kr6kpress_grupo.htm
 
 
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 6-K
 
REPORT OF FOREIGN ISSUER PURSUANT TO RULES 13a-16 or 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
 
For the month of February, 2018
 
GRUPO TELEVISA, S.A.B.
(Translation of registrant’s name into English)
 
 
Av. Vasco de Quiroga No. 2000, Colonia Santa Fe 01210, Mexico City, Mexico
(Address of principal executive offices)
 
 
(Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.)
 
Form 20-F
x
Form 40-F
    
 
 
(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).)
 
Yes
 
No
  
x
 
 
(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).)
 
 
Yes
 
No
  
x
          
 
 
 
TLEVISA
Consolidated
Ticker:       TLEVISA
Quarter:     4     Year:    2017
 

Quarterly Financial Information
 
2
   
12
   
14
   
16
   
17
   
19
   
21
   
24
   
27
   
28
   
29
   
30
   
32
   
33
   
34
   
41
   
45
   
46
   
47
   
48
   
80
 
1 of 80

[105000] Management commentary
 

Management commentary
 
Mexico City, February 20, 2018 — Grupo Televisa, S.A.B. (NYSE:TV; BMV: TLEVISA CPO; “Televisa” or “the Company”), today announced results for full year and fourth quarter 2017. The results have been prepared in accordance with International Financial Reporting Standards (“IFRS”).

The following table sets forth condensed consolidated statements of income for the years ended December 31, 2017 and 2016, in millions of Mexican pesos, as well as the percentage that each line represents of net sales and the percentage change when comparing 2017 with 2016:

 
2017
Margin %
2016
Margin %
Change %
Net sales
94,274.2
100.0
96,287.4
100.0
(2.1)
Net income
6,577.5
7.0
5,333.4
5.5
23.3
Net income attributable to stockholders of the Company
4,524.5
4.8
3,721.4
3.9
21.6
           
Segment net sales
97,618.4
100.0
99,347.8
100.0
(1.7)
Operating segment income (1)
37,456.8
38.4
38,923.2
39.2
(3.8)
(1) The operating segment income margin is calculated as a percentage of segment net sales.
Net sales decreased by 2.1% to Ps.94,274.2 million in 2017 compared with Ps.96,287.4 million in 2016. This decrease was attributable to the decline in Content segment revenues and, to a lesser extent, the decline in sales in our Other Businesses segment. Operating segment income decreased by 3.8%, reaching Ps.37,456.8 million with a margin of 38.4%.

Net income attributable to stockholders of the Company amounted to Ps.4,524.5 million in 2017, compared with Ps.3,721.4 million in 2016. The net increase of Ps.803.1 million, or 21.6%, reflected primarily (i) a Ps.4,227.2 million decrease in finance expense, net; (ii) a Ps.773.7 million increase in share of income of associates and joint ventures, net; and (iii) a Ps.751.1 million decrease in other expense, net. These favorable variances were partially offset by (i) a Ps.1,556.5 million increase in depreciation and amortization; and (ii) a Ps.1,401.9 million increase in income taxes.

Disclosure of nature of business
Televisa, is a leading media company in the Spanish-speaking world, an important cable operator in Mexico, and an operator of a leading direct-to-home satellite pay television system in Mexico. Televisa distributes the content it produces through several broadcast channels in Mexico and in over 50 countries through 26 pay-tv brands and television networks, cable operators and over the top or “OTT” services. In the United States, Televisa´s audiovisual content is distributed through Univision, the leading media company serving the Hispanic market. Univision broadcasts Televisa’s audiovisual content through multiple platforms in exchange for a royalty payment. In addition, Televisa has equity and Warrants which upon their exercise would represent approximately 36% on a fully-diluted, as-converted basis of the equity capital in UHI, the controlling company of Univision. Televisa’s cable business offers integrated services, including video, high-speed data and voice services to residential and commercial customers as well as managed services to domestic and international carriers through five cable multiple system operators in Mexico. Televisa owns a majority interest in Sky, a leading direct-to-home satellite pay television system in Mexico, operating also in the Dominican Republic and Central America. Televisa also has interests in magazine publishing and distribution, radio production and broadcasting, professional sports and live entertainment, feature-film production and distribution, and gaming.
 
2 of 80
 

 
Disclosure of management's objectives and its strategies for meeting those objectives
 
We intend to leverage our position as a leading media company in the Spanish-speaking world to continue expanding our business while maintaining profitability and financial discipline. We intend to do so by maintaining our leading position in the Mexican television market, by continuing to produce high quality programming and by improving our sales and marketing efforts while maintaining high operating margins and expanding our cable business.

By leveraging all our business segments and capitalizing on their synergies to extract maximum value from our content and our distribution channels, we also intend to continue expanding our cable business, increasing our international programming sales worldwide and strengthening our position in the growing U.S.-Hispanic market. We also intend to continue developing and expanding Sky, our DTH platform, and our cable businesses. We will continue to strengthen our position and will continue making additional investments, which could be substantial in size, in the DTH and cable industry in accordance with the consolidation of the cable market in Mexico, and we will also continue developing our publishing business and maintain our efforts to become an important player in the gaming industry.

We intend to continue to expand our business by developing new business initiatives and/or through business acquisitions and investments in Mexico, the United States and elsewhere.

Disclosure of entity's most significant resources, risks and relationships
We funded our operating cash needs in 2017, including cash needs in connection with investments and acquisitions in 2017, primarily through a combination of cash from operations and cash on hand.
 
The investing public should consider the risks described as follows, as well as the risks described in “Item 3. Key Information—Risk Factors” in the Company’s Annual Report on Form 20-F, which are not the only risks the Company faces. Risks and uncertainties unknown by the Company, as well as those that the Company currently considers as not relevant, could affect its operations and activities.
 
Risk Factors Related with Political Developments:

•
Imposition of fines by regulators and other authorities could adversely affect our financial condition and results of operations
•
Social Security Law
•
Federal Labor Law
•
Mexican tax laws
•
Elimination of the tax consolidation regime
•
Limitation of the deduction of non-taxable employee benefits
•
Increase to the border Value Added Tax rate
•
The amendment to the regulations of the General Health Law on advertising could materially affect our business, results of operations and financial condition
•
Mexican Securities Market Law
•
The operation of our business may be adversely affected if the Mexican government does not renew or revokes our broadcast or other concessions
 
3 of 80
 
Risk Factors Related to our Business:

•
Control of a stockholder
•
Measures for the prevention of the taking of control
•
Competition
•
The seasonal nature of our business
•
Loss of transmission or loss of the use of satellite transponders could cause a business interruption in Innova, which would adversely affect our net income
•
Any incidents affecting our network and information systems or other technologies could have an adverse impact on our business, reputation and results of operations
•
The results of operations of UHI may affect our results of operations and the value of our investment in that Company
•
Uncertainty in global financial markets could adversely affect our financing costs and exposure to our customers and counterparties
•
Political events in Mexico could affect Mexican economic policy and our business, financial condition and results of operations 

Disclosure of results of operations and prospects
The following table presents full year consolidated results ended December 31, 2017 and 2016, for each of our business segments. Full year consolidated results for 2017 and 2016 are presented in millions of Mexican pesos.

Net Sales
2017
%
2016
 %
Change %
Content
33,997.2
34.8
36,686.7
36.9
(7.3)
Sky
22,196.6
22.7
21,941.2
22.1
1.2
Cable
33,048.3
33.9
31,891.6
32.1
3.6
Other Businesses
8,376.3
8.6
8,828.3
8.9
(5.1)
Segment Net Sales
97,618.4
100.0
99,347.8
100.0
(1.7)
Intersegment Operations1
(3,344.2)
  
(3,060.4)
  
(9.3)
Net Sales
94,274.2
  
96,287.4
  
(2.1)


Operating Segment Income2
2017
Margin  %
2016
Margin %
Change %
Content
12,825.3
37.7
14,748.0
40.2
(13.0)
Sky
10,106.6
45.5
9,898.5
45.1
2.1
Cable
14,034.8
42.5
13,236.1
41.5
6.0
Other Businesses
490.1
5.9
1,040.6
11.8
(52.9)
Operating Segment Income
37,456.8
38.4
38,923.2
39.2
(3.8)
Corporate Expenses
(2,291.0)
(2.3)
(2,207.9)
(2.2)
(3.8)
Depreciation and Amortization
(18,536.3)
(19.7)
(16,979.8)
(17.6)
(9.2)
Other Expense, net
(2,386.3)
(2.5)
(3,137.4)
(3.3)
23.9
Operating Income
14,243.2
15.1
16,598.1
17.2
(14.2)
1 For segment reporting purposes, intersegment operations are included in each of the segment operations.
2 Operating segment income is defined as operating income before depreciation and amortization, corporate expenses, and other expense, net.


Content
Fourth quarter sales decreased by 9.3% to Ps.10,605.8 million compared with Ps.11,690.9 million in fourth quarter 2016.

4 of 80

 
Full year sales decreased by 7.3% to Ps.33,997.2 million compared with Ps. 36,686.7 million in 2016.

Millions of Mexican pesos
2017
%
2016
%
Change %
Advertising
20,719.1
61.0
23,223.2
63.3
(10.8)
Network Subscription Revenue
4,058.1
11.9
4,399.3
12.0
(7.8)
Licensing and Syndication
9,220.0
27.1
9,064.2
24.7
1.7
Net Sales
33,997.2
100.0
36,686.7
100.0
(7.3)
 
 
Advertising

Advertising fourth quarter revenue decreased by 14.7% to Ps.6,820.5 million compared with Ps.7,995.5 million in fourth quarter 2016. Full year advertising revenue decreased by 10.8%.
 
Advertising sold in our non-cancellable upfront, which typically accounts for the large majority of advertising revenue in a given year, is priced per spot based on, among other things, prior years’ ratings.
 
The pricing of such inventory remains fixed regardless of any change in ratings when transmitted. As a result of the ratings increase during 2017, clients achieved their target number of eyeballs with a smaller expense and were practically absent from the scatter market. This negative effect was particularly adverse to Televisa during the fourth quarter given the significance of scatter market revenue towards the last few months of the year.
 
For 2018, we have successfully migrated clients to a pricing mechanism based on ratings. Under the new sales mechanism, advertising customer deposits increased by 1.8% in 2018, with a number of contracts concluded soon after year end.
 
Network Subscription Revenue
 
Fourth-quarter Network Subscription revenue increased by 9.5% to Ps.1,145.1 million compared to Ps.1,045.4 million in fourth-quarter 2016.
 
Full year Network Subscription revenue decreased by 7.8%. The full year decrease is explained by the fact that a competitor is no longer carrying our pay TV networks. Fourth quarter did not have this effect, which explains the growth.
 
Licensing and Syndication
 
Fourth-quarter Licensing and Syndication revenue decreased by 0.4% to Ps.2,640.2 million compared to Ps.2,650.0 million in fourth-quarter 2016. Fourth-quarter royalties from Univision reached U.S.$78.8 million compared to U.S.$90.4 million in the fourth-quarter 2016. For the full year 2017 royalties from Univision reached U.S.$313.9 million.
 
The full year increase in Licensing and Syndication revenue of 1.7% is mainly explained by non-recurring revenue originated in other local licensing agreements.
 
Fourth quarter operating segment income for our Content segment decreased by 17.8% to Ps.3,919.5 million compared with Ps.4,767.8 million in fourth quarter 2016; the margin was 37.0%.
 
Full-year operating segment income for our Content segment decreased by 13.0% to Ps.12,825.3 million compared with Ps.14,748.0 million in 2016. The margin was 37.7%.
   
Sky Fourth quarter sales increased by 1.2% to Ps.5,568.9 million compared with Ps. 5,505.1 million in fourth quarter 2016. During the quarter, Sky lost 12,372 subscribers.
 
5 of 80
 
 
Full year sales increased by 1.2% to Ps.22,196.6 million compared with Ps.21,941.2 million in 2016. The number of net active subscribers decreased by 23,993 during the year to 8,002,526 as of December 31, 2017. Sky ended the quarter with 174,809 subscribers in Central America and the Dominican Republic.
 
During 2017, Sky was impacted by the unusually high growth in net additions in 2016 as a result of the analog shut down.
 
On the other hand, during 2017 the number of clients that subscribe to a high-definition package grew by 20% reaching approximately 7% of the total subscriber base. In addition, revenue per customer increased year over year by 6%.
 
Fourth quarter operating segment income decreased by 4.1% to Ps.2,324.1 million compared with Ps.2,423.8 million in fourth quarter 2016, and the margin was 41.7%. The decrease in margin is explained by the amortization of cost and expenses associated to the 2018 Soccer World Cup.
 
Full year operating segment income increased by 2.1% to Ps.10,106.6 million compared with Ps.9,898.5 million in 2016, and the margin was 45.5%, in line with given guidance.
   
Cable
Fourth quarter sales increased by 3.4% to Ps.8,592.9 million compared with Ps.8,313.2 million in fourth quarter 2016.
 
Full year sales increased by 3.6% to Ps.33,048.3 million compared with Ps.31,891.6 million in 2016.
 
Total revenue generating units, or RGUs, reached 10.1 million. Quarterly growth was mainly driven by 157 thousand data net additions. Video net additions were 62 thousand and voice net additions were 23 thousand, for a total quarter net additions of approximately 242 thousand.
 
Last quarter was the third consecutive quarter of improvement in net additions.
 
The following table sets forth the breakdown of RGUs per service type for our Cable segment as of December 31, 2017 and 2016.
 
RGUs
2017
2016
Video
4,185,150
4,205,864
Broadband
3,797,336
3,411,790
Voice
2,121,952
2,113,282
Total RGUs
10,104,438
9,730,936
 
 
Fourth quarter operating segment income increased by 9.7% to Ps.3,671.7 million compared with Ps.3,346.2 million in fourth quarter 2016, and the margin reached 42.7%.
 
Full year operating segment income increased by 6.0% to Ps.14,034.8 million compared with Ps.13,236.1 million in 2016. The margin reached 42.5%, equivalent to an increase of 100 basis points from 2016.
 
The following tables set forth the breakdown of revenues and operating segment income, excluding consolidation adjustments, for our cable and enterprise operations for 2017 and 2016.
 
Our cable operations include the video, voice and data services provided by Cablevision, Cablemas, TVI, Cablecom and Telecable. Our enterprise operations include the services offered by Bestel and the enterprise operation of Cablecom.
 

6 of 80

2017
Millions of Mexican pesos
Cable Operations (1)
Enterprise Operations (1)
Total Cable
Revenue
29,067.9
5,218.5
33,048.3
Operating Segment Income
12,578.0
1,892.6
14,034.8
Margin
43.3%
36.3%
42.5%
(1) These results do not include consolidation adjustments of Ps.1,238.1 million in revenues and Ps.435.8 million in Operating Segment Income, which are considered in the consolidated results of the Cable segment.
2016
Millions of Mexican pesos
Cable Operations (2)
Enterprise Operations(2)
Total Cable
Revenue
27,517.1
5,654.6
31,891.6
Operating Segment Income
11,771.7
2,021.0
13,236.1
Margin
42.8%
35.7%
41.5%
(2) These results do not include consolidation adjustments of Ps.1,280.1 million in revenues and Ps.556.6 million in Operating Segment Income, which are considered in the consolidated results of the Cable segment.
 
Other Businesses
Fourth quarter sales decreased by 19.9% to Ps.2,229.2 million compared with Ps.2,783.0 million in fourth quarter 2016. The decrease is mainly explained by lower revenues in our publishing and feature film distribution businesses.
 
Full year sales decreased by 5.1% to Ps.8,376.3 million compared with Ps.8,828.3 million in 2016. Decrease in revenues was mainly driven by performance in publishing and soccer businesses.
 
Fourth quarter operating segment income reached Ps.223.7 million compared with Ps.368.1 million in fourth quarter 2016.
 
Full year operating segment income decreased by 52.9% to Ps.490.1 million compared with Ps.1,040.6 million in 2016, reflecting a decrease in operating segment income of our publishing, soccer and feature film distribution businesses.
 
Corporate Expense

Corporate expense increased marginally by Ps.83.1 million, or 3.8%, to Ps.2,291.0 million in 2017, from Ps.2,207.9 million in 2016. The increase reflected primarily a higher share-based compensation expense.

Share-based compensation expense in 2017 and 2016 amounted to Ps.1,489.9 million and Ps.1,410.5 million, respectively, and was accounted for as corporate expense. Share-based compensation expense is measured at fair value at the time the equity benefits are conditionally sold to officers and employees, and is recognized over the vesting period.

Other Expense, Net

Other expense, net, decreased by Ps.751.1 million, or 23.9%, to Ps.2,386.3 million in 2017, from Ps.3,137.4 million in 2016. This decrease reflected primarily (i) a lower loss on disposition of property and equipment resulting primarily from a reduction in network upgrades in our Cable segment operations, and from the absence of costs incurred in connection with the cancellation in 2016 of a contract for a new satellite in our Sky segment; and (ii) a lower expense related to legal and accounting advisory and professional services. These favorable variances were partially offset by losses on disposition of a publishing business in Argentina in our Other Businesses segment, and of intangible assets in our Content segment.
 
7 of 80
 
Other expense in 2017 included primarily non-recurrent severance expenses; losses on disposition of property, equipment and intangible assets; legal and accounting advisory and professional services; donations; a loss on disposition of a publishing business in Argentina; and impairment adjustments to certain trademarks in our Publishing business.
 
Finance Expense, Net

The following table sets forth the finance (expense) income, net, stated in millions of Mexican pesos for the years ended December 31, 2017 and 2016.

 
2017
2016
(Increase) decrease
Interest expense
(9,245.7)
(8,497.9)
(747.8)
Interest income
2,268.7
1,499.5
769.2
Foreign exchange gain (loss), net
768.9
(2,490.3)
3,259.2
Other finance income (expense), net
903.2
(43.4)
946.6
Finance expense, net
(5,304.9)
(9,532.1)
4,227.2

Finance expense, net, decreased by Ps.4,227.2 million, or 44.3%, to Ps.5,304.9 million in 2017, from Ps.9,532.1 million in 2016. This decrease reflected primarily:

(i)      
a Ps.3,259.2 million favorable change in foreign exchange income or loss, net, resulting primarily from a 4.5% appreciation of the Mexican peso against the U.S. dollar in 2017, compared with a 19.9% depreciation of the Mexican peso against the U.S. dollar in 2016;

(ii)   
a favorable change of Ps.946.6 million in other finance income or expense, net, resulting primarily from a net gain in fair value in our derivative contracts; and

(iii)   
a Ps.769.2 million increase in interest income explained primarily by an increase in interest rates applicable to cash equivalents.

These favorable variances were partially offset by a Ps.747.8 million increase in interest expense, due primarily to a higher average principal amount of debt in the fourth quarter of 2017, as we incurred in Mexican peso debt in October and November 2017, for the prepayment in December 2017 of certain outstanding debt and accrued interest, primarily denominated in U.S. dollars, as well as fees paid in connection with such prepayment of debt.

Share of Income of Associates and Joint Ventures, Net

Share of income of associates and joint ventures, net, increased by Ps.773.7 million, or 67.9%, to Ps.1,913.3 million in 2017, from Ps.1,139.6 million in 2016. This increase reflected mainly a higher share of income of Univision Holdings, Inc. or UHI, the controlling company of Univision Communications Inc., resulting from an increase in UHI’s income before income taxes, and a non-recurring tax benefit in connection with a reduction of the corporate tax rate in the United States from 35% to 21%, which was partially offset by a lower share of income of Imagina Media Audiovisual, S.L., a communications company in Spain.

Income Taxes

Income taxes increased by Ps.1,401.9 million, or 48.8%, to Ps.4,274.1 million in 2017, compared with Ps.2,872.2 million in 2016. This increase resulted in a higher effective income tax rate, primarily in connection with a higher taxable inflationary gain resulting from a net monetary liability position of the Company and certain subsidiaries, and a 6.8% inflation rate in 2017, compared with a 3.4% inflation rate in 2016.

Net Income Attributable to Non-controlling Interests

Net income attributable to non-controlling interests increased by Ps.441.0 million, or 27.4%, to Ps.2,053.0 million in 2017, compared with Ps.1,612.0 million in 2016. This increase reflected primarily a higher portion of net income attributable to non-controlling interests in our Cable and Sky segments.
8 of 80
 
Financial position, liquidity and capital resources
Capital Expenditures

During 2017, capital expenditures were 41% lower than in 2016. We invested approximately U.S.$884.7 million in property, plant and equipment as capital expenditures. These capital expenditures included approximately U.S.$559.7 million for our Cable segment, U.S.$211.4 million for our Sky segment, and U.S.$113.6 million for our Content and Other Businesses segments.

Debt, Finance Lease Obligations and Other Notes Payable

The following table sets forth our total debt, finance lease obligations and other notes payable as of December 31, 2017 and 2016. Amounts are stated in millions of Mexican pesos.

 
Dec 31, 2017
Dec 31, 2016
Increase (decrease)
Current portion of long-term debt
307.0
850.9
(543.9)
       
Long-term debt, net of current portion
121,993.1
126,146.7
(4,153.6)
       
        Total debt 1
122,300.1
126,997.6
(4,697.5)
       
Current portion of finance lease obligations
580.9
575.6
5.3
       
Long-term finance lease obligations
5,041.9
5,816.2
(774.3)
       
       Total finance lease obligations
5,622.8
6,391.8
(769.0)
       
Current portion of other notes payable
1,178.4
1,202.3
(23.9)
       
Other notes payable, net of current portion
2,505.6
3,650.7
(1,145.1)
       
       Total other notes payable 2
3,684.0
4,853.0
(1,169.0)
 
1 As of December 31, 2017 and 2016, total debt is presented net of finance costs in the amount of Ps.1,250.7 million and Ps.1,290.6 million, respectively, and does not include related accrued interest payable in the amount of Ps.1,796.8 million and Ps.1,827.3 million, respectively.
2 In connection with the acquisition in 2016 of a non-controlling interest in our Cable segment subsidiary, Televisión Internacional, S.A. de C.V.

As of December 31, 2017, our consolidated net debt position (total debt, finance leases and other notes payable, less cash and cash equivalents, temporary investments, and non-current held-to-maturity and available-for-sale investments) was Ps.79,273.1 million. The aggregate amount of non-current held-to-maturity and available-for-sale investments as of December 31, 2017, amounted to Ps.7,585.2 million.
 
9 of 80
 
In October 2017, we concluded an offering of Ps.4,500 million aggregate principal amount of local bonds (Certificados Bursátiles) due 2027 with an annual interest rate of 8.79%, registered with the Mexican Banking and Securities Commission (Comisión Nacional Bancaria y de Valores). In November 2017 we entered into long-term credit agreements with three Mexican banks in the aggregate principal amount of Ps.6,000 million.

In December 2017, we prepaid the principal outstanding amount of U.S.$500 million Senior Notes due 2018 at an aggregate redemption price of Ps.9,841.7 million (U.S.$511.7 million), which included related fees and accrued and unpaid interest at the redemption date.

Shares Outstanding

As of December 31, 2017 and 2016, our shares outstanding amounted to 342,337.1 million and 341,268.3 million, respectively, and our CPO equivalents outstanding amounted to 2,926.0 million and 2,916.8 million CPO equivalents, respectively. Not all of our shares are in the form of CPOs. The number of CPO equivalents is calculated by dividing the number of shares outstanding by 117.

As of December 31, 2017 and 2016, the GDS (Global Depositary Shares) equivalents outstanding amounted to 585.2 million and 583.3 million GDS equivalents, respectively. The number of GDS equivalents is calculated by dividing the number of CPO equivalents by five.
 

Internal control
 
 
Disclosure of critical performance measures and indicators that management uses to evaluate entity's performance against stated objectives
 
 
 
2017 
Margin % 
2016 
Margin % 
Change % 
Net sales
94,274.2
100.0
96,287.4
100.0
(2.1)
Net income
6,577.5
7.0
5,333.4
5.5
23.3
Net income attributable to stockholders of the Company
4,524.5
4.8
3,721.4
3.9
21.6
 
 
 
 
 
 
Segment net sales
97,618.4
100.0
99,347.8
100.0
(1.7)
Operating segment income (1)
37,456.8
38.4
38,923.2
39.2
(3.8)
 
(1) The operating segment income margin is calculated as a percentage of segment net sales.

 
Net Sales
2017
%
2016
 %
Change %
Content
33,997.2
34.8
36,686.7
36.9
(7.3)
Sky
22,196.6
22.7
21,941.2
22.1
1.2
Cable
33,048.3
33.9
31,891.6
32.1
3.6
Other Businesses
8,376.3
8.6
8,828.3
8.9
(5.1)
Segment Net Sales
97,618.4
100.0
99,347.8
100.0
(1.7)
Intersegment Operations1
(3,344.2)
  
(3,060.4)
  
(9.3)
Net Sales
94,274.2
  
96,287.4
  
(2.1)
 
10 of 80
 
Operating Segment Income2
2017
Margin  %
2016
Margin %
Change %
Content
12,825.3
37.7
14,748.0
40.2
(13.0)
Sky
10,106.6
45.5
9,898.5
45.1
2.1
Cable
14,034.8
42.5
13,236.1
41.5
6.0
Other Businesses
490.1
5.9
1,040.6
11.8
(52.9)
Operating Segment Income
37,456.8
38.4
38,923.2
39.2
(3.8)
Corporate Expenses
(2,291.0)
(2.3)
(2,207.9)
(2.2)
(3.8)
Depreciation and Amortization
(18,536.3)
(19.7)
(16,979.8)
(17.6)
(9.2)
Other Expense, net
(2,386.3)
(2.5)
(3,137.4)
(3.3)
23.9
Operating Income
14,243.2
15.1
16,598.1
17.2
(14.2)

1 For segment reporting purposes, intersegment operations are included in each of the segment operations.
2 Operating segment income is defined as operating income before depreciation and amortization, corporate expenses, and other expense, net.

Net Sales
4Q 2017
%
4Q 2016
 %
Change %
Content
10,605.8
39.3
11,690.9
41.3
(9.3)
Sky
5,568.9
20.6
5,505.1
19.5
1.2
Cable
8,592.9
31.8
8,313.2
29.4
3.4
Other Businesses
2,229.2
8.3
2,783.0
9.8
(19.9)
Segment Net Sales
26,996.8
100.0
28,292.2
100.0
(4.6)
Intersegment Operations1
(893.7)
  
(991.6)
  
9.9
Net Sales
26,103.1
  
27,300.6
  
(4.4)


Operating Segment Income2
4Q 2017
Margin %
4Q 2016
Margin %
Change %
Content
3,919.5
37.0
4,767.8
40.8
(17.8)
Sky
2,324.1
41.7
2,423.8
44.0
(4.1)
Cable
3,671.7
42.7
3,346.2
40.3
9.7
Other Businesses
223.7
10.0
368.1
13.2
(39.2)
Operating Segment Income
10,139.0
37.6
10,905.9
38.5
(7.0)
Corporate Expenses
(606.2)
(2.2)
(593.9)
(2.1)
(2.1)
Depreciation and Amortization
(4,777.0)
(18.3)
(4,469.5)
(16.4)
(6.9)
Other Expense, net
(1,126.0)
(4.3)
(1,121.5)
(4.1)
(0.4)
Operating Income
3,629.8
13.9
4,721.0
17.3
(23.1)

1 For segment reporting purposes, intersegment operations are included in each of the segment operations.
2 Operating segment income is defined as operating income before depreciation and amortization, corporate expenses, and other expense, net.

  
 
Disclaimer
 
This management commentary contains forward-looking statements regarding the Company’s results and prospects. Actual results could differ materially from these statements. The forward-looking statements in these management commentary should be read in conjunction with the factors described in “Item 3. Key Information – Forward-Looking Statements” in the Company’s Annual Report on Form 20-F, which, among others, could cause actual results to differ materially from those contained in forward-looking statements made in these management commentary and in oral statements made by authorized officers of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
 
11 of 80

[110000] General information about financial statements

Ticker:
TLEVISA
   
Period covered by financial statements:
2017-01-01 to 2017-12-31
   
Date of end of reporting period:
2017-12-31
   
Name of reporting entity or other means of identification:
TLEVISA
   
Description of presentation currency:
MXN
   
Level of rounding used in financial statements:
THOUSANDS OF MEXICAN PESOS
   
Consolidated:
Yes
   
Number of quarter:
4
   
Type of issuer:
ICS
   
Explanation of change in name of reporting entity or other means of identification from end of preceding reporting period:
  
   
Description of nature of financial statements:
  
Disclosure of general information about financial statements
Corporate Information

Grupo Televisa, S.A.B. (the “Company”) is a limited liability public stock corporation (“Sociedad Anónima Bursátil” or “S.A.B.”), incorporated under the laws of Mexico. Pursuant to the terms of the Company’s bylaws (“Estatutos Sociales”), its corporate existence continues through 2106. The shares of the Company are listed and traded in the form of “Certificados de Participación Ordinarios” or “CPOs” on the Mexican Stock Exchange (“Bolsa Mexicana de Valores”) under the ticker symbol TLEVISA CPO, and in the form of Global Depositary Shares or GDSs, on the New York Stock Exchange, or NYSE, under the ticker symbol TV. The Company’s principal executive offices are located at Avenida Vasco de Quiroga 2000, Colonia Santa Fe, 01210 Ciudad de México, México.

Basis of Preparation and Accounting Policies

The condensed consolidated financial statements of the Group, as of December 31, 2017 and December 31, 2016, and for the years ended December 31, 2017 and 2016, are unaudited, and have been prepared in accordance with the guidelines provided by the International Accounting Standard 34, Interim Financial Reporting. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included herein.

The unaudited condensed consolidated financial statements should be read in conjunction with the Group’s audited consolidated financial statements and notes thereto for the years ended December 31, 2016, 2015 and 2014, which have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board, and include, among other disclosures, the Group’s most significant accounting policies, which were applied on a consistent basis as of December 31, 2017. The adoption of the improvements and amendments to current IFRSs effective on January 1, 2017 did not have a significant impact in these interim unaudited condensed consolidated financial statements. 
 
12 of 80

Follow-up of analysis
 The financial institutions that perform financial analysis on the securities of Grupo Televisa, S.A.B., are as follows:

Institution:
   BBVA Bancomer
   BTG Pactual
   Citi
   Credit Suisse
   Evercore
   GBM Casa de Bolsa
   Goldman Sachs
   HSBC
   Invex
   Itaú Securities
   JPMorgan  
   Maxim Group
   Merrill Lynch
   Morgan Stanley
   New Street
   Santander
   Scotiabank
   UBS

13 of 80

[210000] Statement of financial position, current/non-current

Concept
Close Current Quarter
2017-12-31
Close Previous Exercise
2016-12-31
Statement of financial position
    
Assets
    
Current assets
    
Cash and cash equivalents
38,734,949,000
47,546,083,000
Trade and other current receivables
30,357,412,000
30,992,004,000
Current tax assets, current
3,039,810,000
3,292,941,000
Other current financial assets
7,528,719,000
5,498,219,000
Current inventories
1,492,947,000
1,899,078,000
Current biological assets
0
0
Other current non-financial assets
[1] 5,890,866,000
6,533,173,000
Total current assets other than non-current assets or disposal groups classified as held for sale or as held for distribution to owners
87,044,703,000
95,761,498,000
Non-current assets or disposal groups classified as held for sale or as held for distribution to owners
0
0
Total current assets
87,044,703,000
95,761,498,000
Non-current assets
    
Trade and other non-current receivables
0
0
Current tax assets, non-current
0
0
Non-current inventories
0
0
Non-current biological assets
0
0
Other non-current financial assets
44,745,685,000
45,784,521,000
Investments accounted for using equity method
0
0
Investments in subsidiaries, joint ventures and associates
14,110,752,000
12,092,254,000
Property, plant and equipment
85,719,810,000
86,783,572,000
Investment property
0
0
Goodwill
14,112,626,000
14,112,626,000
Intangible assets other than goodwill
21,773,808,000
23,622,145,000
Deferred tax assets
21,355,044,000
22,729,580,000
Other non-current non-financial assets
[2] 8,357,673,000
8,167,954,000
Total non-current assets
210,175,398,000
213,292,652,000
Total assets
297,220,101,000
309,054,150,000
Equity and liabilities
    
Liabilities
    
Current liabilities
    
Trade and other current payables
44,353,813,000
50,926,585,000
Current tax liabilities, current
2,524,349,000
2,012,536,000
Other current financial liabilities
3,863,189,000
4,456,175,000
Other current non-financial liabilities
0
0
Current provisions
    
Current provisions for employee benefits
0
0
Other current provisions
23,466,000
30,767,000
Total current provisions
23,466,000
30,767,000
Total current liabilities other than liabilities included in disposal groups classified as held for sale
50,764,817,000
57,426,063,000
Liabilities included in disposal groups classified as held for sale
0
0
Total current liabilities
50,764,817,000
57,426,063,000
Non-current liabilities
    
Trade and other non-current payables
2,719,236,000
2,413,301,000
Current tax liabilities, non-current
4,730,620,000
6,386,877,000
Other non-current financial liabilities
129,540,643,000
135,619,102,000
 
14 of 80
 

Concept
Close Current Quarter
2017-12-31
Close Previous Exercise
2016-12-31
Other non-current non-financial liabilities
0
0
Non-current provisions
    
Non-current provisions for employee benefits
716,095,000
520,473,000
Other non-current provisions
54,263,000
54,799,000
Total non-current provisions
770,358,000
575,272,000
Deferred tax liabilities
9,037,513,000
10,349,135,000
Total non-current liabilities
146,798,370,000
155,343,687,000
Total liabilities
197,563,187,000
212,769,750,000
Equity
    
Issued capital
4,978,126,000
4,978,126,000
Share premium
15,889,819,000
15,889,819,000
Treasury shares
14,788,984,000
11,433,482,000
Retained earnings
74,983,656,000
70,395,669,000
Other reserves
4,599,147,000
3,961,784,000
Total equity attributable to owners of parent
85,661,764,000
83,791,916,000
Non-controlling interests
13,995,150,000
12,492,484,000
Total equity
99,656,914,000
96,284,400,000
Total equity and liabilities
297,220,101,000
309,054,150,000
 
 
 
15 of 80
 
[310000] Statement of comprehensive income, profit or loss, by function of expense

Concept
Accumulated Current Year
2017-01-01 - 2017-12-31
Accumulated Previous Year
2016-01-01 - 2016-12-31
Quarter Current Year
2017-10-01 - 2017-12-31
Quarter Previous Year
2016-10-01 - 2016-12-31
Profit or loss
        
Profit (loss)
        
Revenue
94,274,235,000
96,287,363,000
26,103,115,000
27,300,650,000
Cost of sales
53,534,553,000
52,377,790,000
15,009,144,000
14,844,723,000
Gross profit
40,739,682,000
43,909,573,000
11,093,971,000
12,455,927,000
Distribution costs
10,554,113,000
10,900,695,000
2,904,440,000
3,107,597,000
Administrative expenses
13,556,033,000
13,273,397,000
3,433,715,000
3,505,859,000
Other income
0
0
0
0
Other expense
2,386,334,000
3,137,384,000
1,126,094,000
1,121,439,000
Profit (loss) from operating activities
14,243,202,000
16,598,097,000
3,629,722,000
4,721,032,000
Finance income
3,940,838,000
1,499,473,000
1,717,036,000
324,809,000
Finance costs
9,245,671,000
11,031,585,000
3,650,329,000
3,441,911,000
Share of profit (loss) of associates and joint ventures accounted for using equity method
1,913,273,000
1,139,604,000
892,566,000
226,460,000
Profit (loss) before tax
10,851,642,000
8,205,589,000
2,588,995,000
1,830,390,000
Tax income (expense)
4,274,120,000
2,872,235,000
1,459,405,000
624,645,000
Profit (loss) from continuing operations
6,577,522,000
5,333,354,000
1,129,590,000
1,205,745,000
Profit (loss) from discontinued operations
0
0
0
0
Profit (loss)
6,577,522,000
5,333,354,000
1,129,590,000
1,205,745,000
Profit (loss), attributable to
        
Profit (loss), attributable to owners of parent
4,524,496,000
3,721,406,000
562,850,000
642,964,000
Profit (loss), attributable to non-controlling interests
2,053,026,000
1,611,948,000
566,740,000
562,781,000
Earnings per share
        
Earnings per share
        
Earnings per share
        
Basic earnings per share
        
Basic earnings (loss) per share from continuing operations
1.54
1.28
0.19
0.21
Basic earnings (loss) per share from discontinued operations
0
0
0
0
Total basic earnings (loss) per share
[3] 1.54
1.28
0.19
0.21
Diluted earnings per share
        
Diluted earnings (loss) per share from continuing operations
1.46
1.2
0.18
0.21
Diluted earnings (loss) per share from discontinued operations
0
0
0
0
Total diluted earnings (loss) per share
[4] 1.46
1.2
0.18
0.21
 
 
 
16 of 80
 

[410000] Statement of comprehensive income, OCI components presented net of tax

 
Concept
Accumulated Current Year
2017-01-01 - 2017-12-31
Accumulated Previous Year
2016-01-01 - 2016-12-31
Quarter Current Year
2017-10-01 - 2017-12-31
Quarter Previous Year
2016-10-01 - 2016-12-31
Statement of comprehensive income
        
Profit (loss)
6,577,522,000
5,333,354,000
1,129,590,000
1,205,745,000
Other comprehensive income
        
Components of other comprehensive income that will not be reclassified to profit or loss, net of tax
        
Other comprehensive income, net of tax, gains (losses) from investments in equity instruments
0
0
0
0
Other comprehensive income, net of tax, gains (losses) on revaluation
0
0
0
0
Other comprehensive income, net of tax, gains (losses) on remeasurements of defined benefit plans
(283,106,000)
(255,713,000)
(283,106,000)
(255,713,000)
Other comprehensive income, net of tax, change in fair value of financial liability attributable to change in credit risk of liability
0
0
0
0
Other comprehensive income, net of tax, gains (losses) on hedging instruments that hedge investments in equity instruments
0
0
0
0
Share of other comprehensive income of associates and joint ventures accounted for using equity method that will not be reclassified to profit or loss, net of tax
0
0
0
0
Total other comprehensive income that will not be reclassified to profit or loss, net of tax
(283,106,000)
(255,713,000)
(283,106,000)
(255,713,000)
Components of other comprehensive income that will be reclassified to profit or loss, net of tax
        
Exchange differences on translation
        
Gains (losses) on exchange differences on translation, net of tax
256,057,000
1,123,994,000
793,686,000
271,179,000
Reclassification adjustments on exchange differences on translation, net of tax
0
0
0
0
Other comprehensive income, net of tax, exchange differences on translation
256,057,000
1,123,994,000
793,686,000
271,179,000
Available-for-sale financial assets
        
Gains (losses) on remeasuring available-for-sale financial assets, net of tax
509,759,000
(2,567,444,000)
(586,754,000)
(2,271,700,000)
Reclassification adjustments on available-for-sale financial assets, net of tax
0
0
0
0
Other comprehensive income, net of tax, available-for-sale financial assets
509,759,000
(2,567,444,000)
(586,754,000)
(2,271,700,000)
Cash flow hedges
        
Gains (losses) on cash flow hedges, net of tax
162,231,000
552,445,000
615,891,000
331,014,000
Reclassification adjustments on cash flow hedges, net of tax
0
0
0
0
Amounts removed from equity and included in carrying amount of non-financial asset (liability) whose acquisition or incurrence was hedged highly probable forecast transaction, net of tax
0
0
0
0
Other comprehensive income, net of tax, cash flow hedges
162,231,000
552,445,000
615,891,000
331,014,000
Hedges of net investment in foreign operations
        
Gains (losses) on hedges of net investments in foreign operations, net of tax
0
0
0
0
Reclassification adjustments on hedges of net investments in foreign operations, net of tax
0
0
0
0
Other comprehensive income, net of tax, hedges of net investments in foreign operations
0
0
0
0
 
 
 
17 of 80
 
 
 
Concept
Accumulated Current Year
2017-01-01 - 2017-12-31
Accumulated Previous Year
2016-01-01 - 2016-12-31
Quarter Current Year
2017-10-01 - 2017-12-31
Quarter Previous Year
2016-10-01 - 2016-12-31
Change in value of time value of options
        
Gains (losses) on change in value of time value of options, net of tax
0
0
0
0
Reclassification adjustments on change in value of time value of options, net of tax
0
0
0
0
Other comprehensive income, net of tax, change in value of time value of options
0
0
0
0
Change in value of forward elements of forward contracts
        
Gains (losses) on change in value of forward elements of forward contracts, net of tax
0
0
0
0
Reclassification adjustments on change in value of forward elements of forward contracts, net of tax
0
0
0
0
Other comprehensive income, net of tax, change in value of forward elements of forward contracts
0
0
0
0
Change in value of foreign currency basis spreads
        
Gains (losses) on change in value of foreign currency basis spreads, net of tax
0
0
0
0
Reclassification adjustments on change in value of foreign currency basis spreads, net of tax
0
0
0
0
Other comprehensive income, net of tax, change in value of foreign currency basis spreads
0
0
0
0
Share of other comprehensive income of associates and joint ventures accounted for using equity method that will be reclassified to profit or loss, net of tax
(60,340,000)
(42,832,000)
(61,772,000)
(25,443,000)
Total other comprehensive income that will be reclassified to profit or loss, net of tax
867,707,000
(933,837,000)
761,051,000
(1,694,950,000)
Total other comprehensive income
584,601,000
(1,189,550,000)
477,945,000
(1,950,663,000)
Total comprehensive income
7,162,123,000
4,143,804,000
1,607,535,000
(744,918,000)
Comprehensive income attributable to
        
Comprehensive income, attributable to owners of parent
5,161,859,000
2,425,636,000
984,253,000
(1,347,407,000)
Comprehensive income, attributable to non-controlling interests
2,000,264,000
1,718,168,000
623,282,000
602,489,000
 
18 of 80
 
[520000] Statement of cash flows, indirect method

Concept
Accumulated Current Year
2017-01-01 - 2017-12-31
Accumulated Previous Year
2016-01-01 - 2016-12-31
Statement of cash flows
    
Cash flows from (used in) operating activities
    
Profit (loss)
6,577,522,000
5,333,354,000
Adjustments to reconcile profit (loss)
    
Discontinued operations
0
0
Adjustments for income tax expense
4,274,120,000
2,872,235,000
Adjustments for finance costs
0
0
Adjustments for depreciation and amortization expense
18,536,274,000
16,979,833,000
Adjustments for impairment loss (reversal of impairment loss) recognized in profit or loss
89,597,000
6,851,000
Adjustments for provisions
1,713,053,000
2,272,303,000
Adjustments for unrealized foreign exchange losses (gains)
(2,396,317,000)
6,707,831,000
Adjustments for share-based payments
1,489,884,000
1,410,492,000
Adjustments for fair value losses (gains)
(903,204,000)
43,370,000
Adjustments for undistributed profits of associates
0
0
Adjustments for losses (gains) on disposal of non-current assets
947,699,000
1,448,295,000
Participation in associates and joint ventures
(1,913,273,000)
(1,139,604,000)
Adjustments for decrease (increase) in inventories
839,128,000
(99,002,000)
Adjustments for decrease (increase) in trade accounts receivable
(210,776,000)
(4,649,477,000)
Adjustments for decrease (increase) in other operating receivables
(670,898,000)
(1,347,263,000)
Adjustments for increase (decrease) in trade accounts payable
(2,696,279,000)
5,255,698,000
Adjustments for increase (decrease) in other operating payables
(3,596,835,000)
438,556,000
Other adjustments for non-cash items
0
0
Other adjustments for which cash effects are investing or financing cash flow
295,194,000
312,000
Straight-line rent adjustment
0
0
Amortization of lease fees
0
0
Setting property values
0
0
Other adjustments to reconcile profit (loss)
784,687,000
352,654,000
Total adjustments to reconcile profit (loss)
16,582,054,000
30,553,084,000
Net cash flows from (used in) operations
23,159,576,000
35,886,438,000
Dividends paid
0
0
Dividends received
0
0
Interest paid
(9,245,671,000)
(8,497,919,000)
Interest received
(885,516,000)
(458,528,000)
Income taxes refund (paid)
6,419,995,000
7,268,938,000
Other inflows (outflows) of cash
0
0
Net cash flows from (used in) operating activities
25,099,736,000
36,656,891,000
Cash flows from (used in) investing activities
    
Cash flows from losing control of subsidiaries or other businesses
(14,357,000)
0
Cash flows used in obtaining control of subsidiaries or other businesses
191,096,000
42,933,000
Other cash receipts from sales of equity or debt instruments of other entities
0
0
Other cash payments to acquire equity or debt instruments of other entities
0
0
Other cash receipts from sales of interests in joint ventures
0
0
Other cash payments to acquire interests in joint ventures
0
0
Proceeds from sales of property, plant and equipment
911,471,000
1,571,211,000
Purchase of property, plant and equipment
16,759,566,000
27,941,585,000
Proceeds from sales of intangible assets
0
0
Purchase of intangible assets
1,777,590,000
2,472,124,000
Proceeds from sales of other long-term assets
0
0
 
 
 
19 of 80
 
Concept
Accumulated Current Year
2017-01-01 - 2017-12-31
Accumulated Previous Year
2016-01-01 - 2016-12-31
Purchase of other long-term assets
0
0
Proceeds from government grants
0
0
Cash advances and loans made to other parties
0
0
Cash receipts from repayment of advances and loans made to other parties
0
0
Cash payments for future contracts, forward contracts, option contracts and swap contracts
0
0
Cash receipts from future contracts, forward contracts, option contracts and swap contracts
0
0
Dividends received
136,000,000
0
Interest paid
0
0
Interest received
0
0
Income taxes refund (paid)
0
0
Other inflows (outflows) of cash
364,053,000
(114,979,000)
Net cash flows from (used in) investing activities
(17,331,085,000)
(29,000,410,000)
Cash flows from (used in) financing activities
    
Proceeds from changes in ownership interests in subsidiaries that do not result in loss of control
0
0
Payments from changes in ownership interests in subsidiaries that do not result in loss of control
1,292,438,000
2,379,424,000
Proceeds from issuing shares
0
0
Proceeds from issuing other equity instruments
0
0
Payments to acquire or redeem entity's shares
2,883,808,000
0
Payments of other equity instruments
0
0
Proceeds from borrowings
10,449,958,000
5,728,498,000
Repayments of borrowings
11,252,655,000
3,622,600,000
Payments of finance lease liabilities
569,711,000
329,064,000
Proceeds from government grants
0
0
Dividends paid
1,084,192,000
1,084,192,000
Interest paid
8,860,881,000
7,633,026,000
Income taxes refund (paid)
0
0
Other inflows (outflows) of cash
(975,611,000)
(671,104,000)
Net cash flows from (used in) financing activities
(16,469,338,000)
(9,990,912,000)
Net increase (decrease) in cash and cash equivalents before effect of exchange rate changes
(8,700,687,000)
(2,334,431,000)
Effect of exchange rate changes on cash and cash equivalents
    
Effect of exchange rate changes on cash and cash equivalents
(110,447,000)
483,388,000
Net increase (decrease) in cash and cash equivalents
(8,811,134,000)
(1,851,043,000)
Cash and cash equivalents at beginning of period
47,546,083,000
49,397,126,000
Cash and cash equivalents at end of period
38,734,949,000
47,546,083,000
 
20 of 80
 
 
[610000] Statement of changes in equity - Accumulated Current

 
Components of equity
Sheet 1 of 3
Issued capital
 
Share premium
Treasury shares
Retained earnings
Revaluation surplus
Reserve of exchange differences on translation
 
Reserve of cash flow hedges
 
Reserve of gains and losses on hedging instruments that hedge investments in equity instruments
Reserve of change in value of time value of options
Statement of changes in equity
                  
Equity at beginning of period
4,978,126,000
15,889,819,000
11,433,482,000
70,395,669,000
0
1,989,164,000
399,181,000
0
0
Changes in equity
                  
Comprehensive income
                  
Profit (loss)
0
0
0
4,524,496,000
0
0
0
0
0
Other comprehensive income
0
0
0
0
0
309,658,000
162,231,000
0
0
Total comprehensive income
0
0
0
4,524,496,000
0
309,658,000
162,231,000
0
0
Issue of equity
0
0
0
0
0
0
0
0
0
Dividends recognised as distributions to owners
0
0
0
1,084,192,000
0
0
0
0
0
Increase through other contributions by owners, equity
0
0
0
0
0
0
0
0
0
Decrease through other distributions to owners, equity
0
0
0
0
0
0
0
0
0
Increase (decrease) through other changes, equity
0
0
0
0
0
0
0
0
0
Increase (decrease) through treasury share transactions, equity
0
0
0
0
0
0
0
0
0
Increase (decrease) through changes in ownership interests in subsidiaries that do not result in loss of control, equity
0
0
0
0
0
0
0
0
0
Increase (decrease) through share-based payment transactions, equity
0
0
3,355,502,000
1,147,683,000
0
0
0
0
0
Amount removed from reserve of cash flow hedges and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
0
0
Amount removed from reserve of change in value of time value of options and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
0
0
Amount removed from reserve of change in value of forward elements of forward contracts and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
0
0
Amount removed from reserve of change in value of foreign currency basis spreads and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
0
0
Total increase (decrease) in equity
0
0
3,355,502,000
4,587,987,000
0
309,658,000
162,231,000
0
0
Equity at end of period
4,978,126,000
15,889,819,000
14,788,984,000
74,983,656,000
0
2,298,822,000
561,412,000
0
0
 
 
21 of 80

 
Components of equity
Sheet 2 of 3
Reserve of change in value of forward elements of forward contracts
 
Reserve of change in value of foreign currency basis spreads
 
Reserve of gains and losses on remeasuring available-for-sale financial assets
 
Reserve of share-based payments
 
Reserve of remeasurements of defined benefit plans
 
Amount recognised in other comprehensive income and accumulated in equity relating to non-current assets or disposal groups held for sale
 
Reserve of gains and losses from investments in equity instruments
 
Reserve of change in fair value of financial liability attributable to change in credit risk of liability
 
Reserve for catastrophe
 
Statement of changes in equity
                  
Equity at beginning of period
0
0
1,686,836,000
0
(381,794,000)
0
0
0
0
Changes in equity
                  
Comprehensive income
                  
Profit (loss)
0
0
0
0
0
0
0
0
0
Other comprehensive income
0
0
509,759,000
0
(283,945,000)
0
0
0
0
Total comprehensive income
0
0
509,759,000
0
(283,945,000)
0
0
0
0
Issue of equity
0
0
0
0
0
0
0
0
0
Dividends recognised as distributions to owners
0
0
0
0
0
0
0
0
0
Increase through other contributions by owners, equity
0
0
0
0
0
0
0
0
0
Decrease through other distributions to owners, equity
0
0
0
0
0
0
0
0
0
Increase (decrease) through other changes, equity
0
0
0
0
0
0
0
0
0
Increase (decrease) through treasury share transactions, equity
0
0
0
0
0
0
0
0
0
Increase (decrease) through changes in ownership interests in subsidiaries that do not result in loss of control, equity
0
0
0
0
0
0
0
0
0
Increase (decrease) through share-based payment transactions, equity
0
0
0
0
0
0
0
0
0
Amount removed from reserve of cash flow hedges and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
0
0
Amount removed from reserve of change in value of time value of options and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
0
0
Amount removed from reserve of change in value of forward elements of forward contracts and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
0
0
Amount removed from reserve of change in value of foreign currency basis spreads and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
0
0
Total increase (decrease) in equity
0
0
509,759,000
0
(283,945,000)
0
0
0
0
Equity at end of period
0
0
2,196,595,000
0
(665,739,000)
0
0
0
0
 
 
22 of 80

 
Components of equity
Sheet 3 of 3
Reserve for equalization
 
Reserve of discretionary participation features
 
Other comprehensive income
 
Other reserves
 
Equity attributable to owners of parent
 
Non-controlling interests
 
Equity
Statement of changes in equity
              
Equity at beginning of period
0
0
268,397,000
3,961,784,000
83,791,916,000
12,492,484,000
96,284,400,000
Changes in equity
              
Comprehensive income
              
Profit (loss)
0
0
0
0
4,524,496,000
2,053,026,000
6,577,522,000
Other comprehensive income
0
0
(60,340,000)
637,363,000
637,363,000
(52,762,000)
584,601,000
Total comprehensive income
0
0
(60,340,000)
637,363,000
5,161,859,000
2,000,264,000
7,162,123,000
Issue of equity
0
0
0
0
0
0
0
Dividends recognized as distributions to owners
0
0
0
0
1,084,192,000
497,617,000
1,581,809,000
Increase through other contributions by owners, equity
0
0
0
0
0
0
0
Decrease through other distributions to owners, equity
0
0
0
0
0
0
0
Increase (decrease) through other changes, equity
0
0
0
0
0
19,000
19,000
Increase (decrease) through treasury share transactions, equity
0
0
0
0
0
0
0
Increase (decrease) through changes in ownership interests in subsidiaries that do not result in loss of control, equity
0
0
0
0
0
0
0
Increase (decrease) through share-based payment transactions, equity
0
0
0
0
(2,207,819,000)
0
(2,207,819,000)
Amount removed from reserve of cash flow hedges and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
Amount removed from reserve of change in value of time value of options and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
Amount removed from reserve of change in value of forward elements of forward contracts and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
Amount removed from reserve of change in value of foreign currency basis spreads and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
Total increase (decrease) in equity
0
0
(60,340,000)
637,363,000
1,869,848,000
1,502,666,000
3,372,514,000
Equity at end of period
0
0
208,057,000
4,599,147,000
85,661,764,000
13,995,150,000
99,656,914,000
 
 
23 of 80

[610000] Statement of changes in equity - Accumulated Previous

 
Components of equity
Sheet 1 of 3
Issued capital
 
Share premium
 
Treasury shares
 
Retained earnings
 
Revaluation surplus
 
Reserve of exchange differences on translation
 
Reserve of cash flow hedges
Reserve of gains and losses on hedging instruments that hedge investments in equity instruments
 
Reserve of change in value of time value of options
 
Statement of changes in equity
                  
Equity at beginning of period
4,978,126,000
15,889,819,000
11,882,248,000
73,139,684,000
0
972,154,000
(153,264,000)
0
0
Changes in equity
                  
Comprehensive income
                  
Profit (loss)
0
0
0
3,721,406,000
0
0
0
0
0
Other comprehensive income
0
0
0
0
0
1,017,010,000
552,445,000
0
0
Total comprehensive income
0
0
0
3,721,406,000
0
1,017,010,000
552,445,000
0
0
Issue of equity
0
0
0
0
0
0
0
0
0
Dividends recognised as distributions to owners
0
0
0
1,084,192,000
0
0
0
0
0
Increase through other contributions by owners, equity
0
0
0
0
0
0
0
0
0
Decrease through other distributions to owners, equity
0
0
0
0
0
0
0
0
0
Increase (decrease) through other changes, equity
0
0
0
0
0
0
0
0
0
Increase (decrease) through treasury share transactions, equity
0
0
0
0
0
0
0
0
0
Increase (decrease) through changes in ownership interests in subsidiaries that do not result in loss of control, equity
0
0
0
(6,324,997,000)
0
0
0
0
0
Increase (decrease) through share-based payment transactions, equity
0
0
(448,766,000)
943,768,000
0
0
0
0
0
Amount removed from reserve of cash flow hedges and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
0
0
Amount removed from reserve of change in value of time value of options and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
0
0
Amount removed from reserve of change in value of forward elements of forward contracts and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
0
0
Amount removed from reserve of change in value of foreign currency basis spreads and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
0
0
Total increase (decrease) in equity
0
0
(448,766,000)
(2,744,015,000)
0
1,017,010,000
552,445,000
0
0
Equity at end of period
4,978,126,000
15,889,819,000
11,433,482,000
70,395,669,000
0
1,989,164,000
399,181,000
0
0
 
 
24 of 80

 
Components of equity
Sheet 2 of 3
Reserve of change in value of forward elements of forward contracts
 
Reserve of change in value of foreign currency basis spreads
 
Reserve of gains and losses on remeasuring available-for-sale financial assets
 
Reserve of share-based payments
 
Reserve of remeasurements of defined benefit plans
 
Amount recognised in other comprehensive income and accumulated in equity relating to non-current assets or disposal groups held for sale
 
Reserve of gains and losses from investments in equity instruments
 
Reserve of change in fair value of financial liability attributable to change in credit risk of liability
 
Reserve for catastrophe
 
Statement of changes in equity
                  
Equity at beginning of period
0
0
4,254,280,000
0
(126,845,000)
0
0
0
0
Changes in equity
                  
Comprehensive income
                  
Profit (loss)
0
0
0
0
0
0
0
0
0
Other comprehensive income
0
0
(2,567,444,000)
0
(254,949,000)
0
0
0
0
Total comprehensive income
0
0
(2,567,444,000)
0
(254,949,000)
0
0
0
0
Issue of equity
0
0
0
0
0
0
0
0
0
Dividends recognised as distributions to owners
0
0
0
0
0
0
0
0
0
Increase through other contributions by owners, equity
0
0
0
0
0
0
0
0
0
Decrease through other distributions to owners, equity
0
0
0
0
0
0
0
0
0
Increase (decrease) through other changes, equity
0
0
0
0
0
0
0
0
0
Increase (decrease) through treasury share transactions, equity
0
0
0
0
0
0
0
0
0
Increase (decrease) through changes in ownership interests in subsidiaries that do not result in loss of control, equity
0
0
0
0
0
0
0
0
0
Increase (decrease) through share-based payment transactions, equity
0
0
0
0
0
0
0
0
0
Amount removed from reserve of cash flow hedges and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
0
0
Amount removed from reserve of change in value of time value of options and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
0
0
Amount removed from reserve of change in value of forward elements of forward contracts and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
0
0
Amount removed from reserve of change in value of foreign currency basis spreads and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
0
0
Total increase (decrease) in equity
0
0
(2,567,444,000)
0
(254,949,000)
0
0
0
0
Equity at end of period
0
0
1,686,836,000
0
(381,794,000)
0
0
0
0
 
 
25 of 80

 
Components of equity
Sheet 3 of 3
Reserve for equalisation
 
Reserve of discretionary participation features
 
Other comprehensive income
 
Other reserves
 
Equity attributable to owners of parent
Non-controlling interests
 
Equity
 
Statement of changes in equity
              
Equity at beginning of period
0
0
311,229,000
5,257,554,000
87,382,935,000
12,138,842,000
99,521,777,000
Changes in equity
              
Comprehensive income
              
Profit (loss)
0
0
0
0
3,721,406,000
1,611,948,000
5,333,354,000
Other comprehensive income
0
0
(42,832,000)
(1,295,770,000)
(1,295,770,000)
106,220,000
(1,189,550,000)
Total comprehensive income
0
0
(42,832,000)
(1,295,770,000)
2,425,636,000
1,718,168,000
4,143,804,000
Issue of equity
0
0
0
0
0
0
0
Dividends recognised as distributions to owners
0
0
0
0
1,084,192,000
560,417,000
1,644,609,000
Increase through other contributions by owners, equity
0
0
0
0
0
0
0
Decrease through other distributions to owners, equity
0
0
0
0
0
0
0
Increase (decrease) through other changes, equity
0
0
0
0
0
318,000
318,000
Increase (decrease) through treasury share transactions, equity
0
0
0
0
0
0
0
Increase (decrease) through changes in ownership interests in subsidiaries that do not result in loss of control, equity
0
0
0
0
(6,324,997,000)
(804,427,000)
(7,129,424,000)
Increase (decrease) through share-based payment transactions, equity
0
0
0
0
1,392,534,000
0
1,392,534,000
Amount removed from reserve of cash flow hedges and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
Amount removed from reserve of change in value of time value of options and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
Amount removed from reserve of change in value of forward elements of forward contracts and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
Amount removed from reserve of change in value of foreign currency basis spreads and included in initial cost or other carrying amount of non-financial asset (liability) or firm commitment for which fair value hedge accounting is applied
0
0
0
0
0
0
0
Total increase (decrease) in equity
0
0
(42,832,000)
(1,295,770,000)
(3,591,019,000)
353,642,000
(3,237,377,000)
Equity at end of period
0
0
268,397,000
3,961,784,000
83,791,916,000
12,492,484,000
96,284,400,000
 
 
26 of 80

[700000] Informative data about the Statement of financial position

Concept
Close Current Quarter
2017-12-31
Close Previous Exercise
2016-12-31
Informative data of the Statement of Financial Position
    
Capital stock (nominal)
2,494,410,000
2,494,410,000
Restatement of capital stock
2,483,716,000
2,483,716,000
Plan assets for pensions and seniority premiums
1,652,420,000
1,934,424,000
Number of executives
73
72
Number of employees
39,915
42,216
Number of workers
0
0
Outstanding shares
342,337,098,324
341,268,344,274
Repurchased shares
20,092,788,807
21,161,542,857
Restricted cash
0
0
Guaranteed debt of associated companies
0
0
 
 
27 of 80

[700002] Informative data about the Income statement

Concept
Accumulated Current Year
2017-01-01 - 2017-12-31
Accumulated Previous Year
2016-01-01 - 2016-12-31
Quarter Current Year
2017-10-01 - 2017-12-31
Quarter Previous Year
2016-10-01 - 2016-12-31
Informative data of the Income Statement
        
Operating depreciation and amortization
18,536,274,000
16,979,833,000
4,776,957,000
4,469,491,000
 
 
28 of 80

[700003] Informative data - Income statement for 12 months

Concept
Current Year
2017-01-01 - 2017-12-31
Previous Year
2016-01-01 - 2016-12-31
Informative data - Income Statement for 12 months
    
Revenue
94,274,235,000
96,287,363,000
Profit (loss) from operating activities
14,243,202,000
16,598,097,000
Profit (loss)
6,577,522,000
5,333,354,000
Profit (loss), attributable to owners of parent
4,524,496,000
3,721,406,000
Operating depreciation and amortization
18,536,274,000
16,979,833,000
 
 
29 of 80

[800001] Breakdown of credits

Institution
Foreign institution (yes/no)
Contract signing date
Expiration date
Interest rate
Denomination
Domestic currency
Foreign currency
Time interval
Time interval
Current year
Until 1 year
Until 2 years
Until 3 years
Until 4 years
Until 5 years or more
Current year
Until 1 year
Until 2 years
Until 3 years
Until 4 years
Until 5 years or more
Banks
  
Foreign trade
  
TOTAL
        
0
0
0
0
0
0
0
0
0
0
0
0
Banks - secured
  
TOTAL
        
0
0
0
0
0
0
0
0
0
0
0
0
Commercial banks
  
BANORTE1
NO
2015-05-15
2022-04-30
TIIE+1.0
  
242,139,000
242,139,000
242,140,000
242,139,000
609,523,000
            
HSBC 2
NO
2013-05-29
2019-05-30
TIIE+1.25
  
64,884,000
196,316,000
                  
HSBC 3
NO
2014-07-04
2019-07-04
TIIE+1.25
    
299,445,000
                  
BANCO SANTANDER 4
NO
2015-03-12
2020-05-07
TIIE+1.25
      
249,633,000
                
BANCO SANTANDER 5
NO
2015-01-08
2019-09-10
TIIE+1.25
    
249,720,000
                  
HSBC 6
NO
2016-03-08
2023-03-08
7.13
        
625,000,000
1,875,000,000
            
SCOTIABANK INVERLAT 7
NO
2016-03-08
2023-03-08
7
        
1,125,000,000
1,875,000,000
            
BANCO SANTANDER 8
NO
2017-11-23
2022-10-21
TIIE+1.25
          
1,488,204,000
            
HSBC9
NO
2017-11-23
2022-11-22
TIIE+1.30
          
1,991,150,000
            
SCOTIABANK INVERLAT10
NO
2017-12-07
2023-02-03
TIIE+1.30
          
2,485,000,000
            
TOTAL
        
0
307,023,000
987,620,000
491,773,000
1,992,139,000
10,323,877,000
0
0
0
0
0
0
Other banks
  
TOTAL
        
0
0
0
0
0
0
0
0
0
0
0
0
Total banks
  
TOTAL
        
0
307,023,000
987,620,000
491,773,000
1,992,139,000
10,323,877,000
0
0
0
0
0
0
Stock market
  
Listed on stock exchange - unsecured
  
SENIOR NOTES 1
YES
2007-05-09
2037-05-11
8.93
          
4,485,922,000
            
NOTES 2
NO
2010-10-14
2020-10-01
7.38
      
9,980,016,000
                
SENIOR NOTES 3
YES
2013-05-14
2043-05-14
7.62
          
6,439,803,000
            
NOTES 4
NO
2014-04-07
2021-04-01
TIIE+0.35
        
5,993,104,000
              
NOTES 5
NO
2015-05-11
2022-05-02
TIIE+0.35
          
4,992,388,000
            
NOTES 6
NO
2017-10-09
2027-10-09
8.79
          
4,476,801,000
            
SENIOR NOTES 7
YES
2005-03-18
2025-03-18
6.97
                      
11,545,317,000
SENIOR NOTES 8
YES
2002-03-11
2032-03-11
8.94
                      
5,886,361,000
SENIOR NOTES 9
YES
2009-11-23
2040-01-15
6.97
                      
11,683,468,000
SENIOR NOTES 10
YES
2014-05-13
2045-05-13
5.26
                      
19,241,393,000
SENIOR NOTES 11
YES
2015-11-24
2026-01-30
4.86
                      
5,872,203,000
SENIOR NOTES 12
YES
2015-11-24
2046-01-31
6.44
                      
17,600,943,000
TOTAL
        
0
0
0
9,980,016,000
5,993,104,000
20,394,914,000
0
0
0
0
0
[5] 71,829,685,000
Listed on stock exchange - secured
  
TOTAL
        
0
0
0
0
0
0
0
0
0
0
0
0
Private placements - unsecured
  
TOTAL
        
0
0
0
0
0
0
0
0
0
0
0
0
Private placements - secured
  
TOTAL
        
0
0
0
0
0
0
0
0
0
0
0
0
 
 
30 of 80
 

Institution
Foreign institution (yes/no)
Contract signing date
Expiration date
Interest rate
Denomination
Domestic currency
Foreign currency
Time interval
Time interval
Current year
Until 1 year
Until 2 years
Until 3 years
Until 4 years
Until 5 years or more
Current year
Until 1 year
Until 2 years
Until 3 years
Until 4 years
Until 5 years or more
Total listed on stock exchanges and private placements
  
TOTAL
        
0
0
0
9,980,016,000
5,993,104,000
20,394,914,000
0
0
0
0
0
71,829,685,000
Other current and non-current liabilities with cost
  
Other current and non-current liabilities with cost
  
GRUPO DE TELECOMUNICACIONES DE ALTA CAPACIDAD 1
NO
2012-08-08
2020-07-01
    
106,639,000
103,175,000
107,320,000
                
GE CAPITAL CFE  MÉXICO, S. DE R.L. DE C.V. 2
NO
2014-07-01
2020-01-01
    
25,446,000
17,102,000
278,000
                
GE CAPITAL CFE  MÉXICO, S. DE R.L. DE C.V. 3
NO
2014-07-01
2020-05-01
    
30,189,000
13,534,000
26,757,000
                
GRUPO DE TELECOMUNICACIONES DE ALTA CAPACIDAD 4
NO
2012-08-01
2021-07-01
    
36,687,000
23,514,000
24,646,000
25,845,000
              
INTELSAT GLOBAL SALES 5
YES
2012-10-01
2027-09-01
                
360,820,000
388,059,000
417,355,000
448,862,000
3,322,953,000
GRUPO DE TELECOMUNICACIONES DE ALTA CAPACIDAD 6
NO
2014-11-01
2022-11-01
    
6,951,000
3,355,000
3,485,000
3,624,000
3,772,000
            
GRUPO DE TELECOMUNICACIONES DE ALTA CAPACIDAD 7
NO
2014-11-01
2024-12-01
    
14,152,000
12,055,000
17,509,000
18,589,000
60,101,000
            
NOTES PAYABLE TRANSFERRED TO BBVA BANCOMER 8
NO
2016-03-01
2020-03-04
    
1,178,435,000
1,252,813,000
1,252,812,000
                
TOTAL
        
0
1,398,499,000
1,425,548,000
1,432,807,000
48,058,000
63,873,000
0
360,820,000
388,059,000
417,355,000
448,862,000
[6] 3,322,953,000
Total other current and non-current liabilities with cost
  
TOTAL
        
0
1,398,499,000
1,425,548,000
1,432,807,000
48,058,000
63,873,000
0
360,820,000
388,059,000
417,355,000
448,862,000
3,322,953,000
Suppliers
  
Suppliers
  
SUPPLIERS 1
NO
2017-12-31
2018-12-31
    
13,926,452,000
          
3,511,638,000
        
TRANSMISSION RIGHTS 2
NO
2012-05-07
2023-12-29
    
449,765,000
270,384,000
1,104,799,000
38,523,000
22,549,000
  
2,071,940,000
661,245,000
301,757,000
178,674,000
141,305,000
TOTAL
        
0
14,376,217,000
270,384,000
1,104,799,000
38,523,000
22,549,000
0
5,583,578,000
661,245,000
301,757,000
178,674,000
141,305,000
Total suppliers
  
TOTAL
        
0
14,376,217,000
270,384,000
1,104,799,000
38,523,000
22,549,000
0
5,583,578,000
661,245,000
301,757,000
178,674,000
141,305,000
Other current and non-current liabilities
  
Other current and non-current liabilities
  
TOTAL
        
0
0
0
0
0
0
0
0
0
0
0
0
Total other current and non-current liabilities
  
TOTAL
        
0
0
0
0
0
0
0
0
0
0
0
0
Total credits
  
TOTAL
        
0
16,081,739,000
2,683,552,000
13,009,395,000
8,071,824,000
30,805,213,000
0
5,944,398,000
1,049,304,000
719,112,000
627,536,000
75,293,943,000
 
 
31 of 80

 
[800003] Annex - Monetary foreign currency position

 
Currencies
 
Dollars
Dollar equivalent in pesos
Other currencies equivalent in dollars
Other currencies equivalent in pesos
Total pesos
Foreign currency position
          
Monetary assets
          
Current monetary assets
1,506,177,000
29,679,368,000
54,998,000
1,083,741,000
30,763,109,000
Non-current monetary assets
0
0
0
0
0
Total monetary assets
1,506,177,000
29,679,368,000
54,998,000
1,083,741,000
30,763,109,000
Liabilities position
          
Current liabilities
439,544,000
8,661,258,000
18,646,000
367,421,000
9,028,679,000
Non-current liabilities
3,997,962,000
78,780,241,000
0
0
78,780,241,000
Total liabilities
4,437,506,000
87,441,499,000
18,646,000
367,421,000
87,808,920,000
Net monetary assets (liabilities)
(2,931,329,000)
(57,762,131,000)
36,352,000
716,320,000
[7] (57,045,811,000)
 
32 of 80

[800005] Annex - Distribution of income by product

 
Income type
 
National income
Export income
Income of subsidiaries abroad
Total income
CONTENT:
        
CONTENT:
0
0
0
0
TELEVISA
        
CONTENT – ADVERTISING
20,366,184,000
262,734,000
90,164,000
20,719,082,000
CONTENT – NETWORK SUBSCRIPTION REVENUE
2,704,998,000
1,353,090,000
0
4,058,088,000
CONTENT – LICENSING AND SYNDICATION
949,440,000
8,270,610,000
0
9,220,050,000
SKY (INCLUDES LEASING OF SET-TOP EQUIPMENT):
        
SKY (INCLUDE LEASING OF SET-TOP EQUIPMENT):
0
0
0
0
SKY, VETV, BLUE TO GO
        
SKY – DTH BROADCAST SATELLITE TV
19,810,392,000
0
1,534,681,000
21,345,073,000
SKY – PAY PER VIEW
199,867,000
0
0
199,867,000
SKY – ADVERTISING
651,689,000
0
0
651,689,000
CABLE (INCLUDE LEASING OF SET-TOP EQUIPMENT):
        
CABLE  (INCLUDE LEASING OF SET-TOP EQUIPMENT):
0
0
0
0
CABLEVISIÓN, CABLEMÁS, TVI, CABLECOM, IZZI, TELECABLE
        
CABLE – DIGITAL TV SERVICE
12,978,715,000
0
0
12,978,715,000
CABLE – BROADBAND SERVICES
11,357,448,000
0
0
11,357,448,000
CABLE -  SERVICE INSTALLATION
255,904,000
0
0
255,904,000
CABLE – PAY PER VIEW
49,401,000
0
0
49,401,000
CABLE -  ADVERTISING
817,330,000
0
0
817,330,000
CABLE – TELEPHONY
2,944,263,000
0
0
2,944,263,000
CABLE – OTHER INCOME
216,698,000
0
0
216,698,000
BESTEL, METRORED
        
CABLE – TELECOMMUNICATIONS
4,173,146,000
0
255,405,000
4,428,551,000
OTHER BUSINESSES:
        
OTHER BUSINESSES:
0
0
0
0
TV Y NOVELAS, CARAS, VANIDADES, COSMOPOLITAN, NATIONAL GEOGRAPHIC, MUY INTERESANTE, TÚ, SKY VIEW, COCINA FÁCIL, GENTE, PAPARAZZI, BILINKEN, PARA TI, CONDORITO
        
PUBLISHING – MAGAZINE CIRCULATION
429,965,000
0
366,897,000
796,862,000
PUBLISHING – ADVERTISING
614,478,000
0
454,886,000
1,069,364,000
PUBLISHING  - OTHER INCOME
30,080,000
0
0
30,080,000
VIDEOCINE, PANTELION
        
DISTRIBUTION, RENTALS AND SALE MOVIE RIGHTS
647,730,000
45,250,000
168,999,000
861,979,000
CLUB DE FÚTBOL AMÉRICA, ESTADIO AZTECA
        
SPECIAL EVENTS AND SHOW PROMOTION
1,447,731,000
118,424,000
0
1,566,155,000
PLAY CITY, MULTIJUEGOS
        
GAMING
2,852,013,000
0
0
2,852,013,000
TELEVISA RADIO
        
RADIO – ADVERTISING
851,140,000
0
0
851,140,000
HOLA MÉXICO, CINE PREMIERE, COCINA VITAL, MINI REVISTA MINA, ENTREPRENEUR, SELECCIONES, RELATOS E HISTORIA EN MÉXICO, ALGARABÍA, GUÍA DE BIENESTAR SELECCIONES, FÚTBOL TOTAL, CARTOON NETWORK, MOI
        
PUBLISHING DISTRIBUTION
286,500,000
0
62,177,000
348,677,000
INTERSEGMENT ELIMINATIONS
        
INTERSEGMENT ELIMINATIONS
(3,326,363,000)
0
(17,831,000)
(3,344,194,000)
TOTAL
81,308,749,000
10,050,108,000
2,915,378,000
94,274,235,000
 
 
33 of 80

[800007] Annex - Financial derivative instruments

Management discussion about the policy uses of financial derivative instruments, explaining if these policies are allowed just for coverage or for other uses like trading
 
 EXHIBIT 1
TO THE ELECTRONIC FORM TITLED “PREPARATION, FILING, DELIVERY AND DISCLOSURE OF QUARTERLY ECONOMIC, ACCOUNTING AND ADMINISTRATIVE INFORMATION BY ISSUERS”
III. QUALITATIVE AND QUANTITATIVE INFORMATION
i. Management’s discussion of the policies concerning the use of financial derivative instruments, and explanation as to whether such policies permit the use of said instruments solely for hedging or also for trading or other purposes. The discussion must include a general description of the objectives sought in the execution of financial derivative transactions; the relevant instruments; the hedging or trading strategies implemented in connection therewith; the relevant trading markets; the eligible counterparties; the policies for the appointment of calculation or valuation agents; the principal terms and conditions of the relevant contracts; the policies as to margins, collateral and lines of credit; the authorization process and levels of authorization required by type of transaction (e.g., full hedging, partial hedging, speculation), stating whether the transactions were previously approved by the committee(s) responsible for the development of corporate and auditing practices; the internal control procedures applicable to the management of the market and liquidity risks associated with the positions; and the existence of an independent third party responsible for the review of such procedures and, as the case may be, the observations raised or deficiencies identified by such third party. If applicable, provide information concerning the composition of the overall risk management committee, its operating rules, and the existence of an overall risk management manual.
Management’s discussion of the policies concerning the use of financial derivative instruments, and explanation as to whether such policies permit the use of said instruments solely for hedging or also for trading or other purposes.
In accordance with the policies and procedures implemented by the Vice President of Finance and Risk and the Vice President and Corporate Controller, along with the Vice President of Internal Audit, the Company has entered into certain financial derivative transactions for hedging purposes in both the Mexican and international markets so as to manage its exposure to the market risks associated with the changes in interest and foreign exchange rates and inflation. In addition, the Company’s Investments Committee has established guidelines for the investment in structured notes or deposits associated with other derivatives, which by their nature may be considered as derivative transactions for trading purposes. It should be noted that in the fourth quarter of 2017, no such financial derivatives were outstanding. Pursuant to the provisions of International Financial Reporting Standards Board, certain financial derivative transactions originally intended to serve as a hedge and in effect until December 31st, 2017, are not within the scope of hedge accounting as specified in such Standards and, consequently, are recognized in the accounting based on the provisions included in the aforementioned Standards.
General description of the objectives sought in the execution of financial derivative transactions; the relevant instruments; the hedging or trading strategies implemented in connection therewith; the relevant trading markets; the eligible counterparties; the policies for the appointment of calculation or valuation agents; the principal terms and conditions of the relevant contracts; the policies as to margins, collateral and lines of credit; the authorization process and levels of authorization required by type of transaction (e.g., full hedging, partial hedging, speculation), stating whether the transactions were previously approved by the committee(s) responsible for the development of corporate and auditing practices; the internal control procedures applicable to the management of the market and liquidity risks associated with the positions; and the existence of an independent third party responsible for the review of such procedures and, as the case may be, the observations raised or deficiencies identified by such third party.
The Company’s principal objective when entering into financial derivative transactions is to mitigate the effects of unforeseen changes in interest and foreign exchange rates and inflation, so as to reduce the volatility in its results and cash flows as a result of such changes.
The Company monitors its exposure to the interest rate risk by: (i) assessing the difference between the interest rates applicable to its debt and temporary investments, and the prevailing market rates for similar instruments; (ii) reviewing its cash flow requirements and financial ratios (interest coverage); (iii) assessing the actual and budgeted-for trends in the principal markets; and (iv) assessing the prevailing industry practices and other similar companies. This approach enables the Company to determine the optimum mix between fixed- and variable-rate interest for its debt.
 
34 of 80
 
Foreign exchange risk is monitored by assessing the Company’s monetary position in U.S. dollars and its budgeted cash flow requirements for investments anticipated to be denominated in U.S. dollars and the service of its U.S. dollar-denominated debt.
Financial derivative transactions are reported from time to time to the Audit and Corporate Practices Committee.
The Company has entered into master derivatives agreements with both domestic and foreign financial institutions, that are internationally recognized institutions with which the Company, from time to time, has entered into financial transactions involving corporate and investment banking, as well as treasury services. The form agreement used in connection with financial derivatives transactions with foreign financial institutions is the Master Agreement published by the International Swaps and Derivatives Association, Inc. (“ISDA”) and with local institutions is the Master Agreement published by ISDA and in some instances, using the form agreement ISDAmex. In both cases, the main terms and conditions are standard for these types of transactions and include mechanisms for the appointment of calculation or valuation agents.
In addition, the Company enters into standard guaranty agreements that set forth the margins, collateral and lines of credit applicable in each instance. These agreements establish the credit limits granted by the financial institutions with whom the Company enters into master financial derivative agreements, which specify the margin implications in the case of potential negative changes in the market value of its open financial derivative positions. Pursuant to the agreements entered into by the Company, financial institutions are entitled to make margin calls if certain thresholds are exceeded. In the event of a change in the credit rating issued to the Company by a recognized credit rating agency, the credit limit granted by each counterparty would be modified.
As of the date hereof, the Company has never experienced a margin call with respect to its financial derivative transactions.
In compliance with its risk management objectives and hedging strategies, the Company generally utilizes the following financial derivative transactions:
1.
Cross-currency interest rate swaps (i.e., coupon swaps);
2.
Interest rate and inflation-indexed swaps;
3.
Cross-currency principal and interest rate swaps;
4.
Swaptions;
5.
Forward exchange rate contracts;
6.
FX options;
7.
Interest Rate Caps and Floors contracts;
8.
Fixed-price contracts for the acquisition of government securities (i.e., Treasury locks); and
9.
Credit Default Swaps.
The strategies for the acquisition of financial derivatives transactions are approved by the Risk Management Committee in accordance with the Policies and Objectives for the Use of Financial Derivatives.
During the quarter from October to December 2017, there were no defaults or margin calls under the aforementioned financial derivative transactions.
The Company monitors on a weekly basis the flows generated by the fair market value of and the potential for margin calls under its open financial derivative transactions. The calculation or valuation agent designated in the relevant Master Agreement, which is always the counterparty, issues monthly reports as to the fair market value of the Company’s open positions.
The Risk Management area is responsible for measuring, at least once a month, the Company’s exposure to the financial market risks associated with its financings and investments, and for submitting a report with respect to the Company’s risk position and the valuation of its financial derivatives to the Finance Committee on a monthly basis, and to the Risk Management Committee on a quarterly basis. The Company monitors the credit rating assigned to its counterparties in its outstanding financial derivative transactions on a regular basis.
 
35 of 80
 
The office of the Comptroller is responsible for the validation of the Company’s accounting records as related to its financial derivative transactions, based upon the confirmations received from the relevant financial intermediaries, and for obtaining from such intermediaries, on a monthly basis, confirmations or account statements supporting the market valuation of its open financial derivative positions.
As a part of the yearly audit on the Company, the aforementioned procedures are reviewed by the Company’s external auditors. As of the date hereof, the Company’s auditors have not raised any observation or identified any deficiency therein.
Information concerning the composition of the overall risk management committee, its operating rules, and the existence of an overall risk management manual.
The Company has a Risk Management Committee, which is responsible for monitoring the Company’s risk management activities and approving the hedging strategies used to mitigate the financial market risks to which the Company is exposed. The assessment and hedging of the financial market risks are subject to the policies and procedures applicable to the Company’s Risk Management Committee, the Finance and Risk Management areas and the Comptroller that form the Risk Management Manual of the Company. In general terms, the Risk Management Committee is comprised of members of the Corporate Management, Corporate Comptroller, Tax Control and Advice, Information to the Stock Exchange, Finance and Risk, Legal, Administration and Finance, Financial Planning and Corporate Finance areas.


General description about valuation techniques, standing out the instruments valuated at cost or fair value, just like methods and valuation techniques

ii. General description of the valuation methods, indicating whether the instruments are valued at cost or at their fair value pursuant to the applicable accounting principles, the relevant reference valuation methods and techniques, and the events taken into consideration. Describe the policies for and frequency of the valuation, as well as the actions taken in light of the values obtained therefrom. Clarify whether the valuation is performed by an independent third party, and indicate if such third party is the structurer, seller or counterparty of the financial instrument. As with respect to financial derivative transactions for hedging purposes, explain the method used to determine the effectiveness thereof and indicate the level of coverage provided thereby.

The Company values its financial derivative instruments based upon the standard models and calculators provided by recognized market makers. In addition, the Company uses the relevant market variables available from online sources. The financial derivative instruments are valued at a reasonable value pursuant to the applicable accounting provisions.
In the majority of cases, the valuation at a reasonable value is carried out on a monthly basis based on valuations of the counterparties and the verification of such reasonable value with internal valuations prepared by the Risk Management area of the Company. Accounting wise, the valuation of the counterparty is registered.
The Company performs its valuations without the participation of any independent third party.
The method used by the Company to determine the effectiveness of an instrument depends on the hedging strategy and on whether the relevant transaction is intended as a fair-value hedge or a cash-flow hedge. The Company’s methods take into consideration the prospective cash flows generated by or the changes in the fair value of the financial derivative, and the cash flows generated by or the changes in the fair value of the underlying position that it seeks to hedge to determine, in each case, the hedging ratio.
 
36 of 80
  

Management discussion about internal and external sources of liquidity that could be used for attending requirements related to financial derivative instruments
 
iii. Management’s discussion of the internal and external sources of liquidity that could be used to satisfy the Company’s requirements in connection with its financial derivatives.
As of the date hereof, the Company’s management has not discussed internal and external sources of liquidity so as to satisfy its requirements in connection with its financial derivatives since, based upon the aggregate amount of the Company’s financial derivative transactions, management is of the opinion that the Company’s significant positions of cash, cash equivalents and temporary investments, and the substantial cash flows generated by the Company, would enable the Company to respond adequately to any such requirements.
  

Changes and management explanation in principal risk exposures identified, as contingencies and events known by the administration that could affect future reports
 
iv. Explanation as to any change in the issuer’s exposure to the principal risks identified thereby and in their management, and any contingency or event known to or anticipated by the issuer’s management, which could affect any future report. Description of any circumstance or event, such as any change in the value of the underlying assets or reference variables, resulting in a financial derivative being used other than as originally intended, or substantially altering its structure, or resulting in the partial or total loss of the hedge, thereby forcing the Issuer to assume new obligations, commitments or changes in its cash flows in a manner that affects its liquidity (e.g., margin calls). Description of the impact of such financial derivative transactions on the issuer’s results or cash flows. Description and number of financial derivatives maturing during the quarter, any closed positions and, if applicable, number and amount of margin calls experienced during the quarter. Disclosure as to any default under the relevant contracts.

Changes in the Company’s exposure to the principal risks identified thereby and in their management, and contingencies or events known to or anticipated by the Company’s management, which could affect any future report.
Since a significant portion of the Company’s debt and costs are denominated in U.S. dollars, while its revenues are primarily denominated in Mexican pesos, depreciation in the value of the Mexican peso against the U.S. dollar and any future depreciation could have a negative effect on the Company’s results due to exchange rate losses. However, the significant amount of U.S. dollars in the Company’s treasury, and the hedging strategies adopted by the Company in recent years, have enabled it to avoid significant foreign exchange losses.
Circumstances or events, such as changes in the value of the underlying assets or reference variables, resulting in a financial derivative being used other than as originally intended, or substantially altering its structure, or resulting in the partial or total loss of the hedge, thereby forcing the Company to assume new obligations, commitments or changes in its cash flows in a manner that affects its liquidity (e.g., margin calls). Description of the impact of such financial derivative transactions on the Company’s results or cash flows.
As of the date hereof, no circumstance or event of a financial derivative transaction, resulted in a partial or total loss of the relevant hedge requiring that the Company assume new obligations, commitments or variations in its cash flow such that its liquidity is affected.
Description and number of financial derivatives maturing during the quarter, any closed positions and, if applicable, number and amount of margin calls experienced during the quarter. Disclosure as to any default under the relevant contracts.
1.
During the relevant quarter, a forward through which the Company hedged against a possible Mexican Peso depreciation with a notional amount of U.S. $40,000,000.00 (Forty Million U.S. Dollars 00/100), expired. As a result of this hedge, a loss of MXN $42,493,750.00 (Forty two million four hundred ninety three thousand seven hundred fifty Pesos 00/100) was incurred in the trimester.
 
37 of 80
 
2.
During the relevant quarter the coverage with expiration in May 2018, which protected a notional amount of US $15,000,000.00 (Fifteen million dollars 00/100) was canceled in advance, related with this a profit in the quarter was obtained for MXN $2,248,499.96 (Two million two hundred forty-eight thousand four hundred ninety-nine pesos 96/100) also the interest rate hedge with maturity in March 2018 which protected a notional amount of MXN $625,000,000.00 (Six hundred twenty-five million pesos 00/100) was canceled in advance derived from which a profit of MXN $398,000.00 (Three hundred ninety eight million pesos 00/100) was obtained
 
During the relevant quarter there were no defaults or margin calls under financial derivative transactions.

Quantitative information for disclosure
 
v. Quantitative Information. Attached hereto as “Table 1” is a summary of the financial derivative instruments purchased by Grupo Televisa, S.A.B, Empresas Cablevisión S.A.B. de C.V. and Televisión Internacional, S.A. de C.V., whose aggregate fair value represents or could represent one of the reference percentages set forth in Section III (v) of the Official Communication.
IV. SENSITIVITY ANALYSIS
Considering that the Company has entered into financial derivative transactions for hedging purposes, and given the low amount of the financial derivative instruments that proved ineffective as a hedge, the Company has determined that such transactions are not material and, accordingly, the sensitivity analysis referred to in Section IV of the Official Communication is not applicable.
In those cases where the derivative instruments of the Company are for hedging purposes, for a material amount and where the effectiveness measures were sufficient, the measures are justified when the standard deviation of the changes in cash flow as a result of changes in the variables of exchange rate and interest rates of the derivative instruments used jointly with the underlying position is lower than the standard deviation of the changes in cash flow of the underlying position valued in pesos and the effective measures are defined by the correlation coefficient between both positions for the effective measures to be sufficient.
 
38 of 80
 
TABLE 1
GRUPO TELEVISA, S.A.B.
Summary of Financial Derivative Instruments as of
December 31, 2017
(In thousands of Mexican pesos and/or U.S. dollars, as indicated)

Type of Derivative, Securities or Contract
Purpose (e.g., hedging, trading or other)
Notional Amount/Face Value
Value of the Underlying Asset / Reference Variable
Fair Value
  
Collateral/
Lines of Credit/
Securities Pledged
Current Quarter (4)
Previous Quarter (5)
Current Quarter Dr (Cr) (4)
Previous Quarter Dr (Cr) (5)
Maturing per Year
 
Interest Rate Swap (1)
Hedging
-
-
TIIE 28 days / 7.4325%
-
(316)
-
Does not exist (6)
Interest Rate Swap (1)
Hedging
Ps. 6,000,000
TIIE 28 days / 5.9351%
TIIE 28 days / 5.9351%
344,958
169,650
Monthly interest
2018-2021
Does not exist (6)
Interest Rate Swap (1)
Hedging
Ps. 5,000,000
TIIE 28 days / 6.5716%
TIIE 28 days / 6.5716%
241,561
45,949
Monthly interest
2018-2022
Does not exist (6)
Interest Rate Swap (1)
Hedging
Ps. 2,000,000
TIIE 28 days / 7.3275%
-
43,222
-
Monthly interest
2018-2022
Does not exist (6)
Interest Rate Swap (1)
Hedging
Ps. 1,500,000
TIIE 28 days / 7.3500%
-
31,906
-
Monthly interest
2018-2022
Does not exist (6)
Interest Rate Swap (1)
Hedging
Ps. 1,000,000
TIIE 28 days / 7.7950%
-
3,077
-
Monthly interest
2018-2023
Does not exist (6)
Forward (1)
Hedging
U.S.$224,000 / Ps. 4,410,711
U.S.$224,000 / Ps. 4,410,711
U.S.$279,000 / Ps. 5,516,831
112,157
(263,467)
2018
Does not exist (6)
Forward (1)
Hedging
U.S.$230,400 / Ps. 4,272,509
U.S.$230,400 / Ps. 4,272,509
U.S.$230,400 / Ps. 4,272,509
397,037
88,652
2018
Does not exist (6)
Options (1)
Hedging
U.S.$779,250
U.S.$779,250
U.S.$779,250
795,010
328,750
2018
Does not exist (6)
Interest Rate Swap (2)
Hedging
Ps.1,296,783
TIIE 28 days   /  5.246%
TIIE 28 days   /  5.246%
61,997
44,821
Monthly Interest
2018-2022
Does not exist (6)
Interest Rate Swap (2)
Hedging
Ps.1,370,868
TIIE 28 days   /  7.2663%
TIIE 28 days   /  7.2663%
22,112
(15,490)
Monthly Interest
2018-2022
Does not exist (6)
Options (2)
Hedging
U.S.$96,250
U.S.$96,250
U.S.$96,250
100,700
42,974
2018
Does not exist (6)
Options (3)
Hedging
U.S.$115,000
U.S.$115,000
U.S.$115,000
110,137
46,488
2018
Does not exist (6)
       
Total
2,263,874
488,011
    
 
39 of 80
 
(1)
Acquired by Grupo Televisa, S.A.B.
(2)
Acquired by Televisión Internacional, S.A. de C.V.
(3)
Acquired by Empresas Cablevisión, S.A. de C.V.
(4)
The aggregate amount of the derivatives reflected in the consolidated statement of financial position of Grupo Televisa, S.A.B. as of December 31, 2017, is as follows:
 
Other financial assets
Ps.
1,515,041
  
 
Other non-current financial assets
  
748,833
  
   
Ps.
2,263,874
  
         
 
(5)
Information as of September 30, 2017.
(6)
Applies only to implicit financing in the ISDA ancillary agreements identified as “Credit Support Annex”.

40 of 80

[800100] Notes - Subclassifications of assets, liabilities and equities

Concept
Close Current Quarter
2017-12-31
Close Previous Exercise
2016-12-31
Subclassifications of assets, liabilities and equities
    
Cash and cash equivalents
    
Cash
    
Cash on hand
66,865,000
77,211,000
Balances with banks
1,694,394,000
1,473,487,000
Total cash
1,761,259,000
1,550,698,000
Cash equivalents
    
Short-term deposits, classified as cash equivalents
36,973,690,000
45,995,385,000
Short-term investments, classified as cash equivalents
0
0
Other banking arrangements, classified as cash equivalents
0
0
Total cash equivalents
36,973,690,000
45,995,385,000
Other cash and cash equivalents
0
0
Total cash and cash equivalents
38,734,949,000
47,546,083,000
Trade and other current receivables
    
Current trade receivables
24,727,073,000
24,906,452,000
Current receivables due from related parties
860,220,000
905,572,000
Current prepayments
    
Current advances to suppliers
0
0
Current prepaid expenses
2,074,046,000
2,143,239,000
Total current prepayments
2,074,046,000
2,143,239,000
Current receivables from taxes other than income tax
1,537,218,000
2,153,221,000
Current value added tax receivables
1,471,394,000
2,082,196,000
Current receivables from sale of properties
0
0
Current receivables from rental of properties
0
0
Other current receivables
1,158,855,000
883,520,000
Total trade and other current receivables
30,357,412,000
30,992,004,000
Classes of current inventories
    
Current raw materials and current production supplies
    
Current raw materials
0
0
Current production supplies
0
0
Total current raw materials and current production supplies
0
0
Current merchandise
0
0
Current work in progress
0
0
Current finished goods
0
0
Current spare parts
0
0
Property intended for sale in ordinary course of business
0
0
Other current inventories
1,492,947,000
1,899,078,000
Total current inventories
1,492,947,000
1,899,078,000
Non-current assets or disposal groups classified as held for sale or as held for distribution to owners
    
Non-current assets or disposal groups classified as held for sale
0
0
Non-current assets or disposal groups classified as held for distribution to owners
0
0
Total non-current assets or disposal groups classified as held for sale or as held for distribution to owners
0
0
Trade and other non-current receivables
    
Non-current trade receivables
0
0
Non-current receivables due from related parties
0
0
Non-current prepayments
0
0
Non-current lease prepayments
0
0
Non-current receivables from taxes other than income tax
0
0
 
41 of 80
 
 

Concept
Close Current Quarter
2017-12-31
Close Previous Exercise
2016-12-31
Non-current value added tax receivables
0
0
Non-current receivables from sale of properties
0
0
Non-current receivables from rental of properties
0
0
Revenue for billing
0
0
Other non-current receivables
0
0
Total trade and other non-current receivables
0
0
Investments in subsidiaries, joint ventures and associates
    
Investments in subsidiaries
0
0
Investments in joint ventures
959,637,000
795,388,000
Investments in associates
13,151,115,000
11,296,866,000
Total investments in subsidiaries, joint ventures and associates
14,110,752,000
12,092,254,000
Property, plant and equipment
    
Land and buildings
    
Land
4,866,337,000
5,036,641,000
Buildings
4,871,925,000
4,589,178,000
Total land and buildings
9,738,262,000
9,625,819,000
Machinery
57,112,452,000
56,578,248,000
Vehicles
    
Ships
0
0
Aircraft
540,743,000
552,105,000
Motor vehicles
816,216,000
919,877,000
Total vehicles
1,356,959,000
1,471,982,000
Fixtures and fittings
563,142,000
471,139,000
Office equipment
2,459,789,000
2,436,025,000
Tangible exploration and evaluation assets
0
0
Mining assets
0
0
Oil and gas assets
0
0
Construction in progress
13,485,066,000
15,053,731,000
Construction prepayments
0
0
Other property, plant and equipment
1,004,140,000
1,146,628,000
Total property, plant and equipment
85,719,810,000
86,783,572,000
Investment property
    
Investment property completed
0
0
Investment property under construction or development
0
0
Investment property prepayments
0
0
Total investment property
0
0
Intangible assets and goodwill
    
Intangible assets other than goodwill
    
Brand names
1,409,494,000
2,043,446,000
Intangible exploration and evaluation assets
0
0
Mastheads and publishing titles
0
0
Computer software
2,797,708,000
2,705,448,000
Licenses and franchises
0
0
Copyrights, patents and other industrial property rights, service and operating rights
0
0
Recipes, formulae, models, designs and prototypes
0
0
Intangible assets under development
0
0
Other intangible assets
17,566,606,000
18,873,251,000
Total intangible assets other than goodwill
21,773,808,000
23,622,145,000
Goodwill
14,112,626,000
14,112,626,000
Total intangible assets and goodwill
35,886,434,000
37,734,771,000
Trade and other current payables
    
Current trade payables
19,959,795,000
22,878,015,000
 
 
42 of 80
 

Concept
Close Current Quarter
2017-12-31
Close Previous Exercise
2016-12-31
Current payables to related parties
991,469,000
1,088,226,000
Accruals and deferred income classified as current
    
Deferred income classified as current
18,798,347,000
21,709,431,000
Rent deferred income classified as current
0
0
Accruals classified as current
3,431,706,000
3,771,842,000
Short-term employee benefits accruals
963,377,000
1,078,729,000
Total accruals and deferred income classified as current
22,230,053,000
25,481,273,000
Current payables on social security and taxes other than income tax
728,263,000
611,603,000
Current value added tax payables
51,918,000
71,297,000
Current retention payables
444,233,000
867,468,000
Other current payables
0
0
Total trade and other current payables
44,353,813,000
50,926,585,000
Other current financial liabilities
    
Bank loans current
307,023,000
850,948,000
Stock market loans current
0
0
Other current liabilities at cost
1,759,319,000
1,777,920,000
Other current liabilities no cost
0
0
Other current financial liabilities
1,796,847,000
1,827,307,000
Total Other current financial liabilities
3,863,189,000
4,456,175,000
Trade and other non-current payables
    
Non-current trade payables
2,719,236,000
2,413,301,000
Non-current payables to related parties
0
0
Accruals and deferred income classified as non-current
    
Deferred income classified as non-current
0
0
Rent deferred income classified as non-current
0
0
Accruals classified as non-current
0
0
Total accruals and deferred income classified as non-current
0
0
Non-current payables on social security and taxes other than income tax
0
0
Non-current value added tax payables
0
0
Non-current retention payables
0
0
Other non-current payables
0
0
Total trade and other non-current payables
2,719,236,000
2,413,301,000
Other non-current financial liabilities
    
Bank loans non-current
13,795,409,000
8,761,657,000
Stock market loans non-current
108,197,719,000
117,385,006,000
Other non-current liabilities at cost
7,547,515,000
9,466,931,000
Other non-current liabilities no cost
0
5,508,000
Other non-current financial liabilities
0
0
Total Other non-current financial liabilities
129,540,643,000
135,619,102,000
Other provisions
    
Other non-current provisions
54,263,000
54,799,000
Other current provisions
23,466,000
30,767,000
Total other provisions
77,729,000
85,566,000
Other reserves
    
Revaluation surplus
0
0
Reserve of exchange differences on translation
2,298,822,000
1,989,164,000
Reserve of cash flow hedges
561,412,000
399,181,000
Reserve of gains and losses on hedging instruments that hedge investments in equity instruments
0
0
Reserve of change in value of time value of options
0
0
Reserve of change in value of forward elements of forward contracts
0
0
Reserve of change in value of foreign currency basis spreads
0
0
Reserve of gains and losses on remeasuring available-for-sale financial assets
2,196,595,000
1,686,836,000
 
 
43 of 80

 
Concept
Close Current Quarter
2017-12-31
Close Previous Exercise
2016-12-31
Reserve of share-based payments
0
0
Reserve of remeasurements of defined benefit plans
(665,739,000)
(381,794,000)
Amount recognised in other comprehensive income and accumulated in equity relating to non-current assets or disposal groups held for sale
0
0
Reserve of gains and losses from investments in equity instruments
0
0
Reserve of change in fair value of financial liability attributable to change in credit risk of liability
0
0
Reserve for catastrophe
0
0
Reserve for equalisation
0
0
Reserve of discretionary participation features
0
0
Reserve of equity component of convertible instruments
0
0
Capital redemption reserve
0
0
Merger reserve
0
0
Statutory reserve
0
0
Other comprehensive income
208,057,000
268,397,000
Total other reserves
4,599,147,000
3,961,784,000
Net assets (liabilities)
    
Assets
297,220,101,000
309,054,150,000
Liabilities
197,563,187,000
212,769,750,000
Net assets (liabilities)
99,656,914,000
96,284,400,000
Net current assets (liabilities)
    
Current assets
87,044,703,000
95,761,498,000
Current liabilities
50,764,817,000
57,426,063,000
Net current assets (liabilities)
36,279,886,000
38,335,435,000
 
 
44 of 80

 
[800200] Notes - Analysis of income and expense

Concept
Accumulated Current Year
2017-01-01 - 2017-12-31
Accumulated Previous Year
2016-01-01 - 2016-12-31
Quarter Current Year
2017-10-01 - 2017-12-31
Quarter Previous Year
2016-10-01 - 2016-12-31
Analysis of income and expense
        
Revenue
        
Revenue from rendering of services
70,408,764,000
72,915,848,000
19,871,434,000
21,087,891,000
Revenue from sale of goods
2,133,122,000
2,317,315,000
1,085,615,000
637,168,000
Interest income
0
0
0
0
Royalty income
8,533,751,000
8,526,197,000
2,393,616,000
2,392,324,000
Dividend income
0
0
0
0
Rental income
13,198,598,000
12,528,003,000
2,752,450,000
3,183,267,000
Revenue from construction contracts
0
0
0
0
Other revenue
0
0
0
0
Total revenue
94,274,235,000
96,287,363,000
26,103,115,000
27,300,650,000
Finance income
        
Interest income
2,268,711,000
1,499,473,000
822,996,000
204,617,000
Net gain on foreign exchange
768,923,000
0
0
0
Gains on change in fair value of derivatives
903,204,000
0
894,040,000
120,192,000
Gain on change in fair value of financial instruments
0
0
0
0
Other finance income
0
0
0
0
Total finance income
3,940,838,000
1,499,473,000
1,717,036,000
324,809,000
Finance costs
        
Interest expense
9,245,671,000
8,497,919,000
2,555,238,000
2,250,365,000
Net loss on foreign exchange
0
2,490,296,000
1,095,091,000
1,191,546,000
Losses on change in fair value of derivatives
0
43,370,000
0
0
Loss on change in fair value of financial instruments
0
0
0
0
Other finance cost
0
0
0
0
Total finance costs
9,245,671,000
11,031,585,000
3,650,329,000
3,441,911,000
Tax income (expense)
        
Current tax
5,382,865,000
6,724,071,000
614,679,000
2,083,298,000
Deferred tax
(1,108,745,000)
(3,851,836,000)
844,726,000
(1,458,653,000)
Total tax income (expense)
4,274,120,000
2,872,235,000
1,459,405,000
624,645,000
 
 
45 of 80

[800500] Notes - List of notes

Disclosure of notes and other explanatory information

See Notes 1 and 2 of the Disclosure of interim financial reporting

Disclosure of general information about financial statements

Corporate Information

Grupo Televisa, S.A.B. (the “Company”) is a limited liability public stock corporation (“Sociedad Anónima Bursátil” or “S.A.B.”), incorporated under the laws of Mexico. Pursuant to the terms of the Company’s bylaws (“Estatutos Sociales”), its corporate existence continues through 2106. The shares of the Company are listed and traded in the form of “Certificados de Participación Ordinarios” or “CPOs” on the Mexican Stock Exchange (“Bolsa Mexicana de Valores”) under the ticker symbol TLEVISA CPO, and in the form of Global Depositary Shares or GDSs, on the New York Stock Exchange, or NYSE, under the ticker symbol TV. The Company’s principal executive offices are located at Avenida Vasco de Quiroga 2000, Colonia Santa Fe, 01210 Ciudad de México, México.

Basis of Preparation and Accounting Policies

The condensed consolidated financial statements of the Group, as of December 31, 2017 and December 31, 2016, and for the years ended December 31, 2017 and 2016, are unaudited, and have been prepared in accordance with the guidelines provided by the International Accounting Standard 34, Interim Financial Reporting. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included herein.

The unaudited condensed consolidated financial statements should be read in conjunction with the Group’s audited consolidated financial statements and notes thereto for the years ended December 31, 2016, 2015 and 2014, which have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board, and include, among other disclosures, the Group’s most significant accounting policies, which were applied on a consistent basis as of December 31, 2017. The adoption of the improvements and amendments to current IFRSs effective on January 1, 2017 did not have a significant impact in these interim unaudited condensed consolidated financial statements.    
 

Disclosure of summary of significant accounting
See Note 2 of the Disclosure of interim financial reporting


46 of 80

[800600] Notes - List of accounting policies

Disclosure of summary of significant accounting policies

See Note 2 of the Disclosure of interim financial reporting


47 of 80

[813000] Notes - Interim financial reporting

Disclosure of interim financial reporting
 
GRUPO TELEVISA, S.A.B. AND SUBSIDIARIES

Notes to Interim Unaudited Condensed Consolidated Financial Statements
For the years ended December 31, 2017 and 2016
(In thousands of Mexican Pesos, except per CPO, per share, and exchange rate amounts, unless otherwise indicated)

1.
Corporate Information

Grupo Televisa, S.A.B. (the “Company”) is a limited liability public stock corporation (“Sociedad Anónima Bursátil” or “S.A.B.”), incorporated under the laws of Mexico. Pursuant to the terms of the Company’s bylaws (“Estatutos Sociales”) its corporate existence continues through 2106. The shares of the Company are listed and traded in the form of “Certificados de Participación Ordinarios” or “CPOs” on the Mexican Stock Exchange (“Bolsa Mexicana de Valores”) under the ticker symbol TLEVISA CPO, and in the form of Global Depositary Shares or GDSs, on the New York Stock Exchange, or NYSE, under the ticker symbol TV. The Company’s principal executive offices are located in Mexico City at Avenida Vasco de Quiroga 2000, Colonia Santa Fe, 01210 Ciudad de México, México.

Grupo Televisa, S.A.B. together with its subsidiaries (collectively, the “Group”) is a leading media company in the Spanish-speaking world, an important cable operator in Mexico, and an operator of a leading direct-to-home satellite pay television system in Mexico. The Group distributes the content it produces through several broadcast channels in Mexico and in over 50 countries through 26 pay-tv brands and television networks, cable operators and over-the-top or “OTT” services. In the United States, the Group’s audiovisual content is distributed through Univision Communications Inc. (“Univision”), the leading media company serving the Hispanic market. Univision broadcasts the Group’s audiovisual content through multiple platforms in exchange for a royalty payment. In addition, the Group has equity and Warrants, which upon their exercise would represent approximately 36% on a fully-diluted, as-converted basis of the equity capital in Univision Holdings, Inc. or “UHI”, the controlling company of Univision. The Group’s cable business offers integrated services, including video, high-speed data and voice services to residential and commercial customers as well as managed services to domestic and international carriers through five cable multiple system operators in Mexico. The Group owns a majority interest in Sky, a leading direct-to-home satellite pay television system in Mexico, operating also in the Dominican Republic and Central America. The Group also has interests in magazine publishing and distribution, radio production and broadcasting, professional sports and live entertainment, feature-film production and distribution, and gaming.

2.
Basis of Preparation and Accounting Policies

These interim condensed consolidated financial statements of the Group, as of December 31, 2017 and 2016, and for the years ended December 31, 2017 and 2016, are unaudited, and have been prepared in accordance with the guidelines provided by the International Accounting Standard 34, Interim Financial Reporting. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included herein.

These interim unaudited condensed consolidated financial statements should be read in conjunction with the Group’s audited consolidated financial statements and notes thereto for the years ended December 31, 2016 and 2015, which have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”), and include, among other disclosures, the Group’s most significant accounting policies, which were applied on a consistent basis as of December 31, 2017.
 
These interim unaudited condensed consolidated financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the Group’s audited consolidated financial statements for the years ended December 31, 2016, 2015 and 2014. There have been no significant changes in the Corporate Finance Department of the Company or in any risk management policies since the year end.
 
These interim unaudited condensed consolidated financial statements were authorized for issuance on February 15, 2018, by the Group’s Principal Financial Officer.

The preparation of interim consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
 
48 of 80

In preparing these interim unaudited condensed consolidated financial statements, the significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended December 31, 2016.
 
In the first quarter of 2018, the Group is adopting IFRS 15 Revenue from Contracts with Customers (“IFRS 15”) and IFRS 9 Financial Instruments (“IFRS 9”), which are applicable for periods beginning on January 1, 2018. Although the Company’s management does not expect a material impact in the Group’s revenue recognition and the measurement of its financial instruments, the Group will be concluding in the first quarter of 2018 with the process of determining the adoption effects of the new standards in its consolidated financial statements. However, the Company’s evaluation of the impact could change if the Company enters into new revenue or financial instrument arrangements in the future or interpretations of the new guidance further evolve. In the first quarter of 2019, the Group will adopt IFRS 16 Leases, which is applicable for periods beginning on January 1, 2019. The Company’s management continues evaluating the effects in applying IFRS 16. The principal effects in connection with the adoption of these new standards are summarized below.

IFRS 15

IFRS 15 provides a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries, and across capital markets. This standard contains principles that an entity applies to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity recognizes revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services.

The Company is adopting IFRS 15 in the first quarter of 2018, by using the retrospective cumulative method, which consists in recognizing any cumulative adjustment resulting from the new standard at the date of initial adoption in consolidated equity. In connection with the adoption of IFRS 15, and based on the Group’s existing customer contracts and relationships, the Company’s management has identified certain effects on the Group’s revenue recognition in the Sky and Cable segments, primarily in connection with  equipment installation revenues, as well as incremental costs of obtaining contracts, primarily commissions, which should be recognized as assets in the statement of financial position and amortized in the expected life of contracts with customers, in accordance with the new standard. Also, the Company has identified other effects related to the transfer of equipment in some telecommunications contracts with customers in the Company’s Cable segment. Finally, the Group’s annual consolidated financial statements are expected to be impacted to some extent by the significant increase in disclosures required by the new standard.

IFRS 9

IFRS 9 addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 requires financial assets to be classified into two measurement categories: those measured at amortized cost and those measured at fair value, with changes in fair value either through income or loss, or through other comprehensive income or loss. The determination is made at initial recognition. The basis of classification depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the financial assets. For financial liabilities, this standard retains most of the IAS 39 Financial Instruments: Recognition and Measurement requirements. IFRS 9  considers under a new impairment approach that is no longer necessary for a credit event to have occurred before credit losses are recognized, instead, an entity always accounts for expected credit losses, and change in those expected losses to profit or loss; in respect to hedging activities, IFRS 9 aligns hedge accounting more closely with an entity’s risk management through a principles-based approach, by means of which the current range from 0.8 to 1.25 to declare a maintaining hedge is eliminated an in its place, an effective hedging instrument will be declared only if it supports the entity’s risk management strategy and maintain an effective hedge, and in lieu thereof, an instrument of effective hedge could be deemed this way if it is aligned with the entity’s management risks strategy; IFRS 9 establishes that an entity making an irrevocable election to present in other comprehensive income changes in fair value of an investment in an equity instrument that is not held for trading, should not transfer to profit or loss any amounts presented in other comprehensive income, but may transfer the cumulative gain or loss within equity; and IFRS 9 requires application of the integral retrospective method at the day of transition of this standard, which consists in restating the comparative periods presented in the consolidated financial statements.

Based on the Group’s existing financial instruments contracts and hedge relationships as of December 31, 2017, the Company’s management does not expect significant changes in the measurement of financial instruments. In connection with the classification and measurement of the Group’s relevant available-for-sale financial assets as of December 31, 2017, no significant changes are expected to be made in the Group’s existing accounting policies, as they are currently recognized at fair value in the consolidated statement of financial position with changes in fair value recognized as other comprehensive income or loss. With respect to recognition of impairment of financial assets, specifically those related to trade receivables, the Group is adopting the simplified approach allowed by IFRS 9.


49 of 80

IFRS 16

IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases. The major change introduced by IFRS 16 is that leases will be brought onto the companies’ statements of financial position, increasing the visibility of their assets and liabilities. IFRS 16 removes the classification of leases as either operating leases or finance leases for the lessee, treating all long-term leases as finance leases. Short-term leases (less than 12 months) and leases of low-value assets are exempt from the requirements. The Company’s management is currently evaluating the impact IFRS 16 will have on its consolidated financial statements and disclosures.
The Company will adopt IFRS 16 beginning in the first quarter of  2019 by using the retrospective cumulative method, which consists of recognizing any cumulative adjustment due to the new standard at the date of initial adoption in consolidated equity. The Company is currently evaluating the two options allowed by IFRS 16 in applying the retrospective cumulative method. While the Group is not yet in a position to assess the full impact of the application of the new standard, the Company’s management expects that the impact of recording the lease liabilities and the corresponding right-to-use assets will increase its consolidated total assets and liabilities primarily in connection non-cancellable lease commitments for the use of real estate property and satellite transponders. IFRS 16 will also affect the presentation of the consolidated statement of income as the Group shall recognize a depreciation of rights of use for long-term lease agreements, and a finance expense for interest from related financial liabilities, instead of affecting costs and expenses for these lease agreements as they are recognized under the current standard. The Company’s management has already started the analysis and assessment of the impact of the new standard in the Group’s consolidated financial statements, including any changes to be made in the Group’s accounting policies as a lessee, as well as the design of effective controls over financial reporting in the different Group’s business segments, in connection with the new measurement and disclosures required for lessees by IFRS 16.

3.
Acquisitions

In March 2016, the Group announced the acquisition of the remaining 50% equity interest of Televisión Internacional, S.A. de C.V. (“TVI”) in the aggregate fair value amount of Ps.6,750,000, including a cash payment of Ps.2,000,000 and the assumption of long-term liabilities in the aggregate amount of Ps.4,750,000 (undiscounted amount of Ps.5,106,250), with maturities between 2017 and 2020 (see Note 8). Until this transaction was completed, a non-controlling interest participated as a shareholder of Corporativo Vasco de Quiroga, S.A. de C.V. (“CVQ”), a direct subsidiary of the Company. In August 2016, the Company completed this transaction by acquiring the non-controlling interest in CVQ. This transaction complied with the guidelines and timetable established by the authorization of the Mexican Institute of Telecommunications (“Instituto Federal de Telecomunicaciones” or “IFT”). With the ownership of 100% of the equity interest of TVI, the Group is better positioned to exploit efficiencies and economies of scale among all its cable operations throughout Mexico and continue to expand upon its offer of video, voice and data services. The effect of this transaction in the equity attributable to stockholders of the Company as of December 31, 2016, was as follows:

   
Acquisition of a
Non-controlling
Interest
  
Carrying value of the non-controlling interest in TVI
  
Ps.
768,703
  
Consideration for the acquisition of a non-controlling interest in TVI
    
(6,750,000
)
Decrease in retained earnings attributable to stockholders of the Company(1)
  
Ps.
(5,981,297
)

In the fourth quarter of 2016, TVI acquired through cash transactions a remaining 50% equity interest of Cable Sistema de Victoria, S.A. de C.V. (“CSV”), an indirect subsidiary of TVI, for an amount of Ps.379,424. The effect of this transaction in the equity attributable to stockholders of the Company as of December 31, 2016, was as follows:
 
   
Acquisition of a
Non-controlling
Interest
  
Carrying value of the non-controlling interest in CSV
  
Ps.
35,724
  
Consideration for the acquisition of a non-controlling interest in CSV
    
(379,424
)
Decrease in retained earnings attributable to stockholders of the Company(1)
  
Ps.
(343,700
)
 
(1)
Changes in ownership interest are treated as equity transactions, if control is maintained. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognized in equity attributed to stockholders of the Company.


50 of 80
 
4.
Investments in Financial Instruments

At December 31, 2017 and 2016, the Group had the following investments in financial instruments:

   
December 31,
2017
    
December 31,
2016
  
Available-for-sale financial assets:
            
     Warrants issued by UHI (1)
  
Ps.
36,395,183
    
Ps.
38,298,606
  
     Available-for-sale investment (2)
    
7,297,577
      
6,456,392
  
     
43,692,760
      
44,754,998
  
Held-to-maturity investments (3)
    
287,605
      
335,833
  
Other
    
16,487
      
45,920
  
   
Ps.
43,996,852
    
Ps.
45,136,751
  

(1)
The Group’s Warrants are exercisable for UHI’s common stock, in whole or in part, at an exercise price of U.S.$0.01 per Warrant share. The Warrants shall expire and no longer be exercisable after the tenth anniversary of the date of issuance (the “Expiration Date”); provided, however, the Expiration Date shall automatically be extended for nine successive ten-year periods unless the Group provides written notice to UHI of its election not to so extend the Expiration Date. The Warrants do not bear interest. These Warrants are classified as available-for-sale financial assets with changes in fair value recognized in accumulated other comprehensive income or loss in consolidated equity. Changes in fair value recognized in other comprehensive income will be reclassified to the statement of income within other finance income, net, in the period the Warrants are exercised, in whole or in part (see Notes 5 and 9). In January 2017, in a Declaratory Ruling, the U.S. Federal Communications Commission (“FCC”) approved an increase in the authorized aggregate foreign ownership of UHI’s issued and outstanding shares of common stock from 25% to 49%, and authorized the Group to hold up to 40% of the voting interest and 49% of the equity interest of UHI.
(2)
The Group has an investment in an Open Ended Fund that has as a primary objective to achieve capital appreciation by using a broad range of strategies through investments and transactions in telecom, media and other sectors across global markets, including Latin America and other emerging markets. Shares may be redeemed on a quarterly basis at the Net Asset Value (“NAV”) per share as of such redemption date. The fair value of this fund is determined by using the NAV per share. The NAV per share is calculated by determining the value of the fund assets and subtracting all of the fund liabilities and dividing the result by the total number of issued shares.
(3)
Held-to-maturity investments represent corporate fixed income securities with long-term maturities. These investments are stated at amortized cost. Maturities of these investments subsequent to December 31, 2017, are as follows: Ps.137,699 in 2019, Ps.62,207 in 2020 and Ps.87,699 thereafter. Held-to-maturity financial assets as of December 31, 2017 and 2016, are denominated primarily in Mexican pesos.

A roll forward of available-for-sale financial assets for the years ended December 31, 2017 and 2016, is presented as follows:

   
Warrants Issued by UHI
    
Available-for-sale Investment
    
Total
  
At January 1, 2017
  
Ps.
38,298,606
    
Ps.
6,456,392
    
Ps.
44,754,998
  
Change in fair value in other comprehensive income (1)
    
(1,903,423
)
    
841,185
      
(1,062,238
)
At December 31, 2017
  
Ps.
36,395,183
    
Ps.
7,297,577
    
Ps.
43,692,760
  

   
Warrants Issued by UHI
    
Available-for-sale Investment
    
Total
  
At January 1, 2016
  
Ps.
35,042,577
    
Ps.
5,873,243
    
Ps.
40,915,820
  
Change in fair value in other comprehensive income (1)
    
3,256,029
      
583,149
      
3,839,178
  
At December 31, 2016
  
Ps.
38,298,606
    
Ps.
6,456,392
    
Ps.
44,754,998
  

(1)
The foreign exchange (loss) gain derived from the hedged Warrants issued by UHI and the initial investment in Open Ended Fund was recognized as a hedge of foreign exchange gain or loss in the consolidated statement of income in the amount of Ps.(1,622,976) and Ps.(167,490), respectively, for the years ended December 31, 2017, and Ps.6,891,428 and Ps.615,528, respectively, for the years ended December 31, 2016 (see Notes 8 and 14).

The maximum exposure to credit risk of the investments in financial instruments as of December 31, 2017 and 2016, is the carrying value of the financial assets mentioned above.

51 of 80
 
5.
Investments in Associates and Joint Ventures

At December 31, 2017 and 2016, the Group had the following investments in associates and joint ventures accounted for by the equity method:

   
Ownership as of December 31, 2017
    
December 31, 2017
    
December 31, 2016
  
Associates:
                  
UHI (1)
    
10.0
%
  
Ps.
8,144,843
    
Ps.
7,236,587
  
Imagina Media Audiovisual, S.L. (“Imagina”) (2)
    
19.9
%
    
3,845,823
      
2,962,102
  
Ocesa Entretenimiento, S.A. de C.V. and subsidiaries (collectively, “OCEN”) (3)
    
40.0
%
    
1,059,391
      
998,117
  
Other
    
-
      
101,058
      
100,060
  
Joint ventures:
                        
Grupo de Telecomunicaciones de Alta Capacidad, S.A.P.I. de C.V. (“GTAC”) (4)
    
33.3
%
    
720,806
      
728,504
  
Periódico Digital Sendero, S.A. de C.V.
    
50.0
%
    
180,159
      
-
  
The Second Screen Company Latam, S.L. (“The Second Screen”)
    
50.0
%
    
58,672
      
57,662
  
Televisa CJ Grand, S.A. de C.V. (“Televisa CJ Grand”)
    
50.0
%
    
-
      
9,222
  
           
Ps.
14,110,752
    
Ps.
12,092,254
  

(1)
The Group accounts for its investment in common stock of UHI, the parent company of Univision, under the equity method due to the Group’s ability to exercise significant influence, as defined under IFRS, over UHI’s operations. The Group has the ability to exercise significant influence over the operating and financial policies of UHI because the Group (i) as of December 31, 2017 and 2016, owned 1,110,382 Class “C” shares of common stock of UHI, representing approximately 10% of the outstanding total shares of UHI as of each of those dates; (ii) as of December 31, 2017 and 2016, held Warrants exercisable for common stock of UHI equivalent to approximately 26% equity stake of UHI on a fully-diluted, as-converted basis, subject to certain conditions, laws and regulations; (iii) as of December 31, 2017 and 2016, had three officers and one director of the Company designated as members of the Board of Directors of UHI, which was composed of 18 directors, of 22 available board seats; and (iv) was party to a program license agreement (“PLA”), as amended, with Univision, an indirect wholly-owned subsidiary of UHI, pursuant to which Univision has the right to broadcast certain Televisa content in the United States, and to another program license agreement pursuant to which the Group has the right to broadcast certain Univision’s content in Mexico, in each case through the later of 2025 (2030 upon consummation of a qualified public equity offering of UHI) or 90 months after the Group has sold two-thirds of its initial investment in UHI made in December 2010 (see Notes 4, 9, 12 and 14).
(2)
The Group holds two of 10 seats on the Board of Directors of Imagina and accounts for this investment under the equity method due to its ability to exercise significant influence over the operating and financial policies of Imagina.
(3)
OCEN is a majority-owned subsidiary of Corporación Interamericana de Entretenimiento, S.A.B. de C.V., and is engaged in the live entertainment business in Mexico. As of December 31, 2017 and 2016, the investment in OCEN included a goodwill of Ps.359,613.
(4)
GTAC was granted a 20-year contract for the lease of a pair of dark fiber wires held by the Mexican Federal Electricity Commission and a concession to operate a public telecommunications network in Mexico with an expiration date in 2030. GTAC is a joint venture in which a subsidiary of the Company, a subsidiary of Grupo de Telecomunicaciones Mexicanas, S.A. de C.V., and a subsidiary of Megacable, S.A. de C.V., have an equal equity participation of 33.3%. In June 2010, a subsidiary of the Company entered into a long-term credit facility agreement to provide financing to GTAC for up to Ps.688,217, with an annual interest rate of the Mexican Interbank Interest Rate (“Tasa de Interés Interbancaria de Equilibrio” or “TIIE”) plus 200 basis points. Under the terms of this agreement, principal and interest are payable at dates agreed by the parties, between 2013 and 2021. As of December 31, 2017 and 2016, GTAC had used a principal amount of Ps.688,183, under this credit facility. During the year ended December 31, 2017, GTAC paid principal and interest to the Group in connection with this credit facility in the aggregate principal amount of Ps.203,945. During 2016, GTAC did not pay any amount of principal nor interest in connection with this credit facility. Also, a subsidiary of the Company entered into supplementary long-term loans to provide additional financing to GTAC for an aggregate principal amount of Ps.529,394, with an annual interest of TIIE plus 200 basis points computed on a monthly basis and payable on an annual basis or at dates agreed by the parties. Under the terms of these supplementary loans, principal amounts can be prepaid at dates agreed by the parties before their maturities between 2023 and 2027. During the year ended December 31, 2017, GTAC paid principal and interest to the Group in connection with this credit facility in the aggregate principal amount of Ps.47,885. During 2016, GTAC did not pay any amount of principal nor interest in connection with these supplementary loans. The net investment in GTAC as of December 31, 2017 and 2016, included amounts receivable in connection with this long-term credit facility and supplementary loans to GTAC in the aggregate amount of Ps.929,516 and Ps.881,740, respectively (see Note 9).
 

52 of 80

  6.
Property, Plant and Equipment, Net

Property, plant and equipment as of December 31, 2017 and 2016, consisted of:

   
December 31, 2017
    
December 31, 2016
  
Buildings
  
Ps.
9,287,456
    
Ps.
8,800,339
  
Building improvements
    
279,336
      
276,421
  
Technical equipment
    
117,466,054
      
105,720,368
  
Satellite transponders
    
10,301,713
      
10,301,713
  
Furniture and fixtures
    
1,121,639
      
995,247
  
Transportation equipment
    
2,830,108
      
2,907,442
  
Computer equipment
    
7,665,913
      
6,955,847
  
Leasehold improvements
    
2,747,307
      
2,542,828
  
     
151,699,526
      
138,500,205
  
Accumulated depreciation
    
(84,331,119
)
    
(71,807,005
)
     
67,368,407
      
66,693,200
  
Land
    
4,866,337
      
5,036,641
  
Construction and projects in progress
    
13,485,066
      
15,053,731
  
   
Ps.
85,719,810
    
Ps.
86,783,572
  

Depreciation charged to income for the years ended December 31, 2017 and 2016, was Ps.15,872,034 and Ps.14,454,149, respectively.

During the years ended December 31, 2017 and 2016, the Group invested Ps.16,759,566 and Ps.27,941,585, respectively, in property, plant and equipment as capital expenditures that correspond mainly to the Cable and Sky segments.

7.
Intangible Assets, Net

The balances of intangible assets as of December 31, 2017 and 2016, were as follows:

               
December 31, 2017
                
December 31, 2016
  
   
Gross Carrying Amount
    
Accumulated Amortization
    
Net Carrying Amount
    
Gross Carrying Amount
    
Accumulated Amortization
    
Net Carrying Amount
  
Intangible assets with indefinite useful lives:
                                    
Goodwill
              
Ps.
14,112,626
                
Ps.
14,112,626
  
Trademarks
                
615,147
                  
776,272
  
Concessions
                
15,166,067
                  
15,719,572
  
Intangible assets with finite useful lives:
                                        
Trademarks
  
Ps.
1,891,306
    
Ps.
(1,096,959
)
    
794,347
    
Ps.
1,891,306
    
Ps.
(624,132
)
    
1,267,174
  
Concessions
    
553,505
      
(110,701
)
    
442,804
                          
Licenses and software
    
7,470,669
      
(4,672,961
)
    
2,797,708
      
6,504,450
      
(3,799,002
)
    
2,705,448
  
Subscriber lists
    
6,203,875
      
(5,404,722
)
    
799,153
      
6,207,195
      
(4,481,366
)
    
1,725,829
  
Other intangible assets
    
3,940,692
      
(2,782,110
)
    
1,158,582
      
3,669,500
      
(2,241,650
)
    
1,427,850
  
   
Ps.
20,060,047
    
Ps.
(14,067,453
)
  
Ps.
35,886,434
    
Ps.
18,272,451
    
Ps.
(11,146,150
)
  
Ps.
37,734,771
  

Amortization charged to income for the years ended December 31, 2017 and 2016, was Ps.2,664,240 and Ps. 2,525,684, respectively. Additional amortization charged to income for the years ended December 31, 2017 and 2016 was Ps.504,674 and Ps.352,654, respectively, primarily in connection with amortization of soccer player rights.

During the fourth quarter of 2017 and 2016, the Group monitored the market associated with its Publishing business, which is classified into the Other Businesses segment, which has experienced a general slow-down in Latin America. Accordingly, the Group has reduced its cash flow expectations for some of its foreign operations. As a result, the Group compared the fair value of the intangible assets in the reporting units with the related carrying value and recorded an aggregate pre-tax impairment charge,  of Ps.89,597 and Ps.6,851 (trademarks), respectively, in other expense, net, in the consolidated statement of income for the years ended December 31, 2017 and 2016.
During the fourth quarter of 2017, the Company’s management reviewed the useful life of certain Group’s television concessions accounted for as intangible assets in conjunction with an expected payment to be made for renewal in 2021, which amount will be determined by the IFT before the renewal date. Based on such review, the Group classified these concessions as intangible assets with a finite useful life and began to amortize the related net carrying amount of $553,505 in a period ending in 2021.
As of December 31, 2017, there was no evidence of significant impairment indicators in connection with the Group’s intangible assets in the Content, Sky and Cable segments.
 
53 of 80
 
8.
Debt, Finance Lease Obligations and Other Notes Payable

As of December 31, 2017 and 2016, debt, finance lease obligations and other notes payable outstanding were as follows:

               
December 31, 2017
    
December 31, 2016
  
   
Principal
    
Finance Costs
    
Total
    
Total
  
U.S. dollar debt:
                        
6% Senior Notes due 2018 (1)
  
Ps.
-
    
Ps.
-
    
Ps.
-
    
Ps.
10,308,289
  
6.625% Senior Notes due 2025 (1)
    
11,823,060
      
(277,743
)
    
11,545,317
      
12,065,307
  
4.625% Senior Notes due 2026 (1)
    
5,911,530
      
(39,327
)
    
5,872,203
      
6,146,385
  
8.5% Senior Notes due 2032 (1)
    
5,911,530
      
(25,169
)
    
5,886,361
      
6,163,745
  
6.625% Senior Notes due 2040 (1)
    
11,823,060
      
(139,592
)
    
11,683,468
      
12,235,399
  
5% Senior Notes due 2045 (1)
    
19,705,100
      
(463,707
)
    
19,241,393
      
20,154,980
  
6.125% Senior Notes due 2046 (1)
    
17,734,590
      
(133,647
)
    
17,600,943
      
18,433,606
  
Total U.S. dollar debt
    
72,908,870
      
(1,079,185
)
    
71,829,685
      
85,507,711
  
Mexican peso debt:
                                
7.38% Notes due 2020 (2)
    
10,000,000
      
(19,984
)
    
9,980,016
      
9,972,963
  
TIIE + 0.35% Notes due 2021 (2)
    
6,000,000
      
(6,896
)
    
5,993,104
      
5,991,035
  
TIIE + 0.35% Notes due 2022 (2)
    
5,000,000
      
(7,612
)
    
4,992,388
      
4,990,665
  
8.79% Notes due 2027 (2)
    
4,500,000
      
(23,199
)
    
4,476,801
      
-
  
8.49% Senior Notes due 2037 (1)
    
4,500,000
      
(14,078
)
    
4,485,922
      
4,485,197
  
7.25% Senior Notes due 2043 (1)
    
6,500,000
      
(60,197
)
    
6,439,803
      
6,437,435
  
Bank loans (3)
    
6,000,000
      
(35,646
)
    
5,964,354
      
1,249,397
  
Bank loans (Sky) (4)
    
5,500,000
      
-
      
5,500,000
      
5,500,000
  
Bank loans (TVI) (5)
    
2,642,027
      
(3,949
)
    
2,638,078
      
2,863,208
  
Total Mexican peso debt
    
50,642,027
      
(171,561
)
    
50,470,466
      
41,489,900
  
Total debt (6)
    
123,550,897
      
(1,250,746
)
    
122,300,151
      
126,997,611
  
Less:  Current portion of long-term debt
    
307,489
      
(466
)
    
307,023
      
850,948
  
Long-term debt, net of current portion
  
Ps.
123,243,408
    
Ps.
(1,250,280
)
  
Ps.
121,993,128
    
Ps.
126,146,663
  
 
Finance lease obligations:
                                
Satellite transponder lease obligation (7)
  
Ps.
4,938,049
    
Ps.
-
    
Ps.
4,938,049
    
Ps.
5,522,565
  
Other (8)
    
684,725
      
-
      
684,725
      
869,261
  
Total finance lease obligations
    
5,622,774
      
-
      
5,622,774
      
6,391,826
  
Less: Current portion
    
580,884
      
-
      
580,884
      
575,576
  
Finance lease obligations, net of current  portion
  
Ps.
5,041,890
    
Ps.
-
    
Ps.
5,041,890
    
Ps.
5,816,250
  
                                 
Other notes payable:
                                
Total other notes payable (9)
  
Ps.
3,684,060
    
Ps.
-
    
Ps.
3,684,060
    
Ps.
4,853,025
  
Less: Current portion
    
1,178,435
      
-
      
1,178,435
      
1,202,344
  
Other notes payable, net of current portion
  
Ps.
2,505,625
    
Ps.
-
    
Ps.
2,505,625
    
Ps.
3,650,681
  
 
 
(1)
The Senior Notes due between 2018 and 2046, in the aggregate outstanding principal amount of U.S.$4,200 million and Ps.11,000,000, are unsecured obligations of the Company, rank equally in right of payment with all existing and future unsecured and unsubordinated indebtedness of the Company, and are junior in right of payment to all of the existing and future liabilities of the Company’s subsidiaries. Interest on the Senior Notes due 2018, 2025, 2026, 2032, 2037, 2040, 2043, 2045 and 2046, including additional amounts payable in respect of certain Mexican withholding taxes, is 6.31%, 6.97%, 4.86%, 8.94%, 8.93%, 6.97%, 7.62%, 5.26% and 6.44% per annum, respectively, and is payable semi-annually. These Senior Notes may not be redeemed prior to maturity, except (i) in the event of certain changes in law affecting the Mexican withholding tax treatment of certain payments on the securities, in which case the securities will be redeemable, as a whole but not in part, at the option of the Company; and (ii) in the event of a change of control, in which case the Company may be required to redeem the securities at 101% of their principal amount. Also, the Company may, at its own option, redeem the Senior Notes due 2018, 2025, 2026, 2037, 2040, 2043 and 2046, in whole or in part, at any time at a redemption price equal to the greater of the principal amount of these Senior Notes or the present value of future cash flows, at the redemption date, of principal and interest amounts of the Senior Notes discounted at a fixed rate of comparable U.S. or Mexican sovereign bonds. The Senior Notes due 2018, 2026, 2032, 2040, 2043, 2045 and 2046 were priced at 99.280%, 99.385%, 99.431%, 98.319%, 99.733%, 96.534%, and 99.677%, respectively, for a yield to maturity of 6.097%, 4.70%, 8.553%, 6.755%, 7.27%, 5.227% and 6.147%, respectively. The Senior Notes due 2025 were issued in two aggregate principal amounts of U.S.$400 million and U.S.$200 million, and were priced at 98.081% and 98.632%, respectively, for a yield to maturity of 6.802% and 6.787%, respectively. The agreement of these Senior Notes contains covenants that limit the ability of the Company and certain restricted subsidiaries engaged in the Group’s Content segment, to incur or assume liens, perform sale and leaseback transactions, and consummate certain mergers, consolidations and similar transactions. The Senior Notes due 2018, 2025, 2026, 2032, 2037, 2040, 2045 and 2046 are registered with the U.S. Securities and Exchange Commission (“SEC”). The Senior Notes due 2043 are registered with both the SEC and the Mexican Banking and Securities Commission (“Comisión Nacional Bancaria y de Valores”). In December 2017, the Company prepaid the principal outstanding amount of U.S.$500 million Senior Notes due 2018 at an aggregate redemption price of Ps. 9,841,716 (U.S.$511.7 million) which included related fees and accrued and unpaid interest at the redemption date (See Note 14).
 
54 of 80
 
 
(2)
In 2010, 2014, 2015 and October 2017, the Company issued Notes (“Certificados Bursátiles”) due 2020, 2021, 2022 and 2027, respectively, through the Mexican Stock Exchange (“Bolsa Mexicana de Valores”) in the aggregate principal amount of Ps.10,000,000, Ps.6,000,000, Ps.5,000,000 and Ps.4,500,000, respectively. Interest on the Notes due 2020 is 7.38% per annum and is payable semi-annually. Interest on the Notes due 2021 and 2022 is Equilibrium Interbank Interest Rate (Tasa de Interés Interbancaria de Equilibrio or “TIIE”) plus 35 basis points per annum and is payable every 28 days. Interest on the Notes due 2027 is 8.79% per annum and is payable semi-annually. The Company may, at its own option, redeem the Notes due 2020 and 2027, in whole or in part at any semi-annual interest payment date at a redemption price equal to the greater of the principal amount of the outstanding Notes and the present value of future cash flows, at the redemption date, of principal and interest amounts of the Notes discounted at a fixed rate of comparable Mexican sovereign bonds. The Company may, at its own option, redeem the Notes due 2021 and 2022, in whole or in part, at any date at a redemption price equal to the greater of the principal amount of the outstanding notes and an average price calculated from prices to be provided at the redemption date by two Mexican financial pricing companies. The agreement of these Notes contains covenants that limit the ability of the Company and certain restricted subsidiaries appointed by the Company’s Board of Directors, and engaged in the Group’s Content segment, to incur or assume liens, perform sale and leaseback transactions, and consummate certain mergers, consolidations and similar transactions.
(3)
As of December 31, 2017, included long-term credit agreements entered in November and December 2017 by the Company with three Mexican Banks, in the aggregate principal amount of Ps.6,000,000 with an annual interest rate payable on a monthly basis of 28-day TIIE plus a range between 125 and 130 basis points, and principal maturities between 2022 and 2023. The proceeds of these loans were used primarily for the prepayment in full of Senior Notes due 2018. Under the terms of these loan agreements, the Company is required to (a) maintain certain financial coverage ratios related to indebtedness and interest expense; and (b) comply with the restrictive covenant on spin-offs, mergers and similar transactions. As of December 31, 2016, included a long-term credit agreement entered into by the Company with a Mexican bank in the principal amount of Ps.1,250,000, with principal maturities between 2017 and  2018, and an annual interest rate payable on a monthly basis of 28-day TIIE plus 117.5 basis points. In December 2017, the Company prepaid the remaining principal amount of this credit agreement in the aggregate amount of Ps.629,311, which included accrued and unpaid interest.
(4)
In March 2016, Sky (i) entered into long-term debt agreements with two Mexican banks in the aggregate principal amount of Ps.5,500,000, with maturities in 2021 and 2023, and interest payable on a monthly basis and an annual rate in the range of 7.0% and 7.13%; and (ii) prepaid to the Company an outstanding amount in connection with a long-term loan in the principal amount of Ps.3,500,000.
(5)
As of December 31, 2017 and 2016, included outstanding balances in the aggregate principal amount of Ps.2,642,027 and Ps.2,868,686, respectively, in connection with certain credit agreements entered into by TVI with Mexican banks, with maturities between 2017 and 2022, bearing interest at an annual rate of TIIE plus a range between 100 and 125 basis points, which is payable on a monthly basis. Under the terms of these credit agreements, TVI is required to comply with certain restrictive covenants and financial coverage ratios.
(6)
Total debt is presented net of unamortized finance costs as of December 31, 2017 and 2016, in the aggregate amount of Ps.1,250,746 and Ps.1,290,595, respectively, and does not include related interest payable in the aggregate amount of Ps. 1,796,847 and Ps.1,827,307, respectively.
(7)
Starting from the fourth quarter of 2012, Sky is obligated to pay a monthly fee of U.S.$3.0 million under a capital lease agreement entered into with Intelsat Global Sales & Marketing Ltd. (“Intelsat”) in March 2010 for satellite signal reception and retransmission service from 24 KU-band transponders on satellite IS-21, which became operational in October 2012. The service term for IS-21 will end at the earlier of (a) the end of 15 years or (b) the date IS-21 is taken out of service (see Note 6).
(8)
Includes minimum lease payments of property and equipment under leases that qualify as finance leases. In December 31, 2017 and 2016, includes Ps.614,246 and Ps.683,474, respectively, in connection with a lease agreement entered into by a subsidiary of the Company and GTAC, for the right to use certain capacity of a telecommunications network through 2029. This lease agreement provides for annual payments through 2020 and 2024. Other finance leases have terms, which expire at various dates between 2017 and 2020.
(9)
Notes payable issued by the Company in connection with the acquisition of a non-controlling interest in TVI. As of December 31, 2017 and 2016, cash payments to be made between 2018 and 2020 related to these notes payable amounted to an aggregate of Ps.3,808,395 and Ps.5,106,250, respectively, including interest of Ps.316,395 and Ps.356,250, respectively (see Note 3). Accumulated accrued interest for this transaction amounted to Ps.192,060 and Ps.103,025 as of December 31, 2017 and 2016, respectively. This was regarded as a Level 2 debt, which was fair valued using a discount cash flow approach, which discounts the contractual cash flows using discount rates derived from observable market price of other quotes debt instruments. In March 2017, the Group prepaid a portion of the outstanding other notes payable with original maturities in August 2017 and 2018, for an aggregate amount of Ps.1,292,438, which included accrued interest at the payment date.
 
As of December 31, 2017, the Group has complied with the covenants contained in the debt agreements.

   As of December 31, 2017 and 2016, the outstanding principal amounts of Senior Notes of the Company that have been designated as hedging instruments of the Group’s investments in UHI and the initial investment in Open Ended Fund (hedged items) were as follows:


   
December 31, 2017
    
December 31, 2016
  
 
Hedged items
  
Millions of
U.S. dollars
    
Thousands of Mexican pesos
    
Millions of
U.S. dollars
    
Thousands of Mexican pesos
  
Investment in shares of UHI (net investment hedge)
  
U.S.$
413.3
    
Ps.
8,144,843
    
U.S.$
350.7
    
Ps.
7,236,587
  
Warrants issued by UHI (foreign currency fair value hedge)
    
1,847.0
      
36,395,183
      
1,855.9
      
38,298,606
  
Initial investment in Open Ended Fund (foreign currency fair value hedge)
    
180.0
      
3,546,918
      
180.0
      
3,817,586
  
Total
  
U.S.$
2,440.3
    
Ps.
48,086,944
    
U.S.$
2,386.6
    
Ps.
49,352,779
  
 
 
55 of 80

 
The foreign exchange gain (loss) derived from the Company’s long-term debt designated as a hedge that was recognized in other comprehensive income or loss and offset by the foreign currency translation gain derived from the net investment in shares of UHI amounted to Ps.260,133 and Ps.(1,189,430) for the years ended December 31, 2017 and 2016, respectively. The foreign exchange (loss) gain derived from the Warrants issued by UHI and the initial investment in Open Ended Fund that was recognized in the consolidated statement of income and offset by the foreign exchange gain or loss derived from the Company’s long-term debt designated as a hedge amounted to Ps.(1,622,976) and Ps.(167,490), respectively, for the year ended December 31, 2017, and Ps.6,891,428 and Ps.615,528, respectively, for the year ended December 31, 2016 (see Notes 4 and 14).

The table below analyzes the Group’s debt, finance lease obligations and other notes payable into relevant maturity groupings based on the remaining period at the statement of financial position date to the contracted maturity date:

   
Less than 12 months
January 1, 2018
to December 31, 2018
    
12-36 months
January 1, 2019 to December 31, 2020
    
36-60 months
January 1, 2020
to December 31, 2022
    
Maturities Subsequent to December 31, 2022
    
Total
  
Debt (1)
  
Ps.
307,489
    
Ps.
11,481,645
    
Ps.
19,852,893
    
Ps.
91,908,870
    
Ps.
123,550,897
  
Finance lease obligations
    
580,884
      
1,158,144
      
1,002,726
      
2,881,020
      
5,622,774
  
Other notes payable
    
1,178,435
      
2,505,625
      
-
      
-
      
3,684,060
  
Total debt, finance lease obligations and other notes payable
  
Ps.
2,066,808
    
Ps.
15,145,414
    
Ps.
20,855,619
    
Ps.
94,789,890
    
Ps.
132,857,731
  

(1)
The amounts of debt are disclosed on a principal amount basis.

9.
Financial Instruments

The Group’s financial instruments presented in the condensed consolidated statements of financial position included cash and cash equivalents, temporary investments, accounts and notes receivable, long-terms loan receivable from GTAC, Warrants that are exercisable for UHI’s common stock, debt securities classified as held-to-maturity investments, investments in securities in the form of an open-ended fund classified as available-for-sale investments, accounts payable, debt, finance lease obligations, other notes payable, and derivative financial instruments. For cash and cash equivalents, temporary investments, accounts receivable, accounts payable, and short-term notes payable due to banks and other financial institutions, the carrying amounts approximate fair value due to the short maturity of these instruments. The fair value of the Group’s long-term debt securities are based on quoted market prices.

The fair value of long-term loans that the Group borrowed from leading Mexican banks (see Note 8) has been estimated using the borrowing rates currently available to the Group for bank loans with similar terms and average maturities. The fair value of held-to-maturity securities, available-for-sale investments, and currency option and interest rate swap agreements were determined by using valuation techniques that maximize the use of observable market data.

The carrying and estimated fair values of the Group’s non-derivative financial instruments as of December 31, 2017 and 2016, were as follows:


56 of 80

 
   
December 31, 2017
    
December 31, 2016
  
   
Carrying Value
    
Fair Value
    
Carrying Value
    
Fair Value
  
Assets:
                        
Cash and cash equivalents
  
Ps.
38,734,949
    
Ps.
38,734,949
    
Ps.
47,546,083
    
Ps.
47,546,083
  
Temporary investments
    
6,013,678
      
6,013,678
      
5,498,219
      
5,498,219
  
Trade notes and accounts receivable, net
    
24,727,073
      
24,727,073
      
24,906,452
      
24,906,452
  
Warrants issued by UHI (see Note 4)
    
36,395,183
      
36,395,183
      
38,298,606
      
38,298,606
  
Long-term loans and interest receivable from GTAC (see Note 5)
    
929,516
      
937,137
      
881,740
      
889,054
  
Held-to-maturity investments (see Note 4)
    
287,605
      
284,443
      
335,833
      
334,807
  
Available-for-sale investment (see Note 4)
    
7,297,577
      
7,297,577
      
6,456,392
      
6,456,392
  
                                 
Liabilities:
                                
Senior Notes due 2018, 2025, 2032 and 2040
  
Ps.
29,557,650
    
Ps.
36,635,229
    
Ps.
41,271,200
    
Ps.
45,615,860
  
Senior Notes due 2045
    
19,705,100
      
20,068,856
      
20,635,600
      
17,713,393
  
Senior Notes due 2037 and 2043
    
11,000,000
      
9,171,610
      
11,000,000
      
8,744,050
  
Senior Notes due 2026 and 2046
    
23,646,120
      
27,294,835
      
24,762,720
      
24,810,017
  
Notes due 2020
    
10,000,000
      
9,702,300
      
10,000,000
      
9,791,680
  
Notes due 2021
    
6,000,000
      
6,090,900
      
6,000,000
      
5,953,980
  
Notes due 2022
    
5,000,000
      
5,063,300
      
5,000,000
      
4,942,230
  
Notes due 2027
    
4,500,000
      
4,442,940
      
-
      
-
  
Long-term notes payable to Mexican banks
    
14,142,027
      
13,917,175
      
9,618,686
      
9,331,330
  
Finance lease obligations
    
5,622,774
      
5,360,933
      
6,391,826
      
5,763,903
  
Other notes payable
    
3,684,060
      
3,319,414
      
4,853,025
      
4,143,984
  

The carrying values (based on estimated fair values), notional amounts, and maturity dates of the Group’s derivative financial instruments as of December 31, 2017 and 2016, were as follows:
 
December 31, 2017:
Derivative Financial Instruments
        
Carrying Value
    
Notional Amount (U.S. Dollars in Thousands)
      
Maturity Date
                          
Assets:
                        
Derivatives not recorded as accounting hedges:
                        
TVI’s options
  
 
      
Ps.
100,700
    
U.S.$
96,250
  
December 2018
Empresas Cablevision options
            
110,137
    
U.S.$
115,000
  
December 2018
Options
            
795,010
    
U.S.$
779,250
  
December 2018
Forward
            
397,037
    
U.S.$
230,400
  
January 2018 through December 2018
Derivatives recorded as accounting hedges (cash flow hedges):
                              
TVI’s interest rate swap
            
61,997
    
Ps.
1,296,783
  
April  2019 through May 2022
TVI’s interest rate swap
            
22,112
    
Ps.
1,370,868
  
April 2022
Interest rate swap
            
344,958
    
Ps.
6,000,000
  
April 2021
Interest rate swap
            
241,561
    
Ps.
5,000,000
  
May 2022
Interest rate swap
            
43,222
    
Ps.
2,000,000
  
October 2022
Interest rate swap
            
31,906
    
Ps.
1,500,000
  
October 2022
Interest rate swap
            
3,077
    
Ps.
1,000,000
  
February 2023
Forward
            
112,157
    
U.S.$
224,000
  
January 2018 through November 2018
Total assets
          
Ps.
2,263,874
             
 
57 of 80
December 31, 2016:
 
Derivative Financial Instruments
        
Carrying Value
    
Notional Amount
        
Maturity Date
                         
Assets:
                       
Derivatives not recorded as accounting hedges:
                       
TVI’s interest rate swap
  
 
 
    
Ps.
72,003
    
Ps.
1,376,667
  
April  2019 through May 2022
Derivatives recorded as accounting hedges (cash flow hedges):
                             
Interest rate swap
            
351,773
    
Ps.
6,000,000
  
April 2021
Interest rate swap
            
223,994
    
Ps.
2,500,000
  
May 2022
Total assets
          
Ps.
647,770
             
                               
 
Liabilities:
                             
Derivatives recorded as accounting hedges (cash flow hedges):
                             
Interest rate swap
          
Ps.
5,508
    
Ps.
1,250,000
  
September 2017 through March 2018
Total liabilities
          
Ps.
5,508
             
 

UHI Warrants

In July 2015, the Group exchanged its investment in U.S.$1,125 million principal amount of Convertible Debentures due 2025 issued by UHI for Warrants that are exercisable for UHI’s common stock.

The Group determined the fair value of its investment in Warrants using the Black-Scholes pricing model (“BSPM”). The BSPM involves the use of significant estimates and assumptions. These estimates and assumptions include the UHI stock’s spot price at valuation date and the stock’s expected volatility. UHI stock’s price at valuation date was obtained by using a discounted projected cash flow model. UHI stock’s volatility was obtained from publicly available information of comparable companies’ stock through determining an average of such companies’ annual volatility. Since the described methodology was an internal model with significant unobservable inputs, the UHI Warrants are classified as Level 3.

Unobservable inputs used as of December 31, 2017 and 2016, included UHI stock’s spot price of U.S.$402 and U.S.$404 per share, respectively, and UHI stock’s expected volatility of 32%, in both years.

Significant judgment was applied in assessing the qualitative factors mentioned in IAS 39 Financial Instruments: Recognition and Measurement, to determine that the changes in cash flows, the different risk and rewards and contractual terms between the exchanged Convertible Debentures due 2025 issued by UHI and the received Warrants issued by UHI resulted in the derecognition of the Convertible Debentures.

The Company’s management applied significant judgment to determine the classification of the Warrants issued by UHI. These Warrants did not comply with the definition of a derivative financial instrument because the initial investment that the Group paid to acquire the original instrument (Convertible Debentures) was significant and a derivative requires no initial investment or one that is smaller than would be required for a contract with similar response to changes in market factors; therefore, the Group classified the Warrants issued by UHI as available-for-sale financial assets with changes in fair value recognized in other comprehensive income or loss in consolidated equity. Significant judgment was applied by the Company’s management in assessing that the characteristics of the Warrants are closer to an equity instrument in accordance with IAS 32 Financial Instruments: Presentation (see Note 4).
 

58 of 80
 
10.
Capital Stock and Long-term Retention Plan

At December 31, 2017, shares of capital stock and CPOs consisted of (in millions):

Authorized and Issued (1)
Repurchased by the Company (2)
Held by a Company´s Trust (3)
Outstanding
Series “A” Shares
123,273.9
(135.3)
(6,350.9)
116,787.7
Series “B” Shares
58,982.9
(119.1)
(4,928.0)
53,935.8
Series “D” Shares
90,086.5
(189.6)
(4,090.1)
85,806.8
Series “L” Shares
90,086.5
(189.6)
(4,090.1)
85,806.8
Total
362,429.8
(633.6)
(19,459.1)
342,337.1
Shares in the form of CPOs
301,145.5
(633.6)
(13,672.7)
286,839.2
Shares not in the form of CPOs
61,284.3
-
(5,786.4)
55,497.9
Total
362,429.8
(633.6)
(19,459.1)
342,337.1
CPOs
2,573.9
(5.4)
(116.9)
2,451.6

(1)
As of December 31, 2017, the authorized and issued capital stock amounted to Ps.4,978,126 (nominal Ps.2,494,410).
(2)
In 2017, the Company repurchased 633.6 million shares, in the form of 5.4 million CPOs, in the amount of Ps.383,808, in connection with a share repurchase program that was approved by the Company’s stockholders.
(3)
In connection with the Company’s Long-Term Retention Plan.


A reconciliation of the number of shares and CPOs outstanding for the year ended December 31, 2017 and 2016, is presented as follows (in millions):

 
Series “A”
Shares
  
Series “B"
Shares
  
Series “D”
Shares
  
Series “L”
Shares
  
Shares Outstanding
  
CPOs Outstanding
As of January 1, 2017
116,283.3  
 
53,800.8  
 
85,592.1  
 
85,592.1  
 
341,268.3  
 
2,445.5  
Acquired (1)
(135.3)  
 
(119.1)  
 
(189.6)  
 
(189.6)  
 
(633.6)  
 
(5.4)  
Acquired (2)
(698.1)  
 
(614.4)  
 
(977.4)  
 
(977.4)  
 
(3,267.3)  
 
(27.9)  
Released (2)
1,337.8  
 
868.5  
 
1,381.7  
 
1,381.7  
 
4,969.7  
 
39.4  
As of December 31, 2017
116,787.7  
 
53,935.8  
 
85,806.8  
 
85,806.8  
 
342,337.1  
 
2,451.6  

 
 
Series “A”
Shares
  
Series “B”
Shares
  
Series “D”
Shares
  
Series “L”
Shares
  
Shares Outstanding
  
CPOs Outstanding
As of January 1, 2016
115,409.0  
 
53,340.3  
 
84,859.5  
 
84,859.5  
 
338,468.3  
 
2,424.6  
Acquired (2)
(325.9)  
 
(286.8)  
 
(456.2)  
 
(456.2)  
 
(1,525.1)  
 
(13.1)  
Released (2)
1,200.2  
 
747.3  
 
1,188.8  
 
1,188.8  
 
4,325.1  
 
34.0  
As of December 31, 2016
116,283.3  
 
53,800.8  
 
85,592.1  
 
85,592.1  
 
341,268.3  
 
2,445.5  

(1)
In connection with a share repurchase program.
(2)
By a Company’s trust in connection with the Company’s Long-Term Retention Plan.

Long-term Retention Plan

During the year ended December 31, 2017, the trust for the Long-term Retention Plan (i) acquired 3,267.3 million shares of the Company in the form of 27.9  million CPOs, in the amount of Ps.2,260,260; and (ii) released 4,618.7 million shares in the form of 39.4 million CPOs, and 351.0 million Series “A” Shares, in the aggregate amount of Ps.2,336,550, in connection with the Long-term Retention Plan. In November and December 2017, the Company made cash contributions in the aggregate amount of Ps.2,500,000 to the trust held for the Company’s Long-Term Retention Plan.

The Group accrued in equity attributable to stockholders of the Company a share-based compensation expense of Ps.1,468,337 and Ps.1,392,534 for the years ended December 31, 2017 and 2016, respectively, which amount was reflected in consolidated operating income as administrative expense.
 
59 of 80
 
 
11.
Retained Earnings

As of December 31, 2017 and 2016, the Company’s legal reserve amounted to Ps.2,139,007, and was classified into retained earnings in equity attributable to stockholders of the Company.

In April 2016, the Company’s stockholders approved the payment of a dividend of Ps.0.35 per CPO and Ps.0.002991452991 per share of Series “A”, “B”, “D” and “L” Shares, not in the form of a CPO, which was paid in cash in May 2016, in the aggregate amount of Ps.1,084,192.

In April 2017, the Company’s stockholders approved the payment of a dividend of Ps.0.35 per CPO and Ps.0.002991452991 per share of Series “A”, “B”, “D” and “L” Shares, not in the form of a CPO, which was paid in cash in May 2017, in the aggregate amount of Ps.1,084,192.


12.
Transactions with Related Parties

The balances of receivables and payables between the Group and related parties as of December 31, 2017 and 2016, were as follows:

   
December 31, 2017
    
December 31, 2016
  
Current receivables:
            
UHI, including Univision (1)
  
Ps.
657,601
    
Ps.
684,159
  
Operadora de Centros de Espectáculos, S.A de C.V.
    
41,080
      
77,044
  
Televisa CJ Grand
    
77,991
      
77,089
  
Editorial Clío, Libros y Videos, S.A. de C.V.
    
23,045
      
28,091
  
Other
    
60,503
      
39,189
  
   
Ps.
860,220
    
Ps.
905,572
  
Current payable:
                
UHI, including Univision (1)
  
Ps.
964,959
    
Ps.
1,031,367
  
DirecTV Group, Inc. (2)
    
6,713
      
24,342
  
Other
    
19,797
      
32,517
  
   
Ps.
991,469
    
Ps.
1,088,226
  

(1)
As of December 31, 2017 and 2016, the Group recognized a provision in the amount of Ps.964,959 and Ps.1,031,367, respectively, associated with a consulting arrangement entered into by the Group, UHI and an entity controlled by the chairman of the Board of Directors of UHI, by which upon a qualified initial public offering of the shares of UHI, the Group would pay the entity a portion of a defined appreciation in excess of certain preferred returns and performance thresholds of UHI. As December 31, 2017 and 2016, receivables from UHI related primarily to the PLA amounted to Ps.657,601 and Ps.684,159, respectively.
(2)
In the third quarter of 2017, the holding companies of the Sky segment approved the payment of a dividend to its equity owners in the aggregate amount of Ps.1,000,000, of which Ps.413,334, were paid in October 2017 to its non-controlling interest.

In the year ended December 31, 2017 and 2016, royalty revenue from Univision amounted to Ps.5,916,147 and Ps.6,112,034, respectively.

The non-controlling interest of CVQ was purchased in 2016 to a related party (see Note 3).
 

60 of 80
 
13.
Other Expense, Net

Other expense (income) for the years ended December 31, 2017 and 2016, is analyzed as follows:

   
December 31, 2017
    
December 31, 2016
  
Loss on disposition of investments(1)
  
Ps.
295,194
    
Ps.
312
  
Donations
    
159,605
      
195,005
  
Legal and financial advisory professional services (2)
    
269,385
      
833,618
  
Loss on disposition of property and equipment
    
118,817
      
810,825
  
Deferred compensation
    
308,814
      
340,202
  
Dismissal severance expense (3)
    
984,816
      
912,173
  
Impairment adjustment (4)
    
89,597
      
6,851
  
Other, net
    
160,106
      
38,398
  
   
Ps.
2,386,334
    
Ps.
3,137,384
  

(1)
In 2017 included a loss on disposition of a publishing business in Argentina, which was classified in the Group’s Other Businesses segment.
(2)
Includes primarily legal and financial advisory professional services in connection with certain litigation and other matters.
(3)
Includes severance expense in connection with dismissals of personnel primarily in the Group’s Content segment, as part of a cost reduction plan.
(4)
In 2017 and 2016, the Group recognized an impairment adjustment in connection with trademarks in its Publishing business (see Note 7).

14.
Finance Expense, Net

Finance (expense) income for the years ended December 31, 2017 and 2016, included:

   
December 31, 2017
    
December 31, 2016
  
Interest expense (1)
  
Ps.
(9,245,671
)
  
Ps.
(8,497,919
)
Foreign exchange loss, net (2)
    
-
      
(2,490,296
)
Other finance expense, net (3)
    
-
      
(43,370
)
Finance expense
    
(9,245,671
)
    
(11,031,585
)
Interest income (4)
    
2,268,711
      
1,499,473
  
Foreign exchange gain, net (2)
    
768,923
      
-
  
Other finance income, net (3)
    
903,204
      
-
  
Finance income
    
3,940,838
      
1,499,473
  
Finance expense, net
  
Ps.
(5,304,833
)
  
Ps.
(9,532,112
)

(1)
In 2017, interest expense included fees for the prepayment of Senior Notes due 2018, in the amount of Ps.158,496 (see Note 8).
(2)
Foreign exchange gain or loss, net, included (i) foreign exchange gain or loss resulted primarily from the appreciation or depreciation of the Mexican peso against the U.S. dollar on the Group’s U.S. dollar-denominated monetary liability position, excluding long-term debt designated as hedging instrument of the Group’s investments in UHI and Open Ended Fund, during the years ended December 31, 2017 and  2016; and (ii) foreign exchange gain or loss resulted primarily from the appreciation or depreciation of the Mexican peso against the U.S. dollar  on the Group’s U.S. dollar-denominated  monetary asset position during the years ended December 31, 2017 and 2016 (see Note 8). The exchange rate of the Mexican peso against the U.S. dollar as of December 31, 2017 and 2016 was of Ps.19.7051 and Ps.20.6356, respectively.
(3)
In 2017 and 2016, other finance income or expense, net, included gain or loss from derivative financial instruments.
(4)
In 2017 and 2016, this line item included primarily gains from cash equivalents and instruments held for trading.

15.
Income Taxes
The effective income tax rate for the years ended December 31, 2017 and 2016 was 39% and 35%, respectively.


16.
Earnings per CPO/Share

At December 31, 2017 and 2016 the weighted average of outstanding total shares, CPOs and Series “A”, Series “B”, Series “D” and Series “L” Shares (not in the form of CPO units), was as follows (in thousands):


61 of 80
 
 
December 31, 2017
December 31, 2016
Total Shares
344,032,527
341,017,197
CPOs
2,466,848
2,444,082
Shares not in the form of CPO units:
    
Series “A” Shares
55,410,684
55,058,962
Series “B” Shares
187
187
Series “D” Shares
239
239
Series “L” Shares
239
239

Basic earnings per CPO and per each Series “A”, Series “B”, Series “D” and Series “L” Share (not in the form of a CPO unit) for the years ended December 31, 2017 and 2016, are presented as follows:

    2017     2016  
   
Per CPO
    
Per Each Series “A”, “B”, “D” and “L” Shares
    
Per CPO
    
Per Each Series “A”, “B”, “D” and “L” Shares
  
Net income attributable to stockholders of the Company
  
Ps.
1.54
    
Ps.
0.01
    
Ps.
1.28
    
Ps,
0.01
  


Diluted earnings per CPO and per Share attributable to stockholders of the Company:

 
December 31, 2017
December 31, 2016
Total Shares
362,373,163
362,429,887
CPOs
2,573,409
2,573,894
Shares not in the form of CPO units:
    
Series “A” Shares
58,926,613
58,926,613
Series “B” Shares
2,357,208
2,357,208
Series “D” Shares
239
239
Series “L” Shares
239
239

Diluted earnings per CPO and per each Series “A”, Series “B”, Series “D” and Series “L” Share (not in the form of a CPO unit) for the years ended December 31, 2017 and 2016, are presented as follows:

   
2017
      2016  
   
Per CPO
    
Per Each Series “A”, “B”, “D” and “L” Shares
    
Per CPO
    
Per Each Series “A”, “B”, “D” and “L” Shares
  
Net income attributable to stockholders of the Company
  
Ps.
1.46
    
Ps.
0.01
    
Ps.
1.20
    
Ps.
0.01
  
 

62 of 80
 
17.
Segment Information

The table below presents information by segment and a reconciliation to consolidated total for the years ended December 31, 2017 and 2016:

   
Total Revenues
    
Intersegment Revenues
    
Consolidated Revenues
    
Segment Income
        
2017:
                              
Content
  
$
33,997,220
    
$
2,445,233
    
$
31,551,987
    
$
12,825,259
        
Sky
    
22,196,629
      
127,129
      
22,069,500
      
10,106,623
        
Cable
    
33,048,310
      
225,755
      
32,822,555
      
14,034,796
        
Other Businesses
    
8,376,270
      
546,077
      
7,830,193
      
490,106
        
Segment total
    
97,618,429
      
3,344,194
      
94,274,235
      
37,456,784
        
Reconciliation to consolidated amounts:
                                      
Eliminations and corporate expenses
    
(3,344,194
)
    
(3,344,194
)
    
-
      
(2,290,974
)
      
Depreciation and amortization expense
    
-
      
-
      
-
      
(18,536,274
)
      
       Consolidated total before other expense
    
94,274,235
      
-
      
94,274,235
      
16,629,536
   (1)    
 
Other expense, net
    
-
      
-
      
-
      
(2,386,334
)
        
  Consolidated total
  
$
94,274,235
    
$
-
    
$
94,274,235
    
$
14,243,202
   (2)    
 
 
 
   
Total Revenues
    
Intersegment Revenues
    
Consolidated Revenues
    
Segment Income
        
2016:
                              
Content
  
$
36,686,676
    
$
2,314,419
    
$
34,372,257
    
$
14,748,037
        
Sky
    
21,941,247
      
70,954
      
21,870,293
      
9,898,516
        
Cable
    
31,891,616
      
162,364
      
31,729,252
      
13,236,117
        
Other Businesses
    
8,828,248
      
512,687
      
8,315,561
      
1,040,571
        
Segment total
    
99,347,787
      
3,060,424
      
96,287,363
      
38,923,241
        
ReconcilIation to consolidated amounts:
                                      
Eliminations and corporate expenses
    
(3,060,424
)
    
(3,060,424
)
    
-
      
(2,207,927
)
      
Depreciation and amortization expense
    
-
      
-
      
-
      
(16,979,833
)
      
      Consolidated total before other expense
    
96,287,363
      
-
      
96,287,363
      
19,735,481
   (1)    
 
Other expense, net
    
-
      
-
      
-
      
(3,137,384
)
        
 Consolidated total
  
$
96,287,363
    
$
-
    
$
96,287,363
    
$
16,598,097
   (2)    
 

(1)
This amount represents operating income before other expense, net.
(2)
This amount represents consolidated operating income.

Seasonality of Operations

The Group’s results of operations are seasonal. The Group typically recognizes a large percentage of its consolidated net sales (principally advertising) in the fourth quarter in connection with the holiday shopping season. In 2016 and 2015, the Group recognized  28.4% and 28.3%, respectively, of its annual consolidated net sales in the fourth quarter of the year. The Group’s costs, in contrast to its revenues, are more evenly incurred throughout the year and generally do not correlate to the amount of advertising sales.
 
63 of 80


The consolidated net income attributable to stockholders of the Company for the four quarters in the year ended December 31, 2017, is presented as follows:

Quarter
       Quarterly
Accumulated
1st/17
1,350,384
1,350,384
2nd/17
1,452,539
2,802,923
3rd/17
1,158,723
3,961,646
4th/17
562,850
4,524,496



18.
Contingencies

On March 2, 2017, the Mexican Institute of Telecommunications (“Instituto Federal de Telecomunicaciones” or “IFT”) announced that the Company, together with some of its subsidiaries, has been declared by the Governing Board of the IFT to be an economic agent with substantial power in the market of restricted television and audio services in Mexico, based on data relevant up to 2014. As a consequence of this resolution notified to the Company, IFT will begin a new proceeding by which it may or may not determine the imposition of certain measures on the Company in respect to the relevant market. The Company will be heard in this proceeding. The Company considers that the reversal of the previous IFT resolution, which determined that the Group did not have substantial power in such market, is unconstitutional and does not comply with the guidelines ordered by the Circuit Court and, therefore, it has pursued and will continue to pursue all options in its defense. Even though the Company continues to vigorously defend its stance, it is not possible to determine the outcome.
There are several legal actions and claims pending against the Group, which are filed in the ordinary course of business. In the opinion of the Company’s management, none of these actions and claims is expected to have a material adverse effect on the Group’s financial statements as a whole; however, the Company’s management is unable to predict the outcome of any of these legal actions and claims.




- - - - - - - - -
 

Description of significant events and transactions

See Note 3 of the Disclosure of interim financial reporting

Description of accounting policies and methods of computation followed in interim financial statements
Accounting Policies

The principal accounting policies followed by the Group and used in the preparation of its annual consolidated financial statements, and where applicable, of its interim condensed consolidated financial statements, are summarized below.

(a)      Basis of Presentation
The consolidated financial statements of the Group as of December 31, 2016 and 2015, and for the years ended December 31, 2016, 2015 and 2014, are presented in accordance with International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”). IFRSs comprise: (i) International Financial Reporting Standards (“IFRS”); (ii) International Accounting Standards (“IAS”); (iii) IFRS Interpretations Committee (“IFRIC”) Interpretations; and (iv) Standing Interpretations Committee (“SIC”) Interpretations.
64 of 80
The consolidated financial statements have been prepared on a historical cost basis, except for the measurement at fair value of temporary investments, derivative financial instruments, available-for-sale financial assets, equity financial instruments, and share-based payments, as described below.

The preparation of consolidated financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. Changes in assumptions may have a significant impact on the consolidated financial statements in the period the assumptions changed. Management believes that the underlying assumptions are appropriate. The areas involving a higher degree of judgment or complexity, or areas where estimates and assumptions are significant to the Group’s financial statements are disclosed in Note 5 to these consolidated financial statements.

These consolidated financial statements were authorized for issuance on April 4, 2017, by the Group’s Chief Financial Officer.

(b)      Consolidation
The financial statements of the Group are prepared on a consolidated basis and include the assets, liabilities and results of operations of all companies in which the Company has a controlling interest (subsidiaries). All intercompany balances and transactions have been eliminated from the consolidated financial statements.

Subsidiaries
Subsidiaries are all entities over which the Company has control. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The existence and effects of potential voting rights that are currently exercisable or convertible are considered when assessing whether or not the Company controls another entity. The subsidiaries are consolidated from the date on which control is obtained by the Company and cease to consolidate from the date on which said control is lost.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquiree on an acquisition-by-acquisition basis at the non-controlling interest’s proportionate share of the recognized amounts of acquiree’s identifiable net assets.

Acquisition-related costs are expensed as incurred.

Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized in income or loss.

Changes in Ownership Interests in Subsidiaries Without Change of Control
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions — that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the interest acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals of non-controlling interests are also recorded in equity.
 
Loss of Control of a Subsidiary
When the Company ceases to have control of a subsidiary, any retained interest in the entity is remeasured to its fair value at the date when control is lost, with the change in carrying amount recognized in income or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This means that amounts previously recognized in other comprehensive income are reclassified to income or loss.


65 of 80


At December 31, 2016, 2015 and 2014, the main direct and indirect subsidiaries of the Company were as follows:

Entity
Company’s Ownership Interest (1)
  
Business Segment (2)
Grupo Telesistema, S.A. de C.V. and subsidiaries
100%       
 
Content and Other Businesses
Televisa, S.A. de C.V. (“Televisa”) (3)
100%       
 
Content
G.Televisa-D, S.A. de C.V. (3)
100%       
 
Content
Multimedia Telecom, S.A. de C.V. (“Multimedia Telecom”) and subsidiary (4)
100%       
 
Content
Innova, S. de R.L. de C.V. (“Innova”) and subsidiaries (collectively, “Sky”) (5)
58.7%       
 
Sky
Corporativo Vasco de Quiroga, S.A. de C.V. (“CVQ”) and subsidiaries (6)
100%       
 
Sky and Cable
Empresas Cablevisión, S.A.B. de C.V. and subsidiaries (collectively, “Empresas Cablevisión”) (7)
51%       
 
Cable
Subsidiaries engaged in the Cablemás business (collectively, “Cablemás”) (8)
100%       
 
Cable
Televisión Internacional, S.A. de C.V. and subsidiaries (collectively, “TVI”) (9)
100%       
 
Cable
Cablestar, S.A. de C.V. and subsidiaries (collectively, “Bestel”) (10)
66.1%       
 
Cable
Arretis, S.A.P.I. de C.V. and subsidiaries (collectively, “Cablecom”) (11)
100%       
 
Cable
Subsidiaries engaged in the Telecable business (collectively, “Telecable”) (12)
100%       
 
Cable
Editorial Televisa, S.A. de C.V. and subsidiaries
100%       
 
Other Businesses
Grupo Distribuidoras Intermex, S.A. de C.V. and subsidiaries
100%       
 
Other Businesses
Sistema Radiópolis, S.A. de C.V. (“Radiópolis”) and subsidiaries (13)
50%       
 
Other Businesses
Televisa Juegos, S.A. de C.V. and subsidiaries
100%       
 
Other Businesses
Villacezán, S.A. de C.V. (“Villacezán”) and subsidiaries (14)
100%       
 
Other Businesses
       
(1)
Percentage of equity interest directly or indirectly held by the Company.

(2)
See Note 25 for a description of each of the Group’s business segments.

(3)
Televisa and G.Televisa-D, S.A. de C.V. are direct subsidiaries of Grupo Telesistema, S.A. de C.V.

(4)
Multimedia Telecom and its direct subsidiary, Comunicaciones Tieren, S.A. de C.V. (“Tieren”), are wholly-owned subsidiaries of the Company through which it owns shares of the capital stock of UHI and maintains an investment in Warrants that are exercisable for shares of common stock of UHI. As of December 31, 2016 and 2015, Multimedia Telecom and Tieren have investments representing 95.3% and 4.7%, respectively, of the Group’s aggregate investment in shares of common stock and Warrants issued by UHI (see Notes 9, 10 and 19).

(5)
Innova is an indirect majority-owned subsidiary of the Company and a direct majority-owned subsidiary of Innova Holdings, S. de R.L. de C.V. (“Innova Holdings”). Sky is a satellite television provider in Mexico, Central America and the Dominican Republic. Although the Company holds a majority of Innova’s equity and designates a majority of the members of Innova’s Board of Directors, the non-controlling interest has certain governance and veto rights in Innova, including the right to block certain transactions between the companies in the Group and Sky. These veto rights are protective in nature and do not affect decisions about relevant business activities of Innova.

(6)
CVQ is a direct subsidiary of the Company and the parent company of Empresas Cablevisión, Cablemás, TVI, Bestel, Cablecom, Telecable and Innova. In September 2016, Factum Más Telecom, S.A. de C.V., a former direct subsidiary of the Company and the parent company of Innova Holdings and Innova was merged into CVQ. At the consolidated level, this merger had no effect. Through September 2014, CVQ. maintained an investment in GSF Telecom Holdings, S.A.P.I. de C.V. (“GSF”), whose disposition was completed in January 2015 (see Note 3).

(7)
Empresas Cablevisión, S.A.B. de C.V. is a direct majority-owned subsidiary of CVQ. As of December 31, 2014, Empresas Cablevisión, S.A.B. de C.V. was directly owned by Editora Factum, S.A. de C.V., a direct subsidiary of the Company that was merged into CVQ in May 2015. At the consolidated level, the merger had no effect.

(8)
The Cablemás subsidiaries are directly and indirectly owned by CVQ. As of December 31, 2014, some Cablemás subsidiaries were directly owned by the Company, and some other were directly owned by Consorcio Nekeas, S.A. de C.V. (“Nekeas”), a former wholly-owned direct subsidiary of the Company. In January 2015, Nekeas was merged into TTelecom H, S.A.P.I. de C.V. (“TTelecom”), a former direct subsidiary of the Company, and in July 2015, TTelecom was merged into CVQ. The Cablemás subsidiaries directly owned by the Company were acquired by a direct subsidiary of CVQ in the second half of 2015. In June 2016, three former subsidiaries of Grupo Cable TV, S.A. de C.V. were merged into a Cablemás subsidiary. At the consolidated level, the mergers had no effect.
 
66 of 80
 
(9)
Televisión Internacional, S.A. de C.V. is a direct subsidiary of CVQ. Through February 2016, the Company had a 50% ownership interest in TVI, and consolidated this subsidiary because it appointed the majority of the members of the Board of Directors of TVI. In March 2016, the Company acquired the remaining 50% non-controlling interest in TVI (see Note 3).

(10)
Cablestar, S.A. de C.V. is an indirect majority-owned subsidiary of CVQ and Empresas Cablevisión, S.A.B. de C.V.

(11)
Grupo Cable TV, S.A. de C.V. was an indirect subsidiary of CVQ and was acquired by the Group in 2014 (see Note 3). In June 2016, three former subsidiaries of Grupo Cable TV, S.A. de C.V. were merged into a Cablemás subsidiary. In the fourth quarter of 2016, Grupo Cable TV, S.A. de C.V. merged into Arretis, S.A.P.I. de C.V., a direct subsidiary of CVQ. At the consolidated level, the mergers had no effect.

(12)
The Telecable subsidiaries are directly owned by CVQ as a result of the merger of TTelecom into CVQ in July 2015. TTelecom was a wholly-owned subsidiary of the Company through which the Company acquired Telecable in January 2015 (see Note 3).

(13)
Radiópolis is a direct  subsidiary of the Company. The Company controls Radiópolis as it has the right to appoint the majority of the members of the Board of Directors of Radiópolis.

(14)
Villacezán is an indirect subsidiary of Grupo Telesistema, S.A. de C.V.. Certain subsidiaries of the Company in the Other Businesses segment, owned by Nekeas as of December 31, 2014, were acquired by Villacezán in the third quarter of 2015, following the mergers described above of Nekeas into TTelecom and TTelecom into CVQ.

The Group’s Content, Sky and Cable segments, as well as the Group’s Radio business, which is reported in the Other Businesses segment, require governmental concessions and special authorizations for the provision of broadcasting and telecommunications services in Mexico. Such concessions are granted by the Mexican Institute of Telecommunications (Instituto Federal de Telecomunicaciones or “IFT”) for a fixed term, subject to renewal in accordance with the Mexican Telecommunications and Broadcasting Law (“Ley Federal de Telecomunicaciones y Radiodifusión” or “LFTR”).

Renewal of concessions for the Content segment (Broadcasting) and the Radio business require, among others: (i) to request such renewal to IFT within the year prior to the last fifth period of the fixed term of the related concession; (ii) to be in compliance with the concession holder’s obligations under the LFTR, other applicable regulations, and the concession title; (iii) a declaration by IFT that there is no public interest in recovering the spectrum granted under the related concession; and (iv) the acceptance by the concession holder of any new conditions for renewing the concession as set forth by IFT, including the payment of a related fee. Renewal of concessions for the Sky and Cable segments require, among others: (i) to request its renewal to IFT in the year prior to the last fifth period of the fixed term of the related concession; (ii) to be in compliance with the concession holder’s obligations under the LFTR, other applicable regulations, and the concession title; and (iii) the acceptance by the concession holder of any new conditions for renewing the concession as set forth by IFT. IFT shall resolve any request for renewal of the telecommunications concessions within 180 business days of its request. Failure to respond within such period of time shall be interpreted as if the request for renewal has been granted.

The regulations of the broadcasting and the telecommunications concessions (including satellite pay TV) establish that at the end of the concession, the frequency bands or spectrum attached to the services provided in the concessions shall return to the Mexican government. In addition, at the end of the concession, the Mexican government will have the preferential right to acquire infrastructure, equipment and other goods directly used in the provision of the concession. If the Mexican government were to exercise its right to acquire infrastructure, equipment and other goods, it would be required to pay a price that is equivalent to a formula that is similar to the fair value. To the knowledge of the Company’s management, no spectrum granted for broadcasting services in Mexico has been recovered by the Mexican government in at least the past three decades for public interest reasons. However, the Company’s management is unable to predict the outcome of any action by IFT in this regard. In addition, these assets, by themselves, would not be enough to immediately begin broadcasting or offering satellite pay TV services or telecommunications services, as no content producing assets or other equipment necessary to operate the business would be included.

Also, the Group’s Gaming business, which is reported in the Other Businesses segment, requires a permit granted by the Mexican Federal Government for a fixed term, subject to renewal in accordance with Mexican law. Additionally, the Group’s Sky businesses in Central America and the Dominican Republic require concessions or permits granted by local regulatory authorities for a fixed term, subject to renewal in accordance with local laws.

The accounting guidelines provided by IFRIC 12 Service Concession Arrangements are not applicable to the Group due primarily to the following factors: (i) the Mexican government does not substantially control the Group’s infrastructure, what services are provided with the infrastructure and the price at which such services are offered; (ii) the Group’s  broadcasting service does not constitute a public service as per the definition in IFRIC 12; and (iii) the Group is unable to divide its infrastructure among the public (telephony and possibly Internet services) and non-public (pay TV) service components.

 
67 of 80
 
At December 31, 2016, the expiration dates of the Group’s concessions and permits were as follows:

Segments
Expiration Dates
   
Content (broadcasting concessions)
In 2021
   
Sky
Various from 2018 to 2027
   
Cable
Various from 2018 to 2046
   
Other Businesses:
  
   
      Radio (1)
Various from 2018 to 2036
   
      Gaming
In 2030
 
(1)
Concessions for six Radio stations in the cities of San Luis Potosí, Guadalajara and Monterrey expired in 2015 and 2016. Renewal applications for these concessions were timely filed, but are still pending as certain related matters of the applicable regulations are being reviewed by the IFT. The Group’s management expects that concessions for these stations will be renewed or granted by the IFT without affecting the continuance of these Radio operations. Concessions for nine Radio stations in the cities of Mexico City, Guadalajara and Veracruz expired in 2016, and were renewed by the IFT that year. The cost paid by the Group for renewal of these concessions amounted to an aggregate of Ps.111,636, which was recognized in consolidated other intangible assets, and will be amortized in a period of 20 years by using the straight-line method (see Note 12).

The concessions or permits held by the Group are not subject to any significant pricing regulations in the ordinary course of business.

(c)      Investments in Associates and Joint Ventures
Associates are those entities over which the Group has significant influence but not control, generally those entities with a shareholding of between 20% and 50% of the voting rights. Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. Joint ventures are those joint arrangements where the Group exercises joint control with other stockholder or more stockholders without exercising control individually, and have rights to the net assets of the joint arrangements. Investments in associates and joint ventures are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor’s share of the net assets of the investee after the date of acquisition.

The Group’s investments in associates include an equity interest in UHI represented by 10% of the outstanding total shares of UHI as of December 31, 2016 and 2015 (see Notes 3, 9 and 10).

The Group recognizes its share of losses of an associate or a joint venture up to the amount of its initial investment, subsequent capital contributions and long-term loans, or beyond that when guaranteed commitments have been made by the Group in respect of obligations incurred by investees, but not in excess of such guarantees. If an associate or a joint venture for which the Group had recognized a share of losses up to the amount of its guarantees generates net income in the future, the Group would not recognize its share of this net income until the Group first recognizes its share of previously unrecognized losses.

If the Group’s share of losses of an associate or a joint venture equals or exceeds its interest in the investee, the Group discontinues recognizing its share of further losses. The interest in an associate or a joint venture is the carrying amount of the investment in the investee under the equity method together with any other long-term investment that, in substance, form part of the Group’s net investment in the investee. After the Group’s interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.

(d)      Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Group’s executive officers (“chief operating decision makers”) who are responsible for allocating resources and assessing performance for each of the Group’s operating segments.
68 of 80
(e)      Foreign Currency Translation
Functional and Presentation Currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The presentation and functional currency of the Group’s consolidated financial statements is the Mexican peso, which is used for compliance with its legal and tax obligations.

Transactions and Balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or measurement where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement as part of finance income or expense, except when deferred in other comprehensive income as qualifying cash flow hedges and qualifying net investment hedges.

Changes in the fair value of monetary securities denominated in foreign currency classified as available for sale are analyzed between exchange differences resulting from changes in the amortized cost of the security and other changes in the carrying amount of the security. Translation differences related to changes in amortized cost are recognized in income or loss, and other changes in carrying amount are recognized in other comprehensive income or loss.

Translation of Foreign Operations
The financial statements of the Group’s foreign entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows: (a) assets and liabilities are translated at the closing rate at the date of the statement of financial position; (b) income and expenses are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and (c) all resulting translation differences are recognized in other comprehensive income or loss.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Translation differences arising are recognized in other comprehensive income or loss.

Assets and liabilities of non-Mexican subsidiaries that use the Mexican Peso as a functional currency are translated into Mexican Pesos by utilizing the exchange rate of the statement of financial position date for monetary assets and liabilities, and historical exchange rates for non-monetary items, with the related adjustment included in the consolidated statement of income as finance income or expense.

The Group has designated as an effective hedge of foreign exchange exposure, a portion of the outstanding principal amount of its U.S. dollar denominated long-term debt in connection with its net investment in shares of common stock of UHI, which amounted to U.S.$350.7 million (Ps.7,236,587) and U.S.$330.5 million (Ps.5,685,748) as of December 31, 2016 and 2015, respectively. Consequently, any foreign exchange gain or loss attributable to this designated hedging long-term debt is credited or charged directly to other comprehensive income or loss as a cumulative result from foreign currency translation (see Note 10).

The Group has designated a portion of its U.S. dollar denominated long-term debt as a fair value hedge of foreign exchange exposure related to its investment in UHI Warrants and the initial investment in Open Ended Fund. A portion of the outstanding principal amount of its U.S. dollar denominated long-term debt (hedging instrument, disclosed in the line “Long-term debt, net of current portion” of the consolidated statement of financial position) is hedging its investment in Warrants exercisable for common stock of UHI and the initial investment in Open Ended Fund (hedged items), which amounted to Ps.38,298,606 (U.S.$1,855.9 million) and Ps.3,817,586 (U.S.$180.0 million) and Ps.35,042,577 (U.S.$2,035.5 million) and Ps.3,184,960 (U.S.$180.0 million) as of December 31, 2016 and 2015, respectively. The other changes in fair value of the Warrants are recognized in other comprehensive income or loss. Consequently, any foreign currency gain or loss attributable to these designated hedged warrants is recognized within foreign exchange gain or loss in the consolidated statement of income, along with the recognition in the same line item of any foreign exchange gain or loss of the designated hedging instrument long-term debt (see Notes 9, 13 and 17).

(f)      Cash and Cash Equivalents and Temporary Investments
Cash and cash equivalents consist of cash on hand and all highly liquid investments with an original maturity of three months or less at the date of acquisition. Cash is stated at nominal value and cash equivalents are measured at fair value, and the changes in the fair value are recognized in the income statement.
 
69 of 80
 
Temporary investments consist of short-term investments in securities, including without limitation debt with a maturity of over three months and up to one year at the date of acquisition, stock and other financial instruments, or a combination thereof, as well as current maturities of noncurrent held-to-maturity securities. Temporary investments are measured at fair value with changes in fair value recognized in finance income in the consolidated income statement, except the current maturities of non-current held-to-maturity securities which are measured at amortized cost.
 
As of December 31, 2016 and 2015, cash equivalents and temporary investments primarily consisted of fixed short-term deposits and corporate fixed income securities denominated in U.S. dollars and Mexican pesos, with an average yield of approximately 0.36% for U.S. dollar deposits and 4.06% for Mexican peso deposits in 2016, and approximately 0.15% for U.S. dollar deposits and 3.09% for Mexican peso deposits in 2015.
 
(g)      Transmission Rights and Programming
Programming is comprised of programs, literary works, production talent advances and films.

Transmission rights and literary works are valued at the lesser of acquisition cost and net realizable value. Programs and films are valued at the lesser of production cost, which consists of direct production costs and production overhead, and net realizable value. Payments for production talent advances are initially capitalized and subsequently included as direct or indirect costs of program production. Transmission rights are recognized from the point of which the legally enforceable license period begins. Until the license term commences and the programming rights are available, payments made are recognized as prepayments.

The Group’s policy is to capitalize the production costs of programs which benefit more than one annual period and amortize them over the expected period of future program revenues based on the Company’s historical revenue patterns for similar productions.

Transmission rights, programs, literary works, production talent advances and films are recorded at acquisition or production cost. Cost of sales is calculated for the month in which such transmission rights, programs, literary works, production talent advances and films are matched with related revenues.

Transmission rights are amortized over the lives of the contracts. Transmission rights in perpetuity are amortized on a straight-line basis over the period of the expected benefit as determined by past experience, but not exceeding 25 years.

(h)      Inventories
Inventories of paper, magazines, materials and supplies for maintenance of technical equipment are recorded at the lower of cost or its net realization value. The net realization value is the estimated selling price in the normal course of business, less estimated costs to conduct the sale. Cost is determined using the average cost method.
(i)      Financial Assets
The Group classifies its financial assets in the following categories: loans and receivables, held-to-maturity investments, fair value through income or loss and available-for-sale financial assets. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are initially recognized at fair value plus transaction costs and subsequently carried at amortized cost using the effective interest method, with changes in carrying value recognized in the income statement in the line which most appropriately reflects the nature of the item or transaction. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. The Group’s loans and receivables are presented as “trade notes and accounts receivable”, “other accounts and notes receivable” and “due from related parties” in the consolidated statement of financial position (see Note 7).

Held-to-maturity Investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group’s management has the positive intention and ability to hold to maturity. After initial measurement, held-to-maturity investments are measured at amortized cost using the effective interest rate method, less impairment, if any. Any gain or loss arising from these investments is included in finance income or loss in the consolidated statement of income. Held-to-maturity investments are included in investments in financial instruments, except for those with maturities less than 12 months from the end of the reporting period, which are classified as temporary investments (see Note 9).
 
70 of 80
 
Available-for-sale Financial Assets
Available-for-sale financial assets are non-derivative financial assets that are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through income or loss, and include debt securities and equity instruments. Debt securities in this category are those that are intended to be held for an indefinite period of time and that may be sold in response to needs for liquidity or in response to changes in the market conditions. Equity instruments in this category are those of companies in which the Group does not exercise joint control nor significant influence, but intent to hold for an indefinite term, and are neither classified as held for trading nor designated at fair value through income. After initial measurement, available-for-sale assets are measured at fair value with unrealized gains or losses recognized as other comprehensive income or loss until the investment is derecognized or the investment is determined to be impaired, at which time the cumulative gain or loss is recognized in the consolidated statement of income either in other finance income or expense (debt securities) or other income or expense (equity instruments). Interest earned whilst holding available-for-sale financial assets is reported as interest income using the effective interest rate method (see Notes 9 and 14).

Financial Assets at Fair Value through Income
Financial assets at fair value through income are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorized as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as non-current.

Impairment of Financial Assets
The Group assesses at each statement of financial position date whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective and other-than-temporary evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset. If it is determined that a financial asset or group of financial assets have sustained a decline other than temporary in their value a charge is recognized in income in the related period.

For financial assets classified as held-to-maturity the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate.

Impairment of Financial Assets Recognized at Amortized Cost
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets measured at amortized cost is impaired. A financial asset or group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

Offsetting of Financial Instruments
Financial assets are offset against financial liabilities and the net amount reported in the consolidated statement of financial position if, and only when the Group (i) currently has a legally enforceable right to set off the recognized amounts; and (ii) intends either to settle on a net basis, or to realize the assets and settle the liability simultaneously.

(j)      Property, Plant and Equipment
Property, plant and equipment are recorded at acquisition cost.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to income or loss during the financial period in which they are incurred.


71 of 80
 
Land is not depreciated. Depreciation of property, plant and equipment is based upon the carrying value of the assets in use and is computed using the straight-line method over the estimated useful lives of the asset, as follows:

 
Estimated useful lives
Buildings
20-65 years
Building improvements
5-20 years
Technical equipment
3-30 years
Satellite transponders
15 years
Furniture and fixtures
3-15 years
Transportation equipment
4-8 years
Computer equipment
3-6 years
Leasehold improvements
5-30 years
   

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized within other income or expense in the consolidated income statement.

(k)      Intangible Assets
Intangible assets are recognized at acquisition cost. Intangible assets acquired through business combinations are recorded at fair value at the date of acquisition. Intangible assets with indefinite useful lives, which include goodwill, trademarks and concessions, are not amortized, and subsequently recognized at cost less accumulated impairment losses. Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives, as follows:

 
Estimated useful lives
Licenses
3-14 years
Subscriber lists
4-10 years
Other intangible assets
3-20 years
   

Trademarks
The Group determines its trademarks to have an indefinite life when they are expected to generate net cash inflows for the Group indefinitely. Additionally, the Group considers that there are no legal, regulatory or contractual provisions that limit the useful lives of trademarks.

In the third quarter of 2015, the Company’s management evaluated trademarks in its Cable segment to determine whether events and circumstances continue to support an indefinite useful life for these intangible assets. As a result of such evaluation, the Company identified certain businesses and locations that began migrating from a current trademark to an internally developed trademark between 2015 and 2016, in connection with enhanced service packages offered to current and new subscribers, and estimated that this migration process will take approximately four years. Accordingly, beginning in the third quarter of 2015, the Group changed the useful life assessment from indefinite to finite for acquired trademarks in certain businesses and locations in its Cable segment, and began to amortize on a straight line basis the related carrying value of these trademarks when the migration to the new trademark started using an estimated useful life of four years. The Group has not capitalized any amounts associated with internally developed trademarks.

Concessions
The Group defined concessions to have an indefinite life due to the fact that the Group has a history of renewing its concessions upon expiration, has maintained the concessions granted by the Mexican government, and has no foreseeable limit to the period over which the assets are expected to generate net cash inflows. In addition, the Group is committed to continue to invest for the long term to extend the period over which the broadcasting and telecommunications concessions are expected to continue to provide economic benefits.
 
72 of 80
 
Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the Group’s interest in net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree.

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash generating units (“CGUs”), or groups of CGUs, that are expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell. Any impairment is recognized as an expense and may be subsequently reversed under certain circumstances.

(l)      Impairment of Long-lived Assets
The Group reviews for impairment the carrying amounts of its long-lived assets, tangible and intangible, including goodwill (see Note 12), at least once a year, or whenever events or changes in business circumstances indicate that these carrying amounts may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. To determine whether an impairment exists, the carrying value of the reporting unit is compared with its recoverable amount. Fair value estimates are based on quoted market values in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including discounted value of estimated future cash flows, market multiples or third-party appraisal valuations.

(m)      Trade Accounts Payable and Accrued Expenses
Trade accounts payable and accrued expenses are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade accounts payable and accrued expenses are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade accounts payable and accrued expenses are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.

Trade accounts payable and accrued expenses are presented as a single item of consolidated current liabilities in the consolidated statements of financial position as of December 31, 2016 and 2015.

(n)      Debt
Debt is recognized initially at fair value, net of transaction costs incurred. Debt is subsequently carried at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period of the debt using the effective interest method.

Fees paid on the establishment of debt facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a pre-payment for liquidity services and amortized over the period of the facility to which it relates.

Current portion of long-term debt and interest payable are presented as a single line item of consolidated current liabilities in the consolidated statements of financial position as of December 31, 2016 and 2015.

Debt early redemption costs are recognized as finance expense in the consolidated statement of income.

(o)      Customer Deposits and Advances
Customer deposit and advance agreements for advertising services provide that customers receive prices that are fixed for the contract period for advertising time in the Group’s platforms based on rates established by the Group. Such rates vary depending on when the advertisement is made, including the season, hour, day and type of programming.
73 of 80
 
(p)      Provisions
Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognized for future operating losses.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provisions due to passage of time is recognized as interest expense.

(q)      Equity
The capital stock and other equity accounts include the effect of restatement through December 31, 1997, determined by applying the change in the Mexican National Consumer Price Index between the dates capital was contributed or net results were generated and December 31, 1997, the date through which the Mexican economy was considered hyperinflationary under the guidelines of the IFRSs. The restatement represented the amount required to maintain the contributions and accumulated results in Mexican Pesos in purchasing power as of December 31, 1997.

Where any company in the Group purchases shares of the Company’s capital stock (shares repurchased), the consideration paid, including any directly attributable incremental costs is deducted from equity attributable to stockholders of the Company until the shares are cancelled, reissued, or sold. Where such shares repurchased are subsequently reissued or sold, any consideration received, net of any directly attributable incremental transaction costs, is included in equity attributable to stockholders of the Company.

(r)      Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for services provided. The Group recognizes revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the Group’s activities, as described below. The Group bases its estimate of return on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

The Group derives the majority of its revenues from media and entertainment-related business activities both in Mexico and internationally. Revenues are recognized when the service is provided and collection is probable. A summary of revenue recognition policies by significant activity is as follows:

•
Advertising revenues, including deposits and advances from customers for future advertising, are recognized at the time the advertising services are rendered.
•
Revenues from program services for network subscription and licensed and syndicated television programs are recognized when the programs are sold and become available for broadcast.
•
Sky program service revenues, including advances from customers for future direct-to-home (“DTH”) program services, are recognized at the time the service is provided.
•
Cable television, internet and telephone subscription, and pay-per-view and installation fees are recognized in the period in which the services are rendered.
•
Revenues from other telecommunications and data services are recognized in the period in which these services are provided. Other telecommunications services include long distance and local telephony, as well as leasing and maintenance of telecommunications facilities.
•
Revenues from magazine subscriptions are initially deferred and recognized proportionately as products are delivered to subscribers. Revenues from the sales of magazines are recognized on the date of circulation of delivered merchandise, net of a provision for estimated returns.
•
Revenues from publishing distribution are recognized upon distribution of the products.
•
Revenues from attendance to soccer games, including revenues from advance ticket sales for soccer games and other promotional events, are recognized on the date of the relevant event.
 
74 of 80
 
•
Motion picture production and distribution revenues are recognized as the films are exhibited.
•
Gaming revenues consist of the net win from gaming activities, which is the difference between amounts wagered and amounts paid to winning patrons.
In respect to sales of multiple products or services, the Group evaluates whether it has fair value evidence for each deliverable in the transaction. For example, the Group sells cable television, internet and telephone subscription to subscribers in a bundled package at a rate lower than if the subscriber purchases each product on an individual basis. Subscription revenues received from such subscribers are allocated to each product in a pro-rata manner based on the fair value of each of the respective services.
(s)      Interest Income
Interest income is recognized using the effective interest method. When a loan and receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loan and receivables is recognized using the original effective interest rate.
(t)      Employee Benefits
Pension and Seniority Premium Obligations
Plans exist for pensions and seniority premiums (post-employment benefits), for most of the Group’s employees funded through irrevocable trusts. Increases or decreases in the consolidated liability or asset for post-employment benefits are based upon actuarial calculations. Contributions to the trusts are determined in accordance with actuarial estimates of funding requirements. Payments of post-employment benefits are made by the trust administrators. The defined benefit obligation is calculated annually using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation.
Remeasurement of post-employment benefit obligations related to experience adjustments and changes in actuarial assumptions of post-employment benefits are recognized in the period in which they are incurred as part of other comprehensive income or loss in consolidated equity.

Profit Sharing
The employees’ profit sharing required to be paid under certain circumstances in Mexico, is recognized as a direct benefit to employees in the consolidated statements of income in the period in which it is incurred.

Termination Benefits
Termination benefits, which mainly represent severance payments by law, are recorded in the consolidated statement of income. The Group recognizes termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognizes costs for a restructuring that involves the payment of termination benefits.

(u)      Income Taxes
The income tax expense for the period comprises current and deferred income tax. Income tax is recognized in the consolidated statement of income, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the income tax is also recognized in other comprehensive income.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred income tax liabilities are not recognized if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction (other than in a business combination) that at the time of the transaction affects neither accounting nor taxable income or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
75 of 80
 
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences and tax loss carryforwards can be utilized. For this purpose, the Group takes into consideration all available positive and negative evidence, including factors such as market conditions, industry analysis, projected taxable income, carryforward periods, current tax structure, potential changes or adjustments in tax structure, and future reversals of existing temporary differences.

Deferred income tax liabilities are provided on taxable temporary differences associated with investments in subsidiaries, joint ventures and associates, except for deferred income tax liabilities where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets are provided on deductible temporary differences associated with investments in subsidiaries, joint ventures and associates, to the extent that it is probable that there will be sufficient taxable income against which to utilize the benefit of the temporary difference and it is expected to reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. In the last quarter of 2013, the Mexican Congress enacted a new Tax Reform (the “2014 Tax Reform”), which became effective as of January 1, 2014. Among the tax reforms approved by the Mexican Congress, one of the most relevant changes was the elimination of the tax consolidation regime allowed for Mexican controlling companies through December 31, 2013 (see Note 23).

(v)      Derivative Financial Instruments
The Group recognizes derivative financial instruments as either assets or liabilities in the consolidated statements of financial position and measures such instruments at fair value. The accounting for changes in the fair value of a derivative financial instrument depends on the intended use of the derivative financial instrument and the resulting designation. For a derivative financial instrument designated as a cash flow hedge, the effective portion of such derivative’s gain or loss is initially reported as a component of  other comprehensive income or loss and subsequently reclassified into income when the hedged exposure affects income. The ineffective portion of the gain or loss is reported in income immediately. For a derivative financial instrument designated as a fair value hedge, the gain or loss is recognized in income in the period of change together with the offsetting loss or gain on the hedged item attributed to the risk being hedged. When a hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss on the hedging instrument that has been recognized in other comprehensive income remains in equity until the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to income or loss. For derivative financial instruments that are not designated as accounting hedges, changes in fair value are recognized in income in the period of change. During the years ended December 31, 2016, 2015 and 2014, certain derivative financial instruments qualified for hedge accounting (see Note 14).

(w)      Comprehensive Income
Comprehensive income for the period includes the net income for the period presented in the consolidated statement of income plus other comprehensive income for the period reflected in the consolidated statement of comprehensive income.

(x)      Share-based Payment Agreements
Key officers and employees of certain subsidiaries of the Company have entered into agreements for the conditional sale of Company’s shares under the Company’s Long-Term Retention Plan. The share-based compensation expense is measured at fair value at the date the equity benefits are conditionally sold to these officers and employees, and is recognized as a charge to consolidated income (administrative expense) over the vesting period (see Note 16). The Group recognized a share-based compensation expense of Ps.1,410,492, Ps.1,199,489 and Ps.844,788 for the years ended December 31, 2016, 2015 and 2014, respectively, of which Ps.1,392,534, Ps.1,184,524 and Ps.821,626 was credited in consolidated stockholders’ equity for those years, respectively.

(y)      Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement and requires an assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets and whether the arrangement conveys the right to use the asset.
76 of 80
 
Leases of property, plant and equipment other assets where the Group holds substantially all the risks and rewards of ownership are classified as finance leases. Finance lease assets are capitalized at the commencement of the lease term at the lower of the present value of the minimum lease payments or the fair value of the lease asset. The obligations relating to finance leases, net of finance charges in respect of future periods, are recognized as liabilities. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term.

Leases where a significant portion of the risks and rewards are held by the lessor are classified as operating leases. Rentals are charged to the income statement on a straight line basis over the period of the lease.

Leasehold improvements are depreciated at the lesser of its useful life or contract term.

(z)      New and Amended IFRSs
Below is a list of the new and amended standards that have been issued by the IASB and are effective for annual periods starting on or after January 1, 2017. Management is in the process of assessing the potential impact of these pronouncements on the Group’s consolidated financial statements. Some amendments and improvements to certain IFRSs became effective on January 1, 2016, and they did not have any significant impact on the Group’s consolidated financial statements.

New or Amended Standard
Title of the Standard
  
Effective for Annual Periods Beginning On or After
Amendments to IFRS 10 and IAS 28 (1)
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
  
Postponed
Amendments to IAS 7 (1)
Disclosure Initiative
  
January 1, 2017
Amendments to IAS 12 (1)
Recognition of Deferred Tax Assets for Unrealized Losses
  
January 1, 2017
Annual Improvements (1)
Annual Improvements 2014-2016 Cycle
  
January 1, 2017
IFRS 15
Revenue from Contracts with Customers
  
January 1, 2018
Amendments to IFRS 15
Clarifications to IFRS 15 Revenue from Contracts with Customers
  
January 1, 2018
IFRS 9
Financial Instruments
  
January 1, 2018
Amendments to IAS 40 (2)
Transfers of Investment Property
  
January 1, 2018
IFRIC 22 (1)
Foreign Currency Transactions and Advance Consideration
  
January 1, 2018
Amendments to IFRS 2 (1)
Classification and Measurement of Share-based Payment Transactions
  
January 1, 2018
IFRS 16
Leases
  
January 1, 2019
Amendments to IFRS 4 (2)
Financial Instruments with IFRS 4 Insurance Contracts
  
No earlier than 2020
       

(1)
This new or amended standard is not expected to have any significant impact on the Group’s consolidated financial statements.
(2)
This new or amended standard is not expected to be applicable to the Group’s consolidated financial statements.
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture were issued in September 2014 and address and acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28 (2011), in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognized when a transaction involved a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognized when a transaction involve assets that do not constitute a business, even if these assets are housed in a subsidiary. In December 2015 the IASB postponed the effective date of these amendments indefinitely pending the outcome of its research project on the equity method of accounting.
Amendments to IAS 7 Disclosure Initiative were issued in January 2016 and clarify that companies should provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes.
Amendments to IAS 12 Recognition of Deferred Tax Assets for Unrealized Losses were issued in January 2016 and clarify the requirements on recognition of deferred tax assets for unrealized losses, to address diversity in practice. Earlier application is permitted.
 
77 of 80
 
IFRS 15 Revenue from Contracts with Customers (“IFRS 15”) was issued in May 2014. IFRS 15 provides a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries, and across capital markets. This standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. IFRS 15 is effective on January 1, 2018, with early adoption permitted. When IFRS 15 is adopted, it can be applied either on a fully retrospective basis, requiring the restatement of the comparative periods presented in the consolidated financial statements, or with the cumulative retrospective impact of IFRS 15 applied as an adjustment to equity on the date of adoption; when the latter approach is applied it is necessary to disclose the impact of IFRS 15 on each line item in the consolidated financial statements in the reporting period. The Group is expected to be impacted to some extent by the significant increase in required disclosures. The Company’s management is currently in the process of assessing the changes that are beyond disclosures, and the effect of the adoption of this standard regarding technology systems, processes, and internal controls to capture new data and address changes in financial reporting. The Group has initially reviewed a majority of its revenue arrangements and expects its review to be completed in the third quarter of 2017.
Amendments to IFRS 15 Clarifications to IFRS 15 Revenue from Contracts with Customers were issued in April 2016. These amendments clarify how to: (i) identify a performance obligation (the promise to transfer a good or a service to a customer) in a contract; (ii) determine whether a company is a principal (the provider of a good or service) or an agent (responsible for arranging for the good or service to be provided); and (iii) determine whether the revenue from granting a license should be recognized at a point in time or over time. In addition to the clarifications, these amendments include two additional reliefs to reduce cost and complexity for a company when it first applies IFRS 15. The amendments have the same effective date as IFRS 15.
IFRS 9 Financial Instruments (“IFRS 9”) addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and October 2010. It replaces the parts of IAS 39 Financial Instruments: Recognition and Measurement (“IAS 39”) that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured at amortized cost and those measured at fair value. The determination is made at initial recognition. The basis of classification depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the financial asset. The guidance in IAS 39 on impairment of financial assets and hedge accounting continues to apply. For financial liabilities, this standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. Some amendments to IFRS 9 and IFRS 7 Financial Instruments: Disclosures (“IFRS 7”) were issued in December 2011. These amendments to IFRS 9 modify the mandatory effective date of this standard and the relief from restating prior periods, and also add transition disclosures to IFRS 7 that are required to be applied when IFRS 9 is first applied. The Company’s management is currently evaluating the impact IFRS 9 will have on its consolidated financial statements and disclosures.
Annual Improvements to IFRSs 2014-2016 Cycle were published in December 2016 and set out amendments to certain IFRSs. These amendments result from proposals made during the IASB’s Annual Improvements process, which provides a vehicle for making non-urgent but necessary amendments to IFRSs. The IFRSs amended and the topics addressed by these amendments are as follows:

Annual Improvements 2014-2016 Cycle
Subject of Amendment
IFRS 12 Disclosure of Interests in Other Entities
Clarification of the scope of the Standard.
IFRS 1 First-time Adoption of International Financial Reporting Standards
Deletion of short-term exemptions for first-time adopters.
IAS 28 Investments in Associates and Joint Ventures
Measuring an associate or joint venture at fair value.

Amendments to IAS 40 Investment Property were issued in December 2016 and clarify the requirements on transfers to, or from, investment property.
IFRIC 22 Foreign Currency Transactions and Advance Consideration was issued in December 2016 and addresses the exchange rate to use in transactions that involve advance consideration paid or received in a foreign currency.
Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transactions were issued in June 2016 and clarify how to account for certain types of share-based payment transactions.
IFRS 16 Leases (“IFRS 16”) was issued in January 2016 and replaces IAS 17 Leases. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases. The major change introduced by IFRS 16 is that leases will be brought onto the companies’ statements of financial position, increasing the visibility of their assets and liabilities. IFRS 16 removes the classification of leases as either operating leases or finance leases for the lessee, treating all long-term leases as finance leases. Short-term leases (less than 12 months) and leases of low-value assets are exempt from the requirements. Early application of IFRS 16 is permitted as long as the IFRS 15 Revenue from Contracts with Customers is also applied. The Company’s management is currently evaluating the impact IFRS 16 will have on its consolidated financial statements and disclosures. While the Group is not yet in a position to assess the full impact of the application of the new standard, the Group expects that the impact of recording the lease liabilities and the corresponding right-to-use assets will increase its consolidated total assets and liabilities primarily in connection with its non-cancellable lease commitments and payment commitments for the use of satellite transponders (see Note 26), with a minimal effect on its consolidated equity.
 
78 of 80
 
Amendments to IFRS 4 Financial Instruments with IFRS 4 Insurance Contracts were issued in September 2016 and address concerns arising from implementing the new financial instruments Standard, IFRS 9, before implementing the replacement Standard that the Board is developing for IFRS 4. These concerns include temporary volatility in reported results.

Dividends paid, ordinary shares

[8] 1,084,192,000

Dividends paid, other shares

0

Dividends paid, ordinary shares per share

[9] 0.002991453

Dividends paid, other shares per share

0


79 of 80

Footnotes

[1] ↑
Current assets – Other current non-financial assets: As of December 31, 2017 and December 31, 2016, includes transmission rights and programming for Ps.5,890,866 thousand and  Ps.6,533,173, thousand, respectively.
 
[2] ↑
Non-current assets – Other non-current non-financial assets: As of December 31, 2017 and December 31, 2016, includes transmission rights and programming for Ps.8,158,521 thousand and Ps.7,975,296 thousand, respectively.
 
[3] ↑
Total basic earnings (loss) per share: This information is related to earnings per CPO. The CPO are the securities traded in the Mexican Stock Exchange.
 
[4] ↑
Total diluted earnings (loss) per share: This information  is related to earnings per diluted CPO.
 
[5] ↑
Breakdown of credits:
The Notes due 2021 and 2022 were contracted at a variable rate and the Notes due 2020 and 2027 were contracted at a fixed rate.
The "Senior Notes" due in 2037, 2043, 2025, 2032, 2040, 2045, 2026 and 2046 were contracted at a fixed rate.
The exchange rates for the credits denominated  in foreign currency were as follows:
Ps.19.7051  pesos per US dollar
Bank loans and senior notes are presented net of unamortized finance costs in the aggregate amount of Ps.1,250,746.
For more information on debt; see Note 8 Notes to the Unaudited Condensed Consolidated Financial  Statements.
 
[6] ↑
Notes payable transferred to BBVA Bancomer by original creditor
 
[7] ↑
Monetary foreign currency position:
 
The exchange rates used for translation were as follows :
 
Ps.
19.7051
  
pesos per US dollar
  
 
23.6256
  
pesos per euro
  
 
15.6996
  
pesos per canadian dollar
  
 
1.0566
  
pesos per argentinean peso
  
 
0.6840
  
pesos per uruguayan peso
  
 
0.0320
  
pesos per chilean peso
  
 
0.0066
  
pesos per colombian peso
  
 
6.0743
  
pesos per peruvian nuevo sol
  
 
20.1889
  
pesos per swiss franc
  
 
3.1277
  
pesos per strong bolivar
  
 
5.9388
  
pesos per brazilian real
  
 
26.5955
  
pesos per pound sterling
  
 
3.0232
  
pesos per chinese yuan
  
 
2.4023
  
pesos per swedish krona
  
 
Long-term liabilities include debt in the amount of U.S.$2,440,330 thousand, which has been designated as hedging instrument of foreign currency investments.
[8] and [9] ↑
In April 2017, our stockholders approved the payment of a dividend of Ps.0.35 per CPO and Ps.0.002991452991 per share of Series “A”, “B”, “D” and “L” Shares, not in the form of a CPO, which was paid in cash in May 2017 in the aggregate amount of Ps.1,084,192 thousand.
 
80 of 80
 
MEXICAN STOCK EXCHANGE
 
STOCK EXCHANGE CODE: TLEVISA
QUARTER: 04
YEAR: 2017
GRUPO TELEVISA, S.A.B.
    
 
 
DECLARATION OF THE REGISTRANT´S OFFICERS, RESPONSIBLE FOR THE INFORMATION.
 

WE HEREBY DECLARE THAT, TO THE EXTENT OF OUR FUNCTIONS, WE PREPARED THE INFORMATION RELATED  TO THE REGISTRANT CONTAINED IN THIS REPORT FOR THE FOURTH QUARTER OF 2017, AND BASED ON OUR KNOWLEDGE, THIS INFORMATION FAIRLY PRESENTS THE REGISTRANT´S CONDITION. WE ALSO DECLARE THAT WE ARE NOT AWARE OF ANY RELEVANT INFORMATION THAT HAS BEEN OMITTED OR UNTRUE IN THIS QUARTERLY REPORT, OR INFORMATION CONTAINED IN SUCH REPORT THAT MAY BE MISLEADING TO INVESTORS.




/s/ ALFONSO DE ANGOITIA NORIEGA   /s/ BERNARDO GÓMEZ MARTÍNEZ
ALFONSO DE ANGOITIA NORIEGA
  
BERNARDO GÓMEZ MARTÍNEZ
CO-CHIEF EXECUTIVE OFFICER
  
CO-CHIEF EXECUTIVE OFFICER
     
     
/s/ CARLOS FERREIRO RIVAS   /s/ JOAQUIN BALCÁRCEL SANTA CRUZ
CARLOS FERREIRO RIVAS
  
JOAQUIN BALCÁRCEL SANTA CRUZ
VICE PRESIDENT OF FINANCE
  
VICE PRESIDENT - LEGAL AND
   
GENERAL COUNSEL
 
 
MÉXICO CITY, FEBRUARY 20, 2018
 
 
SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
GRUPO TELEVISA, S.A.B.
 
(Registrant)
     
     
Dated: February 23, 2018
By:
/s/ Joaquín Balcárcel Santa Cruz
  Name:
Joaquín Balcárcel Santa Cruz
 
Title:
General Counsel