and are not held for trading. The classification is determined on an instrument by instrument basis.

Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognized as other income in the statements of profit or loss when the right of payment has been established, except when the Company benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to
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be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at fair value through OCI, as described above, debt instruments may be designated at fair value through profit or loss on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch.

Financial assets at fair value through profit or loss are carried in the statements of financial position at fair value with net changes in fair value recognized in the consolidated statements of comprehensive income within “Valuation of derivatives, interest cost from labor obligations and other financial items”.

Derecognition of financial assets

A financial asset is primarily derecognized when:

The rights to receive cash flows from the asset have expired, or

The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset

When the Company has transferred its rights to receive cash flows from an asset or has entered into a passthrough arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of its continuingcontinued involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Impairment of financial assets

The Company recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

For some trade receivables and contract assets
based on available information
, the Company applies the simplified approach in calculating ECLs. Therefore, the Company does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Company has established a
loss rate approach
that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment, including the impact by the COVID-19 pandemic.

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Financial liabilities

Initial recognition

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognized in the statements of profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied. The Company has not designated any financial liability as at fair value through profit or loss.

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statements of profit or loss.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the consolidated statements of comprehensive income.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statements of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

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o) Transactions in foreign currency

Transactions in foreign currency are initially recorded at the prevailing exchange rate at the time of the related transactions. Foreign currency denominated assets and liabilities are subsequently translated at the prevailing exchange rate at the financial statements reporting date. Exchange differences determined from the transaction date to the time foreign currency denominated assets and liabilities are settled or translated at the financial statements reporting date are charged or credited to the results of operations.

In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Company initially recognizes the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Company determines the transaction date for each payment or receipt of advance consideration.

The exchange rates used for the translation of foreign currencies against the Mexican peso are as follows:

      Average exchange rate   

Closing exchange rate

at December 31,

 
Country or Zone  

Currency

  2018   2019   2020   2019   2020 
Argentina (1)  Argentine Peso (AR$)   0.7311    0.4110    0.3070    0.3147    0.2371 
Brazil  Real (R$)   5.2937    4.8907    4.1850    4.6754    3.8387 
Colombia  Colombian Peso (COP$)   0.0065    0.0059    0.0058    0.0058    0.0058 
Guatemala  Quetzal   2.5591    2.5023    2.7826    2.4478    2.5596 
U.S.A. (2)  US Dollar   19.2397    19.2641    21.4860    18.8452    19.9487 
Uruguay  Uruguay Peso   0.6274    0.5479    0.5110    0.5051    0.4712 
Nicaragua  Cordoba   0.6097    0.5817    0.6257    0.5569    0.5728 
Honduras  Lempira   0.7994    0.7806    0.8678    0.7597    0.8215 
Chile  Chilean Peso   0.0300    0.0275    0.0271    0.0252    0.0281 
Paraguay  Guaraní   0.0034    0.0031    0.0032    0.0029    0.0029 
Peru  Sol (PEN$)   5.8517    5.7708    6.1483    5.6814    5.5046 
Dominican Republic  Dominican Peso   0.3876    0.3737    0.3766    0.3542    0.3416 
Costa Rica  Colon   0.0332    0.0326    0.0366    0.0327    0.0323 
European Union  Euro   22.7101    21.5642    24.5080    21.1311    24.3693 
Bulgaria  Lev   11.6110    11.0257    12.5284    10.8076    12.4594 
Belarus  New Belarusian Ruble   9.4451    9.2159    8.8172    8.9420    7.5721 
Croatia  Croatian Kuna   3.0613    2.9069    3.2498    2.8406    3.2279 
Macedonia  Macedonian Denar   0.3688    0.3504    0.3975    0.3431    0.3950 
Serbia  Serbian Denar   0.1920    0.1830    0.2083    0.1795    0.2071 

      
Average exchange rate
   
Closing exchange rate
at December 31,
 
Country or Zone
  
Currency
  2019   2020   
2021
   2020   
2021
 
Argentina
(1)
  Argentine Peso (AR$)   0.4110    0.3070   
 
0.2137
 
   0.2371   
 
0.2004
 
Brazil  Real (R$)   4.8907    4.1850   
 
3.7625
 
   3.8387   
 
3.6885
 
Colombia  Colombian Peso (COP$)   0.0059    0.0058   
 
0.0054
 
   0.0058   
 
0.0052
 
Guatemala  Quetzal   2.5023    2.7826   
 
2.6212
 
   2.5596   
 
2.6666
 
U.S.A.
(2)
  US Dollar   19.2641    21.4860   
 
20.2769
 
   19.9487   
 
20.5835
 
Uruguay  Uruguay Peso   0.5479    0.5110   
 
0.4655
 
   0.4712   
 
0.4605
 
Nicaragua  Cordoba   0.5817    0.6257   
 
0.5765
 
   0.5728   
 
0.5795
 
Honduras  Lempira   0.7806    0.8678   
 
0.8384
 
   0.8215   
 
0.8396
 
Chile  Chilean Peso   0.0275    0.0271   
 
0.0268
 
   0.0281   
 
0.0244
 
Paraguay  Guaraní   0.0031    0.0032   
 
0.0030
 
   0.0029   
 
0.0030
 
Peru  Sol (PEN$)   5.7708    6.1483   
 
5.2297
 
   5.5046   
 
5.1484
 
Dominican Republic  Dominican Peso   0.3737    0.3766   
 
0.3540
 
   0.3416   
 
0.3570
 
Costa Rica  Colon   0.0326    0.0366   
 
0.0325
 
   0.0323   
 
0.0319
 
European Union  Euro   21.5642    24.5080   
 
23.9835
 
   24.3693   
 
23.4220
 
Bulgaria  Lev   11.0257    12.5284   
 
12.2617
 
   12.4594   
 
11.9762
 
Belarus  New Belarusian Ruble   9.2159    8.8172   
 
7.9932
 
   7.5721   
 
8.0279
 
Croatia  Croatian Kuna   2.9069    3.2498   
 
3.1852
 
   3.2279   
 
3.1161
 
Macedonia  Macedonian Denar   0.3504    0.3975   
 
0.3893
 
   0.3950   
 
0.3800
 
Serbia  Serbian Denar   0.1830    0.2083   
 
0.2040
 
   0.2071   
 
0.1992
 
(1)

Year-end rates are used for the translation of revenues and expenses if IAS 29 “Financial
“Financial Reporting in Hyperinflationary Economies”
is applied.

Financial reporting in hyperinflationary economies

Financial statements of Argentina subsidiaries are restated before translation to the reporting currency of the Company and before consolidation in order to reflect the same value of money for all items. Items recognized in the statements of financial position which are not measured at the applicable year-end measuring unit are restated based on the general price index. All non-monetary items measured at cost or amortized cost is restated for the changes in the general price index from the date of transaction or the last hyperinflationary calculation to the reporting date. Monetary items are not restated. All items of shareholders’ equity are restated for the changes in the general price index since their addition or the last hyperinflationary calculation until the end of the reporting period. All items of comprehensive income are restated for the change in a general price index from the date of initial recognition to the reporting date. Gains and losses resulting from the net-position of monetary items are reported in the consolidated
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statements of operations in financial result in exchange differences. In accordance with IFRS, prior year financial statements were not restated.

(2)

Includes U.S.A., Ecuador, El Salvador, Puerto Rico and Panama.

As of April 26, 2021, the

The exchange rate between the US dollar and the Mexican Peso for April 28, 2022 was Ps.19.8695. The20.3560 per US dollar, which represents an appreciation of the Mexican peso against the US dollar represent 0.4% with respect1.11% as compared to the year-end value.

December 31, 2021.

p) Accounts payable, accrued liabilities and provisions

Liabilities are recognized whenever (i) the Company has current obligations (legal or assumed) resulting from a past event, (ii) when it is probable the obligation will give rise to a future cash disbursement for its settlement, and (iii) the amount of the obligation can be reasonably estimated.

When the effect of the time value of money is significant, the amount of the liability is determined as the present value of the expected disbursements to settle the obligation. The discount rate is determined on a pre-tax basis

and reflects current market conditions at the financial statements reporting date and, where appropriate, the risks specific to the liability. Where discounting is used, an increase in the liability is recognized as finance expense.

Contingent liabilities are recognized only when it is probable, they will give rise to a future cash disbursement for their settlement.

q) Employee benefits

The Company has defined benefit pension plans for its subsidiaries Puerto Rico Telephone Company, Teléfonos de Mexico, Claro Brasil, and Telekom Austria. Claro Brasil also has medical plans and defined contribution plans and Telekom Austria provides retirement benefits to its employees under a defined contribution plan. The Company recognizes the costs of these plans based upon independent actuarial computations and are determined using the projected unit credit method. The latest actuarial computations were prepared as of December 31, 2020.

2021.

Mexico

Mexican subsidiaries have the obligation to pay seniority premiums to personnel based on the Mexican Federal Labor Law which also establishes the obligation to make certain payments to personnel who cease to provide services under certain circumstances. Pensions (for Telmex) and seniority premiums are determined based on the salary of employees in their final year of service, the number of years worked at and their age at the moment of retirement.

The costs of pensions, seniority premiums and severance benefits, are recognized based on calculations by independent actuaries using the projected unit credit method using financial hypotheses, net of inflation.

Telmex has established an irrevocable trust fund and makes annual contributions to that fund.

Puerto Rico

In Puerto Rico, the Company has noncontributing pension plans for full-time employees, which are tax qualified as they meet Employee Retirement Income Security Act of 1974 requirements.

The pension benefit is composed of two elements:

(i) An employee receives an annuity at retirement if they meet the rule of 85 (age at retirement plus accumulated years of service). The annuity is calculated by applying a percentage times year of services to the last three years of salary.


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(ii) The second element is a lump-sum benefit based on years of service ranging from 9 to 12 months of salary. Health care and life insurance benefits are also provided to retirees under a separate plan (post-retirement benefits).


Brazil

Claro Brasil provides a defined benefit plan and post-retirement medical assistance plan, and a defined contribution plan, through a pension fund that supplements the government retirement benefit for certain employees.

Under the defined benefit plan, the Company makes monthly contributions to the pension fund equal to 17.5%
of the employee’s aggregate salary. In addition, the Company contributes a percentage of the aggregate salary base for funding the post-retirement medical assistance plan for the employees who remain in the defined benefit plan. Each employee makes contributions to the pension fund based on age and salary. All newly hired employees automatically adhere to the defined contribution plan and no further admittance to the defined benefit plan is allowed. For the defined contribution plan, seeplan. See Note 18.

Austria

Telekom Austria provides retirement benefits to its employees under defined contribution and defined benefit plans.

The Company pays contributions to publicly or privately administered pension or severance insurance plans on mandatory or contractual basis. Once the contributions have been paid, the Company has no further payment obligations. The regular contributions are recognized as employee expenses in the year in which they are due.

All other employee benefit obligations provided in Austria are unfunded defined benefit plans for which the Company records provisions which are calculated using the projected unit credit method. The future benefit obligations are measured using actuarial methods on the basis of an appropriate assessment of the discount rate, rate of employee turnover, rate of compensation increase and rate of increase in pensions.

For severance and pensions, the subsidiary recognizes actuarial gains and losses in other comprehensive income. The re-measurement of defined benefit plans relates to actuarial gains and losses only as Telekom Austria holds no plan assets. Interest expense related to employee benefit obligations is reported in “Valuation of derivatives, interests cost from labor obligation and other financial items, net” in the statements of comprehensive income.

Other subsidiaries

For the rest of the Company’s subsidiaries, there are no defined benefit plans or compulsory defined contribution structures. However, certain subsidiaries make contributions to national pension, social security and severance plans in accordance with the percentages and rates established by the applicable social security and labor laws of each country. Such contributions are made to the entities designated by the countries legislation and are recorded as direct labor expenses in the consolidated statements of comprehensive income as they are incurred.

Remeasurements of defined benefit plans, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding net interest and the return on plan assets (excluding net interest), are recognized immediately in the consolidated statements of financial position with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognized in profit or loss on the earlier of:

(i)

The date of the plan amendment or curtailment, and

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(ii)

The date that the Company recognizes restructuring-related costs

Net interest on liability for defined benefits is calculated by applying the discount rate to the net defined benefit liability or asset and it is recognized in the “valuation of derivatives, interest cost from labor obligations and other financial items” in the consolidated statements of comprehensive income. The Company recognizes the changes in the net defined benefit obligation under “Cost of sales and services” and “Commercial, administrative and general expenses” in the consolidated statements of comprehensive income.

Paid absences

The Company recognizes a provision for the cost of paid absences, such as vacation time, based on the accrual method.

r) Employee profit sharing

Employee profit sharing is paid by certain subsidiaries of the Company to its eligible employees. The Company has employee profit sharing in Mexico, Ecuador and Peru. In Mexico, employee profit sharing is computed at the rate of 10% on the individual subsidiaries taxable base adjusted for employee profit sharing purposes as provided by law.

Employee profit sharing is presented as an operating expense in the consolidated statements of comprehensive income.

s) Taxes

Income taxes

Current income tax payable is presented as a short-term liability, net of prepayments made during the year.

Deferred income tax is determined using the liability method based on the temporary differences between the tax values of the assets and liabilities and their book values at the consolidated financial statements reporting date.

Deferred tax assets and liabilities are measured using the tax rates that are expected to be in effect in the period when the asset will materialize or the liability will be settled, based on the enacted tax rates (and tax legislation) that have been enacted or substantially enacted at the financial statements reporting date. The value of deferred tax assets is reviewed by the Company at each financial statementsstatement reporting date and is reduced to the extent that it is more likely that the Company will not have sufficient future tax profits to allow for the realization of all or a part of its deferred tax assets. Unrecognized deferred tax assets are revalued at each financial statement reporting date and are recognized when it is more likely that there will be sufficient future tax profits to allow for the realization of these assets.

Deferred taxes relating to items recognized in Other Comprehensive Income are recognized together with the concept that generated such deferred taxes. Deferred taxes consequence on unremitted earnings from subsidiaries and associates are considered as temporary differences, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Taxes withheld on remitted foreign earnings are creditable against Mexican taxes, thus to the extent that a remittance is to be made, the deferred tax would be limited to the incremental difference between the Mexican tax rate and the rate of the remitting country. As of December 31, 20192020 and 2020,2021, the Company has not provided for any deferred taxes related to unremitted foreign earnings.

The Company offsets tax assets and liabilities if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

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Sales tax

Revenues, expenses and assets are recognized net of the amount of sales tax, except:

When the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the sales tax is recognized as part of the cost of acquisition of the asset or as part of the expense item, as applicable.

Receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the tax authorities is included as part of the current receivables or payables in the consolidated statements of financial position unless they are due in more than a year in which case they are classified as non-current.

t) Advertising

Advertising expenses are recognized as incurred. For the years ended December 31, 2018, 2019, 2020 and 2020,2021, advertising expenses were Ps.26,255,952, Ps.22,810,211Ps. 13,100,877, Ps. 11,157,495 and Ps.19,894,607Ps. 12,018,536 respectively, and are presented in the consolidated statements of comprehensive income in the caption “Commercial, administrative and general expenses”.

u) Earnings per share

Basic and diluted earnings per share are determined by dividing net profit of the year by the weighted-average number of shares outstanding during the year. In determining the weighted average number of outstanding shares, shares repurchased by the Company have been excluded.

v) Financial risks

The main risks associated with the Company’s financial instruments are: (i) liquidity risk, (ii) market risk (foreign currency exchange risk and interest rate risk) and (iii) credit risk and counterparty risk. The Board of Directors approves the policies submitted by management to mitigate these risks.

i) Liquidity risk

Liquidity risk is the risk that the Company may not meet its financial obligations associated with financial instruments when they are due. The Company’s financial obligations and commitments are included in Notes 14 and 17.

ii) Market risk

The Company is exposed to certain market risks derived from changes in interest rates and fluctuations in exchange rates of foreign currencies. The Company’s debt is denominated in foreign currencies, mainly in US dollars and euros, other than its functional currency. In order to reduce the risks related to fluctuations in the exchange rate of foreign currency, the Company uses derivative financial instruments such as cross-currency swaps and forwards to adjust exposures resulting from foreign exchange currency. The Company does not use derivatives to hedge the exchange risk arising from having operations in different countries.

Additionally, the Company occasionally uses interest rate swaps to adjust its exposure to the variability of the interest rates or to reduce their financing costs. The Company’s practices vary from time to time depending on judgments about the level of risk, expectations of change in the movements of interest rates and the costs of using derivatives. The Company may terminate or modify a derivative financial instrument at any time. See Note 7 for disclosure of the fair value of derivatives as of December 31, 20192020 and 2020.

2021.

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iii) Credit risk

Credit risk represents the loss that could be recognized in case the counterparties fail to comply with their contractual obligations.

The financial instruments that potentially represent concentrations of credit risk are cash and short-term deposits, trade accounts receivable and financial instruments related to debt and derivatives. The Company’s policy is designed in order to limit its exposure to any one financial institution; therefore, the Company’s financial instruments are contracted with several different financial institutions located in different geographic regions.

The credit risk in accounts receivable is diversified because the Company has a broad customer base that is geographically dispersed. The Company continuously evaluates the credit conditions of its customers and generally does not require collateral to guarantee collection of its accounts receivable. The Company monitors on a monthly basis its collection cycle to avoid deterioration of its results of operations.

A portion of the Company’s cash surplus is invested in short- term deposits with financial institutions with high credit ratings.

iv) Sensitivity analysis for market risks

The Company uses sensitivity analysis to measure the potential losses based on a theoretical increase of 100 basis points in interest rates and a 5% fluctuation in exchange rates:

Interest rate

In the event that the Company’s agreed-upon interest rates at December 31, 2020 increase/(decrease)2021 decrease by 100
basis points and a 5%5.23% fluctuation in exchange rates, the net interest expense would increase/(decrease) by Ps.1,476,660Ps. 
(1,188,821) and Ps.(13,417,231)
(14,606,005), respectively.

Exchange rate fluctuations

Should the Company’s debt at December 31, 20202021 of Ps.628,382,956,Ps.564,030,102, if suffer a 5% increase/(decrease) in exchange rates, the debt would increase/(decrease) by Ps.31,429,089Ps. 28,394,119 and Ps.(31,429,089) (28,019,972), respectively.

w) Derivative financial instruments

Derivative financial instruments are recognized in the consolidated statements of financial position at fair value. Valuations obtained by the Company are compared against those of the financial institutions with which the agreements are entered into, and it is the Company’s policy to compare such fair value to a valuation provided by an independent pricing provider in case of discrepancies. Changes in the fair value of derivatives that do not qualify as hedging instruments are recognized immediately in the line “Valuation of derivatives, interest cost from labor obligations and other financial items, net”.

The Company is exposed to interest rate and foreign currency risks, which tries to mitigate through a controlled risk management program that includes the use of derivative financial instruments. The Company principally uses to offset the risk of exchange rate and interest rate fluctuations. Additionally, for the years ended December 31, 2018, 2019, 2020 and 20202021 certain of the Company’s derivative financial instruments had been designated, and had qualified, as cash flow hedges. The effective portion of gains or losses on the cash flow derivatives is recognized in equity under the heading “Effect for fair value of derivatives”, and the ineffective portion is charged to results of operations of the period.

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x) Current versus non-current classification

The Company presents assets and liabilities in its consolidated statements of financial position based on current/non-current classification.

An asset is current when it is either:

(i)

Expected to be realized or intended to be sold or consumed in the normal operating cycle.

(ii)

Held primarily for the purpose of trading.

(iii)

Expected to be realized within twelve months after the reporting period.

(iv)

Cash and cash equivalents unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is current when:

It is expected to be settled in the normal operating cycle.

It is held primarily for the purpose of trading.

It is due to be settled within twelve months after the reporting period.

There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Company classifies all other assets and liabilities, including deferred income tax assets and liabilities, as non-current.

y) Presentation of consolidated statements of comprehensive income

The costs and expenses shown in the consolidated statements of comprehensive income are presented in combined manner (based on both their function and nature), which allows a better understanding of the components of the Company’s operating income. This classification allows a comparison to the telecommunications industry.

The Company presents operating income in its consolidated statements of comprehensive income since it is a key indicator of the Company’s performance. Operating income represents operating revenues less operating costs and expenses.

z) Operating segments

Segment information is presented based on information used by management in its decision-making processes. Segment information is presented based on the geographic areas in which the Company operates. The management of the Company is responsible for making decisions regarding the resources to be allocated to the Company’s different segments, as well as evaluating the performance of each segment. Intersegment revenues and costs, intercompany balances as well as investments in shares in consolidated entities are eliminated upon consolidation and reflected in the “eliminations” column in Note 23.

None of the segmentssegment’s records revenue from transactions with a single external customer amounting to 10% or more of the revenues.

Aa) Convenience translation

The consolidated financial statements are stated in thousands of Mexican pesos (“Ps.”); however, solely for the convenience of the readers, the consolidated statement of financial position as of December 31, 20202021 and the
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consolidated statement of comprehensive income and consolidated statement of cash flows for the year ended December 31, 20202021 were converted into U.S. dollars at the exchange rate of Ps.19.9487Ps.
20.5835 per U.S. dollar, which was the exchange rate at that date. This arithmetic conversion should not be construed as representations that the amounts expressed in Mexican pesos may be converted into U.S. dollars at that or any other exchange rate.

Ab) Significant accounting judgments, estimates and assumptions

In preparing its consolidated financial statements, the Company makes estimates concerning a variety of matters. Some of these matters are highly uncertain, and its estimates involve judgments it makes based on the available information. In the discussion below, the Company has identified several of these matters for which its financial statements would be materially affected if either (1) the Company uses different estimates that it could have reasonably used or (2) in the future América Móvil changes its estimates in response to changes that are reasonably likely to occur.

The following discussion addresses only those estimates that the Company considers most important based on the degree of uncertainty and the likelihood of a material impact had it used a different estimate. There are many other areas in which the Company uses estimates about uncertain matters, but the reasonably likely effect of changed or different estimates is not material to the financial presentation for those other areas.

Estimated useful lives of plant, property and equipment

The Company currently depreciates most of its network infrastructure based on an estimated useful life determined upon the expected particular conditions of operation and maintenance in each of the countries in which it operates. The estimates are based on AMX’s historical experience with similar assets, anticipated

technological changes and other factors, taking into account the practices of other telecommunications companies. The Company reviews estimated useful lives each year to determine, for each particular class of assets, whether they should be changed. The Company may shorten/extend the estimated useful life of an asset class in response to technological changes, changes in the market or other developments. This results in increased/decreased depreciation expense (Seeexpense. See Note 10).

10.

Revaluation of passive infrastructure of telecommunications towers

The Company recognizes the passive structureinfrastructure of the telecommunication towers at fair value, recognizing the changes in OCI. The discounted cash flow model was used. The Company hired a valuation specialist with industry experience to measure fair values as of December 31, 2020.

2021

Impairment of Long-Lived Assets

The Company has large amounts of long-lived assets, including property, plant and equipment, intangible assets, investments in affiliates and goodwill on its consolidated statements of financial position. The Company is required to test long-lived assets for impairment when circumstances indicate a potential impairment or, in some cases, at least on an annual basis. The impairment analysis for long-lived assets requires the Company to estimate the recoverable amount of the asset, which is the higher of its fair value (minus any disposal costs) and its value in use. To estimate the fair value of a long-lived asset, the Company typically takes into account recent market transactions or, if no such transactions can be identified, the Company uses a valuation model that requires making certain assumptions and estimates. Similarly, to estimate the value in use of long-lived assets, the Company typically makes various assumptions about the future prospects for the business to which the asset relates, considers market factors specific to that business and estimates future cash flows to be generated by that business. Based on this impairment analysis, including all assumptions and estimates related thereto, as well as guidance provided by IFRS relating to the impairment of long-lived assets different assumptions and estimates could materially impact the Company’s reported financial results. More conservative assumptions of the anticipated future benefits from these businesses could result in impairment charges, which would decrease net
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income and result in lower asset values on the consolidated statements of financial position. Conversely, less conservative assumptions could result in smaller or no impairment charges, higher net income and higher asset values. The key assumptions used to determine the recoverable amount for the Company’s CGUs, are further explained in Notes 23, 10 and 11.

Deferred Income Taxes

The Company is required to estimate its income taxes in each of the jurisdictions in which it operates. This process involves the jurisdiction-by-jurisdiction estimation of actual current tax exposure and the assessment of temporary differences resulting from the differing treatment of certain items, such as accruals and amortization, for tax and financial reporting purposes, as well as net operating loss carry-forwards and other tax credits. These items result in deferred tax assets and liabilities as discussed in Note 2 s). The analysis is based on estimates of taxable income in the jurisdictions in which the Company operates and the period on which the deferred tax assets and liabilities will be recovered or settled. If actual results differ from these estimates, or the Company adjusts these estimates in future periods, its financial position and results of operations may be materially affected.

In assessing the future realization of deferred tax assets, the Company considers future taxable income, ongoing planning strategies and future results in its operations. In the event that the estimates of projected future taxable income are lowered, or changes in current tax regulations are enacted that would impose restrictions on the timing or extent of the ability to utilize the tax benefits of net operating loss carry-forwards in the future, an adjustment to the recorded amount of deferred tax assets would be made, with a related charge to income. See Note 13.

Accruals

Accruals are recorded when, at the end of the period, the Company has a present obligation as a result of past events, whose settlement requires an outflow of resources that is considered probable and can be measured reliably. This obligation may be legal or constructive, arising from, but not limited to, regulation, contracts, common practice or public commitments, which have created a valid expectation for third parties that the Company will assume certain responsibilities. The amount recorded is the best estimation performed by the Company’s management in respect of the disbursement that will be required to settle the obligations, considering all the information available at the date of the financial statements, including the opinion of external experts, such as legal advisors or consultants. Accruals are adjusted to account for changes in circumstances for ongoing matters and the establishment of additional accruals for new matters.

If the Company is unable to reliably measure the obligation, no accrual is recorded, and information is then presented in the notes to its consolidated financial statements. Because of the inherent uncertainties in these estimations, actual expenditures may be different from the originally estimated amount recognized. See Note 16.

The Company is subject to various claims and contingencies related to tax, labor and legal proceedings as described in Note 17b).

Labor Obligations

The Company recognizes liabilities on its consolidated statements of financial position and expenses in its statements of comprehensive income to reflect its obligations related to its post-retirement seniority premiums, pension and retirement plans in the countries in which it operates and offer defined contribution and benefit
pension plans. The amounts the Company recognizes are determined on an actuarial basis that involves estimations and accounts for post-retirement and termination benefits.

The Company uses estimates in four specific areas that have a significant effect on these amounts: (i) the rate of return the Company assumes its pension plans will earn on its investments, (ii) the salaries increase rate that the
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Company assumes it will observe in future years, (iii) the discount rates that the Company uses to calculate the present value of its future obligations and (iv) the expected inflation rate. The assumptions applied are further
disclosed in Note 18. These estimates are determined based on actuarial studies performed by independent experts using the projected unit-credit method.

Ac) Discontinued operations
On September 14, 2020, the Company, announced that it ha
d
 entered into an agreement with Verizon Communications Inc. (“Verizon”) to sell its 100% interest in its subsidiary TracFone Wireless, Inc. (“TracFone”), the largest mobile virtual prepaid service operator in the United States, serving 21 million subscribers. On November 23, 2021, the Company announced that it ha
d
 completed the sale of its 100% interest in TracFone to Verizon.
AMX received a closing consideration of US$3,625.7 million in cash, which includes US$500.7 million related to TracFone’s closing cash and working capital, customary adjustment and other adjustments and 57,596,544 shares of Verizon stock valued at approximately US$2,968 million.
Following
the
transaction
closing, Verizon shall pay to AMX: (i) up to US$500 million as an earn-out if TracFone continues to achieve certain performance measures during the 24 months following the closing, calculated and paid in 4 consecutive
semesters
periods, and (ii) US$150 million deferred consideration payable within two years following the
transaction
closing. The earn-out was not recognized as gain by the Company, in accordance with
IFRS 9, 13 and
IAS 37
,
since
management does not believe the realization of income
and the inflow of economic benefits are virtually certain.
TracFone was deconsolidated from that date resulting in a
net
gain of Ps. 106,527,287
including the recycling of foreign currency exchange losses accumulated in equity. This gain has been recognized under profit after tax from discontinued operations in the consolidated statements of comprehensive income. Furthermore, no impairment loss was identified. Moreover, TracFone had identifiable operations and cash flows and represented a separate geographical area. Therefore, in accordance with IFRS 5, TracFone was classified as discontinued operations for all years presented in these consolidated financial statements; results were accordingly presented as a single amount as profit after tax from discontinued operations in the consolidated statements of comprehensive income. The consolidated statements of comprehensive income comparative figures have therefore been restated accordingly. 
All other notes to the consolidated financial statements include amounts for continuing operations, unless indicated otherwise. 
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Additionally, TracFone represented the U.S.A. segment until November 23, 2021. With TracFone being classified as discontinued operations, the U.S.A. segment is no longer presented in the segment note. The results of TracFone for the year are presented below:
  
For the years ended December 31
 
 2019  2020  
2021
 
Operating revenues:
             
Service revenues
  Ps.131,403,268  Ps.149,376,532  Ps.130,091,540 
Sales of equipment
   24,461,125   27,802,837   22,160,481 
   
 
 
  
 
 
  
 
 
 
    155,864,393   177,179,369   152,252,021 
Total costs and expenses
   144,822,141   157,327,836   134,495,316 
   
 
 
  
 
 
  
 
 
 
Operating income
   11,042,252   19,851,533   17,756,705 
   
 
 
  
 
 
  
 
 
 
Financial cost
   (77,884)   (2,026)   (1,733) 
Gain on disposal of discontinued operations
   0     0     132,821,709 
   
 
 
  
 
 
  
 
 
 
Profit before income tax discontinued operations
   10,964,368   19,849,507   150,576,681 
   
 
 
  
 
 
  
 
 
 
Tax expense:
             
Related to pre-tax profit from the ordinary activities for the period
   1,119,479   2,856,882   2,571,541 
Related to gain on disposal from discontinued operations
   0     0   26,294,422 
   
 
 
  
 
 
  
 
 
 
Net profit for the year from discontinued operations
  Ps.9,844,889  
Ps.

16,992,625  Ps.121,710,718 
   
 
 
  
 
 
  
 
 
 
The assets and liabilities deconsolidated on the date of the disposal were as follows:
November 23,
2021
Current assets
Cash
Ps.
338,439
Subscribers, distributors, recoverable taxes, contract assets and other net
12,368,407
Inventories, net
9,604,658
Other current assets, net
389,052
Total current assets
22,700,556
Non-current assets:
Property, plant and equipment
1,989,498
Intangibles, net
555,012
Goodwill
2,695,557
Deferred income taxes
1,094,756
Other assets, net
327,546
Rights of use
1,625
Total assets
Ps.
29,364,550
Short term liability related to rigth of use of assets
Ps.
1,625
Accounts payable
17,446,513
Income tax
3,267,585
Deferred revenue
13,187,667
Total liabilities
33,903,390
Net
liability
directly associated with disposal group
Ps.
(4,538,840
) 
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Furthermore, pursuant to the Stock Purchase Agreement, the Company agreed to indemnify Verizon against pre-closing tax matters. As of the closing, certain tax related matters had not been resolved, and Verizon has asserted post-closing claims under the adjustments and other provisions of this agreements, which may result in payments by us. 
Ad)
Reclassification
The Company reclassified Ps. 4,540,344
from current
equity investments at fair value through other comprehensive income (OCI) to non-current
debt instruments at fair value through other comprehensive income (OCI)
as of December 31, 2020.
3. Cash and Cash Equivalents

Cash and cash equivalents are comprised of short-term deposits with different financial institutions. Cash equivalents only include instruments with purchased maturity of less than three months. The amount includes the amount deposited, plus any interest earned.

4. Equity
and debt
investments at fair value through OCI and other short-termshort/long-term investments

As of December 31, 20192020 and 2020,2021, equity investments at fair value through OCI and other short-term investments includes an equity investment in KPN for Ps.37,572,410Ps. 50,033,111 and Ps.50,033,111,Ps. 56,087,598
, respectively, and other short-term investments for Ps.10,145,615Ps. 62,940 and Ps.4,603,284,Ps. 15,026, respectively, which represents a cash deposit used to guarantee a short-term obligation for one of the Company’s foreign subsidiaries and are presented at their carrying value, which approximates fair value.

Theequity investment in Verizon for

Ps. 61,600,578 in December 31,
2021.
The investment
s
in KPN, isVerizon and other
s
, are carried at fair value with changes in fair value being recognized through other comprehensive (loss) gain items (equity) in the Company’s consolidated statements of financial position. As of December 31, 20192020 and 2020,2021, the Company has recognized in equity changes in fair value of the investment of Ps.883,408Ps. (1,952,414) and Ps.(1,952,414), 4,560,869 respectively, net of deferred taxes, through other comprehensive (loss) gain items in equity.

taxes.

During the years ended December 31, 2018, 2019, 2020 and 2020,2021, the Company received dividends from KPN for an amount of Ps.2,605,333, Ps.1,742,242Ps. 1,742,242 and Ps.2,119,668, respectively;Ps. 2,119,668 and Ps. 2,628,600, respectively, which are included within “Valuation“Valuation of derivatives, interest cost from labor obligations, and other financial items, net” in the consolidated statements of comprehensive income.

As of December 31, 2020 and 2021 long-term debt instrument at fair value through OCI for Ps. 4,540,344 and Ps. 6,894,757, respectively.
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5. Accounts receivable from subscribers, distributors, recoverable taxes contractual assets and other, net


a)
An analysis of accounts receivable by component at December 31, 20192020 and 20202021 is as follows:

  At December 31, 
  2019  2020 

Subscribers and distributors

  Ps.184,260,099   Ps.168,758,386 

Telecommunications carriers for network interconnection and other services

  5,079,763   4,914,094 

Recoverable taxes

  23,628,728   44,557,402 

Sundry debtors

  12,084,050   12,504,566 

Contract assets

  34,274,007   29,588,104 

Impairment of trade receivables

  (39,480,909)   (44,551,735) 
 

 

 

  

 

 

 

Total net

  Ps.219,845,738   Ps.215,770,817 
 

 

 

  

 

 

 

Non-current subscribers, distributors and contractual assets

  Ps.  15,139,442   Ps.    7,792,863 
 

 

 

  

 

 

 

Total current subscribers, distributors and contractual assets

  Ps.204,706,296  Ps.207,977,954 
 

 

 

  

 

 

 


   
At December 31,
 
   2020  
2021
 
Subscribers and distributors
  
 

Ps. 168,758,386   
Ps. 157,433,609
 
Telecommunications carriers for network interconnection and other services
   4,914,094  
 
3,968,675
 
Recoverable taxes
   44,557,402  
 
43,734,164
 
Sundry debtors
   12,504,566  
 
15,573,586
 
Contract assets
   29,588,104  
 
30,901,277
 
Impairment of trade receivables
   (44,551,735)  
 
(41,835,826
) 
   
 
 
  
 
 
 
Total net
   Ps. 215,770,817   
Ps. 209,775,485
 
Non-current subscribers, distributors and contractual assets
       7,792,863   
    6,928,888
 
   
 
 
  
 
 
 
Total current subscribers, distributors and contractual assets
   Ps. 207,977,954   
Ps. 202,846,597
 
   
 
 
  
 
 
 
b) Changes in the impairment of trade receivables is as follows:

   For the years ended December 31, 
   2018   2019   2020 

Balance at beginning of year

   Ps.(39,044,925)    Ps.(40,798,025)    Ps.(39,480,909) 

Increases recorded in expenses

   (19,535,707)    (16,346,395)    (19,112,635) 

Adjustment on initial application of IFRS 9

   (2,400,783)    —      —   

Write-offs

   15,497,254    17,839,957    11,953,227 

Business combination

     (3,265,490)    (2,066) 

Translation effect

   4,686,136    3,089,044    2,090,648 
  

 

 

   

 

 

   

 

 

 

Balance at end of year

   Ps.(40,798,025)    Ps.(39,480,909)    Ps.(44,551,735) 
  

 

 

   

 

 

   

 

 

 

   
For the years ended December 31,
 
   2019   2020   
2021
 
Balance at beginning of year
   Ps.(40,798,025)    Ps.(39,480,909)   
 
Ps.(44,551,735
) 
Increases recorded in expenses
   (16,346,395)    (19,112,635)   
 
(10,677,421
) 
Write-offs
 
(i)
   17,839,957    11,953,227   
 
11,682,343
 
Business combination
   (3,265,490)    (2,066)   
 
—  
 
Translation effect
   3,089,044    2,090,648   
 
1,710,987
 
   
 
 
   
 
 
   
 
 
 
Balance at end of year
   Ps.(39,480,909)    Ps.(44,551,735)   
 
Ps.(41,835,826
) 
   
 
 
   
 
 
   
 
 
 
(i)
Includes discontinued operation of Tracfone. See Note 2Ac. 
c) The following table shows the aging of accounts receivable at December 31, 20192020 and 2020,2021, for subscribers and distributors:

  Past due 
  Total  Unbilled services
provided		  a-30 days  31-60 days  61-90 days  Greater than
90 days		 

December 31, 2019

 Ps.184,260,099 Ps.76,223,243 Ps.46,083,644 Ps.6,076,281 Ps.4,121,929 Ps.51,755,002

December 31, 2020

 Ps.168,758,386  Ps.75,972,811  Ps.37,439,995  Ps.5,325,264  Ps.3,313,835  Ps.46,706,481 

  
Past due
 
  
Total
  
Unbilled services
provided
  
a-30 days
  
31-60 days
  
61-90 days
  
Greater than
90 days
 
December 31, 2020
 Ps.168,758,386  Ps.75,972,811  Ps.37,439,995  Ps.5,325,264  Ps.3,313,835  Ps.46,706,481 
December 31, 2021
 
Ps.
157,433,609
 
 
Ps.
69,082,837
 
 
Ps.
35,694,272
 
 
Ps.
4,533,604
 
 
Ps.
2,645,034
 
 
Ps.
45,477,862
 
d) The following table shows the accounts receivable from subscribers and distributors included in the impairments of trade receivables, as of December 31, 20192020 and 2020:

   Total   1-90 days   Greater than
90 days		 

December 31, 2019

  Ps.39,480,909  Ps.3,948,091  Ps.35,532,818

December 31, 2020

  Ps.44,551,735   Ps.4,455,174  Ps.40,096,561
2021:

   
Total
   
1-90 days
   
Greater than
90 days
 
December 31, 2020
  Ps.44,551,735   Ps.4,455,174   Ps.40,096,561 
December 31, 2021
  
Ps.
41,835,826
 
  
Ps.
4,183,583
 
  
Ps.
37,652,243
 
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e) An analysis of contract assets and liabilities at December 31, 20192020 and 20202021 is as follows:

   2019   2020 

Contract Assets:

    

Balance at the beginning of the year

  Ps.34,718,749   Ps.34,274,007 

Additions

   34,877,851    27,242,031 

Disposals

   (2,658,641)    (1,397,714) 

Business Combination

   576,463    —   

Amortization

   (30,501,315)    (29,002,995) 

Translation effect

   (2,739,100)    (1,527,225) 
  

 

 

   

 

 

 

Balance at the end of the year

  Ps.34,274,007   Ps.29,588,104 

Non-current contract assets

  Ps.1,786,560   Ps.817,740 
  

 

 

   

 

 

 

Current portion contracts assets

  Ps.32,487,447   Ps.28,770,364 
  

 

 

   

 

 

 

   2020   
2021
 
Contract Assets:
          
Balance at the beginning of the year
  Ps.34,274,007   
Ps.
29,588,104
 
Additions
   27,242,031   
 
31,758,626
 
Disposals
   (1,397,714)   
 
(5,946,487
) 
Amortization
   (29,002,995)   
 
(25,354,712
) 
Translation effect
   (1,527,225)   
 
855,746
 
   
 
 
   
 
 
 
Balance at the end of the year
  Ps.29,588,104   
Ps.
30,901,277
 
Non-current contract assets
  Ps.817,740   
Ps.
989,519
 
   
 
 
   
 
 
 
Current portion contracts assets
  Ps.28,770,364   
Ps.
29,911,758
 
   
 
 
   
 
 
 
6. Related Parties

a) The following is an analysis of the balances with related parties as of December 31, 20192020 and 2020.2021. All of the companies were considered affiliates of América Móvil since the Company’s principal shareholders are either direct or indirect shareholders in the related parties.

   2019   2020 

Accounts receivable:

    

Hubard y Bourlon, S.A. de C.V.

   Ps.   172,952    Ps.   437,231 

Patrimonial Inbursa, S.A.

   386,194    327,985 

Sears Roebuck de México, S.A. de C.V. and Subsidiaries.

   228,523    233,402 

Sanborns Hermanos, S.A.

   229,964    160,116 

Claroshop.com, S.A.P.I de C.V.

   91,874    100,075 

Grupo Condumex, S.A. de C.V. and Subsidiaries

   12,018    10,038 

Carso Infraestructura y Construcción, S.A. de C.V. and Subsidiaries

   41,204    7,679 

Other

   110,411    114,774 
  

 

 

   

 

 

 

Total

   Ps.1,273,140    Ps.1,391,300 
  

 

 

   

 

 

 
   2019   2020 

Accounts payable:

    

Carso Infraestructura y Construcción, S.A. de C.V. and Subsidiaries

   Ps.1,656,123    Ps.2,192,405 

Grupo Condumex, S.A. de C.V. and Subsidiaries

   905,776    1,054,526 

Fianzas Guardiana Inbursa, S.A. de C.V.

   241,305    241,898 

Grupo Financiero Inbursa, S.A.B. de C.V.

   246,804    234,954 

Seguros Inbursa, S.A. de C.V.

   100,155    92,173 

PC Industrial, S.A. de C.V. and Subsidiaries

   68,189    44,198 

Enesa, S.A. de C.V. and Subsidiaries

   25,076    22,014 

Other

   216,991    117,748 
  

 

 

   

 

 

 

Total

   Ps.3,460,419    Ps.3,999,916
  

 

 

   

 

 

 

   2020   
2021
 
Accounts receivable:
          
Sears Roebuck de México, S.A. de C.V. and Subsidiaries
  Ps.233,402   
Ps.
339,366
 
Sanborns Hermanos, S.A.
   160,116   
 
192,599
 
Patrimonial Inbursa, S.A.
   327,985   
 
145,676
 
Grupo Condumex, S.A. de C.V. and Subsidiaries
   10,038   
 
122,555
 
Hubard y Bourlon, S.A. de C.V.
   437,231   
 
52,026
 
Claroshop.com, S.A.P.I de C.V.
   100,075   
 
40,906
 
Other
   122,453   
 
265,483
 
   
 
 
   
 
 
 
Total
  Ps.1,391,300   
Ps.
1,158,611
 
   
 
 
   
 
 
 
   2020   
2021
 
Accounts payable:
    
Carso Infraestructura y Construcción, S.A. de C.V. and Subsidiaries
  Ps.2,192,405   
Ps.
1,273,085
 
Grupo Condumex, S.A. de C.V. and Subsidiaries
   1,054,526   
 
1,709,487
 
Fianzas Guardiana Inbursa, S.A. de C.V.
   241,898   
 
385,287
 
Claroshop.com, S.A.P.I de C.V.
   4,300   
 
247,081
 
Grupo Financiero Inbursa, S.A.B. de C.V.
   234,954   
 
102,314
 
Seguros Inbursa, S.A. de C.V.
   92,173   
 
113,089
 
Sociedad Financiera Inbursa, S.A. de C.V.
   0     
 
80,382
 
PC Industrial, S.A. de C.V. and Subsidiaries
   44,198   
 
4,761
 
Enesa, S.A. de C.V. and Subsidiaries
   22,014   
 
9,384
 
Other
   113,448   
 
292,012
 
   
 
 
   
 
 
 
Total
  Ps.3,999,916   
Ps.
4,216,882
 
   
 
 
   
 
 
 
For the years ended December 31, 2018, 2019, 2020 and 2020,2021, the Company has not recorded any impairment of receivables in connection with amounts owed by related parties.

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40
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b) For the years ended December 31, 2018, 2019, 2020 and 2020,2021, the Company conducted the following transactions with related parties:

   2018   2019   2020 

Investments and expenses:

      

Construction services, purchases of materials, inventories and property, plant and equipment (i)

  Ps.7,211,960   Ps.8,573,894   Ps.7,130,769

Insurance premiums, fees paid for administrative and operating services, brokerage services and others (ii)

   4,134,380    4,590,620    4,375,113 

Rent of towers (iii)

   6,168,592    —      —   

Other services

   1,864,017    1,277,404    1,101,528 
  

 

 

   

 

 

   

 

 

 
  Ps.19,378,949   Ps.14,441,918   Ps.12,607,410 
  

 

 

   

 

 

   

 

 

 

Revenues:

      

Service revenues

  Ps.679,220   Ps.538,110   Ps.608,248 

Sales of equipment

   1,296,204    944,697    656,801 
  

 

 

   

 

 

   

 

 

 
  Ps.1,975,424   Ps.1,482,807   Ps.1,265,049 
  

 

 

   

 

 

   

 

 

 

   2019   2020   
2021
 
Investments and expenses:
               
Construction services, purchases of materials, inventories and property, plant and equipment 
(i)
  Ps.8,573,894   Ps.7,130,769   
Ps.
13,544,289
 
Insurance premiums, fees paid for administrative and operating services, brokerage services and others
(ii)
   4,590,620    4,375,113   
 
4,336,133
 
Other services
   1,277,404    1,101,528   
 
1,617,102
 
   
 
 
   
 
 
   
 
 
 
   Ps.14,441,918   Ps.12,607,410   
Ps.
19,497,524
 
   
 
 
   
 
 
   
 
 
 
Revenues:
               
Service revenues
  Ps.538,110   Ps.608,248   
Ps.
714,148
 
Sales of equipment
 
(iii)
   944,697    656,801   
 
7,629,181
 
   
 
 
   
 
 
   
 
 
 
   Ps.1,482,807   Ps.1,265,049   
Ps.
8,343,329
 
   
 
 
   
 
 
   
 
 
 
i)

In 2020,2021, this amount includes Ps.5,312,845 (Ps.6,809,244Ps.
11,447,164 (Ps.
5,312,845 in 20192020 and Ps.5,622,791Ps.
6,809,244 in 2018)2019) for network construction services and construction materials purchased from subsidiaries of Grupo Carso, S.A.B. de C.V. (Grupo Carso).

ii)

In 2020,2021, this amount includes Ps.203,013 (Ps.956,132Ps.
121,728 (Ps.
203,013 in 20192020 and Ps.778,191Ps.
956,132 in 2018)2019) for network maintenance services performed by Grupo Carso subsidiaries; Ps.13,490Ps.
50,730 in 2021 (Ps.
13,490 in 2020, (Ps.16,161and Ps.
16,161 in 2019, and Ps.13,784 in 2018)2019) for software services provided by an associate; Ps.2,713,370Ps.
3,814,995 in 2021 (Ps.
2,713,370 in 2020 (Ps.2,623,795and Ps.
2,623,795 in 2019 and Ps.2,541,703 in 2018)2019) for insurance premiums with Seguros Inbursa S.A. and Fianzas Guardiana Inbursa, S.A., which, in turn, places most of such insurance with reinsurers.

iii)

Due

In November 2021, a subsidiary of Telmex sold certain tower assets to the implementation of IFRS 16Telesites, S.A.B. de C.V.
iv)
The amounts related to payments for tower leaseslease are no longer considered rental expenses.

reflected in Note 15.

c) The aggregate compensation paid to the Company’s, directors (including compensation paid to members of the Audit and Corporate Practices Committee), and senior management in 20202021 was approximately Ps.6,300Ps.5,800 and Ps.79,600,Ps.85,000, respectively. None of the Company’s directors is a party to any contract with the Company or any of its subsidiaries that provides for benefits upon termination of employment. The Company does not provide pension, retirement or similar benefits to its directors in their capacity as directors. The Company’s executive officers are eligible for retirement and severance benefits required by Mexican law on the same terms as all other employees.

d) Österreichische Bundes- und Industriebeteiligungen GmbH (ÖBIB) is considered a related party due to it is a significant non-controlling shareholder in Telekom Austria. Through Telekom Austria, América Móvil is related to the Republic of Austria and its subsidiaries, which are mainly ÖBB Group, ASFINAG Group and Post Group as well as Rundfunk und Telekom Reguliegungs-GmbH, all of which these are related parties. In 2018, 2019, 2020 and 2020, none2021, NaN of the individual transactions associated with government agencies or government-owned entities of Austria were considered significant to América Móvil.

7. Derivative Financial Instruments

To mitigate the risks of future increases in interest rates and foreign exchange rates for the servicing of its debt, the Company has entered into derivative contracts in over-the-counter transactions carried out with financial institutions. In 20202021 the weighted-average interest rate of the total debt including the impact of interest rate derivatives held by the Company is 3.5% (3.8%3.1% (3.5% and 4.1%3.8% in 2020 and 2019, and 2018, respectively).
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An analysis of the derivative financial instruments contracted by the Company at December 31, 20192020 and 20202021 is as follows:

  At December 31, 
  2019  2020 

Instrument

 Notional amount in
millions		  Fair Value  Notional amount in
millions		  Fair Value 

Assets:

    

Swaps US Dollar-Mexican peso

 US$3,290   Ps. 4,420,433  US$3,490   Ps.16,806,937 

Swaps US Dollar – Euro

 US$150   96,967  US$150   117,726 

Swaps Yen-US Dollar

 ¥6,500   262,993  ¥9,750   269,215 

Swaps Pound sterling – US Dollar

 £100   2,988  £1,010   2,237,919 

Forwards US Dollar – Mexican Peso

 US$100   18  US$240   39,607 

Forwards US Dollar-Brazilian real

 US$83   90,429   —     —   

Forwards Brazilian Real-US Dollar

 BRL5,803   1,620,605  BRL$4,193   1,190,292 

Forwards Euro-Brazilian real

 €50   4,255   —     —   

Forwards Euro-US Dollar

 €1,506   204,241  €915   266,639 

Forwards Argentinean Peso – US Dollar

 ARS$1,388   122,831   —     —   
  

 

 

   

 

 

 

Total Assets

   Ps.6,825,760    Ps.20,928,335 
  

 

 

   

 

 

 
  At December 31, 
  2019  2020 

Instrument

 Notional amount in
millions		  Fair Value  Notional amount in
millions		  Fair Value 

Liabilities:

    

Swaps US Dollar-Mexican peso

 US$200   Ps.     (33,253)   —     Ps.             —   

Swaps US Dollar-Euro

 US$800   (2,228,287)  US$800   (4,811,031) 

Swaps Yen-US Dollar

  —     —    ¥3,250   (14,802) 

Swaps Pound sterling-Euro

 £640   (2,201,997)  £640   (3,122,492) 

Swap Pound sterling-US Dollar

 £2,010   (3,019,255)  £550   (457,559) 

Forwards US Dollar-Mexican Peso

 US$2,343   (1,398,247)  US$3,494   (4,052,852) 

Forwards Brazilian Real-US Dollar

  —     —    BRL$1,762   (425,249) 

Forwards Euro – Mexican Peso

  —     —    €200   (272,274) 

Forwards Euro-US Dollar

 €1,094   (554,278)   —     —   

Forwards US Dollar – Euro

 US$20   (3,787)   —     —   

Forwards Euro – Brazilian Real

 €140   (10,196)   —     —   

Forwards Yen – US Dollar

 ¥6,500   (18,769)   —     —   

Put option

 €374   (126,569)  €374   (1,073,990) 

Call option

 €3,000   (2,113)   —     —   
  

 

 

   

 

 

 

Total Liabilities

   Ps.(9,596,751)   Ps.(14,230,249) 
  

 

 

   

 

 

 

  
At December 31,
 
  
2020
  
2021
 
Instrument
 Notional amount in
millions		  Fair Value  
Notional amount in
millions
  
Fair Value
 
Assets:
                
Swaps US Dollar – Mexican Peso
 US$3,490  Ps.16,806,937  
US$
1,890
 
 
Ps.

6,881,934
 
Swaps US Dollar – Euro
 US$150   117,726  
US$
150
 
 
 
307,646
 
Swaps Yen – US Dollar
 ¥9,750   269,215  
¥
6,500
 
 
 
119,325
 
Swaps Pound Sterling – US Dollar
 £1,010   2,237,919  
£
100
 
 
 
99,463
 
Forwards US Dollar – Mexican Peso
 US$240   39,607  
US$
2,080
 
 
 
321,864
 
Forwards Mexican Peso – US Dollar
  —     —    
MX$
35,419
 
 
 
1,635,087
 
Forwards Brazilian Real – US Dollar
 BRL$4,193   1,190,292  
BRL$
2,480
 
 
 
127,131
 
Forwards Euro – US Dollar
 €915   266,639  
 
0  
 
 
 
0  
 
Put Option
  —     —    
€
374
 
 
 
638,347
 
      
 
 
      
 
 
 
Total Assets
  —    
Ps.

20,928,335  
 
—  
 
 
Ps.
10,130,806
 
      
 
 
      
 
 
 
  
  
At December 31,
 
  
2020
  
2021
 
Instrument
 Notional amount in
millions		  Fair Value  
Notional amount in
millions
  
Fair Value
 
Liabilities:
                
Swaps US Dollar – Euro
 US$800  Ps.(4,811,031)  
US$
800
 
 
 
Ps.
(1,270,005
) 
Swaps Yen – US Dollar
 ¥3,250   (14,802)  
¥
6,500
 
 
 
(119,313
) 
Swaps Pound Sterling – Euro
 £640   (3,122,492)  
£
640
 
 
 
(1,924,941
) 
Swap Pound Sterling – US Dollar
 £550   (457,559)  
£
1,460
 
 
 
(2,117,583
) 
Swaps Euro – US Dollar
  0     0    
€
495
 
 
 
(528,298
) 
Swaps Euro – Mexican Peso
  —     —    
€
750
 
 
 
(680,720
) 
Forwards US Dollar – Mexican Peso
 US$3,494   (4,052,852)  
US$
1,175
 
 
 
(286,937
) 
Forwards Brazilian Real – US Dollar
 BRL$1,762   (425,249)  
BRL$
4,021
 
 
 
(234,822
) 
Forwards Euro – US Dollar
  —     —    
€
815
 
 
 
(1,122,641
) 
Forwards US Dollar – Euro
  —     —    
US$
8
 
 
 
(1,570
) 
Forwards Euro – Mexican Peso
 €200   (272,274)  
€
200
 
 
 
(22,182
) 
Put option
 €374   (1,073,990)  
 
0  
 
 
 
0  
 
Call option
  0     0    
€
2,097
 
 
 
(1,725,495
) 
      
 
 
      
 
 
 
Total Liabilities
  —    Ps.(14,230,249)  
 
—  
 
 
 
Ps.
(10,034,508
) 
      
 
 
      
 
 
 
*
Totals may not sum due to rounding.
The changes in the fair value of these derivative financial instruments for the years ended December 31, 2018, 2019, 2020 and 20202021 amounted to a gain (loss) gain of Ps.(4,686,407)
4,432,023, Ps.
12,378,193 and Ps.
(6,755,214), Ps.4,432,023 and Ps.12,378,193.respectively. Such amounts are included in the consolidated statements of comprehensive income as part of the caption “Valuation of derivatives interest cost from labor obligations and other financial items, net”.

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42
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The maturities of the notional amount of the derivatives are as follows:

Instrument

  Notional
amount in
millions		   2021   2022   2023   2024   2025 Thereafter 

Assets

            

Swaps US Dollar-Mexican peso

  US$       1,600        1,890 

Swaps Yen-US Dollar

  ¥            9,750 

Swaps US Dollar – Euro

  US$             150 

Swaps Pound sterling – US Dollar

  £            1,010 

Forwards US Dollar-Mexican Peso

  US$     240         

Forwards Brazilian Real-US Dollar

  BRL            4,193         

Forwards Euro-US Dollar

  €    915         

Liabilities

            

Swaps US Dollar-Euro

  US$             800 

Swaps Yen-US Dollar

  ¥            3,250 

Swaps Pound sterling-Euro

  £            640 

Swap Pound sterling-US Dollar

  £            550 

Forwards US Dollar – Mexican Peso

  US$     3,494         

Forwards Brazilian Real-US Dollar

  BRL            1,762         

Forwards Euro – Mexican Peso

  €    200         

Put option

  €        374     

Instrument
  
Notional
amount in
millions
   
2022
   
2023
   
2024
   
2025
   
2026 Thereafter
 
Assets
                              
Swaps US Dollar-Mexican Peso
  
US$
 
 
   —      0      —      —      1,890 
Swaps Yen-US Dollar
  
¥
 
 
   —      —      —      —      6,500 
Swaps US Dollar – Euro
  
US$
 
 
   —      —      —      —      150 
Swaps Pound Sterling – US Dollar
  
£
 
 
   —      —      —      —      100 
Forwards US Dollar-Mexican Peso
  
US$
 
 
   2,080    —      —      —      —   
Forwards Mexican Peso – US Dollar
  
MX$
 
 
   35,419    —      —      —      —   
Forwards Brazilian Real-US Dollar
  
BRL
        
 
   2,480    —      —      —      —   
Put Option
  
€
 
 
   —      374    —      —      —   
Liabilities
                              
Swaps US Dollar-Euro
  
US$
 
 
   —      —      —      —      800 
Swaps Euro – US Dollar
  
€
 
 
   —      320    175    —      —   
Swaps Euro – Mexican Peso
  
US$
 
 
   —      750    —      —      —   
Swaps Yen-US Dollar
  
¥
 
 
   —      —      —      —      6,500 
Swaps Pound Sterling-Euro
  
£
 
 
   —      —      —      —      640 
Swap Pound Sterling-US Dollar
  
£
 
 
   —      —      —      —      1,460 
Forwards US Dollar – Mexican Peso
  
US$
 
 
   1,175    —      —      —      —   
Forwards Euro – US Dollar
  
€
 
 
   765    —      50    —      —   
Forwards US Dollar—Euro
  
US$
 
 
   8    —      —      —      —   
Forwards Brazilian Real-US Dollar
  
BRL
        
 
   4,021    —      —      —      —   
Forwards Euro – Mexican Peso
  
€
 
 
   200    —      —      —      —   
Call option
  
€
 
 
   —      —      2,097    —      —   
8. Inventories, net

An analysis of inventories at December 31, 20192020 and 20202021 is as follows:

   2019  2020 

Mobile phones, accessories, computers, TVs, cards and other materials

   Ps.43,954,616   Ps.33,763,086 

Less: Reserve for obsolete and slow-moving inventories

   (2,852,604)   (3,385,647) 
  

 

 

  

 

 

 

Total

   Ps.41,102,012   Ps.30,377,439 
  

 

 

  

 

 

 

   2020  
2021
 
Mobile phones, accessories, computers, TVs, cards and other materials
   Ps.33,763,086  
 
Ps.
 
26,131,521
 
Less: Reserve for obsolete and slow-moving inventories
   (3,385,647)  
 
(1,946,211
) 
   
 
 
  
 
 
 
Total
   Ps.30,377,439  
 
Ps.
 
24,185,310
 
   
 
 
  
 
 
 
For the years ended December 31, 2018, 2019, 2020 and 2020,2021, the cost of inventories recognized in cost of sales was Ps.180,013,986, Ps.174,543,602 Ps.
128,559,826, Ps.
114,711,857
and Ps.167,546,288, respectively.

Ps.
122,220,495
respectively
.
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9. Other assets, net

An analysis of other assets at December 31, 20192020 and 20202021 is as follows:

   2019   2020 

Current portion:

    

Advances to suppliers (different from PP&E and inventories)

   Ps.  7,718,343   Ps.  7,600,644

Prepaid insurance

   978,927    1,300,019 

Other

   776,164    93,244 
  

 

 

   

 

 

 
   Ps.  9,473,434    Ps.  8,993,907 
  

 

 

   

 

 

 

Non-current portion:

    

Recoverable taxes

   Ps.14,647,726    Ps.11,559,961 

Prepayments for the use of fiber optics

   2,095,556    2,709,358 

Judicial Deposits (1)

   19,506,147    15,402,840 

Prepaid expenses

   5,642,590    8,743,667 
  

 

 

   

 

 

 

Total

   Ps.41,892,019   Ps.38,415,826
  

 

 

   

 

 

 

   
2020
   
2021
 
Current portion:
          
Advances to suppliers (different from PP&E and inventories)
  Ps.7,600,644   
Ps.
7,474,932
 
Prepaid insurance
   1,300,019   
 
1,749,589
 
Other
   93,244   
 
227,731
 
   
 
 
   
 
 
 
   Ps.8,993,907   
Ps.
9,452,252
 
   
 
 
   
 
 
 
Non-current portion:
          
   
Recoverable taxes
  Ps.11,559,961   
Ps.
11,689,094
 
Prepayments for the use of fiber optics
   2,709,358   
 
3,783,496
 
Judicial Deposits
 (1)
   15,402,840   
 
14,583,504
 
Prepaid expenses
   8,743,667   
 
9,899,996
 
   
 
 
   
 
 
 
Total
  Ps.38,415,826   
Ps.
39,956,090
 
   
 
 
   
 
 
 
For the years ended December 31, 2018, 2019, 2020 and 2020,2021, amortization expense for other assets was Ps.798,243, Ps.318,824Ps. 318,824, Ps. 213,833 and Ps.213,833,Ps. 442,098, respectively.

(1)

Judicial deposits represent cash and cash equivalents pledged in order to fulfill the collateral requirements for tax contingencies mainly in Brazil. AtAs of December 31, 20192020 and 2020,2021, the amount for these deposits is Ps.19,506,147Ps. 15,402,840 and Ps.15,402,840,Ps. 14,583,504, respectively for Brazil. Based on its evaluation of the underlying contingencies, the Company believes that such amounts are recoverable.

10. Property, Plant and Equipment, net

a)
An analysis of activity in property, plant and equipment, net for the years ended December 31, 2018, 2019, 2020 and 20202021 is as follows:

  At December 31,
2017		  Additions  Retirements  Business
combinations		  Effect of
translation of
foreign
subsidiaries and
hyperinflation
adjustment		  Depreciation
for
the year		  At December 31,
2018		 

Cost

       

Network in operation and equipment

 Ps.989,665,946  Ps.68,900,443  Ps.(1,610,246)   Ps.128,246  Ps.(87,888,453)  Ps. —    Ps. 969,195,936 

Land and buildings

  62,584,189   4,429,433   (3,987,671)   8,874   (5,904,499)   —     57,130,326 

Other assets

  150,315,807   25,268,252   (13,377,798)   2,578   (12,399,702)   —     149,809,137 

Construction in process and advances plant suppliers (1)

  74,121,374   92,285,397   (76,978,798)   1,379   (8,336,823)   —     81,092,529 

Spare parts for operation of the network

  26,591,598   49,380,349   (44,626,488)   1,939   (2,902,869)   —     28,444,529 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total

  1,303,278,914   240,263,874   (140,581,001)   143,016   (117,432,346)   —     1,285,672,457 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Accumulated depreciation

       

Network in operation and equipment

  552,345,509   —     (28,712,096)   —     (67,907,227)   104,279,361   560,005,547 

Buildings

  10,655,285   —     (2,311,442)   —     (2,157,996)   2,625,102   8,810,949 

Other assets

  63,359,529   —     (2,418,837)   —     (6,579,983)   22,172,785   76,533,494 

Spare parts for operation of the network

  575,393   —     (160,696)   —     (131,429)   38,479   321,747 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total

 Ps.626,935,716  Ps.—    Ps.(33,603,071)   Ps.       —    Ps.(76,776,635)  Ps.129,115,727  Ps.645,671,737 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net Cost

 Ps.676,343,198  Ps.240,263,874  Ps.(106,977,930)   Ps.143,016  Ps.(40,655,711)  Ps.(129,115,727)  Ps.640,000,720 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

  At December 31,
2018		  Additions  Retirements  Business
combinations		  Effect of
translation of
foreign
subsidiaries and
hyperinflation
adjustment		  Depreciation
for
the year		  At December 31,
2019		 

Cost

       

Network in operation and equipment

 Ps. 969,195,936  Ps.82,992,062  Ps.(13,417,360)  Ps.9,572,805   Ps.(57,669,840)  Ps.—    Ps.990,673,603

Land and buildings

  57,130,326   1,530,677   (4,025,222)   115,935   (3,950,463)   —     50,801,253 

Other assets

  149,809,137   26,881,611   (7,594,735)   1,021,051   (7,776,500)   —     162,340,564 

Construction in process and advances plant suppliers (1)

  81,092,529   82,640,305   (76,892,011)   209,790   (5,511,439)   —     81,539,174 

Spare parts for operation of the network

  28,444,529   44,776,904   (36,525,735)   —     (2,462,605)   —     34,233,093 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total

  1,285,672,457   238,821,559   (138,455,063)   10,919,581   (77,370,847)   —     1,319,587,687 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Accumulated depreciation

       

Network in operation and equipment

  560,005,547   —     (24,954,514)   —     (47,778,627)   93,097,695   580,370,101 

Buildings

  8,810,949   —     (287,072)   —     (1,386,974)   2,330,405   9,467,308 

Other assets

  76,533,494   —     (695,425)   —     (4,754,982)   19,249,104   90,332,191 

Spare parts for operation of the network

  321,747   —     (283,986)   —     (79,226)   116,182   74,717 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total

 Ps.645,671,737  Ps.—    Ps.(26,220,997)  Ps.—     Ps.(53,999,809)  Ps.114,793,386  Ps.680,244,317
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net Cost

 Ps. 640,000,720  Ps.238,821,559  Ps.(112,234,066)  Ps.10,919,581   Ps.(23,371,038)  Ps.(114,793,386)  Ps.639,343,370
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

  At
December 31,
2019		  Additions  Retirements  Business
combinations		  Revaluation
adjustments		  Transfers  Effect of
translation of
foreign
subsidiaries
and
hyperinflation
adjustment		  Depreciation
for
the year		  At
December 31,
2020		 

Cost

         

Network in operation and equipment

 Ps.990,673,603 Ps.90,387,449  Ps.(19,574,391)  Ps.996,974  Ps.107,152,628  Ps.(62,050,212)  Ps.(49,993,808)  Ps.—    Ps.1,057,592,243

Land and buildings

  50,801,253   570,062   (2,853,037)   —     —     —     369,300   —     48,887,578 

Other assets

  162,340,564   17,474,218   (14,454,598)   55,848   —     —     (8,393,187)   —     157,022,845 

Construction in process and advances plant suppliers (1)

  81,539,174   59,635,316   (68,661,847)   1,099   —     —     (5,011,829)   —     67,501,913 

Spare parts for operation of the network

  34,233,093   30,721,413   (37,829,818)   —     —     —     (2,328,430)   —     24,796,258 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total

  1,319,587,687   198,788,458   (143,373,691)   1,053,921   107,152,628   (62,050,212)   (65,357,954)   —     1,355,800,837 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Accumulated depreciation

         

Network in operation and equipment

  580,370,101   —     (25,726,856)   —     —     (62,050,212)(2)   (58,055,450)   96,729,723   531,267,306 

Buildings

  9,467,308   —     (1,663,796)   —     —     —     (622,253)   1,906,140   9,087,399 

Other assets

  90,332,191   —     (9,317,821)   —     —     —     (5,120,175)   16,549,822   92,444,017 

Spare parts for operation of the network

  74,717   —     (176,131)   —     —     —     38,898   135,000   72,484 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total

 Ps.680,244,317 Ps.—    Ps.(36,884,604)  Ps.—    Ps.—    Ps.(62,050,212)  Ps.(63,758,980)  Ps.115,320,685  Ps.632,871,206 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net Cost

 Ps.639,343,370 Ps.198,788,458  Ps.(106,489,087)  Ps.1,053,921  Ps.107,152,628  Ps.—    Ps.(1,598,974)  Ps.(115,320,685)  Ps.722,929,631 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

  
At December 31,
2018
  
Additions
  
Retirements
  
Business
combinations
  
Effect of
translation of
foreign
subsidiaries and
hyperinflation
adjustment
  
Depreciation
for
the year
  
At December 31,
2019
 
Cost
                            
Network in operation and equipment
 Ps.969,195,936  Ps.82,992,062  Ps.(13,417,360)  Ps.9,572,805  Ps.(57,669,840)  Ps.—    Ps.990,673,603 
Land and buildings
  57,130,326   1,530,677   (4,025,222)   115,935   (3,950,463)   —     50,801,253 
Other assets
  149,809,137   26,881,611   (7,594,735)   1,021,051   (7,776,500)   —     162,340,564 
Construction in process and advances plant suppliers
(1)
  81,092,529   82,640,305   (76,892,011)   209,790   (5,511,439)   —     81,539,174 
Spare parts for operation of the network
  28,444,529   44,776,904   (36,525,735)   0     (2,462,605)   —     34,233,093 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total
  1,285,672,457   238,821,559   (138,455,063)   10,919,581   (77,370,847)   —     1,319,587,687 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Accumulated depreciation
                            
Network in operation and equipment
  560,005,547   —     (24,954,514)   —     (47,778,627)   93,097,695   580,370,101 
Buildings
  8,810,949   —     (287,072)   —     (1,386,974)   2,330,405   9,467,308 
Other assets
  76,533,494   —     (695,425)   —     (4,754,982)   19,249,104   90,332,191 
Spare parts for operation of the network
  321,747   —     (283,986)   —     (79,226)   116,182   74,717 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total
 Ps.645,671,737  Ps.—    Ps.(26,220,997)  Ps.—    Ps.(53,999,809)  Ps.114,793,386  Ps.680,244,317 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net Cost
 Ps.640,000,720  Ps.238,821,559  Ps.(112,234,066)  Ps.10,919,581  Ps.(23,371,038)  Ps.(114,793,386)  Ps.639,343,370 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
F-
44
Table of Contents
  
At December 31,
2019
  
Additions
  
Retirements
  
Business
combinations
  
Revaluation
adjustments
  
Transfers
  
Effect of
translation of
foreign
subsidiaries and
hyperinflation
adjustment
  
Depreciation
for
the year
  
At December 31,
2020
 
Cost
                           
Network in operation and equipment
 Ps.990,673,603  Ps.90,387,449  Ps.
(19,574,391
)  Ps.996,974  Ps.107,152,628  Ps.
(62,050,212
)  Ps.(49,993,808)  Ps.—    Ps.1,057,592,243 
Land and buildings
  50,801,253   570,062   (2,853,037)   —     —     —     369,300   —     48,887,578 
Other assets
  162,340,564   17,474,218   (14,454,598)   55,848   —     —     (8,393,187)   —     157,022,845 
Construction in process and advances plant suppliers
(1)
  81,539,174   59,635,316   (68,661,847)   1,099   —     —     (5,011,829)   —     67,501,913 
Spare parts for operation of the network
  34,233,093   30,721,413   (37,829,818)   —     —     —     (2,328,430)   —     24,796,258 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total
  1,319,587,687   198,788,458   (143,373,691)   1,053,921   107,152,628   (62,050,212)   (65,357,954)   —     1,355,800,837 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Accumulated depreciation
                                    
Network in operation and equipment
  580,370,101   —     (25,726,856)   —     —     (62,050,212
)
(
2
)
 
  (58,055,450)   96,729,723   531,267,306 
Buildings
  9,467,308   —     (1,663,796)   —     —     —     (622,253)   1,906,140   9,087,399 
Other assets
  90,332,191   —     (9,317,821)   —     —     —     (5,120,175)   16,549,822   92,444,017 
Spare parts for operation of the network
  74,717   —     (176,131)   —     —     —     38,898   135,000   72,484 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total
 Ps.680,244,317  Ps.—    Ps.(36,884,604)  Ps.—    Ps.—    Ps.(62,050,212)  Ps.(63,758,980)  Ps.115,320,685  
P
 
s

  632,871,206

 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
 
Net Cost
 Ps.639,343,370  Ps.198,788,458  Ps.(106,489,087)  Ps.1,053,921  Ps.107,152,628  .
—    Ps.(1,598,974)  Ps.(115,320,685)  Ps.722,929,631 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
  
At

December 31,
2020
  
Additions
  
Retirements 
(3)
  
Business
combinations
  
Transfers
  
Effect of
translation of
foreign
subsidiaries and
hyperinflation
adjustment
  
Depreciation
for
the year
  
At December 31,
2021
 
Cost
                                
Network in operation and equipment
 
Ps.
1,057,592,243
  
Ps.
89,696,150
 
 
Ps.
(45,044,049
) 
 
Ps.
0  
 
 
Ps.
53,531,590
 
 
Ps.
(44,061,097
) 
 
Ps.
—  
 
 
Ps
.
1,111,714,837
 
Land and buildings
 
 
48,887,578
 
 
 
784,460
 
 
 
(473,785
) 
 
 
—  
  
 
38,250
  
 
(1,216,894
) 
 
 
—  
 
 
 
48,019,609
 
Other assets
 
 
157,022,845
 
 
 
10,782,903
  
 
(11,994,756
)
 
 
0  
  
 
(1,800,756
)
 
 
(1,870,104
)
 
 
—  
 
 
 
152,140,132
 
Construction in process and advances plant suppliers
(1)
 
 
67,501,913
 
 
 
83,366,813
  
 
(47,178,796
)
 
 
0  
  
 
(38,944,421
)
 
 
(1,420,843
) 
 
 
—  
 
 
 
63,324,666
 
Spare parts for operation of the network
 
 
24,796,258
 
 
 
46,909,494
  
 
(23,108,928
)
 
 
—  
  
 
(13,824,767
)
 
 
(974,011
) 
 
 
—  
 
 
 
33,798,046
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total
 
 
1,355,800,837
 
 
 
231,539,820
  
 
(127,800,314
)
 
 
0  
  
 
(1,000,104
)
 
 
(49,542,949
)
 
 
—  
 
 
 
1,408,997,290
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Accumulated depreciation
                                
Network in operation and equipment
 
 
531,267,306
 
 
 
—  
  
 
(24,322,904
)
 
 
—  
  
 
638,066
  
 
(30,254,288
)
 
 
97,343,878
  
 
574,672,058
 
Buildings
 
 
9,087,399
 
 
 
—  
  
 
(219,030
)
 
 
—  
  
 
(221,937
)
 
 
(738,748
) 
 
 
1,941,819
  
 
9,849,503
 
Other assets
 
 
92,444,017
 
 
 
—  
  
 
(10,522,319
)
 
 
—  
  
 
549,855
  
 
(2,522,458
)
 
 
13,310,584
 
 
 
93,259,679
 
Spare parts for operation of the network
 
 
72,484
 
 
 
—  
  
 
(92,421
)
 
 
—  
  
 
—  
  
 
(26,823
) 
 
 
66,131
  
 
19,371
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total
 
Ps
632,871,206
 
 
Ps
.
—  
  
Ps.
(35,156,674
) 
 
Ps.
—  
 
 
Ps.
(965,984
) 
 
Ps
.
(33,542,317
) 
 
Ps.
112,662,412
 
 
Ps
.
677,800,611
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net Cost
 
Ps
.
722,929,631
 
 
Ps
.
231,539,820
 
 
Ps
.
(92,643,640
) 
 
Ps.
0  
 
 
Ps.
(1,966,088
) 
 
Ps.
(16,000,632
)
 
 
Ps
.
(112,662,412
) 
 
Ps
.
731,196,679
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
(1)

Construction in progress includes fixed and mobile network facilities as well as satellite developments and fiber optic which is in the process of being installed.

(2)

This transfer relates to the accumulated depreciation as at the revaluation date that was eliminated against the gross carrying amount of the revalued asset.

(3)
Includes disposals related to the sale of TracFone. See Note 2Ac.
The completion period of construction in progress is variable and depends upon the type of plant and equipment under construction.

b) Revaluation of telecommunicationst
e
lecommunications towers

The Fair value of the passive infrastructure of telecommunications towers was determined using the ”income“income approach” method through a discounted flow model (DFC) where, among others, inputs such as average rents per tower were used, contract term and discount rates considering market information.

As of December 31, 2020 and 2021, date of the revaluation, the fair values of the passive infrastructure of the telecommunications towers were determinateddeterminate by a valuation specialist with experience in the industry. The complement for the revaluation of the passive infrastructure of the telecommunications towers amounted to Ps.107,152,628Ps.
107,152,628 and 98,172,675, respectively, and was recognized in OCI, the change in revaluation did not have an impact on the results of
during 2020. For
the year due
ended
as of December 31, 2021 the impact amounted to depreciation effects since the change occurred on effective date 31 December 2020.

Ps. 6,450,825.

F-4
5
Table of Contents
The information to be disclosed on the fair value measurement for the revalued telecommunications towers is provided in Note 19.

2020

Book value as of December 31, 2020 (cost model)

Ps.615,777,003

Supplement for change in accounting policy

107,152,628

Book value and fair value as of December 31, 2020 (revaluation model)

722,929,631

   2020   
2021
 
Book value as of December 31, (cost model)
  
Ps.

615,777,003   
Ps.
633,024,004
 
Supplement for change in accounting policy
   107,152,628   
 
98,172,675
 
   
 
 
   
 
 
 
Book value and fair value as of December 31, (revaluation model)
  Ps.722,929,631   
Ps.
731,196,679
 
   
 
 
   
 
 
 
c) Relevant information related to the computation of the capitalized borrowing costs is as follows:

   Year ended December 31, 
   2018  2019  2020 

Amount invested in the acquisition of qualifying assets

  Ps.45,456,630  Ps.50,783,957  Ps.46,528,232 

Capitalized interest

   2,020,288   2,233,358   1,771,613 

Capitalization rate

   4.4%   4.4%   3.8% 

   
Year ended December 31,
 
   2019   2020   
2021
 
Amount invested in the acquisition of qualifying assets
   Ps. 50,783,957    Ps. 46,528,232    
Ps. 38,573,605
 
Capitalized interest
   2,233,358    1,771,613   
 
1,527,259
 
Capitalization rate
   4.4%   3.8%  
 
4.0
%
Capitalized interest is being amortized over a period of estimated useful life of the related assets.


11. Intangible assets, net and goodwill

a)
An analysis of intangible assets at December 31, 2018, 2019, 2020 and 20202021 is as follows:

  For the year ended December 31, 2018 
  Balance at
beginning of
year		  Acquisitions  Acquisitions
in business
combinations		  Disposals and
other		  Amortization
of the year		  Effect of
translation of
foreign
subsidiaries
and
Hyperinflation
adjustment		  Balance at end
of year		 

Licenses and rights of use

 Ps. 247,413,824  Ps.4,227,244  Ps.—    Ps.1,508,274  Ps.—    Ps.(19,670,368)  Ps.233,478,974 

Accumulated amortization

  (134,109,438)   —     —     (1,005,877)   (11,347,089)   16,281,825   (130,180,579) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net

  113,304,386   4,227,244   —     502,397   (11,347,089)   (3,388,543)   103,298,395 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Trademarks

  28,779,212   159,958   6,631   —     —     (738,635)   28,207,166 

Accumulated amortization

  (18,841,405)   —     —     —     (4,973,602)   275,046   (23,539,961) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net

  9,937,807   159,958   6,631   —     (4,973,602)   (463,589)   4,667,205 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Customer relationships

  26,985,714   74,637   15,556   —     —     (1,532,839)   25,543,068 

Accumulated amortization

  (16,129,495)   —     —     —     (3,754,312)   1,122,270   (18,761,537) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net

  10,856,219   74,637   15,556   —     (3,754,312)   (410,569)   6,781,531 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Software licenses

  15,055,598   2,004,550   3,006   (905,610)   —     (1,848,286)   14,309,258 

Accumulated amortization

  (7,815,161)   —     —     2,677,848   (3,491,629)   924,139   (7,704,803) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net

  7,240,437   2,004,550   3,006   1,772,238   (3,491,629)   (924,147)   6,604,455 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Content rights

  6,717,442   850,779   —     —     —     (18,512)   7,549,709 

Accumulated amortization

  (4,516,665)   —     —     —     (2,231,978)   (14,949)   (6,763,592) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net

  2,200,777   850,779   —     —     (2,231,978)   (33,461)   786,117 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total of intangibles, net

 Ps.143,539,626  Ps.7,317,168  Ps.25,193  Ps.2,274,635  Ps.(25,798,610)  Ps.(5,220,309)  Ps.122,137,703 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Goodwill

 Ps. 151,463,232  Ps.—    Ps.334,739  Ps.(1,094,861)   —    Ps.(5,136,613)  Ps.145,566,497 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

  For the year ended December 31, 2019 
  Balance at
beginning of
year		  Acquisitions  Acquisitions
in business
combinations		  Disposals and
other		  Amortization
of the year		  Effect of
translation of
foreign
subsidiaries
and
Hyperinflation
adjustment		  Balance at end
of year		 

Licenses and rights of use

 Ps. 233,478,974  Ps.13,206,877  Ps.7,844,339 Ps.7,286,114  Ps.—    Ps.(15,715,442)  Ps. 246,100,862 

Accumulated amortization

  (130,180,579)   —     —     (2,391,624)   (11,577,160)   9,481,480   (134,667,883) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net

  103,298,395   13,206,877   7,844,339   4,894,490   (11,577,160)   (6,233,962)   111,432,979 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Trademarks

  28,207,166   53,467   —     (6,012)   —     (835,613)   27,419,008 

Accumulated amortization

  (23,539,961)   —     —     —     (1,008,483)   618,145   (23,930,299) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net

  4,667,205   53,467   —     (6,012)   (1,008,483)   (217,468)   3,488,709 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Customer relationships

  25,543,068   20,248   —     5,507   —     (2,693,812)   22,875,011 

Accumulated amortization

  (18,761,537)   —     —     —     (3,371,924)   2,357,831   (19,775,630) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net

  6,781,531   20,248   —     5,507   (3,371,924)   (335,981)   3,099,381 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Software licenses

  14,309,258   2,729,480   —     (949,858)   —     (2,984,770)   13,104,110 

Accumulated amortization

  (7,704,803)   —     —     (1)   (2,479,088)   2,183,149   (8,000,743) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net

  6,604,455   2,729,480   —     (949,859)   (2,479,088)   (801,621)   5,103,367 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Content rights

  7,549,709   1,427,694   —     1,638,007   —     (455,228)   10,160,182 

Accumulated amortization

  (6,763,592)   —     —     (8,720)   (1,772,779)   429,862   (8,115,229) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net

  786,117   1,427,694   —     1,629,287   (1,772,779)   (25,366)   2,044,953 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total of intangibles, net

 Ps.122,137,703  Ps.17,437,766  Ps.7,844,339  Ps.5,573,413  Ps.(20,209,434)  Ps.(7,614,398)  Ps.125,169,389 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Goodwill

 Ps. 145,566,497  Ps.—    Ps.10,869,571  Ps.(843,005)   —    Ps.(2,693,262)  Ps.152,899,801 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

  For the year ended December 31, 2019 
  Balance at
beginning of
year		  Acquisitions  Acquisitions
in business
combinations		  Disposals and
other		  Amortization
of the year		  Effect of
translation of
foreign
subsidiaries
and
Hyperinflation
adjustment		  Balance at end
of year		 
Licenses and rights of use
 Ps.233,478,974  
Ps.
13,206,877  Ps.7,844,339  Ps.7,286,114  Ps.—    Ps.(15,715,442)  Ps.246,100,862 
Accumulated amortization
  (130,180,579)   —     —     (2,391,624)   (11,577,160)   9,481,480   (134,667,883) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net
  103,298,395   13,206,877   7,844,339   4,894,490   (11,577,160
)
 
  (6,233,962
)
 
  111,432,979 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Trademarks
  28,207,166   53,467   
— 
 
   (6,012
)
 
  
—
  
   (835,613
)
 
  27,419,008 
Accumulated amortization
  (23,539,961
)
 
  0
  
   
—
  
   0
  
   (1,008,483
)
 
  618,145   (23,930,299) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net
  4,667,205   53,467   
—
  
   (6,012
)
 
  (1,008,483
) 
  (217,468
)
 
  3,488,709 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Customer relationships
  25,543,068   20,248   
—  
   5,507   
—
  
   (2,693,812
)
 
  22,875,011 
Accumulated amortization
  (18,761,537
)
 
  0
  
   
—
  
   0
  
   (3,371,924)   2,357,831   (19,775,630) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net
  6,781,531   20,248   
— 
 
   5,507   (3,371,924)   (335,981
)
 
  3,099,381 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Software licenses
  14,309,258   2,729,480   
—
  
   (949,858
) 
  0
  
   (2,984,770
)
 
  13,104,110 
Accumulated amortization
  (7,704,803
)
 
  0
 
 
   
—
  
   (1
)
 
  (2,479,088
)
 
  2,183,149   (8,000,743
)
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net
  6,604,455   2,729,480   
—
  
   (949,859
)
 
  (2,479,088
)
 
  (801,621
)
 
  5,103,367 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Content rights
  7,549,709   1,427,694   
— 
 
   1,638,007   
—
  
   (455,228
)
 
  10,160,182 
Accumulated amortization
  (6,763,592
)
 
  
— 
 
   
—
  
   (8,720
)
 
  (1,772,779
)
 
  429,862   (8,115,229
)
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net
  786,117   1,427,694   
—
  
   1,629,287   (1,772,779
)
 
  (25,366
)
 
  2,044,953 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total of intangibles, net
 
Ps.
122,137,703  
Ps.
17,437,766  Ps.7,844,339  Ps.5,573,413  Ps.(20,209,434)  Ps.(7,614,398)  Ps.125,169,389 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Goodwill
 
Ps.
145,566,497  
Ps
.
—    Ps.10,869,571  Ps.(843,005)   —    Ps.(2,693,262)  Ps.152,899,801 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 

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Table of Contents
   For the year ended December 31, 2020 
   Balance at
beginning of
year		  Acquisitions   Acquisitions
in business
combinations		  Disposals and
other		  Amortization
of the year		  Effect of
translation of
foreign
subsidiaries
and
Hyperinflation
adjustment		  Balance at end
of year		 
Licenses and rights of use
 Ps.246,100,862  Ps.15,079,714  Ps.4,436,313  Ps.1,502,981  Ps.—    Ps.(14,029,709)  Ps.253,090,161 
Accumulated amortization
  (134,667,883)   —     —     105,892   (14,274,497)   14,227,424   (134,609,064) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net
  111,432,979   15,079,714   4,436,313   1,608,873   (14,274,497)   197,715   118,481,097 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Trademarks
  27,419,008   162,309   12,110   4,000   —     1,534,938   29,132,365 
Accumulated amortization
  (23,930,299)   —     —     (4,276)   (300,727)   (1,119,645)   (25,354,947) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net
  3,488,709   162,309   12,110   (276)   (300,727)   415,293   3,777,418 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Customer relationships
  22,875,011   1,935   2,689,718   (5,763)   —     4,018,365   29,579,266 
Accumulated amortization
  (19,775,630)   —     —     855   (1,654,237)   (3,996,593)   (25,425,605) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net
  3,099,381   1,935   2,689,718   (4,908)   (1,654,237)   21,772   4,153,661 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Software licenses
  13,104,110   2,445,784   36   (2,485,429)   —     4,236,645   17,301,146 
Accumulated amortization
  (8,000,743)   —     —     2,013,617   (2,667,870)   (3,578,452)   (12,233,448) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net
  5,103,367   2,445,784   36   (471,812)   (2,667,870)   658,193   5,067,698 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Content rights
  10,160,182   1,570,415   —     (313,942)   —     619,657   12,036,312 
Accumulated amortization
  (8,115,229)   —     —     —     (1,440,749)   (503,241)   (10,059,219) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net
  2,044,953   1,570,415   —     (313,942)   (1,440,749)   116,416   1,977,093 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total of intangibles, net
 Ps.125,169,389  Ps.19,260,157  Ps.7,138,177  Ps.817,935  Ps.(20,338,080)  Ps.1,409,389  Ps.133,456,967 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Goodwill
 Ps.152,899,801  Ps.—    Ps.(7,014,120)  Ps.(537,343)  Ps.—    Ps.(2,295,479)  Ps.143,052,859 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 

  For the year ended December 31, 2021 
  Balance at
beginning of
year		  Acquisitions  Disposals and
other		  Amortization
of the year		  Effect of
translation of
foreign
subsidiaries
and
Hyperinflation
adjustment		  Balance at end
of year		 
Licenses and rights of use
 
Ps.
 
253,090,161
 
 
Ps.
 
24,406,905
 
 
Ps.
 
(4,427,685
) 
 
Ps.
 
—  
 
 
Ps.
 
(7,011,691
) 
 
Ps.
 
266,057,690
 
Accumulated amortization
 
 
(134,609,064
) 
 
 
—  
 
 
 
6,764,067
 
 
 
(14,682,451
) 
 
 
6,737,503
 
 
 
(135,789,945
) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net
 
 
118,481,097
 
 
 
24,406,905
 
 
 
2,336,382
 
 
 
(14,682,451
) 
 
 
(274,188
) 
 
 
130,267,745
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Trademarks
(1)
 
 
29,132,365
 
 
 
75,100
 
 
 
(1,129,666
) 
 
 
—  
 
 
 
(401,946
) 
 
 
27,675,853
 
Accumulated amortization
 
 
(25,354,947
) 
 
 
—  
 
 
 
802,717
 
 
 
(140,205
) 
 
 
308,745
 
 
 
(24,383,690
) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net
 
 
3,777,418
 
 
 
75,100
 
 
 
(326,949
) 
 
 
(140,205
) 
 
 
(93,201
) 
 
 
3,292,163
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Customer relationships
(1)
 
 
29,579,266
 
 
 
229,936
 
 
 
(4,133,408
) 
 
 
—  
 
 
 
(1,105,668
) 
 
 
24,570,126
 
Accumulated amortization
 
 
(25,425,605
) 
 
 
—  
 
 
 
3,830,742
 
 
 
(707,500
) 
 
 
1,093,401
 
 
 
(21,208,962
) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net
 
 
4,153,661
 
 
 
229,936
 
 
 
(302,666
) 
 
 
(707,500
) 
 
 
(12,267
) 
 
 
3,361,164
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Software licenses
 
 
17,301,146
 
 
 
2,660,330
 
 
 
(3,484,755
) 
 
 
—  
 
 
 
(1,225,585
) 
 
 
15,251,136
 
Accumulated amortization
 
 
(12,233,448
) 
 
 
(626
) 
 
 
3,482,440
 
 
 
(2,738,978
) 
 
 
1,052,938
 
 
 
(10,437,674
) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net
 
 
5,067,698
 
 
 
2,659,704
 
 
 
(2,315
) 
 
 
(2,738,978
) 
 
 
(172,647
) 
 
 
4,813,462
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Content rights
 
 
12,036,312
 
 
 
818,436
 
 
 
(281,747
) 
 
 
—  
 
 
 
429,319
 
 
 
13,002,320
 
Accumulated amortization
 
 
(10,059,219
) 
 
 
—  
 
 
 
(147,668
) 
 
 
(899,666
) 
 
 
(404,537
) 
 
 
(11,511,090
) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net
 
 
1,977,093
 
 
 
818,436
 
 
 
(429,415
) 
 
 
(899,666
) 
 
 
24,782
 
 
 
1,491,230
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total of intangibles, net
 Ps.
133,456,967
 
 Ps.28,190,081
 
 Ps.1,275,037
 
 Ps.(19,168,800
) 
 Ps.(527,521
) 
 Ps.143,225,764
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Goodwill
(1)
 Ps.143,052,859
 
 Ps.
—  
 
 Ps.(3,516,287) Ps.
—  
 
 Ps.(2,958,378) Ps.136,578,194
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
(1) 
Includes disposals related to the sale of TracFone. See
Note
2Ac. 

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Table of Contents
b) The aggregate carrying amount of goodwill is allocated as follows:

   2019   2020 

Europe

  Ps.  52,950,325   Ps.  53,388,139 

Brazil

   28,062,398    18,730,686 

Puerto Rico

   17,463,394    17,463,394 

Dominican Republic

   14,186,723    14,186,723 

Colombia

   12,124,685    12,253,743 

México

   10,148,380    10,148,380 

Peru

   2,739,947    2,710,979 

Chile

   2,364,816    2,558,098 

El Salvador

   2,499,552    2,499,544 

United States (Tracfone)

   3,220,105    3,362,900 

Ecuador

   2,155,384    2,155,384 

Guatemala

   3,245,613    2,301,533 

Other countries

   1,738,479    1,293,356 
  

 

 

   

 

 

 
  Ps.152,899,801  Ps.143,052,859 
  

 

 

   

 

 

 

   2020   
2021
 
Europe
   Ps
.
 
 
53,388,139		   
 
Ps
.
 
 
52,307,190
 
Brazil
   18,730,686   
 
18,017,916
 
Puerto Rico
   17,463,394   
 
17,463,394
 
Dominican Republic
   14,186,723   
 
14,186,723
 
Colombia
   12,253,743   
 
11,685,585
 
México
   10,148,380   
 
10,164,814
 
Peru
   2,710,979   
 
2,532,770
 
Chile
   2,558,098   
 
2,311,239
 
El Salvador
   2,499,544   
 
2,510,595
 
United States (Tracfone)
 
(3)
   3,362,900   
 
0  
 
Ecuador
   2,155,384   
 
2,155,384
 
Guatemala
   2,301,533   
 
1,947,203
 
Other countries
   1,293,356   
 
1,295,381
 
   
 
 
   
 
 
 
    Ps.143,052,859   
 
Ps.136,578,194
 
   
 
 
   
 
 
 

c) The following is a description of the major changes in the “Licenses and rights of use” caption during the years ended December 31, 2018, 2019, 2020 and 2020:

2018 Acquisitions

i) In December, Dominican Republic acquired radio spectrum totaling Ps.709,829 (RD$ 1,831,427) with a useful life of 11 years.

2021:

ii) Additionally, in 2018, the Company acquired other licenses in Paraguay, Puerto Rico, Europe, Argentina, Chile and others countries in the amount of Ps.3,517,415.

2019 Acquisitions

i) In 2019, Claro Brasil increased its licenses value by Ps.3,457,251Ps.
3,457,251 by renewal licenses Anatel and reversion of IRU of Telxus referring to ICMS.

ii) In 2019,
AMX’s subsidiary in
Austria acquired licenses to operate certain frequencies for Ps.3,023,732,Ps.
3,023,732, (3.5 GHz; EUR 64.3 mn), Belarus (2.1 GHz; EUR 9.5 mn) and Croatia (2.1 GHz; EUR 7.2 mn).

iii) In 2019, Telmex increased its licenses value by Ps.459,668Ps.
459,668 for rights to use IFETEL with a validity of 20 years, and a right to use submarine cable with a validity of 10 years.

iv) In January 2019, Telcel acquired licenses for an amount of Ps.1,649,525 for PC´s 98 concessions titles and September 30, 2019 for 400 MHZ concessions titles.

v) In December 2019, Comcel increased its licenses value by Ps.2,753,768Ps.
2,753,768 or (468,511,573,375 Colombian pesos) in accordance with Res.3386 of December 23, granted Claro (Comcel) the 20 years renewal of 10 MHz of spectrum in the 1900 MHz band.

vi) Additionally, in 2019, the Company acquired other licenses in Puerto Rico, Argentina, Guatemala, Panamá and other countries in the amount of Ps.1,862,934.

Ps.

1,862,934.
2020 Acquisitions

i) In February 2020, Comcel increased its licenses value by Ps.9,246,825Ps.
9,246,825 for an auction of the 30 Mhz spectrum in the 2,500 band for a period of 20 years in accordance with resolution. 325,326 and 327 of February 20, 2020 issued by the Ministry of Information and Communication (MINTIC)

ii) In 2020, Telcel acquired licenses for an amount Ps.1,806,875Ps.
1,806,875 for Axtel and Ultra Vision concession titles valid from 2020 to 2040.

iii) In January 2020, CTE acquired licenses by Ps.620,052Ps.
620,052 for 12 pairs of frequencies, advance payment of Advanced Wireless Services (AWS) band and complementary payment of AWS band of block 4.

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8
Table of Contents
iv) In 2020, TAG acquired licenses for the right of us for Ps.1,704,280,Ps.
1,704,280, in Slovenia and VIP Movil 1940E.

v) Additionally, in 2020, the Company acquired other licenses in Puerto Rico, Argentina, Uruguay, Honduras, Paraguay, Brasil and other countries in the amount of Ps.1,701,682.

Ps.
1,701,682.
2021 Acquisitions
i) In December the subsidiary Claro Brasil acquired a 5G license for
Ps.
17,789,163
carried out by ANATEL in November 2021, for the sale of radio frequency bands. The total amount of this license was recorded in the intangibles line on December 31, 2021. 
ii) During the year, AMX’s subsidiary in Austria acquired licenses for
 Ps.
1,752,128
.
iii) In November, AMX’s subsidiary in the Dominican Republic acquired a 5G concession and right of operation until
 2041 for an amount of Ps.
2,008,503
.

iv) AMX’s subsidiary in Colombia renewed spectrum at 5 MHZ in the 1900 MHZ band for an amount of
Ps.
1,599,473
according to resolution 2802 of October 2021, and made acquisitions of terrestrial fiber optics and submarine cable valid for
2 and 3 years
.
v) In February 2021, AMX’s subsidiary in El Salvador acquired licenses for an amount of 
Ps.139,363
.
The concession is for 10 MHZ in the 1,900 mobile network bandwidth coverage in the national territory, exploitable as of February 28, 2021 with validity of
 20 years.
vi) In February 2021, AMX’s subsidiary in Chile acquired a concession for 
Ps.
411,375 for
 the Concession of Band 1900 MHZ with a term 
of 10 years.
Additionally, in 2021, the Company acquired other licenses in Mexico, Guatemala, Brazil, Ecuador, Peru, Argentina and other countries for an amount of
Ps.
706,900
Amortization of intangibles for the years ended December 31, 2018, 2019, 2020 and 20202021 amounted to Ps.25,798,610, Ps.20,209,434Ps.
20,209,434, Ps.
20,338,080 and Ps.20,338,080,Ps.
19,168,800 respectively.

Some of the jurisdictions in which the Company operates can revoke their concessions under certain circumstances such as imminent danger to national security, national economy and natural disasters.

12. Business combinations, acquisitions and non-controlling interest

a)
The following is a description of the major acquisitions of investments in associates and subsidiaries during the years ended December 31, 20192020 and 2020:

Acquisitions 2019

a) On January 24, 2019, the Company acquired 100% of Telefónica Móviles Guatemala, S.A (“Telefónica Guatemala”) from Telefónica S.A. and certain of its affiliates. The acquired company provides mobile and fixed telecommunications services, including voice, data and Pay TV. The final purchase price paid for the business acquisition was Ps.5,734,254, net of acquired cash. For the purchase accounting, the Company determined the fair value of Telefónica Guatemala´s identifiable assets and liabilities based on relative fair values. The purchase accounting is completed as of the date of the financial statements and the values of the assets acquired and liabilities assumed are as follows:

2019
amounts at the
acquisition date

Current assets

Ps.1,312,906

Other non-current assets

257,853

Intangible assets (excluding goodwill)

1,354,105

Property, plant and equipment

4,144,334

Rights-of-use

864,046

Total assets acquired

7,933,244

Accounts payable

1,248,470

Other liabilities

1,705,580

Total liabilities assumed

2,954,050

Fair value of assets acquired a liabilities assumed-net

4,979,194

Acquisition Price

6,174,330

Goodwill

Ps.1,195,136

b) On December 18, 2019, after receipt of the necessary approvals from local regulators, the Company completed the previously announced acquisition of 100% of Nextel Telecomunicações Ltda. and its subsidiaries (“Nextel Brazil”), from NII Holdings, Inc. and certain of its affiliates (“NII”) and AI Brazil Holdings B.V. Nextel Brazil provides nationwide mobile telecommunications services.

The aggregate purchase price was Ps.17,992,362, after making adjustments pursuant to the Purchase Agreement. After deducting Ps.9,325,712 of net debt, the net purchase consideration transferred at closing was Ps.6,905,539 net of acquired cash.

The net assets recognized in the 31 December 2019 financial statements were based on provisional amounts, the Company finished the Purchase Price allocation adjusting some values mainly for the spectrum licenses from the provisional goodwill, as a result the final goodwill was Ps.1,912,372.

2021:

The final amounts as of the date of the financial statement and the values of the assets acquired and liabilities assumed are as follows:

2019
amounts at the
acquisition date

Current assets

Ps. 6,366,943

Other non-current assets

5,970,810

Intangible assets (excluding goodwill)

12,914,175

Property, plant and equipment

5,147,093

Rights-of-use assets

8,086,655

Total assets acquired

38,485,676

Accounts payable

9,170,230

Other liabilities

22,504,097

Total liabilities assumed

31,674,327

Fair value of assets acquired a liabilities assumed-net

6,811,349

Purchase consideration transferred

8,723,721

Goodwill

Ps. 1,912,372

Acquisitions 2020

a) During 2020, the Company acquired through its subsidiaries, other entities for which it paid Ps.152,896,Ps.
152,896, net of acquired cash.

b) The Company acquired an additional non-controlling interest in its entities for an amount of Ps.1,104,662.

Ps.

1,104,662.
c) In December 2020, the offer submitted by our Brazilian subsidiary, Claro, jointly with Telefónica Brasil, S.A. and TIM, S.A. for the acquisition of the mobile business owned by Oi Group was accepted. The offer is in the amount of R$16.5 billion, of which Claro will pay 22%. In consideration of such amount, Claro will receive 32% of Oi Group’s mobile business customer base and approximately 4.7 thousand mobile access sites. The closing of the transaction is subject to customary conditions including regulatory approvals from Anatel and Conselho Administrativo de Defesa Econômica, CADE.


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Table of Contents
Acquisitions 2021
a) The Company acquired an additional non-controlling interest in its entities for an amount of Ps.7,720

Consolidated subsidiaries with non-controlling interests

The Company has control over Telekom Austria, which has a material non-controlling interest. Set out below is summarized information as of December 31, 20192020 and 20202021 of TKA’s consolidated financial statements.
The amounts disclosed for this subsidiary are before inter-company eliminations and using the same accounting policies of América Móvil.

Selected financial data from the consolidated statements of financial position

   December 31, 
   2019   2020 

Assets:

    

Current assets

   Ps.  29,516,038    Ps.  32,775,046 

Non-current assets

   137,724,390    150,747,947 
  

 

 

   

 

 

 

Total assets

   Ps.167,240,428    Ps.183,522,993 
  

 

 

   

 

 

 

Liabilities and equity:

    

Current liabilities

   Ps.  34,608,254    Ps.  49,942,415 

Non-current liabilities

   89,711,288    82,293,652 
  

 

 

   

 

 

 

Total liabilities

   124,319,542    132,236,067 

Equity attributable to equity holders of the parent

   21,864,132    26,129,649 

Non-controlling interest (1)

   21,056,754    25,157,277 
  

 

 

   

 

 

 

Total equity

   Ps.  42,920,886    Ps.  51,286,926 
  

 

 

   

 

 

 

Total liabilities and equity

   Ps.167,240,428    Ps.183,522,993 
  

 

 

   

 

 

 

   December 31, 
   2020   
2021
 
Assets:
          
Current assets
  Ps
.
32,775,046   
Ps.
39,781,192
 
Non-current assets
   150,747,947   
 
142,407,870
 
   
 
 
   
 
 
 
Total assets
  Ps.183,522,993   
Ps.
182,189,062
 
   
 
 
   
 
 
 
Liabilities and equity:
          
Current liabilities
  Ps.49,942,415   
Ps.
68,795,807
 
Non-current liabilities
   82,293,652   
 
58,312,238
 
   
 
 
   
 
 
 
Total liabilities
   132,236,067   
 
127,108,045
 
Equity attributable to equity holders of the parent
   26,129,649   
 
28,066,198
 
Non-controlling interest
   25,157,277   
 
27,014,819
 
   
 
 
   
 
 
 
Total equity
  Ps.51,286,926   
Ps.
55,081,017
 
   
 
 
   
 
 
 
Total liabilities and equity
  
Ps.

183,522,993   
Ps.
182,189,062
 
   
 
 
   
 
 
 
Summarized consolidated statements of comprehensive income

   For the year ended December 31, 
   2018   2019   2020 

Operating revenues

   Ps.100,716,444    Ps.98,420,289    Ps.111,472,191 

Operating costs and expenses

   95,984,880    89,732,428    98,312,325 
  

 

 

   

 

 

   

 

 

 

Operating income

   Ps.    4,731,564    Ps.  8,687,861    Ps.  13,159,866 
  

 

 

   

 

 

   

 

 

 

Net income

   Ps.    3,809,694    Ps.  5,051,145    Ps.    7,787,388 
  

 

 

   

 

 

   

 

 

 

Total comprehensive income

   Ps.    5,047,838    Ps.  1,466,783    Ps.  12,103,406 
  

 

 

   

 

 

   

 

 

 

Net income attributable to:

      

Equity holders of the parent

   Ps.    1,942,944    Ps.  2,565,733    Ps.    3,986,412 

Non-controlling interest

   1,866,750    2,485,412    3,800,976 
  

 

 

   

 

 

   

 

 

 
   Ps.    3,809,694    Ps.  5,051,145    Ps.    7,787,388 
  

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to:

      

Equity holders of the parent

   Ps.    2,574,397    Ps.    748,059    Ps.    6,172,737 

Non-controlling interest

   2,473,441    718,724    5,930,669 
  

 

 

   

 

 

   

 

 

 
   Ps.    5,047,838    Ps. 1,466,783    Ps.  12,103,406 
  

 

 

   

 

 

   

 

 

 

   
For the year ended December 31,
 
   2019   2020   
2021
 
Operating revenues
  Ps.98,420,289   Ps.111,472,191   
Ps.
113,838,487
 
Operating costs and expenses
   89,732,428    98,312,325   
 
98,346,896
 
   
 
 
   
 
 
   
 
 
 
Operating income
  Ps.8,687,861   Ps.13,159,866   
Ps.
15,491,591
 
   
 
 
   
 
 
   
 
 
 
Net income
  Ps.5,051,145   Ps.7,787,388   
Ps.
9,104,962
 
   
 
 
   
 
 
   
 
 
 
Total comprehensive income
  Ps.1,466,783   Ps.12,103,406   
Ps.
7,790,499
 
   
 
 
   
 
 
   
 
 
 
Net income attributable to:
               
Equity holders of the parent
  Ps.2,565,733   Ps.3,986,412   
Ps.
4,629,816
 
Non-controlling interest
   2,485,412    3,800,976   
 
4,475,146
 
   
 
 
   
 
 
   
 
 
 
   Ps.5,051,145   Ps.7,787,388   
Ps.
9,104,962
 
   
 
 
   
 
 
   
 
 
 
Comprehensive income attributable to:
               
Equity holders of the parent
  Ps.748,059   Ps.6,172,737   
Ps.
3,973,154
 
Non-controlling interest
   718,724    5,930,669   
 
3,817,345
 
   
 
 
   
 
 
   
 
 
 
   Ps.1,466,783   Ps.12,103,406   
Ps.
7,790,499
 
   
 
 
   
 
 
   
 
 
 
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13. Income Taxes

As explained previously in these consolidated financial statements, the Company is a Mexican corporation which has numerous consolidated subsidiaries operating in different countries. Presented below is a discussion of income tax matters that relates to the Company’s consolidated operations, its Mexican operations and significant foreign operations.

i)

Consolidated income tax matters

i)    Consolidated income tax matters
The composition of income tax expense (benefit) for the years ended December 31, 2018, 2019, 2020 and 20202021 is as follows:

   2018   2019   2020 

In Mexico:

      

Current year income tax

  Ps.28,572,414   Ps.26,295,431   Ps.13,407,948 

Deferred income tax

   (2,688,727)    208,658    (9,334,246) 

Foreign:

      

Current year income tax

   19,898,728    20,843,720    15,250,218 

Deferred income tax

   694,664    3,685,724    (2,957,768) 
  

 

 

   

 

 

   

 

 

 
  Ps.46,477,079   Ps.51,033,533   Ps.16,366,152 
  

 

 

   

 

 

   

 

 

 

   2019  2020  
2021
 
In Mexico:
    
Current year income tax
  Ps.26,295,431  Ps.13,407,948  
Ps.
24,355,240
 
Deferred income tax
   208,658   (9,334,246)  
 
(5,079,397
) 
Foreign:
             
Current year income tax
   19,830,227   12,319,690  
 
23,412,990
 
Deferred income tax
   3,579,739   (2,884,122)  
 
(14,544,064
) 
   
 
 
  
 
 
  
 
 
 
Total Income tax
  Ps.49,914,055  Ps.13,509,270  
Ps.
28,144,769
 
Income Tax attributable to a discontinued operation
             
Income tax discontinued operations in Mexico
(1)
   0     0     (26,294,422) 
Income tax discontinued operations Foreign
(1)
   (1,119,479)   (2,856,882)   (2,571,541) 
(1)
Includes effects related to the sale of Tracfone. See Note 2Ac.
Deferred tax related to items recognized in OCI during the year:

   For the years ended December 31, 
   2018   2019   2020 

Remeasurement of defined benefit plans

   Ps.   408,735    Ps.9,217,320    Ps.   4,151,600 

Equity investments at fair value

   1,613,667    (378,606)    (665,814) 

Other

   (8,922)    —      (35,670) 

Revaluation assets

   —      —      (29,922,597) 
  

 

 

   

 

 

   

 

 

 

Deferred tax benefit recognized in OCI

   Ps.2,013,480    Ps.8,838,714   Ps.(26,472,481) 
  

 

 

   

 

��

   

 

 

 

   
For the years ended December 31,
 
   2019   2020   
2021
 
Remeasurement of defined benefit plans
  Ps.9,217,320   Ps.4,151,600   
Ps.
(4,760,089
) 
Equity investments at fair value
   (378,606)    (665,814)   
 
583,892
 
Other
   0      (35,670)   
 
0  
 
Revaluation assets
   —      (29,922,597)   
 
0  
 
   
 
 
   
 
 
   
 
 
 
Deferred tax benefit recognized in OCI
  Ps.8,838,714   Ps.(26,472,481)   
Ps.
(4,176,197
) 
   
 
 
   
 
 
   
 
 
 
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Table of Contents
A reconciliation of the statutory income tax rate in Mexico to the consolidated effective income tax rate recognized by the Company is as follows:

   Year ended December 31, 
   2018  2019  2020 

Statutory income tax rate in Mexico

   30.0%   30.0%   30.0% 

Impact of non-deductible and non-taxable items:

    

Tax inflation effects

   7.3%   3.5%   6.1% 

Derivatives

   0.4%   (0.1%)   (0.7%) 

Employee benefits

   1.3%   1.8%   3.0% 

Other

   6.3%   1.8%   (2.4%) 
  

 

 

  

 

 

  

 

 

 

Effective tax rate on Mexican operations

   45.3%   37.0%   36.0% 

Tax recoveries in Brazil

   —     —     (9.3%) 

Dividends received from associates Equity

   (0.8%)   (0.4%)   (0.9%) 

Foreign subsidiaries and other non-deductible items, net

   1.5%   5.5%   (1.5%) 
  

 

 

  

 

 

  

 

 

 

Effective tax rate

   46.0%   42.1%   24.3% 
  

 

 

  

 

 

  

 

 

 

   
Year ended December 31,
 
   2019  2020  
2021
 
Statutory income tax rate in Mexico
   30.0%   30.0%  
 
30.0
% 
Impact of non-deductible and non-taxable items:
             
Tax inflation effects
   3.8%   8.6%  
 
7.9
% 
Derivatives
   (0.1%)   (1.0%)  
 
(0.9
%) 
Employee benefits
   2.0%   4.2%  
 
2.6
% 
Other
   2.0%   (3.4%)  
 
(2.9
%) 
   
 
 
  
 
 
  
 
 
 
Effective tax rate on Mexican operations
   37.7%   38.4%  
 
36.7
%
Tax recoveries in Brazil
   —     (13.2%)  
 
(10.8
%) 
Dividends received from associates Equity
   (0.5%)   (1.3%)  
 
(0.7
%)
Foreign subsidiaries and other non-deductible items, net
   8.0%   4.5%  
 
2.2
% 
   
 
 
  
 
 
  
 
 
 
Effective tax rate from continuing operations

   45.2%   28.4%  
 
27.4
% 
Effective tax rate from discontinued operations

   10.2%   14.4%  
 
19.2
% 
An analysis of temporary differences giving rise to the net deferred tax liability
assets
is as follows:

  

Consolidated statements

of financial position

  Consolidated statements of net income 
 2019  2020  2018  2019  2020 

Provisions

 Ps.17,964,305  Ps.19,312,081  Ps.1,841,705  Ps.(257,070)  Ps.4,458,848 

Deferred revenues

  5,820,260   6,748,101   3,632,051   (1,077,259)   897,762 

Tax losses carry forward

  26,630,407   25,121,933   (5,833,660)   (9,873)   2,236,244 

Property, plant and equipment (1)

  (11,962,544)   (39,459,549)   453,493   (461,594)   3,524,761 

Inventories

  1,787,065   (537,404)   81,270   (291,531)   (2,393,979) 

Licenses and rights of use (1)

  (3,399,931)   (5,177,924)   961,402   432,403   344,729 

Employee benefits

  41,743,744   45,467,827   1,128,209   (1,019,042)   422,473 

Other

  9,491,550   14,828,012   (270,407)   (1,210,417)   2,801,176 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net deferred tax assets

 Ps.88,074,856  Ps.66,303,077    
 

 

 

  

 

 

    

Deferred tax expense in net profit for the year

 

 Ps.1,994,063  Ps.(3,894,383)  Ps.12,292,014 
 

 

 

  

 

 

  

 

 

 

   
Consolidated statements
of financial position
  
Consolidated statements of net income
 
  2020  
2021
  2019  2020  
2021
 
Provisions
  
Ps.

19,312,081  
Ps.

18,038,607
 
 Ps.318,843  Ps.3,887,471  
Ps.
2,324,227
 
Deferred revenues
   6,748,101  
 
9,041,137
 
  (1,077,259)   897,762  
 
2,202,413
 
Tax losses carry forward
   25,121,933  
 
33,954,926
 
  (9,873)   2,236,244  
 
10,352,978
 
Property, plant and equipment 
(1)
   (39,459,549)  
 
(33,445,815
) 
  (1,067,307)  3,990,750  
 
9,246,429
 
Inventories
   (537,404)  
 
135,658
 
  (55,380)   (2,394,485)  
 
814,626
 
Licenses and rights of
use 
(1)
   (5,177,924)  
 
(3,668,389
) 
  432,403   344,729  
 
(151,013
) 
Employee benefits
   45,467,827  
 
40,246,031
 
  (1,019,042)   422,473  
 
(354,803
) 
Other
   14,828,012  
 
13,520,684
 
  (1,310,782)   2,833,424  
 
(4,811,396
) 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net deferred tax assets
  
Ps.

66,303,077  
Ps.

77,822,839
 
            
   
 
 
  
 
 
             
Deferred tax expense in net profit for the year
 
 Ps.(3,788,397) Ps.12,218,368  
Ps.

19,623,461
 
Deferred tax discontinued operations
 
  (105,986)  73,646 
 
143,482
 
   
 
 
  
 
 
  
 
 
 
(1)

As of December 31, 2020 and 2021, the balance included the effects of hyperinflation and revaluation of telecommunications towers.

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Table of Contents
Reconciliation of deferred tax assets and liabilities, net:

   2018  2019  2020 

Opening balance as of January 1,

   Ps. 104,573,985   Ps.  86,613,327   Ps.  88,074,856 

Deferred tax benefit

   1,994,063   (3,894,383)   12,292,014 

Translation effect

   (8,854,010)   2,047,915   375,105 

Deferred tax benefit recognized in OCI

   2,013,480   8,838,714   (26,472,481) 

Deferred taxes acquired in business combinations

   (25,827)   (276,568)   (2,580,552) 

Hyperinflationary effect in Argentina

   (4,907,151)   (5,254,149)   (5,385,865) 

Effect of adoption of IFRS 9

   544,628   —     —   

Effect of adoption of IFRS 15

   (8,725,841)   —     —   
  

 

 

  

 

 

  

 

 

 

Closing balance as of December 31,

   Ps.  86,613,327   Ps.  88,074,856   Ps. 66,303,077 
  

 

 

  

 

 

  

 

 

 

Presented in the consolidated statements of financial position as follows:

    

Deferred income tax assets

   Ps.111,186,768   Ps.106,167,897   Ps.115,370,240 

Deferred income tax liabilities

   (24,573,441)   (18,093,041)   (49,067,163) 
  

 

 

  

 

 

  

 

 

 
   Ps.  86,613,327   Ps.  88,074,856   Ps.  66,303,077 
  

 

 

  

 

 

  

 

 

 

   2019  2020  
2021
 
Opening balance as of January 1,
  Ps.86,613,327  Ps.88,074,856  
Ps.
66,303,077
 
Deferred tax benefit
   (3,894,383)   12,292,014  
 
19,623,461
 
Translation effect
   2,047,915   375,105  
 
(727,099
) 
Deferred tax benefit recognized in OCI
   8,838,714   (26,472,481)  
 
(4,176,197
) 
Deferred taxes acquired in business combinations
   (276,568)   (2,580,552)  
 
0  
 
Hyperinflationary effect in Argentina
   (5,254,149)   (5,385,865)  
 
(3,540,962
) 
Disposals see to 2Ac
   —     —    
 
(1,203,203
) 
Related discontinued operation
   —     —    
 
1,543,762
 
   
 
 
  
 
 
  
 
 
 
Closing balance as of December 31,
  Ps. 88,074,856  Ps. 66,303,077  
Ps.
 77,822,839
 
   
 
 
  
 
 
  
 
 
 
Presented in the consolidated statements of financial position as follows:
             
Deferred income tax assets
  Ps.106,167,897  Ps.115,370,240  
Ps.
127,287,934
 
Deferred income tax liabilities
   (18,093,041)   (49,067,163)  
 
(49,465,095
) 
   
 
 
  
 
 
  
 
 
 
   Ps.88,074,856  Ps.66,303,077  
Ps.
77,822,839
 
   
 
 
  
 
 
  
 
 
 
The deferred tax assets are in tax jurisdictions in which the Company considers that based on financial projections of its cash flows, results of operations and synergies between subsidiaries, will generate sufficient taxable income in subsequent periods to utilize or realize such assets.

The Company does not recognize a deferred tax liability related to the undistributed earnings of its subsidiaries, because it currently does not expect these earnings to be taxable or to be repatriated in the near future. The Company’s policy has been to distribute the profits when it has paid the corresponding taxes in its home jurisdiction and the tax can be accredited in Mexico.

At December 31, 20192020 and 2020,2021, the balance of the contributed capital account (“CUCA”) is Ps.551,221,490Ps. 573,362,949 and Ps.573,362,949Ps. 612,351,412 respectively. Effectively, on January 1, 2014, the
Cuenta de Utilidad Fiscal Neta
(“CUFIN”) is computed on an América Móvil’s stand-alone basis. The balance of the América Móvil’s stand-alone basis CUFIN amounted to Ps.320,880,512Ps. 332,273,039 and Ps.332,273,039Ps. 431,249,107 as of December 31, 20192020 and 2020,2021, respectively.

ii)

Significant foreign income tax matters

a)

Results of operations

During 2021, America Móvil sold 100% of its participation in Tracfone Wireless, Inc (Tracfone), virtual operator of the most important mobile prepaid services in USA to Verizon Communications Inc. (“Verizon”), tax profit of this transaction was Ps. 93,968,555.

ii) Significant foreign income tax matters
a)
Results of operations
The foreign subsidiaries determine their taxes on profits based on their individual taxable income, in accordance with the specific tax regimes of each country.

The effective income tax rate for the Company’s foreign jurisdictions was 31% in 2018, 40%38% in 2019, 15% in 2020 and 18%14.2% in 2020.2021. The statutory tax rates in these jurisdictions vary, although many approximate 10% to 34%. The primary difference between the statutory rates and the effective rates in 2018, 2019, 2020 and 20202021 was attributable to dividends received from KPN, other non-deductible items, non-taxable income and tax recoveries in Brazil and registry of benefits related to tax losses credits in Brazil and Chile and Impairment related to subsidiaries in Europe.
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Table of Contents
a.1
) In 2021, The Brazilian Federal Supreme Court’s (STF) ruled in favor of a third party’ thesis related to the unconstitutionality of incidence of the IRPJ (Income Tax in Brazil) and CSLL (Social Contribution ovr Net Profit in Brazil) on the amounts corresponding to the SELIC (Special settlement and custody system) rate received for repetition of the tax that should not be applicable, such thesis being similar to the thesis filed by subsidiaries of the Company in Brazil.

a.1

Given the more likely than not position of success of this lawsuit as consequence of the decision, with general repercussion, of the STF, Brazil updated its analysis, support documentation and forecast and recorded Ps. 2,647,919 (R$703,761) of which Ps. 2,076,594 (R$551,915) represent an excess on deferred IRPJ and CSLL and Ps. 571,325 (R$151,846) represent an excess on current IRPJ and CSLL. The subsidiaries are waiting for the necessary procedural steps to continue, to start the compensation of such amounts.
a.
2
) In 2020 the
 ,
Claro Brasil began to use the tax benefit related to the ICMS Grant on TV based on Complementary Law 160/2017 and art. 30 of Law 12,973, as well as in recent interpretations on the subject, investment grants are not computed in determining actual profit in the amount of Ps.1,721,453Ps. 1,721,453 (R$411,336). The Company kicked back the application of the benefit for the years 2018 and 2019, with a total impact of Ps.2,748,084Ps. 2,748,084 (R$656,646).

In 2021 the tax benefit was Ps. 1,431,164 (R$380,373).

iii)    Tax losses

a) At December 31, 2020,2021, the available tax loss carryforwards recorded in deferred tax assets are as follows on a country by country basis:

Country

  Gross balance
of available tax loss
carryforwards at
December 31, 2020		   Tax-effected
loss carryforward
benefit		 

Brazil

  Ps.44,578,152   Ps.15,156,572 

Mexico

   20,523,070    6,156,920 

Austria

   11,631,381    2,907,845 

United States

   3,023,441    786,095 

Peru

   380,770    112,327 

Puerto Rico

   5,574    2,174 
  

 

 

   

 

 

 

Total

  Ps.80,142,388   Ps.25,121,933 
  

 

 

   

 

 

 

Country
  
Gross balance
of available tax loss
carryforwards at
December 31, 2021
   
Tax-effected
loss carryforward
benefit
 
Brazil
   
Ps.71,910,653
 
   
Ps.24,449,622
 
Mexico
  
 
14,768,325
 
  
 
4,430,497
 
Europe
  
 
2,031,465
 
  
 
507,866
 
United States
  
 
432,301
 
  
 
112,398
 
Peru
  
 
356,133
 
  
 
105,060
 
Chile
  
 
16,109,194
 
  
 
4,349,483
 
   
 
 
   
 
 
 
Total
   
Ps.105,608,071
 
   
Ps.33,954,926
 
   
 
 
   
 
 
 
b)
The tax loss carryforwards in the different countries in which the Company operates have the following terms and characteristics:

bi)
The Company has accumulated Ps.44,578,152Ps. 71,910,653 in net operating loss carryforwards (NOL’s) in Brazil as of December 31, 2020.2021. In Brazil, there is no expiration of the NOL’s. However, theThe NOL´s amount used against taxable income in each year may not exceed 30% of the taxable income for such year. Consequently, in the year in which taxable income is generated, the effective tax rate is 25% rather than the 34% corporate tax rate.

The Company believes that it is more likely than not that the accumulated balances of its net deferred tax assets are recoverable, based on the positive evidence of the Company to generate future taxable income related to the same taxation authority which will result in taxable amounts against which the available tax losses can be utilized before they expire.

bii)
The Company has accumulated Ps.20,523,070Ps. 14,768,325 in tax losses in Mexico. The company estimates that there is positive evidence that allows it to use these losses, these should be reduced to the extent that it is considered likely that there will be sufficient taxable profits to allow them to recover in full or in part, the losses will only be compensated when there is a right legally required and are approved by the tax authorities in Mexico.

biii)
The Company has accumulated Ps.11,631,381Ps. 2,031,465 in NOL’s in AustriaEurope as of December 31, 2020.2021. In Austria,Europe, the NOL´s have no expiration, but its annual usage is limited to 75% of the taxable income of the year. The
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4
Table of Contents
realization of deferred tax assets is dependent upon the expected generation of future taxable income during the periods in which these temporary differences become deductible.

biv) The Company has accumulated Ps. 16,109,194 in NOL’s in Chile as of December 31, 2021. In Chile, the NOL´s have no expiration. The Company estimates that there is positive evidence that allows it to use these losses, these should be reduced to the extent that it is considered likely that there will be sufficient taxable profits to allow them to recover in full or in part, the losses will only be compensated when there is a right legally required and are approved by the tax authorities in Chile.
iv)    Optional regime

The Mexican Tax Law establishes an optional regime for group companies called: Optional Regime for Groups of Companies. For these purposes, the integrating (controlling) company must own more than 80% of the shares with voting rights of the integrated (controlled) companies. In general terms, the Integration regime allowed deferral, for each of the companies that make up the group, and for up to three years, or sooner if certain assumptions are made, the whole of the income tax that results from considering the determination of the individual income tax to its charge is the effect derived from recognizing, indirectly, the tax losses incurred by the companies in the group for the year in question.

question

.
On December 19, 2019, the integrating company submitted to the Mexican tax authorities, the notice to end to belong under the Optional Regime for Groups of Companies, which implies, payimplied a payment made in January 2020 related to the deferred income tax for the years 2016-2018. Therefore, fromFrom the year 2020, the group will beis taxable under the General Regime for Legal Persons.

v)    Limiting interest deductions

The Mexican Tax Law establishes forsince 2020 further new rules related withto the limitinglimit on interest deductions, in concordance with the action 4 of Base Erosion and Profit Shifting (BEPS) project issued by the Organization for Economic Co-operation and Development (OCDE)(OECD), whomfrom which Mexico is member.

In general terms, each Mexican companies should calculated acalculate an adjusted Tax EBITDA, whose amount bytimes the corporate income tax, will be the interest limit allowallowed to deductbe deducted in theeach tax year it’syear. It is important to underlinemention that the amount that was not deductible could be carryforward in the following ten years.

vi)    Revaluation of telecommunications towers

Deferred taxes related to the revaluation of the passive infrastructure of the telecommunications towers have been calculated at the tax rate of the jurisdiction in which the subsidiaries are located.

14.

Debt

F-
5
5
Table of Contents
14.    Debt
a)
The Company’s short-andshort- and long-term debt consists of the following:

The Company’s short-and long-term debt consists

At December 31, 2020
  
(Thousands of
Mexican pesos)
 
Currency
 
Loan
 
Interest rate
   
Maturity
  
Total
 
Senior Notes
               
U.S. dollars               
  Fixed-rate Senior notes (i)  3.125%    2022  Ps.31,917,920 
  Fixed-rate Senior notes (i)  3.625%    2029   19,948,700 
  Fixed-rate Senior notes (i)  2.875%    2030   19,948,700 
  Fixed-rate Senior notes (i)  6.375%    2035   19,576,258 
  Fixed-rate Senior notes (i)  6.125%    2037   7,365,559 
  Fixed-rate Senior notes (i)  6.125%    2040   39,897,400 
  Fixed-rate Senior notes (i)  4.375%    2042   22,941,005 
  Fixed-rate Senior notes (i)  4.375%    2049   24,935,875 
             
 
 
 
  
Subtotal U.S. dollars
          
Ps.
186,531,417
 
             
 
 
 
Mexican pesos
               
  Fixed-rate Senior notes (i)  6.450%    2022  Ps.22,500,000 
  Fixed-rate Senior notes (i)  7.125%    2024   11,000,000 
  Domestic Senior notes (i)  0.000%    2025   4,911,181 
  Fixed-rate Senior notes (i)  8.460%    2036   7,871,700 
  Domestic Senior notes (i)  8.360%    2037   5,000,000 
             
 
 
 
  
Subtotal Mexican pesos
          
Ps.
51,282,881
 
             
 
 
 
Euros
               
  Fixed-rate Senior notes (i)  3.000%    2021  Ps.24,369,332 
  Fixed-rate Senior notes (i)  3.125%    2021   18,276,999 
  Fixed-rate Senior notes (i)  4.000%    2022   18,276,999 
  Fixed-rate Senior notes (i)  4.750%    2022   18,276,999 
  Fixed-rate Senior notes (i)  3.500%    2023   7,310,800 
  Fixed-rate Senior notes (i)  3.259%    2023   18,276,999 
  Fixed-rate Senior notes (i)  1.500%    2024   20,713,932 
  Fixed-rate Senior notes (i)  1.500%    2026   18,276,999 
  Fixed-rate Senior notes (i)  0.750%    2027   24,369,332 
  Fixed-rate Senior notes (i)  2.125%    2028   15,840,066 
  Commercial Paper (iv)  (0.230%) - (0.310%)    2021   40,940,477 
             
 
 
 
  
Subtotal Euros
          
Ps.
224,928,934
 
             
 
 
 
Pound sterling
               
  Fixed-rate Senior notes (i)  5.000%    2026  Ps.13,634,936 
  Fixed-rate Senior notes (i)  5.750%    2030   17,725,417 
  Fixed-rate Senior notes (i)  4.948%    2033   8,180,962 
  
Fixed-rate Senior notes (i)
  4.375%    2041   20,452,405 
             
 
 
 
  
Subtotal Pound sterling
          
Ps.
59,993,720
 
             
 
 
 
Brazilian reais
               
  
Debentures (i)
  104.000% of CDI    2021  Ps.4,222,597 
  
Debentures (i)
  104.250% of CDI    2021   5,815,668 
  
Promissory notes (i)
  CDI + 0.600%    2021   1,381,941 
  
Debentures (i)
  CDI + 0.960%    2022   9,596,811 
  
Promissory notes (i)
  106.000% of CDI    2022   7,677,449 
  
Debentures (i)
  106.500% of CDI    2022   3,838,725 
             
 
 
 
  
Subtotal Brazilian reais
          
Ps.
32,533,191
 
             
 
 
 
Other currencies
               
Japanese yen
               
  
Fixed-rate Senior notes (i)
  2.950%    2039  Ps.2,511,701 
             
 
 
 
  
Subtotal Japanese yen
          
Ps.
2,511,701
 
             
 
 
 
Chilean pesos
               
  
Fixed-rate Senior notes (i)
  3.961%    2035  Ps.4,078,453 
             
 
 
 
  
Subtotal Chilean pesos
          
Ps.
4,078,453
 
             
 
 
 
  
Subtotal other currencies
          
Ps.
6,590,154
 
             
 
 
 
                  
F-
5
6
Table of the following:

At December 31, 2019

  (Thousands of
Mexican pesos)		 

Currency

 

Loan

 Interest rate   Maturity  Total 

Senior Notes

     

U.S. dollars

     
 Fixed-rate Senior notes (i)  5.000%    2020   Ps. 11,774,764 
 Fixed-rate Senior notes (i)  3.125%    2022   30,152,320 
 Fixed-rate Senior notes (i)  3.625%    2029   18,845,200 
 Fixed-rate Senior notes (i)  6.375%    2035   18,493,360 
 Fixed-rate Senior notes (i)  6.125%    2037   6,958,119 
 Fixed-rate Senior notes (i)  6.125%    2040   37,690,400 
 Fixed-rate Senior notes (i)  4.375%    2042   21,671,980 
 Fixed-rate Senior notes (i)  4.375%    2049   23,556,500 
     

 

 

 
 Subtotal U.S. dollars     Ps.169,142,643 
     

 

 

 

Mexican pesos

     
 Domestic Senior notes (i)  8.600%    2020   

Ps.    7,000,000		 
 
 Fixed-rate Senior notes (i)  6.450%    2022   22,500,000 
 Fixed-rate Senior notes (i)  7.125%    2024   11,000,000 
 Domestic Senior notes (i)  0.000%    2025   4,757,592 
 Fixed-rate Senior notes (i)  8.460%    2036   7,871,700 
 Domestic Senior notes (i)  8.360%    2037   5,000,000 
     

 

 

 
 Subtotal Mexican pesos     Ps.  58,129,292 
     

 

 

 

Euros

     
 Commercial Paper (iv)  -0.230%    2020   

Ps.    2,599,128		 
 
 Exchangeable Bond (i)  0.000%    2020   60,051,270 
 Fixed-rate Senior notes (i)  3.000%    2021   21,131,123 
 Fixed-rate Senior notes (i)  3.125%    2021   15,848,342 
 Fixed-rate Senior notes (i)  4.000%    2022   15,848,342 
 Fixed-rate Senior notes (i)  4.750%    2022   15,848,342 
 Fixed-rate Senior notes (i)  3.500%    2023   6,339,337 
 Fixed-rate Senior notes (i)  3.259%    2023   15,848,342 
 Fixed-rate Senior notes (i)  1.500%    2024   17,961,454 
 Fixed-rate Senior notes (i)  1.500%    2026   15,848,342 
 Fixed-rate Senior notes (i)  0.750%    2027   21,131,123 
 Fixed-rate Senior notes (i)  2.125%    2028   13,735,230 
     

 

 

 
 Subtotal Euros     Ps.222,190,375 
     

 

 

 

Pound Sterling

     
 Fixed-rate Senior notes (i)  5.000%    2026   Ps.  12,491,541 
 Fixed-rate Senior notes (i)  5.750%    2030   16,239,003 
 Fixed-rate Senior notes (i)  4.948%    2033   7,494,924 
 

Fixed-rate Senior notes (i)

  4.375%    2041   18,737,311 
     

 

 

 
 

Subtotal Pound Sterling

     Ps.  54,962,779 
     

 

 

 

Brazilian reais

     
 

Debentures (i)

  102.900% of CDI    2020   Ps.    7,013,124 
 

Debentures (i)

  104.000% of CDI    2021   5,142,958 
 

Debentures (i)

  104.250% of CDI    2021   7,083,256 
 

Promissory notes (i)

  CDI + 0.600%    2021   1,683,150 
 

Promissory notes (i)

  106.000% of CDI    2022   9,350,832 
 

Promissory notes (i)

  106.500% of CDI    2022   4,675,416 
     

 

 

 
 

Subtotal Brazilian reais

     Ps.  34,948,736 
     

 

 

 
     

Other currencies

               

Japanese yen

     
 

Fixed-rate Senior notes (i)

  2.950%    2039   Ps.    2,255,663 
     

 

 

 
 

Subtotal Japanese yen

     Ps.    2,255,663 
     

 

 

 
Contents

At December 31, 2019

  (Thousands of
Mexican pesos)		 

Currency

 

Loan

 Interest rate   Maturity  Total 

Chilean pesos

     
 

Fixed-rate Senior notes (i)

  3.961%    2035   Ps.    3,562,695 
     

 

 

 
 

Subtotal Chilean pesos

     Ps.    3,562,695 
     

 

 

 
 

Subtotal other currencies

     Ps.    5,818,358 
     

 

 

 
     

Hybrid Notes

               

Euros

     
 

Euro NC10 Series B Capital Securities (iii)

  6.375%    2073   Ps.  11,622,118 
     

 

 

 
 

Subtotal Euros

     Ps.  11,622,118 
     

 

 

 

Pound Sterling

     
 

GBP NC7 Capital Securities (iii)

  6.375%    2073   Ps.  13,740,695 
     

 

 

 
 

Subtotal Pound Sterling

     Ps.  13,740,695 
     

 

 

 
 

Subtotal Hybrid Notes

     Ps.  25,362,813 
     

 

 

 
     

Lines of Credit and others

             

U.S. dollars

     
 

Lines of credit (ii)

  5.500% - 9.020%    2020 - 2024   Ps.    9,359,340 

Mexican pesos

     
 

Lines of credit (ii)

  

TIIE + 0.050% -

TIIE + 0.090%

 

 

   2020   Ps.  22,000,000 

Euros

     
 

Lines of credit (ii)

  0.030%    2020   Ps.    2,113,112 

Peruvian Soles

     
 

Lines of credit (ii)

  3.550% - 3.700%    2020 - 2021   Ps.  15,351,211 

Chilean pesos

     
 

Lines of credit (ii)

  TAB + 0.350%    2021   Ps.    4,821,222 
 

Financial Leases

  8.700% - 8.970%    2020 - 2027   Ps.         54,596 
     

 

 

 
 

Subtotal Lines of Credit and others

     Ps.  53,699,481 
     

 

 

 
 

Total debt

     Ps.624,254,477 
     

 

 

 
 

Less: Short-term debt and current portion of long-term debt

     Ps.129,172,033 
     

 

 

 
 

Long-term debt

     Ps.495,082,444 
     

 

 

 

At December 31, 2020

At December 31, 2020

 (Thousands of Mexican pesos) 
At December 31, 2020
 
(Thousands of
Mexican pesos)
 
Currency Loan Interest rate Maturity Total  
Loan
 
Interest rate
   
Maturity
 
Total
 

Senior Notes

        

U.S. dollars

    
Hybrid Notes
         
Euros
         
 
Euro NC10 Series B Capital
Securities (iii)
  6.375%    2073  Ps.13,403,133 
        
 
 
 
Subtotal Euros
      
Ps.
13,403,133
 
        
 
 
 
Subtotal Hybrid notes
      
Ps.
13,403,133
 
        
 
 
         
Lines of Credit and others
Lines of Credit and others
       
Mexican pesos         
 
Lines of credit (ii)
  
TIIE +
0.300
% -
TIIE +
1.000
%
 		   2021  Ps.27,100,000 
Peruvian soles         
 
Lines of credit (ii)
  1.200% - 1.450%    2021  Ps.17,094,079 
Chilean pesos         
 

Fixed-rate Senior notes (i)

  3.125%   2022  Ps. 31,917,920  
Lines of credit (ii)
  

TAB +
0.350
%
 
and
TAB +
 
0.450
%		 
 
 		   2021  Ps.8,868,181 
 

Fixed-rate Senior notes (i)

  3.625%   2029   19,948,700  
Financial Leases
  8.700% - 8.970%    2021 - 2027  
Ps. 

57,266 
 

Fixed-rate Senior notes (i)

  2.875%   2030   19,948,700         
 
 
 

Fixed-rate Senior notes (i)

  6.375%   2035   19,576,258  
Subtotal Lines of Credit and others
      
Ps.
53,119,526
 
 

Fixed-rate Senior notes (i)

  6.125%   2037   7,365,559         
 
 
 

Fixed-rate Senior notes (i)

  6.125%   2040   39,897,400  
Total debt
      
Ps.
628,382,956
 
 

Fixed-rate Senior notes (i)

  4.375%   2042   22,941,005         
 
 
 

Fixed-rate Senior notes (i)

  4.375%   2049   24,935,875  
Less: Short-term debt and current portion of long-term
debt
      
Ps.
148,083,184
 
    

 

         
 
 
 

Subtotal U.S. dollars

   Ps.186,531,417  
Long-term debt
      
Ps.
480,299,772
 
    

 

         
 
 

Mexican pesos

    
 

Fixed-rate Senior notes (i)

  6.450%   2022  Ps.22,500,000 
 

Fixed-rate Senior notes (i)

  7.125%   2024   11,000,000 
 

Domestic Senior notes (i)

  0.000%   2025   4,911,181 
 

Fixed-rate Senior notes (i)

  8.460%   2036   7,871,700 
 

Domestic Senior notes (i)

  8.360%   2037   5,000,000 
    

 

 
 

Subtotal Mexican pesos

   Ps.51,282,881 
    

 

 

Euros

    
 

Fixed-rate Senior notes (i)

  3.000%   2021  Ps.24,369,332 
 

Fixed-rate Senior notes (i)

  3.125%   2021   18,276,999 
 

Fixed-rate Senior notes (i)

  4.000%   2022   18,276,999 
 

Fixed-rate Senior notes (i)

  4.750%   2022   18,276,999 
 

Fixed-rate Senior notes (i)

  3.500%   2023   7,310,800 
 

Fixed-rate Senior notes (i)

  3.259%   2023   18,276,999 
 

Fixed-rate Senior notes (i)

  1.500%   2024   20,713,932 
 

Fixed-rate Senior notes (i)

  1.500%   2026   18,276,999 
 

Fixed-rate Senior notes (i)

  0.750%   2027   24,369,332 
 

Fixed-rate Senior notes (i)

  2.125%   2028   15,840,066 
 

Commercial Paper (iv)

  -0.230% -0.310%   2021   40,940,477 
    

 

 
 

Subtotal Euros

   Ps.224,928,934 
    

 

 

Pound Sterling

    
 

Fixed-rate Senior notes (i)

  5.000%   2026  Ps.13,634,936 
 

Fixed-rate Senior notes (i)

  5.750%   2030   17,725,417 
 

Fixed-rate Senior notes (i)

  4.948%   2033   8,180,962 
 

Fixed-rate Senior notes (i)

  4.375%   2041   20,452,405 
    

 

 
 

Subtotal Pound Sterling

   Ps.59,993,720 
    

 

 

Brazilian reais

    
 

Debentures (i)

  104.000% of CDI   2021  Ps.4,222,597 
 

Debentures (i)

  104.250% of CDI   2021   5,815,668 
 

Promissory notes (i)

  CDI + 0.600%   2021   1,381,941 
 

Debentures (i)

  CDI + 0.960%   2022   9,596,811 
 

Promissory notes (i)

  106.000% of CDI   2022   7,677,449 
 

Debentures (i)

  106.500% of CDI   2022   3,838,725 
    

 

 
 

Subtotal Brazilian reais

   Ps. 32,533,191 
    

 

 
    

Other currencies

        

Japanese yen

    
 

Fixed-rate Senior notes (i)

  2.950%   2039  Ps.2,511,701 
    

 

 
 

Subtotal Japanese yen

   Ps.2,511,701 
    

 

 

Chilean pesos

    
 

Fixed-rate Senior notes (i)

  3.961%   2035  Ps.4,078,453 
    

 

 
 

Subtotal Chilean pesos

   Ps.4,078,453 
    

 

 
 

Subtotal other currencies

   Ps.6,590,154 
    

 

 
    

Hybrid Notes

        

Euros

    
 Euro NC10 Series B Capital Securities (iii)  6.375%   2073  Ps.13,403,133 
    

 

 
 

Subtotal Euros

   Ps.13,403,133 
    

 

 
 

Subtotal Hybrid Notes

   Ps.13,403,133 
    

 

 

At December 31, 2020

  (Thousands of Mexican pesos) 
Currency Loan Interest rate Maturity  Total 

Lines of Credit and others

          

Mexican pesos

    
 

Lines of credit (ii)

 TIIE + 0.300% -
TIIE + 1.000%		  2021  Ps.27,100,000 

Peruvian Soles

    
 

Lines of credit (ii)

 1.200% - 1.450%  2021  Ps.17,094,079 

Chilean pesos

    
 

Lines of credit (ii)

 TAB + 0.350% and
TAB + 0.450%		  2021  Ps.8,868,181 
 

Financial Leases

 8.700% - 8.970%  2021 - 2027  Ps.57,266 
    

 

 

 
 

Subtotal Lines of Credit and others

  Ps.53,119,526 
    

 

 

 
 

Total debt

   Ps.628,382,956 
    

 

 

 
 

Less: Short-term debt and current portion of long-term debt

   Ps.148,083,184 
    

 

 

 
 

Long-term debt

   Ps.480,299,772 
    

 

 

 

L=

At December 31, 2021
 
(Thousands of
Mexican pesos)
 
Currency
 
Loan
 
Interest rate
 
Maturity
 
Total
 
Senior Notes
 
 
 
 
 
 
 
 
 
 
U.S. dollars
          
  
Fixed-rate Senior notes (i)
 3.625%  2029 Ps.20,583,500 
  
Fixed-rate Senior notes (i)
 2.875%  2030  20,583,500 
  
Fixed-rate Senior notes (i)
 6.375%  2035  20,199,206 
  
Fixed-rate Senior notes (i)
 6.125%  2037  7,599,943 
  
Fixed-rate Senior notes (i)
 6.125%  2040  41,167,000 
  
Fixed-rate Senior notes (i)
 4.375%  2042  23,671,025 
  
Fixed-rate Senior notes (i)
 4.375%  2049  25,729,375 
         
 
 
 
  
Subtotal U.S. dollars
      
Ps.
159,533,549
 
         
 
 
 
Mexican pesos
           
  
Fixed-rate Senior notes (i)
 6.450%  2022 Ps.22,500,000 
  
Fixed-rate Senior notes (i)
 7.125%  2024  11,000,000 
  
Domestic Senior notes (i)
 0.000%  2025  5,284,885 
  
Fixed-rate Senior notes (i)
 8.460%  2036  7,871,700 
  
Domestic Senior notes (i)
 8.360%  2037  5,000,000 
         
 
 
 
  
Subtotal Mexican pesos
      
Ps.
51,656,585
 
         
 
 
 
Euros
           
  
Fixed-rate Senior notes (i)
 4.000%  2022 Ps.17,566,473 
  
Fixed-rate Senior notes (i)
 3.500%  2023  7,026,589 
  
Fixed-rate Senior notes (i)
 3.259%  2023  17,566,474 
  
Fixed-rate Senior notes (i)
 1.500%  2024  19,908,670 
  
Exchangeable Bond (i)
 0.000%  2024  49,115,860 
  
Fixed-rate Senior notes (i)
 1.500%  2026  17,566,473 
  
Fixed-rate Senior notes (i)
 0.750%  2027  23,421,965 
  
Fixed-rate Senior notes (i)
 2.125%  2028  15,224,277 
         
 
 
 
  
Subtotal euros
      
Ps.
167,396,781
 
         
 
 
 
Pound sterling
           
  
Fixed-rate Senior notes (i)
 5.000%  2026 Ps.13,924,738 
  
Fixed-rate Senior notes (i)
 5.750%  2030  18,102,159 
  
Fixed-rate Senior notes (i)
 4.948%  2033  8,354,843 
  
Fixed-rate Senior notes (i)
 4.375%  2041  20,887,106 
         
 
 
 
  
Subtotal Pound sterling
      
Ps.
61,268,846
 
         
 
 
 

F-5
7
Table of Contents
At December 31, 2021
  
(Thousands of
Mexican pesos)
 
Currency
 
Loan
 
Interest rate
  
Maturity
  
Total
 
Brazilian reais
              
  
Debentures (i)
  CDI + 0.960%    2022  Ps.9,221,172 
  
Promissory notes (i)
  106.000% of CDI    2022   7,376,937 
  
Debentures (i)
  106.500% of CDI    2022   3,688,469 
             
 
 
 
  
Subtotal Brazilian reais
          
Ps.
20,286,578
 
             
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other currencies
               
Japanese yen
               
  
Fixed-rate Senior notes (i)
  2.950%    2039  Ps.2,325,617 
             
 
 
 
  
Subtotal Japanese yen
          
Ps.
2,325,617
 
             
 
 
 
Chilean pesos
               
  
Fixed-rate Senior notes (i)
  3.961%    2035  Ps.3,776,051 
             
 
 
 
  
Subtotal Chilean pesos
          
Ps.
3,776,051
 
             
 
 
 
  
Subtotal other currencies
          
Ps.
6,101,668
 
             
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hybrid Notes
               
Euros
               
  Euro NC10 Series B Capital Securities (iii)  6.375%    2073  Ps.12,882,081 
             
 
 
 
  
Subtotal Euros
          
Ps.
12,882,081
 
             
 
 
 
  
Subtotal Hybrid Notes
          
Ps.
12,882,081
 
             
 
 
 
               
Lines of Credit and others
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. dollars
              
  
Lines of credit (ii)
  0.350% - 0.700%   2022  Ps.14,723,980 
Euros
              
  
Lines of credit (ii)
  (0.400%)  -
(0.450%)		   2022  
Ps.
18,737,572 
Mexican pesos
              
  
Lines of credit (ii)
  
TIIE + 0.280% -
TIIE + 0.400%
 		  2022  
Ps.
34,080,000 
Peruvian soles
              
  
Lines of credit (ii)
  0.976% - 1.045%   2022  
Ps.
9,815,068 
Chilean pesos
              
  
Lines of credit (ii)
  TAB + 0.450%   2022  
Ps.
7,419,372 
  
Financial Leases
  
8.700% - 8.970%
   
2022 - 2027
  
Ps.
47,743 
Others 
Lines of credit (ii)
  15.790%   2022  
Ps.
80,279 
            
 
 
 
  
Subtotal Lines of Credit and others
         
Ps.
    84,904,014
 
            
 
 
 
  
Total debt
         
Ps.
    564,030,102
 
            
 
 
 
  
Less: Short-term debt and current portion of long-term debt
         
Ps.
    145,222,672
 
            
 
 
 
  
Long-term debt
         
Ps.
    418,807,430
 
            
 
 
 
L = LIBOR (London Interbank Offered Rate)

TIIE = Mexican Interbank Rate

CDI = Brazil Interbank Deposit Rate

TAB=

TAB = Chilean weighted average funding rate

Interest rates on the Company’s debt are subject to variancesfluctuations in international and local rates. The Company’s weighted average cost of borrowed funds atas of December 31, 2019,2020, and December 31, 20202021 was approximately 4.16%3.72% and 3.72%3.78%, respectively.

Such rates do not include commissions or the reimbursements for Mexican tax withholdings (typically a tax rate of 4.9%) that the Company must pay to international lenders.

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An analysis of the Company’s short-term debt maturities as of December 31, 2019, and2020, a
n
d December 31, 2020,2021, is as follows:

   2019  2020 

Obligations and Senior Notes

  Ps. 88,438,286  Ps.95,007,014 

Lines of credit

   40,722,004   53,062,260 

Financial Leases

   11,743   13,910 
  

 

 

  

 

 

 

Total

  Ps.129,172,033  Ps.148,083,184 
  

 

 

  

 

 

 

Weighted average interest rate

   3.31%   2.23% 
  

 

 

  

 

 

 

   
2020
  
2021
 
Obligations and Senior Notes
  Ps.95,007,014  
Ps.
60,353,052
 
Lines of credit
   53,062,260  
 
84,856,270
 
Financial Leases
   13,910  
 
13,350
 
   
 
 
  
 
 
 
Subtotal short term debt
  Ps.  148,083,184  
Ps.
145,222,672
 
   
 
 
  
 
 
 
Weighted average interest rate
  
2.23
%  
4.02
% 
The Company’s long-term debt maturities are as follows:
Years
  
Amount
 
2023
  Ps.24,599,324 
2024
   80,031,350 
2025
   5,292,314 
2026 and thereafter
   308,884,442 
   
 
 
 
Total
  Ps.418,807,430 
(i) Senior Notes
The outstanding Senior Notes as of December 31, 2020, are as follows:

Years

  Amount 

2022

  Ps.112,091,112 

2023

   25,594,561 

2024

   31,721,298 

2025 and thereafter

   310,892,801 
  

 

 

 

Total

  Ps.480,299,772 
  

 

 

 

(i) Senior Notes

The outstanding Senior Notes at December 31, 2019, and December 31, 2020,2021, are as follows:

Currency*

  2019   2020 

U.S. dollars

  Ps.169,142,643   Ps.186,531,417 

Mexican pesos

   58,129,292    51,282,881 

Euros**

   222,190,375    183,988,456 

Pounds sterling**

   54,962,779    59,993,720 

Brazilian reais

   34,948,736    32,533,191 

Japanese yens

   2,255,663    2,511,701 

Chilean pesos

   3,562,695    4,078,453 

Currency*
  
2020
   
2021
 
U.S. dollars
  
 
Ps.186,531,417
 
  
 
Ps.159,533,549
 
Mexican pesos
  
 
51,282,881
 
  
 
51,656,585
 
Euros
  
 
183,988,456
 
  
 
167,396,781
 
Pound sterling
  
 
59,993,720
 
  
 
61,268,846
 
Brazilian reais
  
 
32,533,191
 
  
 
20,286,578
 
Japanese yens
  
 
2,511,701
 
  
 
2,325,617
 
Chilean pesos
  
 
4,078,453
 
  
 
3,776,051
 
*

Thousands of Mexican pesos

**

Includes secured and unsecured senior notes.

In December 2021, the Company redeemed in advance 1,600 million U.S. Dollars senior notes with an interest rate of 3.125% and 750 million Euros senior notes with an interest rate of 4.75%. Both were set to mature in 2022.
(ii) Lines of credit

At

As of December 31, 2019,2020, and December 31, 2020,2021, debt under lines of credit aggregated to Ps.$53,645
53,062 million and Ps.$53,062
84,856 million, respectively.

Telekom Austria closed December 2021 with an aggregated debt of Ps.

18,818 under lines of credit.
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The Company has two revolving syndicated credit facilities, one for the Euro equivalent of U.S. $2,000$1,500 million and the other for U.S. $2,500 million maturing in 20212026 and 2024, respectively. As long as the facilities are committed, a commitment fee is paid. As of December 31, 2020,2021, these credit facilities are undrawn. Telekom Austria has an undrawn revolving syndicated credit facility in Euros for €1,000 million that matures in 2026.

(iii) Hybrid Notes

We currently have a Capital Securities (hybrid notes) maturing in 2073: a series denominated in euros for a total amount of €550 million with a coupon of 6.375%. The Capital Securities are deeply subordinated, and when they were issued the principal rating agencies stated that they would treat only half of the principal amount as indebtedness for purposes of evaluating our leverage (an analysis referred to as 50.0% equity credit). Standard & Poor´s considers 100% of the total amount of this note as debt. The Capital Securities are subject to redemption at our option at varying dates beginning in 2023 for the euro-denominated series.

(iv) Commercial Paper

In August 2020, we established a new Euro-Commercial Paper program for a total amount of €2,000 million. AtAs of December 31, 2020,2021, there is no debt under this program aggregated to Ps.40,940 million.

program.

Restrictions

A portion of the debt is subject to certain restrictions with respect to maintaining certain financial ratios, as well as restrictions on selling a significant portion of groups of assets, among others. AtAs of December 31, 2020,2021, the Company was in compliance with all these requirements.

A portion of the debt is also subject to early maturity or repurchase at the option of the holders in the event of a change in control of the Company, as defined in each instrument. The definition of change in control varies from instrument to instrument; however, no change in control shall be considered to have occurred as long as its current shareholders continue to hold the majority of the Company’s voting shares.

Covenants

In conformity with the credit agreements, the Company is obliged to comply with certain financial and operating commitments. Such covenants limit in certain cases, the ability of the Company or the guarantor to: pledge assets, carry out certain types of mergers, sell all or substantially all of its assets, and sell control of Telcel.

Such covenants do not restrict the ability of AMX’s subsidiaries to pay dividends or other payment distributions to AMX. The more restrictive financial covenants require the Company to maintain a consolidated ratio of debt to EBITDA (defined as operating income plus depreciation and amortization) that does not exceed 4 to 1, and a consolidated ratio of EBITDA to interest paid that is not below 2.5 to 1 (in accordance with the clauses included in the credit agreements).

Several of the financing instruments of the Company may be accelerated, at the option of the debt holder in the case that a change in control occurs.

At

As of December 31, 2020,2021, the Company was in compliance with all the covenants.

15. Right-of-use assets and lease debt

The Company has lease contracts for various items of towers & sites, property and other equipment used in its operations. Towers and sites generally have lease terms between 5 and 12 years, while property and other equipment generally have lease terms between 5 and 25 years.

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At December 31, 2019, 2020 and 20202021 the
right-of-use
assets and lease liabilities are as follows:

  Right-of-use assets  Liability related to
right-of-use of
assets		 
  Towers & Sites  Property  Other
equipment		  Total 

As of January 1, 2019

 Ps.94,252,098  Ps.21,075,884  Ps.4,750,320  Ps.120,078,302  Ps.119,387,660 

Additions and release

  6,364,508   921,542   729,001   8,015,051   7,437,621 

Business Combinations

  9,668,507   —     —     9,668,507   10,810,111 

Modifications

  7,474,469   1,288,974   728,837   9,492,280   8,363,045 

Depreciation

  (17,286,497)   (4,941,222)   (1,365,847)   (23,593,566)   —   

Interest expense

  —     —     —     —     7,940,240 

Payments

  —     —     —     —     (26,765,075) 

Translation adjustment

  (4,370,636)   (905,808)   (380,907)   (5,657,351)   (6,576,869) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance at December 31, 2019

 Ps.96,102,449  Ps.17,439,370  Ps.4,461,404  Ps.118,003,223  Ps.120,596,733 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance at the beginning of the year

 Ps.96,102,449  Ps.17,439,370  Ps.4,461,404  Ps.118,003,223  Ps.120,596,733 

Additions and release

  5,745,869   309,576   1,514,519   7,569,964   4,833,959 

Modifications

  8,559,335   (3,035,831)   1,048,858   6,572,362   7,769,326 

Depreciation

  (22,064,413)   (3,440,428)   (2,866,244)   (28,371,085)   —   

Interest expense

  —     —     —     —     9,134,288 

Payments

  —     —     —     —     (29,623,565) 

Translation adjustment

  (3,124,365)   932,748   393,997   (1,797,620)   (3,383,500) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance at December 31, 2020

 Ps.85,218,875  Ps.12,205,435  Ps.4,552,534  Ps.101,976,844  Ps.109,327,241 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

  
Right-of-use
assets
  
Liability related to
right-of-use
of
assets
 
  Towers & Sites  Property  Other
equipment		  Total 
As of January 1, 2019
 Ps.94,252,098  Ps.21,075,884  Ps.4,750,320  Ps.120,078,302  Ps.119,387,660 
Additions and release
  6,364,508   921,542   729,001   8,015,051   7,437,621 
Business Combinations
  9,668,507   —     —     9,668,507   10,810,111 
Modifications
  7,474,469   1,288,974   728,837   9,492,280   8,363,045 
Depreciation
  (17,286,497)   (4,941,222)   (1,365,847)   (23,593,566)   —   
Interest expense
  —     —     —     —     7,940,240 
Payments
  —     —     —     —     (26,765,075) 
Translation adjustment
  (4,370,636)   (905,808)   (380,907)   (5,657,351)   (6,576,869) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance at December 31, 2019
 Ps.96,102,449  Ps.17,439,370  Ps.4,461,404  Ps.118,003,223  Ps.120,596,733 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
  
Right-of-use
assets
  
Liability related to
right-of-use
of
assets
 
  Towers & Sites  Property  Other
equipment		  Total 
Balance at the beginning of the year
 Ps.96,102,449  Ps.17,439,370  Ps.4,461,404  Ps.118,003,223  Ps.120,596,733 
Additions and release
  5,745,869   309,576   1,514,519   7,569,964   4,833,959 
Modifications
  8,559,335
  (3,035,831)   1,048,858   6,572,362   7,769,326 
Depreciation
  (22,064,413)   (3,440,428)   (2,866,244)   (28,371,085)   —   
Interest expense
  —     —     —     —     9,134,288 
Payments
  —     —     —     —     (29,623,565) 
Translation adjustment
  (3,124,365)   932,748   393,997   (1,797,620)   (3,383,500) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance at December 31, 2020
 Ps.85,218,875  Ps.12,205,435  Ps.4,552,534  Ps.101,976,844  Ps.109,327,241 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
  
Right-of-use
assets
  
Liability related to
right-of-use
of
assets
 
  Towers & Sites  Property  Other
equipment		  Total 
Balance at the beginning of the year
 
Ps.
85,218,875
 
 
Ps.
12,205,435
 
 
Ps.
4,552,534
 
 
Ps.
101,976,844
 
 
Ps.
109,327,241
 
Additions and release
 
 
3,145,941
 
 
 
482,456
 
 
 
1,052,022
 
 
 
4,680,419
 
 
 
3,060,042
 
Modifications
 
 
10,945,985
 
 
 
1,024,573
 
 
 
998,161
 
 
 
12,968,719
 
 
 
12,535,394
 
Depreciation
 
 
(20,699,207
) 
 
 
(3,221,499
) 
 
 
(2,630,526
) 
 
 
(26,551,232
) 
 
 
—  
 
Interest expense
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
7,301,216
 
Payments
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
(30,544,750
) 
Translation adjustment
 
 
(2,054,566
) 
 
 
(554,260
) 
 
 
(93,531
) 
 
 
(2,702,357
) 
 
 
(3,024,918
) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance at December 31, 2021
 
Ps.
76,557,028
 
 
Ps.
9,936,705
 
 
Ps.
3,878,660
 
 
Ps.
90,372,393
 
 
Ps.
98,654,225
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
At December 31, 20192020 and 2020,2021, the total of the right-of-use assets include an amount of Ps.22,878,245Ps.
18,499,851 and Ps.$18,499,851, 14,785,012, corresponding to related parties, respectively and the total of lease liabilities include an amount of Ps.23,805,275Ps.
20,016,478 and Ps.$20,016,478
16,212,629 corresponding to related parties, respectively.

The implementation of IFRS 16 required a significant effort due to the fact of the need to make certain estimates, such as the lease term, based on the non-cancelable period and the periods covered by options to extend the lease. The

Company considered the extension of the lease terms beyond the non-cancelable period only when it was reasonably certain to extend it. The reasonability of the extension was affected by several factors, such as regulation, business model, and geographical business strategies.

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The lease debt of the Company is integrated according to its maturities as follows:

   2020
2021
 

Short term

  
Ps.
25,067,905
27,632,357
Long term
71,021,868
 

Long term

Total
Ps.
98,654,225
   84,259,336

Total

Ps.109,327,241

 

The Company’s long-term debt maturities as of December 31, 20202021 are as follows:

Year ended December 31,

    

2022

  Ps.35,744,268 

2023

   12,778,050 

2024

   9,606,195 

2025 and thereafter

   26,130,823 
  

 

 

 

Total

  Ps.84,259,336 
  

 

 

 

Year ended December 31,
    
2023
  
Ps.
13,370,533
 
2024
  
 
22,664,124
 
2025
  
 
10,342,707
 
2026 and thereafter
  
 
24,644,504
 
   
 
 
 
Total
  
Ps.
71,021,868
 
   
 
 
 
During the years ended December 31, 2019, 2020 and 2020,2021, the Company recognized expenses as follows:

   2019 
   Others   Related parties   Total 

Depreciation expense of right-of-use assets

   Ps.18,176,521    Ps.5,417,045    Ps.23,593,566 

Interest expense on lease liabilities

   5,654,721    2,285,519    7,940,240 

Expense relating to short-term leases

   1,978,403    1,958    1,980,361 

Expense relating to leases of low-value assets

   25,935    —      25,935 

Variable lease payments

   1,299,502    —      1,299,502 
  

 

 

   

 

 

   

 

 

 

Total

   Ps.27,135,082    Ps.7,704,522    Ps.34,839,604 
  

 

 

   

 

 

   

 

 

 

   2020 
   Others   Related parties   Total 

Depreciation expense of right-of-use assets

   Ps.22,404,924    Ps.5,966,161    Ps.28,371,085 

Interest expense on lease liabilities

   7,081,693    2,052,595    9,134,288 

Expense relating to short-term leases

   32,238    —      32,238 

Expense relating to leases of low-value assets

   2,883    —      2,883 

Variable lease payments

   78,494    —      78,494 
  

 

 

   

 

 

   

 

 

 

Total

   Ps.29,600,232    Ps.8,018,756    Ps.37,618,988 
  

 

 

   

 

 

   

 

 

 

   2019 
   Others   Related parties   Total 
Depreciation expense of right-of-use assets
  Ps.18,176,521   Ps.5,417,045   Ps.23,593,566 
Interest expense on lease liabilities
   5,654,721    2,285,519    7,940,240 
Expense relating to short-term leases
   1,978,403    1,958    1,980,361 
Expense relating to leases of low-value assets
   25,935    —      25,935 
Variable lease payments
   1,299,502    —      1,299,502 
   
 
 
   
 
 
   
 
 
 
Total
  Ps.27,135,082   Ps.7,704,522   Ps.34,839,604 
   
 
 
   
 
 
   
 
 
 
   2020 
   Others   Related parties   Total 
Depreciation expense of right-of-use assets
  Ps.22,404,924   Ps.5,966,161   Ps.28,371,085 
Interest expense on lease liabilities
   7,081,693    2,052,595    9,134,288 
Expense relating to short-term leases
   32,238    —      32,238 
Expense relating to leases of low-value assets
   2,883    —      2,883 
Variable lease payments
   78,494    —      78,494 
   
 
 
   
 
 
   
 
 
 
Total
  Ps.29,600,232   Ps.8,018,756   Ps.37,618,988 
   
 
 
   
 
 
   
 
 
 
   
2021
 
   Others   Related parties   Total 
Depreciation expense of right-of-use assets
  
Ps.
 
19,932,316
 
  
Ps.
 
6,618,916
 
  
Ps.
 
26,551,232
 
Interest expense on lease liabilities
  
 
6,212,774
 
  
 
1,088,442
 
  
 
7,301,216
 
Expense relating to short-term leases
  
 
29,833
 
  
 
—  
 
  
 
29,833
 
Expense relating to leases of low-value assets
  
 
685
 
  
 
—  
 
  
 
685
 
Variable lease payments
  
 
68,236
 
  
 
—  
 
  
 
68,236
 
   
 
 
   
 
 
   
 
 
 
Total
  
Ps.
26,243,844
 
  
Ps.
7,707,358
 
  
Ps.
33,951,202
 
   
 
 
   
 
 
   
 
 
 

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Impact on accounting for changes in lease payments applying the exemption.

Based on the information available for evaluation as of the date of adoption, the effect of applying this amendment to IFRS 16 in the Company’s consolidated financial statements as of December 31, 20202021 was Ps.277,680,Ps.
59,104, reflecting an adjustment to accrued liability for leases and recognizing a benefit in the income statement for the period.

16. Accounts payable, accrued liabilities and asset retirement obligations

a)
The components of the captions account payable and accrued liabilities are as follows:

   At December 31, 
   2019   2020 

Suppliers

   Ps.113,370,716    Ps.74,285,881 

Sundry creditors

   90,849,195    101,406,307 

Interest payable

   8,057,170    7,661,762 

Guarantee deposits from customers

   1,467,835    1,386,645 

Dividends payable

   2,367,908    2,254,877 
  

 

 

   

 

 

 

Total

   Ps.216,112,824    Ps.186,995,472 
  

 

 

   

 

 

 


   
At December 31,
 
   2020   
2021
 
Suppliers
  Ps.74,285,881   
Ps.
 
87,942,106
 
Sundry creditors
   101,406,307   
 
107,111,390
 
Interest payable
   7,661,762   
 
6,827,225
 
Guarantee deposits from customers
   1,386,645   
 
1,577,424
 
Dividends payable
   2,254,877   
 
3,029,536
 
   
 
 
   
 
 
 
Total
  Ps.186,995,472   
Ps.
206,487,681
 
   
 
 
   
 
 
 
b)
The balance of accrued liabilities at December 31, 20192020 and 20202021 are as follows:

   At December 31, 
   2019   2020 

Current liabilities

    

Direct employee benefits payable

  Ps.17,991,283   Ps.18,965,160 

Contingencies

   34,379,969    31,326,691 
  

 

 

   

 

 

 

Total

  Ps.52,371,252   Ps.50,291,851 
  

 

 

   

 

 

 

   
At December 31,
 
   2020   
2021
 
Current liabilities
          
Direct employee benefits payable
  Ps.18,965,160   
Ps.
20,052,946
 
Contingencies
   31,326,691   
 
34,338,518
 
   
 
 
   
 
 
 
Total
  Ps.50,291,851   
Ps.
54,391,464
 
   
 
 
   
 
 
 
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The movements in contingencies for the years ended December 31, 20192020 and 20202021 are as follows:

   Balance at
December 31,
2018		   Business
combination		   Effect of
translation		  Increase of
the year		   Applications  Reclassification
by adoption of
IFRIC 23		  Balance at
December 31,
2019		 
   Payments  Reversals 

Contingencies

  Ps.40,281,573   Ps.1,378,611   Ps.(2,302,058)  Ps.6,410,975  Ps.(5,483,327)  Ps.(1,833,518)  Ps.(4,072,287)  Ps.34,379,969
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

   Balance at
December 31,
2019		   Business
combination		   Effect of
translation		  Increase of
the year		   Applications  Balance at
December 31,
2020		 
   Payments  Reversals 

Contingencies

  Ps.34,379,969   Ps.292   Ps.(4,290,753)  Ps.7,442,292   Ps.(3,214,407)  Ps.(2,990,702)  Ps.31,326,691 
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

   
Balance at
December 31,
2019
   
Business
combination
   
Effect of
translation
  
Increase of
the year
   
Applications
  
Balance at
December 31,
2020
 
   
Payments
  
Reversals
 
Contingencies
  Ps.34,379,969   Ps.292   Ps.(4,290,753)  Ps.7,442,292   Ps.(3,214,407)  Ps.(2,990,702)  Ps.31,326,691 
   
 
 
   
 
 
   
 
 
  
 
 
   
 
 
  
 
 
  
 
 
 
       
   
Balance at
December 31,
2020
   
Business
combination
   
Effect of
translation
  
Increase of
the year
   
Applications
  
Balance at
December 31,
2021
 
   
Payments
  
Reversals
 
Contingencies
  
Ps.
31,326,691
 
  
Ps.
        0  
 
  
Ps.
1,556,950
 
 
Ps.
7,425,182
 
  
Ps.
(4,079,190
) 
 
Ps.
(1,891,115
) 
 
Ps.
34,338,518
 
   
 
 
   
 
 
   
 
 
  
 
 
   
 
 
  
 
 
  
 
 
 
Contingencies include tax, labor, regulatory and other legal type contingencies. See Note 17 b) for detail of contingencies.

c)
The movements in the asset retirement obligations for the years ended December 31, 20192020 and 20202021 are as follows:

   Balance at
December 31,
2018		   Business
combination		   Effect of
translation		  Increase of
the year		   Applications  Balance at
December 31,
2019		 
   Payments  Reversals 

Asset retirement obligations

  Ps.15,971,601   Ps.293,548   Ps.(1,339,033)  Ps.1,600,197   Ps.(128,842)  Ps.(580,727)  Ps.15,816,744 
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

   Balance at
December 31,
2019		   Business
combination		   Effect of
translation		   Increase of
the year		   Applications  Balance at
December 31,
2020		 
   Payments  Reversals 

Asset retirement obligations

  Ps.15,816,744   Ps.        —     Ps.374,418   Ps.2,412,908   Ps.(593,644)  Ps.(122,435)  Ps.17,887,991 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

  

 

 

  

 

 

 

  Balance at
December 31,
2019		  Business
combination		  Effect of
translation		  Increase of
the year		  Applications  Balance at
December 31,
2020		 
  Payments  Reversals 
Asset retirement obligations
 Ps.15,816,744  Ps.        0    Ps.374,418  Ps.2,412,908  Ps.(593,644)  Ps.(122,435)  Ps.17,887,991 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
  
Balance at
December 31,
2020
  
Business
combination
  
Effect of
translation
  
Increase of
the year
  
Applications
  
Balance at
December 31,
2021
 
  
Payments
  
Reversals
 
Asset retirement obligations
 
Ps.
17,887,991
 
 
Ps.
        0  
 
 
Ps.
(910,181
) 
 
Ps.
1,273,201
 
 
Ps.
(148,634
) 
 
Ps.
(1,350,154
) 
 
Ps.
16,752,223
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
The discount rates used for the asset retirement obligation are based on market rates that are expected to be undertaken by the dismantling or restoration of cell sites and may include labor costs.

17. Commitments and Contingencies

a) Commitments

The Company and its subsidiaries have commitments that mature on different dates, related to committed capital expenditures and cell phone purchases.

expenditures.

As of December 31, 2020,2021, the total amounts equivalent to the contract period are detailed below:

Year ended December 31,

    

2021

  Ps.74,446,526 

2022

   37,345,449 

2023

   2,240,297 

2024 and thereafter

   13,555,946 
  

 

 

 

Total

  Ps.127,588,218 
  

 

 

 

Year ended December 31,
    
2022
  
Ps.
7,770,936
 
2023
  
 
3,469,647
 
2024
  
 
2,808,660
 
2025 and thereafter
  
 
19,960,884
 
   
 
 
 
Total
  
Ps.
34,010,127
 
   
 
 
 
b) Contingencies

In each of the countries in which we operate, we are party to legal proceedings in the ordinary course of business. These proceedings include tax, labor, antitrust, contractual matters and administrative and judicial proceedings concerning regulatory matters regarding interconnection and tariffs. The following is a description of our material legal proceedings.

(1) Mexican Tax Assessment and Fine

In 2014, the Mexican Tax Administration Service (Servicio de Administración Tributaria)(“SAT”) notified the Company a Ps.529,700 tax assessment related to the Company’s tax return for the fiscal year ended December 31, 2005, pursuant to which the SAT has determined a reduction

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64
Table of the Company’s consolidated tax loss for such year from Ps.8,556,000 to zero. Furthermore, in 2012 the SAT notified the Company’s subsidiary Sercotel, S.A. de C.V. a tax assessment of approximately Ps.1,400,000. The Company and such subsidiary challenged these tax assessments and once all corresponding instances had been concluded, during the second half of 2020, the Federal Tax Court issued a final judgment annulling such tax assessments.

(2)Contents

(1) Telcel Mobile Termination Rates

The mobile termination rates between Telcel and other network operators have been the subject of various legal proceedings. With respect to interconnection fees for 2017, 2018, 2019, 2020 and 2021, Telcel has challenged the applicable resolutions and final resolutions are pending.
With respect to 2021,2022, Telcel will challenge the applicable resolutions.

Given that the “zero rate” that prevented Telcel from charging termination rates in its mobile network was held unconstitutional by the Supreme Court (Suprema(Suprema Corte de Justicia de la Nación “SCJN”or “SCJN”), the IFT has determined asymmetric interconnection rates for the termination of traffic in Telcel’s and other operators’ networks for 2018, 2019, 2020, 2021 and 2021.2022. The resolutions setting such rates have been challenged by Telcel, and final resolutions are pending.

The Company expects that mobile termination rates, as well as other rates applicable to mobile interconnection (such as transit), will continue to be the subject of litigation and administrative proceedings. The Company cannot predict when or how these disputes will be resolved or the financial effects of any such resolution.

(3)

(
2
)
Telcel Class Action Lawsuits

One of the three class action lawsuits that have been filed against Telcel by customers allegedly affected by Telcel’s quality of service and wireless and broadband rates continues in process, the remaining two lawsuits

have been concluded without any adverse effect on the Company. At this stage, the Company cannot assess whether this class action lawsuit could have an adverse effect on the Company’s business and results of operations in the event that it is resolved against Telcel, due to uncertainty about the factual and legal claims underlying this proceeding. Consequently, the Company has not established a provision in the accompanying consolidated financial statements for an eventual loss arising from this proceeding.

(4)

(
3
) IFT Proceedings Against Telmex

In 2018, the IFT imposed a fine of Ps.2,543,937Ps.
2,543,937 on Telmex relating to a sanction procedure triggered by the alleged breach in 2013 and 2014 of certain minimum quality goals for
dedicated
link services.
 Telmex challenged this fine, and a final resolution is pending.

(5)pending

.
(
4
) Brazilian Tax Matters

As of December 31, 2020,2021, certain Company’s Brazilian subsidiaries had aggregate tax contingencies of Ps.119,231,362Ps.
131,140,527 (R$ 31,060,349)35,554,192) for which the Company has established provisions of Ps.17,643,740Ps.
17,915,605 (R$ 4,596,280)4,857,193) in the accompanying consolidated financial statements for eventual losses arising from contingencies that the Company considers probable. 
The most significant contingencies for which provisions have been established are:

Ps.
46,016,079 (R$ 12,475,659) aggregate contingencies and Ps.
3,297,735 (R$ 894,066) provisions related to value-added tax
(Imposto sobre a Circulação de Mercadorias e Prestação de Serviços or “ICMS”
) assessments;
Ps. 18,360,489 (R$ 4,977,808) aggregate contingencies and Ps. 3,228,656 (R$ 875,338) provisions related to social contribution on net income (Contribuição Social sobre o Lucro Lĺquido or “CSLL”) and corporate income tax (Imposto de Renda sobre Pessoa Jurĺdica or “IRPJ”) assessments;

Ps.
16,245,325 (R$ 4,404,355) aggregate contingencies and Ps.
5,116,747 (R$ 1,387,228) 
provisions related to the social integration program (Programa de Integração Social or “PIS”) and the contribution for social security financing (Contribuição para o Financiamento da Seguridade Social or “COFINS”) assessments; 
Ps. 11,684,785 (R$ 3,167,923) aggregate contingencies and Ps. 1,396,376 (R$ 378,579) provisions mainly related to an allegedly improper exclusion of interconnection revenues and costs from the basis used to
F-
65
Table of Contents
•

Ps.41,974,641 (R$ 10,934,598) aggregate contingencies and Ps.3,101,862 (R$ 808,050) provisions related to value-added tax (Imposto sobre a Circulação de Mercadorias e Prestação de Serviços or “ICMS”) assessments;

•

Ps.20,151,371 (R$ 5,249,530) aggregate contingencies and Ps.3,319,251 (R$ 864,681) provisions related to social contribution on net income (Contribuição Social sobre o Lucro Líquido or “CSLL”) and corporate income tax (Imposto de Renda sobre Pessoa Jurídica or “IRPJ”) assessments;

•

Ps.14,991,233 (R$ 3,905,289) aggregate contingencies and Ps.4,993,865 (R$ 1,300,926) provisions related to the social integration program (Programa de Integração Social or “PIS”) and the contribution for social security financing (Contribuição para o Financiamento da Seguridade Social or “COFINS”) assessments;

•

Ps.11,476,895 (R$ 2,989,787) aggregate contingencies and Ps.1,428,756 (R$ 372,198) provisions mainly related to an allegedly improper exclusion of interconnection revenues and costs from the basis used to

calculate Fund for Universal Telecommunication Services (Fundo(Fundo de Universalização dos Serviços de Telecomunicações or “FUST”) obligations, which are being contested;

•

Ps.4,410,628 (R$ 1,148,990) aggregate contingencies and Ps.656 (R$ 171) provisions related to an alleged underpayment of obligations to the Telecommunications Technology Development Fund (Fundo para o Desenvolvimento Tecnológico das Telecomunicações or “FUNTTEL”), which are being challenged and a final resolution is pending;

•

Ps.1,688,790 (R$ 439,938) aggregate contingencies and Ps.46,947 (R$ 12,230) provisions related to the alleged nonpayment of Services Tax (Imposto Sobre Serviços or “ISS”) over several communication services, including Pay TV services, considered taxable for ISS by the Municipal Revenue Services, which are being challenged and a final resolution is pending;

Ps.4,183,953

Ps.
4,778,186 (R$ 1,089,940)1,295,439) aggregate contingencies and Ps.108,877Ps.
387 (R$ 28,363) 105) 
provisions related to an alleged underpayment of obligations to the Telecommunications Technology Development Fund (Fundo para o Desenvolvimento Tecnológico das Telecomunicações or “FUNTTEL”), which are being challenged and for which a final resolution is pending; 
Ps.
1,847,959 (R$ 501,010) aggregate contingencies and Ps.
48,964 (R$ 13,275)
provisions related to the alleged nonpayment of Services Tax (Imposto Sobre Serviços or “ISS”) over several communication services, including Pay TV services, considered taxable for ISS by the Municipal Revenue Services, which are being challenged and for which a final resolution is pending; 
Ps.
4,143,670 (R$ 1,123,412) aggregate contingencies and Ps.
120,856 (R$ 32,766)
provisions arising from, among others, fromother
,
things the alleged underpayment of IRRF and CIDE taxes and on remittances made to foreign operators as remuneration for completing international calls abroad (outgoing traffic); and

Ps.3,848,354

Ps.
4,213,972 (R$ 1,002,515)1,142,472) aggregate contingencies and Ps.3,826,631Ps.
3,762,522 (R$ 996,856) 1,020,077) 
provisions related to the requirement to contribute to the Promotion of Public Radio Broadcasting (“EBC”).

In addition, the Company’s Brazilian subsidiaries are subject to a number of contingencies for which it has not established provisions in the accompanying consolidated financial statements because the Company does not

consider the potential losses related to these contingencies to be probable. These include a fine for Ps.12,921,410Ps. 

18,118,080
 (R$ 3,366,090) imposed for
4,912,087)
related to
an unpaid installation inspection fee
rate
(Taxa de Fiscalização de Instalação or “TFI”) allegedly due for
to
the renovation of radio base stations, which is being challenged on the basis that there was no new equipment installation that could have led to this charge.

(6)charge

, along with any unpaid functioning inspection rate (Taxa de Fiscalização de Funcionamento or “TFF”).
(
5
) Anatel Challenge to Inflation Adjustments

Anatel has challenged the calculation of inflation-related adjustments due under the concession agreements with Tess S.A. (“Tess”), and Algar Telecom Leste S.A. (“ATL”), two of the Company’s subsidiaries that were previously merged into Claro Brasil. Anatel rejected Tess and ATL’s calculation of the inflation-related adjustments applicable to 60% 
of the concessions price (which was due in three equal annual installments, subject to inflation-related adjustments and interest), claiming that the companies’ calculation of the inflationrelatedinflation related adjustments resulted in a shortfall of the installment payments. The companies have filed declaratory and consignment actions seeking the resolution of the disputes and have obtained injunctions from a federal appeals courtthe Federal Court of Appeal. suspending any payment until the pending appeals are resolved.

The amount of the alleged shortfall as well as the method used to calculate monetary corrections are in dispute. If other methods or assumptions are applied, the amount may increase. In 2019,2021, Anatel calculated the monetary correction in a total amount of Ps.15,738,670Ps.
24,620,529 (R$ 4,100,000)6,675,000). As of December 31, 2020,2021, the Company has established a provision of Ps.2,625,671Ps.
4,577,389 (R$ 684,000)1,241,000) in the accompanying consolidated financial statements for the losses arising from these contingencies, which the Company considers probable.

18.

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66
Table of Contents
18
. Employee Benefits

An analysis of the net liability and net period cost for employee benefits isi
s
 as follows:

   At December 31, 
   2019   2020 

Mexico

  Ps.116,537,660   Ps.129,260,355 

Puerto Rico

   13,228,592    14,924,874 

Brazil

   9,503,738    8,913,548 

Europe

   12,827,318    14,392,445 

Ecuador

   409,750    488,161 

El Salvador

     154,422 

Nicaragua

     61,337 

Honduras

     35,060 
  

 

 

   

 

 

 

Total

  Ps.152,507,058   Ps.168,230,202 
  

 

 

   

 

 

 

   For the year ended December 31 
   2018   2019   2020 

Mexico

  Ps.12,046,208   Ps.12,788,464   Ps.14,911,208 

Puerto Rico

   686,067    747,755    664,046 

Brazil

   579,432    511,964    722,412 

Europe

   619,039    2,526,957    1,701,424 

Ecuador

   58,354    34,425    67,402 

El Salvador

       15,751 

Nicaragua

       3,711 
  

 

 

   

 

 

   

 

 

 
   13,989,100   Ps.16,609,565   Ps.18,085,954 
  

 

 

   

 

 

   

 

 

 

   
At December 31,
 
   2020   
2021
 
Mexico
  Ps.129,260,355   
Ps.
110,225,654
 
Puerto Rico
   14,924,874   
 
12,502,377
 
Brazil
   8,913,548   
 
6,108,744
 
Europe
   14,392,445   
 
13,127,228
 
Ecuador
   488,161   
 
601,239
 
El Salvador
   154,422   
 
177,922
 
Nicaragua
   61,337   
 
75,084
 
Honduras
   35,060   
 
32,217
 
   
 
 
   
 
 
 
Total
  Ps.168,230,202   
Ps.
142,850,465
 
   
 
 
   
 
 
 
   
For the year ended December 31
 
   2019   2020   
2021
 
Mexico
  Ps.12,788,464   Ps.14,911,208   
Ps.
15,507,652
 
Puerto Rico
   747,755    664,046   
 
548,550
 
Brazil
   511,964    722,412   
 
724,587
 
Europe
   2,526,957    1,701,424   
 
1,753,872
 
Ecuador
   34,425    67,402   
 
111,353
 
El Salvador
   0      15,751   
 
19,081
 
Nicaragua
   0      3,711   
 
18,561
 
Honduras
   0      0     
 
4,718
 
   
 
 
   
 
 
   
 
 
 
Total
  Ps.16,609,565   Ps.18,085,954   
Ps.
18,688,374
 
   
 
 
   
 
 
   
 
 
 
a) Defined Benefit Plans

The defined benefit obligation (DBO) and plan assets for the pension and other benefit obligation plans, by country, are as follows:

  At December 31 
  2019  2020 
  DBO  Plan Assets  Effect of
asset celling		  Net employee
benefit liability		  DBO  Plan Assets  Effect of
asset celling		  Net employee
benefit
liability		 

Mexico

 Ps.280,602,176  Ps.(164,910,346)  Ps.  Ps.115,691,830  Ps.278,434,302  Ps.(150,090,481)  Ps.  Ps.128,343,821 

Puerto Rico

  35,803,893   (22,575,301)    13,228,592   40,240,193   (25,315,319)    14,924,874 

Brazil

  21,412,097   (18,815,174)   4,428,021   7,024,944   18,568,932   (16,143,783)   3,393,640   5,818,789 

Europe

  4,538,543     4,538,543   5,490,873     5,490,873 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total

 Ps.342,356,709  Ps.(206,300,821)  Ps.4,428,021  Ps.140,483,909  Ps.342,734,300  Ps.(191,549,583)  Ps.3,393,640  Ps.154,578,357 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

  
At December 31
 
  
2020
  
2021
 
  DBO  Plan Assets  Effect of
asset ceiling		  Net employee
benefit liability		  
DBO
  
Plan Assets
  
Effect of
asset ceiling
  
Net employee
benefit
liability
 
Mexico
 Ps.278,434,302  Ps.(150,090,481)  Ps.—    Ps.128,343,821  
Ps.
286,396,483
 
 
Ps.
(177,270,561
) 
 
Ps.
—  
 
 
Ps.
109,125,922
 
Puerto Rico
  40,240,193   (25,315,319)   —     14,924,874  
 
38,092,662
 
 
 
(25,590,285
) 
 
 
—  
 
 
 
12,502,377
 
Brazil
  18,568,932   (16,143,783)   3,393,640   5,818,789  
 
15,497,227
 
 
 
(15,466,336
) 
 
 
4,422,459
 
 
 
4,453,350
 
Europe
  5,490,873   —     —     5,490,873  
 
5,093,036
 
 
 
—  
 
 
 
—  
 
 
 
5,093,036
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total
 Ps.342,734,300  Ps.(191,549,583)  Ps.3,393,640  Ps.154,578,357  
Ps.
345,079,408
 
 
Ps.
(218,327,182
) 
 
Ps.
4,422,459
 
 
Ps.
131,174,685
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
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Table of Contents
Below is a summary of the actuarial results generated for the pension and retirement plans as well as the medical services in Puerto Rico and Brazil; the pension plans and seniority premiums related to Telmex; the pension plan, the service awards plan and severance in Austria corresponding to the years ended December 31, 2018, 2019, 2020 and 2020:

  At December 31, 2018 
  DBO  Plan Assets  Effect of asset
celling		  Net employee
benefit liability		 

Balance at the beginning of the year

 Ps.329,113,625  Ps.(227,688,604)  Ps.6,519,560  Ps.107,944,581 

Current service cost

  3,322,813     3,322,813 

Interest cost on projected benefit obligation

  30,185,257     30,185,257 

Expected return on plan assets

   (20,804,104)    (20,804,104) 

Changes in the asset ceiling during the period and others

    587,373   587,373 

Past service costs and other

   157,765    157,765 

Actuarial gain for changes in experience

  (7,222)     (7,222) 

Actuarial loss from changes in demographic assumptions

  134,625     134,625 

Actuarial gain from changes in financial assumptions

  (24,890)     (24,890) 
 

 

 

  

 

 

  

 

 

  

 

 

 

Net period cost

 Ps.33,610,583  Ps.(20,646,339)  Ps.587,373  Ps.13,551,617 

Actuarial gain for changes in experience

  (21,283,470)     (21,283,470) 

Actuarial loss from changes in demographic assumptions

  68,482     68,482 

Actuarial gain from changes in financial assumptions

  (1,246,539)     (1,246,539) 

Changes in the asset ceiling during the period and others

    (1,055,409)   (1,055,409) 

Return on plan assets greater than discount rate (shortfall)

   23,503,296    23,503,296 
 

 

 

  

 

 

  

 

 

  

 

 

 

Recognized in other comprehensive income

 Ps.(22,461,527)  Ps.23,503,296  Ps.(1,055,409)  Ps.(13,640) 

Contributions made by plan participants

  173,722   (173,722)    —   

Contributions to the pension plan made by the Company

   (1,565,792)    (1,565,792) 

Benefits paid

  (19,546,541)   19,546,541    —   

Payments to employees

  (10,651,938)     (10,651,938) 

Effect of translation

  (3,535,477)   3,353,498   (963,981)   (1,145,960) 
 

 

 

  

 

 

  

 

 

  

 

 

 

Others

 Ps.(33,560,234)  Ps.21,160,525  Ps.(963,981)  Ps.(13,363,690) 

Balance at the end of the year

  306,702,447   (203,671,122)   5,087,543   108,118,868 

Less short-term portion

  (212,141)     (212,141) 
 

 

 

  

 

 

  

 

 

  

 

 

 

Non-current obligation

 Ps.306,490,306  Ps.(203,671,122)  Ps.5,087,543  Ps.107,906,727 
 

 

 

  

 

 

  

 

 

  

 

 

 
2021:


   At December 31, 2019 
   DBO  Plan Assets  Effect of asset
celling		  Net
employee
benefit
liability		 

Balance at the beginning of the year

  Ps.306,702,447  Ps.(203,671,122)   5,087,543  Ps.108,118,868 

Current service cost

   2,591,975     2,591,975 

Interest cost on projected benefit obligation

   31,001,348     31,001,348 

Expected return on plan assets

    (20,070,037)    (20,070,037) 

Changes in the asset ceiling during the period and others

     445,743   445,743 

Past service costs and others

    144,481    144,481 

Actuarial gain for changes in experience

   (22,599)     (22,599) 

Actuarial gain from changes in demographic assumptions

   (129)     (129) 

Actuarial loss from changes in financial assumptions

   36,163     36,163 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net period cost

  Ps.33,606,758  Ps.(19,925,556)  Ps.445,743  Ps.14,126,945 

Actuarial loss for changes in experience

   31,606,323     31,606,323 

Actuarial gain from changes in demographic assumptions

   (339,657)     (339,657) 

Actuarial loss from changes in financial assumptions

   7,207,072     7,207,072 

Changes in the asset ceiling during the period and others

     (712,064)   (712,064) 

Return on plan assets greater than discount rate (shortfall)

    423,514    423,514 
  

 

 

  

 

 

  

 

 

  

 

 

 

Recognized in other comprehensive income

  Ps.38,473,738  Ps.423,514  Ps.(712,064)  Ps.38,185,188 

Contributions made by plan participants

   155,188   (155,188)    —   

Contributions to the pension plan made by the Company

    (1,337,610)    (1,337,610) 

Benefits paid

   (15,836,928)   15,836,928    —   

Payments to employees

   (16,996,920)     (16,996,920) 

Effect of translation

   (3,534,509)   2,528,213   (393,201)   (1,399,497) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Others

  Ps.(36,213,169)  Ps.16,872,343  Ps.(393,201)  Ps.(19,734,027) 

Balance at the end of the year

   342,569,774   (206,300,821)   4,428,021   140,696,974 

Less short-term portion

   (213,065)     (213,065) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Non-current obligation

  Ps.342,356,709  Ps.(206,300,821)  Ps.4,428,021  Ps.140,483,909 
  

 

 

  

 

 

  

 

 

  

 

 

 

   At December 31, 2020 
   DBO  Plan Assets  Effect of asset
celling		  Net employee
benefit liability		 

Balance at the beginning of the year

  Ps.342,569,774  Ps.(206,300,821)  Ps.4,428,021  Ps.140,696,974 

Current service cost

   2,810,584     2,810,584 

Interest cost on projected benefit obligation

   30,482,173     30,482,173 

Expected return on plan assets

    (17,655,119)    (17, 655,119) 

Changes in the asset ceiling during the period and others

     278,639   278,639 

Past service costs and other

    148,253    148,253 

Actuarial gain for changes in experience

   (8,945)     (8,945) 

Actuarial gain from changes in demographic assumptions

   (270)     (270) 

Actuarial loss from changes in financial assumptions

   20,219     20,219 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net period cost

  Ps.33,303,761  Ps.(17,506,866)  Ps.278,639  Ps.16,075,534 

Actuarial gain for changes in experience

   (9,677)     (9,677) 

Actuarial gain from changes in demographic assumptions

   (103,987)     (103,987) 

Actuarial loss from changes in financial assumptions

   3,475,345     3,475,345 

Changes in the asset ceiling during the period and others

     (542,430)   (542,430) 

Return on plan assets greater than discount rate (shortfall)

    12,320,777    12,320,777 

Actuarial loss from changes in demographic assumptions

   (924,084)     (924,084) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Recognized in other comprehensive income

  Ps.2,437,597  Ps.12320,777  Ps.(542,430)  Ps.14,215,944 

Contributions made by plan participants

   137,947   (137,947)    —   

Contributions to the pension plan made by the Company

    (1,882,654)    (1,882,654) 

Benefits paid

   (19,740,727)   19,740,727    —   

Payments to employees

   (14,426,720)     (14,426,720) 

Effect of translation

   (1,278,392)   2,217,201   (770,590)   168,219 
  

 

 

  

 

 

  

 

 

  

 

 

 

Others

  Ps.(35,307,892)  Ps.19,937,327  Ps.(770,590)  Ps.(16,141,155) 

Balance at the end of the year

   343,003,240   (191,549,583)   3,393,640   154,847,297 

Less short-term portion

   (268,940)     (268,940) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Non-current obligation

  Ps.342,734,300  Ps.(191,549,583)  Ps.3,393,640  Ps.154,578,357 
  

 

 

  

 

 

  

 

 

  

 

 

 

   At December 31, 2019 
   DBO  Plan Assets  Effectofasset
ceiling		  Net employee
benefit liability		 
Balance at the beginning of the year
 
Ps.
306,702,447  
Ps.
(203,671,122
)
 
 
Ps.
5,087,543  
Ps.
108,118,868 
Current service cost
  2,591,975           2,591,975 
Interest cost on projected benefit obligation
  31,001,348           31,001,348 
Expected return on plan assets
      (20,070,037)       (20,070,037) 
Changes in the asset ceiling during the period and others
          445,743   445,743 
Past service costs and others
      144,481       144,481 
Actuarial gain for changes in experience
  (22,599)           (22,599) 
Actuarial gain from changes in demographic assumptions
  (129)           (129) 
Actuarial loss from changes in financial assumptions
  36,163           36,163 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net period cost
 
Ps.
33,606,758  
Ps.
(19,925,556
)
 
 
Ps.
445,743  
Ps.
14,126,945 
Actuarial loss for changes in experience
  31,606,323           31,606,323 
Actuarial gain from changes in demographic assumptions
  (339,657)           (339,657) 
Actuarial loss from changes in financial assumptions
  7,207,072           7,207,072 
Changes in the asset ceiling during the period and others
      

  (712,064)   (712,064) 
Return on plan assets greater than discount rate (shortfall)
      423,514       423,514 
  
 
 
  
 
 
  
 
 
  
 
 
 
Recognized in other comprehensive income
 
Ps.
38,473,738  
Ps.
423,514  
Ps.
(712,064
)

 
Ps.
38,185,188 
Contributions made by plan participants
  155,188   (155,188)       —   
Contributions to the pension plan made by the Company
      (1,337,610)       (1,337,610) 
Benefits paid
  (15,836,928)   15,836,928       —   
Payments to employees
  (16,996,920)           (16,996,920) 
Effect of translation
  (3,534,509)   2,528,213   (393,201)   (1,399,497) 
  
 
 
  
 
 
  
 
 
  
 
 
 
Others
 
Ps.
(36,213,169
)
 
Ps.
16,872,343  
Ps.
(393,201
)
 
 
Ps.
(19,734,027
)
Balance at the end of the year
  342,569,774   (206,300,821)   4,428,021   140,696,974 
Less short-term portion
  (213,065)           (213,065) 
  
 
 
  
 
 
  
 
 
  
 
 
 
Non-current obligation
 
Ps.
342,356,709  
Ps.
(206,300,821
)
 
 
Ps.
4,428,021  
Ps.
140,483,909 
  
 
 
  
 
 
  
 
 
  
 
 
 
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68
Table of Contents
   At December 31, 2020 
   DBO  Plan Assets  Effect of asset
ceiling		  Net employee
benefit liability		 
Balance at the beginning of the year
  Ps.342,569,774  Ps.(206,300,821)  Ps.4,428,021  Ps.140,696,974 
Current service cost
   2,810,584           2,810,584 
Interest cost on projected benefit obligation
   30,482,173           30,482,173 
Expected return on plan assets
       (17,655,119)       (17,655,119) 
Changes in the asset ceiling during the period and others
           278,639   278,639 
Past service costs and other
       148,253       148,253 
Actuarial gain for changes in experience
   (8,945)           (8,945) 
Actuarial gain from changes in demographic assumptions
   (270)           (270) 
Actuarial loss from changes in financial assumptions
   20,219           20,219 
   
 
 
  
 
 
  
 
 
  
 
 
 
Net period cost
  Ps.33,303,761  Ps.(17,506,866)  Ps.278,639  Ps.16,075,534 
Actuarial gain for changes in experience
   (9,677)           (9,677) 
Actuarial gain from changes in demographic assumptions
   (103,987)           (103,987) 
Actuarial loss from changes in financial assumptions
   3,475,345           3,475,345 
Changes in the asset ceiling during the period and others
           (542,430)   (542,430) 
Return on plan assets greater than discount rate (shortfall)
       12,320,777       12,320,777 
Others

   (924,084)           (924,084) 
   
 
 
  
 
 
  
 
 
  
 
 
 
Recognized in other comprehensive income
  Ps.2,437,597  Ps.12,320,777  Ps.(542,430)  Ps.14,215,944 
Contributions made by plan participants
   137,947   (137,947)       —   
Contributions to the pension plan made by the Company
       (1,882,654)       (1,882,654) 
Benefits paid
   (19,740,727)   19,740,727       —   
Payments to employees
   (14,426,720)           (14,426,720) 
Effect of translation
   (1,278,392)   2,217,201   (770,590)   168,219 
   
 
 
  
 
 
  
 
 
  
 
 
 
Others
  Ps.(35,307,892)  Ps.19,937,327  Ps.(770,590)  Ps.(16,141,155) 
Balance at the end of the year
   343,003,240   (191,549,583)   3,393,640   154,847,297 
Less short-term portion
   (268,940)           (268,940) 
   
 
 
  
 
 
  
 
 
  
 
 
 
Non-current
obligation
  Ps.342,734,300  Ps.(191,549,583)  Ps.3,393,640  Ps.154,578,357 
   
 
 
  
 
 
  
 
 
  
 
 
 
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69
Table of Contents
  
At December 31, 2021
 
  
DBO
  
Plan Assets
  
Effect of asset
ceiling
  
Net employee
benefit liability
 
Balance at the beginning of the year
 
Ps.
 
343,003,240
 
 
Ps.
 
(191,549,583)
 
 
Ps.
 
3,393,640
 
 
Ps.
 
154,847,297
 
Current service cost
 
 
2,090,896
 
         
 
2,090,896
 
Interest cost on projected benefit obligation
 
 
28,913,257
 
         
 
28,913,257
 
Expected return on plan assets
 
 
(15,112,669
) 
         
 
(15,112,669
) 
Changes in the asset ceiling during the period and others
         
 
215,544
 
 
 
215,544
 
Past service costs and other
     
 
139,910
 
     
 
139,910
 
Actuarial gain for changes in experience
 
 
(23,024
) 
         
 
(23,024
) 
Actuarial gain from changes in demographic assumptions
 
 
(48
) 
         
 
(48
) 
Actuarial
gain
from changes in financial assumptions
 
 
(6,907
) 
         
 
(6,907
) 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net period cost
 
Ps.
30,974,174
 
 
Ps.
(14,972,759)
 
 
Ps.
215,544
 
 
Ps.
16,216,959
 
Actuarial
loss
for changes in experience
 
 
10,728,950
 
         
 
10,728,950
 
Actuarial gain from changes in demographic assumptions
 
 
(104,568
) 
         
 
(104,568
) 
Actuarial
gain
from changes in financial assumptions
 
 
(4,099,321
) 
         
 
(4,099,321
) 
Changes in the asset ceiling during the period and others
         
 
969,433
 
 
 
969,433
 
Return on plan assets greater than discount rate (shortfall)
     
 
(22,198,615
) 
     
 
(22,198,615
) 
  
 
 
  
 
 
  
 
 
  
 
 
 
Recognized in other comprehensive income
 
Ps.
6,525,061
 
 
Ps.
(22,198,615
) 
 
Ps.
969,433
 
 
Ps.
(14,704,121
) 
Contributions made by plan participants
 
 
99,201
 
 
 
(99,201
) 
     
 
—  
 
Contributions to the pension plan made by the Company
     
 
311,108
 
     
 
311,108
 
Benefits paid
 
 
(10,574,420
) 
 
 
10,348,544
 
     
 
(225,876
) 
Payments to employees
 
 
(25,042,314
) 
         
 
(25,042,314
) 
Effect of translation
 
 
330,770
 
 
 
(166,676
) 
 
 
(156,158
) 
 
 
7,936
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Others
 
Ps.
 
(35,186,763)
 
 
Ps.
10,393,775
 
 
Ps.
(156,158)
 
 
Ps.
(24,949,146)
 
Balance at the end of the year
 
 
345,315,712
 
 
 
(218,327,182
) 
 
 
4,422,459
 
 
 
131,410,989
 
Less short-term portion
 
 
(236,304
) 
         
 
(236,304
) 
  
 
 
  
 
 
  
 
 
  
 
 
 
Non-current obligation
 
Ps.
345,079,408
 
 
Ps.
(218,327,182)
 
 
Ps.
4,422,459
 
 
Ps.
131,174,685
 
  
 
 
  
 
 
  
 
 
  
 
 
 
In the case of other subsidiaries in Mexico, the net period cost of other employee benefits for the years ended December 31, 2018, 2019, 2020 and 20202021 was Ps.(16,347) , Ps.49,050 49,050, Ps. 174,994 and Ps.174,994,Ps.267,728, respectively. The balance of other employee benefits at December 31, 20192020 and 20202021 was Ps.845,830Ps. 916,534 and Ps.916,534,Ps. 1,099,732, respectively.

In the case of Brazil, the net period cost of other benefits for the years ended December 31, 2018, 2019, 2020 and 20202021 was Ps.98,658, Ps.99,498Ps. 99,498, Ps. 268,562 and Ps.268,562,Ps. 225,984, respectively. The balance of employee benefits at December 31, 20192020 and 20202021 was Ps.2,402,285Ps. 2,111,801 and Ps.2,111,801,Ps.1,380,764, respectively.

In the case of Ecuador, the net period cost of other benefits for the years ended December 31, 2018, 2019, 2020 and 20202021 was Ps.58,354, Ps.34,425Ps. 34,425, Ps. 67,402 and Ps.67,402,Ps. 111,353, respectively. The balance of employee benefits at December 31, 20192020 and 20202021 was Ps.409,750Ps. 488,161 and Ps.488,161,Ps. 601,239, respectively.

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70
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In the case of Central America, the net period cost of other benefits for the years ended December 
31
,
2020
and
2021
was Ps.19,462.Ps.
19,462
and Ps.
42,360
, respectively. The balance of employee benefits at December 
31
,
2020
and
2021
was Ps.250,819.

Ps.

250,819
and Ps.
285,223
, respectively.
Plan assets are invested in:

At December 31

   2019  2020 
   Puerto Rico  Brazil  Mexico  Puerto Rico  Brazil  Mexico 

Equity instruments

   41%   —   64%   43%   —   68% 

Debt instruments

   58%   94%   36%   22%   95%   32% 

Others

   1%   6%   —   35%   5%   — 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
   100%   100%   100%   100%   100%   100% 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

   2020  
2021
 
   Puerto Rico  Brazil  Mexico  
Puerto Rico
  
Brazil
  
Mexico
 
Equity instruments
   43%   —     68%  
 
42
% 
 
 
—  
 
 
 
74
% 
Debt instruments
   22%   95%   32%  
 
21
% 
 
 
94
% 
 
 
26
% 
Others
   35%   5%   —    
 
37
% 
 
 
6
% 
 
 
—  
 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
    100%   100%   100%  
 
100
% 
 
 
100
% 
 
 
100
% 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Included in the Telmex’s net pension plan liability are plan assets of Ps.164,910,346Ps. 150,090,481 and Ps.150,090,481Ps.
177,270,561 as of December 31, 20192020 and 2020,2021, respectively, of which 31.9%36.9% and 39.6%47.5% during 20192020 and 2020,2021, respectively, were invested in equity and debt instruments of both América Movil and also of related parties, primarily entities that are under common control of the Company’s principal shareholder. The Telmex pension plan recorded a re-measurement of its defined pension plan of Ps.34,782,129Ps. 11,753,416 and Ps.11,753,416Ps
. (
9,928,728) during 2019 20
20
and 2020,202
1
, respectively, attributable to a change in actuarial assumptions, and also a decline and an increase in the fair value of plan investments from December 31, 20192020 to December 31, 2020.2021. The decrease and increase in fair value of the aforementioned related party pension plan investments approximated Ps.4,156,919Ps. 14,820,220 and Ps.14,820,220Ps. (20,234,095) during the years ended December 31, 20192020 and 2020,2021, respectively.

The assumptions used in determining the net period cost were as follows:

  2018 2019 2020
  Puerto
Rico		 Brazil Mexico Europe Puerto
Rico		 Brazil Mexico Europe Puerto
Rico		 Brazil Mexico Europe
    1.25%,    0.75%,  6.48% &  0.25%,
    

 

1.75% &

    

 

1.00% &

    

 

0.50% &

 

Discount rate and long- term rate return

 

 

4.45%

 

 

9.10%

 

 

11.81%

 

 

2.00%

 

 

3.23%

 

 

7.03%

 

 

10.50%

 

 

1.25%

 

 

2.34%

 

 

7.39%

 

 

10.04%

 

 

0.75%

    3.0.%,    3.00%,    3.00%,
    3.5% &    3.5% &    3.5% &

Rate of future salary increases

 2.75% 4.00% 3.55% 4.40% 2.75% 3.80% 3.20% 4.40% 2.75% 3.25% 2.84% 4.10%

Percentage of increase in health care costs for the coming year

 3.87% 10.50%   3.18% 10.30%   2.28% 9.96%  

Year to which this level will be maintained

 N/A 2029   N/A 2029   N/A 2031  

Rate of increase of pensions

    1.60%    1.60%    1.60%

Employee turnover rate*

    0.0%-1.51%    0.00%-1.38%    0.00%-1.31%

  2019 2020 2021
  Puerto
Rico		  Brazil  Mexico  Europe Puerto
Rico		  Brazil  Mexico  Europe 
Puerto
Rico
  
Brazil
  
Mexico
  
Europe
              0.75%,
 
             0.25%,
 
             
0.25%,
 
              1.00% &      6.48% &      0.50% &      
8.51% &
      
0.75% &
             
Discount rate and long-term
 
rate
 
return
  3.23
%

  7.03
%

  10.50
%

 1.25%  2.34
%

  7.39
%

  10.04
%

 0.75%  
2.75
%

  
8.67%
   
10.4
%

 
1.00%
             
              3.00%,             3.00%,             
3.00%,
              3.5% &             3.5% &             
3.40% &
Rate of future salary increases
  2.75%   3.80%   3.20%  4.40%  2.75%   3.25%   2.84%  4.10%  
2.75%
   
3.25%
   
2.80%
  
4.00%
             
Percentage of increase in health care
costs for the coming year
  3.18%   10.30%         2.28%   9.96%         
2.72%
   
9.44%
       
             
Year to which this level will be
maintained
  N/A   2029         N/A   2031         
NA
   
2030
       
             
Rate of increase of pensions
             1.60%             1.60%             
1.60%
             
Employee turnover rate*
             0.00%-1.38%             0.00%-1.31%             
0.00%-1.12%
*

Depending on years of service

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71
Table of Contents
Biometric

Puerto Rico:  
Mortality:  RP 2014, MSS 2020 202
1
Tables.
Disability:  1985 Pension Disability Table
Brazil:  
Mortality:  2000 Basic AT Table for gender
Disability for assets:  UP 84 modified table for gender
Disability retirement:  80 CSO Code Table
Rotation:  Probability of leaving the Company other than death, Disability and retirement is zero

Europe

Life expectancy in Austria is base on “AVÖ 2018-P – Rechnungsgrundlagen für die Pensionsversicherung – Pagler & Pagler”.

Telmex  
Mortality:  Mexican 2000 (CNSF) adjusted
Disability:  Mexican Social Security adjusted by Telmex experience
Turnover:  Telmex experience
Retirement:  Telmex experience

For the year ended December 31, 2020,2021, the Company conducted a sensitivity analysis on the most significant variables that affect the DBO, simulating independently, reasonable changes to roughly 100 basis points in each of these variables. The increase (decrease) would have resulted in the DBO pension and other benefits at December 31, 20202021 are as follows:

   -100 points   +100 points 

Discount rate

  Ps.29,012,552   Ps.(25,541,956) 

Health care cost trend rat

  Ps.(665,934)   Ps.781,238 

   
-100 points
   
+100 points
 
Discount rate
  Ps.32,094,727   Ps.(22,626,321) 
Health care cost trend rat
  Ps.(431,724)   Ps.499,356 
Telmex Plans

Part of the Telmex´s employees are covered under defined benefit pension plans and seniority premiums. Pension benefits and seniority premiums are determined on the basis in their final year of employment, their seniority, and their age at the time of retirement. Telmex has set up an irrevocable trust fund to finance these employee benefits and has adopted the policy of making contributions to such fund when it is considered necessary.

Europe

Defined benefit pension plans

A1 Telekom Austria Group provides defined benefits for certain former employees in Austria. All eligible employees are retired and were employed prior to January 1, 1975. This unfunded plan provides benefits based on a percentage of salary and years employed, not exceeding 80% of the salary before retirement, and taking into consideration the pension provided by the social security system. A1 Telekom Austria Group is exposed primarily to the risk of development of life expectancy and inflation because the benefits from pension plans are lifetime benefits. Furthermore, at December 31, 2020 and 2019,2021, approximately 10% and 10%, respectively,24% (2020: 20%) of the obligation for pensions relate to the employees of the company Akenes in Lausanne, which was acquired in 2017.

Lausanne.

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Table of Contents
Service awards

Civil servants and certain employees (in the following “employees”) are eligible to receive service awards. In accordance with the legal regulations, eligible employees receive a cash bonus of two months’ salary after 25 years of service and four months’ salary after 40 years of service. Employees with at least 35 years of service when retiring (at the age of 65) or who are retiring based on specific legal regulations are also eligible to receive the service award of four monthly salaries. The obligation is accrued over the period of service, taking into account the employee turnover rate offor employees who leave service early.employment prematurely. The main risk that A1 Telekom Austria Group is exposed to is the risk of development of salary increases and changes of interest rates.

Severance

Defined contribution plans

Employees who started work for A1 Telekom Austria Group in Austria on or after January 1, 2003 are covered by a defined contribution plan. In 2021, A1 Telekom Austria Group paid Ps.54,945 and Ps.66,294 (1.53%Ps. 68,425 (2020: Ps. 66,294), 1.53% of the salary or wage)wage, into this defined contribution plan (BAWAG Allianz Mitarbeitervorsorgekasse AG) in 2019 and 2020, respectively.

.

Defined benefit plans

Severance benefit obligations for employees, hiredwhose employment commenced before January 1, 2003, excluding civil servants, are covered by defined benefit plans. Upon termination of employment by A1 Telekom Austria Group or upon retirement, eligible employees receive severance payments. Depending on their time in service, their severance is equalamounts to a multiple of their monthly basic compensation plus variable elementscomponents such as overtime or bonuses, withup to a maximum of twelve monthly salaries. In case of death, the heirs of eligible employees receive 50% of the severance benefits. The primary risks to A1 Telekom Austria Group are salary increases and changes of interest rates.

b) Defined Contribution Plans

Brazil

Claro makes contributions to the DCP through Embratel Social Security Fund – Telos. Contributions are computed based on the salaries of the employees, who decide on the percentage of their contributions to the plan (participants enrolled before October 31st, 2014 is from 1% to 8% and, for those subscribed after that date, the contribution is from 1% to 7% of their salaries). Claro contributes the same percentage as the employee, capped at 8% of the participant’s balance for the employees that are eligible to participate in this plan.

At December 31, 20192020 and 2020,2021, the balance of the DCP liability was Ps.76,509Ps. 980,014 and Ps 980,014
.
274,630 respectively. For the years ended December 31, 2018, 2019, 2020 and 20202021 the cost of labor were Ps.2,377, Ps.3,365Ps. 3,365, Ps. 2,930 and Ps.2,930,Ps.
61,649, respectively.

Europe

In Austria, pension benefits are generally provided by the social security system for employees, and by the government for civil servants. The contributions of 12.55% of gross salaries that A1 Telekom Austria Group made in 2019 and 20202021 to the social security system and the government in Austria amount to Ps.1,334,713 and Ps.1,474,721, respectively. ContributionsPs. 1,436,587 (2020: Ps.
1,474,721). In 2021, contributions of the foreign subsidiaries into the respective systems range between 7% and 29% of gross salaries and amount to Ps.530,888 and Ps.601,476 in 2019 and 2020, respectively.

Ps. 601,626 (2020: Ps. 601,476).

Additionally, A1 Telekom Austria Group offers a defined contribution plan for employees of some of its Austrian subsidiaries. A1 Telekom Austria Group’s contributions to this plan are based on a percentage of the compensation not exceeding 5%. TheIn 2021, the annual expenses for this plan amounted to Ps.281,693 and Ps.295,567 in 2019 and 2020, respectively.

Ps. 286,195 (2020: Ps.

295,567).

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As of December 31, 20192020 and 20202021 the liability related to this defined contribution plan amounted to Ps.111,724Ps. 134,034 and Ps.134,034,Ps.
114,233, respectively.

Other countries

For the rest of the countries where the Company operates and that do not have defined benefit plans or defined contribution plans, the Company makes contributions to the respective governmental social security agencies which are recognized in results of operations as they are incurred.

c) Long-term direct employee benefits

   Balance at
December 31,
2018		   Effect of
translation		  Increase of
the year		   Applications   Balance at
December 31,
2019		 
   Payments  Reversals 

Long-term direct employee benefits

  Ps.8,111,778   Ps.(518,180)   Ps.2,528,224    Ps.(1,946,055)   Ps. —      Ps.8,175,767 
  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

   

 

 

 
   Balance at
December 31,
2019		   Effect of
translation		  Increase of
the year		   Applications   Balance at
December 31,
2020		 
   Payments  Reversals 

Long-term direct employee benefits

  Ps.8,175,767   Ps.1,256,880   Ps.1,729,392    Ps.(2,411,436)   Ps. —      Ps.8,750,603 
  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

   

 

 

 

   Balance at
December 31,
2019		   Effect of
translation		  Increase of
the year		   Payments  Balance at
December 31,
2020		 
Long-term direct employee benefits
  Ps.8,175,767   Ps.1,256,880  Ps.1,729,392   Ps.(2,411,436)  Ps.8,750,603 
   
 
 
   
 
 
  
 
 
   
 
 
  
 
 
 
      
   
Balance at
December 31,
2020
   
Effect of
translation
  
Increase of
the year
   
Payments
  
Balance at
December 31,
2021
 
Long-term direct employee benefits
  
Ps.
8,750,603
 
  
Ps.
(328,619
) 
 
Ps.
1,824,693
 
  
Ps.
(2,320,831
) 
 
Ps.
7,925,846
 
   
 
 
   
 
 
  
 
 
   
 
 
  
 
��
 
In 2008, a comprehensive restructuring program was initiated in the segment Austria. The provision for restructuring includes future compensation of employees who will no longer provide services for A1 Telekom Austria Group but who cannot be laid off due to their status as civil servants. These employment contracts are onerous contracts under IAS 37, as the unavoidable cost related to the contractual obligation exceeds the future economic benefit. The restructuring program also includes social plans for employees whose employment will be terminated in a socially responsible way. In 2009 and every year from 2011 to 2019, new social plans were initiated that provide for early retirement, special severance packages and golden handshake options. Due to their nature as termination benefits, these social plans are accounted for according to IAS 19.

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19. Financial Assets and Liabilities

Set out below is the categorization of the financial instruments, excluding cash and cash equivalents, held by the Company as of December 31, 20192020 and 2020:

   December 31, 2019 
   Loans and
Receivables		   Fair value
through
profit or loss		   Fair value
through OCI		 

Financial Assets:

      

Equity investments at fair value through OCI and other short term investments

  Ps.10,145,615   Ps.—     Ps.37,572,410 

Accounts receivable from subscribers, distributors, contractual assets and other

   196,217,010    —      —   

Related parties

   1,273,140    —      —   

Derivative financial instruments

   —      6,825,760    —   
  

 

 

   

 

 

   

 

 

 

Total

  Ps.207,635,765   Ps.6,825,760   Ps.37,572,410 
  

 

 

   

 

 

   

 

 

 

Financial Liabilities:

      

Debt

  Ps.624,254,477   Ps.—     Ps.—   

Liability related to right-of-use of assets

   120,596,733    —      —   

Accounts payable

   216,112,824    —      —   

Related parties

   3,460,419    —      —   

Derivative financial instruments

   —      9,596,751    —   
  

 

 

   

 

 

   

 

 

 

Total

  Ps.964,424,453   Ps.9,596,751   Ps.—   
  

 

 

   

 

 

   

 

 

 
2021:

   December 31, 2020 
   Loans and
Receivables		   Fair value
through
profit or loss		   Fair value
through OCI		 

Financial Assets:

      

Equity investments at fair value through OCI and other short term investments

  Ps.4,603,284   Ps.—     Ps.50,033,111 

Accounts receivable from subscribers, distributors, contractual assets and other

   171,213,415    —      —   

Related parties

   1,391,300    —      —   

Derivative financial instruments

   —      20,928,335    —   
  

 

 

   

 

 

   

 

 

 

Total

  Ps.177,207,999   Ps.20,928,335   Ps.50,033,111 
  

 

 

   

 

 

   

 

 

 

Financial Liabilities:

      

Debt

  Ps.628,382,956   Ps.—     Ps.—   

Liability related to right-of-use of assets

   109,327,241    —      —   

Accounts payable

   186,995,472    —      —   

Related parties

   3,999,916    —      —   

Derivative financial instruments

   —      14,230,249    —   
  

 

 

   

 

 

   

 

 

 

Total

  Ps.928,705,585  Ps.14,230,249   Ps.—   
  

 

 

   

 

 

   

 

 

 

   
December 31, 2020
 
   
Loans and
Receivables
   
Fair value
through
profit or loss
   
Fair value
through OCI
 
Financial Assets:
               
Equity investments at fair value through OCI and other short term investments
  Ps.62,940   Ps.—     Ps.50,033,111 
Accounts receivable from subscribers, distributors, contractual assets and other
   171,213,415    —      —   
Related parties
   1,391,300    —      —   
Derivative financial instruments
 (Note 7)
   —      20,928,335    —   
   
 
 
   
 
 
   
 
 
 
Total current assets
   172,667,655    20,928,335    50,033,111 
   
 
 
   
 
 
   
 
 
 
Non-current assets
               
Debt instruments
at fair value through OCI
   0    —   

4,540,344
 
   
 
 
   
 
 
   
 
 
 
Total
  Ps.172,667,655   Ps.20,928,335   Ps.54,573,455 
   
 
 
   
 
 
   
 
 
 
Financial Liabilities:
               
Debt
  Ps.628,382,956   Ps.—     Ps.—   
Liability related to right-of-use of assets
   109,327,241    —      —   
Accounts payable
   186,995,472    —      —   
Related parties
   3,999,916    —      —   
Derivative financial instruments (Note 7)
   —      14,230,249    —   
   
 
 
   
 
 
   
 
 
 
Total
  Ps.928,705,585   Ps.14,230,249   Ps.—   
   
 
 
   
 
 
   
 
 
 
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December 31, 2021
 
   
Loans and
Receivables
   
Fair value
through
profit or loss
   
Fair value
through OCI
 
Financial Assets:
               
Equity investments at fair value through OCI and other short term investments
  
Ps.
15,026
 
  
Ps.
—  
   
Ps.
117,688,176
 
Accounts receivable from subscribers, distributors, contractual assets and other
  
 
166,041,321
 
  
 
—  
   
 
—  
 
Related parties
  
 
1,158,611
 
  
 
—  
 
  
 
—  
 
Derivative financial instruments
 (Note 7)
  
 
—  
 
  
 
10,130,806
   
 
—  
 
   
 
 
   
 
 
   
 
 
 
Total current assets
  
 
167,214,958
 
  
 
10,130,806
 
  
 
117,688,176
 
   
 
 
   
 
 
   
 
 
 
Non-current assets
               
Debt instruments
 at fair value through OCI
  
 
—  
 
  
 
—  
 
  
 
6,894,757
 
   
 
 
   
 
 
   
 
 
 
Total
  
Ps.
167,214,958
 
  
Ps.
10,130,806
 
  
Ps.
124,582,933
 
   
 
 
   
 
 
   
 
 
 
Financial Liabilities:
               
Debt
  
Ps.
564,030,102
 
  
Ps.
—  
   
Ps.
—  
 
Liability related to right-of-use of assets
  
 
98,654,225
 
  
 
—  
   
 
—  
 
Accounts payable
  
 
201,341,806
 
  
 
—  
   
 
—  
 
Related parties
  
 
4,216,882
 
  
 
—  
   
 
—  
 
Derivative financial instruments (Note 7)
  
 
—  
 
  
 
10,034,508
   
 
—  
 
   
 
 
   
 
 
   
 
 
 
Total
  
Ps.
868,243,015
 
  
Ps.
10,034,508
 
  
Ps.
—  
 
   
 
 
   
 
 
   
 
 
 
Fair value hierarchy

The Company’s valuation techniques used to determine and disclose the fair value of its financial instruments are based on the following hierarchy:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Variables other than quoted prices in Level 1 that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices); and

Level 3: Variables used for the asset or liability that are not based on any observable market data (non-observable(non-observable variables).


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The fair value for the financial assets (excluding cash and cash equivalents) and financial liabilities shown in the consolidated statements of financial position at December 31, 20192020 and 20202021 is as follows:

   Measurement of fair value at December 31, 2019 
   Level 1   Level 2   Level 3   Total 

Assets:

        

Equity investments at fair value through OCI and other short-term investments

  Ps.37,572,410   Ps.10,145,615   Ps.—    Ps.47,718,025 

Derivative financial instruments

   —      6,825,760    —      6,825,760 

Pension plan assets

   185,981,861    20,294,557    24,403    206,300,821 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

  Ps.223,554,271   Ps.37,265,932   Ps.24,403   Ps.260,844,606 
  

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities:

        

Debt

  Ps.582,003,256   Ps.101,667,421   Ps.—     Ps.683,670,677 

Liability related to right-of-use of assets

   120,596,733    —      —      120,596,733 

Derivative financial instruments

   —      9,596,751    —      9,596,751 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

  Ps.702,599,989   Ps.111,264,172   Ps.—     Ps.813,864,161 
  

 

 

   

 

 

   

 

 

   

 

 

 
   Measurement of fair value at December 31, 2020 
   Level 1   Level 2   Level 3   Total 

Assets:

        

Equity investments at fair value through OCI and other short-term investments

  Ps.50,033,111   Ps.4,603,284   Ps.—    Ps.54,636,395 

Derivative financial instruments

   —      20,928,335    —      20,928,335 

Revalued of assets

   —      —      107,152,628    107,152,628 

Pension plan assets

   168,939,091    22,589,392    21,100   191,549,583 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

  Ps.218,972,202   Ps.48,121,011  Ps.107,173,728  Ps.374,266,941 
  

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities:

        

Debt

  Ps.578,712,562   Ps.135,645,912   Ps.—    Ps.714,358,474 

Liability related to right-of-use of assets

   109,327,241    —      —      109,327,241 

Derivative financial instruments

   —      14,230,249    —      14,230,249 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

  Ps.688,039,803   Ps.149,876,161   Ps.—     Ps.837,915,964 
  

 

 

   

 

 

   

 

 

   

 

 

 

   
Measurement of fair value at December 31, 2020
 
   
Level 1
   
Level 2
   
Level 3
   
Total
 
Assets:
                    
Equity investments at fair value through OCI and other short-term investments
  Ps.50,033,111   Ps.62,940   Ps.—     Ps.50,096,051 
Derivative financial instruments (Note 7)
   —      20,928,335    —      20,928,335 
Revalued of assets (Note 23)
   —      —      107,152,628    107,152,628 
Pension plan assets (Note 18)
   168,939,091    22,589,392    21,100    191,549,583 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total current assets
   218,972,202    43,580,667    107,173,728    369,726,597 
   
 
 
   
 
 
   
 
 
   
 
 
 
Debt instruments
 at fair value through OCI 
   —      4,540,344    —      4,540,344 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total
  Ps.218,972,202   Ps.48,121,011   Ps.107,173,728   Ps.374,266,941 
   
 
 
   
 
 
   
 
 
   
 
 
 
Liabilities:
                    
Debt
  Ps.578,712,562   Ps.135,645,912   Ps.—     Ps.714,358,474 
Liability related to right-of-use of assets
   109,327,241    —      —      109,327,241 
Derivative financial instruments (Note 7)
   —      14,230,249    —      14,230,249 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total
  Ps.688,039,803   Ps.149,876,161   Ps.—     Ps.837,915,964 
   
 
 
   
 
 
   
 
 
   
 
 
 
  
 
 
   
Measurement of fair value at December 31, 2021
 
   
Level 1
   
Level 2
   
Level 3
   
Total
 
Assets:
                    
Equity investments at fair value through OCI and other short-term investments
  
Ps.
117,688,176
 
  
Ps.
15,026
 
  
Ps.
—  
   
Ps.
117,703,202
 
Derivative financial instruments (Note 7)
  
 
—  
 
  
 
10,130,806
 
  
 
—  
 
  
 
10,130,806
 
Revalued of assets (Note 23)
  
 
—  
 
  
 
—  
 
  
 
98,172,675
 
  
 
98,172,675
 
Pension plan assets (Note 18)
  
 
196,148,604
 
  
 
22,124,138
 
  
 
54,440
 
  
 
218,327,182
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total current assets
  
 
313,836,780
 
  
 
32,269,970
 
  
 
98,227,115
 
  
 
444,333,865
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Debt instruments
 at fair value through OCI 
  
 
—  
 
  
 
6,894,757
 
  
 
—  
 
  
 
6,894,757
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total
  
Ps.
313,836,780
 
  
Ps.
39,164,727
 
  
Ps.
98,227,115
 
  
Ps.
451,228,622
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Liabilities:
                    
Debt
  
Ps.
440,660,165
 
  
Ps.
180,122,540
 
  
Ps.
—  
 
  
Ps.
620,782,705
 
Liability related to right-of-use of assets
  
 
98,654,225
 
  
 
—  
 
  
 
—  
 
  
 
98,654,225
 
Derivative financial instruments
  
 
—  
 
  
 
10,034,508
 
  
 
—  
 
  
 
10,034,508
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total
  
Ps.
539,314,390
 
  
Ps.
190,157,048
 
  
Ps.
—  
 
  
Ps.
729,471,438
 
   
 
 
   
 
 
   
 
 
   
 
 
 
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Fair value of derivative financial instruments is valued using valuation techniques with market observable inputs. To determine its Level 2 fair value, the Company applies different valuation techniques including forward pricing and swaps models, using present value calculations. The models incorporate various inputs including credit quality of counterparties, foreign exchange spot and forward rates and interest rate curves. Fair value of debt Level 2 has been determined using a model based on present value calculation incorporating credit quality of AMX. The Company’s investment in equity investments at fair value, specifically the investment in KPN and Verizon, is valued using the quoted prices (unadjusted) in active markets for identical assets. The net realized (loss) gain related to derivative financial instruments for the years ended December 31, 20192020 and 20202021 was Ps.(1,774,932)
2,606,938 and Ps.2,606,938Ps.
(1,664,465) respectively.

The fair value of the asset revaluation was calculated using valuation techniques, using observable market data and internal information on transactions carried out with independent third parties. To determine fair value we use level 2 and 3 information, the Company used inputs such as average rents, contract term and discount rates for discounted flow modeling techniques; in the case of discount rates, we use level 2 data where the information is public and is found in recognized databases, such as country risks, inflation, etc. In the case of average rents and contract terms, we use level 3 data, where the information is mainly internal based on lease contracts entered into with independent third parties.

During the end of the period ended December 31, 20192020 and 2020,2021, there were no0 transfers between the Level 1 and Level 2 fair value measurement hierarchies.

Changes in liabilities arising from financing activities

  At December 31,
2018		  At January 1,
2019		  Cash flow  Foreign currency
exchange and
other		  At December 31,
2019		 

Debt

  638,922,453   —     8,273,440   (22,941,416)   624,254,477 

Liability related to right-of-use of assets

  —     119,387,660   (26,765,075)   27,974,148   120,596,733 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total liabilities from financing activities

 Ps.638,922,453  Ps.119,387,660  Ps.(18,491,635)  Ps.5,032,732  Ps.744,851,210
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

   At December 31,
2019		   Cash flow  Foreign currency
exchange and
other		   At December 31,
2020		 

Debt

   624,254,477    (53,091,801)   57,220,280    628,382,956 

Liability related to right-of-use of assets

   120,596,733    (29,623,565)   18,354,073    109,327,241 
  

 

 

   

 

 

  

 

 

   

 

 

 

Total liabilities from
financing activities

   Ps.744,851,210    Ps.(82,715,366)   Ps.75,574,353    Ps.737,710,197 
  

 

 

   

 

 

  

 

 

   

 

 

 

   
At
 
December 31,
2019
   
Cash flow
  
Foreign currency
exchange and
other
   
At December 31,
2020
 
Debt
  Ps.624,254,477   Ps.(53,091,801)  Ps.57,220,280   Ps.628,382,956 
Liability related to right-of-use of assets
   120,596,733    (29,623,565)   18,354,073    109,327,241 
   
 
 
   
 
 
  
 
 
   
 
 
 
Total liabilities from financing activities
  Ps.744,851,210   Ps.(82,715,366)  Ps.75,574,353   Ps.737,710,197 
   
 
 
   
 
 
  
 
 
   
 
 
 

   
At December 31,
2020
   
Cash flow
  
Foreign currency
exchange and
other
  
At December 31,
2021
 
Debt
  
Ps.
628,382,956
 
  
Ps.
(58,354,281
) 
 
Ps.
(5,998,573
) 
 
Ps.
564,030,102
 
Liability related to right-of-use of assets
  
 
109,327,241
 
  
 
(30,544,750
) 
 
 
19,871,734
 
 
 
98,654,225
 
   
 
 
   
 
 
  
 
 
  
 
 
 
Total liabilities from
financing activities
  
Ps.
737,710,197
 
  
Ps.
(88,899,031
) 
 
Ps.
13,873,161
 
 
Ps.
662,684,327
 
   
 
 
   
 
 
  
 
 
  
 
 
 
20. Shareholders’ Equity

a)
Pursuant to the Company’s bylaws, the capital stock of the Company consists of a minimum fixed portion of Ps.270,049,Ps. 252,371, (nominal amount),
represented as of December 31, 2021 by a total of 71,063,212,17066,411,260,649 shares (including treasury shares available for placement in accordance with the provisions of the Ley del Mercado de Valores)Valores), of which (i) 20,578,173,27420,554,697,460 are “AA” shares (full voting rights); (ii) 519,948,436502,404,175 are “A” shares (full
voting rights); and (iii) 49,965,090,46045,354,159,014 are “L” shares (limited voting rights).

b)
As of December 31, 20202021 and 2019,2020, the Company’s capital stock was represented by 64,689,740,633 shares (20,554,697,460 “AA” shares, 502,404,175 “A” shares and 43,632,638,998 “L” shares), and 66,862,560,649 shares (20,578,173,274 “AA” shares, 519,926,536 “A” shares and 45,764,460,839 “L” shares), and 66,004,214,830 (20,601,632,660 “AA” shares, 530,563,378 “A” shares and 44,872,018,792 “L” shares), respectively.

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c)
As of December 31, 20202021 and 2019,2020, the Company’s treasury held for placement in accordance with the provisions of the Ley del Mercado de Valores and the Disposiciones de carácter general aplicables a las emisoras de valores y a otros participantes en el Mercado de valores issued by the Comisión Nacional Bancaria y de Valores, a total amount of 1,721,520,016 shares all of which are series L shares and 4,200,651,521 shares (4,200,629,621 “L” shares and 21,900 “A” shares); and 5,058,997,340 shares (5,058,975,440 “L” shares and 21,900 “A” shares), respectively, all acquired pursuant to the Company’s share repurchase program.

d)
The holders of “AA” and “A” shares are entitled to full voting rights. The holders of “L” shares may only vote in limited circumstances, and they are only entitled to appoint two members of the Board of Directors and their respective alternates. The matters in which “L” shares holders are entitled to vote are the following: extension of the Company´s corporate life, dissolution of the Company, change of Company’s corporate purpose, change of nationality of the Company, transformation of the Company, a merger with another company, any transaction representing 20% or more of the Company’s consolidated assets, as well as the cancellation of the inscription of the shares issued by the Company at the Registro Nacional de Valores and any other foreign stock exchanges where they may be registered, except for quotation systems or other markets not organized as stock exchanges. Within their respective series, all shares confer the same rights to their holders.

The Company’s bylaws contain restrictions and limitations related to the subscription and acquisition of “AA” shares by non-Mexican investors.

e)
Pursuant to the Company’s bylaws, “AA” shares must at all times represent no less than 20% and no more than 51% of the Company’s capital stock, and they shall also represent at all times, no less than 51% of the common shares (entitled to full voting rights, represented by “AA” and “A” shares) representing said capital stock.

“A” shares, which may be freely subscribed, must not represent more than 19.6% of capital stock and must not exceed 49% of the common shares representing such capital. Common shares (entitled to full voting rights, represented by “AA” and “A” shares), must represent no more than 51% of the Company’s capital stock.


Lastly
, “L” shares which have limited voting rights and may be freely subscribed may not exceed, along with “A” shares, 80%
80
% of the Company’s capital stock. For purposes of determining these restrictions, the percentages mentioned above refer only to the number of the Company’s shares outstanding.

Dividends

On April 26, 2021, the Company’s shareholders approved, among other resolutions, the payment of a dividend of Ps. 0.40 (forty peso cents) per share to each of the shares series of its capital stock “AA”, “A” and “L”. It was approved, that such dividend would be paid in two installments of Ps. 0.20 (twenty peso cents) each, on July 19 and November 08, 2021 respectively.
On April 24, 2020, the Company’s shareholders approved, among other resolutions, the payment of a dividend of Ps.$0.38 (thirty-eight peso cents) per share to each of the shares series of its capital stock “AA”, “A” and “L”. It was approved, that such dividend would be paid in two installments of Ps.$0.19 (nineteen peso cents) each, on July 20 and November 09, 2020 respectively.

On April 9, 2019, the Company’s shareholders approved, among other resolutions, the payment of a dividend of Ps.$0.35 (thirty-five peso cents) per share to each of the shares series of its capital stock “AA”, “A” and “L”. It was approved, that such dividend would be paid in two installments of Ps.$0.18 (eighteen peso cents) and Ps.$0.17 (seventeen peso cents), on July 15 and November 11, 2019 respectively.

Legal Reserve

According to the Ley General de Sociedades Mercantiles,, companies must allocate from the net profit of each year, at least 5% to increase the legal reserve until it reaches 20% of its capital stock. This reserve may not be distributed to shareholders during the existence of the Company, except as a stock dividend. As of December 31, 20202021 and 2019,2020, the legal reserve amounted Ps.358,440.

Ps. 358,440.

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Restrictions on Certain Transactions

Pursuant to the Company’s bylaws any transfer of more than 10% of the full voting shares (“A” shares and “AA” shares), effected in one or more transactions by any person or group of persons acting in concert, requires prior approval by our Board of Directors. If the Board of Directors denies such approval, however, the Company bylaws require it to designate an alternate transferee, who must pay market price for the shares as quoted on the Bolsa Mexicana de Valores, S.A.B. de C.V.

Payment of Dividends

Dividends, either in cash or in kind, paid with respect to the “A” Shares, “L” Shares, “A” Share ADSs or “L” Share ADSs will generally be subject to a 10% Mexican withholding tax (provided that no Mexican withholding tax will apply to distributions of net taxable profits generated before 2015)2014). Nonresident holders could be subject to a lower tax rate, to the extent that they are eligible for benefits under an income tax treaty to which Mexico is a party.

Earnings per Share

The following table shows the computation of the basic and diluted earnings per share:

  For the years ended December 31, 
  2018  2019  2020 

Net profit for the period attributable to equity holders of the parent

 Ps.52,566,197  Ps.67,730,891  Ps.46,852,605 

Weighted average shares (in millions)

  66,055   66,016   66,265 
 

 

 

  

 

 

  

 

 

 

Earnings per share attributable to equity holders of the parent

 Ps.0.79  Ps.1.03  Ps.0.71 
 

 

 

  

 

 

  

 

 

 

  
For the years ended December 31,
 
  
2019
  
2020
  
2021
 
Net profit for the period attributable
to equity holders of the parent from continuing operations
 Ps.57,886,001  Ps.29,859,980  
Ps.
70,712,449
 
Net profit for the period attributable
to equity holders of the parent from discontinued operations
  9,844,889   16,992,625  
 
121,710,718
 
  
 
 
  
 
 
  
 
 
 
Net profit for the period attributable
to equity holders of the parent
  67,730,890   46,852,605  
 
192,423,167
 
Weighted average shares (in millions)
  66,016   66,265  
 
65,967
 
  
 
 
  
 
 
  
 
 
 
Earnings per share attributable to
equity holders of the parent continuing operations
 Ps.0.88  Ps.0.45  
Ps.
1.07
 
  
 
 
  
 
 
  
 
 
 
Earnings per share attributable to
equity holders of the parent discontinued operations
 Ps.0.15  Ps.0.26  
Ps.
1.85
 
  
 
 
  
 
 
  
 
 
 
21. Components of other comprehensive loss

(income)

The movement on the components of the other comprehensive (loss) income for the years ended December 31, 2018, 2019, 2020 and 20202021 is as follows:

   For the years ended December 31, 
   2018  2019  2020 

Controlling interest:

    

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

   (3,765,688)   883,408   (1,952,414) 

Translation effect of foreign entities

   (61,223,458)   (34,010,066)   (13,558,774) 

Remeasurement of defined benefit plan, net of deferred taxes

   652,722   (29,153,554)   (10,026,454) 

Assets revaluation surplus net of deferred taxes

   —     —     64,835,155 

Non-controlling interest of the items above

   (2,986,018)   (1,908,304)   14,165,249 
  

 

 

  

 

 

  

 

 

 

Other comprehensive (loss) income

   Ps.(67,322,442)   Ps.(64,188,516)   Ps.53,462,762 
  

 

 

  

 

 

  

 

 

 

   
For the years ended December 31,
 
   
2019
  
2020
  
2021
 
Controlling interest:
             
Unrealized gain (loss) on equity investments at fair value, net of deferred taxes
  Ps.883,409  Ps.(1,952,414)  
Ps.
4,560,869
 
Translation effect of foreign entities
   (34,010,066)   (13,558,774)  
 
(4,837,206
) 
Translation effect by discontinued operations
   —     —    
 
(829,163
) 
Remeasurement of defined benefit plan, net of deferred taxes
   (29,153,554)   (10,026,454)  
 
11,100,835
 
Asset’s revaluation surplus net of deferred taxes
   —     64,835,155  
 
—  
 
Non-controlling interest of the items above
   (1,908,304)   14,165,249  
 
(2,135,886
) 
   
 
 
  
 
 
  
 
 
 
Other comprehensive (loss) income
  Ps.(64,188,515)  Ps.53,462,762  
Ps.
7,859,449
 
   
 
 
  
 
 
  
 
 
 
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22. Valuation of derivatives, interest cost from labor obligations and other financial items, net

For the years ended December 31, 2018, 2019, 2020 and 2020,2021, valuation of derivatives and other financial items are as follows:

   For the years ended December 31, 
   2018  2019  2020 

Controlling interest:

    

(Loss) gain in valuation of derivatives, net

  Ps.(4,686,407)  Ps.4,432,023  Ps.12,378,193 

Capitalized interest expense (Note 10 b)

   2,020,288   2,233,358   1,771,613 

Commissions

   (1,901,473)   (2,820,477)   (1,135,082) 

Interest cost of labor obligations (Note 18)

   (9,968,526)   (11,377,054)   (13,105,693) 

Interest expense on taxes

   (555,921)   (516,522)   (59,032) 

Dividend received (Note 4)

   2,605,333   1,773,336   2,122,826 

Gain on net monetary positions

   4,429,145   4,267,194   3,262,512 

Other financial cost

   (2,118,755)   (5,067,200)   (3,944,229) 
  

 

 

  

 

 

  

 

 

 

Total

  Ps.(10,176,316)  Ps.(7,075,342)  Ps.1,291,108 
  

 

 

  

 

 

  

 

 

 

   
For the years ended December 31,
 
   2019  2020  
2021
 
Controlling interest:
             
Gain (loss) in valuation of derivatives, net
  Ps.4,432,023  Ps.12,378,193  
Ps.
(6,755,214
) 
Capitalized interest expense (Note 10 b)
   2,233,358   1,771,613  
 
1,527,259
 
Commissions
   (2,820,477)   (1,135,082)  
 
(1,071,935
) 
Interest cost of labor obligations (Note 18)
   (11,377,054)   (13,105,693)  
 
(14,375,520
) 
Interest expense on taxes
   (516,522)   (59,032)  
 
(243,075
) 
Dividend received (Note 4)
   1,773,336   2,122,826  
 
2,628,600
 
Gain on net monetary positions
   4,267,194   3,262,512  
 
4,876,842
 
Other financial cost
(i)
   (4,989,702)   (3,942,459)  
 
(837,023
) 
   
 
 
  
 
 
  
 
 
 
Total with discontinued operations
  Ps.(6,997,844)  Ps.1,292,878  
Ps.
(14,250,066
) 
   
 
 
  
 
 
  
 
 
 
(i)
Includes discontinued operations of Tracfone (See note 2, Ac)
23. Segments

América Móvil operates in different countries. As mentioned in Note 1, the Company has operations in Mexico, Guatemala, Nicaragua, Ecuador, El Salvador, Costa Rica, Brazil, Argentina, Colombia, United States, Honduras, Chile, Peru, Paraguay, Uruguay, Dominican Republic, Puerto Rico, Panama, Austria, Croatia, Bulgaria, Belarus, Macedonian, Serbia and Slovenia. The accounting policies for the segments are the same as those described in Note 2.

The Chief Executive Officer, who is the Chief Operating Decision Maker (“CODM”), analyzes the financial and operating information by operating segment. All operating segments that (i) represent more than 10% of consolidated revenues, (ii) more than the absolute amount of its reported 10% of profits before income tax or (iii) more than 10% of consolidated assets, are presented separately.

The Company presents the following reportable segments for the purposes of its consolidated financial statements: Mexico (includes Telcel and Corporate operations and assets), Telmex (Mexico), Brazil, Southern Cone (includes Argentina, Chile, Paraguay and Uruguay), Colombia, Andean (includes Ecuador and Peru), Central America (includes Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama), U.S.A. (excludes Puerto Rico), Caribbean (includes Dominican Republic and Puerto Rico), and Europe (includes Austria, Bulgaria, Croatia, Belarus, Slovenia, Macedonia and Serbia).

The segment Southern Cone comprises mobile communication services in Argentina as well as Chile, Paraguay and Uruguay. Beginning in 2018, hyperinflation accounting in accordance with IAS 29 was initially applied to Argentina, which results in the restatement of non-monetary assets, liabilities and all items of the statement of comprehensive income for the change in a general price index and the translation of these items applying the period-end exchange rate.

The Company considers that the quantitative and qualitative aspects of any aggregated operating segments (that is, Central America and Caribbean reportable segments) are similar in nature for all periods presented. In evaluating the appropriateness of aggregating operating segments, the key indicators considered included but were not limited to: (i) the similarity of key financial statements measures and trends, (ii) all entities provide telecommunications services, (iii) similarities of customer base and services, (iv) the methods to distribute services are the same, based on telephone plant in both cases, wireless and fixed lines, (v) similarities of governments and regulatory entities that oversee the activities and services of telecom companies, (vi) inflation trends, and (vii) currency trends.

  Mexico  Telmex  Brazil  Southern Cone  Colombia  Andean  Central
America		  U.S.A.  Caribbean  Europe  Eliminations  Consolidated
total		 

As of and for the year ended December 31, 2018 (in Ps.):

            

External revenues

  207,610,244   86,339,289   188,712,666   89,149,978   75,460,428   55,633,192   44,883,585   153,266,315   36,435,541   100,716,443   —     1,038,207,681 

Intersegment revenues

  16,946,543   9,741,908   4,593,760   13,200,358   344,517   154,082   149,445   —     204,294   —     (45,334,907)   —   
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total revenues

  224,556,787   96,081,197   193,306,426   102,350,336   75,804,945   55,787,274   45,033,030   153,266,315   36,639,835   100,716,443   (45,334,907)   1,038,207,681 

Depreciation and amortization

  17,619,342   18,358,248   42,857,751   13,526,361   13,464,867   8,516,960   8,940,655   1,545,395   5,036,831   26,838,972   (992,802)   155,712,580 

Operating income (loss)

  57,450,599   8,085,764   23,494,903   16,975,797   14,388,552   5,003,915   4,867,763   2,665,270   5,811,846   4,731,562   (3,918,800)   139,557,171 

Interest income

  26,578,280   420,380   11,303,888   2,251,474   1,013,839   1,666,879   1,566,086   559,548   1,458,874   122,133   (36,295,212)   10,646,169 

Interest expense

  32,526,258   1,153,913   20,377,191   4,338,941   2,913,881   1,719,663   509,081   —     561,867   1,973,431   (34,302,793)   31,771,433 

Income tax

  28,842,505   643,377   4,026,444   1,390,039   2,251,877   2,498,666   2,533,600   810,898   2,774,204   707,093   (1,624)   46,477,079 

Equity interest in net income (loss) of associated companies

  (5,962)   44,965   (152)   (20,871)   —     —     —     —     —     (17,713)   —     267 

Net profit (loss) attributable to equity holders of the parent

  23,185,029   (2,201,572)   3,530,653   6,065,703   9,165,801   1,730,933   2,821,733   2,820,505   3,644,697   3,809,694   (2,006,979)   52,566,197 

Assets by segment

  970,564,314   174,461,398   390,791,480   127,946,573   111,975,598   96,347,779   81,640,157   38,814,907   102,531,547   186,135,358   (851,985,719)   1,429,223,392 

Plant, property and equipment, net

  56,056,634   103,737,293   173,197,708   62,988,635   51,422,548   35,800,477   37,146,601   1,356,237   38,011,242   80,421,642   (138,297)   640,000,720 

Goodwill

  27,104,632   215,381   21,388,124   2,796,759   12,770,380   5,242,365   5,466,871   3,328,533   14,186,723   53,066,729   —     145,566,497 

Trademarks, net

  227,774   243,556   124,910   —     —     —     —     507,033   249,984   3,313,948   —     4,667,205 

Licenses and rights, net

  10,573,147   —     25,873,910   12,555,496   3,400,235   9,651,582   3,605,416   —     10,294,336   27,344,273   —     103,298,395 

Investment in associated companies

  5,621,661   563,667   543   20,697   412   —     24,262   —     —     748,674   (3,847,209)   3,132,707 

Liabilities by segments

  748,965,728   136,993,838   298,308,084   94,550,901   56,211,438   50,064,761   28,592,953   35,552,678   58,716,154   117,214,746   (441,820,311)   1,183,350,970 

  Mexico  Telmex  Brazil  Southern Cone  Colombia  Andean  

Central

America

  U.S.A.  Caribbean  Europe  Eliminations  

Consolidated

total

 

As of and for the year ended December 31, 2019 (in Ps.):

            

External revenues

  226,164,232   84,173,980   177,596,077   54,230,682   74,274,684   55,440,675   46,602,036   155,864,392   34,580,822   98,420,289   —     1,007,347,869 

Intersegment revenues

  11,676,015   11,863,364   4,182,248   11,041,705   361,386   92,249   132,061   —     1,136,879   —     (40,485,907)   —   
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total revenues

  237,840,247   96,037,344   181,778,325   65,272,387   74,636,070   55,532,924   46,734,097   155,864,392   35,717,701   98,420,289   (40,485,907)   1,007,347,869 

Depreciation and amortization

  24,742,622   16,346,927   39,424,474   13,847,506   13,439,489   10,256,129   11,045,817   1,396,422   6,322,648   24,975,146   (2,881,970)   158,915,210 

Operating income (loss)

  67,694,409   9,731,852   28,846,565   4,007,614   15,324,977   8,023,002   5,712,068   2,968,236   5,741,368   8,687,862   (1,897,418)   154,840,535 

Interest income

  23,713,455   1,839,973   3,155,681   896,256   1,306,571   1,283,788   532,046   324,932   1,478,560   115,359   (28,361,949)   6,284,672 

Interest expense

  30,972,658   1,439,785   19,021,965   3,849,318   2,952,123   2,422,887   1,406,720   385   1,435,862   2,220,168   (27,810,532)   37,911,339 

Income tax

  30,000,511   1,528,229   4,251,116   2,022,336   5,405,452   1,681,159   2,355,380   1,119,478   719,774   1,946,255   3,843   51,033,533 

Equity interest in net income (loss) of associated companies

  (3,732)   46,789   (1,538)   (23,424)   —     —     (28,795)   —     —     (6,909)   —     (17,609) 

Net profit (loss) attributable to equity holders of the parent

  42,598,946   (1,705,068)   5,618,095   (6,984)   9,571,046   (2,604,646)   2,335,963   2,095,807   4,312,630   5,051,145   463,957   67,730,891 

Assets by segment

  915,233,048   201,283,526   382,561,753   132,722,497   115,851,227   94,021,632   77,355,732   30,775,893   100,694,650   191,744,924   (710,311,225)   1,531,933,657 

Plant, property and equipment, net

  54,589,459   106,869,482   174,761,167   60,537,650   50,133,642   39,068,450   38,934,747   1,405,755   38,223,641   75,707,738   (888,361)   639,343,370 

Goodwill

  27,396,393   215,381   25,379,805   5,241,305   12,124,685   4,895,331   7,289,748   3,220,105   14,186,723   52,950,325   —     152,899,801 

Trademarks, net

  46,476   212,324   37,207   —     —     —     —     369,950   227,156   2,595,596   —     3,488,709 

Licenses and rights, net

  11,087,882   452,504   29,324,718   12,103,980   5,530,422   8,064,487   4,390,547   —     7,942,670   25,951,335   —     104,848,545 

Investment in associated companies

  3,562,323   610,807   111,073   (7,806)   391   —     25,603   —     —     —     (1,828,198)   2,474,193 

Liabilities by segments

  718,354,229   175,774,964   297,877,328   103,330,525   55,576,253   55,463,339   37,993,180   31,557,816   54,276,868   124,319,541   (349,497,251)   1,305,026,792 

  Mexico  Telmex  Brazil  Southern Cone  Colombia  Andean  

Central

America

  U.S.A.  Caribbean  Europe  Eliminations  

Consolidated

total

 

As of and for the year ended December 31, 2020 (in Ps.):

            

External revenues

  214,578,601   77,920,910   163,865,421   55,484,744   77,282,658   53,846,358   48,073,436   177,179,369   37,182,842   111,472,191   —     1,016,886,530 

Intersegment revenues

  17,663,525   13,668,264   4,207,466   1,220,100   352,694   88,305   121,580   —     1,440,983   —     (38,762,917)   —   
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total revenues

  232,242,126   91,589,174   168,072,887   56,704,844   77,635,352   53,934,663   48,195,016   177,179,369   38,623,825   111,472,191   (38,762,917)   1,016,886,530 

Depreciation and amortization

  24,748,756   13,341,479   41,795,397   13,095,004   14,413,760   11,447,356   14,355,899   1,561,284   7,094,331   25,593,204   (3,202,787)   164,243,683 

Operating income (loss)

  70,851,525   11,204,433   25,203,504   1,877,079   15,111,947   8,698,645   4,004,501   10,579,394   6,701,086   13,159,865   (2,037,068)   165,354,911 

Interest income

  21,322,406   1,479,021   2,904,430   980,581   822,447   1,049,261   1,130,767   77,235   1,105,420   90,746   (25,900,278)   5,062,036 

Interest expense

  30,936,195   1,306,867   17,976,227   3,334,966   2,586,708   2,223,478   1,559,917   255   1,658,619   2,546,255   (25,467,747)   38,661,740 

Income tax

  4,905,863   577,178   (4,442,598)   992,831   2,078,789   3,115,693   1,518,953   2,856,881   2,524,214   2,234,065   4,283   16,366,152 

Equity interest in net income (loss) of associated companies

  (3,820)   23,955   (2,972)   (15,422)   —     —     —     —     —     (288,747)   —     (287,006) 

Net profit (loss) attributable to equity holders of the parent

  3,613,907   (1,085,038)   4,963,424   1,456,062   16,579,303   4,649,047   1,919,558   7,797,723   3,294,111   7,777,426   (4,112,918)   46,852,605 

Assets by segment

  947,396,510   203,081,314   386,982,711   118,266,380   132,210,369   101,717,708   88,690,683   35,083,285   109,914,293   239,583,759   (737,878,785)   1,625,048,227 

Plant, property and equipment, net

  52,117,395   110,751,083   145,307,497   62,157,797   48,876,853   36,102,261   37,855,227   1,761,595   39,128,447   82,595,077   (876,229)   615,777,003 

Revalued of assets

  —     —     36,076,207   7,494,408   12,893,284   9,500,708   7,059,247   —     2,572,504   31,556,270   —     107,152,628 

Goodwill

  26,949,185   215,381   16,048,092   5,436,675   12,253,743   4,866,363   6,345,659   3,362,899   14,186,723   53,388,139   —     143,052,859 

Trademarks, net

  126,823   181,094   —     —     —     —     —     269,325   219,087   2,981,089   —     3,777,418 

Licenses and rights, net

  12,017,318   100,623   26,171,345   12,099,873   12,363,039   6,870,531   5,427,857   —     8,616,880   27,963,250   —     111,630,716 

Investment in associated companies

  51,645   613,449  ��64,125   (20,970)   395   —     25,413   —     —     —     1,095,703   1,829,760 

Liabilities by segments

  725,408,198   193,840,756   263,989,566   61,786,265   63,610,642   53,379,366   34,252,511   33,141,315   60,839,340   138,747,621   (319,064,971)   1,309,930,609 
F-
81

Table of Contents
  
Mexico
  
Telmex
  
Brazil
  
Southern Cone
  
Colombia
  
Andean
  
Central
America
  
U.S.A.(1)
  
Caribbean
  
Europe
  
Eliminations
  
Consolidated
total
 
As of and for the year ended December 31, 2019 (in Ps.):
                                                
External revenues
  226,164,231   84,173,980   177,596,077   54,230,682   74,274,684   55,440,675   46,602,036   —     34,580,822   98,420,289   —     851,483,476 
Intersegment revenues
  11,676,015   11,863,364   4,182,248   11,041,705   361,386   92,249   132,061   —     1,136,879   —     (40,485,907)   —   
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total revenues
  237,840,246   96,037,344   181,778,325   65,272,387   74,636,070   55,532,924   46,734,097   —     35,717,701   98,420,289   (40,485,907)   851,483,476 
Depreciation and amortization
  24,742,622   16,346,927   39,424,474   13,847,506   13,439,489   10,256,129   11,045,817   —     6,322,648   24,975,146   (2,881,971)   157,518,787 
Operating income (loss)
  67,694,409   9,731,852   28,846,565   4,007,614   15,324,977   8,023,002   5,712,068   —     5,741,368   8,687,862   (9,971,433)   143,798,284 
Interest income
  23,713,455   1,839,973   3,155,681   896,256   1,306,571   1,283,788   532,046   —     1,478,560   115,359   (28,037,017)   6,284,672 
Interest expense
  30,972,658   1,439,785   19,021,965   3,849,318   2,952,123   2,422,887   1,406,720   —     1,435,862   2,220,168   (27,810,532)   37,910,954 
Income tax
  30,000,511   1,528,229   4,251,116   2,022,336   5,405,452   1,681,159   2,355,380   —     719,774   1,946,255   3,843   49,914,055 
Equity interest in net income (loss) of associated companies
  (3,732)   46,789   (1,538)   (23,424)   —     —     (28,795)   —     —     (6,909)   —     (17,609) 
Net profit (loss) attributable to equity holders of the parent continues operations
  42,598,946   (1,705,068)   5,618,095   (6,984)   9,571,046   (2,604,646)   2,335,963   —     4,312,630   5,051,145   (7,285,126)   57,886,001 
Net profit (loss) attributable to equity holders of the parent discontinued operations
  —     —     —     —     —     —     —     —     —     —     —     9,844,889 
Net profit (loss) attributable to equity holders of the parent
  42,598,946   (1,705,068)   5,618,095   (6,984)   9,571,046   (2,604,646)   2,335,963   —     4,312,630   5,051,145   2,559,763   67,730,890 
Assets by segment
  915,233,048   201,283,526   382,561,753   132,722,497   115,851,227   94,021,632   77,355,732   30,775,893   100,694,650   191,744,924   (710,311,225)   1,531,933,657 
Plant, property and equipment, net
  54,589,459   106,869,482   174,761,167   60,537,650   50,133,642   39,068,450   38,934,747   1,405,755   38,223,641   75,707,738   (888,361)   639,343,370 
Goodwill
  27,396,393   215,381   25,379,805   5,241,305   12,124,685   4,895,331   7,289,748   3,220,105   14,186,723   52,950,325   —     152,899,801 
Trademarks, net
  46,476   212,324   37,207   —     —     —     —     369,950   227,156   2,595,596   —     3,488,709 
Licenses and rights, net
  11,087,882   452,504   29,324,718   12,103,980   5,530,422   8,064,487   4,390,547   —     7,942,670   25,951,335   —     104,848,545 
Investment in associated companies
  3,562,323   610,807   111,073   (7,806)   391   —     25,603   —     —     —     (1,828,198)   2,474,193 
Liabilities by segments
  718,354,229   175,774,964   297,877,328   103,330,525   55,576,253   55,463,339   37,993,180   31,557,816   54,276,868   124,319,541   (349,497,251)   1,305,026,792 
(1) 
Restated for discontinued operations.
F-
82
Table of Contents
  
Mexico
  
Telmex
  
Brazil
  
Southern Cone
  
Colombia
  
Andean
  
Central
America
  
U.S.A. (1)
  
Caribbean
  
Europe
  
Eliminations
  
Consolidated
total
 
As of and for the year ended December 31, 2020 (in Ps.):
                                                
External revenues
  214,578,600   77,920,910   163,865,421   55,484,744   77,282,658   53,846,358   48,073,436   —     37,182,842   111,472,191   —     839,707,160 
Intersegment revenues
  17,663,525   13,668,264   4,207,466   1,220,100   352,694   88,305   121,580   —     1,440,983   —     (38,762,917)   —   
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total revenues
  232,242,125   91,589,174   168,072,887   56,704,844   77,635,352   53,934,663   48,195,016   —     38,623,825   111,472,191   (38,762,917)   839,707,160 
Depreciation and amortization
  24,748,756   13,341,479   41,795,397   13,095,004   14,413,760   11,447,356   14,355,899   —     7,094,331   25,593,204   (3,202,788)   162,682,398 
Operating income (loss)
  70,851,525   11,204,433   25,203,504   1,877,079   15,111,947   8,698,645   4,004,501   —     6,701,086   13,159,865   (11,309,206)   145,503,379 
Interest income
  21,322,406   1,479,021   2,904,430   980,581   822,447   1,049,261   1,130,767   —     1,105,420   90,746   (25,823,043)   5,062,036 
Interest expense
  30,936,195   1,306,867   17,976,227   3,334,966   2,586,708   2,223,478   1,559,917   —     1,658,619   2,546,255   (25,467,747)   38,661,485 
Income tax
  4,905,863   577,178   (4,442,598)   992,831   2,078,789   3,115,693   1,518,953   —     2,524,214   2,234,065   4,282   13,509,270 
Equity interest in net income (loss) of associated companies
  (3,820)   23,955   (2,972)   (15,422)   —     —     —     —     —     (288,747)   —     (287,006) 
Net profit (loss) attributable to equity holders of the parent continues operations
  3,613,907   (1,085,038)   4,963,424   1,456,062   16,579,303   4,649,047   1,919,558   —     3,294,111   7,777,426   (13,307,820)   29,859,980 
Net profit (loss) attributable to equity holders of the parent discontinued operations
  —     —     —     —     —     —     —     —     —     —     —     16,992,625 
Net profit (loss) attributable to equity holders of the parent
  3,613,907   (1,085,038)   4,963,424   1,456,062   16,579,303   4,649,047   1,919,558   —     3,294,111   7,777,426   3,684,805   46,852,605 
Assets by segment
  947,396,510   203,081,314   386,982,711   118,266,380   132,210,369   101,717,708   88,690,683   35,083,285   109,914,293   239,583,759   (737,878,785)   1,625,048,227 
Plant, property and equipment, net
  52,117,395   110,751,083   145,307,497   62,157,797   48,876,853   36,102,261   37,855,227   1,761,595   39,128,447   82,595,077   (876,229)   615,777,003 
Revalued of assets
  —     —     36,076,207   7,494,408   12,893,284   9,500,708   7,059,247   —     2,572,504   31,556,270   —     107,152,628 
Goodwill
  26,949,185   215,381   16,048,092   5,436,675   12,253,743   4,866,363   6,345,659   3,362,899   14,186,723   53,388,139   —     143,052,859 
Trademarks, net
  126,823   181,094   —     —     —     —     —     269,325   219,087   2,981,089   —     3,777,418 
Licenses and rights, net
  12,017,318   100,623   26,171,345   12,099,873   12,363,039   6,870,531   5,427,857   —     8,616,880   27,963,250   —     111,630,716 
Investment in associated companies
  51,645   613,449   64,125   (20,970)   395   —     25,413   —     —     —     1,095,703   1,829,760 
Liabilities by segments
  725,408,198   193,840,756   263,989,566   61,786,265   63,610,642   53,379,366   34,252,511   33,141,315   60,839,340   138,747,621   (319,064,971)   1,309,930,609 
(1)
Restated for discontinued operations.
F-
83
Table of Contents
  
Mexico
  
Telmex
  
Brazil
  
Southern Cone
  
Colombia
  
Andean
  
Central
America
  
Caribbean
  
Europe
  
Eliminations
  
Consolidated
total
 
As of and for the year ended December 31, 2021 (in Ps.):
                                            
External revenues
 
 
225,219,719
 
 
 
87,189,642
 
 
 
148,729,232
 
 
 
62,030,033
 
 
 
79,312,071
 
 
 
52,888,323
 
 
 
48,468,386
 
 
 
37,858,979
 
 
 
113,838,486
 
 
 
—  
 
 
 
855,534,871
 
Intersegment revenues
 
 
18,041,465
 
 
 
15,237,420
 
 
 
4,044,386
 
 
 
329,000
 
 
 
360,638
 
 
 
73,828
 
 
 
98,530
 
 
 
2,069,648
 
 
 
—  
 
 
 
(40,254,915
) 
 
 
—  
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total revenues
 
 
243,261,184
 
 
 
102,427,062
 
 
 
152,773,618
 
 
 
62,359,033
 
 
 
79,672,709
 
 
 
52,962,151
 
 
 
48,566,916
 
 
 
39,928,627
 
 
 
113,838,486
 
 
 
(40,254,915
) 
 
 
855,534,871
 
Depreciation and amortization
 
 
25,797,791
 
 
 
12,740,332
 
 
 
40,342,871
 
 
 
14,996,243
 
 
 
15,067,211
 
 
 
11,211,523
 
 
 
11,962,486
 
 
 
6,987,129
 
 
 
27,469,463
 
 
 
(3,948,183
) 
 
 
162,626,866
 
Operating income (loss)
 
 
77,783,972
 
 
 
21,100,316
 
 
 
21,867,457
 
 
 
2,144,825
 
 
 
15,165,356
 
 
 
7,457,802
 
 
 
8,216,945
 
 
 
8,661,475
 
 
 
13,421,147
 
 
 
(9,686,654
) 
 
 
166,132,641
 
Interest income
 
 
14,864,242
 
 
 
758,126
 
 
 
2,104,574
 
 
 
821,594
 
 
 
431,314
 
 
 
833,540
 
 
 
269,379
 
 
 
701,785
 
 
 
116,031
 
 
 
(17,065,758
) 
 
 
3,834,827
 
Interest expense
 
 
24,586,641
 
 
 
1,385,103
 
 
 
15,875,138
 
 
 
2,987,751
 
 
 
2,240,707
 
 
 
1,213,421
 
 
 
1,219,061
 
 
 
1,066,733
 
 
 
2,414,415
 
 
 
(16,963,658
) 
 
 
36,025,312
 
Income tax
 
 
25,002,390
 
 
 
2,496,010
 
 
 
(9,603,701
) 
 
 
(3,795,160
) 
 
 
3,112,946
 
 
 
2,375,281
 
 
 
2,945,700
 
 
 
2,171,594
 
 
 
3,438,161
 
 
 
1,548
 
 
 
28,144,769
 
Equity interest in net income (loss) of associated companies
 
 
85,648
 
 
 
44,525
 
 
 
4,575
 
 
 
(19,073
) 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
(1,757
) 
 
 
—  
 
 
 
113,918
 
Net profit (loss) attributable to equity holders of the parent continues operations
 
 
34,195,093
 
 
 
4,594,450
 
 
 
14,185,905
 
 
 
415,994
 
 
 
5,959,563
 
 
 
4,180,473
 
 
 
4,099,930
 
 
 
5,151,166
 
 
 
8,313,018
 
 
 
(10,383,143
) 
 
 
70,712,449
 
Net profit (loss) attributable to equity holders of the parent discontinued operations
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
121,710,718
 
Net profit (loss) attributable to equity holders of the parent
 
 
34,195,093
 
 
 
4,594,450
 
 
 
14,185,905
 
 
 
415,994
 
 
 
5,959,563
 
 
 
4,180,473
 
 
 
4,099,930
 
 
 
5,151,166
 
 
 
8,313,018
 
 
 
(10,383,143
) 
 
 
192,423,167
 
Assets by segment
 
 
999,502,407
 
 
 
195,869,232
 
 
 
407,458,440
 
 
 
135,862,040
 
 
 
133,232,525
 
 
 
95,719,937
 
 
 
101,725,955
 
 
 
102,949,901
 
 
 
210,944,575
 
 
 
(693,615,163
) 
 
 
1,689,649,849
 
Plant, property and equipment, net
 
 
50,420,866
 
 
 
118,056,718
 
 
 
153,607,199
 
 
 
64,864,986
 
 
 
48,888,907
 
 
 
34,395,339
 
 
 
42,407,727
 
 
 
41,601,009
 
 
 
79,764,422
 
 
 
(983,169
) 
 
 
633,024,004
 
Revalued of assets
 
 
—  
 
 
 
—  
 
 
 
33,004,669
 
 
 
6,159,077
 
 
 
10,266,464
 
 
 
8,389,460
 
 
 
9,113,632
 
 
 
2,564,149
 
 
 
28,675,224
 
 
 
—  
 
 
 
98,172,675
 
Goodwill
 
 
26,965,618
 
 
 
215,381
 
 
 
15,335,322
 
 
 
5,191,841
 
 
 
11,685,585
 
 
 
4,688,154
 
 
 
6,002,380
 
 
 
14,186,723
 
 
 
52,307,190
 
 
 
—  
 
 
 
136,578,194
 
Trademarks, net
 
 
90,673
 
 
 
149,865
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
229,000
 
 
 
2,822,625
 
 
 
—  
 
 
 
3,292,163
 
Licenses and rights, net
 
 
11,081,972
 
 
 
129,233
 
 
 
39,620,009
 
 
 
13,791,003
 
 
 
11,384,533
 
 
 
5,502,139
 
 
 
5,220,437
 
 
 
10,847,685
 
 
 
25,709,849
 
 
 
—  
 
 
 
123,286,860
 
Investment in associated companies
 
 
4,725,279
 
 
 
522,403
 
 
 
65,699
 
 
 
(34,401
) 
 
 
351
 
 
 
—  
 
 
 
26,348
 
 
 
—  
 
 
 
—  
 
 
 
(2,253,198
) 
 
 
3,052,481
 
Liabilities by segments
 
 
679,954,783
 
 
 
176,177,522
 
 
 
273,655,967
 
 
 
72,702,285
 
 
 
65,631,866
 
 
 
44,676,727
 
 
 
42,823,861
 
 
 
53,885,848
 
 
 
134,357,142
 
 
 
(308,257,878
) 
 
 
1,235,608,123
 
F-8
4
Table of Contents
24. Recently Issued Accounting Standards

New and amended standards and interpretations

The Company applied for the first-time certain standards and amendments, which are effective for annual periods beginning on or after January 1, January 2020.2021. The Company has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

Amendments to IFRS 3, Definition of a Business

The amendment to IFRS 3 Business Combinations clarifies that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that, together, significantly contribute to the ability to create output. Furthermore, it clarifies that a business can exist without including all of the inputs and processes needed to create outputs. These amendments had no impact on the consolidated financial statements of the Company, but may impact future periods should the Company enter into any business combinations.

Amendments to IFRS 7, IFRS 9 and IAS 39

Interest Rate Benchmark Reform

The amendments – Phase 2: Amendments to IFRS 9, and IAS 39, Financial Instruments: RecognitionIFRS 7, IFRS 4 and MeasurementIFRS 16.

The amendments provide a number oftemporary reliefs which applyaddress the financial reporting effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR). The amendments include the following practical expedients:

To require contractual changes, or changes to all hedging relationshipscash flows that are directly affectedrequired by the reform, to be treated as changes to a floating interest rate, benchmark reform. Aequivalent to a movement in a market rate of interest
To permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the hedging relationship being discontinued
To provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR instrument is affected if the reform gives rise to uncertainty about the timing and/or amountdesignated as a hedge of benchmark-based cash flows of the hedged item or the hedging instrument. These amendments have no impact on the consolidated financial statements of the Company as it does not have any interest rate hedge relationships.

Amendments to IAS 1 and IAS 8 Definition of Material

The amendments provide a new definition of material that states, “information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users. These amendments had no impact on the consolidated financial statements of, nor is there expected to be any future impact to the Company.

Conceptual Framework for Financial Reporting issued on 29 March 2018

The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the IASB in developing standards, to help preparers develop consistent accounting policies where there is no applicable standard in place and to assist all parties to understand and interpret the standards. This will affect those entities which developed their accounting policies based on the Conceptual Framework. The revised Conceptual Framework includes some new concepts, updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts. risk component

These amendments had no impact on the consolidated financial statements of the Company.

The Company intends to use the practical expedients in future periods if they become applicable.

COVID-19-Related
Rent Concessions beyond 30 June 2021 Amendments to IFRS 16
On 28 May 2020, the IASB issued
COVID-19-Related
Rent Concessions – amendment to IFRS 16 Leases. The amendments provide relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the
COVID-19
pandemic. As a practical expedient, a lessee may elect not to assess whether a
COVID-19
related rent concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from the
COVID-19
related rent concession the same way it would account for the change under IFRS 16, if the change were not a lease modification.
The amendment was intended to apply until 30 June 2021, but as the impact of the
COVID-19
pandemic is continuing, on 31 March 2021, the IASB extended the period of application of the practical expedient to 30 June 2022.
The amendment applies to annual reporting periods beginning on or after 1 April 2021; however, the Company has not received
COVID-19-related
rent concessions.
New standards, amendments and interpretations not yet effective
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.
Amendments to IAS 1: Classification of Liabilities as Current or Non-current
In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or
non-current.
The amendments clarify:
What is meant by a right to defer settlement
That a right to defer must exist at the end of the reporting period
That classification is unaffected by the likelihood that an entity will exercise its deferral right

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That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification
The amendments are effective for annual reporting periods beginning on or after January 1, 2023 and must be applied retrospectively. The Company is currently assessing the impact the amendments will have on current practice and whether existing loan agreements may require renegotiation; however, the amendments are not expected to have a material impact on the Company.
Reference to the Conceptual Framework – Amendments to IFRS 3
In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations – Reference to the Conceptual Framework. The amendments are intended to replace a reference to the Framework for the Preparation and Presentation of Financial Statements, issued in 1989, with a reference to the Conceptual Framework for Financial Reporting issued in March 2018 without significantly changing its requirements.
The Board also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential ‘day 2’ gains or losses arising for liabilities and contingent liabilities that would be within the scope of IAS 37 or IFRIC 21 Levies, if incurred separately.
At the same time, the Board decided to clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Framework for the Preparation and Presentation of Financial Statements.
The amendments are effective for annual reporting periods beginning on or after January 1, 2022 and apply prospectively.
Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16
In May 2020, the IASB issued Property, Plant and Equipment – Proceeds before Intended Use, which prohibits entities deducting from the cost of an item of property, plant and equipment, any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognizes the proceeds from selling such items, and the costs of producing those items, in profit or loss. The amendment is effective for annual reporting periods beginning on or after January 1, 2022 and must be applied retrospectively to items of property, plant and equipment made available for use on or after the beginning of the earliest period presented when the entity first applies the amendment. The amendments are not expected to have a material impact on the Company.
Onerous Contracts – Costs of Fulfilling a Contract – Amendments to IAS 37
In May 2020, the IASB issued amendments to IAS 37 to specify which costs an entity needs to include when assessing whether a contract is onerous or loss-making.
The amendments apply a “directly related cost approach”. The costs that relate directly to a contract to provide goods or services include both incremental costs and an allocation of costs directly related to contract activities. General and administrative costs do not relate directly to a contract and are excluded unless they are explicitly chargeable to the counterparty under the contract.
The amendments are effective for annual reporting periods beginning on or after January 1, 2022. The Company will apply these amendments to contracts for which it has not yet fulfilled all its obligations at the beginning of the annual reporting period in which it first applies the amendments.
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IFRS 1 First-time Adoption of International Financial Reporting Standards – Subsidiary as a first-time adopter
As part of its 2018-2020 annual improvements to IFRS standards process, the IASB issued an amendment to IFRS 1 First-time Adoption of International Financial Reporting Standards. The amendment permits a subsidiary that elects to apply paragraph D16(a) of IFRS 1 to measure cumulative translation differences using the amounts reported by the parent, based on the parent’s date of transition to IFRS.
This amendment is also applied to an associate or joint venture that elects to apply paragraph D16(a) of IFRS 1. The amendment is effective for annual reporting periods beginning on or after January 1, 2022 with earlier adoption permitted.
IFRS 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognition of financial liabilities
As part of its 2018-2020 annual improvements to IFRS standards process the IASB issued amendment to IFRS 9. The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment.
The amendment is effective for annual reporting periods beginning on or after January 1, 2022 with earlier adoption permitted. The amendments are not expected to have a material impact on the Company.
Definition of Accounting Estimates – Amendments to IAS 8
In February 2021, the IASB issued amendments to IAS 8, in which it introduces a definition of ‘accounting estimates’. The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. Also, they clarify how entities use measurement techniques and inputs to develop accounting estimates.
The amendments are effective for annual reporting periods beginning on or after January 1, 2023 and apply to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. Earlier application is permitted as long as this fact is disclosed.
The amendments are not expected to have a material impact on the Company.
Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2
In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements, in which it provides guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ‘significant’ accounting policies with a requirement to disclose their ‘material’ accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.
The amendments to IAS 1 are applicable for annual periods beginning on or after January 1, 2023 with earlier application permitted. Since the amendments to the Practice Statement 2 provide non-mandatory guidance on the application of the definition of material to accounting policy information, an effective date for these amendments is not necessary.
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The Company is currently assessing the impact of the amendments to determine the impact they will have on the Company’s accounting policy disclosures.
25. Subsequent Events

a)

In February 2021, The Board of Directors approved a plan to spin-off our towers from América Móvil in Latin América. This spin-off will maximize the value of the infrastructure by becoming an independent entity entirely focused on development, construction and co-location of towers for wireless services and this transaction is consider to shareholders as a new entity. The Company expect to complete the reorganization of assets in 2021.

b)

In February, 2021, the Company announces that its wholly-owned Dutch subsidiary América Móvil B.V. (the “Issuer”) has completed the placement of approximately EUR 2.1 billion principal amount of senior unsecured bonds (the “Bonds”) exchangeable into ordinary shares of Koninklijke KPN N.V. (the “Exchangeable Bond Offering”). The Bonds will have a maturity of 3 years, they will not bear interest (zero-coupon) and will be issued at an issue price of 104.75% of their principal amount, resulting in an annual yield-to-maturity of (1.53)%. The aggregate proceeds from the Bonds will be approximately EUR 2.2 billion. The Bonds will be exchangeable into Koninklijke KPN N.V. (“KPN”) ordinary shares and the initial exchange price has been set at EUR 3.1185, a premium of 15 per cent. above the Reference Price of EUR 2.7117 (the volume weighted average price of the KPN ordinary shares on Euronext Amsterdam on 23 February 2021). The Exchangeable Bond Offering is expected to close on 2 March 2021.

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a) In July 2020, the Company announced that its Brazilian subsidiary, Claro S.A. (“Claro”), agreed to extend and amend the binding offer submitted, jointly with Telefónica Brasil S.A. (“Telefonica”) and TIM S.A. (“TIM”), for the acquisition of the mobile business owned by Oi Group, in the amount of R

$
16,500
million. Such joint offer contemplated, additionally, the possibility of entering into long term agreements for the use of infrastructure with Oi Group. The offer was submitted by the parties, and is subject to certain conditions, including their right to make a higher bid than another offer potentially presented by a third party (“right to top”) in the competitive process of Oi Group’s mobile business sale. Therefore, Claro believes that the joint offer with TIM and Telefonica is the one that best serves the interests of current customers of Oi, as it provides long-term experience in the Brazilian market, investment capacity and technical innovation to the sector as a whole; besides being in line with current regulation. On February 9, 2022, the Company announced that Brazil’s antitrust authority had approved the sale. 
This
transaction
closed on
April 20, 2022. 
b) On March 18, 2022, the Company entered into a credit agreement providing for borrowings in an amount up to Ps.20,558,500 with a group of lenders and BBVA México, S.A., Institución de Banca Múltiple, Grupo Financiero BBVA México, as administrative agent for the lenders (the “Sitios Credit Facility”). The full principal amount available under the Sitios Credit Facility was disbursed on March 23, 2022. Under this credit agreement, the Company is an initial co-borrower with Torres Latinoamérica, S.A. de C.V. (“Torres”). In connection with the spin-off (through an escisión) by the Company of certain of its telecommunications towers and other associated passive infrastructure outside of Mexico to a new company (the “Sitios Spin-off”) to be named Sitios Latinoamérica, S.A.B. de C.V. (“Sitios”), on the date on which Sitios is duly incorporated in accordance with Mexican law, pursuant to the resolutions approved by the shareholders of the Company in the extraordinary shareholders’ meeting dated as of September 29, 2021, the Company will be released from its obligations under the Sitios Credit Facility and all liabilities with respect thereto will be transferred to Sitios, and Sitios will assume all of our obligations thereunder. After such date, Torres will continue to be a co-borrower under the Sitios Credit Facility and Torres do Brasil S.A. will become a guarantor thereunder. 

c) In April 2022, the Company issued a bond for a total of U.S.$ 1 billion at a rate of 5.375% maturing in 2032. América Móvil plans to transfer, through the spin-off, the total amount of the bonds to Sitios and any obligation of the Company with respect to the Sitios notes will be extinguished. 

d) On April 14, 2022, the Company acquired a loan of 1,640.8 million reais maturing in 2023 at a rate of 13.32%.
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