Basis of Preparation of the Consolidated Financial Statements and Summary of Significant Accounting Policies and Practices (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Effect of Adoption of IFRS 15

The effect of adopting IFRS 15 as of January 1, 2018 was, as follows:


	Reference		Increase
Assets:
Subscribers, distributors, recoverable taxes, contract assets and other, net		(a), (b), (c)	Ps.	31,261,436

Liabilities:
Current liabilities		(c)	Ps.	562,651
Deferred income taxes		(d)		8,725,841

			Ps.	9,288,492

Equity:
Retained earnings		(a), (b), (c), (d)		21,454,504
Non-controlling interests				518,440

Total equity				21,972,944

Total liabilities and equity			Ps.	31,261,436

Schedule of Impact of Adoption IFRS 15 on Company's Financial Statements

Set out below are, the impacts of adopting IFRS 15 on the Company´s consolidated financial statements for the year ended December 31, 2018:


	Reference		As reported			Figures without adoption of IFRS 15			Adjustments
Operating revenues:
Revenues services		(a), (b)	Ps.	863,647,642		Ps.	881,530,167		Ps.	(17,882,525	)
Sales of equipment		(a), (b)		174,560,039			158,721,765			15,838,274

				1,038,207,681			1,040,251,932			(2,044,251	)

Operating costs and expenses:
Cost of sales and services			Ps.	508,822,430		Ps.	509,100,174		Ps.	(277,744	)
Commercial, administrative and general and other expenses		(c)		234,115,500			240,010,631			(5,895,131	)
Depreciation and amortization				155,712,580			155,712,580			—

				898,650,510			904,823,385			(6,172,875	)

				139,557,171			135,428,547			4,128,624
Financial items, net				38,563,536			38,356,359			207,177
Equity interest in net result of associated companies				267			267			—
Income tax		(d)		46,477,079			45,496,698			980,381
Non-controlling interests				(1,950,626	)		(1,950,626	)		—

Net profit for the year			Ps.	52,566,197		Ps.	49,625,131		Ps.	2,941,066


	Reference		As reported		Balances without adoption of IFRS 15		Adjustments
Assets:
Current assets:
Cash and cash equivalents and equity investments at fair value			Ps.	70,675,896	Ps.	70,675,896	Ps.	—
Subscribers, distributors, recoverable taxes, contract assets and other, net		(a), (b), (c)		216,226,920		185,303,634		30,923,286
Other current assets, net				62,152,708		62,152,708		—

Total current assets				349,055,524		318,132,238		30,923,286
Non-current assets:
Property, plant and equipment, net				640,000,720		640,000,720		—
Intangibles and other assets, net				424,485,276		424,485,276		—
Subscribers, distributors, recoverable taxes, contract assets and other, net		(a), (b), (c)		15,681,872		10,244,609		5,437,263

Total assets			Ps.	1,429,223,392	Ps.	1,392,862,843	Ps.	36,360,549

Liabilities and equity:
Current liabilities:
Short-term debt and current portion of long-term debt			Ps.	96,230,634	Ps.	96,230,634	Ps.	—
Accounts payable and other liabilities				338,116,412		337,448,940		667,472
Deferred revenues				32,743,843		32,315,690		428,153

Total current liabilities				467,090,889		465,995,264		1,095,625
Non-current-liabilities:
Long-term debt				542,691,819		542,691,819		—
Deferred income taxes		(d)		24,573,441		15,382,500		9,190,941
Other liabilities				148,994,821		148,994,821		—

Total liabilities				1,183,350,970		1,173,064,404		10,286,566
Total equity		(d)		245,872,422		219,798,439		26,073,983

Total liabilities and equity			Ps.	1,429,223,392	Ps.	1,392,862,843	Ps.	36,360,549

Schedule of Effect of Adoption of IFRS 9 in Retained Earnings and Other Components of Equity

The effect of adopting IFRS 9 as of January 1, 2018 was, as follows:


	Adjustments		January 1, 2018
Assets
Trade receivables		(a)	Ps.	(2,400,783	)
Deferred tax assets		(b)		544,628

Total assets			Ps.	(1,856,155	)

Equity
Retained earnings		(a), (b)	Ps.	(1,856,155	)

Total adjustment on equity			Ps.	(1,856,155	)

Schedule of Impact in Consolidated Financial Statements upon Application of Hyperinflation

The main impact in the consolidated financial statements of the Company in 2018 of applying hyperinflationary accounting under IAS 29 are shown below:


	Impact of the application of hyperinflation adjustments in 2018
Impact in:
Operating revenues		Ps. 6,286,140
Operating loss		(1,423,252	)
Financial loss		(1,289,317	)
Gain on net monetary positions		4,429,145
Income tax		(770,928	)
Net profit for the year		945,647
Current assets		1,866,674
Non-current assets		19,796,073
Total liabilities		4,890,166
Total equity ⁽ⁱ⁾		16,772,581

(i)	This total includes the initial effect of hyperinflation of Ps. 15,826,934 and the net effect on results due to the hyperinflation of the year of Ps. 945,647.

Summary of Equity Interest in Most Significant Subsidiaries

The equity interest in the most significant subsidiaries at December 31, 2017 and 2018 is as follows:


Company name	Country		Equity interest at December 31
Company name	Country		2017			2018
Subsidiaries:
América Móvil B.V. ^a)		Netherlands		100.0	%		100.0	%
Compañía Dominicana de Teléfonos, S.A. (“Codetel”) ^b)		Dominican Republic		100.0	%		100.0	%
Sercotel, S.A. de C.V. ^a)		Mexico		100.0	%		100.0	%
Radiomóvil Dipsa, S.A. de C.V. and subsidiaries (“Telcel”) ^b)		Mexico		100.0	%		100.0	%
Puerto Rico Telephone Company, Inc. ^b)		Puerto Rico		100.0	%		100.0	%
Servicios de Comunicaciones de Honduras, S.A. de C.V. (“Sercom Honduras”) ^b)		Honduras		100.0	%		100.0	%
TracFone Wireless, Inc. (“TracFone”) ^b)		USA		100.0	%		100.0	%
Claro S.A. (Claro Brasil) ^b)		Brazil		97.7	%		98.2	%
Telecomunicaciones de Guatemala, S.A. (“Telgua”) ^b)		Guatemala		99.3	%		99.3	%
Empresa Nicaragüense de Telecomunicaciones, S.A. (“Enitel”) ^b)		Nicaragua		99.6	%		99.6	%
Compañía de Telecomunicaciones de El Salvador, S.A. de C.V. (“CTE”) ^b)		El Salvador		95.8	%		95.8	%
Comunicación Celular, S.A. (“Comcel”) ^b)		Colombia		99.4	%		99.4	%
Telmex Colombia, S.A. ^b)		Colombia		99.3	%		99.3	%
Consorcio Ecuatoriano de Telecomunicaciones, S.A. (“Conecel”) ^b)		Ecuador		100.0	%		100.0	%
AMX Argentina, S.A. ^b)		Argentina		100.0	%		100.0	%
AMX Paraguay, S.A. ^b)		Paraguay		100.0	%		100.0	%
AM Wireless Uruguay, S.A. ^b)		Uruguay		100.0	%		100.0	%
Claro Chile, S.A. ^b)		Chile		100.0	%		100.0	%
América Móvil Perú, S.A.C ^b)		Peru		100.0	%		100.0	%
Claro Panamá, S.A. ^b)		Panamá		100.0	%		100.0	%
Teléfonos de México, S.A.B. de C.V. ^b)		Mexico		98.8	%		98.8	%
Telekom Austria AG ^b)		Austria		51.0	%		51.0	%

a)	Holding companies

b)	Operating companies of mobile and fixed services

Summary of Annual Depreciation Rates

Annual depreciation rates are as follows:


Network infrastructure	5	%-33%
Buildings and leasehold improvement	2	%-33%
Other assets	10	%-50%

Summary of Most Significant Forward Looking Estimates Used for Impairment Evaluations

The most significant forward-looking estimates used for the 2017 and 2018 impairment evaluations are shown below:


	Average margin on EBITDA	Average margin on CAPEX	Average pre-tax discount rate (WACC)
2017:
Europe (7 countries)	25.59% - 52.46%	7.34% - 14.97%	9.06% - 19.04%
Brazil (fixed line, wireless and TV)	35.28%	22.13%	11.71%
Puerto Rico	23.31%	8.31%	4.42%
Dominican Republic	45.79%	15.55%	19.23%
Mexico (fixed line and wireless)	35.48%	8.72%	16.13%
Ecuador	37.83%	10.07%	23.57%
Peru	29.64%	16.75%	13.61%
El Salvador	40.36%	17.99%	25.14%
Chile	22.04%	12.45%	6.15%
Colombia	41.93%	19.88%	19.06%
Other countries	9.16% - 48.18%	0.43% - 23.43%	7.89% - 24.28%

Average margin on
EBIDTA

Average margin on
CAPEX

Average pre-tax
discount rate
(WACC)las

2018:

Europe (7 countries)

22.13% - 41.51%

8.13% - 19.40%

8.36% - 22.08%

Brazil (fixed line, wireless and TV)

36.43%

21.88%

10.38%

Puerto Rico

23.86%

9.89%

4.81%

Dominican Republic

48.64%

18.43%

17.66%

Mexico (fixed line and wireless)

36.33%

7.93%

16.30%

Ecuador

39.83%

11.26%

24.45%

Peru

30.29%

19.95%

11.52%

El Salvador

45.36%

22.61%

18.01%

Chile

25.91%

14.99%

6.62%

Colombia

45.01%

17.14%

20.29%

Other countries

7.90% - 45.91%

0.61% - 23.96%

9.97% - 31.63%

Summary of Exchange Rates Used forTranslation of Foreign Currencies

The exchange rates used for the translation of foreign currencies against the Mexican peso are as follows:


		Average exchange rate						Closing exchange rate at December 31,
Country or Zone	Currency	2016		2017		2018		2017		2018
Argentina⁽¹⁾	Argentine Peso (AR$)		1.2632		1.1489		0.7311		1.0610		0.5221
Brazil	Real (R$)		5.3868		5.9346		5.2937		5.9815		5.0797
Colombia	Colombian Peso (COP$)		0.0061		0.0064		0.0065		0.0066		0.0061
Guatemala	Quetzal		2.4548		2.5755		2.5591		2.6940		2.5440
U.S.A. ⁽²⁾	US Dollar		18.6529		18.9400		19.2397		19.7867		19.6829
Uruguay	Uruguay Peso		0.6206		0.6606		0.6274		0.6869		0.6074
Nicaragua	Cordoba		0.6515		0.6307		0.6097		0.6428		0.6088
Honduras	Lempira		0.8109		0.8007		0.7994		0.8330		0.8031
Chile	Chilean Peso		0.0276		0.0292		0.0300		0.0322		0.0283
Paraguay	Guaraní		0.0033		0.0034		0.0034		0.0035		0.0033
Peru	Sol (PEN$)		5.5232		5.8054		5.8517		6.0976		5.8406
Dominican Republic	Dominican Peso		0.4048		0.3983		0.3876		0.4095		0.3898
Costa Rica	Colon		0.0338		0.0331		0.0332		0.0346		0.0322
European Union	Euro		20.6334		21.3649		22.7101		23.7539		22.5586
Bulgaria	Lev		10.5483		10.9223		11.6110		12.1406		11.5327
Belarus	New Belarusian Ruble		9.3929		9.8087		9.4451		9.9882		9.1319
Croatia	Croatian Kuna		2.7392		2.8619		3.0613		3.1954		3.0435
Macedonia	Macedonian Denar		0.3350		0.3471		0.3688		0.3861		0.3667
Serbia	Serbian Denar		0.1676		0.1762		0.1920		0.2009		0.1907

(1)	Year-end rates are used for the translation of revenues and expenses if IAS 29 “Financial Reporting in Hyperinflationary Economies” is applied.

Financial reporting in hyperinflationary economies

Financial statements of Argentina subsidiaries are restated before translation to the reporting currency of the Company and before consolidation in order to reflect the same value of money for all items. Items recognized in the statements of financial position which are not measured at the applicable year-end measuring unit are restated based on the general price index. All non-monetary items measured at cost or amortized cost is restated for the changes in the general price index from the date of transaction or the last hyperinflationary calculation to the reporting date. Monetary items are not restated. All items of shareholders’ equity are restated for the changes in the general price index since their addition or the last hyperinflationary calculation until the end of the reporting period. All items of comprehensive income are restated for the change in a general price index from the date of initial recognition to the reporting date. Gains and losses resulting from the net-position of monetary items are reported in the consolidated statements of operations in financial result in exchange differences. In accordance with IFRS prior year financial statements were not restated.

(2)	Includes U.S.A., Ecuador, El Salvador, Puerto Rico and Panama.

Summary of Retrospective Reclassification of Financial Statements

Thefollowing amounts in the consolidated statements of comprehensive income for the years ended December 31, 2016 and 2017, have been retrospectively reclassified to conform to the presentation for the year ended December 31, 2018.

In the Consolidated Statements of Comprehensive Income:


	As reported 2016		Retrospective reclassification			2016 As adjustments
Operating revenues:
Mobile voice services	Ps.	242,302,380	Ps.	(242,302,380	)	Ps.	—
Fixed voice services		95,299,154		(95,299,154	)		—
Mobile data services		256,936,895		(256,936,895	)		—
Fixed data services		126,278,206		(126,278,206	)		—
Pay television		78,268,778		(78,268,778	)		—
Other related services		32,799,952		(32,799,952	)		—
Revenues services		—		831,885,365			831,885,365

	Ps.	831,885,365	Ps.	—		Ps.	831,885,365


	As reported 2017		Retrospective reclassification			2017 As adjustments
Operating revenues:
Mobile voice services	Ps.	221,751,600	Ps.	(221,751,600	)	Ps.	—
Fixed voice services		89,856,743		(89,856,743	)		—
Mobile data services		308,526,994		(308,526,994	)		—
Fixed data services		139,277,613		(139,277,613	)		—
Pay television		86,882,606		(86,882,606	)		—
Other related services		32,115,767		(32,115,767	)		—
Revenues services		—		878,411,323			878,411,323

	Ps.	878,411,323	Ps.	—		Ps.	878,411,323