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Financial Instruments (Tables) | 12 Months Ended
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Dec. 31, 2019
Financial Instruments |
Schedule of carrying value and estimated fair value of financial instruments | The carrying and estimated fair values of the Group’s non-derivative financial instruments as of December 31, 2019 and 2018, were as follows:
|  | 2019 |  | 2018
|  | Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | Ps. | 27,451,997 |  | Ps. | 27,451,997 |  | Ps. | 32,068,291 |  | Ps. | 32,068,291
Temporary investments |  |  | — |  |  | — |  |  | 30,992 |  |  | 30,992
Trade notes and accounts receivable, net |  |  | 14,486,184 |  |  | 14,486,184 |  |  | 19,748,850 |  |  | 19,748,850
Warrants issued by UHI (see Note 9) |  |  | 33,775,451 |  |  | 33,775,451 |  |  | 34,921,530 |  |  | 34,921,530
Long-term loan and interest receivable from GTAC (see Note 10) |  |  | 872,317 |  |  | 875,585 |  |  | 817,605 |  |  | 824,540
Open Ended Fund (see Note 9) |  |  | 4,688,202 |  |  | 4,688,202 |  |  | 7,662,726 |  |  | 7,662,726
Other equity instruments (see Note 9) |  |  | 5,751,001 |  |  | 5,751,001 |  |  | 6,545,625 |  |  | 6,545,625
Other financial assets (see Note 9) |  |  | — |  |  | — |  |  | 72,612 |  |  | 72,612
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Senior Notes due 2025, 2032 and 2040 |  | Ps. | 28,325,700 |  | Ps. | 34,954,254 |  | Ps. | 29,509,500 |  | Ps. | 33,110,013
Senior Notes due 2045 |  |  | 18,883,800 |  |  | 19,739,047 |  |  | 19,673,000 |  |  | 17,317,748
Senior Notes due 2037 and 2043 |  |  | 11,000,000 |  |  | 8,986,870 |  |  | 11,000,000 |  |  | 7,905,625
Senior Notes due 2026 and 2046 |  |  | 22,660,560 |  |  | 26,645,193 |  |  | 23,607,600 |  |  | 24,051,128
Senior Notes due 2049 |  |  | 14,162,850 |  |  | 15,364,426 |  |  | — |  |  | —
Notes due 2020 |  |  | — |  |  | — |  |  | 10,000,000 |  |  | 9,605,700
Notes due 2021 |  |  | — |  |  | — |  |  | 6,000,000 |  |  | 5,956,506
Notes due 2022 |  |  | — |  |  | — |  |  | 5,000,000 |  |  | 4,941,430
Notes due 2027 |  |  | 4,500,000 |  |  | 4,656,375 |  |  | 4,500,000 |  |  | 4,027,275
Short and long-term notes payable to Mexican banks |  |  | 22,845,382 |  |  | 23,012,707 |  |  | 13,834,538 |  |  | 13,551,620
Lease liabilities |  |  | 9,363,520 |  |  | 9,120,903 |  |  | 5,317,944 |  |  | 5,121,534
Other notes payable |  |  | 1,324,063 |  |  | 1,295,780 |  |  | 2,576,874 |  |  | 2,430,667
The carrying values (based on estimated fair values), notional amounts, and maturity dates of the Group’s derivative financial instruments as of December 31, 2019 and 2018, were as follows:
|  |  |  |  | Notional |  |
|  |  |  |  | Amount |  |
December 31, 2019: |  | Carrying |  | (U.S. Dollars in |  |
Derivative Financial Instruments |  | Value |  | Thousands) |  | Maturity Date
Assets: |  |  |  |  |  |  |  |
Derivatives recorded as accounting hedges (cash flow hedges): |  |  |  |  |  |  |  |
TVI’s interest rate swap(a) |  | Ps. | 4,592 |  | Ps. | 407,200 |  | May 2020 through May 2022
Total assets |  | Ps. | 4,592 |  |  |  |  |
Liabilities: |  |  |  |  |  |  |  |
Derivatives recorded as accounting hedges (cash flow hedges): |  |  |  |  |  |  |  |
TVI’s interest rate swap(b) |  | Ps. | 8,943 |  | Ps. | 938,182 |  | April 2022
Interest rate swap (c) |  |  | 38,543 |  | Ps. | 2,000,000 |  | October 2022
Interest rate swap (d) |  |  | 30,702 |  | Ps. | 1,500,000 |  | October 2022
Interest rate swap (e) |  |  | 83,122 |  | Ps. | 2,500,000 |  | February 2023
Interest rate swap (f) |  |  | 185,205 |  | Ps. | 6,000,000 |  | June 2024
Forward (g) |  |  | 144,466 |  | U.S.$ | 218,688 |  | January 2020 through September 2020
Derivatives not recorded as accounting hedges: |  |  |  |  |  |  |  |
TVI's forward (h) |  |  | 45,968 |  | U.S.$ | 66,000 |  | January 2020 through October 2020
Empresas Cablevisión’s forward (i) |  |  | 48,474 |  | U.S.$ | 73,000 |  | January 2020 through October 2020
Sky's forward (j) |  |  | 87,090 |  | U.S.$ | 127,850 |  | January 2020 through September 2020
Forward (k) |  |  | 242,777 |  | U.S.$ | 361,550 |  | January 2020 through October 2020
Total liabilities |  | Ps. | 915,290 |  |  |  |  |
|  |  |  |  | Notional |  |
|  |  |  |  | Amount |  |
December 31, 2018: |  | Carrying |  | (U.S. Dollars in |  |
Derivative Financial Instruments |  | Value |  | Thousands) |  | Maturity Date
Assets: |  |  |  |  |  |  |  |
Derivatives recorded as accounting hedges (cash flow hedges): |  |  |  |  |  |  |  |
TVI’s interest rate swap(a) |  | Ps. | 37,251 |  | Ps. | 1,188,667 |  | April 2019 through May 2022
TVI’s interest rate swap(b) |  |  | 32,267 |  | Ps. | 1,145,871 |  | April 2022
Interest rate swap (l) |  |  | 340,153 |  | Ps. | 6,000,000 |  | April 2021
Interest rate swap (m) |  |  | 299,560 |  | Ps. | 5,000,000 |  | May 2022
Interest rate swap (c) |  |  | 85,073 |  | Ps. | 2,000,000 |  | October 2022
Interest rate swap (d) |  |  | 63,420 |  | Ps. | 1,500,000 |  | October 2022
Interest rate swap (e) |  |  | 76,876 |  | Ps. | 2,500,000 |  | February 2023
Forward (g) |  |  | 100,922 |  | U.S.$ | 224,000 |  | January 2019 through November 2019
Total assets |  | Ps. | 1,035,522 |  |  |  |  |
Liabilities: |  |  |  |  |  |  |  |
Derivatives not recorded as accounting hedges: |  |  |  |  |  |  |  |
TVI's forward (h) |  | Ps. | 10,255 |  | U.S.$ | 75,000 |  | January 2019 through October 2019
Empresas Cablevisión's forward (i) |  |  | 10,518 |  | U.S.$ | 82,000 |  | January 2019 through October 2019
Sky's forward (j) |  |  | 27,309 |  | U.S.$ | 38,600 |  | January 2019 through August 2019
Forward (k) |  |  | 99,979 |  | U.S.$ | 491,400 |  | January 2019 through October 2019
Total liabilities |  | Ps. | 148,061 |  |  |  |  |
| (a) |  | 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.407,200 and Ps.1,188,667, as of December 31, 2019 and 2018, respectively. Under these agreements, the Company receives monthly payments based on aggregate notional amounts of Ps.407,200 and Ps.1,188,667 and makes payments based on the same notional amount at an annual weighted average fixed rate of 5.508%. TVI has recognized the change in fair value of this transaction as an accounting hedge, and recorded a loss of Ps.54,383 and Ps.21,722 in other comprehensive income or loss as of December 31, 2019 and 2018, respectively. In the years ended as of December 31, 2019 and 2018, TVI recorded a gain of Ps.26,962 and Ps.33,692, respectively, in consolidated other finance income or expense.
| (b) |  | 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.938,182 and Ps.1,145,871, as of December 31, 2019 and 2018, respectively. Under these agreements, the Company receives monthly payments based on aggregate notional amounts of Ps.938,182 and Ps.1,145,871, as of December 31, 2019 and 2018, respectively, at an annual variable rate of 28- days TIIE and makes monthly payments based on the same notional amounts at an annual weighted average fixed rate of 7.2663%. The Company has recognized the change in fair value of this transaction as an accounting hedge, and recorded a (loss) gain of Ps.(8,943) and Ps.32,267 in other comprehensive income or loss as of December 31, 2019 and 2018, respectively. TVI recorded a gain of Ps.11,738 and Ps.8,881 for this transaction agreement in consolidated other finance income or expense as of December 31, 2019 and 2018, respectively.
| (c) |  | 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 (loss) gain of Ps.(38,543) and Ps.85,073 in other comprehensive income or loss as of December 31, 2019 and 2018, respectively. In 2019 and 2018, the Company recorded a gain of Ps.20,933 and Ps.12,374, respectively, in consolidated other finance income or expense.
| (d) |  | 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 (loss) gain of Ps.(30,702) and Ps.63,420, in other comprehensive income or loss as of December 31, 2019 and 2018, respectively. In 2019, the Company recorded a gain of Ps.15,472 in consolidated other finance income or expense.
| (e) |  | In January 2018, 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.2,500,000. Under this transaction, the Company receives monthly payments based on aggregate notional amounts of Ps.2,500,000, 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 7.7485%. The Company has recognized the change in fair value of this transaction as an accounting hedge, and recorded a cumulative (loss) gain of Ps.(83,122) and Ps.76,876 in other comprehensive income or loss as of December 31, 2019 and 2018, respectively. In 2019, the Company recorded a gain of Ps.16,167 in consolidated other finance income or expense.
| (f) |  | In June and July 2019, the Company entered into a derivative transaction agreement (interest rate swap) through June 2024, to hedge the variable interest rate exposure resulting from a Mexican peso loan of a total principal amount of Ps.6,000,000. Under this transaction, the Company receives monthly payments based on aggregate notional amounts of Ps.6,000,000, 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 7.3873%. The Company has recognized the change in fair value of this transaction as an accounting hedge, and recorded a cumulative loss of Ps.185,205 in other comprehensive income or loss as of December 31, 2019. In 2019, the Company recorded a gain of Ps.21,488 in consolidated other finance income or expense.
| (g) |  | As of December 31, 2019 and 2018, the Company had entered into derivative contracts of foreign currency (forward) to fix the exchange rate for the purchase of U.S.$218.7 million and U.S.$224.0 million, respectively at an average exchange rate of Ps.19.9256 and Ps.19.6767, respectively. The Company has recognized the change in fair value of this transaction as an accounting hedge, and recorded a cumulative (loss) gain of Ps.(144,466) and Ps.100,922 for this transaction agreement in other comprehensive income or loss as of December 31, 2019, and 2018, respectively. In 2019 and 2018, the Company recorded a loss of Ps.107,440 and Ps.153,853 in consolidated other finance income or expense, respectively.
| (h) |  | As of December 31, 2019, TVI had foreign currency contracts (forward) in the aggregate notional amount of U.S.$66.0 million at an average rate of Ps.20.0094. As a result of the change in fair value of these agreements, in the year ended December 31, 2019, the Company recorded a loss of Ps.149,389, in consolidated other finance income or expense.
| (i) |  | As of December 31, 2019, Empresas Cablevisión had foreign currency contracts (forward) in the aggregate notional amount of U.S.$73.0 million at an average rate of Ps.20.0049. As a result of the change in fair value of these agreements, in the year ended December 31, 2019, the Company recorded a loss of Ps.147,383, in consolidated other finance income or expense.
| (j) |  | As of December 31, 2019, Sky had foreign currency contracts (forward) in the aggregate notional amount of U.S.$127.8 million at an average rate of Ps.20.0001. As a result of the change in fair value of these agreements, in the year ended December 31, 2019, the Company recorded a loss of Ps.115,189, in consolidated other finance income or expense.
| (k) |  | As of December 31, 2019 and 2018, the Company had foreign currency contracts (forward) in the aggregate notional amount of U.S.$361.5 million and U.S.$491.4 million at an average rate of Ps.19.9898 and Ps.20.3561, respectively. As a result of the change in fair value of these agreements, in the years ended December 31, 2019 and 2018, the Company recorded a loss of Ps.820,585 and Ps.331,946, in consolidated other finance income or expense, respectively.
| (l) |  | The Company entered into derivative transaction agreements (interest rate swaps) through April 2021 to hedge the variable interest rate exposure resulting from TIIE plus 0.35% Notes due 2021. Under these transactions, the Company received 28-day TIIE payments based on a principal amount of Ps.6,000,000, as of December 31, 2018, and made 28-day payments based on the same notional amount at an annual weighted average fixed rate of 5.9351%. The Company recognized the change in fair value of these transactions as an accounting hedge, and recorded a cumulative gain of Ps.340,153 in other comprehensive income or loss as of December 31, 2018. In connection with the prepayment in July 2019 of the TIIE plus 0.35% Notes with an original maturity in 2021, the Company terminated these agreements early for a notional amount of Ps.6,000,000, and recorded a net gain of Ps.152,415, in consolidated other finance income. In the years ended December 31, 2019, 2018 and 2017, the Company recorded a gain of Ps.248,420, Ps.119,975 and Ps.58,278, respectively, for these transaction agreements in consolidated other finance income or expense.
| (m) |  | In 2017, 2016, and 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 received 28-day TIIE payments based on a principal amount of Ps.5,000,000, as of December 31, 2018, and made 28-day payments based on the same notional amount at an annual weighted average fixed rate of 6.5716%. The Company recognized the change in fair value of these transactions as an accounting hedge, and recorded a cumulative gain of Ps.299,560 in other comprehensive income or loss as of December 31, 2018. In connection with the prepayment in July 2019 of the TIIE plus 0.35% Notes with an original maturity in 2022, the Company terminated these agreements early for a notional amount of Ps.5,000,000, and recorded a net gain of Ps.44,333, in consolidated other finance income. In the years ended December 31, 2019, 2018 and 2017, the Company recorded a gain of Ps.106,515, Ps.69,483 and Ps.26,457, respectively, for these transaction agreements in consolidated other finance income or expense.
Schedule of reconciliation for all assets and liabilities measured at fair value | Financial assets and liabilities measured at fair value as of December 31, 2019 and 2018:
|  |  |  |  | Quoted Prices in |  | Internal Models |  | Internal Models
|  | Balance as of |  | Active Markets |  | with Significant |  | with Significant
|  | December 31, |  | for Identical |  | Observable |  | Unobservable
|  | 2019 |  | Assets (Level 1) |  | Inputs (Level 2) |  | Inputs (Level 3)
Assets: |  |  |  |  |  |  |  |  |  |  |  |
At FVOCIL: |  |  |  |  |  |  |  |  |  |  |  |
Open Ended Fund |  | Ps. | 4,688,202 |  | Ps. | — |  | Ps. | 4,688,202 |  | Ps. | —
Other equity instruments |  |  | 5,751,001 |  |  | 5,751,001 |  |  | — |  |  | —
Warrants issued by UHI |  |  | 33,775,451 |  |  | — |  |  | — |  |  | 33,775,451
Derivative financial instruments |  |  | 4,592 |  |  | — |  |  | 4,592 |  |  | —
Total |  | Ps. | 44,219,246 |  | Ps. | 5,751,001 |  | Ps. | 4,692,794 |  | Ps. | 33,775,451
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Derivative financial instruments |  | Ps. | 915,290 |  | Ps. | — |  | Ps. | 915,290 |  | Ps. | —
Total |  | Ps. | 915,290 |  | Ps. | — |  | Ps. | 915,290 |  | Ps. | —
|  |  |  |  | Quoted Prices in |  | Internal Models |  | Internal Models
|  | Balance as of |  | Active Markets |  | with Significant |  | with Significant
|  | December 31, |  | for Identical |  | Observable |  | Unobservable
|  | 2018 |  | Assets (Level 1) |  | Inputs (Level 2) |  | Inputs (Level 3)
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Temporary investments |  | Ps. | 30,992 |  | Ps. | 30,992 |  | Ps. | — |  | Ps. | —
At FVOCIL: |  |  |  |  |  |  |  |  |  |  |  |
Open Ended Fund |  |  | 7,662,726 |  |  | — |  |  | 7,662,726 |  |  | —
Other equity instruments |  |  | 6,545,625 |  |  | 6,545,625 |  |  | — |  |  | —
Other financial assets |  |  | 72,612 |  |  | 72,612 |  |  | — |  |  | —
Warrants issued by UHI |  |  | 34,921,530 |  |  | — |  |  | — |  |  | 34,921,530
Derivative financial instruments |  |  | 1,035,522 |  |  | — |  |  | 1,035,522 |  |  | —
Total |  | Ps. | 50,269,007 |  | Ps. | 6,649,229 |  | Ps. | 8,698,248 |  | Ps. | 34,921,530
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Derivative financial instruments |  | Ps. | 148,061 |  | Ps. | — |  | Ps. | 148,061 |  | Ps. | —
Total |  | Ps. | 148,061 |  | Ps. | — |  | Ps. | 148,061 |  | Ps. | —
The table below presents the reconciliation for all assets and liabilities measured at fair value using internal models with significant unobservable inputs (Level 3) during the years ended December 31, 2019 and 2018:
|  | 2019 |  | 2018
Balance at beginning of year |  | Ps. | 34,921,530 |  | Ps. | 36,395,183
Included in other comprehensive income |  |  | (1,146,079) |  |  | (1,473,653)
Balance at the end of year |  | Ps. | 33,775,451 |  | Ps. | 34,921,530
Schedule of sensitivity analysis for investment | As of December 31, 2019 and 2018, the effect on consolidated income and consolidated equity of changing the main assumptions used for the measurement of Level 3 financial instruments for other reasonably possible models, taking the highest or lowest value of the range reasonably possible, would be as follows:
|  |  |  |  |  | Potential Impact on |  |
|  |  |  |  |  | Consolidated Income |  | Potential Impact on
|  |  |  |  |  | Statement |  | Consolidated Equity
|  |  |  |  |  | Most |  | Least |  | Most |  | Least
|  | Main |  |  |  | Favorable |  | Favorable |  | Favorable |  | Favorable
|  | Assumptions |  |  |  | Assumptions |  | Assumptions |  | Assumptions |  | Assumptions
Financial Assets Level 3 |  | Used |  | Sensitivity |  | 2019 |  | 2019 |  | 2019 |  | 2019
Warrants issued by UHI |  | Price per Share |  | +/-10 | % | Ps. | — |  | Ps. | — |  | Ps. | 3,377,623 |  | Ps. | (3,377,623)
Total |  |  |  |  |  | Ps. | — |  | Ps. | — |  | Ps. | 3,377,623 |  | Ps. | (3,377,623)
|  |  |  |  |  | Potential Impact on |  |
|  |  |  |  |  | Consolidated Income |  | Potential Impact on
|  |  |  |  |  | Statement |  | Consolidated Equity
|  |  |  |  |  | Most |  | Least |  | Most |  | Least
|  | Main |  |  |  | Favorable |  | Favorable |  | Favorable |  | Favorable
|  | Assumptions |  |  |  | Assumptions |  | Assumptions |  | Assumptions |  | Assumptions
Financial Assets Level 3 |  | Used |  | Sensitivity |  | 2018 |  | 2018 |  | 2018 |  | 2018
Warrants issued by UHI |  | Price per Share |  | +/-10 | % | Ps. | — |  | Ps. | — |  | Ps. | 3,492,229 |  | Ps. | (3,492,229)
Total |  |  |  |  |  | Ps. | — |  | Ps. | — |  | Ps. | 3,492,229 |  | Ps. | (3,492,229)

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