The carrying and estimated fair values of the Group’s non-derivative financial instruments as of December 31, 2017 and 2016, were as follows:
|
|
|
2017 |
|
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 9) |
|
36,395,183 |
|
36,395,183 |
|
38,298,606 |
|
38,298,606 |
|
||||
|
Long-term loan and interest receivable from GTAC (see Note 10) |
|
929,516 |
|
937,137 |
|
881,740 |
|
889,054 |
|
||||
|
Held-to-maturity investments (see Note 9) |
|
287,605 |
|
284,443 |
|
335,833 |
|
334,807 |
|
||||
|
Available-for-sale investments (see Note 9) |
|
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 |
|
— |
|
— |
|
||||
|
Short and 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: |
|
Carrying |
|
Notional |
|
Maturity Date |
|
||
|
Assets: |
|
|
|
|
|
|
|
|
|
|
Derivatives not recorded as accounting hedges: |
|
|
|
|
|
|
|
|
|
|
TVI’s options (a) |
|
Ps. |
100,700 |
|
U.S.$ |
96,250 |
|
December 2018 |
|
|
Empresas Cablevisión options (b) |
|
110,137 |
|
U.S.$ |
115,000 |
|
December 2018 |
|
|
|
Options (c) |
|
795,010 |
|
U.S.$ |
779,250 |
|
December 2018 |
|
|
|
Forward (d) |
|
397,037 |
|
U.S.$ |
230,400 |
|
January 2018 through December 2018 |
|
|
|
Derivatives recorded as accounting hedges (cash flow hedges): |
|
|
|
|
|
|
|
|
|
|
TVI’s interest rate swap (e) |
|
61,997 |
|
Ps. |
1,296,783 |
|
April 2019 through May 2022 |
|
|
|
TVI’s interest rate swap (f) |
|
22,112 |
|
Ps. |
1,370,868 |
|
April 2022 |
|
|
|
Interest rate swap (g) |
|
344,958 |
|
Ps. |
6,000,000 |
|
April 2021 |
|
|
|
Interest rate swap (h) |
|
241,561 |
|
Ps. |
5,000,000 |
|
May 2022 |
|
|
|
Interest rate swap (i) |
|
43,222 |
|
Ps. |
2,000,000 |
|
October 2022 |
|
|
|
Interest rate swap (j) |
|
31,906 |
|
Ps. |
1,500,000 |
|
October 2022 |
|
|
|
Interest rate swap (k) |
|
3,077 |
|
Ps. |
1,000,000 |
|
February 2023 |
|
|
|
Forward (l) |
|
112,157 |
|
U.S.$ |
224,000 |
|
January 2018 through November 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
Ps. |
2,263,874 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016: |
|
Carrying |
|
Notional |
|
Maturity Date |
|
||
|
Assets: |
|
|
|
|
|
|
|
|
|
|
Derivatives not recorded as accounting hedges: |
|
|
|
|
|
|
|
|
|
|
TVI’s interest rate swap (e) |
|
Ps. |
72,003 |
|
Ps. |
1,376,667 |
|
April 2019 through May 2022 |
|
|
Derivatives recorded as accounting hedges (cash flow hedges): |
|
|
|
|
|
|
|
|
|
|
Interest rate swap (g) |
|
351,773 |
|
Ps. |
6,000,000 |
|
April 2021 |
|
|
|
Interest rate swap (h) |
|
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 (m) |
|
Ps. |
5,508 |
|
Ps. |
1,250,000 |
|
September 2017 through March 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
Ps. |
5,508 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
In July 2017, TVI entered into a derivative transaction agreement (“Call” and “Put” options) of a total principal amount of U.S.$96.3 million. As a result of the change in fair value of these agreements, in the year ended December 31, 2017, TVI recorded a gain of Ps.70,409 in consolidated other finance income or expense. |
|
(b) |
In July 2017, Empresas Cablevision entered into a derivative transaction agreement (“Call” and “Put” options) of a total principal amount of U.S.$115.0 million. As a result of the change in fair value of these agreements, in the year ended December 31, 2017, Empresas Cablevision recorded a gain of Ps.80,464 in consolidated other finance income or expense. |
|
(c) |
In July 2017, the Company entered into a derivative transaction agreement (“Call” and “Put” options) of a total principal amount of U.S.$779.3 million. As a result of the change in fair value of these agreements, in the year ended December 31, 2017, the Company recorded a gain of Ps.558,280, in consolidated other finance income or expense. |
|
(d) |
As of December 31, 2017, the Company had foreign currency contracts (forward) in the aggregate notional amount of U.S.$230.4 million at an average rate of Ps.18.5439. As a result of the change in fair value of these agreements, in the year ended December 31, 2017, the Company recorded a gain of Ps.397,037, in consolidated other finance income or expense. |
|
(e) |
TVI has entered into several derivative transaction agreements (interest rate swaps)with two financial institutions from August 2013 through May 2022 to hedge the variable interest rate exposure resulting from Mexican peso loans of a total principal amount of Ps.1,296,783 and Ps.1,376,667, as of December 31, 2017 and 2016, respectively. Under these agreements, the Company receives monthly payments based on aggregate notional amounts of Ps.1,296,783 and Ps.1,376,667 and makes payments based on the same notional at annual fixed rate of in the range of 4.850% and 5.585%. TVI has recognized the change in fair value of this transaction as an accounting hedge, and recorded a gain of Ps.3,024 in other comprehensive income or loss as of December 31, 2017. In the years ended as of December 31, 2017, 2016 and 2015, TVI recorded a gain (loss) of Ps.10,204, Ps.64,877 and Ps.(28,659), respectively, in consolidated other finance income or expense. |
|
(f) |
In March and April 2017, TVI entered into several derivative transaction agreements (interest rate swaps) with two financial institutions through April 2022 to hedge the variable interest rate exposure resulting from Mexican peso loan of a total principal amount of Ps.1,370,868. |
Under these agreements, the Company receives monthly payments based on aggregate notional amount of Ps.1,370,868 at an annual variable rate of 28-days TIIE and makes monthly payments based on the same notional amount at an annual fixed rate of 7.2663%. The Company has recognized the change in fair value of this transaction as an accounting hedge, and recorded a gain of Ps.22,112 in other comprehensive income or loss as of December 31, 2017. TVI recorded a loss of Ps.459 for this transaction agreement in consolidated other finance income or expense.
|
(g) |
The Company has entered into a derivative transaction agreement (interest rate swap) through April 2021 to hedge the variable interest rate exposure resulting from TIIE plus 0.35% Notes due 2021. Under this transaction, the Company receives 28-day TIIE payments based on a principal amount of Ps.6,000,000 and makes 28-day payments based on the same notional amount at an annual fixed rate of 5.9351%. The Company has recognized the change in fair value of this transaction as an accounting hedge, and recorded a cumulative gain (loss) of Ps.344,958 and Ps.351,773 in other comprehensive income or loss as of December 31, 2017 and 2016, respectively. In the years ended December 31, 2017 and 2016, the Company recorded a gain (loss) of Ps.58,278 and Ps.(102,641), respectively, for this transaction agreement in consolidated other finance income of expense. |
|
(h) |
In February and March 2017, January and February 2016, and June 2015, the Company entered into derivative transaction agreements (interest rate swaps) through May 2022 to hedge the variable interest rate exposure resulting from TIIE plus 0.35% Notes due 2022. Under these transactions, the Company receives 28-day TIIE payments based on a principal amount of Ps.5,000,000 and Ps.2,500,000 as of December 31, 2017 and 2016, respectively, and makes 28-day payments based on the same notional amount at an annual weighted average fixed rate of 6.5716% and 5.6148%, respectively. The Company has recognized the change in fair value of this transaction as an accounting hedge, and recorded a cumulative gain of Ps.241,561 and Ps.223,994 in other comprehensive income or loss as of December 31, 2017 and 2016, respectively. In the years ended December 31, 2017 and 2016, the Company recorded a gain (loss) of Ps.26,457 and Ps.(29,059), respectively, for this transaction agreement in consolidated other finance income or expense. |
|
(i) |
In November 2017, the Company entered into a derivative transaction agreement (interest rate swap) through October 2022 to hedge the variable interest rate exposure resulting from a Mexican peso loan of a total principal amount of Ps.2,000,000. Under this transaction, the Company receives monthly payments based on an aggregate notional amount of Ps.2,000,000, at an annual variable rate of 28 days of TIIE and makes monthly payments based on the same notional amount at an annual fixed rate of 7.3275%. The Company has recognized the change in fair value of this transaction as an accounting hedge, and recorded a cumulative gain of Ps.43,222 in other comprehensive income or loss as of December 31, 2017. |
|
(j) |
In November and December 2017, the Company entered into a derivative transaction agreement (interest rate swap) through October 2022 to hedge the variable interest rate exposure resulting from a Mexican peso loan of a total principal amount of Ps.1,500,000. Under this transaction, the Company receives monthly payments based on an aggregate notional amount of Ps.1,500,000, at an annual variable rate of 28 days of TIIE and makes monthly payments based on the same notional amount at an annual fixed rate of 7.35%. The Company has recognized the change in fair value of this transaction as an accounting hedge, and recorded a cumulative gain of Ps.31,906, in other comprehensive income or loss as of December 31, 2017. |
|
(k) |
In December 2017, the Company entered into a derivative transaction agreement (interest rate swap) through February 2023 to hedge the variable interest rate exposure resulting from a Mexican peso loan of a total principal amount of Ps.1,000,000. Under this transaction, the Company receives monthly payments based on an aggregate notional amount of Ps.1,000,000, at an annual variable rate of 28 days of TIIE and makes monthly payments based on the same notional amount at an annual fixed rate of 7.795%. The Company has recognized the change in fair value of this transaction as an accounting hedge, and recorded a cumulative gain of Ps.3,077 in other comprehensive income or loss as of December 31, 2017. |
|
(l) |
In March, April, May and June 2017, the Company entered into derivative contracts of foreign currency forward to fix the exchange rate for the purchase of U.S.$224.0 million at an average exchange rate of Ps.19.6907. The Company has recognized the change in fair value of this transaction as an accounting hedge, and recorded a cumulative gain of Ps.112,157 for this transaction agreement in other comprehensive income or loss as of December 31, 2017. In 2017, the Company recorded a loss of Ps.292,326 in consolidated other finance income or expense. |
|
(m) |
The Company has entered into a derivative transaction agreement (interest rate swap) through March 2018 to hedge the variable interest rate exposure resulting from a Mexican peso loan of a total principal amount of Ps.1,250,000 as of December 31, 2016. Under this transaction, the Company receives monthly payments based on an aggregate notional amount of Ps.2,500,000 through March 2016, Ps.1,250,000 through September 2017, and Ps.625,000 through March 2018, at an annual variable rate of TIIE and makes monthly payments based on the same notional amount at an annual fixed rate of 7.4325%. The Company has recognized the change in fair value of this transaction in other comprehensive income or loss, and in consolidated other finance income or expense at the time of the interest payments. The Company has recognized the change in fair value of this transaction as an accounting hedge, and recorded a cumulative loss of Ps.5,508 in other comprehensive income or loss as of December 31, 2016. In the years ended December 31, 2017 and 2016, the Company recorded a loss of Ps.5,140 and Ps.79,999, respectively, for this transaction agreement in consolidated other finance expense (see Note 13). |