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

12 Months Ended

Dec. 31, 2019

Summary of Reconciliation of Operating Lease Commitments to Lease liabilities

The lease liabilities as of January 1, 2019 can be reconciled to the operating lease commitments as of December 31, 2018, as follows:


Operating lease commitments as of December 31, 2018	Ps. 137,949,821
Lease commitments not in scope of IFRS 16	(29,624,063	)
Lease payments not included in the operating lease commitments as at 31 December 2018, resulting from differences between IAS 17 and IFRS 16 at implementation date	60,064,406
Short-term leases and leases of low-value assets	(5,498,423	)
Effect of discounting	(43,504,081	)

Lease liabilities as of January 1, 2019	Ps. 119,387,660

Summary of Equity Interest in Most Significant Subsidiaries

The equity interest in the most significant subsidiaries at December 31, 2018 and 2019 is as follows:


Company name	Country		Equity interest at December 31
Company name	Country		2018			2019
Subsidiaries:
América Móvil B.V. a)		Netherlands		100.0	%		100.0	%
Compañía Dominicana de Teléfonos, S.A. (“Codetel”) b)		Dominican Republic		100.0	%		100.0	%
Sercotel, S.A. de C.V. a)		Mexico		100.0	%		100.0	%
Radiomóvil Dipsa, S.A. de C.V. and subsidiaries (“Telcel”) b)		Mexico		100.0	%		100.0	%
Puerto Rico Telephone Company, Inc. b)		Puerto Rico		100.0	%		100.0	%
Servicios de Comunicaciones de Honduras, S.A. de C.V. (“Sercom Honduras”) b)		Honduras		100.0	%		100.0	%
TracFone Wireless, Inc. (“TracFone”) b)		USA		100.0	%		100.0	%
Claro S.A. (Claro Brasil) b)		Brazil		98.2	%		98.2	%
NII Brazil Holding S.A.R.L a)		Luxembourg		—			100.0	%
Nextel Telecomunicações Ltda b)		Brazil		—			100.0	%
Telecomunicaciones de Guatemala, S.A. (“Telgua”) b)		Guatemala		99.3	%		99.3	%
Claro Guatemala, S.A. b)		Guatemala		—			100	%
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.		Colombia		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 2018 and 2019 impairment evaluations are shown below:


	Average margin on EBIDTA	Average margin on CAPEX	Average pre-tax discount rate (WACC)
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%


	Average margin on EBIDTA		Average margin on CAPEX		Average pre-tax discount rate (WACC)
2019:
Europe (7 countries)		29.40% - 44.50%		10.90% - 19.30%		5.77% - 14.96%
Brazil (fixed line, wireless and TV)		40.43%		23.50%		11.00%
Puerto Rico		21.94%		17.94%		4.39%
Dominican Republic		47.23%		16.17%		13.84%
Mexico (fixed line and wireless)		38.81%		9.84%		11.85%
Ecuador		44.98%		11.65%		19.85%
Peru		32.51%		18.51%		8.86%
El Salvador		44.04%		25.03%		16.05%
Chile		26.85%		18.00%		4.16%
Colombia		45.58%		19.25%		17.27%
Other countries		7.40% - 52.40%		0.57% - 31.0%		6.41% - 34.75%

Summary of quantitative information about right-of-use assets

Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:


Assets		Useful life
Towers and sites		5 to 12 years
Property		10 to 25 years
Other equipment		5 to 15 years

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	2017		2018		2019		2018		2019
Argentina (1)	Argentine Peso (AR$)		1.1489		0.7311		0.4110		0.5221		0.3147
Brazil	Real (R$)		5.9346		5.2937		4.8907		5.0797		4.6754
Colombia	Colombian Peso (COP$)		0.0064		0.0065		0.0059		0.0061		0.0058
Guatemala	Quetzal		2.5755		2.5591		2.5023		2.5440		2.4478
U.S.A. (2)	US Dollar		18.9400		19.2397		19.2641		19.6829		18.8452
Uruguay	Uruguay Peso		0.6606		0.6274		0.5479		0.6074		0.5051
Nicaragua	Cordoba		0.6307		0.6097		0.5817		0.6088		0.5569
Honduras	Lempira		0.8007		0.7994		0.7806		0.8031		0.7597
Chile	Chilean Peso		0.0292		0.0300		0.0275		0.0283		0.0252
Paraguay	Guaraní		0.0034		0.0034		0.0031		0.0033		0.0029
Peru	Sol (PEN$)		5.8054		5.8517		5.7708		5.8406		5.6814
Dominican Republic	Dominican Peso		0.3983		0.3876		0.3737		0.3898		0.3542
Costa Rica	Colon		0.0331		0.0332		0.0326		0.0322		0.0327
European Union	Euro		21.3649		22.7101		21.5642		22.5586		21.1311
Bulgaria	Lev		10.9223		11.6110		11.0257		11.5327		10.8076
Belarus	New Belarusian Ruble		9.8087		9.4451		9.2159		9.1319		8.9420
Croatia	Croatian Kuna		2.8619		3.0613		2.9069		3.0435		2.8406
Macedonia	Macedonian Denar		0.3471		0.3688		0.3504		0.3667		0.3431
Serbia	Serbian Denar		0.1762		0.1920		0.1830		0.1907		0.1795

(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.