UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

Report of Foreign Private Issuer

Pursuant To Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of September 2016

Commission File Number: 1-16269

 

 

AMÉRICA MÓVIL, S.A.B. DE C.V.

(Exact Name of the Registrant as Specified in the Charter)

 

 

America Mobile

(Translation of Registrant’s Name into English)

Lago Zurich 245

Plaza Carso / Edificio Telcel

Colonia Ampliación Granada

Delegación Miguel Hidalgo

11529 México, D.F., México

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F   ☒             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):   ☐

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):   ☐

 

 

 

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

Unaudited Condensed Consolidated Statements of Financial Position

(In thousands of Mexican pesos)

 

		At June 30, 2016 Unaudited				At 31 December, 2015 Audited
Assets
Current assets:
Cash and cash equivalents		Ps.	46,909,470			Ps.	45,160,032
Marketable securities and other short-term investments (Note 3)			59,115,473				56,347,469
Accounts receivable:
Subscribers, distributors, recoverable taxes and other, net			191,317,888				155,241,127
Related parties (Note 4)			848,864				845,633
Derivative financial instruments			4,281,680				40,882,008
Inventories, net			36,823,990				35,577,472
Other current assets, net			25,436,429				17,277,913
Total current assets			364,733,794				351,331,654
Non-current assets:
Property, plant and equipment, net (Note 5)			646,935,859				573,528,878
Intangibles, net			141,633,529				124,745,040
Goodwill			146,444,878				137,113,716
Investment in associated companies			3,483,823				3,110,570
Deferred income taxes			100,052,813				81,407,012
Other assets, net			36,205,814				25,249,943
Total assets		Ps.	1,439,490,510			Ps.	1,296,486,813
Liabilities and equity
Current liabilities:
Short-term debt and current portion of long-term debt (Note 8)		Ps.	105,727,031			Ps.	119,589,786
Accounts payable			210,590,679				189,938,381
Accrued liabilities			68,850,019				52,243,228
Income tax and other taxes payable			19,779,507				20,666,548
Derivative financial instruments			9,458,649				7,450,790
Related parties (Note 4)			1,649,281				2,246,834
Deferred revenues			35,127,690				33,399,892
Total current liabilities			451,182,856				425,535,459
Non-current liabilities:
Long-term debt ( Note 8)			609,293,022				563,626,958
Deferred income taxes			11,451,236				11,589,865
Deferred revenues			1,695,863				1,052,940
Derivative financial instruments			3,321,819				3,314,146
Asset retirement obligations			14,611,922				11,569,897
Employee benefits			130,097,650				118,943,362
Total non-current liabilities			770,471,512				710,097,168
Total liabilities			1,221,654,368				1,135,632,627
Equity (Note 9):
Capital stock			96,336,660				96,338,477
Retained earnings:
Prior years			146,207,646				137,276,667
Profit for the period			12,498,515				35,054,772
Total retained earnings			158,706,161				172,331,439
Other comprehensive loss items			(89,269,188	)			(156,391,921	)
Equity attributable to equity holders of the parent			165,773,633				112,277,995
Non-controlling interests			52,062,509				48,576,191
Total equity			217,836,142				160,854,186
Total liabilities and equity		Ps.	1,439,490,510			Ps.	1,296,486,813

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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

Unaudited Condensed Consolidated Statements of Comprehensive Income

(In thousands of Mexican pesos, except for earnings per share)

 

		For the six-month periods ended June 30, Unaudited
		2016				2015 Adjusted (Note 2)
Operating revenues:
Mobile voice services		Ps.	118,607,447			Ps.	127,779,064
Fixed voice services			47,236,415				50,875,160
Mobile data voice services			119,055,664				109,752,408
Fixed data services			59,185,920				54,028,919
Paid television			35,486,438				34,012,708
Sale of equipment, accessories and computers			62,257,118				52,607,017
Other related services			14,538,776				10,815,740
			456,367,778				439,871,016
Operating costs and expenses:
Cost of sales and services			225,073,702				202,902,694
Commercial, administrative and general expenses			106,869,918				98,954,250
Other expenses			1,707,091				1,450,978
Depreciation and amortization			68,916,561				62,533,521
			402,567,272				365,841,443
Operating income			53,800,506				74,029,573
Interest income			1,901,195				2,219,823
Interest expense			(16,089,165	)			(14,132,547	)
Foreign currency exchange loss, net			(13,665,208	)			(30,767,941	)
Valuation of derivatives, interest cost from labor obligations and other financial items, net			(5,515,948	)			7,486,295
Equity interest in net gain (loss) of associated companies			70,022				(1,388,837	)
Profit before income tax			20,501,402				37,446,366
Income tax (Note 7)			6,770,070				14,505,029
Net profit for the period		Ps.	13,731,332			Ps.	22,941,337
Net profit for the period attributable to:
Equity holders of the parent		Ps.	12,498,515			Ps.	22,275,505
Non-controlling interests			1,232,817				665,832
		Ps.	13,731,332			Ps.	22,941,337
Basic and diluted earnings per share attributable to equity holders of the parent from continuing operations		Ps.	0.19			Ps.	0.33
Other comprehensive income items:
Net other comprehensive income to be reclassified to profit or loss in subsequent periods:
Effect of translation of foreign entities and affiliates		Ps.	73,650,211			Ps.	(13,853,692	)
Effect of fair value of derivatives, net of deferred taxes			24,742				18,340
Unrealized loss on available for sale securities, net of deferred taxes			(2,238,657	)			—
Items that will not be reclassified to profit or loss in subsequent periods:
Re-measurement of defined benefit plan, net of deferred taxes			(1,555,184	)			(1,364	)
Total other comprehensive income (loss) items for the period, net of deferred taxes			69,881,112				(13,836,716	)
Total comprehensive income for the period		Ps.	83,612,444			Ps.	9,104,621
Comprehensive income for the period attributable to:
Equity holders of the parent		Ps.	79,621,248			Ps.	6,316,951
Non-controlling interests			3,991,196				2,787,670
		Ps.	83,612,444			Ps.	9,104,621

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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

Unaudited Condensed Consolidated Statements of Changes in Equity

For the six-month period ended June 30, 2016

(In thousands of Mexican pesos)

 

		Capital stock				Legal reserve				Retained earnings				Effect of derivative financial instruments acquired for hedging purposes				Unrealized loss on available for sale securities				Re-measurement of defined benefit plan				Effect of translation				Total equity attributable to equity holders of the parent				Non-controlling interests				Total equity
Balance at December 31, 2015 (audited)		Ps.	96,338,477			Ps.	358,440			Ps.	171,972,999			Ps.	(60,788	)		Ps.	4,011			Ps.	(82,844,947	)		Ps.	(73,490,197	)		Ps.	112,277,995			Ps.	48,576,191			Ps.	160,854,186
Net profit for the period											12,498,515																				12,498,515				1,232,817				13,731,332
Effect of fair value of derivatives, net of deferred taxes															24,423																24,423				319				24,742
Unrealized loss on available for sale securities, net of deferred taxes																			(2,238,657	)											(2,238,657	)							(2,238,657	)
Re-measurement of defined benefit plan, net of deferred taxes																							(1,418,208	)							(1,418,208	)			(136,976	)			(1,555,184	)
Effect of translation of foreign entities and affiliates																											70,755,175				70,755,175				2,895,036				73,650,211
Comprehensive income for the period											12,498,515				24,423				(2,238,657	)			(1,418,208	)			70,755,175				79,621,248				3,991,196				83,612,444
Dividends declared											(18,405,802	)																			(18,405,802	)			(566,945	)			(18,972,747	)
Repurchase of shares			(1,817	)							(5,293,281	)																			(5,295,098	)							(5,295,098	)
Other acquisitions of non-controlling interests											(2,424,710	)																			(2,424,710	)			62,067				(2,362,643	)
Balance at June 30, 2016 (unaudited)		Ps.	96,336,660			Ps.	358,440			Ps.	158,347,721			Ps.	(36,365	)		Ps.	(2,234,646	)		Ps.	(84,263,155	)		Ps.	(2,735,022	)		Ps.	165,773,633			Ps.	52,062,509			Ps.	217,836,142

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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

Unaudited Condensed Consolidated Statements of Changes in Equity

For the six-month period ended June 30, 2015

(In thousands of Mexican pesos)

 

		Capital stock				Legal reserve				Retained earnings				Effect of derivative financial instruments acquired for hedging purposes				Unrealized gain on available for sale securities				Re-measurement of defined benefit plan				Effect of translation				Total equity attributable to equity holders of the parent				Non-controlling interests				Total equity
Balance at December 31, 2014 (audited)		Ps.	96,382,631			Ps.	358,440			Ps.	191,975,968			Ps.	(1,556,693	)		Ps.				Ps.	(62,992,683	)		Ps.	(39,783,387	)		Ps.	184,384,276			Ps.	50,254,772			Ps.	234,639,048
Net profit for the period											22,275,505																				22,275,505				665,832				22,941,337
Effect of fair value of derivatives, net of deferred taxes															18,103																18,103				237				18,340
Re-measurement of defined benefit plan, net																							13,892								13,892				(15,256	)			(1,364	)
Effect of translation of foreign entities and affiliates																											(15,990,549	)			(15,990,549	)			2,136,857				(13,853,692	)
Comprehensive income for the period											22,275,505				18103								13,892				(15,990,549	)			6,316,951				2,787,670				9,104,621
Dividends declared											(37,632,000	)																			(37,632,000	)			(469,762	)			(38,101,762	)
Repurchase of shares			(5,704	)							(22,095,041	)																			(22,100,745	)							(22,100,745	)
Konin Klijke KPN															1,457,853								(1,486,452	)			282,023				253,424								253,424
Other acquisitions of non-controlling interests											(1,697,471	)																			(1,697,471	)			101,406				(1,596,065	)
Balance at June 30, 2015 (unaudited)		Ps.	96,376,927			Ps.	358,440			Ps.	152,826,961			Ps.	(80,737	)		Ps.				Ps.	(64,465,243	)		Ps.	(55,491,913	)		Ps.	129,524,435			Ps.	52,674,086			Ps.	182,198,521

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands of Mexican pesos)

 

		For the six-month periods ended June 30, Unaudited
		2016				2015 Adjusted (Note 2)
Operating activities
Profit before income tax		Ps.	20,501,402			Ps.	37,446,366
Items not requiring the use of cash:
Depreciation			60,324,651				57,107,189
Amortization of intangible assets and other assets			8,591,910				5,426,332
Equity interest in net (gain) loss of associated companies			(70,022	)			1,388,837
(Gain) loss on sale of property, plant and equipment			(20,707	)			36,332
Net period cost of labor obligations			6,854,668				4,735,973
Foreign currency exchange loss, net			15,852,960				20,367,338
Interest income			(1,901,195	)			(2,219,823	)
Interest expense			16,089,165				14,132,547
Employee profit sharing			1,465,011				1,881,853
Gain in valuation of derivative financial instruments, capitalized interest expense and other, net			(924,384	)			(5,917,122	)
Working capital changes:
Accounts receivable from subscribers, distributors and other			(12,321,997	)			(4,158,053	)
Prepaid expenses			(6,602,457	)			(2,096,270	)
Related parties			(600,784	)			(185,738	)
Inventories, net			1,397,319				1,685,588
Other assets			(1,725,048	)			(1,967,653	)
Employee benefits			(1,911,560	)			(2,708,884	)
Accounts payable and accrued liabilities			(11,776,006	)			(18,192,834	)
Employee profit sharing paid			(3,245,446	)			(3,819,138	)
Derivative financial instruments			28,713,685				(4,937,179	)
Deferred revenues			(690,733	)			(1,052,938	)
Interest received			2,314,740				2,391,075
Income taxes paid			(21,972,555	)			(26,342,286	)
Net cash flows provided by operating activities			98,342,617				73,001,512
Investing activities
Purchase of property, plant and equipment			(52,505,460	)			(51,154,545	)
Acquisition of intangibles			(4,813,709	)			(10,661,545	)
Dividends received from associates and marketable securities			5,527,226				653,915
Proceeds from sale of plant, property and equipment			97,415				14,626
Acquisition of business, net of cash acquired			(778,798	)			(471,370	)
Partial sale of shares of associated company							633,270
Assets available for sale							40,593,389
Net cash flows used in investing activities			(52,473,326	)			(20,392,260	)
Financing activities
Loans obtained			34,711,056				115,406,006
Repayment of loans			(57,200,483	)			(75,173,108	)
Interest paid			(15,869,777	)			(14,927,050	)
Repurchase of shares			(5,172,021	)			(23,081,081	)
Dividends paid			(319,047	)			(843,057	)
Derivative financial instruments			(205,792	)			(263,743	)
Acquisition of non-controlling interests			(2,362,644	)			(26,067	)
Net cash flows (used in) provided by financing activities			(46,418,708	)			1,091,900
Net (decrease) increase in cash and cash equivalents			(549,417	)			53,701,152
Adjustment to cash flows due to exchange rate fluctuations, net			2,298,855				(1,564,869	)
Cash and cash equivalents at beginning of the period			45,160,032				66,473,703
Cash and cash equivalents at end of the period		Ps.	46,909,470			Ps.	118,609,986
Non-cash transactions related to:
		2016				2015
Investing activities
Acquisition of property, plant and equipment in accounts payable at end of period		Ps.	5,919,201			Ps.	4,521,263

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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

Notes to Unaudited Interim Condensed Consolidated Financial Statements

(In thousands of Mexican pesos and thousands of U.S. dollars, unless otherwise indicated)

 

1.	Description of the business

América Móvil, S.A.B. de C.V. and subsidiaries (hereinafter, the “Company”, “América Móvil” or “AMX”) was incorporated under laws of Mexico on September 25, 2000. The Company provides telecommunications services in 25 countries throughout the United States, Latin America, the Caribbean and Central and Eastern Europe. These telecommunication services include mobile and fixed voice services, mobile and fixed data services, internet access and paid TV, as well as other related services.

 

•

The voice services provided by the Company, both mobile and fixed, mainly include the following: airtime, local, domestic and international long-distance services, and network interconnection services.

 

•

The data services provided by the Company include the following: value added services, corporate networks, data and Internet services.

 

•

Paid TV represents basic services, as well as pay-per-view and additional programming and advertising services.

 

•

Other services mainly include revenues from advertising in telephone directories publishing and call center services.

 

•

Equipment, accessories and computer sales, mainly include equipment and computer sales.

In order to provide these services, América Móvil has the necessary licenses, permits and concessions (collectively referred to herein as “licenses”) to build, install, operate and exploit public and/or private telecommunications networks and provide miscellaneous telecommunications services (mostly mobile and fixed telephony services), as well as to operate frequency bands in the radio-electric spectrum to be able to provide fixed wireless telephony and to operate frequency bands in the radio-electric spectrum for point-to-point and point-to-multipoint microwave links. The Company holds licenses in the countries where it has a presence, and such licenses have different dates of expiration through 2046.

Certain licenses require the payment to the respective governments of a share in sales determined as a percentage of revenues from services under concession. The percentage is set as either a fixed rate or in some cases based on certain size of the infrastructure in operation.

The corporate offices of América Móvil are located in Mexico City at Lago Zurich # 245, Colonia Ampliación Granada, Miguel Hidalgo, zip code 11529.

The accompanying unaudited interim condensed consolidated financial statements were approved for their issuance by the Company’s Chief Financial Officer on September 22, 2016. Subsequent events have been considered through that date.

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Relevant events

a) On May 9, 2016, the Company´s subsidiary in Peru entered into an agreement to acquire 100% of the shareholders shares of Peru OLO and TVS Wireless S.A.C for Ps. 1,984,715. These companies provide telecommunication services throughout Peru and have spectrum in the 2.5 GHz band.

b) On May 26, 2016, the Company’s subsidiary in Peru acquired in a public auction 30 MHz of spectrum in the 700 MHz band. The cost of the spectrum was Ps. 5,521,115

 

2.	Basis of Preparation of the Unaudited Interim Condensed Consolidated Financial Statements and Changes in Significant Accounting Policies and Practices

 

a)	Basis of preparation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with the International Accounting Standard No. 34, Interim Financial Reporting (“IAS 34”), and using the same accounting policies applied in preparing the annual financial statements, except as explained below.

The unaudited interim condensed consolidated financial statements do not include all the information and disclosures required in the annual consolidated financial statements, and should be read in conjunction with the Company’s audited annual consolidated financial statements as of December 31, 2014 and 2015, and for the three-year period ended December 31, 2015, as included in the Company’s Annual Report on Form 20-F for the year ended December 31, 2015 (the “2015 Form 20-F”).

The preparation of these unaudited interim condensed consolidated financial statements in accordance with IAS 34 requires the use of critical estimates and assumptions that affect the amounts reported for certain assets and liabilities, as well as certain income and expenses. It also requires that management exercise judgment in the application of the Company’s accounting policies.

The Mexican peso is the functional and reporting currency of the Company and the ones used in these unaudited interim condensed consolidated financial statements.

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b)	Retrospective adjustments

The following amounts in the unaudited condensed consolidated statements of comprehensive income and cash flows for the period ended June 30, 2015 have been adjusted to conform to the presentation for the six month period ended June 30, 2016:

 

		2015, As previously reported				Retrospective adjustments				2015, As adjusted
Operating revenues:
Mobile voice services		Ps.	123,636,008			Ps.	4,143,056			Ps.	127,779,064
Fixed voice services			53,176,873				(2,301,713	)			50,875,160
Mobile data voice services			114,039,444				(4,287,036	)			109,752,408
Fixed data services			51,858,715				2,170,204				54,028,919
Paid television			33,626,202				386,506				34,012,708
Sale of equipment, accessories and computers			52,472,222				134,795				52,607,017
Other related services			11,225,758				(410,018	)			10,815,740
			440,035,222				(164,206	)			439,871,016
Operating costs and expenses:
Cost of sales and services			201,847,915				1,054,779				202,902,694
Commercial, administrative and general expenses			99,954,918				(1,000,668	)			98,954,250
Other expenses			1,651,283				(200,305	)			1,450,978
Depreciation and amortization			62,521,466				12,055				62,533,521
			365,975,582				(134,139	)			365,841,443
Operating income			74,059,640				(30,067	)			74,029,573
Interest income			2,169,963				49,860				2,219,823
Interest expense			(14,133,600	)			1,053				(14,132,547	)
Foreign currency exchange (loss) gain, net			(30,767,989	)			48				(30,767,941	)
Valuation of derivatives, interest cost from labor obligations and other financial items, net			7,507,189				(20,894	)			7,486,295
Equity interest in net loss of associated companies			(1,388,837	)			—				(1,388,837	)
Profit before income tax		Ps.	37,446,366			Ps.				Ps.	37,446,366

In the Consolidated Statements of Cash Flows:

 

		2015, As previously reported				Reclassifications and retrospective other adjustments				2015, as Reclassified
Depreciation		Ps.	57,095,134			Ps.	12,055			Ps.	57,107,189
Purchase of property, plant and equipment			(51,142,490	)			(12,055	)			(51,154,545	)

Retrospective adjustments to the June 30, 2015 unaudited interim condensed consolidated statements of comprehensive income and statement of operations and cash flows reflect reclassifications made to the mapping of certain accounts from Telekom Austria and subsidiaries to coincide with the Company´s reporting structure at June 30, 2015.

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c)	New standards, interpretations and amendments thereof

IFRS 9 Financial Instruments

In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments, which reflects all phases of the financial instruments project and replaces IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. The standard introduces new requirements for classification and measurement, impairment and hedge accounting. IFRS 9 is effective for annual periods beginning on or after January 1, 2018, with early application permitted. Retrospective application is required, but comparative information is not compulsory. The adoption of IFRS 9 will have an effect on the classification and measurement of the Company’s financial assets and financial liabilities, which is still in process of being determined.

IFRS 15 Revenue from Contracts with Customers

IFRS 15 was issued in May 2014 and established a new five-step model that will apply to revenue arising from contracts with customers. Under IFRS 15, revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The principles in IFRS 15 provide a more structured approach to measuring and recognizing revenue. The new revenue standard is applicable to all entities and will supersede all current revenue recognition requirements under IFRS. Either a full or modified retrospective application is required for annual periods beginning on or after January 1, 2018, with early adoption permitted. The Company plans to apply a modified retrospective method which will provide disclosures of the effects of the standard on each of the reporting periods of the consolidated financial statements for prior years. The Company is still evaluating the impact of this new standard.

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations

Amendments were issued to IFRS 5, Non-current assets held for sale ad discontinued operations, on September 2014. The amendment clarifies that changing from one of these disposal methods to the other would not be considered a new plan of disposal, rather it is a continuation of the original plan. There is, therefore, no interruption of the application of the requirements in IFRS 5. This amendment must be applied prospectively. This amended is effective for annual periods beginning on or after January 1, 2016. The implementation of this amendment was not applicable to the Company as it does not have assets held for sale or discontinued operations.

IFRS 7 Financial Instruments: Disclosures

Servicing contracts

Amendments were issued to IFRS 7, Financial Instruments: Disclosures, in September 2014. The amendment clarifies that a servicing contract that includes a fee can constitute continuing involvement in a financial asset. An entity must assess the nature of the fee and the arrangement against the guidance for continuing involvement in IFRS 7 in order to assess whether the disclosures are required. The assessment of which servicing contracts constitute continuing involvement must be done retrospectively. However, the required disclosures would not need to be provided for any period beginning before the annual period in which the entity first applies the amendments. This amended is effective for annual periods beginning on or after January 1, 2016. The implementation of this amendment was not applicable to the Company, as the Company does not have any material servicing contracts.

IAS 19 Employee Benefits

The amendment clarifies that market depth of high quality corporate bonds is assessed based on the currency in which the obligation is denominated, rather than the country where the obligation is located. When there is no deep market for high quality corporate bonds in that currency, government

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bond rates must be used. This amendment must be applied prospectively. This amended is effective for annual periods beginning on or after January 1, 2016. Given the Company has developed discount rates to measure the present value of its defined benefit plan obligations based on the currency in which each corresponding defined benefit plan obligation is denominated, the implementation of this amendment did not have a material impact on the Company’s interim condensed consolidated financial statements, as the Company has been developing discount rates for its defined benefit plan obligations based on the currency in which the pension obligations have been denominated.

IAS 1 Disclosure Initiative

In December 2014, the IAS 1 Presentation of Financial Statements clarified, rather than significantly changed, existing IAS 1 requirements:

 

a)

The materiality requirements in IAS 1.

 

b)

That specific line items in the statements of comprehensive income and the statement of financial position may be disaggregated.

 

c)

That entities have flexibility as to the order in which they present the notes to financial statements.

 

d)

That the share of other comprehensive income of associates and joint ventures accounted for using the equity method must be presented in aggregate as a single line item, and classified between those items that will or will not be subsequently reclassified to profit or loss.

This amended is effective for annual periods beginning on or after January 1, 2016. The Company is currently working in the amount of both quantitative and qualitative materiality and under this premise considers that any disclosure should be adjusted, but adequate.

Furthermore, the amendments clarify the requirements that apply when additional subtotals are presented in the statement of financial position and the statement(s) of profit or loss and OCI. These standards are effective for annual periods beginning on or after January 1, 2016, with early adoption permitted. The Company is in the process of evaluating the impact of this new standard on the annual consolidated financial statements of the Company for the year ended December 31, 2016.

Amendments to IFRS 10, IFRS 12 and IAS 28 Investment Entities: Applying the Consolidation Exception.

The amendments address issues that have arisen in applying the investment entities exception under IFRS 10. The amendments to IFRS 10 clarify that the exemption from presenting consolidated financial statements applies to a parent entity that is a subsidiary of an investment entity, when the investment entity measures all of its subsidiaries at fair value. Furthermore, the amendments to IFRS 10 clarify that only a subsidiary of an investment entity that is not an investment entity itself and that provides support services to the investment entity is consolidated. All other subsidiaries of an investment entity are measured at fair value. The amendments to IAS 28 allow the investor, when applying the equity method, to retain the fair value measurement applied by the investment entity associate or joint venture to its interests in subsidiaries. The implementation of this amendment is not applicable, as the Company does not claim an exemption from presenting consolidated financial statements and as the Company is not an investment entity, as defined by IFRS.

IFRS 16 Leases

IFRS 16 Leases was issued in January 2016 and requires the entities to recognize most leases on their balance sheets. Lessees will have a single accounting model for all leases, with certain exemptions. Lessor accounting is substantially unchanged. IFRS 16 does not require a company to recognize assets

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and liabilities for (a) short-term leases (i.e., leases of 12 months or less), and (b) leases of low-value assets. The new standard will be effective from January 1, 2019, with limited early application permitted if IFRS 15 is also applied at the same time. The Company has yet to quantify the impact these amendments will have on its consolidated financial statements.

 

3.	Marketable securities and other short-term investments

As of June 30, 2016 and December 31, 2015, marketable securities and other short-term investments include an available for sale investments in Koninklijke KPN N.V. (KPN) for Ps. 46,201,023 and Ps. 44,089,801, and other short-term investments for Ps. 12,914,450 and Ps.12,257,668, respectively. The investment in KPN is carried at fair value with changes in fair value being recognized through other comprehensive income (equity) in the unaudited condensed Company’s consolidated financial statements.

During the six periods ended June 30, 2016 and 2015 the Company received dividends from KPN for an amount of Ps. 5,527,226 and Ps. 653,915, respectively; and is included within “Valuation of derivatives, interest cost from labor obligations, and other financial items, net” in the condensed consolidated statement of comprehensive income.

 

4.	Related Parties

The following is an analysis of the balances with related parties at June 30, 2016 and December 31, 2015. All of the companies are considered as associates or affiliates of América Móvil since the Company’s principal shareholders are also direct or indirect shareholders in the related parties:

 

		2016				2015
Accounts receivable:
Sanborns Hermanos, S.A.		Ps.	105,799			Ps.	140,058
Sears Roebuck de México, S.A. de C.V.			149,241				219,338
Patrimonial Inbursa, S.A.			191,893				8,399
Other			401,931				477,838
Total		Ps.	848,864			Ps.	845,633
		2016				2015
Accounts payable:
Fianzas Guardiana Inbursa, S.A. de C.V.		Ps.	293,305			Ps.	506,658
Operadora Cicsa, S.A. de C.V.			313,259				435,875
Procisa do Brasil Projetos, Construções e Instalações, LTDA			286,555				598,297
Conductores Mexicanos Eléctricos y de Telecomunicaciones, S.A. de C.V.			180,002				136,687
PC Industrial, S.A. de C.V.			86,099				136,212
Microm, S.A. de C.V.			117,471				33,583
Grupo Financiero Inbursa, S.A.B. de C.V.			36,395				34,622
Other			336,195				364,900
Total		Ps.	1,649,281			Ps.	2,246,834

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For the six-month periods ended June 30, 2016 and 2015, the Company conducted the following transactions with related parties:

 

		2016				2015
Investments and expenses:
Construction services, purchases of materials, inventories and property, plant and equipment (1)		Ps.	5,813,738			Ps.	2,753,291
Insurance premiums, fees paid for administrative and operating services, brokerage services and others			818,228				951,558
Interconnection costs			—				986
Other services (2)			2,845,083				638,598
		Ps.	9,477,049			Ps.	4,344,433
Revenues:
Sale of long-distance services and other telecommunications services		Ps.	184,232			Ps.	131,059
Sale of materials and other services			475,400				281,734
Call termination revenues and other							29,885
		Ps.	659,632			Ps.	442,678

 

(1)	In 2016, this amount includes Ps. 3,024,211 (Ps. 1,067,072 in 2015) for network construction and maintenance services performed by Microm, S.A. de C.V and Condumex S.A. de C.V.

(2)	In October 2015, the Company completed the spin-off process of Telesites, S.A.B. de C.V. (“Telesites”); therefore, since such date, Telesites is considered a related party. In 2016, this amount includes Ps. 2,254,011 for the rent of towers with such company.

 

5.	Property, plant and equipment, net

During the six-month periods ended June 30, 2016 and 2015, the Company made cash payments related to investments in plant and equipment in order to increase and update its transmission network and other mobile and fixed assets for an amount of Ps.52,505,460 and Ps. 51,154,545, respectively.

 

6.	Business combinations

Acquisitions

a) In January 2016, in order to expand and strengthen its operations in Brazil, the Company through its Brazilian subsidiary, acquired a controlling interest of 99.99% in Brazil Telecomunicações S.A. (“BRTel”), a company operating in the market for Pay TV, Internet and broadband services and serving various municipalities of Brazil under the BLUE brand. The amount paid for the business acquisition was Ps. 778,798, net of acquired cash. The Company is in process to determine the fair value of the assets and liabilities of BRTel.

b) In May 2016, the Company acquired an additional non-controlling interest of 1.8% of Tracfone Wireless Inc. thereby obtaining 100% of its capital stock. The amount paid was US$ 124,673 (Ps. 2,300,553). This additional acquisition of shares was accounted as an equity transaction, as the Company has control over this subsidiary.

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7.	Income Tax

An analysis of income tax expense charged to results of operations for the six-month periods ended June 30, 2016 and 2015 is as follows:

 

		2016				2015
Current period income tax		Ps.	14,542,961			Ps.	26,311,742
Deferred income tax			(7,772,891	)			(11,806,713	)
Total		Ps.	6,770,070			Ps.	14,505,029

Other comprehensive (loss) income

 

		2016				2015
Deferred tax related to items recognized in OCI during the year
Effect of fair value of derivatives		Ps.	10,595			Ps.	(7,859	)
Unrealized gain on available for sale securities			(957,705	)			—
Other			(109,768	)			—
Deferred tax charged to OCI		Ps.	(1,056,878	)		Ps.	(7,859	)

The Company’s effective tax rate was 33.0% and 38.7% for the six months ended June 30, 2016 and 2015, respectively. Significant differences between the effective tax rate and the statutory tax rate for such interim periods relates to the tax inflation effects and non-deductible.

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8.

Debt

The Company’s short- and long-term debt consists of the following:

 

As of June 30, 2016
Currency		Loan		Interest rate		Maturity				Total
U.S. dollars
		Fixed-rate Senior notes (i)		2.375% - 6.375%			2042			Ps.	224,678,832
		Floating rates Senior notes (i)		L + 1.0%			2016				14,183,475
		Lines of credit (iii)		1.5% - 8.5%			2024				14,791,685
		Subtotal U.S. dollars									253,653,992
Mexican pesos
		Fixed-rate Senior notes (i) (ii)		6.00% - 8.6%			2037				72,307,950
		Floating rate Senior notes (i) (ii)		TIIE + 1.25%			2016				2,000,000
		Lines of credit (iii)		TIIE + 0.05% - 1.00%			2016				2,811,048
		Subtotal Mexican pesos									77,118,998
Euros
		Fixed-rate Senior notes (i)		1.00% - 6.375%			2073				280,773,605
		Lines of credit (iii)		3.10% - 5.41%			2019				7,999,602
		Subtotal Euros									288,773,207
Sterling Pounds
		Fixed-rate Senior notes (i)		4.375% - 6.375%			2073				69,225,286
		Subtotal Sterling pounds									69,225,286
Swiss francs
		Fixed-rate Senior notes (i)		1.125% y 2.00%			2018				15,888,592
		Subtotal Swiss francs									15,888,592
Brazilian reais
		Lines of credit (iii)		3.00% - 9.50%			2020				3,140,906
		Subtotal Brazilian reais									3,140,906
Other currencies
		Fixed-rate Senior notes (i)		1.53% - 3.96%			2039				7,041,489
		Financial Leases		5.05% - 8.97%			2027				177,583
		Subtotal other currencies									7,219,072
		Total debt									715,020,053
		Less: Short-term debt and current portion of long-term debt									105,727,031
		Long-term debt								Ps.	609,293,022

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As of December 31, 2015
Currency		Loan		Interest rate		Maturity				Total
U.S. dollars
		Fixed-rate Senior notes (i)		2.375% - 6.375%			2042			Ps.	205,099,106
		Floating rates Senior notes (i)		L + 1.0%			2016				12,904,875
		Lines of credit (iii)		1.5% - 8.0% & L + 0.20% - 0.28%			2024				39,488,198
		Subtotal U.S. dollars									257,492,179
Mexican pesos
		Fixed-rate Senior notes (i) (ii)		6.00% - 9.00%			2037				81,782,648
		Floating rate Senior notes (i) (ii)		TIIE + 1.25%			2016				2,000,000
		Lines of credit (iii)		TIIE + 0.05% - 1.00%			2016				2,632,549
		Subtotal Mexican pesos									86,415,197
Euros
		Fixed-rate Senior notes (i)		1.00% - 6.375%			2073				237,077,578
		Lines of credit (iii)		3.10% - 5.41%			2019				7,316,507
		Subtotal Euros									244,394,085
Sterling Pounds
		Fixed-rate Senior notes (i)		4.375% - 6.375%			2073				69,689,766
		Subtotal Sterling pounds									69,689,766
Swiss francs
		Fixed-rate Senior notes (i)		1.125% y 2.00%			2018				14,085,385
		Subtotal Swiss francs									14,085,385
Brazilian reais
		Lines of credit (iii)		3.00% - 9.50%			2020				2,752,089
		Subtotal Brazilian reais									2,752,089
Colombian pesos
		Fixed-rate Senior notes (i)		7.59%			2016				2,458,485
		Subtotal Colombian pesos									2,458,485
Other currencies
		Fixed-rate Senior notes (i)		1.53% - 3.96%			2039				5,695,406
		Financial Leases		5.05% - 8.97%			2027				234,152
		Subtotal other currencies									5,929,558
		Total debt									683,216,744
		Less: Short-term debt and current portion of long-term debt									119,589,786
		Long-term debt								Ps.	563,626,958

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L = LIBOR (London Interbank Offer Rate)

TIIE = Mexican Interbank Rate

Euribor = Euro Interbank Offered Rate

Except for the fixed-rate notes, interest rates on the Company’s debt are subject to variances in international and local rates. The Company’s weighted average cost of borrowed funds as of June 30, 2016 and December 31, 2015, was approximately 4.1% and 4.2%, respectively.

Such rates do not include commissions or the reimbursements for Mexican tax withholdings (typically a tax rate of 4.9%) that the Company must pay to international lenders.

The following is an analysis of the Company’s short-term debt maturities as of June 30, 2016 and December 31, 2015:

 

		2016				2015
Domestic Senior Notes		Ps.	2,000,000			Ps.	2,000,000
International Senior Notes			84,395,922				75,878,612
Lines of credit			19,241,307				41,573,097
Financial Leases			89,802				138,077
Total		Ps.	105,727,031			Ps.	119,589,786
Weighted average interest rate			3.5	%			3.5	%

The Company’s long-term debt maturities as of June 30, 2016 are as follows:

 

Years		Amount
2017		Ps.	19,673,025
2018			32,869,972
2019			54,136,184
2020			108,394,697
2021 and thereafter			394,219,144
Total		Ps.	609,293,022

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(i) Senior Notes

The outstanding Senior Notes as of June 30, 2016 and December 31, 2015 are as follows:

 

Currency*		2016				2015
U.S. dollars		Ps.	238,862,307			Ps.	218,003,981
Mexican pesos			74,307,950				83,782,648
Euros			280,773,605				237,077,578
Sterling pounds			69,225,286				69,689,766
Swiss francs			15,888,592				14,085,385
Japanese yens			3,316,807				2,590,564
Colombian pesos							2,458,485
Chilean pesos			3,724,681				3,104,842

 

*	Thousands of Mexican pesos

In March 2016, AMX placed an international bond for a total amount of EUR 1,500,000, divided in two tranches, the first one for EUR 850,000 with a coupon of 1.5% and maturity in 2024, and a second one for EUR 650,000 with a coupon of 2.125% and maturity in 2028.

In September 2015, the Company completed the placement of EUR 750,000 principal amount of exchangeable bonds that will be mandatorily exchangeable into ordinary shares of KPN at maturity. The bonds have a maturity of 3 years and will pay a coupon of 5.5% per year payable quarterly in arrears, as well as the corresponding cash dividends paid by KPN net of withholding taxes. The reference price of the KPN shares for its exchange was set at €3.3374 but could be as high as €4.2552 (reference price plus 27.5%). As a result of the Company’s mandatory exchangeable bond, the Company placed 224,726 million of ordinary shares of KPN in a trust in favor of the bond trustee and the bond holders. The aforementioned conditions allowed the Company to derecognize a portion of its investment in shares in KPN corresponding to the 224,726 million of ordinary shares of KPN on its Consolidated Statement of Financial Position as of December 31, 2015.

The exchangeable bonds described above have provisions that will allow for their settlement in cash if AMX wishes to retain ownership of the shares.

In May 2015, the Company placed 5 year bonds for an amount of EUR 3,000,000 which may be exchanged for ordinary shares of KPN, at an exercise price of €4.9007, 45% higher than the reference price on the date of issuance. On December 31, 2015, the closing price of the stock of KPN was €3.4920. Given the terms of the bond, we have identified an embedded option with a fair value of EUR 165,000 reflected as a liability within derivative financial instruments on the Consolidated

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Statement of Financial Position as of June 30, 2016. Under the terms of the exchangeable bond agreement, none of the exchanged property (specifically, the KPN shares) has been or will be charged or otherwise placed in custody or set aside to secure or satisfy the Company’s obligations. At any time, the Company may or may not be the owner of the whole or any part of this property and may sell or otherwise dispose of the same or take any action or exercise any rights or options in respect of the same at any time.

In the first quarter of 2015 the Company placed Ps. 3,500,000 under the Global Notes Program with the reopening of the bond maturing in 2024 and a coupon of 7.125%. The Global Notes Program of Mexican pesos, that was announced in November 2012 has the advantage of being registered both with the SEC in the US and with the National Banking and Securities Commission (“CNBV”) in Mexico, allowing seamless operation for domestic and international investors of such Notes.

(ii) Domestic Senior Notes

As of June 30, 2016 and December 31, 2015, debt under Domestic Senior Notes aggregated to Ps. 22,936,250 and Ps. 22,910,948, respectively. In general, these issues bear a fixed rate or floating rate determined as a differential on the TIIE rate.

(iii) Lines of credit

As of June 30 2016 and December 31, 2015, debt under lines of credit aggregated to Ps. 28,743,241 and Ps. 52,189,343, respectively.

The Company has two undrawn revolving syndicated facilities –one for the Euro equivalent of U.S. 2,100,000 and the other for U.S.2,500,000, maturing in 2016 and 2019, respectively. These loans bear interest at variable rates based on LIBOR and EURIBOR. Telekom Austria has also an undrawn revolving syndicated facility in Euros for 1,000,000 at a variable rate based on EURIBOR.

Restrictions

A portion of the debt is subject to certain restrictions with respect to maintaining certain financial ratios, as well as restrictions on selling a significant portion of groups of assets, among others. As of June 30, 2016, the Company was in compliance with all these requirements.

A portion of the debt is also subject to early maturity or repurchase at the option of the holders in the event of a change in control of the Company, as defined in each instrument. The definition of change in control varies from instrument to instrument; however, no change in control shall be considered to have occurred as long as Carso Global Telecom or its current shareholders continue to hold the majority of the Company’s voting shares.

Covenants

In conformity with the credit agreements, the Company is obliged to comply with certain financial and operating commitments. Such covenants limit, in certain cases, the ability of the Company or the guarantor to: pledge assets, carry out certain types of mergers, sell all or substantially all of its assets, and sell control of Telcel.

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Such covenants do not restrict the ability of AMX’s subsidiaries to pay dividends or other payment distributions to AMX. The more restrictive financial covenants require the Company to maintain a consolidated ratio of debt to EBITDA (defined as operating income plus depreciation and amortization) that does not exceed 4 to 1, and a consolidated ratio of EBITDA to interest paid that is not below 2.5 to 1 (in accordance with the clauses included in the credit agreements).

Several of the financing instruments of the Company may be accelerated, at the option of the debt holder in the case that a change in control occurs.

As of June 30, 2016, the Company was in compliance with all the covenants.

9. Equity

a) Pursuant to the Company’s bylaws, the capital stock of the Company consists of a minimum fixed portion of Ps. 362,873 (nominal amount), represented by a total of 95,489,724,196 shares (including treasury shares available for placement in accordance with the provisions of the Ley del Mercado de Valores y las Disposiciones de carácter general aplicables a las emisoras de valores y a otros participantes en el Mercado de valores issued by the Comisión Nacional Bancaria y de Valores), of which (i) 23,384,632,660 are “AA” shares (full voting rights); (ii) 642,279,095 are “A” shares (full voting rights); and (iii) 71,462,812,441 are “L” shares (limited voting rights), all of them fully subscribed and paid.

b) As of June 30, 2016 and December 31, 2015, the Company’s capital stock was represented by 65’564,000,000 (22,684,632,660 shares “AA” shares, 603,065,365 “A” shares and 42,276,301,975 “L” shares), and 66,000,000,000 (23’384,632,660 “AA” shares, 625,416,402 “A” shares and 41,989,950,938 “L” shares), respectively.

c) As of June 30, 2016 and December 31, 2015, the Company’s treasury held for placement in accordance with the provisions of the Ley del Mercado de Valores y las Disposiciones de carácter general aplicables a las emisoras de valores y a otros participantes en el Mercado de valores issued by the Comisión Nacional Bancaria y de Valores), a total amount of (i) 29,925,724,196 shares (29,925,668,196 “L” shares and 56,000 “A” shares), and 29’489,724,196 (29,486,009,139 “L” shares and 3,715,057 “A” shares), respectively.

d) The holders of “AA” and “A” shares are entitled to full voting rights. The holders of “L” shares may only vote in limited circumstances, and they are only entitled to appoint two members of the Board of Directors and their respective alternates. The matters in which the shareholders who are entitled to vote are the following: extension of the term of the Company, early dissolution of the Company, change of corporate purpose of the Company, change of nationality of the Company, transformation of the Company, a merger with another company, and the cancellation of the registration of the shares issued by the Company in the Registro Nacional de Valores and any other foreign stock exchanges where they may be registered, except for quotation systems or other markets not organized as stock exchanges where they may be registered. Within their respective series, all shares confer the same rights to their holders.

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The Company’s bylaws contain restrictions and limitations related to the subscription and acquisition of “AA” shares by non-Mexican investors.

e) Pursuant to the Company’s bylaws, “AA” shares must at all times represent no less than 20% and no more than 51% of the Company’s capital stock, and they also must represent at all times no less than 51% of the common shares (entitled to full voting rights, represented by “AA” and “A” shares), representing said capital stock.

“AA” shares may only be subscribed to or acquired by Mexican investors, Mexican corporations and/or trusts expressly empowered for such purposes in accordance with the applicable legislation in force. “A” shares, which may be freely subscribed, may not represent more than 19.6% of capital stock and may not exceed 49% of the common shares representing such capital. Common shares (entitled to full voting rights, represented by “AA” and “A” shares), may represent no more than 51% of the Company’s capital stock.

Lastly, “L” shares, which have limited voting rights and may be freely subscribed, and “A” shares may not exceed 80% of the Company’s capital stock. For purposes of determining these restrictions, the percentages mentioned above refer only to the number of the Company’s shares outstanding.

Dividends

a) On April 18, 2016, the Company’s shareholders approved, among other resolutions, the(i) payment of a cash dividend of Ps.0.28, per share to each of the shares of its capital stock (“AA”, “A” and “L”), payable in two equal installments of Ps.0.14; and (ii) increase the amount of funds available for the acquisition of the Company’s buyback program by Ps. 12 billion.

b) On April 30, 2015, the Company’s shareholders approved, among other resolutions, the (i) payment of cash dividend of Ps.0.26 pesos, per share to each of the shares of its capital stock series (“AA”, “A” and “L”), payable in two equal installments of Ps.0.13; (ii) payment of an extraordinary cash dividend of Ps.0.30 to each of the shares of its capital stock series (“AA”, “A” and “L”), payable in a single installment; and (iii) increase the amount of funds available for the acquisition of the Company’s buyback program by Ps.35 billion.

10. Components of other comprehensive income (loss)

An analysis of the components of other comprehensive income (loss) for the six-month periods ended June 30, 2016 and 2015 is as follows:

 

		2016				2015
Valuation of derivative financial instruments, net of deferred tax		Ps.	24,423			Ps.	18,103
Unrealized loss on available for sale securities, net of deferred taxes			(2,238,657	)			—
Translation effect of foreign subsidiaries			70,755,175				(15,990,549	)
Re-measurement of defined benefit plans, net of income tax effect			(1,418,208	)			13,892
Non-controlling interest of the items above			2,758,379				2,121,838
Other comprehensive income (loss)		Ps.	69,881,112			Ps.	(13,836,716	)

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11. Financial Assets and Liabilities

Set out below is the categorization of the financial instruments, other those than carrying value amounts that are reasonable approximations of fair value, held by América Móvil as of June 30, 2016 and December 31, 2015:

 

June 30, 2016

Carrying value

Fair value through profit or loss

Fair value through OCI

Financial Assets:

Cash and cash equivalents

Ps.

46,909,470

Ps.

Ps.

Marketable securities and other short term investments

12,914,450

46,201,023

Accounts receivable from subscribers, distributors and other, net

163,942,838

Related parties

848,864

Derivative financial instruments

4,281,680

Total

Ps.

224,615,622

Ps.

4,281,680

Ps.

46,201,023

Financial Liabilities:

Debt

Ps.

715,020,053

Ps.

Ps.

Accounts payable

210,590,679

Related parties

1,649,281

Derivative financial instruments

12,480,357

300,111

Total

Ps.

927,260,013

Ps.

12,480,357

Ps.

300,111

December 31, 2015

Carrying value

Fair value through profit or loss

Fair value through OCI

Financial Assets:

Cash and cash equivalents

Ps.

45,160,032

Ps.

Ps.

Marketable securities and other short term investment

12,257,668

44,089,801

Accounts receivable from subscribers, distributors, and other, net

129,198,593

Related parties

845,633

Derivative financial instruments

40,882,008

Total

Ps.

187,461,926

Ps.

40,882,008

Ps.

44,089,801

Financial Liabilities:

Debt

Ps.

683,216,744

Ps.

Ps.

Accounts payable

189,938,381

Related parties

2,246,834

Derivative financial instruments

10,664,337

100,599

Total

Ps.

875,401,959

Ps.

10,664,337

Ps.

100,599

Fair value hierarchy

The Company’s valuation techniques used to determine and disclose the fair value of its financial instruments are based on the following hierarchy:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Variables other than quoted prices in Level 1 that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices); and

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Level 3: Variables used for the asset or liability that are not based on any observable market data (non-observable variables).

The fair value for the financial assets (other those with carrying value amounts that are reasonable approximations of fair value) and financial liabilities shown in the consolidated statement of financial position as of June 30, 2016 and December 31, 2015 is as follows:

 

		Measurement of fair value as of June 30, 2016
		Level 1				Level 2				Level 3				Total
Assets:
Cash and cash equivalents		Ps.	46,909,470			Ps.								Ps.	46,909,470
Marketable securities and other short term investment			46,201,023				12,914,450								59,115,473
Derivatives financial instruments							4,281,680								4,281,680
Pension plan assets			202,158,955				7,418,393				111,728				209,689,076
Total		Ps.	295,269,448			Ps.	24,614,523			Ps.	111,728			Ps.	319,995,699
Liabilities:
Debt		Ps.	741,582,092				36,688,712							Ps.	778,270,804
Derivatives financial instruments							12,780,468								12,780,468
Total		Ps.	741,582,092			Ps.	49,469,180							Ps.	791,051,272
		Measurement of fair value as of December 31, 2015
		Level 1				Level 2				Level 3				Total
Assets:
Cash and cash equivalents		Ps.	45,160,032			Ps.				Ps.				Ps.	45,160,032
Marketable securities and other short term investments			44,089,801				12,257,668								56,347,469
Derivatives financial instruments							40,882,008								40,882,008
Pension plan assets			205,383,139				6,749,645				101,656				212,234,440
Total		Ps.	294,632,972			Ps.	59,889,321			Ps.	101,656			Ps.	354,623,949
Liabilities:
Debt		Ps.	656,026,844			Ps.	59,400,873			Ps.				Ps.	715,427,717
Derivatives financial instruments							10,764,936								10,764,936
Total		Ps.	656,026,844			Ps.	70,165,809			Ps.				Ps.	726,192,653

Fair value of derivative financial instruments are valued using valuation techniques with market observable inputs. To determine its Level 2 fair value, the Company applies valuation techniques

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including forward pricing and swaps models, using present value calculations. The models incorporate various inputs including credit quality of counterparties, foreign exchange spot and forward rates and interest rate curves. Fair value of debt Level 2 has been determined using a model based on present value calculation incorporating credit quality of AMX. The Company’s investment in available for sale securities, specifically the investment in KPN, is valued using the quoted prices (unadjusted) in active markets for identical assets. The net realized gains related to derivative financial instruments for the six months period ended June 30, 2016 and 2015 was Ps. 28,753,341 and Ps.3,238,850, respectively.

For the six-month periods ended June 30, 2016 and the year ended December 31,2015, no transfers were made between Level 1 and Level 2 fair value measurement hierarchies.

12. Contingencies

Included in Note 21 on pages F-83 to F-93 of the Company’s 2015 Form 20-F is a disclosure of material contingencies outstanding as of December 31, 2015. As of June 30, 2016, and other than in connection with the following matters, there has not been any other material changes in the status of such contingencies:

 

I.

Colombia – Comcel

Local Arbitration Proceedings (Bogotá Chamber of Commerce)

In 2013, the Colombian Constitutional Court (Corte Constitucional de Colombia) rendered a decision holding that certain laws eliminating the reversion of telecommunication assets in Colombia did not apply to concessions granted prior to 1998, and that the reversion of assets under those earlier concession agreements would be governed by their contractual terms. Following the termination of Comcel S.A.’s (“Comcel”) concession contracts, Comcel and the Ministry of Information Technology and Communications (Ministerio de Tecnologías de la Información y las Comunicaciones) (“ITC Ministry”) initiated discussions with respect to the liquidation (liquidación) of Comcel’s concession contracts. However, as a result of the Constitutional Court’s decision, the ITC Ministry took the position that assets under Comcel’s concession contracts should revert to the Colombian government. In March 2014, the ITC Ministry imposed upon Comcel a rental fee for the assets, which should have been determined six months after the liquidation. Comcel disputes the ITC Ministry’s interpretation of the Constitutional Court’s decision and insists that the reversion of assets should not apply.

In February 2016, the ITC Ministry initiated an arbitration claim against Comcel before the Bogotá Chamber of Commerce pursuant to the concession contracts. In its claim, the ITC Ministry requested (a) the liquidation of the concession contracts; (b) the reversion of all assets related to the concession contracts; and (c) monetary compensation in case the assets cannot be reverted without affecting the continuity of the mobile services. In May 2016, Comcel was served with the ITC Ministry’s arbitration claim and in July 2016 it answered the complaint, rejecting the ITC Ministry’s claim. The proceedings are currently at an evidentiary gathering stage.

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II.

Mexico – AMX

ICSID (Additional Facility) Arbitration Proceedings

On August 18, 2016, AMX initiated an arbitration claim on behalf of itself and its subsidiary Comcel under the ICSID Additional Facility Rules pursuant to the investment chapter of the Mexico-Colombia Free Trade Agreement (the “Mexico – Colombia FTA”) against the Republic of Colombia. The claim relates to certain measures adopted by Colombia since August 2013, including the Colombian Constitutional Court’s decision of 2013 holding that certain laws eliminating the reversion of telecommunication assets did not apply to concessions granted prior to 1998, among them, Comcel’s concessions. As a result, the ITC Ministry refused to recognize Comcel’s property rights over its assets following the termination of its concession contracts and decided that Comcel must pay a fee to rent those assets. Moreover, the ITC Ministry initiated an arbitration pursuant to the concession contracts seeking the reversion of all assets related to those contracts. This has prevented Comcel AMX from using or disposing of their assets freely.

AMX has requested compensation on the basis of Colombia’s breach of the Mexico-Colombia FTA and other international legal obligations. The rights and obligations invoked in the ICSID (Additional Facility) Arbitration are separate from those involved in the local arbitration proceedings administered by the Bogotá Chamber of Commerce. AMX’s international claims do not affect Comcel’s right to defend against any legal actions initiated by the ITC Ministry or any other government entity pursuant to Colombian law.

 

III.

Ecuador – Conecel

Monopolistic Practices Fine

In August 2016, the Superintendencia de Control del Poder del Mercado (“SCPM”), imposed a fine on Conecel of Ps.1,526 (US$82 million), in connection with a proceeding initiated by the SCPM to assess Conecel’s compliance with an administrative injunction issued by the SCPM as part of its decision in admitting the claim filed by the state-owned operator Corporación Nacional de Telecomunciaciones in 2012. Conecel has challenged this decision and posted a guarantee for Ps. 768.7 million (US$41.3 million). The Company has not established a provision in the accompanying financial statements to cover losses arising from this contingency, which the Company considers possible.

13. Segments

América Móvil operates in different countries. The Company has operations in Mexico, Guatemala, Nicaragua, Ecuador, El Salvador, Costa Rica, Brazil, Argentina, Colombia, United States of America, Honduras, Chile, Peru, Paraguay, Uruguay, Dominican Republic, Puerto Rico, Panama, Austria, Bulgaria, Croatia, Belarus, Slovenia, Macedonia and Serbia.

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The Chief Executive Officer, who is the Chief Operating Decision Maker (“CODM”), analyzes the financial and operating information by geographical operating segment, except for Mexico, which shows Corporate and Telcel as one segment and Telmex as another segment. All significant operating segments that (i) represent more than 10% of consolidated revenues, (ii) more than the absolute amount of its reported 10% of profits or loss or (iii) more than 10% of consolidated assets, are presented separately.

The Company has presented the following reporting segments for the purposes of its consolidated financial statements: (i) Mexico (includes Telcel and Corporate operations and Assets), Telmex (Mexico), Brazil, Southern Cone (includes Argentina Chile, Paraguay and Uruguay), Colombia, Andean (includes Ecuador and Peru), Central-América (includes Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama), U.S.A. (excludes Puerto Rico), Caribbean (includes Dominican Republic and Puerto Rico), and Europe (includes Austria, Bulgaria, Croatia, Belarus, Slovenia, Macedonia and Serbia).

The Company considers that the quantitative and qualitative aspects of any aggregated operating segments are similar in nature for all periods presented. In evaluating the appropriateness of aggregating operating segments, the key indicators considered included but were not limited to: (i) the similarity of key financial statement measures and trends, (ii) all entities provide telecommunications services, (iii) similarities of customer base and services, (iv) the methods to distribute services are the same, based on telephone plant in both cases, wireless and fixed lines, (v) similarities of governments and regulatory entities that oversee the activities and services that telecom companies, (vi) inflation trends and, and (vii) currency trends.

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		Mexico				Telmex				Brazil				Southern Cone				Colombia				Andean				Central America				U.S.A.				Caribbean				Europe				Eliminations				Consolidated total
At June 30, 2016 (in Ps.):
External revenues			88,536,299				46,398,283				88,217,305				32,864,152				31,247,737				26,722,756				20,094,100				63,731,816				17,436,231				41,119,099								456,367,778
Intersegment revenues			7,697,673				4,147,343				1,577,853				344,463				130,957				155,608				148,130								11,186								(14,213,213	)
Total revenues			96,233,972				50,545,626				89,795,158				33,208,615				31,378,694				26,878,364				20,242,230				63,731,816				17,447,417				41,119,099				(14,213,213	)			456,367,778
Depreciation and amortization			6,844,107				8,346,247				21,568,626				4,548,377				5,089,279				3,672,565				4,902,200				410,694				2,725,512				10,958,884				(149930	)			68,916,561
Operating income (loss)			25,745,554				6,801,932				2,743,980				3,831,439				5,047,070				3,274,809				2,013,130				(601,112	)			2,462,400				2,411,129				70,175				53,800,506
Interest income			12,540,643				121,493				817,624				1,292,982				30,460				404,062				182,317				120,448				297,166				127,066				(14,033,066	)			1,901,195
Interest expense			14,820,536				621,737				9,548,015				2,255,986				522,848				446,574				206,557								53,084				1,206,299				(13,592,471	)			16,089,165
Income tax			2,513,042				579,470				(1,664,380	)			584,690				2,285,393				782,689				1,146,706				(195,258	)			1,018,596				(280,878	)							6,770,070
Equity interest in net income (loss) of associated companies			31,954				43,628				(117	)			(9,407	)											(4,182	)											8,146								70,022
Net profit attributable to parent			4,527,658				951,703				(3,583,698	)			2,760,079				1,824,000				2,597,622				715,753				(126,451	)			1,415,615				2,577,753				(1,161,519	)			12,498,515
Assets by segment			1,013,863,039				170,123,085				418,457,512				129,890,240				95,201,272				95,430,140				72,946,040				37,724,559				84,327,867				213,777,744				(892,250,988	)			1,439,490,510
Plant, property and equipment, Net			58,097,980				109,798,017				188,557,335				58,992,502				52,765,754				33,142,662				38,425,202				2,054,843				30,543,932				74,557,632								646,935,859
Goodwill			27,105,647				213,926				24,470,177				2,845,646				13,766,309				4,457,484				5,407,571				2,015,003				14,186,723				51,976,392								146,444,878
Trademarks, net			718,904				327,223				391,543								401												722,606				263,853				9,770,583								12,195,113
Licenses and rights, net			6,218,000				57,712				39,202,123				8,683,538				4,463,966				6,473,439				3,836,896								7,052,630				30,650,886								106,639,190
Investment in associated companies			4,882,723				1,930,271				795				89,608				441								15,624												1,018,839				(4,454,478	)			3,483,823
Liabilities by segments			821,066,707				144,459,982				304,322,386				107,597,465				33,809,001				33,550,472				33,015,613				37,716,246				37,509,339				115,718,257				(447,111,100	)			1,221,654,368
At June 30, 2015 (in Ps.):
External revenues			92,014,698				46,675,124				92,490,167				32,103,677				34,417,264				25,270,771				16,062,635				52,996,187				14,175,081				33,665,412								439,871,016
Intersegment revenues			5,561,142				3,594,910				1,659,877				135,337				114,176				109,353				88,815								9,888								(11,273,498	)
Total revenues			97,575,840				50,270,034				94,150,044				32,239,014				34,531,440				25,380,124				16,151,450				52,996,187				14,184,969				33,665,412				(11,273,498	)			439,871,016
Depreciation and amortization			7,192,502				7,618,224				20,018,503				4,085,340				4,712,533				3,025,840				4,493,495				345,379				2,555,103				8,555,411				(68,809	)			62,533,521
Operating income			35,229,590				8,980,909				5,928,158				3,935,403				7,610,097				5,020,373				874,184				1,914,525				2,017,768				2,516,182				2,384				74,029,573
Interest income			8,095,209				120,189				588,476				1,783,710				200,234				411,378				91,425				98,399				171,360				223,413				(9,563,970	)			2,219,823
Interest expense			12,288,922				715,059				7,107,512				1,108,588				243,205				305,425				138,591								18,585				1,360,428				(9,153,768	)			14,132,547
Income tax			7,626,103				2,008,551				(4,071,829	)			1,920,167				2,716,566				2,025,766				1,184,291				752,504				679,584				(336,674	)							14,505,029
Equity interest in net income (loss) of associated companies			(1,424,586	)			22,988				(4,000	)			11,060																								5,701								(1,388,837	)
Net profit attributable to parent			17,113,824				3,615,250				(7,208,162	)			(891,744	)			2,932,565				2,616,296				(417,572	)			1,340,294				1,123,694				2,769,336				(718,276	)			22,275,505
Assets by segment			954,434,584				140,586,739				345,277,165				117,031,177				88,871,654				82,594,975				59,720,918				36,156,767				70,128,033				177,707,760				(782,957,303	)			1,289,552,469
Plant, property and equipment, net			64,328,036				95,465,873				165,189,423				52,391,690				45,191,256				27,893,412				34,198,209				1,599,663				26,545,023				65,012,199								577,814,784
Goodwill			27,101,739				368,376				20,064,019				2,577,562				12,790,100				4,383,720				5,027,811				1,796,846				14,186,723				51,115,022								139,411,918
Trademarks, net			934,179				365,908				399,150				3,229				778								—				646,584				221,982				8,350,362								10,922,172
Licenses and rights, net			3,674,709				87,403				31,389,223				10,900,877				3,733,506				6,238,897				2,978,747								5,856,776				25,351,594								90,211,732
Investment in associated companies			10,778,225				2,046,366				(1,650	)			140,322				1,307								19,607												848,714				(10,677,843	)			3,155,048
Liabilities by segments			727,460,236				105,245,047				242,431,216				89,781,701				34,058,757				30,200,416				28,636,984				30,890,231				27,911,968				115,716,413				(324,979,021	)			1,107,353,948

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14. Subsequent Events

In July 2016, the Company sold shares corresponding to 7.8% of the outstanding common stock of Telekom Austria AG to the market. This sale reduces the overall shareholding of America Movil in Telekom Austria AG from 59.70% to 51.89%. Additionally, in August 2016, the Company sold 0.89% of the outstanding common stock of Telekom Austria AG to the market. Following the successful completion of this transaction, AMX stake was reduced to 51.0%.The amount of cash received for these transactions was Ps. 6,413,855. As America Movil still retains control over Telekom Austria AG, these transactions will be recorded as equity transactions.

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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.

Date: September 29, 2016